UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-QSB  SQuarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2007  or  £Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.   000-51230(Commission File No.)  CASTLE ARCH REAL ESTATE INVESTMENT COMPANY, L.L.C.  (name of small business issuer in its charter)    California20-1077312(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)9595 Wilshire, PH 1000, Beverly Hills, CA90212(Address of principal executive offices)(Zip Code)  Issuers telephone number: (310) 385-5970  Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).  Yes £   No S  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes S   No £  The number of outstanding common units, no par value, as of March 31, 2007 was 24,115,377 common member units.     INDEX  Castle Arch Real Estate Investment Company, LLC For The Quarter Ending March 31, 2007   Part I.  Financial InformationItem 1.Financial Statements3Statement of Financial Condition  March 31, 20076 (Unaudited).3Statements of Operations (Unaudited)  For the three months ended March 31, 2007; and for the three months ended March 31, 2006; and cumulative from April 15, 2004 (inception) to March 31, 2007.4Statements of Cash Flows (Unaudited)  For the three months ended March 31, 2007, and for the three months ended March 31, 2006, and cumulative from April 15, 2004 (inception) to March 31, 2007.5Notes to Financial Statements (Unaudited)  March 31, 2007.7Item 2.Managements Discussion and Analysis of Financial Condition or Plan of Operation.12Item 3.Controls and Procedures15Part II.  Other Information15Item 1.Legal Proceedings15Item 2.Unregistered Sales of Equity Securities and Use of Proceeds16Item 3.Defaults Upon Senior Securities16Item 4.Submission of Matters to a Vote of Security HoldersItem 5.Other Matters16Item 6.Exhibits and Reports on Form 8-K17Signatures17  2   Part I  Financial Information  Item 1. Financial Statements  Financial Information Castle Arch Real Estate Investment Company, LLC (A Development Stage Company) Statement of Financial Condition (Unaudited)  March  31,ASSETS2007Current assets:Cash and cash equivalents$1,416,356Interest receivable, net of allowance,totaling $10,95962,361Notes receivable  current, net of allowance,totaling $100,000570,000Other current assets699Total current assets2,049,416Property, plant and equipment:Office equipment38,910Less: accumulated depreciation(12,934)Net property, plant and equipment25,976Other assets:Notes receivable  noncurrent255,000Other properties held for investment24,891,059Earnest money and other deposits270,000Entitlement costs520,707Other noncurrent assets3,430Total other assets25,940,196Total assets$28,015,588LIABILITIES AND MEMBERS CAPITALCurrent liabilities:Accounts payable499,264Other accrued expenses14,670Preferred dividends payable3,134,795Notes payable7,302,922Total current liabilities10,951,651Total liabilities10,951,651Members capital:Minority interest in consolidated subsidiary3,554,382Common units, 24,115,377, issued and outstandingranging from $.001 to $2.50 per unit2,171,040Non-managing members units, series A preferred,1,000,000 units issued and outstanding, $1.00 per unit652,940Non-managing members units, series B preferred,2,000,000 units issues and outstanding, $1.00 per unit1,371,156Non-managing members units, series C preferred,3,300,000 units issued and outstanding, $1.00 per unit2,450,863Non-managing members units, series D preferred,3,940,000 units issued and outstanding, $5.00 per unit16,696,799Deficit accumulated during the development phase(9,833,243)Total members capital17,063,937Total liabilities and members capital$28,015,588  See accompanying notes.  3   Castle Arch Real Estate Investment Company, LLC (A Development Stage Company) Statements of Operations (Unaudited)  Cumulative FromPeriod FromPeriod FromApril 15,  2004January 1, 2007 toJanuary 1, 2006 to(inception) toMarch 31, 2007March 31, 2006March 31, 2007Revenues:Proceeds from sale of property, netof cost of property sold$-$-$48,041Total revenues--48,041Operating Expenses:Selling, general and administrative1,062,140776,9038,847,554Depreciation and amortization36,40767,387170,755Costs of terminated purchase agreements11,7501,155257,915Bad debt expense and impairment losses986-110,959Start-up and organizational costs--55,696Total operating expenses1,111,283845,4469,442,879Operating loss(1,111,283)(845,446)(9,394,839)Other revenue/(expenses)Interest income25,36817,851174,726Interest expense(178,036)(48,389)(746,078)Income/(loss) from continuing operationsbefore minority interest(1,263,951)(875,984)(9,966,191)Minority interest in losses ofconsolidated subsidiary47,671-132,948Net loss and deficit accumulated duringthe development stage$(1,216,280)$(875,984)$(9,833,243)Accumulated preferred dividends$556,701$394,061$3,056,279Net loss available to common unitholders(1,772,981)(1,270,045)(12,889,522)Net loss per common unit$(.07)$(.06)Weighted average units outstanding24,064,96522,065,163   See accompanying notes.  4   Castle Arch Real Estate Investment Company, LLC (A Development Stage Company) Statements of Cash Flows (Unaudited)  CumulativePeriod FromPeriod FromFrom April 15,January 1, 2007 toJanuary 1, 2006 to2004 (inception) toMarch 31, 2007March 31, 2006March 31, 2007Cash Flows From Operating Activities:Net loss$(1,216,280)$(875,984)$(9,833,243)Adjustments to reconcile net loss tonet cash used in operating activities:Depreciation1,8891,47112,934Amortization of debt issue costs32,63576,962158,361Allowance for bad debts10,959-110,959Minority interest in losses of subsidiary(47,671)-(132,948)Professional outside services paid inthe form of common units-50,0001,412,500Changes in operating assetsand liabilities:Increase in notes receivable--(255,000)Interest receivable(24,665)(6,582)(73,321)Other receivable250,000--Prepaid expenses and othercurrent assets6,52617,359-Accounts payable228,056(75,643)499,262Other accrued expenses(70,314)-2,170Properties held for investment(885,393)(5,194,565)(17,727,923)Other--(4,129)Net cash used in operating activities(1,714,258)(482,273)(25,830,378)Cash Flows From Investing Activities:Option, earnest money,entitlement deposits(48,388)(157,000)(784,632)Additions to notes receivable(65,000)(400,000)(670,000)Purchase of property, plantand equipment-(8,868)(38,910)Net cash used in investing activities(113,388)(565,868)(1,493,542)Cash Flows From Financing Activities:Proceeds from issuance of member units1,691,0002,143,76530,103,294Offering costs(16,250)(58,212)(1,338,370)Proceeds from subscriptions receivable68,4001,573,035-Proceeds from issuance of long-term debt---Repayment of long-term debt---Debt issue costs--(24,648)Net cash provided by financing activities1,743,2503,716,80028,740,276Net increase (decrease) in cash and cashequivalents(84,396)(2,856,050)1,416,356Cash at beginning of period1,500,7524,030,912-Cash at end of period$1,416,356$1,174,862$1,416,356   See accompanying notes.  5     Castle Arch Real Estate Investment Company, LLC (A Development Stage Company) Statements of Cash Flows (Unaudited)   CumulativePeriod FromPeriod FromFrom April 15,January 1, 2007 toJanuary 1, 2006 to2004 (inception) toMarch 31, 2007March 31, 2006March 31, 2007Non-Cash Investing and Financing Activities:Issuance of members units for subscriptionsreceivable$2,611,782$630,975$2,611,782Preferred dividends payable$3,134,795$1,077,503$3,134,795Accrued referral fees (offering costs)$12,500$92,298$12,500Issuance of notes payable (net of debt issuecosts) in exchange for other properties heldfor investment$450,000$5,229,365$7,302,922Supplemental DisclosuresCash paid for interest$178,036$31,300$746,078  See accompanying notes.  6   Castle Arch Real Estate Investment Company, LLC (A Development Stage Company) Notes to Financial Statements March 31, 2007 (Unaudited)  1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  A. General Description of the Company and Presentation  Castle Arch Real Estate Investment Company, LLC, a California limited liability company, was organized on April 15, 2004 as a residential and commercial land development company with target properties located primarily in the Western United States.  The principal activities of the Company include securing acquisition rights to the property, obtaining zoning and other entitlements for the property, securing financing for the purchase of the property, improving the propertys infrastructure and amenities, and selling the property.  Property targeted by the Company may have end uses that range from residential, multifamily, retail and office, to industrial.  The Company may also consider other strategic and joint venture opportunities.  The Company has completed or commenced five private placements of membership units in the Company, and its subsidiaries as follows:  Effective May 1, 2004, the placement of 1,000,000 Series A membership units consisting of one common and one preferred unit each at $1.00 per membership unit.  Effective July 20, 2004, the placement of 1,000,000 Series B membership units, consisting of one common and two preferred units each at $2.00 per membership unit.  Effective November 5, 2004, the placement of 1,100,000 Series C membership units, consisting of one common and three preferred units each at $3.00 per membership unit.  Effective June 30, 2005, the placement of 3,000,000 Series D membership units, consisting of one common and one preferred unit each at $5.00 per membership unit.  Effective April 14, 2006, the Company elected to oversubscribe the Series D private placement; resulting in an additional 940,000 Series D membership units, consisting of one common and one preferred unit each at $5.00 per membership unit.  As of March 31, 2007, the Company has successfully placed 4,000,000 membership units.  Effective May 22, 2006, the placement of 1,200,000 membership units in Castle Arch Kingman, LLC (CAK), a variable interest entity, of which the Company is considered the primary beneficiary.  Each membership unit consists of five common and one preferred unit at $25.00 per membership unit.  At March 31, 2007, CAK had raised $6,399,076, resulting in the placement of 255,963 membership units.  Of this amount, $2,571,782 represents subscribed units outstanding for which funds had not been received at March 31, 2007.  At March 31, 2007, the Company had completed the Series A, B, and C private placement offerings, and had raised $20,000,000 of the Series D private placement, resulting in the placement of 4,000,000 membership units.  Of this amount, $40,000 represents Series D subscribed units outstanding for which funds had not been received at March 31, 2007.  The Members share in the profits and losses of the Company in proportion to their respective interests in the Company based on the weighted average dollar amount invested during the period.  A non-Managing Members loss is limited to the amount of his or her investment.  Consistent with the Companys policy and its private placement memorandums, profits and losses have been allocated to the various members interests as follows:   7   Castle Arch Real Estate Investment Company, LLC (A Development Stage Company) Notes to Financial Statements March 31, 2007 (Unaudited)  1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)  A. General Description of the Company (continued)  a) Allocation of profits shall be made:  (i) First, to the members, up to the aggregate of, and in proportion to, any losses previously allocated to each member, to the extent not previously offset by allocations of profits; (ii) Second, to preferred members, subject to the Managers election to redeem the membership units and to the extent of the cumulative preferred unit return; (iii) Third, to the common members, in proportion to their percentage interests.  b) Allocation of losses shall be made as follows:  (i) First, to the members, up to the aggregate of, and in proportion to, any profits previously allocated to each member and not previously offset by losses until their capital account balances have been reduced to zero; (ii) Second, to the preferred members until their capital account balances have been reduced to zero; (iii) Third, to the common members, in proportion to their percentage interest.  At no time shall the sum of all historical net profit distributions to common unit holders exceed the total amounts paid toward redeeming any outstanding preferred units, until all preferred units have been redeemed.  The Company has not received significant revenues from the sale or development of property as of December 31, 2006 in accordance with its business plan.  Accordingly, the Companys activities have been accounted for as those of a development stage enterprise as defined in Statement of Financial Accounting Standards (SFAS) No. 7, Accounting and Reporting by Development Stage Enterprises.  All losses since inception have been considered part of the Companys development stage activities.  B. Method of Reporting and Use of Estimates  The Companys financial statements are presented in accordance with U.S. generally accepted accounting principles (GAAP).  Such principles require the use of certain estimates and assumptions made by the Companys management in determining the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  Significant estimates that may change in the near future include properties held for sale and other properties held for investment if it becomes necessary to incur unexpected additional costs to prepare these properties for sale within the next twelve months.  In addition, significant estimates include potential impairment of certain promissory notes receivable whose maturities expired at December 31, 2006.  C. Principles of Consolidation  The accompanying consolidated financial statements include the accounts of the Company and, effective April, 2006, the accounts of Castle Arch Kingman, LLC (CAK).  In December 2003, the Financial Accounting Standards Board ("FASB") issued Interpretation No. 46(R) ("FIN 46(R)"), which further clarified and amended FIN 46, Consolidation of Variable Interest Entities, which requires the consolidation of entities in which an enterprise absorbs a majority of the entity's expected losses, receives a majority of the entity's expected residual returns, or is the primary beneficiary, as a result of ownership, contractual or other financial interests in the entity.  CAK is considered a variable interest entity of which the Company is the primary beneficiary.  All intercompany accounts and transactions have been eliminated in the consolidated financial statements.   8   D. Reclassifications  Certain prior year amounts have been reclassified to conform to the current quarters presentation.  E. Accounting Method  The Companys financial statements are prepared using the accrual method of accounting. The Company has elected a December 31 year end.  F. Income and Expense Recognition  Gains or losses associated with real estate are realized in full when the property is sold by the full accrual method in accordance with the provisions of Statement of Financial Accounting Standards (SFAS) No. 66 Accounting for Sales of Real Estate. Costs associated with real estate are accounted for in accordance with the provisions of Statement of Financial Accounting Standard (SFAS) No. 67 Accounting for Cost and Initial Rental Operations of Real Estate Projects.Accordingly, acquisition, development and construction costs, including property taxes and interest on associated debt and selling costs, are capitalized.  Such costs are specifically allocated to the related components or, if relating to multiple components, allocated on a pro rata basis as appropriate.  Estimates are reviewed periodically and revised as needed.  The respective real estate projects are also periodically reviewed to determine that the carrying amount does not exceed the net realizable value.  To date, no allowance has had to be provided for estimated impairments of value based on evaluation of the projects.  G. Income Taxes  No provision for income taxes has been made in these financial statements because each member is individually responsible for reporting income or loss based on its respective share of the Companys income and expenses as reported for income tax purposes.  The Company prepares calendar year federal and state information tax returns and reports to the members their allocable shares of the Companys income, expenses, and gains or losses.  H. Cash and Cash Equivalents  The Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents.  Cash and cash equivalents are carried at cost, which approximates fair value.  I. Offering Costs  Costs incurred in the successful raising of capital under the Companys private placement memorandums such as referral fees and attorneys costs have been offset against various components of members equity as a reduction of the proceeds received from the sale of membership units.  J. Property, Plant and Equipment  Property, plant and equipment is stated at cost.  Depreciation is computed primarily using the straight-line method based on estimated useful lives of 5 years.  K. Advertising Costs  The Company may incur costs of advertising which it will expense as incurred.  Advertising costs do not include commissions for the sale of property or referral fees incurred for the successful raising of capital.  9   Castle Arch Real Estate Investment Company, LLC (A Development Stage Company) Notes to Financial Statements March 31, 2007 (Unaudited)  1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)  L. Entitlement Costs, Earnest money and other deposits  The terms of the Companys purchase agreements provide for due diligence periods during which deposits may be refunded upon written notice of unsuitability.  Upon expiration of the review periods, the deposits become non-refundable as liquidated damages to the seller if the purchase does not transpire.  The Companys policy is to capitalize entitlement costs and applicable deposits incurred as noncurrent assets, classified as earnest and increased money deposits, and entitlement costs, until such time as the properties are purchased.  Upon purchase, the Company classifies certain properties as held for sale that meet the requirements of SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. These requirements include the completion of the respective entitlements and the preparation of the property for immediate sale in its existing condition, the initiation of an active program to identify potential buyers, and the expectation of occurrence of a probable sale within the following twelve months.  Those properties that do not meet these criteria are classified as other properties held for investment.  As of March 31, 2007, other properties held for investment, earnest money and other deposits, and entitlement costs totaled $24,891,059, $270,000 and $520,707, respectively.  During the three month period ended March 31, 2007, the Company incurred costs related to the acquisition or potential acquisition and development of four separate properties, totaling $1,239,923.  Included in this amount is $450,000 in debt proceeds used to fund the closing of an individual purchase during the period (see Note 2).  Of the total costs incurred during the period, $1,179,736, $60,000, and $187 have been classified as other properties held for investment, earnest money and other deposits, and entitlement costs, respectively, at March 31, 2007.  M. Net Loss per Common Unit  Net loss per common unit is computed based on the weighted-average number of common units and, as appropriate, dilutive common unit equivalents outstanding during the period in accordance with SFAS No. 128, Earnings Per Share.  Basic net loss per common unit is the amount of net loss for the period available to each common unit outstanding during the reporting period.  Diluted net loss per common unit is the amount of net loss for the period available to each common unit outstanding during the reporting period and to each unit that would have been outstanding assuming the issuance of common units for all dilutive potential common units outstanding during the period.  At March 31, 2007 the basic and diluted net loss per common unit is the same as there are no common unit equivalents outstanding.  Preferred unit dividends, totaling $556,701 for the three months ended March 31, 2007, have been included in the computation of net loss per common unit, resulting in an incremental increase in loss per unit of $.02.  2.  NOTE PAYABLE  During the three months ended March 31, 2007, the Company entered into a promissory note payable to a separate, nonrelated party, totaling $450,000.  The note bears interest of 8 percent per annum and corresponding payments are due on a monthly basis.  Principal, along with any outstanding accrued interest, is to be paid on or before September, 2007.  At March 31, 2007, the Company had $2,170 in associated interest payable, which amount has been included in other accrued expenses, totaling $14,670 at the periods end.   10   Castle Arch Real Estate Investment Company, LLC (A Development Stage Company) Notes to Financial Statements March 31, 2007 (Unaudited)   3.  SUBSEQUENT EVENTS  Subsequent to the period ended March 31, 2007, the Company placed $1,085,000 in earnest and increased deposits on three separate properties.  The proceeds are to be applied towards the respective purchase price at the time of closing.  Subsequent to the period ended March 31, 2007, the Company received $1,097,995 of the subscriptions receivable at March 31, 2007, totaling $2,571,782 (see Note 1) resulting in the issuance of 43,920 membership units in CAK, consisting of five common and one preferred unit each at $25.00 per membership unit.  11   Item 2. Management's Discussion and Analysis or Plan of Operation.  This discussion and analysis should be read in conjunction with the accompanying Financial Statements. Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of any contingent liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis we review our estimates and assumptions. Our estimates were based on our historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions, but we do not believe such differences will materially affect our financial position or results of operations.  Overview  The following management discussion and analysis relates to our business of residential and commercial land development with target properties located primarily in the Western United States.  Our principal activities include securing acquisition rights to the property, obtaining zoning and other entitlements for the property, securing financing for the purchase of the property, improving the propertys infrastructure and amenities, and selling the property.  The financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which contemplate our continuation as a going concern. We have sustained significant operating losses since our inception, including the years 2006 and 2005. At March 31, 2007, we had total member capital of $17,063,937, and cash on hand of $1,416,356. In the coming three months, our liquidity and cash requirements will depend on several factors. If our resources are not sufficient to fund our needs through 2007 there are no assurances that we will be successful in raising sufficient capital.  Revenues  We had no revenues in the three month period ended March 31, 2007 and no revenues in the comparative period of 2006. Our past revenues have been limited. We have yet to derive revenues from our primary business target of selling property that we have improved through obtaining legal entitlements or other developmental improvements.  Currently, we are continuing to work several properties through the entitlement process and expect to generate revenues from those activities in 2007. Due to our limited revenues, our operations are currently funded by capital funding.  Selling, General and Administrative Expenses  Our operating selling, general and administrative expenses totaled $1,062,140 during the three month period ended March 31, 2007, compared to $845,446 during the comparable three month period ended March 31, 2006. The increase in operating expenses is primarily attributable to increased salaries of our executive officers and additional employees, office costs, professional services and the costs and ongoing entitlement costs.  During the period, we incurred $138 in costs for the Imperial California property, $1,329,318 for the properties located in Kingman Arizona, $450,000 of which was a note issued to the seller of the land, and $60,000 in connection with our attempts to secure purchase rights to land in Star Valley Wyoming.  We anticipate that our general and administrative expenses will maintain relatively similar in the coming three months. We anticipate only limited revenues in the coming twelve months.  12    Selected Financial Information Three months endedMarch 31,20072006Revenue, net$- 0 -$- 0 -Operating loss(1,111,283)(845,446)Net income (loss)(1,216,280)(875,984)Balance Sheet Data:Cash and Cash Equivalents$1,416,356$1,174,862Total Current Assets2,049,4161,692,265Total Assets28,015,58822,293,943Total Current Liabilities10,951,6516,617,866Total stockholders equity$17,063,937$15,676,077   Liquidity and Capital Resources  At March 31, 2007, we had cash and cash equivalents of $1,416,356, compared to $1,174,862 at March 31, 2006. Our decreased cash balance as of March 31, 2007 is largely attributable to deployment of capital to meet selling, general and administrative expenses.  Proceeds from the private offering and expected revenues will be sufficient to for us to survive as a going concern for the next 12 months. However, additional funding will be necessary to finance growth and to achieve our strategic objectives. Management is actively pursuing additional sources of funding. In addition, management is expecting an increase in cash flows through anticipated increases in revenue.  If we do not raise sufficient funds in the future, we may not be able to fund expansion, take advantage of future opportunities, meet our existing debt obligations or respond to competitive pressures or unanticipated requirements. Financing transactions in the future may include the issuance of equity or debt securities, obtaining credit facilities, or other financing mechanisms.  Off-Balance Sheet Arrangements  We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.   13   Critical Accounting Policies  The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and our discussion and analysis of our financial condition and results of operations require us to make judgments, assumptions and estimates that affect the amounts reported in our consolidated financial statements and accompanying notes.  We base our estimates on historical experience, current trends, future projections, and on various other assumptions we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities.  Actual results may differ from these estimates.  Recent Accounting Pronouncements  In February, 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments.  SFAS No. 155 eliminates the temporary exemption of bifurcation requirements to securitized financial assets, contained in SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities.  As a result, similar financial instruments are accounted for similarly regardless of the form of the instruments.  In addition, in instances where a derivative would otherwise have to bifurcated, SFAS No. 155 allows a preparer on an instrument-by-instrument basis to elect fair value measurement at acquisition, at issuance, or when a previously recognized financial instrument is subject to remeasurement.  The adoption of SFAS No. 155 has not materially affected the Companys reported loss, financial condition or cash flows.  In March, 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.  The pronouncement establishes standards whereby servicing assets and servicing liabilities are initially measured at fair value, where applicable.  In addition, SFAS No. 156 allows subsequent measurement of servicing assets and liabilities at fair value, and where applicable, derivative instruments used to mitigate risks inherent with servicing assets and liabilities are likewise measured at fair value.  The adoption of SFAS No. 156 has not materially affected the Companys reported loss, financial condition, or cash flows.  In March, 2006, the FASB issued Interpretation No. 48, (FIN 48) Accounting for Uncertainty in Income Taxes, an interpretation of SFAS No. 109, Accounting for Income Taxes.  FIN 48 prescribes criteria for the recognition and measurement of a tax position taken or expected to be taken in a tax return.  Accordingly, tax positions are analyzed to determine whether it is more likely than not they will be sustained when examined by the appropriate tax authority.  Positions that meet the more-likely-than-not criteria are measured to determine the amount of benefit to be recognized, whereas those positions that do not meet the more-likely-than-not criteria are derecognized in the financial statements.  The adoption of FIN 48 has not materially affected the Companys reported loss, financial condition, or cash flows.  In September, 2006, the FASB issued SFAS No. 157, Fair Value Measurements.  The statement defines fair value, determines appropriate measurement methods, and expands disclosure requirements about those measurements.  The adoption of SFAS No. 157 has not materially affected the Companys reported loss, financial condition, or cash flows.  In September, 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans.  This statement requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year of change through comprehensive income.  In addition, SFAS No. 158 requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position.   The adoption of SFAS No. 158 has not materially affected the Companys reported loss, financial condition, or cash flows.  14   Prospective shareholders should understand that several factors govern whether any forward-looking statement contained herein will be or can be achieved. Any one of those factors could cause actual results to differ materially from those projected herein. These forward-looking statements include plans and objectives of management for future operations, including plans and objectives relating to the products and the future economic performance of the Company. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, future business decisions, and the time and money required to successfully complete development projects, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the Company. Although the Company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of those assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in any of the forward-looking statements contained herein will be realized. Based on actual experience and business development, the company may alter its marketing, capital expenditure plans or other budgets, which may in turn affect the companys results of operations. In light of the significant uncertainties inherent in the forward-looking statements included therein, the inclusion of any such statement should not be regarded as a representation by the Company or any other person that the objectives or plans of the company will be achieved.  Item 3.  Controls and Procedures  We carried out an evaluation as of March 31, 2007, under the supervision and with participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms. Subsequent to March 31, 2007, there have been no significant changes in our internal controls over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.  PART II - OTHER INFORMATION Item 1.  Legal Proceedings  The Company currently is not party to any material legal proceedings.  15   Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds  During the three month period ended March 31, 2007, we received $328,400 from the sale of 65,680 member units to a total of 5 persons. In addition, our subsidiary Castle Arch Kingman, L.L.C., received $1,211,100 from the sale of its 242,220 member units to a total of 23 investors. In both the case of Castle Arch Real Estate Investment Company, L.L.C. and Castle Arch Kingman, L.L.C., we believe the transactions to be exempt under Section 4(2) of the Securities Act of 1933, as amended, because they do not involve a public offering. We believe that this sale of securities did not involve a public offering on the basis that each investor is an accredited investor as defined in Rule 501 of Regulation D and because we provided each of our investors with a private placement memorandum disclosing items set out in Rule 501 and 506 of Regulation D.  The shares sold were restricted securities as defined in Rule 144(a)(3). Further, each common stock certificate issued in connection with this private offering bears a legend providing, in substance, that the securities have been acquired for investment only and may not be sold, transferred or assigned in the absence of an effective registration statement or opinion of legal counsel that registration is not required under the Securities Act of 1933. Item 3.  Defaults Upon Senior Securities.  None.  Item 4.  Submission of Matters to a Vote of Security Holders.  Members holding a majority of our outstanding common units voted by consent resolution to amend our Amended Operating Agreement to the sections affecting transfer of member units, operating agreement amendments, dispute resolution and member withdrawals. The amendment providing the Company with a right of first refusal to purchase member units which allows the Company to further ensure that the Companys member units are held by qualified, accredited investors. The amendment setting out dispute resolution allows disputes to be resolved in a more efficient and potentially less adversarial manner. The amendment regarding member withdrawal clarifies procedures for member expulsion. The provisions regarding Amended Operating Agreement amendments reduce the percentage of common units to a 60% majority rather than a 70% super-majority. The results of the voting were as follows:  Shares in favor17,093,384Shares againstn/aShares abstaining (not participating)6,927,411   16   Item 6.  Exhibits and Reports on Form 8-K.  (a) Exhibits (filed with this report unless indicated below)  Exhibit 31.1 Certification of principal executive officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  Exhibit 31.2 Certification of principal financial officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002  Exhibit 32.1 Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002  Exhibit 32.2 Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002   (b) Reports on Form 8-K.  No reports on Form 8-K were filed by the Company during the three months ended March 31, 2007.   SIGNATURES  In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.  CASTLE ARCH REAL ESTATE INVESTMENT COMPANY, L.L.C.  Dated:  May 14, 2007   By: /s/ Kirby D. Cochran Kirby D. Cochran, Chief Executive Officer (Principal Executive Officer)   By: /s/ Douglas W. Child Douglas W. Child, Chief Financial Officer (Principal Financial Officer)   17