ANNUAL REPORT

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-KSB

         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934


                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004


                         Commission File Number 0-27159

                      NATIONAL RESIDENTIAL PROPERTIES, INC.
             (Exact Name of Registrant as Specified in its Charter)

           Nevada                                               65-0439467
(State or Other Jurisdiction                                 (I.R.S. Employer
     of Incorporation)                                    Identification Number)

       6915 RED ROAD SUITE #222 CORAL GABLES, FLORIDA 33143 (305) 666-6565
               (Address, including zip code, and telephone number,
                  of registrant's principal executive offices)

           SECURITIES REGISTERED UNDER SECTION 12(B) OF THE ACT: None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                          Common Stock $.001 par value
                                (Title of class)


         Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No |_|


         Check if there is no disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. X

         Issuer's revenues for its most recent fiscal year:  $1,600,120.

         The aggregate market value of voting stock held by non-affiliates of
the registrant as of December 28, 2004 was $191,977.30 (based on the last
reported sale price of $0.0001 per share on December 28, 2004).

         The number of shares of the registrant's common stock outstanding as of
December 28, 2004 was 1,938,566,046.
<PAGE>
                      NATIONAL RESIDENTIAL PROPERTIES, INC.
                      FOR THE YEAR ENDED SEPTEMBER 30, 2004
                                TABLE OF CONTENTS

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                 Page

<S>                                                                              <C>
PART I   ..........................................................................2
         ITEM 1.  BUSINESS.........................................................3
         ITEM 2.  PROPERTIES......................................................12
         ITEM 3.  LEGAL PROCEEDINGS...............................................13
         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.............13

PART II  .........................................................................12
         ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
                 MATTERS..........................................................14
         ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION........14
         ITEM 7. FINANCIAL STATEMENTS.............................................20
         ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
                 FINANCIAL DISCLOSURE.............................................38
         ITEM 8A.     CONTROLS AND PROCEDURES.....................................38
         ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
                 COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT................38
         ITEM 10.     EXECUTIVE COMPENSATION......................................40
         ITEM 11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                 MANAGEMENT AND RELATED STOCKHOLDER MATTERS.......................41
         ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..............41
         ITEM 13.     EXHIBITS AND REPORTS ON FORM 8-K............................42
         ITEM 14.     PRINCIPAL ACCOUNTANT FEES AND SERVICES......................44
</TABLE>

         THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND
UNCERTAINTIES. SUCH STATEMENTS ARE BASED ON CURRENT EXPECTATIONS, ASSUMPTIONS,
ESTIMATES AND PROJECTIONS ABOUT THE COMPANY AND ITS INDUSTRY. FORWARD-LOOKING
STATEMENTS ARE SUBJECT TO KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER
FACTORS THAT MAY CAUSE ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE,
ACHIEVEMENTS AND PROSPECTS TO BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED OR
IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY UNDERTAKES NO OBLIGATION
TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS FOR ANY REASON EVEN IF NEW
INFORMATION BECOMES AVAILABLE OR OTHER EVENTS OCCUR IN THE FUTURE. BECAUSE THE
COMPANY IS CURRENTLY ISSUING "PENNY STOCK" AS DEFINED IN RULE 3A51-1 UNDER THE
EXCHANGE ACT, THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995 DO NOT APPLY TO THE COMPANY.











                                       i
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                                     PART I


RESTATEMENT

          As discussed in Notes 1 and 14 to the consolidated financial
statements, National Residential Properties, Inc. (the "COMPANY") has restated
its audited consolidated financial statements for September 30, 2001. The
Company adjusted its consolidated financial statements for certain expenses not
previously recognized relating to the amortization of discount on debenture
conversions and fees and interest associated with the debentures in the amount
of $1,830,731 that occurred in that fiscal year. Cumulatively, the Company's
accumulated deficit increased $1,830,731 to $3,849,533 from $2,108,802 at
September 30, 2001 and the net loss of the Company increased to $2,414,375 from
$583,644. The recognition of the 2001 expenses had no effect on the
stockholders' equity (deficit) since the expenses were associated with the
issuance of the Company's common stock. Additionally, the Company classified
certain shares of its common stock as "Temporary" equity to "Permanent" equity.

          Accordingly, the deficit is restated as follows as it was carried
through to reflect the restated beginning balance at October 1, 2002.  The net
effect of this restatement has been previously reported.

        Deficit, September 30, 2001, as previously reported   ($ 2,018,802)
        Prior Period Adjustment, September 30, 2001             (1,830,731)
                                                                -----------

        Deficit, September 30, 2001, as restated               ($3,849,533)
        Net loss for the year ended September 30, 2002            (347,513)
                                                                  ---------
        Deficit, September 30, 2002                            ($4,197,046)
                                                               ============

         Additionally, in September 30, 2003 the Company restated its financial
statements to adjust for the underreporting of amortization expense in the
amount of $9,050.

BACKGROUND CAPITALIZATION INFORMATION

         The Company's original Articles of Incorporation (the "ARTICLES") of
authorized the Company to issue 1 million shares of the Company's common stock
("NRES COMMON STOCK"). After its incorporation, the following events occurred:
(i) in December 1994, the Company attempted to effect a 2 for 1 stock split (the
"1994 STOCK SPLIT"); (ii) in January 1999, the Company attempted to effect a 1
for 10 reverse stock split (the "1999 REVERSE STOCK SPLIT"); (iii) between the
date of its incorporation and January 2001, the Company believed it increased
the number of shares it was authorized to issue from 1 million to 40 million
shares of NRES Common Stock (the "40 MILLION SHARE INCREASE"); (iv) in October
2000, the Company attempted to increase the number of shares the Company was
authorized to issue from 40 million to 250 million shares of NRES Common Stock
(the "250 MILLION SHARE INCREASE"); (v) in January 2001, the Company attempted
to increase the number of shares it was authorized to issue from 250 million to
750 million shares of NRES Common Stock and effected a 3 for 1 stock split (the
"750 MILLION SHARE INCREASE"); and (vi) in June 2001, the Company attempted to

                                       2
<PAGE>
increase the number of shares it was authorized to issue from 750 million to 1.5
billion shares of NRES Common Stock (the "1.5 BILLION SHARE INCREASE", and
together with the 1994 Stock Split, the 1999 Reverse Stock Split, the 40 Million
Share Increase, the 250 Million Share Increase and the 750 Million Share
Increase, the "CAPITAL CHANGES"). The Company has since determined that some or
all of the Capital Changes were not validly adopted by the Company's board of
directors, approved by the Company's shareholders or filed with the Secretary of
State of the State of Nevada as required by the laws of the State of Nevada. As
a result, it appears the Company never has been authorized to issue more than 1
million shares of NRES Common Stock. All shares of NRES Common Stock issued in
excess of 1 million shares appear to have been issued in excess of the
authorized amount.

         Given the foregoing, the Company has attempted to determine the
majority owners of the validly issued shares of NRES Common Stock. The Company
discovered that Richard Astrom and Pamela Gay Astrom, tenants by the entireties,
were issued a substantial block of shares shortly after the Company merged with
National Rehab Properties, Inc. These shares consisted of the majority of the
Company's validly issued outstanding shares.  After their initial issuance,
approximately 22% of these shares were transferred by Mr. and Mrs. Astrom to
their family members, and were then resold into the public market. While Mr. and
Mrs. Astrom did transfer these shares, the Company's assumption is that, because
the shares are largely fungible, the shares transferred by Mr. and Mrs. Astrom
were those issued in excess of the Company's authorized amount. The Company's
former transfer agent's records show that the remainder of these shares
(including those shares the Company assumes were validly issued) were still held
by Richard and Pamela Astrom, as tenants by the entireties, when the Company's
former transfer agent and the Company severed relations. The Company's current
transfer agent's records confirm that these shares can be traced from that time
to the present, as they are still held by Richard and Pamela Astrom, as tenants
by the entireties, and have not been sold or otherwise transferred. As such,
Richard Astrom and Pamela Gay Astrom, as tenants by the entireties, appear to
hold a majority of the validly issued shares of NRES Common Stock.

         After making the aforementioned factual findings, the Company proceeded
to retain local counsel in the State of Nevada to determine the effect of the
invalidity of some or all of the Capital Changes and to confirm the foregoing
analysis under Nevada law. " Based on the Company's discussions with Nevada
counsel and the assumption that the shares transferred to Mr. and Mrs. Astrom's
family members described above included only those shares that were issued in
excess of the Company's authorized amount, the Company determined (and currently
believes) that Richard and Pamela Astrom can amend the Company's articles of
incorporation to increase the Company's authorized shares of common stock. The
Company also believes that the issuance of NRES Common Stock in excess of the
authorized amount can be cured by the Company's board of directors. The
Company's board of directors intends to 'cure and ratify the overissuances and
the Capital Changes after Richard and Pamela Astrom amend the Articles to
increased the number of authorized shares.' The Company also intends to file an
Information Statement on Schedule 14C reflecting this, and any other actions
taken by Richard and Pamela Astrom, as appropriate.

ITEM 1.  BUSINESS

OVERVIEW

         o    National Residential Properties, Inc. was incorporated on October
              18, 1971, in the State of Nevada under the name of Mister Las
              Vegas, Inc. At the time of its incorporation, the Company was
              authorized to issue 1 million shares of its common stock.

                                       3
<PAGE>
         o    Pursuant to a letter agreement executed on November 15, 1994,
              Richard Astrom, the then-president of National Rehab Properties,
              Inc., a Florida corporation formed on October 1, 1993, purchased
              200,000 of the 235,000 issued and outstanding shares of NRES
              Common Stock from the Company's then controlling stockholders. At
              this time the Company was authorized to issue 1 million shares of
              NRES Common Stock. On December 15, 1994, the Company's board of
              directors approved the 1994 Stock Split, giving Richard Astrom
              400,000 of the issued and outstanding shares of NRES Common Stock.

         o    On December 15, 1994, the Company entered into an agreement of
              merger with National Rehab Properties, Inc. On May 15, 1995, the
              merger became effective and National Rehab Properties, Inc. merged
              with and into the Company, with National Rehab Properties, Inc.
              remaining as the surviving entity. The surviving entity
              subsequently changed its name to National Rehab Properties, Inc.
              and became authorized to conduct business in the State of Florida
              on August 17, 1995. o In January 1999, the Company attempted to
              effect the 1999 Reverse Stock Split. Between the date of its
              incorporation and January 2001, the Company attempted to increase
              the number of shares the Company was authorized to issue from 1
              million to 40 million shares of Common Stock pursuant to the 40
              Million Share Increase.

         o    On June 17, 1999, pursuant to a joint action by written consent of
              the Company's shareholders and board of directors, the Company was
              given the authority to amend its Articles of Incorporation to
              authorize 2 million shares of Class A Common Stock per share and
              to issue 1 million shares of its newly authorized Class A Common
              Stock to Christopher Astrom. o In April 2000, the Company acquired
              80% of Encore Services, Inc. ("ENCORE SERVICES"). Encore Services
              served as the Company's general construction contractor, but was
              subsequently replaced by Encore Builders, Inc. ("ENCORE
              BUILDERS"), a former subsidiary (through March 21, 2002) of
              Vacation Ownership Marketing, Inc. Vacation Ownership Marketing,
              Inc. ("VACATION OWNERSHIP") is an affiliate of the Company. Encore
              Builders was the general construction contractor for the Company's
              Conquistador Plaza project in Miami, Florida. Since the time
              Encore Builders replaced Encore Services as the general
              construction contractor of the Company's Conquistador Plaza
              project, to the time the Company severed its relationship with
              Encore Services in March 2002, Encore Services has been inactive.
              o In October 2000, the Company changed its name to National
              Residential Properties, Inc. (the "NATIONAL RESIDENTIAL NAME
              CHANGE").

         o    In October 2000, the Company attempted to effect the 250 Million
              Share Increase by filing a Certificate of Change in Number of
              Authorized Shares with the Nevada Secretary of State to increase
              its authorized number of shares from 40 million shares, to 250
              million shares.

         o    In January 2001, the Company attempted to effect the 750 Million
              Share Increase.


                                       4
<PAGE>
         o    On April 12, 2001, the Company's wholly-owned subsidiary,
              Connecticut Acquisition Corp. No. 1 ("CONNECTICUT ACQUISITION")
              obtained a loan from accredited investors evidenced by its 8%
              Series A Senior Subordinated Convertible Redeemable Debentures due
              April 12, 2003 (the "CONNECTICUT ACQUISITION DEBENTURES"), which
              were convertible from time to time into shares of Connecticut
              Acquisition's Class A common stock. On May 8, 2001, Connecticut
              Acquisition merged with and into the Company, with the Company
              remaining as the surviving entity. As a result, all rights and
              obligations of Connecticut Acquisition inured to the benefit of
              and became binding upon the Company. Pursuant to the merger, the
              Connecticut Acquisition Debentures were surrendered and canceled,
              and new debentures, identical to the Connecticut Acquisition
              Debentures (the "NRES CONNECTICUT DEBENTURES"""), but convertible
              into authorized and unissued shares of NRES Common Stock, were
              issued by the Company to the holders of the Connecticut
              Acquisition Debentures.

         o    In June 2001, the Company filed a Certificate of Amendment with
              the Nevada Secretary of State attempting to effect the 1.5 Billion
              Share Increase.

         o    On October 17, 2001, the Company's wholly-owned subsidiary, DC
              Power Products Acquisition Corp. ("DC POWER"), a Florida
              corporation, obtained a loan from accredited investors evidenced
              by its 8% Series A Senior Subordinated Convertible Redeemable
              Debentures due October 17, 2003 (the "DC POWER DEBENTURES"), which
              were convertible from time to time into shares of DC Power's
              common stock. On November 1, 2001, DC Power merged with and into
              the Company with the Company remaining as the surviving entity. As
              a result, all rights and obligations of DC Power inured to the
              benefit of and became binding upon the Company. Pursuant to the
              merger, the DC Power Debentures were surrendered and canceled, and
              new debentures, identical to the DC Power Debentures (the "NRES DC
              POWER DEBENTURES" and together with the NRES Connecticut
              Debentures, the "NRES DEBENTURES"), but convertible into
              authorized and unissued shares of NRES Common Stock, were issued
              by the Company to the holders of the DC Power Debentures. o The
              Articles, as amended, currently provide that the Company is
              authorized to issue up to 1.5 billion shares of NRES Common Stock.
              However, the Company concluded that the 1994 Stock Split, the 1999
              Reverse Stock Split, the 40 Million Share Increase, the 250
              Million Share Increase, the 750 Million Share Increase and the 1.5
              Billion Share Increase may not have been validly adopted by the
              Company's board of directors, approved by the Company's
              shareholders or filed with the Secretary of State of the State of
              Nevada, as required by the laws of the State of Nevada. As such,
              the Company believes it currently has only 1 million shares of
              NRES Common Stock authorized, a majority of which are owned by
              Richard and Pamela Gay Astrom, as tenants by the entireties. In
              this report, all references to shares of NRES Common Stock do not
              reflect the Capital Changes referenced above (including any stock
              splits). Additionally, as a result of the conversion of the NRES
              Debentures into NRES Common Stock and the decrease in the price of
              NRES Common Stock, investors were entitled to more shares than
              authorized. As a result, the Company, as of August 10, 2004, has
              1,938,566,046 shares of NRES Common Stock issued, which exceeds
              the number of authorized shares. Under the state law of Nevada, it

                                       5
<PAGE>
              may be possible that the transactions for shares in excess of the
              number of authorized shares will not be viewed as valid and the
              Company may be responsible for taking corrective action or
              compensating the stockholders. o As of December 31, 2004, the
              Company engages in operations both as a land development company
              that purchases zoned, but undeveloped real property, develops
              architectural plans for the real property, obtains building
              permits for the real property and subsequently sells the real
              property when it is ready for development, and as a mortgage
              lender.

OPERATING HISTORY

         From 1993 until 1999, the Company's business concentrated on investing
in and revitalizing single family homes in established older residential
neighborhoods in urban areas. The Company either bought single unit vacant
properties and built single family homes on them, or bought abandoned homes
which the Company then renovated and sold. During 1999, while retaining its
efforts in the renovation of urban single family homes as one aspect of its
business, the Company entered a second phase of business - the development,
construction and ownership of multifamily housing projects. In 2004, the Company
commenced operations as a mortgage lender. The Company has become licensed to
extend credit as a mortgage lender, implemented an online appraisal service and
has begun active efforts to locate potential borrowers, including increased
advertising efforts and discussions with mortgage brokers. Although the Company
has determined to develop its mortgage lending business, it has not discontinued
its real estate development business. The Company plans to continue its real
estate development business in tandem with its mortgage lending business to the
extent appropriate development opportunities present themselves and become
available to the Company. The Company has not hired additional personnel to
engage in its mortgage lending business. As of June 30, 2004, the Company has
approximately $173,000 outstanding in credit extended to borrowers.

CONNECTICUT PROPERTIES

         On May 4, 2001, the Company's wholly-owned subsidiary, Connecticut
Acquisition, entered into a land development agreement with a Mr. Nathan Kahn
and various companies controlled by him (the "KAHN ENTITIES") to develop a
parcel of land located in Hebron, Connecticut (the "HEBRON PARCEL") as a senior
adult community. Thereafter, Connecticut Acquisition and the Kahn Entities hoped
to continue to develop the Hebron Parcel with a view toward either selling
developed lots to builders or erecting dwellings themselves. In addition, the
Kahn Entities had obtained options to purchase and develop other properties, and
the Kahn Entities advised they would need additional funding to pay their
expenses, such as engineering reports, zoning studies, and the like, in
connection with the obtaining and maintenance of these options. On April 12,
2001, in contemplation of the financing of this project, Connecticut Acquisition
obtained a loan from accredited investors evidenced by the Connecticut
Acquisition Debentures.

         From the proceeds of the sale of the Connecticut Acquisition Debentures
approximately (a) $160,000 was to be used by Connecticut Acquisition to acquire
the Hebron Parcel (together with a mortgage in the amount of $315,000 which
Connecticut Acquisition would assume) and (b) $680,000 was to be used by
Connecticut Acquisition to pay the expenses to be incurred with the development
of the other properties.

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<PAGE>
         On May 8, 2001, following the acquisition of the Hebron Parcel by
Connecticut Acquisition, Connecticut Acquisition merged with and into the
Company. As a result of the Merger, (a) the rights and obligations of
Connecticut Acquisition with respect to the land development agreement inured to
the benefit of and became binding upon the Company, and (b) the Connecticut
Acquisition Debentures were surrendered and canceled and the NRES Connecticut
Debentures, which were convertible into NRES Common Stock, were issued by the
Company to the holders of the Connecticut Acquisition Debentures.

         In 2001, the Company sold all the rights, title and interest in (i) the
Hebron Parcel and (ii) contracts to purchase certain parcels of real property in
Watertown, New Milford, Granby and East Windsor, Connecticut to Senior Adult
Lifestyle, Inc., a subsidiary of Genesis Capital Corporation of Nevada
("GENESIS"), which may be deemed an affiliate of the Company.

CONQUISTADOR PLAZA

         In April 2000, the Company acquired 80% of the outstanding shares of
Encore Services, a general construction contractor. The remaining shares were
held by Braulio Gutierrez who, until March 2002, was a director of the Company
as well as a director and officer of Vacation Ownership.

         Encore Builders, a subsidiary of Vacation Ownership whose president was
a director of the Company, was the primary construction company responsible for
construction projects at the Company's properties. However, the first of these
projects, the Conquistador Plaza project, was subject to substantial delays due
to the inability of Encore Builders to meet completion schedules. The delays in
construction caused the Company to commence financing construction loan interest
from its own resources, rather than from construction loan proceeds, and to
terminate Encore Builders as the project's contractor. In March 2002, the
Company returned the shares of Encore Services, the Company's wholly-owned
inactive company.

         On April 18, 2002, the Company's subsidiary, Conquistador Plaza, Inc.
("CONQUISTADOR PLAZA") received a notice of default from its lender. The notice
cited violations of loan covenants by Conquistador Plaza, specifically relating
to the proceeds of the construction loan being insufficient to complete
construction of the Conquistador Plaza development. The notice of default also
cited the termination of work on the project for a period of more than 20 days.
As a consequence of the defaults, the lender accelerated and declared due and
payable Conquistador Plaza's entire indebtedness of $3,205,317.89, and advised
Conquistador Plaza that the lender would take action to protect its interest if
Conquistador Plaza did not return the entire balance by May 19, 2002. Although
the Company was not liable on the Conquistador Plaza loan, the Company invested
substantial funds in the Conquistador Plaza development and might have lost its
investment were the lender to foreclose on the lender's mortgage. In order to
repay the lender, Conquistador Plaza entered into a contract to sell the
Conquistador Plaza project. The Company entered into a contract dated June 24,
2002, to sell this property to Shamrock at the Gables LLC for $3.5 million. This
transaction was completed on October 8, 2002.

         On August 2, 2002, Encore Builders filed suit against Conquistador
Plaza in the Circuit Court of the Eleventh Judicial Circuit in Miami-Dade
County, Florida seeking foreclosure of a mechanic's lien with respect to the
Conquistador Plaza development. Encore Builders asserted Conquistador Plaza
breached the January 30, 2001 construction contract between Encore Builders and
Conquistador Plaza. Encore Builders asserted that $504,076.03 was due from

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Conquistador Plaza, Inc. and sought damages with interest, costs and attorneys
fees. Encore Builders was bonded by Mountbatten Surety Company, Inc. On August
26, 2003, the parties stipulated for a full settlement of all claims that
existed amongst them. As part of the settlement, $55,000 was to be paid for the
benefit of Encore Builders and $50,000 was to be paid to Mountbatten Surety
Company, Inc.

CURRENT OPERATIONS

         OVERVIEW

         From 1999 until 2002, the Company's business focused on residential
real estate development and building construction services, and in particular on
acquiring properties suitable for development as multifamily housing or multiple
unit single family development tracts. The properties still held by the Company
are described below in detail along with the status of each project. In 2004,
the Company commenced operations as a mortgage lender.

         RESIDENCES AT BAY HARBOR

         The Bay Harbor property, located on Bay Harbor Island, Florida, was
purchased by the Company in 2000, for $850,000. The Residences at Bay Harbor
were built on a 22,500 square foot area with permit approval to construct a 15
story building. The Company intended to construct a 15-story, 60 unit apartment
building on the Bay Harbor property and intended for Encore Builders to handle
the construction. Immediately after closing the acquisition of the land, the
Company applied for a building permit, but did not obtain the permit due to
various neighborhood objections to construction. The initial business plan
called for the building to be sold as a condominium project for $18 million,
with construction costs at approximately $12 million. Due to the Company's
relations with Encore Builders and the difficulties with the building permit,
the Company chose not to construct the building and instead, on December 17,
2001, chose to resell the land for $2.2 million to Dennis Almandares, an
independent third party. The transaction contemplated by this agreement did not
close, and the Company subsequently entered into a purchase and sale agreement
dated as of May 20, 2002 to sell this property to Gateway Mortgage Bankers, Inc.
for $2.3 million. The Company expected to close this transaction in September of
2002 or upon the issuance of a building permit by the city building department
for a 15-story building but was unable to obtain the required building permit.
Subsequently, the Company filed a complaint against the Town of Bay Harbor. On
June 30, 2004, the Circuit Court granted the Town of Bay Harbor Island's summary
judgment motion. See "Item 3 - Legal Proceedings" for a discussion of the
related litigation. The carrying value of the Bay Harbor property was $1.3
million at September 30, 2004. As of September 30, 2004 this property was
subject to an outstanding mortgage in the amount of $736,493. The Company
currently has fee simple ownership of the property, subject to a mortgages. The
first mortgage is due in September 2004 and the second mortgage is due in 2006.
While the Company has not entered into a purchase agreement with respect to the
Bay Harbor property, the Company has been soliciting offers for the Bay Harbor
property, and has received an offer of $1.3 million. As management continues to
consider its options, the Company has also been working closely with the city to
determine what permitting flexibility can be obtained with respect to the Bay
Harbor property.


         The Company believes the property is adequately covered by insurance.
The Company's tax basis in the property as of September 30, 2004 is $1,300,000
and realty taxes are $16,000 per year. The Company does not depreciate the
property because no construction on the land has taken place.




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<PAGE>
         BARCELONA APARTMENTS

         On this property, located in Miami, Florida and purchased in 2000, the
Company intended to construct 70 rental apartments. The Company's July 31, 2002
contract to sell this property to Antonio Sarmiento fell through. The Company is
currently continuing its efforts to sell this property. The Company entered into
an agreement for purchase and sale with Salomon Yuken to sell the Barcelona
Apartments to Salomon Yuken on January 10, 2003. On May 8, 2003, the Company and
Salomon Yuken entered into an amendment to the agreement for purchase and sale.
In June 2003, the Company and Salomon Yuken entered into a second amendment to
the agreement for purchase and sale which, among other things, extended the
closing date to October 31, 2003. A $100,000 deposit has been paid to the
Company by Salomon Yuken. The closing date was subsequently extended.

         On March 12, 2004, the Company completed the sale of the Barcelona
Apartments and transferred title to the Barcelona Apartments to Salomon Yuken
for $1,550,000 in cash. Mortgages and closing expenses totaled $1,166,796.79. A
$100,000 deposit was previously paid to the Company by Salomon Yuken. Net
proceeds totaled $285,849.57. The purchase price for the Barcelona Apartments
was determined through arms-length negotiations. The transfer was made pursuant
to the terms of a Special Warranty Deed dated March 12, 2004, by and between the
Registrant and Salomon Yuken. The Barcelona property had a carrying value of
$1,290,194 and $1,221,467 at September 30, 2003 and 2002, respectively and a
carrying value of $1,476459 on the date of sale.

RISK FACTORS

         IN ADDITION TO OTHER INFORMATION IN THIS REPORT, YOU SHOULD CONSIDER
THE FOLLOWING RISK FACTORS CAREFULLY. THESE RISKS MAY IMPAIR THE COMPANY'S
OPERATING RESULTS AND BUSINESS PROSPECTS AS WELL AS THE MARKET PRICE OF THE
COMPANY'S COMMON STOCK.

RISKS RELATED TO LEGAL UNCERTAINTIES

         THE COMPANY BELIEVES IT HAS VIOLATED NEVADA CORPORATE LAW

         At the time of its incorporation, the Company had 1 million shares of
its common stock authorized. Since that time, the Company believed it had
effected the 1994 Stock Split, the 1999 Reverse Stock Split, the 40 Million
Share Increase, the 250 Million Share Increase, the 750 Million Share Increase
and the 1.5 Billion Share Increase. These changes in capital structure appear to
have not been validly adopted by the Company's board of directors, approved by
the Company's shareholders or filed with the Secretary of State of the State of
Nevada, as required by the laws of the State of Nevada. As such, it appears the
Company currently has only 1 million shares of NRES Common Stock authorized, and
the majority of the validly issued shares are held by Richard and Pamela Astrom
as tenants by the entireties. The Company believes a majority of the Company's
validly issued and outstanding shares and the board of directors can cure and
ratify the overissuances of stock and the aforementioned changes in capital
structure. Until that time, the Company may be liable to the holders of the NRES
Common Stock issued in excess of the authorized amount. The Company also
believes the issuance of Class A common stock to Christopher Astrom was not
authorized as an amendment to the Company's Articles of Incorporation was never
filed with the Secretary of State of the State of Nevada. The Company believes
the recipient of the unauthorized shares, Christopher Astrom, may have a claim
against the Company for damages, but it is unlikely that Christopher Astrom will
file a claim against the Company as he is an officer, director and principal
shareholder of the Company. Also, as discussed below, the Company's board of
directors and the holders of a majority of its validly issued shares intend to
authorize the creation of Class A common stock and issue shares to Christopher
Astrom.
                                       9
<PAGE>
         It has come to the Company's attention that, as a result of the
conversion of the debentures issued by the Company into NRES Common Stock,
coupled with the decrease in the trading price of NRES Common Stock, investors
were entitled to more shares of NRES Common Stock than is authorized under the
Articles. As a result, as of December 31, 2004, the Company has 1,938,566,046
shares of NRES Common Stock issued, which exceeds the number of shares
authorized. As stated above, the Company believes the holders of a majority of
the Company's validly issued and outstanding shares (Richard and Pamela Astrom)
and the board of directors can cure and ratify the overissuances of stock. If
this cannot be accomplished, the Company may be liable to the holders of the
NRES Common Stock issued in excess of the authorized amount in an amount equal
to 1,937,566,046 shares (the number of shares issued in excess of the amount
authorized) multiplied by the price each such share was issued for (which ranged
from approximately $.0001 to $5.4 per share). These holders can demand the
issuance of the shares in excess of the Company's authorized amount be
rescinded, causing the Company to purchase the shares at the price at which they
were sold. The overissuance, together with the Company's inability to increase
its authorized number of shares, has eliminated the Company's ability to raise
capital through issuances of publicly registered securities. The Company
believes it will not be able to continue trading NRES Common Stock or increase
its capital resources through selling publicly registered securities until the
overissuance is cured and the Company increases the authorized number of shares
of NRES Common Stock. The Company's officers and directors may have also
violated their fiduciary duties to the Company by permitting the Company to
issue shares in excess of its authorized amount and by not having sufficient
shares available upon the conversion of the debentures issued by the Company.

         THE COMPANY HAS VIOLATED SECTION 5 OF THE SECURITIES ACT.

         Section 5 of the Securities Act prohibits the public sale of securities
absent an effective registration statement being filed with the SEC, unless an
exemption from registration applies. All shares of NRES Common Stock issued upon
conversion of the NRES Debentures were sold by holders of the NRES Debentures
following conversion. This occurred during the period beginning on May 16, 2001
and ending on July 13, 2001 for the NRES Connecticut Debentures and beginning on
November 5, 2001 and ending on August 2, 2002 for the NRES DC Power Debentures.
In October 2000, the Company issued debentures pursuant to a merger with 2217
Acquisition Inc., a Nevada corporation. These debentures were also converted
into NRES Common Stock. These transactions were performed in a manner thought to
be exempt from the registration requirements of Section 5 of the Securities Act.
However, the requirements of the exemptions relied on do not appear to have been
satisfied.

         As of the date of this report, the Company has not received $540,000 in
additional proceeds from the sale of the NRES DC Power Debentures and has
$199,202 in NRES DC Power Debentures outstanding. The Company has no plans to
issue additional NRES Debentures for any amounts not yet received and has no
plans to permit outstanding NRES Debentures to be converted.

         THE COMPANY MAY HAVE VIOLATED THE FEDERAL PROXY RULES

         At the time of its incorporation, the Company had 1 million shares of
its common stock authorized. Since that time, the Company believed it had

                                       10
<PAGE>
effected the 1994 Stock Split, the 1999 Reverse Stock Split, the 40 Million
Share Increase, the 250 Million Share Increase, the 750 Million Share Increase
and the 1.5 Billion Share Increase. These changes in capital structure do not
appear to have been validly adopted by the Company's board of directors,
approved by the Company's shareholders or filed with the Secretary of State of
the State of Nevada, as required by the laws of the State of Nevada. The Company
may have violated the federal proxy rules by either (i) not obtaining the
requisite shareholder approval to effect these changes or (ii) not providing
shareholders with an Information Statement on Schedule 14C. As such, it appears
the Company has only 1 million shares of NRES Common Stock authorized. Until the
Company's board of directors and shareholders cure and ratify the overissuances
of stock, the 40 Million Share Increase, the 250 Million Share Increase, the 750
Million Share Increase and the 1.5 Billion Share Increase and comply with the
federal proxy rules in doing so by properly obtaining shareholder approval, the
Company may be liable to the holders of the NRES Common Stock issued in excess
of the authorized amount. The Company still may be subject to an enforcement
action for possible violations of this and other provisions of the federal
securities laws.

         THE COMPANY MAY NOT BE ABLE TO RAISE ADDITIONAL CAPITAL

         The Company plans to seek stockholder approval to cure and ratify the
Capital Changes and provide a related information statement on Schedule 14C to
its stockholders. Pending resolution of this matter, the Company will not be
able to realize any proceeds from the sale of the NRES Debentures, other debt,
or equity (other than from the purchase and sale of properties and proceeds from
mortgages on properties). Even if the Company were able to increase its
authorized capital, there can be no assurance that the Company will be able to
raise additional capital on a debt or equity basis, or to obtain mortgage
financing, to complete any of its projects under development (should they be
completed), or land purchased for resale or development at a profit.

         THE COMPANY IS IN DEFAULT OF THE NRES DEBENTURES

         The Company is in default under the terms of the NRES Debentures
because, among other things, the Company has no plans to register additional
NRES Common Stock to be issued upon conversion of the NRES Debentures that are
currently outstanding and has no plans to complete the issuance of the NRES
Debentures. Given the foregoing, the Company could face litigation by the
holders of the NRES Debentures seeking to enforce the Company's obligations
thereunder. This would likely have a substantial negative effect on the
Company's capital resources and would also negatively affect the Company's
liquidity. The Company is currently working with the holders to reach a mutually
satisfactory resolution.

OTHER RISKS

         THE COMPANY'S STOCK PRICE HAS DECLINED SIGNIFICANTLY AND MAY NOT
         RECOVER

         The trading price of NRES Common Stock has declined significantly since
approximately October 2001. The market for NRES Common Stock is essentially
non-existent and there can be no assurance of a change in the immediate future.





                                       11
<PAGE>
         RISKS RELATED TO REAL ESTATE AND RELATED INVESTMENTS

         The Company is subject to the risks associated with ownership,
operation and financing of real estate. These risks include, but are not limited
to, liability for environmental hazards, changes in general or local economic
conditions, changes in interest rates and the availability of construction and
permanent mortgage financing which may render the acquisition, sale or
refinancing of a property difficult or unattractive and which may make debt
service burdensome, changes in real estate and zoning laws, bonding
requirements, permitting requirements, changes in income taxes, real estate
taxes or federal or local economic or rent controls, floods, earthquakes and
other acts of nature and other factors beyond the Company's control. The
illiquidity of real estate investments generally may impair the Company's
ability to respond promptly to changing circumstances.

         Under federal, state and local environmental laws, ordinances and
regulations, the Company may be liable for removal or remediation costs, as well
as other costs (such as fines or injuries to persons and property) where its
employees may have arranged for removal, disposal or treatment of hazardous or
toxic substances. In addition, environmental laws impose liability for release
of asbestos-containing materials into the air, and third parties can seek
recovery from the Company for personal injury associated with those materials.

ITEM 2.  PROPERTIES

         As of September 30, 2004 the only real property owned by the Company is
the Bay Harbor Property. For a discussion of the Company's properties and
business operations, see "Item 1 - Business" under the subheading "Current
Operations".

         OUTSTANDING MORTGAGES

         As of September 30, 2004, the Company had six mortgages outstanding on
its properties. The balance due at maturity as of September 30, 2004 and 2003
and interest rate provisions of each of these mortgages is set forth below:
<TABLE>
<CAPTION>
         Notes and mortgages payable consist of the following
         at September 30, 2004 and 2003, respectively:                                           Restated
                                                                                 2004               2003
                                                                            --------------    ---------------
<S>                                                                         <C>               <C>
         Open credit line with a bank with interest at 8.50%
         unsecured.                                                              $ 23,907           $ 25,744

         Note payable with a bank, bearing interest at 7.00%,
         secured by real estate and due December 26, 2004.                        461,493            506,785

         Second mortgage with a bank, with interest at 9.50%,
         secured by real estate and due in 2004.                                  275,000            275,000

         Third mortgage with a bank, with interest at 9.50%,
         secured by real estate and due in 2004. Debt was                               -            290,000
         repaid in 2004.

         Second mortgage with a bank, with interest at 9.50%, secured
         secured by real estate and due in 2004. Debt was                               -            232,492
         repaid in 2004.

         Construction note payable with a bank, bearing interest at
         prime plus 1.5%, payable monthly, and due upon the sale
         of the underlying real estate or January 1, 2003. The note
         is secured by the real estate. Debt was repaid in 2004                         -            600,000
                                                                            --------------    ---------------

                     Total                                                      $ 760,400        $ 1,930,021
                                                                            ==============    ===============
</TABLE>
                                       12
<PAGE>
ITEM 3.  LEGAL PROCEEDINGS

         On August 2, 2002, Encore Builders filed suit against Conquistador
Plaza, a subsidiary of the Company, in the Circuit Court of the Eleventh
Judicial Circuit in Miami-Dade County, Florida seeking foreclosure of a
mechanic's lien with respect to the Conquistador Plaza development. Conquistador
Plaza retained Encore Builders to construct the Conquistador Plaza development.
Encore Builders asserted Conquistador Plaza breached the January 30, 2001
construction contract between Encore Builders and Conquistador Plaza. Encore
Builders asserted that $504,076.03 was due from Conquistador Plaza, Inc. and
sought damages with interest, costs and attorneys fees. Encore Builders was
bonded by Mountbatten Surety Company, Inc. On August 26, 2003, the parties
stipulated for a full settlement of all claims that existed amongst them. As
part of the settlement, $55,000 was to be paid for the benefit of Encore
Builders and $50,000 was to be paid to Mountbatten Surety Company, Inc.

         On December 13, 2002, the Company filed an Amended Complaint against
the Town of Bay Harbor Islands and the Director of the Town of Bay Harbor
Islands, Building and Zoning Department in the Circuit Court of the 11th
Judicial Circuit for Miami-Dade County, Florida regarding (i) an application by
the Company for zoning approval for a planned residential development overlay
district and (ii) approval from the Town of Bay Harbor for the development of
the Residences at Bay Harbor. Subsequent to the filing of this case, the Company
filed a related complaint in the United States District Court for the Southern
District of Florida. The federal claim was dismissed with prejudice on May 20,
2003. In July 2003 the Company filed a Second Amended Complaint amending its
complaint to add state law counts that were previously asserted by the Company
in its federal complaint. On June 30, 2004, the Circuit Court granted the Town
of Bay Harbor Island's summary judgment motion. As a result, the Company does
not expect its pending disposition of Bay Harbor to close as the acquisition
transaction was conditional upon the Company receiving a building permit for 60
units, which it no longer expects to obtain. The Company management team is
currently exploring the Company's options with respect to the Bay Harbor
property. While the Company has not entered into a purchase agreement with
respect to the Bay Harbor property, the Company has been soliciting offers for
the Bay Harbor property, and has received an offer of $1.3 million. As
management continues to consider its options, the Company has also been working
closely with the city to determine what permitting flexibility can be obtained
with respect to the Bay Harbor property.

         In the ordinary course of business, the Company and its subsidiaries
are involved in legal proceedings incidental to their operations. The Company
and its subsidiaries are not currently involved in any legal proceedings that
management believes would have a material adverse effect on the operations or
financial condition of the Company and its subsidiaries taken as a whole. See,
however, the discussion under Item 1, "Business," under the subheading,
"Operating History", with respect to the foreclosure proceedings on the
Company's Conquistador Plaza project.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable.

                                       13
<PAGE>
                                     PART II


ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

MARKET PRICE OF NRES COMMON STOCK

         NRES Common Stock is quoted on The Over the Counter Bulletin Board
under the symbol NRES.PK. While it appears there is no market for NRES Common
Stock, the Company has set forth in the table below the high and low closing bid
prices per share of NRES Common Stock as reported on The Over the Counter
Bulletin Board during the fiscal years ended September 30, 2003 and 2004. The
last reported bid price on The Over the Counter Bulletin Board for NRES Common
Stock was $.0001 on January 3, 2005.

    FISCAL YEAR ENDED                                   HISTORIC PRICES
      SEPTEMBER 30,                        PERIOD       HIGH       LOW
    -----------------      ------------------------   -------   -------
           2003            First Quarter...........   $0.0004   $0.0001
                           Second Quarter..........   $0.0090   $0.0001
                           Third Quarter...........   $0.0002   $0.0001
                           Fourth Quarter..........   $0.0010   $0.0001
           2004            First Quarter...........   $0.0002   $0.0001
                           Second Quarter..........   $0.0100   $0.0001
                           Third Quarter...........   $0.0006   $0.0001
                           Fourth Quarter..........   $0.0002   $0.0001


         HOLDERS

         As of December 30, 2004, there were approximately 594 holders of record
of NRES Common Stock.

         DIVIDEND POLICY

         The Company has never declared or paid any cash dividends on its
capital stock. The Company currently intends to retain future earnings, if any,
in the foreseeable future.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

         THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE
COMPANY'S FINANCIAL STATEMENTS AND NOTES TO THOSE STATEMENTS AND OTHER FINANCIAL
INFORMATION APPEARING ELSEWHERE IN THIS REPORT.

INTRODUCTION

         As of September 30, 2004, the Company had one major asset, the
Barcelona Apartments. This property is described in greater detail in the
section entitled "Item 1. Business". Revenues for the Company's fiscal year
ended September 30, 2004 were almost solely generated from the sale of
properties held in the Company's portfolio. The Company does not expect to
generate additional revenues other than from the sale of the remaining property
and from its newly commenced lending business.




                                       14
<PAGE>
RESULTS OF OPERATIONS

         The following is a discussion of the consolidated financial condition
and results of operations of the Company for the fiscal years ended September
30, 2004 and 2003, which should be read in conjunction with, and is qualified in
its entirety by, the consolidated financial statements and notes thereto
included elsewhere in this report.

         For the year ended September 30, 2004, the Company incurred net loss of
$1,126,721, compared to net loss of $2,135,936 for the comparable 2003 period.
The decrease in net loss in 2004 is primarily attributable to a slowdown in the
Company's operations, and lower operating costs due to property evaluation and
purchases.

RESULTS OF OPERATIONS FOR THE YEARS ENDED SEPTEMBER 30, 2004 AND SEPTEMBER 30,
2003

REVENUES

         Total revenues for the year ended September 30, 2004 decreased
approximately 71.8% to $1,600,120, as compared to $5,665,805 for the year ended
September 30, 2003. The primary source of revenues for the year ended September
30, 2004 was the sale of property, whereas the Company sold its two larger
properties in the year ended September 30, 2004.

         During the prior periods in which the Company had engaged in
construction operations, the Company capitalized direct construction costs. The
capitalized costs are recorded by project on the Company's balance sheet as an
inventory item. When the project is sold, the inventory is relieved and charged
to cost of sales. For the year ended September 30, 2003, the Company was in the
process of selling projects and properties, and, as such, more costs were moved
from inventory to cost of sales. Additionally, the Company was forced to
increase spending to complete construction.

COST OF SALES

         Cost of sales for the year ended September 30, 2003 were $6,681,460 as
compared to $1,476,459 for the year ended September 30, 2004. This 78.5%
decrease in cost of sales was largely attributable to s significant decrease in
activities relating to the sale of property.

OPERATING EXPENSES

         PROFESSIONAL FEES AND COMPENSATION EXPENSES

         Professional fees and compensation expenses for the year ended
September 30, 2004 totaled $555,420 compared to $746,133 for the year ended
September 30, 2003. This $190,713 decrease is primarily related to a decrease in
legal fees compared to the legal fees reimbursed to bring the Company into
compliance with state and federal law during the prior fiscal year.








                                       15
<PAGE>
         TRAVEL AND AUTOMOBILE EXPENSES

         Travel and automobile expenses for the year ended September 30, 2004
totaled $80,334 compared to $69,119 for the year ended September 30, 2003. This
16% increase is primarily due to the Company's management commuting for purposes
of resolving the Bay Harbor litigation and reviewing new opportunities to expand
the Company's business.

DEPRECIATION AND AMORTIZATION

         Depreciation and amortization for the year ended September 30, 2004
totaled $39,410 as compared to $28,853 for the year ended September 30, 2003.
The reason for this 36.6% increase is was the Company's amortization of loan
costs in December 2003.

OTHER INCOME (EXPENSE)

         Other income (expense) for the year ended September 30, 2003, was an
expense of $17,181, which increased 2,675.4% to an expense of $476,839 for the
year ended September 30, 2004. The reason for this increase was a writedown for
impairment of property under FASB 144.

LIQUIDITY AND CAPITAL RESOURCES

         To date, the Company has financed its operations primarily through
mortgage debt and the issuance of the NRES Debentures. At September 30, 2004,
the Company had $25,020 in cash and cash equivalents, a decrease of $769,695
from September 30, 2003. This 96.9% decrease in cash and cash equivalents is
attributable to the Company's lending money under its mortgage business as well
as paying off outstanding debt and compensation to officers. The Company made no
acquisitions of real estate holdings in the year ended September 30, 2003. The
Company has no plans to issue additional NRES Debentures for any amounts not yet
received and has no plans to permit outstanding NRES Debentures to be converted.

         The Company used $160,224 in investing activities for the year ended
September 30, 2004, as compared to $352,500 earned in the year ended September
30, 2003. This increase in cash used in investing activities is primarily due to
the Company lending money under its new mortgage business. Net cash used in
financing activities was $1,143,513 for the year ended September 30, 2004, as
compared to $3,892,246 used in the year ended September 30, 2003. This decrease
in net cash used in financing activities is attributable to the Company paying
off less debt in its 2004 fiscal year than 2003 because only one property was
sold in 2004.

         The Company had $534,042 in cash flow from operating activities for the
year ended September 30, 2004 as compared to $3,852,852 for the year ended
September 30, 2003. This decrease in cash flow from operating activities is
primarily due to the Company's decrease in the sale of properties. The Company
had stockholders' deficit of $3,852,123 at September 30, 2004. The Company's
determination that it has issued shares in excess of its authorized amount
resulted in the Company's determination to continue to classify all shares
issued in excess of 1 million as temporary equity.

         The Company believes that through its operations as a mortgage lender
and the sale of property owned by it, it has sufficient cash resources to
maintain operations for a period of at least 12 months. The Company expects,
however, to dramatically reduce operating expenses going forward. Further,

                                       16
<PAGE>
because the Company recently began its lending operations and only holds one
property, there can be no assurance that such funds will actually be liquid and
available. See "Outlook", below for a discussion on possible limits on the
Company's ability to raise capital. Cash requirements will largely depend upon
the availability of real estate acquisition opportunities, the costs to continue
funding its real estate development projects and costs related to its lending
operations.

          The Company's ability to rely on exemptions from the registration
requirements of Section 5 of the Securities Act relating to the issuance,
exchange and conversion of its debentures has been called into question. It
appears the Company may have violated Section 5. The ramifications of this may
entail a possible rescission offer to the stockholders affected within the past
year. Section 13 of the Securities Act provides that no action shall be
maintained for offering or selling securities in violation of Section 5 unless
that action is brought within one year of the date of the violation. One year
has passed from the initial placement of the NRES Debentures and from the
conversion of the NRES Debentures issued. As of the date of this report, there
have been no actions filed against the Company based upon a violation of Section
5. Because the statute of limitations has run, it is unlikely that these holders
of NRES Common Stock will file an action against the Company. However, any such
action maintained against the Company could have a substantial impact on the
Company's liquidity. As such, the Company could not afford to offer rescission.
If a court were to determine that rescission rights existed, the Company might
be compelled to seek bankruptcy protection.


OUTLOOK

         The Company invested substantial funds in its previous projects, but
only realized material profits from these projects upon the sale of the real
estate. While the Company entered into agreements to sell its remaining
property, it cannot guarantee this transaction will close or that the two sales
will occur in a timely fashion. If the Company is unable to close its
disposition transaction on this property, the Company may not be able to realize
additional revenues. The Company estimates the general overhead costs necessary
to sustain its existence (excluding expenses related to its remaining real
estate property and newly commenced mortgage business) to be $65,000 per month.

         Currently, the Company is using its available cash on hand as resources
to begin its mortgage business. Much of these funds were derived from the
Company's recent sales of its real property holdings. Shortly after the Company
files a definitive information statement on Schedule 14C with the SEC to effect
and ratify certain changes to its capital structure, and effects these changes,
the Company intends to enter into a financing agreement with an as of yet
unidentified third party to generate cash to broaden its mortgage lending
business. The Company currently has no third party funding source for loans it
originates. The Company intends both to originate and service loans.

         At the time of its incorporation, the Company had 1 million shares of
its common stock authorized. Since that time, the Company believed it had
effected the 1994 Stock Split, the 1999 Reverse Stock Split, the 40 Million
Share Increase, the 250 Million Share Increase, the 750 Million Share Increase
and the 1.5 Billion Share Increase. These changes in capital structure appear to
have not been validly adopted by the Company's board of directors, approved by
the Company's shareholders or filed with the Secretary of State of the State of
Nevada, as required by the laws of the State of Nevada. As such, it appears the
Company currently has only 1 million shares of NRES Common Stock authorized, and

                                       17
<PAGE>
the majority of the validly issued shares are held by Richard and Pamela Astrom
as tenants by the entireties. The Company believes a majority of the Company's
validly issued and outstanding shares and the board of directors can cure and
ratify the overissuances of stock and the aforementioned changes in capital
structure. Until that time, the Company may be liable to the holders of the NRES
Common Stock issued in excess of the authorized amount. The Company also
believes the issuance of Class A common stock to Christopher Astrom was not
authorized as an amendment to the Company's Articles of Incorporation was never
filed with the Secretary of State of the State of Nevada. The Company believes
the recipient of the unauthorized shares, Christopher Astrom, may have a claim
against the Company for damages, but it is unlikely that Christopher Astrom will
file a claim against the Company as he is an officer, director and principal
shareholder of the Company. Also, as discussed below, the Company's board of
directors and the holders of a majority of its validly issued shares intend to
authorize the creation of Class A common stock and issue shares to Christopher
Astrom.

         It has come to the Company's attention that, as a result of the
conversion of the debentures issued by the Company into NRES Common Stock,
coupled with the decrease in the trading price of NRES Common Stock, investors
were entitled to more shares of NRES Common Stock than is authorized under the
Company's Articles of Incorporation. As a result, the Company has 1,938,566,046
shares of NRES Common Stock issued, which exceeds the number of shares
authorized. As stated above, the Company believes the holders of a majority of
the Company's validly issued and outstanding shares and the board of directors
can cure and ratify the overissuances of stock. If this cannot be accomplished,
the Company may be liable to the holders of the NRES Common Stock issued in
excess of the authorized amount in an amount equal to 1,937,566,046 shares (the
number of shares issued in excess of the amount authorized) multiplied by the
price each such share was issued for (which ranged from approximately $.0001 to
$5.4 per share). The overissuance, together with the Company's inability to
increase its authorized number of shares, has eliminated the Company's ability
to raise capital through issuances of publicly registered securities. The
Company believes it will not be able to continue trading NRES Common Stock or
increase its capital resources through selling publicly registered securities
until the overissuance is cured and the Company increases the authorized number
of shares of NRES Common Stock. The Company's officers and directors may have
also violated their fiduciary duties to the Company by permitting the Company to
issue shares in excess of its authorized amount and by not having sufficient
shares available upon the conversion of the debentures issued by the Company.


         Section 5 of the Securities Act prohibits the public sale of securities
absent an effective registration statement being filed with the SEC, unless an
exemption from registration applies. All shares of NRES Common Stock issued upon
conversion of the NRES Debentures were sold by holders of the NRES Debentures
following conversion. This occurred during the period beginning on May 16, 2001
and ending on July 13, 2001 for the NRES Connecticut Debentures and beginning on
November 5, 2001 and ending on August 2, 2002 for the NRES DC Power Debentures.
In October 2000, the Company issued debentures pursuant to a merger with 2217
Acquisition Inc., a Nevada corporation. These debentures were also converted
into NRES Common Stock. These transactions were performed in a manner thought to
be exempt from the registration requirements of Section 5 of the Securities Act.
However, the requirements of the exemptions relied on do not appear to have been
satisfied. As of the date of this report, the Company has not received $540,000
in additional proceeds from the sale of the NRES DC Power Debentures and has
$199,202 in NRES DC Power Debentures outstanding. The Company has no plans to
issue additional NRES Debentures for any amounts not yet received and has no
plans to permit outstanding NRES Debentures to be converted.

                                       18
<PAGE>
         The Company may also have violated the federal proxy rules by either
(i) not obtaining the requisite shareholder approval to effect the changes in
capital structure described above or (ii) not providing shareholders with an
Information Statement on Schedule 14C. As such, it appears the Company has only
1 million shares of NRES Common Stock authorized. Until the Company's board of
directors and shareholders cure and ratify the overissuances of stock, the 40
Million Share Increase, the 250 Million Share Increase, the 750 Million Share
Increase and the 1.5 Billion Share Increase and comply with the federal proxy
rules in doing so by properly obtaining shareholder approval, the Company may be
liable to the holders of the NRES Common Stock issued in excess of the
authorized amount. These holders can demand the issuance of the shares in excess
of the Company's authorized amount be rescinded, causing the Company to purchase
the shares at the price at which they were sold. The Company still may be
subject to an enforcement action for possible violations of this and other
provisions of the federal securities laws.

         The Company's ability to meet its continuing operating expenses largely
depends on its ability to continue to raise capital (i) through the sale of debt
or equity, (ii) through construction and permanent mortgage financing, (iii)
through the completion and sale, or sale prior to completion, of the Company's
real estate projects, (iv) through the sale of land purchased, but not
developed, by the Company and (v) through operations as a mortgage lender. In
the likely event the Company is forced to sell its remaining property prior to
completion or the time such property appreciates substantially, should such
increase occur, the Company's profit, if any, from its real estate activities
would be materially adversely affected. There can be no assurance the Company
will be able to raise additional capital on a debt or equity basis, or obtain
mortgage financing, complete any of its projects under development, or sell any
completed development projects (should they be completed) or land purchased for
resale or development at a profit.

CRITICAL ACCOUNTING ESTIMATES

         The Company's discussion and analysis of its financial condition is
based on the Company's consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. Given the limited nature of the Company's business, it is
generally not required to make critical accounting estimates.

OFF-BALANCE SHEET ARRANGEMENTS

         The Company has no off-balance sheet arrangements and has not entered
into any transactions involving unconsolidated, limited purpose entities or
commodities contracts.











                                       19
<PAGE>
ITEM 7.  FINANCIAL STATEMENTS

                        BAGELL, JOSEPHS & COMPANY, L.L.C.
                          Certified Public Accountants

                               High Ridge Commons
                                 Suites 400-403
                           200 Haddonfield Berlin Road
                           Gibbsboro, New Jersey 08026
                        (856) 346-2828 Fax (856) 346-2882

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders of
National Residential Properties, Inc. and Subsidiaries
Coral Gables,  Florida

We have audited the accompanying consolidated balance sheets of National
Residential Properties, Inc. and Subsidiaries (the "Company") as of September
30, 2004 and 2003 and the related consolidated statements of operations, changes
in stockholders' (deficit), changes in temporary equity, and cash flows for the
years then ended. These consolidated financial statements are the responsibility
of management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

As discussed in Notes 1 and 14 to the consolidated financial statements, the
Company has restated its September 30, 2003 financial statements to correct the
amortization expense of loan fees. The effect of this change was to increase the
net loss and deficit for the year ended September 30, 2003 by $9,050.
Additionally, the opening balance equity has been restated to reflect certain
adjustments that stemmed from changes in the September 30, 2001 consolidated
audited financial statements. The net effect of the 2001 changes was to increase
the net loss by $1,830,731. The recognition of the 2001 expenses had no effect
on the stockholders' equity (deficit) since the expenses were associated with
the issuance of the Company's common stock. The expenses recognized were
attributed to amortization of interest and fees associated with convertible
debentures issued by the Company. Additionally, the Company classified certain
shares of its common stock as "Temporary" equity to "Permanent" equity.

         MEMBER OF:    AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
                       NEW JERSEY SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
                       PENNSYLVANIA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
                       NEW YORK STATE SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS




                                       20
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           SEPTEMBER 30, 2004 AND 2003

                                     ASSETS
                                     ------                         (RESTATED)
                                                        2004           2003
                                                   -------------  -------------

  Cash and cash equivalents                        $     25,020   $    794,715
  Inventory - real estate holdings                    1,300,000      2,972,420
  Fixed assets, net of depreciation                      27,612         31,531
  Loan origination fees, net                             17,688         70,633
  Loans receivable - others                             116,600              -
  Mortgages receivable and other                         68,606         33,636
  Investment securities                                   2,523          2,523
  Deposits                                                    -          8,725
                                                   -------------  -------------


TOTAL ASSETS                                       $  1,558,049   $  3,914,183
                                                   =============  =============


LIABILITIES
  Accounts payable and accrued expenses            $     32,632   $     92,424
  Debentures payable                                    199,202        199,202
  Notes and mortgages payable                           760,400      1,930,021
                                                   -------------  -------------


      TOTAL LIABILITIES                                 992,234      2,221,647
                                                   -------------  -------------


TEMPORARY EQUITY                                      4,417,938      4,417,938
                                                   -------------  -------------


STOCKHOLDERS' (DEFICIT)
  Common stock, $.001 par value; 1,500,000 shares
    authorized and 1,000,000 shares issued and
    outstanding, respectively                             1,000          1,000
  Common stock class A voting, $.001 par value; 0
      shares authorized, issued and outstanding               -              -
  Additional paid- in capital                         3,606,580      3,606,580
  Accumulated deficit                                (7,459,703)    (6,332,982)
                                                   -------------  -------------


      TOTAL STOCKHOLDERS' (DEFICIT)                  (3,852,123)    (2,725,402)

                                                   -------------  -------------


TOTAL LIABILITIES, TEMPORARY EQUITY AND
   STOCKHOLDERS' (DEFICIT)                         $  1,558,049   $  3,914,183
                                                   =============  =============

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

                                       21
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2004 AND 2003

                                                                    (RESTATED)
                                                   2004               2003
                                                 -------------    -------------

OPERATING REVENUES
  Revenue                                        $  1,600,120     $  5,665,805

COST OF SALES                                       1,476,459        6,861,460

                                                 -------------    -------------


GROSS PROFIT (LOSS)                                   123,661       (1,195,655)

                                                 -------------    -------------


OPERATING EXPENSES
   Professional fees and compensation expenses        555,420          746,133
   Advertising                                          4,310            3,865
   Travel and automobile expenses                      80,334           69,119
   Telephone and utilities                             12,537           10,442
   Real estate taxes and property maintenance          20,600           23,512
   Office expenses                                     22,665           24,913
   Miscellaneous                                       38,267           16,263
   Depreciation and amortization                       39,410           28,853

                                                 -------------    -------------

       TOTAL OPERATING EXPENSES                       773,543          923,100

                                                 -------------    -------------


(LOSS) BEFORE OTHER INCOME (EXPENSE)                 (649,882)      (2,118,755)

                                                 -------------    -------------


OTHER INCOME (EXPENSE)

   Impairment expense                                (472,175)               -
   Bad debt                                            (8,067)               -
   Interest expense                                   (14,982)         (17,794)
   Interest income                                     18,385              613

                                                 -------------    -------------

       TOTAL OTHER INCOME (EXPENSE)                  (476,839)         (17,181)

                                                 -------------    -------------


NET LOSS BEFORE PROVISION FOR INCOME TAXES         (1,126,721)      (2,135,936)
Provision for Income Taxes                                  -                -
                                                 -------------    -------------


NET LOSS APPLICABLE TO COMMON SHARES             $ (1,126,721)    $ (2,135,936)
                                                 =============    =============


NET LOSS PER BASIC AND DILUTED SHARES            $      (1.13)    $      (2.14)
                                                 =============    =============


WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING                              1,000,000        1,000,000
                                                 =============    =============

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

                                       22
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                 FOR THE YEARS ENDED SEPTEMBER 30, 2004 AND 2003
<TABLE>
<CAPTION>
                                                                         CLASS A      ADDITIONAL
                                                     COMMON STOCK      COMMON STOCK    PAID-IN     ACCUMULATED   (RESTATED)
                                                  SHARES     AMOUNT   SHARES  AMOUNT   CAPITAL       DEFICIT       TOTALS
                                                ---------  ---------- ------  ------  ----------  ------------  ------------

<S>                                             <C>          <C>      <C>     <C>     <C>         <C>           <C>
    Balance, September 30, 2002                 1,000,000    $1,000        -  $    -  $3,606,580  $(4,197,046)  $  (589,466)

    Net loss                                            -         -        -       -           -   (2,126,886)            -
                                                ---------  ---------- ------  ------  ----------  ------------  ------------


    Balance, September 30, 2003
    as originally reported                              -         -        -       -           -   (6,323,932)   (6,323,932)

    Adjustment for amortization expense
                                                        -         -        -       -           -       (9,050)       (9,050)
                                                ---------  ---------- ------  ------  ----------  ------------  ------------

    Balance, September 30, 2003, as restated    1,000,000     1,000        -       -   3,606,580   (6,332,982)   (1,726,402)


    Net loss                                            -         -        -       -           -   (1,126,721)   (1,126,721)
                                                ---------  ---------- ------  ------  ----------  ------------  ------------

    Balance, September 30, 2004,                1,000,000    $1,000        -  $    -  $3,606,580  $(7,459,703)  $(3,852,123)
                                                =========  ========== ======  ======  ==========  ============  ============

The accompanying notes are an integral part of the condensed consolidated financial statements.
</TABLE>





















                                       23
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF CHANGES IN TEMPORARY EQUITY
                 FOR THE YEARS ENDED SEPTEMBER 30, 2004 AND 2003
<TABLE>
<CAPTION>
                                                                          CLASS A                        ADDITIONAL
                                               COMMON STOCK             COMMON STOCK                      PAID-IN
                                           SHARES         AMOUNT      SHARES     AMOUNT     DISCOUNT      CAPITAL        TOTALS

<S>                                    <C>             <C>           <C>         <C>      <C>           <C>           <C>
Balance, September 30, 2002            1,937,566,046   $ 1,937,566   1,000,000   $1,000   $ (687,311)   $ 3,166,683   $ 4,417,938

No activity                                        -             -           -        -            -              -             -
                                      --------------   -----------   ---------   ------   -----------   -----------   -----------

Balance, September 30, 2003           1,937,566,046     1,937,566    1,000,000    1,000     (687,311)     3,166,683     4,417,938

No activity                                       -             -            -        -           -               -             -
                                      -------------   -----------    ---------   ------   -----------   -----------   -----------


Balance, September 30, 2004           1,937,566,046   $ 1,937,566    1,000,000   $1,000   $ (687,311)   $ 3,166,683   $ 4,417,938
                                      =============   ===========    =========   ======   ===========   ===========   ===========

The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>































                                       24
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED SEPTEMBER 30, 2004 AND 2003
<TABLE>
<CAPTION>
                                                                                            (RESTATED)
                                                                          2004                 2003
                                                                     -------------         -------------

<S>                                                                  <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                          $ (1,126,721)         $ (2,135,936)
                                                                     -------------         -------------

ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:

     Depreciation and amortization                                         39,410                28,853
     Impairment Expense                                                   472,175                     -

  CHANGES IN ASSETS AND LIABILITIES
     Decrease in inventory - real estate holdings                       1,200,245             5,951,218
     (Increase) decrease in deposits                                        8,725                (2,000)
     Increase (decrease) in accounts payable and
       and accrued expenses                                               (59,792)               10,717
                                                                     -------------         -------------
     Total adjustments                                                  1,660,763             5,988,788
                                                                     -------------         -------------


     NET CASH PROVIDED BY OPERATING ACTIVITIES                            534,042             3,852,852

                                                                     -------------         -------------


CASH FLOWS FROM INVESTING ACTIVITIES
    (Acquisition) disposal of fixed assets - net                           (8,654)               (1,652)
    (Increase) decrease loans to/from others                             (116,600)              312,778
    (Increase) decrease in mortgage and notes receivable                  (34,970)               41,374
                                                                     -------------         -------------


     NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                 (160,224)              352,500
                                                                     -------------         -------------

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












                                       25
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED SEPTEMBER 30, 2004 AND 2003



                                                                                            (RESTATED)
                                                                          2004                 2003
                                                                     -------------         -------------


CASH FLOWS FROM FINANCING ACTIVITIES
    Payment of loan origination costs                                      26,108               (88,181)
    Net change in notes and mortgages payable                          (1,169,621)           (3,804,065)

                                                                     -------------         -------------

        NET CASH (USED IN) FINANCING ACTIVITIES                        (1,143,513)           (3,892,246)

                                                                     -------------         -------------


NET INCREASE (DECREASE) IN
    CASH AND CASH EQUIVALENTS                                            (769,695)              313,106

CASH AND CASH EQUIVALENTS -
    BEGINNING OF YEAR                                                     794,715               481,609

                                                                     -------------         -------------


CASH AND CASH EQUIVALENTS - END OF YEAR                              $     25,020          $    794,715
                                                                    ==============         =============


SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION:

CASH PAID DURING THE YEAR FOR:
    Interest expense                                                 $     14,982          $      1,851
                                                                    ==============         =============

The accompanying notes are an integral part of the condensed consolidated financial statements.
</TABLE>














                                       26
<PAGE>
                NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                              SEPTEMBER 30, 2004 AND 2003


NOTE 1 -          ORGANIZATION AND BASIS OF PRESENTATION
                  --------------------------------------

                  National Residential Properties, Inc. (the "COMPANY"), was
                  originally incorporated in the State of Nevada on October 18,
                  1971 under the name of Mister Las Vegas, Inc. On December 15,
                  1994, the Company merged with a privately owned company,
                  National Rehab Properties, Inc., a Florida corporation formed
                  on October 1, 1993. The surviving Nevada corporation changed
                  its name to National Rehab Properties, Inc. and became
                  authorized to conduct business in the State of Florida on
                  August 17, 1995. On October 10, 2000, the Company changed its
                  name to National Residential Properties, Inc.

                  The Company's business was residential real estate development
                  and building construction services. From 1993 to 1999 the
                  Company's business concentrated in investing in and
                  revitalizing single family homes in established older
                  residential neighborhoods in urban areas. The Company bought
                  either single unit vacant properties and built single family
                  homes or it bought abandoned homes and completed all
                  renovations to the home followed by a sale of the home. During
                  1999, while retaining its efforts in the renovation of urban
                  single family homes as one aspect of the business, the Company
                  entered a second phase of business, the development,
                  construction and ownership of multifamily housing projects.

                  Beginning in the fiscal year ending September 30, 1999, the
                  Company initiated a program of acquisition of properties
                  suitable for development as multifamily housing or multiple
                  unit single family development tracts. Since 1999, the Company
                  has purchased four tracts with the intention of building from
                  60 to 72 apartment units on each tract and one twenty acre
                  citrus grove for single family home development. In April
                  2000, the Company acquired Encore Services, Inc. ("Encore
                  Services").

                  On May 4, 2001, the Company's wholly-owned subsidiary,
                  Connecticut Acquisition Corp. No. 1, ("Connecticut
                  Acquisition") entered into a joint venture to develop a parcel
                  of land located in Hebron, Connecticut, (the "Hebron Parcel")
                  as a senior adult community pursuant to a land development
                  agreement with Mr. Nathan Kahn and various entities controlled
                  by Mr. Nathan Kahn. The objective of this development was to
                  either sell developed lots to builders, or erect dwellings
                  themselves.

                  Mr. Kahn's entities had obtained options to purchase and
                  develop other properties, and the Kahn entities advised that
                  they would need additional funding to pay for the expenses in
                  connection with the obtaining and maintenance of these
                  options.



                                       27
<PAGE>
                  The land development agreement called for Connecticut
                  Acquisition to fund the initial costs of acquisition and
                  development, and, after deduction of expenses from gross
                  revenues, profits would be divided 50-50 between the parties.

                  In contemplation of the financing of this project, on April
                  12, 2001, Connecticut Acquisition, obtained a loan from
                  accredited investors evidenced by its 8% Series A Senior
                  Subordinated Convertible Redeemable Debentures due April 13,
                  2003 (the "Connecticut Acquisition Debentures"), which were
                  convertible from time to time into shares of Connecticut
                  Acquisition's Class A Common Stock. On May 8, 2001, following
                  the acquisition of the Hebron Parcel, Connecticut Acquisition
                  was merged into the Company. As a result, all rights and
                  obligations of Connecticut Acquisition inured to the benefit
                  of and became binding upon the Company. Pursuant to the
                  merger, the Connecticut Acquisition Debentures were
                  surrendered and canceled, and new debentures, identical to the
                  Connecticut Acquisition Debentures, together with accompanying
                  conversion rights into authorized but unissued shares of the
                  Company's common stock, par value $.001 per share ("NRES
                  Common Stock"), were issued by the Company to the holders of
                  the Connecticut Acquisition Debentures.

                  Pursuant to an agreement executed on December 26, 2001, made
                  effective as of October 31, 2001 and a Statutory Warranty Deed
                  dated October 31, 2001, the Company sold to Senior Adult
                  Lifestyle, Inc ("Senior Adult Lifestyle") a related entity
                  through common corporate officers, all of the rights, title
                  and interest in (i) the Hebron Parcel; and (ii) contracts to
                  purchase certain parcels of real property in Watertown, New
                  Milford, Granley and East Windsor, Connecticut. As additional
                  consideration for the conveyance to Senior Adult Lifestyle,
                  the Company received on February 1, 2002, 20 million shares of
                  common stock of Genesis Capital Corporation of Nevada
                  ("Genesis"), the parent of Senior Adult Lifestyles. These
                  shares were based on a value of $0.10 per share, the value the
                  stock was trading for in December 2001, for an agreed
                  consideration of $2 million. Should the value at the earlier
                  of (a) the time the Company sells these shares or (b) the
                  expiration of three years from the date of the conveyance fall
                  below $2 million, Genesis will be required to issue to the
                  Company, additional shares of Genesis Common Stock to make up
                  the difference in value. The value of the Genesis Common Stock
                  was $.009 ($180,000) on February 1, 2002.

                  On October 17, 2001, the Company's other wholly-owned
                  subsidiary, DC Power Products Acquisition Corp, ("DC Power"),
                  obtained a loan from accredited investors evidenced by its 8%
                  Series A Senior Subordinated Convertible Redeemable Debentures
                  due October 17, 2003 (the "DC Power Debentures"), which were
                  convertible from time to time into shares of DC Power's common
                  stock. DC Power was merged into the Company on November 1,
                  2001.

                  As a result, all rights and obligations inured to the benefit
                  of and became binding upon the Company. Pursuant to the
                  merger, the DC Power Debentures were surrendered and canceled,
                  and new debentures, identical to the DC Power Debentures,
                  together with accompanying conversion rights into authorized
                  but unissued shares of NRES Common Stock, were issued by the
                  Company to the holders of the DC Power Debentures.

                                       28
<PAGE>
                  In October 2003, the Company began lending money to
                  individuals in the form of mortgage notes. The Company acts as
                  a broker on some of these transactions and receives loan
                  origination fees for its services.

                  The Company has restated its audited consolidated financial
                  statements for September 30, 2001. The Company adjusted its
                  consolidated financial statements for certain expenses not
                  previously recognized relating to the amortization of discount
                  on debenture conversions and fees and interest associated with
                  the debentures in the amount of $1,830,731 that occurred in
                  that fiscal year. There were also adjustments made to the
                  statements of operations due to a change in the way the
                  Company accounts for its sales of its real estate inventory.
                  The changes resulted in an increase in the operating revenues
                  of $232,000, an increase in the cost of sales of $200,149 and
                  an increase in its gross profit and operating expenses of
                  $31,851 for the year ended September 30, 2001. Cumulatively,
                  the Company's accumulated deficit increased $1,830,731 to
                  $3,849,533 from $2,108,802 at September 30, 2001 and the net
                  loss of the Company increased to $2,414,375 from $583,644.
                  Additionally, in September 30, 2003 the Company restated its
                  financial statements to adjust for the under reporting of
                  amortization expense in the amount of $9,050.

NOTE 2 -          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                  ------------------------------------------

                  PRINCIPLES OF CONSOLIDATION

                  The consolidated financial statements include the accounts of
                  the Company and all of its wholly owned subsidiaries. All
                  significant intercompany accounts and transactions have been
                  eliminated in consolidation.

                  USE OF ESTIMATES

                  The preparation of financial statements in conformity with
                  accounting principles generally accepted in the United States
                  of America requires management to make estimates and
                  assumptions that affect the reported amounts of assets and
                  liabilities and disclosures of contingent assets and
                  liabilities at the date of the financial statements and the
                  reported amounts of revenues and expenses during the reporting
                  period. Actual results could differ from those estimates.

                  REVENUE AND COST RECOGNITION

                  Sales of real estate are generally recognized under the full
                  accrual method. Under that method, gain is not recognized
                  until the collectibility of the sales price is reasonably
                  assured and the earnings process is virtually complete. When a
                  sale does not meet the requirements for income recognition a
                  gain is deferred until those requirements are met.

                                       29
<PAGE>
                  The Company recorded the sale of property to Genesis Capital
                  Corporation of Nevada under the cost recovery method. When
                  this method is used, no profit is recognized on the sales
                  transaction until the cost of the property sold is recovered
                  (See Note 1).

                  Acquisition and other direct costs, interest, and other
                  indirect costs related to acquisition and development of lots
                  are capitalized. Capitalized costs are allocated based on the
                  relative sales value of each lot.

                  The Company also recognizes revenue from loan origination fees
                  upon the closing of the various mortgages it provides. The
                  Company follows SFAS 91, whereby loan origination fees are
                  deferred and recognized over the life of the loan as an
                  adjustment of yield (interest income).


                  CASH AND CASH EQUIVALENTS

                  The Company considers all highly liquid debt instruments and
                  other short-term investments with an initial maturity of three
                  months or less to be cash equivalents.

                  The Company maintains cash and cash equivalent balances at
                  several financial institutions, which are insured by the
                  Federal Deposit Insurance Corporation up to $100,000.

                  FIXED ASSETS

                  Fixed assets are stated at cost. Depreciation is computed
                  primarily using the straight-line method over the estimated
                  useful life of the assets.

                  Equipment and other                   3 to 5 Years
                  Vehicle                                 3   Years

                  INCOME TAXES

                  The income tax benefit is computed on the pretax loss based on
                  the current tax law. Deferred income taxes are recognized for
                  the tax consequences in future years of differences between
                  the tax basis of assets and liabilities and their financial
                  reporting amounts at each year-end based on enacted tax laws
                  and statutory tax rates.

                  ADVERTISING

                  Costs of advertising are expensed as incurred. Advertising
                  costs were $4,310 and $3,865 for the years ended September 30,
                  2004 and 2003, respectively.

                  EARNINGS (LOSS) PER SHARE OF COMMON STOCK

                  Historical net income (loss) per common share is computed
                  using the weighted average number of common shares
                  outstanding. Diluted earnings per share (EPS) includes
                  additional dilution from common stock equivalents, such as
                  stock issuable pursuant to the exercise of stock options and
                  warrants. Common stock equivalents were not included in the
                  computation of diluted earnings per share when the Company
                  reported a loss because to do so would be antidilutive for
                  periods presented.

                                       30
<PAGE>
                  The following is a reconciliation of the computation for basic
                  and diluted EPS:

                                                                    Restated
                                                       2004           2003
                                                       ----           ----

                  Net Loss                        ($ 1,126,721)   ($2,135,936)

                  Weighted-average common shares
                    outstanding (Basic)              1,000,000      1,000,000

                  Weighted-average common stock
                    equivalents:
                        Stock options                    -              -
                        Warrants                         -              -

                  Weighted-average common shares
                      outstanding (Diluted)          1,000,000      1,000,000

                  Options and warrants outstanding to purchase stock were not
                  included in the computation of diluted EPS because inclusion
                  would have been antidilutive.

                  There are no options and warrants outstanding to purchase
                  stock at September 30, 2004 and 2003.

                  INVESTMENT SECURITIES

                  Management determines the appropriate classification of
                  investment securities at the time they are acquired and
                  evaluates the appropriateness of such classifications at each
                  balance sheet date. The classification of those securities and
                  the related accounting policies are as follows:

                  Trading securities: Trading securities are held for resale in
                  anticipation of short-term fluctuations in market prices.
                  Trading securities, consisting primarily of actively traded
                  equity securities, are stated at fair value. Realized and
                  unrealized gains and losses are included in income.

                  Available-for-sale securities: Available-for-sale securities
                  consist of marketable equity securities not classified as
                  trading securities. Available-for-sale securities are stated
                  at fair value, and unrealized holding gains and losses, net of
                  the related deferred tax effect, are reported as a separate
                  component of stockholders' equity (deficit).



                                       31
<PAGE>
                  Dividends on marketable equity securities are recognized in
                  income when declared. Realized gains and losses are included
                  in income. Realized gains and losses are determined on the
                  basis of the actual cost of the securities sold.

                  FAIR VALUE OF FINANCIAL INSTRUMENTS

                  The carrying amount reported in the consolidated balance
                  sheets for cash and cash equivalents, loans receivable,
                  accounts payable and accrued expenses approximate fair value
                  because of the immediate or short-term maturity of these
                  financial instruments. The carrying amount reported for notes
                  and mortgages payable approximates fair value because, in
                  general, the fair value of the notes and mortgages payable is
                  estimated based on interest rates for the same or similar debt
                  offered to the Company having the same or similar remaining
                  maturities and collateral requirements.

                  LOAN ORIGINATION FEES

                  Represent fees in connection with obtaining mortgages on the
                  various properties. The loan origination fees are being
                  amortized straight-line over a two-year period. Amortization
                  expense for the years ended September 30, 2004 and 2003 is
                  $26,838 and $8,948, respectively.

                  RECENT ACCOUNTING PRONOUNCEMENT

                  On October 3, 2004, the FASB issued Statement of Financial
                  Accounting Standards No. 144, "Accounting for the Impairment
                  or Disposal of Long-Lived Assets" ("SFAS 144"), that is
                  applicable to the financial statements issued for fiscal years
                  beginning after December 15, 2001. The FASB's new rules on
                  asset impairment supersedes SFAS 121, "Accounting for the
                  Impairment of Long-Lived Assets and for Long-Lived Assets to
                  Be Disposed Of," and portions of Accounting Principles Board
                  Opinion 30, "Reporting the Results of Operations."

                  This standard provides a single accounting model for
                  long-lived assets to be disposed of and significantly changes
                  the criteria that would have to be met to classify an asset as
                  held-for-sale. Classification as held-for-sale is an important
                  distinction since such assets are not depreciated and are
                  stated at the lower of fair value and carrying amount. This
                  Standard also requires expected future operating losses from
                  discontinued operations to be displayed in the period (s) in
                  which the losses are incurred, rather than as of the
                  measurement date as presently required. As a result of FASB No
                  144, the Company has recorded an impairment loss at September
                  30, 2004 of $472,175 on its inventory.

                  RECLASSIFICATIONS

                  Certain amounts for the year ended September 30, 2003 have
                  been reclassified to conform with the presentation of the
                  September 30, 2004 amounts. The reclassifications have no
                  effect on the net loss for the year ended September 30, 2003.

                                       32
<PAGE>
NOTE 3 -          INVENTORY - REAL ESTATE HOLDINGS
                  --------------------------------

                  Inventory consists of land held for development and is valued
                  at the lower of cost or market value. Cost includes
                  acquisition, renovation and carrying costs specifically
                  identified with each unit.

                  The Company follows SFAS 144 accounting for the impairment or
                  disposal of long-lived assets. An impairment loss shall be
                  recognized only if the carrying value of a long lived-asset
                  (asset group) is not recoverable and exceeds its fair value.
                  Since the Company's assets are not generating income, the fair
                  valued is determined and estimated by management and current
                  market conditions, the amount at which the asset could be
                  bought or sold in a current transaction between willing
                  parties, that is other than a forced or liquidation sale.

NOTE 4-           MORTGAGES RECEIVABLE AND OTHER
                  -----------------------------

                  Represents amounts due from individuals who purchased property
                  from the Company and other various amounts due the Company.
                  Amounts due at September 30, 2004 and 2003 were $68,606 and
                  $33,636, respectively.


NOTE 5-           FIXED ASSETS
                  ------------

                  Fixed assets consist of the following at September 30, 2004
                  and 2003:

                                                             2004        2003
                                                             ----        ----

                  Office equipment and other              $ 30,969    $ 22,315
                  Vehicles                                  31,509      31,509
                                                          ---------   ---------
                                                            62,478      53,824
                  Less:  accumulated depreciation          (34,866)    (22,293)
                                                          ---------   ---------

                                Total                     $ 27,612    $ 31,531
                                                         =========   =========


                  Depreciation expense was $12,572 and $11,305 for the years
                  ended September 30, 2004 and 2003, respectively.







                                       33
<PAGE>
NOTE 6-           NOTES AND MORTGAGES PAYABLE
                  ---------------------------
<TABLE>
<CAPTION>
                  Notes and mortgages payable consist of the following
                  at September 30, 2004 and 2003, respectively:                        RESTATED
                                                                           2004          2003
                                                                        ---------    -----------
<S>                                                                     <C>            <C>
                  Open credit line with a bank with interest at 8.50%
                  unsecured.                                            $ 23,907       $ 25,744

                  Note payable with a bank, bearing interest at 7.00%,
                  secured by real estate and due December 26, 2004.      461,493        506,785

                  Second mortgage with a bank, with interest at 9.50%,
                  secured by real estate and due in 2004.                275,000        275,000

                  Third mortgage with a bank, with interest at 9.50%,
                  secured by real estate and due in 2004. Debt was             -        290,000
                  repaid in 2004.

                  Second mortgage with a bank, with interest at 9.50%,
                  secured by real estate and due in 2004. Debt was             -        232,492
                  repaid in 2004.

                  Construction note payable with a bank, bearing
                  interest at prime plus 1.5%, payable monthly, and
                  due upon the sale of the underlying real estate or
                  January 1, 2003. The note is secured by the real
                  estate. Debt was repaid in 2004.                             -        600,000
                                                                       ----------    -----------

                                Total                                  $ 760,400     $1,930,021
                                                                       ==========    ===========
</TABLE>

NOTE 7-           CONVERTIBLE DEBENTURES PAYABLE
                  ------------------------------

                  The Company has convertible debentures outstanding at
                  September 30, 2004 and 2003 in the amount of $199,202. These
                  debentures accrue interest at 8% per annum. These debentures
                  mature along with the related interest at November 2003. The
                  debentures are convertible at the investors' discretion
                  pursuant to the convertible debenture agreement. As of
                  September 30, 2004 these debentures are in default. The
                  investors have not contacted the Company about new payment
                  terms. The Company purports that the investors will wait until
                  the Company clears its' contingency problems (see Note 9).

NOTE 8-           ACQUISITIONS
                  ------------

                  On February 10, 2000, the Company acquired MAS XV Acquisitions
                  Corp. for 1,500,000 shares of its common stock valued at $.19
                  per share or $285,000. Additionally, on April 1, 2000, the
                  Company acquired 80% of the Encore Services, Inc. for 250,000
                  common shares of its stock valued at $33,750. The Company

                                       34
<PAGE>
                  restated its September 30, 2000 consolidated financial
                  statements and expensed the entire amounts of these
                  acquisitions because they were determined to have no value.
                  Both companies had no assets or liabilities upon the purchase.

                  On May 8, 2001, the Company merged with Connecticut
                  Acquisition upon the acquisition of the Hebron Parcel. The
                  Hebron Parcel was subsequently conveyed on October 31, 2001 to
                  Genesis, an entity related to the Company through common
                  officers and directors.

                  DC Power merged into the Company on November 1, 2001. The
                  Company currently has no operations.


NOTE 9-           CONTINGENCY/UNCERTAINTY
                  -----------------------

                  The Company during the year ended September 30, 2001, became
                  aware that some or all of the changes to its capital structure
                  were not validly adopted by the Company's board of directors,
                  approved by the Company's shareholders, or filed with the
                  Secretary of State of the State of Nevada as required by the
                  laws of the State of Nevada. As a result, it appears that the
                  Company never has been authorized to issue more than 1,000,000
                  shares of its common stock. All shares of the Company's common
                  stock issued in excess of 1,000,000 shares appear to have been
                  issued in excess of the Company's authorized amount,
                  therefore, these shares have been reclassified to temporary
                  equity (See Notes 10 and 11).

                  Additionally, the Company issued common stock above the
                  Company's authorized amount and issued shares that at the time
                  may not have been in compliance with the registration
                  provisions of Section 5 of the Securities Act of 1933, as
                  amended. The full impact of these items are unknown at this
                  time. As a result, the Company had reclassified $3,927,047 to
                  temporary equity as of September 30, 2001. Subsequent to
                  September 30, 2001, the Company issued 843,265,695 shares of
                  stock in connection with the conversion of debentures that
                  have been classified as temporary equity. This resulted in an
                  increase to temporary equity of $490,891 for the year ended
                  September 30, 2002. This account acts as a reserve for capital
                  that the Company may be required to repay.

                  The Company expects to reclassify certain amounts from
                  temporary equity to permanent stockholders' equity after
                  curing any over issuances of its common stock pursuant to
                  Section 13 of the Securities Act.

NOTE 10-          TEMPORARY EQUITY
                  ----------------

                  The Company has recorded on its balance sheet a temporary
                  equity account for those securities issued that may not be in
                  compliance with the registration provisions of Section 5 of
                  the Securities Act of 1933, as amended and for the issuance of

                                       35
<PAGE>
                  common stock issued above its authorized amount. All related
                  amounts that were previously included in common stock and
                  additional paid-in capital of the permanent stockholders'
                  equity (deficit) section have been reclassified to temporary
                  equity as their redemption may not be solely within the
                  control of the issuer.

                  Temporary equity at September 30, 2004 and 2003, was
                  $4,417,938. Substantially all the shares issued in connection
                  with the conversion of debentures have been reclassified as
                  temporary equity.

NOTE 11-          STOCKHOLDERS' EQUITY (DEFICIT)
                  ------------------------------

                  As of September 30, 2004 and 2003, there were 1,000,000 shares
                  authorized, and 1,000,000 shares issued and outstanding of the
                  Company's common stock with a par value of $.001.

                  The Company issued 843,265,695 shares of common stock for the
                  year ended September 30, 2002. These shares were recorded in
                  temporary equity along with 1,094,300,351 shares of common
                  stock from fiscal 2001 which have been reclassified to
                  temporary equity (see Note 10). All of the 843,265,695 shares
                  of common stock issued, were issued in excess of authorized
                  limits.

                  As of September 30, 2004 and 2003, there were 0 shares
                  authorized issued and outstanding of the Company's Class A
                  Voting common stock with a par value of $.001.

                  The shares of common stock issued for the years ended
                  September 30, 2002 relate to the debenture conversions.

NOTE 12-          INCOME TAXES
                  ------------

                  The net deferred tax assets in the accompanying consolidated
                  balance sheets include the following components at September
                  30, 2004 and 2003.



                                                         2004         2003

                  Deferred tax assets                 $2,831,248   $2,529,573
                  Deferred tax valuation allowance    (2,831,248)  (2,529,573)

                  Net deferred tax assets             $     -0-    $     -0-
                                                      ===========  ===========

                  Due to the uncertainty of utilizing the approximate $7,459,703
                  and $6,323,932 in net operating losses, respectively, and
                  recognizing the deferred tax assets, an offsetting valuation
                  allowance has been established.


                                       36
<PAGE>
NOTE 13-          LITIGATION
                  ----------

                  On August 2, 2002, Encore Builders, Inc. filed suit against
                  Conquistador Plaza, Inc., a wholly owned subsidiary of the
                  Company, in the Circuit Court of the Eleventh Judicial Circuit
                  in Miami-Dade County, Florida seeking the foreclosure of a
                  mechanic's lien with respect to the Conquistador Plaza
                  development. Encore Builders, Inc. asserts that $504,076 is
                  due from Conquistador Plaza, Inc. The Company paid in 2003,
                  $342,858, and the remaining balance of $161,218 was written
                  off at September 30, 2003 as the case has been settled.

                  On December 13, 2002, the Company filed an Amended Complaint
                  against the Town of Bay Harbor Islands and the Director of the
                  Town of Bay Harbor Islands, Building and Zoning Department in
                  the Circuit Court of the 11th Judicial Circuit for Miami-Dade
                  County, Florida regarding (i) an application by the Company
                  for zoning approval for a planned residential development
                  overlay district and (ii) approval from the Town of Bay Harbor
                  for the development of the Residences at Bay Harbor.
                  Subsequent to the filing of this case, the Company filed a
                  related complaint in the United States District Court for the
                  Southern District of Florida. The federal claim was dismissed
                  with prejudice on May 20, 2003. In July 2003 the Company filed
                  a Second Amended Complaint amending its complaint to add state
                  law counts that were previously asserted by the Company in its
                  federal complaint. On June 30, 2004, the Circuit Court granted
                  the Town of Bay Harbor Island's summary judgment motion. As a
                  result, the Company does not expect its pending disposition of
                  Bay Harbor to close as the acquisition transaction was
                  conditional upon the Company receiving a building permit for
                  60 units, which it no longer expects to obtain. The Company
                  management team is currently exploring the Company's options
                  with respect to the Bay Harbor property. While the Company has
                  not entered into a purchase agreement with respect to the Bay
                  Harbor property, the Company has been soliciting offers for
                  the Bay Harbor property, and has received an offer of $1.3
                  million. As management continues to consider its options, the
                  Company has also been working closely with the city to
                  determine what permitting flexibility can be obtained with
                  respect to the Bay Harbor property.

NOTE 14-          PRIOR PERIOD ADJUSTMENT AND RESTATEMENT
                  ---------------------------------------

                  There were no adjustments effecting the years ended September
                  30, 2004. The Company restated its September 30, 2003
                  financial statements to correct the amortization expense of
                  loan fees. The effect of this change was to increase the net
                  loss and deficit by $9,050.

                  Accordingly, the deficit is restated as follows as it was
                  carried through to reflect the restated beginning balance at
                  October 1, 2002.
<TABLE>
<CAPTION>
<S>                                                                       <C>
                  Deficit, September 30, 2001, as previously reported     ($2,018,802)
                  Prior Period Adjustment, September 30, 2001(Note 1)      (1,830,731)
                                                                         -------------

                  Deficit, September 30, 2001, as restated                ($3,849,533)
                  Net loss for the year ended September 30, 2002             (347,513)
                                                                         -------------

                  Deficit, September 30, 2002                             ($4,197,046)
                                                                         =============
</TABLE>
                  Accordingly, related stockholders' equity (deficit) accounts
                  and temporary equity accounts were adjusted to account for
                  this recognition (See Notes 9, 10 and 11).

                                       37
<PAGE>
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

                  Not applicable.

ITEM 8A. CONTROLS AND PROCEDURES

         EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES


              Based on their evaluation of the Company's disclosure controls and
         procedures conducted as of the end of the period covered by this report
         on Form 10-KSB, Richard Astrom, the Company's Chief Executive Officer,
         and Christopher Astrom, the Company's Chief Financial Officer, have
         concluded that they are the only individuals involved in the Company's
         disclosure process. The Company has no formal procedures in place for
         processing and assembling information to be disclosed in the Company's
         periodic reports. The Company's system is designed so that information
         is retained by the Company and relayed to counsel and the Company's
         accountants as it becomes available. Though the Company has had
         difficulty implementing its disclosure controls and procedures in the
         past, the Company's principal executive officer and principal financial
         officer believe that as of the end of the period being reported, the
         Company's disclosure controls and procedures are effective. Further,
         the Company believes that, given its size, an extensive disclosure
         controls and procedures system is not necessary.


         CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING


              No changes in the Company's internal control over financial
         reporting have come to management's attention during the Company's last
         fiscal quarter that have materially affected, or are likely to
         materially affect, the Company's internal control over financial
         reporting.


ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT


              The Company's board of directors currently consists of two people.
         The following information with respect to the principal occupation or
         employment, other affiliations and business experience during the last
         five years of the directors has been furnished to the Company by such
         directors. Except as indicated, the directors have had the same
         principal occupation for the last five years. The Company has no
         standing audit committee. Because the Company has no standing audit
         committee it does not have an audit committee financial expert serving
         on the audit committee.

                                       38
<PAGE>
              There have been no material changes to the procedures by which
         security holders may recommend nominees to the Company's board of
         directors.

         NAME               AGE   PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
         -----------------  ---   ----------------------------------------------

         Richard Astrom      57   Richard Astrom has been a director of the
                                  Company since 1994. Richard Astrom Secretary
                                  of Vacation Ownership and has served as one of
                                  its directors since September of 2001. Mr.
                                  Astrom has served as President and a director
                                  of Genesis Capital Corporation of Nevada since
                                  September of 2001 and a director of Prime Rate
                                  Investors, Inc. since August of 2002.

         Christopher Astrom  33   Christopher Astrom has been a director of the
                                  Company since June of 1995. Christopher Astrom
                                  is currently President, Chief Executive
                                  Officer and Chief Financial Officer of
                                  Vacation Ownership, and has served as one of
                                  its directors since August of 2001. Mr. Astrom
                                  has served as Secretary and Treasurer of
                                  Genesis Capital Corporation of Nevada since
                                  September of 2001 and is currently a director
                                  and has served as President of Prime Rate
                                  Investors, Inc. since September of 2002.


EXECUTIVE OFFICERS

         The following individuals were serving as executive officers of the
Company on February 5, 2004:


NAME               AGE   POSITION WITH THE COMPANY
-----------------  ---   ----------------------------------------------

Richard Astrom      57   President and Chief Executive Officer

Christopher Astrom  33   Vice President, Secretary and Chief Financial Officer

         Richard Astrom is Christopher Astrom's father. The Company does not
have any employees besides Christopher Astrom and Richard Astrom.

         The Company's two current directors and officers, Richard Astrom and
Christopher Astrom, are each directors and officers of another public company,
Capital Solutions I, Inc. ("Capital Solutions I") and another entity, each which
may be deemed an affiliate of the Company. Richard Astrom and Christopher Astrom
divide their time between the Company, Capital Solutions I and this other
entity, and devote time to each company as they determine to be necessary and
appropriate. As such, the amount of time Richard Astrom and Christopher Astrom
devote to the Company varies widely, depending upon the needs of the Company.
There are times when they put in up to 10 hours per day, and other times where
they do not dedicate any time at all, as the Company does not require it.

                                       39
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Exchange Act requires the Company's directors,
executive officers and persons who own more than ten percent of the outstanding
NRES Common Stock to file with the SEC and the Company reports on Form 4 and
Form 5 reflecting transactions affecting beneficial ownership. Based solely upon
its review of the copies of such forms received by it, the Company believes
that, during the Company's 2004 fiscal year, all persons complied with such
filing requirements.

CODE OF ETHICS

         The Company has not yet adopted a code of ethics that applies to its
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions. The Company's
two directors, Richard and Christopher Astrom, have chosen not to adopt such a
code of ethics because they are also the Company's principal executive officer
and principal financial officer, and also the Company's only two employees.

ITEM 10. EXECUTIVE COMPENSATION
<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE
NAME AND PRINCIPAL POSITION     YEAR       SALARY          BONUS    LONG-TERM          ALL OTHER COMPENSATION
                                                                    COMPENSATION
                                                                    AWARDS: SECURITIES
                                                                    UNDERLYING OPTIONS
                                      ANNUAL COMPENSATION (1)
<S>                             <C>      <C>               <C>      <C>                 <C>
Richard Astrom (2)              2004     $418,888(4)         -        -                        -
   President and                2003     $200,000(4)         -        -                        -
   Chief Executive Officer      2002     $505,525(5)         -        -                        -

Christopher Astrom (3)          2004         $75,000         -        -                        -
   Vice President, Secretary    2003         $62,578         -        -                        -
   and Chief Financial Officer  2002         $76,439         -        -                        -
</TABLE>

         (1) In accordance with the rules of the Securities and Exchange
Commission, compensation in the form of perquisites and other personal benefits
has been omitted for the Company's named executive officers because the
aggregate amount of such perquisites and other personal benefits constituted
less than the lesser of $50,000 or 10% of the total of annual salary and bonuses
for each named executive officer in the Company's prior fiscal year.

         (2) Richard Astrom joined the Company in 1994.

         (3) Christopher Astrom joined the Company in 1994.

         (4) The amount reflected above includes amounts paid to Richard Astrom
to reimburse him for legal fees paid by him to Richard and Christopher Astrom's
counsel who assisted Richard and Christopher Astrom with securities matters
which also benefited the Company.

         (5) Includes charge for management fees and write off for loan during
the year ended September 30, 2002.

         Richard Astrom and Christopher Astrom are directors of the Company.
Directors currently do not receive a stated salary from the Company for their
service as members of the board of directors.

                                       40
<PAGE>
EMPLOYMENT AND SEPARATION AGREEMENTS


         The Company does not have any employment or separation agreements with
either Christopher Astrom or Richard Astrom, the Company's only employees as of
December 31, 2004.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN  BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED  STOCKHOLDER MATTERS

         To the Company's knowledge, the following table sets forth information
with respect to beneficial ownership of outstanding NRES Common Stock as of
December 30, 2004 by:

         o    each person known by the Company to beneficially own more than 5%
              of the outstanding NRES Common Stock;

         o    each of the Company's named executive officers;

         o    each of the Company's directors; and

         o    all of the Company's executive officers and directors as a group.

         Beneficial ownership is determined in accordance with the rules of the
SEC and includes voting or investment power with respect to the securities as
well as securities which the individual or group has the right to acquire within
sixty days of the original filing of this Form 10-KSB. Unless otherwise
indicated, the address for those listed below is c/o National Residential
Properties, Inc., 6915 Red Road, Suite 222, Coral Gables, Florida 33143. Except
as indicated by footnote, and subject to applicable community property laws, the
persons named in the table have sole voting and investment power with respect to
all shares of NRES Common Stock shown as beneficially owned by them. The number
of shares of NRES Common Stock outstanding used in calculating the percentage
for each listed person includes the shares of NRES Common Stock underlying
options held by such persons that are exercisable within 60 days of September
30, 2004, but excludes shares of NRES Common Stock underlying options held by
any other person. The number of shares of NRES Common Stock outstanding as of
September 30, 2004 was 1,938,566,046. Except as noted otherwise, the amounts
reflected below are based upon information provided to the Company and filings
with the SEC.
<TABLE>
<CAPTION>
                    NAME OF                NUMBER        PERCENT OF CLASS       NUMBER         PERCENT OF CLASS
                  BENEFICIAL                                  SHARES BENEFICIALLY OWNED (1)
                     OWNER                        COMMON STOCK                      CLASS A COMMON STOCK
<S>                                         <C>               <C>             <C>                 <C>
Richard Astrom (2)(3)                          763,050           0.04%                -                 -
Christopher Astrom (4)(5)                   18,030,000           0.93%        1,000,000            100.00%
All directors and executive officers as a   18,793,050           0.97%        1,000,000            100.00%
     group (2 persons)
</TABLE>


                                       41
<PAGE>
         (1) The percent and number of shares beneficially owned reflected in
the table set forth above assumes that the Capital Changes had been effective
and that the 1 million shares of Class A common stock issued to Christopher
Astrom by the Company on June 17, 1999 (each share of which was entitled to 20
votes) were validly issued.]

         (2) Richard Astrom serves as President, Chief Executive Officer and a
director of the Company.

         (3) As discussed in the section entitled "Background Capitalization
Information," and "Item 1 - Business" under the subheading "Overview," the
Company may not be authorized to issue more than 1 million shares of Common
Stock. As such, Richard and Pamela Astrom, as tenants by the entireties, appear
to hold a majority of the authorized shares of the Company.

         (4) Christopher Astrom serves as a Vice President, Secretary, Chief
Financial Officer and a director of the Company.

         (5) On June 17, 1999, the Company attempted to issue 2 million shares
of Class A Common Stock to Christopher Astrom. Each such share of Class A Common
Stock was entitled to 20 votes. The Company believes that these shares were not
validly issued. Including these shares in the number of shares beneficially
owned by Christopher Astrom would yield a beneficial ownership percentage of
1.03%.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


         Nearly all of the amount paid to Richard Astrom as compensation was
paid to reimburse him for legal fees paid by him to Richard and Christopher
Astrom's counsel who assisted them with securities matters which also benefited
the Company.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits:

Exhibit
Number        Description

3.1*          Articles of Incorporation of the Company

3.2***        Certificate of Amendment to Articles of Incorporation of the
              Company

3.4*          Bylaws of the Company

4.1**         8% Series SPB Senior Subordinated Convertible Redeemable
              Debentures due November 3, 2002

4.2**         8% Series SPC Senior Subordinated Convertible Redeemable
              Debentures due April 12, 2003

4.3**         8% Series SPD Senior Subordinated Convertible Redeemable
              Debentures due October 17, 2003

                                       42
<PAGE>
10.1**        Securities Subscription Agreement dated as of October 10, 2000 by
              and between 2217 Acquisition Inc. and Louvre Investors LLC, Yellow
              Stream Company LLC and Carlsbad LLC

10.2**        Assignment and Assumption Agreement dated as of November 3, 2000
              by and between 2217 Acquisition Inc. and National Residential
              Properties, Inc.

10.3**        Securities Subscription Agreement dated as of April 12, 2001 by
              and between Connecticut Acquisition Corp. No. 1 and Louvre
              Investors LLC, Yellow Stream Company LLC and Carlsbad Capital LLC

10.4**        Assignment and Assumption Agreement dated as of April 19, 2001 by
              and between Connecticut Acquisition Corp. 1 and National
              Residential Properties, Inc.

10.5**        Securities Subscription Agreement dated as of October 17, 2001 by
              and between DC Power Products Acquisition Corp. and Equity
              Planners LLC, Sea Lion Investors LLC and Myrtle Holdings LLC

10.6**        Assignment and Assumption Agreement dated as of November 5, 2001
              by and between DC Power Acquisition Corp. and National Residential
              Properties, Inc.

10.7**        Real Estate Purchase and Sale Agreement dated as of December 17,
              2001 by and between Dennis Almendares and National Residential
              Properties, Inc.

10.8**        Real Estate Purchase and Sale Agreement dated as of May 20, 2002
              by and between Gateway Mortgage Bankers and National Residential
              Properties, Inc.

31.1          Certification of the Principal Executive Officer pursuant to Rule
              13a-14(a)

31.2          Certification of the Principal Financial Officer pursuant to Rule
              13a-14(a)

32.1          Certifications of the Principal Executive Officer and Principal
              Financial Officer pursuant to 18 U.S.C. Section 1350

*             Previously filed.


**            Filed as an exhibit to the Company's quarterly report on Form
              10-QSB for the period ended June 30, 2002, filed with the
              Securities and Exchange Commission on January 8, 2004.

***           Filed as an exhibit to the Company's annual report on Form 10-KSB
              for the year ended September 30, 2000, filed with the Securities
              and Exchange Commission on January 16, 2001.


         (b) Reports on Form 8-K:

              None.


                                       43
<PAGE>
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT AND NON-AUDIT FEES


         Aggregate fees for professional services rendered for the Company by
Bagell, Josephs & Company, L.L.C for the fiscal years ended September 30, 2004
and 2003 are set forth below. The aggregate fees included in the Audit category
are fees billed for the fiscal years for the audit of the Company's annual
financial statements and review of financial statements and statutory and
regulatory filings or engagements. The aggregate fees included in each of the
other categories are fees billed in the fiscal years. (All references to "$" in
this Proxy Statement are to United States dollars.)


                               FISCAL YEAR 2004       FISCAL YEAR 2003
AUDIT FEES                         $35,000                $37,500
AUDIT-RELATED FEES                       -                      -
TAX FEES                            $2,609                 $2,000
ALL OTHER FEES                           -                      -
                               ----------------       ----------------
     TOTAL                         $37,609                $39,500

         Audit Fees for the fiscal years ended September 30, 2004 and 2003 were
for professional services rendered for the audits of the consolidated financial
statements of the Company, quarterly review of the financial statements included
in Quarterly Reports on Form 10-Q, consents, and other assistance required to
complete the year end audit of the consolidated financial statements.

         Audit-Related Fees as of the fiscal years ended September 30, 2004 and
2003 were for assurance and related services reasonably related to the
performance of the audit or review of financial statements and not reported
under the caption Audit Fees.

         Tax Fees as of the fiscal years ended September 30, 2004 and 2003 were
for professional services related to tax compliance, tax authority audit support
and tax planning.

         There were no fees that were classified as All Other Fees as of the
fiscal years ended September 30, 2004 and 2003.


         As the Company does not have a formal audit committee, the services
described above were not approved by the audit committee under the de minimus
exception provided by Rule 2-01(c)(7)(i)(C) under Regulation S-X. Further, as
the Company does not have a formal audit committee, the Company does not have
audit committee pre-approval policies and procedures.

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                   NATIONAL RESIDENTIAL PROPERTIES, INC.


                                   By:  /s/ RICHARD ASTROM
                                        --------------------------------
                                        Richard Astrom
                                        President and Chief Executive Officer


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on January 5, 2005.


                                       44
<PAGE>
SIGNATURE                                   TITLE(S)


/s/ RICHARD ASTROM        President, Chief Executive Officer and Director
------------------
Richard Astrom


/s/ CHRISTOPHER ASTROM    Vice President, Chief Financial Officer, Secretary
----------------------    and Director
Christopher Astrom