##### Table of Contents





As filed with
    the Securities and Exchange Commission on July 19,
    2011
 
 Registration No. 333-156434
   UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
 
  Amendment No. 10
 
 to
  Form S-11
 FOR REGISTRATION
 UNDER
 THE SECURITIES ACT OF
    1933
 OF CERTAIN REAL ESTATE
    COMPANIES
  CM REIT, INC.
 (Exact Name of Registrant as
    specified in its Governing Instruments)
  1291 W. Galleria
    Drive, Suite 200
 Henderson, Nevada
    89014
 (866) 659-3849
 (Address, including zip code,
    and telephone number, including area code, of Registrants
    principal executive offices)
  Todd B. Parriott
 Chief Executive
    Officer
 CM REIT, Inc.
 1291 W. Galleria
    Drive, Suite 200
 Henderson, Nevada
    89014
 (866) 659-3849
 (Name, Address, including zip
    code, and telephone number, including area code, of agent for
    service)
  Copies to:
  Bryan L. Goolsby
 X. Lane Folsom
 Locke Lord Bissell &
    Liddell LLP
 2200 Ross Avenue,
    Suite 2200
 Dallas, Texas
    75201-6776
 (214) 740-8000
  Approximate date of commencement of proposed sale to the
    public:
  þ
  o
  o
  o
  o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer o
    Smaller reporting
    company þ (Do not check if a smaller
    reporting company)
  CALCULATION
    OF REGISTRATION FEE
  Proposed Maximum


Proposed MaximumTitle of Each Class of


Amount to be


Offering Price


Aggregate


Amount ofSecurities to be Registered


Registered


per Share


Offering Price


Registration FeeCommon Stock, $.01 par value(1)


100,000,000


$10.00


$995,000,000(2)


$53,343.50(3)  (1)
    
    Represents shares issuable both in
    the registrants primary offering and pursuant to the
    registrants distribution reinvestment plan.(2)
    
    Estimated solely for the purposes
    of calculating the registration fee pursuant to
    Rule 457(o), promulgated under the Securities Act of 1933,
    as amended.(3)
    
    $21,615 previously paid with
    initial filing on December 23, 2008, and the remainder
    previously paid with the filing of the second pre-effective
    amendment to the Registration Statement on August 27, 2009.  The Registrant hereby amends this Registration Statement on
    such date or dates as may be necessary to delay its effective
    date until the Registrant shall file a further amendment which
    specifically states that this Registration Statement shall
    thereafter become effective in accordance with Section 8(a)
    of the Securities Act or until the Registration Statement shall
    become effective on such date as the Commission, acting pursuant
    to said Section 8(a), may determine.




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PROSPECTUS
 CM REIT, INC.
 100,000,000 Shares of
    Common Stock  Maximum Offering
 At least 250,000 Shares of
    Common Stock  Minimum Offering
  This investment is speculative, and involves a high degree of
    risk. You should purchase shares only if you can afford a
    complete loss. You should carefully consider the information set
    forth in the Risk Factors section beginning on
    page 23 for a discussion of risks relating to our common
    stock, including, among others:
 
    We are a blind pool REIT and have not identified any specific
    assets to acquire with the net proceeds of this offering.
    Accordingly, you will not have the opportunity to review the
    assets we will acquire with the net proceeds of this offering
    prior to your investment.
    We have not established a minimum distribution payment level,
    and we cannot assure you of our ability to make distributions to
    holders of our common stock (stockholders) in the future.
    A conflict of interest exists with respect to our
    dealer-manager,
    CM Securities, LLC, because it is our affiliate. Certain of our
    executive officers own the majority of the membership interests
    in CM Group, LLC, which owns our dealer-manager, and serve as
    officers of CM Group, LLC and our
    dealer-manager.
    You will not have the benefit of an independent due diligence
    review in connection with this offering.
    There is currently no public trading market for our common
    stock, and there is no assurance that one will develop.
    Therefore, you may not be able to sell your shares at a price
    equal to or greater than the offering price, or at all.
    Our share redemption plan, which is the only current source of
    liquidity for our stockholders, may be amended or suspended at
    any time, leaving our stockholders unable to sell their shares.
    Our results may suffer as a consequence of a conflict of
    interest arising out of our relationship with our advisor. We
    pay our advisor first-tier management compensation based on the
    amount of our invested assets and a
    second-tier
    management fee on our portfolios performance. Accordingly,
    our advisor may recommend riskier or more speculative
    investments regardless of their long-term performance in an
    effort to maximize its compensation.
    We have not commenced operations. Our total assets currently
    consist of approximately $200,000 in cash.
    If we fail to qualify or are disqualified as a REIT, we will be
    subject to taxation as a regular corporation and face
    substantial tax liability.
    A prior investment program advised by an affiliate of our
    advisor and whose loans were originated by an affiliate of our
    advisor has been materially and adversely impacted by the
    disruptions in the real estate and credit markets and has
    experienced extremely high default and foreclosure rates.
    Because of this programs operating losses, its
    auditors opinions for the years ended December 31,
    2009 and 2010 state that there is substantial doubt as to the
    entitys ability to continue as a going concern. The
    default rate for loans originated by the loan originator for
    this prior investment program in 2008 and 2007 was 87.54% and
    86.11% respectively.
    There may be delays in investing the proceeds of this offering
    and, therefore, delays in the receipt of any returns from such
    investments.
    We expect to borrow funds to make certain of our investments and
    may rely on bank lines of credit to fund a portion of our
    acquisitions. Such leverage could reduce our net income and our
    cash available for distributions or cause us to suffer losses.
    Under our articles of incorporation, we can incur debt in an
    amount up to 300% of our net assets or 75% of the cost of our
    assets.
    Our organizational documents permit us to pay distributions from
    any source, including offering proceeds. We have not established
    a cap on the use of proceeds to fund distributions. If we pay
    distributions from sources other than our cash flow from
    operations, we will have less funds available for investments
    and your overall return may be reduced. Until we have invested
    sufficient proceeds from this offering, we may use proceeds from
    borrowings to fund distributions in anticipation of cash flow to
    be received in later periods. We may also fund distributions
    from advances from our advisor or from our advisors
    deferral of its fees under the advisory agreement.
    We expect to begin reviewing liquidity options for our
    stockholders beginning five years from the commencement of our
    offering. If we do not list our shares of common stock on a
    national securities exchange by December 31, 2018, our
    charter requires our directors to seek stockholder approval to
    liquidate our assets. 
 
    We intend to invest in interest-carry balloon payment loans and
    non-agency residential loans that may be riskier than loans made
    by traditional lenders and, as a result, may have a higher
    default rate. 
 
    Because the dealer-manager is our affiliate, the sales
    commissions and dealer-manager fees we are paying were not
    negotiated at arms length. 
 
    Ignite Funding, LLC, currently our only loan origination source,
    could lose its mortgage license. 
 Price

Selling

Dealer-

Net Proceedsto Public(1)

Commissions

Manager Fee

(Before Expenses)(2)Primary Offering

$
10.00


$
.70


$
.30


$
9.00Total Minimum

$
2,500,000.00


$
175,000.00


$
75,000.00


$
2,250,000.00Total Maximum

$
900,000,000.00


$
63,000,000.00


$
27,000,000.00


$
810,000,000.00Dividend Reinvestment PlanPer Share

$
9.50


$
0.0


$
0.0


$
9.50Total Maximum

$
95,000,000.00


$
0.0


$
0.0


$
95,000,000.00    (1)
    Assumes we sell shares at $10.00 per share and no shares
    are sold pursuant to our DRIP or otherwise discounted as
    provided in this prospectus.




(2)
    Represents a 7.0% sales commission and 3.0% dealer-manager fee
    we will pay for sales of common stock. Our dealer-manager will
    not be paid any sales commissions or dealer-manager fees from
    sales of common stock under our DRIP.      Neither the Securities and Exchange Commission, the Attorney
    General of the State of New York nor any other state securities
    regulator has approved or disapproved of these securities or
    determined if this prospectus is truthful or complete. Any
    representation to the contrary is a criminal offense. No one is
    authorized to make any statements about this offering different
    from those that appear in this prospectus. The use of forecasts
    in this offering is prohibited. Any representation to the
    contrary and any predictions, written or oral, as to the amount
    or certainty of any present or the future cash benefit or tax
    consequence which may flow from an investment in our common
    stock is not permitted
 The date of this prospectus
    is           ,
    2011




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This prospectus is not an offer to sell these securities and
    it is not soliciting an offer to buy these securities in any
    state where the offer or sale is not permitted. We will only
    accept subscriptions from people who meet the suitability
    standards described in this prospectus. You should also be aware
    that the description of our company contained in this prospectus
    was accurate as
    of          .
    We will amend or supplement this prospectus if there is a
    material change in our affairs.
       i




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SUITABILITY
    STANDARDS AND HOW TO SUBSCRIBE



Suitability
    Standards



The shares of common stock offered through this prospectus are
    suitable only as a long-term investment for persons of adequate
    financial means who have no need for liquidity in this
    investment. Initially, there is not expected to be any public
    market for the shares, which means that it may be difficult to
    sell shares. See the Description of Capital
    Stock  Transfer Restrictions for a description
    of the transfer restrictions. As a result, we have established
    minimum suitability standards which require investors to have
    either (1) a net worth (not including home, furnishings,
    and personal automobiles) of at least $70,000 and an annual
    gross income of at least $70,000, or (2) a net worth (not
    including home, furnishings, and personal automobiles) of at
    least $250,000. Our suitability standards also require that a
    potential investor (a) can reasonably benefit from an
    investment in us based on such investors overall
    investment objectives and portfolio structuring, (b) is
    able to bear the economic risk of the investment based on the
    prospective stockholders overall financial situation, and
    (c) has an apparent understanding of (1) the
    fundamental risks of the investment, (2) the risk that such
    investor may lose the entire investment, (3) the lack of
    liquidity of our shares, (4) the background and
    qualifications of our advisor, and (5) the tax consequences
    of the investment.



The foregoing suitability standards must be met by the investor
    who purchases the shares. If the investment is being made for a
    fiduciary account (such as an IRA, Keogh Plan, or corporate
    pension or profit-sharing plan), the beneficiary, the fiduciary
    account, or any donor or grantor that is the fiduciary of the
    account who directly or indirectly supplies the investment funds
    must meet such suitability standards.



Several states have established suitability requirements that
    are more stringent than the standards that we have established
    and described above. Shares will be sold to investors in these
    states only if investors represent that they meet the special
    suitability standards set forth below. In each case, these
    special suitability standards exclude from the calculation of
    net worth the value of the investors home, home
    furnishings and personal automobiles. 
    Alabama  In addition to meeting the applicable
    minimum suitability standards set forth above, an Alabama
    resident may not invest more than 10% of his or her net worth,
    exclusive of his or her home, home furnishings and automobile,
    in this offering and in other similar real estate programs
    sponsored by 2020 Capital Advisors, LLC or its affiliates.
    Kentucky, Oregon, Massachusetts, Michigan, Missouri and
    Pennsylvania  In addition to meeting the applicable
    minimum suitability standards set forth above, your investment
    may not exceed 10% of your liquid net worth, which may be
    defined as the remaining balance of cash and other assets easily
    converted to cash after subtracting the investors total
    liabilities from total assets.
    California and Massachusetts  In addition to meeting
    the applicable minimum suitability standards set forth above, an
    investment in us is limited to investors who have: (i) a
    liquid net worth of not less than $100,000 and a gross annual
    income of not less than $75,000; or (ii) a net worth of
    $250,000, exclusive of their home, home furnishings and
    automobile. In addition, a California resident may not invest
    more than ten percent (10%) of his or her net worth in this
    offering.
    Iowa  In addition to meeting the applicable minimum
    suitability standards set forth above, an investment in us is
    limited to investors who have: (i) a liquid net worth of
    not less than $100,000 and a gross annual income of not less
    than $70,000; and (ii) a net worth of $100,000, exclusive
    of their home, home furnishings and automobile, or a net worth
    of $350,000, exclusive of their home, home furnishings and
    automobile. In addition, the Iowa Securities Bureau requires
    that an investors aggregate investment in our securities
    and similar direct participation investments should not exceed
    10% of the investors liquid net worth. For these purposes,
    liquid net worth is defined as that portion of net
    worth that consists of cash, cash equivalents and readily
    marketable securities.  
    Kansas and Massachusetts  In addition to meeting the
    applicable minimum suitability standards set forth above, the
    Office of the Kansas Securities Commissioner and the
    Massachusetts Securities Division recommend that an
    investors aggregate investment in our securities and
    similar direct participation ii




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investments should not exceed 10% of the investors liquid
    net worth. For these purposes, liquid net worth is
    defined as that portion of net worth that consists of cash, cash
    equivalents and readily marketable securities.  
    Maine  Investors must have either (a) net worth
    of at least $250,000 or (b) an annual gross income of at
    least $70,000 and a minimum net worth of at least $70,000. The
    investors maximum investment in us and our affiliates
    cannot exceed 10% of the Maine investors net worth.
    Nebraska  In addition to meeting the applicable
    minimum suitability standards set forth above, an investment in
    us is limited to investors who have: (i) a liquid net worth
    of not less than $100,000 and a gross annual income of not less
    than $70,000; and (ii) a net worth of $100,000, exclusive
    of their home, home furnishings and automobile, or a net worth
    of $350,000, exclusive of their home, home furnishings and
    automobile. In addition, the Nebraska Department of Banking and
    Finance requires that an investors aggregate investment in
    our securities and similar direct participation investments
    should not exceed 10% of the investors liquid net worth.
    For these purposes, liquid net worth is defined as
    that portion of net worth that consists of cash, cash
    equivalents and readily marketable securities.
    North Dakota  Shares will only be sold to residents
    of North Dakota representing that they have a liquid net worth
    of at least ten times their investment in us and our affiliates
    and that they meet one of the established suitability standards. 
 
  
    Tennessee  Tennessee residents investment must
    not exceed ten percent (10%) of their liquid net worth. In
    addition to the applicable minimum suitability standards set
    forth above, an investment in us is limited to investors who
    have (i) a minimum annual gross income of $100,000 and a
    minimum net worth of $100,000; or (ii) a minimum net worth
    of $500,000 exclusive of home, home furnishings and automobile.    
    Pennsylvania Investors  Because the minimum offering
    is less than $100 million, you are cautioned to carefully
    evaluate the programs ability to fully accomplish its
    stated objectives and to inquire as to the current dollar volume
    of program subscriptions. Pursuant to the requirements of the
    Commissioner of Securities of the State of Pennsylvania, we will
    place all Pennsylvania investor subscriptions in escrow until we
    have received total subscriptions of at least $50,000,000, or
    for a period of 120 days, whichever is shorter.    
    Return the Pennsylvania investors funds within 15 calendar
    days of the end of the escrow period, or
    Notify the Pennsylvania investors in writing by certified mail
    or any other means whereby receipt of delivery is obtained
    within 10 calendar days after the end of the escrow period, that
    the Pennsylvania investors have a right to have their investment
    returned to them. If such an investor requests the return of
    such funds within 10 calendar days after receipt of
    notification, we must return such funds
    within 15 calendar days after receipt of the
    investors request.  120-day 120-day 120-day
   iii




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Appendix D
  How To
    Subscribe
        You should rely only on the information contained in this
    document. We have not authorized anyone to provide you with
    information that is different. This document may be used only
    where it is legal to sell these securities.
 iv




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##### 



TABLE OF
    CONTENTS
  
 SUITABILITY STANDARDS AND HOW TO SUBSCRIBE


iiQUESTIONS AND ANSWERS ABOUT THE OFFERING


1SUMMARY


8RISK FACTORS


23CAUTIONARY NOTE REGARDING FORWARD-LOOKING
    STATEMENTS


57ESTIMATED USE OF PROCEEDS


58DISTRIBUTION POLICY


59SUMMARY OF REINVESTMENT PLAN


60SHARE REDEMPTION PLAN


64BUSINESS


66OUR OPERATING POLICIES AND INVESTMENT POLICIES


83MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


91OTHER AFFILIATE-SPONSORED PROGRAMS


96CONFLICTS OF INTEREST


102CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
    AND DIRECTOR INDEPENDENCE


105OUR ADVISOR


109MANAGEMENT OF THE COMPANY


119PRIOR PERFORMANCE SUMMARY


128U.S. FEDERAL INCOME TAX CONSIDERATIONS


133ERISA CONSIDERATIONS


148DESCRIPTION OF CAPITAL STOCK


150CERTAIN PROVISIONS OF MARYLAND LAW AND OF OUR
    ARTICLES OF INCORPORATION AND BYLAWS


154PRINCIPAL STOCKHOLDERS


159PLAN OF DISTRIBUTION


161LEGAL MATTERS


168EXPERTS


168SUPPLEMENTAL SALES MATERIALS


168WHERE YOU CAN FIND MORE INFORMATION ABOUT CM
    REIT, INC.


169DEFINITIONS


169INDEX TO FINANCIAL STATEMENTS


F-1APPENDIX A  REINVESTMENT PLAN


A-1APPENDIX B  AUTOMATIC INVESTMENT
    PROGRAM


B-1APPENDIX C  SHARE REDEMPTION
    PLAN


C-1APPENDIX D  SUBSCRIPTION
    AGREEMENT


D-1APPENDIX E  PRIOR PERFORMANCE
    TABLES


E-1EX-23.2




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QUESTIONS
    AND ANSWERS ABOUT THE OFFERING  Q:
    
    What is CM REIT, Inc.?    Q:
    
    What is a REIT?A:
    
    In general, a REIT is a company that:  
    combines the capital of many investors to, among other things,
    invest in qualified REIT real estate assets;
    offers benefits of a diversified portfolio under professional
    management;
    typically is not subject to federal corporate income taxes on
    taxable income that is distributed to its stockholders, thereby
    substantially eliminating the double taxation
    (taxation at both the corporate and stockholder levels) that
    generally results from investments in a corporation; and
    must pay distributions to investors of at least 90% of its
    taxable income.  Q:
    
    What kind of offering is this?A:
    
    We are offering up to 100 million shares of our common
    stock on a best efforts basis, including shares
    issued through our dividend reinvestment plan.Q:
    
    How does a best efforts offering work?A:
    
    When shares are offered to the public on a best
    efforts basis, no underwriter, broker-dealer or other
    person has a firm commitment or obligation to purchase any of
    the shares. Therefore, we are not guaranteeing that any minimum
    number of shares will be sold. We are offering a minimum of
    250,000 shares and a maximum of 100 million shares,
    including shares purchased through our dividend reinvestment
    plan. Prior to the time we sell at least 250,000 of our shares,
    your subscription payments will be placed in an account held by
    our escrow agent and will be held in trust for your benefit
    until the minimum offering is achieved. If we are not able to
    sell at least 250,000 shares
    by          ,
    which is one year from the effective date of this prospectus, we
    will terminate this offering and your funds in the escrow
    account, including interest thereon at a floating rate
    (currently     % per year), will be
    returned to you within 10 business days following the
    termination date. None of the purchases of shares of common
    stock by our officers, directors and affiliates will count
    toward the calculation of the minimum offering. If you choose to
    purchase stock in this offering, you will need to complete a
    subscription agreement, in the form attached to this prospectus
    as Appendix D, and pay for the shares at the time you
    subscribe. If you purchase our shares after the minimum offering
    amount is sold, the transfer agent will hold your funds, along
    with those of other similar subscribers, until such time as you
    are admitted as a stockholder. Generally, we admit stockholders
    on the day of acceptance of their subscription, which will be
    within seven days after receipt thereof.Q:
    
    How long will the offering last?A:
    
    This offering will not last
    beyond          (two
    years after the effective date of this prospectus), unless we
    decide to extend the offering for an additional year until not
    later
    than          .
    Under rules promulgated by the SEC, should we decide to register
    a follow-on offering, we may extend this offering up to an
    additional 180 days
    beyond          .
    If we decide to continue our primary offering beyond two years
    from 1




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the date of this prospectus, we will provide that information in
    a prospectus supplement. We may continue to offer shares under
    our dividend reinvestment plan beyond two years from the date of
    this prospectus until we have sold 10 million shares
    through the reinvestment of distributions. In many states, we
    will need to renew the registration statement to continue the
    offering beyond one year from the date of this prospectus. In
    addition, we reserve the right to terminate this offering for
    any other reason at any time.Q:
    
    Who can buy shares?A:
    
    Anyone who receives this prospectus can buy shares provided that
    they meet the suitability standards described elsewhere in this
    prospectus.Q:
    
    Who might benefit from an investment in our shares?A:
    
    An investment in our shares may be beneficial for you if you
    meet the minimum suitability standards described in this
    prospectus, seek to diversify your personal portfolio with a
    REIT investment focused on real estate-related loans, commercial
    real estate-related debt securities and select real estate
    equity investments, seek to receive current income, seek to
    preserve capital and are able to hold your investment for a time
    period consistent with our liquidity strategy. On the other
    hand, we caution persons who require immediate liquidity or
    guaranteed income, or who seek a short-term investment, that an
    investment in our shares will not meet those needs.Q:
    
    Are there any risks involved in an investment in the
    shares?A:
    
    You should read the Risk Factors section of this
    prospectus for a discussion of material risks that you should
    consider before you invest in our common stock. An investment in
    our shares involves significant risks, including the following:  
    We have not identified any specific assets to acquire with the
    net proceeds of this offering. Accordingly, you will not have
    the opportunity to review the assets we will acquire with the
    net proceeds of this offering prior to your investment.
    We have not established a minimum distribution payment level and
    we cannot assure you of our ability to make distributions to our
    stockholders in the future.
    A conflict of interest exists with respect to our
    dealer-manager, because our advisor owns our
    dealer-manager.
    Our chief executive officer indirectly owns a majority of the
    membership interests in our advisor and serves as an officer of
    our advisor and our dealer-manager. You will not have the
    benefit of an independent due diligence review in connection
    with this offering.
    There is currently no public trading market for our common
    stock, and there is no assurance that one will develop.
    Therefore, you may not be able to sell your shares at a price
    equal to or greater than the offering price, or at all.
    Our share redemption plan, which is the only current source of
    liquidity for our stockholders, may be amended or suspended at
    any time, leaving our stockholders unable to sell their shares.
    Our results may suffer as a consequence of a conflict of
    interest arising out of our relationship with our advisor. Our
    chief executive officer indirectly owns a majority of our
    advisor and serves as an officer of our advisor. We pay our
    advisor a first-tier management fee based on the amount of our
    invested assets and a second-tier management fee based on our
    portfolios performance. Accordingly, our advisor may
    recommend riskier or more speculative investments regardless of
    their long-term performance in an effort to maximize its
    compensation. The agreement between us and our advisor (the
    advisory agreement) pursuant to which our advisor acts as our
    advisor and provides specified services to us provides for
    substantial compensation to our advisor. 
  
    An affiliate of our advisor served as the advisor to Desert
    Capital REIT, Inc., which we refer to as Desert Capital, which
    had investment objectives similar to ours. Desert Capital has
    been materially and adversely impacted by the disruptions in the
    real estate and credit markets and has experienced extremely
    high default and foreclosure rates. Because of its operating
    losses, its auditors opinions for 
 2




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the years ended December 31, 2009 and 2010 state that
    there is substantial doubt as to the entitys ability to
    continue as a going concern.  
    We have not commenced operations. Our total assets currently
    consist of approximately $200,000 in cash.
    If we fail to qualify or are disqualified as a REIT, we will be
    subject to tax as a regular corporation and face substantial tax
    liabilities.
    There may be delays in investing the proceeds of this offering
    and, therefore, delays in the receipt of any returns from such
    investments.
    We expect to borrow funds to make certain of our investments and
    may rely on bank lines of credit to fund a portion of our
    acquisitions. Such leverage could reduce our net income and our
    cash available for distributions or cause us to suffer losses.
    Under our articles of incorporation, we can incur debt in an
    amount up to 300% of our net assets or 75% of the cost of our
    assets. We currently do not have a credit facility or line of
    credit in place, and given current market conditions, we may not
    be able to obtain a credit facility or line of credit.
    Our organizational documents permit us to pay distributions from
    any source, including offering proceeds. We have not established
    a limit on the amount of net offering proceeds we may use to
    fund distributions. If we pay distributions from sources other
    than our cash flow from operations, we will have less funds
    available for investments and your overall return may be
    reduced. Until we have invested sufficient proceeds from this
    offering, we may use proceeds from borrowings to fund
    distributions in anticipation of cash flow to be received in
    later periods. We may also fund distributions from advances from
    our advisor or from our advisors deferral of its fees
    under the advisory agreement. 
  
    We intend to invest in interest-carry balloon payment loans and
    non-agency residential loans that may be riskier than loans made
    by traditional lenders and, as a result, may have a higher
    default rate. Balloon payment mortgage loans are risky because
    repayment depends on the borrowers ability to refinance
    the loan or sell the property. 
  
    Many of the loans in which we intend to invest will be
    non-investment grade and risky because they have been and will
    be made to borrowers with limited credit histories, which
    increases the risk that the borrower will not be able to repay
    the principal at maturity.
    We do not have any limitations in our charter documents on the
    types of investments we may acquire. Therefore, our investments
    may not be diversified among the various categories we are
    targeting, which include acquisition, development, construction
    and commercial mortgage loans, non-agency residential mortgage
    loans, commercial real property, real estate-related debt
    securities and equity securities of other real estate-related
    companies.
    The dealer-manager, who is our affiliate, will be paid sales
    commissions equal to 7.0% of the proceeds of this offering, plus
    a dealer-manager fee of 3.0% of such proceeds. These commissions
    and fees were not negotiated at arms length.
    Certain of our affiliates are presently defendants in various
    civil lawsuits and are also the subject of investigations by
    several regulatory authorities. Unfavorable results of these
    legal proceedings could materially adversely affect us.  Q:
    
    Is there any minimum required investment?A:
    
    Yes. Generally, individuals must initially invest at least
    $2,500 and IRA, Keogh or other qualified plans must initially
    invest at least $1,000. Thereafter, you may purchase additional
    shares in $10.00 increments. These minimum investment levels may
    vary from state to state, so you should carefully read the more
    detailed description of the minimum investment requirements
    appearing elsewhere in this prospectus.Q:
    
    After I subscribe for shares, can I change my mind and
    withdraw my money?A:
    
    Once you have subscribed for shares and we have deposited the
    subscription price, your subscription is irrevocable, unless we
    elect to permit you to revoke your subscription. A securities
    dealer may not complete a sale of common stock to you until at
    least five business days after you receive a copy of the final
    prospectus. 3




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Q:
    
    If I buy shares in the offering, how can I sell them?A:
    
    At the time you purchase shares, they will not be listed for
    trading on any national securities exchange or over-the-counter
    market. In fact, we expect that there will not be any public
    market for the shares when you purchase them, and we cannot be
    sure whether one will ever develop. As a result, you may find
    that if you wish to sell your shares, you may not be able to do
    so at a price equal to or greater than the offering price, or at
    all.Subject to then existing market conditions, we expect to begin
    reviewing options for providing liquidity to our stockholders
    beginning five years from the commencement of our offering.
    While we expect to seek a liquidity transaction in this time
    frame, there can be no assurance that a suitable transaction
    will be available or that market conditions for a transaction
    will be favorable during that time frame. Our board of directors
    has the discretion to consider a liquidity transaction at any
    time if it determines such event to be in our best interests. A
    liquidity transaction could consist of a sale of our assets, a
    sale or merger of the company, a listing of our shares on a
    national securities exchange or a similar transaction. Some
    types of liquidity transactions require, after approval by our
    board of directors, approval of our stockholders. If we do not
    list our shares of common stock on a national securities
    exchange by December 31, 2018, our charter requires that we
    seek stockholder approval of the liquidation of the company. If
    we sought and failed to obtain stockholder approval of our
    liquidation, our charter would not require us to list or
    liquidate, and we could continue to operate as before. If we
    sought and obtained stockholder approval of our liquidation, we
    would begin an orderly sale of our properties and other assets.
    The precise timing of such sales would take account of the
    prevailing real estate and financial markets, the economic
    conditions in the submarkets where our properties are located
    and the federal income tax consequences to our stockholders. In
    making the decision to apply for listing of our shares, our
    directors will try to determine whether listing our shares or
    liquidating our assets will result in greater value for
    stockholders.One of the factors our board of directors will consider when
    making this determination is the liquidity needs of our
    stockholders. In assessing whether to list, our board of
    directors would likely solicit input from financial advisors as
    to the likely demand for our shares upon listing. If, after
    listing, the board of directors believed that it would be
    difficult for stockholders to dispose of their shares, then that
    factor would weigh against listing. However, this would not be
    the only factor considered by the board of directors. If listing
    still appeared to be in the best long-term interest of our
    stockholders, despite the prospects of a relatively small market
    for our shares upon the initial listing, the board may still opt
    to list our shares of common stock in keeping with its
    obligations under Maryland law. The board of directors would
    also likely consider whether there was a large
    pent-up
    demand to sell our shares when making decisions regarding
    listing. The degree of participation in our DRIP and the number
    of requests for repurchase under the share repurchase program at
    this time could be an indicator of stockholder demand to
    liquidate their investment.If we list the shares, we expect that you will be able to sell
    your shares in the same manner as other listed stocks.Q:
    
    Do you have a share redemption program?A:
    
    Yes, we provide a redemption program under which we redeem
    shares, subject to certain limitations. Our board of directors
    may amend, suspend, or terminate our redemption plan at any time
    upon 15 days prior notice. If you are able to have your
    shares redeemed, depending on the timing of the redemption, it
    will likely be at a price that is less than the price you paid
    for the shares. Please see Share Redemption Plan for
    more information regarding this plan.Q:
    
    Do you have a reinvestment plan through which I can reinvest
    my distributions in additional shares?A:
    
    Yes. We have adopted a distribution reinvestment plan (DRIP) in
    which investors can reinvest their distributions in additional
    shares at a price of $9.50. The terms of the plan may, however,
    be amended or terminated by our board of directors upon
    30 days prior written notice to our plan participants.Q:
    
    What will you do with the proceeds from this offering?A:
    
    Our use of proceeds will depend somewhat on the number of shares
    sold in the offering. If we only sell the minimum number of
    shares, we plan to use approximately 85% of the proceeds of this
    offering to make investments, and the balance will be used to
    pay fees and expenses in connection with this offering. The
    payment of these fees will not reduce the amount of your
    invested capital which is calculated by 4




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multiplying the total number of shares of common stock you
    acquire by the issue price. If we sell all 90 million
    shares, which excludes shares issued through our DRIP, we expect
    to use approximately 88.8% of the proceeds to make investments.
    Many of the expenses associated with the offering are fixed, so
    that the more shares we sell, the higher the portion of the
    proceeds available for investment by us. If we only sell the
    minimum number of shares, 2020 Capital will initially pay many
    of our expenses because our actual expenses will greatly exceed
    $125,000. If we sell additional shares, we will use up to 1.5%
    of the additional proceeds to reimburse 2020 Capital partially
    for these expenses. In addition, we are prohibited by FINRA
    rules from incurring offering expenses in excess of 15% of the
    proceeds of the offering. Because the actual expenses incurred
    will greatly exceed $375,000 (15% of the minimum offering amount
    of $2.5 million), we are required to cap our expenses at
    15%. If, however, the maximum offering amount of
    $900 million, which excludes proceeds of our DRIP, is
    raised, our total offering expenses are estimated at
    $101.1 million, which is approximately 11.2% of the
    offering proceeds (excluding our DRIP). Your initial invested
    capital amount will be $10 per share. 
 
  We expect that our loan origination agreement with Ignite
    Funding, LLC, referred to as Ignite Funding, will provide us a
    pipeline of investment opportunities. Accordingly, we expect
    that proceeds received from this offering generally will be
    invested in mortgage loans or other real estate-related
    investments within 30 days of receipt. As a result, we do
    not expect to experience the significant short-term dilution
    that can result from investing offering proceeds in short-term
    investments that do not earn as high a return as we expect to
    earn on our mortgage loan or other real estate-related
    investments, because we are able to invest the proceeds promptly. 
 
  Assuming all 90 million shares are sold in this offering,
    we expect to have approximately $798.9 million of net
    offering proceeds available for investment in mortgage loans and
    other real estate-related assets. If the minimum number of
    shares is sold in this offering, we expect to have approximately
    $2.1 million of net offering proceeds available for
    investment. 
  Q:
    
    If I buy shares, will I receive distributions and, if so, how
    often?A:
    
    We intend to make regular cash distributions to our
    stockholders. The amount of distributions will be determined by
    the board of directors and typically will depend on the amount
    of net cash from operations (which includes interest income from
    borrowers under mortgage loans, less expenses paid), current and
    projected cash requirements, tax considerations, our general
    financial condition and other factors. However, in order to
    remain qualified as a REIT, we must make distributions equal to
    at least 90% of our REIT taxable income each year.
    Distributions, if any, will be made monthly. The board of
    directors may in the future change our policy so that
    distributions will be paid quarterly. We may make distributions
    from sources other than cash flow from operations, including
    offering proceeds.Q:
    
    Are distributions I receive taxable?A:
    
    Yes. Generally, distributions that you receive will be
    considered ordinary income to the extent they are from current
    and accumulated earnings and profits; however, we expect a
    portion of your distributions will be considered return of
    capital for tax purposes. These amounts will not be subject to
    tax immediately but will instead reduce the tax basis of your
    investment. This in effect defers a portion of your tax until
    you have exhausted the tax basis of your investment, your
    investment is sold or we are liquidated, at which time the gain
    should, generally, be taxable as a capital gain assuming that
    you hold your shares as a capital asset. However, because each
    investors tax implications are different, we suggest you
    consult with your tax advisor. Dividends that United States
    individual stockholders receive from a REIT generally are not
    eligible for the 15% U.S. federal income tax rate except to
    the extent that such dividends are attributable to dividends
    that the REIT received from taxable corporations. Certain other
    limited circumstances can result in the taxation of dividends at
    the 15% U.S. federal income tax rate as discussed under
    U.S. Federal Income Tax Considerations 
    Taxation of Taxable United States Stockholders and
     Distributions Generally.Q:
    
    When will I get my tax information?A:
    
    Your Form 1099 tax information will be mailed by January 31
    of each year.Q:
    
    If I buy shares, will I be liable for the acts or obligations
    of CMR?A:
    
    No. Because CM REIT is a corporation, as a stockholder you
    are not generally liable for its obligations and the amount of
    your potential loss is limited to the price you pay for our
    shares. 5




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Q:
    
    What fees will CMR pay as part of this offering? 
  A:
    
    We will pay the dealer-manager a selling commission of 7.0% of
    aggregate gross proceeds, a
    dealer-manager
    fee of 3.0% of aggregate gross proceeds and will reimburse our
    advisor, its affiliates and related parties for other
    organization and offering expenses of up to 1.5% of the
    aggregate gross proceeds. If the maximum offering amount is
    sold, we will pay $63.0 million in selling commissions,
    $27.0 million in dealer-manager fees and up to
    $13.5 million in organization and offering expense
    reimbursements, although we estimate that these expense
    reimbursements will be approximately $11.1 million if the
    maximum offering amount is sold. We will not pay any of these
    commissions or fees for shares issued under the DRIP. We will
    pay the advisor a first-tier management fee calculated as a
    percentage of average invested assets. We will also pay the
    advisor a second-tier management fee based on the amount of our
    taxable REIT income, the amount of which cannot be reasonably
    estimated due to the uncertainty of
    10-year
    U.S. Treasury yields and net interest margin. We will also
    reimburse our advisor for any out-of-pocket expenses. We also
    pay our
    non-employee
    directors an annual retainer of $15,000 and additional fees
    based on the number of meetings attended and chairmanships of
    various committees. See Plan of Distribution 
    Compensation of
    Dealer-Manager
    and Participating Broker-Dealers and The
    Advisor  Compensation and Expenses for a more
    complete description of these fees. 
  Q:
    
    What is your relationship to Desert Capital REIT, Inc.? 
  A:
    
    Desert Capital REIT, Inc., which we refer to as Desert Capital,
    is an affiliated
    non-traded
    public REIT that was sponsored and advised by CM Group, LLC, an
    affiliate of our advisor, which we refer to as CM Group. The
    majority of the membership interests in our advisor,
    2020 Capital, and CM Group are beneficially owned directly
    or indirectly by our Chief Executive Officer and Chief Financial
    Officer, who were also previously officers and directors of
    Desert Capital. 
  Q:
    
    What is the performance of Desert Capital REIT, Inc.? 
  A:
    
    Desert Capital was formed in December 2003 as a REIT
    specializing in financing of short-term mortgage loans. Due to
    market conditions since the fourth quarter of 2007, most of
    Desert Capitals borrowers have defaulted on their loans
    owing to Desert Capital, which has caused Desert Capital to
    foreclose on almost all of the mortgage loans in its portfolio.
    Because Desert Capital suffered losses from operations and the
    cash flow from its operating activities was insufficient to meet
    its current obligations and debt payments, Desert Capitals
    auditors opinions for the years ended December 31,
    2009 and 2010 state that there is substantial doubt as to the
    entitys ability to continue as a going concern. As of
    December 31, 2010, Desert Capital had outstanding requests
    to repurchase or redeem approximately $57.6 million of its
    common stock and negative stockholders equity of
    approximately $28.7 million. On April 29, 2011,
    certain of Desert Capitals creditors filed an involuntary
    Chapter 11 bankruptcy petition against Desert Capital in
    the United States Bankruptcy Court for the District of Nevada in
    Las Vegas, Nevada. On June 9, 2011, Desert Capital
    consented to the involuntary bankruptcy filing and will operate
    as a
    debtor-in-possession
    during the pendency of the bankruptcy proceeding. 
  Q:
    
    Are there conflicts of interest between CMR and other related
    parties? 
  A:
    
    Yes. The majority of the membership interests in our advisor,
    2020 Capital, are beneficially owned directly or indirectly
    by two of our directors and officers including our Chief
    Executive Officer and our Chief Financial Officer. We pay our
    advisor a second-tier management fee based on our net income. In
    evaluating potential investment opportunities and in evaluating
    other operating strategies, an undue emphasis by our advisor on
    the maximization of our net income at the expense of other
    criteria, such as preservation of capital, in order to earn
    higher compensation, could result in an increased risk to the
    value of our portfolio. Our advisor may have a conflict of
    interest in allocating management time between us and other
    programs that it advises. Ignite Funding, LLC, which was
    formerly Residential Capital Mortgage Corporation and which we
    refer to as Ignite Funding, the company that originates and
    services our acquisition, development, construction, commercial
    and non-agency residential loans, is owned by 2020 Capital. In
    addition, the dealer-manager is an affiliate of ours. Our Chief
    Executive Officer is also an officer, and registered principal
    of the dealer-manager. These relationships may create conflicts
    in connection with the fulfillment by the
    dealer-manager
    of its due diligence obligations under the federal securities
    laws. Although the
    dealer-manager
    will examine the information in the prospectus for accuracy and
    completeness, the
    dealer-manager
    is an affiliate of ours and will not make an independent review
    of the company or the offering. Accordingly, investors do not
    have the benefit of such independent review. See Conflicts
    of Interest and Certain Relationships and Related
    Transactions, and Director 
 6




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Independence for a more complete description of conflicts
    of interest, and Other Affiliate-Sponsored Programs
    for a description of affiliates with whom we may compete for
    investment opportunities.Q:
    
    Will affiliates of CMR receive loan origination and servicing
    fees?A:
    
    Yes. Our advisor identifies loans originated by both
    affiliated and non-affiliated mortgage brokers, including Ignite
    Funding, a related party that will solicit new borrowers to
    originate loans for us. A loan origination fee is paid by the
    borrower of each mortgage loan directly to the entity
    originating the loan. Accordingly, Ignite Funding will be paid
    loan origination fees (points) by the borrowers on the loans
    that it originates. We are not entitled to receive any part of
    the origination fees; however, we will charge and receive
    commitment fees in connection with some of our loans. In
    addition, Ignite Funding or another affiliate of our advisor
    services our mortgage loans for us pursuant to our loan
    servicing agreement and is paid servicing fees for its services.
    The servicing fee that Ignite Funding or such other affiliate,
    as the case may be, receives for each loan is comprised of a
    spread of up to 100 basis points between the interest rate that
    is paid by the related borrower on the loan and the interest
    rate we receive as the lender on the loan. The servicing fee
    will vary per loan and will be mutually determined by our
    advisor and Ignite Funding, or such other affiliate, as the case
    may be.Q:
    
    If we foreclose on a property, will asset management fees be
    paid to affiliates of CMR?A:
    
    If a loan becomes non-performing and we take ownership of the
    property securing the loan, in lieu of the up to 100 basis point
    servicing fee that was previously paid by the borrower of the
    loan, we will pay Ignite Funding an asset management fee equal
    to 1% of the original loan amount per annum.Q:
    
    Who can help answer questions?A:
    
    If you have more questions about the offering or if you would
    like additional copies of this prospectus, you should contact
    your registered representative or our dealer-manager:  CM
    Securities, LLC
    1291 W. Galleria Drive, Suite 210
    Henderson, Nevada 89014(888) 942-9292
  Q:
    
    Will I be notified of how my investment is doing?A:
    
    Yes. We will provide you with periodic updates on the
    performance of your investment with us, including:  
    quarterly financial reports;
    an annual report;
    an annual Internal Revenue Service
    Form 1099-DIV,
    if required; and
    supplements to this prospectus.  www.cmreit.com
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SUMMARY  This summary highlights selected information contained
    elsewhere in this prospectus. You should read this entire
    prospectus carefully, including the section titled Risk
    Factors and our financial statements and the notes thereto
    before making an investment in our common stock. As used in this
    prospectus, company, we,
    our, and us refer to CM REIT, Inc.,
    except where the context otherwise requires. For a description
    of capitalized terms that are not defined, please see the
    Definitions section of this prospectus.
  CM REIT,
    Inc.
 Our
    Company  (866) 659-3849. www.cmreit.com.
 Our
    Business  loan-to-value loan-to-value
  mortgage-backed
 8




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(12-24 months)
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Our
    Advisor and Executive Officers   
 
   
       sub-prime
 10




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(1)
    
    Messrs. Parriott and Dawson indirectly beneficially own a
    controlling interest in 2020 Capital and CM Group and are our
    Chief Executive Officer and Chief Financial Officer,
    respectively, and two of our directors. Mr. Dawsons
    interest is held by Corriente Partners, L.P., which is
    wholly-owned by Corriente Private Trust. Mr. Dawson is the
    sole trustee and beneficiary of Corriente Private Trust.
    Mr. Dawson through Corriente Private Trust has voting and
    investment control with respect to the interest held by
    Corriente Partners, L.P. Mr. Dawson, however, disclaims
    beneficial ownership of any interest held by Corriente Partners,
    L.P. 
 
  (2)
    
    CM Group was the advisor to Desert Capital until June 2011. 
 
  (3)
    
    2020 Capital is the advisor to CM REIT. 
 The
    Advisory Agreement    
    Asset Management  our advisor will advise us
    with respect to, arrange for and manage the acquisition,
    financing, management and disposition of, our investments.
    Liability Management  our advisor will
    evaluate the credit risk of our investments and arrange
    borrowing strategies.
    Capital Management  our advisor will
    coordinate our capital raising activities.
 11




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Conflicts
    of Interest    
    The second-tier management fee, which is based on our net
    income, may create an incentive for our advisor to recommend
    investments with greater income potential, which may be
    relatively more risky than would be the case if its compensation
    from us did not include a component based on our financial
    performance. 
  
    Two of our directors and executive officers, are part owners,
    officers, employees or members of, or otherwise affiliated with,
    our advisor, which owns Ignite Funding, currently our only loan
    origination source for acquisition, development, construction,
    commercial and non-agency residential mortgage loans. 
 
  
    Two of our directors and executive officers, are part owners,
    officers, employees or members of, or otherwise affiliated with,
    CM Group, which owns our dealer-manager. 
  
    In the event that one of our loans becomes non-performing and we
    take ownership of the property, we will pay an asset management
    fee to Ignite Funding in the amount of 1% of the original loan
    amount, which in certain instances, may be higher than the
    servicing fee that was being paid to Ignite Funding by the
    borrower, which may create an incentive for Ignite Funding to
    originate riskier loans for us.
    Our advisor must determine how to allocate investment
    opportunities among us and any other investment programs that it
    sponsors, some of which may have similar investment objectives
    to ours. 
  
    Members of our management team will have to allocate their time
    among us and other business activities of affiliates of our
    advisor in which they are involved. 
 
   
 
  and/or
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Compensation
    to Our Advisor and Affiliates      and/or
  Type of



Estimated AmountCompensation



for Minimum/Maximumand Recipient

Method of Computation

Offering(1)Fees Paid in Connection with Our OfferingSelling Commissions to our dealer-manager and participating
    broker-dealers

We will pay our dealer-manager selling commissions of 7.0% of
    aggregate gross proceeds from sales of shares. Our
    dealer-manager will reallow all of the 7% selling commissions to
    participating broker-dealers with respect to shares they sell.

$175,000/$63,000,000(2)
 13




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Type of



Estimated AmountCompensation



for Minimum/Maximumand Recipient

Method of Computation

Offering(1)Dealer-Manager Fees to our dealer-manager and participating
    broker-dealers

We will pay our dealer-manager a dealer-manager fee of 3.0% of
    aggregate gross proceeds from sales of shares. Our
    dealer-manager
    may reallow a portion of the dealer-manager fee to any
    participating broker-dealer with respect to shares it sells(4).

$75,000/$27,000,000(3)Reimbursement of Other Organization and Offering Expenses to our
    advisor, its affiliates and related parties

To date, our advisor has paid organization and offering expenses
    on our behalf. We will reimburse our advisor and its affiliates
    for actual expenses in connection with our formation and this
    offering, including certain salaries and non-transaction based
    compensation paid to employees of our advisor and its affiliates
    for performing services for us and bona fide, itemized and
    detailed due diligence expenses incurred by the dealer-manager
    and participating broker-dealers(5). We will reimburse these
    expenses only to the extent that the reimbursement would not
    cause the selling commissions, the
    dealer-manager
    fee and the other organization and offering expenses borne by us
    to exceed 15% of gross offering proceeds as of the date of the
    reimbursement.

$125,000/$11,079,500Fees Paid in Connection with the Acquisition of
    Properties, Loans or Other Real Estate-
    Related InvestmentsAcquisition Fee to our advisor and its affiliates

We do not anticipate paying any acquisition fees to our advisor
    or its affiliates in connection with the acquisition of our
    investments. However, if we do pay acquisition fees to our
    advisor or any of its affiliates for services in connection with
    the selection, evaluation, structure and purchase of an
    investment, the fee will be usual and customary for services
    rendered and not exceed an amount equal to 6% of the cost of the
    investment acquired by us, or in the case of a loan, 6% of the
    funds advanced.

Amount is dependent upon our results of operations and is not
    determinable at this time.Reimbursement of Acquisition Expenses to our advisor, its
    affiliates and related parties

We will reimburse our advisor and its affiliates and related
    parties for actual expenses incurred in connection with the
    selection, evaluation, structure and purchase of making loans
    and other real estate-related investments, whether or not
    acquired. Acquisition expenses may include, without limitation,
    legal fees and expenses, travel and communications expenses,
    costs of appraisals, nonrefundable option payments on property
    not acquired, accounting fees and expenses, title insurance
    premiums and the costs of performing due diligence. The total of
    all acquisition fees and acquisition expenses shall be
    reasonable, and shall not exceed an amount equal to 6% of the
    contract price of the property, or in the case of a loan, 6% of
    the funds advanced.

Amount is dependent upon our results of operations and is not
    determinable at this time(6).
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Type of



Estimated AmountCompensation



for Minimum/Maximumand Recipient

Method of Computation

Offering(1)Origination Fee
    to Ignite Funding

Up to 500 basis points of loan amount and is paid by the
    borrower.

Amount is not determinable at this time.Fees Paid in Connection with our OperationsManagement Fees to our advisor

First tier management compensation of 1% per annum of the first
    $200 million of our average invested assets, plus 0.8% per annum
    of our average invested assets in excess of $200 million during
    such fiscal year, calculated on a monthly basis and payable
    monthly in arrears; and second tier management compensation of a
    specified percentage of the amount our REIT taxable net income,
    before deducting certain management compensation, net operating
    losses and certain other items, exceeds a return based on the
    10 year U.S. Treasury rate plus 1%. The percentage for this
    calculation is the weighted average of the following percentages
    based on our average invested assets for the period: 20% for the
    first $200 million of our average invested assets; and 10% of
    our average invested assets in excess of $200 million calculated
    and paid on a monthly basis and subject to annual reconciliation.

Amount of first tier management fee for the minimum offering
    amount is estimated to be $21,250 (assuming no debt financing to
    purchase investments) and approximately $85,000 (assuming debt
    financing equal to 75% of our total assets) and for the maximum
    offering amount is estimated to be $6,772,000 (assuming no debt
    financing to purchase investments) and approximately $25,888,000
    (assuming debt financing equal to 75% of the cost of our total
    assets). Amount of second tier management fee is dependent upon
    our results of operations and is not determinable at this time.Out-of-Pocket
    Expense
    Reimbursement
    to our advisor,
    its affiliates
    and related parties

Reimbursement of actual out-of-pocket expenses incurred in
    connection with our administration on an on-going basis includes
    reimbursement of expenses incurred in contracting with third
    parties to provide services to us or on our behalf, such as
    legal fees, accounting fees, consulting fees, trustee fees,
    appraisal fees, insurance premiums, commitment fees, brokerage
    fees, ad valorem and property taxes, costs of foreclosure,
    maintenance, repair and improvement of property and premiums for
    insurance. Also includes reimbursement for travel and related
    expenses incurred in connection with performing business and
    bona fide due diligence activities for or on our behalf,
    including, without limitation, travel and expenses incurred in
    connection with the purchase, financing, refinancing, sale or
    other disposition of any of our assets or other investments.
    Such fees and expenses will only be reimbursed if a detailed and
    itemized invoice is provided. Except for salaries, reimbursable
    as other organization and offering expenses, we do not reimburse
    our advisor for employment expenses of the personnel employed by
    our advisor (including our officers who are also employed by our
    advisor).

(6)
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Type of



Estimated AmountCompensation



for Minimum/Maximumand Recipient

Method of Computation

Offering(1)Servicing Fee
    to Ignite Funding

Up to 100 basis points of the loan amount and is paid by the
    borrower.

Amount is not determinable at this time.Asset Management Fee to Ignite Funding

If a loan becomes non-performing and we take ownership of a
    property as a result of a workout or foreclosure of a loan, in
    lieu of the servicing fee that was previously paid by the
    borrower, we will pay Ignite Funding an asset management fee
    equal to 1% of the original loan amount per annum.

Amount is not determinable at this time.Fees Paid in Connection with Sales or LiquidationDisposition Fee
    to Ignite Funding

If we take ownership of a property as a result of a workout or
    foreclosure of a loan, or otherwise sell a property, in
    consideration for substantial assistance in connection with the
    sale of such property (including a sale of all of our
    properties), we will pay a disposition fee upon the sale of such
    property in an amount no greater than the lesser of one-half of
    the brokerage commission paid or an amount equal to 3% of the
    contractual sales price. If we pay a disposition fee to Ignite
    Funding, we may also pay a disposition fee to another third
    party. However, the amount paid to Ignite Funding when added to
    all other disposition fees paid to any unaffiliated parties in
    such a capacity in connection with the sale, may not exceed the
    lesser of the competitive real estate commission or an amount up
    to 6% of the contractual sales price.

Amount is not determinable at this time as it is dependent upon
    amount of assets sold.     (1)
    
    The estimated minimum dollar amounts are based on the sale of
    the minimum of 250,000 shares to the public. The estimated
    maximum dollar amounts are based on the sale of the maximum of
    90,000,000 shares to the public in the primary offering. No
    sales commissions or dealer-manager fees are payable as a result
    of sales of shares under our DRIP.(2)
    
    Commissions may be reduced for discounts or waived as further
    described in the Plan of Distribution section of
    this prospectus; however, for purposes of calculating the
    estimated maximum selling commissions in this table, we have not
    assumed any such discounts or waivers.(3)
    
    The dealer-manager fees may be reduced for discounts or waived
    as further described in the Plan of Distribution
    section of this prospectus; however, for purposes of calculating
    the estimated maximum dealer-manager fees in this table, we have
    not assumed any such discounts or waivers.(4)
    
    In addition, out of its dealer-manager fee, our dealer-manager
    may reimburse participating broker-dealers for distribution and
    marketing-related costs and expenses, such as costs associated
    with attending or sponsoring conferences, technology costs and
    other marketing costs and expenses.(5)
    
    We will reimburse our dealer-manager for actual, bona fide,
    itemized and detailed due diligence expenses incurred by it or
    other participating broker-dealers in connection with this
    offering. Reimbursement is contingent upon receipt by our
    dealer-manager of a detailed invoice or similar itemized
    statement from the participating broker-dealer that demonstrates
    the actual due diligence expenses incurred. Our dealer-manager
    will reallow such reimbursements to the applicable participating
    broker-dealer.(6)
    
    All out-of-pocket expenses incurred on our behalf will be
    reimbursed in accordance with the terms of the advisory
    agreement and pursuant to an agreed upon budget. We and our
    advisor will agree on a budget, including estimated
    out-of-pocket expenses. Any individual cost or expense exceeding
    $100,000 not reflected in our budget must be approved by our
    board of directors.
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Prior
    Investment Programs       
  debtor-in-possession Appendix E
 17




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Related
    Party Legal Proceedings
 
  and/or
 18




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The
    Offering  Offering Size
    
    Minimum  $2.5 millionMaximum  $995 million$900 million of common stock to be offered to investors
    meeting certain suitability standards and up to $95 million
    of common stock available to investors who purchased their
    shares in this offering and who choose to participate in our
    DRIP.Minimum Investments
    
    Individuals  $2,500  Additional shares may
    be purchased in $10 increments.IRA, Keogh and other qualified plans 
    $1,000  Additional shares may be purchased in $10
    increments.The amounts apply to most potential investors, but minimum
    investments may vary from state to state.Suitability Standards
    
    Net worth (not including home, furnishings and personal
    automobiles) of at least $70,000 and annual gross income of at
    least $70,000; or net worth (not including home, furnishings and
    personal automobiles) of at least $250,000.Suitability standards vary from state to state.Distribution Policy
    
    Consistent with our objective of qualifying as a REIT, we expect
    to pay regular distributions and distribute at least 90% of our
    REIT taxable income. Generally, our policy is to pay
    distributions from cash flow from operations. However, we can
    give no assurance that we will pay distributions solely from our
    funds from operations in the future, especially during the
    period when we are raising capital and have not yet acquired a
    substantial portfolio of income-producing investments. If the
    cash available to us is insufficient to pay such distributions,
    we may obtain the necessary funds by borrowing funds, issuing
    new securities, or selling assets. We may make distributions
    from other sources, including from offering proceeds. Although
    our distribution policy is not to use the proceeds of this
    offering to make distributions, our organizational documents
    permit us to pay distributions from any source, including
    offering proceeds. We have not established a cap on the amount
    of proceeds that we may use to fund distributions. If we pay
    distributions from sources other than our cash flow from
    operations, we will have less funds available for investments
    and your overall return may be reduced. In addition, paying
    distributions from sources other than cash flow from operations
    may reduce the amount of distributions that we make in the
    future and may serve to dilute later investors. Such
    distributions would constitute a return of capital, which will
    have the effect of reducing the basis of your investment in our
    stock. In order to provide additional funds to pay distributions
    to our stockholders before we have acquired a substantial
    portfolio of income-producing investments, we may fund such
    distributions from advances from our advisor or from our
    advisors deferral of its fees under the advisory agreement.
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Our Advisor
    
    2020 Capital is our advisor and will administer our day-to-day
    operations and select our investments, subject to the oversight
    and direction of our board of directors. 
  Estimated Use of Proceeds
    
    If we sell only the minimum offering amount of
    250,000 shares, approximately 85% of the offering proceeds
    will be available to make investments. If we sell all
    90 million shares (excluding the DRIP shares),
    approximately 88.8% of the net offering proceeds will be
    available to make investments. The balance will be used to pay
    fees and expenses in connection with the offering, some of which
    are fixed regardless of the size of the offering. We are
    prohibited by FINRA rules from incurring offering expenses in
    excess of 15% of the proceeds of the offering. Because the
    actual expenses incurred will greatly exceed $375,000 (15% of
    the minimum offering amount of $2.5 million), we are
    required to cap our expenses at 15%. If the maximum offering
    amount of $900 million is raised, the total estimated
    organization and offering expenses of $101.1 million will
    constitute approximately 11.2% of the offering proceeds. 
  Our Reinvestment Plan
    
    We have adopted a DRIP which allows stockholders to have the
    full amount of their distributions reinvested in additional
    shares that may be available at a price of $9.50 per share. We
    have registered 10 million shares of our common stock for
    this purpose. We have attached the DRIP as
    Appendix A to this prospectus.Our Share Redemption Plan
    
    We have adopted a share redemption plan that allows our
    stockholders who hold shares for at least one year to request
    that we redeem their shares. If we have sufficient funds
    available to do so and if we choose, in our sole discretion, to
    redeem shares, the number of shares we may redeem in any
    calendar year and the price at which they are redeemed are
    subject to conditions and limitations, including:If we elect to redeem shares, some or all of the proceeds from
    the sale of shares under our distribution reinvestment plan
    attributable to any quarter may be used to redeem shares
    presented for redemption during such quarter;No more than 5% of the weighted average number of shares of our
    common stock outstanding during such
    12-month
    period may be redeemed during such
    12-month
    period; andThe price at which we redeem our shares of common stock will be
    determined by us. Subject to restrictions and limitations
    discussed herein, if we elect to redeem any shares, we may
    redeem shares (including fractional shares), from time to time,
    at the following prices:(i) the lesser of (a) the estimated value of a share
    of our common  stock, as determined by our board of directors or
    (b) 90.0% of the purchase price paid per share for
    stockholders who have owned those shares for at least one year;
    and(ii) the lesser of (a) the estimated value of a share
    of our common stock, as determined by our board of directors or
    (b) 95.0% of the
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purchase price paid per share for stockholders who have owned
    those shares for at least two years.Notwithstanding the foregoing, during any period in which we are
    engaged in a public offering, the redemption price will be
    (i) 90% of the purchase price paid per share for
    stockholders who have owned those shares for at least one year,
    or (ii) 95% of the purchase price per share for
    stockholders who have owned those shares for at least two years
    and in any event will be less than the price of shares offered
    in such public offering. During periods when we are not engaged
    in an offering, the estimated value of a share of our common
    stock, for purposes of redemption, will be the net asset value
    per share as of the end of the most recent fiscal quarter.
    Accordingly, the redemption prices paid to stockholders for
    shares of common stock redeemed by us during periods when we are
    not engaged in an offering may vary over time. Our board of
    directors has the ability, in its sole discretion, to amend or
    suspend the redemption plan or to waive any specific conditions
    if it is deemed to be in our best interest. Further, we have the
    right to waive the holding periods, the redemption prices and
    the first come, first served redemption requirements described
    herein, in the event of the death or permanent disability of a
    stockholder.  Investment
    Company Act Considerations
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Our Tax
    Status   Restrictions
    on Ownership of Our Stock
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RISK
    FACTORS  You should carefully consider the following risk factors in
    conjunction with the other information in this prospectus before
    making an investment decision. Our business, financial condition
    or results of operations could be harmed by any of these risks.
    Similarly, these risks could cause the value of our common stock
    to decline and you might lose all or part of your investment.
    Our forward-looking statements in this prospectus are subject to
    the following risks and uncertainties. Our actual results could
    differ materially from those anticipated by our forward-looking
    statements as a result of the risk factors below.
 Risks
    Related to the Offering  A
    prior program advised by an affiliate of our advisor, has been
    materially and adversely impacted by the disruptions in the real
    estate and credit markets, has experienced extremely high
    default and foreclosure rates, and as a result, there is
    substantial doubt as to such programs ability to continue
    as a going concern.
 
 
  18-
 
 
   
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debtor-in-possession
 
 
   
 We do
    not have any operating history and might not be able to operate
    our business or implement our operating policies and strategies
    successfully.    
    identify and acquire investments that further our investment
    strategy;
    create awareness of the CM REIT name within the investment
    products market;
    establish and maintain our network of licensed securities
    brokers and other agents;
    attract, integrate, motivate and retain qualified personnel to
    manage our day-to-day operations;
    respond to competition both for investment opportunities and
    potential investors in us; and
    build and expand our operations structure to support our
    business.   There
    is currently no public trading market for our common stock and
    there is no assurance that one will develop; therefore, you may
    not be able to sell your shares at a price equal to or greater
    than the offering price, or at all.   24




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We
    cannot assure you of our ability to make the distributions to
    our stockholders required in order for us to qualify as a REIT
    in the future.   If we
    pay distributions from sources other than our cash flow from
    operations, we will have less funds available for investments,
    and your overall return may be reduced.   If
    there are delays in investing the proceeds of this offering,
    then receipts from investments and our investment returns may be
    lower than anticipated.   The
    business and financial due diligence of CMR was conducted by our
    dealer-manager, which is our affiliate.   25




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Our
    share redemption plan, which is the only current source of
    liquidity for our stockholders, may be amended or suspended at
    any time, leaving our stockholders unable to sell their
    shares.   Certain
    amounts of the proceeds of this offering will be paid to our
    affiliates.   We
    established the offering price on an arbitrary basis, so the
    price bears no relationship to any established valuation
    criteria.   The
    risk that we will not be able to accomplish our business
    objectives will increase if only the minimum number of shares
    are sold in this offering.   Investors
    who invest in us at the beginning of our offering may realize a
    lower rate of return than later investors.   26




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Your
    interest may be diluted if we issue additional
    shares.    
    sell shares in this offering or sell additional common shares in
    the future, whether publicly or privately;
    sell securities that are convertible into common shares;
    issue restricted shares to our officers or directors; or
    issue common stock upon the exercise of options. Your
    interest may be diluted by the issuance of stock pursuant to our
    2011 Stock Incentive Plan.   Future
    offerings of debt securities, which would be senior to our
    common stock upon liquidation, or equity securities, which would
    dilute our existing stockholders and may be senior to our common
    stock for the purposes of distributions, may harm the value of
    our common stock.   Certain
    provisions of Maryland law and our articles of incorporation and
    bylaws could hinder, delay or prevent a change in control of
    CMR.    
    Number of Directors, Board Vacancies, Term of
    Office.  Under our bylaws, we have elected to be
    subject to certain provisions of Maryland law which vest in our
    board of directors the exclusive right to determine the number
    of directors and the exclusive right, by the affirmative vote of
    a majority of the remaining directors, to fill vacancies on the
    board even if the remaining directors do not constitute a
    quorum. These provisions of Maryland law, which are applicable
    even if other provisions of Maryland law or the articles of
    incorporation or bylaws provide to the contrary, also provide
    that any director elected to fill a vacancy shall hold office
    until the next annual meeting of stockholders and until his or
    her successor is elected and qualified. 27




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
    Limitation on Stockholder-Requested Special
    Meetings.  Our articles of incorporation and
    bylaws provide that our stockholders have the right to call a
    special meeting only upon the written request of stockholders
    entitled to cast not less than 10% of all the votes entitled to
    be cast by the stockholders at such meeting.
    Advance Notice Provisions for Stockholder Nominations and
    Proposals.  Our bylaws require no less than 120
    nor more than 150 days advance written notice for
    stockholders to nominate persons for election as directors at,
    or to bring other business before, any meeting of stockholders.
    This bylaw provision limits the ability of stockholders to make
    nominations of persons for election as directors or to introduce
    other proposals unless we are notified in a timely manner prior
    to the meeting.
    Preferred Stock.  Under our articles of
    incorporation, our board of directors has authority to issue up
    to 15 million shares of preferred stock from time to time
    in one or more series and to establish the terms, preferences
    and rights of any such series of preferred stock, all without
    approval of our stockholders. We will not offer preferred stock
    to a promoter except on the same terms and conditions as that
    stock is offered to all other existing stockholders or to new
    stockholders.
    Ownership Limit.  In order to preserve our
    status as a REIT under the Internal Revenue Code, our articles
    of incorporation generally prohibit any single stockholder, or
    any group of affiliated stockholders, from beneficially owning
    more than 9.8% of our outstanding common or preferred stock
    unless our board of directors waives or modifies this ownership
    limit.   Restrictions
    on ownership of a controlling percentage of our capital stock
    might limit your opportunity to receive a premium on our
    stock.   Distribution
    payments are subordinate to payments on debt.   28




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There
    may be significant fluctuations in our quarterly results, which
    makes it difficult to anticipate our performance from quarter to
    quarter.    
    interest rate changes;
    the volume and timing of our acquisitions or investments;
    the recognitions of gains or losses on sales;
    the level of competition in our market; and
    general economic conditions, especially those which affect the
    commercial mortgage market and real estate development.   Risks
    Related to Our Business and Operations A
    prolonged economic slowdown, lengthy or severe recession or
    significant increase in interest rates could harm our
    business.    Continued
    volatile market conditions could harm our ability to acquire
    mortgage loans and financing to implement our investment
    strategy, which could have a material adverse effect on our
    business, results of operations and our ability to make
    distributions to you.
       29




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and/or and/or
    and/or
 
 
  CM
    Capital Services, the loan originator for Desert Capital, a
    prior program advised by an affiliate of our advisor, has
    forfeited its mortgage broker license.
 
   
  Ignite
    Funding, our loan originator, servicer and asset manager has
    limited experience originating and servicing certain types of
    loans in which we intend to invest.
 
   
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Recent
    disruptions in the financial markets and deteriorating economic
    conditions could adversely affect the values of our investments
    and our ongoing results of operations.
        
    the values of our investments could decrease below the amounts
    we paid for the investments;
    revenues from our loans could decrease due to borrower defaults
    and further declining property values; and
    we may not be able to obtain debt financing to finance our
    investments or refinance existing indebtedness on attractive
    terms or at all.    A
    prolonged recessionary economic environment in the Las Vegas,
    Nevada area could result in continued market illiquidity and
    further declining real estate values, which could have a
    material adverse effect on our business and results of
    operations and our ability to make distributions to
    you.
    We
    have not yet identified any specific assets to purchase with the
    net proceeds of this offering and may be unable to invest a
    significant portion of such net proceeds on acceptable terms or
    at all, which could harm our financial condition and operating
    results.    interest-bearing
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Defaults
    on the mortgage loans we expect to fund or acquire may reduce
    the value of our investment portfolio and may harm our results
    of operations.     If we
    become the owner of real estate as a result of a workout or
    foreclosure of a loan, we may incur additional obligations,
    which may reduce the amount of funds available for distribution
    to our stockholders.   Because
    the assets underlying the loans that we expect to acquire might
    experience periods of illiquidity, we might be prevented from
    liquidating our collateral at opportune times and prices, and
    our capital available to acquire new investments will be
    reduced.   32




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We
    expect to invest in non-investment grade loans, which have a
    higher risk of payment default, thereby increasing the risk to
    our revenues.   A
    majority of our mortgage loan investments will be balloon
    mortgage loans, which have a higher risk of payment default than
    amortizing loans, thereby increasing the risk to our
    revenues.   Because
    a substantial majority of our loans are expected to be
    interest-carry and
    non-amortizing,
    we may not realize that a loan is non-performing until the
    maturity date, and therefore may not make proper provision for
    loan losses or timely prepare a strategy for the non-performing
    loan, which may adversely affect our results of
    operations.  non-amortizing,
 Decreases
    in the value of the property underlying our mortgage loans might
    decrease the value of our assets.   Commercial
    loans generally involve a greater risk of loss than residential
    loans. If a borrower defaults on its payment obligations to us,
    our results of operations will be harmed.   33




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We
    expect that a significant portion of the mortgage loans invested
    in by us will be either acquisition or development mortgage
    loans, which are highly speculative.    
    until disposition, the property does not generate separate
    income for the borrower to make loan payments;
    the completion of planned development may require additional
    development financing by the borrower, which may not be
    available;
    depending on the velocity or amount of lot sales to
    homebuilders, demand for lots may decrease causing the price of
    the lots to decrease;
    depending on the velocity or amount of lot sales to developers
    or homebuilders, demand for land may decrease causing the price
    of the land to decrease;
    there is no assurance that we will be able to sell unimproved
    land promptly if we are forced to foreclose upon it; and
    lot sale contracts are generally not specific
    performance contracts, and the borrower may have no
    recourse if a homebuilder elects not to purchase lots.   We
    expect to invest in construction loans, which are subject to the
    risk of failure of completion or failure of the subsequent sale
    of the completed project.  and/or
 We
    have limited recourse with respect to non-agency residential
    mortgage loans that we make to foreign nationals.   A fire
    or other accident could occur in a single condo or hotel room
    that causes the entire building to be
    uninhabitable.   34




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Some
    of our non-agency residential mortgage loans may be made to
    individuals for a second home, thereby increasing the risk that
    our mortgage loan will not be paid.   Borrowers
    may use their property for rental purposes, making enforcement
    of the mortgage loan more difficult.   We may
    be subject to losses due to fraudulent and negligent acts on the
    part of mortgage loan applicants, mortgage brokers, other
    vendors and our employees.   Properties
    securing our non-agency residential mortgage loans may have
    construction problems, which causes the borrower to move out and
    default on his or her mortgage loan.    Our
    charter documents do not require a particular allocation of
    assets in our portfolio. Therefore, our investments may not be
    diversified among the various categories we are targeting. Any
    lack of diversity in our investments could increase the impact
    of defaults on our results of operations.
  estate-related
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We
    rely on information provided to us by third parties which we
    cannot always verify in making our investment decisions. If any
    of these third parties makes an error or misrepresents
    information to us, we may make investments in assets that do not
    meet our standard investment criteria.    As a
    part of our loan underwriting criteria we may use an
    as-if-developed value of a property.
  post-construction
  New
    and proposed legislation and court rulings with respect to
    foreclosures and other lending practices could restrict our
    ability to produce mortgages loans, which could harm our
    revenues and profitability.
    The
    mortgage origination business of many financial services firms
    is subject to special litigation and regulatory
    risks.
   36




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If the
    estimates or assumptions we use to value our assets or determine
    our allowance for loan losses prove to be incorrect, we may be
    required to write down assets or increase our allowance for loan
    losses.
    Our
    opportunistic commercial property-acquisition strategy involves
    a higher risk of loss than more conservative investment
    strategies.
  and/or
  We
    will be subject to risks incident to the ownership of real
    estate over which we will have no control.
  on-site
  Some
    of our investments may be dependent on tenants for revenue, and
    lease terminations could reduce our ability to make
    distributions to stockholders.
   37




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We may
    be unable to secure funds for future tenant improvements, which
    could adversely impact our financial condition.
  property-by-property
  Uninsured
    losses relating to real property or excessively expensive
    premiums for insurance coverage may adversely affect our
    financial condition.
    If we
    set aside insufficient capital reserves, we may be required to
    defer necessary capital improvements.
    The
    costs of compliance with environmental laws and other
    governmental laws and regulations may adversely affect our
    income and results of operations.
  above-ground
 38




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Discovery
    of previously undetected environmentally hazardous conditions
    may adversely affect our operating results.
    Our
    costs associated with complying with the Americans with
    Disabilities Act may adversely affect our results of
    operations.
    The
    mortgage-backed securities in which we may invest are subject to
    the risks of the mortgage securities market as a whole and risks
    of the securitization process.
  mortgage-backed
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Our
    investments in debt securities and preferred and common equity
    securities will be subject to the specific risks relating to the
    particular issuer of the securities and may involve greater risk
    of loss than secured debt financings.
  and/or
  Our
    dependence on the management of other entities in which we
    invest may adversely affect our business.
    Many
    of our investments are illiquid and we may not be able to vary
    our portfolio in response to changes in economic and other
    conditions.
    Declines
    in the market values of our investments may adversely affect
    periodic reported results of operations and credit availability,
    which may reduce earnings and, in turn, cash available for
    distribution to our stockholders.
   40




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Some
    of our portfolio investments will be carried at estimated fair
    value as determined by us and, as a result, there may be
    uncertainty as to the value of these investments.
    Delays
    in restructuring or liquidating non-performing debt-related
    securities could reduce the return on your
    investment.
  and/or
  We may
    be required to repurchase loans that we have sold or to
    indemnify holders of CDOs we issue.
   41




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We may
    not be able to acquire eligible investments for a CDO issuance
    or may not be able to issue CDO securities on attractive terms,
    either of which may require us to seek more costly financing for
    our investments or to liquidate assets.
   Interest
    rate fluctuations may adversely affect the value of our
    assets.   We
    might experience reduced net interest income or a loss from
    holding fixed rate investments during periods of rising interest
    rates.   The
    geographic concentration of the properties underlying our
    investments may increase our risk of loss.   42




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We may
    not be able to expand our operations into new geographic
    regions, which may cause us to incur expenses that do not result
    in increased revenues, which would reduce our results of
    operations.   Our
    board of directors may change our operating policies and
    strategies without prior notice or stockholder approval and such
    changes could harm our business and results of operations and
    the value of our common stock.   We
    depend on our key personnel, especially our Chairman of the
    Board, Chief Executive Officer, President and Chief Investment
    Officer, Todd Parriott, and the loss of any of our key personnel
    could severely and detrimentally affect our
    operations.    We
    depend on Ignite Funding to service our mortgage loans, and
    termination of our loan servicing agreement with Ignite Funding
    or poor performance by Ignite Funding could adversely affect our
    results of operations and our ability to make distributions to
    our stockholders.
  back-up
 43




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Our
    joint venture partners could take actions that decrease the
    value of an investment to us and lower your overall
    return.    
    that our co-venturer, co-tenant or partner in an investment
    could become insolvent or bankrupt in which case our investment
    might become subject to the rights of the co-venturer or
    partners creditors and we may be forced to liquidate our
    investment before we otherwise would choose to do so;
    that such co-venturer, co-tenant or partner may at any time have
    economic or business interests or goals that are or that become
    inconsistent with our business interests or goals; which may
    cause us to disagree with our co-venturer or partner as to the
    best course of action with respect to the investment and which
    disagreement may not be resolved to our satisfaction; or
    that such co-venturer, co-tenant or partner may be in a position
    to take action contrary to our instructions or requests or
    contrary to our policies or objectives which may cause us not to
    realize the return anticipated from our investment.    co-invest
 Competition
    might prevent us from acquiring mortgage loans at favorable
    spreads over our borrowing costs which would harm our results of
    operations.   Insurance
    will not cover all potential losses on the underlying real
    properties and the absence thereof may impair our security and
    harm the value of our assets.   44




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The
    liquidation of our assets may be delayed, which may delay the
    distribution of liquidation proceeds to our
    stockholders.  12-24 month
   We
    expect to depend on borrowings to purchase some of our assets
    and reach our desired amount of leverage. Continued adverse
    conditions in the capital markets could cause us to fail to
    obtain sufficient funding on favorable terms or at all, which
    would limit our ability to acquire assets and harm our results
    of operations.   Failure
    to procure adequate capital and funding on favorable terms, or
    at all, would adversely affect our results and may, in turn,
    negatively affect our ability to distribute dividends to our
    stockholders.    short-term
   45




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Our
    leverage strategy increases the risks of our operations, which
    could reduce our net income and the amount available for
    distributions or cause us to suffer a loss.    
    A majority of our borrowings will be secured by our investments.
    A decline in the market value of the assets used to secure these
    debt obligations could limit our ability to borrow or result in
    lenders requiring us to pledge additional collateral to secure
    our borrowings. In that situation, we could be required to sell
    assets under adverse market conditions in order to obtain the
    additional collateral required by the lender. If these sales are
    made at prices lower than the carrying value of the assets, we
    would experience losses.
    A default under a mortgage loan that constitutes collateral for
    a loan could also result in an involuntary liquidation of the
    mortgage loan, including any cross-collateralized assets. This
    would result in a loss to us of the difference between the value
    of the mortgage loan upon liquidation and the amount borrowed
    against the mortgage loan. Distributions to our stockholders are
    subordinate to the payment of our debts and obligations. If we
    have insufficient funds to pay our debts and obligations,
    distributions to stockholders may be suspended pending the
    payment of such debts and obligations. This could result in our
    inability to distribute at least 90% of our annual REIT taxable
    income and possible loss of our status as a REIT.
    To the extent we are compelled to liquidate qualified REIT
    assets to repay debts, our compliance with the REIT rules
    regarding our assets and our sources of income could be
    negatively affected, which would jeopardize our status as a REIT.
    If we experience losses as a result of our leverage policy, such
    losses would reduce the amounts available for distribution to
    our stockholders.   46




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##### Table of Contents



Lenders
    may require us to enter into restrictive covenants relating to
    our operations, which could limit our ability to make
    distributions to our stockholders.   We may
    incur increased borrowing costs related to credit agreements
    that would harm our results of operations.     Possible
    market developments could cause our lenders to require us to
    pledge additional assets as collateral. If our assets are
    insufficient to meet the collateral requirements, we might be
    compelled to liquidate particular assets at inopportune times
    and at disadvantageous prices, which may cause us to experience
    losses.



Possible market developments, including a sharp or prolonged
    rise in interest rates or the current increasing market concern
    about the value or liquidity of one or more types of the
    mortgages in which we will invest, might reduce the market value
    of our portfolio, which might cause our lenders to require
    additional collateral. Any requirement for additional collateral
    might compel us to liquidate our assets at inopportune times and
    at disadvantageous prices, thereby harming our operating
    results. If we sell assets at prices lower than the carrying
    value of the assets, we would experience losses. See
    Managements Discussion and Analysis of Financial
    Condition and Results of Operations  Liquidity and
    Capital Resources.



Terrorist
    attacks and other acts of violence, civilian unrest or war may
    affect the markets in which we operate, our operations and our
    profitability.



Terrorist attacks and other acts of violence, civilian unrest or
    war may negatively affect our operations and your investment in
    our shares. We may acquire mortgage loans secured by real estate
    located in areas that are susceptible to attack. In addition,
    any kind of terrorist activity or violent criminal acts,
    including terrorist acts against public institutions or
    buildings or modes of public transportation (including airlines,
    trains or buses) could have a negative effect on our business.
    These events may directly impact the value of our assets through
    damage, destruction, loss or increased security costs. Our
    borrowers may not be able to obtain insurance against the risk
    of terrorism because it may not be available or may not be
    available on terms that are economically feasible. Further, even
    if they do obtain terrorism insurance, they may not be able to
    obtain sufficient coverage to fund any losses they may incur.
    Risks associated with potential acts of terrorism in the areas
    in which the properties securing our mortgage loans are located
    could sharply increase the premiums for coverage against
    property and casualty claims.



The consequences of any armed conflict are unpredictable, and we
    may not be able to foresee events that could have an adverse
    effect on our business or your investment. More generally, any
    terrorist attack, other act of violence or war, including armed
    conflicts, could result in increased volatility in, or damage
    to, the United States and worldwide financial markets and
    economy. They also could result in a continuation of the current
    economic uncertainty in the United States or abroad. Our
    revenues will be dependent upon the return of our investments
    which may be particularly vulnerable to uncertainty in the local
    economy. Increased economic volatility could adversely affect
    our borrowers ability to repay their loans to us and our
    ability to borrow



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Risks
    Related to Our Advisor and Conflicts of Interest Our
    results may suffer as a consequence of a conflict of interest
    arising out of our relationship with our advisor. We pay our
    advisor a first-tier management fee based on the average amount
    of invested assets, and a second-tier management fee based on
    our portfolios performance. This arrangement may lead our
    advisor to recommend riskier or more speculative investments
    regardless of their long-term performance in an effort to
    maximize its
    compensation.



The first-tier management compensation fee we pay our advisor is
    based on the average amount of assets invested, which provides
    incentive for our advisor to invest our assets quickly, and
    possibly in riskier investments regardless of their performance.
    In addition to its first-tier management fee, our advisor earns
    a second-tier management fee for each fiscal month, equal to a
    specified percentage of the amount by which our net income,
    before deducting the second-tier management fee, net operating
    losses and certain other items, exceeds a return based on the
    10 year U.S. Treasury rate plus 1%. The percentage for
    this calculation is the weighted average of the following
    percentages based on our average invested assets for the period: 
    20% for the first $200 million of our average invested
    assets; and
    10% of our average invested assets in excess of
    $200 million.  under-weighted
 Our
    advisor has significant influence over our affairs, and might
    cause us to engage in transactions that are not in our or our
    stockholders best interests.   Our
    success will depend on the performance of our advisor and if
    our advisor or our board of directors makes inadvisable
    investment or management decisions, our operations could be
    impaired, potentially causing us to suffer a loss.   48




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Members
    of our management team render services to other entities, which
    could reduce the amount of time and effort that they devote to
    us.   
 Our
    advisor may face conflicts of interest relating to the
    allocation of investment opportunities between us and its
    other clients, and such conflicts may not be resolved in our
    favor, meaning our advisor may offer us less attractive
    investment opportunities, lowering your overall
    return.



We rely on our advisor to identify suitable investment
    opportunities. Affiliate entities may also rely on our advisor
    for investment opportunities. Many investment opportunities may
    be suitable for us as well as any such other entities, because
    we may have similar investment objectives. Our advisor could
    direct attractive investment opportunities to other entities or
    even make such investments for its own account. Such allocation
    decisions could result in our investing in mortgage loans that
    provide less attractive returns, thus reducing the level of
    distributions we may be able to pay you. See Conflicts of
    Interest  Allocation of Investment
    Opportunities. Our
    advisor may become the advisor to other investment programs,
    and may not always be able to allocate investment opportunities
    on an equitable basis among us and its other
    clients.



Our advisor may become the advisor to other investment programs,
    which we may compete with for investments. Our advisor, through
    its investment committee, will seek to equitably apportion among
    us and its other direct and indirect clients all investment
    opportunities of which it becomes aware. Our advisor intends to
    allocate investments based on factors it deems relevant, such as
    each clients underwriting criteria and cash available for
    investment. However, circumstances may arise, due to
    availability of capital or other reasons, when it is not
    possible for us to make an investment allocated to us. We cannot
    assure you that we will be able to invest in all investment
    opportunities of which our advisor becomes aware that may be
    suitable for us on an equitable basis or otherwise. Our
    executive officers and some of our directors face conflicts
    of interest related to the positions they hold with our advisor
    and its affiliates, which could hinder our ability to
    successfully implement our business strategy and to make
    distributions to our stockholders.



Our executive officers and some of our directors are also part
    owners, officers and directors of our advisor, our
    dealer-manager and other affiliated entities. As a result, they
    owe fiduciary duties to these various entities and their
    stockholders and members, which fiduciary duties may from time
    to time conflict with the fiduciary duties that they owe to us
    and our stockholders. Their loyalties to these other entities
    could result in actions or inactions that are detrimental to our
    business, which could hinder the implementation of our business
    strategy and our investment opportunities. The taking of any
    such actions or inactions by our executive officers and
    directors that are detrimental to our business may result in a
    breach of their fiduciary duties to us and our stockholders. If
    we do not successfully implement our business strategy, we may
    be unable to generate the cash needed to make distributions to
    you and to maintain or increase the value of our assets.


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Our
    advisor and its affiliates may form other companies that
    will engage in businesses similar to ours, and may direct
    profitable investment opportunities to those other clients
    rather than us. We may not always be able to participate in
    investment opportunities on an equitable basis between us and
    such other companies.



Our advisor and its affiliates may engage in additional real
    estate-related activities in the future, including the
    activities in which we intend to engage, and may form new
    entities to engage in these activities. If new companies are
    formed for the purpose of engaging in the businesses in which we
    engage, our advisor intends to allocate investment opportunities
    among us, its other clients, and the new entities equitably.
    However, we cannot assure you that our advisor will allocate
    investment opportunities equitably. Our advisor may direct more
    profitable investment opportunities to its other clients instead
    of to us, thereby harming our results of operations. Certain
    of our directors loyalties to future
    affiliate-sponsored programs could influence their judgment,
    resulting in actions that are not in our stockholders best
    interest or that result in a disproportionate benefit to another
    affiliate program at our expense.







Certain of our directors may in the future be directors of other
    affiliate-sponsored programs. The loyalties of these directors
    to other programs may influence their judgment when considering
    issues for us that may also affect such other programs, such as
    the following: 
    Our board of directors will evaluate the performance of our
    advisor. If our advisor is not presenting a sufficient number of
    investment opportunities to us because it is presenting many
    opportunities to other programs, or if our advisor is giving
    preferential treatment to other programs, our board of directors
    may not be well suited to enforce our rights under the terms of
    the advisory agreement or to seek a new advisor.
    We could enter into a transaction with such other programs, such
    as a joint venture or joint financing arrangement. Decisions of
    our board of directors regarding the terms of these transactions
    may be influenced by its loyalties to such other programs.
    A decision of the board of directors regarding the timing of a
    debt or equity offering could be influenced by concerns that the
    offering would compete with an offering of another
    affiliate-sponsored program.   Certain
    of the principals of our advisor will face conflicts of
    interest relating to the extension and purchase of loans, and
    such conflicts may not be resolved in our favor.





Certain of the principals of our advisor are also principals,
    directors, officers and equity holders of other entities,
    including CM Group, and they may also in the future hold
    positions with, and interests in, other entities engaged in real
    estate activities. These multiple responsibilities may create
    conflicts of interest for these individuals if they are
    presented with opportunities that may benefit us and their other
    affiliates. These individuals may be incentivized to allocate
    opportunities to other entities rather than to us if they are
    more highly compensated based on investments made by other
    entities. In determining which opportunities to allocate to us
    and to their other affiliates, these individuals will consider
    the investment strategy and underwriting criteria of each
    entity. Because we cannot predict the precise circumstances
    under which future potential conflicts may arise, we intend to
    address potential conflicts on a
    case-by-case
    basis. There is a risk that our advisor will choose an
    investment for us that provides lower returns to us than a loan
    made by one of our affiliates. You will not have the opportunity
    to evaluate the manner in which any conflicts of interest
    involving the advisor and its affiliates are resolved before
    making your investment. For more information on these potential
    conflicts of interest, see Conflicts of Interest and
    Other Affiliate-Sponsored Programs.




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An
    affiliate of our advisor will receive origination and servicing
    fees, which may create a conflict of interest that could
    encourage our advisor to cause us to invest in larger or riskier
    loans than we otherwise would.   We may
    be obligated to pay our advisor the second-tier management fee
    even if we incur a loss.   We can
    not estimate with certainty the future aggregate fees and
    expense reimbursements that will be paid to our advisor under
    the advisory agreement.



Our advisor is entitled to substantial fees pursuant to the
    advisory agreement. Our advisors first-tier management fee
    is calculated as a percentage of our average invested assets.
    Our advisors second-tier management fee is calculated as a
    tiered percentage of our taxable income (before deducting
    certain items) in excess of a threshold amount of taxable income
    and is indeterminable in advance of a particular period. Because
    payments of first-tier management fee, second-tier management
    fee and expense reimbursements are determined at future dates
    based upon our then-applicable average invested assets, results
    of operations and actual expenses incurred by our advisor, such
    fees and expense reimbursements cannot be estimated with
    certainty. We can provide no assurance at this time as to the
    amount of any such first-tier management fee, second-tier
    management fee or expense reimbursements that may be payable to
    our advisor in the future. See The Advisor 
    Compensation and Expenses. Our
    advisors liability is limited under the advisory
    agreement, and we have agreed to indemnify it against certain
    liabilities.   51




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If our
    advisor terminates the advisory agreement, we may not be able to
    find an adequate replacement advisor.   Risks
    Related to Legal and Tax Requirements  Unfavorable
    results of legal proceedings could materially adversely affect
    us.
 
 
   
 
  and/or
 
 If we
    fail to qualify or are disqualified as a REIT, we will be
    subject to tax as a regular corporation and face substantial tax
    liability.    
    we would be taxed as a regular domestic corporation, which,
    among other things, means that we would be unable to deduct
    distributions to stockholders in computing taxable income and we
    would be subject to U.S. federal income tax on our taxable
    income at regular corporate rates; 52




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
    any resulting tax liability could be substantial, would reduce
    the amount of cash available for distribution to stockholders,
    and could force us to liquidate assets at inopportune times,
    causing lower income or higher losses than would result if these
    assets were not liquidated; and
    unless we were entitled to relief under applicable statutory
    provisions, we would be disqualified from treatment as a REIT
    for the subsequent four taxable years following the year during
    which we lost our qualification and, thus, our cash available
    for distribution to our stockholders would be reduced for each
    of the years during which we did not qualify as a REIT.   Our
    management team has limited experience managing a
    REIT.   Complying
    with REIT requirements might cause us to forego otherwise
    attractive opportunities.     Complying
    with REIT requirements may force us to liquidate otherwise
    attractive investments.   Our
    investment in taxable REIT subsidiaries may exceed the statutory
    limit.   53




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and/or
 Complying
    with REIT requirements may force us to borrow to make
    distributions to our stockholders.   Your
    investment return may be reduced if we are required to register
    as an investment company under the Investment Company Act; if we
    become an unregistered investment company, we could not continue
    our business.    
    limitations on capital structure;
    restrictions on specified investments;
    prohibitions on transactions with affiliates; and
    compliance with reporting, record keeping, voting, proxy
    disclosure and other rules and regulations that would
    significantly increase our operating expenses.     54




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Rapid
    changes in the values of our assets may make it more difficult
    for us to maintain our qualification as a REIT or exemption from
    the Investment Company Act.
  estate-related
 Misplaced
    reliance on legal opinions or statements by borrowers could
    result in a failure to comply with REIT income or assets
    tests.   One-action
    rules may harm the value of the underlying
    property.   We may
    be harmed by changes in various laws and
    regulations.   55




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Legal
    claims and regulatory risks and restrictions arise in the
    conduct of our business and the business of our
    affiliates.
  and/or and/or and/or and/or
 
 
 
 We may
    incur excess inclusion income that would increase the tax
    liability of our stockholders.     Our
    rights and the rights of our stockholders to recover claims
    against our independent directors are limited, which could
    reduce your and our recovery against them if they negligently
    cause us to incur losses.   56




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CAUTIONARY
    NOTE REGARDING FORWARD-LOOKING STATEMENTS      
    our limited operating history; 
  
    our ability to raise capital; 
  
    your inability to review the assets that we will acquire with
    the net proceeds of this offering;
    economic conditions impacting the real estate market and credit
    markets;
    changes in interest rates; 
  
    our ability to obtain debt financing on acceptable terms or at
    all and any failure to satisfy the conditions and requirements
    of such debt; 
  
    changes in the rate of construction in the markets in which we
    invest;
    potential impacts of our leverage policy on our net income and
    cash available for distribution;
    our boards ability to change our operating policies and
    strategies without notice to you or stockholder approval;
    the number of our mortgage loans that become non-performing; 
  
    our advisors motivation to recommend riskier investments
    in an effort to maximize its compensation under the advisory
    agreement; 
 
  
    conflicts of interest arising out of our relationships with our
    advisor and its affiliates; and 
  
    our failure to remain qualified as a REIT.  forward-looking
 57




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ESTIMATED
    USE OF PROCEEDS  dealer-manager
 
  
 Minimum Offering


Maximum Offering(1)Amount


Percent


Amount


PercentOFFERING PROCEEDS TO THE COMPANY LESS:

$
2,500,000



100.0
%

$
900,000,000



100.0
%Selling Commission to Dealer-Manager


175,000



7.0
%


63,000,000



7.0
%Dealer-Manager Fee to Dealer-Manager


75,000



3.0
%


27,000,000



3.0
%Other Offering Expenses(2)(3)


125,000



5.0
%


11,079,500



1.2
%NET PROCEEDS TO THE COMPANY(4)(5)

$
2,125,000



85.0
%

$
798,920,500



88.8
%  
    (1)
    
    Excludes 10 million shares of our common stock that may be
    sold pursuant to our DRIP.(2)
    
    Includes all expenses (other than selling commissions and the
    dealer-manager fee) to be paid by us in connection with the
    formation of the company and the qualification and registration
    of the offering, and the marketing and distribution of shares,
    including, without limitation, total underwriting and brokerage
    discounts and commissions (including the fees of the
    underwriters attorneys), expenses for printing, engraving
    and amending registration statements or supplementing
    prospectuses, mailing and distributing costs, salaries of
    employees while engaged in sales activity, telephones and other
    telecommunications costs, all advertising and marketing
    expenses, charges of transfer agents, registrars, trustees,
    escrow holders, depositories and experts and fees, expenses and
    taxes related to the filing, registration and qualification of
    the sale of shares under federal and state laws, including taxes
    and fees and accountants and attorneys fees. Our
    advisor has agreed to reimburse us to the extent selling
    commissions, the dealer manager fee and other organization and
    offering expenses incurred by us exceed 15% of aggregate gross
    offering proceeds. See Plan of Distribution. 
  (3)
    
    We are prohibited by FINRA rules and NASAA guidelines from
    incurring total organization and offering expenses in excess of
    15% of the proceeds of the offering. Because the actual expenses
    incurred will greatly exceed $375,000 (15% of the minimum
    offering amount of $2.5 million), we are required to cap
    our expenses at 15%. If we only sell the minimum offering
    amount, offering expenses in excess of 15.0% of gross proceeds
    will be paid by 2020 Capital. If however, the maximum
    offering amount of $900 million is raised (which excludes
    amounts that may be raised under the DRIP), the estimated total
    offering expenses of $101.1 million will constitute
    approximately 11.2% of the offering proceeds. At the time 
 58




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when we have sold in excess of the minimum offering amount, any
    offering expenses in excess of 11.5% of gross proceeds will be
    paid by 2020 Capital.(4)
    
    We do not anticipate paying any acquisition fees in connection
    with the acquisition of our investments. However, if we ever do
    pay acquisition fees, they will be reasonable and will not
    exceed an amount equal to 6% of the cost of the investments
    acquired by us, or in the case of a loan, 6% of the funds
    advanced. We may incur customary acquisition expenses in
    connection with the acquisition or origination (or attempted
    acquisition or origination) of an asset.(5)
    
    Offering proceeds designated for investments may also be used to
    repay debt borrowed in connection with such investments.
    Offering proceeds designated for investments temporarily may be
    invested in short-term, highly liquid investments with
    appropriate safety of principal. In addition, although our
    distribution policy is not to use the proceeds of this offering
    to make distributions, our organizational documents permit us to
    pay distributions from any source, including offering proceeds.
    We have not established a cap on the use of proceeds to fund
    distributions. DISTRIBUTION
    POLICY         59




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SUMMARY
    OF REINVESTMENT PLAN  Appendix A
 General   60




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Investment
    of Distributions     Participant
    Accounts, Fees and Allocation of Shares         61




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Automatic
    Investment Program
 
   
 
  and/or Appendix B.
 
 
   
 
 
 Reports
    to Participants     62




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Election
    to Participate or Terminate Participation         U.S.
    Federal Income Tax Considerations   63




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Amendments
    and Termination   SHARE
    REDEMPTION PLAN  Appendix C
 
 
  12-month 12-month
 
 
   
       64




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Form 8-K
     
   
 
   
   
   
 65




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BUSINESS General     66




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Investment
    Strategy      Real
    Estate Market Outlook
     67




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Financing
    Strategy   Our
    Investment Types   Acquisition,
    Development, Construction and Commercial Mortgage
    Loans  (12-24 months)
 68




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Acquisition of Raw and Unimproved
    Land.
  Development Loans.
  Construction Loans. post-construction
  Commercial Loans.
  Trust Deeds.
  
    we do not have sufficient funds to invest in an entire
    loan; or
    an originated trust deed mortgage loan fits within our
    investment guidelines but would constitute more than 10% of our
    average invested assets or otherwise be disproportionately large
    given our then existing portfolio.    
    review all material contracts;
    cause a sale of the loan or our interest therein subject in
    certain cases to limitations imposed by the participation
    agreement among the parties;
    approve budgets and major capital expenditures;
    veto any sale of the loan, or alternatively, to receive a
    specified preference on sale or proceeds;
    exercise a right of first refusal on any desired sale; and
    cause the foreclosure of the loan. 69




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Balloon Payment.
  Collateral.
 70




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Prepayment Penalties and Exit
    Fees.
  Escrow Conditions.
  
    Title to the subject property must be free and clear of all
    liens and encumbrances.
    Borrowers must obtain title insurance coverage for all loans,
    with the title insurance policy naming us as the insured, and
    providing title insurance in an amount at least equal to the
    principal amount of the loan. Title insurance insures only the
    validity and priority of our deed of trust, and does not insure
    us against loss by other causes, such as diminution in the value
    of the property.
    Borrowers must obtain fire and casualty insurance for all loans
    secured by improved real property, naming us as loss payee in an
    amount sufficient to cover the replacement cost of improvements.
    All insurance policies, notes, deeds of trust or mortgages,
    escrow agreements, and any other loan documents for a particular
    transaction will name us as payee and beneficiary.  Construction Controls.
  Repayment of Mortgages on Sales of
    Properties.
 Non-agency
    Residential Mortgage Loans   71




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non-agency re-emerge
      Non-agency Residential Mortgage Loan
    Payments.
  Collateral.
 72




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Prepayment Penalties. non-agency
  Escrow Conditions.
  
    Title to the subject property must reflect free and clear title
    with no liens or encumbrances.
    Borrowers must obtain title insurance coverage for the loan,
    with the title insurance policy naming us as the insured, and
    providing title insurance in an amount at least equal to the
    principal amount of the loan. Title insurance insures only the
    validity and priority of ownership, and does not insure us
    against loss by other causes, such as diminution in the value of
    the property.
    Borrowers must obtain fire and casualty insurance for all loans
    secured by real property, naming us as loss payee in an amount
    sufficient to cover the replacement cost of real property.
    All insurance policies, escrow agreements, and any other loan
    documents for a particular transaction will name us as payee and
    beneficiary.  Investments
    in Commercial Real Property
    Commercial
    Real Estate-Related Debt Securities
    Commercial Mortgage-Backed
    Securities.
  and/or
  Collateralized Debt Obligations.
 73




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Ratings of Real Estate-Related Debt
    Securities.
  Real
    Estate-Related Equity Investments
      Other
    Possible Investments
   Underwriting
    Criteria   Acquisition,
    Development, Construction and Commercial Mortgage
    Loans    
    We will fund the entire principal amount of the mortgage loan or
    acquire no less than a majority position in a trust deed
    mortgage loan.
    We expect to invest only in first lien mortgage loans.
    We will evaluate each mortgage loan based on specific
    loan-to-value (LTV) or loan-to-cost
    (LTC) ratios relating to the type of mortgage loan
    being made. The LTV ratio compares the total amount 74




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being borrowed to the value of the property as supported by an
    appraisal, comparable sales prices, or other accepted valuation
    methodology. The LTC compares the total amount being borrowed to
    the borrowers cost basis in the subject property. We will
    obtain an appraisal, sales comparables or other accepted
    valuation methodology for every mortgage loan. We may also use
    other valuation methodologies in our valuation analysis. We do
    not intend to fund mortgage loans that have a LTV or LTC ratio
    greater than 80%.  Type of Collateral

Expected Maximum Loan-to-Value RatioRaw and unimproved land

65%Property under development

70% (of anticipated post-development value)Construction

75% (of anticipated post-construction value)Commercial property

80% (of property value)   
    We do not have a minimum net worth requirement for a prospective
    borrower; instead, we rely heavily on evaluating the strength of
    the borrower based on its experience, track record and
    reputation as a borrower in the subject community. The
    established strength of the borrower provides insight into a
    borrowers ability to fulfill the proposed exit strategy
    and anticipated holding period necessary for a strategic
    disposition of the property.
    We expect that each of our mortgage loans will be full recourse
    against the real estate being financed.
    We require each prospective borrower to provide tax returns and
    financial statements for the prior two years in order for us to
    evaluate the strength of the borrower.
    We expect income-producing properties will generally have a debt
    service coverage ratio of 1.05:1, which is typically achieved if
    the property has at least a 60% occupancy rate; however, we will
    not lend to any income-producing property that does not have
    sufficient occupancy to meet the applicable debt service
    requirements.
    We will analyze the property securing a potential investment for
    the likelihood of capital appreciation or depreciation.
    We require a review of the status and condition of the recorded
    title of the property.
    We will generally focus on geographic locations in the Western
    United States, which is where we believe we possess the
    requisite market knowledge, although we have no geographic
    limitations on the lending opportunities we will consider.     75




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76




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(12-18 months)
  sub-prime
   
   
   77




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loan-to-value loan-to-value
  Non-Agency
    Residential Mortgage Loans
    
    We will invest in fully amortizing or interest only non-agency
    loans originated under the terms of 15 and
    30 year fixed, 2, 3 and 5 year fixed with adjustable
    rate mortgage (ARM), and 2, 3 and 5 year fixed
    interest only ARM loans.
    We will invest in loans secured by the following types of
    property:
    1-unit
    attached and detached single family residence (SFR),
    planned unit development (PUD), low and high-rise
    condominiums and condo/hotels (exposure in any one condo/hotel
    project is limited to a maximum of 20% of the total units and
    are only eligible as a second home or investment property) and
    properties up to 10 acres.
    We expect that non-agency mortgage loans will not exceed a
    maximum loan amount of $2 million per borrower, subject to
    exceptions with compensating factors that would require
    investment committee approval.
    We will evaluate each non-agency mortgage loan based on specific
    LTV ratios relating to the total amount being borrowed to the
    value of the property as supported by an appraisal, comparable
    sales prices, or other valuation methodologies and the risk
    assessed by the occupancy, debt-to-income ratio
    (DTI), FICO scores, reserves and cash down payment.
    We do not intend to fund non-agency residential mortgage loans
    that have a LTV ratio greater than 75%.
    We require a full uniform residential appraisal with interior
    and exterior inspection and photos of the property within
    90 days prior to close of escrow (COE).
    We expect that each of our loans will be full-recourse to the
    assets of individual borrowers, except where prohibited by law.
    We require a review of the status and condition of the recorded
    title of the property.
    We will generally focus on geographic locations in the Western
    United States, which is where we believe we possess the
    requisite market knowledge, although we have no geographic
    limitations on the lending opportunities we will consider.
    We will invest in non-agency residential mortgage loans to the
    following eligible borrowers: U.S. citizens, resident aliens,
    non-permanent resident aliens and foreign nationals. 78




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
    We require non-agency residential mortgage loans to prospective
    borrowers to have a thorough documentation review to include,
    but not limited to:  
    Borrower must have a minimum of a 24 month credit history
    (except foreign nationals) that meets the following criteria: 
  
    credit report may not be more than 90 days old at COE; 
 
  
    minimum of three sources of credit; 
 
  
    collection amounts over $250 individual or $1,000 aggregate may
    be required to be paid; and 
 
  
    judgments and liens may be required to be paid. 
 
  
    Borrower must provide some of the following income and asset
    documentation: 
  
    prior two years and current year financial statement;
    two years of employment history;
    last two paycheck stubs to cover most recent
    30-day
    period;
    three months of bank statements and other documentation
    illustrating current financial holdings (i.e. IRA, mutual funds,
    stocks, etc.);
    documentation on all real property owned;
    bankruptcy filing, if applicable; and
    verbal verification of employment (VOE) prior to
    funding is required on all loans.  and/or
 
   
   79




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non-agency
 
  loan-to-value
   
  
    LTV/TLTV of 60% on all property types; 
  
    foreign nationals without a social security number or tax
    identification must execute an IRS
    form W-8BEN
    (Certification of Foreign Status);
    a domestic credit report must be maintained on file;
    we will attempt to obtain a foreign credit report;
    two original bank reference letters from financial institutions
    in their country of origin (translated in English must be
    provided); and
    foreign income may be used for qualification purposes only if
    the stability and continuance can be verified. Borrowers with
    diplomatic immunity are not eligible. 
   
 
  
    two years of work history in the same line of work; 
 
  
    self-employed borrowers must document business existence for at
    least one year; 
  
    stated income must be reasonable and consistent with employment
    and the amount to be financed; 
  
    income stated on 1003 must be supported by assets reflecting a
    minimum balance of the greater of 40% of the borrowers
    annual income or $100,000 in assets after COE; 
  
    IRS Form 8821/4506T is required to be signed at COE to
    cover a two year period for the individual and the business;
    assets to support income may come from any combination of liquid
    assets (checking, savings, certificates of deposit, brokerage
    accounts and 401(k)s; and
    asset documentation requires three months of consecutive
    statements with all pages. 
   
 80




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non-agency
     Resolution
    Strategy        
    Sale of the Foreclosed Collateral  If we
    determine through a thorough review process that it is
    advantageous to sell the property that secured a nonperforming
    loan at a loss rather than to continue to hold the property and
    incur additional costs, we may sell the property for cash or
    finance the sale with a qualified buyer.
    New Borrower Assumption  If we can identify
    new qualified borrowers to assume the initial loan amount, we
    will convert the nonperforming loan into a performing loan.
    Joint Venture  We may contribute the real
    estate to an operating joint venture usually structured as a
    limited liability company (LLC) with other private
    investors in a loan or with a new investor to provide additional
    financing and development expertise to complete the project.
    Once the project is completed and sold, we will distribute the
    sales proceeds according to the joint venture agreement. This
    strategy may significantly reduce our ownership in the property.
    Holding the Property  If we are unable to
    implement any of the strategies discussed above, or if we
    determine that it may be advantageous to hold the property based
    upon local real estate market conditions, we will hold the
    property for an undetermined period of time. In most cases, this
    will be a temporary strategy, which at the appropriate time will
    be replaced with one of the other options. 81




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Regulation       Competition   82




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##### Table of Contents



Property   Employees   Website
    Access to Our Periodic SEC Reports  www.cmreit.com Form 10-K, Form 10-Q Form 8-K
  1-800-SEC-0330. www.sec.gov
 OUR
    OPERATING POLICIES AND INVESTMENT POLICIES General      
    asset acquisition policy;
    capital/liquidity and leverage policies;
    credit risk management policy; and
    asset/liability management policy. Asset
    Acquisition Policy   83




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estate-related
          
    After the proceeds of this offering have been fully invested, we
    expect that our portfolio allocation will consist of up to
    approximately 80% acquisition, development, construction and
    commercial mortgage loans, up to approximately 10% non-agency
    residential mortgage loans and up to approximately 20%
    commercial real property, real estate-related debt securities
    and equity securities of other real
    estate-related
    companies.
    After the proceeds of this offering have been fully invested,
    our investment in any single mortgage loan will not exceed 10%
    of our average invested assets.
    After the proceeds of this offering have been fully invested,
    our aggregate investment in mortgage loans made to any one
    borrower and its affiliates will not exceed 10% of our average
    invested assets.
    After the proceeds of this offering have been fully invested,
    our aggregate investment in any individual submarket will not
    exceed 20% of our average invested assets.
    Our board of directors must approve or will delegate to our
    advisor the authority, subject to certain parameters imposed by
    the board and the investment restrictions set forth in our
    articles of incorporation, to approve all investments other than
    investments in real estate-related loans. See Our
    Operating Policies and Investment Policies  Certain
    Investment Limitations below.
    Our board of directors must approve any investment in any real
    estate-related loan in excess of $15 million.
    We will seek to allocate our portfolio to comply with an
    exemption from the Investment Company Act of 1940, as amended. 84




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
    We will not acquire mortgage loans or other investments from
    Desert Capital or any of our other affiliates, directly or
    indirectly, other than pursuant to our loan origination
    arrangement with Ignite Funding. Capital/Liquidity
    and Leverage Strategy and Policies    long-term
    Credit
    Risk Management Policy      Asset/Liability
    Management Policy  Interest Rate Risk Management.
 85




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
    monitoring and adjusting, if necessary, the interest rate
    sensitivity of our investments compared with the interest rate
    sensitivities of our borrowings;
    attempting to structure our credit agreements to have a range of
    different maturities and interest rate adjustment
    periods; and
    actively managing, on an aggregate basis, the interest rate
    indices, interest rate adjustment periods, and gross reset
    margins of the mortgages underlying our investments compared to
    the interest rate indices and adjustment periods of our
    borrowings.      Prepayment Risk Management. (12-24 months)
   Certain
    Investment Limitations          and/or
 86




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Investment
    Company Act Considerations
    
    under Section 3(a)(1)(A), it is, or holds itself out as
    being, engaged primarily, or proposes to engage primarily, in
    the business of investing, reinvesting or trading in
    securities; and
    under Section 3(a)(1)(C), it is engaged, or proposes to
    engage, in the business of investing, reinvesting, owning,
    holding or trading in securities and owns or proposes to acquire
    investment securities having a value exceeding 40%
    of the value of its total assets (exclusive of U.S. government
    securities and cash items) on an unconsolidated basis, which we
    refer to as the 40% test. Excluded from the
    definition of investment securities are, among other
    things, U.S. government securities and securities of
    majority-owned subsidiaries that are not themselves investment
    companies and are not relying on the exception from the
    definition of investment company under Section 3(c)(1) or
    Section 3(c)(7) of the Investment Company Act. 87




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Commercial
    and Residential Real Estate Loans
  First Mortgage Loans.
  First Mortgage Trust Deeds.
  Mezzanine Loans.
 88




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Participations.
  Equity Participations.
  Fund-Level or Corporate-Level Debt.
  Other Real Estate-Related Loans.
  Commercial
    Real Estate-Related Debt Securities
  CMBS.
  CDOs.
  Publicly Traded REIT Securities.
  Select
    Commercial Real Estate Equity Investments
  Joint Venture Interests.
 89




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Real
    Property
    Other
    Investments
           90




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MANAGEMENTS
    DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS  We are newly incorporated and have not commenced operations.
    Therefore, we do not have any results of operations to discuss.
    The following analysis of our financial condition should be read
    in conjunction with our financial statements and notes to those
    statements and the other financial data included elsewhere in
    this prospectus. This discussion may contain certain
    forward-looking statements. Forward-looking statements are those
    that are not historical in nature. They can often be identified
    by their inclusion of words such as will,
    anticipate, estimate,
    should, expect, believe,
    intend and similar expressions. Any projection of
    revenues, earnings or losses, capital expenditures,
    distributions, capital structure or other financial terms is a
    forward-looking statement.
  Our forward-looking statements are based upon our
    managements beliefs, assumptions and expectations of our
    future operations and economic performance, taking into account
    the information currently available to us. Forward-looking
    statements involve risks and uncertainties, some of which are
    not currently known to us, that might cause our actual results,
    performance or financial condition to be materially different
    from the expectations of future results, performance or
    financial condition we express or imply in any forward-looking
    statements. Some of the important factors that could cause our
    actual results, performance or financial condition to differ
    materially from expectations are:
 
  
    our limited operating history; 
 
  
    your inability to review the assets that we will acquire with
    the proceeds of this offering; 
  
    economic conditions impacting the real estate and credit
    markets; 
  
    our ability to raise capital; 
  
    changes in interest rates; 
  
    our ability to obtain debt financing on acceptable terms or
    at all and any failure to satisfy the conditions and
    requirements of such debt; 
  
    changes in the rate of construction in the markets in which
    we invest; 
  
    potential impacts of our leverage policy on our net income
    and cash available for distribution; 
 
  
    our boards ability to change our operating policies and
    strategies without notice to you or stockholder approval; 
 
  
    the number of our mortgage loans that become
    non-performing; 
 
  
    our advisors motivation to recommend riskier
    investments in an effort to maximize its management compensation
    under the advisory agreement; 
 
  
    conflicts of interest arising out of our relationships with
    our advisor and its affiliates; and 
  
    our failure to qualify or remain qualified as a REIT.  We undertake no obligation to publicly update or revise any
    forward-looking statements, whether as a result of new
    information, future events or otherwise. In light of these
    risks, uncertainties and assumptions, the events described by
    our forward-looking statements might not occur. We qualify any
    and all of our
    forward-looking
    statements by these cautionary factors. In addition, you should
    carefully review the risk factors described in the reports we
    file from time to time with the SEC.
 General   91




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non-agency mortgage-backed
   
   
      estate-related
  Real
    Estate Market Outlook
  sub-prime
 92




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Critical
    Accounting Policies and Management Estimates    Use of Estimates.
 93




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Revenue Recognition.
  Offering Costs.
  Mortgage Investments.
  Allowance for Loan Losses.
  Impairment Policy. property-by-property
  Income Taxes.
   94




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Liquidity
    and Capital Resources           95




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Quantitative
    and Qualitative Disclosures About Market Risk            OTHER
    AFFILIATE-SPONSORED PROGRAMS   
    Desert
    Capital
 
   
 96




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debtor-in-possession
 
  CM
    Equity
    CM Notes
    Program I
    CM
    Capital Services
   97




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Future
    Affiliate-Sponsored Programs
    Allocation
    of Investment Opportunities Among Affiliate-Sponsored
    Programs
 
   
   
   
    
    the investment objectives and criteria of each program;
    the cash requirements of each program;
    the effect of the acquisition on diversification of each
    programs investments;
    the policy of each program relating to leverage of properties;
    the anticipated cash flow of each program;
    the income tax effects of the purchase on each program; 98




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
    the size of the investment; and
    the amount of funds available to each program and the length of
    time such funds have been available for investment.      Conflicts
    Committee
        Other
    Charter Provisions Relating to Conflicts of Interest
    Advisor Compensation.
 99




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
    the amount of the fees and any other compensation, including
    stock-based compensation, paid to our advisor and its affiliates
    in relation to the size, composition and performance of our
    investments;
    whether the expenses incurred by us are reasonable in light of
    our investment performance, net assets, net income and the fees
    and expenses of other comparable unaffiliated REITs;
    the success of our advisor in generating appropriate investment
    opportunities;
    the rates charged to other companies, including other REITs, by
    advisors performing similar services;
    additional revenues realized by our advisor and its affiliates
    through their relationship with us, including whether we pay
    them or they are paid by others with whom we do business;
    the quality and extent of service and advice furnished by our
    advisor and its affiliates;
    the performance of our investment portfolio; and
    the quality of our portfolio relative to the investments
    generated by our advisor and its affiliates for their own
    account and for their other clients.          Term of Advisory Agreement.
  Our Acquisitions.
 100




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Mortgage Loans Involving Affiliates.
  Other Transactions Involving Affiliates.
  Limitation on Operating Expenses. 12-month
  Repurchase of Our Shares.
  Loans.
  Reports to Stockholders.
  
    financial statements prepared in accordance with GAAP that are
    audited and reported on by independent certified public
    accountants; 101




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
    The ratio of the costs of raising capital during the year to the
    capital raised;
    the aggregate amount of advisory fees and the aggregate amount
    of other fees paid to our advisor and any affiliates of our
    advisor by us or third parties doing business with us during the
    year;
    our total operating expenses for the year stated as a percentage
    of our average invested assets and as a percentage of our net
    income;
    a report from the conflicts committee that our policies are in
    the best interests of our common stockholders and the basis for
    such determination; and
    separately stated, full disclosure of all material terms,
    factors and circumstances surrounding any and all transactions
    involving us and our advisor, a director or any affiliate
    thereof during the year, which disclosure has been examined and
    commented upon in the report by the conflicts committee with
    regard to the fairness of such transactions.  Voting of Shares Owned by Affiliates.
  Ratification of Charter Provisions.
  Transactions with Affiliates.
  
    The transaction is fair and reasonable to us.
    The terms and conditions of such transaction are not less
    favorable to us than those available from unaffiliated third
    parties.
    If an acquisition is involved, the total consideration is not in
    excess of the appraised value of the real property being
    acquired, directly or indirectly, as determined by an
    independent expert.    CONFLICTS
    OF INTEREST Relationship
    with Our Advisor   102




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
    the continuation, renewal or enforcement of our agreements with
    our advisor and its affiliates, including the advisory agreement
    and the dealer-manager agreement;
    public offerings of equity by us, which entitle CM Securities to
    dealer-manager fees and will likely entitle our advisor to
    increased management fees and Ignite Funding to increased loan
    origination and servicing fees;
    acquisitions of properties and others investments from other
    affiliate-sponsored programs, which might entitle affiliates of
    our advisor to fees in connection with its services for the
    seller;
    acquisitions of properties and other investments from third
    parties and originations of loans, which entitle our advisor to
    management fees; and
    borrowings to acquire properties and other investments and to
    originate loans, which borrowings will increase the management
    fees payable to our advisor.     103




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Our
    Directors Loyalties to other Existing and Future
    Affiliate-Sponsored Programs   
 
  
    We could enter into a transaction with another entity or
    affiliate-sponsored program, such as a joint venture or joint
    financing arrangement. Decisions of our board of directors
    regarding the terms of these transactions may be influenced by
    its loyalties to such other entity or program. We have formed
    the conflicts committee which will approve related party
    transactions to protect against this conflict. 
  
    A decision of the board of directors regarding the timing of a
    debt or equity offering could be influenced by concerns that the
    offering would compete with an offering of another
    affiliate-sponsored program.   Allocation
    of Investment Opportunities   
 Competition
    for Management Time   
 Relationship
    with Dealer-Manager  dealer-manager
 104




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Relationship
    with Our Accountant   Relationship
    with Our Legal Counsel   CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE Relationship
    with Our Advisor    Name

Position with Our Advisor

Position with UsTodd B. Parriott

President, Chief Executive Officer, Manager, and Majority Owner

Chairman of the Board of Directors, Chief Executive Officer,
    President and Chief Investment OfficerG. Steven Dawson

Managing Director and Manager, and Minority Owner

Chief Financial Officer, Treasurer, Secretary and Director    Relationship
    with Our Dealer-Manager     Loan
    Origination Agreement and Loan Servicing Agreement with Ignite
    Funding   105




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Relationship
    with Preferred Trust
     Approval
    of Related Party Transactions   106




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dealer-manager
  Related
    Party Legal Proceedings
   
   
 
  debtor-in-possession
 
 
  and/or
 
 
   
 107




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09-5033527-5)
 
 
   
 
  In the Matter of CM Capital Services, LLC
 
 
   
   
  and/or
 
 Independence
    of Directors and Committee Members   108




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OUR
    ADVISOR General   
 The
    Advisory Agreement  Services
    and Duties of the Advisor
    
    Asset Management  our advisor advises us with
    respect to, and arranges for and manages the acquisition,
    financing, management and disposition of, our investments.
    Liability Management  our advisor evaluates
    the credit risk of our investments and arranges appropriate
    borrowing and hedging strategies.
    Capital Management  our advisor coordinates
    our capital raising activities.    
    serving as our advisor with respect to the formulation of
    investment criteria and the preparation of policy guidelines by
    our board of directors;
    assisting us in developing criteria for mortgage loan purchase
    commitments that are consistent with our long-term investment
    objectives and making available to us our advisors
    knowledge and experience with respect to mortgage loans;
    representing us in connection with the purchase, sale and
    commitment to purchase or sell investments that meet in all
    material respects our investment criteria, and managing our
    portfolio of investments;
    advising us and negotiating our agreements with third-party
    lenders for borrowings by us;
    making available to us statistical and economic research and
    analysis regarding our activities and the services performed for
    us by our advisor;
    investing or reinvesting any of our money in accordance with our
    policies and procedures;
    providing the executive and administrative personnel, office
    space and services required in rendering services to us, in
    accordance with and subject to the terms of the advisory
    agreement;
    administering our day-to-day operations and performing and
    supervising the performance of such other administrative
    functions necessary to our management as may be agreed upon by
    our advisor and our board of directors, including the collection
    of our revenues and the payment of our debts and obligations
    from our accounts, and the maintenance of appropriate computer
    systems to perform such administrative functions;
    advising our board of directors in connection with policy
    decisions; 109




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
    evaluating and recommending hedging strategies to our board of
    directors and, upon approval by our board of directors, engaging
    in hedging activities on our behalf consistent with our status
    as a REIT;
    supervising our compliance with the REIT provisions of the
    Internal Revenue Code and our maintenance of our status as a
    REIT;
    qualifying and causing us to qualify to do business in all
    applicable jurisdictions and obtaining and maintaining all
    appropriate licenses;
    assisting us to retain qualified accountants and tax experts to
    assist in developing and monitoring appropriate accounting
    procedures and testing systems and to conduct quarterly
    compliance reviews as our board of directors may deem necessary
    or advisable;
    assisting us in our compliance with all federal, state and local
    regulatory requirements applicable to us in respect of our
    business activities, including preparing or causing to be
    prepared all financial statements required under applicable
    regulations and contractual undertakings and all reports,
    documents and filings, if any, required under the Exchange Act
    or other federal or state laws;
    assisting us in our compliance with federal, state and local tax
    filings and reports and generally enabling us to maintain our
    status as a REIT, including soliciting stockholders, as defined
    below, for required information to the extent provided in the
    REIT provisions of the Internal Revenue Code;
    assisting us in our maintenance of an exemption from the
    Investment Company Act and monitoring our compliance with the
    requirements for maintaining an exemption from the Investment
    Company Act;
    coordinating and managing the operations of any joint venture or
    co-investment interests held by us and conducting all matters
    with the joint venture or co-investment collaborators;
    advising us as to our capital structure and capital raising
    activities;
    handling and resolving all claims, disputes or controversies
    (including all litigation, arbitration, settlement or other
    proceedings or negotiations) in which we may be involved or to
    which we may be subject arising out of our day-to-day
    operations, subject to the approval of our board of directors;
    engaging and supervising, on behalf of us and at our expense,
    the following, without limitation: independent contractors to
    provide investment banking services, leasing services, mortgage
    brokerage services, securities brokerage services, other
    financial services, and such other services as may be deemed by
    our advisor or our board of directors to be necessary or
    advisable from time to time; and
    so long as our advisor does not incur additional costs or
    expenses, performing such other services as may be required from
    time to time for management and other activities relating to our
    assets as our board of directors shall reasonably request or our
    advisor shall deem appropriate under the particular
    circumstances.     Term   110




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Terminations by Us for Cause.
  Terminations Without Cause or Penalty.
    Terminations by Our Advisor Upon a Change of
    Control.
  
    the date of (a) any sale, lease, assignment, transfer or
    other conveyance of all or substantially all of our assets;
    (b) any consolidation or merger involving our company in
    which all of our stockholders immediately prior to the
    transaction, considered collectively, do not immediately
    following the transaction own shares of the surviving entity
    constituting at least a majority of the voting power of the
    surviving entity; (c) any capital reclassification or other
    recapitalization of our company in which any person or group
    that owned 30% or more of our voting power falls below that
    threshold or in which any person or group that owned less than
    30% of our voting power rises above that ceiling; or
    (d) any liquidation, dissolution or winding up of our
    company; or
    the first date on which fewer than two of our directors are
    persons whose nomination to the board was supported by our
    advisor. Currently, the board seat of Messrs. Parriott and
    Dawson are supported by our advisor. Our advisor has informed us
    that it will generally support the nomination of persons
    employed by, or affiliated with, our advisor. We intend to
    disclose in our proxy statements regarding the election of
    directors whether a candidates nomination is supported by
    our advisor.   111




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Compensation
    and Expenses    
 Type of



Estimated AmountCompensation



for Minimum/Maximumand Recipient

Method of Computation

Offering(1)Fees Paid in Connection with Our OfferingSelling Commissions to our Dealer-manager and participating
    broker-dealers

We will pay our dealer-manager selling commissions of 7.0% of
    aggregate gross proceeds from sales of shares. Our
    dealer-manager will reallow all of the 7% selling commissions to
    participating broker-dealers with respect to shares they sell.

$175,000/$63,000,000(2)Dealer-Manager Fees to our Dealer-manager and participating
    broker-dealers

We will pay our dealer-manager a dealer-manager fee of 3.0% of
    aggregate gross proceeds from sales of shares. Our
    dealer-manager
    may reallow a portion of the dealer-manager fee to any
    participating broker-dealer with respect to shares it sells(4).

$75,000/$27,000,000(3)Reimbursement of Other Organization and Offering Expenses to our
    advisor, its affiliates and related parties

To date, our advisor has paid organization and offering expenses
    on our behalf. We will reimburse our advisor and its affiliates
    for actual expenses in connection with our formation and this
    offering, including certain salaries and non-transaction based
    compensation paid to employees of our advisor and its affiliates
    for performing services for us and bona fide, itemized and
    detailed due diligence expenses incurred by the dealer-manager
    and participating broker-dealers(5). We will reimburse these
    expenses only to the extent that the reimbursement would not
    cause the selling commissions, the
    dealer-manager
    fee and the other organization and offering expenses borne by us
    to exceed 15% of gross offering proceeds as of the date of the
    reimbursement. If we raise the maximum offering amount, we
    expect organization and offering expenses (other than selling
    commissions and the dealer-manager fee) to be $11,079,500 or
    1.2% of gross offering proceeds.

$125,000/$11,079,500 
 112




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Type of



Estimated AmountCompensation



for Minimum/Maximumand Recipient

Method of Computation

Offering(1)Fees Paid in Connection with the Acquisition of
    Properties, Loans or Other Real Estate-
    Related InvestmentsAcquisition Fee to our advisor and its affiliates

We do not anticipate paying any acquisition fees to our advisor
    or its affiliates in connection with the acquisition of our
    investments. However, if we do pay acquisition fees to our
    advisor or any of its affiliates for services in connection with
    the selection, evaluation, structure and purchase of an
    investment, the fee will be usual and customary for services
    rendered and not exceed an amount equal to 6% of the cost of the
    investment acquired by us, or in the case of a loan, 6% of the
    funds advanced.

Amount is dependent upon our results of operations and is not
    determinable at this time.Reimbursement of Acquisition Expenses to our advisor, its
    affiliates and related parties

We will reimburse our advisor and its affiliates and related
    parties for actual expenses incurred in connection with the
    selection, evaluation, structure and purchase of making loans
    and other real estate-related investments, whether or not
    acquired. Acquisition expenses may include, without limitation,
    legal fees and expenses, travel and communications expenses,
    costs of appraisals, nonrefundable option payments on property
    not acquired, accounting fees and expenses, title insurance
    premiums and the costs of performing due diligence. The total of
    all acquisition fees and acquisition expenses shall be
    reasonable, and shall not exceed an amount equal to 6% of the
    contract price of the property, or in the case of a loan, 6% of
    the funds advanced.

Amount is dependent upon our results of operations and is not
    determinable at this time(6).Origination Fee
    to Ignite Funding

Up to 500 basis points of loan amount and is paid by the
    borrower.

Amount is not determinable at this time.Fees Paid in Connection with our OperationsManagement Fees to our advisor

First tier management compensation of 1% per annum of the first
    $200 million of our average invested assets, plus 0.8% per annum
    of our average invested assets in excess of $200 million during
    such fiscal year, calculated on a monthly basis and payable
    monthly in arrears; and second tier management compensation of a
    specified percentage of the amount our REIT taxable net income,
    before deducting certain management compensation, net operating
    losses and certain other items, exceeds a return based on the
    10 year U.S. Treasury rate plus 1%. The percentage for this
    calculation is the weighted average of the following percentages
    based on our average invested assets for the period: 20% for the
    first $200 million of our average invested assets; and 10% of
    our average invested assets in excess of $200 million calculated
    and paid on a monthly basis and subject to annual reconciliation.

Amount of first tier management fee for the minimum offering
    amount is estimated to be $21,250 (assuming no debt financing to
    purchase investments) and approximately $85,000 (assuming debt
    financing equal to 75% of our total assets) and for the maximum
    offering amount is estimated to be $6,772,000 (assuming no debt
    financing to purchase investments) and approximately $25,888,000
    (assuming debt financing equal to 75% of the cost of our total
    assets). Amount of second tier management fee is dependent upon
    our results of operations and is not determinable at this time. 113




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Type of



Estimated AmountCompensation



for Minimum/Maximumand Recipient

Method of Computation

Offering(1)Out-of-Pocket
    Expense
    Reimbursement
    to our advisor,
    its affiliates
    and related parties

Reimbursement of actual out-of-pocket expenses incurred in
    connection with our administration on an on-going basis includes
    reimbursement of expenses incurred in contracting with third
    parties to provide services to us or on our behalf, such as
    legal fees, accounting fees, consulting fees, trustee fees,
    appraisal fees, insurance premiums, commitment fees, brokerage
    fees, ad valorem and property taxes, costs of foreclosure,
    maintenance, repair and improvement of property and premiums for
    insurance. Also includes reimbursement for travel and related
    expenses incurred in connection with performing business and
    bona fide due diligence activities for or on our behalf,
    including, without limitation, travel and expenses incurred in
    connection with the purchase, financing, refinancing, sale or
    other disposition of any of our assets or other investments.
    Such fees and expenses will only be reimbursed if a detailed and
    itemized invoice is provided. Except for salaries reimbursable
    as other organization and offering expenses, we do not reimburse
    our advisor for employment expenses of the personnel employed by
    our advisor (including our officers who are also employed by our
    advisor).

(6)Servicing Fee
    to Ignite Funding

Up to 100 basis points of loan amount and is paid by the
    borrower.

Amount is not determinable at this time.Asset Management Fee to Ignite Funding

If a loan becomes non-performing and we take ownership of a
    property as a result of a workout or foreclosure of a loan, in
    lieu of the servicing fee that was previously paid by the
    borrower, we will pay Ignite Funding an asset management fee
    equal to 1% of the original loan amount per annum.

Amount is not determinable at this time.Fees Paid in Connection with Sales or LiquidationDisposition Fee
    to Ignite Funding

If we take ownership of a property as a result of a workout or
    foreclosure of a loan, or otherwise sell a property, in
    consideration for substantial assistance in connection with the
    sale of such property (including a sale of all our properties),
    we will pay a disposition fee upon the sale of such property in
    an amount no greater than the lesser of one-half of the
    brokerage commission paid or an amount equal to 3% of the
    contractual sales price. If we pay a disposition fee to Ignite
    Funding, we may also pay a disposition fee to another third
    party. However, the amount paid to Ignite Funding when added to
    all other disposition fees paid to any unaffiliated parties in
    such a capacity in connection with the sale, may not exceed the
    lesser of the competitive real estate commission or an amount up
    to 6% of the contractual sales price.

Amount is not determinable at this time as it is dependent upon
    amount of assets sold.     (1)
    
    The estimated minimum dollar amounts are based on the sale of
    the minimum of 250,000 shares to the public. The estimated
    maximum dollar amounts are based on the sale of the maximum of
    90,000,000 shares to the public in the primary offering. No
    sales commissions or dealer-manager fees are payable as a result
    of sales of shares under our DRIP.(2)
    
    Commissions may be reduced for discounts or waived as further
    described in the Plan of Distribution section of
    this prospectus; however, for purposes of calculating the
    estimated maximum selling commissions in this table, we have not
    assumed any such discounts or waivers. 114




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(3)
    
    The dealer-manager fees may be reduced for discounts or waived
    as further described in the Plan of Distribution
    section of this prospectus; however, for purposes of calculating
    the estimated maximum dealer-manager fees in this table, we have
    not assumed any such discounts or waivers.(4)
    
    In addition, out of its dealer-manager fee, our dealer manager
    may reimburse participating broker-dealers for distribution and
    marketing-related costs and expenses, such as costs associated
    with attending or sponsoring conferences, technology costs and
    other marketing costs and expenses.(5)
    
    We will reimburse our dealer-manager for actual, bona fide,
    itemized and detailed due diligence expenses incurred by it or
    other participating broker-dealers in connection with this
    offering. Reimbursement is contingent upon receipt by our
    dealer-manager of a detailed invoice or similar itemized
    statement from the participating broker-dealer that demonstrates
    the actual due diligence expenses incurred. Our dealer-manager
    will reallow such reimbursements to the applicable participating
    broker-dealer.(6)
    
    All out-of-pocket expenses incurred on our behalf will be
    reimbursed in accordance with the terms of the advisory
    agreement and pursuant to an agreed upon budget. We and our
    advisor will agree on a budget, including estimated
    out-of-pocket expenses. Any individual cost or expense exceeding
    $100,000 not reflected in our budget must be approved by our
    board of directors.After commencement of this offering, our advisor must reimburse
    us the amount by which our aggregate total operating expenses
    for the four fiscal quarters then ended exceed the greater of 2%
    of our average invested assets or 25% of our net income, unless
    our board of directors has determined that such excess expenses
    were justified based on unusual and non-recurring factors.
    Average invested assets means the average monthly
    book value of our assets during a specified period before
    deducting depreciation, bad debts or other non-cash reserves.
    Total operating expenses means all costs and
    expenses paid or incurred by us, as determined under GAAP, that
    are in any way related to our operation, including asset
    management fees, but excluding (a) the expenses of raising
    capital such as organization and offering expenses, legal,
    audit, accounting, underwriting, brokerage, listing,
    registration and other fees, printing and other such expenses
    and taxes incurred in connection with the issuance,
    distribution, transfer, registration and stock exchange listing
    of our stock; (b) interest payments; (c) taxes;
    (d) non-cash expenditures such as depreciation,
    amortization and bad debt reserves; (e) incentive fees paid
    in compliance with the NASAA Guidelines; (f) acquisition
    and origination fees, acquisition expenses, real estate
    commissions on the resale of real property and other fees and
    expenses connected with the acquisition, financing, disposition,
    management and ownership of real estate interests, loans or
    other property (other than commissions on the sale of assets
    other than real property), including the costs of foreclosure,
    insurance premiums, legal services, maintenance, repair and
    improvement of property.  Management Fee.
  10-year 10-year
 115




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Expense reimbursements.
      
    most costs and expenses of its officers and employees;
    the costs of any salaries of any of our officers or directors
    who are affiliated with our advisor;
    all internal and overhead expenses of our advisor; and
    fees and expenses of third parties that are engaged by our
    advisor to perform services for us but for which our advisor is
    specifically not entitled to reimbursement under the advisory
    agreement, except that our board of directors may approve
    reimbursement to our advisor of our pro rata portion of the
    salaries, bonuses, health insurance, retirement benefits and
    similar employment costs for the time spent on our operations
    and administration other than for the provision of investment
    advisory services.    
    costs associated with the raising of capital and incurrence of
    debt;
    issuance and transaction costs associated with the acquisition,
    disposition and financing of investments;
    costs associated with our accounting systems;
    legal, independent accounting and auditing fees and expenses;
    the compensation and expenses of our independent directors;
    the costs of printing and mailing proxy statements and reports
    to stockholders;
    costs incurred by employees of our advisor for travel on our
    behalf; 116




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
    costs associated with any computer software or hardware that is
    used solely for us;
    all insurance costs, including costs to obtain liability
    insurance to indemnify our directors and officers, our advisor
    and its employees and managers;
    the compensation and expenses of our custodian and transfer
    agent;
    the acquisition of assets;
    interest expense;
    taxes and license fees;
    non-cash costs;
    litigation expenses;
    the management fee; and
    extraordinary or non-recurring expenses.          Conflicts
    of Interest    
    the second-tier management fee, which is based on our income,
    may create an incentive for our advisor to recommend investments
    with greater income potential, which may be relatively more
    risky than would be the case if its compensation from us did not
    include a component based on our income; 
  
    two of our directors and executive officers are owners or
    employees of, or otherwise affiliated with, our advisor, which
    owns Ignite Funding, currently our only loan origination
    source; and 
 
  
    Two of our directors and executive officers, are part owners,
    officers, employees or members of, or otherwise affiliated with,
    CM Group, which owns our dealer-manager. 
 117




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Limits of
    Responsibility
     118




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MANAGEMENT
    OF THE COMPANY                 119




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Our
    Directors and Executive Officers  c/o CM
  Name

Age

PositionTodd B. Parriott


40


Chairman of the Board, Chief Executive Officer, President and
    Chief Investment OfficerG. Steven Dawson


53


Chief Financial Officer, Treasurer, Secretary and DirectorAnthony D. Cinquini


47


Independent Director Nominee*Darin D. Gilson


43


Independent Director Nominee*Hunt C. Holsomback


47


Independent Director Nominee*Robert J. Simmons


48


Independent Director Nominee*     *
    
    Each of these nominees has been elected by our stockholder
    effective on the date the registration statement of which this
    prospectus forms a part becomes effective. Non-Employee
    Officers   Business
    Experience of Our Directors and Executive Officers   
  Todd B. Parriott.
 
  G. Steven Dawson.
 120




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##### Table of Contents



(2000-2005), (2005-2007), (2000-2008), (2005-2007), (2007-2009)
  Anthony D. Cinquini. tax-exempt
  Darin D. Gilson. start-up
  Hunt C. Holsomback.
 121




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Robert J. Simmons.
 Board of
    Directors           Compensation
    of Directors   122




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Annual retainer fee

$
15,000Fee for each board meeting attended in person


3,000Fee for each board meeting attended telephonically


1,500Audit committee chairman retainer


5,000Chairman retainer for other committees


3,000Fee for each committee meeting attended in person


1,000Fee for each committee meeting attended telephonically


500    Compensation
    Committee Interlocks and Insider Participation   Indemnification    
    The indemnitee has determined, in good faith, that the course of
    conduct which caused the loss or liability was in CMRs
    best interests.
    The indemnitee was acting on behalf of or performing services
    for CMR.
    Such liability or loss was not the result of:  
    negligence or misconduct, in the case that the indemnitee is a
    director (other than an independent director), officer, advisor
    or an affiliate of the advisor; or
    gross negligence or willful misconduct, in the case that the
    indemnitee is an independent director.  
    Such indemnification or agreement to hold harmless is
    recoverable only out of CMRs net assets and not from
    CMRs stockholders.    
    there has been a successful adjudication on the merits of each
    count involving alleged securities law violations as to the
    indemnitee;
    such claims have been dismissed with prejudice on the merits by
    a court of competent jurisdiction as to the indemnitee; or
    a court of competent jurisdiction approves a settlement of the
    claims against the indemnitee and finds that indemnification of
    the settlement and the related costs should be made, and the
    court considering the request for indemnification has been
    advised of the position of the SEC and of the published 123




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position of any state securities regulatory authority in which
    CMRs securities were offered or sold as to indemnification
    for violations of securities laws.     Board
    Committees and Meetings    Audit
    Committee
    
    at least one member of our audit committee qualifies as an
    audit committee financial expert, as defined by the
    SEC; and
    all members of the audit committee are financially
    literate, within the meaning of NYSE rules, and
    independent, under the audit committee independence
    standards of the SEC.  www.cmreit.com
  
    oversee the accounting and financial reporting processes and
    compliance with legal and regulatory requirements on behalf of
    our board of directors and report the results of its activities
    to the board;
    be directly and solely responsible for the appointment,
    retention, compensation, oversight, evaluation and, when
    appropriate, the termination and replacement of our independent
    auditors;
    review the annual engagement proposal and qualifications of our
    independent auditors;
    prepare an annual report as required by applicable SEC
    disclosure rules;
    review the integrity, adequacy and effectiveness of our internal
    controls and financial disclosure process; and
    manage our relationship with our advisor under the advisory
    agreement. 124




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Compensation
    Committee
    
    Independent directors under the NYSE independence
    standards;
    Non-employee directors under Exchange Act
    Rule 16b-3; and
    Outside directors under Internal Revenue Code
    Section 162(m).  www.cmreit.com
  
    develop the overall compensation policies and the corporate
    goals and objectives, if any, relevant to the chief executive
    officers compensation from our company;
    evaluate the chief executive officers performance in light
    of those goals and objectives, if any;
    be directly and solely responsible for establishing the chief
    executive officers compensation level, if any, based on
    this evaluation;
    make recommendations to the board regarding the compensation of
    officers junior to the chief executive officer,
    incentive-compensation plans and equity-based plans; and
    produce an annual report on executive compensation for inclusion
    in our proxy statement, if required.    Governance
    and Nominating Committee
    www.cmreit.com
  
    develop criteria for selecting new directors and to identify
    individuals qualified to become board members and members of the
    various committees of the board;
    select, or to recommend that the board select, the director
    nominees for the each annual meeting of stockholders and the
    committee nominees; and
    develop and recommend to the board a set of corporate governance
    principles applicable to the corporation.  Conflicts
    Committee
   125




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Corporate
    Governance  Code
    of Business Conduct and Ethics
    
    honest and ethical conduct, including the ethical handling of
    actual or apparent conflicts of interest between personal and
    professional relationships;
    full, fair, accurate, timely and understandable disclosure in
    our SEC reports and other public communications;
    compliance with applicable governmental laws, rules and
    regulations;
    prompt internal reporting of violations of the code to
    appropriate persons identified in the code; and
    accountability for adherence to the code.  www.cmreit.com
  Public
    Availability of Corporate Governance Documents
  www.cmreit.com.
 Compensation
    of Executive Officers   2011
    Stock Incentive Plan  See
     Restricted Stock below for a description
    of these securities.
  Purpose
    of the Plan
   126




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Administration
    of the Plan
  Rule 16b-3
  Eligibility
    Under the Plan
      Duration
    of Plan
    Types
    of Awards
    Authorized
    Shares Available for Awards Under the Plan
      Stock
    Options
     127




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Restricted
    Stock
    Change
    of Control Events
  and/or
 PRIOR
    PERFORMANCE SUMMARY  The information presented in this section represents the
    historical experience of Desert Capital, CM Equity and CM
    Notes, the only prior real estate programs sponsored or advised
    by affiliates of our sponsor, 2020 Capital, and/or our chief
    executive officer, Todd B. Parriott. The following summary is
    qualified in its entirety by reference to the Prior Performance
    Tables, which may be found in Appendix E of this
    prospectus. Investors should direct their attention to the Prior
    Performance Tables for further information regarding the prior
    performance of Desert Capital, CM Equity and CM Notes.
    Furthermore, Desert Capital is subject to the information and
    reporting requirements of the Exchange Act, has filed periodic
    reports, proxy statements and
    Forms 10-K
    containing audited financial information for each year of
    operation with the SEC. These filings are available to you for
    free on the SECs website at www.sec.gov. We will also
    provide, upon request, for no fee, Desert Capital REIT,
    Inc.s most recent
    Form 10-K
    filed with the SEC. We will provide the exhibits to such filing
    for a reasonable fee. Investors in our common stock should not
    assume that they will experience returns, if any, comparable to
    those experienced by investors in Desert Capital, CM Equity or
    CM Notes. Investors who purchase our common stock will not
    thereby acquire any ownership interest in Desert Capital, CM
    Equity or CM Notes.
 
    Prior
    Investment Programs
 
   
 128




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Overview
    of Desert Capital
 
   
     129




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debtor-in-possession
 
      
    Sale of the Foreclosed Collateral If it
    determines through a thorough review process that it is
    advantageous to sell the property that previously secured a
    non-performing loan at a loss rather than to continue to hold
    the property and incur additional costs related to property
    ownership, Desert Capital will sell the property. Additionally,
    Desert Capital may sell assets to generate operating liquidity.
    During 2009, Desert Capital sold foreclosed properties with a
    carrying value of $2.5 million for total net proceeds of
    $2.4 million. During 2010, Desert Capital sold foreclosed
    on properties for net proceeds of $6.5 million.
    Joint Venture  It may contribute real estate
    assets to an operating joint venture usually structured as a
    limited liability company (LLC) with other private
    investors in a loan or with a new investor to provide additional
    financing and development expertise to complete the project.
    Once the project is completed and sold, Desert Capital will
    distribute the sales proceeds according to the LLC agreement.
    This strategy may significantly reduce its ownership in the
    property. During 2008, Desert Capital formed three joint
    ventures, each with the same partner, and contributed real
    estate with a carrying balance of $6.7 million into the
    joint ventures. During 2009, it sold 10 homes within one of
    its joint venture projects for cash proceeds of $475,000. During
    2010, Desert Capital sold three homes within one of its joint
    venture projects for net cash proceeds of $120,000. In addition,
    Desert Capital sold the majority of the underlying real estate
    from one of its joint ventures for cash proceeds of $621,000 and
    terminated another joint venture and sold the underlying lots
    for cash proceeds of $587,000.
    Hold the Property If it is unable to
    implement any of the strategies discussed above, or if it
    determines that it may be advantageous to hold the property
    based upon local real estate market conditions, Desert Capital
    will hold the property for a period of time. This is a temporary
    strategy, which at the appropriate time will be replaced with
    one of the other strategies. In certain circumstances, holding
    the property is the best strategy while an exit strategy is
    developed and implemented.   130




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Summary
    Information  Capital
    Raising
    Investments
    Desert
    Capital Portfolio, December 31, 2010
  Portfolio as ofPercent of Total

December 31, 2010,Loans, Based on

Based onNumber of

Outstanding

OutstandingType of Loan

Mortgage Loans

Principal Amount

Principal AmountAcquisition and development loans


2



100
%

$
6,140,000Construction loans


0



0
%


0Commercial property loans


0



0
%


0    131




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Mortgage
    Loans Defaulted, Foreclosed Loans
  2004

2005

2006

2007

2008

2009

2010Number of loans defaulted at beginning of year














3



43



29



5Aggregate value














4,501,000



38,735,657



83,725,113



11,193,054Additional defaults during year










3



77



52



6



0Aggregate value










4,501,000



65,808,033



99,616,531



477,822



0Defaulted properties/loans disposed of during year














3



11



5



1Aggregate value














4,501,000



8,725,249



16,205,400



3,790,000Defaulted loans reclassified to real estate owned and real
    estate investments














34



55



25



4Aggregate value














31,573,376



45,901,826



56,804,481



7,403,054Number of loans defaulted at end of year










3



43



29



5



0Aggregate value










4,501,000



38,735,657



83,725,113



11,193,054



0   Loan
    Losses Including Provision for Loan Losses
  2004

2005

2006

2007

2008

2009

2010Losses


21,904



55,825



369,236



34,411,328



23,616,345



11,123,470



14,263,493   Sales
      CM
    Equity
   132




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CM Notes
    Program I
      Appendix E
 U.S.
    FEDERAL INCOME TAX CONSIDERATIONS       133




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Taxation
    of Our Company  General          
    We will be required to pay tax at regular corporate rates on any
    undistributed REIT taxable income, including undistributed net
    capital gains.
    We may be required to pay the alternative minimum
    tax on our items of tax preference, if any.
    If we have (1) net income (including certain foreign
    currency gain) from the sale or other disposition of foreclosure
    property which is held primarily for sale to customers in the
    ordinary course of business or (2) other nonqualifying
    income from foreclosure property, we will be required to pay tax
    at the highest corporate rate on this income. In general,
    foreclosure property is property acquired through foreclosure
    after a default on a loan secured by the property or on a lease
    of the property.
    We will be required to pay a 100% tax on any net income
    (including certain foreign currency gain) from prohibited
    transactions. In general, prohibited transactions are sales or
    other taxable dispositions of property, other than foreclosure
    property, held for sale to customers in the ordinary course of
    business. Further, we will be required to pay a 100% tax in
    respect of amounts that are treated by us as rents from real
    property but are properly allocable or attributable under the
    Internal Revenue Code to 134




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services rendered by a taxable REIT subsidiary (see below) as
    well as deductible expense items paid to us by our taxable REIT
    subsidiary in excess of amounts that would be paid by an
    unrelated third party.  
    If we fail to satisfy the 75% or 95% gross income tests, as
    described below, but have otherwise maintained our qualification
    as a REIT, we will be required to pay a 100% tax on an amount
    based upon the magnitude of the failure, intended to reflect our
    profitability.
    If we fail to meet the requirements of any asset test for a
    particular quarter by more than the de minimis amount, as
    described below, we may be required to pay a tax equal to the
    greater of (1) $50,000 or (2) the amount determined
    under Treasury Regulations by multiplying the net income
    generated by the assets that caused the failure by the highest
    corporate tax rate.
    If we fail to satisfy any of the REIT qualification requirements
    except the gross income and asset tests, as described below, we
    may be required to pay a tax of $50,000 for each such failure in
    order to maintain our REIT status.
    We will be required to pay a 4% excise tax on the amount by
    which our annual distributions to our stockholders is less than
    the sum of (1) 85% of our ordinary income for the year;
    (2) 95% of our REIT capital gain net income for the year;
    and (3) any undistributed taxable income from prior periods.
    If we acquire an asset from a corporation that is not a REIT in
    a transaction in which the basis of the asset in our hands is
    determined by reference to the basis of the asset in the hands
    of the transferor corporation, and we subsequently sell the
    asset at a gain within 10 years, then we would be required
    to pay tax at the highest regular corporate tax rate on this
    gain to the extent (a) the fair market value of the asset
    exceeds (b) our adjusted tax basis in the asset, in each
    case, determined as of the date on which we acquired the asset.
    The results described in this paragraph assume that we will
    elect this treatment in lieu of an immediate tax when the asset
    is acquired.
    With respect to an equity interest in either a taxable mortgage
    pool or a residual interest in a real estate mortgage investment
    conduit (REMIC), the ownership of which is attributed to us, we
    will pay tax at the highest corporate rate on the amount of any
    excess inclusion income for the taxable year allocable to the
    percentage of our shares that are held by specified tax exempt
    organizations that are not subject to the tax on unrelated
    business taxable income. Requirements
    for Qualification as a REIT                   135




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Ownership
    of a Partnership Interest   Taxable
    REIT Subsidiaries   Qualified
    REIT Subsidiaries   Income
    Tests   136




---



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
    Our failure to meet the gross income tests was due to reasonable
    cause and not due to willful neglect; and
    We file a schedule for the year in accordance with Treasury
    Regulations describing our items of gross income.   137




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Foreclosure
    Property   Prohibited
    Transaction Income   Hedging
    Transactions   Asset
    Tests             138




---



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Annual
    Distribution Requirements     139




---



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Record
    Keeping Requirements   Failure
    to Qualify   Taxable
    Mortgage Pool Rules    
    Substantially all of its assets consist of debt obligations or
    interests in debt obligations;
    More than 50% of those debt obligations are real estate
    mortgages or interests in real estate mortgages as of specified
    testing dates;
    The entity has issued debt obligations (liabilities) that have
    two or more maturities; and 140




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
    The payments required to be made by the entity on its debt
    obligations bear a relationship to the payments to be received
    by the entity on the debt obligations that it holds as assets.         REMIC
    Residual Interests   141




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Taxation
    of Taxable United States Stockholders    
    A citizen or resident of the United States;
    A corporation or partnership, or other entity taxable as a
    corporation or partnership for U.S. federal income tax
    purposes, created or organized in or under the laws of the
    United States or of any state thereof or in the District of
    Columbia, unless Treasury Regulations provide otherwise;
    An estate the income of which is subject to U.S. federal
    income taxation regardless of its source; or
    A trust whose administration is subject to the primary
    supervision of a United States court and which has one or more
    United States persons whom have the authority to control all
    substantial decisions of the trust. Distributions
    Generally       Capital
    Gain Distributions   142




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Retention
    of Net Capital Gains    
    Include their proportionate share of our undistributed net
    capital gains in their taxable income;
    Receive a credit for their proportionate share of the tax paid
    by us; and
    Increase the adjusted basis of their stock by the difference
    between the amount of their capital gain and their share of the
    tax paid by us. Passive
    Activity Losses and Investment Interest Limitations   Dispositions
    of Stock       143




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Backup
    Withholding and Information Reporting   Taxation
    of Tax-Exempt Stockholders        
    Is described in Section 401(a) of the Internal Revenue Code;
    Is tax-exempt under Section 501(a) of the Internal Revenue
    Code; and
    Holds more than 10%, by value, of the equity interests in the
    REIT.   144




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
    It would not have qualified as a REIT but for the fact that
    Section 856(h)(3) of the Internal Revenue Code provides
    that stock owned by a qualified trust shall be treated, for
    purposes of the
    5/50
    rule, as owned by the beneficiaries of the trust, rather than by
    the trust itself; and
    Either at least one qualified trust holds more than 25%, by
    value, of the interests in the REIT, or one or more qualified
    trusts, each of which owns more than 10%, by value, of the
    interests in the REIT, holds in the aggregate more than 50%, by
    value, of the interests in the REIT.    
    The gross income from the unrelated business earned by the REIT,
    less direct expenses relating to this gross income, treating the
    REIT as if it were a qualified trust and therefore subject to
    tax on unrelated business taxable income, to
    The total gross income of the REIT less direct expenses relating
    to this gross income.
    A de minimis exception applies where the percentage is less than
    5% for any year. As a result of the limitations on the transfer
    and ownership of stock contained in our articles of
    incorporation, we do not expect to be classified as a
    pension-held REIT but there can be no assurance that this will
    always be the case. Taxation
    of
    Non-United
    States Stockholders  (non-United
  non-United
  non-United non-United non-United non-United non-United Form W-8BEN, non-United non-United Form W-8ECI
  non-United non-United
   145




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non-United non-United
  non-United non-United Non-United non-United non-United
  non-United non-United
  non-United non-United non-United non-United non-United non-United
  non-U.S. entities. Non-United
 146




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Withholding
    Tax and Information Reporting on Disposition of REIT
    Stock  non-United
  non-United
  non-United
  
    A United States person;
    A controlled foreign corporation for U.S. federal income
    tax purposes; or
    A foreign person 50% or more of whose gross income from a
    specified period is effectively connected with a United States
    trade or business; then  non-United
  non-United
  
    One or more of its partners are United States persons, as
    defined for U.S. federal income tax purposes, who in the
    aggregate hold more than 50% of the income or capital interests
    in the partnership; or
    The foreign partnership is engaged in a United States trade or
    business.  non-United non-United
   Possible
    Legislative or Other Actions Affecting REITs   State,
    Local and Foreign Taxation   147




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ERISA
    CONSIDERATIONS     Fiduciary
    Duties and Prohibited Transactions  and/or
   Plan
    Assets   148




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Governmental
    Plans   Minimum
    Distribution Requirements   149




---



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Annual
    Valuation    Fiduciaries of ERISA plans and IRAs should consult with and
    rely upon their own advisors in evaluating the consequences
    under the fiduciary responsibility and prohibited transaction
    provisions of ERISA and the Internal Revenue Code of an
    investment in common stock in light of their own
    circumstances.
 DESCRIPTION
    OF CAPITAL STOCK   General     Common
    Stock   150




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Preferred
    Stock   151




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Power to
    Issue Additional Shares of Our Common Stock and Preferred
    Stock   Transfer
    Restrictions      
    any person from beneficially or constructively owning shares of
    our stock that would result in us being closely held
    under Section 856(h) of the Internal Revenue Code or
    otherwise cause us to fail to qualify as a REIT; and
    any person from transferring shares of our stock if such
    transfer would result in shares of our stock being owned by
    fewer than 100 persons.     152




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
    to rescind as void any vote cast by a prohibited owner prior to
    the discovery by us that such shares have been transferred to
    the trust; and
    to recast such vote in accordance with the desires of the
    trustee acting for the benefit of the charitable beneficiary.
    However, if we have already taken irreversible corporate action,
    then the trustee shall not have the authority to rescind and
    recast such vote.    
    the price paid by the prohibited owner for the shares or, if the
    prohibited owner did not give value for the shares in connection
    with the event causing the shares to be held in the trust (e.g.,
    a gift, devise or other such transaction), the market price, as
    defined in our charter, of such shares on the day of the event
    causing the shares to be held in the trust; and
    the price per share received by the trustee from the sale or
    other disposition of the shares held in the trust, in each case
    reduced by the costs incurred to enforce the ownership limits as
    to the shares in question. Any net sale proceeds in excess of
    the amount payable to the prohibited owner shall be paid
    immediately to the charitable beneficiary.    
    such shares shall be deemed to have been sold on behalf of the
    trust; and
    to the extent that the prohibited owner received an amount for
    such shares that exceeds the amount that such prohibited owner
    was entitled to receive pursuant to the aforementioned
    requirement, such excess shall be paid to the trustee upon
    demand.    
    the price per share in the transaction that resulted in such
    transfer to the trust (or, in the case of a devise or gift, the
    market price at the time of such devise or gift); and
    the market price on the date we, or our designee, accept such
    offer.       153




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Transfer
    Agent and Registrar   CERTAIN
    PROVISIONS OF MARYLAND LAW AND OF OUR
    ARTICLES OF INCORPORATION AND BYLAWS   Board of
    Directors     Removal
    of Directors   Limitation
    of Liability and Indemnification   154




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
    the act or omission of the director or officer was material to
    the matter giving rise to the proceeding and (a) was
    committed in bad faith or (b) was the result of active and
    deliberate dishonesty;
    the director or officer actually received an improper personal
    benefit in money, property or services; or
    in the case of any criminal proceeding, the director or officer
    had reasonable cause to believe that the act or omission was
    unlawful.      
    the indemnitee has determined, in good faith, that the course of
    conduct that caused the loss or liability was in our best
    interests;
    the indemnitee was acting on our behalf or performing services
    for us; and
    the liability or loss was not the result of negligence or
    misconduct, if the indemnitee is a director (other than an
    independent director), the advisor or an affiliate of the
    advisor or gross negligence or willful misconduct, if the
    indemnitee is an independent director.    
    there has been a successful adjudication on the merits of each
    count involving alleged material securities law violations as to
    the indemnitee;
    the claims have been dismissed with prejudice on the
    merits; or
    a court approves a settlement of the claims against the
    indemnitee and finds that indemnification of the settlement and
    the related costs should be made, after having been advised of
    the position of the SEC and the published position of any state
    securities regulatory authority as to indemnification for
    violations of securities laws. 155




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
    the proceeding relates to acts or omissions with respect to the
    performance of duties or services on behalf of us;
    the indemnitee provides us with written affirmation of the
    indemnitees good faith belief that the indemnitee has met
    the standard of conduct necessary for indemnification by us;
    the legal proceeding was initiated by a third party who is not a
    stockholder or, if by a stockholder of the company acting in his
    or her capacity as such, a court of competent jurisdiction
    approves such advancement; and
    the indemnitee provides us with a written agreement to repay the
    amount paid or reimbursed by us, together with the applicable
    legal rate of interest thereon, if it is ultimately determined
    that the indemnitee did not comply with the requisite standard
    of conduct and is not entitled to indemnification. Business
    Combinations     Control
    Share Acquisitions    
    one-tenth or more, but less than one-third; 156




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
    one-third or more, but less than a majority; or
    a majority or more of all voting power.          
    to shares acquired in a merger, consolidation or share exchange
    if the corporation is a party to the transaction; or
    to acquisitions approved or exempted by our charter or bylaws.   Amendment
    to our Articles of Incorporation   Dissolution   Meetings
    of Stockholders; Advance Notice of Director Nominations and New
    Business  Annual Meetings.
  
    pursuant to our notice of the meeting;
    at the direction of our board of directors; or
    by a stockholder who is entitled to vote at the meeting and has
    complied with the advance notice procedures set forth in our
    bylaws. 157




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th th th th
    
    as to each person whom the stockholder proposes to nominate for
    election or reelection as a director, the name, age, business
    address and residence address of such individual, the class,
    series and number of any shares of our stock that are
    beneficially owned by such individual, the date such shares were
    acquired and the investment intent of such acquisition and all
    other information relating to such person that is required to be
    disclosed in solicitation of proxies for election of directors
    in an election contest, or is otherwise required, in each case
    pursuant to Regulation 14A of the Exchange Act, including
    such persons written consent to be named as a nominee and
    serving as a director if elected;
    as to any other business that the stockholder proposes to bring
    before the meeting, a brief description of the business to be
    brought before the meeting, the reasons for proposing such
    business at the meeting, and any material interest in such
    business of such stockholder and of any such stockholders
    affiliates and of any person who is the beneficial owner, if
    any, of such stock; and
    as to the stockholder giving notice and each beneficial owner,
    if any, of such stock, the name and address of such stockholder,
    as they appear on the companys stock ownership records,
    and the name and address of each beneficial owner of such stock,
    and the class and number of shares of stock of the company which
    are owned of record or beneficially by each such person.  Special Meetings.
  
    pursuant to our notice of the meeting;
    by or at the direction of our board of directors; or
    provided that our board of directors has determined that
    directors shall be elected at such meeting, by a stockholder who
    is entitled to vote at the meeting and has complied with the
    advance notice provisions set forth in our bylaws. Liability
    of Stockholders   158




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Anti-Takeover
    Effect of Certain Provisions of Maryland Law, our Bylaws and
    Board Resolutions   PRINCIPAL
    STOCKHOLDERS    
    all shares the investor actually owns (of record or
    beneficially);
    all shares over which the investor has or shares voting or
    dispositive control (such as in the capacity as a general
    partner of an investment fund); and
    all shares the investor has the right to acquire within
    60 days (such as upon exercise of options that are
    currently vested or which are scheduled to vest within
    60 days).    
    each of our named executive officers;
    each of our directors;
    all of our directors and executive officers as a group; and
    each stockholder known to us to own beneficially more than 5% of
    our common stock.    Beneficial Ownership


Beneficial OwnershipBefore Offering


After OfferingNumber


Percent(1)


Number


Percent(2)Five Percent or More Stockholders2020 Capital Advisors, LLC
    1291 W. Galleria Drive, Suite 200
    Henderson, Nevada 89014


20,000



100
%


20,000



*Directors and Executive Officers(3)Todd B. Parriott


0



*



0



*G. Steven Dawson


0



*



0



*Anthony D. Cinquini


0



*



0



*Hunt C. Holsomback


0



*



0



*Darin D. Gilson


0



*



0



*Robert J. Simmons


0



*



0



*All directors and executive officers as a group (6 persons)


0



0
%


0



0
%     *
    
    Holdings represent less than 1% of all shares outstanding. 159




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##### Table of Contents



(1)
    
    Assumes that the listed person does not sell any shares of our
    common stock prior to the completion of this offering.
    Calculated using 20,000 shares of our common stock
    outstanding as
    of          ,
    2011.(2)
    
    Assumes that the listed person does not sell any shares of our
    common stock prior to the completion of this offering.
    Calculated using 20,000 shares of our common stock
    outstanding as
    of          ,
    2011, plus the 100,000,000 shares that may be issued by us
    in this offering.(3)
    
    The address of each of our officers and directors is
    c/o CM
    REIT, Inc., 1291 W. Galleria Drive, Suite 200,
    Henderson, Nevada 89014.  REPORTS
    TO STOCKHOLDERS
    
    financial statements, including a balance sheet, statement of
    operations, statement of stockholders equity and statement
    of cash flows, prepared in accordance with GAAP, which are
    audited and reported on by independent certified public
    accountants;
    the ratio of the costs of raising capital during the period to
    the capital raised;
    the aggregate amount of advisory fees and the aggregate amount
    of other fees paid by us to our advisor and any affiliate or
    related party of our advisor, including fees or charges paid to
    our advisor and any affiliate or related party of our advisor by
    third parties doing business with us;
    our Total Operating Expenses, stated as a percentage of the
    Average Invested Assets (the average of the aggregate book value
    of our assets, for a specified period before deducting
    depreciation, bad debts or other non-cash reserves, computed by
    taking the average of such values at the end of each month
    during such period) and as a percentage of our net income;
    a report from our independent directors that the policies being
    followed by us are in the best interests of our stockholders and
    the basis for such determination;
    separately stated, full disclosure of all material terms,
    factors and circumstances surrounding any and all transactions
    involving us and our directors, our advisor and any affiliate
    occurring during the year for which the annual report is made,
    and the independent directors will be specifically charged with
    a duty to examine and comment in the report on the fairness of
    such transactions; and
    distributions to our stockholders for the period, identifying
    the source of such distributions.     160




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PLAN OF
    DISTRIBUTION General      follow-on
     161




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Minimum
    Offering
        Compensation
    of Dealer-Manager and Participating Broker-Dealers
      dealer-manager broker-dealers
 162




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##### Table of Contents



dealer-manager.
  broker-dealer, broker-dealers and/or
      Dealer-Manager
    andParticipating Broker-Dealer Compensation
  Selling commissions (maximum)

$
63,000,000Dealer manager fee (maximum)

$
27,000,000Total

$
90,000,000  163




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##### Table of Contents



broker-dealers dealer-manager broker-dealer
 
   
      
    pays a broker a single fee, e.g., a percentage of assets under
    management, for investment advisory and broker services, which
    is frequently referred to as a wrap fee;
    has engaged the services of a registered investment adviser with
    whom the investor has agreed to pay compensation for investment
    advisory services or other financial or investment advice (other
    than a registered investment adviser that is also registered as
    a broker-dealer who does not have a fixed or wrap
    fee feature or other asset fee arrangement with the
    investor); or
    is investing through a bank acting as trustee or fiduciary.     164




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Shares
    Purchased by Affiliates and Participating
    Broker-Dealers
    
    registered principals or representatives of our dealer-manager
    or a participating broker-dealer (and immediate family members
    of any of the foregoing persons); and
    our employees, officers and directors or those of our advisor,
    or the affiliates of any of the foregoing entities (and the
    immediate family members of any of the foregoing persons or
    entities), any Plan established exclusively for the benefit of
    such persons or entities, and, if approved by our board of
    directors, joint venture partners, consultants and other service
    providers.     Subscription
    Procedures  Procedures
    Applicable to All Subscriptions
  Appendix D
 165




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##### Table of Contents



Procedures
    Applicable to Non-Telephonic Orders
    Procedures
    Applicable To Telephonic Orders
   166




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##### Table of Contents



Rule 15c2-4(a)
    ten-day
  Additional
    Subscription Procedures
 
  Appendix D
 
  Escrow
    Arrangements
   167




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##### Table of Contents



Special
    Notice to Pennsylvania and Tennessee Investors
    
    Return the Pennsylvania investors funds within 15 calendar
    days of the end of the escrow period, or
    Notify the Pennsylvania investors in writing by certified mail
    or any other means whereby receipt of delivery is obtained
    within 10 calendar days after the end of the escrow period, that
    the Pennsylvania investors have a right to have their investment
    returned to them. If such an investor requests the return of
    such funds within 10 calendar days after receipt of
    notification, we must return such funds within 15 calendar
    days after receipt of the investors request.  120-day 120-day 120-day
   Determination
    of the Offering Price    LEGAL
    MATTERS    EXPERTS
   SUPPLEMENTAL
    SALES MATERIALS   168




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WHERE YOU
    CAN FIND MORE INFORMATION ABOUT CM REIT, INC.  Form S-11, www.sec.gov 1-800-SEC-0300.
    www.cmreit.com
 DEFINITIONS  Acquisition Expenses
  Acquisition Fee
  Advisor
 169




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##### Table of Contents



Affiliate
  Average Invested Assets
  Competitive Real Estate Commission
  Independent directors
  
    owns an interest in the Sponsor, advisor, or any of their
    affiliates; or
    is employed by the Sponsor, advisor or any of their
    affiliates; or
    is an officer or director of the Sponsor, advisor or any of
    their affiliates; or
    performs services, other than as a director, for us; or
    is a director for more than three REITs organized by our Sponsor
    or advised by our advisor; or
    has any material business or professional relationship with the
    Sponsor, advisor, or any of their affiliates.    
    annual gross revenue, derived from all sources, during either of
    the last two years; or
    net worth, on a fair market value basis.  fathers-in-law, daughters-in-law, sisters-in-law
  Independent expert
  Leverage
  Net assets
  Net income
 170




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##### Table of Contents



Operating expenses (15) non-cash
  Ownership Limit
  Plan
  Preferred stock
  Qualified Plans
  Roll-Up Roll-Up
  
    a transaction involving securities of the company that have been
    for at least 12 months listed on a national securities
    exchange or traded through the National Association of
    Securities Dealers Automated Quotation National Market
    System; or
    a transaction involving the conversion to corporate trust or
    association form of only the company if, as a consequence of the
    transaction there will be no significant adverse change in any
    of the following:  
    shareholders voting rights;
    the term of existence of the company;
    sponsor or advisor compensation; and
    the companys investment objectives.  Roll-Up
    Entity Roll-Up
  Shareholders
  Sponsor
  
    taking the initiative, directly or indirectly, in founding or
    organizing our business or enterprise; either alone or in
    conjunction with one or more other persons; 171




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##### Table of Contents




    receiving a material participation in us in connection with the
    founding or organizing of our business, in consideration of
    services or property, or both services and property;
    having a substantial number of relationships and contacts with
    us;
    possessing significant rights to control our properties;
    receiving fees for providing services to us which are paid on a
    basis that is not customary in the industry; or
    providing goods or services to us on a basis which was not
    negotiated at arms length with us.    Total Operating Expenses
  
    the expenses of raising capital such as organization and
    offering expenses, legal, audit, accounting, underwriting,
    brokerage, listing, registration and other fees, printing and
    other such expenses, and tax incurred in connection with the
    issuance, distribution, transfer, registration and stock
    exchange listing of the companys shares;
    interest payments;
    taxes;
    non-cash expenditures such as depreciation, amortization and bad
    debt reserves;
    incentive fees paid in compliance with North American Securities
    Administrators Association, Inc. Guidelines; and
    acquisition fees, acquisition expenses, real estate commissions
    on resale of property and other expenses connected with the
    acquisition, disposition and ownership of real estate interests,
    mortgage loans, or other property (such as the costs of
    foreclosure, insurance premiums, legal services, maintenance
    repair and improvement of property). 172




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##### Table of Contents



INDEX
    TO BALANCE SHEETS
    AnnualReport of Independent Registered Public
    Accounting Firm


F-2Balance Sheets


F-3Notes to Balance Sheets


F-4-F-8QuarterlyBalance Sheet


F-9Note to Balance Sheet


F-10  F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                  F-2




---



##### Table of Contents



CM REIT,
    INC.
  BALANCE SHEETS
  December 31,


December 31,2010


2009ASSETSCash and cash equivalents

$
200,000


$
200,000Total assets

$
200,000


$
200,000LIABILITIES AND STOCKHOLDERS EQUITYTotal Liabilities:

$



$
Commitments and contingenciesStockholders equity:Preferred stock, $0.01 par value; 15,000,000 shares
    authorized and issuable






Common stock, $0.01 par value; 100,000,000 shares
    authorized; 20,000 shares issued and outstanding


200



200Additional paid-in capital


199,800



199,800Total stockholders equity


200,000



200,000Total liabilities and stockholders equity

$
200,000


$
200,000    F-3




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##### Table of Contents



CM REIT,
    INC.
  NOTES TO
    BALANCE SHEETS
  Note 1.  Organization
            Note 2.
    Summary
    of Significant Accounting Policies  Basis
    of Presentation
   F-4




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##### Table of Contents



CM REIT,
    INC.
  NOTES TO
    BALANCE SHEETS  (Continued)
   Note 2.
    Summary
    of Significant Accounting Policies (Continued)  Use of
    Estimates
    Cash
    and Cash Equivalents
    Organizational
    and Offering Costs
      Income
    Taxes
   F-5




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##### Table of Contents



CM REIT,
    INC.
  NOTES TO
    BALANCE SHEETS  (Continued)
   Note 2.
    Summary
    of Significant Accounting Policies (Continued)  
 Income
    Taxes (Continued)
    Concentration
    of Credit Risk
    Note 3.
    Capitalization    Distribution
    Reinvestment Plan
    Share
    Redemption Plan
  12-month 12-month
   F-6




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##### Table of Contents



CM REIT,
    INC.
  NOTES TO
    BALANCE SHEETS  (Continued)
   Note 3.
    Capitalization
    (Continued)  
 Share
    Redemption Plan (Continued)
      Note 4.
    Related
    Party Arrangements    Advisory
    Agreement
  10-year
  Advisory
    Agreement
   F-7




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##### Table of Contents



CM REIT,
    INC.
  NOTES TO
    BALANCE SHEETS  (Continued)
   Note 4.
    Related
    Party Arrangements (Continued)  
 Advisory
    Agreement (Continued)
    Dealer-Manager
    Agreement
    Loan
    Origination Agreements
    Note 5.
    Commitments
    and Contingencies    Note 6.
    Economic
    Dependency    Note 7.
    Subsequent
    Events   F-8




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##### Table of Contents



CM REIT,
    INC.
  BALANCE
    SHEETS
  March 31,


December 31,2011


2010(Unaudited)ASSETSCash and cash equivalents

$
200,000


$
200,000Total assets

$
200,000


$
200,000LIABILITIES AND STOCKHOLDERS EQUITYTotal Liabilities:

$



$
Commitments and contingenciesStockholders equity:Preferred stock, $0.01 par value; 15,000,000 shares
    authorized and issuable






Common stock, $0.01 par value; 100,000,000 shares
    authorized; 20,000 shares issued and outstanding


200



200Additional paid-in capital


199,800



199,800Total stockholders equity


200,000



200,000Total liabilities and stockholders equity

$
200,000


$
200,000    F-9




---



##### Table of Contents



CM REIT,
    INC.
  NOTE TO
    BALANCE SHEET (UNAUDITED)
  Note 1.  Summary
    of Significant Accounting Policies
  Basis
    of Presentation
  Form S-11/A,
  Organizational
    and Offering Costs
 
   
 F-10




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##### Table of Contents



APPENDIX A



REINVESTMENT
    PLAN



CM REIT, Inc., a Maryland corporation (the Company),
    adopted a Reinvestment Plan (the Reinvestment Plan)
    on the terms and conditions set forth below.



1. Reinvestment of
    Distributions.  DST Systems, Inc., the agent
    (the Reinvestment Agent), for participants (the
    Participants) in the Reinvestment Plan, will receive
    all cash distributions made by the Company with respect to
    shares of common stock of the Company (the Shares)
    owned by each Participant, which are subject to the Reinvestment
    Plan including all Shares acquired by the Reinvestment Agent
    through the application of such distributions pursuant to the
    terms of the Reinvestment Plan (collectively, the
    Distributions). The Reinvestment Agent will apply
    such Distributions as follows:



(a) Prior to the termination of the Companys initial
    public offering (the Initial Offering) of the Shares
    reserved for issuance under the Reinvestment Plan pursuant to
    the Companys registration statement on Form S-11
    (File No. 333-156434), the Reinvestment Agent will invest
    Distributions in Shares acquired from the managing dealer or
    participating brokers for the Initial Offering at $9.50 per
    Share.



(b) After the Initial Offering, the Reinvestment Agent will
    purchase Shares from any additional shares which the Company
    elects to register with the Securities and Exchange Commission
    (the SEC) for the Reinvestment Plan, at a per Share
    price equal to the net asset value of the Shares determined by
    the Companys board of directors in its sole discretion,
    based on quarterly appraisal or other valuation updates of the
    Companys assets until such time, if any, as listing of the
    Companys common stock on a national securities exchange or
    trading of such shares in the
    over-the-counter
    market occurs. Upon Listing, the current reinvestment agent may
    purchase Shares either through such market or directly from the
    Company pursuant to a registration statement relating to the
    Reinvestment Plan, in either case at a per Share price equal to
    the then-prevailing market price on the national securities
    exchange or
    over-the-counter
    market on which the Shares are listed at the date of purchase by
    the current reinvestment agent. In the event that, after Listing
    occurs, the current reinvestment agent purchases Shares on a
    national securities exchange or
    over-the-counter
    market through a registered broker-dealer, the amount to be
    reinvested shall be reduced by any brokerage commissions charged
    by such registered broker-dealer. In the event that such
    registered broker-dealer charges reduced brokerage commissions,
    additional funds in the amount of any such reduction shall be
    left available for the purchase of Shares.



(c) For each Participant, the Reinvestment Agent will
    maintain a record which shall reflect for each month the
    Distributions received by the Reinvestment Agent on behalf of
    such Participant. The Reinvestment Agent will use the aggregate
    amount of Distributions to all participants for each month to
    purchase Shares for the participants. If the aggregate amount of
    Distributions to participants exceeds the amount required to
    purchase all Shares then available for purchase, the
    Reinvestment Agent will purchase all available Shares and will
    return all remaining Distributions to the participants within
    30 days after the date such purchase is made. The purchased
    Shares will be allocated among the participants based on the
    portion of the aggregate Distributions received by the
    Reinvestment Agent on behalf of each Participant, as reflected
    in the records maintained by the Reinvestment Agent. The
    ownership of the Shares purchased pursuant to the Reinvestment
    Plan shall be reflected on the books of the Company.



(d) Distributions shall be invested by the Reinvestment
    Agent in Shares promptly following the payment date to the
    extent Shares are available.



(e) The allocation of Shares among participants may result
    in the ownership of fractional Shares, computed to four decimal
    places.



(f) Distributions attributable to Shares purchased on
    behalf of the participants pursuant to the Reinvestment Plan
    will be reinvested in additional Shares in accordance with the
    terms hereof.


A-1




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Election to Participate.
  Distribution of Funds.
  Proxy Solicitation.
  Absence of Liability.
  Suitability.
   A-2




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##### Table of Contents



Reports to participants.
  Administrative Charges, Commissions, and Plan
    Expenses.
  No Drawing.
  Taxes.
  Termination.
     A-3




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##### Table of Contents



Notice.
  Amendment.
  Governing Law.
 A-4




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##### Table of Contents



APPENDIX B



AUTOMATIC
    INVESTMENT PROGRAM



CM REIT, INC., a Maryland corporation (the Company),
    has adopted an Automatic Investment Program (the
    Investment Program), administered by DST Systems,
    Inc., the administrator (the Administrator) for
    participants in the Investment Program
    (Participants), on the terms and conditions set
    forth below.



1. Election to Participate. Subject to the terms
    hereof, any purchaser of shares of common stock of the Company
    (the Shares) may become a Participant by making a
    written election to participate on such purchasers
    Subscription Agreement at the time of subscription for Shares;
    provided, however, automatic debits to the Participants
    account will not commence until after the Company has accepted
    $2,500,000 in subscriptions for its Initial Offering (defined
    below) and broken escrow. Any stockholder who has not previously
    elected to participate in the Investment Program may so elect at
    any time by completing and executing an Authorization Form
    obtained from the Administrator or any other appropriate
    documentation as may be acceptable to the Administrator. A
    Participant who has terminated his or her participation in the
    Investment Program pursuant to Section 10 below will be
    allowed to participate in the Investment Program again upon
    receipt of a then-current prospectus relating to participation
    in the Investment Program. Residents of the State of Alabama,
    the State of Nebraska, the State of Ohio and the State of
    Tennessee are not eligible to participate in the Investment
    Program.



2. Investment Program. The Administrator or the
    Companys transfer agent will, at monthly, quarterly or
    annual intervals, as initially selected by the Participant
    (each, a Payment Interval), automatically debit the
    Participants bank checking account, savings account, or
    other account in the amount indicated on the Participants
    election to participate (collectively, the Additional
    Payments); provided, however, that the minimum amount of
    such Additional Payments is $1,000 for Participants who are
    residents of the State of Maine, the State of Minnesota or the
    State of Washington. Participation in the program will commence
    with the next monthly, quarterly or annual interval (subject to
    the Company breaking escrow as provided in Section 1
    above), provided the election is received at least 15 Business
    Days prior to the end of the month, quarter or year; otherwise,
    the election will apply to all subsequent monthly, quarterly or
    annual intervals. For purposes of the Investment Program,
    Business Day means any day except Saturday, Sunday,
    or any day commercial banks are closed in Kansas City, Missouri
    pursuant to federal and state law.



3. General Terms of Investment Program Investment.
    The Administrator will apply all Additional Payments subject to
    the Investment Program, as follows:



(a) Prior to the termination of the Companys initial
    public offering (the Initial Offering) of the Shares
    pursuant to the Companys registration statement on
    Form S-11,
    as thereafter amended or supplemented (the Registration
    Statement), the Administrator will invest Additional
    Payments in Shares at the then-current public offering price per
    Share. No reduction in the purchase price for Shares purchased
    hereunder shall be made for discounts set forth in the
    Companys prospectus.



(b) The Administrator will invest Additional Payments in
    Shares that may (but are not required to) be supplied from
    (i) Shares registered with the Securities and Exchange
    Commission (the Commission) in connection with the
    Initial Offering or any subsequent offering by the Company;
    (ii) Shares registered with the Commission pursuant to an
    effective registration statement for Shares for use in the
    Investment Program (a Future Registration), or
    (iii) Shares purchased by the Administrator for the
    Investment Program in a secondary market (if available) or on a
    stock exchange (collectively, the Secondary Market)
    and registered with the Commission for resale pursuant to the
    Investment Program. Shares purchased on the Secondary Market as
    set forth in (iii) above will be purchased at the
    then-prevailing market price, and the average price paid by the
    Administrator for all such purchases for a Payment Interval will
    be utilized for purposes of purchases of Shares in the
    Investment Program on such Payment Interval. Shares acquired by
    the Administrator on the Secondary Market or registered in a
    Future Registration for use in the Investment Program may be at
    prices lower or higher than the per Share price



B-1




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and/or
  and/or and/or
              Absence of Liability
  Suitability
 
   
 B-2




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Reports to Participants and/or
  Administrative Charges and Investment Program
    Expenses
  No Drawing
  Taxes
  Termination
       B-3




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State Regulatory Restrictions
  Notice
  Amendment
  Governing Law
 B-4




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##### Table of Contents



APPENDIX C



SHARE
    REDEMPTION PLAN



CM REIT I, Inc., a Maryland corporation (the
    Company), adopted a Share Redemption Plan (the
    Redemption Plan) on the terms and conditions set
    forth below.



1. Redemption of Shares.  DST
    Systems, Inc., the agent (the Reinvestment Agent),
    for each stockholder participant in the Redemption Plan, will
    redeem shares of common stock of the Company (the
    Shares) owned by each stockholder, in accordance
    with the terms of this Redemption Plan upon instruction received
    by the Company. All recordkeeping and other administrative
    functions required to be performed in connection with the
    Redemption Plan will be performed by the Reinvestment Agent. All
    redemptions of Shares are at the Companys option, and the
    Company is under no obligation to redeem any Shares.



2. Holding Period.  Except in the
    case of Exigent Circumstances (herein after defined), in order
    to be eligible to present Shares for redemption, the stockholder
    must have acquired the Shares at least one year prior to
    presentment for repurchase. For purposes of calculating the
    ownership periods set forth herein, if a stockholder purchased
    shares for economic value from a prior stockholder (a
    Resale), the purchasing stockholders period of
    ownership for such shares shall commence on the date the
    purchasing stockholder purchased the shares from the prior
    stockholder, which shall be deemed to be the date the shares are
    re-registered in the name of the purchasing stockholder by the
    Reinvestment Agent. For a transfer of ownership that is not
    considered a Resale, the stockholders period of ownership
    for such shares shall commence on the date of the acquisition of
    shares by the original stockholder.



With respect to redemption requests made in connection with
    shares acquired at multiple points in time, the pricing
    associated with the shares held for the longest period of time
    shall be applied first, until such time as all shares purchased
    at such point in time have been redeemed. At such time, pricing
    associated with the remaining shares then held for the next
    applicable longest period of time shall be applied, and so on.



3. Number of Shares.  A stockholder
    may present all or any portion of his Shares for redemption.



4. Amount of Shares to be Redeemed.



(a) If the Company elects to redeem Shares, the conditions
    and limitations described herein would apply. The full amount of
    the proceeds from the sale of Shares under the reinvestment plan
    (the DRIP) attributable to any calendar quarter may
    be used to redeem Shares presented for redemption during such
    quarter.



(b) At no time during any consecutive
    12-month
    period will the number of shares redeemed by the Company under
    the Repurchase Plan exceed 5% of the weighted average number of
    outstanding shares of the Companys common stock during
    such
    12-month
    period.



(c) Notwithstanding anything to the contrary in this
    Redemption Plan, no Shares shall be redeemed under the
    Redemption Plan on any date upon which the Company pays any
    dividend or other distribution with respect to the Shares.



(d) If the funds made available for redemptions in any
    quarter exceed the amount needed to redeem the common stock for
    which redemption requests have been submitted, the Company may,
    in its sole discretion, carry over any excess amount to the next
    succeeding calendar quarter for use in addition to the amount of
    funds available for redemptions during that calendar quarter
    unless the Company elects to use such amount for other corporate
    purposes.



(e) If the funds available for redemptions in any quarter
    are insufficient to redeem all of the common stock for which
    redemption requests have been submitted, to the extent the
    Company redeems any Shares at the end of a quarter, the Company
    will redeem the Shares on a first come, first served basis at
    the end of each quarter; provided, however, with respect to
    Shares being redeemed due to Exigent Circumstances, the Company,
    in its sole discretion, may waive the first come, first served
    requirements for the redemption of such Shares and redeem such
    Shares in full, to the extent funds are available, before any
    other Shares are redeemed the Company is redeeming shares and at
    the end of each quarter. A stockholder whose entire request is
    not honored, due to



C-1




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Redemption Price.
            C-2




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##### Table of Contents



Form 8-K
  Procedures.
        Nature of Redeemed
    Shares.
  Absence of Liability.
  Administrative Charges, Commissions, and Plan
    Expenses.
  Termination. Form 8-K
 C-3




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##### Table of Contents



over-the-counter
  Notice.
  Amendment. Form 8-K.
  Governing Law.
 C-4




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APPENDIX
    D  
 D-1




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D-2




---



##### Table of Contents



D-3




---



##### Table of Contents



D-4




---



##### Table of Contents



D-5




---



##### Table of Contents



D-6




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##### Table of Contents



APPENDIX E



PRIOR
    PERFORMANCE TABLES





The following prior performance tables provide information
    relating to Desert Capital REIT, Inc. (Desert
    Capital), CM Equity LLC (CM Equity) and
    CM Notes Program I, LLC (CM Notes and
    together with Desert Capital and CM Equity, the Prior
    Investment Programs), the only prior real estate
    investment programs sponsored by our sponsor, 2020 Capital
    Advisors, LLC and its affiliates and/or Todd B. Parriott, our
    Chief Executive Officer. Desert Capital had investment
    objectives similar to ours. None of the Prior Investment
    Programs was a prior program of CM REIT, Inc. This offering is
    our first public offering.





This information should be read together with the summary
    information included in the Prior Performance
    Summary section of this prospectus, which includes a
    description of the Prior Investment Programs. The tables below
    provide information on the performance of Desert Capital, a
    public company which has conducted two public offerings,
    CM Equity and CM Notes. All of the following prior
    performance tables are unaudited.



THE INCLUSION OF THE TABLES DOES NOT IMPLY THAT WE WILL MAKE
    INVESTMENTS COMPARABLE TO THOSE REFLECTED IN THE TABLES OR THAT
    INVESTORS IN OUR SHARES WILL EXPERIENCE RETURNS COMPARABLE TO
    THE RETURNS EXPERIENCED IN THE PROGRAM REFERRED TO IN THE
    TABLES. IF YOU PURCHASE OUR SHARES, YOU WILL NOT ACQUIRE ANY
    OWNERSHIP IN ANY OF THE PROGRAMS TO WHICH THE TABLES RELATE.



The following tables are included herein: TABLE I

Experience in Raising and Investing FundsTABLE II

Compensation to SponsorTABLE III

Operating Results of Prior ProgramsTABLE IV

Results of Completed ProgramsTABLE V

Sales or Disposals of Properties  
 
 
   
  Forms 10-K
 
 
   
 E-1




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##### Table of Contents



TABLE
    I
  EXPERIENCE IN RAISING AND INVESTING FUNDS (ON A PERCENTAGE
    BASIS)(1)(2)
    Desert Capital REIT, Inc.



CM NotesFirst Offering

Second Offering

CM Equity, LLC

Program I, LLCDollar amount offered

$
200,000,000
(1)

$
202,500,000
(1)

$
50,000,000


$
25,000,000Dollar amount raised (100 percent)


133,178,041
(3)


54,648,122
(4)


1,674,340



1,300,000Less offering expenses:Selling commissions and discounts retained by affiliates


8.7
%


7.8
%


6.4
%


3.6
%Organizational expenses














Marketing and offering expenses


1.9
%


.5
%


4.6
%


7.3
%ReservesPercent available for investment


89.4
%


91.7
%


89.0
%


89.1
%Acquisition CostsPrepaid items and fees related to purchase of property














Cash down payment














Acquisition fees














Loan costs














Proceeds from mortgage financing














Total funds invested in mortgage loans


89.4
%


91.7
%


89.0
%


89.1
%Date offering began


7/2004



3/2006



6/2007



1/7/2009Length of offering (in months)


20



23



26



12Months to invest 90 percent of amount available for
    investment (measured from beginning of offering)(5)


1



1



1



1     (1)
    
    Excludes shares registered for issuance under the dividend
    reinvestment plan.(2)
    
    Percentages are of total dollar amounts raised.(3)
    
    Includes $2,812,858 issued under the reinvestment plan.(4)
    
    Includes $9,591,637 issued under the reinvestment plan.(5)
    
    Generally, funds are invested within 30 days of receipt. E-2




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##### Table of Contents



TABLE II
  COMPENSATION TO SPONSOR
    Desert Capital REIT, Inc.



CM NotesType of Compensation

First Offering

Second Offering

CM Equity, LLC

Program I, LLCDate offering commenced


7/16/2004



3/22/2006



6/2007



1/7/2009Dollar amount raised

$
133,178,041
(1)

$
54,648,122
(2)

$
1,674,340


$
1,300,000Amount paid to sponsor and affiliates from proceeds of offering:Underwriting fees










Acquisition fees










 real estate commissions










 advisory fees










 other










Other(3)


11,660,188



4,266,958



106,434



Total amount paid to sponsorDollar amount of cash generated from operations before deducting
    payments to sponsor:


11,432,945



26,589,841



(138,341
)


(33,608
)Amount paid to sponsor from operations:Loan servicing fees














Partnership management fees














Reimbursements














Leasing commissions














Management fees under Advisory Agreement


1,296,925



7,693,016



19,950



Dollar amount of property sales and refinancing before deducting
    payments to sponsor cash














 notes














Amount paid to sponsor from property sales and refinancing:Real estate commissions














Incentive fees














Other














Loan origination fees paid to CM Capital Services by borrowers(4)






344,811







     (1)
    
    Includes $2,812,858 issued under the dividend reinvestment plan.(2)
    
    Includes $9,591,637 issued under the dividend reinvestment plan.(3)
    
    Selling commissions and discounts retained by affiliates.(4)
    
    Based on an average loan origination fee of 3.07%. E-3




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##### Table of Contents



TABLE
    III
  OPERATING RESULTS OF PRIOR PROGRAMS
  Form 10-K
  
 Desert Capital REIT, Inc.2005

2006

2007

2008

2009

2010Gross Revenues

$
15,435,930


$
29,659,558


$
32,584,501


$
8,513,233


$
2,498,883


$
2,125,355Profit on sale of properties






















Less: Operating expenses


8,155,072



12,307,468



49,655,871



42,378,346



52,437,996



50,624,191Interest expense


941,709



2,669,710



4,017,764



3,125,741



2,609,256



4,188,747Depreciation


143,668



434,668



748,092



485,739



466,825



685,061Net (loss) income attributable to common shareholders


6,195,481



14,247,712



(21,837,226
)


(37,476,593
)


(53,016,194
)


(53,372,644
)Taxable Income


4,117,450



13,277,140



12,799,829



(20,849,735
)


(52,665,000
)


(20,850,000
) from operations


4,117,450



13,277,140



12,799,829



(20,849,735
)


(52,665,000
)


(20,850,000
) from gain on sale


















Cash generated from operations


4,577,108



9,361,500



17,735,767



3,371,571



(8,814,000
)


(6,830,000
)Cash generated from sales






















Cash generated from refinancing






















Cash generated from operations, sales and refinancing


4,577,108



9,361,500



17,735,767



3,371,571



(8,814,000
)


(6,830,000
)Less: Cash distributions to investors from operating cash flow


3,068,025



10,880,736



14,230,562



5,838,501







 from sales and refinancing






















 from other






















Cash generated (deficiency) after cash distributions


1,509,083



(1,519,236
)


3,505,205



(2,466,930
)


(8,814,000
)


(6,830,000
)Less: Special Items (not including sales and refinancing)






















Cash generated (deficiency) after cash distributions and special
    items


1,509,083



(1,519,236
)


3,505,205



(2,466,930
)


(8,814,000
)


(6,830,000
)Tax and Distribution Data Per $1000 InvestedFederal Income Tax Results:Ordinary income (loss)


47



87



69



(111
)


(279
)


(111
) from operations


47



87



69



(111
)


(279
)


(111
) from recapture






















Capital gain (loss)






















Cash Distributions to InvestorsSource (on a GAAP basis) Investment income


35



71



76



31



0



0 Return of capital






















Source (on cash basis) Sales






















 Refinancing






















 Operations


35



71



76



31



0



 Other






















Total distributions on cash basis


35



71



76



31



0



Amounts (in percentage terms) remaining invested in program
    properties at the end of the last year reported in the Table


















80
%  
 E-4




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##### Table of Contents



TABLE
    III
  OPERATING RESULTS OF PRIOR PROGRAMS 
    (Continued)
  CM Equity, LLC2007


2008


2009


2010Gross Revenues

$
23,007


$
13,922


$
107,013



1,838Profit on sale of properties














Less: Operating expenses


27,801



1,172,700



329,850



33,459Interest expense


25,725



219,203



11,110



9,922Depreciation










Net income (loss)  GAAP Basis


(30,519
)


(1,377,981
)


(233,947
)


(41,543
)Taxable Income














 from operations














 from gain on sale














Cash generated from operations


(9,419
)


(138,552
)


(10,320
)


(12,077
)Cash generated from sales














Cash generated from refinancing














Cash generated from operations, sales and refinancing


(9,419
)


(138,552
)


(10,320
)


(12,077
)Less: Cash distributions to investors from operating cash flow














 from sales and refinancing














 from other














Cash generated (deficiency) after cash distributions


(9,419
)


(138,552
)


(10,320
)


(12,077
)Less: Special Items (not including sales and refinancing)














Cash generated (deficiency) after cash distributions and special
    items


(9,419
)


(138,552
)


(10,320
)


(12,077
)Tax and Distribution Data Per $1000 InvestedFederal Income Tax Results:Ordinary income (loss)














 from operations














 from recapture














Capital gain (loss)














Cash Distributions to InvestorsSource (on a GAAP basis) Investment income














 Return on capital














Source (on cash basis) Sales














 Refinancing














 Operations














 Other














Total distributions on a cash basis














Amounts (in percentage terms) remaining invested in program
    properties at the end of the last year reported in the Table










3.7
%


  E-5




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##### Table of Contents



TABLE
    III
  OPERATING RESULTS OF PRIOR PROGRAMS 
    (Continued)
  CM NotesProgram I, LLC2009


2010Gross Revenues

$
70,109



65,116Profit on sale of properties


Less: Operating expenses


46,743



5,486Interest expense


57,331



53,127Depreciation


Net income (loss)  GAAP Basis


(33,965
)


6,503Taxable Income from operations


 from gain on sale


Cash generated from operations


(33,608
)


5,391Cash generated from sales






Cash generated from refinancing






Cash generated from operations, sales and refinancing


(33,608
)


5,391Less: Cash distributions to investors from operating cash flow






 from sales and refinancing






 from other






Cash generated (deficiency) after cash distributions


(33,608
)


5,391Less: Special Items (not including sales and refinancing)






Cash generated (deficiency) after cash distributions and special
    items


(33,608
)


5,391Per $1,000 InvestedFederal Income Tax Results:Ordinary income (loss)






 from operations






 from recapture






Capital gain (loss)






Cash Distributions to InvestorsSource (on GAAP basis) Investment income






 Return on capital






Source (on cash basis) Sales






 Refinancing






 Operations






 Other






Total distributions on a cash basis






Amounts (in percentage terms) remaining invested in program
    properties at the end of the last year reported in the Table


0
%


  E-6




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##### Table of Contents



TABLE
    IV
  RESULTS
    OF COMPLETED PROGRAMS
 
 
   
  
 CM Equity, LLCDollar Amount Raised

$
1,674,340Number of Properties Purchased



(1)Date of Closing of Offering


8/01/2009Date of First Sale of Property


6/18/2010
(2)Date of Final Sale of Property


6/18/2010
(2)Tax and Distribution Data Per $1000 InvestmentFederal Income Tax Results:Ordinary Income (loss)


 from operations


 from recapture


Capital Gain (loss)


Deferred Gain


Capital


Ordinary


Cash Distributions to Investors


Source (on GAAP basis)


 Investment Income


 Return of capital


Source (on cash basis)


 Sales


 Refinancing


 Operations


 Other


Receivable on Net Purchase money Financing


  
 
   
 
 
 
  (1)
    
    CM Equity, LLC primarily invested in mortgages rather than
    acquiring properties directly. It acquired one property through
    foreclosure, which property was subsequently foreclosed upon by
    the lender that financed the original mortgage note that was
    acquired by CM Equity. CM Equity, LLC, as a subordinate lender,
    also acquired certain real property consisting of residential
    lots pursuant to an accord and satisfaction agreement with the
    borrower. 
 
  (2)
    
    The only real property sold by CM Equity, LLC consisted of
    residential lots acquired by CM Equity, LLC pursuant to an
    accord and satisfaction agreement with the borrower pursuant to
    a subordinate loan. 
 E-7




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##### Table of Contents



TABLE
    V
  SALES OR DISPOSALS OF PROPERTIES
    2006

2007

2008

2009

2010

TotalTotal Mortgage Loans

$
149,588,926


$
143,462,056


$
90,333,617


$
17,333,054



6,140,000Number of mortgages purchased during period


133



62



12







Principal receipts


67,610,886



47,856,291



10,125,104







530,005



163,636,669Total number of loans paid off


159



98



17







1



433Number of foreclosed loans liquidated






3



3



10



9



25Amount outstanding at liquidation


















2,708,632



Proceeds from sale of foreclosed loans






3,926,613



962,000



2,640,311



6,470,000



13,998,924Losses realized






548,524







54,503







603,027Number of loans prepaid in full






















Foreclosed loans at end of period






27,072,376



44,868,463



36,288,278



6,810,000Number of foreclosed loans at end of period






24



53



60



46     Total Number of

Total Dollar

Foreclosed Loans

Losses

PrincipalYear

Investments

Amount Invested

at End of Period

Realized

Receipts2008


3


$
420,000


$
1,960,000







2009


1






$
60,000


$
1,347,920


$
78,0002010


0



0



0


$
248,618


$
60,000  E-8




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##### Table of Contents



100,000,000 Shares
  CM REIT, Inc.
  Common Stock
    PROSPECTUS
       Until          
    (which is 40 days after the date of this prospectus), all
    dealers effect transactions in these securities, whether or not
    participating in this offering, may be required to deliver a
    prospectus. This is in addition to the dealers obligation
    to deliver a prospectus when acting as underwriters and with
    respect to their unsold allotments or subscriptions.




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##### Table of Contents



PART II
  INFORMATION
    NOT REQUIRED IN PROSPECTUS
  Item 31.
    Other
    Expenses of Issuance and Distribution    SEC

$
54,000FINRA fee


75,500Printing expenses


400,000
(1)Legal fees and expenses


4,000,000
(1)Sales Expenses


1,700,000
(1)Literature


1,500,000
(1)Accounting fees and expenses


1,250,000
(1)Blue Sky registration fees


200,000
(1)Transfer and Escrow Agents


500,000
(1)Bona Fide Due Diligence Expenses


1,300,000
(1)Miscellaneous


100,000
(1)Total

$
11,079,500     (1)
    
    Estimated  Item 32.
    Sales
    to Special Parties    Item 33.
    Recent
    Sales of Unregistered Securities    Item 34.
    Indemnification
    of Directors and Officers    
    the indemnitee has determined, in good faith, that the course of
    conduct which caused the loss or liability was in CM REITs
    best interests; and
    the Indemnitee was acting on behalf of or performing services
    for CM REIT.
    Such liability or loss was not the result of:  
    negligence or misconduct, in the case that the indemnitee is a
    director (other than an independent director), officer, advisor
    or an affiliate of the advisor; or
    gross negligence or willful misconduct, in the case that the
    indemnitee is an independent director.  
    Such indemnification or agreement to hold harmless is
    recoverable only out of CM REITs net assets and not from
    CM REITs stockholders. II-1




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##### Table of Contents




    there has been a successful adjudication on the merits of each
    count involving alleged securities law violations as to the
    indemnitee;
    such claims have been dismissed with prejudice on the merits by
    a court of competent jurisdiction as to the indemnitee; or
    a court of competent jurisdiction approves a settlement of the
    claims against the indemnitee and finds that indemnification of
    the settlement and the related costs should be made, and the
    court considering the request for indemnification has been
    advised of the position of the Securities and Exchange
    Commission and of the published position of any state securities
    regulatory authority in which CM REITs securities were
    offered or sold as to indemnification for violations of
    securities laws.        Item 35.
    Treatment
    of Proceeds from Stock Being Registered    Item 36.
    Financial
    Statements and Exhibits  Financial Statement Schedules
    Exhibits
  
 1
.1

Form of Amended and Restated Dealer-Manager Agreement1
.2

Form of Participating Dealer Agreement (Included as Appendix A
    to Exhibit 1.1)3
.1

Form of Articles of Amendment and Restatement of CM REIT,
    Inc.3
.2

Bylaws of the Company 
 II-2




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##### Table of Contents



4
.1

Form of Reinvestment Plan (included in the Prospectus as
    Appendix A and incorporated herein by reference)4
.2

Form of Automatic Investment Program (included in the Prospectus
    as Appendix B and incorporated herein by reference)4
.3

Form of Share Redemption Plan (included in the Prospectus
    as Appendix C and incorporated herein by reference)4
.4

Form of Subscription Agreement (included in the Prospectus as
    Appendix D and incorporated herein by reference)5
.1

Opinion of Locke Lord Bissell & Liddell LLP regarding
    the legality of the securities being registered8
.1

Opinion of Locke Lord Bissell & Liddell LLP regarding
    tax matters10
.1

Form of Advisory Agreement10
.2

Form of Loan Origination Agreement10
.4

Form of Indemnification Agreement10
.5

Escrow Agreement21
.1

List of Subsidiaries23
.1

Consent of Locke Lord Bissell & Liddell LLP (included
    in Exhibit 5.1 and Exhibit 8.1)23
.2

Consent of Hancock Askew & Co., LLP23
.4

Consent of Anthony D. Cinquini23
.5

Consent of Hunt C. Holsomback23
.6

Consent of Darin D. Gilson23
.7

Consent of Robert J. Simmons24
.1

Power of Attorney  
    *
    
    To be filed by amendment.
    
    Previously filed.  Item 37.
    Undertakings            Form S-8,
 II-3




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##### Table of Contents



Form S-3 Form F-3
  bona fide
    Provided, however
               II-4




---



##### Table of Contents



Form 10-K
  Rule 3-14 Regulation S-X
  Form 8-K Rule 3-14 Regulation S-X, i.e.
 II-5




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##### Table of Contents



TABLE
    VI
  ACQUISITIONS OF SECURED LOANS BY PRIOR PROGRAMS
    2006

2007

2008

2009

2010Aggregate value of acquisition loans purchased

$
135,666,937


$
41,996,685


$
9,863,494







Number of acquisition loans purchased


90



24



7







Aggregate value of construction loans purchased


16,696,100



15,766,738



727,600







Number of construction loans purchased


43



34



5







Aggregate value of commercial property loans purchased






18,198,900











Number of commercial property loans purchased






4











     Total Number of

Total Dollar AmountYear

Investments

Invested2007


2


$
2,460,0002008


3



420,0002009






2010






     2009

2010Aggregate value of acquisition and development loans purchased

$
568,900



Number of acquisition and development loans purchased


7



Aggregate value of construction loans purchased

$
494,900



Number of construction loans purchased


5



  II-6




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##### Table of Contents



SIGNATURES
 
  Form S-11 Form S-11
 
  CM REIT, INC.
  By:
    /s/  Todd
    B. Parriott   Title:
    Chairman of the Board, Chief Executive  
   
  
 Signature

Title

Date/s/  Todd
    B. ParriottTodd
    B. Parriott

Chairman of the Board, Chief Executive
    Officer, President and Chief
    Investment Officer
    (Principal Executive Officer)

July 19, 2011*G.
    Steven Dawson

Chief Financial Officer (Principal Financial and Accounting
    Officer) and Treasurer and Director

July 19, 2011  
 
   
  *By: /s/  Todd
    B. ParriottTodd B. Parriott
    Attorney-In-Fact  II-7




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##### Table of Contents



EXHIBIT INDEX
  
 ExhibitNo.1
.1

Form of Amended and Restated Dealer-Manager Agreement1
.2

Form of Participating Dealer Agreement (included as
    Appendix A to Exhibit 1.1)3
.1

Form of Articles of Amendment and Restatement of CM REIT,
    Inc.3
.2

Bylaws of the Company4
.1

Form of Reinvestment Plan (included in the Prospectus as
    Appendix A and incorporated herein by reference)4
.2

Form of Automatic Investment Program (included in the Prospectus
    as Appendix B and incorporated herein by reference)4
.3

Form of Share Redemption Plan (included in the Prospectus as
    Appendix C and incorporated herein by reference)4
.4

Form of Subscription Agreement (included in the Prospectus as
    Appendix D and incorporated herein by reference)5
.1

Opinion of Locke Lord Bissell & Liddell LLP regarding
    the legality of the securities being registered8
.1

Opinion of Locke Lord Bissell & Liddell LLP regarding
    tax matters10
.1

Form of Advisory Agreement10
.2

Form of Loan Origination Agreement10
.4

Form of Indemnification Agreement10
.5

Escrow Agreement21
.1

List of Subsidiaries23
.1

Consent of Locke Lord Bissell & Liddell LLP (included
    in Exhibit 5.1 and Exhibit 8.1)23
.2

Consent of Hancock Askew & Co., LLP23
.4

Consent of Anthony D. Cinquini23
.5

Consent of Hunt C. Holsomback23
.6

Consent of Darin G. Gilson23
.7

Consent of Robert J. Simmons24
.1

Power of Attorney  
    *
    
    To be filed by amendment.
    
    Previously filed.