UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark one)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

Or

[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: 000-51964

VESTIN REALTY MORTGAGE I, INC.

(Exact name of registrant as specified in its charter)

MARYLAND	20-4028839
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

8880 W. SUNSET ROAD, SUITE 200, LAS VEGAS, NEVADA 89148

 (Address of Principal Executive Offices)(Zip Code)

Registrant’s Telephone Number: 702.227.0965

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  [X]    No   []

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  [ X ]    No   [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer []	Accelerated filer []
Non-accelerated filer [] (Do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  [   ]    No   [X]

As of May 12, 2015 there were 1,380,278 shares of the Company’s Common Stock outstanding.

TABLE OF CONTENTS

		Page
Part I	FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (Unaudited)	1
	Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014	1
	Consolidated Statements of Operations for the Three Months Ended March 31, 2015 and 2014	2
	Consolidated Statements of Other Comprehensive Income for the Three Months Ended March 31, 2015 and 2014	3
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2015 and 2014	4
	Notes to Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 4.	Controls and Procedures	32
Part II	OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 6.	Exhibits	33
	SIGNATURES	34
	Exhibit 31.1
	Exhibit 31.2
	Exhibit 32

PART I - FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

VESTIN REALTY MORTGAGE I, INC.
ASSETS
	March 31, 2015			December 31, 2014
Assets
Cash and cash equivalents	$	4,459,000		$	1,395,000
Investment in marketable securities - related party		1,059,000			1,126,000
Investment in MVP Advisor, net of allowance of $2,125,000 as of March 31, 2015 and $1,425,000 as of December 31, 2014		--			--
Investment in equity method investee held for sale		6,946,000			6,932,000
Interest and other receivables		4,000			6,000
Notes receivable, net of allowance of $643,000 at March 31, 2015 and $650,000 at December 31, 2014		--			--
Investments in real estate and fixed assets
Land and improvements		1,741,000			1,741,000
Building and improvements		2,450,000			2,450,000
Furniture and fixtures		19,000			14,000
		4,210,000			4,205,000
Accumulated depreciation		(151,000	)		(120,000	)
Total investments in real estate and fixed assets, net		4,059,000			4,085,000
Loan fees		63,000			67,000
Investment in real estate loans		3,100,000			7,063,000
Prepaid expenses – related party		135,000			--
Other assets		110,000			122,000
Total assets	$	19,935,000		$	20,796,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable and accrued liabilities	$	65,000		$	115,000
Due to related parties		26,000			30,000
Notes payable		2,231,000			2,260,000
Total liabilities		2,322,000			2,405,000
Commitments and contingencies		--			--
Stockholders' equity
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued		--			--
Treasury stock, at cost, no shares at March 31, 2015 and December 31, 2014		--			--
Common stock, $0.0001 par value; 25,000,000 shares authorized; 1,380,278 shares issued and outstanding at March 31, 2015 and December 31, 2014		1,000			1,000
Additional paid-in capital		59,725,000			59,725,000
Accumulated deficit		(42,036,000	)		(41,335,000	)
Accumulated other comprehensive loss		(77,000	)		--
Total stockholders’ equity		17,613,000			18,391,000
Total liabilities and stockholders' equity	$	19,935,000		$	20,796,000

The accompanying notes are an integral part of these consolidated statements.

-1-

VESTIN REALTY MORTGAGE I, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Three Months Ended March 31,
	2015			2014
Revenues
Interest income from investment in real estate loans	$	125,000		$	81,000
Gain related to pay off of notes receivable, including recovery of allowance for notes receivable		8,000			--
Rental revenue		183,000			174,000
Total revenues		316,000			255,000
Operating expenses
Management fees - related party		69,000			69,000
Payroll		9,000			15,000
Impairment on MVP Realty Advisors		700,000			411,000
Acquisition expense		--			1,000
Operations and maintenance		44,000			79,000
Depreciation		34,000			--
Professional fees		116,000			84,000
Insurance		50,000			53,000
Consulting		23,000			25,000
Other		41,000			27,000
Total operating expenses		1,086,000			764,000
Loss from operations		(770,000	)		(509,000	)
Non-operating income (loss)
Gain on sale of marketable securities		--			1,000
Dividend income		10,000			9,000
Interest expense		(28,000	)		--
Gain related to recovery from settlement with loan guarantor		--			102,000
Total other non-operating income (loss), net		(18,000	)		112,000
Provision for income taxes		--			--
Loss from continuing operations		(788,000	)		(397,000	)
Discontinued operations, net of income taxes
Net loss on sale of real estate held for sale		--			(5,000	)
Income from investment in equity method investee		96,000			43,000
Expenses related to real estate held for sale		(9,000	)		(44,000	)
Total income(loss) from discontinued operations		87,000			(6,000	)
Net loss		(701,000	)		(403,000	)
Net income attributable to non-controlling interest – related parties		--			21,000
Net loss attributable to common stockholders	$	(701,000	)	$	(424,000	)
Basic and diluted income (loss) per weighted average common share
Continuing operations	$	(0.57	)		(0.28	)
Discontinued operations		0.06			(0.02	)
Total basic and diluted loss per weighted average common share	$	(0.51	)	$	(0.30	)
Dividends declared per common share	$	--		$	--
Weighted average common shares		1,380,278			1,428,164

The accompanying notes are an integral part of these consolidated statements.

-2-

VESTIN REALTY MORTGAGE I, INC.

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME(LOSS)

	For the Three Months Ended March 31,
	2015			2014
Net loss	$	(701,000	)	$	(403,000	)
Unrealized holding gain (loss) on available-for-sale securities – related parties		77,000			(141,000	)
Comprehensive loss		(624,000	)		(544,000	)
Less: net income attributable to noncontrolling interest – related party		--			(21,000	)
Comprehensive loss attributable to Vestin Realty Mortgage I, Inc.	$	(624,000	)	$	(565,000	)

The accompanying notes are an integral part of these consolidated statements.

-3-

VESTIN REALTY MORTGAGE I, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
	For the Three Months Ended March 31,
	2015			2014
Cash flows from operating activities:
Net loss	$	(701,000	)	$	(403,000	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		34,000			--
Gain related to recovery of allowance for doubtful notes receivable		(8,000	)		--
Gain on sale of marketable securities		--			(1,000	)
Amortization		4,000			--
Recognized gain on sale of HFS		--			(23,000	)
Income from equity method investee held for sale		(96,000	)		(43,000	)
Loss from sale of investment in equity method investee		--			5,000
Dividend from MVP REIT (DRIP Shares)		(10,000	)		(9,000	)
Impairment on MVP Realty Advisors		700,000			411,000
Change in operating assets and liabilities:
Interest and other receivables		2,000			1,000
Due to/from related parties		(4,000	)		91,000
Prepaid expense – related party		(135,000	)		--
Assets held for sale, net of liabilities		--			(80,000	)
Other assets		12,000			31,000
Accounts payable and accrued liabilities		(50,000	)		61,000
Net cash provided by (used in) operating activities		(252,000	)		41,000
Cash flows from investing activities:
Investments in real estate loans		(1,263,000	)		(2,298,000	)
Proceeds from loan payoffs		4,593,000			1,304,000
Sale of investments in real estate loans
VRM II		200,000			--
Third parties		433,000			250,000
Purchase of fixed assets		(8,000	)		--
Proceeds from investment in equity method investee held for sale		--			1,157,000
Proceeds from sale of investment in equity method investee held for sale		--			686,000
Proceeds from sale of marketable securities		--			13,000
Proceeds from distributions from investment in equity method investee		82,000			--
Investment in MVP Realty Advisors		(700,000	)		(411,000	)
Proceeds from notes receivable		8,000			--
Net cash provided by investing activities		3,345,000			701,000
Cash flows from financing activities:
Principal payments on notes payable		(29,000	)		(18,000	)
Net cash used in financing activities		(29,000	)		(18,000	)

NET CHANGE IN CASH		3,064,000			724,000
Cash and cash equivalents, beginning of period		1,395,000			7,588,000
Cash and cash equivalents, end of period	$	4,459,000		$	8,312,000
Supplemental disclosures of cash flows information:
Interest expense	$	28,000		$	--
Non-cash investing and financing activities:
Unrealized loss on marketable securities - related party	$	(77,000	)	$	(141,000	)

-4-

VESTIN REALTY MORTGAGE I, INC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2015

(UNAUDITED)

NOTE A — ORGANIZATION

Vestin Realty Mortgage I, Inc. (“VRM I”, the “Company”, “we”, “us”, or “our”), formerly Vestin Fund I, LLC (“Fund I”) invests in loans secured by real estate through deeds of trust or mortgages (hereafter referred to collectively as “deeds of trust” and as defined in our management agreement (“Management Agreement”) as “Mortgage Assets”).  In addition we invest in, acquire, manage or sell real property and acquire entities involved in the ownership or management of real property.  We commenced operations in December 1999.  References in this report to the “Company,” “we,” “us,” or “our” refer to Fund I with respect to the period prior to April 1, 2006 and to VRM I with respect to the period commencing on May 1, 2006.

We operated as a real estate investment trust (“REIT”) through December 31, 2011.  We are not a mutual fund or an investment company within the meaning of the Investment Company Act of 1940, nor are we subject to any regulation thereunder.  As a REIT, we were required to have a December 31 fiscal year end. We announced on March 28, 2012 that we have terminated our election to be treated as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”), effective for the tax year ending December 31, 2012. Under the Code, we will not be able to make a new election to be taxed as a REIT during the four years following December 31, 2012. Pursuant to our charter, upon the determination by the Board of Directors that we should no longer qualify as a REIT, the restrictions on transfer and ownership of shares set forth in Article VII of our charter ceased to be in effect and, accordingly, shares of the Company’s stock are no longer subject to such restrictions.  In connection with the termination of our REIT status, we also amended our stockholders’ rights plan to provide that a stockholder, other than Michael Shustek, may own up to 20% of outstanding shares of common stock, and that Michael Shustek may own up to 35% of outstanding shares of common stock.

Michael Shustek owns a significant majority of Vestin Mortgage, LLC, a Nevada limited liability company, which is our manager (the “manager” or “Vestin Mortgage”). On January 7, 2011, Vestin Mortgage converted from a corporation to a limited liability company.  The business of brokerage and placement of real estate loans have been performed by affiliated or non-affiliated mortgage brokers, including Advant Mortgage, LLC (“MVP Mortgage”), a licensed Nevada mortgage broker, which is indirectly wholly owned by Mr. Shustek.

Pursuant to a management agreement, our manager is responsible for managing our operations and implementing our business strategies on a day-to-day basis.  Consequently, our operating results are dependent to a significant extent upon our manager’s ability and performance in managing our operations and servicing our assets.

Vestin Mortgage is also the manager of Vestin Realty Mortgage II, Inc. (“VRM II”), as the successor by merger to Vestin Fund II, LLC (“Fund II”) and Vestin Fund III, LLC (“Fund III”).  VRM II has investment objectives similar to ours, and Fund III is in the process of an orderly liquidation of its assets.

During April 2009, we entered into an accounting services agreement with Strategix Solutions, a Nevada limited liability company, for the provision of accounting and financial reporting services.  Strategix Solutions also provides accounting and financial reporting services to VRM II and Fund III.  Our CFO and other members of our accounting staff are employees of Strategix Solutions.  Strategix Solutions is owned by our CFO, Tracee Gress.  As used herein, “management” means our manager, its executive officers and the individuals at Strategix Solutions who perform accounting and financial reporting services on our behalf.

-5-

In December 2013, we acquired a 40% interest in MVP Realty Advisors, LLC (“MVP Advisor”) the manager of MVP REIT, Inc., pursuant to a membership interest transfer agreement, dated as of December 19, 2013, between MVP Capital Partners, LLC (“MVP Capital”) and us.  Pursuant to the transfer agreement, we did not pay any up-front consideration for the acquired interest but will be responsible for our proportionate share of future expenses of MVP Advisor. In recognition of MVP Capital’s substantial investment in MVP Advisor for which MVP Capital received no up-front consideration, the transfer agreement further provides that once we and VRM II have been repaid in full for any capital contributions to MVP Advisor or for any expenses advanced on MVP Advisor’s behalf (“Capital Investment”), and once we and VRM II have received an annualized return on our Capital Investment of 7.5%, then MVP Capital will receive one-third of the net profits of MVP Advisor.  This acquisition was approved by the independent members of our Board of Directors.  MVP REIT is a SEC-registered, non-traded REIT that seeks to invest predominantly in parking facilities located throughout the United States and loans secured by real estate as its core assets.

NOTE B — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements of the Company have been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”).  In the opinion of management, all normal recurring adjustments considered necessary to give a fair presentation of operating results for the periods presented have been included.  The information included in this Form 10-Q should be read in conjunction with information included in the 2014 annual report filed on Form 10-K.

Management Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Impairment of Long Lived Assets

When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the asset for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists, due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net income.

Derivative Instruments

The Company may use derivative financial instruments to hedge all or a portion of the interest rate risk associated with its borrowings. Certain of the techniques used to hedge exposure to interest rate fluctuations may also be used to protect against declines in the market value of assets that result from general trends in debt markets. The principal objective of such agreements is to minimize the risks and/or costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions.

-6-

The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designed and qualifies for hedge accounting treatment. If the Company elects not to apply hedge accounting treatment, any changes in the fair value of these derivative instruments is recognized immediately in gains (losses) on derivative instruments in the consolidated statement of operations. If the derivative is designated and qualifies for hedge accounting treatment, the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) to the extent that it is effective. Any ineffective portion of a derivative’s change in fair value will be immediately recognized in earnings.

Investments in Real Estate and Fixed Assets

Investments in real estate and fixed assets are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which are primarily 3 to 40 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).

The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful lives of fixed assets or whether the remaining balance of fixed assets should be evaluated for possible impairment. The Company uses an estimate of the related undiscounted cash flows over the remaining life of the fixed assets in measuring their recoverability.

Cash and Cash Equivalents

Cash and cash equivalents include interest-bearing and non-interest-bearing bank deposits, money market accounts, short-term certificates of deposit with original maturities of three months or less, and short-term instruments with a liquidation provision of one month or less.

Revenue Recognition

Interest is recognized as revenue on performing loans when earned according to the terms of the loans, using the effective interest method.  We do not accrue interest income on loans once they are determined to be non-performing.  A loan is non-performing when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement or when the payment of interest is 90 days past due.  Cash receipts will be allocated to interest income, except when such payments are specifically designated by the terms of the loan as principal reduction.  Interest is fully allowed for on impaired loans and is recognized on a cash basis method.

All leases are accounted for as non-cancelable operating leases. We recognize rental revenue on a straight-line basis over the term of the lease. Rental income related to the leases is recognized on an accrual basis in accordance with the terms of the leases. Advanced receipts of rental income are deferred and classified as liabilities until earned.

-7-

Reclassifications

Certain amounts in the 2014 consolidated financial statements regarding investment in equity method investee currently held for sale have been reclassified to conform to the March 31, 2015 presentation.  Additionally, commencing April 1, 2014, our investment in VREO XXV, LLC is considered held for use.

Investments in Real Estate Loans

We may, from time to time, acquire or sell investments in real estate loans from or to our manager or other related parties pursuant to the terms of our Management Agreement without a premium.  The primary purpose is to either free up capital to provide liquidity for various reasons, such as loan diversification, or place excess capital in investments to maximize the use of our capital.  Selling or buying loans allows us to diversify our loan portfolio within these parameters.  Due to the short-term nature of the loans we make and the similarity of interest rates in loans we normally would invest in, the fair value of a loan typically approximates its carrying value.  Accordingly, discounts or premiums typically do not apply upon sales of loans and therefore, generally no gain or loss is recorded on these transactions, regardless of whether to a related or unrelated party.

Investments in real estate loans are secured by deeds of trust or mortgages.  Generally, our real estate loans require interest only payments with a balloon payment of the principal at maturity.  We have both the intent and ability to hold real estate loans until maturity and therefore, real estate loans are classified and accounted for as held for investment and are carried at amortized cost.  Loans sold to or purchased from affiliates are accounted for at the principal balance and no gain or loss is recognized by us or any affiliate.  Loan-to-value ratios are initially based on appraisals obtained at the time of loan origination and are updated when new appraisals are received or when management’s assessment of the value has changed, to reflect subsequent changes in value estimates.  Original appraisals are generally dated within 12 months of the date of loan origination and may be commissioned by the borrower.

The Company considers a loan to be impaired when, based upon current information and events, it believes it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  The Company’s impaired loans include troubled debt restructuring, and performing and non-performing loans in which full payment of principal or interest is not expected.  The Company calculates an allowance required for impaired loans based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or at the loan’s observable market price or the fair value of its collateral.

Loans that have been modified from their original terms are evaluated to determine if the loan meets the definition of a Troubled Debt Restructuring (“TDR”) as defined by Accounting Standards Codification (“ASC”) 310-40.  When the Company modifies the terms of an existing loan that is considered a TDR, it is considered performing as long as it is in compliance with the modified terms of the loan agreement.  If the modification calls for deferred interest, it is recorded as interest income as cash is collected.

Allowance for Loan Losses

We maintain an allowance for loan losses on our investments in real estate loans for estimated credit impairment.  Our manager’s estimate of losses is based on a number of factors including the types and dollar amounts of loans in the portfolio, adverse situations that may affect the borrower’s ability to repay, prevailing economic conditions and the underlying collateral securing the loan.  Additions to the allowance are provided through a charge to earnings and are based on an assessment of certain factors, which may indicate estimated losses on the loans.  Actual losses on loans are recorded as a charge-off or a reduction to the allowance for loan losses.  Generally, subsequent recoveries of amounts previously charged off are added back to the allowance and included as income.

-8-

Estimating allowances for loan losses requires significant judgment about the underlying collateral, including liquidation value, condition of the collateral, competency and cooperation of the related borrower and specific legal issues that affect loan collections or taking possession of the property.  As a commercial real estate lender willing to invest in loans to borrowers who may not meet the credit standards of other financial institutional lenders, the default rate on our loans could be higher than those generally experienced in the real estate lending industry.  We and our manager generally approve loans more quickly than other real estate lenders and, due to our expedited underwriting process; there is a risk that the credit inquiry we perform will not reveal all material facts pertaining to a borrower and the security.

Additional facts and circumstances may be discovered as we continue our efforts in the collection and foreclosure processes.  This additional information often causes management to reassess its estimates.  In recent years, we have revised estimates of our allowance for loan losses.  Circumstances that have and may continue to cause significant changes in our estimated allowance include, but are not limited to:

· Declines in real estate market conditions, which can cause a decrease in expected market value;

· Discovery of undisclosed liens for community improvement bonds, easements and delinquent property taxes;

· Lack of progress on real estate developments after we advance funds.  We customarily utilize disbursement agents to monitor the progress of real estate developments and approve loan advances.  After further inspection of the related property, progress on construction occasionally does not substantiate an increase in value to support the related loan advances;

· Unanticipated legal or business issues that may arise subsequent to loan origination or upon the sale of foreclosed property; and

· Appraisals, which are only opinions of value at the time of the appraisal, may not accurately reflect the value of the property.

Discontinued Operations

We have reclassified for all periods presented in the accompanying consolidated statements of operations, the amounts related to discontinued operations and real estate held for sale, in accordance with the applicable accounting criteria.  In addition, the assets and liabilities related to the discontinued operations are reported separately in the accompanying consolidated balance sheets as real estate held for sale, assets held for sale, and liabilities related to assets held for sale.

Real Estate Owned Held for Sale

Real estate held for sale (“REO”) includes real estate acquired through foreclosure and will be carried at the lower of the recorded amount, inclusive of any senior indebtedness, or the property's estimated fair value, less estimated costs to sell, with fair value based on appraisals and knowledge of local market conditions.  While pursuing foreclosure actions, we seek to identify potential purchasers of such property.  We seek to sell properties acquired through foreclosure as quickly as circumstances permit, taking into account current economic conditions.  The carrying values of REO are assessed on a regular basis from updated appraisals, comparable sales values or purchase offers.

-9-

Management classifies REO when the following criteria are met:

· Management commits to a plan to sell the properties;

· The property is available for immediate sale in its present condition subject only to terms that are usual and customary;

· An active program to locate a buyer and other actions required to complete a sale have been initiated;

· The sale of the property is probable;

· The property is being actively marketed for sale at a reasonable price; and

· Withdrawal or significant modification of the sale is not likely.

Classification of Operating Results from Real Estate Held for Sale

Generally, operating results and cash flows from long-lived assets held for sale are to be classified as discontinued operations as a separately stated component of net income.  Our operations related to REO are separately identified in the accompanying consolidated statements of operations.

Secured Borrowings

Secured borrowings provide an additional source of capital for our lending activity.  Secured borrowings allow us to increase the diversification of our loan portfolio and to invest in loans that we might not otherwise invest in.  We do not receive any fees for entering into secured borrowing arrangements; however, we may receive revenue for any differential of the interest spread, if applicable.  Loans in which unaffiliated investors have participated through inter-creditor agreements (“Inter-creditor Agreements”) are accounted for as secured borrowings.

The Inter-creditor Agreements provide us additional funding sources for real estate loans whereby an unaffiliated investor (the “Investor”) may participate on a non-pari-passu basis in certain real estate loans with us and/or VRM II (collectively, the “Lead Lenders”).  In the event of borrower non-performance, the Inter-creditor Agreements generally provide that the Lead Lenders must repay the Investor’s loan amount either by (i) continuing to remit to the Investor the interest due on the participated loan amount; (ii) substituting an alternative loan acceptable to the Investor; or (iii) repurchasing the participation from the Investor for the outstanding balance plus accrued interest.

Additionally, an Investor may participate in certain loans with the Lead Lenders through Participation Agreements.  In the event of borrower non-performance, the Participation Agreement may allow the Investor to be repaid up to the amount of the Investor’s investment prior to the Lead Lender being repaid.  Real estate loan financing under the Participation Agreements are also accounted for as a secured borrowing.  We do not receive any revenues for entering into secured borrowing arrangements.

Investment in Marketable Securities and Investment in Marketable Securities – Related Party

Investment in marketable securities and investment in marketable securities– related party consists of stock in VRM II and MVP REIT.  The securities are stated at fair value as determined by the closing market price as of March 31, 2015 and December 31, 2014.  All securities are classified as available-for-sale.

We are required to evaluate our available-for-sale investment for other-than-temporary impairment charges.  We will determine when an investment is considered impaired (i.e., decline in fair value below its amortized cost), and evaluate whether the impairment is other-than-temporary (i.e., investment value will not be recovered over its remaining life).  If the impairment is considered other-than-temporary, we will recognize an impairment loss equal to the difference between the investment’s basis and its fair value.

-10-

According to the SEC Staff Accounting Bulletin, Topic 5: Miscellaneous Accounting, M - Other Than Temporary Impairment of Certain Investments in Debt and Equity Securities, there are numerous factors to be considered in such an evaluation and their relative significance will vary from case to case.  The following are a few examples of the factors that, individually or in combination, indicate that a decline is other than temporary and that a write-down of the carrying value is required:

· The length of the time and the extent to which the market value has been less than cost;

· The financial condition and near-term prospects of the issuer, including any specific events which may influence the operations of the issuer such as changes in technology that may impair the earnings potential of the investment or the discontinuance of a segment of the business that may affect the future earnings potential; or

· The intent and ability of the holder to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value.

Basic and Diluted Earnings Per Common Share

Basic earnings per share (“EPS”) is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding.  Diluted EPS is similar to basic EPS except that the weighted average number of common shares outstanding is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been exercised.  We had no outstanding common share equivalents during the periods ended March 31, 2015 and December 31, 2014.

Common Stock Dividends

During June 2008, our Board of Directors decided to suspend the payment of dividends.  Our Board of Directors will closely monitor our operating results in order to determine when dividends should be reinstated; however, we do not expect our Board or Directors to reinstate dividends in the foreseeable future.

Treasury Stock

On February 21, 2008, our Board of Directors authorized the repurchase of up to $5 million worth of our common stock.  Depending upon market conditions, shares may be repurchased from time to time at prevailing market prices through open market or privately negotiated transactions.  We are not obligated to purchase any shares.  Subject to applicable securities laws, including SEC Rule 10b-18, repurchases may be made at such times and in such amounts, as our management deems appropriate.  The repurchases will be funded from our available cash.  Under the Maryland General Corporation Law, shares of its own stock acquired by a corporation constitute authorized but unissued shares.

Segments

We are currently authorized to operate two reportable segments, investments in real estate loans and investments in real property.  As of March 31, 2015, the Company operates both segments.

Our objective is to invest approximately 97% of our assets in real estate loans and real estate investments, while maintaining approximately 3% as a working capital cash reserve.

Advertising Costs

Advertising costs incurred in the normal course of operations are expensed as incurred.  The Company had no advertising expense for the three months ended March 31, 2015.

-11-

Principles of Consolidation

Our consolidated financial statements include the accounts of VRM I and VREO XXV, LLC, in which we have a controlling interest.  All significant intercompany balances and transactions have been eliminated in consolidation.

Business Combinations

In December 2007, the Financial Accounting Standards Board (FASB) revised the authoritative guidance for business combinations, establishing principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired (including goodwill), the liabilities assumed, and any noncontrolling interest in the acquiree. Subsequently, on April 1, 2009, the FASB amended and clarified certain aspects of its authoritative guidance on initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. We apply the FASB authoritative guidance to all business combinations for which the acquisition date is on or after January 1, 2009, and to certain future income tax effects related to our prior business combinations, should they arise.

Non-controlling Interests

The FASB issued authoritative guidance for non-controlling interests in December 2007, which establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. The guidance clarifies that a non-controlling interest in a subsidiary, which is sometimes referred to as an unconsolidated investment, is an ownership interest in the consolidated entity that should be reported as a component of equity in the consolidated financial statements. Among other requirements, the guidance requires consolidated net income to be reported at amounts attributable to both the parent and the non-controlling interest. It also requires disclosure, on the face of the consolidated income statement, of the amounts of consolidated net income attributable to the parent and to the non-controlling interest.

Income Taxes

The Company accounts for its income taxes under the assets and liabilities method, which requires recognition of deferred tax assets and liabilities for future tax consequences of events that have been included in the financial statements.  Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.  The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized.  In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations.  A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition.  In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, they would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax positions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods.  Also included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

-12-

NOTE C — FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK

Financial instruments consist of cash, interest and other receivables, notes receivable, accounts payable and accrued liabilities, due to/from related parties and notes payable. The carrying values of these instruments approximate their fair values due to their short-term nature. Marketable securities and marketable securities – related party and investment in real estate loans are further described in Note J – Fair Value.

Financial instruments with concentration of credit and market risk include cash, interest and other receivables, marketable securities and marketable securities- related party, notes receivable, accounts payable and accrued liabilities, due to/from related parties, notes payable, and loans secured by deeds of trust.

We maintain cash deposit accounts and certificates of deposit which, at times, may exceed federally-insured limits.  To date, we have not experienced any losses.  As of March 31, 2015 and 2014 we had approximately $3.9 and $7.8 million, respectively, in funds in excess of the federally-insured limits.

As of March 31, 2015, 100% of our loans were in Nevada, compared to 29% and 71% of our loans in California, and Nevada at December 31, 2014, respectively.  As a result of this geographical concentration of our real estate loans, the continuation of depressed conditions in certain of the local real estate markets in these states has had a material adverse effect on us.

As of March 31, 2015 and December 31, 2014, all of our loans were loans in which we participated with other lenders, most of whom are our affiliates.

As of March 31, 2015, the aggregate amount of loans to our three largest borrowers represented approximately 96% of our total investment in real estate loans.  These real estate loans consisted of two commercial loans secured by property located in Nevada and one construction loan secured by property located in Nevada.  All are first lien positions with interest rates between 7.00% and 8.00%, and an aggregate outstanding balance of approximately $3 million.  As of March 31, 2015, all three of our largest loans were considered performing.

The success of a borrower’s ability to repay its real estate loan obligation in a large lump-sum payment may be dependent upon the borrower’s ability to refinance the obligation or otherwise raise a substantial amount of cash.  With the weakened economy, credit continues to be difficult to obtain and as such, many of our borrowers who develop and sell commercial real estate projects have been unable to complete their projects, obtain takeout financing or have been otherwise adversely impacted.  In addition, an increase in interest rates over the loan rate applicable at origination of the loan may have an adverse effect on our borrower’s ability to refinance.

Common Guarantors

As of March 31, 2015 and December 31, 2014, there were two loans, totaling approximately $1.1 million, representing approximately 35.7% and 15.7%, respectively, of our portfolio’s total value, which had a common guarantor.

For additional information regarding the above loans, see Note D – Investments In Real Estate Loans.

NOTE D — INVESTMENTS IN REAL ESTATE LOANS

As of March 31, 2015 and December 31, 2014, all of our loans provided for interest only payments with a “balloon” payment of principal payable and any accrued interest payable in full at the end of the term.

In addition, we may invest in real estate loans that require borrowers to maintain interest reserves funded from the principal amount of the loan for a period of time.  At March 31, 2015 and December 31, 2014, we had no investment in real estate loans that had interest reserves.

-13-

Loan Portfolio

As of March 31, 2015, we had five available real estate loan products consisting of commercial, construction, acquisition and development, land and residential.  The effective interest rates on all product categories range from 7.0% to 8.0% which includes performing loans that are being fully or partially accrued and will be payable at maturity.  Revenue by product will fluctuate based upon relative balances during the period.

Investments in real estate loans as of March 31, 2015, were as follows:

Loan Type	Number of Loans		Balance *		Weighted Average Interest Rate			Portfolio Percentage			Current Weighted Average Loan-To-Value, Net of Allowance for Loan Losses
Commercial		3	$	2,937,000		7.38	%		94.74	%		49.41	%
Construction		1		163,000		8.00	%		5.26	%		0.29	%
Total		4	$	3,100,000		7.41	%		100.00	%		47.09	%

Investments in real estate loans as of December 31, 2014 were as follows:

Loan Type	Number of Loans		Balance *		Weighted Average Interest Rate			Portfolio Percentage			Current Weighted Average Loan-To-Value, Net of Allowance for Loan Losses
Commercial		5	$	5,043,000		7.60	%		71.40	%		51.35	%
Land		1		2,020,000		9.00	%		28.60	%		67.63	%
Total		6	$	7,063,000		8.00	%		100.00	%		56.00	%

* Please see Balance Sheet Reconciliation below.

The “Weighted Average Interest Rate” as shown above is based on the contractual terms of the loans for the entire portfolio including non-performing loans. The weighted average interest rate on performing loans only, as of March 31, 2015 and December 31, 2014, was 7.41% and 8.00%, respectively.  Please see “Asset Quality and Loan Reserves” below for further information regarding performing and non-performing loans.

Loan-to-value ratios are generally based on the most recent appraisals and may not reflect subsequent changes in value and include allowances for loan losses.  Recognition of allowance for loan losses will result in a maximum loan-to-value ratio of 100% per loan.

The following is a schedule of priority of real estate loans as of March 31, 2015 and December 31, 2014.

Loan Type	Number of Loans		March 31, 2015 Balance *		Portfolio Percentage			Number of Loans		December 31, 2014 Balance *		Portfolio Percentage
First deeds of trust		4	$	3,100,000		100.00	%		6	$	7,063,000		100.00	%
Second deeds of trust		--		--		--			--		--		--
Total		4	$	3,100,000		100.00	%		6	$	7,063,000		100.00	%

* Please see Balance Sheet Reconciliation below.

-14-

The following is a schedule of contractual maturities of investments in real estate loans as of March 31, 2015:

Non-performing	$	--
January 2015 – March 2015		--
April 2015 – June 2015		2,937,000
Thereafter		163,000
Total	$	3,100,000

The following is a schedule by geographic location of investments in real estate loans as of March 31, 2015 and December 31, 2014:

	March 31, 2015 Balance *		Portfolio Percentage			December 31, 2014 Balance *		Portfolio Percentage
California	$	--		--		$	2,020,000		28.60	%
Nevada		3,100,000		100	%		5,043,000		71.40	%
Total	$	3,100,000		100.00	%	$	7,063,000		100.00	%

* Please see Balance Sheet Reconciliation below.

Balance Sheet Reconciliation

The following table reconciles the balance of the loan portfolio to the amount shown on the accompanying Consolidated Balance Sheets.

	March 31, 2015		December 31, 2014
Balance per loan portfolio	$	3,100,000	$	7,063,000
Less:
Allowance for loan losses		--		-
Balance per consolidated balance sheets	$	3,100,000	$	7,063,000

Non-Performing Loans

As of March 31, 2015 and December 31, 2014, we had no loans considered non-performing (i.e., based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement or when the payment of interest is 90 days past due).

Asset Quality and Loan Reserves

Losses may occur from investing in real estate loans.  The amount of losses will vary as the loan portfolio is affected by changing economic conditions and the financial condition of borrowers.

The conclusion that a real estate loan is uncollectible or that collectability is doubtful is a matter of judgment.  On a quarterly basis, our manager evaluates our real estate loan portfolio for impairment.  The fact that a loan is temporarily past due does not necessarily mean that the loan is non-performing.  Rather, all relevant circumstances are considered by our manager to determine impairment and the need for specific reserves.  Such evaluation, which includes a review of all loans on which full collectability may not be reasonably assured, considers among other matters:

-15-

· Prevailing economic conditions;

· Historical experience;

· The nature and volume of the loan portfolio;

· The borrowers’ financial condition and adverse situations that may affect the borrowers’ ability to pay;

· Evaluation of industry trends; and

· Estimated net realizable value of any underlying collateral in relation to the loan amount.

Based upon this evaluation, a determination is made as to whether the allowance for loan losses is adequate to cover any potential losses on an individual loan basis; we do not have a general allowance for loan losses.  Additions to the allowance for loan losses are made by charges to the provision for loan loss.

As of March 31, 2015 and December 31, 2014, our ratio of total allowance for loan losses to total loans with an allowance for loan loss is 0%.

Our manager evaluated our loans and, based on current estimates with respect to the value of the underlying collateral, believes that such collateral is sufficient to protect us against further losses of principal.  However, such estimates could change or the value of the underlying real estate could decline.  Our manager will continue to evaluate our loans in order to determine if any other allowance for loan losses should be recorded.

Specific Reserve Allowances

As of March 31, 2015 and December 31, 2014, we had no specific reserve allowance.

Extensions

As of March 31, 2015 and December 31, 2014, our manager had granted extensions on one and three outstanding loans, totaling approximately $4.7 and $10.9 million, respectively, of which our portion was approximately $1.9 and $3.5 million, respectively, pursuant to the terms of the original loan agreements, which permit extensions by mutual consent, or as part of a TDR.  Such extensions are generally provided on loans where the original term was 12 months or less and where a borrower requires additional time to complete a construction project or negotiate take-out financing.  Our manager generally grants extensions when a borrower is in compliance with the material terms of the loan, including, but not limited to the borrower’s obligation to make interest payments on the loan.  In addition, if circumstances warrant, our manager may extend a loan that is in default as part of a work out plan to collect interest and/or principal.

NOTE E — INVESTMENT IN EQUITY METHOD INVESTEE AND NOTE RECEIVABLE FROM MVP REALTY ADVISORS

MVP Realty Advisors

As of March 31, 2015 we have made loans of approximately $2,125,000 to MVP Advisor, the manager of MVP REIT.  We believe MVP Advisor has the opportunity to generate fees for the services it will render to MVP REIT.  However, MVP REIT is currently seeking to raise funds through its initial public offering and the fees paid to date to MVP Advisor have not been significant.  We may not realize interest income from the loan to MVP Advisor until it is able to generate sufficient fees to service the interest on our loan.  We have not forgiven the balance due from MVP Advisor; however the decision by MVP Advisor to forgive certain amounts creates uncertainty as to when we will be repaid the amounts loaned to MVP Advisor.

-16-

Based on this uncertainty, we have determined to fully impair the balance of this investment and note receivable.  During the three months ended March 31, 2015, we impaired approximately $700,000 of the amounts loaned to MVP Advisor.  During the three months ended March 31, 2014, we impaired approximately $411,000 of the amounts loaned to MVP Advisor.

NOTE F — INVESTMENT IN MARKETABLE SECURITIES – RELATED PARTY

In February 2014, VRM II effected a 1 for 4 reverse split of its common stock. All share and per share information in the consolidated financial statements and accompanying notes have been adjusted to retroactively reflect the 1 for 4 reverse stock split.

As of March 31, 2015 and December 31, 2014, we owned 134,270 shares of VRM II’s common stock, representing approximately 5.20% of the total outstanding shares.  The closing price of VRM II’s common stock on March 31, 2015, was $3.47 per share.

During the three months ended March 31, 2015, the trading price for VRM II’s common stock ranged from $2.76 to $4.82 per share.  At December 31, 2014, our manager evaluated the near-term prospects of VRM II in relation to the severity and duration of the unrealized loss.  Based on that evaluation and current market conditions, we have determined there was an other-than-temporary impairment on our investment in VRM II as of December 31, 2014.  We realized a loss on our investment to its fair value of $4.04 per share as of December 31, 2014, totaling approximately $0.5 million and recognizing an impairment of approximately $0.1 million.

As of March 31, 2015 and December 31, 2014, we owned 67,532 and 66,379 shares of common stock, respectively, of MVP REIT.  The shares are recorded on our balance sheet valued at $594,000 and $584,000, respectively.  Such amount was determined based upon the offer price for such shares in MVP REIT’s pending public offering. During the three months ended March 31, 2015 we received 1,153 shares through MVP REIT’s distribution reinvestment program which resulted in dividend income of approximately $10,000.

NOTE G — REAL ESTATE OWNED HELD FOR SALE

At March 31, 2015 and December 31, 2014 we held one property with no total carrying value, which was acquired through foreclosure and recorded as investment in REO.  Our REO are accounted for at the lower of cost or fair value less costs to sell with fair value based on appraisals and knowledge of local market conditions.  We seek to sell properties acquired through foreclosure as quickly as circumstances permit taking into account current economic conditions.

As of March 31, 2015 our REO property consisted of raw land on which there were no operations.

NOTE H — RELATED PARTY TRANSACTIONS

From time to time, we may acquire or sell investments in real estate loans from/to our manager or other related parties.  Pursuant to the terms of our Management Agreement, such acquisitions and sales are made without any mark up or mark down.  No gain or loss is recorded on these transactions, as it is not our intent to make a profit on the purchase or sale of such investments.  The purpose is generally to diversify our portfolio by syndicating loans and real estate investments, thereby providing us with additional capital to make additional loans and investments in real estate.

Transactions with the Manager

Our manager is entitled to receive from us an annual management fee of up to 0.25% of our aggregate capital contributions received by us and Fund I from the sale of shares or membership units, paid monthly.  The amount of management fees paid to our manager for the three months ended March 31, 2015 and 2014 was $69,000 for each period.

-17-

As of March 31, 2015 and December 31, 2014, our manager owned 25,000 of our common shares, representing approximately 1.8% of our total outstanding common stock.  For the three months ended March 31, 2015 and 2014, we declared no dividends payable to our manager.

Accounting services

During the three months ended March 31, 2015 and 2014, Accounting Solutions, an entity owned by Ms. Gress, the Company’s Chief Financial Officer, received fees of approximately $15,000 and $10,000, respectively, for accounting services.

During the three months ended March 31, 2015 and 2014, Strategix Solutions, an entity owned by Ms. Gress, the Company’s Chief Financial Officer, received fees of approximately $27,000 and $19,500, respectively, for accounting services.

Transactions with Other Related Parties

As of March 31, 2015 and December 31, 2014, we owned 134,270 common shares of VRM II, representing approximately 5.20% of their total outstanding common stock.  For the three months ended March 31, 2015 and 2014 we recognized no dividend income from VRM II.

As of March 31, 2015 and December 31, 2014, VRM II owned 134,545 of our common shares, approximately 9.74% of our total outstanding common stock.  For the three months ended March 31, 2015 and 2014, we declared no dividends payable to VRM II.

As of March 31, 2015 and December 31, 2014 we owned 67,532 and 66,379, respectively, of MVP REIT common stock. During the three months ended March 31, 2015 we received 1,153 shares through MVP REIT’s distribution reinvestment program.  For the three months ended March 31, 2015 and 2014 we recognized $10,000 and $9,000, respectively, in dividend income.

As of March 31, 2015 and December 31, 2014, we owned a 40% interest in MVP Advisor, the advisor of MVP REIT and MVP REIT II, Inc.

We have made loans of approximately $2,125,000 to MVP Advisor, the manager of MVP REIT.  We believe MVP Advisor has the opportunity to generate fees for the services it will render to MVP REIT.  However, MVP REIT is currently seeking to raise funds through its initial public offering and the fees paid to date to MVP Advisor have not been significant.  We may not realize interest income from the loan to MVP Advisor until it is able to generate sufficient fees to service the interest on our loan.  We have not forgiven the balance due from MVP Advisor; however the decision by MVP Advisor to forgive certain amounts creates uncertainty as to when we will be repaid the amounts loaned to MVP Advisor. Based on this uncertainty, we have determined to fully impair the balance of this investment and note receivable.  During the three months ended March 31, 2015 and 2014, we impaired approximately $700,000 and $411,000 of the amounts loaned MVP Advisor.

As of March 31, 2015 and December 31, 2014 we owed VRM II approximately $26,000 and $30,000, respectively.

During the three months ended March 31, 2015, we sold approximately $0.2 million in real estate loans to VRM II.

NOTE I — NOTES PAYABLE

During July 2014, VREO XXV issued a promissory note to Mohave State Bank for $2.3 million.  This note bears an annual interest rate of 5.0%, is secured by property and is payable in monthly principal and interest payments of approximately $13,000, with a lump sum payment of approximately $2.0 million due at maturity in July of 2019.

-18-

As of March 31, 2015, future principal payments on the notes payable are as follows:

2015	$	36,000
2016		50,000
2017		53,000
2018		56,000
2019		2,036,000
Thereafter		--
Total	$	2,231,000

NOTE J — FAIR VALUE

As of March 31, 2015, financial assets and liabilities utilizing Level 1 inputs included investment in marketable securities and marketable securities - related party.  We had no assets or liabilities utilizing Level 2 inputs, and assets and liabilities utilizing Level 3 inputs included investments in real estate loans and investments in equity method investees held for sale.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment.  Accordingly, our degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.  In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.  In such cases, an asset or liability will be classified in its entirety based on the lowest level of input that is significant to the measurement of fair value.

Fair value is a market-based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity-specific measure.  Therefore, even when market assumptions are not readily available, our own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date.  We use prices and inputs that are current as of the measurement date, including during periods of market dislocation, such as the recent illiquidity in the auction rate securities market.  In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments.  This condition may cause our financial instruments to be reclassified from Level 1 to Level 2 or Level 3 and/or vice versa.

Our valuation techniques will be consistent with at least one of the three possible approaches: the market approach, income approach and/or cost approach.  Our Level 1 inputs are based on the market approach and consist primarily of quoted prices for identical items on active securities exchanges.  Our Level 2 inputs are primarily based on the market approach of quoted prices in active markets or current transactions in inactive markets for the same or similar collateral that do not require significant adjustment based on unobservable inputs.  Our Level 3 inputs are primarily based on the income and cost approaches, specifically, discounted cash flow analyses, which utilize significant inputs based on our estimates and assumptions.

The following tables present the valuation of our financial assets as of March 31, 2015 and December 31, 2014, measured at fair value on a recurring basis by input levels:

	Fair Value Measurements at Reporting Date Using
	Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at 03/31/15		Carrying Value on Balance Sheet at 03/31/15
Assets
Investment in equity method investee held for sale	$	--	$	--	$	6,946,000	$	6,946,000	$	6,946,000
Investment in marketable securities - related party	$	1,059,000	$	--	$	--	$	1,059,000	$	1,059,000
Investment in real estate loans	$	--	$	--	$	3,099,000	$	3,099,000	$	3,100,000

-19-

	Fair Value Measurements at Reporting Date Using
	Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance at 12/31/14		Carrying Value on Balance Sheet at 12/31/14
Assets
Investment in equity method investee – held for sale	$	--	$	--	$	6,932,000	$	6,932,000	$	6,932,000
Investment in marketable securities - related party	$	1,126,000	$	--	$	--	$	1,126,000	$	1,126,000
Investment in real estate loans	$	--	$	--	$	7,063,000	$	7,063,000	$	7,063,000

The following table presents the changes in our financial assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from January 1, 2015 to March 31, 2015.  There were no liabilities measured at fair value on a recurring basis using significant unobservable inputs as of January 1, 2015 to March 31, 2015.

	Investment in real estate loans
Balance on January 1, 2015	$	7,063,000
Purchase and additions of assets
New mortgage loans and mortgage loans bought		1,263,000
Sales, pay downs and reduction of assets
Collections of principal and sales of investment in real estate loans		(4,593,000	)
Sale of assets to affiliate and third parties		(633,000	)
Temporary change in estimated fair value based on future cash flows		(1,000	)
Balance on  March 31, 2015, net of temporary valuation adjustment	$	3,099,000

	Investment in equity method investee – held for sale
Balance on January 1, 2015	$	6,932,000
Distributions from investment in equity method investee held for sale		(82,000	)
Income from investment in equity method investee held for sale		96,000
Balance on March 31, 2015, net of temporary valuation adjustment	$	6,946,000

-20-

The following table presents the changes in our financial assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from January 1, 2014 to December 31, 2014:

	Investment in real estate loans
Balance on January 1, 2014	$	3,353,000
Purchase and additions of assets
New mortgage loans and mortgage loans bought		4,106,000
Purchase from affiliate		2,823,000
Purchase from third party		600,000
Sales, pay downs and reduction of assets
Collections of principal and sales of investment in real estate loans		(2,838,000	)
Sale of assets to third parties		(992,000	)
Temporary change in estimated fair value based on future cash flows		11,000
Balance on  December 31, 2014, net of temporary valuation adjustment	$	7,063,000

	Investment in equity method investee
Balance on January 1, 2014	$	--
Investment in equity method investee		6,932,000
Balance on December 31, 2014, net of temporary valuation adjustment	$	6,932,000

	Investment in equity method investee – held for sale
Balance on January 1, 2014	$	4,515,000
Sale of investment in equity method investee held for sale		(4,515,000	)
Balance on December 31, 2014, net of temporary valuation adjustment	$	--

NOTE K — SEGMENT INFORMATION

Company management reviews financial and operating performance in the following two separate operating segments:  (1) investment in real estate loans and (2) investments in real property.  Selling, general and administrative expenses, primarily consisting of compensation of employees, seminar expense, professional fees and overhead costs not directly related to a specific operating segment, are reflected in the table below as corporate activities.

-21-

The following are certain financial data for the Company’s operating segments for the periods:

	For three months
	March 31,
	2015		2014
Revenues
Investment in real estate loans	$	133,000	$	81,000
Rental revenue		183,000		174,000
Total revenues		316,000		255,000
Operating expenses
Investment in real estate loans	$	69,000	$	69,000
Investment in real property		78,000		79,000
Corporate activities		939,000		616,000
Total expenses	$	1,086,000	$	764,000

Total Assets	March 31, 2015		December 31, 2014
Investment in real estate loans	$	3,104,000	$	7,069,000
Investment in real property		11,068,000		11,084,000
Corporate assets		5,763,000		2,643,000
Total assets	$	19,935,000	$	20,796,000

NOTE L — RECENT ACCOUNTING PRONOUNCEMENTS

No new accounting pronouncements have been defined that would materially impact our financial statements.

NOTE M — LEGAL MATTERS INVOLVING THE MANAGER

The United States Securities and Exchange Commission (the “Commission”), conducted an investigation of certain matters related to us, our manager, Vestin Capital, VRM II, and Fund III.  We fully cooperated during the course of the investigation.  On September 27, 2006, the investigation was resolved through the entry of an Administrative Order by the Commission (the “Order”).  Our manager, Vestin Mortgage and its Chief Executive Officer, Michael Shustek, as well as Vestin Capital (collectively, the “Respondents”), consented to the entry of the Order without admitting or denying the findings therein.

In the Order, the Commission found that the Respondents violated Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 through the use of certain slide presentations in connection with the sale of units in Fund III and in our predecessor, Vestin Fund II, LLC.  The Respondents consented to the entry of a cease and desist order, the payment by Mr. Shustek of a fine of $100,000 and Mr. Shustek’s suspension from association with any broker or dealer for a period of six months, which expired in March 2007.  In addition, the Respondents agreed to implement certain undertakings with respect to future sales of securities.  We are not a party to the Order.

Other than the matters described in Note N – Legal Matters Involving The Company below, our manager believes that it is not a party to any pending legal or arbitration proceedings that would have a material adverse effect on our manager’s financial condition or results of operations or cash flows, although it is possible that the outcome of any such proceedings could have a material impact on the manager’s net income in any particular period.

-22-

NOTE N — LEGAL MATTERS INVOLVING THE COMPANY

On February 7, 2012, we, VRM II and Fund III entered into a Deed in Lieu Agreement with a borrower in lieu of the foreclosure of our subordinated secured loan which had matured on December 31, 2011, with a principal balance, net of allowance for loan loss, of approximately $9.9 million, of which our portion was approximately $0.1 million.  Pursuant to the Deed in Lieu Agreement, our subsidiary 1701 Commerce, LLC (“1701 Commerce”) received a deed to the secured property operated as the Sheraton Hotel and Spa Fort Worth, Texas (the “Hotel”).  On March 26, 2012, 1701 Commerce filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Northern District of Texas, Ft. Worth Division, to seek relief from a pending foreclosure of the Hotel by the senior mortgage lien holder and to preserve and protect 1701 Commerce’s equity and the interests of other Hotel creditors.  Due to the uncertainty and disputes involving the Hotel, we recorded this investment as Other Real Estate Owned on our balance sheet until August 23, 2012. The Hotel was sold on July 17, 2013 for the sum of $49,300,000.  The net proceeds of the sale and the cash on hand as of the date of the sale were used to pay all 1701 Commerce creditors 100% of their claim plus interest, with the balance distributed to us and our two partners, VRM II and Fund III. On February 4, 2015, the court entered its final decree closing the case.

We hold an interest of approximately 8%, VRM II holds an interest of approximately 90% and Fund III holds an interest of approximately 2% in 1701 Commerce.

In addition to the matters described above, we are involved in a number of other legal proceedings concerning matters arising in the ordinary course of our business activities.  We believe we have meritorious defenses to each of these actions and intend to defend them vigorously.  Other than the matters described above, we believe that we are not a party to any pending legal or arbitration proceedings that would have a material adverse effect on our financial condition or results of operations or cash flows, although it is possible that the outcome of any such proceedings could have a material impact on our operations in any particular period.

NOTE O — SUBSEQUENT EVENTS

The following subsequent events have been evaluated through the date of this filing with the SEC.

-23-

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a financial review and analysis of our financial condition and results of operations for the three months ended March 31, 2015 and 2014.  This discussion should be read in conjunction with our consolidated financial statements and accompanying notes and other detailed information regarding us appearing elsewhere in this report on Form 10-Q and our annual report on Form 10-K, Part II, Item 7 Management’s Discussion and Analysis of Financial Conditions and Results of Operations for the year ended December 31, 2014.

FORWARD-LOOKING STATEMENTS

Certain statements in this report, including, without limitation, matters discussed under this Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations, should be read in conjunction with the consolidated financial statements, related notes, and other detailed information included elsewhere in this report on Form 10-Q.  We are including this cautionary statement to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Statements that are not historical fact are forward-looking statements.  Certain of these forward-looking statements can be identified by the use of words such as “believes,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “estimates,” “assumes,” “may,” “should,” “will,” or other similar expressions.  Such forward-looking statements involve known and unknown risks, uncertainties and other important factors, which could cause actual results, performance or achievements to differ materially from future results, performance or achievements.  These forward-looking statements are based on our current beliefs, intentions and expectations.  These statements are not guarantees or indicative of future performance.  Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements include, but are not limited to, those factors, risks and uncertainties of this Quarterly Report on Form 10-Q, our Annual Report on Form 10-K and in our other securities filings with the Securities and Exchange Commission (“SEC”).  Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and involve inherent risks and uncertainties.  Our estimates of the value of collateral securing our loans may change, or the value of the underlying property could decline subsequent to the date of our evaluation.  As a result, such estimates are not guarantees of the future value of the collateral.  The forward-looking statements contained in this report are made only as of the date hereof.  We undertake no obligation to update or revise information contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

RESULTS OF OPERATIONS

OVERVIEW

We were formed in May 2006 and our primary business objective at that time was to generate income while preserving principal by investing in real estate loans. At our annual meeting held on December 15, 2011, a majority of the shareholders voted to amend our Bylaws to expand our investment policy to include investments in and acquisition, management and sale of real property or the acquisition of entities involved in the ownership or management of real property.  A majority of the shareholders also voted to amend our charter to change the terms of our existence from its expiration date of December 31, 2019 to perpetual existence. As a result we have begun to acquire, manage, renovate, reposition, sell or otherwise invest in real property or acquire entities involved in the ownership or management of real property. We operated as a REIT through December 31, 2011.  On March 28, 2012, we announced that we have terminated our election to be treated as a REIT under the Code, effective for the tax year ended December 31, 2012.

-24-

We believe there is a significant market opportunity to make real estate loans to owners and developers of real property whose financing needs are not met by other real estate lenders.  The loan underwriting standards utilized by our manager and the mortgage brokers we utilize are less strict than those used by many institutional real estate lenders.  In addition, one of our competitive advantages is our ability to approve loan applications more quickly than many institutional lenders.  As a result, in certain cases, we may make real estate loans that are riskier than real estate loans made by many institutional lenders such as commercial banks.  However, in return, we seek a higher interest rate and our manager takes steps to mitigate the lending risks such as imposing a lower loan-to-value ratio.  While we may assume more risk than many institutional real estate lenders, in return, we seek to generate higher yields from our real estate loans.

We will seek to acquire properties that present strong characteristics that we believe are essential for a successful real estate investment. These investments could include a variety of asset types in the United States such as office, parking facilities, retail, industrial, hotels, multi-family, etc., leisure and recreational facilities, etc.  We will seek to reposition properties that we acquire through strategic renovation and, where appropriate, re-tenanting such properties.  Repositioning of properties may be accomplished by (1) stabilizing occupancy; (2) upgrading and renovating existing structures; and (3) investing significant efforts in recruiting tenants whose goods and services meet the needs of the surrounding neighborhood.  We currently do not intend to engage in significant development or redevelopment of properties as the costs of development and redevelopment may exceed the cost of properties that we acquire.

During the three months ended March 31, 2015, we funded one loan totaling approximately $1.3 million.  During the three months ended March 31, 2014, we funded two loans totaling approximately $2.3 million.  As of March 31, 2015, our loan-to-value ratio was 47.09%, net of allowances for loan losses, on a weighted average basis generally using updated appraisals.  Any increase in loan defaults accompanied by declines in real estate values, as evidenced by updated appraisals generally prepared on an “as-is-basis,” will have a material adverse effect on our financial condition and operating results.

As of March 31, 2015, we have made loans of approximately $2,125,000 to our 40% owned subsidiary, MVP Advisor, the manager of MVP REIT.  We acquired our ownership interest in MVP Advisor in December 2013 from the sponsor of MVP REIT, MVP Capital. MVP REIT is a SEC-registered, non-traded REIT that seeks to invest predominantly in parking facilities located throughout the United States and loans secured by real estate as its core assets. We believe MVP Advisor has the opportunity to generate fees for the services it will render to MVP REIT.  However, MVP REIT is currently seeking to raise funds through its publicly registered offering and the fees paid to date to MVP Advisor have not been significant.  We may not realize interest income from the loan to MVP Advisor or any return on our investment in MVP Advisor until it is able to generate sufficient fees to service the interest on our loan and generate a return on our investment.  We have not forgiven the balance due from MVP Advisor; however the decision by MVP Advisor to forgive certain amounts due from MVP REIT creates uncertainty as to when we will be repaid the amounts loaned to MVP Advisor. Based on this uncertainty, we have determined to fully impair the balance of this investment and note receivable.  During the three months ended March 31, 2015, we impaired approximately $700,000 of the amounts loaned MVP Advisor.  During the three months ended March 31, 2014, we impaired approximately $411,000 of the amounts loaned to MVP Advisor.

On January 14, 2014, we, VRM II and MVP REIT sold MVP PF Baltimore 2013, LLC to a third party for $1,550,000 which resulted in a nominal loss.  As of March 31, 2014, we had invested approximately $4.5 million in real property, which represented a 44% ownership interest in five parking facilities, subject to triple net leases. On April 30, 2014, following MVP REIT’s exercise of the Purchase Right and approval by our Board of Directors along with the Board of Directors for VRM II and MVP REIT, MVP REIT acquired our and VRM II’s interest in the five parking facilities and VRM II’s interest in a storage facility, net of the assumed debt secured by the real estate.  In exchange, we and VRM II received MVP REIT’s interest in four office properties, net of the assumed debt secured by the real estate. The difference between the net amount of the assets exchanged was paid in cash. As a result of this transaction, MVP REIT holds 100% interest in the five parking facilities and 100% interest in the storage facility. We and VRM II together hold a 100% interest in the four office properties.  The five parking facilities have been reported as Discontinued Operations in the accompanying statement of operations.

-25-

During March 2014, VRM II acquired a 42% interest in Building C, LLC whose sole asset is an office property located in Las Vegas, NV from MVP REIT.  During July 2014, we and VRM II entered into an agreement to acquire the remaining 58% interest in Building C, LLC and 100% interest in Building A, LLC whose sole asset is an office building also located in Las Vegas, NV from MVP REIT. The cash consideration, net of assumed debt of approximately $16.9 million, totals approximately $10.3 million, of which our portion is approximately $3.7 million.  On July 31, 2014, we and VRM II completed the acquisition of the remaining 58% interest in Building C, LLC. The acquisition of the interests in Building A, LLC was completed on August 29, 2014. The purchase price for both buildings is equal to the amount paid by MVP to acquire the buildings which were acquired within the twelve (12) months prior to sale. No commissions were paid in connection with the purchase.

See Note E – Investment in Equity Method Investee and Note Receivable from MVP Realty Advisors to the Consolidated Financial Statements included in Part II, Item 8 Consolidated Financial Statements of this Quarterly Report on Form 10-Q for more information regarding the property exchanges.

SUMMARY OF FINANCIAL RESULTS

Comparison of Operating Results for the Three Months Ended March 31, 2015 to the Three Months Ended March 31, 2014:

Total Revenue:	2015		2014		$ Change		% Change
Interest income from investment in real estate loans	$	125,000	$	81,000	$	44,000		54	%
Gain related to payoff of notes receivable, including recoveryof allowance for doubtful notes receivable		8,000		--		8,000		100	%
Rental revenue		183,000		174,000		9,000		5	%
Total	$	316,000	$	255,000	$	61,000		24	%

During 2015, our investments in new real estate loans portfolio increased, which resulted in a increase of interest income.

For additional information see Note D – Investments in Real Estate Loans of the Notes to the Consolidated Financial Statements included in Part II, Item 8 Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

Operating Expenses:	2015		2014		$ Change			% Change
Management fees – related party	$	69,000	$	69,000	$	--			--
Payroll		9,000		15,000		(6,000	)		(40	%)
Impairment of MVP Realty Advisors		700,000		411,000		289,000			70	%
Acquisition expense		--		1,000		(1,000	)		(100	%)
Operations and maintenance		44,000		79,000		(35,000	)		(44	%)
Depreciation		34,000		--		34,000			100	%
Professional fees		116,000		84,000		32,000			38	%
Insurance		50,000		53,000		(3,000	)		(6	%)
Consulting		23,000		25,000		(2,000	)		(8	%)
Other		41,000		27,000		14,000			52	%
Total	$	1,086,000	$	764,000	$	322,000			42	%

Operating expenses were 42% higher during the three months ending March 31, 2015 than during the three months ending March 31, 2014.  We impaired amounts we loaned MVP Realty Advisors (“MVP Advisor”) during the three months ending March 31, 2015 and 2014 totaling $700,000 and $411,000, respectively.  We have not forgiven the balance due from MVP Advisor however the decision by MVP Capital, the sponsor of MVP REIT, to forgive the full amount of its $3.6 million loan to MVP Advisor creates uncertainty as to when we will be repaid the amounts loaned to MVP Advisor. Based on this uncertainty, we have determined to fully impair the balance of this note receivable as of March 31, 2015. Under the terms of the Operating Agreement which governs MVP Advisor, any loans we may make to MVP Advisor must be paid in full and we shall have received distributions of profits equal to our capital contributions prior to MVP CP receiving any distributions from MVP Advisor. We will continue to review this investment and note receivable to determine whether future advances should be funded to MVP Advisor.

-26-

Note E – Investment in Equity Method Investee and Note Receivable from MVP Realty Advisors of the Notes to the Consolidated Financial Statements included in Part II, Item 8 Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

Non-operating income (loss):	2015			2014		$ Change			% Change
Gain on sale of marketable securities	$	--		$	1,000	$	(1,000	)		(100	%)
Dividend income		10,000			9,000		1,000			11	%
Interest expense		(28,000	)		--		(28,000	)		100	%
Recovery from settlement with loan guarantor		--			102,000		(102,000	)		(100	%)
Total	$	(18,000	)	$	112,000	$	(130,000	)		(116	%)

During January 2011, we, VRM II and VF III were awarded unsecured claims up to $3.6 million from a bankruptcy settlement with a guarantor of certain loans. Pursuant to the terms of the settlement we received payment of approximately $0.1 million during the three months ended March 31, 2014.  No similar transaction occurred in 2015.

See Note N – Legal Matters Involving The Company of the Notes to the Consolidated Financial Statements included in Part II, Item 8 Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

Discontinued operations, net of income taxes:	2015			2014			$ Change		% Change
Net gain on sale of real estate held for sale	$	--		$	(5,000	)	$	5,000		(100	%)
Income from investment in equity method investee held for sale		96,000			43,000			53,000		123	%
Expenses related to real estate held for sale		(9,000	)		(44,000	)		35,000		(80	%)
Total	$	87,000		$	(6,000	)	$	93,000		(1,550	%)

During the third quarter of 2013, we acquired a non-controlling interest in six parking facilities along with VRM II and MVP REIT.  On January 14, 2014, we, VRM II and MVP REIT sold one of the parking facilities, MVP PF Baltimore 2013, LLC, to a third party for a loss of approximately $5,000.  In March 2014, the board approved the exchange of our interest in the five remaining parking facilities for interests in commercial office buildings; because of this approval the parking facilities have been reclassified as assets held for sale. The exchange was completed on April 30, 2014.  Additionally, investments in equity method investee acquired in second quarter 2014 are currently held for sale.   The results of operations related to the non-controlling interest in these properties held for sale is recognized as income from investment in equity method investee held for sale as a part of discontinued operations included in the statements of operations.

See Note E — Investments in Equity Method Investee and Note Receivable from MVP Realty Advisors of the Notes to the Consolidated Financial Statements included in Part II, Item 8 Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

CAPITAL AND LIQUIDITY

Liquidity is a measure of a company’s ability to meet potential cash requirements, including ongoing commitments to fund lending activities and general operating purposes.  Subject to a 3% working capital reserve, we generally seek to use all of our available funds to invest in real estate loans.  Distributable cash flow generated from such loans is paid out to our stockholders, in the form of a dividend.  We do not anticipate the need for hiring any employees, acquiring fixed assets such as office equipment or furniture, or incurring material office expenses during the next twelve months.  We may pay our manager an annual management fee of up to 0.25% of our aggregate capital received by us and Fund I from the sale of shares or membership units.

-27-

During the three months ended March 31, 2015, net cash flows provided by operating activities approximated $0.3 million.  Operating cash flows were used for the payment of normal operating expenses such as management fees, accounting fees and legal bills.  Cash flows related to investing activities consisted of cash used by loan investments in new real estate loans of approximately $1.3 million and investment in MVP Advisor of approximately $0.7 million.  In addition, cash flows related to investing activities consisted of cash provided by payoffs and sales to third parties of real estate loans of approximately $5.2 million and distributions from investment in equity method investee held for sale of approximately $82,000. Cash flows used in financing activities included cash payments on notes payable of approximately $29,000.

At March 31, 2015, we had approximately $4.5 million in cash, $1.1 million in liquid marketable securities of related parties and approximately $19.9 million in total assets.  We intend to meet short-term working capital needs through a combination of proceeds from loan payoffs, loan sales, rental income, sales of real estate held for sale and/or borrowings.  We believe we have sufficient working capital to meet our operating needs during the next 12 months.

Our interest in MVP Advisor has required, and may continue to require, us to continue to direct a portion of our cash towards development of the business of MVP REIT, including in the form of loans totaling approximately $2,125,000 as of March 31, 2015.  To further support development of the business of MVP REIT, MVP Advisor also has agreed to waive certain fees and expense reimbursements it otherwise would have been entitled to receive under the terms of its advisory agreement with MVP REIT. The return on our investment in MVP Advisor will likely depend upon the success of MVP REIT’s public offering and its ability to successfully deploy the offering proceeds. While we expect any such investments to ultimately generate a return through management fees payable by MVP REIT to MVP Advisor, such fees may not be significant in the near term as MVP REIT only recently commenced operations in December 2012, and over the next 12 months, there may be a diminution of our liquid assets.  If MVP REIT is unable to raise sufficient capital in its publicly registered offering or deploy the capital and operate its business successfully, then our return on our investment in MVP Advisor and the ability of MVP Advisor to repay our loans could be adversely impacted.  During the three months ended March 31, 2015, we impaired approximately $700,000 of the amounts loaned MVP Advisor.  During the three months ended March 31, 2014, we impaired approximately $411,000 of the amounts loaned to MVP Advisor.

We have no current plans to sell any new shares.  Although a small percentage of our shareholders had elected to reinvest their dividends, we suspended payment of dividends in June 2008 and at this time are not able to predict when dividend payments will resume.  Accordingly, we do not expect to issue any new shares through our dividend reinvestment program in the foreseeable future.

When economic conditions permit, we may seek to expand our capital resources through borrowings from institutional lenders or through securitization of our loan portfolio or similar arrangements.  No assurance can be given that, if we should seek to borrow additional funds or to securitize our assets, we would be able to do so on commercially attractive terms.  Our ability to expand our capital resources in this manner is subject to many factors, some of which are beyond our control, including the state of the economy, the state of the capital markets and the perceived quality of our loan and real estate portfolios.

On February 21, 2008, our Board of Directors authorized the repurchase of up to $5 million worth of our common stock.  Depending upon market conditions, shares may be repurchased from time to time at prevailing market prices through open market or privately negotiated transactions.  During 2013 we used approximately $1,155,000 to acquire 628,206 shares of our common stock.  During 2014 we used approximately $337,000 to acquire 47,885 shares of our common stock.  As of March 31, 2015, we had no treasury stock.  We are not obligated to purchase any additional shares.  Under the Maryland General Corporation Law, shares of its own stock acquired by a corporation constitute authorized but unissued shares.

We maintain working capital reserves of approximately 3% in cash and cash equivalents, certificates of deposits and short-term investments or liquid marketable securities. This reserve is available to pay expenses in excess of revenues, satisfy obligations of underlying properties, expend money to satisfy our unforeseen obligations and for other permitted uses of working capital.  As of May 12, 2015, we met our 3% reserve.

-28-

Investments in Real Estate Loans Secured by Real Estate Portfolio

We offer five real estate loan products consisting of commercial property, construction, acquisition and development, land, and residential.  The effective interest rates on all product categories range from 7.0% to 8.0%. Revenue by product will fluctuate based upon relative balances during the period.

For additional information on our investments in real estate loans, refer to Note D – Investments In Real Estate Loans of the Notes to the Consolidated Financial Statements included in Part II, Item 8 Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

Asset Quality and Loan Reserves

As a commercial real estate lender willing to invest in riskier loans, rates of delinquencies, foreclosures and our losses on our loans could be higher than those generally experienced in the commercial mortgage lending industry.  Problems in the sub-prime residential mortgage market have adversely affected the general economy and the availability of funds for commercial real estate developers.  We believe this lack of available funds has led to an increase in defaults on our loans.  Furthermore, problems experienced in U.S. credit markets from 2007 through 2009 reduced the availability of credit for many prospective borrowers.  While credit markets have generally improved, the commercial real estate markets in some of our principal areas of operation have not recovered, thereby resulting in continuing constraints on the availability of credit in these markets.  These problems have made it more difficult for our borrowers to obtain the anticipated re-financing necessary in many cases to pay back our loans.  Thus, we have had to work with some of our borrowers to either modify, restructure and/or extend their loans in order to keep or restore the loans to performing status.  Our manager will continue to evaluate our loan portfolio in order to minimize risk associated with current market conditions.

Real Estate Investments

Investments in real estate are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset. Costs of repairs and maintenance are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, five years for fixtures and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests.

We are required to make subjective assessments as to the useful lives of our properties for purposes of determining the amount of depreciation to record on an annual basis with respect to our investments in real estate. These assessments have a direct impact on our net income because if we were to shorten the expected useful lives of our investments in real estate, we would depreciate these investments over fewer years, resulting in more depreciation expense and lower net income on an annual basis.

We are required to present the operations related to properties that have been sold or properties that are intended to be sold as discontinued operations in the statement of operations for all periods presented. Properties that are intended to be sold are to be designated as “held for sale” on the balance sheet.

OFF-BALANCE SHEET ARRANGEMENTS

As of March 31, 2015, we do not have any interests in off-balance sheet special purpose entities nor do we have any interests in non-exchange traded commodity contracts.

-29-

RELATED PARTY TRANSACTIONS

From time to time, we may acquire or sell investments in real estate loans from/to our manager or other related parties pursuant to the terms of our Management Agreement without a premium.  No gain or loss is recorded on these transactions, as it is not our intent to make a profit on the purchase or sale of such investments.  The purpose is generally to diversify our portfolio by syndicating loans or investments in real estate, thereby providing us with additional capital to invest in real estate or make additional loans.  For further information regarding related party transactions, refer to Note H – Related Party Transactions in the notes to our Consolidated Financial Statements in Part II, Item 8 Consolidated Financial Statements of this Quarterly Report on Form 10-Q.

CRITICAL ACCOUNTING ESTIMATES

Revenue Recognition

Interest income on loans is accrued by the effective interest method.  We do not accrue interest income from loans once they are determined to be non-performing.  A loan is considered non-performing when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement or when the payment of interest is 90 days past due.

The following table presents a sensitivity analysis, averaging the balance of our loan portfolio at the end of the last six quarters, to show the impact on our financial condition at March 31, 2015, from fluctuations in weighted average interest rate charged on loans as a percentage of the loan portfolio:

Changed Assumption	Increase (Decrease) in Interest Income
Weighted average interest rate assumption increased by 1.0% or 100 basis points	$	48,000
Weighted average interest rate assumption increased by 5.0% or 500 basis points	$	240,000
Weighted average interest rate assumption increased by 10.0% or 1,000 basis points	$	481,000
Weighted average interest rate assumption decreased by 1.0% or 100 basis points	$	(48,000	)
Weighted average interest rate assumption decreased by 5.0% or 500 basis points	$	(240,000	)
Weighted average interest rate assumption decreased by 10.0% or 1,000 basis points	$	(481,000	)

The purpose of this analysis is to provide an indication of the impact that the weighted average interest rate fluctuations would have on our financial results.  It is not intended to imply our expectation of future revenues or to estimate earnings.  We believe that the assumptions used above are appropriate to illustrate the possible material impact on the consolidated financial statements.

Allowance for Loan Losses

We maintain an allowance for loan losses on our investments in real estate loans for estimated credit impairment in our investment in real estate loans portfolio.  Our manager’s estimate of losses is based on a number of factors including the types and dollar amounts of loans in the portfolio, adverse situations that may affect the borrower’s ability to repay, prevailing economic conditions and the underlying collateral securing the loan.  Additions to the allowance are provided through a charge to earnings and are based on an assessment of certain factors, which may indicate estimated losses on the loans.  Actual losses on loans are recorded as a charge-off or a reduction to the allowance for loan losses.  Subsequent recoveries of amounts previously charged off are added back to the allowance or included as income.

-30-

The following table presents a sensitivity analysis to show the impact on our financial condition at March 31, 2015, from increases and decreases to our allowance for loan losses as a percentage of the loan portfolio:

Changed Assumption	Increase (Decrease) in Allowance for Loan Losses
Allowance for loan losses assumption increased by 1.0% of loan portfolio	$	31,000
Allowance for loan losses assumption increased by 5.0% of loan portfolio	$	155,000
Allowance for loan losses assumption increased by 10.0% of loan portfolio	$	310,000
Allowance for loan losses assumption decreased by 1.0% of loan portfolio	$	(31,000	)
Allowance for loan losses assumption decreased by 5.0% of loan portfolio	$	(155,000	)
Allowance for loan losses assumption decreased by 10.0% of loan portfolio	$	(310,000	)

Estimating allowances for loan losses requires significant judgment about the underlying collateral, including liquidation value, condition of the collateral, competency and cooperation of the related borrower and specific legal issues that affect loan collections or taking possession of the property.  As a commercial real estate lender willing to invest in loans to borrowers who may not meet the credit standards of other financial institutional lenders, the default rate on our loans could be higher than those generally experienced in the mortgage lending industry.  We and our manager generally approve loans more quickly than other real estate lenders and, due to our expedited underwriting process, there is a risk that the credit inquiry we perform will not reveal all material facts pertaining to a borrower and the security.

We may discover additional facts and circumstances as we continue our efforts in the collection and foreclosure processes.  This additional information often causes management to reassess its estimates.  In recent years, we have revised estimates of our allowance for loan losses.  Circumstances that may cause significant changes in our estimated allowance include, but are not limited to:

· Declines in real estate market conditions that can cause a decrease in expected market value;

· Discovery of undisclosed liens for community improvement bonds, easements and delinquent property taxes;

· Lack of progress on real estate developments after we advance funds.  We customarily utilize disbursement agents to monitor the progress of real estate developments and approve loan advances.  After further inspection of the related property, progress on construction occasionally does not substantiate an increase in value to support the related loan advances;

· Unanticipated legal or business issues that may arise subsequent to loan origination or upon the sale of foreclosed upon property; and

· Appraisals, which are only opinions of value at the time of the appraisal, may not accurately reflect the value of the property.

Real Estate Held for Sale

Real estate held for sale includes real estate acquired through foreclosure and will be carried at the lower of the recorded amount, inclusive of any senior indebtedness, or the property’s estimated fair value, less estimated costs to sell, with fair value based on appraisals and knowledge of local market conditions.  The carrying values of real estate held for sale are assessed on a regular basis from updated appraisals, comparable sales values or purchase offers.

-31-

RECENT ACCOUNTING PRONOUNCEMENTS

No new accounting pronouncements have been defined that would materially impact our financial statements.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer has evaluated the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as of the end of the period covered by this report, and they have concluded that these controls and procedures are effective.

(b) Changes in Internal Control over Financial Reporting

There have been no changes in internal control over financial reporting during the first quarter of 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Please refer to Note M – Legal Matters Involving the Manager and Note N – Legal Matters Involving the Company of the Notes to the Consolidated Financial Statements included in Part I, Item I Consolidated Financial Statements of this Quarterly Report on Form 10-Q for information regarding our legal proceedings, which are incorporated herein by reference.

ITEM 2. UNREGISTERED SALES OF EQUITY AND USE OF PROCEEDS

None.

The following is a summary of our stock purchases during the three months ended March 31, 2015, as required by Regulation S-K, Item 703.

Period	(a) Total Number of Shares Purchased		(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number of (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
January 1, 2015 – January 31, 2015		--	$	--		--	$	3,048,599
February 1, 2015 – February 28, 2015		--		--		--		3,048,599
March 1, 2015 – March 31, 2015		--		--		--		3,048,599
Total		--	$	--		--	$	3,048,599

-32-

ITEM 6. EXHIBITS

EXHIBIT INDEX

Exhibit No.	Description of Exhibits
2.1(1)	Agreement and Plan of Merger between Vestin Fund I, LLC and the Registrant
2.2(4)	Membership Interest Purchase Agreement between VRM I, VRM II and Northstar Hawaii, LLC
3.1(1)	Articles of Incorporation of the Registrant
3.2(1)	Bylaws of the Registrant
3.3(1)	Form of Articles Supplementary of the Registrant
4.1(1)	Reference is made to Exhibits 3.1, 3.2 and 3.3, 10.1 and 10.5
4.2(2)	Specimen Common Stock Certificate
4.3(1)	Form of Rights Certificate
14 (3)	Vestin Realty Mortgage I, Inc. Code of Business Conduct and Ethics
21.1*	List of subsidiaries of the Registrant
31.1*	Section 302 Certification of Michael V. Shustek
31.2*	Section 302 Certification of Tracee Gress
32*	Certification Pursuant to 18 U.S.C. Sec. 1350
101*	The following material from the Company's quarterly report on Form 10-Q for the three months ended March 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of March 31, 2015 and December 31, 2014 (unaudited), (ii) Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014 (unaudited), (iii) Consolidated Statements of Other Comprehensive Income for the three months ended March 31, 2015 and 2014 (unaudited), (iv) Consolidated Statement of Equity for the three months ended March 31, 2015 and 2014 (unaudited), (v) Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014 (unaudited), and (vi) Notes to the Consolidated Financial Statements (unaudited).

(1)	Incorporated herein by reference to Post-Effective Amendment No. 3 to our Form S-4 Registration Statement filed on January 4, 2006 (File No. 333-125347)
(2)	Incorporated herein by reference to Post-Effective Amendment No. 4 to our Form S-4 Registration Statement filed on January 31, 2006 (File No. 333-125347)
(3)	Incorporated herein by reference to the Transition Report on Form 10-K for the ten month transition period ended April 30, 2006 filed on June 28, 2006 (File No. 000-51964)
(4)	Incorporated herein by reference to the Form 8-K/A filed on August 14, 2012 (File No. 000-51964)
*	Filed concurrently herewith.

-33-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Vestin Realty Mortgage I, Inc.
By:	/s/ Michael V. Shustek
	Michael V. Shustek
	President and Chief Executive Officer
Date:	May 12, 2015
By:	/s/ Tracee Gress
	Tracee Gress
	Chief Financial Officer
Date:	May 12, 2015