----

| Page                                                                                                                                                                                                                     |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                     |
| INDEPENDENT AUDITORS' REPORT                           1                          |
|                                                                                                                                                                                                                     |
| CONSOLIDATED FINANCIAL STATEMENTS                                                                                                                                                                                        |
| AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2009:                                                                                                                                                                          |
|                                                                                                                                                                                                                     |
| Statement of Assets, Liabilities and Members’ Equity                     2                                |
|                                                                                                                                                                                                                     |
| Schedule of Investments                               3       |
|                                                                                                                                                                                                                     |
| Statement of Operations                               4  |
|                                                                                                                                                                                                                     |
| Statement of Changes in Members' Equity                         5                           |
|                                                                                                                                                                                                                     |
| Statement of Cash Flows                               6       |
|                                                                                                                                                                                                                     |
| Notes to Consolidated Financial Statements                        7-14                           |

----

----

| (cost - $476,101,135)                                        |   | $      | 355,200,000   |   |
|--------------------------------------------------------------|--------|--------|---------------|--------|
|                                                         |   |   |          |   |
| Cash and cash equivalents                                    |   |   | 1,774,644     |   |
|                                                         |   |   |          |   |
| Restricted cash                                              |   |   | 3,855,475     |   |
|                                                         |   |   |          |   |
| Cash held in escrow by lenders                               |   |   | 6,474,365     |   |
|                                                         |   |   |          |   |
| Prepaid expenses and other assets                            |   |   | 1,155,984     |   |
|                                                         |   |   |          |   |
| Tenant security deposits                                     |   |   | 84,887        |   |
|                                                         |   |   |          |   |
| Deferred costs (net of accumulated amortization of $181,748) |   |   |  441,388 |   |
|                                                         |   |   |          |   |
| Total assets                                                 |   | $      | 368,986,743   |   |

| (cost - $364,608,410 )                      |   | $      | 344,361,319      |   |
|---------------------------------------------|--------|--------|------------------|--------|
|                                        |   |   |             |   |
| Accounts payable and accrued expenses       |   |   | 7,815,552        |   |
|                                        |   |   |             |   |
| Prepaid rent                                |   |   | 483,058          |   |
|                                        |   |   |             |   |
| Tenant security deposits payable            |   |   | 1,114,980        |   |
|                                        |   |   |             |   |
| Deferred revenue                            |   |   | 127,113          |   |
|                                        |   |   |             |   |
| Total liabilities                           |   |   | 353,902,022      |   |
|                                        |   |   |             |   |
|                                        |   |   |             |   |
| Members’ equity                       |   |   |  15,084,721 |   |
|                                        |   |   |             |   |
| Total liabilities and members’ equity |   | $      | 368,986,743      |   |

----

| PROPERTY | LOCATION |  OF UNITS | ALLOCATION(1) |               COST (2) |            VALUE__      |   |
|----------|----------|----------------|---------------|-----------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------|--------|

| Arbor Hill                   | Antioch, TN       |   |                               | 548    |   |   | $         | 32,320,781  |   |   | $         | 33,175,405  |   |   | $         | 28,100,000  |   |   |   | (3     | )      |
|------------------------------|-------------------|--------|------------------------------------|--------|--------|--------|-----------|-------------|--------|--------|-----------|-------------|--------|--------|-----------|-------------|--------|--------|--------|--------|--------|
| Arbors of Dublin             | Dublin,OH         |   |                               | 288    |   |   |      | 16,771,849  |   |   |      | 17,838,663  |   |   |      | 18,500,000  |   |   |   | (4     | )      |
| Bluff Ridge                  | Jacksonville,NC   |   |                               | 108    |   |   |      | 8,434,421   |   |   |      | 8,852,471   |   |   |      | 7,500,000   |   |   |   | (3     | )      |
| Brentwood Oaks               | Nashville, TN     |   |                               | 262    |   |   |      | 20,256,609  |   |   |      | 20,878,608  |   |   |      | 15,000,000  |   |   |   | (3     | )      |
| Coral Point                  | Mesa, AZ          |   |                               | 337    |   |   |      | 24,798,298  |   |   |      | 25,918,505  |   |   |      | 16,200,000  |   |   |   | (3     | )      |
| Cornerstone Apartments       | Independence, MO  |   |                               | 420    |   |   |      | 36,183,516  |   |   |      | 36,679,004  |   |   |      | 29,600,000  |   |   |   | (3     | )      |
| Covey at Fox Valley          | Aurora, IL        |   |                               | 216    |   |   |      | 23,511,386  |   |   |      | 24,402,242  |   |   |      | 17,300,000  |   |   |   | (3     | )      |
| Elliot’s Crossing      | Tempe, AZ         |   |                               | 247    |   |   |      | 19,638,653  |   |   |      | 20,183,319  |   |   |      | 14,600,000  |   |   |   | (3     | )      |
| Fox Hollow                   | High Point, NC    |   |                               | 184    |   |   |      | 7,764,467   |   |   |      | 8,346,987   |   |   |      | 6,100,000   |   |   |   | (3     | )      |
| Greenhouse Apartments        | Omaha, NE         |   |                               | 129    |   |   |      | 17,586,793  |   |   |      | 18,024,929  |   |   |      | 13,400,000  |   |   |   | (3     | )      |
| Highland Park Apartments     | Reynoldsburg, OH  |   |                               | 238    |   |   |      | 11,347,222  |   |   |      | 11,148,747  |   |   |      | 9,700,000   |   |   |   | (3     | )      |
| Hunt’s View Apartments | Greensboro, NC    |   |                               | 240    |   |   |      | 14,026,038  |   |   |      | 14,632,403  |   |   |      | 11,000,000  |   |   |   | (3     | )      |
| Jackson Park Place I         | Fresno, CA        |   |                               | 296    |   |   |      | 31,633,829  |   |   |      | 32,901,038  |   |   |      | 21,300,000  |   |   |   | (3     | )      |
| Jackson Park Place II        | Fresno, CA        |   |                               | 80     |   |   |      | 11,999,177  |   |   |      | 12,528,178  |   |   |      | 8,000,000   |   |   |   | (3     | )      |
| Lakes of Northdale           | Tampa, FL         |   |                               | 216    |   |   |      | 17,127,825  |   |   |      | 17,859,806  |   |   |      | 12,500,000  |   |   |   | (4     | )      |
| Littlestone at Village Green | Gallatin, TN      |   |                               | 200    |   |   |      | 14,598,998  |   |   |      | 15,165,796  |   |   |      | 10,200,000  |   |   |   | (3     | )      |
| Misty Springs                | Daytona Beach, FL |   |                               | 128    |   |   |      | 9,131,372   |   |   |      | 9,560,140   |   |   |      | 6,200,000   |   |   |   | (3     | )      |
| Morganton Place              | Fayetteville, NC  |   |                               | 280    |   |   |      | 18,885,703  |   |   |      | 19,742,137  |   |   |      | 18,600,000  |   |   |   | (3     | )      |
| Oakhurst Apartments          | Ocala, FL         |   |                               | 214    |   |   |      | 17,388,805  |   |   |      | 17,741,807  |   |   |      | 9,200,000   |   |   |   | (3     | )      |
| Oakwell Farms                | Hermitage, TN     |   |                               | 414    |   |   |      | 28,050,074  |   |   |      | 28,995,824  |   |   |      | 22,400,000  |   |   |   | (3     | )      |
| The Park at Countryside      | Port Orange, FL   |   |                               | 120    |   |   |      | 9,243,364   |   |   |      | 9,560,626   |   |   |      | 4,600,000   |   |   |   | (3     | )      |
| The Reserve at Wescott       | Summerville, SC   |   |                               | 192    |   |   |      | 16,236,884  |   |   |      | 16,557,107  |   |   |      | 14,100,000  |   |   |   | (3     | )      |
| The Reserve at Wescott II    | Summerville, SC   |   |                               | 96     |   |   |      | 5,999,588   |   |   |      | 9,955,169   |   |   |      | 6,600,000   |   |   |   | (3     | )      |
| Village at Cliffdale         | Fayetteville, NC  |   |                               | 356    |   |   |      | 23,726,370  |   |   |      | 24,520,193  |   |   |      | 21,000,000  |   |   |   | (3     | )      |
| Woodberry Apartments         | Asheville, NC     |   |                               | 168    |   |   |      | 11,899,182  |   |   |      | 12,449,668  |   |   |      | 9,200,000   |   |   |   | (3     | )      |
|                         |              |   |                               |   |   |   |      |        |   |   |      |        |   |   |      |        |   |   |   |   |   |
| Subtotal                     |              |   |                               | 5,977  |   |   |      | 448,561,204 |   |   |      | 467,618,772 |   |   |      | 350,900,000 |   |   |   |   |   |
|                         |              |   |                               |   |   |   |      |        |   |   |      |        |   |   |      |        |   |   |   |   |   |
| Commercial:                  |              |   |                               |   |   |   |      |        |   |   |      |        |   |   |      |        |   |   |   |   |   |
|                         |              |   |                               |   |   |   |      |        |   |   |      |        |   |   |      |        |   |   |   |   |   |
| The Exchange at Palm Bay     | Palm Bay, FL      |   |      72,007 SF |   |   |   | 8,099,444 |        |   |   | 8,482,363 |        |   |   | 4,300,000 |        |   |   | (3     | )      |
|                         |              |   |                               |   |   |   |      |        |   |   |      |        |   |   |      |        |   |   |   |   |   |
| Total                        |              |   |                               |   |   |   | $         | 456,660,648 |   |   | $         | 476,101,135 |   |   | $         | 355,200,000 |   |   |   | (5     | )      |

| (1)   | Purchase price allocation is based on fair value as determined by the Manager on September 18, 2007 at time that APRO was acquired. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Historical cost equals the purchase price allocation plus capital improvements made from the acquisition date through December 31, 2009. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Fair value is as determined by the Manager at December 31, 2009. |
|-----------------|------------------------------------------------------------------|

| (4)   | Fair value is as determined by independent appraiser at December 31, 2009. |
|-----------------|----------------------------------------------------------------------------|

| (5)   | Fair value of the investments in real estate as a percentage of net assets is 2,354.7% |
|-----------------|----------------------------------------------------------------------------------------|

----

| Base rent                                                             |   | $      | 46,154,564  |   |
|-----------------------------------------------------------------------|--------|--------|-------------|--------|
| Other rental income                                                   |   |   | 3,964,409   |   |
|                                                                  |   |   |        |   |
| Total operating revenues                                              |   |   | 50,118,973  |   |
|                                                                  |   |   |        |   |
| OPERATING EXPENSES:                                                   |   |   |        |   |
|                                                                  |   |   |        |   |
| Payroll and related costs                                             |   |   | 7,213,274   |   |
| Repairs and maintenance                                               |   |   | 5,401,388   |   |
| Real property taxes                                                   |   |   | 5,113,868   |   |
| Utilities                                                             |   |   | 3,274,719   |   |
| General and administrative                                            |   |   | 2,455,762   |   |
| Property management fees                                              |   |   | 2,264,942   |   |
| Insurance                                                             |   |   | 1,222,021   |   |
| Advertising                                                           |   |   | 1,185,358   |   |
|                                                                  |   |   |        |   |
| Total operating expenses                                              |   |   | 28,131,332  |   |
|                                                                  |   |   |        |   |
|                                                                  |   |   |        |   |
| INCOME FROM OPERATIONS                                                |   |   | 21,987,641  |   |
|                                                                  |   |   |        |   |
| OTHER INCOME (EXPENSE):                                               |   |   |        |   |
|                                                                  |   |   |        |   |
| Interest on mortgage notes, bonds and credit facilities payable       |   |   | (18,161,514 | )      |
| Amortization of deferred financing costs                              |   |   | (1,162,270  | )      |
| Professional fees                                                     |   |   | (466,200    | )      |
| Interest income                                                       |   |   | 85,436      |   |
|                                                                  |   |   |        |   |
| INCOME BEFORE NET UNREALIZED DEPRECIATION AND                         |   |   |        |   |
|  APPRECIATION AND REALIZED GAIN AND LOSS                         |   |   | 2,283,093   |   |
|                                                                  |   |   |        |   |
| Net unrealized depreciation of investment in real estate properties   |   |   | (69,748,604 | )      |
| Net unrealized appreciation on fair value of mortgage notes and bonds |   |   | 5,481,881   |   |
| Net unrealized appreciation of interest rate cap and swap agreements  |   |   | 343,360     |   |
| Realized gain on mortgage notes                                       |   |   | 674,420     |   |
| Realized loss on sales of real estate properties                      |   |   | (141,246    | )      |
|                                                                  |   |   |        |   |
| NET INVESTMENT LOSS                                                   |   | $      | (61,107,096 | )      |

----

|                                           |   | Member I |        |   | Member II |   |        | Member III |   |   | Total       |   |
|------------------------------------------------|--------|----------|-------------|--------|-----------|--------|-------------|------------|--------|--------|-------------|--------|
|                                           |   |     |        |   |      |   |        |       |   |   |        |   |
| Members’ equity at beginning of the      |   |     |        |   |      |   |        |       |   |   |        |   |
|   year                               |   | $        | 26,667,137  |   |      | $      | 26,667,137  |       |   | $      | 22,857,543  |   |   | $ | 76,191,817 |   |
|                                           |   |     |        |   |      |   |        |       |   |   |        |   |   |   |   |   |
| Income before net unrealized depreciation      |   |     |        |   |      |   |        |       |   |   |        |   |   |   |   |   |
|   and appreciation and realized      |   |     |        |   |      |   |        |       |   |   |        |   |   |   |   |   |
|     gain and loss          |   |     | 799,082     |   |      |   | 799,082     |       |   |   | 684,929     |   |   |   | 2,283,093 |   |
|                                           |   |     |        |   |      |   |        |       |   |   |        |   |   |   |   |   |
| Net unrealized depreciation of investment      |   |     |        |   |      |   |        |       |   |   |        |   |   |   |   |   |
|                                           |   |     |        |   |      |   |        |       |   |   |        |   |   |   |   |   |
|    In real estate properties    |   |     | (24,412,011 | )      |      |   | (24,412,011 | )          |   |   | (20,924,582 | )      |   |   | (69,748,604 | ) |
|                                           |   |     |        |   |      |   |        |       |   |   |        |   |   |   |   |   |
| Net unrealized appreciation on fair value      |   |     |        |   |      |   |        |       |   |   |        |   |   |   |   |   |
|    of mortgage notes and bonds  |   |     | 1,918,658   |   |      |   | 1,918,658   |       |   |   | 1,644,565   |   |   |   | 5,481,881 |   |
|                                           |   |     |        |   |      |   |        |       |   |   |        |   |   |   |   |   |
| Net unrealized appreciation of interest        |   |     |        |   |      |   |        |       |   |   |        |   |   |   |   |   |
|    rate cap and swap agreements |   |     | 120,175     |   |      |   | 120,175     |       |   |   | 103,010     |   |   |   | 343,360 |   |
|                                           |   |     |        |   |      |   |        |       |   |   |        |   |   |   |   |   |
| Realized gain on mortgage                      |   |     |        |   |      |   |        |       |   |   |        |   |   |   |   |   |
|   notes payable                      |   |     | 236,047     |   |      |   | 236,047     |       |   |   | 202,326     |   |   |   | 674,420 |   |
|                                           |   |     |        |   |      |   |        |       |   |   |        |   |   |   |   |   |
| Realized loss on sales of real estate          |   |     |        |   |      |   |        |       |   |   |        |   |   |   |   |   |
|    properties                   |   |     | (49,436     | )      |      |   | (49,436     | )          |   |   | (42,374     | )      |   |   | (141,246 | ) |
|                                           |   |     |        |   |      |   |        |       |   |   |        |   |   |   |   |   |
|                                           |   |     |        |   |      |   |        |       |   |   |        |   |   |   |   |   |
| Members’ equity at end of year           |   | $        | 5,279,652   |   |      | $      | 5,279,652   |       |   | $      | 4,525,417   |   |   | $ | 15,084,721 |   |

----

|                                                                                                  |   |                                                                                      |        |   |   |   |
|-------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------|-------------|--------|--------|--------|
|                                                                                                  |   |                                                                                      |        |   |   |   |
| Net investment loss                                                                                   |   | $                                                                                         | (61,107,096 | )      |   |   |   |
| Adjustments to reconcile net investment loss to                                                       |   |                                                                                      |        |   |   |   |   |
|     net cash provided by operating activities:                                    |   |                                                                                      |        |   |   |   |   |
|     Net unrealized depreciation of investment in real estate properties           |   |                                                                                      | 69,748,604  |   |   |   |   |
|     Net unrealized appreciation on fair value of mortgage notes and bonds         |   |              (5,481,881) |        |   |   |   |   |
|     Net unrealized appreciation of interest rate cap and swap agreements          |   |                                                                                      | (343,360)   |   |   |   |   |   |
|     Realized gain on mortgage notes payable                                       |   |                                                                                      | (674,420    | )      |   |   |   |   |
|     Realized loss on sales of real estate properties                              |   |                                                                                      | 141,246     |   |   |   |   |   |
|     Amortization of deferred financing costs                                      |   |                                                                                      | 1,162,270   |   |   |   |   |   |
|     Changes in operating assets and liabilities:                                  |   |                                                                                      |        |   |   |   |   |   |
|        Increase in cash held in escrow by lenders                  |   |                                                                                      | (442,992    | )      |   |   |   |   |
|        Decrease in prepaid expenses and other assets               |   |                                                                                      | 241,337     |   |   |   |   |   |
|        Decrease in tenant security deposits                        |   |                                                                                      | 48,972      |   |   |   |   |   |
|        Increase in accounts payable and accrued expenses           |   |                                                                                      | 121,323     |   |   |   |   |   |
|        Decrease in deferred revenue                                |   |                                                                                      | (28,797     | )      |   |   |   |   |
|        Decrease in prepaid rent                                    |   |                                                                                      | (84,176     | )      |   |   |   |   |
|        Decrease in tenant security deposits payable                |   |                                                                                      | (46,455     | )      |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
|           Net cash provided by operating activities |   |                                                                                      | 3,254,575   |   |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                                 |   |                                                                                      |        |   |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
| Capital additions to real estate properties                                                           |   |                                                                                      | (4,961,199  | )      |   |   |   |   |
| Increase in restricted cash                                                                           |   |                                                                                      | (1,861,636  | )      |   |   |   |   |
| Proceeds from sales of real estate properties                                                         |   |                                                                                      | 24,371,349  |   |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
|           Net cash provided by investing activities |   |                                                                                      | 17,548,514  |   |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                                 |   |                                                                                      |        |   |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
| Payments of mortgage notes, bonds and credit facilities                                               |   |                                                                                      | (41,313,465 | )      |   |   |   |   |
| Proceeds from mortgage notes, bonds and credit facilities                                             |   |                                                                                      | 18,796,000  |   |   |   |   |   |
| Purchase and settlement of interest rate derivatives                                                  |   |                                                                                      | (506,519    | )      |   |   |   |   |
| Deferred financing costs                                                                              |   |                                                                                      | (1,035,564  | )      |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
|           Net cash used in financing activities     |   |                                                                                      | (24,059,548 | )      |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
| NET DECREASE IN CASH AND CASH EQUIVALENTS                                                             |   |                                                                                      | (3,256,459  | )      |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, beginning of year                                                          |   |                                                                                      | 5,031,103   |   |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, end of year                                                                |   | $                                                                                         | 1,774,644   |   |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                                      |   |                                                                                      |        |   |   |   |   |   |
|                                                                                                  |   |                                                                                      |        |   |   |   |   |   |
| Cash paid during the year for interest                                                                |   | $                                                                                         | 18,505,168  |   |   |   |   |   |

----

| 1. | ORGANIZATION |
|----|--------------|

| 2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|----|--------------------------------------------|

----

----

|   | On July 2, 2009, The Hunt Apartments was sold for $9,425,000 in an all cash transaction.  The carrying value of the property on the date of sale was $9,409,825 and resulted in a net loss of $109,882 after transaction closing costs of $125,057.  The proceeds of the sale were used to retire the mortgage on the property. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 4. | MORTGAGE NOTES, BONDS AND CREDIT FACILITIES PAYABLE |
|----|-----------------------------------------------------|

| Fox Hollow                        |   |   | 6.91   | %      | 03/01/11 |   | $      | 41,072  |   |   | $                 | 5,557,076  |         |   |
|-----------------------------------|--------|--------|--------|--------|----------|--------|--------|---------|--------|--------|-------------------|------------|--------------|--------|
| Bluff Ridge                       |   |   | 5.84   | %      | 09/01/13 |   |   | 31,704  |   |   |              | 5,299,651  |         |   |
| Highland Park                     |   |   | 4.69   | %      | 09/01/13 |   |   | 36,263  |   |   |              | 6,258,946  |         |   |
| Hunt’s View Apartments      |   |   | 5.83   | %      | 01/01/12 |   |   | 42,384  |   |   |              | 6,366,024  |         |   |
| Misty Springs                     |   |   | 5.37   | %      | 01/01/13 |   |   | 31,832  |   |   |              | 7,120,000  |         |   |
| Oakwell Farms                     |   |   | 5.63   | %      | 02/01/14 |   |   | 91,038  |   |   |              | 15,640,973 |         |   |
| Park at Countryside               |   |   | 5.46   | %      | 02/01/14 |   |   | 16,902  |   |   |              | 2,957,698  |         |   |
| The Reserve at Wescott Plantation |   |   | 5.75   | %      | 11/01/44 |   |   | 65,635  |   |   |              | 11,849,388 |         |   |
| Coral Point                       |   |   | 5.22   | %      | 03/01/13 |   |   | 72,172  |   |   |              | 16,056,000 |         |   |
| Jackson Park Place I              |   |   | 5.23   | %      | 12/01/12 |   |   | 107,438 |   |   |              | 18,965,725 |         |   |
| Oakhurst Apartments               |   |   | 5.37   | %      | 01/01/13 |   |   | 52,577  |   |   |              | 11,760,000 |         |   |
|                              |   |   |   |   |     |   |   |    |   |   |              |       |         |   |
| Total Mortgage Notes Payable      |   |   |   |   |     |   |   |    |   |   | 107,831,481  |       |    |

| Arbor Hill (1) (2)           |   |   | 1.47 | % | 12/01/25 |   |   | 33,586 |   |   |   | 26,150,000 |   |
|------------------------------|--------|--------|------|---|----------|--------|--------|--------|--------|--------|--------|------------|--------|
| Brentwood Oaks (2)           |   |   | 1.29 | % | 07/15/31 |   |   | 11,984 |   |   |   | 11,320,000 |   |
| Covey at Fox Valley (2)      |   |   | 1.29 | % | 10/15/27 |   |   | 12,244 |   |   |   | 12,410,000 |   |
| Elliots Crossing (3)         |   |   | 5.38 | % | 04/01/30 |   |   | 37,177 |   |   |   | 8,300,000  |   |
| The Exchange at Palm Bay (4) |   |   | 6.75 | % | 11/01/10 |   |   | 37,633 |   |   |   | 4,561,721  |   |
| Lakes of Northdale (2)       |   |   | 1.29 | % | 05/15/12 |   |   | 10,096 |   |   |   | 9,610,000  |   |

| Total Bonds Payable                                                                       |    72,351,721 |                 |
|-------------------------------------------------------------------------------------------|------------------------------|--------------------------------|
|                                                                                      |                         |                           |
| Subtotal                                                                                  |   180,183,202           |                           |
|                                                                                      |                         |                           |
| Secured Credit Facility (5)                                                               |   84,718,000            |                           |
| Construction Credit Facility for The Reserve at Wescott Phase II (6)                      |    5,982,208  |       |
|                                                                                      |                         |                           |
|                                                                                      |   270,883,410           |                           |
| Plus: Net unrealized depreciation on Mortgage Notes, Bonds and                            |                         |                           |
|           Credit facilities payable (7) |   (20,247,091)          |                           |
|                                                                                      |                         |                           |
| Mortgage Notes, Bonds and Secured Credit Facilities Payable, at Fair Value                |   250,636,319           |                           |
|                                                                                      |                         |                           |
| Unsecured Credit Facility (8)                                                             |   93,725,000            |                      |
|                                                                                      |                         |                           |
| Total Mortgage Notes, Bonds, and Credit Facilities Payable                                |   $344,361,319          |                           |

| (1)   | The bond is also collateralized with Littlestone at Village Green. |
|-----------------|--------------------------------------------------------------------|

| (2)   | The interest rate is based on a weekly variable rate, which is determined by a highly rated bond composite variable rate. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------|

| (3)   | The rate is fixed at 5.38% through May, 2010.  Thereafter the rate is based on the SIFMA Municipal Swap Index (formerly the BMA Municipal Swap Index). |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | The property is scheduled to be sold before the loan matures. |
|-----------------|---------------------------------------------------------------|

| (5)   | The secured credit facility (the “Facility”) in the amount of $84,718,000 is collateralized by Arbors of Dublin, Cornerstone, Morganton Place, The Greenhouse, Village at Cliffdale and Woodberry.  The Facility provides for an interest only monthly payment which is based upon a fixed rate through 2012, after which time it shall include principal to amortize the outstanding balance over a 30 year period and each draw matures on dates ranging from October, 2016 to October, 2017.  The interest rates for each draw vary from 5.44% to 5.68%.   The outstanding amount of the Facility is $84,718,000 at December 31, 2009.  The Facility may be prepaid with penalty. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6)   | In connection with the construction of The Reserve at Wescott Phase II, APRO entered into a construction credit facility with a bank, in the amount of $6,314,000 with a maturity date of April 11, 2010. The loan provides interest of LIBOR plus 1.65%, which was 1.89% at December 31, 2009.  The outstanding balance of the loan is $5,982,208 at December 31, 2009.  The Company received a notice of default from the lender regarding compliance with certain covenants, which the Company does not agree with.  The Company is currently in discussion with the lender to extend and/or modify the loan to cure the defaults. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7)   | This amount is the net of the net unrealized depreciation of the mortgages, bonds and credit facilities for the period of inception to December 31, 2009 and the mark to market adjustment of debt at the time of the APRO acquisition. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8)   | In connection with the acquisition of APRO, the Company entered into an unsecured credit facility (the “Loan”) with a bank, in the amount of $175,000,000 that has been extended to May 31, 2011. At December 31, 2009, the interest rate on the Loan was based upon a blended rate of LIBOR plus 5.85%, which was 6.08% at December 31, 2009.  The maximum amount of the Loan was reduced to $93,725,000 as of 12/31/09 and any principal that is repaid shall not be re-borrowed.  The Loan may be prepaid without penalty, requires mandatory repayments from the proceeds of sales, and restricts distributions until the loan is paid in full.  As of and for the year ended December 31, 2009, the Company is not in compliance with certain financial ratios which must be maintained during the life of the Loan. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | 2010       | $  11,640,812 |   |
|--------|------------|-------------------------|--------|
|   | 2011       | 100,604,720             |   |
|   | 2012       | 35,172,761              |   |
|   | 2013       | 45,390,254              |   |
|   | 2014       | 17,666,469              |   |
|   | Thereafter |   154,133,394 |   |
|   |       | $364,608,410            |   |

| Variable to fixed swap     | 01/15/12 |   | $      | 11,320,000 |   |   |   | 3.44   | %      |   |   | 3.69   | %      |   | $      | (551,173   | )      |
|----------------------------|----------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|------------|--------|
| Variable to fixed swap     | 12/15/16 |   |   | 12,410,000 |   |   |   | 3.44   | %      |   |   | 3.69   | %      |   |   | (849,930   | )      |
| Fixed to variable swap (1) | 05/01/10 |   |   | 4,587,491  |   |   |   | 7.75   | %      |   |   | 2.27   | %      |   |   | (399,887   | )      |
| Fixed to variable swap (1) | 05/01/10 |   |   | 8,300,000  |   |   |   | 5.36   | %      |   |   | 2.00   | %      |   |   | (168,331   | )      |
| Libor Cap                  | 01/01/15 |   |   | 13,400,000 |   |   |   | 6.00   | %      |   |   | n/a    |   |   |   | 98,438     |   |
| Libor Cap                  | 01/01/15 |   |   | 12,750,000 |   |   |   | 6.00   | %      |   |   | n/a    |   |   |   | 93,663     |   |
| Libor Cap                  | 09/15/11 |   |   | 11,320,000 |   |   |   | 6.22   | %      |   |   | n/a    |   |   |   | 1,594      |   |
| Libor Cap                  | 09/19/12 |   |   | 9,610,000  |   |   |   | 7.30   | %      |   |   | n/a    |   |   |   | 6,406      |   |
|                       |     |   |   |       |   |   |   |   |   |   |   |   |   |   |   |       |   |
|                       |     |   | $      | 83,697,491 |   |   |   |   |   |   |   |   |   |   | $      | (1,769,220 | )      |

----

|   | The Company uses a three-tier valuation hierarchy that prioritizes the assumptions, referred to as inputs, used in valuation techniques to measure fair value.  Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | The three levels of fair value hierarchy are described below. |
|--------|---------------------------------------------------------------|

| ·   | Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 2 – Quoted prices in active markets for similar assets and liabilities or quoted prices in less active, dealer or broker markets; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and are unobservable. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------|

|   | The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.  Accordingly, when available, the Company measures fair value using Level 1 inputs because they generally provide the most reliable evidence of fair value.  If market data is not readily available, fair value is based upon other significant unobservable inputs such as inputs that reflect the Company’s own assumptions about the inputs market participants would use in valuing the investments.  Investments valued using unobservable inputs are classified to the lowest level of any input that is most significant to the valuation.  Thus, a valuation may be classified in Level 3 even though the valuation may include significant inputs that are readily observable. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Investment in real estate properties                        |   | $      | 355,200,000 |   |
|-------------------------------------------------------------|--------|--------|-------------|--------|
|                                                        |   |   |        |   |
| Interest rate derivatives, net                              |   | $      | 1,769,220   |   |
| Mortgage notes, bonds payable and certain credit facilities |   |   | 250,636,319 |   |
|                                                        |   |   |        |   |
| Total Liabilities                                           |   | $      | 252,405,539 |   |

----

| Beginning balance – January 1, 2009            |   | $      | 444,500,000 |   |
|------------------------------------------------------|--------|--------|-------------|--------|
| Total realized and unrealized gains and              |   |   |        |   |
|   losses included in changes in net assets |   |   | (69,748,604 | )      |
|  Purchases, capital additions, issuances        |   |   |        |   |
|   and settlements                          |   |   | 4,961,199   |   |
| Carrying value of sold real estate properties        |   |   | (24,512,595 | )      |
|                                                 |   |   |        |   |
| Ending balance – December 31, 2009             |   | $      | 355,200,000 |   |

| Beginning balance – January 1, 2009 |   | $      | 269,235,085 |   |   | $      | 2,619,099 |   |   | $      | 271,854,184 |   |
|-------------------------------------------|--------|--------|-------------|--------|--------|--------|-----------|--------|--------|--------|-------------|--------|
|                                      |   |   |        |   |   |   |      |   |   |   |        |   |
| Total realized and unrealized gains and   |   |   |        |   |   |   |      |   |   |   |        |   |
| losses included in changes in net assets  |   |   | (6,156,301  | )      |   |   | (343,360  | )      |   |   | (6,499,661  | )      |
| Purchases, capital additions, issuances   |   |   |        |   |   |   |      |   |   |   |        |   |
| and settlements                           |   |   | (12,442,465 | )      |   |   | (506,519  | )      |   |   | (12,948,984 | )      |
|                                      |   |   |        |   |   |   |      |   |   |   |        |   |
| Ending balance – December 31, 2009  |   | $      | 250,636,319 |   |   | $      | 1,769,220 |   |   | $      | 252,405,539 |   |

----

| (1)   | Average net assets are calculated based upon the weighted average of the beginning and ending net assets of the year ending December 31, 2009. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Net investment income includes income less all expenses other than any realized and unrealized gains and losses. |
|-----------------|------------------------------------------------------------------------------------------------------------------|

| (3)   | Internal rate of return calculated based on all cash inflows and outflows since inception and net assets at December 31, 2009. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------|

|   | The Company and the properties in which it has an interest are operating in a challenging and uncertain economic environment.  Financial and real estate companies continue to be affected by the lack of liquidity in financial markets, declines in real estate values and the reduction in the willingness of financial institutions to make new loans and refinance or extend existing loans on the same terms and conditions. The Company’s estimates of fair value are based upon the best information available as of the date of valuation. Should market conditions continue to deteriorate there is no assurance that such conditions will not result in further decreased property values and cash flows. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|