Exhibit A to Response to SEC Comment Letter dated April 24, 2017 regarding File No. 333-223135

Regarding Our Ongoing Underwriting and Unaudited Borrower Reported Annual Revenue and Expenses and Annual Performance Review Statements

Our CM Loans are made primarily based on the loan amount as a percentage of the appraised value and the debt service coverage ratio potential of the property as it is currently being managed at the time of the loan. KDM believes these metrics are the key to loan safety and that the conservative loan to value standards that we employ make it likely that if we foreclose on a CM Loan we will recover all mortgage principal and interest due and any foreclosure and sale expenses.

Despite these measures of protection for KDM and our Noteholders, we believe it is prudent to monitor mortgaged properties and report on any changes in our analyses and assumptions at least annually, even if all payments have been made on time. Accordingly, we require borrowers to report to us at least annually revenues and expenses for each property which secures a CM Loan. Our borrowers are generally small businesses and their revenue and expense reports are unaudited. When their financial statements are compared from year-to-year, we may find that there are inconsistencies between revenue and expense levels or categorizations of expenses and revenues. We use alternative methods to test the economic validity of the financial statements we receive. Whenever possible, we compare the financial statements we receive from our borrowers to industry standards for revenues and expenses as reported by statistical services we have reason to believe are reliable. We also compare current financial statements with the metrics of our original underwriting reports from the loan origination. Further, we have professional real estate inspectors physically visit each of the properties at least annually and assess their condition.

If we find a property’s physical condition to be reasonable and reports of income and expenses from our borrowers to be reasonably within a range which meets our underwriting standards, we report our conclusion when we publish the borrower’s unaudited income statements in our annual reports as they are received. As to an understanding of a borrower’s financial statements, we will explain the bases for our analysis and, if appropriate, confirmation that we believe the CM Loan to be performing as underwritten. As we deem appropriate, we may discuss one or more borrower financial statement items reported by a borrower and describe our analysis and conclusions about that item, including any potential impact upon the creditworthiness of a borrower’s property or properties.

If we determine that a property’s physical condition does not meet our standards or that a borrower’s reported expenses or revenues are not within a reasonable range, we may, as we believe appropriate, state in our annual or other current reports that based upon our analysis of our property inspection and the borrower’s financial statements. we believe that a property securing a CM Loan is underperforming. In that event, we will state how we believe property is underperforming and any actions that KDM may be taking to protect the interest of Noteholders. As appropriate, we will file a report on Form 8-K with respect to a CM loan which we deem materially underperforming or as which we propose to take, or have taken, a foreclosure action or other remedial action which we may deem appropriate under the circumstances.

KDM 2017-001

Property Address: 4771 78^th Avenue and 14120 Palm St

Principal Balance: $1,049,132

Current Appraised Value: $1,920,000 (as of March, 2018)

LTV: 54.64%

Loan Status: Current

Current Interest Rate: 5.25%

Maturity: 5/1/2027

Interest Covenant: 3 years

This loan is performing. All payments have been made timely since inception. Below appear the borrower-provided, unaudited profit and loss statements for 2017. This borrower has prepared this statement on a cash basis and not in accordance with GAAP.

In our analysis of the borrower-provided numbers, we analyzed certain line items and noted the following .material differences from the information used in our original loan underwriting, as follows:

Overall expenses are materially lower than at the time of underwriting, using the borrower’s 2016 calendar year numbers, because the borrower installed meters to have tenants pay directly for water. This puts the CM Loan in a more favorable cash flow position than the prior year.

The insurance expense is lower than we have recorded as servicer. We reviewed the total insurance expense for the properties and it should be $21,361.54, which is $6,185.54 higher than the borrower reported.

“Maintenance” covers gardening, pest, and incidental utilities, per borrower. This differs from their presentation in the registration statement for the MSN for this CM Loan,(File No. 333-219895), in which these numbers were broken out into individual line items.

Profit and Loss Statement – Full Year 2017 (Provided by Borrower)

January 2017 – December 2017
PROFIT & LOSS STATEMENT

INCOME (Both Properties)
RENTAL PROPERTIES	$	235,680
14120 Palm Street. Madeira Beach, FL 33708
4771 78th Avenue N. Pinellas Park, FL 33781

EXPENSES (Both Properties)
TAXES		21,945
INSURANCE		15,176
MAINTENANCE		7,200
INTEREST EXPENSE		53,280
TOTAL EXPENSES		97,601
NET INCOME	$	138,079

KDM 2017-002

Property Address: 8400 Grand Canal Drive,

445/447 SW 78^th Pl, 7992 SW 4^th St

Principal Balance: $950,000
Current Appraised Value: $1,605,000 (as of November, 2017)

LTV: 59.19%

Loan Status: Current

Current Interest Rate: 6.50%

Maturity: 12/12/2020

Interest Covenant: 2 years

This loan is performing. Timely payments have been received since it closed. Below is the actual, unaudited profit and loss statement received from the borrower. The statement was prepared on a tax basis. Although the borrower reported a net loss of $144,672 for the year, we continue to feel confident in our underwriting of the loan and are not concerned about ongoing performance at this time.

Rental revenue in the profit and loss statement below is less than in KDM’s debt service analysis because the properties were all purchased in early 2017, were then under renovation for a month each, and rented at a higher rate afterward. After taking these different Income for the properties for 2017 is approximately $14,000 lower than 2018 expected income of $119,808.

Expenses shown below are significantly higher than those included in the underwriting analysis in our original registration statement for the MSN secured by this CM Loan (File No. 333-222293). The borrower’s numbers include several one-time and non-recurring expenses, including renovation costs, closing costs from the KDM financing, interest expense from higher interest rate loans that were redeemed with proceeds of the CM Loan, legal fees, an additional year of insurance, and minor expenses not associated with the properties. When these items and the non-cash expenses are added back (a total of over ~$165,000), we believe that the property was operated on a positive cash flow basis and will continue to operate as such.

Profit and Loss Statement – Full Year 2017 (Provided by Borrower)

	12 Months Ended
	Dec.31 2017
Revenue
Rental Income - Duplex 445	$	20,900.00
Rental Income - Duplex 447		33,000.00
Rental Income - 7992 SW 4ST		27,500.00
Rental Income - 8400 Grand		30,000.00
Returns and Allowances		(5,600.00	)
Total Revenue		105,800.00
Cost of Sales		-

Total Cost of Sales		-
Gross Profit		105,800.00

Operating Expenses
Alarm		731.91
Appraisal Fees		475.00
Auto and Truck Expense		1,001.10
Bank Charges		170.00
Closing Cost		1,433.00
Cleaning Services		750.00
Cleaning Supplies		137.89
Course Fee		72.00
Depreciation		35,959.00
Amortization Expense		1,056.00
Entertainment		3,368.97
Escrow Mtg - 8400 Grand Canal		7,348.50
Freight & Courier		53.75
Houses Insurance		13,814.00
Insurance - Hazard		13,947.00
Insurance - Comm/Liability		3,167.00
Insurance - Flood		907.82
Interest - Korth Direct Mtgt		1,792.45
Interest - Fuse Funding LLC		16,764.33
Interest - Intercorp MS		41,101.69
Landscaping		420.00
Legal		7,600.00
Licenses and Fees		820.50
Loan Fees		5,050.00
Maintenance - Pool		1,177.00
Marketing		1,265.22
Office Expense		668.20
Parking Expense		9.00
Property Taxes - 8400 Grand		1,892.04
Property Taxes - 445/447		7,429.69
Property Taxes - 7992 SW 4ST		6,327.43
Repairs and Maintenance		16,227.07
Secretarial Help		3,000.00
Settlement Charges		45,351.50
State Taxes		3,325.00
Telephone		146.35
Title Insurance		2,880.00
Utilities		2,832.43
Total Operating Expenses		250,472.84

Operating Income		(144,672.84	)

Total Other Income		-

Net Income (Loss)		(144,672.84	)

	Sincerely,

	/s/ Holly MacDonald-Korth

	Chief Financial Officer

	Korth Direct Mortgage LLC