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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
SEPTEMBER 30, 2005
 Commission file number 0-11777
 FIRST EQUITY PROPERTIES, INC.
  Nevada
    
    95-6799846(State or other jurisdiction of incorporation
    
    (I.R.S. Employeror organization)
    
    Identification No.)
  
   
  
  þ o
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FIRST EQUITY PROPERTIES, INC.
 
  Page No.Part I Financial Information:Item 1. Financial StatementsBalance Sheets
September 30, 2005 (Unaudited) and December 31, 2004
    
    
    3Statement of Earnings (Unaudited)
Three Months and Nine Months Ended September 30, 2005 and 2004
    
    
    4Statement of Cash Flows (Unaudited)
Nine Months Ended September 30, 2005 and 2004
    
    
    5Notes to Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    8Item 4. Controls and Procedures
    
    
    8Part II Other Information:Item 6. Exhibits
    
    
    9Certification Pursuant to Section 302Certification Pursuant to Section 906
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FIRST EQUITY PROPERTIES, INC.
 
  Sep 30, 2005
    
    
    December 31,(Unaudited)
    
    
    2004ASSETSCash and cash equivalents
    
    $
    6,624
    
    
    $
    4,621Notes and
interest receivable  related party
    
    
    2,407,540
    
    
    
    2,626,588$
    2,414,164
    
    
    $
    2,631,209LIABILITIES AND STOCKHOLDERS EQUITYAccounts payable  related party
    
    $
    2,069,713
    
    
    $
    2,448,936Total liabilities
    
    
    2,069,713
    
    
    
    2,448,936Stockholders equityPreferred stock, $0.01 par, 4,960,000 shares
authorized, none issued and outstanding
    
    
    
    
    
    
    Common stock, $0.01 par, 40,000,000 shares
authorized, 1,057,628 shares issued and outstanding
    
    
    10,576
    
    
    
    10,576Capital in excess of par value
    
    
    1,376,682
    
    
    
    1,376,682Retained earnings (deficit)
    
    
    (1,042,807
    )
    
    
    (1,204,985
    )Total stockholders equity
    
    
    344,451
    
    
    
    182,273$
    2,414,164
    
    
    $
    2,631,209
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FIRST EQUITY PROPERTIES, INC.
 
    Three months ended Sep 30,
    
    
    Nine months ended Sep 30,2005
    
    
    2004
    
    
    2005
    
    
    2004RevenueInterest income  related party
    
    $
    60,683
    
    
    $
    60,683
    
    
    $
    180,071
    
    
    $
    120,31560,683
    
    
    
    60,683
    
    
    
    180,071
    
    
    
    120,315Operating expensesGeneral and administrative
    
    
    1,428
    
    
    
    3,766
    
    
    
    3,318
    
    
    
    5,659Legal and professional fees
    
    
    5,156
    
    
    
    22,954
    
    
    
    14,575
    
    
    
    40,621Total operating expenses
    
    
    6,584
    
    
    
    26,720
    
    
    
    17,893
    
    
    
    46,280Net income from continuing
operations
    
    
    54,099
    
    
    
    33,963
    
    
    
    162,178
    
    
    
    74,035Income from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,715Impairment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37,931,116
    )NET EARNINGS (LOSS)
    
    $
    54,099
    
    
    $
    33,963
    
    
    $
    162,178
    
    
    $
    (37,811,116
    )Earnings (loss) per shareNet earnings from continuing
operations
    
    $
    .05
    
    
    $
    .03
    
    
    $
    .15
    
    
    $
    .07Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35.82
    )Net earnings (loss)
    
    $
    .05
    
    
    $
    .03
    
    
    $
    .15
    
    
    $
    (35.75
    )Weighted average shares outstanding
    
    
    1,057,628
    
    
    
    1,057,628
    
    
    
    1,057,628
    
    
    
    1,057,628
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FIRST EQUITY PROPERTIES, INC.
 
    2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIESNet earnings (loss)
    
    $
    162,178
    
    
    $
    (37,811,366
    )Adjustments to reconcile net income to net cash
provided by (used for) operating activitiesImpairment loss
    
    
    
    
    
    
    37,931,116(Increase) decrease inInterest receivable
    
    
    219,048
    
    
    
    (120,312
    )Increase (decrease) inAccounts payable
    
    
    
    
    
    
    1,191Accounts payable  affiliate
    
    
    (379,223
    )
    
    
    (256,118
    )Net cash provided by (used for) operating
activities
    
    
    2,003
    
    
    
    (259,489
    )CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale of subsidiaries
    
    
    
    
    
    
    250,000Net cash provided by (used for)
investing activities
    
    
    
    
    
    
    250,000Net increase (decrease) in cash and cash equivalents
    
    
    2,003
    
    
    
    (5,489
    )Cash and cash equivalents at beginning of period
    
    
    4,621
    
    
    
    6,127Cash and cash equivalents at end of period
    
    $
    6,624
    
    
    $
    638Noncash investing and financing activities:Note received in sale of subsidiaries
    
    
    
    
    
    
    1,822,540
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FIRST EQUITY PROPERTIES, INC.
 
    NOTE A  BASIS OF PRESENTATION
   NOTE B  DISCONTINUED OPERATIONS
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FIRST EQUITY PROPERTIES, INC.
 
 NOTE B  DISCONTINUED OPERATIONS  continued
   Three months ended Sep 30,
    
    
    Nine months ended Sep 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Operating revenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    45,715Net income from
discontinued
operations
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    45,715
 NOTE C  REVERSE STOCK SPLIT
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FIRST EQUITY PROPERTIES, INC.
 
         
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(a)
    
    Exhibits
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FIRST EQUITY PROPERTIES, INC.November 21, 2005
    /s/ Ken L. Joines,Vice President, Secretary and ChiefAccounting Officer 10