UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





**FORM
      10-QSB**


(Mark
      One)


**x**
              Quarterly
                  Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange
                  Act Of
                  1934





For
      the
      quarterly period ended **May
      31** **st** **, 2008**





 ̈
            Transition
                Report Under Section 13 Or 15(d) Of The Securities Exchange Act Of
                1934





For
      the
      transition period ________ to ________





**COMMISSION
      FILE NUMBER** **000-51376**





**RANCHO
      SANTA MONICA DEVELOPMENTS INC.**





(Exact
      name of small business issuer as specified in its charter)





**NEVADA**
            
            **83-0414306**(State
                or other jurisdiction of incorporation or organization)
            
            (IRS
                Employer Identification No.)**3104
                Sunnyhurst Road**
              **North
                Vancouver, BC, Canada V7K 2G3**(Address
                of principal executive offices)**(604)
                537-5905**Issuer's
                telephone number**Not
                Applicable**(Former
                name, former address and former fiscal year, if changed since last
                report)





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





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes  ̈  **No** **x**





State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date: **As
      of July 5** **th** **, 2008, the Issuer had 7,866,999 Shares of Common Stock outstanding.**




Transitional
      Small Business Disclosure Format (check one): Yes  ̈ **No** **x**









**PART
      I - FINANCIAL INFORMATION**





**ITEM
      1.**  **FINANCIAL
      STATEMENTS.**





The
      accompanying unaudited financial statements have been prepared in accordance
      with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B, and,
      therefore, do not include all information and footnotes necessary for a complete
      presentation of financial position, results of operations, cash flows, and
      stockholders' equity in conformity with generally accepted accounting
      principles. In the opinion of management, all adjustments considered necessary
      for a fair presentation of the results of operations and financial position
      have
      been included and all such adjustments are of a normal recurring nature.
      Operating results for the six months ended May 31 st , 2008
      are not necessarily indicative of the results that can be expected for the
      year
      ending November 30, 2008.





As
      used
      in this Quarterly Report, the terms "we", "us", "our", the “Company” and
“Rancho” mean Rancho Santa Monica Developments Inc. unless otherwise indicated.
      All dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise
      stated.









**RANCHO
        SANTA MONICA DEVELOPMENTS, INC.**
 
 FINANCIAL
        STATEMENTS
 
 May
        31,
        2008 and November 30, 2007









**RANCHO
        SANTA MONICA DEVELOPMENTS, INC.**
 Balance
        Sheets
 
 May
                  31,
              
              November
                  30,2008
              
              2007(Unaudited)ASSETSCURRENT
                  ASSETSCash
              
              $
              18,541
              
              $
              493Total
                  Current Assets
              
              
              18,541
              
              
              493PROPERTY
                  AND EQUIPMENT, NET
              
              
              5,849,304
              
              
              304,108TOTAL
                  ASSETS
              
              $
              5,867,845
              
              $
              304,601LIABILITIES
                  AND STOCKHOLDERS' EQUITYCURRENT
                  LIABILITIESAccounts
                  payable and accrued liabilities
              
              $
              50,000
              
              $
              29,996Due
                  to related parties
              
              
              109,797
              
              
              118,788Convertible
                  debt, net
              
              
              8,750
              
              
              -Notes
                  payable
              
              
              5,450,000
              
              
              50,000Total
                  Current Liabilities
              
              
              5,618,547
              
              
              198,784COMMITMENTS
                  AND CONTINGENCIES
              
              
              -
              
              
              -STOCKHOLDERS'
                  EQUITYPreferred
                  stock; 100,000,000 shares authorized at $0.0001 par value, no shares
                  issued or outstanding
              
              
              -
              
              
              -Common
                  stock; 100,000,000 shares authorized at $0.0001 par value, 7,866,999
                  and
                  7,816,999 shares issued and outstanding, respectively
              
              
              7,867
              
              
              7,817Additional
                  paid-in capital
              
              
              357,338
              
              
              211,388Currency
                  translation adjustment
              
              
              (4,835
              )
              
              (4,835
              )Accumulated
                  deficit
              
              
              (111,072
              )
              
              (108,553
              )Total
                  Stockholders' Equity
              
              
              249,298
              
              
              105,817TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              5,867,845
              
              $
              304,601
 
 The
        accompanying notes are an integral part of these financial
        statements.
  
 
 **RANCHO
        SANTA MONICA DEVELOPMENTS, INC.**
 Statements
        of Operations
 (Unaudited)
 
 For the Three
              
              For the Three
              
              For the Six
              
              For the SixMonths Ended
              
              Months Ended
              
              Months Ended
              
              Months EndedMay 31,
              
              May 31,
              
              May 31,
              
              May 31,2008
              
              2007
              
              2008
              
              2007REVENUES
              
              $
              35,211
              
              $
              8,100
              
              $
              48,947
              
              $
              8,100OPERATING
                  EXPENSESGeneral
                  and administrative
              
              
              16,283
              
              
              4,200
              
              
              32,725
              
              
              11,291Professional
                  fees
              
              
              6,763
              
              
              750
              
              
              11,687
              
              
              3,250Depreciation
                  expense
              
              
              1,924
              
              
              -
              
              
              4,054
              
              
              -Total
                  Operating Expenses
              
              
              24,970
              
              
              4,950
              
              
              48,466
              
              
              14,541INCOME
                  (LOSS) FROM OPERATIONS
              
              
              10,241
              
              
              3,150
              
              
              481
              
              
              (6,441
              )OTHER
                  INCOME (EXPENSE)Interest
                  expense
              
              
              (1,500
              )
              
              (1,500
              )
              
              (3,000
              )
              
              (3,000
              )Total
                  Other Income (Expense)
              
              
              (1,500
              )
              
              (1,500
              )
              
              (3,000
              )
              
              (3,000
              )NET
                  INCOME (LOSS)
              
              $
              8,741
              
              $
              1,650
              
              $
              (2,519
              )
              $
              (9,441
              )CURRENCY
                  TRANSLATION ADJUSTMENT
              
              
              -
              
              
              1,559
              
              
              -
              
              
              379COMPREHENSIVE
                  NET INCOME (LOSS)
              
              $
              8,741
              
              $
              3,209
              
              $
              (2,519
              )
              $
              (9,062
              )BASIC
                  INCOME (LOSS) PER SHARE
              
              $
              0.00
              
              $
              0.00
              
              $
              (0.00
              )
              $
              (0.00
              )WEIGHTED
                  AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
              
              
              7,866,999
              
              
              7,791,542
              
              
              7,854,499
              
              
              7,791,542
 
 The
        accompanying notes are an integral part of these financial
        statements
  
 
 **RANCHO
        SANTA MONICA DEVELOPMENTS, INC.**
 Statements
        of Stockholders' Equity
 (Unaudited)
 
 Additional
              
              Stock
              
              CurrencyCommon Stock
              
              Paid-In
              
              Subscriptions
              
              Translation
              
              AccumulatedShares
              
              Amount
              
              Capital
              
              Receivable
              
              Adjustment
              
              Deficit
              
              TotalBalance,
                  November 30, 2006
              
              
              7,751,999
              
              $
              7,752
              
              $
              136,453
              
              $
              -
              
              $
              (1,400
              )
              $
              (113,186
              )
              $
              29,619Common
                  stock cancelled
              
              
              (10,000
              )
              
              (10
              )
              
              10
              
              
              -
              
              
              -
              
              
              -
              
              
              -Shares
                  issued for cash at $1.00 per share
              
              
              75,000
              
              
              75
              
              
              74,925
              
              
              -
              
              
              -
              
              
              -
              
              
              75,000Net
                  income for the year ended November 30, 2007
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (3,435
              )
              
              4,633
              
              
              1,198Balance,
                  November 30, 2007
              
              
              7,816,999
              
              
              7,817
              
              
              211,388
              
              
              -
              
              
              (4,835
              )
              
              (108,553
              )
              
              105,817Fair
                  value of beneficial conversion feature
              
              
              -
              
              
              -
              
              
              105,000
              
              
              -
              
              
              -
              
              
              -
              
              
              105,000Shares
                  issued for cash at $0.82 per share
              
              
              50,000
              
              
              50
              
              
              40,950
              
              
              -
              
              
              -
              
              
              -
              
              
              41,000Net
                  loss for the six months ended May 31, 2008
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (2,519
              )
              
              (2,519
              )Balance,
                  May 31, 2008
              
              
              7,866,999
              
              $
              7,867
              
              $
              357,338
              
              $
              -
              
              $
              (4,835
              )
              $
              (111,072
              )
              $
              249,298
 
 The
        accompanying notes are an integral part of these financial
        statements.
  
 
 **RANCHO
        SANTA MONICA DEVELOPMENTS, INC.**
 Statements
        of Cash Flows
 (Unaudited)
 
 For
                  the Six
              
              For
                  the SixMonths Ended
              
              Months EndedMay
                  31,
              
              May
                  31,2008
              
              2007OPERATING
                  ACTIVITIESNet
                  income (loss)
              
              $
              (2,519
              )
              $
              (9,441
              )Adjustments
                  to reconcile net loss to net cash used by operating
                  activities:Depreciation
                  and amortization
              
              
              4,054
              
              
              -Currency
                  translation adjustment
              
              
              -
              
              
              (379
              )Changes
                  in operating assets and liabilities:Change
                  in due to related parties
              
              
              (8,991
              )
              
              120,451Changes
                  in accounts payable and accrued expenses
              
              
              20,004
              
              
              3,000Net
                  Cash Used in Operating Activities
              
              
              12,548
              
              
              113,631INVESTING
                  ACTIVITIESPurchase
                  of property and equipment
              
              
              (140,500
              )
              
              (126,351
              )Net
                  Cash Used in Financing Activities
              
              
              (140,500
              )
              
              (126,351
              )FINANCING
                  ACTIVITIESProceeds
                  from notes payable
              
              
              105,000
              
              
              -Proceeds
                  from common stock issued
              
              
              41,000
              
              
              5,940Net
                  Cash Provided by Financing Activities
              
              
              146,000
              
              
              5,940NET
                  DECREASE IN CASH
              
              
              18,048
              
              
              (6,780
              )CASH
                  AT BEGINNING OF PERIOD
              
              
              493
              
              
              8,761CASH
                  AT END OF PERIOD
              
              $
              18,541
              
              $
              1,981SUPPLIMENTAL
                  DISCLOSURES OFCASH
                  FLOW INFORMATIONCASH
                  PAID FOR:Interest
              
              $
              -
              
              $
              -Income
                  Taxes
              
              $
              -
              
              $
              -NON
                  CASH FINANCING ACTIVITIES:Property
                  and equipment purchased for notes payable
              
              $
              5,400,000
              
              $
              -
 
 The
        accompanying notes are an integral part of these financial
        statements.




**RANCHO
        SANTA MONICA DEVELOPMENTS, INC.**
 Notes
        to
        the Condensed Financial Statements
 May
        31,
        2008 and November 30, 2007
 
 NOTE 1 -
              CONDENSED
                  FINANCIAL STATEMENTS
 
 The
        accompanying financial statements have been prepared by the Company without
        audit. In the opinion of management, all adjustments (which include only
        normal
        recurring adjustments) necessary to present fairly the financial position,
        results of operations, and cash flows at May 31, 2008, and for all periods
        presented herein, have been made.
 
 Certain
        information and footnote disclosures normally included in financial statements
        prepared in accordance with accounting principles generally accepted in the
        United States of America have been condensed or omitted. It is suggested
        that
        these condensed financial statements be read in conjunction with the financial
        statements and notes thereto included in the Company’s November 30, 2007 audited
        financial statements. The results of operations for the periods ended May
        31,
        2008 and May 31, 2007 are not necessarily indicative of the operating results
        for the full years.
 
 NOTE 2 -
              GOING
                  CONCERN
 
 The
        Company’s financial statements are prepared using generally accepted accounting
        principles in the United States of America applicable to a going concern
        which
        contemplates the realization of assets and liquidation of liabilities in
        the
        normal course of business. The Company has not yet established an ongoing
        source
        of revenues sufficient to cover its operating costs and allow it to continue
        as
        a going concern. The ability of the Company to continue as a going concern
        is
        dependent on the Company obtaining adequate capital to fund operating losses
        until it becomes profitable. If the Company is unable to obtain adequate
        capital, it could be forced to cease operations.
 
 In
        order
        to continue as a going concern, the Company will need, among other things,
        additional capital resources. Management’s plan is to obtain such resources for
        the Company by obtaining capital from management and significant shareholders
        sufficient to meet its minimal operating expenses and seeking equity and/or
        debt
        financing. However management cannot provide any assurances that the Company
        will be successful in accomplishing any of its plans.
 
 The
        ability of the Company to continue as a going concern is dependent upon its
        ability to successfully accomplish the plans described in the preceding
        paragraph and eventually secure other sources of financing and attain profitable
        operations. The accompanying financial statements do not include any adjustments
        that might be necessary if the Company is unable to continue as a going
        concern.










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





**Cautionary
      Statement Regarding Forward-Looking Statements**





Certain
      statements contained in this Quarterly Report constitute "forward-looking
      statements". These statements, identified by words such as “plan”, "anticipate,"
      "believe," "estimate," "should", "expect" and similar expressions include our
      expectations and objectives regarding our future financial position, operating
      results and business strategy. These statements reflect the current views of
      management with respect to future events and are subject to risks, uncertainties
      and other factors that may cause our actual results, performance or
      achievements, or industry results, to be materially different from those
      described in the forward-looking statements. Such risks and uncertainties
      include those set forth under the caption "Management's Discussion and Analysis
      or Plan of Operation" and elsewhere in this Quarterly Report. We advise you
      to
      carefully review the reports and documents we file from time to time with the
      Securities and Exchange Commission (“SEC”), particularly our Annual Reports on
      Form 10-KSB and our Current Reports on Form 8-K.





**Corporate
      Background**





We
      are a
      development company focused on the development of real estate. We own resort
      property in Tulum Mexico and have constructed certain facilities and provide
      management services for the apartment units constructed on the adjoining
      property. The resort is an ocean front property hotel located on the Caribbean
      beaches of Tulum, Quintana Roo, Mexico and the resort is named Hotel ParaYso,
      Tulum, Mexico.





We
      have
      signed a purchase contract to acquire real property located at 620-622 Seymour
      Street in Vancouver, British Columbia Canada for the construction of a hi-rise
      hotel, office, or mixed use development of up to 91 condo-hotel suites. The
      site
      is located in the financial district of downtown Vancouver, British Columbia
      Canada.





**Recent
      Corporate Developments**





We
      experienced the following significant developments since May 31 st ,
      2008:





1.
            We
                signed a purchase contract for the purchase of real property for
                $5,500,000 Canadian Dollars located at 620-622 Seymour Street, Vancouver,
                British Columbia, Canada.


2.
            We
                entered into a letter of intent with Akiin Beach Club to provide
                beach
                front weddings in Tulum, Mexico jointly with Hotel ParaYso Resort,
                Tulum,
                Mexico.


3.
            We
                achieved revenues of $48,947 for the six months ending May 31st,
                2008.


4.
            We
                contracted De Cotiis Group Windsor Holdings Ltd. as consultant to
                assist
                the Company in capital raising efforts and to find new development
                deals
                for the Company.





**2.1
      Hotel ParaYso Resort, Tulum, Quintana Roo, Mexico**





We
      own
      property (the “Solidaridad Property”) in Tulum, Mexico as noted in Figure 1. The
      property consists of two developable pods where we can build an additional
      15
      hotel suites. The hotel has been open since February 7 th ,
      2007.
      We also manage the adjoining 11 hotel suites and receive income from the supply
      of management services. The Company entered into an agreement dated for
      reference November 29, 2005 with Monica Galan-Rios for the purchase of certain
      lands located in Solidaridad, Mexico consisting of approximately 1,220 square
      meters, See Figure 1 below. Under the terms of the property purchase agreement
      with Ms. Galan-Rios:





(1)
            In
                consideration of Ms. Galan-Rios’s grant of all of her interests in the
                Solidaridad Property to us, we: (i) paid $30,000 to Ms. Galan-Rios,
                and
                (ii) issued an unsecured promissory note to Ms. Galan-Rios in the
                amount
                of $50,000, plus accrued interest at a rate of 12% per year, maturing
                on
                November 29, 2006;









(2)
            We
                agreed to provide septic and water services to tenants at a rate
                of $50
                per apartment unit per month;





(3)
            We
                agreed that commencing on the completion of construction of the units,
                for
                a 25 year period following November 29, 2004, we will provide security,
                maintenance and gardening services for the Solidaridad Property for
                a fee
                of $250 per unit per month; and





(4)
            We
                agreed to grant to Ms. Galan-Rios and any of the potential tenants,
                access
                to the road presently existing on the Solidaridad
                Property.





**2.1.1
      Location of Hotel ParaYso Resort, Tulum, Quintana Roo,
      Mexico**





The
      property consists of the Western half of the fraction of Lot #10 located at
      Km
      8, Carretara a Tulum-Boca Paila Ejido Jose Maria Pino Suarez Municipality of
      Solidaridad, Quintana Roo, Mexico in the city of Tulum, Mexico. See Figure
      1
      below. Solidaridad is one of the eight municipalities that make up the Mexican
      state of Quintana Roo. Quintana Roo is located on the eastern part of the
      Yucatán Peninsula. It borders the Mexican states of Yucatán and Campeche to the
      north and west, the Caribbean Sea to the east, and the nation of Belize to
      the
      south.





Figure
      1


Property
      Location





RANCHO SANTA Logo





**2.2
      Hotel ParaYso Vancouver Development Property**





We
      entered into an agreement to purchase 620-622 Seymour Street Property in the
      Financial District of Vancouver, British Columbia, Canada for a mixed use hotel
      or office building. The purchase price for the lands is $5,500,000 Canadian
      Dollars and the expected close date is April 22 nd ,
      2009.
      The vendor of the lands has agreed to provide a vendor take back mortgage for
      $3,000,000 dollars and the Company is required to raise equity of $2,500,000
      dollars on or before April 22 nd ,
      2009.







The
      Company is current raising debt and equity financing to complete the property
      purchase transaction.





We
      intend
      to acquire real property at 620 Seymour Street, Vancouver, Canada, obtain the
      appropriate development permits from the City of Vancouver, and build 14 floors
      and 91 suites with roof top lounge bar, energy efficient style suites, and
      stylish lobby. We intend to commence construction in the summer of 2009 and
      complete summer of 2011.





Management
      is of the belief that a cash flow and capital appreciation concept can be
      applied Dormant Vacant Land that is currently zoned and designated for a
      permitted use such as commercial, residential or mixed use and that has
      sufficient density so that a lengthy rezoning process is not required; this
      type
      of land we can apply the Capital Appreciation Concept. The Company and its
      executive have had significant experience in taking land from dormant unused
      currently zoned property to completed residential subdivided land and a
      commercial space in the form of a resort hotel. In this concept, the Company
      chooses viable land pieces based on a number of factors as outlined in section
      “2.2. **1** Selection of 620 Seymour Street as Development Property ” and raises sufficient
      capital to build equity in the land to a point that a debt financing with a
      reasonable interest rate payment can be supported and serviced during
      construction; upon completion of the development, a forecasted payout timeframe
      can be expected within a reasonable amount of time.





**2.2.1
      Selection of 620 Seymour Street as Development Property**





The
      Property is located on the “Hudson Bay Block”, the 2 nd lot in
      from the corner on the North West side facing Seymour Street. The Property
      dimensions is 50 foot frontage (15.2 meters) by 120 foot depth (36.6meters)
      or
      6,000 square feet. The Property is zoned Downtown and is in Section C of the
      Community plan of the City of Vancouver. Section C permits a total Floor Space
      Ratio (FSR) of 5.0, allowing a total of 30,000 square feet of buildable space.
      For Hotel usage, the city can permit a bonus of 15% or another 4,500 square
      feet
      for a total of 34,500 square feet. Below illustrates a overview map, the
      proposed urban design for the Hotel, and photos of the Property.




RANCHO SANTA Logo










In
      choosing the Property, 620 Seymour Street, Vancouver, BC for development of
      a
      hotel in the downtown Vancouver Financial District, discussions were initiated
      with City of Vancouver in the Summer of 2007. The City’s response was that they
      would consider a Hotel Development on the site after all development issues
      have
      been met, such as parking, massing, urban design, issues, and any other issues
      that may come up in the Development process review.





In
      addition to our discussions with the Development Board of the City of Vancouver,
      management also considered the factors as outlined below:





a)
            The
                close proximity of the Property to the new Canada Line Downtown station,
                the new shuttle from Vancouver Airport to Downtown Vancouver’s Financial
                District


b)
            The
                2010 Winter Olympics to be hosted in Vancouver, British Columbia
                and its
                affect on post Olympic tourism vests;
                and


c)
            The
                new Canada Convention Center and post Olympic added business delegate
                visit; and


d)
            The
                redevelopment of the surrounding block, including the Hudson Bay
                Block and
                St. Regis Hotel


e)
            The
                current occupancy levels of downtown Vancouver hotels pre Olympics
                2010


f)
            The
                price of land for buildable square foot at 200 per square foot as
                the
                going rate in downtown Vancouver


g)
            The
                scarcity of land in the Downtown Vancouver
                District


h)
            Property
                within the last remaining developable block in downtown
                Vancouver


i)
            The
                timing of construction upon one year prior to the commencement of
                the 2010
                Olympics.





**2.2.2
      The 2010 Winter Olympics affect on Hotel Occupancy levels in following
      years**




Major,
      internationally recognized *hallmark* tourism
      events like the Calgary Stampede or an Olympic Games is expected to have a
      substantial enduring impact on the growth of international travel to British
      Columbia and in particular, an increase in hotel occupancy levels and rates,
      particularly in the downtown Vancouver core. This was demonstrated by Holmes
      and
      Shamsuddin of Simon Fraser University in 1997 2 .
      With a
      multivariate statistical model developed for the purpose, these researchers
      examined American tourism to British Columbia in the five years following Expo
      86. Eliminating the effects of other variables such as currency exchange rates
      and travel price indexes, the research by Holmes and Shamsuddin lead them to
      the
      conclusion: *what
      is clear from this study is that the long-term*  *economic
      benefits*  *from
      successful mega-events, such as Expo 86, are very large (probably larger in
      total than the short-term economic benefits)* . *These
      benefits result from the post-mega-event visitors who come to the sponsoring
      city as a result of its world-wide exposure by the event.* The key
      enduring benefit is the incremental growth in tourism resulting from the volume
      and quality of international media exposure surrounding the event.









RANCHO SANTA Logo




Holmes
      and Shamsuddin examined only American visitors and only in those first five
      post-Expo years. Examination of European and Japanese travel data suggests
      similar conclusions. This chart, drawn from Statistics Canada data illustrates
      the dramatic change in the trend of total international visitors to British
      Columbia in the 14 years before 1986 and the 14 years following. In the 14
      years
      prior to 1986, British Columbia's share of total international visitors to
      Canada fluctuated in the relatively narrow range of 9.5% to 11.6 %. This jumped
      to over 17% during 1986. Since Expo 86 British Columbia's share of international
      visitors to Canada has increased every year from 12 % in 1987 to 17.4% in 2000.
      There are undoubtedly a number of contributing factors for this performance,
      including the federal "open skies" airport policy in recent years, but the
      common thread appears to be the heightened international awareness of British
      Columbia kicked off by Expo 86.




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Similar,
      but smaller scale, impacts appear to follow the Calgary 1988 Games. This chart
      shows the growth trend in international travel to Alberta following the 1988
      Calgary Winter Olympics.




It
      is
      instructive to observe what was happening to international visitor volumes
      to
      the rest of Canada in this period. Data for Canada excluding BC and Alberta
      is
      compared to BC and Alberta results. Comparison of the average annual growth
      rate
      of international tourism in three periods - the years from 1972 to the
      pre-hallmark event year, the years two through seven after the event, and the
      post event year two through to year 2000 produces interesting results. In both
      cases (BC and Alberta) data for the year of the event and the post-event year
      was excluded to eliminate the distorting effect of the large spike in visitors
      which occurs during the event year and the inevitable drop the following
      year.









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As
      can be
      seen in the next chart, the rate of growth in international visitor volumes
      has
      considerably outpaced the rest of Canada in the respective British Columbia
      and
      Alberta post-hallmark event periods.




RANCHO SANTA Logo




The
      apparent impact of Expo 86 was more dramatic. While the exposition did not
      have
      the same long seven year build up, the event itself was much longer, running
      six
      months versus about one month (including Paralympics) for the Winter Games.
      During the Expo year, 1986, British Columbia attracted an astonishing 68%
      additional international visitors to the province, (more than 2.8 million),
      on
      top of a solid 6% gain the previous year. In the first post-Expo year, 1987,
      the
      province gave up most of the Expo gain but retained a 14% increase over the
      volume in the immediate pre-Expo year, 1985. In the first five post-Expo years,
      1987 - 1991, British Columbia gained each year, with an average annual growth
      of
      5.4% compared to 1985. Meanwhile, the rest of Canada, excluding Alberta
      experienced declining volumes in four of the five years and an average annual
      growth of just 0.2% compared to 1985.









Being
      in
      the financial district and within one block of the Canada Line main Station
      for
      the downtown district, we expect hi occupancy rates post Olympics
      and we do expect increases in rates due to our prime location.




**The
      close proximity of the Property to the new Canada Line transportation system
      from the Airport**





At
      a
      length of nearly 19 km, the Canada Line will be an automated rail-based rapid
      transit service connecting Downtown Vancouver with the Vancouver Airport — and
      adding transit capacity equivalent to 10 major road lanes. This transportation
      line is a key link and a key factor for Management to choose this site for
      ParaYso Hotel as it will be the 2 nd closest
      hotel to the main “DowntownVancouver City Center” Station other than the Four
      Seasons Vancouver. The Four Seasons has a room rate of $410 per night on average
      and has recently undergone an extensive interior overhaul. This line is expected
      to enhance occupancy levels of all hotels in downtown Vancouver for
      international travelers.





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Convention
      Center Expansion in Downtown Vancouver




The **Vancouver
      Convention & Exhibition Centre** (VCEC),
      is also expected to be ready before the winter 2010 Olympics, and will be one
      of
      Canada's largest convention centers. It has more than 150,000 ft2
(13,936 m2) of space, including a 91,205 ft2 (8,500 m2)
      column-free, dividable exhibition hall, 20 meeting rooms, and a ballroom. When
      the current expansion construction is completed in 2009, VCEC will have
      473,523 ft2 (43,991 m2) of meeting space.




The
      VCEC,
      3 blocks from the Property and to be completed by November 2009, is expected
      to
      bring significant more visitors to Vancouver after the Olympics. A study of
      the
      four most recent summer Olympic Games host cities by Jones Lange
      LaSalle 8 highlights
      this fact. Sydney, for example, increased its convention bid win average by
      34%
      following its selection in 1993 to host the 2000 Games. Barcelona experienced
      a
      29% increase in international delegates in the immediate post-Games year and
      achieved a 21% annual compound
      growth in international delegates in the six years following the 1992 Games.
      Increased conventions will mean increased demand for hotel rooms.









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**2.2.3**  **Current
      Occupancy Rates for downtown Vancouver and rates pre Olympics
      2010**




Occupancy
      Rates are per PFK Consulting Group’s Study is 71% for 2007. The level of
      occupancy without the taking into consideration the level of increase of
      occupancy and rates due to the after boom of the Olympics. Rates range between
      200 per night to 410 per night in downtown Vancouver. All hotels receive
      consistent income throughout the year.




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Other
      Main Factors in Selecting the Property and future Projects




As
      per an
      Appraisal for the property by Carmichael Wilson Property Consultants, Ltd.,
      the
      average buildable per square foot 1 year ago was 150 per square foot. Now,
      due
      the scarcity of the land downtown, and the expected demand for commercial real
      estate, the price per buildable square foot is $200.00. Due to the bemusing
      of
      15% for hotel usage, the land is being acquired for 159 per buildable square
      foot. In addition the site is the last remaining site block for developement
      in
      downtown Vancouver. The closest hotel in the Property site is the St. Regis
      Hotel, across the street on Seymour; the hotel is undergoing a 10 million dollar
      upgrade and is expected to be a 4 star hotel upon completion of the
      upgrades.









PK
      Consulting Group Ltd. conducted a survey of hotel and occupancy levels in
      downtown Vancouver and across Canada. PK based its forecasts on surveying hotels
      in Vancouver along with projected new hotels opening in the next 2 years. Other
      than Calgary, Vancouver leads Canada as the highest occupancy level for hotel
      suites and the second highest room rate without taking into consideration the
      stimulus expected from the 2010 Winter Olympic Games in Vancouver and the
      international visitors expected to the City.




Hi
      forecasted occupancy levels and higher room rates provide a stronger financial
      base for rental income for this Development.




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**2.2.4
      Management Experience in Developments**




*Development
      of Business* –
Since
      inception, the Company has been focused on developing its Hotel property in
      Tulum Mexico. We commenced construction in summer 2005 and completed the Hotel
      in February 2007. We are currently at close to 100% occupancy throughout the
      year since November 2007 in hi season. Tulum has had significant growth over
      the
      last several years as Cancun and Playa del Carmen have both been growing at
      a
      very rapid pace. What brings people to Tulum is its superior beaches and its
      away from it all lifestyle. Hi-season in Tulum occurs from November to April
      31 st and July
      and August. Since completing its development, management has been focused on
      finding its next development candidate. We were selecting from various
      candidates including Puerto Vallarta and Vancouver. We finally selected
      Vancouver and a property in the downtown district due to the upcoming 2010
      Olympics, the close proximity to the new Canada Line station, and the new Canada
      convention center.





*Management
      Experience* **–**




Primary
      management of the Company consists of Graham Alexander and Angela Manetta.
      The
      Company has 18 employees in Canada and Mexico. The following two developments
      were primarily developed by Mr. Alexander and Ms. Manetta:





**Elk
      Mountain Estates, Chilliwack, British Columbia,
      Canada** –
32
      lot
1⁄2 acre lot Subdivision


Mr.
      Alexander and Ms. Manetta (the “Principals”) purchased a 26 acre parcel property
      located at 7625 Marble Hill Road, Chilliwack, BC (the “Chilliwack Property”) on
      February 28 th ,
      2004
      for the sum of $780,000 in cash payment. The funds were raised via an offering
      memorandum and the purchase was conducted by the selling of proposed lots and
      providing as security a mortgage on the purchase of the Chilliwack Property.
      In
      servicing of the lands, the Principals raised an additional $2.1 million dollars
      via pre-sale of Limited Partnership Units and the presale of proposed lots
      on
      the subdivision. The Principals created Mount Thurston Drive and Mount Archibald
      Place and subdivided 32 lots. The services that were added were all sewer,
      water, storm drainage, paving, water pump system, cub, gutter, and sidewalks.
      The total cost for Development was including land and servicing was $2,880,000
      Canadian Dollars. The Average selling price of all lots by 2007 was $182,000
      or
      $5,284,000 for a total appreciation over 4 years of 83%. The pictures post
      subdivision are illustrated below:




ELK
        MOUNTAIN ESTATES
  RANCHO SANTA Logo




MT
      THURSTON DRIVE and MT. ARCHIBALD PLACE 10 1⁄2 acre VIEW LOTS, CHILLIWACK,
      BC




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**ParaYso
      Hotel, Tulum, Quintana Roo Mexico-** 11
      suite
      boutique hotel, ocean front suites, pool Mr. Alexander and Ms. Manetta (the
      “Principals”) purchased from the sale of the cedar timber from the Chilliwack
      Property, the Principals purchased the land in Tulu Mexico for the Development
      of a Hotel for $100,000USD Cash (the “Tulum Property”) in 2004. The Principals
      raised funds by selling shares in the Company, private investors and from the
      income of the lots from the Chilliwack Property for the sum of $1.2 million
      Canadian Dollars. An independent appraisal by Abodes Abroad & Associates,
      Inc. of New York City on March 9 th ,
      2007
      estimated the hotel to be worth $2.45 million dollars. The Principals have
      determined that an additional 15 rooms can be constructed on the Tulum Property
      and the appraisal by Adobes Abroad and Associates did not consider this
      development potential in its appraisal. Without considering the real market
      value of the property and the further development potential of the Tulum
      Property, the development has appreciated in value 104% in 3 years. This
      appraisal assumes the property owned by the Company and the adjoining hotel
      suites as an aggregate. Illustrated below are pictures of the Tulum Property
      today:









ParaYso
      Hotel, Tulum, Mexico


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  **2.3
      PLAN OF OPERATION**


Our
      plan
      of operation is to acquire, manage, and develop income-producing real property
      in Mexico, Canada and the United States. Our ParaYso Hotel in Tulum Mexico
      currently produces income and has been in operations since February
      7 th ,
      2008.





**MILESTONES
      AND OBJECTIVES**





The
      table
      below highlights our milestones and objectives over the next twelve
      months: ****





**MILESTONES
                AND OBJECTIVES**
            
            **ANTICIPATED**
              **COST**
            
            **TIME FRAME****PHASE
                I –****RAISE
                SUFFICIENT EQUITY TO PURCHASE 620-620 Seymour Street, Vancouver,
                B.C.**
            
            **$**
            **2,500,000**
            
            
            **9
                Months****PHASE
                II – RAISE SUFFICIENT EQUITY FOR SOFT COSTS FOR DEVELOPMENT of 620-622
                Seymour Street**
            
            **$**
            **500,000**
            
            
            **9
                Months****PHASE
                III – AQUIRING OTHER DEVELOPMENT OR INCOME****PRODUCING
                PROPERTIES IN MEXICO**
            
            **$**
            **50,000**
            
            
            **12
                Months**-
                Visit other resort areas in Mexico to review real estate development
                opportunities-
                Negotiate purchase of lands-
                Cash deposit required to secure potential land parcels**TOTAL**
            
            **$**
            **3,050,000**
            
            
            **-**




We
      anticipate spending approximately $3,050,000 in the next 12 months in pursuing
      our plan of operation and to pursue development Property in Vancouver, Canada.
      Currently, we have cash of $18,456 which is insufficient to allow us to meet
      our
      current commitments and to complete our plan of operation for the next twelve
      months. We are will need substantial additional financing in order to implement
      our long term business strategy and plan of operation. We anticipate that any
      additional financing will likely be in the form of equity financing as
      substantial debt financing is not expected to be available at this stage of
      our
      business.









Our
      actual expenditures and business plan may differ from the one stated above.
      Our
      Board of Directors may decide not to pursue this plan. In addition, we may
      modify the plan based on available financing.




In
      addition to the costs outlined above, we anticipate that we will incur over
      the
      next twelve months the following expenses:





***Category***
            
            ***Planned Expenditures Over***
              ***The
                Next Twelve Months***Professional
                Fees
            
            $
            10,000General
                Administrative Expenses
            
            $
            25,000Consulting
                Fees
            
            $
            10,000Contractor
                Fees
            
            $
            10,200**TOTAL**
            
            **$**
            **55,000**





Our
      total
      expenditures over the next twelve months are anticipated to be approximately
      $3,105,000, the majority of which is due to the acquisition of our Vancouver
      Property.





**LIQUIDITY
      AND CAPITAL RESOURCES**





As
      of May
      31 st , 2008
      we had cash on hand of $18,541. Since our inception, we have used our common
      stock to raise money for our operations and for our property acquisitions.
      We
      are currently under operations for our Solidaridad Property.





We
      anticipate continuing to rely on equity sales of our common stock in order
      to
      continue to fund our business operations. Issuances of additional shares will
      result in dilution to our existing stockholders. There is no assurance that
      we
      will achieve any of additional sales of our equity securities or arrange for
      debt or other financing for to fund our planned business activities.





**OFF-BALANCE
      SHEET ARRANGEMENTS**





We
      have
      no significant off-balance sheet arrangements that have or are reasonably likely
      to have a current or future effect on our financial condition, changes in
      financial condition, revenues or expenses, results of operations, liquidity,
      capital expenditures or capital resources.





**CRITICAL
      ACCOUNTING POLICIES**





The
      financial statements presented with this quarterly report on Form 10-QSB have
      been prepared in accordance with generally accepted accounting principles in
      the
      United States of America for interim financial information. These financial
      statements do not include all information and footnote disclosures required
      for
      an annual set of financial statements prepared under United States generally
      accepted accounting principles. In the opinion of our management, all
      adjustments (consisting solely of normal recurring accruals) considered
      necessary for a fair presentation of the financial position, results of
      operations and cash flows as at May 31 st ,
      2008
      and for all periods presented in the attached financial statements, have been
      included. Interim results for the six month period ended May 31 st , 2008
      are not necessarily indicative of the results that may be expected for the
      fiscal year as a whole.







We
      have
      identified below certain accounting policies that are most important to the
      portrayal of our current financial condition and results of
      operation:





*Development
      Stage Company*





Rancho
      is
      a development stage company as defined in the Statements of Financial Accounting
      Standards No. 7. All losses accumulated since inception have been considered
      as
      part of the Rancho’s development stage activities.





*Property*





Property
      consists of land and is recorded at cost. Land improvements are capitalized
      and
      maintenance, repairs and minor replacements are expensed as
      incurred.





*Stock
      Based Compensation*





Rancho
      accounts for employee stock based compensation using the intrinsic value method
      prescribed in Accounting Principles Board Opinion No. 25 – “Accounting for Stock
      Issued to Employees”, and related interpretations. Accordingly, compensation
      cost for stock options is measured as the excess, if any, of the market price
      of
      the Company’s common stock at the date of the grant over the amount an employee
      must pay to acquire the common stock. Non-employee stock based compensation
      is
      accounted for using the fair value method in accordance with SFAS No. 123 –
“Accounting for Stock Based Compensation”.





*Impairment
      of Long-Lived Assets*





Rancho
      periodically evaluates potential impairments of its long-lived assets, including
      intangibles. When Rancho determines that the carrying value of long-lived assets
      may not be recoverable based upon the existence of one or more indicators of
      impairment, Rancho evaluates the projected undiscounted cash flows related
      to
      the assets. If these cash flows are less than the carrying value of the assets,
      Rancho measures the impairment using discounted cash flows or other methods
      of
      determining fair value.





Long-lived
      assets to be disposed of are carried at the lower of cost or fair value less
      estimated costs of disposal.





**2.4.
      RISKS AND UNCERTAINTIES**





**2.4.1
      Limited Operating History for the Company**


The
      Company has its main asset is its property in Tulum, Mexico and serves as the
      main security and revenue generator for the Company’s shareholders. The Company
      has been operating its hotel only since February 2007 and therefore the Company
      has limited operating, investment or performance history.





**2.4.2
      Competition**


There
      are
      a number of hotels with which the Company will be forced to compete with in
      the
      downtown Financial District in order to obtain sufficient occupancy and room
      rental rates. The primary competition will come from hotels such as Opus, Four
      Seasons, Hyatt, Hilton, Hotel Vancouver, Pan Pacific, Fairmont, Wedgewood,
      and
      Ritz Carlton. Many of these competitors have a great deal of experience, capital
      resources and managerial capability and could be better placed to access or
      negotiate favourable terms for such Property. Our
      competitors have substantially greater capital resources, name recognition,
      expertise in commercial real estate development and marketing. A number of
      residential and commercial developers and real estate services companies, some
      with greater financial and other resources, compete with us in seeking
      properties for acquisition, resources for development and prospective
      purchasers. Competition from other real estate developers and real estate
      services companies may adversely affect our ability to:





1.
            attract
                purchasers





2.
            sell
                undeveloped rural land









The
      presence of competing real estate development companies in Mexico in Vancouver
      may impact on our ability to raise additional capital in order to fund our
      property acquisitions or property developments in Mexico and Canada if investors
      are of the view that investments in competitors are more attractive. Competition
      could also reduce the availability of properties of merit or increase the cost
      of acquiring the properties.





**2.4.3
      Nature of Investments**


Shareholders
      must rely on the ability, expertise, judgment and discretion of management
      of
      the Company. There is no assurance that the Property or investments in the
      Property made by the Company will perform in a manner which will be profitable
      to the Company. The investments require substantial time (such as several years
      or more) in order to complete construction and to obtain the necessary approvals
      from the City of Vancouver. The Company's investments will be in raw land and
      will therefore be illiquid investments. Furthermore, any investments by the
      Company in raw land will be subject to real estate market volatility. The
      Company’s intention is the build a 14 storey 91 suite hotel and there is no
      assurance that the Company will obtain the necessary financing to build the
      Hotel. The Company will require further financings after completing this
      offering to obtain the necessary capital required to obtain
      financing.





**2.4.4
      Ability for the Company to Raise Sufficient Capital for Development
      Financing**


Shareholders
      are dependent upon the ability of the Management of the Company to raise
      sufficient capital or financing to complete the property acquisition and to
      later obtain the sufficient development financing and capital required to
      construct the commercial development.





**2.4.5
      Factors Affecting Property**


The
      Company's success depends upon the success of the development approval process,
      the ability of the Company to service the land loan, the development financing,
      and any other costs that come up as they relate to the development process.
      Property, Economic, governmental, industry and internal factors that
      detrimentally affect the financial health of the Property will cause a resulting
      loss of value in the Company's investments.





**2.4.6
      Possible Loss of Limited Liability**


The
      Company may be carrying on business in jurisdictions other than that under
      which
      it was formed. The Company will be registered as an extra-jurisdictional Company
      in those jurisdictions where the Company is advised that it will be carrying
      on
      business by virtue of this Offering or otherwise and where there is provision
      for registration as an extra jurisdictional Company. However, there is a risk
      that Unit Holders may not be afforded limited liability in jurisdictions where
      the Company is not registered to the extent that principles of conflicts of
      law
      recognizing the limitation of liability of Unit Holders have not been
      authoritatively established with respect to Companys formed under laws of one
      jurisdiction but carrying on business in other jurisdictions.





**2.4.7
      Reliance on Company**


Shareholders
      will be required to rely on the ability of the Company to actively manage the
      assets of the Company. The Company will make the actual decisions on the
      development of the Property upon which the success of the Company will depend.
      No assurance can be given that the business approaches utilized by the Manager
      will prove successful. There can be no assurance that satisfactory replacements
      for Company will be available, if needed. The Company will depend, to a great
      extent, on the services of a very limited number of individuals of the Company
      in the administration of the Company's business. The loss of such services
      for
      any reason could impair the ability of the Manager Company to perform its
      advisory activities on behalf of the Company.





**2.4.8
      Reliance on Executive**


The
      Company will depend extensively on its executive management raise sufficient
      capital, obtain the necessary approvals from the City of Vancouver, and obtain
      further capital necessary to construct the Hotel. The loss of the services
      of
      key executive could impair the ability of the Company to properly manage and
      develop the Property.









**2.4.9
      Limited Ability to Liquidate Shares**


The
      current market for liquidating the shares and selling the shares is on the
      Over
      the Counter Bulletin Board in the United States. Shareholders are also under
      certain resale restrictions as per rule 144 of the United States Securities
      Act
      of 1933. The current market for the shares is illiquid and could be difficult
      to
      achieve the current market value for the shares. This Offering of Units is
      not
      qualified by way of prospectus, and consequently the resale of Units could
      be
      subject to restrictions under applicable securities legislation.





**2.4.10
      Tax Liability**


Each
      Unit
      Holder is required to include in computing income, a *pro
      rata* share
      of
      the income of the Company allocated to him. Income will be allocated to Unit
      Holders according to the terms of the Company Agreement and without regard
      to
      the acquisition price of such Units. Unit Holders may have an income tax
      liability in respect of profits not distributed and also in respect of returns
      of capital on the Units exceeding the adjusted cost base of their
      Units.





**2.4.11
      Potential Indemnification Obligations**


Under
      certain circumstances, the Company might be subject to significant
      indemnification obligations in
      respect of the Company or certain parties related to them. The Company will
      not
      carry any Insurance
      to cover such potential obligations and none of the foregoing parties will
      be
      insured for losses for
      which
      the Company has agreed to indemnify them. Any indemnification paid by the
      Company would
      reduce the Company's net asset value and, by extension, the value of the
      shares.





**2.4.12
      Real Property Development and Ownership**


Real
      estate developments and investments are generally subject to varying degrees
      of
      risk depending on the
      nature of the property. Such risks include changes in general economic
      conditions (such as the availability
      and cost of mortgage funds), local conditions (such as demand for hotel space,
      conventions, the successful completion of the Canada Line), government
      regulation (such as taxation of property and environmental legislation) and
      the
      attractiveness of hotel suites to potential purchasers. In addition, each
      segment in the real estate development industry is capital intensive and is
      typically sensitive to interest rates. The income generated by the Property
      in
      which the Company has an interest is dependent upon general economic conditions
      and, accordingly, the return to investors may be affected by changes in those
      conditions. Certain significant expenditures, including property taxes,
      maintenance costs, mortgage payments, insurance costs and related charges must
      be made regardless of whether or not a property is producing sufficient income
      to service such expenses. In addition, the Property of the Company may be
      subject to mortgages to complete the purchase of a particular Property which
      require debt service payments. If the Company is unable or unwilling to meet
      mortgage payments on any property, losses could be sustained as a result of
      the
      exercise by the mortgagee of its rights of foreclosure or sale.





**2.4.13
      Ability to Obtain, Pre-Development Approvals to Allow Future Development on
      the
      Property**


The
      Company will be subject to risks associated with the development of the Property
      such as municipal
      and government approvals along with potential environmental problems. As a
      result the ability to
      develop the Property may be affected from time to time in varying degrees by
      obtaining or not obtaining
      the appropriate municipal or government approvals or, alternatively, such
      approval may be subject
      to such terms and conditions that may delay or change the Property and thereby
      altering the profitability
      of such Property. While management has obtained the necessary predevelopment
      approvals its past projects, this is NOT a guarantee of future
      performance.





**2.4.14
      Construction Costs and Uncertainty of Density**


The
      real
      estate industry is significantly impacted by fluctuations in the cost of
      construction and servicing of
      land.
      Any material increase in construction and/or servicing costs may have a
      materially adverse effect on
      the
      Company in the timing of selling the Property or having the Company purchase
      a
      portion or all of
      the
      Property. The Density of the Hotel may be adjusted at the discretion of the
      Planning Department of the City of Vancouver.









**2.4.15
      Liquidity of Real Estate**


Real
      estate is relatively illiquid. Such illiquidity may limit the ability of the
      Company to diversify its portfolio
      promptly in response to changing economic or investment conditions. In
      recessionary times, it may
      be
      virtually impossible to dispose of certain types of real estate, particularly
      commercial real estate. The
      costs
      of holding real estate are considerable, and the Company, as a holder of real
      estate, during a Recessionary
      period may be faced with ongoing expenditures with little prospect of incoming
      receipts. Without
      adequate cash reserves, it may be necessary for the Company to dispose of
      Property at low prices.
      Financial difficulties of other property owners may lead to distress sales
      which
      could further


depress
      real estate values in markets in which the Company operates.





**2.4.16
      Regulatory Approvals**


From
      time
      to time the development of Property by the Company will or may require zoning, environmental
      and other approvals from local government agencies. The process of obtaining
      such approvals
      may take many months and there can be no assurance that the necessary approvals
      for the Property
      will be obtained. Holding costs accrue while regulatory approvals are being
      sought and delays can
      render Property uneconomic at any given period. The Manager, while having a
      track record in other projects
      of obtaining development approvals on other lands, cannot guarantee that the
      Property within this
      Offering will receive the same level of development approvals in a timely
      fashion.





**2.4.17
      Environmental Matters**


Under
      various environmental laws, ordinances and regulations, the current or previous
      owner or operator of
      real
      property may be liable for the costs of removal or rededication of hazardous
      or
      toxic substances on,
      under
      or in such property. Such laws could impose liability whether or not the Company
      knew of, or
      was
      responsible for, the presence of such hazardous or toxic substances. The
      presence of hazardous or toxic
      substances, or the failure to remove or rededicate such substances, if any,
      could adversely affect the Company's
      ability to sell such real estate or to borrow using such real estate as
      collateral and could potentially
      also result in claims against the Company





**2.4.18
      General Real Estate Risks**


Various
      factors can affect the timing and profitability of real estate development.
      While the Company has made
      certain plans for applying and obtaining a Development Permit for the Property,
      there is no assurance that such plans will be met on a timely basis or at all.
      There is also no assurance that the Property can be rented to a sufficient
      occupancy level to make the development economically viable. The Company will
      be
      subject to risks inherent in the ownership of land intended for the future
      development of commercial real estate including:


(i)
      unforeseen delays with the municipal approval process; (ii) cost overruns;
      (iv)
      the inability to secure the
      appropriate permits and other necessary approvals in a timely and cost-effective
      manner; (v) the inability
      to rent sufficient rooms to an occupancy level that is viable; and (vi) the
      inability to obtain suitable property for development.





**2.4.19
      Property Ownership Risk of Tulum Hotel ParaYso Property**





Under
      the
      terms of the property purchase agreement for our Solidaridad Property, Ms.
      Galan-Rios assigned
      to us her interest in an occupation order issued by the Ejidal Commissariat
      of
      the Ejido NCPE Jose Maria Pino Suarez for the use and possession of the
      Solidaridad Property. Under Mexican law we own the right to possess and make
      use
      of our Solidaridad Property but do not own title to the property until a legal
      survey is completed by the Mexican government. Because we do not own legal
      title
      to our Solidaridad Property we are subject to the risk that: (i) conditions
      may
      be imposed on our occupation order for the property and/or the order may be
      cancelled; (ii) the Mexican government may delay the implementation of a legal
      survey or decide not to undertake a survey of the property; and (iii) if a
      legal
      survey is completed there is no assurance that we will not be required to pay
      additional fees for the transfer of legal title to the property or that the
      property boundaries will be identical to those granted in the occupation order
      issued by the Ejidal Commissariat. The occurrence of any of the above risks
      would have a material adverse effect our business, results of operations or
      financial condition.









**2.4.20**  **Environmental
      And Other Regulations**





Our
      present operations and development activities in Mexico are subject to Mexican
      state and local laws and regulations, respectively, relating to the protection
      of the environment, including those concerning water supply, wastewater, noise,
      soil pollution and generation and handling of hazardous waste and materials
      and
      environmental impact.





We
      believe that we are in compliance in all material respects with all Mexican
      state and local laws and regulations relating to water, atmospheric pollution,
      hazardous wastes or substances. We have not been notified by any environmental
      authority or any third party, of any material noncompliance, liability or claim
      related to those environmental matters in connection with any of our present
      properties. The possibility exists that in the future that our facilities and
      operations will encounter: (i) newer and stricter state or local environmental
      laws and regulations, (ii) more rigorous interpretations of existing
      environmental laws and regulations, and/or (iii) stricter enforcement of
      federal, state and local environmental law regulations.





The
      Solidaridad Property is subject to federal, state and local regulations and
      restrictions that may impose significant limitations on our ability to develop
      them. In addition, our ownership and operation of real property is subject
      to
      extensive and evolving federal, state and local environmental laws and other
      regulations. The provisions and enforcement of these environmental laws and
      regulations may become more stringent in the future. Violations of these laws
      and regulations can result in:





1.
            civil
                penalties;





2.
            remediation
                expenses;





3.
            natural
                resource damages;





4.
            personal
                injury damages;





5.
            potential
                injunctions;





6.
            cease
                and desist orders; and





7.
            criminal
                penalties.





In
      addition, some of these environmental laws impose strict liability, which means
      that we may be held liable for any environmental damages on our property
      regardless of our fault. The presence of hazardous substances on a property
      may
      also adversely affect our ability to sell or develop the property or to borrow
      using the property as collateral.




Changes
      in laws or the interpretation thereof, new enforcement of laws, the
      identification of new facts or the failure of other parties to perform
      remediation could all lead to new or greater liabilities that could materially
      adversely affect our business, results of operations or financial
      condition.




**2.4.21
      The Occurrence In Mexico Of Natural Disasters**




Our
      property is located in Mexico. The occurrence of natural disasters, such as
      fires, hurricanes, floods, unusually heavy or prolonged rain and droughts in
      Mexico could have a material adverse effect on our ability to develop properties
      or realize income from our property.




**2.4.22** **We
          Do Not Carry Comprehensive Liability Insurance for the Mexico Property.**





We
      do not
      currently carry comprehensive liability, fire, hurricane, storm, earthquake
      and
      business interruption insurance with respect to our business operations in
      Mexico. Should an uninsured loss occur, we could lose our capital invested
      in
      the Solidaridad Property, as well as the anticipated future revenues from such
      property and would continue to be obligated on any indebtedness or other
      obligations related to the property. Any such loss could have a material adverse
      effect on Rancho.









**2.4.23**  **Future
      Equity Financings May Dilute Existing Stockholders’ Ownership
      Interests.**





We
      rely
      upon the availability of equity capital to fund our growth, which financing
      may
      or may not be available on favorable terms or at all. Equity capital could
      include our common stock or preferred stock. We cannot guarantee that additional
      financing, refinancing or other capital will be available in the amounts we
      desire or on favorable terms.





There
      is
      no assurance that we will achieve any additional sales of our equity securities
      or arrange for debt or other financing to fund our planned business
      activities.





**ITEM
      3.** **CONTROLS
      AND PROCEDURES.**




**Evaluation
      Of Disclosure Controls And Procedures**





As
      of the
      end of the period covered by this Quarterly Report, our management carried
      out
      an evaluation, under the supervision and with the participation of our principal
      executive officer and principal financial officer, of the effectiveness of
      the
      design and operation of our disclosure controls and procedures (as defined
      in
      Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation,
      our principal executive officer and principal financial officer has concluded
      that our disclosure controls and procedures are, as of the date covered by
      this
      Quarterly Report, effective to ensure that the 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 SEC rules and forms.





**PART
      II - OTHER INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS.**





None.





**ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS.**





None.





**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES.**





None.





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





None.





**ITEM
      5. OTHER INFORMATION.**





None.





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


Exhibit
                Number
              
              Description
                  of Exhibits3.1
              
              Articles
                  of Incorporation.(1)3.2
              
              Bylaws,
                  as amended.(1)4.1
              
              Form
                  of Share Certificate.(1)
  
  10.1
              
              2004
                  Stock Option Plan.(1)10.2
              
              Management
                  Consulting Agreement dated October 1, 2004 between Rancho Santa
                  Monica
                  Developments Inc. and Graham G. Alexander.(1)10.3
              
              Management
                  Consulting Agreement dated October 1, 2004 between Rancho Santa
                  Monica
                  Developments Inc. and Angela Manetta.(1)10.4
              
              Extension
                  Agreement dated December 31, 2004 between Rancho Santa Monica Developments
                  Inc. and Graham G. Alexander.(1)10.5
              
              Extension
                  Agreement dated December 31, 2004 between Rancho Santa Monica Developments
                  Inc. and Angela Manetta.(1)10.6
              
              Purchase
                  Agreement dated for reference November 29, 2004 between Monica
                  Galan-Rios
                  and Rancho Santa Monica Developments Inc.(1)10.7
              
              Promissory
                  Note dated November 29, 2004 Monica Galan-Rios and Rancho Santa
                  Monica
                  Developments Inc.(1)31.1
              
              Certification
                  of Chief Executive Officer and Chief Financial Officer pursuant
                  to Section
                  302 of the Sarbanes-Oxley Act of 2002.32.1
              
              Certification
                  of Chief Executive Officer and Chief Financial Officer pursuant
                  to 18
                  U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.
  (1)
                Filed
                    with the SEC as an exhibit to our Registration Statement on Form
                    SB-2
                    originally filed on January 29, 2005, as
                    amended.





**REPORTS
      ON FORM 8-K**




We
      filed
      the following Current Reports on Form 8-K during the fiscal quarter ended May
      31st, 2008:




**Date
                of Form 8-K**
            
            **Date
                of Filing with the SEC**
            
            **Description
                of the Form 8-K**March
                28th, 2008
            
            March
                28th,
                2008
            
            Item
                4.02 Non-Reliance of previously filed financial
                statementsMay
                5th,
                2008
            
            May
                5th,
                2008
            
            Item
                1.01 Entry into an agreement to purchase lands located at 620-622
                Seymour
                Street, Vancouver for $5,500,000.June
                30th,
                2008
            
            June
                30th,
                2008
            
            Hired
                consultant, De Cotiis Group Windsor Holdings, Ltd. to assist in capital
                raising and find new development deals for the
                Company




**SIGNATURES**





In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.





**RANCHO
                SANTA MONICA DEVELOPMENTS INC.**Date:
                July 7th,
                2008
            By:
            */s/
                Graham G. Alexander***GRAHAM
                G. ALEXANDER**Chief
                Executive Officer, Chief Financial Officer
              President,
                Secretary and Treasurer(Principal
                Executive Officer
              and
                Principal Accounting Officer)