1230634--3/30/2007--VESTIN_FUND_III

related topics

{loan, real, estate}

{investment, property, distribution}

{debt, indebtedness, cash}

{personnel, key, retain}

{cost, regulation, environmental}

{condition, economic, financial}

{regulation, government, change}

{tax, income, asset}

{stock, price, share}

Units lack liquidity and marketability. Members have limited ability to have units redeemed. Any borrowing by us will increase members risk and may reduce the amount we have available to distribute. RISKS OF THE MORTGAGE LENDING BUSINESS Defaults on our real estate loans will decrease our revenues and members distributions. The value of our real estate security may be insufficient. We may invest in unimproved land loans that do not generate income. We may invest in acquisition and development loans that do not generate income. We may invest in construction loans that do not generate income. Our investments in commercial property loans may not yield the anticipated increase in value and income. We may invest in residential loans. Investments in second deeds of trust and wraparound loans are subject to the rights of the first deed of trust. Balloon payments require sufficient resources to make payment when due. Investment in large loans may reduce our ability to diversify our loan portfolio. Taking a lease interest as collateral only provides a right to assume the borrower s obligations under the lease. Our underwriting standards and procedures are more lenient than conventional lenders. Our loans are not guaranteed by any government agency. Our real estate loans will not be marketable and we expect no secondary market to develop. As a result of our small size, we will not be able to build a diversified loan portfolio, thereby increasing our risk that defaults on one or more loans could have a material adverse effect upon our operating results. Our loan portfolio may exhibit greater risk if it is not diversified geographically. We may have difficulty protecting our rights as a secured lender. By becoming the owner of property, we may become liable for unforeseen environmental obligations. Our results are subject to fluctuations in interest rates and other economic conditions. We face competition for real estate loans that may reduce available yields and fees available. Our lending operations are subject to certain regulatory requirements. We are dependent on our Manager to select our loans and manage our loan portfolio. Our Manager lacks experience with certain real estate markets. Our success depends on key personnel of our manager, the loss of whom could adversely affect our operating results, and on our manager s ability to attract and retain qualified personnel. Our manager and its affiliates will face conflicts of interest arising from our fee structure. Our manager will face conflicts of interest concerning the allocation of its personnel s time. Our manager will face conflicts of interest relating to other investments in real estate loans. We may have a lack of control over participations.

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1230634--3/30/2007--VESTIN_FUND_III_LLC