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

                                   FORM 10-QSB

     |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                                 ---------------
                                     0-27159

                            (COMMISSION FILE NUMBER)

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004

                                       OR

     |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                                  ------------

                      NATIONAL RESIDENTIAL PROPERTIES, INC.


             (Exact Name of Registrant as Specified in its Charter)

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

                                  6915 RED ROAD
                                   SUITE #222
                           CORAL GABLES, FLORIDA 33143
                                 (305) 666-6565

               (Address, including zip code, and telephone number,
                  of registrant's principal executive offices)
                                  ------------

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

As of May 17, 2004, there were 1,938,566,046 shares of the Registrant's Common
Stock, $.001 par value per share, outstanding.

Transitional Small Business Disclosure Format (Check one):  Yes|_| No|X|
<PAGE>
                      NATIONAL RESIDENTIAL PROPERTIES, INC.
                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004

                                TABLE OF CONTENTS

PART I  FINANCIAL INFORMATION.................................................3

         ITEM 1.  FINANCIAL STATEMENTS........................................3

         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION..20

         RISK FACTORS........................................................22

         ITEM 3.  CONTROLS AND PROCEDURES....................................30

PART II  OTHER INFORMATION...................................................31

         ITEM 1.  LEGAL PROCEEDINGS..........................................31

         ITEM 2.  CHANGES IN SECURITIES INCREASES IN AUTHORIZED SHARES.......31

         ITEM 3.  DEFAULTS UPON SENIOR SECURITIES............................32

         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........32

         ITEM 5.  OTHER INFORMATION..........................................32

         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K...........................32

SIGNATURES...................................................................34



This report contains forward-looking statements that involve risks and
uncertainties. Such statements are based on current expectations, assumptions,
estimates and projections about the Company and its industry. These
forward-looking statements involve risks and uncertainties. Forward-looking
statements are subject to known and unknown risks, uncertainties and other
factors that may cause actual results, levels of activity, performance,
achievements and prospects to be materially different from those expressed or
implied by such forward-looking statements. The Company undertakes no obligation
to update publicly any forward-looking statements for any reason even if new
information becomes available or other events occur in the future.
















                                       2
<PAGE>
                                     PART I

                              FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

              NATIONAL RESIDENTIAL PROPERTIES, INC AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2004

                                     ASSETS
                                     ------

  Cash and cash equivalents                                 $ 116,366

  Inventory - real estate holdings                          1,745,558

  Fixed assets, net of depreciation                            34,134

  Loan origination fees, net                                   43,835

  Mortgage receivable and other                               171,408

  Other receivables                                           113,866

  Investment securities                                         2,523

  Deposits and other assets                                    15,925
                                                      --------------------
TOTAL ASSETS                                               $2,243,615
                                                      ====================



























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

                                       3
<PAGE>
              NATIONAL RESIDENTIAL PROPERTIES, INC AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED)
                                 MARCH 31, 2004

        LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY (DEFICIT)
        ----------------------------------------------------------------

<TABLE>
<CAPTION>
LIABILITIES
<S>                                                                             <C>
  Accounts payable and accrued expenses                                                 $26,812
  Debentures payable                                                                    199,202
  Notes and mortgages payable                                                           781,981
                                                                                -----------------

      TOTAL LIABILITIES                                                               1,007,995
                                                                                -----------------

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

STOCKHOLDERS' EQUITY (DEFICIT)
  Common Stock, $.001 Par Value; 1,000,000 shares
    authorized and 1,000,000 shares issued and outstanding,
    respectively                                                                          1,000
  Common Stock Class A Voting, $.001 Par Value; 0
      shares authorized and 0 shares issued and outstanding                                   -
  Additional Paid-in Capital                                                          3,606,580
  Deficit                                                                            (6,789,898)
                                                                                -----------------

      TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                           (3,182,318)
                                                                                -----------------

TOTAL LIABILITIES, TEMPORARY EQUITY AND
   STOCKHOLDERS' EQUITY (DEFICIT)                                                    $2,243,615
                                                                                =================
</TABLE>






















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

                                       4
<PAGE>
<TABLE>
<CAPTION>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE SIX MONTHS ENDED MARCH 31, 2004 AND 2003

                                                   SIX MONTHS ENDED                          THREE MONTHS ENDED
                                             MARCH 31,            MARCH 31,            MARCH 31,            MARCH 31,
                                               2004                 2003                 2004                 2003
                                               ----                 ----                 ----                 ----

OPERATING REVENUES
<S>                                          <C>                  <C>                  <C>                     <C>
  Revenue                                    $1,610,403           $3,542,902           $1,572,251              $21,451
  Cost of sales                              (1,471,084)          (4,345,639)          (1,471,084)                   -
                                          ---------------- -------------------- -------------------- --------------------
GROSS PROFIT                                    139,319             (802,737)             101,167               21,451
                                          ---------------- -------------------- -------------------- --------------------

OPERATING EXPENSES
   Professional fees and compensation
   expenses                                     471,608              286,775              284,435              125,920
   Advertising                                    3,247                3,845                1,117                3,845
   Travel and automobile expenses                43,413               21,507               26,538               13,704
   Telephone and utilities                        6,885                3,412                4,368                1,334
   Real estate taxes and property
   maintenance                                   15,574                8,062                9,010                4,899
   Office expenses                               10,380                9,494                5,853                7,503
   Miscellaneous                                 13,811                7,038                5,980                4,501
   Depreciation and amortization                 41,898                6,145               34,582                3,360
                                          ---------------- -------------------- -------------------- --------------------
       TOTAL OPERATING EXPENSES                 606,816              346,278              371,883              165,066
                                          ---------------- -------------------- -------------------- --------------------

LOSS BEFORE OTHER INCOME (EXPENSE)             (467,497)          (1,149,015)            (270,716)            (143,615)
OTHER INCOME (EXPENSE)
   Interest expense                             (10,739)              (9,608)              (5,423)              (5,009)
   Interest income                               12,270                   35                6,679                   17
                                          ---------------- -------------------- -------------------- --------------------
       TOTAL OTHER INCOME (EXPENSE)               1,531               (9,573)               1,256               (4,992)
                                          ---------------- -------------------- -------------------- --------------------

NET LOSS BEFORE PROVISION FOR INCOME TAXES    $(465,966)         $(1,158,588)           $(269,460)           $(148,607)
PROVISION FOR INCOME TAXES                            -                    -                    -                    -
                                          ---------------- -------------------- -------------------- --------------------

NET LOSS APPLICABLE TO COMMON SHARES          $(465,966)         $(1,158,588)           $(269,460)           $(148,607)
                                          ================ ==================== ==================== ====================

NET LOSS PER BASIC AND DILUTED SHARES            $(0.46)            $(1.1586)            $(0.2695)            $(0.1486)
                                          ================ ==================== ==================== ====================

WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING                        1,000,000            1,000,000            1,000,000            1,000,000
                                          ================ ==================== ==================== ====================
</TABLE>







                                        5
<PAGE>
<TABLE>
<CAPTION>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED MARCH 31, 2004 AND 2003

                                                                  2004              2003
                                                            ------------------------------------
<S>                                                              <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                      $(465,966)     $(1,158,588)
                                                            ------------------------------------
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
     Depreciation and amortization                                  41,898            6,145

  CHANGES IN ASSETS AND LIABILITIES
     Decrease in inventory - real estate holdings                1,226,862        3,907,992
     (Increase) in escrow receivable                                     -         (462,741)
     (Increase) in deposits                                         (7,200)               -
     Increase (decrease) in accounts payable and
       and accrued expenses                                        (65,612)          13,843
                                                            ------------------------------------
     Total adjustments                                           1,195,948        3,465,239
                                                            ------------------------------------

     NET CASH PROVIDED BY OPERATING ACTIVITIES                     729,982        2,306,651
                                                            ------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
    (Acquisition) of fixed assets                                   (8,653)               -
    Loans to/from others                                                 -          207,550
    (Increase) decrease in mortgage and notes receivable          (137,772)          42,301
                                                            ------------------------------------

     NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES          (146,425)         249,851
                                                            ------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Payment of loan origination costs                                    -          (34,507)
    Net change in notes and mortgages payable                   (1,261,906)      (2,936,553)
                                                            ------------------------------------
        NET CASH (USED IN) FINANCING ACTIVITIES                 (1,261,906)      (2,971,060)
                                                            ------------------------------------

NET (DECREASE) IN
    CASH AND CASH EQUIVALENTS                                     (678,349)        (414,558)

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

CASH AND CASH EQUIVALENTS - END OF PERIOD                         $116,366          $67,051
                                                            ====================================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
   INFORMATION:

CASH PAID DURING THE PERIOD FOR:
    Interest expense                                                $2,779           $1,648
                                                            ====================================
</TABLE>
                                        6
<PAGE>
<TABLE>
<CAPTION>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                FOR THE SIX MONTHS ENDED MARCH 31, 2004 AND 2003

                                                                    CLASS A              ADDITIONAL
                                      COMMON STOCK                COMMON STOCK            PAID-IN     ACCUMULATED
                                  SHARES         AMOUNT       SHARES         AMOUNT       CAPITAL       DEFICIT       TOTALS
                               ------------- ------------- ------------- ------------- ------------- ------------- -------------

                               ------------- ------------- ------------- ------------- ------------- ------------- -------------
<S>                               <C>         <C>           <C>           <C>           <C>           <C>           <C>
Balance, September 30, 2002       1,000,000   $     1,000             -   $         -   $ 3,606,580   $(4,197,046)  $  (589,466)
Net loss                                  -             -             -             -             -    (1,158,588)   (1,158,588)
                               ------------- ------------- ------------- ------------- ------------- ------------- -------------
Balance, March 31, 2003           1,000,000   $     1,000             -   $         -   $ 3,606,580   $(5,355,634)  $(1,748,054)

                               ============= ============= ============= ============= ============= ============= =============
Balance, September 30, 2003       1,000,000   $     1,000             -   $         -   $ 3,606,580   $(6,323,932)  $(2,716,352)
Net loss                                  -             -             -             -             -      (465,966)     (465,966)
                               ------------- ------------- ------------- ------------- ------------- ------------- -------------
Balance, March 31, 2004           1,000,000   $     1,000             -   $         -   $ 3,606,580   $(6,789,898)  $(3,182,318)
                               ============= ============= ============= ============= ============= ============= =============
</TABLE>
































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

                                       7
<PAGE>
<TABLE>
<CAPTION>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN TEMPORARY EQUITY
                FOR THE SIX MONTHS ENDED MARCH 31, 2004 AND 2003


                                                               CLASS A
                                     COMMON STOCK            COMMON STOCK
                            ---------------------------- -------------------- ----------- ---------------- ------------- -----------
                                                                                            ADDITIONAL      ACCUMULATED
                               SHARES          AMOUNT      SHARES     AMOUNT    DISCOUNT  PAID-IN CAPITAL     DEFICIT      TOTALS
                            --------------- ------------ ----------- -------- ----------- ---------------- ------------- -----------

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

No activity                              -            -           -        -           -              -                           -
                            --------------- ------------ ----------- -------- ----------- ----------------              ------------
Balance, March 31, 2003      1,937,566,046   $1,937,566   1,000,000   $1,000   $(687,311)    $3,166,683                  $4,417,938
                            =============== ============ =========== ======== =========== ================              ============

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

No activity                              -            -           -        -           -              -                           -
                            --------------- ------------ ----------- -------- ----------- ----------------              ------------
Balance, March 31, 2004      1,937,566,046   $1,937,566   1,000,000   $1,000   $(687,311)    $3,166,683                  $4,417,938
                            =============== ============ =========== ======== =========== ================              ============
</TABLE>

























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


                                       8
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             MARCH 31, 2004 AND 2003
                                   (UNAUDITED)

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

                  The condensed consolidated unaudited interim financial
                  statements included herein have been prepared, without audit,
                  pursuant to the rules and regulations of the Securities and
                  Exchange Commission. The condensed consolidated financial
                  statements and notes are presented as permitted on Form 10-QSB
                  and do not contain information included in the Company's
                  annual consolidated statements and notes. Certain information
                  and footnote disclosures normally included in financial
                  statements prepared in accordance with accounting principles
                  generally accepted in the United States of America have been
                  condensed or omitted pursuant to such rules and regulations,
                  although the Company believes that the disclosures are
                  adequate to make the information presented not misleading. It
                  is suggested that these condensed consolidated financial
                  statements be read in conjunction with the September 30, 2003
                  audited consolidated financial statements and the accompanying
                  notes thereto. While management believes the procedures
                  followed in preparing these condensed consolidated financial
                  statements are reasonable, the accuracy of the amounts are in
                  some respects dependent upon the facts that will exist, and
                  procedures that will be accomplished by the Company later in
                  the year.

                  These condensed consolidated unaudited financial statements
                  reflect all adjustments, including normal recurring
                  adjustments which, in the opinion of management, are necessary
                  to present fairly the consolidated operations, changes in
                  permanent stockholders equity (deficit), changes in temporary
                  equity and cash flows for the periods presented.

                  The Company was originally incorporated in the State of Nevada
                  on October 18, 1971 under the name of Mister Las Vegas, Inc.
                  On December 15, 1994, the Company merged with a privately
                  owned company, National Rehab Properties, Inc., a Florida
                  corporation formed on October 1, 1993. The surviving Nevada
                  corporation changed its name to National Rehab Properties,
                  Inc. and became authorized to conduct business in the State of
                  Florida on August 17, 1995. On September 13, 2000, the Company
                  changed its name to National Residential Properties, Inc.

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

                                       9
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             MARCH 31, 2004 AND 2003
                                   (UNAUDITED)



NOTE 1 -          ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)
                  --------------------------------------------------

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

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

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

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

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

                                     10
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             MARCH 31, 2004 AND 2003
                                   (UNAUDITED)

NOTE 1-        ORGANIZATION AND BASIS OF PRESENTATION (CONTINUED)

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

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

                  Pursuant to the merger, the DC Power Debentures were
                  surrendered and canceled, and new debentures, identical to the
                  DC Power Debentures, together with accompanying conversion
                  rights into authorized but unissued shares of NRES Common
                  Stock, were issued by the Company to the holders of the DC
                  Power Debentures.

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

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

                  Principles of Consolidation

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

                                       11
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             MARCH 31, 2004 AND 2003
                                   (UNAUDITED)

NOTE 2 -          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                  ------------------------------------------

                  Use of Estimates

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

                  Revenue and Cost Recognition

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

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

                  Acquisition and other direct costs, interest, and other
                  indirect costs related to acquisition and development of lots
                  are capitalized. Capitalized costs are allocated based on the
                  relative sales value of each lot. The capitalized costs are
                  charged to earnings when the relative revenue is recognized.

                  The Company also recognizes revenue from loan origination fees
                  upon the closing of the various mortgages they provide.

                  Cash and Cash Equivalents

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

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

                                       12
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             MARCH 31, 2004 AND 2003
                                   (UNAUDITED)

NOTE 2 -          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                  ------------------------------------------------------


                  Fixes Assets

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

                  Equipment and other                  3 to 5 Years
                  Vehicles                              5     Years

                  Income Taxes

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

                  Advertising

                  Costs of advertising are expensed as incurred. Advertising
                  costs were $3,247 and $3,845 for the six months ended March
                  31, 2004 and 2003, respectively.

                  Earnings (Loss) Per Share of Common Stock

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

                                       13
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             MARCH 31, 2004 AND 2003
                                   (UNAUDITED)

NOTE 2 -          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                  ------------------------------------------------------

                  The following is a reconciliation of the computation for basic
and diluted EPS:
<TABLE>
<CAPTION>
                                                                               March 31,          March 31,
                                                                                 2004               2003
                                                                        ----------------    ---------------

<S>                                                                         <C>              <C>
                  Net Loss                                                   $ (465,966)      $ (1,158,588)
                                                                        ----------------    ---------------

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

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

                  Weighted-average common shares outstanding (Diluted)        1,000,000          1,000,000
</TABLE>

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

                  There are no options and warrants outstanding to purchase
                  stock at March 31, 2004 and 2003.

                  Investment Securities

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

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

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

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

                                       14
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             MARCH 31, 2004 AND 2003
                                   (UNAUDITED)

NOTE 2 -          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
                  ------------------------------------------------------

                  Fair Value of Financial Instruments

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

                  Loan Origination Fees

                  Represent fees in connection with obtaining mortgages on the
                  various properties. The loan origination fees are being
                  amortized straight-line over a five-year period. When the
                  loans are paid off, the Company recognizes the entire loan
                  origination fee as amortization expense. Amortization expense
                  for the six months ended March 31, 2004 and 2003 is $35,849
                  and $575, respectively.

                  Reclassifications

                  Certain amounts for the six months ended March 31, 2003 have
                  been reclassified to conform with the presentation of the
                  March 31, 2004 amounts. The reclassifications have no effect
                  on net income for the six months ended March 31, 2003.

NOTE 3 -          INVENTORY - REAL ESTATE HOLDINGS
                  --------------------------------

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

NOTE 4-  MORTGAGES RECEIVABLE AND OTHER

                  Represents amounts due from individuals who purchased property
                  from the Company or amounts due from individuals the Company
                  loaned money to in the form of mortgages. Amounts due at March
                  31, 2004 were $171,408.

                                       15
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             MARCH 31, 2004 AND 2003
                                   (UNAUDITED)

NOTE 5-  FIXED ASSETS

                  Fixed assets consist of the following at March 31, 2004:


                       Office Equipment and other        $    30,968
                       Vehicles                               31,509
                                                              ------
                        Subtotal                              62,477
                         Accumulated Depreciation            (28,343)
                                                         ------------

                                            Total        $    34,134
                                                         ===========

                  Depreciation expense was $6,050 and $5,570 for the six months
                  ended March 31, 2004 and 2003, respectively.

NOTE 6-  MORTGAGES AND NOTES PAYABLE

                  Mortgages and notes payable consist of the following at March
31, 2004:

                  The Company has various mortgages and construction loans
                  payable aggregating $781,981 at March 31, 2004. These amounts
                  are payable at various times ranging through December 31,
                  2004, bearing interest at various rates ranging from 5%
                  through 7% per year. The mortgages and construction notes are
                  secured by the land and buildings held for development by the
                  Company.

NOTE 7-  CONVERTIBLE DEBENTURES PAYABLE

                  The Company has convertible debentures outstanding at March
                  31, 2004 in the amount of $199,202. These debentures accrue
                  interest at 8% per annum. These debentures matured along with
                  the related interest at November 2003, however, no repayments
                  or further conversions were made. The debentures are
                  convertible at the discretion of the investors pursuant to the
                  convertible debenture agreement.

                  Interest expense for the six months ended March 31, 2004 and
                  2003 relating to the debentures were $7,960 and $7,960,
                  respectively.

                                       16
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             MARCH 31, 2004 AND 2003
                                   (UNAUDITED)
                  .

NOTE 8-  ACQUISITIONS

                  On February 10, 2000, the Company acquired MAS XV Acquisitions
                  Corp. for 1,500,000 shares of its common stock valued at $.19
                  per share or $285,000. Additionally, on April 1, 2000, the
                  Company acquired 80% of the Encore Services, Inc. for 250,000
                  shares of its common stock valued at $33,750. The Company
                  restated its September 30, 2000 consolidated financial
                  statements and expensed the entire amounts of these
                  acquisitions because they were determined to have no value.
                  Both companies had no assets or liabilities upon the purchase.

                  On May 8, 2001, the Company merged with Connecticut
                  Acquisition Corp. No. 1 and acquired a parcel of land in
                  Hebron, Connecticut. This parcel of land was subsequently
                  conveyed on October 31, 2001 to Genesis Capital Corporation of
                  Nevada, an entity related to the Company through common
                  officers and directors.

                  DC Power merged into the Company on November 1, 2001.

NOTE 9-  CONTINGENCY/UNCERTAINTY

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

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

                  The Company expects to reclassify certain amounts from
                  temporary equity to permanent stockholders' equity after
                  curing any over issuances of its common stock.

                                       17
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             MARCH 31, 2004 AND 2003
                                   (UNAUDITED)

NOTE 10- TEMPORARY EQUITY

                  The Company has recorded on its balance sheet as a temporary
                  equity account for those securities issued that may not be in
                  compliance with the registration provisions of Section 5 of
                  the Securities Act of 1933, as amended and for the issuance of
                  common stock issued above its authorized amount. All related
                  amounts that were previously included in common stock and
                  additional paid-in capital of the permanent stockholders'
                  equity (deficit) section have been reclassified to temporary
                  equity as their redemption may not be solely within the
                  control of the issuer. Temporary equity at March 31, 2004 and
                  2003, were $4,417,938 and $4,417,938, respectively.
                  Substantially all the shares issued in connection with the
                  conversion of debentures have been reclassified as temporary
                  equity.

NOTE 11- STOCKHOLDERS' EQUITY (DEFICIT)

                  As of March 31, 2004 and 2003, there were 1,000,000 shares
                  authorized, and 1,000,000 shares issued and outstanding of the
                  Company's common stock with a par value of $.001.

                  The Company issued 843,265,695 shares of common stock for the
                  three months ended December 31, 2001, and there have been no
                  issuances of common stock since this time period. These shares
                  are recorded in temporary equity (See Note 10). All of these
                  shares were issued in excess of authorized limits.

                  As of March 31, 2004 and 2003, there were 0 shares authorized
                  and 0 shares issued and outstanding of the Company's Class A
                  Voting common stock with a par value of $.001. (See Note 9).

NOTE 12- INCOME TAXES

                  There was no income tax benefit recognized at March 31, 2004
                  and 2003.

                  The net deferred tax assets in the accompanying condensed
                  consolidated balance sheet include benefit of utilizing net
                  operating losses of approximately $2,435,000 (at March 31,
                  2004), however due to the uncertainty of utilizing the net
                  operating losses, an offsetting valuation allowance has been
                  established.









                                       18
<PAGE>
             NATIONAL RESIDENTIAL PROPERTIES, INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                             MARCH 31, 2004 AND 2003
                                   (UNAUDITED)

NOTE 13- LITIGATION

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

                  On December 13, 2002, the Company filed an Amended Complaint
                  against the Town of Bay Harbor Islands and the Director of the
                  Town of Bay Harbor Islands, Building and Zoning Department in
                  the Circuit Court of the 11th Judicial Circuit for Miami-Dade
                  County, Florida regarding (i) an application by the Company
                  for zoning approval for a planned residential development
                  overlay district and (ii) approval from the Town of Bay Harbor
                  for the development of the Residences at Bay Harbor.
                  Subsequent to the filing of this case, the Company filed a
                  related complaint in the United States District Court for the
                  Southern District of Florida. The federal claim was dismissed
                  with prejudice on May 20, 2003. In July 2003, the Company
                  filed a Second Amended Complaint amending its complaint to add
                  state law counts that were previously asserted by the Company
                  in its federal complaint. The Company believes that, unless
                  settled before then, the matter will go to trial in the summer
                  of 2004.

NOTE 14- SUBSEQUENT EVENTS

                  The Company filed a Preliminary Information Statement 14C in
                  March 2004. There were six proposals contained in the
                  Information Statement. The proposals were:

                  a)  to amend the Company's Articles of Incorporation to
                      increase the number of authorized shares of common stock
                      to 21 billion shares and increase the number of shares of
                      all classes of stock the Company is authorized to issue to
                      22 billion shares;
                  b) to create and issue Class A Common Stock;
                  c) to change the par value of the Company's common stock;
                  d) to effect a 1 for 200 reverse stock split of the Company's
                     common stock;
                  e) to ratify the Company's past name changes and change the
                     Company's name to National Realty and Mortgage, Inc.; and
                  f) to approve the amended and restated Articles of
                     Incorporation.
                                       19
<PAGE>
ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

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

         THE COMPANY CAUTIONS INVESTORS THAT ITS BUSINESS AND FINANCIAL
PERFORMANCE ARE SUBJECT TO SUBSTANTIAL RISKS AND UNCERTAINTIES. IN EVALUATING
THE COMPANY'S BUSINESS, PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE
INFORMATION SET FORTH IN THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR
ENDED SEPTEMBER 30, 2003 UNDER THE CAPTION "RISK FACTORS" IN ADDITION TO THE
OTHER INFORMATION SET FORTH HEREIN.

BACKGROUND CAPITALIZATION INFORMATION

         The original Articles of Incorporation (the "ARTICLES") of National
Residential Properties, Inc., a Nevada corporation (the "COMPANY") authorized
the Company to issue 1 million shares of the Company's common stock ("NRES
COMMON STOCK"). After its incorporation, the following events occurred: (i) in
December of 1994, the Company attempted to effect a 2 for 1 stock split (the
"1994 STOCK SPLIT"); (ii) in January of 1999, the Company attempted to effect a
1 for 10 reverse stock split (the "1999 REVERSE STOCK SPLIT"); (iii) between the
date of its incorporation and January of 2001, the Company believed it increased
the number of shares it was authorized to issue from 1 million to 40 million
shares of NRES Common Stock (the "40 MILLION SHARE INCREASE"); (iv) in October
of 2000, the Company attempted to increase the number of shares the Company was
authorized to issue from 40 million to 250 million shares of NRES Common Stock
(the "250 MILLION SHARE INCREASE"); (v) in January of 2001, the Company
attempted to increase the number of shares it was authorized to issue from 250
million to 750 million shares of NRES Common Stock and effected a 3 for 1 stock
split (the "750 MILLION SHARE INCREASE"); and (vi) in June of 2001, the Company
attempted to increase the number of shares it was authorized to issue from 750
million to 1.5 billion shares of NRES Common Stock (the "1.5 BILLION SHARE
INCREASE", and together with the 1994 Stock Split, the 1999 Reverse Stock Split,
the 40 Million Share Increase, the 250 Million Share Increase and the 750
Million Share Increase, the "CAPITAL CHANGES"). The Company has since determined
that some or all of the Capital Changes were not validly adopted by the
Company's board of directors, approved by the Company's shareholders or filed
with the Secretary of State of the State of Nevada as required by the laws of
the State of Nevada. As a result, it appears the Company never has been
authorized to issue more than 1 million shares of NRES Common Stock. All shares
of NRES Common Stock issued in excess of 1 million shares appear to have been
issued in excess of the authorized amount.

         Given the foregoing, the Company has attempted to determine the
majority owners of the validly issued shares of NRES Common Stock. The Company
discovered that Richard Astrom and Pamela Gay Astrom, tenants by the entireties,
were issued a substantial block of shares shortly after the Company merged with
National Rehab Properties, Inc. These shares consisted of the majority of the
Company's validly issued outstanding shares. The Company's former transfer
agent's records show that these shares can be traced to such point that the
Company's former transfer agent and the Company severed relations, when they
were still held by Richard and Pamela Astrom, as tenants by the entireties. The
Company's current transfer agent's records confirm that these shares can be
traced from that time to the present, as

                                       20
<PAGE>
they are still held by Richard and Pamela Astrom, as tenants by the entireties,
and have not been sold or otherwise transferred. As such, Richard Astrom and
Pamela Gay Astrom, as tenants by the entireties, appear to hold a majority of
the validly issued shares of NRES Common Stock.

         After making the aforementioned factual findings, the Company proceeded
to retain local counsel in the State of Nevada to determine the effect of the
invalidity of some or all of the Capital Changes and to confirm the foregoing
analysis under Nevada law. The Company believes that Richard and Pamela Astrom,
as the valid owners of a majority of the Company's validly issued shares, can
amend the Articles to increase the Company's authorized number of shares. The
Company also believes that the issuance of NRES Common Stock in excess of the
authorized amount can be cured by the Company's board of directors. The Company
and Richard and Pamela Astrom intend to amend the Company's Articles and cure
and ratify any issuances of shares issued in excess of the authorized amount
after the Company's local counsel renders these opinions. The Company also
intends to file an Information Statement on Schedule 14C reflecting these
actions, as appropriate.

RECENT DEVELOPMENTS

     o   On March 12, 2004, the Company completed the sale of the Barcelona
         Apartments to Salomon Yuken for $1,550,000 in cash.

     o   On March 17, 2004, the Company filed a preliminaty information
         statement on Schedule 14C proposing the following actions: (i) to
         approve an amendment to the Company's Articles of Incorporation to
         increae the number of authorized shares of NRES Common Stock to 21
         billion, (ii) to create and issue Class A common stock, (iii) to
         approve an amendment to the Company's Articles of Incorporation to
         change the par value of the NRES Common Stock, (iv) to effect a 1 for
         200 reverse split of the NRES Common Stock, (v) to ratify past changes
         of the Company's name and (vi) to adopt and approve Amended and
         Restated Articles of Incorporation.

OVERVIEW

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

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

     o   On December 15, 1994, the Company entered into an agreement of merger
         with National Rehab Properties, Inc. On May 15, 1995, the merger became
         effective and National Rehab Properties, Inc. merged with and into the
         Company, with National Rehab Properties, Inc. remaining as the
         surviving entity. Pursuant to the agreement of merger, each share of
         National Rehab Properties, Inc.'s common stock was converted into one
         share of NRES Common Stock and each share of NRES Common Stock before
         the merger remained as one share of NRES Common Stock. At the time of
         the merger, Richard Astrom owned 1,000 shares of National Rehab
         Properties, Inc.'s common stock. After the merger, Richard Astrom and
         members of his family held 401,000 shares of the issued and outstanding
         shares of NRES
                                       21
<PAGE>
         Common Stock. The surviving entity subsequently changed
         its name to National Rehab Properties, Inc. and became authorized to
         conduct business in the State of Florida on August 17, 1995.

     o   In January of 1999, the Company attempted to effect the 1999 Reverse
         Stock Split.

     o   Between the date of its incorporation and January of 2001, the Company
         attempted to increase the number of shares the Company was authorized
         to issue from 1 million to 40 million shares of Common Stock pursuant
         to the 40 Million Share Increase.

     o   On June 17, 1999, pursuant to a joint action by written consent of the
         Company's shareholders and board of directors, the Company was given
         the authority to amend its Articles of Incorporation to authorize 2
         million shares of Class A Common Stock per share and to issue 1 million
         shares of its newly authorized Class A Common Stock to Christopher
         Astrom.

     o   In April of 2000, the Company acquired 80% of Encore Services, Inc.
         ("ENCORE SERVICES"). Encore Services served as the Company's general
         construction contractor, but was subsequently replaced by Encore
         Builders, Inc. ("ENCORE BUILDERS"), a former subsidiary (through March
         21, 2002) of Vacation Ownership Marketing, Inc. Vacation Ownership
         Marketing, Inc. ("VACATION OWNERSHIP") is an affiliate of the Company.
         Encore Builders was the general construction contractor for the
         Company's Conquistador Plaza project in Miami, Florida. Since the time
         Encore Builders replaced Encore Services as the general construction
         contractor of the Company's Conquistador Plaza project, to the time the
         Company severed its relationship with Encore Services in March of 2002,
         Encore Services has been inactive.

     o   In October of 2000, the Company changed its name to National
         Residential Properties, Inc. (the "NATIONAL RESIDENTIAL NAME CHANGE").

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

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

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

                                       22
<PAGE>
     o   In June of 2001, the Company filed a Certificate of Amendment with the
         Nevada Secretary of State attempting to effect the 1.5 Billion Share
         Increase.

     o   On October 17, 2001, the Company's wholly-owned subsidiary, DC Power
         Products Acquisition Corp. ("DC POWER"), a Florida corporation,
         obtained a loan from accredited investors evidenced by its 8% Series A
         Senior Subordinated Convertible Redeemable Debentures due October 17,
         2003 (the "DC POWER DEBENTURES"), which were convertible from time to
         time into shares of DC Power's common stock. On November 1, 2001, DC
         Power merged with and into the Company with the Company remaining as
         the surviving entity. As a result, all rights and obligations of DC
         Power inured to the benefit of and became binding upon the Company.
         Pursuant to the merger, the DC Power Debentures were surrendered and
         canceled, and new debentures, identical to the DC Power Debentures (the
         "NRES DC POWER DEBENTURES" and together with the NRES Connecticut
         Debentures, the "NRES DEBENTURES"), but convertible into authorized and
         unissued shares of NRES Common Stock, were issued by the Company to the
         holders of the DC Power Debentures.

     o   The Company's Articles of Incorporation, as amended, currently provide
         that the Company is authorized to issue up to 1.5 billion shares of
         NRES Common Stock. However, the Company concluded that the 1994 Stock
         Split, the 1999 Reverse Stock Split, the 40 Million Share Increase, the
         250 Million Share Increase, the 750 Million Share Increase and the 1.5
         Billion Share Increase may not have been validly adopted by the
         Company's board of directors, approved by the Company's shareholders or
         filed with the Secretary of State of the State of Nevada, as required
         by the laws of the State of Nevada. As such, the Company believes it
         currently has only 1 million shares of NRES Common Stock authorized, a
         majority of which are owned by Richard and Pamela Gay Astrom, as
         tenants by the entireties. As such, all references to shares of NRES
         Common Stock do not reflect the Capital Changes referenced above
         (including any stock splits).

     o   It has come to the Company's attention that, as a result of the
         conversion of the NRES Debentures into NRES Common Stock and the
         decrease in the price of NRES Common Stock, investors were entitled to
         more shares than authorized. As a result, the Company, as of May
         17, 2004, has 1,938,566,046 shares of NRES Common Stock issued, which
         exceeds the number of authorized shares. Under the state law of Nevada,
         it may be possible that the transactions for shares in excess of the
         number of authorized shares will not be viewed as valid and the Company
         may be responsible for taking corrective action or compensating the
         stockholders.

     o   The Company currently is a land development company that purchases
         zoned, but undeveloped real property, develops architectural plans for
         the real property, obtains building permits for the real property and
         subsequently sells the real property when it is ready for development.
         During the period ended December 31, 2003, the Company commenced
         operations as a mortgage lender.

OPERATING HISTORY

         From 1993 until 1999, the Company's business concentrated on investing
in and revitalizing single family homes in established older residential
neighborhoods in urban areas. The Company either bought single unit vacant
properties and built single family homes on them, or bought abandoned homes
which the Company then renovated and sold. During 1999, while retaining its
efforts in the renovation of

                                       23
<PAGE>
urban single family homes as one aspect of its business, the Company entered a
second phase of business: the development, construction and ownership of
multifamily housing projects.

         CONNECTICUT PROPERTIES

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

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

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

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

         CONQUISTADOR PLAZA

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

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

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

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

CURRENT OPERATIONS

         OVERVIEW

         From 1999 until 2002, the Company's business focused on residential
real estate development and building construction services, and in particular on
acquiring properties suitable for development as multifamily housing or multiple
unit single family development tracts. During this time period, the Company
purchased four parcels of land for apartment construction and one 20-acre citrus
grove for subdivision development. The properties still held by the Company are
described below in detail along with the status of each project. During the
period ended December 31, 2003, the Company commenced operations as a mortgage
lender.















                                       25
<PAGE>
         RESIDENCES AT BAY HARBOR

         The Bay Harbor property, located on Bay Harbor Island, Florida, was
purchased by the Company in 2000, for $850,000. The Company intended to
construct a 15-story, 60 unit apartment building on the Bay Harbor property and
intended for Encore Builders to handle the construction. Immediately after
closing the acquisition of the land, the Company applied for a building permit,
but to this date, the permit has not been obtained due to various neighborhood
objections to construction. The initial business plan called for the building to
be sold as a condominium project for $18 million, with construction costs at
approximately $12 million. Due to the Company's relations with Encore Builders
and the difficulties with the building permit, the Company chose not to
construct the building and instead, on December 17, 2001, chose to resell the
land for $2.2 million to Dennis Almandares, an independent third party. The
transaction contemplated by this agreement did not close, and the Company
subsequently entered into a purchase and sale agreement dated as of May 20, 2002
to sell this property to Gateway Mortgage Bankers, Inc. for $2.3 million. The
Company expected to close this transaction in September of 2002 or upon the
issuance of a building permit by the city building department for a 15-story
building but was unable to obtain the required building permit. Subsequently,
the Company filed a complaint against the Town of Bay Harbor. The Company
believes that, unless settled, the matter will go to trial in the summer of
2004. The Company does not expect the transaction to close until the litigation
has been completed. See "Part II, Item 1 - Legal Proceedings" for a discussion
of the related litigation.

RESULTS OF OPERATIONS

         THE FOLLOWING IS A DISCUSSION OF THE CONSOLIDATED FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF THE COMPANY FOR THE PERIOD ENDED MARCH 31,
2004 AND 2003, WHICH SHOULD BE READ IN CONJUNCTION WITH, AND IS QUALIFIED IN ITS
ENTIRETY BY, THE CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED
ELSEWHERE IN THIS REPORT.


         For the six months ended March 31, 2003, the Company incurred a net
loss of $1,158,588, compared to a net loss of $465,966 for the comparable 2004
period. The difference is primarily due to the fact that during the period ended
March 31, 2003, the Company recorded sales of property in which the cost of
sale exceeded the revenues generated therefrom.

         Total revenues were $3,542,902 for the six months ended March 31, 2003,
as compared to $1,610,403 for the six months ended March 31, 2004. This decrease
is due to the fact that the Company only disposed of one property
in the period ended March 31, 2004.

OPERATING EXPENSES

         PROFESSIONAL FEES AND COMPENSATION EXPENSES

         Professional fees and compensation expenses totaled $125,920 and
$284,435 for the three months ended March 31, 2003 and 2004, respectively. The
reason for this 125% increase was increased costs related to the Company's
attempt to seek shareholder approval for the actions set forth in the Company's
preliminary information statement on Schedule 14C, as well as increased legal
costs related to the closing of the sale of the Barcelona Apartments.

         TRAVEL AND AUTOMOBILE EXPENSES

         Travel and automobile expenses totaled $13,704 and $26,538 for the
three months ended March 31, 2003 and 2004, respectively. The reason for this
93% increase was increased travel relating to the Company's efforts to expand
its business.

                                       26
<PAGE>
         DEPRECIATION AND AMORTIZATION

         Depreciation and amortization expenses totaled $3,360 and $34,582 for
the three months ended March 31, 2003 and 2004, respectively.  This 900%
increase is due to the amortization of loan origination fees in connection with
a loan relating to real property.

LIQUIDITY AND CAPITAL RESOURCES

         To date, the Company has financed its operations primarily through
mortgage debt and the sale of NRES Common Stock issued through converting the
NRES Debentures. At March 31, 2004, the Company had $116,366 in cash and cash
equivalents, an increase of $49,315 from March 31, 2003. The amount of cash
and cash equivalents held by the Company fluctuated as the Company sold parcels
of real property. The Company made no acquisitions of real estate either in the
period ended March 31, 2003, or 2004.

         The Company earned $249,881 from investing activities for the period
ended March 31, 2003, as compared to $146,425 used in the period ended March 31,
2004. Net cash used in financing activities was $2,971,0630 for the period ended
March 31, 2003, as compared to $1,261,906 used in the three months ended March
31, 2004. This decrease in net cash used in financing activities is attributable
to the Company's repayment of mortgage debt upon the disposition of real
property.

         The Company had negative net cash flow of $1,158,588 from operating
activities for the three months ended March 31, 2003 as compared to negative net
cash flow of $465,966 for the three months ended March 31, 2004.

         The Company had stockholders' deficit of $3,182,318 at March 31, 2004
as compared to $1,748,054 at March 31, 2003. The Company's determination that it
has issued shares in excess of its authorized amount resulted in the Company's
determination to continue to classify all shares issued in excess of 1 million
as temporary equity.

         The Company believes that when considered together with anticipated
income from the sale of real property, it has sufficient cash resources to
maintain operations for a period of at least twelve months. The Company's cash
requirements will largely depend upon the availability of real estate
acquisition opportunities and the costs to continue funding its real estate
development projects. Because the Company only holds two real estate properties,
and because the Company has just begun its lending operations, there can be no
assurance that funds required by the Company for these purposes, or to meet its
operating requirements, will be available or, if they are, that they will be
available on acceptable terms and at such times as the Company requires. See
"Outlook", below for a discussion on possible limits on the Company's ability to
raise capital.



                                       27
<PAGE>
OUTLOOK

         The Company invested substantial funds in its previous projects, but
only realized material profits from these projects upon the sale of the real
estate. While the Company entered into agreements to sell its remaining
properties, it cannot guarantee these transactions will close or that the two
sales will occur in a timely fashion. If the Company is unable to close its
disposition transactions on these properties, the Company may not be able to
realize additional revenues. Further, the Company faces litigation with respect
to the Conquistador Plaza project resulting from the termination of the
project's contractor, a former subsidiary of the Company whose president was a
director of the Company. See "Part II, Item 1 - Legal Proceedings."

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

RISK FACTORS

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

RISKS RELATED TO LEGAL UNCERTAINTIES

         THE COMPANY BELIEVES IT HAS VIOLATED NEVADA CORPORATE LAW

         At the time of its incorporation, the Company had 1 million shares of
its common stock authorized. Since that time, the Company believed it had
effected the 1994 Stock Split, the 1999 Reverse Stock Split, the 40 Million
Share Increase, the 250 Million Share Increase, the 750 Million Share Increase
and the 1.5 Billion Share Increase. These changes in capital structure appear to
have not been validly adopted by the Company's board of directors, approved by
the Company's shareholders or filed with the Secretary of State of the State of
Nevada, as required by the laws of the State of Nevada. As such, it appears the
Company currently has only 1 million shares of NRES Common Stock authorized, and
the majority of the validly issued shares are held by Richard and Pamela Astrom
as tenants by the entireties. The Company believes a majority of the Company's
validly issued and outstanding shares and the board of directors can cure and
ratify the overissuances of stock and the aforementioned changes in capital
structure. Until that time, the Company may be liable to the holders of the NRES
Common Stock issued in excess of the authorized amount. The Company also
believes the issuance of Class A common stock to Christopher Astrom was not
authorized as an amendment to the Company's Articles of Incorporation was never
filed with the Secretary of State of the State of Nevada. The Company believes
the recipient of the unauthorized shares, Christopher Astrom, may have a claim
against the Company for damages, but it is unlikely that Christopher Astrom will
file a claim against the Company as he is an officer, director and principal
shareholder of the Company. Also, as discussed below, the Company's board of
directors and

                                       22
<PAGE>
the holders of a majority of its validly issued shares intend to authorize the
creation of Class A common stock and issue shares to Christopher Astrom.

         It has come to the Company's attention that, as a result of the
conversion of the debentures issued by the Company into NRES Common Stock,
coupled with the decrease in the trading price of NRES Common Stock, investors
were entitled to more shares of NRES Common Stock than is authorized under the
Company's Articles of Incorporation. As a result, as of February 5, 2004, the
Company has 1,938,566,046 shares of NRES Common Stock issued, which exceeds the
number of shares authorized. As stated above, the Company believes the holders
of a majority of the Company's validly issued and outstanding shares and the
board of directors can cure and ratify the overissuances of stock. If this
cannot be accomplished, the Company may be liable to the holders of the NRES
Common Stock issued in excess of the authorized amount in an amount equal to
1,937,566,046 shares (the number of shares issued in excess of the amount
authorized) multiplied by the price each such share was issued for (which ranged
from approximately $.0001 to $5.4 per share). The overissuance, together with
the Company's inability to increase its authorized number of shares, has
eliminated the Company's ability to raise capital through issuances of publicly
registered securities. The Company believes it will not be able to continue
trading NRES Common Stock or increase its capital resources through selling
publicly registered securities until the overissuance is cured and the Company
increases the authorized number of shares of NRES Common Stock. The Company may
also have violated other provisions of Nevada law with respect to the duties of
officers and directors to the Company and by not having sufficient shares
available upon the conversion of debentures issued by the Company.

         The Company Has Violated Section 5 of the Securities Act.

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

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

         The Company May Have Violated the Federal Proxy Rules

         At the time of its incorporation, the Company had 1 million shares of
its common stock authorized. Since that time, the Company believed it had
effected the 1994 Stock Split, the 1999 Reverse Stock Split, the 40 Million
Share Increase, the 250 Million Share Increase, the 750 Million Share Increase
and the 1.5 Billion Share Increase. These changes in capital structure appear to
have not been validly adopted by the Company's board of directors, approved by
the Company's shareholders or filed with the Secretary of State of the State of
Nevada, as required by the laws of the State of Nevada. The Company may have
violated the federal proxy rules by either (i) not obtaining the requisite
shareholder approval to effect these changes or (ii) not providing shareholders
with an Information Statement on Schedule 14C. As such, it appears the Company
has only 1 million shares of NRES Common Stock authorized. Until the

                                       28
<PAGE>
Company's board of directors and shareholders cure and ratify the overissuances
of stock, the 40 Million Share Increase, the 250 Million Share Increase, the 750
Million Share Increase and the 1.5 Billion Share Increase and comply with the
federal proxy rules in doing so by properly obtaining shareholder approval, the
Company may be liable to the holders of the NRES Common Stock issued in excess
of the authorized amount. The Company still may be subject to an enforcement
action for possible violations of this and other provisions of the federal
securities laws.

         THE COMPANY MAY NOT BE ABLE TO RAISE ADDITIONAL CAPITAL

         On March 17, 2004, the Company filed a preliminary information
statement on Schedule 14C with the SEC to increase the number of shares of
authorized NRES Common Stock, among other things. The Company plans to provide a
definitive information statement on Schedule 14C to its stockholders shortly
after the Company is satisfied it has resolved any of the SEC's comments.
Pending resolution of this matter, the Company will not be able to realize any
proceeds from the sale of the NRES Debentures, other debt, or equity (other than
proceeds from mortgages on properties). Even if the Company were able to
increase its authorized capital, there can be no assurance that the Company will
be able to raise additional capital on a debt or equity basis, or to obtain
mortgage financing, to complete any of its projects under development (should
they be completed), or land purchased for resale or development at a profit.

         THE COMPANY MAY BE IN DEFAULT OF THE NRES DEBENTURES

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

OTHER RISKS

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

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

         RISKS RELATED TO REAL ESTATE AND RELATED INVESTMENTS

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



                                       29
<PAGE>
         Under federal, state and local environmental laws, ordinances and
regulations, the Company may be liable for removal or remediation costs, as well
as other costs (such as fines or injuries to persons and property) where its
employees may have arranged for removal, disposal or treatment of hazardous or
toxic substances. In addition, environmental laws impose liability for release
of asbestos-containing materials into the air, and third parties can seek
recovery from the Company for personal injury associated with those materials.

ITEM 3.  CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

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

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

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























                                       30
<PAGE>
                                     PART II

                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

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

         On December 13, 2002, the Company filed an Amended Complaint against
the Town of Bay Harbor Islands and the Director of the Town of Bay Harbor
Islands, Building and Zoning Department in the Circuit Court of the 11th
Judicial Circuit for Miami-Dade County, Florida regarding (i) an application by
the Company for zoning approval for a planned residential development overlay
district and (ii) approval from the Town of Bay Harbor for the development of
the Residences at Bay Harbor. Subsequent to the filing of this case, the Company
filed a related complaint in the United States District Court for the Southern
District of Florida. The federal claim was dismissed with prejudice on May 20,
2003. In July 2003 the Company filed a Second Amended Complaint amending its
complaint to add state law counts that were previously asserted by the Company
in its federal complaint. The Company believes that, unless settled before then,
the matter will go to trial in the summer of 2004.

         In the ordinary course of business, the Company and its subsidiaries
are involved in legal proceedings incidental to their operations. The Company
and its subsidiaries are not currently involved in any legal proceedings that
management believes would have a material adverse effect on the operations or
financial condition of the Company and its subsidiaries taken as a whole. See,
however, the discussion under Item 2, "Management's Discussion and Analysis or
Plan of Operation," under the subheading, "Operating History", with respect to
the foreclosure proceedings on the Company's Conquistador Plaza project.

ITEM 2.  CHANGES IN SECURITIES INCREASES IN AUTHORIZED SHARES

     o   At the time of its incorporation, the Company was authorized to issue 1
         million shares of NRES Common Stock.

     o   Since the time of its incorporation, the Company believed it had
         effected the 1994 Stock Split, the 1999 Reverse Stock Split, the 40
         Million Share Increase, the 250 Million Share Increase, the 750 Million
         Share Increase and the 1.5 Billion Share Increase. These changes in
         capital structure appear to have not been validly adopted by the
         Company's board of directors, approved by the Company's shareholders or
         filed with the Secretary of State of the State of Nevada, as required
         by the laws of the State of Nevada. As such, it appears the currently
         has only 1 million shares of NRES Common Stock authorized, and the
         majority of the validly issued shares are held by Richard and Pamela
         Astrom as tenants by the entireties. The Company believes a majority of
         the Company's validly issued and outstanding shares


                                       31
<PAGE>
         and the board of directors can cure and ratify the overissuances of
         stock, the 40 Million Share Increase, the 250 Million Share Increase,
         the 750 Million Share Increase and the 1.5 Billion Share Increase.
         Until that time, the Company may be liable to the holders of the NRES
         Common Stock issued in excess of the authorized amount. All references
         to shares of Common Stock in this report take into account the 1 for 10
         reverse stock split and the 3 for 1 stock split discussed above.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         See the discussion in Part I, Item 2 and "RISK FACTORS - Risks Related
to Legal Uncertainties" regarding the Company's inability to provide NRES Common
Stock to the NRES Debenture holders upon conversion of the NRES Debentures,
which items are incorporated into this Item 3 by this reference.

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

         None.

ITEM 5.  OTHER INFORMATION

         None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits:

  Exhibit
  Number    Description
----------  ------------------------------------------------------------------

3.1*        Articles of Incorporation of the Company.

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

3.4*        Bylaws of the Company.

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

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

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

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

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

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


                                       32
<PAGE>
  Exhibit
  Number    Description
----------  ------------------------------------------------------------------
            Company LLC and Carlsbad Capital LLC.

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

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

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

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

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

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

*        Previously filed.

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

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

(b) Reports on Form 8-K:

   o     On March 29, 2004, the Company filed a current report on Form 8-K
         disclosing that it had completed the sale of the Barcelona Apartments
         to Salomon Yuken.




















                                       33
<PAGE>
                                   SIGNATURES

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

                                NATIONAL RESIDENTIAL PROPERTIES, INC.

Date:  May 17, 2004             By:    /s/ Richard Astrom
                                       ----------------------------
                                       Richard Astrom
                                       President, Chief Executive Officer
                                       and Director

Date:  May 17, 2004             By:    /s/ Christopher Astrom
                                       -------------------------------------
                                       Christopher Astrom
                                       Vice President, Chief Financial Officer,
                                       Secretary and Director








































                                       34