----

----

----

| Investment      in real estate properties, at fair value             |   |   |   |          |
|----------------------------------------------------------------------|--------|--------|--------|---------------|
| (cost      - $500,589,518)                                           |   |   |   | $444,500,000  |   |
|                                                                 |   |   |   |          |   |   |
| Cash      and cash equivalents                                       |   |   |   | 5,031,103     |   |
|                                                                 |   |   |   |          |   |   |
| Restricted      cash                                                 |   |   |   | 1,993,839     |   |
|                                                                 |   |   |   |          |   |   |
| Cash      held in escrow by lenders                                  |   |   |   | 6,031,373     |   |
|                                                                 |   |   |   |          |   |   |
| Prepaid      expenses and other assets                               |   |   |   | 1,397,321     |   |
|                                                                 |   |   |   |          |   |   |
| Tenant      security deposits                                        |   |   |   | 133,859       |   |
|                                                                 |   |   |   |          |   |   |
| Deferred      costs (net of accumulated amortization of $ 1,703,955) |   |   |   |  568,094 |   |
|                                                                 |   |   |   |          |   |   |
| Total      assets                                                    |   |   |   | $459,655,589  |   |
|                                                                 |   |   |   |          |   |   |

| Mortgage      notes, bonds and credit facilities payable |   |   |   |             |
|----------------------------------------------------------|--------|--------|--------|------------------|
| (Cost      - $387,125,875)                               |   |   |   | $373,035,085     |   |
|                                                     |   |   |   |             |   |   |
| Accounts      payable and accrued expenses               |   |   |   | 8,544,108        |   |
|                                                     |   |   |   |             |   |   |
| Prepaid      rent                                        |   |   |   | 567,234          |   |
|                                                     |   |   |   |             |   |   |
| Tenant      security deposits payable                    |   |   |   | 1,161,435        |   |
|                                                     |   |   |   |             |   |   |
| Deferred      revenue                                    |   |   |   | 155,910          |   |
|                                                     |   |   |   |             |   |   |
| Total      liabilities                                   |   |   |   | 383,463,772      |   |
|                                                     |   |   |   |             |   |   |
| Members’      equity                               |   |   |   |  76,191,817 |   |
|                                                     |   |   |   |             |   |   |
| Total      liabilities and members’ equity         |   |   |   | $459,655,589     |   |

----

|                              |   |   |                   |                 |   |   | NUMBER         |            |   | PURCHASE             |        |               | HISTORICAL |   |        |         | FAIR  |   |
|-----------------------------------|--------|--------|------------------------|-----------------|--------|--------|----------------|-----------------|--------|----------------------|-------------|--------------------|------------|--------|-------------|--------------|------------|--------|
| PROPERTY                          |   |   |                   |   LOCATION |   |   |           |   OF UNITS |   |   ALLOCATION(1) |        |   COST (2)    |       |   |        | VALUE   |       |
|                                   |   |   |                   |            |   |   |           |            |   |                 |        |                    |       |   |        |         |
|                              |   |   |                   |            |   |   |           |            |   |                 |        |               |       |   |        |         |       |   |   |   |   |   |
| Arbor      Hill                   |   |   | Antinoch,      TN      |            |   |   | 548            |            |   |                 | $32,320,781 |               |       |   | $32,787,601 |         |       |   | $30,300,000 | (3) |
| Arbors      of Dublin             |   |   | Dublin,OH              |            |   |   | 288            |            |   |                 | 16,771,849  |               |       |   | 17,414,874  |         |       |   | 14,900,000 | (3) |
| Bluff      Ridge                  |   |   | Jacksonville,NC        |            |   |   | 108            |            |   |                 | 8,434,421   |               |       |   | 8,727,755   |         |       |   | 8,800,000 | (3) |
| Brentwood      Oaks               |   |   | Nashville,      TN     |            |   |   | 262            |            |   |                 | 20,256,609  |               |       |   | 20,825,360  |         |       |   | 19,100,000 | (3) |
| Coral      Point                  |   |   | Mesa,      AZ          |            |   |   | 337            |            |   |                 | 24,798,298  |               |       |   | 25,600,183  |         |       |   | 21,500,000 | (3) |
| Cornerstone      Apartments       |   |   | Independence,      MO  |            |   |   | 420            |            |   |                 | 36,183,516  |               |       |   | 36,477,059  |         |       |   | 30,500,000 | (4) |
| Covey      at Fox Valley          |   |   | Aurora,      IL        |            |   |   | 216            |            |   |                 | 23,511,386  |               |       |   | 24,093,911  |         |       |   | 22,000,000 | (3) |
| Elliot’s      Crossing      |   |   | Tempe,      AZ         |            |   |   | 247            |            |   |                 | 19,638,653  |               |       |   | 19,940,079  |         |       |   | 17,000,000 | (3) |
| Fox      Hollow                   |   |   | High      Point, NC    |            |   |   | 184            |            |   |                 | 7,764,467   |               |       |   | 8,077,734   |         |       |   | 7,500,000 | (3) |
| Greenhouse      Apartments        |   |   | Omaha,      NE         |            |   |   | 128            |            |   |                 | 17,586,793  |               |       |   | 17,827,744  |         |       |   | 16,500,000 | (3) |
| Highland      Park Apartments     |   |   | Reynoldsburg,      OH  |            |   |   | 252            |            |   |                 | 11,347,222  |               |       |   | 11,795,258  |         |       |   | 12,500,000 | (3) |
| The      Hunt                     |   |   | Oklahoma      City, OK |            |   |   | 216            |            |   |                 | 9,597,342   |               |       |   | 10,315,154  |         |       |   | 10,000,000 | (3) |
| Hunt’s      View Apartments |   |   | Greensboro,      NC    |            |   |   | 240            |            |   |                 | 14,026,038  |               |       |   | 14,469,737  |         |       |   | 14,000,000 | (3) |
| Jackson      Park Place I         |   |   | Fresno,      CA        |            |   |   | 296            |            |   |                 | 31,633,829  |               |       |   | 32,357,882  |         |       |   | 26,500,000 | (3) |
| Jackson      Park Place II        |   |   | Fresno,      CA        |            |   |   | 80             |            |   |                 | 11,999,177  |               |       |   | 12,306,306  |         |       |   | 9,000,000 | (3) |
| Lakes      of Northdale           |   |   | Tampa,      FL         |            |   |   | 216            |            |   |                 | 17,127,825  |               |       |   | 17,635,600  |         |       |   | 13,900,000 | (3) |
| Littlestone      at Village Green |   |   | Gallatin,      TN      |            |   |   | 200            |            |   |                 | 14,598,998  |               |       |   | 14,995,171  |         |       |   | 10,500,000 | (3) |
| Misty      Springs                |   |   | Daytona      Beach, FL |            |   |   | 128            |            |   |                 | 9,131,372   |               |       |   | 9,472,264   |         |       |   | 7,600,000 | (3) |
| Morganton      Place              |   |   | Fayetteville,      NC  |            |   |   | 280            |            |   |                 | 18,885,703  |               |       |   | 19,395,833  |         |       |   | 20,800,000 | (4) |
| Oakhurst      Apartments          |   |   | Ocala,      FL         |            |   |   | 214            |            |   |                 | 17,388,805  |               |       |   | 17,652,033  |         |       |   | 10,600,000 | (3) |
| Oakwell      Farms                |   |   | Hermitage,      TN     |            |   |   | 414            |            |   |                 | 28,050,074  |               |       |   | 28,402,314  |         |       |   | 27,900,000 | (3) |
| The      Park at Countryside      |   |   | Port      Orange, FL   |            |   |   | 120            |            |   |                 | 9,243,364   |               |       |   | 9,429,992   |         |       |   | 5,500,000 | (3) |
| The      Reserve at Wescott       |   |   | Summerville,      SC   |            |   |   | 192            |            |   |                 | 16,236,884  |               |       |   | 16,496,903  |         |       |   | 16,900,000 | (3) |
| The      Reserve at Wescott II    |   |   | Summerville,      SC   |            |   |   | 96             |            |   |                 | 5,999,588   |               |       |   | 9,942,019   |         |       |   | 9,100,000 | (3) |
| Tregaron      Oaks                |   |   | Bellvue,      NE       |            |   |   | 300            |            |   |                 | 18,452,733  |               |       |   | 19,261,437  |         |       |   | 17,500,000 | (3) |
| Village      at Cliffdale         |   |   | Fayetteville,      NC  |            |   |   | 356            |            |   |                 | 23,726,370  |               |       |   | 24,276,608  |         |       |   | 26,400,000 | (3) |
| Woodberry      Apartments         |   |   | Asheville,      NC     |            |   |   | 168            |            |   |                 | 11,899,182  |               |       |   | 12,259,745  |         |       |   | 12,500,000 | (3) |
|                              |   |   |                   |            |   |   |           |            |   |                 |        |               |       |   |        |         |       |   |   |   |   |   |
| Subtotal                          |   |   |                   |            |   |   |           | 6,506           |   |                 |        | 476,611,279        |       |   |        | 492,236,556  |       |   |   | 439,300,000 |   |
|                              |   |   |                   |            |   |   |           |            |   |                 |        |               |       |   |        |         |       |   |   |   |   |   |
| Commercial:                       |   |   |                   |            |   |   |           |            |   |                 |        |               |       |   |        |         |       |   |   |   |   |
|                              |   |   |                   |            |   |   |           |            |   |                 |        |               |       |   |        |         |       |   |   |   |   |   |
| The      Exchange at Palm Bay     |   |   | Palm      Bay, FL      |            |   |   | 72,007      SF |            |   |                 | 8,099,444   |               |       |   | 8,352,962   |         |       |   | 5,200,000 | (3) |
|                              |   |   |                   |            |   |   |           |            |   |                 |        |               |       |   |        |         |       |   |   |   |   |   |
| Total                             |   |   |                   |            |   |   |           |            |   |                 |        | $484,710,723  |       |   |        | $500,589,518 |       |   |   | $444,500,000 |  (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,  2008. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Fair      value is as determined by the Manager at December 31,  2008. |
|-----------------|------------------------------------------------------------------------|

| (4)   | Fair      value is as determined by independent appraiser at December 31,      2008. |
|-----------------|--------------------------------------------------------------------------------------|

| (5)   | Fair      value of the investments in real estate as a percentage of net assets is      538.40% |
|-----------------|-------------------------------------------------------------------------------------------------|

----

| Base      rent                                                                  |   |   |   | $50,336,774      |   |
|---------------------------------------------------------------------------------|--------|--------|--------|------------------|--------|
| Other      rental income                                                        |   |   |   | 4,218,441        |   |
|                                                                            |   |   |   |             |   |   |
| Total      operating revenues                                                   |   |   |   | 54,555,215       |   |
|                                                                            |   |   |   |             |   |   |
| OPERATING      EXPENSES:                                                        |   |   |   |             |   |
|                                                                            |   |   |   |             |   |   |
| Payroll      and related costs                                                  |   |   |   | 7,796,202        |   |
| Repairs      and maintenance                                                    |   |   |   | 5,954,925        |   |
| Real      property taxes                                                        |   |   |   | 5,668,910        |   |
| Utilities                                                                       |   |   |   | 3,396,706   |   |
| Property      management fees                                                   |   |   |   | 2,460,437        |   |
| General      and administrative                                                 |   |   |   | 2,002,903        |   |
| Insurance                                                                       |   |   |   | 1,563,460        |   |
| Advertising                                                                     |   |   |   | 1,413,693        |   |
|                                                                            |   |   |   |             |   |   |
| Total      operating expenses                                                   |   |   |   | 30,257,236  |   |
|                                                                            |   |   |   |             |   |   |
|                                                                            |   |   |   |             |   |   |
| INCOME      FROM OPERATIONS                                                     |   |   |   | 24,297,979       |   |
|                                                                            |   |   |   |             |   |   |
| OTHER      INCOME (EXPENSE):                                                    |   |   |   |             |   |
|                                                                            |   |   |   |             |   |   |
| Interest      on mortgage notes, bonds and credit facilities payable            |   |   |   | (20,537,255      | )      |
| Amortization      of deferred financing costs                                   |   |   |   | (1,595,090       | )      |
| Professional      fees                                                          |   |   |   | (456,084         | )      |
| Ground      rent                                                                |   |   |   | (54,821          | )      |
| Interest      income                                                            |   |   |   | 217,793          |   |
|                                                                            |   |   |   |             |   |   |
| INCOME      BEFORE NET UNREALIZED DEPRECIATION AND                              |   |   |   |             |   |
| APPRECIATION      AND REALIZED GAIN AND LOSS                                    |   |   |   | 1,872,522        |   |
|                                                                            |   |   |   |             |   |   |
| Net      unrealized depreciation of investment in real estate      properties   |   |   |   | (58,203,203      | )      |
| Net      unrealized appreciation on fair value of mortgage notes and      bonds |   |   |   | 14,601,886       |   |
| Net      unrealized depreciation of interest rate cap and swap      agreements  |   |   |   | (1,154,091       | )      |
| Realized      gain on mortgage notes payable                                    |   |   |   | 717,280          |   |
| Realized      gain on termination of swap agreement                             |   |   |   | 112,557          |   |
| Realized      loss on sales of real estate properties                           |   |   |   | (2,512,515       | )      |
|                                                                            |   |   |   |             |   |   |
| NET      INVESTMENT LOSS                                                        |   |   |   | $(44,565,564     | )      |
|                                                                            |   |   |   |             |   |   |

----

|                                           |   |   | Member I |              |   | Member II |   |        | Member III |   |   | Total       |   |
|------------------------------------------------|--------|--------|----------|-------------------|--------|-----------|--------|-------------|------------|--------|--------|-------------|--------|
|                                           |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |   |
| Members’      equity at beginning of the |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |
| year      – as previously reported       |   |   |     | $43,119,548       |   |      |   | $43,119,548 |       |   |   | $36,959,612 |   |   |   | $123,198,708 |   |
|                                           |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |   |
| Cumulative      effect of change               |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |
| in      accounting principle                   |   |   |     | (854,464          | )      |      |   | (854,464    | )          |   |   | (732,399    | )      |   |   | (2,441,327 | ) |
|                                           |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |   |
| Members’      equity at beginning of the |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |
| year      – as revised                   |   |   |     | 42,265,084        |   |      |   | 42,265,084  |       |   |   | 36,227,213  |   |   |   | 120,757,381 |   |
|                                           |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |   |
| Income      before unrealized depreciation     |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |
| and      appreciation, and realized            |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |
| gain      and loss                             |   |   |     | 655,383           |   |      |   | 655,383     |       |   |   | 561,756     |   |   |   | 1,872,522 |   |
|                                           |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |   |
| Net      unrealized depreciation of investment |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |
|                                           |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |   |
| In      real estate properties                 |   |   |     | (20,371,121       | )      |      |   | (20,371,121 | )          |   |   | (17,460,961 | )      |   |   | (58,203,203 | ) |
|                                           |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |   |
| Net      unrealized depreciation on fair value |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |
| of      mortgage notes and bonds               |   |   |     | 5,110,660         |   |      |   | 5,110,660   |       |   |   | 4,380,566   |   |   |   | 14,601,886 |   |
|                                           |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |   |
| Net      unrealized depreciation of interest   |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |
| rate      cap and swap agreements              |   |   |     | (403,932          | )      |      |   | (403,932    | )          |   |   | (346,227    | )      |   |   | (1,154,091 | ) |
|                                           |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |   |
| Realized      gain on mortgage notes payable   |   |   |     | 251,048           |   |      |   | 251,048     |       |   |   | 215,184     |   |   |   | 717,280 |   |
|                                           |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |   |
| Realized      gain on termination of swap      |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |
| agreement                                      |   |   |     | 39,395            |   |      |   | 39,395      |       |   |   | 33,767      |   |   |   | 112,557 |   |
|                                           |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |   |
| Realized      loss on sales of real estate     |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |
| properties                                     |   |   |     | (879,380)    |   |      |   | (879,380    | )          |   |   | (753,755    | )      |   |   | (2,512,515)  |   |
|                                           |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |   |
|                                           |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |   |
| Members’      equity at end of year      |   |   |     | $26,667,137  |   |      |   | $26,667,137 |       |   |   | $22,857,543 |   |   |   | $76,191,817 |   |
|                                           |   |   |     |              |   |      |   |        |       |   |   |        |   |   |   |   |   |   |

----

| Net      investment loss                                                        |   |   |   | $(44,565,564 | )      |
|---------------------------------------------------------------------------------|--------|--------|--------|--------------|--------|
| Adjustments      to reconcile net investment loss to                            |   |   |   |         |   |
| net      cash provided by operating activities:                                 |   |   |   |         |   |
| Net      unrealized depreciation on investment in real estate      properties   |   |   |   | 58,203,203   |   |
| Net      unrealized depreciation on fair value of mortgage notes and      bonds |   |   |   | (14,601,886  | )      |
| Net      unrealized depreciation of interest rate cap and swap      agreements  |   |   |   | 1,154,091    |   |
| Realized      gain on mortgage notes payable                                    |   |   |   | (717,280     | )      |
| Realized      gain on termination of swap agreement                             |   |   |   | (112,557     | )      |
| Realized      loss on sales of real estate properties                           |   |   |   | 2,512,515    |   |
| Amortization      of deferred financing costs                                   |   |   |   | 1,595,090    |   |
| Changes      in operating assets and liabilities:                               |   |   |   |         |   |
| Increase      in cash held by lenders in escrow                                 |   |   |   | (875,498     | )      |
| Increase      in prepaid expenses and other assets                              |   |   |   | (51,561      | )      |
| Decrease      in accounts payable and accrued expenses                          |   |   |   | (1,571,755   | )      |
| Decrease      in due to Manager                                                 |   |   |   | (216,001     | )      |
| Decrease      in deferred revenue                                               |   |   |   | (39,108      | )      |
| Increase      in prepaid rent                                                   |   |   |   | 127,550      |   |
| Decrease      in tenant security deposits payable                               |   |   |   | (6,552       | )      |
|                                                                            |   |   |   |         |   |   |
| Net      cash provided by operating activities                                  |   |   |   | 834,687      |   |
|                                                                            |   |   |   |         |   |   |
|                                                                            |   |   |   |         |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES:                                      |   |   |   |         |   |
|                                                                            |   |   |   |         |   |   |
|                                                                            |   |   |   |         |   |   |
| Proceeds      from sales of real estate properties                              |   |   |   | 50,195,313   |   |
| Capital      additions to real estate properties                                |   |   |   | (10,107,098  | )      |
| Decrease      in restricted cash                                                |   |   |   | 808,285      |   |
| Decrease      in tenant security deposits                                       |   |   |   | 16,669       |   |
|                                                                            |   |   |   |         |   |   |
| Net      cash provided by investing activities                                  |   |   |   | 40,913,169   |   |
|                                                                            |   |   |   |         |   |   |
|                                                                            |   |   |   |         |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES:                                      |   |   |   |         |   |
|                                                                            |   |   |   |         |   |   |
|                                                                            |   |   |   |         |   |   |
| Payments      of mortgage notes, bonds and credit facilities                    |   |   |   | (69,590,190  | )      |
| Proceeds      from mortgage notes, bonds and credit facilities                  |   |   |   | 22,323,209   |   |
| Payment      of deferred financing costs                                        |   |   |   | (876,184     | )      |
|                                                                            |   |   |   |         |   |   |
| Net      cash used in financing activities                                      |   |   |   | (48,143,165  | )      |
|                                                                            |   |   |   |         |   |   |
| NET      DECREASE IN CASH AND CASH EQUIVALENTS                                  |   |   |   | (6,395,309   | )      |
|                                                                            |   |   |   |         |   |   |
|                                                                            |   |   |   |         |   |   |
| CASH      AND CASH EQUIVALENTS, beginning of year                               |   |   |   | 11,426,412   |   |
|                                                                            |   |   |   |         |   |   |
| CASH      AND CASH EQUIVALENTS, end of year                                     |   |   |   | $5,031,103   |   |
|                                                                            |   |   |   |         |   |   |
|                                                                            |   |   |   |         |   |   |
| SUPPLEMENTAL      DISCLOSURE OF CASH FLOW INFORMATION                           |   |   |   |         |   |
|                                                                            |   |   |   |         |   |   |
| Cash      paid during the year for interest                                     |   |   |   | $21,625,720  |   |
|                                                                            |   |   |   |         |   |   |

----

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

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

----

----

|   | On      January 31, 2008, Monticello Apartments was sold for $6,100,000 in an all      cash transaction.  The carrying value of the property on the      date of sale was $6,131,390 and resulted in a net loss of $141,954 after      transaction closing costs of$110,564. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On      January 31, 2008, Ponds at Georgetown Apartments was sold for $8,275,000      in an all cash transaction.  The carrying value of the property      on the date of sale was $8,806,799 and resulted in a net loss of $568,342      after transaction closing costs of$36,543. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On      February 7, 2008, Waterman’s Crossing Apartments was sold for $29,650,000      in an all cash transaction.  The carrying value of the property      on the date of sale was $29,992,098 and resulted in a net loss of      $2,071,292 after transaction closing costs of $1,729,194.  The      proceeds of the sale were used to retire the mortgage on the property,      which included a yield maintenance premium of $1,388,294 that is included      in the aforementioned transaction closingcosts. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On      August 28, 2008, Shelby Heights Apartments was sold for $3,575,000 in an      all cash transaction.  The carrying value of the property on the      date of sale was $3,276,597 and resulted in a net gain of $121,790 after      transaction closing costs of$176,613. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | On      September 4, 2008, Greenbriar Apartments was sold for $4,820,000 in an all      cash transaction.  The carrying value of the property on the      date of sale was $4,499,730 and resulted in a net gain of $147,283 after      transaction closing costs of $172,987.  The proceeds of the sale      were used to retire the mortgage on the  property. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 4. | MORTGAGE      NOTES, BONDS AND CREDIT FACILITIESPAYABLE |
|----|---------------------------------------------------------|

|                                  |   |   | INTEREST |   |   | MATURITY |     |   | MONTHLY |    |    | PRINCIPAL |        |
|---------------------------------------|--------|--------|----------|--------|--------|----------|----------|--------|---------|---------|---------|-----------|-------------|
|  PROPERTY                        |   |   |     | RATE   |   |     | DATE     |   |    | PAYMENT |    |      | AT 12/31/08 |   |
|                                  |   |   |     |   |   |     |     |   |    |    |    |      |        |   |   |   |   |   |
|  Mortgage      Notes Payable:    |   |   |     |        |   |     |     |   |    |    |    |      |        |   |   |   |   |
|                                  |   |   |     |   |   |     |     |   |    |    |    |      |        |   |   |   |   |   |
| Fox      Hollow                       |   |   |     | 6.91   | %      |     | 03/01/11 |   |    |    | $41,072 |      |        |   | $5,657,945 |   |
| Bluff      Ridge                      |   |   |     | 5.84   | %      |     | 09/01/13 |   |    |    | 31,704  |      |        |   | 5,364,230 |   |
| Highland      Park                    |   |   |     | 4.69   | %      |     | 09/01/13 |   |    |    | 36,263  |      |        |   | 6,393,009 |   |
| Hunt’s      View Apartments     |   |   |     | 5.83   | %      |     | 01/01/12 |   |    |    | 42,384  |      |        |   | 6,494,213 |   |
| Misty      Springs                    |   |   |     | 5.37   | %      |     | 01/01/13 |   |    |    | 31,832  |      |        |   | 7,120,000 |   |
| Oakwell      Farms                    |   |   |     | 6.94   | %      |     | 05/01/09 |   |    |    | 85,757  |      |        |   | 11,222,783 |   |
| The      Reserve at Wescott Platation |   |   |     | 5.75   | %      |     | 11/01/44 |   |    |    | 65,635  |      |        |   | 11,952,434 |   |
| Tregaron      Oaks                    |   |   |     | 5.12   | %      |     | 09/01/15 |   |    |    | 53,500  |      |        |   | 12,370,000 |   |
| Coral      Point                      |   |   |     | 5.22   | %      |     | 03/01/13 |   |    |    | 72,172  |      |        |   | 16,056,000 |   |
| Jackson      Park Place I             |   |   |     | 5.23   | %      |     | 12/01/12 |   |    |    | 107,438 |      |        |   | 19,241,360 |   |
| Oakhurst      Apartments              |   |   |     | 5.37   | %      |     | 01/01/13 |   |    |    | 52,577  |      |        |   | 11,760,000 |   |

| Total      Mortgage Notes Payable |   |   |   |   |
|-----------------------------------|--------|--------|--------|--------|
|                              |   |   |   |   | 113,631,974 |   |

| 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 (3)     |   |   |   | 1.29   | %      |   | 10/15/27 |   |   |   | 12,244 |   |   |   | 12,410,000 |             |
| Elliots      Crossing (4)        |   |   |   | 5.38   | %      |   | 04/01/30 |   |   |   | 37,177 |   |   |   | 8,300,000  |             |
| The      Exchange at Palm Bay    |   |   |   | 6.75   | %      |   | 11/01/10 |   |   |   | 37,633 |   |   |   | 4,701,556  |             |
| The      Hunt                    |   |   |   | 7.25   | %      |   | 07/01/29 |   |   |   | 41,868 |   |   |   | 6,930,000  |             |
| Lakes      of Northdale (3)      |   |   |   | 1.29   | %      |   | 05/15/12 |   |   |   | 10,096 |   |   |   | 9,610,000  |             |
|                             |   |   |   |   |   |   |     |   |   |   |   |   |   |   |       |             |   |   |
| Total      Bonds Payable         |   |   |   |   |   |   |     |   |   |   |   |   |   |   |       | 79,421,556  |   |
|                             |   |   |   |   |   |   |     |   |   |   |   |   |   |   |       |             |   |   |
| Subtotal                         |   |   |   |   |   |   |     |   |   |   |   |   |   |   |       | 193,053,530      |   |
|                             |   |   |   |   |   |   |     |   |   |   |   |   |   |   |       |             |   |   |
| Secured      Credit Facility (5) |   |   |   |   |   |   |     |   |   |   |   |   |   |   |       | 84,718,000       |   |
|                             |   |   |   |   |   |   |     |   |   |   |   |   |   |   |       |             |   |   |

| Construction      Credit Facility for The Reserve at Wescott Phase II (6) |   |   |   |         5,554,345 |   |
|---------------------------------------------------------------------------|--------|--------|--------|-----------------------------------------------------------|--------|
|                                                                      |   |   |   |                                                      |   |
|                                                                      |   |   |   | 283,325,875                                               |   |
| Plus:      Net unrealized depreciation on Mortgage Notes, Bonds and       |   |   |   |                                                      |   |
| Credit      facilities payable (7)                                        |   |   |   |        (14,090,790)                             |   |
|                                                                      |   |   |   |                                                      |   |   |
| Mortgage      Notes, Bonds and Credit Facilities Payable, at Fair Value   |   |   |   | 269,235,085                                          |   |
|                                                                      |   |   |   |                                                      |   |   |
| Unsecured      Credit Facility (8)                                        |   |   |   | 103,800,000                                          |   |
|                                                                      |   |   |   |                                                      |   |   |
| Total      Mortgage Notes, Bonds, and Credit Facilities Payable           |   |   |   | $373,035,085                                         |   |

| (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.  The rates are capped      at 4.50% and 6.22% through December 2009 and September 2011,      respectively. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | The      interest rate is based on a weekly variable rate, which is determined by a      highly rated bond composite variablerate. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | The      rate is fixed at 5.38%  through  June,      2011.  Thereafter the rate is based on the SIFMA Municipal Swap      Index (formerly the BMA Municipal SwapIndex). |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (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,      2008.  In addition, the Company is fully compliant with certain      financial ratios which must be maintained during the life of the      Facility.   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%. The outstanding balance of the loan is      $5,554,345 at December 31, 2008. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (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,      2008 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 matures on March 18,2009. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2009       |   |   |   | $115,967,507 |         |
|------------|--------|--------|--------|--------------|--------------|
|       |   |   |   |         |         |   |
| 2010       |   |   |   | 10,969,601   |         |
|       |   |   |   |         |         |   |
| 2011       |   |   |   | 6,620,355    |         |
|       |   |   |   |         |         |   |
| 2012       |   |   |   | 34,896,861   |         |
|       |   |   |   |         |         |   |
| 2013       |   |   |   | 45,100,883   |         |
|       |   |   |   |         |         |   |
| Thereafter |   |   |   | 173,570,668  |         |
|       |   |   |   |         |         |   |
|       |   |   |   |         | $387,125,875 |   |
|       |   |   |   |         |         |   |

|                        |   |   |     |   |   |            |        |   |         |           |   |          |   |   |       |           |   |   |       |
|-----------------------------|--------|--------|----------|--------|--------|-----------------|-------------|--------|--------------|----------------|--------|---------------|--------|--------|------------|----------------|--------|--------|------------|
|                        |   |   |     |   |   |            |        |   |         |           |   |          |   |   |       |           |   |   |       |   |   |   |   |   |   |   |
|                        |   |   |     |   |   |            |        |   |         |  Receive/ |   |          |   |   |       |  12/31/08 |   |   |       |   |   |
|  Type                  |   |   | Maturity |   |   | Notional amount |        |   | Cap rate     |           |   | Pay Rate |   |   | Fair Value |           |   |   |       |
|                        |   |   |     |   |   |            |        |   |         |           |   |          |   |   |       |           |   |   |       |   |   |   |   |   |   |   |
| Variable      to fixed swap |   |   | 01/15/12 |   |   |            | $11,320,000 |   |         |           | 3.44   | %             |   |   | 3.69       | %              |   |   | $(564,455  | ) |   |   |   |   |
| Variable      to fixed swap |   |   | 12/15/16 |   |   |            | 12,410,000  |   |         |           | 3.44   | %             |   |   | 3.69       | %              |   |   | (153,664   | ) |   |   |   |   |
| Variable      to fixed swap |   |   | 12/15/16 |   |   |            | 12,410,000  |   |         |           | 3.44   | %             |   |   | 3.69       | %              |   |   | (1,218,035 | ) |   |   |   |   |
| Variable      to fixed swap |   |   | 06/25/09 |   |   |            | 10,910,000  |   |         |           | 3.44   | %             |   |   | 3.30       | %              |   |   | (127,681   | ) |   |   |   |   |
| Variable      to fixed swap |   |   | 02/03/09 |   |   |            | 8,100,000   |   |         |           | 3.44   | %             |   |   | 2.82       | %              |   |   | (39,913    | ) |   |   |   |   |
| Fixed      to variable swap |   |   | 12/06/09 |   |   |            | 4,724,561   |   |         |           | 7.75   | %             |   |   | 2.87       | %              |   |   | 28,243     |   |   |   |   |   |
| Fixed      to variable swap |   |   | 07/13/09 |   |   |            | 6,930,000   |   |         |           | 7.25   | %             |   |   | 2.77       | %              |   |   | (309,447   | ) |   |   |   |   |
| Fixed      to variable swap |   |   | 01/22/09 |   |   |            | 8,300,000   |   |         |           | 5.36   | %             |   |   | 0.65       | %              |   |   | (242,111   | ) |   |   |   |   |
| Libor      Cap              |   |   | 12/22/09 |   |   |            | 13,400,000  |   |         |           | 4.50   | %             |   |   | n/a        |           |   |   | 118        |   |   |   |   |   |
| Libor      Cap              |   |   | 12/22/09 |   |   |            | 12,750,000  |   |         |           | 4.50   | %             |   |   | n/a        |           |   |   | 112        |   |   |   |   |   |
| Libor      Cap              |   |   | 09/15/11 |   |   |            | 11,320,000  |   |         |           | 6.22   | %             |   |   | n/a        |           |   |   | 2,946      |   |   |   |   |   |
| Libor      Cap              |   |   | 09/15/12 |   |   |            | 9,610,000   |   |         |           | 7.30   | %             |   |   | n/a        |           |   |   | 4,788      |   |   |   |   |   |
|                        |   |   |     |   |   |            |        |   |         |           |   |          |   |   |       |           |   |   |       |   |   |   |   |   |   |   |
|                        |   |   |     |   |   |            |        |   | $122,184,561 |           |   |          |   |   |       |           |   |   |       |   | $(2,619,099 | ) |   |   |   |   |
|                        |   |   |     |   |   |            |        |   |         |           |   |          |   |   |       |           |   |   |       |   |   |   |   |   |   |   |

----

|   | The      Company adopted SFAS No. 157, Fair Value      Measurements, on January 1, 2008, as required.  SFAS No.      157 established a three-tier valuation hierarchy to prioritize the      assumptions, referred to as inputs, used in valuation techniques to      measure fair value.  The three levels of fair value hierarchy      under SFAS No. 157 are describedbelow. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 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 areunobservable. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | In      accordance with SFAS No. 157, in determining the fair value of its      investments, the Company uses appropriate valuation techniques based on      available inputs.  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.  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.  As required by SFAS No. 157, 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                        |   |   |   | $444,500,000 |   |
|------------------------------------------------------------------|--------|--------|--------|--------------|--------|
|                                                             |   |   |   |         |   |   |
| Interest      rate derivatives                                   |   |   |   | $2,619,099   |   |
|                                                             |   |   |   |         |   |   |
| Mortgage      notes, bonds payable and certain credit facilities |   |   |   | $269,235,085 |   |
|                                                             |   |   |   |         |   |   |
| Total      Liabilities                                           |   |   |   | $271,854,184 |   |
|                                                             |   |   |   |         |   |   |

| Beginning      balance – January 1, 2008     |   |   |   | $545,303,933 |   |
|----------------------------------------------------|--------|--------|--------|--------------|--------|
|                                               |   |   |   |         |   |   |
| Total      realized and unrealized gains and       |   |   |   |         |   |
| losses      included in changes in net assets      |   |   |   | (58,203,203  | )      |
|                                               |   |   |   |         |   |   |
| Purchases,      capital additions, issuances       |   |   |   |         |   |
| and      settlements                               |   |   |   | 10,107,098   |   |
|                                               |   |   |   |         |   |   |
| Carrying      value of sold real estate properties |   |   |   | (52,707,828  | )      |
|                                               |   |   |   |         |   |   |
| Ending      balance – December 31, 2008      |   |   |   | $444,500,000 |   |
|                                               |   |   |   |         |   |   |
|                                               |   |   |   |         |   |   |
|                                               |   |   |   |         |   |   |

| Beginning      balance – January 1, 2008 |   |   | $291,121,232 |   |   |   | $752,565   |   |   |   | $291,873,797 |   |
|------------------------------------------------|--------|--------|--------------|--------|--------|--------|------------|--------|--------|--------|--------------|--------|
| Total      realized and unrealized gains and   |   |   |         |   |   |   |       |   |   |   |         |   |
| losses      included in changes in net assets  |   |   | (15,319,166  | )      |   |   | 1,041,534  |   |   |   | (14,277,632  | )      |
| Purchases,      capital additions, issuances   |   |   |         |   |   |   |       |   |   |   |         |   |
| and      settlements                           |   |   | (6,566,981   | )      |   |   | 825,000    |   |   |   | (5,741,981   | )      |
|                                           |   |   |         |   |   |   |       |   |   |   |         |   |
| Ending      balance – December 31, 2008  |   |   | $269,235,085 |   |   |   | $2,619,099 |   |   |   | $271,854,184 |   |
|                                           |   |   |         |   |   |   |       |   |   |   |         |   |

----

| (1)   | Average      net assets are calculated based upon the average of the beginning and      ending net assets of the year ending December 31,  2008. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

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

| (3)   | Internal      rate of return calculated based on all cash inflows and outflows since      inception and net assets at December 31, 2008 adjusted for unrealized      appreciation of mortgage notes and bonds  payable. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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 cashflows. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|