U.S.
Securities and Exchange Commission


Washington,
D.C. 20549
  
  FORM
10-Q
  
 [X]           QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF
1934
 
 For the Quarterly Period Ended March
31, 2009
  [
]            TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF
1934
  For
the Transition Period From ____to _____
 
 Commission
File Number
 000-1430060
  MONTGOMERY REAL ESTATE
SERVICE, INC.
 (F/K/A
MEDIA GROUP SOUTH, INC.)
 (Exact
name of small business issuer as specified in its charter)
  Nevada
                88-0450667(State
      or other jurisdiction of
                (IRS
      Employer Identification No.)incorporation
      or organization)
 
 Montgomery
Real Estate Service, Inc.
 c/o
Lessard Property Management, Inc.
 191
Chestnut Street
 Springfield, MA
01103
 (Address
of principal executive offices)
 
 (413)
734-3116
 (Issuer's
telephone number, including area code)
  Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes [x] No [ ]
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, if any, every Interactive Date File required to be
submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes [x] No [ ]
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
  Large
      accelerated filer
               ̈Non-accelerated
      filer
               ̈(Do
      not check if a smaller reporting company)Accelerated
      filer
               ̈Smaller
      reporting company
              þ
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes [  ] No [X]
 
 Number of
shares of common stock outstanding as of May 14,
2009:      20,196,200
  CAUTIONARY
STATEMENT REGARDING FORWARD LOOKING INFORMATION
  The
discussion contained in this 10-Q under the Securities Exchange Act of 1934, as
amended, contains forward-looking statements that involve risks and
uncertainties. The issuer's actual results could differ significantly from those
discussed herein. These include statements about our expectations, beliefs,
intentions or strategies for the future, which we indicate by words or phrases
such as "anticipate," "expect," "intend," "plan," "will," "we believe," "the
Company believes," "management believes" and similar language, including those
set forth in the discussions under "Notes to Financial Statements" and
"Management's Discussion and Analysis or Plan of Operation" as well as those
discussed elsewhere in this Form 10-Q. We base our forward-looking statements on
information currently available to us, and we assume no obligation to update
them. Statements contained in this Form 10-Q that are not historical facts are
forward-looking statements that are subject to the "safe harbor" created by the
Private Securities Litigation Reform Act of 1995.
 
 
  
  INDEX TO FORM 10-Q
   PART
I                                                                                                                                                                                                                                                                                                       
Page No.
 
 Item
1.  Financial
Statements                                                                                                                                                                                                                                                                              3
 
 Item
2.  Management's Discussion and Analysis of Financial Condition and
Results of
Operations                                                                                                                                                  10
  Item
3.  Quantitative and Qualitative Disclosures About Market
Risk                                                                                                                                                                                                      
14
 
 Item 4.
Controls and
Procedures                                                                                                                                                                                                                                                                      
14
  Item 4T.
Controls and
Procedures                                                                                                                                                                                                                                                                    14
  PART
II
  Item
1.  Legal
Proceedings                                                                                                                                                                                                                                                                                
15
  Item 1A.
Risk
Factors                                                                                                                                                                                                                                                                                         
15
 
 Item
2.  Unregistered Sales of Equity Securities and Use of
Proceeds                                                                                                                                                                                                      
16
  Item
3.  Defaults Upon Senior
Securities                                                                                                                                                                                                                                                        
16
  Item
4.  Submission of Matters to a Vote of Security
Holders                                                                                                                                                                                                                    
16
  Item
5.  Other
Information                                                                                                                                                                                                                                                                                  
16
  Item
6.  Exhibits                                                                                                                                                                                                                                                                                                    17
 
 2
 Table of Contents
  ITEM 1.FINANCIAL
STATEMENTS
  INDEX
TOMONTGOMERY REAL
ESTATE SERVICE, INC. FINANCIAL STATEMENTS
 
 MONTGOMERY REAL ESTATE
SERVICE,
INC.                                                                                                                                                                               
                                                     PAGE
 
 Balance
Sheets                                                                                                                                                                                                                                                                                    
4
 
 Statements
of
Operations                                                                                                                                                                                                                                                                   5
 
 Statement
of Stockholders’
Equity                                                                                                                                                                                                                                                   6
 
 Statements
of Cash
Flows                                                                                                                                                                                                                                                                  7
 
 Notes to
Financial
Statements                                                                                                                                                                                                                                                           8
  3
 Table of Contents
  MONTGOMERY
REAL ESTATE SERVICE, INC.
 (F/K/A
MEDIA GROUP SOUTH, INC.)
 CONSOLIDATED
BALANCE SHEETS
 AS OF
MARCH 31, 2009 AND DECEMBER 31, 2008
  (Unaudited)
                  
                  
                  (Audited)Assets:
                  
                  3/31/2009
                  
                  
                  12/31/2008Current
      assetsCash
      - unrestricted
                  
                  $
                  83
                  
                  
                  $
                  10Restricted
      cash - security deposits
                  
                  
                  3,886
                  
                  
                  
                  4,586Due
      from affiliate
                  
                  
                  29,024
                  
                  
                  
                  29,024Accounts
      receivable
                  
                  
                  2,932
                  
                  
                  
                  2,932Total
      current assets
                  
                  
                  35,925
                  
                  
                  
                  36,552Fixed
      assetsProperty
      and equipment
                  
                  
                  275,000
                  
                  
                  
                  275,000Accumulated
      depreciation
                  
                  
                  (4,244
                  )
                  
                  
                  (1,698
                  )Total
      fixed assets
                  
                  
                  270,756
                  
                  
                  
                  273,302Total
      assets
                  
                  $
                  306,681
                  
                  
                  $
                  309,854Liabilities
      and Stockholders' EquityCurrent
      liabilitiesAccounts
      payable and other current liabilities
                  
                  $
                  8,876
                  
                  
                  $
                  7,296Security
      deposits
                  
                  
                  3,886
                  
                  
                  
                  4,586Current
      portion of mortgage payable
                  
                  
                  3,526
                  
                  
                  
                  15,000Total
      current liabilities
                  
                  
                  16,288
                  
                  
                  
                  26,882Long-term
      mortgage payable
                  
                  
                  243,339
                  
                  
                  
                  232,746Total
      liabilities
                  
                  
                  259,627
                  
                  
                  
                  259,628Stockholders'
      EquityCommon
      stock, (175,000,000 shares authorized, 20,196,200 shares
      issuedand
      outstanding, par value $.001 per share)
                  
                  
                  20,196
                  
                  
                  
                  10,736Preferred
      stock, (25,000,000 shares authorized, 3,600,000 shares
    issuedand
      outstanding, par value $.001 per share)
                  
                  
                  3,600
                  
                  
                  
                  3,600Additional
      paid-in capital
                  
                  
                  561,743
                  
                  
                  
                  192,803Retained
      deficit
                  
                  
                  (538,485
                  )
                  
                  
                  (156,913
                  )Total
      stockholders' equity
                  
                  
                  47,054
                  
                  
                  
                  50,226Total
      liabilities and stockholders' equity
                  
                  $
                  306,681
                  
                  
                  $
                  309,854
  The
accompanying notes are an integral part of these financial
statements.
  4
 Table of Contents
  MONTGOMERY
REAL ESTATE SERVICE, INC.
 (F/K/A
MEDIA GROUP SOUTH, INC.)
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 FOR THE
THREE MONTHS ENDED MARCH 31, 2009 and 2008 (UNAUDITED)
  Quarter
      Ended
                    
                    
                    Quarter
      Ended3/31/2009
                    
                    
                    3/31/2008Rental
      income
                    
                    $
                    12,384
                    
                    
                    $
                    13,649Total
      revenue
                    
                    
                    12,384
                    
                    
                    
                    13,649Selling,
      general and administrative expenses
                    
                    
                    3,836
                    
                    
                    
                    4,882Common
      stock issued for services
                    
                    
                    378,400
                    
                    
                    
                    -Repairs
      and maintenance
                    
                    
                    4,317
                    
                    
                    
                    -Depreciation
                    
                    
                    2,546
                    
                    
                    
                    2,613Total
      expenses
                    
                    $
                    389,099
                    
                    
                    $
                    7,495Net
      ordinary income
                    
                    
                    (376,715
                    )
                    
                    
                    6,154Interest
      expense
                    
                    
                    (4,857
                    )
                    
                    
                    (3,361
                    )Total
      other income (expense)
                    
                    
                    (4,857
                    )
                    
                    
                    (3,361
                    )Net
      income (loss)
                    
                    $
                    (381,572
                    )
                    
                    $
                    2,793Net
      income (loss) per share, basic and fully diluted
                    
                    $
                    (0.02
                    )
                    
                    $
                    *Weighted
      Average Common Shares Outstanding
                    
                    
                    15,466,200
                    
                    
                    
                    30,356,200* =
      Less than $.01 per share.
  The
accompanying notes are an integral part of these financial
statements.
  5
 Table of Contents
  MONTGOMERY
REAL ESTATE SERVICE, INC.
 (F/K/A
MEDIA GROUP SOUTH, INC.)
 CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY
 FOR THE
THREE MONTHS ENDED MARCH 31, 2009 (UNAUDITED)
  Common
                  
                  
                  
                  
                  
                  PreferredStock
                  
                  
                  
                  
                  
                  Stock
                  
                  
                  
                  
                  
                  Additional(Par
      Value
                  
                  
                  Common
                  
                  
                  (Par
      Value
                  
                  
                  Preferred
                  
                  
                  Paid
      in
                  
                  
                  Retained$
                  .001
                  )
                  
                  Shares
                  
                  
                  $
                  .001
                  )
                  
                  Shares
                  
                  
                  Capital
                  
                  
                  (Deficit)Balances,
      January 1, 2009
                  
                  $
                  10,736
                  
                  
                  
                  10,736,200
                  
                  
                  $
                  3,600
                  
                  
                  
                  3,600,000
                  
                  
                  $
                  192,803
                  
                  
                  $
                  (156,913
                  )Issuance
      of common shares for services received
                  
                  $
                  9,460
                  
                  
                  
                  9,460,000
                  
                  
                  $
                  -
                  
                  
                  
                  
                  
                  
                  $
                  368,940Net
      loss for the quarter
                  
                  $
                  -
                  
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  (381,572
                  )Balances,
      March 31, 2009
                  
                  $
                  20,196
                  
                  
                  
                  20,196,200
                  
                  
                  $
                  3,600
                  
                  
                  
                  3,600,000
                  
                  
                  $
                  561,743
                  
                  
                  $
                  (538,485
                  )
  The
accompanying notes are an integral part of these financial
statements.
  6
 Table of Contents
  MONTGOMERY
REAL ESTATE SERVICE, INC.
 (F/K/A
MEDIA GROUP SOUTH, INC.)
 CONSOLDIATED
STATEMENT OF CASH FLOWS
 FOR THE
THREE MONTHS ENDED MARCH 31, 2009 and 2008 (UNAUDITED)
  Quarter
      Ended
                    
                    
                    Quarter
      Ended3/31/2009
                    
                    
                    3/31/2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income (loss)
                    
                    $
                    (381,572
                    )
                    
                    $
                    2,793Adjustments
      to reconcile net (loss) to net cash provided byoperating
      activities:Depreciation
                    
                    
                    2,546
                    
                    
                    
                    2,613Common
      stock issued for services received
                    
                    
                    378,400
                    
                    
                    
                    -(Increase)
      decrease in operating assets:Accounts
      receivable
                    
                    
                    -
                    
                    
                    
                    (1,624
                    )Other
      assets
                    
                    
                    -
                    
                    
                    
                    4,415Increase
      (decrease) in operating liabilities:Accounts
      payable and other current liabilities
                    
                    
                    1,580
                    
                    
                    
                    (1,618
                    )NET
      CASH PROVIDED BY OPERATING ACTIVITIES
                    
                    
                    954
                    
                    
                    
                    6,579CASH
      FLOWS FROM FINANCING ACTIVITIES:Principal
      repayments of long term debt
                    
                    
                    (881
                    )
                    
                    
                    (3,047
                    )NET
      CASH (USED IN) FINANCING ACTIVITIES
                    
                    
                    (881
                    )
                    
                    
                    (3,047
                    )NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                    
                    
                    73
                    
                    
                    
                    3,532CASH
      AND CASH EQUIVALENTS:Beginning
      of period
                    
                    
                    10
                    
                    
                    
                    1,093End
      of period
                    
                    $
                    83
                    
                    
                    $
                    4,625OTHER
      SUPPLEMENTAL CASH FLOW DISCLOSURES:Cash
      paid during the period for interest
                    
                    $
                    4,857
                    
                    
                    $
                    3,361Cash
      paid during the period for income taxes
                    
                    $
                    -
                    
                    
                    $
                    -
  The
accompanying notes are an integral part of these financial
statements.
  7
 Table of Contents
  MONTGOMERY
REAL ESTATE SERVICE, INC.
 (F/K/A
MEDIA GROUP SOUTH, INC.)
 CONSOLIDATED
NOTES TO FINANCIAL STATEMENTS
 FOR THE
THREE MONTHS ENDED MARCH 31, 2009 (UNAUDITED)
  NOTE 1 -
BASIS OF PRESENTATION
 
 The
consolidated financial statements of Montgomery Real Estate Service, Inc. (the
"Company"), included herein were prepared, without audit, pursuant to rules and
regulations of the Securities and Exchange Commission. Because certain
information and notes normally included in consolidated financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America were condensed or omitted pursuant to such rules and
regulations, these consolidated financial statements should only be read in
conjunction with the consolidated financial statements and notes thereto
included in our audited consolidated financial statements as included in our
Form 10-K for the year ended December 31, 2008.
 
 Interim
Financial Information
 
 The
unaudited interim consolidated financial statements have been prepared in
accordance with United States generally accepted accounting principles for
interim financial information. In the opinion of management, all adjustments
considered necessary for a fair presentation of the financial position, results
of operations and cash flows as of (at) March 31, 2009, and 2008, have been
included. Readers of these consolidated financial statements should note that
the interim results for the three month periods ended March 31, 2009 is not
necessarily indicative of the results that may be expected for the fiscal year
as a whole.
 
 NOTE 2 -
SIGNIFICANT ACCOUNTING POLICIES
 
 Business
Activity— Montgomery Real Estate Service, Inc. f/k/a Media Group South,
Inc. ("The Company") was organized under laws of the State of as a
C-Corporation. The Company owns 100% interest in Front Street First Corp, (Front
Street) a Nevada Corporation.  Front Street merged with and into the
Company as a wholly owned subsidiary on December 31, 2008.  The
purpose of Front Street is to buy, sell, rent, and improve any and all aspects
of real estate. Front Street currently owns one building in Chicopee,
Massachusetts.
 
 Cash and
Cash Equivalents—For purposes of the Consolidated Statement of Cash
Flows, the Company considers liquid investments with an original maturity of
three months or less to be cash equivalents.
 
 Management’s
Use of Estimates—The preparation of consolidated 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 consolidated financial statements and the
reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.
 
 Revenue
Recognition—The Company’s revenue is derived from rental income from 6
leases, and all 6 are paid on a “month to month” basis.
 
 In
accordance with SFAS 13, paragraph 23, the cost of property held for leasing by
major classes of property according to nature or function, and the amount of
accumulated depreciation in total, is presented in the accompanying March 31,
2009 consolidated balance sheet. There are no contingent rentals included in income
in the accompanying statements of operations. With the exception of the
month-to-month leases, revenue is recognized on a straight-line basis and
amortized into income on a monthly basis, over the lease term.
 
 Comprehensive
Income (Loss)—The Company adopted Financial Accounting Standards Board
Statement of Financial Accounting Standards (SFAS) No. 130, “Reporting Comprehensive
Income”, which establishes standards for the reporting and display of
comprehensive income and its components in the consolidated financial
statements.  There were no items of comprehensive income (loss)
applicable to the Company during the periods covered in the consolidated
financial statements.
 
 Advertising
Costs—Advertising costs are expensed as incurred. For the quarters ended
March 31, 2009 and 2008, the Company incurred $-0- and $-0-
respectively.
 
 Fair
Value of Financial Instruments—The carrying amounts reported in the
consolidated balance sheet for cash, accounts receivable and payable approximate
fair value based on the short-term maturity of these instruments.
 
 Net Loss
per Common Share—Statement of Financial Accounting Standard (SFAS) No.
128 requires dual presentation of basic and diluted earnings per share (EPS)
with a reconciliation of the numerator and denominator of the EPS
computations.  Basic earnings per share amounts are based on the
weighted average shares of common stock outstanding.  If applicable,
diluted earnings per share would assume the conversion, exercise or issuance of
all potential common stock instruments such as options, warrants and convertible
securities, unless the effect is to reduce a loss or increase earnings per
share.  Accordingly, this presentation has been adopted for the period
presented.  There were no adjustments required to net loss for the
period presented in the computation of diluted earnings per share.
 
 Income
Taxes—Income taxes are provided in accordance with Statement of Financial
Accounting Standards (SFAS) No. 109, “Accounting for Income
Taxes.”A deferred tax asset or liability is recorded for all
temporary differences between financial and tax reporting and net operating
loss-carry forwards.
 
 Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that, and some portion or the entire
deferred tax asset will not be realized.  Deferred tax assets and
liabilities are adjusted for the effect of changes in tax laws and rates on the
date of enactment.
 
 Accounts
Receivable—Accounts deemed uncollectible are written off in the year they
become uncollectible.
 
 Impairment
of Long-Lived Assets—The Company evaluated the recoverability of its
property and equipment, and other assets in accordance with Statements of
Financial Accounting Standards (SFAS) No. 121, “Accounting for the Impairment of
Long-Lived Assets to be Disposed of” which requires recognition of
impairment of long-lived assets in the event the net book value of such assets
exceeds the estimated future undiscounted cash flows attributable to such assets
or the business to which such intangible assets relate.
 
 8
 Table of Contents
 
 MONTGOMERY
REAL ESTATE SERVICE, INC.
 (F/K/A
MEDIA GROUP SOUTH, INC.)
 CONSOLIDATED
NOTES TO FINANCIAL STATEMENTS
 FOR THE
THREE MONTHS ENDED MARCH 31, 2009 (UNAUDITED)
 
 Property
and equipment—Rental property is stated at cost. Depreciation is provided
by the straight-line method over the estimated economic life of the rental
property’s remaining 27 years.
 
 NOTE 3 –
NOTES PAYABLE
 
 Mortgages
incurred for the purchase of the rental property consist of the
following:
 
 Secured,
      Commercial Mortgage to an unrelated party.Maturing
      on July 1, 2036, Bearing 6.75% interest.
                    
                    $
                    223,854Secured,
      Commercial Mortgage to an unrelated party.Maturing
      on February 1, 2022 Bearing 4.99% interest.
                    
                    
                    23,011$
                    246,865
 
 The
aggregate amount of long-term debt at December 31, 2008 maturing during each of
the succeeding five years and thereafter is as follows:
  For
      the year ending
                      
                      Amount2009
                      
                      $
                      3,5262010
                      
                      $
                      3,7512011
                      
                      $
                      3,9912012
                      
                      $
                      4,2462013
                      
                      $
                      4,518Thereafter
                      
                      $
                      226,833Total
                      
                      $
                      246,865
 
 NOTE 4 -
GOING CONCERN
 
 As shown
in the accompanying consolidated financial statements, we have suffered
recurring losses from operation to date. We have a retained deficiency of
$538,485 as of March 31, 2009. These factors raise substantial doubt about our
ability to continue as a going concern.
 
 Management's
plans in regard to this matter are to raise equity capital and seek strategic
relationships and alliances in order to increase revenues in an effort to
generate positive cash flow. Additionally, we must continue to rely upon equity
infusions from investors in order to improve liquidity and sustain operations.
The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
  9
 Table of Contents
  ITEM 2.  
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
  Management’s
Discussion and Analysis contains various “forward looking statements” within
regarding future events or the future financial performance of the Company that
involve risks and uncertainties. Certain statements included in this 10-Q,
including, without limitation, statements related to anticipated cash flow
sources and uses, and words including but not limited to “anticipates”,
“believes”, “plans”, “expects”, “future” and similar statements or expressions,
identify forward looking statements. Any forward-looking statements herein are
subject to certain risks and uncertainties in the Company’s business, including
but not limited to, reliance on key customers and competition in its markets,
market demand, product performance, technological developments, maintenance of
relationships with key suppliers, difficulties of hiring or retaining key
personnel and any changes in current accounting rules, all of which may be
beyond the control of the Company. Management will elect additional changes to
revenue recognition to comply with the most conservative SEC recognition on a
forward going accrual basis as the model is replicated with other similar
markets (i.e. SBDC). The Company’s actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including those set forth therein.
  Management’s
Discussion and Analysis of Results of Financial Condition and Results of
Operations (“MD&A”) should be read in conjunction with the financial
statements included herein.
  BUSINESS
DESCRIPTION
 
 We were
incorporated on February 8, 2000 under the laws of the State of
Nevada.  From the beginning of 2003 until December 31, 2007 we had no
operations and no assets.  We were a dormant company with no
revenues.  Subsequent to December 31, 2007 we have begun operating in
the real estate industry and now engage in the business of buying, selling,
renting, and improving real estate. Over the last year we have been engaged in
buying and selling our property and we have entered into new agreements for the
management of new rental property.
  During
2008 we owned 100% of the common stock of a company called Front Street First
Corp., which, in turn, owned property in Chicopee, Massachusetts, near
Springfield in western Massachusetts at 472 Front Street. Specifically, we owned
a three-story house that consisted of six units and generated revenues by
rentals on units.  During 2008 we sold this property and acquired a
new property in Chicopee, Massachusetts near Springfield in western
Massachusetts at 68-70 Cochran Street.  We own this property through
our 100% stock ownership in Phillips Real Estate Services, Inc. which owns 68-70
Cochran Street.  We plan to continue in this line of business for the
foreseeable future. Our executive offices are located at c/o Lessard Property
Management, Inc. 191 Chestnut Street in Springfield, Massachusetts 01103. Our
telephone number is at Lessard Property Management, Inc. is (413) 734-3116. We
are currently authorized to issue 175,000,000 shares of common stock and
25,000,000 shares of preferred stock. Both have a par value of $.001 per share.
The preferred shares are convertible into common on a one for ten conversion
basis. We currently have 20,196,200 shares of common stock issued and
outstanding. We currently have 3,600,000 preferred shares issued and
outstanding.
 
 Our
business plan is to buy more investment properties which we believe have good
cash flows or good cash flow potential, plus a favorable estimated resale value.
We plan to lease our properties primarily to residential tenants. We plan to
make limited improvements to our properties, so that we can increase occupancy,
improve cash flows, and enhance potential resale value.
 
 As shown
in the accompanying audited financial statements, we have suffered recurring
losses from operations since our inception. We experienced net income (losses)
of ($134,482) and ($12,767) during 2008 and 2007, respectively. We had a total
accumulated deficit of $538,485 as of March 31, 2009. These factors raise
substantial doubt about our ability to continue as a going concern.
 
 THE
BUILDING AT 472 FRONT STREET
 
 On
December 31, 2007, we acquired 100% of the common stock of Front Street First
Corp., which in turn, owns 100% of a three-story apartment house, with six units
in central downtown Chicopee, Massachusetts at 472 Front Street, which the board
of directors had identified as an acceptable business opportunity.
 
 As of
October 29, 2008, we had six lease agreements in place for the 472 Front Street
Building. The leases were managed by Lessard Property Management, Inc. on our
behalf, and the monthly amounts due under the leases, in the aggregate, total
$4,465 per month according to the rent roll. We have not reported the individual
lease amounts, because they are in the names of private
individuals.
  Lessard
Property Management had a contract with us to manage the 472 Front Street lease,
and their fee for doing so is 8% of the collected rent, or $150 per project,
whichever is greater.  This property management agreement was assigned
to us by, Duane Bennett, trustee of our majority shareholder, for no additional
consideration, other than as part of the process by which he deeded the property
to us.
 
 On
December 18, 2009, we sold the property at 472 Front Street in Chicopee, MA to
Moose Creek Realty, LLC of 90 Maple Street, Southhampton, MA 01073 in the amount
of $275,123.  As a result all contractual arrangements with Lessard
Property Management for the management and rental of 472 Front Street were
cancelled.
 
 THE
BUILDING AT 68-70 COCHRAN STREET
 
 On
October 29, 2008 the Registrant entered into a Stock Purchase Agreement between
Pablo Torres majority shareholder of Phillips Real Estate Services, Inc. (“Seller”) and Montgomery Real
Estate Service, Inc. (“Buyer”) as to the facts set
forth below. (Exhibit 10.1)
 
 On
October 29th, Pablo
Torres sold 20,000,000 shares (twenty million) of Phillips Real Estate Services,
Inc. (“Phillips”) to the Registrant in exchange for 250,000 shares (two hundred
fifty thousand) of Montgomery Real Estate Services Inc. (“Buyer”) and $5,000
giving the Buyer majority control of 100% of Phillips which in turn owns the
property located at 68-70 Cochran Street in Chicopee, Massachusetts
(“Property”). At the same time the Seller transferred the rights and obligations
under the Residential Property Management Agreement to the Buyer. The Buyer and
Seller agreed and Philips became a wholly owned subsidiary of the
Buyer.
 
 Seller
assigned its rights and obligations under the Residential Property Management
Agreement to the following limited extent: the mortgage will continue to be the
personal liability of the Seller until paid in full by him, all rental proceeds
to be collected by and controlled by the Seller until the property is resold,
any negative cash flows for repairs or expenses whatsoever be the sole
responsibility of the Seller. Furthermore in the event cash flow after all
expenses exceeds 20%, Montgomery and the Seller will equally share the proceeds.
Upon liquidation of this property after expenses, the Seller will receive 25% of
the capital gains profit and Montgomery will receive 75% of the capital gains
profit. In the event that the Seller is incapable of managing the property, then
Montgomery will hire a professional property management company to manage the
day to day operations, at the Seller’s expense. Additionally, 100,000 (one
hundred thousand) shares of the 250,000 (two hundred fifty thousand) shares are
to be sold at a mutually acceptable price and the proceeds to be used
exclusively for the pay down of the mortgage on the subject real estate. The
Buyers is to pay $5,000 (five thousand) dollars for consideration in this
transaction
 
 The 68-70
Cochran Street, Chicopee, Massachusetts property consists of 4 rental units. Of
which the accumulated rent received from all 4 units is approximately $2,575 a
month.
 
 10
 Table of Contents
  OVERVIEW
OF OUR MARKET AREA
 
 The city
of Chicopee lies on the outskirts of the Springfield, Massachusetts urban area,
located in the Pioneer Valley near the intersection of U.S. Interstates 90 (the
Massachusetts Turnpike) and 91.  Interstate 90 is the major east-west
highway crossing Massachusetts. Interstate 91 is the major north-south highway
that runs directly through the heart of New England. Chicopee is located
approximately 90 miles west of Boston, Massachusetts, 70 miles southeast of
Albany, New York and 30 miles north of Hartford,
Connecticut.  Chicopee serves as the home of Westover Air Force
Reserve Base and Barnes Air National Guard Base and is located in Hampden
County, Massachusetts, whose estimated 2007 population was 464,758. Hampden
County’s current annual growth rate is 0.3%.
 
 The
economy in our primary market area enjoys the presence of large employers such
as the Baystate Health, Big Y Supermarkets, University of Massachusetts, Mass
Mutual Financial Group, Mercy Medical Center, Friendly Ice Cream Corporation,
Yankee Candle, and Hasbro Games.  Performance Foods is near completion
of its 275,000 square foot distribution facility and Harvey Industries will
build a new 250,000 square foot manufacturing facility in the Chicopee River
Industrial Park. Other employment and economic activity is provided by financial
institutions, eight other colleges and universities, several other hospitals and
a variety of wholesale and retail trade businesses.
 
 Recent
local developments such as the announcement by Baystate Health of a $259 million
expansion, a historic downtown hotel in Springfield will be redeveloped next
year with a new parking garage and a rebound in the class A office market will
bring improvements to the local economy.  According to the NAI Global
2008 Market Report, although the real estate market in Western Massachusetts
continues to have problems, the fourth quarter of 2007 ended with positive
changes in the area and with new commercial and industrial development planned
for the future, the Greater Springfield, Massachusetts area is expected to
rebound in 2008.
 
 According
to the Pioneer Valley Planning Commission's "Briefing Report:  The
Economic Impact of the Proposed New Haven-Hartford-Springfield Commuter Rail
Line," dated December 2006, the economic impact of building the proposed New
Haven-Hartford-Springfield commuter rail line will be
significant.  The operation of the commuter rail line will create
about 249 new jobs in the corridor as well as increase regional economic output
by almost $15 million per year and regional income tax revenues by about $1.2
million per year for the 10-year period 2011-2020.
 
 A press
release put out on May 29, 2008 by the University of Massachusetts Donahue
Institute indicates that Massachusetts has stayed above the average national
economic growth, which through March has grown by a 3.2% annual rate compared to
a .6% rate for the nation. Additionally, the state has added 4,600 jobs while
the nation has cut over 200,000 jobs.  Massachusetts is home to many
technology, biotechnology and health science industries that are in high
demand.  For this reason, Michael Goodman, Director of Economic and
Public Policy Research at the University of Massachusetts’ Donahue Institute
stated that, “The technology part of our economy is offsetting the housing
market.”
  These
market factors form the setting in which we plan to execute our business
model.
 
 OUR PLAN
TO ACQUIRE OTHER RENTAL PROPERTIES
 
 Our
business plan is to buy more rental properties that we believe are undervalued,
compared to their cash flows and estimated resale value. Our strategy is to
identify rental properties with a favorable purchase price relative to their
market value, as well as positive cash flow. We plan to buy properties primarily
leased to residential tenants. We are prepared to make some improvements to our
properties, so that we can increase occupancy, improve cash flows, and enhance
potential resale value. We will most likely seek properties in the Springfield,
Massachusetts area for the next 12 months.
 
 Our
success will be dependent upon implementing our plan of operations and the risks
associated with our business plans. We operate primarily in the Springfield,
Massachusetts area. We plan to strengthen our position in this market. We plan
to expand our operations through our acquisition and improvement of real
estate.
  We
presently own one three-story apartment building in Chicopee, Massachusetts
located at 68-70 Cochran Street. Duane Bennett, has previously owned and
operated a real estate company in the Springfield, Massachusetts area, and has
long-term contacts in the area. We hope to acquire additional real estate in the
next 12 months, and to utilize the proceeds from the rental revenues of those
properties to pay our operating costs for the next twelve months; however, there
are no assurances that this revenue will be sufficient to cover our operating
costs. Accordingly, if our revenues are not sufficient, management actions would
be taken to raise equity capital, seek strategic relationships and alliances,
and build our marketing efforts to generate positive cash flow provide the means
for us to continue as a going concern. Mr. Bennett is related to us as our
officer, director and sole shareholder of the Northeast Nominee Trust, our
majority shareholder. There is not a written agreement in place with Mr. Bennett
and he has no obligation to provide additional funds.
  PROPERTY
LOCATION PROCEDURES
  We plan
to conduct a preliminary analysis that consists of:
 
 ·
              Reviewing
      real estate sales information provided by local board of realtors
      associations and our review of the census tract increases. The information
      that we may obtain that would weigh in favor of our proceeding with a
      property acquisition would be:
 
 o
              High
      volume of real estate sales within the specific areao
              New
      schools and major commercial developments in the areao
              Improved
      state and city roads in the area
 
 The
information that we may obtain that would weigh against our proceeding with a
property acquisition would be:
 
 o
              Hazardous
      waste in the areao
              High
      crime in the areao
              Overcrowding
      in the area
 
 The data
that we analyze to determine whether to purchase properties are:
 
 ·
              Demographic
      data that suggests increased demand in a specific area. The data that
      would weigh in favor of our proceeding with a purchase would
      be:o
              Increase
      in industrial activity such as a major corporation moving into the area
      creating new jobs and increasing residential housing
    demand.o
              Increase
      in the population’s median income levels for a certain
    area.o
              Low
      crime rate in the area
  ·
              Demographic
      data that would weigh against a purchase would be:o
              Migration
      of industrial companies outside the area.o
              Decrease
      in income levelso
              High
      crime rate in the area
  In order
to determine and evaluate the fastest growing areas, we will obtain reports from
report surveys and reporting companies. These reports will provide detailed
information that we will then study to determine where the good areas of growth
are.
 
 We will
also rely on information provided by the U.S. Census Bureau to obtain
information pertaining to population shifts and number of total people in a
specific area. We plan also to compare the population figures from the 1990
census with those of the 2000 census.
 
 DETAILED
MARKET AND FINANCIAL ANALYSIS
 
 We will
perform detailed market and financial analysis regarding each property we decide
to review for purchase so as to determine whether the specific location is
appropriate for acquisition and development. That detailed information will
include the following:
 
 ·
              Number
      of properties on the market.·
              Number
      of properties sold in the past 12 months.·
              Sales
      prices asked per property.·
              Sales
      price sold per property.·
              Total
      square footage and acreage per property·
              Total
      number of units per property.·
              Total
      number of pending closings per
property.
 
 11
 Table of Contents
  PURCHASE
PROCEDURES
 
 Once we
have located a property that we may want to purchase, we will ascertain whether
the owner is willing to sell the property. We then negotiate a purchase price
and ask the following questions of the prospective seller and/or obtain answers
from third parties:
 
 ·
              When
      does the owner want to sell and close? Favorable conditions we look for
      regarding this factor are:o
              The
      seller is willing and able to sell within a six-month
    period.o
              Typically,
      the timing and motivation of sellers to enter into contract to sell may
      include several factors such as: estate planning, gifts to family, age,
      health and other personal factors.
 
 ·
              How
      much will the owner sell the land for?  Favorable conditions we
      will look for regarding this factor are:o
              The
      price is below market value. We determine market value through appraisals
      and comparable sales reports in the area.o
              With
      respect to price, we would also consider value trends, such as historical
      yearly increases in property values
 
 ·
              Are
      there any defects on the title?  Favorable conditions we will
      look for regarding this factor are:o
              No
      liens and/or encumbrances.o
              The
      buyer is able to deliver a clean title within the time we would like to
      close.
  ·
              Does
      the landowner have title insurance on the property?  Favorable
      conditions we will look for regarding this factor are:o
              The
      landowner has title insurance on the property.o
              The
      landowner is able to secure title insurance on the
    property.o
              We
      would be able to obtain title insurance on the purchased
      property.
 
 We will
obtain the following documents from the seller during our due diligence on the
property:
  •           General
maps;
 •           Environmental
reports
 •           Copies
of existing zoning maps and regulations;
 •           Conduct
land inspection procedures;
 •           Proposed
zoning regulations;
 •           Deeds;
 •           Title
insurance; and
 •           Tax
bills.
  We then
verify the accuracy of these documents and determine how the information
contained in the documents impacts the property that we are considering to
purchase
 
 OUR
FINANCING PROCEDURES
  We will
attempt to obtain financing from local banks doing business within the area
where we are attempting to purchase property. Our officer and director, Mr.
Bennett, has, in the past, personally guaranteed repayment of debt for property
purchases along with necessary corporate guarantees, and we plan to use such
guarantees in the future, if necessary; however, there are no assurances that
Mr. Bennett, or we, will be in a financial position to do so. We do not have any
written agreements now or in the past with Mr. Bennett, obligating him to
guarantee repayment of future debt or any of our other obligations. Mr. Bennett
is not otherwise under any legal obligation to provide us with capital. Assuming
we can pay down some of the mortgages on our property, we hope to leverage the
property with a financial institution or private lender so that funds are
available for additional purchases, based on using the property as
collateral.
  The
procedures for obtaining our financing are as follows:
 
 1.
              File
      loan application.2.
              Credit
      checks, property appraisal done.3.
              Loan
      documents drafted.4.
              Down
      payment made that is typically approximately 5 to 10% of the appraised
      value.5.
              Institution
      lends funds for the balance, less certain transaction fees that are
      typically between approximately 2 to 3%.6.
              A
      lien is then filed with the appropriate recorder’s
  office.
 
 There are
no assurances that our financing procedures will be adequate to secure the funds
needed to sustain our operations.
  DISTRIBUTION
 
 We have
no distribution agreements in place with anyone. We plan to sell the properties
we acquire primarily through direct selling efforts involving established real
estate brokers and property managers and corporations that may have a need for
residential and/or commercial real estate. We plan to contract with real estate
brokers, sub-contractors and other agents to assist in us on a
project-by-project basis.
  NEW
PRODUCTS OR SERVICES
 
 We
currently have no new products or services announced to the public. We will make
public announcement in the future upon entering into material contracts to
acquire any new real estate projects.
  COMPETITIVE
BUSINESS CONDITIONS
 
 We face
significant competition both in acquiring rental properties and in attracting
renters. Our primary market area of residential multi-family unit rentals is
highly competitive, and we face direct competition from a significant number of
multi-family unit landlords, many with a local, state-wide or regional presence
and, in some cases, a national presence. Many of these landlords are
significantly larger and have greater financial resources than us. Our
competition for renters comes from newer built apartment complexes as well as
older apartment buildings.
 
 In
addition, we face significant competition from home builders and land
developers, because many renters have moved out of the rental market into
single-family homes. Nationally, there are over one hundred major land
developers. Approximately 10% of these developers capture approximately 50% of
the market for such developments. These developers have greater financial
resources than we do and are better poised for market retention and expansion
than we are. Specifically, our competition with national homebuilders is as
follows:
 
 •           Pulte
Homes;
 •           Ryan
Homes;
 •           Ryland
Homes;
 •           Toll
Brothers
 •           John
Weiland Homes;
 •           Cresent
Resources; and
 •           Harris
Group
  These
national homebuilders purchase land or lots of vacant land parcels to build
single-family homes, often in connection with nearby shopping centers and
commercial buildings. The national homebuilders have substantial resources to
enable them to build single-family homes for resale.
 
 These
builders engage in single-family home development and have greater financial
resources than we do. In addition, these companies have greater operational
resources because they are able to perform a variety of development tasks
themselves. These companies purchase vacant land tracts and perform all the work
necessary to construct the homes, such as land clearing and road development and
then build the homes themselves. In contrast, we do not have the financial or
operational resources to perform these tasks. These national and local builders
are better equipped to acquire tracts of land equipped with these capabilities
due to their operational and financial superiority over us.
 
 We have
no competitive advantages over any of the individuals and/or companies against
whom we compete. We have significantly less capital, assets, revenues, employees
and other resources than our local and/or national competition. There are no
barriers to entry into this market.
  INTELLECTUAL
PROPERTY
  At
present, we do not have any patents, trademarks, licenses, franchises,
concessions, and royalty agreements, labor contracts or other proprietary
interests.
  GOVERNMENT
REGULATION ISSUES
  We are
subject to applicable provisions of federal and state securities laws and to
regulations specifically governing the real estate industry, including those
governing fair housing and federally backed mortgage programs. Our operations
will also be subject to regulations normally incident to business operations,
such as occupational safety and health acts, workmen's compensation statutes,
unemployment insurance legislation and income tax and social security related
regulations. Although we will use our best efforts to comply with applicable
regulations, we can provide no assurance of our ability to do so, nor can we
fully predict the effect of these regulations on our proposed
activities.
 
 RESEARCH
AND DEVELOPMENT
 
 We have
spent no funds on research and development.
  12
 Table of Contents
  EMPLOYEES
  Presently,
we have no employees with the exception of Duane Bennett.  We have no
employment agreements with any of our management. We do not anticipate hiring
any additional employees in the next 12 months.
  RESULTS OF OPERATIONS FOR THE THREE
MONTHES ENDED MARCH 31, 2009 and 2008
 
 Revenues
(for the three months ended March 31, 2009 and 2008).
 
 Revenues
decreased $1,265 or 9.3% to $12,384 for the three months ended March 31, 2009 as
compared with $13,649 for the three months ended March 31, 2008, respectively.
Revenues consisted of rentals on residential rental properties. The reasons for
the above decreases in revenues are attributable to the sell of the Front Street
property and the acquisition of the Cochran Street property. The Cochran Street
property has 2 less units and therefore less rental income than the Front Street
property.
 
 All sales
transactions were with unrelated parties.
 
 Cost
of Sales (for the three months ended March 31, 2009 and 2008).
 
 None.
 
 Expenses
(for the three months ended March 31, 2009 and 2008).
 
 Operating
expenses for the three months ended March 31, 2009 increased $381,604 or over
100%% to $389,099. The increase in expenses during this period was primarily
attributable to the common stock issued for services in the amount of $378,400.
Also $4,317 were expenses for repairs and maintenance for the three months ended
March 31, 2009.
 
 We do not
have any lease agreements for our principal office and do not currently have any
employment agreements.
 
 Income
Taxes (for the three months ended March 31, 2009 and 2008).
 
 We had no
provision for income taxes for the three months ended March 31, 2009 and 2008,
respectively, due to our net loss.
 
 If we
incur losses, we may have a deferred tax asset. Deferred tax assets are reduced
by a valuation allowance when, in the opinion of management, it is more likely
than not that, some portion or all of the deferred tax asset will not be
realized. Deferred tax assets and liabilities are adjusted for the effect of
changes in tax laws and rates on the date of enactment. We do not currently have
any net deferred tax assets.
 
 Income/Losses
(for the three months ended March 31, 2009 and 2008).
 
 We had a
net (loss) of $(381,572), or $(.02) per common share for the three months ended
March 31, 2009. This compares to a net income of $2,793, or less than $.01 per
common share for the three months ended March 31, 2008. This period net income
(loss) increased by over 100% from period to period. The 2009 net loss increase
is attributable to the expense for shares issued for common stock in the amount
of $378,400.
 
 Impact
of Inflation.
 
 We
believe that inflation has had a negligible effect on operations since
inception. We believe that we can offset inflationary increases in the cost of
operations by increasing sales and improving operating
efficiencies.
 
 Liquidity
and Capital Resources (for the three months ended March 31, 2009 and
2008).
 
 Cash
flows provided by (used in) operations were $954 and $6,579 for the three months
ended March 31, 2009 and 2008, respectively. These were mainly attributable to
an increase in the amount of $3,198 in accounts payable and other current
liabilities during the three months ended March 31, 2009, partially offset by
accounts receivable in the amount of $(1,624) for the three months ended March
31, 2008 compared to $0 for the three months ended March 31, 2009. Also, for the
three months ended March 31, 2008, we had other assets in the amount of $4,415
compared to $0 for the three months ended March 31, 2009.
 
 There
were no cash flows provided by (used in) investing activities for the three
months ending March 31, 2009 and 2008.
 
 Cash
flows provided by (used in) financing activities were $(881) and $(3,047) for
the three months ended March 31, 2009 and 2008, respectively. Cash flows used in
2008 and 2009 was due solely to the principal repayments of long term debt in
varying amounts.
  Overall,
we funded our cash needs from inception through March 31, 2009 with a series of
equity and debt transactions, including those with related parties as described
above. If we are unable to receive additional cash from our related parties, we
may need to rely on financing from outside sources through debt or equity
transactions. Our related parties are under no legal obligation to provide us
with capital infusions. Failure to obtain such financing could have a material
adverse effect on our operations and financial condition. This could include an
inability to do sufficient advertising for the homes that we sell, which would
make us less competitive in the marketplace. We could also find it more
difficult to enter into strategic joint venture relationships with third
parties. Finally, it would most likely delay the implementation of our business
plan. An alternative plan of operation in the event of a failure to obtain
financing would be to continue operations as currently configured, with the
result being little, if any, projected growth. Another alternative would be to
enter into a joint venture with another company that has working capital
available, albeit on less favorable terms than had we obtained financing, for
the development of our business plan.
 
 We had
cash on hand of only $83 and a working capital of $19,637 as of March 31, 2009.
Our current amount of cash in the bank is insufficient to fund our operations
for the next twelve months. We will rely on the existence of revenue from our
business, if any, and funding from outside sources; however, we have no current
or projected capital reserves that will sustain our business for the next 12
months. Also, if the projected revenues fall short of needed capital we will not
be able to sustain our capital needs for the next twelve months. We will then
need to obtain additional capital through equity or debt financing to sustain
operations for an additional year. A lack of significant revenues during 2008
will significantly affect our cash position and make it necessary to raise
additional funds through equity or debt financing. Our current level of
operations would require capital of a range of $45,000 to $1,000,000, depending
on the properties we plan to acquire and the maintenance of our current
facilities. Please note that the $45,000 amount above consists of $25,000 in
cash to purchase such properties as discussed in more detail in this paragraph
plus $20,000 which covers additional expense related to our newly acquired
reporting obligation. For instance, if we can purchase a property with as little
money down, such as low as 5% for illustrative purposes, then we would only
require the low end of the above range, or about $25,000 in cash, exclusive of
the $20,000 in costs to cover the expense related to our newly acquired
reporting obligation, to purchase such property costing $500,000 for
illustrative purposes. On the other hand, if we purchase a property with only
cash and without borrowing, then we would spend as much as $500,000 on the same
purchase in the illustration above. If two of these properties are purchased
with no borrowings, then we would spend $1,000,000 as an example. Modifications
to our business plans or additional property acquisitions may require additional
capital for us to operate. There can be no assurance that additional capital
will be available to us when needed or available on terms favorable to us. We
have no sources of capital in place.
  On a
long-term basis, liquidity depends on continuation and expansion of operations,
receipt of revenues, and additional infusions of capital and debt financing. We
are considering launching a local advertising campaign. Our current capital and
revenues are insufficient to fund such marketing. If we choose to launch such a
campaign, we will require substantially more capital. If necessary, we will
raise this capital through an additional stock offering. However, there can be
no assurance that we will be able to obtain additional equity or debt financing
in the future, if at all. If we are unable to raise additional capital, our
growth potential will be adversely affected and we will have to significantly
modify our plans. For example, if we are unable to raise sufficient capital to
develop our business plan, we may need to:
 
 - Seek
projects of lesser value or that may be less profitable
 - Seek
smaller projects, which are less capital intensive, in lieu of larger projects;
or
 - Seek
projects that are outside our geographical area to generate some revenue for
us.
 
 Demand
for our rental services will be dependent on, among other things, market
acceptance of our services, the real estate market in general and general
economic conditions, which are cyclical in nature. Inasmuch as a major portion
of our activities is the receipt of rents from residential properties, our
business operations may be adversely affected by our competitors and prolonged
recession periods.
 
 Our
success will depend upon implementing our plan of operations and the risks
associated with our business plans. We operate a small real estate rental
business in the Springfield, Massachusetts area. We plan to strengthen our
position in this market. We also plan to expand our operations in the
Springfield area.
  Going
concern
 
 As shown
in the accompanying consolidated financial statements, we have suffered
recurring losses from operation to date. We have a net deficiency of $538,485 as
of March 31, 2009. These factors raise substantial doubt about our ability to
continue as a going concern.
 
 Management's
plans in regard to this matter are to raise equity capital and seek strategic
relationships and alliances in order to increase revenues in an effort to
generate positive cash flow. Additionally, we must continue to rely upon equity
infusions from investors in order to improve liquidity and sustain operations.
The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
  13
 Table of Contents
  ITEM
3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKETRISK
 
 The
information to be reported under this item is not required of smaller reporting
companies.
 
 ITEM 4. CONTROLS AND
PROCEDURES
 
 We
maintain disclosure controls and procedures designed to ensure that information
required to be disclosed in reports filed under the Securities Exchange Act of
1934 (“Exchange Act”) is recorded, processed, summarized and reported within the
specified time periods. Our Chief Executive Officer and its Chief Financial
Officer (collectively, the “Certifying Officers”) are responsible for
maintaining our disclosure controls and procedures. The controls and procedures
established by us are designed to provide reasonable assurance that information
required to be disclosed by the issuer in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Commission’s rules and forms.
  As of the
end of the period covered by this report, the Certifying Officers evaluated the
effectiveness of our disclosure controls and procedures. Based on the
evaluation, the Certifying Officers concluded that our disclosure controls and
procedures were effective to provide reasonable assurance that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the applicable rules and forms, and that it is accumulated
and communicated to our management, including the Certifying Officers, as
appropriate to allow timely decisions regarding required
disclosure.
  The
Certifying Officers have also concluded, based on their evaluation of our
controls and procedures that as of March 31, 2009, our internal controls over
financial reporting are effective and provide a reasonable assurance of
achieving their objective.
  The
Certifying Officers have also concluded that there was no change in our internal
controls over financial reporting identified in connection with the evaluation
that occurred during our fourth fiscal quarter that has materially affected, or
is reasonably likely to materially affect, our internal control over financial
reporting.
 
 ITEM 4T. CONTROLS AND
PROCEDURES
  (a) Conclusions
regarding disclosure controls and procedures. Disclosure controls and
procedures are the Company’s controls and other procedures that are designed to
ensure that information required to be disclosed by the Company in the reports
that the Company files or submits under the Exchange Act is recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission’s rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports that it files
under the Exchange Act is accumulated and communicated to the Company’s
management, including its Chief Executive Officer and Chief Financial Officer,
as appropriate to allow timely decisions regarding required disclosure.
Management is responsible for establishing and maintaining adequate internal
control over financial reporting.
  Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is defined
under Rule 13a-14(c) promulgated under the Exchange Act as of March 31, 2009,
and, based on their evaluation, as of the end of such period, the our disclosure
controls and procedures were effective as of the end of the period covered by
the Quarterly Report,
  (b) Management’s
Report On Internal Control Over Financial Reporting. It is management’s
responsibilities to establish and maintain adequate internal controls over the
Company’s financial reporting. Internal control over financial reporting is
defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a
process designed by, or under the supervision of, the issuer’s principal
executive and principal financial officers and effected by the issuer’s
management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles and includes those policies and procedures that:
 
 •           Pertain
to the maintenance of records that in reasonable detail accurately and fairly
reflect the transactions and dispositions of the assets of the issuer;
and
 
 •           Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles and that receipts and expenditures of the issuer are being
made only in accordance with authorizations of management of the issuer;
and
 
 •           Provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the issuer’s assets that could have a
material effect on the financial statements.
 
 As of the
end of the period covered by the Quarterly Report, an evaluation was carried out
under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of
our internal control over financial reporting.
  Management
assessed the effectiveness of our internal control over financial reporting as
of March 31, 2009. In making this assessment, management used the criteria set
forth by the Committee of Sponsoring Organizations of the Treadway Commission in
Internal Control-Integrated Framework.
  Based on
that evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that, as of the end of such period, internal controls over financial
reporting were effective as of the end of the period covered by the
Report.
  Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate. All internal control systems, no matter
how well designed, have inherent limitations. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation. Because of the inherent
limitations of internal control, there is a risk that material misstatements may
not be prevented or detected on a timely basis by internal control over
financial reporting. However, these inherent limitations are known features of
the financial reporting process. Therefore, it is possible to design into the
process safeguards to reduce, though not eliminate, this risk.
  This
Quarterly Report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management’s report in this Quarterly
Report.
  (c) Changes in
internal control over financial reporting. There were no changes in our
internal control over financial reporting identified in connection with the
evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that
occurred during our last fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
 
 14
 Table of Contents
  PART II.  OTHER
INFORMATION
 
 ITEM
1.      LEGAL PROCEEDINGS
 
 As of the
date of this report, we are not a party to any pending legal proceeding and are
not aware of any threatened legal proceeding.
 
 ITEM
1A.   RISK FACTORS
 
 In addition to the other information set forth in
this report, you should carefully consider the following factors, which could
materially affect our business, financial condition or future results. The risks
described below are not the only risks facing us. Additional risks and
uncertainties not currently known to us or that we currently deems to be
immaterial also may materially adversely affect our business, financial
condition or results of operations.
  OUR
LIMITED OPERATING HISTORY AND NEAR ABSENCE OF REVENUES MAKES EVALUATING OUR
BUSINESS AND PROSPECTS DIFFICULT
 
 While our
competitors have operated real estate businesses for a significant period of
time, we have only had limited operations and a near absence of revenues since
our inception on February 8, 2000.  As a result, we have a limited
operating history upon which you can evaluate us and our prospects. In addition,
we have an accumulated deficit of $538,485 since inception through March 31,
2009. These uncertainties increase the risk that you may lose your
investment.
 
 WE
DO NOT EXPECT TO PAY DIVIDENDS ON OUR COMMON STOCK
 
 To date,
we have not paid any dividends on our common stock. We do not anticipate paying
any cash dividends on our common stock in the foreseeable future. Any payment of
future dividends and the amounts thereof will depend upon our earnings,
financial requirements and other factors deemed relevant by our board of
directors.  Thus, there is a greater risk you may never receive a
return on your investment in our common stock.
 
 THERE
IS NO TRADING MARKET FOR OUR SHARES OF COMMON STOCK, AND YOU MAY BE UNABLE TO
SELL YOUR SHARES.
  There is
not, and has never has been, a trading market for our securities. There is no
established public trading market for our securities. There can be no assurance
that a trading market for our common stock will be established or that, if
established, can be sustained. Thus, there is a risk that you may never be able
to sell your shares.
 
 OUR
LACK OF AN ESTABLISHED BRAND NAME AND RELATIVE LACK OF RESOURCES COULD DECREASE
OUR ABILITY TO EFFECTIVELY COMPETE IN THE REAL ESTATE MARKET.
 
 We do not
have an established brand name or reputation in the residential real estate
business. We also have a relative lack of resources to conduct our business
operations.  Thus, we may have difficulty effectively competing with
companies that have greater name recognition and resources than we do.
Presently, we have no patents, copyrights, trademarks and/or service marks that
would protect our brand name or our proprietary information, nor do we have any
current plans to file applications for such rights. Our inability to promote
and/or protect our brand name may decrease our ability to compete effectively in
the residential real estate market.
 
 WE
HAVE SUBSTANTIAL NEAR-TERM CAPITAL NEEDS; WE MAY BE UNABLE TO OBTAIN THE
ADDITIONAL FUNDING NEEDED TO ENABLE US TO OPERATE PROFITABLY IN THE
FUTURE.
 
 We will
need additional funding over the next twelve months to develop our business. The
estimated need for funds could be as little as $25,000 or as high as $1,000,000,
depending on the properties we plan to acquire and the maintenance of current
facilities. As of March 31, 2009, we had only $83 worth of liquid cash with
which to pay our expenses. In addition, we have no credit facility or other
committed sources of capital. Accordingly, we will seek outside sources of
capital such as conventional bank financing; however, there can be no assurance
that we will be able to obtain favorable terms for such financing. If adequate
funds are not available, we may be required to curtail operations or shut down
completely.
  WE
MAY NEED TO ISSUE MORE STOCK, WHICH COULD DILUTE YOUR STOCK
  If we do
not have enough capital to meet our future capital requirements, we may need to
conduct additional capital-raising in order to continue our operations. To the
extent that additional capital is raised through the sale of equity and/or
convertible debt securities, the issuance of such securities could result in
dilution to our shareholders and/or increased debt service commitments.
Accordingly, if we issue additional stock, it could reduce the value of your
stock.
  IF
WE LOSE THE SERVICES OF OUR KEY PERSON, OUR BUSINESS COULD LOSE MONEY OR SHUT
DOWN COMPLETELY.
 
 Our
success is heavily dependent upon the continued active participation of Duane
Bennett, our officer and director. Mr. Bennett has twenty years of experience in
the real estate business selling, buying and renovating multifamily homes in the
Springfield, Massachusetts area and land development and buying and selling real
estate in the Massachusetts area. If we lost Mr. Bennett’s services, we could
lose money or shut down completely. We do not maintain "key person" life
insurance on Mr. Bennett. We do not have a written employment agreement with Mr.
Bennett. There can be no assurance that we will be able to recruit or retain
other qualified personnel, should it be necessary to do so.
 
 WE
DO NOT HAVE ANY PLANS TO HIRE ADDITIONAL PERSONNEL FOR AT LEAST THE NEXT TWELVE
MONTHS, WHICH MAY CAUSE SUBSTANTIAL DELAYS IN OUR OPERATIONS.
 
 Although
we plan to expand our business and operations, we have no plans to hire
additional personnel for at least the next twelve months. As we expand our
business there will be additional strains on our operations due to increased
cost. In addition, expanded operations of our business may create additional
demand for the time and services of our president, who currently devotes
approximately ten hours per week to our business. We now only have the services
of our president to accomplish our current business and our planned expansion.
If our growth outpaces his ability to provide services and we do not hire
additional personnel, itmay substantially delay
our operations.
 
 OUR
MANAGEMENT MAY HAVE POSSIBLE CONFLICTS OF INTEREST THAT MAY REDUCE THE LEVEL OF
BUSINESS WE CONDUCT OR EXPANSION WE PURSUE.
 
 Our
officers and directors are involved in other business activities (such as other
investments in the real estate market, and other lines of business in the
automotive industry) and may, in the future become involved in other business
opportunities that may reduce the level of business we conduct or expansion we
pursue.  If another business opportunity becomes available, our
officers and directors may face a conflict in selecting between us and their
other business interests. We have not formulated a policy for the resolution of
such conflicts. We have previously entered into transactions—and may do so in
the future—with our officers, directors, and shareholders, or companies under
their control. For example, Mr. Duane Bennett sold us the 3-story apartment
building at 472 Front Street.  We have no current plans to engage in
further transactions with Mr. Bennett or our officers, directors, or owners.
However, future transactions or arrangements between or among our officers,
directors and shareholders, and companies they control, may occur, and may
result in conflicts of interest, which may reduce the level of business we
conduct or the level of expansion we pursue. Mr. Bennett, as Trustee of
Northeast Nominee Trust, purchased the Front Street property from James L. and
Ann T. Domingos for $260,000 on February 14, 2005.  Mr. Bennett
negotiated the purchase price through a real estate broker when he decided to
make an offer on the property.  The property was held in the name of
Northeast Nominee Trust until March 12, 2008, when it was transferred to Front
Street First Corporation, a wholly owned subsidiary of Montgomery Real Estate
Service, by Warranty Deed for consideration of $100 paid. On October 29, 2008,
the property at 472 Front Street was sold for $275,123. The proceeds from this
sale helped pay the mortgages on the property.
  WE
FACE INTENSE COMPETITION, WHICH PUTS US AT A COMPETITIVE DISADVANTAGE; IF WE ARE
UNABLE TO OVERCOME THESE COMPETITIVE DISADVANTAGES WE MAY NEVER BECOME
PROFITABLE.
  We face
intense competition from companies engaged in similar businesses. We will
compete with numerous companies that lease or sell residential real estate both
over the Internet and via traditional forms of business. We anticipate that
competition will intensify within Internet distribution channels, which we do
not utilize. Many of our competitors have significantly greater customer bases,
operating histories, financial, technical, personnel and other resources than we
do, and may have established reputations for success in the real estate
industry. There can be no assurance that we will be able to compete effectively
in the highly competitive real estate industry.  As a response to
changes in the competitive environment, we may from time to time make certain
service, marketing or supply decisions or acquisitions that could reduce our
revenues, increase our expenses, or alter our pricing in a way that would
diminish or prevent our profitability.
  WE
HAVE INCURRED LOSSES FROM OPERATIONS AND LIMITED CASH THAT RAISES SUBSTANTIAL
DOUBT AS TO WHETHER WE CAN CONTINUE AS A GOING CONCERN.
 
 As of
March 31, 2009, our accumulated deficit was $538,485. Our cash flows (used in)
operations were $954 for the three months ended March 31, 2009. We have incurred
losses from operations and limited cash that raises substantial doubt as to
whether we can continue as a going concern.
 
 WE
HAVE NOT CONDUCTED AN APPRAISAL ON OUR CURRENT PROPERTY
 
 We have
not conducted an appraisal on our property at 68-70 Cochran Street in Chicopee,
Massachusetts.  It is possible that the value of this property may be
worth less than the money we paid for the property.  If it is later
deemed that the value of the property is worth less than what we paid for it,
your investment could lose value.
 
 WE
HAVE NOT CONDUCTED AN INDEPENDENT TITLE EXAMINATION ON OUR CURRENT
PROPERTY
 
 We have
not conducted an independent title examination on our property at 68-70 Cochran
Street.  If in the future we discover a cloud on this title we could
face costly litigation to resolve this cloud.  Furthermore, if we
discover that someone else has better title to the property, we may be required
to buy out that party or we could even lose ownership in the property all
together.
 
 ENVIRONMENTAL
RISKS IN OWNING PROPERTY
 
 In the
event that we buy property and later uncover environmental problems on that
property we could face costly litigation to clear up the environmental
issues.  We could also be forced to pay for environmental clean up of
the property or could even lose the property all together if it is determined
that the environmental conditions are so bad that the property is
uninhabitable.
 
 POTENTIAL
DISRUPTION IN RENTAL REVENUES DUE TO OUR RENTERS’ POTENTIAL LIABILITY TO THEIR
GUESTS IF THEIR GUESTS ARE HURT ON OUR PROPERTY
 
 If our
renters decide to have guests over and an accident occurs, it is possible that
our renters could be sued.  In the event that our renters are
underinsured it is possible they will be forced into bankruptcy or be forced to
move out of our property.  If this occurs we could see a disruption in
rental revenues and our business could suffer as a result.
  POTENTIAL
LIABILITY TO OUR RENTERS AND THEIR GUESTS IN THE EVENT ONE OF THEM IS HURT ON
OUR PROPERTY
 
 If our
renters or their guests have an accident on our property, it is possible that we
could be held liable for the damages to our renters or their
guests.  If this occurs, we could see a disruption in our revenues and
our business could suffer as a result.  If our business suffers you
could lose your investment or the value of your stock could drop
significantly.
 
 DECLINING
ECONOMIC CONDITIONS COULD NEGATIVELY IMPACT OUR BUSINESS
  Our
operations are affected by local, national and worldwide economic
conditions.  Markets in the United States and elsewhere have been
experiencing extreme volatility and disruption for more than 12 months, due in
part to the financial stresses affecting the liquidity of the banking system and
the financial markets generally.  In recent weeks, this volatility and
disruption has reached unprecedented levels.  The consequences of a
potential or prolonged recession may include a lower level of economic activity
and uncertainty regarding energy prices and the capital and commodity markets.
While the ultimate outcome and impact of the current economic conditions cannot
be predicted, a lower level of economic activity might result in a decline in
energy consumption, which may adversely affect the price of oil, liquidity and
future growth.  Instability in the financial markets, as a result of
recession or otherwise, also may affect the cost of capital and our ability to
raise capital.
 
 15
 Table of Contents
 
 ITEM
2.      UNREGISTERED SALES OF EQUITY SECURITIES AND USE
OF PROCEEDS
 
 In 2009,
we issued 4,960,000 common shares to 12 consultants for consulting services
rendered. These shares were valued at $.04 as of the date of issuance, yielding
an aggregate expense of $198,400. We relied on exemptions provided by
Section 4(2) of the Securities Act of 1933, as amended. We made this offering
based on the following facts: (1) the issuance was an isolated private
transaction which did not involve a public offering; (2) there was only one
offeree, (3) the offeree has agreed to the imposition of a restrictive legend on
the face of the stock certificate representing its shares, to the effect that it
will not resell the stock unless its shares are registered or an exemption from
registration is available; (4) the offeree was a sophisticated investor very
familiar with our company and stock-based transactions; (5) there were no
subsequent or contemporaneous public offerings of the stock; (6) the stock was
not broken down into smaller denominations; and (7) the negotiations for the
sale of the stock took place directly between the offeree and our
management.
 
 In 2009,
we issued 2,300,000 common shares to Duane Bennett for his services to the
Company as President.  These shares were valued at $.04 as of the date
of issuance, yielding an aggregate expense of $92,000. We relied on exemptions
provided by Section 4(2) of the Securities Act of 1933, as amended. We made this
offering based on the following facts: (1) the issuance was an isolated private
transaction which did not involve a public offering; (2) there was only one
offeree, (3) the offeree has agreed to the imposition of a restrictive legend on
the face of the stock certificate representing its shares, to the effect that it
will not resell the stock unless its shares are registered or an exemption from
registration is available; (4) the offeree was a sophisticated investor very
familiar with our company and stock-based transactions; (5) there were no
subsequent or contemporaneous public offerings of the stock; (6) the stock was
not broken down into smaller denominations; and (7) the negotiations for the
sale of the stock took place directly between the offeree and our
management.
  In 2009,
we issued 1,500,000 common shares to Northeast Nominee Trust, Duane Bennett
trustee, for his services to the Company as President.  These shares
were valued at $.04 as of the date of issuance, yielding an aggregate expense of
$60,000. We relied on exemptions provided by Section 4(2) of the Securities Act
of 1933, as amended. We made this offering based on the following facts: (1) the
issuance was an isolated private transaction which did not involve a public
offering; (2) there was only one offeree, (3) the offeree has agreed to the
imposition of a restrictive legend on the face of the stock certificate
representing its shares, to the effect that it will not resell the stock unless
its shares are registered or an exemption from registration is available; (4)
the offeree was a sophisticated investor very familiar with our company and
stock-based transactions; (5) there were no subsequent or contemporaneous public
offerings of the stock; (6) the stock was not broken down into smaller
denominations; and (7) the negotiations for the sale of the stock took place
directly between the offeree and our management.
 
 In 2009,
we issued 200,000 common shares to Richard Rousakis. He bought 200,000 shares of
common stock for $25,000.  We relied on exemptions provided by Section
4(2) of the Securities Act of 1933, as amended. We made this offering based on
the following facts: (1) the issuance was an isolated private transaction which
did not involve a public offering; (2) there was only one offeree, (3) the
offeree has agreed to the imposition of a restrictive legend on the face of the
stock certificate representing its shares, to the effect that it will not resell
the stock unless its shares are registered or an exemption from registration is
available; (4) the offeree was a sophisticated investor very familiar with our
company and stock-based transactions; (5) there were no subsequent or
contemporaneous public offerings of the stock; (6) the stock was not broken down
into smaller denominations; and (7) the negotiations for the sale of the stock
took place directly between the offeree and our management.
 
 ITEM
3.      DEFAULTS UPON SENIOR SECURITIES
 
 We have
not had any default upon senior securities.
 
 ITEM
4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
 
 We have
not had any submission of matters to a vote of security holders.
 
 ITEM
5.      OTHER INFORMATION
 
 We do not
have any other information to report.
 
 ITEM
6.      EXHIBITS
 
 31.1 CEO
Certification Pursuant
to Section 302
 31.2 CFO
Certification Pursuant to Section 302(included in Exhibit
31.1)
 32.1 CEO Certification Pursuant to Section
906
 32.2 CFO
Certification Pursuant to Section 906(included in Exhibit
32.1)
 
 Reports on Form8-K
 
 None
 
 16
 Table of Contents
  SIGNATURES
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
  MONTGOMERY
      REAL ESTATE SERVICE, INC.
                (Registrant)Date:
      May 15, 2009
              By:
              /s/
      Duane BennettDuane
      Bennett
                President,
      Chief Executive Officer, and
                Chief
      Financial Officer