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Notes Payable

9 Months Ended

Mar. 31, 2012

Note 5: Notes Payable

In September 2011 the Company entered into separate promissory notes with The Diversified Group Land Contract Limited Partnership # 5 (“LCLP #5”) and The Diversified Group Land Contract Limited Partnership # 6 (“LCLP #6”) for $300,000 and $250,000, respectively. LCLP #5 and LCLP #6 both consist of general partner The Diversified Group Partnership Management, LLC, a related party, and multiple limited partners, who are not related parties to the Company and are not parties in any other Company agreements. No amounts under the promissory notes were paid by The Diversified Group Partnership Management, LLC. Each note has an interest rate of 9.9% and a term that ends in December 2011. Monthly payments are required with a final balloon payment due at the end of the loan term. Additionally, in October 2011 the promissory notes were amended to extend the due date of the final balloon payment to June 1, 2012.

In October 2011 the Company entered into the following separate promissory notes:

Note Description	Amount	Rate	Due Date
The Diversified Group Land Contract Limited Partnership #7 (“LCLP#7”)	237,500	13.68%	6/1/2012
The Diversified Group Land Contract Limited Partnership #8 (“LCLP#8”)	247,000	11.13%	6/1/2012
The Diversified Group Land Contract Limited Partnership #9 (“LCLP#9”)	450,000	11.13%	6/1/2012

Each promissory note consists of general partner The Diversified Group Partnership Management, LLC, a related party, and multiple limited partners, who are not related parties to the Company and are not parties in any other Company agreements. No amounts under the promissory notes were paid by The Diversified Group Partnership Management, LLC. Monthly payments are required with a final balloon payment due June 1, 2012.

In January 2012 the Company entered into separate promissory notes with The Diversified Group Land Contract Limited Partnership # 10 (“LCLP #10”) and The Diversified Group Land Contract Limited Partnership # 11 (“LCLP #11”) for $405,000 and $225,000, respectively. LCLP #10 and LCLP #11 both consist of general partner The Diversified Group Partnership Management, LLC, a related party, and multiple limited partners, who are not related parties to the Company and are not parties in any other Company agreements. No amounts under the promissory notes were paid by The Diversified Group Partnership Management, LLC. Each note has an interest rate of 11.13% and a term that ends June 1, 2012. The proceeds from these loans were received directly by DGPM and applied towards renovations performed or to be performed by DGPM on the Company’s real estate inventory. Any unused loan proceeds received by DGPM were held for future renovations.

Interest expense for the three and nine months ended March 31, 2012 was $58,545 and $97,505, respectively.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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