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U.S. SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


FORM 10-Q


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934 
|          
|           |  | FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005                                           
|          
|Or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | Transition Period
    From           To                                                     

COMMISSION FILE NUMBER 333-32800


VESTIN FUND I, LLC


(Exact Name of Registrant as Specified in Its Charter)


|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|NEVADA                                                             |  | 88-0446244                              
|(State or Other Jurisdiction of
    Incorporation or Organization) |  | (I.R.S. Employer
    Identification No.)

8379 WEST SUNSET ROAD, LAS VEGAS, NEVADA 89113


(Address of Principal Executive Offices) (Zip Code)


Registrants Telephone Number: 702.227.0965


þ o


þ o


o þ












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TABLE OF CONTENTS


|                             |  |                                                                                                 |    |      |    | 
|---------------------------- |  | ----------------------------------------------------------------------------------------------- | -- | ---- | -- | 
|                             |  |                                                                                                 |    | Page |   
|                             |  |                                                                                                 |    |      |   
|PART I FINANCIAL INFORMATION
|Item 1.                      |  | Financial Statements                                                                            |    |      |    | 
|                             |  | Balance Sheets as of September 30,
    2005 (unaudited), and June 30, 2005                      |    |      | 3  | 
|                             |  | Statements of Income for the Three Months
    Ended September 30, 2005 and 2004 (unaudited)     |    |      | 4  | 
|                             |  | Statement of Members Equity for the
    Three Months Ended September 30, 2005 (unaudited)      |    |      | 5  | 
|                             |  | Statements of Cash Flows for the Three
    Months Ended September 30, 2005 and 2004 (unaudited) |    |      | 6  | 
|                             |  | Notes to Financial Statements
    (unaudited)                                                   |    |      | 7  | 
|Item 2.                      |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations       |    |      | 24 | 
|Item 3.                      |  | Quantitative and Qualitative Disclosures
    About Market Risk                                  |    |      | 38 | 
|Item 4.                      |  | Control and Procedures                                                                          |    |      | 39 | 
|                            
|PART II OTHER INFORMATION   
|Item 1.                      |  | Legal Proceedings                                                                               |    |      | 41 | 
|Item 2.                      |  | Unregistered Sales of Equity 
    Securities and Use of Proceeds                               |    |      | 42 | 
|Item 3.                      |  | Defaults Upon Senior Securities                                                                 |    |      | 43 | 
|Item 4.                      |  | Submission of Matters to a Vote of Security
    Holders                                         |    |      | 43 | 
|Item 5.                      |  | Other Information                                                                               |    |      | 43 | 
|Item 6.                      |  | Exhibits                                                                                        |    |      | 43 | 
|SIGNATURES                   |  |                                                                                                 | 44 |     
|Exhibit 31.1                
|Exhibit 31.2                
|Exhibit 32                  



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VESTIN FUND I, LLC


BALANCE SHEETS


|                                                                                                                                                                                            |                                          |                                       |            |           |               |   |            |            |            | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------- | ------------------------------------- | ---------- | --------- | ------------- | - | ---------- | ---------- | ---------- | 
|                                                                                                                                                                                            |                                          | September 30, 2005                    |            |           | June 30, 2005 |  
|                                                                                                                                                                                            |                                          |                                       |            |           |               |  
|                                                                                                                                                                                            |                                          | (Unaudited)                           |            |           |              
|ASSETS                                                                                                                                                                                     
|Cash                                                                                                                                                                                        |                                          | $                                     | 5,430,000  |           |               | $ | 2,862,000  |           
|Certificates of deposit                                                                                                                                                                     |                                          |                                       | 300,000    |           |               |   | 300,000    |           
|Interest and other receivables                                                                                                                                                              |                                          |                                       | 1,181,000  |           |               |   | 682,000    |           
|Due from Fund Manager                                                                                                                                                                       |                                          |                                       | 48,000     |           |               |   |           |           
|Note receivable, net of allowance of $692,000 at
    September 30, 2005 and $706,000 at June 30, 2005                                                                                       |                                          |                                       | 119,000    |           |               |   | 119,000    |           
|Real estate held for sale                                                                                                                                                                   |                                          |                                       | 4,310,000  |           |               |   | 7,757,000  |           
|Real estate held for sale  seller financed                                                                                                                                                 |                                          |                                       | 8,634,000  |           |               |   | 10,374,000 |           
|Investment in real estate loans, net of allowance for loan
    losses of $1,896,000 at September 30, 2005 and
    June 30, 2005                                                             |                                          |                                       | 56,437,000 |           |               |   | 54,878,000 |           
|Assets under secured borrowings                                                                                                                                                             |                                          |                                       | 1,643,000  |           |               |   | 11,391,000 |           
|                                                                                                                                                                                            |                                          |                                       |            |           |               |  
|                                                                                                                                                                                            |                                          | Total assets                          |            | $         | 78,102,000    |   |            | $          | 88,363,000 | 
|                                                                                                                                                                                            |                                          |                                       |            |           |               |  
|                                                                                                                                                                                           
|LIABILITIES AND MEMBERS EQUITY                                                                                                                                                            
|Liabilities                                                                                                                                                                                 |                                          |                                       |            |           |               |   |            |           
|                                                                                                                                                                                            | Accounts payable and accrued liabilities |                                       | $          | 464,000   |               |   | $          | 443,000    |           
|                                                                                                                                                                                            | Due to Fund Manager                      |                                       |            |          |               |   |            | 922,000    |           
|                                                                                                                                                                                            | Due to Vestin Group                      |                                       |            |          |               |   |            | 2,000      |           
|                                                                                                                                                                                            | Due to Vestin Fund II                    |                                       |            | 1,595,000 |               |   |            | 1,560,000  |           
|                                                                                                                                                                                            | Due to Vestin Fund III                   |                                       |            | 6,000     |               |   |            | 6,000      |           
|                                                                                                                                                                                            | Secured borrowings                       |                                       |            | 1,643,000 |               |   |            | 11,391,000 |           
|                                                                                                                                                                                            | Deferred income                          |                                       |            | 542,000   |               |   |            | 768,000    |           
|                                                                                                                                                                                            |                                          |                                       |            |           |               |  
|                                                                                                                                                                                            |                                          | Total liabilities                     |            |           | 4,250,000     |   |            |            | 15,092,000 | 
|                                                                                                                                                                                            |                                          |                                       |            |           |               |  
|Members equity  authorized
    10,000,000 units, 7,668,851 units and
    7,686,323 units issued at $10 per unit and outstanding
    at September 30, 2005 and June 30, 2005, respectively |                                          |                                       | 73,852,000 |           |               |   | 73,271,000 |           
|                                                                                                                                                                                            |                                          |                                       |            |           |               |  
|                                                                                                                                                                                            |                                          | Total members equity                 |            |           | 73,852,000    |   |            |            | 73,271,000 | 
|                                                                                                                                                                                            |                                          |                                       |            |           |               |  
|                                                                                                                                                                                            |                                          | Total liabilities and members equity |            | $         | 78,102,000    |   |            | $          | 88,363,000 | 
|                                                                                                                                                                                            |                                          |                                       |            |           |               |  



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VESTIN FUND I, LLC


STATEMENTS OF INCOME


|                                                                          |                                                      |                          |           |           |                      |   |           |           |           | 
|------------------------------------------------------------------------- | ---------------------------------------------------- | ------------------------ | --------- | --------- | -------------------- | - | --------- | --------- | --------- | 
|                                                                          |                                                      | For the Three Months     |           |           | For the Three Months |  
|                                                                          |                                                      | Period Ended             |           |           | Period Ended         |  
|                                                                          |                                                      | September 30, 2005       |           |           | September 30, 2004   |  
|                                                                          |                                                      |                          |           |           |                      |  
|                                                                          |                                                      | (Unaudited)              |          
|Revenues                                                                  |                                                      |                          |           |           |                      |   |           |          
|                                                                          | Interest income from investment in real estate loans |                          | $         | 1,853,000 |                      |   | $         | 1,738,000 |          
|                                                                          | Loan fees                                            |                          |           | 25,000    |                      |   |           | 72,000    |          
|                                                                          | Other income                                         |                          |           | 336,000   |                      |   |           | 11,000    |          
|                                                                          |                                                      |                          |           |           |                      |  
|                                                                          |                                                      | Total revenues           |           |           | 2,214,000            |   |           |           | 1,821,000 | 
|Operating expenses                                                        |                                                      |                          |           |           |                      |   |           |          
|                                                                          | Management fees                                      |                          |           | 69,000    |                      |   |           | 64,000    |          
|                                                                          | Interest expense                                     |                          |           | 50,000    |                      |   |           | 308,000   |          
|                                                                          | Loss on sale of real estate held for sale            |                          |           |          |                      |   |           | 463,000   |          
|                                                                          | Write down on real estate held for sale              |                          |           |          |                      |   |           | 14,000    |          
|                                                                          | Expenses related to real estate held for sale        |                          |           | 75,000    |                      |   |           | 229,000   |          
|                                                                          | Professional Fees                                    |                          |           | 110,000   |                      |   |           | 86,000    |          
|                                                                          | Other                                                |                          |           | 1,000     |                      |   |           | 2,000     |          
|                                                                          |                                                      |                          |           |           |                      |  
|                                                                          |                                                      | Total operating expenses |           |           | 305,000              |   |           |           | 1,166,000 | 
|                                                                          |                                                      |                          |           |           |                      |  
|                                                                          |                                                      | NET INCOME               |           | $         | 1,909,000            |   |           | $         | 655,000   | 
|                                                                          |                                                      |                          |           |           |                      |  
|Net income allocated to members                                           |                                                      | $                        | 1,909,000 |           |                      | $ | 655,000   |          
|                                                                          |                                                      |                          |           |           |                      |  
|Net income allocated to members per weighted average membership
    units |                                                      | $                        | 0.25      |           |                      | $ | 0.08      |          
|                                                                          |                                                      |                          |           |           |                      |  
|Weighted average membership units                                         |                                                      |                          | 7,667,852 |           |                      |   | 8,385,189 |          
|                                                                          |                                                      |                          |           |           |                      |  



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VESTIN FUND I, LLC





STATEMENT OF MEMBERS EQUITY


FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005


|                                                  |                                |       |           |         |        |   |            |            |  
|------------------------------------------------- | ------------------------------ | ----- | --------- | ------- | ------ | - | ---------- | ---------- | -
|                                                  |                                | Units |           |         | Amount |  
|                                                  |                                |       |           |         |        |  
|Members equity at June 30, 2005                  |                                |       | 7,686,323 |         |        | $ | 73,271,000 |           
|                                                  | Distributions                  |       |           |         |        |   |            | (1,160,000 | )
|                                                  | Reinvestments of distributions |       |           | 10,414  |        |   |            | 104,000    |  
|                                                  | Members redemptions           |       |           | (27,886 | )      |   |            | (272,000   | )
|                                                  | Net income                     |       |           |         |        |   |            | 1,909,000  |  
|                                                  |                                |       |           |         |        |  
|Members equity at September 30, 2005 (Unaudited) |                                |       | 7,668,851 |         |        | $ | 73,852,000 |           
|                                                  |                                |       |           |         |        |  



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VESTIN FUND I, LLC





STATEMENTS OF CASH FLOWS


|                                                    |                                                                                            |                                                                          |                                           |             |                    |            |           |            |            |            |  
|--------------------------------------------------- | ------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------ | ----------------------------------------- | ----------- | ------------------ | ---------- | --------- | ---------- | ---------- | ---------- | -
|                                                    |                                                                                            | For the Three Months Ended                                               |                                          
|                                                    |                                                                                            |                                                                          |                                          
|                                                    |                                                                                            | September 30, 2005                                                       |                                           |             | September 30, 2004 |           
|                                                    |                                                                                            |                                                                          |                                           |             |                    |           
|                                                    |                                                                                            | (Unaudited)                                                              |                                          
|Cash flows from operating activities:               |                                                                                            |                                                                          |                                           |             |                    |            |           |           
|                                                    | Net income                                                                                 |                                                                          | $                                         | 1,909,000   |                    |            | $         | 655,000    |           
|                                                    | Adjustments to reconcile net income to net cash provided by
    operating activities:      |                                                                          |                                           |             |                    |            |           |            |           
|                                                    |                                                                                            | Write down of real estate held for sale                                  |                                           |             |                   |            |           |            | 14,000     |           
|                                                    |                                                                                            | Recovery of losses on sale of real estate held for sale                  |                                           |             | (5,000             | )          |           |            |           |           
|                                                    |                                                                                            | Loss on sale of real estate held for sale                                |                                           |             |                   |            |           |            | 463,000    |           
|                                                    |                                                                                            | Change in operating assets and liabilities:                              |                                           |             |                    |            |           |            |            |           
|                                                    |                                                                                            |                                                                          | Interest and other receivables            |             |                    | 16,000     |           |            |            | (61,000    | )
|                                                    |                                                                                            |                                                                          | Due to Manager                            |             |                    | (970,000   | )         |            |            | 162,000    |  
|                                                    |                                                                                            |                                                                          | Due to Vestin Group                       |             |                    | (2,000     | )         |            |            | (191,000   | )
|                                                    |                                                                                            |                                                                          | Due to Fund II                            |             |                    | 35,000     |           |            |            | 2,062,000  |  
|                                                    |                                                                                            |                                                                          | Accounts payable and accrued liabilities  |             |                    | 21,000     |           |            |            | 344,000    |  
|                                                    |                                                                                            |                                                                          | Note receivable                           |             |                    | 5,000      |           |            |            |           |  
|                                                    |                                                                                            |                                                                          | Deferred income                           |             |                    | (369,000   | )         |            |            | 72,000     |  
|                                                    |                                                                                            |                                                                          |                                           |             |                    |           
|                                                    |                                                                                            |                                                                          | Net cash provided by operating activities |             |                    | 640,000    |           |            |            | 3,520,000  |  
|                                                    |                                                                                            |                                                                          |                                           |             |                    |           
|Cash flows from investing activities:               |                                                                                            |                                                                          |                                           |             |                    |            |           |           
|                                                    | Investments in real estate loans                                                           |                                                                          |                                           | (12,350,000 | )                  |            |           | (5,627,000 | )         
|                                                    | Purchase of investments in real estate loans                                               |                                                                          |                                           |            |                    |            |           | (1,000,000 | )         
|                                                    | Purchase of investments in real estate loans including interest
    receivable of $515,000 |                                                                          |                                           | (5,408,000  | )                  |            |           |           |           
|                                                    | Proceeds from loan payoff                                                                  |                                                                          |                                           | 15,827,000  |                    |            |           | 9,755,067  |           
|                                                    | Principal payments on real estate held for sale-seller financed                            |                                                                          |                                           | 2,626,000   |                    |            |           | 506,933    |           
|                                                    | Sale of investments in real estate loans                                                   |                                                                          |                                           |            |                    |            |           | 155,000    |           
|                                                    | Proceeds from sale of investment in real estate                                            |                                                                          |                                           | 2,561,000   |                    |            |           | 1,650,000  |           
|                                                    | Cash outlays for real estate held for sale                                                 |                                                                          |                                           |            |                    |            |           | (2,251,000 | )         
|                                                    |                                                                                            |                                                                          |                                           |             |                    |           
|                                                    |                                                                                            |                                                                          | Net cash provided by investing activities |             |                    | 3,256,000  |           |            |            | 3,189,000  |  
|                                                    |                                                                                            |                                                                          |                                           |             |                    |           
|Cash flows from financing activities:               |                                                                                            |                                                                          |                                           |             |                    |            |           |           
|                                                    | Payment on note payable                                                                    |                                                                          |                                           |            |                    |            |           | (2,000,000 | )         
|                                                    | Members distributions, net of reinvestments                                               |                                                                          |                                           | (1,160,000  | )                  |            |           | (1,184,000 | )         
|                                                    | Members withdrawals                                                                       |                                                                          |                                           | (168,000    | )                  |            |           | (267,000   | )         
|                                                    |                                                                                            |                                                                          |                                           |             |                    |           
|                                                    |                                                                                            |                                                                          | Net cash used in financing activities     |             |                    | (1,328,000 | )         |            |            | (3,451,000 | )
|                                                    |                                                                                            |                                                                          |                                           |             |                    |           
|                                                    |                                                                                            |                                                                          | NET CHANGE IN CASH                        |             |                    | 2,568,000  |           |            |            | 3,258,000  |  
|Cash, beginning of period                           |                                                                                            |                                                                          | 2,862,000                                 |             |                    |            | 6,571,000 |           
|                                                    |                                                                                            |                                                                          |                                           |             |                    |           
|Cash, end of period                                 |                                                                                            | $                                                                        | 5,430,000                                 |             |                    | $          | 9,829,000 |           
|                                                    |                                                                                            |                                                                          |                                           |             |                    |           
|Supplemental disclosures of cash flows information: |                                                                                            |                                                                          |                                           |             |                    |            |           |           
|                                                    | Non-cash investing and financing activities:                                               |                                                                          |                                           |             |                    |            |           |            |           
|                                                    |                                                                                            | Change in loans funded through secured borrowing                         |                                           | $           | 9,748,000          |            |           | $          | 12,871,000 |           
|                                                    |                                                                                            |                                                                          |                                           |             |                    |           
|                                                    |                                                                                            | Real estate held for sale acquired through foreclosure                   |                                           | $           |                   |            |           | $          | 3,309,000  |           
|                                                    |                                                                                            |                                                                          |                                           |             |                    |           
|                                                    |                                                                                            | Deferred gain on sale of real estate where we provided the
    financing |                                           | $           | 144,000            |            |           | $          |           |           
|                                                    |                                                                                            |                                                                          |                                           |             |                    |           
|                                                    |                                                                                            | Transfer of pro-rata interest in real property to Fund II                |                                           | $           |                   |            |           | $          | 4,278,000  |           
|                                                    |                                                                                            |                                                                          |                                           |             |                    |           
|                                                    |                                                                                            | Note receivable from guarantor in exchange for release of
    guarantee  |                                           | $           |                   |            |           | $          | 119,000    |           
|                                                    |                                                                                            |                                                                          |                                           |             |                    |           
|                                                    |                                                                                            | Sale of real estate held for sale where we provide the financing         |                                           | $           | 886,000            |            |           | $          | 7,910,000  |           
|                                                    |                                                                                            |                                                                          |                                           |             |                    |           



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VESTIN FUND I, LLC


NOTES TO FINANCIAL STATEMENTS


SEPTEMBER 30, 2005


(UNAUDITED)


NOTE A  ORGANIZATION


















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VESTIN FUND I, LLC


NOTES TO
FINANCIAL STATEMENTS  (Continued)






NOTE B  SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES


Management Estimates




Cash and Cash Equivalents




Revenue Recognition




Investments in Real Estate Loans






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VESTIN FUND I, LLC


NOTES TO
FINANCIAL STATEMENTS  (Continued)






Allowance for Loan Losses








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VESTIN FUND I, LLC


NOTES TO
FINANCIAL STATEMENTS  (Continued)






| |   |                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Declines in real estate market conditions which can cause a
    decrease in expected market value.                                                                                                                                                                                                                                                                                         
|
| |  | Discovery of undisclosed liens for community improvement bonds,
    easements and delinquent property taxes.                                                                                                                                                                                                                                                                               
|
| |  | Lack of progress on real estate developments after we advance
    funds. We customarily utilize disbursement agents to monitor the
    progress of real estate developments and approve loan advances.
    After further inspection of the related property, progress on
    construction occasionally does not substantiate an increase in
    value to support the related loan advances.

Real Estate Held For Sale


Accounting for the
Impairment or Disposal of Long Lived Assets






| |   |                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------
| |  | Management commits to a plan to sell the properties;                                                                         
|
| |  | The property is available for immediate sale in its present
    condition subject only to terms that are usual and customary;
|
| |  | An active program to locate a buyer and other actions required
    to complete a sale have been initiated;                   
|
| |  | The sale of the property is probable;                                                                                        
|
| |  | The property is being actively marketed for sale at a reasonable
    price; and                                              
|
| |  | Withdrawal or significant modification of the sale is not likely.                                                            

Real Estate Held For Sale  Seller
Financed






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VESTIN FUND I, LLC


NOTES TO
FINANCIAL STATEMENTS  (Continued)




Classification of Operating Results from Real Estate Held
for Sale




Secured Borrowings


Accounting for
Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities




Fair Value of Financial Instruments


Disclosures about Fair Value of Financial
Instruments






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VESTIN FUND I, LLC


NOTES TO
FINANCIAL STATEMENTS  (Continued)






Net Income Allocated to Members




Segments




Income Taxes




Reclassifications




NOTE C  FINANCIAL INSTRUMENTS AND CONCENTRATIONS
OF CREDIT RISK










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VESTIN FUND I, LLC


NOTES TO
FINANCIAL STATEMENTS  (Continued)








NOTE D  INVESTMENTS IN REAL ESTATE LOANS






|                            |  |          |    |  |            |          |            |               |  |           |            |  |         |          |         |  |  |  |        | 
|--------------------------- |  | -------- | -- |  | ---------- | -------- | ---------- | ------------- |  | --------- | ---------- |  | ------- | -------- | ------- |  |  |  | ------ | 
|                            |  |          |    |  |            | Weighted |            |               |  |           |           
|                            |  | Number   |    |  |            |          | Average    |               |  | Portfolio |            |  | Loan to |         
|Loan Type                   |  | of Loans |    |  | Balance(3) |          |            | Interest Rate |  |           | Percentage |  |         | Value(2) |        
|                            |  |          |    |  |            |          |            |               |  |           |            |  |         |          |        
|Acquisition and development |  |          | 2  |  |            | $        | 4,343,000  |               |  |           | 8.04%      |  |         |          | 6.49%   |  |  |  | 79.28% | 
|Commercial(1)               |  |          | 16 |  |            |          | 47,073,000 |               |  |           | 9.57%      |  |         |          | 70.29%  |  |  |  | 66.90% | 
|Construction                |  |          | 3  |  |            |          | 2,298,000  |               |  |           | 12.00%     |  |         |          | 3.43%   |  |  |  | 62.32% | 
|Land                        |  |          | 5  |  |            |          | 13,253,000 |               |  |           | 12.74%     |  |         |          | 19.79%  |  |  |  | 58.44% | 
|                            |  |          |    |  |            |          |            |               |  |           |            |  |         |          |        
|Total                       |  |          | 26 |  |            | $        | 66,967,000 |               |  |           | 10.18%     |  |         |          | 100.00% |  |  |  | 65.87% | 
|                            |  |          |    |  |            |          |            |               |  |           |            |  |         |          |        



|                            |  |          |    |  |            |          |            |               |  |           |            |  |         |          |         |  |  |  |        | 
|--------------------------- |  | -------- | -- |  | ---------- | -------- | ---------- | ------------- |  | --------- | ---------- |  | ------- | -------- | ------- |  |  |  | ------ | 
|                            |  |          |    |  |            | Weighted |            |               |  |           |           
|                            |  | Number   |    |  |            |          | Average    |               |  | Portfolio |            |  | Loan to |         
|Loan Type                   |  | of Loans |    |  | Balance(3) |          |            | Interest Rate |  |           | Percentage |  |         | Value(2) |        
|                            |  |          |    |  |            |          |            |               |  |           |            |  |         |          |        
|Acquisition and development |  |          | 4  |  |            | $        | 7,272,000  |               |  |           | 8.49%      |  |         |          | 10.82%  |  |  |  | 71.05% | 
|Commercial(1)               |  |          | 15 |  |            |          | 38,439,000 |               |  |           | 10.02%     |  |         |          | 57.25%  |  |  |  | 64.16% | 
|Construction                |  |          | 3  |  |            |          | 3,712,000  |               |  |           | 9.40%      |  |         |          | 5.53%   |  |  |  | 69.94% | 
|Land                        |  |          | 7  |  |            |          | 17,725,000 |               |  |           | 12.89%     |  |         |          | 26.40%  |  |  |  | 61.67% | 
|                            |  |          |    |  |            |          |            |               |  |           |            |  |         |          |        
|Total                       |  |          | 29 |  |            | $        | 67,148,000 |               |  |           | 10.58%     |  |         |          | 100.00% |  |  |  | 64.56% | 
|                            |  |          |    |  |            |          |            |               |  |           |            |  |         |          |        






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Bridge loans are a subcategory of commercial loans in which we
    provide interim financing for borrowers seeking long-term,
    permanent financing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(2) | Loan to value ratios are based on appraisals obtained at the
    time of loan origination and may not reflect subsequent changes
    in value estimates. Such appraisals, which may be commissioned
    by the borrower and also may precede the placement of the loans
    with us, are generally dated no greater than 12 months
    prior to the date of loan origination. The appraisals may be for
    the current estimate of the as-if developed value of
    the property, which approximates the post-construction value of
    the collateralized property assuming that such property is
    developed. As-if developed values on raw land loans
    or acquisition and development loans often dramatically exceed
    the immediate sales value and may include

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VESTIN FUND I, LLC


NOTES TO
FINANCIAL STATEMENTS  (Continued)




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | anticipated zoning changes, and successful development by the
    purchaser; upon which development is dependent on availability
    of financing. As most of the appraisals will be prepared on an
    as-if developed basis, if a loan goes into default
    prior to any development of a project, the market value of the
    property may be substantially less than the appraised value. As
    a result, there may be less security than anticipated at the
    time the loan was originally made. If there is less security and
    a default occurs, we may not recover the full amount of the loan.                                                                                          
|   
|(3) | The following table reconciles the balance of the loan portfolio
    to the amount shown on the accompanying Balance Sheet. The
    contra accounts represent the amount of real estate held for
    sale sold to third parties where we provided financing. GAAP
    requires the borrower to have a certain percentage equity
    ownership (typically 20%) to allow us to record the sale of a
    property. In addition, the borrower must maintain a minimum
    commitment in the property on a continuing basis. Therefore,
    until the borrower meets these requirements, the investment in
    the new loan is reduced by the amount originally invested in the
    real estate held for sale.

|                                                            |  |                    |            |   |               |   |             |  
|----------------------------------------------------------- |  | ------------------ | ---------- | - | ------------- | - | ----------- | -
|                                                            |  | September 30, 2005 |            |   | June 30, 2005 |  
|                                                            |  | Balance            |            |   | Balance       |  
|                                                            |  |                    |            |   |               |  
|Balance per loan portfolio                                  |  | $                  | 66,967,000 |   |               | $ | 67,148,000  |  
|Less:                                                       |  |                    |            |   |               |   |             |  
|Seller financed loans included in real estate held for sale |  |                    | (8,634,000 | ) |               |   | (10,374,000 | )
|Allowance for loan losses                                   |  |                    | (1,896,000 | ) |               |   | (1,896,000  | )
|                                                            |  |                    |            |   |               |  
|Balance per accompanying Balance Sheet                      |  | $                  | 56,437,000 |   |               | $ | 54,878,000  |  
|                                                            |  |                    |            |   |               |  

|                     |  |                    |            |  |            |  |        |               |  |   |            |  |  |  |         | 
|-------------------- |  | ------------------ | ---------- |  | ---------- |  | ------ | ------------- |  | - | ---------- |  |  |  | ------- | 
|                     |  | September 30, 2005 |            |  | Portfolio  |  |        | June 30, 2005 |  |   | Portfolio  | 
|Loan Type            |  | Balance*           |            |  | Percentage |  |        | Balance*      |  |   | Percentage | 
|                     |  |                    |            |  |            |  |        |               |  |   |            | 
|First trust deeds    |  | $                  | 66,967,000 |  |            |  | 100    | %             |  | $ | 66,645,000 |  |  |  | 99.25%  | 
|Second trust deeds** |  |                    |           |  |            |  |       |               |  |   | 503,000    |  |  |  | 0.75%   | 
|                     |  |                    |            |  |            |  |        |               |  |   |            | 
|                     |  | $                  | 66,967,000 |  |            |  | 100.00 | %             |  | $ | 67,148,000 |  |  |  | 100.00% | 
|                     |  |                    |            |  |            |  |        |               |  |   |            | 






| |   |                   
| | - | ------------------
| | * | See note (3) above



|   |                                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------
|** | Generally, our Second trust deeds are junior to a first trust
    deed position held by either us or our Manager.



|     |  |   |            | 
|---- |  | - | ---------- | 
|2005 |  | $ | 14,705,000 | 
|2006 |  |   | 43,515,000 | 
|2007 |  |   | 8,747,000  | 
|     |  |   |           
|     |  | $ | 66,967,000 | 
|     |  |   |           

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VESTIN FUND I, LLC


NOTES TO
FINANCIAL STATEMENTS  (Continued)




|               |  |                    |            |  |            |  |         |               |  |   |            |  |  |  |        |  
|-------------- |  | ------------------ | ---------- |  | ---------- |  | ------- | ------------- |  | - | ---------- |  |  |  | ------ | -
|               |  | September 30, 2005 |            |  | Portfolio  |  |         | June 30, 2005 |  |   | Portfolio  | 
|               |  | Balance*           |            |  | Percentage |  |         | Balance*      |  |   | Percentage | 
|               |  |                    |            |  |            |  |         |               |  |   |            | 
|Arizona        |  | $                  | 11,386,000 |  |            |  | 17.00%  |               |  | $ | 13,063,000 |  |  |  | 19.45  | %
|California     |  |                    | 13,574,000 |  |            |  | 20.27%  |               |  |   | 19,794,000 |  |  |  | 29.48  | %
|Hawaii         |  |                    | 9,031,000  |  |            |  | 13.49%  |               |  |   | 4,139,000  |  |  |  | 6.16   | %
|Nevada         |  |                    | 17,623,000 |  |            |  | 26.32%  |               |  |   | 24,428,000 |  |  |  | 36.38  | %
|New York       |  |                    | 3,249,000  |  |            |  | 4.85%   |               |  |   | 3,320,000  |  |  |  | 4.94   | %
|North Carolina |  |                    | 1,000,000  |  |            |  | 1.49%   |               |  |   |           |  |  |  |       |  
|Oklahoma       |  |                    | 1,237,000  |  |            |  | 1.85%   |               |  |   | 1,237,000  |  |  |  | 1.84   | %
|Oregon         |  |                    | 3,200,000  |  |            |  | 4.78%   |               |  |   |           |  |  |  |       |  
|Texas          |  |                    | 2,167,000  |  |            |  | 3.23%   |               |  |   | 1,167,000  |  |  |  | 1.75   | %
|Washington     |  |                    | 2,500,000  |  |            |  | 3.73%   |               |  |   |           |  |  |  |       |  
|Wisconsin      |  |                    | 2,000,000  |  |            |  | 2.99%   |               |  |   |           |  |  |  |       |  
|               |  |                    |            |  |            |  |         |               |  |   |            | 
|               |  | $                  | 66,967,000 |  |            |  | 100.00% |               |  | $ | 67,148,000 |  |  |  | 100.00 | %
|               |  |                    |            |  |            |  |         |               |  |   |            | 






|  |                   
|- | ------------------
|* | See note (3) above



|                                                |  |                    |            |  |               |           |            |                |  |                     |              |  |  |  |                   | 
|----------------------------------------------- |  | ------------------ | ---------- |  | ------------- | --------- | ---------- | -------------- |  | ------------------- | ------------ |  |  |  | ----------------- | 
|                                                |  |                    |            |  |               | Number of |            |                | 
|                                                |  | Balance            |            |  |               |           | Months     |                |  | Percentage of Total |             
|Description of Collateral                       |  | September 30, 2005 |            |  | Maturity Date |           |            | Non-Performing |  |                     | Loan Balance | 
|                                                |  |                    |            |  |               |           |            |                |  |                     |              | 
|4 cemeteries and 8 mortuaries in Hawaii Part I  |  | $                  | 4,139,000  |  |               |           | 03/31/2004 |                |  |                     | 18           |  |  |  | 21.00% of Part I  | 
|4 cemeteries and 8 mortuaries in Hawaii Part II |  |                    | 4,893,000  |  |               |           | 03/31/2004 |                |  |                     | 18           |  |  |  | 35.00% of Part II | 
|Racetrack and hotel in Vernon, NY               |  |                    | 3,249,000  |  |               |           | 06/30/2005 |                |  |                     | 14           |  |  |  | 12.50%            | 
|                                                |  |                    |            |  |               |           |            |                |  |                     |              | 
|                                                |  | $                  | 12,281,000 |  |               |           |            |                |  |                     |              |  |  |  |                   | 
|                                                |  |                    |            |  |               |           |            |                |  |                     |              | 





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VESTIN FUND I, LLC


NOTES TO
FINANCIAL STATEMENTS  (Continued)






|                            |  |               |           |  |            |   |            |  |                    |   |   |  |  |   |           | 
|--------------------------- |  | ------------- | --------- |  | ---------- | - | ---------- |  | ------------------ | - | - |  |  | - | --------- | 
|                            |  | Balance       |           |  |            |   |            |  | Balance            |  
|Description                 |  | June 30, 2005 |           |  | Provisions |   | Deductions |  | September 30, 2005 |  
|                            |  |               |           |  |            |   |            |  |                    |  
|General Valuation Allowance |  | $             | 671,000   |  |            | $ |           |  |                    | $ |  |  |  | $ | 671,000   | 
|Specific Allowance          |  |               | 1,225,000 |  |            |   |           |  |                    |   |  |  |  |   | 1,225,000 | 
|                            |  |               |           |  |            |   |            |  |                    |   |   | 
|Total                       |  | $             | 1,896,000 |  |            | $ |           |  |                    | $ |  |  |  | $ | 1,896,000 | 
|                            |  |               |           |  |            |   |            |  |                    |   |   | 

Rightstar Allowance




Asset Quality and Loan Reserves






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VESTIN FUND I, LLC


NOTES TO
FINANCIAL STATEMENTS  (Continued)






| |   |                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------
| |  | Prevailing economic conditions;                                                                             
|
| |  | Historical experience;                                                                                      
|
| |  | The nature and volume of the loan portfolio;                                                                
|
| |  | The borrowers financial condition and adverse situations
    that may affect the borrowers ability to pay;
|
| |  | Evaluation of industry trends; and                                                                          
|
| |  | Estimated net realizable value of any underlying collateral in
    relation to the loan amount.             



NOTE E  REAL ESTATE HELD FOR SALE




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VESTIN FUND I, LLC


NOTES TO
FINANCIAL STATEMENTS  (Continued)




|                                                                        |  |          |           |  |               |         |    |          |        |   |           |          |  |              |            |   |             |   |            |               |  |   |         |  |  |   |           | 
|----------------------------------------------------------------------- |  | -------- | --------- |  | ------------- | ------- | -- | -------- | ------ | - | --------- | -------- |  | ------------ | ---------- | - | ----------- | - | ---------- | ------------- |  | - | ------- |  |  | - | --------- | 
|                                                                        |  |          |           |  |               |         |    |          |        |   |           | Deferred |  |              |           
|                                                                        |  |          |           |  |               |         |    |          |        |   |           | Gain     |  |              |           
|                                                                        |  |          |           |  |               | Balance |    |          | Seller |   |           |          |  | (Loss) on    |            |   | Balance     |  
|                                                                        |  | Date     |           |  | Percentage of |         |    | June 30, |        |   | Financed  |          |  | Proceed From |            |   | Sale of     |   |            | September 30, | 
|Description                                                             |  | Acquired |           |  | Ownership     |         |    | 2005     |        |   | Sales     |          |  | Sales        |            |   | Real Estate |   |            | 2005          | 
|                                                                        |  |          |           |  |               |         |    |          |        |   |           |          |  |              |            |   |             |   |            |               | 
|Land containing 82 residential lots in Henderson, Nevada(1)             |  |          | 2/28/2003 |  |               |         | 66 | %        |        | $ | 5,058,000 |          |  | $            |           |   |             | $ | (2,561,000 | )             |  | $ |        |  |  | $ | 2,497,000 | 
|126 unit, (207 bed) assisted living facility in Phoenix,
    Arizona(1) |  |          | 9/08/2004 |  |               |         | 10 | %        |        |   | 886,000   |          |  |              | (1,030,000 | ) |             |   |           |               |  |   | 144,000 |  |  |   |          | 
|460 acre residential sub-division in Lake Travis, Texas                 |  |          | 8/03/2004 |  |               |         | 34 | %        |        |   | 1,813,000 |          |  |              |            |   |             |   |           |               |  |   |        |  |  |   | 1,813,000 | 
|                                                                        |  |          |           |  |               |         |    |          |        |   |           |          |  |              |            |   |             |   |            |               | 
|Total                                                                   |  |          |           |  |               |         |    |          |        | $ | 7,757,000 |          |  | $            | (1,030,000 | ) |             | $ | (2,561,000 | )             |  | $ | 144,000 |  |  | $ | 4,310,000 | 
|                                                                        |  |          |           |  |               |         |    |          |        |   |           |          |  |              |            |   |             |   |            |               | 




(1) Sales of Real Estate Held for Sale for the Three
Months Ended September 30, 2005:






NOTE F  REAL ESTATE HELD FOR SALE 
SELLER FINANCED




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VESTIN FUND I, LLC


NOTES TO
FINANCIAL STATEMENTS  (Continued)




|                                                                             |  |               |            |            |           |  |            |               |  |           |              |               |  |            |               |  |      |   |            |   |  |   |           | 
|---------------------------------------------------------------------------- |  | ------------- | ---------- | ---------- | --------- |  | ---------- | ------------- |  | --------- | ------------ | ------------- |  | ---------- | ------------- |  | ---- | - | ---------- | - |  | - | --------- | 
|                                                                             |  |               |            |            |           |  |            |               |  | Principal |              |               | 
|                                                                             |  |               |            | Percentage |           |  |            |               |  |           | Payments     |               |  | Balance at |              
|                                                                             |  |               |            | of         |           |  | Balance at |               |  |           |              | Received from |  |            | September 30, | 
|Description                                                                  |  | Date Acquired |            |            | Ownership |  |            | June 30, 2005 |  |           | Acquisitions |               |  | Borrower   |               |  | 2005 |  
|                                                                             |  |               |            |            |           |  |            |               |  |           |              |               |  |            |               |  |      |  
|An approximately 200-unit apartment complex located in Las
    Vegas, Nevada |  |               | 1/27/2003  |            |           |  | 5          | %             |  | $         | 171,000      |               |  | $          |              |  |      | $ | (171,000   | ) |  | $ |          | 
|A completed golf course and raw land in Mesquite, Nevada                     |  |               | 11/06/2002 |            |           |  | 55         | %             |  |           | 1,475,000    |               |  |            |              |  |      |   | (1,475,000 | ) |  |   |          | 
|36 acres of raw land in Mesquite, Nevada                                     |  |               | 11/27/2002 |            |           |  | 48         | %             |  |           | 334,000      |               |  |            |              |  |      |   | (334,000   | ) |  |   |          | 
|Assisted living facility in Las Vegas, Nevada                                |  |               | 9/23/2004  |            |           |  | 52         | %             |  |           | 7,789,000    |               |  |            |              |  |      |   | (41,000    | ) |  |   | 7,748,000 | 
|126 Unit (207 bed) assisted living facility in Phoenix, AZ                   |  |               | 9/08/2004  |            |           |  | 10         | %             |  |           |             |               |  |            | 886,000       |  |      |   |           |   |  |   | 886,000   | 
|Raw land in Mesquite, Nevada                                                 |  |               | 11/27/2002 |            |           |  | 53         | %             |  |           | 605,000      |               |  |            |              |  |      |   | (605,000   | ) |  |   |          | 
|                                                                             |  |               |            |            |           |  |            |               |  |           |              |               |  |            |               |  |      |  
|                                                                             |  |               |            |            |           |  |            |               |  | $         | 10,374,000   |               |  | $          | 886,000       |  |      | $ | (2,626,000 | ) |  | $ | 8,634,000 | 
|                                                                             |  |               |            |            |           |  |            |               |  |           |              |               |  |            |               |  |      |  



NOTE G  RELATED PARTY TRANSACTIONS


Transactions with the Manager












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VESTIN FUND I, LLC


NOTES TO
FINANCIAL STATEMENTS  (Continued)




Transactions with the Funds






Transactions with Other Related Parties






NOTE H  NOTES RECEIVABLE








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VESTIN FUND I, LLC


NOTES TO
FINANCIAL STATEMENTS  (Continued)


NOTE I  SECURED BORROWINGS


Accounting for
Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities






NOTE J  RECENT ACCOUNTING PRONOUNCEMENTS






NOTE K  LEGAL MATTERS INVOLVING THE MANAGER




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VESTIN FUND I, LLC


NOTES TO
FINANCIAL STATEMENTS  (Continued)








NOTE L  LEGAL MATTERS INVOLVING THE COMPANY








NOTE M  REDEMPTION LIMITATION




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##### Table of Contents



VESTIN FUND I, LLC


NOTES TO
FINANCIAL STATEMENTS  (Continued)








23



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##### Table of Contents








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
    CONDITION AND RESULTS OF OPERATIONS



Background


















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##### Table of Contents









| |   |                                                                                             
| | - | --------------------------------------------------------------------------------------------
| |  | Produce revenues from the interest income on our real estate
    loans;                     
|
| |  | Provide monthly cash distributions from the revenues generated
    by our real estate loans;
|
| |  | Preserve capital contribution; and                                                          
|
| |  | Reinvest, to the extent permissible, payments of principal and
    sales (net of expenses). 

Overview








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##### Table of Contents











Summarization of Financial Results


|                                                                          |  |               |           |   |               |   |           |  
|------------------------------------------------------------------------- |  | ------------- | --------- | - | ------------- | - | --------- | -
|                                                                          |  | For the Three |           |   | For the Three |  
|                                                                          |  | Months Ended  |           |   | Months Ended  |  
|                                                                          |  | September 30, |           |   | September 30, |  
|                                                                          |  | 2005          |           |   | 2004          |  
|                                                                          |  |               |           |   |               |  
|                                                                          |  | (Unaudited)   |           |   | (Unaudited)   |  
|Total revenues                                                            |  | $             | 2,214,000 |   |               | $ | 1,821,000 |  
|Total expenses                                                            |  | $             | 305,000   |   |               | $ | 1,166,000 |  
|                                                                          |  |               |           |   |               |  
|Net income                                                                |  | $             | 1,909,000 |   |               | $ | 655,000   |  
|                                                                          |  |               |           |   |               |  
|Net income allocated to members per weighted average membership
    units |  | $             | 0.25      |   |               | $ | 0.08      |  
|                                                                          |  |               |           |   |               |  
|Annualized rate of return to members(a)                                   |  |               | 9.88      | % |               |   | 3.10      | %
|                                                                          |  |               |           |   |               |  
|Weighted average membership units                                         |  | $             | 7,667,852 |   |               | $ | 8,385,189 |  
|                                                                          |  |               |           |   |               |  
|Cash distributions                                                        |  | $             | 1,160,000 |   |               | $ | 1,393,000 |  
|                                                                          |  |               |           |   |               |  
|Cash distributions per weighted average membership unit                   |  | $             | 0.15      |   |               | $ | 0.17      |  
|                                                                          |  |               |           |   |               |  
|Weighted average term of outstanding loans                                |  |               | 18 months |   |               |   | 19 months |  
|                                                                          |  |               |           |   |               |  






|    |  |                                                                                                                                                                                                                                                                                                                                                       
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | The annualized rate of return to members is calculated based
    upon the GAAP net income allocated to members per weighted
    average units as of September 30, 2005 and 2004 divided by
    92 days (the number of days during each respective period)
    and multiplied by 365 days, then divided by ten (the
    original cost of $10 per unit).

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##### Table of Contents



Total Revenues.




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Revenues for the three months ended September 30, 2005
    included other income of $336,000, compared to $11,000, for the
    three months ended September 30, 2004. The increase in
    other income is primarily related to a title settlement received
    in the amount of $272,000 in the current period. In addition, we
    received $32,000 relating to a settlement agreement with the
    guarantors of a loan relating to the 126-unit hotel in Mesquite,
    Nevada property which was sold in March 2005.
|
| |  | Approximately $254,000 of our interest revenue for the three
    months ended September 30, 2005 was derived from interest
    reserves compared to interest revenue of $461,000 for the three
    months ended September 30, 2004.                                                                                                                                                                                                                                                                                    







Total Expenses.




| |   |                                                                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Expenses related to the maintenance of real estate held for sale
    decreased by approximately $154,000, due to the decrease of real
    estate held for sale of approximately $11 million from
    September 30, 2004 to September 30, 2005.                                                              
|
| |  | Interest expense related to secured borrowings decreased
    approximately $258,000 due to the decrease in the balance of
    secured borrowers of approximately $4.5 million from
    September 30, 2004 to September 30, 2005.                                                                            
|
| |  | During the three months ended September 30, 2004, we and
    Fund II sold and provided financing on an assisted living
    facility in Las Vegas, Nevada. The sale resulted in a loss
    of approximately $463,000.                                                                                        
|
| |  | For the three months ended September 30, 2005 and 2004, we
    had professional fees of approximately $110,000 and $86,000,
    respectively, which was an increase of $24,000. We expect fees
    to continue at the amounts being incurred during the three
    months ended September 30, 2005 due to the

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| |  |                                                                                                                     
| |  | --------------------------------------------------------------------------------------------------------------------
| |  | implementation and maintenance requirements of the
    Sarbanes-Oxley Act of 2002 and costs related to foreclosures.

Net Income.


Annualized Rate of Return to Members.


Distributions to Members.


|                                                                                                  |  |               |           |  |               |   |           | 
|------------------------------------------------------------------------------------------------- |  | ------------- | --------- |  | ------------- | - | --------- | 
|                                                                                                  |  | For the Three |           |  | For the Three |  
|                                                                                                  |  | Months Ended  |           |  | Months Ended  |  
|                                                                                                  |  | September 30, |           |  | September 30, |  
|                                                                                                  |  | 2005          |           |  | 2004          |  
|                                                                                                  |  |               |           |  |               |  
|Distributions Representing Net Income Available for Distribution                                  |  | $             | 1,160,000 |  |               | $ | 669,000   | 
|Distributions in Excess of Net Income Available for
    Distributions Generated During the Period |  |               |          |  |               |   | 724,000   | 
|                                                                                                  |  |               |           |  |               |  
|Total Distributions                                                                               |  | $             | 1,160,000 |  |               | $ | 1,393,000 | 
|                                                                                                  |  |               |           |  |               |  



|                                                       |  |               |           |   |               |   |         | 
|------------------------------------------------------ |  | ------------- | --------- | - | ------------- | - | ------- | 
|                                                       |  | For the Three |           |   | For the Three |  
|                                                       |  | Months Ended  |           |   | Months Ended  |  
|                                                       |  | September 30, |           |   | September 30, |  
|                                                       |  | 2005          |           |   | 2004          |  
|                                                       |  |               |           |   |               |  
|Net Income                                             |  | $             | 1,909,000 |   |               | $ | 655,000 | 
|Provision for Write-down of Real Estate Included Above |  |               |          |   |               |   | 14,000  | 
|Working Capital Reserves                               |  |               | (749,000  | ) |               |   |        | 
|                                                       |  |               |           |   |               |  
|Distributions of Net Income Available for Distribution |  | $             | 1,160,000 |   |               | $ | 669,000 | 
|                                                       |  |               |           |   |               |  

Stated Unit Value Adjustment.


Redemptions.


28



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INVESTMENTS IN REAL ESTATE LOANS SECURED BY REAL ESTATE
PORTFOLIO








| |                                
| | -------------------------------
| | Asset Quality and Loan Reserves







| |   |                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------
| |  | Prevailing economic conditions;                                                                             
|
| |  | Historical experience;                                                                                      
|
| |  | The nature and volume of the loan portfolio;                                                                
|
| |  | The borrowers financial condition and adverse situations
    that may affect the borrowers ability to pay;
|
| |  | Evaluation of industry trends;                                                                              
|
| |  | Review and evaluation of loans identified as having loss
    potentials; and                                
|
| |  | Estimated net realizable value of any underlying collateral in
    relation to the loan amount.             



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OFF-BALANCE SHEET ARRANGEMENTS




CONTRACTUAL OBLIGATIONS




|                       |  |                       |           |           |        |   |           |           |           |           |   |         |  |   |   |  |  |   |   | 
|---------------------- |  | --------------------- | --------- | --------- | ------ | - | --------- | --------- | --------- | --------- | - | ------- |  | - | - |  |  | - | - | 
|                       |  | Payment Due By Period
|                       |  |                      
|                       |  |                       |           | Less Than |        |   |           |           | More Than
|Contractual Obligation |  | Total                 |           |           | 1 Year |   |           | 1-3 Years |           | 3-5 Years |   | 5 Years
|                       |  |                       |           |           |        |   |           |           |           |           |   |        
|Secured borrowings     |  | $                     | 1,643,000 |           |        | $ | 1,643,000 |           |           | $         |  |         |  | $ |  |  |  | $ |  | 

CRITICAL ACCOUNTING ESTIMATES


Revenue Recognition






|                                                                                  |  |                     |            |  
|--------------------------------------------------------------------------------- |  | ------------------- | ---------- | -
|                                                                                  |  | Increase (Decrease) |           
|Changed Assumption                                                                |  | in Interest Income  |           
|                                                                                  |  |                     |           
|Weighted average interest rate assumption increased by 1% or
    100 basis points |  | $                   | 575,000    |  
|Weighted average interest rate assumption increased by 5% or
    500 basis points |  | $                   | 2,875,000  |  
|Weighted average interest rate assumption decreased by 1% or
    100 basis points |  | $                   | (575,000   | )
|Weighted average interest rate assumption decreased by 5% or
    500 basis points |  | $                   | (2,875,000 | )





| |                                 
| | --------------------------------
| | Investments in Real Estate Loans



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| |                          
| | -------------------------
| | Allowance for Loan Losses





|                                                                           |  |                     |            |  
|-------------------------------------------------------------------------- |  | ------------------- | ---------- | -
|                                                                           |  | Increase (Decrease) |           
|                                                                           |  | in Allowance for    |           
|Changed Assumption                                                         |  | Loan Losses         |           
|                                                                           |  |                     |           
|Allowance for loan losses assumption increased by 1% of loan
    portfolio |  | $                   | 670,000    |  
|Allowance for loan losses assumption increased by 5% of loan
    portfolio |  | $                   | 3,348,000  |  
|Allowance for loan losses assumption decreased by 1% of loan
    portfolio |  | $                   | (670,000   | )
|Allowance for loan losses assumption decreased by 5% of loan
    portfolio |  | $                   | (3,348,000 | )





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| |   |                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Declines in real estate market conditions which can cause a
    decrease in expected market value.                                                                                                                                                                                                                                                                                         
|
| |  | Discovery of undisclosed liens for community improvement bonds,
    easements and delinquent property taxes.                                                                                                                                                                                                                                                                               
|
| |  | Lack of progress on real estate developments after we advance
    funds. We customarily utilize disbursement agents to monitor the
    progress of real estate developments and approve loan advances.
    After further inspection of the related property, progress on
    construction occasionally does not substantiate an increase in
    value to support the related loan advances.
|
| |  | Unanticipated legal or business issues that may arise subsequent
    to loan origination or upon the sale of foreclosed upon property.                                                                                                                                                                                                                                                     
|
| |  | Appraisals which are only opinions of value at the time of the
    appraisal may not accurately reflect the value of the property.                                                                                                                                                                                                                                                         

Real Estate Held For Sale


Accounting for the
Impairment or Disposal of Long Lived Assets,






| |   |                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------
| |  | Management commits to a plan to sell the properties;                                                                         
|
| |  | The property is available for immediate sale in its present
    condition subject only to terms that are usual and customary;
|
| |  | An active program to locate a buyer and other actions required
    to complete a sale have been initiated;                   
|
| |  | The sale of the property is probable;                                                                                        
|
| |  | The property is being actively marketed for sale at a reasonable
    price; and                                              
|
| |  | Withdrawal or significant modification of the sale is not likely.                                                            



| |                                                
| | -----------------------------------------------
| | Real Estate Held For Sale  Seller
    Financed





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| |                                                                       
| | ----------------------------------------------------------------------
| | Classification of Operating Results from Real Estate Held
    for Sale





| |                   
| | ------------------
| | Secured Borrowings

Accounting for
Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities




RELATED PARTY TRANSACTIONS




| |                              
| | -----------------------------
| | Transactions with the Manager







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Transactions with the Funds






Transactions with Other Related Parties






FACTORS AFFECTING OUR OPERATING RESULTS




Risks of Investing in Real Estate Loans




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Our underwriting standards and procedures are more lenient than
    conventional lenders in that we will invest in loans to
    borrowers who will not be required to meet the credit standards
    of conventional real estate lenders. This may result in a higher
    rate of non-performing loans.                                                                                                                                                        
|
| |  | We approve real estate loans more quickly than other real estate
    lenders. Due to the nature of loan approvals, there is a risk
    that the credit inquiry our Manager performs will not reveal all
    material facts pertaining to the borrower and the security.                                                                                                                                                                                       
|
| |  | Our results of operations will vary with changes in interest
    rates and with the performance of the relevant real estate
    markets.                                                                                                                                                                                                                                                                                                                      
|
| |  | If the economy is healthy, we expect that more people will
    borrow money to acquire, develop or renovate real property.
    However, if the economy grows too fast, interest rates may
    increase too much and the cost of borrowing may become too
    expensive. This could result in a slowdown in real estate
    lending which may mean we will have fewer loans to acquire, thus
    reducing the revenues and the distributions to our members.   
|
| |  | If, at a time of relatively low interest rates, a borrower
    should prepay obligations that have a higher interest rate from
    an earlier period, investors will likely not be able to reinvest
    the funds in real estate loans earning that higher rate of
    interest. In the absence of a prepayment fee, the investors will
    receive neither the anticipated revenue stream at the higher
    rate nor any compensation for their loss. This in

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| |  |                                                                                                                                                   
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------
| |  | turn could harm our reputation and make it more difficult for us
    to attract investors willing to acquire an interest in real
    estate loans.

Risk of Defaults










| |   |                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | We may incur substantial legal fees and court costs in acquiring
    a mortgaged property through a foreclosure sale and/or
    bankruptcy proceedings.                                                                                                  
|
| |  | During the period of time when a defaulted loan is the subject
    of foreclosure proceedings, it is likely that we will earn less,
    if any, income from such loans, thereby reducing our earnings.                                                   
|
| |  | Properties foreclosed upon may not generate sufficient income
    from operations to meet expenses, such as property taxes,
    maintenance costs, mortgage payments, insurance cost and related
    charges.                                            
|
| |  | Operation of foreclosed properties may require us to spend
    substantial funds for an extended period until we are able to
    find a suitable buyer.                                                                                                  
|
| |  | We incur liability risks in owning and operating real property
    such as possible liability for injury to persons and property or
    for the cost involved in cleaning up any contamination by
    materials hazardous to the environment.            
|
| |  | Proceeds from the sale of foreclosed property may not generate
    full repayment of our loans and, in connection with such sale,
    we may be required to provide seller financing and incur the
    risk that the buyer may default on such financing.

Risks of Interest Rate Changes












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##### Table of Contents







Competition for Borrowers




Effect of Fluctuations in the Economy




CAPITAL AND LIQUIDITY






36



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37



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Accounting for
Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities








FORWARD LOOKING STATEMENT







ITEM 3.  QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK






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##### Table of Contents







Interest Earning Assets


Aggregated by Maturity


Three Months Ended September 30, 2005


|                                 |  |      |            |   |      |   |            |      |  |   |           |   |      |   |            |  |       |   |   |  |  |   |   |  |  |   |            |  
|-------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | ---- |  | - | --------- | - | ---- | - | ---------- |  | ----- | - | - |  |  | - | - |  |  | - | ---------- | -
|Interest Earning Assets          |  | 2005 |            |   | 2006 |   |            | 2007 |  |   | 2008      |   | 2009 |   | Thereafter |  | Total |  
|                                 |  |      |            |   |      |   |            |      |  |   |           |   |      |   |            |  |       |  
|Investments in real estate loans |  | $    | 14,705,000 |   |      | $ | 43,515,000 |      |  | $ | 8,747,000 |   |      | $ |           |  |       | $ |  |  |  | $ |  |  |  | $ | 66,967,000 |  
|Weighted Average interest rates  |  |      | 13.07      | % |      |   | 10.09      | %    |  |   | 5.80      | % |      |   |           |  |       |   |  |  |  |   |  |  |  |   | 10.18      | %








|        |                        
|------- | -----------------------
|ITEM 4. | CONTROLS AND PROCEDURES

Disclosure Controls and Procedures






Managements Report on Internal Control Over
Financial Reporting






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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The first material weakness identified insufficient resources of
    technical accounting and reporting expertise. This weakness
    relates to the oversight and review of financial transactions,
    which affects our ability to prepare and properly review
    financial statements and accompanying footnote disclosures in
    accordance with United States generally accepted accounting
    principles and the rules and regulations of the SEC.
|
| |  | As a result of the foregoing material weakness, there has been
    ineffective oversight of documentation of authorizations to
    ensure that procedures are properly executed. Specifically, we
    did not have backup documentation for some authorized payments
    made by our Company.                                                                                                                                                              



Remediation Plan






| |   |                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Hired a Corporate Controller with the requisite experience to
    assist and work directly with our Managers Chief Financial
    Officer;                                                                     
|
| |  | Hired an Accounting Manager with the requisite experience to
    assist and work directly with our Managers Corporate
    Controller;                                                                         
|
| |  | Created an additional position to assist with the financial
    reporting process and is in the process of identifying an
    individual for this position;                                                    
|
| |  | Implemented a mandatory weekly management meeting for all key
    personnel. This allows for financial reporting personnel to be
    consistently updated on significant matters affecting the
    Company; and
|
| |  | Implemented a Financial Reporting Review Committee, which
    reviews all periodic financial reporting documents prior to
    filing.                                                                          



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Changes in Internal Control Over Financial
Reporting







PART II  OTHER INFORMATION







|        |                  
|------- | -----------------
|ITEM 1. | LEGAL PROCEEDINGS

Legal Matters Involving Our Manager








Legal Matters Involving the Company






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##### Table of Contents












|        |                                                 
|------- | ------------------------------------------------
|ITEM 2. | UNREGISTERED SALES OF EQUITY AND USE OF PROCEEDS

Market Information




Holders




Distribution Policy




Recent Sales of Unregistered Securities




Equity Compensation Plan Information




Purchases of Equity Securities by the Issuer and
Affiliated Purchasers


|               |  |                    |        |  |                    |                    |      |                 |                    |  |              |  |  |  |      | 
|-------------- |  | ------------------ | ------ |  | ------------------ | ------------------ | ---- | --------------- | ------------------ |  | ------------ |  |  |  | ---- | 
|               |  |                    |        |  |                    |                    |      | Maximum Number  |                   
|               |  |                    |        |  |                    |                    |      | (or Approximate |                   
|               |  |                    |        |  |                    | Total Number of    |      |                 | Dollar Value) of   | 
|               |  |                    |        |  |                    | Units Purchased as |      |                 | Units that May Yet | 
|               |  |                    |        |  |                    | Part of Publicly   |      |                 | be Purchased under | 
|               |  | Total Number of    |        |  | Average Price Paid |                    |      | Announced Plans |                    |  | the Plans or | 
|Period         |  | Units Purchased(1) |        |  | per Unit           |                    |      | or Programs     |                    |  | Programs     | 
|               |  |                    |        |  |                    |                    |      |                 |                    |  |              | 
|July 2005      |  |                    | 26,624 |  |                    | $                  | 9.75 |                 |                    |  | None         |  |  |  | None | 
|August 2005    |  |                    | 714    |  |                    | $                  | 9.75 |                 |                    |  | None         |  |  |  | None | 
|September 2005 |  |                    | 548    |  |                    | $                  | 9.75 |                 |                    |  | None         |  |  |  | None | 






|    |                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Pursuant to our Operating Agreement, members may request to have
    their units redeemed. However, in order to comply with our
    Operating Agreement and Internal Revenue Code, we may redeem no
    more

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| |                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | than 10% of the aggregate members capital in any calendar
    year. Balances in Members capital accounts as of
    January 1, 2005 were approximately $81.7 million,
    which limited redemptions to approximately $8.2 million for
    calendar year 2005. As of September 30, 2005, we had
    approximately $1.8 million in redemptions that remain to be
    fulfilled in 2005.






|        |                                
|------- | -------------------------------
|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES








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








|        |                  
|------- | -----------------
|ITEM 5. | OTHER INFORMATION








|        |         
|------- | --------
|ITEM 6. | EXHIBITS

EXHIBIT INDEX


|            |        |                         |  |                                                                                                 
|----------- | ------ | ----------------------- |  | ------------------------------------------------------------------------------------------------
|Exhibit No. |        | Description of Exhibits
|            |        |                        
|            | 3.1(1) |                         |  | Articles of Organization                                                                        
|            | 3.2(2) |                         |  | Amended and Restated Operating Agreement (included as
    Exhibit A to the Companys prospectus)
|            | 31.1   |                         |  | Section 302 Certification of Michael V. Shustek                                                 
|            | 31.2   |                         |  | Section 302 Certification of John Alderfer                                                      
|            | 32     |                         |  | Certification Pursuant to U.S.C. 18 Section 1350                                                






|    |                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Incorporated herein by reference to our Form S-11
    Registration Statement filed on December 21, 2000 (File
    No. 333-52484).                                 
|   
|(2) | Incorporated herein by reference to Post-Effective Amendment
    No. 4 to our Form S-11 Registration Statement filed on
    October 23, 2003 (File No. 333-52484).

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SIGNATURES






| |                   
| | ------------------
| | Vestin Fund I, LLC



| |     |                                        
| | --- | ---------------------------------------
| | By: | Vestin Mortgage, Inc., its sole Manager
|
| | By: | /s/ Michael V. Shustek                 

| |                                                    
| | ---------------------------------------------------
| |                                                    
| | Michael V. Shustek                                 
| | Chief Executive Officer and Director of the Manager
| | (Principal Executive Officer of Manager)           



| |     |                  
| | --- | -----------------
| | By: | /s/ John Alderfer

| |                                       
| | --------------------------------------
| |                                       
| | John Alderfer                         
| | Chief Financial Officer of the Manager



44