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 September 30, 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 £  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes £   No S  The number of outstanding common units, no par value, as of November 9, 2007 was 25,861,789 common member units.       Part I  Financial Information  Item 1. Financial Statements   Castle Arch Real Estate Investment Company, LLC  (A Development Stage Company)  Index to Unaudited Financial Statements  Consolidated Balance Sheet (unaudited) as of September 30, 20073Consolidated Statements of Operations (unaudited) for the nine months ended September 30, 2007; for the nine months ended September 30, 2006; for the three months ended September 30, 2007; for the three months ended September 30, 2006; and cumulative from April 15, 2004 (inception) to September 30, 20074Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2007; for the nine months ended September 30, 2006; and cumulative from April 15, 2004 (inception) to September 30, 20075Notes to the Companys Consolidated Financial Statements7       2     Castle Arch Real Estate Investment Company, LLC (A Development Stage Company) Consolidated Balance Sheet (Unaudited)  September 30,ASSETS2007Current assets:Interest receivable, net of allowance,totaling, $9,973$83,988Notes receivable  current, net of allowance,totaling, $100,000681,383Prepaid expenses2,264Other current assets208,388Total current assets976,023Property and equipment:Office equipment55,852Leasehold improvements1,200Less: accumulated depreciation(17,615)Net property and equipment39,437Other assets:Notes receivable  noncurrent250,000Other properties held for investment32,498,595Earnest money and other deposits1,860,000Entitlement costs809,914Total other assets35,418,509Total assets$36,433,969LIABILITIES AND MEMBERS CAPITALCurrent liabilities:Checks drawn in excess of bank balance(see Note 2, Item H)$19,699Accounts payable44,997Other accrued expenses63,415Preferred dividend payable4,447,506Notes payable9,333,910Interest payable219,548Capital lease  current4,496Total current liabilities14,133,571Long term liabilitiesCapital lease  noncurrent10,523Notes payable  related parties1,772,303Minority interest in consolidated LLCs9,005,504Total long term liabilities10,788,330Total liabilities24,921,901Members Capital:Common units, 25,588,789, issued and outstanding,ranging from $.001 to $2.50 per unit5,619,118Non-managing members units, series A preferred,1,000,000 units issued and outstanding, $1.00 per unit593,105Non-managing members units, series B preferred,2,000,000 units issued and outstanding, $2.00 per unit1,251,485Non-managing members units, series C preferred,3,300,000 units issued and outstanding, $3.00 per unit2,253,406Non-managing members units, series D preferred,4,290,678 units issued and outstanding, $5.00 per unit17,530,289Deficit accumulated during the development stage(15,735,335)Total members capital11,512,068Total liabilities and members capital$36,433,969   See accompanying notes.  3     Castle Arch Real Estate Investment Company, LLC (A Development Stage Company) Consolidated Statements of Operations (Unaudited)  CumulativeFromFor the NineFor the NineFor the ThreeFor the ThreeApril 15, 2004Months EndedMonths EndedMonths EndedMonths Ended(inception) toSeptember  30,September 30,September 30,September 30,September 30,20072006200720062007Revenues:Proceeds from sale ofproperty, net of costof property sold$-$-$-$-$48,041Total revenuesand other income----48,041Operating Expenses:Compensation paid in the formof common units3,399,800118,7503,125,00068,7504,733,550Selling, generaland administrative3,403,5684,012,5421,460,1812,333,3989,854,720Depreciation and amortization106,734109,01962,88420,663241,082Costs of terminatedpurchase agreements70,814157,42959,064156,274316,979Bad debt expenseand impairment losses----109,973Start-up andorganizational costs----55,696Total operating expenses6,980,9164,397,7404,707,1292,579,08515,312,000Operating loss(6,980,916)(4,397,740)(4,707,129)(2,579,085)(15,263,959)Other revenue/(expenses):Interest income66,16358,2893,14224,646215,522Interest expense(626,201)(393,215)(253,638)(207,427)(1,194,243)Income/(loss) fromcontinuing operationsbefore minority interest(7,540,954)(4,732,666)(4,957,625)(2,761,866)(16,242,680)Minority interest in losses ofconsolidated subsidiaries326,42514,10582,96214,057507,345Net loss and deficitaccumulated duringthe development stage$(7,214,529)$(4,718,561)$(4,874,663)$(2,747,809)$(15,735,335)Accumulated preferred dividends$(1,869,412)$(1,361,998)$(688,174)$(507,432)$(4,447,506)Net loss availableto common unitholders$(9,083,941)$(6,080,559)$(5,562,837)$(3,255,241)$(20,182,841)Net loss per common unit$(.37)$(.26)$(.22)$(.14)Weighted averageunits outstanding24,377,65822,963,74325,094,99523,331,716  See accompanying notes.  4


Castle Arch Real Estate Investment Company, LLC (A Development Stage Company) Consolidated Statements of Cash Flows (Unaudited)     CumulativeFor the NineFor the NineFrom April 15,Months EndedMonths Ended2004 (inception) toSeptember 30,September 30,September 30,200720062007Cash Flows From Operating Activities:Net loss$(7,214,529)$(4,718,561)$(15,735,335)Adjustments to reconcile net loss tonet cash used in operating activities:Depreciation and amortization6,57132,05517,615Amortization of debt issuance costs100,163115,005223,467Allowance for bad debts--109,973Minority interest in losses of subsidiary(326,425)(14,105)(507,345)Professional outside services paid inthe form of common units3,399,800118,7504,733,550Changes in operating assets and liabilities:Other receivable45,242(200,000)(204,758)Interest receivable(35,334)(34,906)(93,961)Prepaid expenses and othercurrent assets4,761(27,741)(2,264)Accounts payable(304,859)1,270,38444,997Other accrued expenses25,546-25,935Interest payable219,548-219,548Properties held for investment(6,135,467)(7,889,150)(23,000,224)Other assets--(3,630)Net cash used in operating activities(10,214,983)(11,349,612)(34,172,432)Cash Flows From Investing Activities:Option, earnest money,entitlement deposits(514,989)(116,317)(1,251,233)Additions to notes receivable(171,383)183,041(1,031,383)Purchase of property, plantand equipment(18,142)(13,016)(57,052)Net cash provided (used) in investing activities(704,514)53,708(2,339,668)Cash Flows From Financing Activities:Checks drawn in excess of bank balance19,699-19,699Proceeds from issuance of member units8,730,2316,988,22037,998,088Offering costs(164,260)-(1,471,380)Proceeds from subscriptions receivable867,4821,985,135-Debt issue costs(34,307)(22,765)(34,307)Net cash provided by financing activities9,418,8458,950,59036,512,100Net decrease in cash and cashequivalents(1,500,652)(2,345,314)-Cash at beginning of period1,500,6524,030,912-Cash at end of period$-$1,685,598$-  See accompanying notes  5





Castle Arch Real Estate Investment Company, LLC (A Development Stage Company) Consolidated Statements of Cash Flows (Unaudited)    CumulativeFor the NineFor the NineFrom April 15,Months EndedMonths Ended2004 (inception) toSeptember 30,September 30,September 30,200720062007Non cash investing and financing activities:Notes payable issued for other propertyheld for investment, net of unamortizeddebt issue costs$4,397,506$6,708,707$11,106,213Preferred dividend payable1,869,4121,361,9984,447,506Accrued referral fees52,50085,02252,500Referral fees paid in the form ofcommon units126,82881,688869,368Supplemental disclosures:Cash paid for interest555,093366,2191,123,136       6





Castle Arch Real Estate Investment Company, LLC (A Development Stage Company) Notes to Consolidated Financial Statements September 30, 2007 (Unaudited)   1. METHOD OF REPORTING AND USE OF ESTIMATES  The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations.  The information furnished in the interim condensed financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements.  Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed financial statements be read in conjunction with the Company's audited financial statements and notes thereto included in its most recent Form 10KSB.  Operating results for the nine months ended September 30, 2007 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2007.  2. MATERIAL TRANSACTIONS  A. Other Properties Held for Investment  During the three months ended September 30, 2007, the Company acquired two separate properties, totaling $6,778,437.  Of this amount, $4,191,500 represents promissory notes payable incurred in conjunction with the respective acquisitions (see Note 2, Item E below).  In addition to these amounts, the Company incurred entitlement costs associated with the acquired properties during the same period totaling $166,424.  These amounts have been included in other properties held for investment, totaling $32,498,595, at September 30, 2007.  B. Earnest money and Other Deposits  During the three month period ended September 30, 2007, the Company had placed $340,000 in earnest and increased money deposits on a separate property.  These deposits have been recorded as earnest money and other deposits, totaling $1,860,000, at September 30, 2007.  C. Entitlement Costs  Entitlement costs were incurred on four separate properties the Company has an option to purchase during the three months ended September 30, 2007, totaling $88,073.  This amount been recorded as entitlement costs at September 30, 2007 totaling $809,914.   7





Castle Arch Real Estate Investment Company, LLC (A Development Stage Company) Notes to Consolidated Financial Statements September 30, 2007 (Unaudited)  2.    MATERIAL TRANSACTIONS (CONTINUED)  D. Equity Transactions  During the three months ended September 30, 2007, the Company raised $94,450 pursuant to its Round D private placement, resulting in the issuance of 18,890 common and preferred units, respectively.  In total, at September 30, 2007, the Company had raised $20,055,550 in the Round D private placement, and issued a corresponding 4,011,110 common and preferred units, respectively.  Of this total amount, $541,000 represents subscriptions receivable, or those subscriptions for which funds have not been received at September 30, 2007.  In addition, the Company has raised $9,508,594 of the Castle Arch Kingman, LLC private placement, resulting in the issuance of approximately 1,901,719 and 380,344 common and preferred units, respectively, in the subsidiary of the Company.  Of this amount, $1,208,100 represents subscriptions receivable at September 30, 2007.  During the three months ended September 30, 2007, the Company raised $2,210,600 of the Castle Arch Smyrna, LLC private placement, resulting in the issuance of approximately 5,527 and 22,106 common and preferred units, respectively.  During the three months ended September 30, 2007, the Company elected a new Chairman.  In conjunction with the Chairmans election, the Company issued 1,000,000 common units.  In addition, the Company issued 200,000 common units to a separate officer for management services rendered.  The common units issued were valued at $2.50 per unit, or $3,000,000 in total using managements good faith estimate of value at the measurement date.  Accordingly, this amount has been recorded in operating expenses, totaling $4,707,129 for the three month period ended September 30, 2007.  The per unit value at the date of issuance is a significant estimate that may change substantially in the near-term.  E. Promissory Notes Payable  During the three months ended September 30, 2007, the Company acquired two separate parcels, totaling $6,778,437 (see Note 2, Item A) net of earnest and increased deposits.  In conjunction with these acquisitions, the Company entered into five promissory note payable agreements with related and third parties (see Note 2, Item F).  The following table sets forth the terms of the promissory note agreements.  NoteAmountInterest RateDebt Issue CostsMaturityN1$500,00012.00%$25,00002/15/2008N21,316,44912.00%65,82302/15/2008N31,800,00012.00%90,00002/15/2008N4550,00012.00%27,50003/06/2008N525,05112.00%1,25303/05/2008  Interest only payments on the promissory notes are paid monthly.  Debt issue costs, together with principal and any outstanding interest are to be paid in full on the respective date of maturity.   8





Castle Arch Real Estate Investment Company, LLC (A Development Stage Company) Notes to Consolidated Financial Statements September 30, 2007 (Unaudited)  2.    MATERIAL TRANSACTIONS (CONTINUED)  F. Related Party Transactions  During the three months ended September 30, 2007, the Companys President and Chairman entered into promissory note payable agreements with the Company, totaling $1,841,500.  As per the terms of the agreements, the Company is to make interest only payments monthly to its President and Chairman, with accrued debt issue costs, together with principal and any outstanding interest, to be paid in full by the respective maturity date.  Notes 1, 2 and 5 in Note 3, Item E above disclose the detailed terms of the related party agreements.  The related party promissory notes were incurred to facilitate the acquisition of two separate properties (see Note 2, Item A).  G. Joint Venture Agreement  During the three months ended September 30, 2007, the Company entered into a joint venture arrangement with a third party (Consultant), wherein the Company is to allocate a percentage of its net profits in a separate project (the Project) to the Consultant.  In exchange for its proportionate share of the Projects net profits, the Consultant is to render project specific services and pay a corresponding percentage of all costs incurred to further entitle, improve and ultimately sell the Project.  At September 30, 2007, the Consultant owed the Company $204,758.  This amount has been recorded in other current assets at September 30, 2007.  H. Checks Drawn in Excess of Bank Balance  During the three months ended September 30, 2007, the Company acquired two separate parcels totaling $6,778,437 (see Note 2, Item A).  Of this amount, $2,586,937 represents cash expended.  As a result of these and prior acquisitions, the Company drew other checks in excess of its available bank balances, totaling $19,699 at September 30, 2007 to maintain and fund operations.  Also, the Company has significantly replenished its bank balances subsequent to September 30, 2007, resulting in a cash and cash equivalent balance of $788,705 as of November 1, 2007 (see Note 3).   3. SUBSEQUENT EVENTS  Subsequent to September 30, 2007, the Company has received $596,200 of its outstanding subscriptions receivable at September 30, 2007.  In addition, the Company has successfully raised an additional $1,091,200, resulting in a cash and cash equivalent balance of $788,705 as of November 1, 2007.        9





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 discussion relates to our business of residential and commercial land development with target properties.  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. Below is a summary of our current material projects.  Rutherford County Tennessee  During the three month period ended September 30, 2007, we purchased 640 acres of land in the Smyrna Tennessee area. The purchase was financed via loans.  We intend to develop approximately 615 out of the 640 acres into a residential community. We are currently working the property through the entitlement process  City of Lindale Texas  During the three month period ended September 30, 2007, we continued to explore the viability of exercising our purchase rights on approximately 75 acres of land at the intersection of U.S. Interstate 20 and U.S. Highway 69 which intersects within the city of Lindale Texas.  In the event that we exercise purchase option of the land, we intend to work the property through the entitlement process and facilitate design. If we choose to move forward with the project, we currently intend to construct horizontal improvements, and sell improved commercial sites to end users, such as hotels, restaurants, retail stores, fast food, etc.  Tooele County Utah  We own 348 acres of raw land in Tooele County, Utah and have rights to purchase an additional 83 acres. We have been working the land through the entitlement process. We continue to weigh the comparative benefits between developing the land in the county and attempting to have the land annexed into the city of Tooele where governmental approvals for higher density is more likely. Higher lot density can improve resale profitability depending on the costs incurred and imposed in connection with annexation into the city, including water rights, utilities and other public works related costs. We have yet to complete a master plan for governmental approval, but intend for the property to be a family residential development with between 700 and 1,000 homes on the land.   10





Fresno County California  In 2004, we acquired rights to purchase 158 and 181 acres of raw land in the cities of Coalinga and Firebaugh, California, respectively. The market conditions in 2004 made the purchase price of the property extremely appealing. Due to the subsequent softening of the real estate market in the area and our internal financial factors, we elected in 2005 to assign our purchase rights in the properties to a third party in exchange for $10.5 million in consideration to be repaid upon that third partys resale of the properties.  The third party purchased the property, but due to ongoing market conditions has been holding the properties. We do not have authority to dispose of the properties and are unsure when or whether the third party purchaser will commence development activities or liquidate the properties.  Mohave County Arizona  Through Castle Arch Kingman, L.L.C., a company in which we are a majority owner, we own or have purchase rights to a total of approximately 2,100 acres of raw land just outside of the city of Kingman Arizona. During the three month period ended September 30, 2007, we nearly completed the entitlement process. Kingmans city planning commission has formally approved our master plan for the Development. We believe that Mohave Countys district supervisor may approve the master plan prior to the end of 2007. Once the master plan is approved by the county, we will be in a position to commence excavation. Commencement of excavation will be time based on weather, project management and financing considerations, but should begin in early 2008.  Imperial County California  We have rights to purchase 160 acres of raw land in Imperial County California. We have spent approximately $700,000 in non-refundable deposits and entitlement costs in the form of government filing fees, engineering fees and legal fees in connection with planning and civil engineering services, environmental site assessment, biological study, burrowing owl survey, tentative subdivision map, engineering services, site assessment, preparation of conceptual layout, biological assessment, research and reporting, environmental consulting services. Management is currently assessing the viability of further investment in the Imperial County properties in light of market conditions and further entitlement and estimated development costs. Notwithstanding the unrecoverable investment to date, the unlikelihood of significant profitability for the project compared to the costs, and considering the benefits of allocating financial resources and management efforts toward other projects, pursuit of the Imperial project is currently disfavored among management.  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 September 30, 2007, we had total member capital of $11,512,068, and no cash on hand as of September 30, 2007. In the coming three months, our liquidity and cash requirements will depend on several factors.  11





Revenues  We had no revenues in the three month period ended September 30, 2007 and no revenues in the comparative period of 2006. Other than one time revenues of $48,041 in connection with the sale of a portion of the land we hold in Kingman Arizona to one of holders of our member units, we have yet to derive any material revenues and no revenues from our primary business operations 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 the next 12 months. 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 $4,585,181 during the three month period ended September 30, 2007, compared to $2,402,148 during the comparable three month period ended September 30, 2006. The increase in operating expenses is primarily attributable to the issuance of 1,000,000 common units to William Davidson as equity compensation in connection with Mr. Davidsons appointment to Chairman of our board of directors, 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 $809,914 in entitlement costs in connection with our properties.  We anticipate that our general and administrative expenses will maintain relatively similar in the coming three months. We anticipate only limited revenues in the coming twelve months.  Selected Financial InformationThree months endedSeptember 30,20072006Revenue, net$-0-$-0-Operating loss(4,707,129)(2,579,085)Net Loss(4,874,663)(2,747,809)Balance Sheet Data:Cash and Cash Equivalents$-$1,685,598Total Current Assets976,0232,476,424Total Assets36,433,96927,447,903Total Current Liabilities14,133,57110,414,135Total stockholders equity$11,512,068$15,041,885   12





Liquidity and Capital Resources  At September 30, 2007, we had cash and cash equivalents of $0, compared to $1,685,598 at September 30, 2006. Our decreased cash balance as of September 30, 2007 is due to deployment of capital to meet property purchases, interest on loan financings, and selling, general and administrative expenses.  Proceeds from private offerings, loans and/or anticipated 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.  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.  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.   13





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 over-funded or under-funded 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.  In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115. This pronouncement permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value.  The adoption of SFAS 159 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 September 30, 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 September 30, 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 September 30, 2007, we received $94,450 from the sale of 18,890 common member units and 18,890 preferred D member units to a total of 3 persons. 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 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 September 30, 2007.    16





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:  November 13, 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