REDWOOD MORTGAGE INVESTORS VI
                       (a California Limited Partnership)
                               Index to Form 10-K

                                December 31, 2003


                                                 Part I
<TABLE>
<S>      <C>                                                                                                 <C>
                                                                                                             Page No.
                                                                                                          ------------
Item 1   - Business                                                                                            3
Item 2   - Properties                                                                                          6
Item 3   - Legal Proceedings                                                                                   6
Item 4   - Submission of Matters to a Vote of Security Holders (Partners)                                      6

                                                   Part II


Item 5   - Market for the Registrant's "Limited Partnership Units" and Related Unitholder Matters              7
Item 6   - Selected Financial Data                                                                             7
Item 7   - Management's Discussion and Analysis of Financial Condition and Results of Operations               9
Item 7a - Quantitative and Qualitative Disclosures About Market Risk                                           16
Item 8   - Financial Statements and Supplementary Data                                                         18
Item 9   - Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                39
Item 9a - Controls and Procedures                                                                              39

                                                  Part III


Item 10 - Directors and Executive Officers of the Registrant                                                   39
Item 11 - Executive Compensation                                                                               40
Item 12 - Security Ownership of Certain Beneficial Owners and Management                                       41
Item 13 - Certain Relationships and Related Transactions                                                       41
Item 14 - Principal Accountant Fees and Services                                                               41

                                                   Part IV

Item 15 - Exhibits, Financial Statements and Schedules, and Reports of Form 8-K                                42

Signatures                                                                                                     43

Certifications                                                                                                 44
</TABLE>


                                       1
<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    Form 10-K

                Annual Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

      For the year ended December 31, 2003 Commission File number 33-12519
-----------------------------------------------------------------------------

                          REDWOOD MORTGAGE INVESTORS VI
-----------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          California                                   94-3031211
-----------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification)
 incorporation or organization)

900 Veterans Blvd., Suite 500, Redwood City, CA          94063
-----------------------------------------------------------------------------
(address of principal executive offices)              (zip code)

Registrant's telephone number including area code      (650) 365-5341
-----------------------------------------------------------------------------

Securities registered pursuant to Section 12 (b) of the Act:        None

        Title of each class        Name of each exchange on which registered
-----------------------------------------------------------------------------
             None                                     None
-----------------------------------------------------------------------------

     Securities  registered  pursuant  to  Section  12 (g) of the  Act:  Limited
Partnership Units

     Indicate by check mark whether the  registrant (1) has filed all reports to
be filed by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934 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        XX                               NO
         ---------------                          ------------

     At the close of the sale of Units in 1989,  the limited  partnership  Units
purchased by  non-affiliates  was 97,725.94 Units computed at $100.00 a Unit for
$9,772,594, excluding general partners' contribution of $9,772.

Documents incorporated by reference:

     Portions of the Prospectus for Redwood  Mortgage  Investors VI, included as
part of the form  S-11  Registration  Statement,  SEC File  No.  33-12519  dated
September 3, 1987 and Supplement No. 6 dated May 16, 1989, incorporated in Parts
II, III, and IV.

                                       2
<PAGE>

                                     Part I

Item 1 - Business

     Redwood  Mortgage  Investors VI is a California  Limited  Partnership  (the
"Partnership").  Michael R. Burwell,  an individual,  and Gymno  Corporation,  a
California  corporation,  are the general  partners.  The address of the general
partners is 900 Veterans Blvd.,  Suite 500, Redwood City,  California 94063. The
Partnership's primary purpose is to invest its capital in first and second deeds
of trust  secured by Northern  California  properties.  Loans are  arranged  and
serviced by Redwood  Mortgage Corp., an affiliate of the general  partners.  The
Partnership's  objectives  are to make  investments  which will: (i) provide the
maximum possible cash returns which limited partners may elect to (a) receive as
monthly, quarterly or annual cash distributions or (b) have earnings credited to
their capital  accounts and used to invest in Partnership  activities;  and (ii)
preserve  and protect  the  Partnership's  capital.  The  Partnership's  general
business  is  more  fully  described  under  the  section  entitled  "Investment
Objectives  and  Criteria",  pages  23-26  of  the  Prospectus,  a  part  of the
above-referenced Registration Statement, which is incorporated by reference.

     The  Partnership  was formed in September  1987,  with an approved  120,000
Units of $100 each  ($12,000,000).  The Units were  offered on a "best  efforts"
basis  through  broker/dealer  member  firms  of  the  National  Association  of
Securities Dealers,  Inc. It immediately began issuing Units and began investing
in loans in October 1987. The offering  terminated in September  1989, and as of
that date  97,725.94  limited  partner  Units were sold  realizing  proceeds  of
$9,772,594.  At  December  31,  2003,  the  Partnership  had a balance  of loans
totaling $5,255,620 with interest rates thereon ranging from 6.50% to 10.75%.

     Currently  first  mortgage  loans  comprise  75.79% of the total  amount of
secured loan  portfolio.  Second  mortgage loans comprise  24.21% of the secured
loan portfolio.  Owner-occupied  homes,  combined with non-owner occupied homes,
total 28.65% of the secured mortgage loans. Secured mortgage loans to apartments
make up 2.60% of the total secured  loans  portfolio.  Commercial  secured loans
decreased from last year, now comprising 68.75% of the portfolio,  a decrease of
4.41% from 2002. The major concentration of secured loans,  comprising 93.34% of
the total secured loans, are in five counties of the San Francisco Bay Area. The
balance is  primarily  in Northern  California.  Currently  secured loan size is
averaging  $328,476  per loan.  Some of the  secured  loans  are  fractionalized
between  affiliated  partnerships  with  objectives  similar  to  those  of  the
Partnership to further reduce risk.  Average equity per loan transaction,  which
is our loan plus any senior loans,  divided by the property's  appraised  value,
subtracted  from 100%,  stood at 21.13%.  Generally,  the more equity,  the more
protection for the lender. The Partnership's loan portfolio had no properties in
foreclosure as of the end of December 2003.

     Delinquencies  are discussed  under Item 7 -  Management's  Discussion  and
Analysis of Financial Condition and Results of Operations.

     For the year ended December 31, 2003 the  Partnership did not take back any
collateral  from  defaulted  borrowers.  During the year 2002,  the  Partnership
acquired one piece of real estate property  through  foreclosure.  This property
consisted of four  townhouses.  The Partnership  commenced  refurbishment of the
units and concluded a sale of the units in March 2004. The Partnership  realized
a loss upon sale of  approximately  $15,000,  which had previously been reserved
for.

     The  Partnership  also  owns  (through  previous   foreclosure)  two  other
properties;  a commercial  property  and the other land.  The land is located in
East Palo Alto. The land is owned with two other  affiliated  partnerships.  The
Partnership's  net  investment  in the land at December  31,  2003 is  $130,215.
Currently  the  Partnership  is in the  process  of  negotiating  a sale with an
interested  buyer. The  Partnership's net investment of $130,215 is less than 1%
of Partnership  assets.  The general partners believe that the property is worth
considerably  more than its net  investment.The  second property is a commercial
property located in Walnut Creek, California.  The property is currently pending
sale.  We  anticipate  that the sale  will  occur in the last  quarter  of 2004.
Management  has set aside loss  reserves in the amount of  $784,191,  which they
believe are adequate in amount to cover anticipated losses.

                                       3
<PAGE>

     The Partnership's  revenues  decreased from $735,900 in 2001 to $574,171 in
2002 and to $491,640 in 2003. This was due largely to the decline in interest on
loans,  which averaged 9.48% in 2001, 7.99% in 2002 and 7.39% in 2003. Cash flow
the Partnership generated from mortgage interest and loan pay-downs and pay-offs
was used primarily to meet limited  partner  capital and earnings  liquidations.
For the three years ended December 31, 2003 withdrawals by limited partners were
$836,749 in 2001, $602,753 in 2002 and $506,503 in 2003.

     During the year 2003,  the  Partnership's  annualized  yield on compounding
accounts was 5.00% and on monthly distributing accounts it was 4.89%.

Competition and General Economic Conditions.

     The Partnership's  major competitors in providing mortgage loans are banks,
savings and loan associates,  thrifts,  conduit lenders,  mortgage brokers,  and
other entities both larger and smaller than the Partnership.  The Partnership is
competitive  in large part  because the general  partners  generate all of their
loans.  The general partners have been in the business of making or investing in
mortgage  loans in Northern  California  since 1978 and have developed a quality
reputation and recognition within the field.

     Mortgage  interest rates have fallen during the last 24 to 36 months.  This
has been  partially  due to actions by the  Federal  Reserve  Bank to reduce the
discount rate on borrowings  charged to member banks, a sluggish economy and low
inflation  rates.  Although the general trend for interest  rates has been down,
many lenders have tightened  their credit and reduced their lending  exposure in
various  markets and  property  types.  This credit  tightening  from  competing
lenders  would  generally  provide  the  Partnership  with  additional   lending
opportunities at attractive rates.  However, as a result of the slowing economy,
there are now fewer  transactions in the  marketplace,  which could  potentially
reduce the number of lending  opportunities to the  Partnership.  Continued rate
reductions  by the Federal  Reserve  Bank,  a  continued  slowing  economy,  and
continued low inflation rates could have the effect of reducing mortgage yields.
In the future, when cash flow permits,  currently existing loans with relatively
high yields  could be  replaced  with loans with lower  yields as they  pay-off,
which in turn  could  reduce  the net yield  paid to the  limited  partners.  In
addition,  if there is less demand by borrowers for loans and, thus, fewer loans
for the Partnership to invest in, it will invest its excess cash in shorter-term
alternative  investments yielding  considerably less than the current investment
portfolio.

Secured Loan Portfolio

     As of  December  31,  2003,  a summary of the  Partnership's  secured  loan
portfolio is set forth below.

   Loans as a Percentage of Appraised Value

   First Trust Deed Loans                                        $ 3,983,032
   Second Trust Deed Loans                                         1,272,588
                                                               -------------
        Total loans                                              $ 5,255,620

   Priority Positions due other Lenders at Time of Loan            2,377,041

        Total Debt                                               $ 7,632,661
                                                               =============

   Appraised Property Value at time of loan                      $ 9,677,215

        Total Secured Loans as a % of Appraisal based on
           appraisals and prior liens at date of loan                 78.87%

   Number of Secured Loans Outstanding                         16

   Average Secured Loan                                              328,476
   Average Secured Loan as a % of Net Assets                           4.98%
   Largest Secured Loan Outstanding                                2,103,300
   Largest Secured Loan as a % of Net Assets                          31.89%


                                       4
<PAGE>

   Secured Loans as a Percentage of Total Loans                     Percent
   -----------------------------------------------------          ------------
   First Trust Deeds                                                    75.79%
   Second Trust Deeds                                                   24.21%
        Total                                                          100.00%

   Secured Loans by Type of Property                Amount           Percent
   -----------------------------------------     ------------     ------------

   Owner Occupied Homes                             $ 640,000           12.18%
   Non-Owner Occupied Homes                           865,710           16.47%
   Apartments                                         136,841            2.60%
   Commercial                                       3,613,069           68.75%
   Land                                                     0            0.00%
                                                 ------------     ------------
        Total                                     $ 5,255,620          100.00%
                                                 ============     ============

     The following is a distribution of secured loans outstanding as of December
31, 2003 by Counties:


                  California County                 Secured Loans      Percent
  ----------------------------------------------    -------------    -----------

  San Francisco Bay Area Counties
      Santa Clara                                     $ 2,210,368         42.06%
      Alameda                                           2,054,886         39.10%
      San Francisco                                       290,125          5.52%
      San Mateo                                           244,968          4.66%
      Marin                                               105,000          2.00%
                                                    -------------    -----------
                                                        4,905,347         93.34%

  San Francisco Bay Area Adjacent Counties
      Stanislaus                                          176,085          3.35%
                                                    -------------    -----------
                                                          176,085          3.35%

  Other California Counties
      Sacramento                                           96,716          1.84%
      Shasta                                               77,472          1.47%
                                                    -------------    -----------
                                                          174,188          3.31%

  Total                                               $ 5,255,620        100.00%
                                                    =============    ===========

Statement of Condition of loans:
  Number of Loans in Foreclosure                                0

     Scheduled  maturity  dates of secured  loans as of December 31, 2003 are as
follows:

                          Year Ending
                         December 31,
                   --------------------------

                             2004                   $   503,556
                             2005                       958,209
                             2006                        96,716
                             2007                     3,258,681
                             2008                        46,387
                          Thereafter                    392,071
                                                   ------------
                                                    $ 5,255,620
                                                   ============


                                       5
<PAGE>

     The  Partnership's  largest  loan in the  principal  amount  of  $2,103,300
represents 40.02% of outstanding secured loans and 31.76% of Partnership assets.
Larger  loans  sometimes  increase  above 10% of the secured  loan  portfolio or
Partnership assets as these amounts decrease due to limited partner  withdrawals
and loan payoffs and due to  restructuring  of existing  loans. In this instance
all of these factors  affected this loan.  Chief among them was a restructure of
two loans  with  outstanding  principal  plus  accrued  interest,  late fees and
advances into one new loan with an outstanding balance of $2,103,300.

     The  Partnership has a substantial  amount of its loan  receivable  balance
from one borrower at December  31, 2003 and 2002.  The  borrower  accounted  for
approximately  58% and 62% of the loan balances at such dates. This borrower has
two loans secured by separate  properties in the principal amounts of $2,103,000
and $956,800 as of December 31, 2003.

     The  scheduled  maturities  for 2004  include  three  loans  for  $253,556,
representing 4.82% of the secured loan portfolio,  past maturity at December 31,
2003.  Additionally,  one loan for $96,716 (1.84% of the secured loan portfolio)
was categorized as impaired.  The Partnership  occasionally  allows borrowers to
continue to make the regular interest payments on debt past maturity for periods
of time. In many  instances  the interest  rate on these past maturity  loans is
higher than currently existing interest rates.  Interest payments on these loans
were current,  except for one impaired loan where  repayment was delinquent over
90 days.


Item 2 - Properties

     The Partnership did not take back any collateral security from borrowers in
2003. During 2002, the Partnership took back one piece of real estate collateral
through  foreclosure.  The Partnership,  together with other  partnerships,  all
affiliates of the general partners,  own the property.  The property is a 4 unit
condominium complex. During the year 2003, renovation work was completed and the
property  was placed on the market for sale.  A purchase  offer was accepted and
the escrow closed in March, 2004. As of December 31, 2003, the carrying value of
this property was $454,862 and the Partnership sustained a loss of approximately
$15,000, which had been anticipated and reserved for.

     The  Partnership  also  owns,  through  previous  foreclosures,  two  other
properties;  a commercial  property and an undeveloped land parcel.  The land is
located  in East  Palo  Alto.  The  land is  owned  with  two  other  affiliated
partnerships.  The Partnership's net investment in the land at December 31, 2003
is $130,125.  Currently the Partnership is negotiating a sale with an interested
buyer. The general partners believe that the property is worth considerably more
than its net investment.

     The second  property  is a  commercial  property  located in Walnut  Creek,
California.  The property is currently  pending sale.  Management  has set aside
loss  reserves in the amount of  $784,191,  which they  believe are  adequate in
amount to cover anticipated losses.


Item 3 - Legal Proceedings

     In the normal course of business,  the  Partnership  may become involved in
various  types of legal  proceedings  such as  assignment  of rents,  bankruptcy
proceedings, appointment of receivers, unlawful detainers, judicial foreclosure,
etc.,  to enforce the  provisions  of the deeds of trust,  collect the debt owed
under the promissory  notes,  or to protect,  or recoup its investment  from the
real  property  secured  by the  deeds of  trust.  None of these  actions  would
typically be of any material importance.  As of the date hereof, the Partnership
is not  involved  in any  legal  proceedings  other  than  those  that  would be
considered part of the normal course of business.


Item 4 - Submission of Matters to a Vote of Security Holders (Partners)

     No matters have been submitted to a vote of the Partnership.


                                       6
<PAGE>

                                     Part II


     Item 5 -  Market  for the  Registrant's  "Limited  Partnership  Units"  and
Related Unitholder Matters

     120,000  Units  at $100  each  (minimum  20  Units)  were  offered  through
broker-dealer  member firms of the National Association of Securities Dealers on
a "best  efforts"  basis (as indicated in Part I item 1). All Units were sold to
California  residents.  Investors have the option of  withdrawing  earnings on a
monthly,  quarterly  or annual basis or having  their  earnings  retained in the
Partnership.  Limited  partners may withdraw from the  Partnership in accordance
with  the  terms  of the  partnership  agreement  subject  to  early  withdrawal
penalties.  There is no established  public trading market for the Units.  As of
December 31, 2003, 418 limited partners had a capital balance of $6,586,482.

     A  description  of the  Partnership's  Units,  transfer  restrictions,  and
withdrawal  provisions  is more  fully  described  under  the  section  entitled
"Description of Units" and "Summary of the Limited Partnership Agreement", pages
38-42 of the Prospectus, a part of the above-referenced  Registration Statement,
which is incorporated by reference.


Item 6 - Selected Financial Data

     Redwood  Mortgage  Investors  VI began  operations  in October,  1987.  Its
financial  condition and results of operation as of and for the five years ended
December 31, 2003 were:

                                 Balance Sheets
<TABLE>
<S>                                                <C>             <C>             <C>            <C>            <C>
                                                                              December 31,
                                               --------------------------------------------------------------------------

                                                   2003            2002            2001           2000           1999
                                               ------------    ------------    ------------   ------------   ------------
Cash                                            $    32,160     $   341,127     $   190,414    $   354,860    $ 1,120,295

Loans
    Loans, secured by deeds of trust              5,255,620       5,183,100       4,970,433      5,570,576      5,282,773
    Loans, unsecured                                242,462         223,697          82,362         82,362              -

Interest and other receivables
    Accrued interest and late fees                   54,562          61,384         797,105        664,292        706,841

    Advances on loans                                 4,091          31,007         197,946        133,647        137,930

Less allowances for loan losses                   (279,865)       (275,294)       (370,612)      (261,452)      (303,249)
Note receivable - Redwood Mortgage Corp                   -               -         178,200        125,000        300,000
Real estate held for sale, net                    1,312,773       1,234,541       1,093,503        767,583        133,300

Real estate owned in process                              -               -               -              -        668,132
                                               ------------    ------------    ------------   ------------   ------------

      Total assets                              $ 6,621,803     $ 6,799,562     $ 7,139,351    $ 7,436,868    $ 8,046,022
                                               ============    ============    ============   ============   ============
</TABLE>


                                       7
<PAGE>


                        Liabilities and Partners' Capital
<TABLE>
<S>                                                 <C>             <C>              <C>             <C>              <C>
                                                                               December 31,
                                               ------------------------------------------------------------------------------

                                                    2003            2002             2001            2000             1999
                                                ------------    ------------     ------------    ------------     ------------
Liabilities
  Accounts payable                               $    13,064     $    11,953      $    20,261     $    13,068      $         -
  Deferred interest on loans                               -               -           74,022               -           15,676
  Payable to affiliates                               12,496          14,643           35,632               -                -
                                                ------------    ------------     ------------    ------------     ------------
      Total liabilities                               25,560          26,596          129,915          13,068           15,676
                                                ------------    ------------     ------------    ------------     ------------

Partners' capital
  Limited partners' capital, subject to
    Redemption                                     6,586,482       6,763,200        6,999,670       7,414,034        8,020,580
  General partners' capital                            9,761           9,766            9,766           9,766            9,766
                                                ------------    ------------     ------------    ------------     ------------

      Total partners' capital                      6,596,243       6,772,966        7,009,436       7,423,800        8,030,346
                                                ------------    ------------     ------------    ------------     ------------

      Total liabilities and partners' capital    $ 6,621,803     $ 6,799,562      $ 7,139,351     $ 7,436,868      $ 8,046,022
                                                ============    ============     ============    ============     ============
</TABLE>

                              Statements of Income
<TABLE>
<S>                                                 <C>             <C>              <C>             <C>              <C>
                                                    2003            2002             2001            2000             1999
                                                ------------    ------------     ------------    ------------     ------------
Gross revenue                                    $   491,640     $   574,171      $   735,900     $   785,209      $ 1,086,317
Expenses                                             158,524         204,188          309,249         307,280          565,408
                                                ------------    ------------     ------------    ------------     ------------
Net income                                       $   333,116     $   369,983      $   426,651     $   477,929      $   520,909
                                                ============    ============     ============    ============     ============

Net income:   to general partners (1%)           $     3,331     $     3,700      $     4,266     $     4,779      $     5,209
              to limited partners (99%)              329,785         366,283          422,385         473,150          515,700
                                                ------------    ------------     ------------    ------------     ------------

                                                 $   333,116     $   369,983      $   426,651     $   477,929      $   520,909
                                                ============    ============     ============    ============     ============
Net income per $1,000 invested by limited
  partners for entire period:
    - where income is reinvested and
        compounded                               $        50     $        54      $        59     $       62       $        62
                                                ============    ============     ============    ============     ============

     - where partner receives income in
        monthly distributions                    $        49     $        53      $        58     $       61       $        61
                                                ============    ============     ============    ============     ============
</TABLE>

     The annualized  yield,  when income is compounded and retained for 1999 was
6.24%,  for 2000 the annualized  yield was 6.22%,  for 2001 the annualized yield
was 5.95%,  for 2002 the annualized yield was 5.40%, and for 2003 the annualized
yield was 5.00%. The annualized  yield,  when income is distributed  monthly for
1999 was 6.07%, for 2000 the annualized yield was 6.05%, for 2001 the annualized
yield  was  5.79%,  for 2002 the  annualized  yield  was  5.27% and for 2003 the
annualized  yield was  4.89%.  The  average  annualized  yield,  when  income is
compounded and retained, from inception through December 31, 2003 was 6.92%. The
average  annualized  yield, when income is distributed  monthly,  from inception
through December 31, 2003 was 6.71%.

                                       8
<PAGE>

     Item 7 - Management  Discussion  and Analysis of  Financial  Condition  and
Results of Operations

 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OF THE PARTNERSHIP

Critical Accounting Policies.

     In  preparing  the  financial  statements,  management  is required to make
estimates based on the information available that affect the reported amounts of
assets and  liabilities  as of the balance sheet dates and revenues and expenses
during  the  reporting  periods.   Such  estimates  relate  principally  to  the
determination of (1) the allowance for loan losses (i.e. the amount of allowance
established  against loans  receivable as an estimate of potential  loan losses)
including   the  accrued   interest  and  advances  that  are  estimated  to  be
unrecoverable  based on estimates of amounts to be collected  plus  estimates of
the value of the  property as  collateral  and (2) the  valuation of real estate
acquired  through  foreclosure.  At  December  31,  2003,  there were three real
properties all acquired  through  foreclosure,  one in 2002 and the other two in
prior years.

     Loans and the related accrued interest, late fees and advances are analyzed
on a continuous  basis for  recoverability.  Delinquencies  are  identified  and
followed as part of the loan system.  Delinquencies  are  determined  based upon
contractual  terms.  A provision is made for loan losses to adjust the allowance
for loan losses to an amount  considered by management to be adequate,  with due
consideration  to  collateral  values,  to provide for  unrecoverable  loans and
receivables,  including impaired loans, other loans, accrued interest, late fees
and advances on loans and other accounts receivable (unsecured). The Partnership
charges  off  uncollectible  loans  and  related  receivables  directly  to  the
allowance account once it is determined that the full amount is not collectible.

     If the probable  ultimate  recovery of the carrying  amount of a loan, with
due  consideration  for the fair value of  collateral,  is less than amounts due
according to the  contractual  terms of the loan  agreement and the shortfall in
the amounts due are not  insignificant,  the carrying  amount of the  investment
shall be reduced to the  present  value of future cash flows  discounted  at the
loan's effective interest rate. If a loan is collateral dependent,  it is valued
at the estimated fair value of the related collateral.

     If events and or changes in circumstances  cause management to have serious
doubts  about the  collectibility  of the  contractual  payments,  a loan may be
categorized  as impaired  and  interest  is no longer  accrued.  Any  subsequent
payments on impaired loans are applied to reduce the outstanding  loan balances,
including accrued interest and advances.

     Recent  trends in the  economy  have been taken into  consideration  in the
aforementioned  process of arriving at the  allowance  for loan  losses.  Actual
results could vary from the aforementioned provisions for losses.

Forward Looking Statements.

     Some of the  information  in the Form  10-K  may  contain  forward  looking
statements.  Uses of words  such as  "will",  "may",  "anticipate",  "estimate",
"continue"  or other forward  looking  words,  discuss  future  expectations  or
predictions.  The foregoing analysis of 2003 includes forward looking statements
and predictions  about the  possibility of future events,  results of operations
and  financial  condition.  As such,  this  analysis may prove to be  inaccurate
because of assumptions made by the general partners or the actual development of
the future  events.  No assurance  can be given that any of these  statements or
predictions will ultimately prove to be correct or substantially correct.

Related Parties.

     The general  partners of the Partnership are Gymno  Corporation and Michael
R. Burwell.  Most  Partnership  business is conducted  through Redwood  Mortgage
Corp.,  an  affiliate  of the general  partners,  which  arranges,  services and
maintains  the loan  portfolio  for the  benefit  of the  Partnership.  The fees
received by the affiliate are paid pursuant to the partnership agreement and are
determined at the sole  discretion of the  affiliate.  In the past the affiliate
has elected not to take the maximum  compensation.  The  following  is a list of
various Partnership activities for which related parties are compensated.

                                       9
<PAGE>

     o Mortgage  Brokerage  Commissions  For fees in connection with the review,
selection,  evaluation,  negotiation and extension of loans, the Partnership may
collect an amount  equivalent  to 12% of the loaned  amount until 6 months after
the termination date of the offering. Thereafter, the loan brokerage commissions
(points) will be limited to an amount not to exceed 4% of the total  Partnership
assets per year. The loan brokerage  commissions are paid by the borrowers,  and
thus,  are not an expense of the  Partnership.  For the years ended December 31,
2001,  2002 and 2003,  loan  brokerage  commissions  paid by the borrowers  were
$46,581, $22,611 and $42,407, respectively.

     o Mortgage  Servicing Fees Monthly mortgage  servicing fees of up to 1/8 of
1% (1.5% on an annual basis) of the unpaid principal of the Partnership's  loans
are paid to Redwood  Mortgage  Corp., or such lesser amount as is reasonable and
customary in the  geographic  area where the  property  securing the mortgage is
located.  Mortgage servicing fees of $41,406, $138,851 and $48,759 were incurred
for the years ended December 31, 2001, 2002 and 2003, respectively.

     These  servicing  fees  were  charged  at 1%, on an  annual  basis,  of the
outstanding  principal balances.  If the maximum mortgage servicing fee of 1.5%,
on an annual basis, had been charged to the  Partnership,  then net income would
have been reduced by approximately  $24,500 in 2003. Reducing net income reduces
the annualized yields. An increase or decrease in this fee within the limits set
by the  Partnership's  agreement  directly  impacts  the  yield  to the  limited
partners.

     o Asset  Management  Fees The general  partners  receive  monthly  fees for
managing the Partnership's portfolio and operations up to 1/32 of 1% of the `net
asset  value'  (3/8 of 1% on an annual  basis).  Management  fees to the general
partners of $9,115,  8,677 and $8,427 were incurred by the  Partnership  for the
years ended December 31, 2001, 2002 and 2003, respectively.

     o Other Fees The Partnership  agreement  provides that the general partners
may receive other fees such as  reconveyance,  mortgage  assumption and mortgage
extension  fees.  Such fees are  incurred by the  borrowers  and are paid to the
general partners.

     o Income and Losses  All  income  and  losses  are  credited  or charged to
partners in relation to their respective Partnership  interests.  The allocation
to the general partners (combined) shall be a total of 1%.

     o Operating  Expenses An affiliate  of the  Partnership,  Redwood  Mortgage
Corp.,  is reimbursed by the  Partnership  for all operating  expenses  actually
incurred  by it on  behalf of the  Partnership,  including  without  limitation,
out-of-pocket general and administration expenses of the Partnership, accounting
and audit fees,  legal fees and expenses,  postage and preparation of reports to
limited partners.

     o Contributed  Capital The general  partners  jointly and severally were to
contribute 1/10 of 1% in cash  contributions  as proceeds from the offerings are
received from the limited partners.  As of December 31, 2002 and 2003, a general
partner, Gymno Corporation, had contributed $9,772 as capital in accordance with
Section 4.02(a) of the partnership agreement.

Results of Operations - For the years ended December 31, 2001, 2002 and 2003

     The net income  decrease of $51,278  (11%) for the year ended  December 31,
2001 versus December 31, 2000 was due primarily to a decrease in interest earned
on loans of  $85,613,  a  decrease  in late  charges of  $4,094,  a decrease  in
interest on  promissory  note of $11,179,  and an increase of mortgage  servicer
subsidy of $53,200;  offset by significant  expense increases or (decreases) for
the year ended  December  31, 2001 versus  December  31, 2000 of lower  mortgage
servicing fees of ($7,150), and an increase in the provision for losses on loans
and real estate acquired through foreclosure of $7,609.

     The income  decrease of $56,668 (13%) for the year ended  December 31, 2002
versus  December  2001 was due  primarily  to an increase in interest  earned on
loans of  $40,515,  a decrease  in late  charges of  $18,480,  and a decrease in
mortgage servicer subsidy of $178,200;  offset by significant  expense increases
or (decreases)  for the year ended December 31, 2002 versus December 31, 2001 of
higher  mortgage  servicing  fees of $97,445,  a decrease in the  provision  for
losses on loans and real estate acquired through foreclosure of ($206,900),  and
an increase in professional fees of $11,594.

                                       10
<PAGE>

     The net income  decrease of $36,867  (10%) for the year ended  December 31,
2003 versus December 31, 2002 was due primarily to a decrease in interest earned
on loans of $97,048, a decrease in interest-interest bearing accounts of $2,067,
a decrease in interest on promissory note of $7,128, and an increase in late fee
and  other  fees  of  $23,712;   offset  by  significant  expense  increases  or
(decreases)  for the year ended  December  31,  2003  including  a  decrease  in
mortgage  servicing fees of $90,092,  a decrease in clerical cost of $5,833,  an
increase in the provision for losses on loans and real estate  acquired  through
foreclosure  of  $10,449,  an  increase  in  professional  fees of $6,143 and an
increase in other expenses of $33,919.

     The  decrease in  interest on loans of $97,048 for the year ended  December
31,  2003 was due to a lower  interest  rates on new loans made to replace  loan
payoff and  non-receipt of additional  interest on impaired loans in 2003 versus
$51,404 of additional interest collected on impaired loans in 2002. The increase
in interest on loans of $40,515 for the year ended December 31, 2002 versus 2001
was  due  to a  slightly  higher  average  loan  portfolio  balance,  which  was
$5,183,100  at December  31, 2002  compared to the  December 31, 2001 balance of
$4,970,433.  Also, in 2002 the Partnership  collected interest on impaired loans
that paid-off in 2002. The decrease in interest on loans of $85,613 for the year
ended  December  31, 2001 versus 2000 was due to lower  average  loan  portfolio
balance of  $4,970,433  at December 31, 2001  compared to $5,570,576 at December
31, 2000.  During 2001  $513,795  fewer loans were written than in 2000 and loan
pay-offs  increased by $489,497 in 2001,  over the 2000 total of $2,058,681.  No
interest on impaired loans was collected during 2001.

     The decrease in  interest-interest  bearing accounts of $4,094,  $7,780 and
$2,067 for the years ended December 31, 2001,  2002 and 2003,  respectively,  is
due to lower interest rates being earned on interest  bearing  accounts and less
money held in interest bearing accounts.

     The  decrease of $11,179 in interest  on  promissory  notes for 2001 versus
2000 is due to lower average note balance  outstanding  in 2001. The increase of
$2,216 in  interest on  promissory  note for 2002 versus 2001 is due to a higher
average note balance  outstanding  in 2002 versus 2001. The decrease in interest
on promissory  note of $7,128 for 2003 versus 2002 is due to the promissory note
being paid in full in 2002, therefore no interest was due.

     The increase in mortgage servicer subsidy of $53,200 in 2001 versus 2000 is
due to an increased  subsidy by the mortgage  servicer in 2001.  The decrease in
mortgage  servicer subsidy of $178,200 in 2002 versus 2001 and $0 in 2003 is due
to no subsidy being provided by the mortgage servicer in 2002 and 2003.

     The  decrease  in late  charge  revenue of $1,623 and $18,480 for the years
ended  December 31, 2001 and 2002 reflects less  collection of past due borrower
payments and less delinquency. The increase in late charge revenue of $23,712 in
2003 versus 2002 is due primarily to collection of late charges on an advance of
$16,424, and late charges of $4,850 on a loan paid-off in 2003.

     Professional  fees  decreased by $5,596 in 2001 but increased by $11,594 in
2002 and by $6,143 in 2003.  The  fluctuations  relate  mainly to the  increased
costs and timing of services for audits, and tax filing.

     The  decrease  in  mortgage  servicing  fees of $7,150  for the year  ended
December 31, 2001 is primarily  attributable to the lower average loan portfolio
balances during 2001. The increase in mortgage servicing fees of $97,445 in 2002
is due to the  collection  of  previously  past due payments on impaired  loans,
which were collected in 2002. The Partnership  does not accrue servicing fees to
Redwood Mortgage Corp. on impaired loans. Rather, servicing fees are incurred as
borrower  payments  are  received.  The decrease in mortgage  servicing  fees of
$90,092 in 2003 is due to no collection of interest on impaired  loans and lower
average loan portfolio  balances during 2003.  These servicing fees were charged
at 1%, on an annual basis, of the outstanding principal balances. If the maximum
mortgage  servicing  fee of 1.5%,  on an annual  basis,  had been charged to the
Partnership, then net income would have been reduced by approximately $24,500 in
2003. Reducing net income reduces the annualized yields. An increase or decrease
in this fee  within  the  limits  set by the  Partnership's  agreement  directly
impacts the yield to the limited partners.

                                       11
<PAGE>

     The  increase  of $7,609 in  provision  for losses on loans and real estate
acquired  through  foreclosure  for the year ended December 31, 2001 versus 2000
reflects the general partners'  estimate that reserves needed to be increased to
cover  anticipated  losses.  The decrease of $206,900 in provision for losses on
loans and real estate acquired  through  foreclosure for the year ended December
31, 2002 versus 2001 reflects the general  partners'  estimate that the existing
reserves  were  adequate as  complemented  by a guarantee  received from Redwood
Mortgage Corp.  relating to the collectibility of certain Partnership loans. The
increase in provision for losses by $10,449 in 2003 is an  additional  allowance
against potential loan losses, which could occur in the future.

     The decrease in asset  management  fees of $665  (6.80%),  $438 (4.81%) and
$250  (2.88%)  for 2001,  2002 and 2003,  respectively,  is due to a decrease in
capital under management in 2001, 2002 and 2003.

     The increase in clerical costs of $8,509 (43.31%) in 2001, but decreases of
$5,284  (18.77%) and $5,833  (25.50%) for 2002 and 2003,  respectively,  are due
primarily to a decrease in the Partnership size.

     As of September 2, 1989, the Partnership had sold 97,725.94 limited partner
Units and its contributed capital totaled $9,772,594 of the approved $12,000,000
issue, in Units of $100 each. As of that date the offering was formally  closed.
On December 31, 2003, the Partnership's net capital totaled $6,596,243.

     The  Partnership  began funding loans in October  1987.  The  Partnership's
secured loans  outstanding  for the years ended December 31, 2001, 2002 and 2003
were  $4,970,433,  $5,183,100  and  $5,255,620,  respectively.  The average loan
balances over this time period has remained relatively stable as the Partnership
utilized  loan payoffs to meet limited  partner  capital  liquidations  and make
additional  loans.  During  the  years  2001,  2002  and  2003,  loan  principal
collections exceeded limited partner liquidations.

     Since January 2001 and through  December 31, 2003, the Federal  Reserve has
reduced interest rates significantly by cutting the Federal Funds Rate to 1.00%.
The effect of the cuts has greatly  reduced  short-term  interest rates and to a
lesser extent reduced long-term  interest rates. New loans will be originated at
then existing  interest rates. In the future,  the general  partners  anticipate
that interest  rates likely will change from their current  levels.  The general
partners  cannot at this time predict at what levels  interest  rates will be in
the future.  The general  partners  anticipate  that new loans will be placed at
rates  similar  to those  during  2003.  The  lowering  of  interest  rates  has
encouraged  those  borrowers  that hold  higher  interest  rate loans than those
currently  available to seek  refinancing of their existing  obligations to take
advantage of these lower rates.  The  Partnership  may face  prepayments  in the
existing  portfolio  from  borrowers  taking  advantage  of these  lower  rates.
However, demand for loans from qualified borrowers continues to be strong and as
prepayments occur, we expect to replace these loans with loans at somewhat lower
interest  rates.  Based upon the rates expected in connection  with the existing
loans,  anticipated  interest  rates to be  charged by the  Partnership  and the
general  partners'  experience,  the  general  partners  anticipate,  but do not
guarantee, that the annualized yield for compounding limited partners will range
between 4.75% and 5.00% for the year 2004.

Allowance for Losses.

     The general  partners  regularly  review the loan portfolio,  examining the
status of delinquencies,  the underlying  collateral  securing these loans, real
estate held for sale expenses, sales activities,  and borrower's payment records
and other data  relating  to the loan  portfolio.  Data on the local real estate
market,  and on the  national  and local  economy are  studied.  Based upon this
information  and more,  loan loss reserves are increased or decreased.  Borrower
foreclosures are a normal aspect of Partnership  operations.  The Partnership is
not a credit  based  lender and hence  while it reviews  the credit  history and
income of  borrowers,  and if  applicable,  the  income  from  income  producing
properties,  the general partners expect that we will on occasion take back real
estate security.  During 2001, the Northern California real estate market slowed
and the national and local  economies  slipped into  recession.  During 2002 and
2003 the economy has stabilized, but is still stagnant. At December 31, 2003 the
Partnership had one loan past due 90 days or more totaling  $144,335.  This loan
past due 90 days or more is also past maturity. In addition to the one 90 day or
more  delinquent  loan the  Partnership  has two loans which are making  current
monthly  payments  but are past  maturity.  These two loans past  maturity  have
principal  balances  of  $109,221.  In addition  to the above,  the  Partnership
considers one loan to be impaired,  which means that interest is no longer being
accrued and that  payments  received  will be applied to reduce the  outstanding
loan balances, including accrued interest and advances. The principal balance of
the impaired loan is $96,716. The Partnership does not have any filed notices of
default,  which would begin the  foreclosure  process at December 31, 2003.  The
Partnership entered into workout agreements with borrowers who are past maturity


                                       12
<PAGE>

or delinquent in their regular payments.  The Partnership had workout agreements
on two loans totaling  $176,068 (3.35% of the loan portfolio) as of December 31,
2003.  These borrowers in workout  agreements are included in the delinquent and
past matured loans. Typically, a workout agreement allows the borrower to extend
the  maturity  date of the balloon  payment  and/or  allows the borrower to make
current monthly payments while deferring for periods of time, past due payments,
or  allows  time  to  pay  the  loan  in  full.  These  workout  agreements  and
foreclosures  generally  exist  within our loan  portfolio  to greater or lesser
degrees,  depending  primarily  on the  health  of the  economy.  The  number of
foreclosures  and  workout  agreements  will  rise  during  difficult  times and
conversely  fall during  good  economic  times.  The  delinquencies  and workout
agreements existing at December 31, 2003, in management's opinion, do not have a
material  effect on our results of operations or liquidity.  These  workouts and
delinquencies  have been considered when management  arrived at appropriate loan
loss  reserves  and  based  on  our  experience,  are  reflective  of  our  loan
marketplace segment.  Because of the number of variables involved, the magnitude
of possible swings and the general  partners  inability to control many of these
factors, actual results may and do sometimes differ significantly from estimates
made by the general partners.

     As of December 31, 2001, 2002 and 2003, the Partnership's  real estate held
for sale balance was $1,093,503,  $1,234,541 and $1,312,773,  respectively.  The
increase  in  2003  was  due to  improvements  made  to  these  properties.  The
Partnership  did not take back any  collateral  security from borrowers in 2003.
During  2002,  the  Partnership  took back one piece of real  estate  collateral
through  foreclosure.  The Partnership,  together with other  partnerships,  all
affiliates of the general partners,  own the property.  The property is a 4 unit
condominium complex. During the year 2003, renovation work was completed and the
property  was placed on the market for sale.  A purchase  offer was accepted and
the escrow closed in March, 2004. As of December 31, 2003, the carrying value of
this  property  was  $454,862  and in March of 2004,  upon sale the  Partnership
sustained  a loss of  approximately  $12,400,  which  had been  anticipated  and
reserved for.

     The  Partnership  also  owns,  through  previous  foreclosures,  two  other
properties;  a commercial  property  and the other land.  The land is located in
East Palo Alto. The land is owned with two other  affiliated  partnerships.  The
Partnership's  net  investment  in the land at December  31,  2003 is  $130,125.
Currently the  Partnership is negotiating a sale with an interested  buyer.  The
general partners believe that the property is worth  considerably  more than its
net investment.

     The second  property  is a  commercial  property  located in Walnut  Creek,
California.  At December 31,2003, the cost of this property was $1,511,887.  The
property is currently  pending sale.  Management  has set aside loss reserves of
$784,191, which they believe are adequate in amount to cover anticipated losses.

     Management provided $201,036, ($5,864) and $4,585 as provision (recoveries)
for  loan  losses  for the  years  ended  December  31,  2001,  2002  and  2003,
respectively.  The increase in the  provision  for loan losses for 2001 and 2003
was to build up for the  allowance for  potential  losses in the future.  During
2002 the  allowance for loan losses was reduced  based on  management's  revised
estimate of potential losses based in part on a guarantee  received from Redwood
Mortgage Corp.  relating to the collectibility of certain  Partnership loans. As
of December 31, 2003,  there is a  collateral  shortfall on these loans  ranging
from  approximately  $191,000  to  $337,000  that  has not  been  reserved  for.
Management  believes  that the allowance for loan losses at December 31, 2003 is
adequate.

     The  Partnership  may  restructure  loans.  This is done either through the
modification  of an existing  loan or by  re-writing a whole new loan.  It could
involve,  among other conditions,  an extension in maturity date, a reduction in
repayment amount, a reduction in interest rate, granting an additional loan.

     In 2002, the Partnership  restructured four previously  impaired loans into
two  new  loans  with  a  lower  interest  rate.  The  amount  restructured  was
$3,060,100.  As of December  31, 2003,  there is a  collateral  shortfall on the
restructured loans ranging from approximately  $194,000 to $337,000 that has not
been  reserved  for.  Redwood  Mortgage  Corp.  has  guaranteed  to cover losses
sustained by the Partnership  related to these  restructured loans to the extent
such losses exceed existing reserves,  as defined in the agreement,  and related
collateral value.

Borrower Liquidity and Capital Resources.

     The Partnership  relies upon loan payoffs and borrowers'  mortgage payments
for the  source of funds for  loans.  Recently,  mortgage  interest  rates  have
decreased somewhat from those available at the inception of the Partnership.  If
interest rates were to increase  substantially,  the yield of the  Partnership's
loans may provide lower yields than other comparable  debt-related  investments.
Additionally,  since the  Partnership  has made primarily  fixed rate loans,  if
interest rates were to rise, the likely result would be a slower prepayment rate

                                       13
<PAGE>

for the  Partnership.  This could cause a lower degree of liquidity as well as a
slowdown  in the  ability  of the  Partnership  to  invest  in loans at the then
current interest rates. Conversely, in the event interest rates were to decline,
the  Partnership  could see  significant  borrower  prepayments,  which,  if the
Partnership  can only obtain the then existing lower rates of interest may cause
a  dilution  of  the  Partnership's   yield  on  loans,   thereby  lowering  the
Partnership's  overall yield to the limited  partners.  Cash is constantly being
generated  from  borrower  payments of  interest,  principal  and loan  payoffs.
Currently,  cash flow exceeds  Partnership  expenses and earnings  requirements.
Cash is  constantly  being  generated  from  borrower  interest  payments,  late
charges,  amortization of loan principal and loan payoffs.  Currently, cash flow
exceeds  Partnership  expenses,  earnings  and limited  partner  capital  payout
requirements.  Excess cash flow will be invested in new loan opportunities, when
available, and in other Partnership business.

     At the time of subscription to the Partnership, limited partners must elect
either to receive  monthly,  quarterly  or annual  cash  distributions  from the
Partnership,  or to compound earnings in their capital account. If you initially
elect to receive monthly, quarterly or annual distributions, such election, once
made,  is  irrevocable.  Earnings  allocable  to limited  partners  who elect to
compound earnings in their capital account,  will be retained by the Partnership
for making  further  loans or for other proper  Partnership  purposes,  and such
amounts will be added to such limited partners' capital accounts.

     For the years ended December 31, 2001, 2002 and 2003, the Partnership  made
distributions  of  earnings  to  limited  partners  of  $164,787,  $130,296  and
$115,254,  respectively.  Distribution  of earnings to limited  partners for the
years ended  December  31, 2001,  2002 and 2003,  to limited  partners'  capital
accounts and not withdrawn, was $257,598,  $235,987 and $214,530,  respectively.
As of December 31, 2001, 2002 and 2003,  limited  partners  electing to withdraw
earnings  represented  37%, 35% and 35%,  respectively,  of the limited partners
outstanding capital accounts. These percentages have remained relatively stable.

     The Partnership  also allows the limited partners to withdraw their capital
account subject to certain limitations and penalties (see liquidation provisions
of Partnership Agreement). For the years ended December 31, 2001, 2002 and 2003,
$187,804, $78,674 and $93,770, respectively,  were liquidated subject to the 10%
and/or 8%  penalty  for early  withdrawal.  These  withdrawals  are  within  the
normally  anticipated  range that the  general  partners  would  expect in their
experience in this and other  partnerships.  The general  partners expect that a
small  percentage  of limited  partners  will elect to liquidate  their  capital
accounts  over one  year  with a 10%  and/or  8% early  withdrawal  penalty.  In
originally  conceiving the  Partnership,  the general partners wanted to provide
limited   partners  needing  their  capital  returned  a  degree  of  liquidity.
Generally, limited partners electing to withdraw over one year need to liquidate
investments  to raise  cash.  The  demand the  Partnership  is  experiencing  in
withdrawals  by  limited  partners  electing  a  one  year  liquidation  program
represents  a small  percentage  of limited  partner  capital as of December 31,
2001, 2002 and 2003,  respectively,  and is expected by the general  partners to
commonly occur at these levels.

     Additionally,  for the  years  ended  December  31,  2001,  2002 and  2003,
$484,158,  $393,784  and  $297,479,  respectively,  were  liquidated  by limited
partners who have elected a  liquidation  program over a period of five years or
longer.  Once the initial five-year hold period has passed, the general partners
expect to see an increase in liquidations due to the ability of limited partners
to  withdraw  without  penalty.  This  ability to  withdraw  after five years by
limited  partners has the effect of providing  limited  partner  liquidity.  The
general  partners expect a portion of the limited  partners to take advantage of
this  provision.  This has the anticipated  effect of the  Partnership  growing,
primarily  through  reinvestment  of  earnings in years one  through  five.  The
general partners expect to see increasing numbers of limited partner withdrawals
in years five through eleven,  at which time the bulk of those limited  partners
who have  sought  withdrawal  will  have been  liquidated.  After  year  eleven,
liquidation generally subsides.

     Actual  liquidation  of both capital and earnings for the three years ended
December 31, 2003 were:

                            Years ended December 31,

                               2001              2002               2003
                           -------------     -------------      ------------
    Earnings                  $  164,787        $  130,296        $  115,254
    Capital                     *671,962          *472,457           391,249
                           -------------     -------------      ------------
    Total                     $  836,749        $  602,753        $  506,503
                           =============     =============      ============

*These amounts represent gross of early withdrawal penalties.

                                       14
<PAGE>

     In some  cases in order to  satisfy  Broker  Dealers  and  other  reporting
requirements, the general partners have valued the limited partners' interest in
the  Partnership  on a basis which  utilizes a per Unit  system of  calculation,
rather than based upon the investors' capital account. This information has been
reported  in this manner in order to allow the  Partnership  to  integrate  with
certain  software used by the Broker Dealers and other  reporting  entities.  In
those cases, the Partnership will report to Broker Dealers,  Trust Companies and
others a  "reporting"  number of Units based upon a $1.00 per Unit  calculation.
The number of reporting Units provided will be calculated based upon the limited
partner's  capital  account  value  divided by $1.00.  Each  investor's  capital
account balance is set forth  periodically on the Partnership  account statement
provided  to  investors.  The  reporting  Units are solely  for  Broker  Dealers
requiring such information for their software programs and do not reflect actual
Units owned by a limited  partner or the limited  partners' right or interest in
cash flow or any other  economic  benefit in the  Partnership.  Each  investor's
capital  account balance is set forth  periodically  on the Partnership  account
statement  provided  to  investors.  The  amount of  Partnership  earnings  each
investor is entitled to receive is determined by the ratio that each  investor's
capital account bears to the total amount of all investor  capital accounts then
outstanding.  The capital account balance of each investor should be included on
any NASD member client account statement in providing a per Unit estimated value
of the client's investment in the Partnership in accordance with NASD Rule 2340.

     While the general  partners have set an estimated value for the Partnership
Units,  such  determination  may not be  representative  of the  ultimate  price
realized  by an  investor  for such Units upon sale.  No public  trading  market
exists for the Partnership's Units and none is likely to develop. Thus, there is
no certainty  that the Units can be sold at a price equal to the stated value of
the capital account. Furthermore, the ability of an investor to liquidate his or
her investment is limited subject to certain  liquidation rights provided by the
Partnership,  which may include early  withdrawal  penalties (See the section of
the  Prospectus  entitled  "Risk  Factors  -  Purchase  of Units is a long  term
investment").

Current Economic Conditions.

     The  Partnership  makes  loans  primarily  in  Northern  California.  As of
December 31, 2003,  approximately 93.34%,  ($4,905,347) of the loans held by the
Partnership  were in five San Francisco Bay Area Counties.  The remainder of the
loans held were secured primarily by Northern California real estate outside the
San Francisco Bay Area. Like the rest of the nation,  the San Francisco Bay Area
has also felt the recession and  accompanying  slow down in economic  growth and
increasing unemployment. The technology companies of Silicon Valley, the airline
industry,  the tourism  industry and other industries are feeling the effects of
the overall United States  economy,  which includes lower  earnings,  losses and
layoffs.

     Recently  the  national  and  Northern  California  economies  seem  to  be
improving.  Job creation  remains a concern,  as little job creation seems to be
evident.  The partnership makes loans primarily in Northern  California and real
estate values of residential,  commercial,  multi-family properties and land are
of particular  interest to the partnership.  Real estate is the primary security
for the partnership's loans.

     The residential  real estate market in California  continues to appreciate.
The Office of  Federal  Housing  Enterprise  Oversight  reported  that the state
average  home  prices  rose  13.8%  in  2003.  Southern  California  home  price
appreciation  outpaced  Northern  California home price  appreciation.  Yet even
Santa Clara County had positive  price  appreciation  in 2003.  The  residential
market is not all positive. The luxury home market in the San Francisco Bay Area
is still well below values posted in 1999 and 2000. The strong  residential real
estate outlook implies that  collateral  values behind the  partnership's  loans
should remain firm and assist in reducing  losses if the take back of collateral
through the foreclosure process should eventuate.

     While the residential  market outlook remains strong overall the commercial
real estate market is not as strong.

     Commercial  property  values are chiefly  tied to the income a property can
produce. Vacancies in office properties since 2000 have risen sharply in the San
Francisco Bay Area. In the fourth quarter of 2003 both BT Commercial Real Estate
and Cornish and Carey  Commercial/Oncor  International  reported declines in San
Francisco  peninsula office vacancies.  Each reported about 1% declines to about
27.3%. Colliers International reported a decline in San Francisco office vacancy
in the fourth quarter of 2003 from 17.3% to 16.9%.  Rents have also continued to
fall and in San  Francisco  the average is $29.31,  which is down from $30.04 at
the start of 2003. These statistics seem to indicate that the commercial  rental
market is stabilizing but that existing vacancies will take a long time to fill.
Commercial  real estate values have decreased but lowered  capitalization  rates
have helped keep commercial  property from large value reductions.  The decrease
in vacancies  could mean improved cash flows for owners,  which  translates into
improved debt service abilities.

                                       15
<PAGE>

     As of December 31, 2003, the Partnership had an average loan to value ratio
based on  appraised  values and prior  liens as of the date the loan was made of
78.87%.  This  percentage  does not account for any  increases  or  decreases in
property  values  since  the date the loan was  made,  nor does it  include  any
reductions in principal of prior liens through  amortization  of payments  after
the loan was made.  This loan to value  ratio  will  assist the  Partnership  in
weathering loan delinquencies and foreclosures should they eventuate.


Item 7a - Quantitative and Qualitative Disclosures About Market Risk

     The  following  table  contains  information  about  the cash held in money
market accounts,  and loans held in the  Partnership's  portfolio as of December
31, 2003. The  presentation,  for each category of  information,  aggregates the
assets and liabilities by their maturity dates for maturities  occurring in each
of the years 2004 through 2008 and separately aggregates the information for all
maturities  arising  after  2008.  The  carrying  values  of  these  assets  and
liabilities approximate their fair values as of December 31, 2003:
<TABLE>
<S>                               <C>          <C>         <C>          <C>          <C>       <C>             <C>
                                  2004         2005        2006         2007         2008      Thereafter      Total
                                -------------------------------------------------------------------------------------
Interest earning assets:
Money market accounts            $  2,311                                                                  $    2,311
Average interest rate               0.99%                                                                       0.99%
Loans secured by deeds
   of trust                      $503,556     958,209     96,716     3,258,681      46,387      392,071    $5,255,620
Average interest rate              10.24%       9.69%      6.50%         7.68%      10.00%        9.09%         7.78%
</TABLE>


Market Risk.

     The Partnership's  primary market risk in terms of its profitability is the
exposure to  fluctuations  in earnings  resulting from  fluctuations  in general
interest  rates.  The majority of the  Partnership's  mortgage loans (100% as of
December 31, 2003) earn interest at fixed rates.  Changes in interest  rates may
also affect the value of the Partnership's  investment in mortgage loans and the
rates at which the Partnership reinvests funds obtained from loan repayments and
new capital contributions from limited partners. If interest rates increase, the
interest  rates the  Partnership  obtains from  reinvested  funds will generally
increase,  but the value of the Partnership's existing loans at fixed rates will
generally  tend to  decrease.  The  risk  is  mitigated  by the  fact  that  the
Partnership  does not intend to sell its loan  portfolio,  rather such loans are
held until they are paid off. If interest rates decrease,  the amounts  becoming
available to the  Partnership  for  investment  due to repayment of  Partnership
loans may be  reinvested  at lower rates than the  Partnership  had been able to
obtain in prior investments, or than the rates on the repaid loans. In addition,
interest rate  decreases may encourage  borrowers to refinance  their loans with
the  Partnership at a time where the  Partnership is unable to reinvest in loans
of comparable value.

     The  Partnership  does not hedge or otherwise seek to manage  interest rate
risk. The Partnership does not enter into risk sensitive instruments for trading
purposes.


PORTFOLIO REVIEW - For the years ended December 31, 2001, 2002 and 2003.

Loan Portfolio

     The Partnership's  loan portfolio  consists primarily of short-term (one to
five years),  fixed rate loans secured by real estate.  As of December 31, 2001,
2002 and 2003 the  Partnership's  loans secured by real  property  collateral in
five of the San Francisco Bay Area counties  (San  Francisco,  San Mateo,  Santa
Clara, Alameda and Marin) represented $3,855,721 (77.57%),  $4,588,023 (88.52%),
and  $4,905,347  (93.34%),   respectively,   of  the  outstanding  secured  loan
portfolio.  The  remainder of the  portfolio  represented  loans secured by real
estate located primarily in Northern California.

                                       16
<PAGE>

     The  following  table  sets  forth the  distribution  of loans  held by the
Partnership  by property  type for the years ended  December 31, 2001,  2002 and
2003:
<TABLE>
<S>                                    <C>               <C>          <C>               <C>         <C>               <C>
                                                                           December 31,
                                     ---------------------------------------------------------------------------------------
                                               2001                           2002                           2003
                                     --------------------------    ---------------------------    --------------------------

Single-family homes (1-4 units)
   - owner occupied                    $  741,154        14.91%       $  749,707        14.47%      $  640,000        12.18%
Single-family homes (1-4 units)
   - non-owner occupied                   181,952         3.66%           74,674         1.44%         865,710        16.47%
Apartments (over 4 units)                 562,015        11.31%          566,600        10.93%         136,841         2.60%
Commercial                              3,154,562        63.47%        3,792,119        73.16%       3,613,069        68.75%
Land                                      330,750         6.65%                -             -               -             -
                                     ------------    ----------    -------------    ----------    ------------   -----------

          Total                        $4,970,433       100.00%       $5,183,100       100.00%      $5,255,620       100.00%
                                     ============    ==========    =============    ==========    ============   ===========
</TABLE>


     As of December 31, 2003, the Partnership  held 16 loans secured by deeds of
trust. The following table sets forth the priorities,  asset  concentrations and
maturities of the secured loans held by the Partnership as of December 31, 2003.

        PRIORITIES, ASSET CONCENTRATIONS AND MATURITIES OF SECURED LOANS
                             As of December 31, 2003
<TABLE>
<S>       <C>                                                 <C>              <C>             <C>
                                                              # of Loans       Amount          Percent
                                                             ------------   ------------     ----------

          1st Mortgages                                                8     $ 3,983,032         75.79%
          2nd Mortgages                                                8       1,272,588         24.21%
                                                             ============   =============    ==========
                Total                                                 16     $ 5,255,620        100.00%

          Maturing in 2004                                             4     $   503,556          9.58%
          Maturing in 2005                                             4         958,209         18.23%
          Maturing in 2006                                             1          96,716          1.84%
          Maturing after 12/31/06                                      7       3,697,139         70.35%
                                                             ============   =============    ==========
                Total                                                 16     $ 5,255,620        100.00%

          Average Secured Loan                                               $   328,476          6.25%
          Largest Secured Loan                                                 2,103,300         40.02%
          Smallest Secured Loan                                                   31,736          0.60%
          Average Loan-to-Value based upon appraisals
            and prior liens at time of loan                                                      78.87%
</TABLE>


     The  Partnership's  largest  loan in the  principal  amount  of  $2,103,300
represents 40.02% of outstanding secured loans and 31.76% of Partnership assets.
Larger  loans  sometimes  increase  above 10% of the secured  loan  portfolio or
Partnership assets as these amounts decrease due to limited partner  withdrawals
and loan payoffs and due to  restructuring  of existing  loans. In this instance
all of these factors  affected this loan.  Chief among them was a restructure of
two loans  with  outstanding  principal  plus  accrued  interest,  late fees and
advances into one new loan with an outstanding balance of $2,103,300.

     The  Partnership has a substantial  amount of its loan  receivable  balance
from one borrower at December  31, 2003 and 2002.  The  borrower  accounted  for
approximately  58% and 62% of the loan balances at such dates. This borrower has
two loans secured by separate  properties in the principal amounts of $2,103,000
and $956,800 as of December 31, 2003.

                                       17
<PAGE>

ASSET QUALITY

     A consequence  of lending  activities is that  occasionally  losses will be
experienced  and that the  amount  of such  losses  will vary from time to time,
depending  upon the risk  characteristics  of the loan  portfolio as affected by
economic  conditions and the financial  experiences of borrowers.  Many of these
factors  are beyond the  control of the  general  partners.  There is no precise
method of predicting  specific  losses or amounts that ultimately may be charged
off on  particular  segments of the loan  portfolio,  especially in light of the
current economic environment.

     The conclusion that a loan may become  uncollectible,  in whole or in part,
is  a  matter  of  judgment.  Although  institutional  lenders  are  subject  to
requirements and regulations  that, among other things,  require them to perform
ongoing analyses of their portfolios,  loan-to-value ratios, reserves, etc., and
to obtain and maintain  current  information  regarding  their borrowers and the
securing properties, the Partnership is not subject to these regulations and has
not  adopted  certain of these  practices.  Rather,  the  general  partners,  in
connection  with  the  periodic  closing  of  the  accounting   records  of  the
Partnership and the preparation of the financial  statements,  determine whether
the allowance for loan losses is adequate to cover  potential loan losses of the
Partnership.  As of December 31, 2003 the general  partners have determined that
the  allowance  for loan  losses  of  $279,865  (4.24%  of net  assets)  and the
allowance  for real estate  held for sale of $784,191  (11.89% of net assets) is
adequate in amount.  Because of the number of variables involved,  the magnitude
of the swings  possible and the general  partners'  inability to control many of
these factors,  actual results may and do sometimes  differ  significantly  from
estimates  made by the general  partners.  As of December 31, 2003, one loan was
delinquent over 90 days amounting to $144,335.

     The Partnership also makes loans requiring periodic disbursements of funds.
These  loans  include  ground  up   construction  of  buildings  and  loans  for
rehabilitation  of existing  structures.  Interest on these loans is computed at
simple interest method and only on the amounts disbursed on a daily basis. As of
December 31, 2003 there was one such loan.

     A summary of the status of the  partnership's  loan, which are periodically
disbursed as of December 31, 2003, is set forth below:

                                 Complete Construction       Rehabilitation
                                -----------------------     -----------------

        Disbursed funds              $         0              $   163,086
        Undisbursed funds            $         0              $     3,619


Item 8 - Financial Statements and Supplementary Data

A - Financial Statements

     The following  financial  statements of Redwood  Mortgage  Investors VI are
included in Item 8:

  o  Independent Auditors' Report
  o  Balance Sheets - December 31, 2003, and December 31, 2002
  o  Statements of Income for the years ended December 31, 2003, 2002
     and 2001
  o  Statements of Changes in Partners' Capital for the years ended
     December 31, 2003, 2002 and 2001
  o  Statements of Cash Flows for the years ended December 31, 2003, 2002
     and 2001
  o  Notes to Financial Statements

B - Financial Statement Schedules

     The following  financial  statement schedules of Redwood Mortgage Investors
VI are included in Item 8:

  o  Schedule II  - Valuation and Qualifying Accounts
  o  Schedule IV - Mortgage Loans on Real Estate

     All  other  schedules  for  which  provision  is  made  in  the  applicable
accounting  regulations  of the  Securities  and  Exchange  Commission  are  not
required under the related instructions or are inapplicable,  and therefore have
been omitted.

                                       18
<PAGE>












                          REDWOOD MORTGAGE INVESTORS VI
                       (A CALIFORNIA LIMITED PARTNERSHIP)
                              FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2003 AND 2002
                         AND FOR EACH OF THE THREE YEARS
                      IN THE PERIOD ENDED DECEMBER 31, 2003




                                       19
<PAGE>







       TABLE OF CONTENTS                                       Page No.
                                                              ---------

       Independent Auditors' Report                              21

       Balance Sheets                                            22

       Statements of Income                                      23

       Statements of Changes in Partners' Capital                24

       Statements of Cash Flows                                  25

       Notes to Financial Statements                             26

       Supplemental Schedules

             Schedule II - Valuation and Qualifying Accounts     36

             Schedule IV - Mortgage Loans on Real Estate         37





                                       20
<PAGE>


                              ARMANINO McKENNA LLP
                          CERTIFIED PUBLIC ACCOUNTANTS
                         12667 Alcosta Blvd., Suite 500
                               San Ramon, CA 94583
                                 (925) 790-2600




                          INDEPENDENT AUDITORS' REPORT



To the Partners
Redwood Mortgage Investors VI
Redwood City, California

     We have  audited  the  accompanying  balance  sheets  of  Redwood  Mortgage
Investors VI (a California limited partnership) as of December 31, 2003 and 2002
and the related  statements  of income,  changes in  partners'  capital and cash
flows for each of the three years in the period ended  December 31, 2003.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States of America.  Those standards  require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all material  respects,  the financial position of Redwood Mortgage Investors
VI as of December 31, 2003 and 2002,  and the results of its operations and cash
flows for each of the three years in the period  ended  December  31,  2003,  in
conformity with accounting principles generally accepted in the United States of
America.

     Our  audits  were  conducted  for the  purpose of forming an opinion on the
basic financial  statements taken as a whole.  Schedules II and IV are presented
for purposes of  additional  analysis  and are not a required  part of the basic
financial  statements.  Such  information  has been  subjected  to the  auditing
procedures  applied in the audits of the basic financial  statements and, in our
opinion,  is fairly  stated in all  material  respects  in relation to the basic
financial statements taken as a whole.



                                                  ARMANINO McKENNA LLP


San Ramon, California
February 13, 2004


                                       21
<PAGE>



                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                                 BALANCE SHEETS
                           DECEMBER 31, 2003 AND 2002


                                     ASSETS
<TABLE>
<S>                                                                                          <C>           <C>
                                                                                             2003          2002
                                                                                         ------------  ------------

  Cash and cash equivalents                                                               $    32,160   $   341,127
                                                                                         ------------  ------------

  Loans
     Loans, secured by deeds of trust                                                       5,255,620     5,183,100
     Loans, unsecured, net of discount of $112,587 and $131,352 in 2003
       and 2002, respectively                                                                 242,462       223,697
     Allowance for loan losses                                                              (279,865)     (275,294)
                                                                                         ------------  ------------
       Net loans                                                                            5,218,217     5,131,503
                                                                                         ------------  ------------

  Interest and other receivables
     Accrued interest and late fees                                                            54,562        61,384
     Advances on loans                                                                          4,091        31,007
                                                                                         ------------  ------------
       Total interest and other receivables                                                    58,653        92,391
                                                                                         ------------  ------------

  Real estate held for sale, net                                                            1,312,773     1,234,541
                                                                                         ------------  ------------

       Total assets                                                                       $ 6,621,803   $ 6,799,562
                                                                                         ============  ============

                        LIABILITIES AND PARTNERS' CAPITAL

Liabilities
   Accounts payable                                                                       $    13,064   $    11,953
   Payable to affiliate                                                                        12,496        14,643
                                                                                         ------------  ------------
     Total liabilities                                                                         25,560        26,596
                                                                                         ------------  ------------

Partners' capital
   Limited partners' capital, subject to redemption                                         6,586,482     6,763,200
   General partners' capital                                                                    9,761         9,766
                                                                                         ------------  ------------
     Total partners' capital                                                                6,596,243     6,772,966
                                                                                         ------------  ------------

     Total liabilities and  partners' capital                                             $ 6,621,803   $ 6,799,562
                                                                                         ============  ============
</TABLE>





     The accompanying notes are an integral part of these financial statements

                                       22
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                              STATEMENTS OF INCOME
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

<TABLE>
<S><C>                                                                       <C>            <C>            <C>
                                                                             2003           2002           2001
                                                                         ------------   ------------    ------------
   Revenues
      Interest on loans                                                     $ 455,850      $ 552,898       $ 512,383
      Interest - interest bearing accounts                                      3,080          5,147          12,927
      Interest on promissory note                                                   -          7,128           4,912
      Late fees, prepayment penalties and fees                                 32,710          8,998          27,478
      Mortgage servicer subsidy                                                     -              -         178,200
                                                                         ------------   ------------    ------------
                                                                              491,640        574,171         735,900
                                                                         ------------   ------------    ------------

   Expenses
      Mortgage servicing fees                                                  48,759        138,851          41,406
      Asset management fees                                                     8,427          8,677           9,115
      Clerical costs from Redwood Mortgage Corp.                               17,039         22,872          28,156
      Provisions for (recovery of) losses on loans and real estate              4,585        (5,864)         201,036
      Professional services                                                    37,603         31,460          19,866
      Other                                                                    42,111          8,192           9,670
                                                                         ------------   ------------    ------------
                                                                              158,524        204,188         309,249
                                                                         ------------   ------------    ------------

   Net income                                                               $ 333,116      $ 369,983       $ 426,651
                                                                         ============   ============    ============

   Net income
      General partners (1%)                                                 $   3,331      $   3,700       $   4,266
      Limited partners (99%)                                                  329,785        366,283         422,385
                                                                         ------------   ------------    ------------

                                                                            $ 333,116      $ 369,983       $ 426,651
                                                                         ============   ============    ============

   Net income per $1,000 invested by limited partners for entire period
      Where income is reinvested and compounded                             $      50      $      54       $      59
      Where partner receives income in monthly distributions                $      49      $      53       $      58
</TABLE>





     The accompanying notes are an integral part of these financial statements


                                       23
<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001


                                          Limited       General
                                         Partners       Partners       Total
                                        -----------   -----------   -----------

    Balances at December 31, 2000        $7,414,034    $    9,766    $7,423,800

       Net income                           422,385         4,266       426,651

       Early withdrawal penalties          (15,024)             -      (15,024)

       Partners' withdrawals              (821,725)       (4,266)     (825,991)
                                        -----------   -----------   -----------

    Balances at December 31, 2001         6,999,670         9,766     7,009,436

       Net income                           366,283         3,700       369,983

       Early withdrawal penalties           (6,287)             -       (6,287)

       Partners' withdrawals              (596,466)       (3,700)     (600,166)
                                        -----------   -----------   -----------

    Balances at December 31, 2002         6,763,200         9,766     6,772,966

       Net income                           329,785         3,331       333,116

       Early withdrawal penalties           (7,502)             -       (7,502)

       Partners' withdrawals              (499,001)       (3,336)     (502,337)
                                        -----------   -----------   -----------

    Balances at December 31, 2003        $6,586,482    $    9,761    $6,596,243
                                        ===========   ===========   ===========




     The accompanying notes are an integral part of these financial statements


                                       24
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                            STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

<TABLE>
<S>                                                                         <C>              <C>             <C>
                                                                            2003             2002            2001
                                                                        -------------    -------------   ------------
Cash flows from operating activities
   Net income                                                             $   333,116      $   369,983     $  426,651
   Adjustments to reconcile net income to
     net cash provided by operating activities
     Provision (recovery) for loan losses and real estate                       4,585          (5,864)        201,036
     Early withdrawal penalties credited to income                            (7,502)          (6,287)       (15,024)
     Discount on unsecured loans                                             (18,765)                -              -
     Mortgage servicer subsidy                                                      -                -      (178,200)
     Change in operating assets and liabilities
        Loans, unsecured                                                            -           82,362              -
        Accrued interest and late fees                                          6,822        (162,674)      (168,444)
        Advances on loans                                                      26,916           74,251       (28,667)
        Accounts payable                                                        1,111          (8,308)          7,192
        Payable to affiliate                                                  (2,147)         (20,989)         35,632
        Deferred interest                                                           -         (74,022)         74,022
                                                                        -------------    -------------   ------------
Net cash provided by operating activities                                     344,136          248,452        354,198
                                                                        -------------    -------------   ------------

Cash flows from investing activities
   Principal collected on loans                                             1,564,808        1,265,798      2,548,178
   Loans originated                                                       (1,637,342)        (900,418)    (1,838,265)
   Note receivable payments                                                         -          178,200        125,000
   Payments on real estate held for sale                                     (78,232)         (41,153)      (588,438)
   Proceeds from disposition of real estate                                         -                -         60,872
                                                                        -------------    -------------   ------------
Net cash provided by (used in) investing activities                         (150,766)          502,427        307,347
                                                                        -------------    -------------   ------------

Cash flows from financing activities
   Partners' withdrawals                                                    (502,337)        (600,166)      (825,991)
                                                                        -------------    -------------   ------------

Net increase (decrease) in cash and cash equivalents                        (308,967)          150,713      (164,446)

Cash and cash equivalents at beginning of year                                341,127          190,414        354,860
                                                                        -------------    -------------   ------------

Cash and cash equivalents at end of year                                  $    32,160      $   341,127     $  190,414
                                                                        =============    =============   ============
</TABLE>



     The accompanying notes are an integral part of these financial statements

                                       25
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2003, 2002 AND 2001


1.     Organization and General

     Redwood Mortgage  Investors VI (the  "Partnership"),  a California  Limited
Partnership, was organized in 1987. The general partners are Michael R. Burwell,
an individual, and Gymno Corporation, a California corporation.  The Partnership
was organized to engage in business as a mortgage lender for the primary purpose
of making loans secured by deeds of trust on California  real estate.  Loans are
being  arranged  and  serviced by Redwood  Mortgage  Corp.,  an affiliate of the
general partners.

     The  Partnership  is scheduled  to  terminate on December 31, 2027,  unless
sooner terminated as provided in the partnership agreement.


2.     Summary of Significant Accounting Policies

       Management estimates

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management  to make  estimates  and  assumptions  about the reported  amounts of
assets and liabilities, and disclosures of contingent assets and liabilities, at
the dates of the financial  statements and the reported  amounts of revenues and
expenses during the reported periods.  Such estimates relate  principally to the
determination  of the  allowance  for loan losses,  including  the  valuation of
impaired  loans and the valuation of real estate held for sale.  Actual  results
could differ significantly from these estimates.

       Loans, secured by deeds of trust

     Loans generally are stated at their  outstanding  unpaid principal  balance
with interest thereon being accrued by the effective interest method.

     If the probable  ultimate  recovery of the carrying  amount of a loan, with
due  consideration  for the fair value of  collateral,  is less than amounts due
according to the contractual  terms of the loan agreement,  and the shortfall in
the  amounts  due are not  insignificant,  the  carrying  amount  of the loan is
reduced  to the  present  value of future  cash flows  discounted  at the loan's
effective interest rate. If a loan is collateral dependent,  it is valued at the
estimated fair value of the related collateral.

     If events and or changes in circumstances  cause management to have serious
doubts  about the  collectibility  of the  contractual  payments,  a loan may be
categorized  as impaired  and  interest  is no longer  accrued.  Any  subsequent
payments on impaired loans are applied to reduce the outstanding  loan balances,
including  accrued  interest and advances.  At December 31, 2003 and 2002, loans
categorized as impaired by the Partnership totaled $96,716,  with a reduction in
the carrying value of the impaired loans of $14,596,  and $6,620,  respectively.
The  reduction  in the carrying  value of the impaired  loans is included in the
allowance  for loan losses.  The  impaired  loans have  accrued  interest,  late
charges and advances  totaling $7,977 and $10,973 at December 31, 2003 and 2002.
The average  recorded  investment in the impaired loans was $96,716,  $1,282,304
and $2,468,698 for the three years ended 2003, 2002 and 2001, respectively.

                                       26
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2003, 2002 AND 2001


2.     Summary of Significant Accounting Policies (continued)

       Loans, secured by deeds of trust (continued)

     At December 31, 2003 and 2002, the  Partnership  had one and two loans past
due  90  days  or  more  totaling  $144,335  and  $207,648,   respectively.  The
Partnership  does not  consider  these  loans to be  impaired  because  there is
sufficient collateral to cover the amount outstanding to the Partnership, and is
still  accruing  interest  on these  loans.  At December  31, 2003 and 2002,  as
presented in Note 9, the average loan to appraised value of security at the time
the loans were consummated was 78.87% and 79.68%,  respectively.  When loans are
considered  impaired,  the  allowance  for loan losses is updated to reflect the
change in the valuation of  collateral  security.  However,  a low loan to value
ratio tends to minimize reductions for impairment.

     During 2002, the Partnership  restructured  four previously  impaired loans
into two new loans  with a lower  interest  rate.  The amount  restructured  was
$3,060,100.  As of December  31, 2003,  there is a  collateral  shortfall on the
restructured loans ranging from approximately  $194,000 to $337,000 that has not
been  reserved  for.  Redwood  Mortgage  Corp.  has  guaranteed  to cover losses
sustained by the Partnership  related to these  restructured loans to the extent
such losses exceed existing reserves,  as defined in the agreement,  and related
collateral value.

       Allowance for loan losses

     Loans and the related accrued interest, late fees and advances are analyzed
on a continuous  basis for  recoverability.  Delinquencies  are  identified  and
followed as part of the loan system.  Delinquencies  are  determined  based upon
contractual  terms.  A provision is made for loan losses to adjust the allowance
for loan losses to an amount  considered by management to be adequate,  with due
consideration  to  collateral  values,  to provide for  unrecoverable  loans and
receivables,  including impaired loans, other loans, accrued interest, late fees
and advances on loans and other accounts receivable (unsecured). The Partnership
charges  off  uncollectible  loans  and  related  receivables  directly  to  the
allowance account once it is determined that the full amount is not collectible.

     The  composition  of the  allowance for loan losses as of December 31, 2003
and 2002 was as follows:

                                        2003              2002
                                     ------------     ------------

           Impaired loans              $   14,596       $    6,620
           Specified loans                 28,750           44,977
           Unsecured loans                236,519          223,697
                                     ------------     ------------

                                       $  279,865       $  275,294
                                     ============     ============

       Activity in the allowance for loan losses is as follows for the years
ended December 31:

                                         2003           2002         2001
                                     -----------    -----------   -----------

       Beginning balance               $ 275,294      $ 370,612     $ 261,452
       Provision for loan losses           4,585          3,083       109,160
       Recoveries                              -        (8,947)             -
       Restructures / transfers                -       (48,009)             -
       Write-offs                           (14)       (41,445)             -
                                     -----------    -----------   -----------
                                       $ 279,865      $ 275,294     $ 370,612
                                     ===========    ===========   ===========


                                       27
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2003, 2002 AND 2001


2.     Summary of Significant Accounting Policies (continued)

       Cash and cash equivalents

     The  Partnership  considers all highly liquid  financial  instruments  with
maturities  of  three  months  or  less  at the  time  of  purchase  to be  cash
equivalents.

       Real estate held for sale

     Real  estate  held  for  sale,   includes  real  estate  acquired   through
foreclosure  and is  stated  at the  lower  of the  recorded  investment  in the
property,  plus any senior  indebtedness,  or at the  property's  estimated fair
value, less estimated costs to sell.

     The Partnership  periodically compares the carrying value of real estate to
expected  future  undiscounted  cash  flows for the  purpose  of  assessing  the
recoverability  of the recorded  amounts.  If the carrying  value exceeds future
undiscounted cash flows, the assets are reduced to fair value.  During 2002, the
Partnership  transferred  $249,999  from the  allowance  for loan  losses to the
allowance for losses on real estate held for sale.

       Income taxes

     No provision for federal and state income taxes, except for a minimum state
tax of $800,  is made in the  financial  statements  since  income taxes are the
obligation of the partners if and when income taxes apply.

       Net income per $1,000 invested

     Amounts  reflected  in the  statements  of income as net  income per $1,000
invested by limited  partners  for the entire  period are amounts  allocated  to
limited  partners  who held  their  investment  throughout  the  period and have
elected to either  leave their  earnings to compound or have  elected to receive
monthly  distributions of their net income.  Individual income is allocated each
month  based on the  limited  partners'  pro rata  share of  partners'  capital.
Because the net income percentage varies from month to month, amounts per $1,000
will vary for those  individuals  who made or  withdrew  investments  during the
period, or select other options.

       Late fee revenue

     Late fees are generally  charged at 6% of the monthly  installment  payment
past due. During 2003, 2002 and 2001,  late fee revenue of $7,379,  $1,947,  and
$10,959,  respectively,  was recorded. The Partnership has a late fee receivable
at December 31, 2003 and 2002 of $1,608 and $968, respectively.

      Recently issued accounting pronouncements

     In November 2002, the Financial  Accounting  Standards  Board (FASB) issued
FASB Interpretation 45, "Guarantor's  Accounting and Disclosure Requirements for
Guarantees,  Including Indirect  Guarantees of Indebtedness of Others" (FIN 45).
FIN 45 requires the recognition of liabilities for guarantees that are issued or
modified  subsequent to December 31, 2002.  The  liabilities  should reflect the
fair value,  at  inception,  of the  guarantor's  obligations  to stand ready to
perform, in the event that the specified  triggering events or conditions occur.
The  implementation  of  FIN 45 did  not  have  any  significant  effect  on the
Partnership.

                                       28
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2003, 2002 AND 2001


2.     Summary of Significant Accounting Policies (continued)

       Recently issued accounting pronouncements (continued)

     In January 2003, the FASB issued FASB  Interpretation  46 "Consolidation of
Variable Interest Entities, an Interpretation of ARB No. 51" (FIN 46). FIN 46 is
effective  immediately for any variable  interest entities created after January
31, 2003 and is effective beginning in the third quarter of 2003 to any variable
interest  entities created prior to the issuance of the  interpretation.  FIN 46
provides a new framework to identify variable interest entities and to determine
when an entity should include the assets, liabilities, non-controlling interests
and the results of  activities  of a variable  interest  entity in its financial
statements.  The implementation of FIN 46 did not have any significant effect on
the Partnership.

     In December 2003, the American  Institute of Certified  Public  Accountants
(AICPA)  Accounting  Standards  Executive  Committee (AcSEC) issued Statement of
Position 03-03,  "Accounting for Certain Loans or Debt Securities  Acquired in a
Transfer"(SOP  03-3).  SOP 03-03 is effective for loans acquired in fiscal years
beginning  after December 15, 2004,  with early adoption  encouraged.  SOP 03-03
addresses  accounting for differences  between  contractual  cash flows and cash
flows expected to be collected from an investor's initial investment in loans or
debt securities acquired in a transfer if those differences are attributable, at
least in part,  to credit  quality.  It  includes  loans  acquired  in  business
combinations   and   applies   to  all   nongovernmental   entities,   including
not-for-profit organizations.  The SOP does not apply to loans originated by the
entity.  The  implementation  of  SOP  03-03  is not  anticipated  to  have  any
significant effect on the Partnership.


3.     Other Partnership Provisions

     The Partnership is a California limited partnership. The rights, duties and
powers of the general and limited  partners of the  Partnership  are governed by
the limited  partnership  agreement and Sections 15611 et seq. of the California
Corporations Code.

     The general partners are in complete  control of the Partnership  business,
subject to the voting rights of the limited partners on specified  matters.  Any
one of the general  partners acting alone has the power and authority to act for
and bind the Partnership.

     A majority of the outstanding  limited  partnership  interests may, without
the permission of the general partners,  vote to: (i) terminate the Partnership,
(ii) amend the limited  partnership  agreement,  (iii) approve or disapprove the
sale of all or  substantially  all of the  assets  of the  Partnership  and (iv)
remove or replace one or all of the general partners.

     The approval of all the limited partners is required to elect a new general
partner to continue the Partnership business where there is no remaining general
partner  after a general  partner  ceases to be a general  partner other than by
removal.

       Election to receive monthly, quarterly or annual distributions

     At subscription,  investors elected to receive monthly, quarterly or annual
distributions of earnings allocations, or to allow earnings to compound. Subject
to certain  limitations,  a  compounding  investor may  subsequently  change his
election, but an investor's election to have cash distributions is irrevocable.

                                       29
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2003, 2002 AND 2001


3.    Other Partnership Provisions continued)

      Profits and losses

     Profits and losses are allocated  among the limited  partners  according to
their respective capital accounts monthly after 1% of the profits and losses are
allocated to the general partners.

      Liquidity, capital withdrawals and early withdrawals

     There are substantial  restrictions on transferability of Partnership units
and accordingly an investment in the Partnership is non-liquid. Limited partners
had no right to withdraw from the  Partnership  or to obtain the return of their
capital  account for at least one year from the date of purchase of  Partnership
units.

     In order to provide a certain  degree of liquidity to the limited  partners
after the one-year  period,  limited  partners may withdraw all or part of their
capital accounts from the Partnership in four quarterly  installments  beginning
on the last day of the  calendar  quarter  following  the  quarter  in which the
notice of withdrawal is given,  subject to a 10% early withdrawal  penalty.  The
10% penalty is  applicable  to the amount  withdrawn  as stated in the notice of
withdrawal and will be deducted from the capital account.

     After five years from the date of purchase of the units,  limited  partners
have the  right to  withdraw  from the  Partnership,  on an  installment  basis.
Generally,   this  is  done  over  a  five-year   period  in  twenty   quarterly
installments. Once a limited partner has been in the Partnership for the minimum
five-year  period,  no penalty will be imposed if  withdrawal  is made in twenty
quarterly  installments  or longer.  Notwithstanding  the  five-year (or longer)
withdrawal  period,  the general partners may liquidate all or part of a limited
partner's capital account in four quarterly  installments  beginning on the last
day of the  calendar  quarter  following  the  quarter  in which  the  notice of
withdrawal  is given.  This  withdrawal  is  subject  to a 10% early  withdrawal
penalty  applicable to any sums withdrawn prior to the time when such sums could
have been withdrawn without penalty.

     The Partnership will not establish a reserve from which to fund withdrawals
and,  accordingly,  the  Partnership's  capacity  to return a limited  partner's
capital  account is restricted to the  availability  of  Partnership  cash flow.
Furthermore,  no more than 20% of the total limited  partners'  capital accounts
outstanding at the beginning of any year shall be liquidated during any calendar
year.


4.    General Partners and Related Parties

     The  following  are  commissions  and fees  that  are  paid to the  general
partners and affiliates:

      Mortgage brokerage commissions

     For fees in connection with the review, selection, evaluation,  negotiation
and extension of loans, the Partnership may collect an amount  equivalent to 12%
of the loaned amount until 6 months after the termination  date of the offering.
Thereafter, loan brokerage commissions (points) will be limited to an amount not
to exceed 4% of the  total  Partnership  assets  per  year.  The loan  brokerage
commissions  are paid by the  borrowers,  and thus,  are not an  expense  of the
Partnership.  In 2003,  2002 and 2001,  loan brokerage  commissions  paid by the
borrowers were $42,407, $22,611, and $46,581, respectively.

                                       30
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2003, 2002 AND 2001


4.     General Partners and Related Parties (continued)

       Mortgage servicing fees

     Monthly  mortgage  servicing  fees of up to 1/8 of 1% (1.5%  annual) of the
unpaid  principal  are paid to  Redwood  Mortgage  Corp.,  based  on the  unpaid
principal balance of the loan portfolio,  or such lesser amount as is reasonable
and customary in the geographic area where the property securing the mortgage is
located. Once a loan is categorized as impaired,  mortgage servicing fees are no
longer  accrued.  Additional  service fees are recorded  upon the receipt of any
subsequent  payments  on impaired  loans.  Mortgage  servicing  fees of $48,759,
$138,851, and $41,406, were incurred for 2003, 2002 and 2001, respectively.  The
Partnership  has a payable to  Redwood  Mortgage  Corp.  for  servicing  fees of
$12,496 and $14,643 at December 31, 2003 and 2002, respectively.

       Asset management fee

     The general  partners  receive monthly fees for managing the  Partnership's
loan  portfolio and operations of up to 1/32 of 1% of the "net asset value" (3/8
of 1%  annually).  Asset  management  fees of $8,427,  $8,677,  and $9,115  were
incurred for 2003, 2002 and 2001, respectively.

       Other fees

     The  Partnership  Agreement  provides for other fees such as  reconveyance,
mortgage  assumption and mortgage extension fees. These fees are incurred by the
borrowers and paid to parties related to the general partners.

       Operating expenses

     The general  partners  or their  affiliate,  Redwood  Mortgage  Corp.,  are
reimbursed by the  Partnership  for all operating  expenses  incurred by them on
behalf of the Partnership,  including without limitation,  out-of-pocket general
and administration expenses of the Partnership, accounting and audit fees, legal
fees and  expenses,  postage  and  preparation  of reports to limited  partners.
During 2003, 2002 and 2001,  operating  expenses totaling  $17,039,  $22,872 and
$28,156, respectively, were reimbursed to Redwood Mortgage Corp.


5.     Real Estate Held for Sale

     The following  schedule  reflects the costs of real estate acquired through
foreclosure  and the recorded  reductions  to estimated  fair values,  including
estimated costs to sell, as of December 31, 2003 and 2002:

                                                 2003             2002
                                             ------------     ------------

      Costs of properties                     $ 2,096,964      $ 2,018,732
      Reduction in value                        (784,191)        (784,191)
                                             ------------     ------------

         Real estate held for sale, net       $ 1,312,773      $ 1,234,541
                                             ============     ============


                                       31
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2003, 2002 AND 2001


6.    Income Taxes

     The following  reflects a reconciliation  of partners' capital reflected in
the financial statements to the tax basis of Partnership capital:

                                                      2003             2002
                                                  ------------     ------------

   Partners' capital per financial statements      $ 6,596,243      $ 6,772,966
   Allowance for loan losses and real estate         1,064,056        1,059,485
                                                  ------------     ------------

       Partners' capital tax basis                 $ 7,660,299      $ 7,832,451
                                                  ============     ============


     In 2003 and 2002,  approximately  73% of taxable  income was  allocated  to
tax-exempt organizations (e.g., retirement plans). -


7.    Fair Value of Financial Instruments

     The following  methods and assumptions were used to estimate the fair value
of financial instruments:

     (a) Cash and cash  equivalents - The carrying amount equals fair value. All
amounts,   including   interest-bearing   accounts   are  subject  to  immediate
withdrawal.

     (b) Secured loans  carrying value was $5,255,620 and $5,183,100 at December
31, 2003 and 2002, respectively. The fair value of these loans of $5,019,338 and
$4,862,646,   respectively,  was  estimated  based  upon  projected  cash  flows
discounted at the estimated  current interest rates at which similar loans would
be made.  The  applicable  amount of the  allowance  for loan losses  along with
accrued  interest and advances  related  thereto  should also be  considered  in
evaluating the fair value versus the carrying value.


8.           Non-cash Transactions

     During 2002, the  Partnership  restructured  four loans that resulted in an
increase to loans  receivable  of $920,346 and a decrease to the  allowance  for
loan losses,  accrued  interest  and advances of $21,707,  $849,365 and $92,688,
respectively.

     During 2002, the  Partnership  foreclosed on a property that resulted in an
increase  to real  estate  held for sale of  $349,883  and a  decrease  to loans
receivable and accrued interest of $300,853 and $49,030, respectively.

     During 2002, the Partnership originated two unsecured, non-interest bearing
loans,  which  resulted in an increase to unsecured  loans and the allowance for
loan losses of $355,049 and  $223,697,  respectively.  The  Partnership  imputed
interest  on these  loans at 10.5% per annum,  which  resulted  in a decrease to
unsecured loans of $131,352 and an increase to discount on loans of $131,352.

                                       32
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2003, 2002 AND 2001


9.     Asset Concentrations and Characteristics

     Most loans are secured by recorded deeds of trust. At December 31, 2003 and
2002,  there were 16 and 22 secured  loans  outstanding  respectively,  with the
following characteristics:
<TABLE>
<S>   <C>                                                                      <C>               <C>
                                                                               2003              2002
                                                                           ------------     -------------

      Number of secured loans outstanding                                            16                22
      Total secured loans outstanding                                       $ 5,255,620       $ 5,183,100

      Average secured loan outstanding                                      $   328,476       $   235,595
      Average secured loan as percent of total                                    6.25%             4.55%
      Average secured loan as percent of partners' capital                        4.98%             3.48%

      Largest secured loan outstanding                                      $ 2,103,300       $ 2,103,300
      Largest secured loan as percent of total                                   40.02%            40.58%
      Largest secured loan as percent of partners' capital                       31.89%            31.05%
      Number of counties where security is located (all California)                   8                10

      Largest percentage of secured loans in one county                          42.06%            42.67%
      Average secured loan to appraised value of security based upon
          appraisals and prior liens at time loan was consummated                78.87%            79.68%

      Number of secured loans in foreclosure                                          -                 -
      Amounts of secured loans in foreclosure                               $         -       $         -
</TABLE>

     The  following  categories  of secured loans were held at December 31, 2003
and 2002:
<TABLE>
<S>   <C>                                                                      <C>               <C>
                                                                               2003              2002
                                                                           ------------     -------------

      First trust deeds                                                     $ 3,983,032       $ 4,392,120
      Second trust deeds                                                      1,272,588           790,979
                                                                           ------------     -------------
            Total loans                                                       5,255,620         5,183,100
      Prior liens due other lenders at time of loan                           2,377,041         2,779,170
                                                                           ------------     -------------

            Total debt                                                      $ 7,632,661       $ 7,962,270
                                                                           ============     =============

      Appraised property value at time of loan                              $ 9,677,215       $ 9,992,743
                                                                           ============     =============

      Total loans as a percent of appraisals based upon appraisals
           and prior liens at date of loan                                       78.87%            79.68%
                                                                           ============     =============

      Loans by type of property
         Owner occupied homes                                               $   640,000       $   749,707
         Non-owner occupied homes                                               865,710            74,674
         Apartments                                                             136,841           566,600
         Commercial                                                           3,613,069         3,792,119
                                                                           ------------     -------------

                                                                            $ 5,255,620       $ 5,183,100
                                                                           ============     =============
</TABLE>


                                       33
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2003, 2002 AND 2001


9.       Asset Concentrations and Characteristics (continued)

     Scheduled  maturity  dates of secured  loans as of December 31, 2003 are as
follows:

                     Year Ending December 31,
                              2004                        $  503,556
                              2005                           958,209
                              2006                            96,716
                              2007                         3,258,681
                              2008                            46,387
                           Thereafter                        392,071
                                                        ------------
                                                          $5,255,620
                                                        ============


     The remaining  scheduled  maturities  for 2004 include three loans totaling
$253,556,  which were past maturity at December 31, 2003. One of these loans was
categorized as delinquent  over 90 days and is included in the total of loans 90
days or more delinquent presented in Note 2.

     Cash deposits at December 31, 2003,  exceeded federal  insurance limits (up
to $100,000 per bank) by approximately $60,000.

     The  Partnership has a substantial  amount of its loan  receivable  balance
from one borrower at December 31, 2003 and 2002.  This  borrower  accounted  for
approximately  58% and 62% of the loan  balances  at such dates.  This  borrower
accounted for  approximately  47%, 31% and 35% of interest revenue for the years
ended December 31, 2003, 2002 and 2001, respectively.


10.   Commitments and Contingencies

      Workout agreements

     The Partnership has negotiated various  contractual workout agreements with
borrowers.  The  Partnership  is not  obligated to fund  additional  money as of
December 31, 2003. There are two loans totaling  $176,068 in workout  agreements
as of December 31, 2003.

      Legal proceedings

     The  Partnership is involved in various legal actions arising in the normal
course of business.  In the opinion of management,  such matters will not have a
material effect upon the financial position of the Partnership.

                                       34
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2003, 2002 AND 2001


11.    Selected Financial Information (Unaudited)
<TABLE>
<S> <C>                                                 <C>           <C>            <C>            <C>            <C>
                                                                        Calendar Quarter
                                                     -------------------------------------------------------

                                                        First         Second         Third          Fourth         Annual
                                                     ----------     ---------      ----------     ----------     ----------
    Revenues
        2003                                           $110,453      $149,615        $107,613       $123,959       $491,640
        2002                                           $214,521      $120,559        $125,341       $113,750       $574,171
        2001                                           $143,077      $142,581        $134,603       $315,639       $735,900

    Expenses
        2003                                           $ 35,041      $ 57,724        $ 24,466       $ 41,293       $158,524
        2002                                           $116,728      $ 26,094        $ 34,988       $ 26,378       $204,188
        2001                                           $ 30,562      $ 34,253        $ 29,249       $215,185       $309,249

    Net income allocated to general partners
        2003                                           $    754      $    919        $    832       $    826       $  3,331
        2002                                           $    978      $    945        $    903       $    874       $  3,700
        2001                                           $  1,125      $  1,083        $  1,054       $  1,004       $  4,266

    Net income allocated to limited partners
        2003                                           $ 74,658      $ 90,972        $ 82,315       $ 81,840       $329,785
        2002                                           $ 96,815      $ 93,520        $ 89,450       $ 86,498       $366,283
        2001                                           $111,390      $107,245        $104,300       $ 99,450       $422,385

    Net income per $1,000 invested
    where income is reinvested
        2003                                           $     12      $     12        $     12       $     14       $     50
        2002                                           $     14      $     13        $     13       $     14       $     54
        2001                                           $     15      $     15        $     14       $     15       $     59
    where income is withdrawn
        2003                                           $     12      $     12        $     12       $     13       $     49
        2002                                           $     14      $     13        $     13       $     13       $     53
        2001                                           $     15      $     15        $     14       $     14       $     58
</TABLE>





                                       35
<PAGE>


                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                                   SCHEDULE II
                        VALUATION AND QUALIFYING ACCOUNTS
                                December 31, 2003


<TABLE>
<S>               <C>                       <C>          <C>          <C>             <C>              <C>
                                                           Col. C - Additions
                                            Col B     ---------------------------                      Col E
                                          Balance at     Charged      Charged to                     Balance at
                  Col A                   Beginning      to Costs       Other          Col. D          End of
               Description                of Period     & Expenses     Accounts     Deductions         Period
---------------------------------------  -----------   ------------  ------------  --------------   ------------

Year Ended December 31, 2003

  Deducted from asset accounts

   Allowance for doubtful accounts        $  275,294     $    4,585    $        -     $      (14)(a)  $  279,865

   Cumulative write-down of
    real estate held for sale (REO)          784,191              -             -               -        784,191
                                         -----------   ------------  ------------  --------------   ------------

                                          $1,059,485     $    4,585    $        -     $      (14)(a) $ 1,064,056
                                         ===========   ============  ============  ==============   ============
</TABLE>


Note (a) - Represents write-offs of loans.


                                       36
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                                   SCHEDULE IV
                          mortgage loans on real estate
                         rule 12-29 loans on real estate
                                December 31, 2003

<TABLE>
<S>          <C>        <C>          <C>        <C>           <C>          <C>         <C>         <C>         <C>
             Col. B     Col. C       Col. D     Col. E        Col. F       Col. G      Col. H      Col. I      Col. J
  Col. A    Interest    Final        Period      Prior       Face Amt     Carry Amt  Principal Amt  Type     Geographic
 Descript     Rate     Maturity     Payment      Liens       Mortgage     Mortgage    Delinquent    Lien      Location
-------------------------------------------------------------------------------------------------------------------------

Apts.         6.50%    05/01/06    $    541   $   89,904   $  100,000   $   96,716   $   96,716      2nd    Sacramento
Apts.         7.00%    02/10/05         234       80,250       40,125       40,125            -      2nd    San Francisco
Comm.         9.00%    05/10/02         671            -       83,333       77,472       77,472      1st    Shasta
Comm.        10.00%    12/01/03       1,276            -      145,455      144,349      144,349      1st    Stanislaus
Comm.        10.00%    12/01/01         284      208,012       32,323       31,736       31,736      2nd    Stanislaus
Comm.        10.00%    07/01/11         997            -      109,769      107,068            -      1st    Santa Clara
Comm.         7.50%    02/28/07      13,146            -    2,103,300    2,103,300            -      1st    Santa Clara
Comm.         7.50%    02/28/07       5,980            -      956,800      956,800            -      1st    Alameda
Res.         10.25%    08/01/04       2,135      714,286      250,000      250,000            -      2nd    San Francisco
Comm.        10.50%    10/01/07       1,345            -      147,000      145,957            -      1st    San Mateo
Res.         10.50%    10/01/07         485       81,786       53,000       52,624            -      2nd    San Mateo
Res.         10.25%    12/01/05         897      465,349      105,000      105,000            -      2nd    Marin
Comm.        10.00%    03/01/08         409      186,316       46,579       46,387            -      2nd    San Mateo
Res.          8.75%    09/01/05       2,053            -      300,000      163,086            -      1st    Alameda
Res.          8.75%    01/01/09       2,242            -      285,000      285,000            -      1st    Alameda
Res.         10.00%    12/25/05       5,417      551,138      650,000      650,000            -      2nd    Alameda
                                  -------------------------------------------------------------

     Total                         $ 38,111   $2,377,041   $5,407,684   $5,255,620   $  350,273
                                  =============================================================
</TABLE>


Notes:  Loans classified as impaired had principal balances totaling $96,716.
        Impaired loans are defined as loans where the costs of related balances
        exceeds the anticipated fair value less costs to collect. Interest is no
        longer accrued thereon.

        Amounts reflected in column G (carrying amount of loans) represent both
        costs and the tax basis of the loans.



                                       37
<PAGE>

                          REDWOOD MORTGAGE INVESTORS VI
                       (A California Limited Partnership)
                             Schedule IV (continued)
                          mortgage loans on real estate
                         rule 12-29 loans on real estate
                                December 31, 2003


     Reconciliation of carrying amount (cost) of loans at close of periods

                                               Year ended December 31,
                                    --------------------------------------------

                                       2003             2002             2001
                                    ------------    ------------    ------------

   Balance at beginning of year      $ 5,183,100     $ 4,970,433     $ 5,570,576
                                    ------------    ------------    ------------
   Additions during period
      New loans                        1,637,342         900,418       1,838,265
      Other                                    -         920,346         109,770
                                    ------------    ------------    ------------
        Total additions                1,637,342       1,820,764       1,948,035
                                    ------------    ------------    ------------

   Deductions during period
      Collections of principal         1,564,808       1,265,798       2,548,178
      Foreclosures                             -         300,854               -
      Cost of loans sold                       -               -               -
      Amortization of premium                  -               -               -
      Other                                   14          41,445               -
                                    ------------    ------------    ------------
        Total deductions               1,564,822       1,608,097       2,548,178
                                    ------------    ------------    ------------

      Balance at close of year       $ 5,255,620     $ 5,183,100     $ 4,970,433
                                    ============    ============    ============


                                       38
<PAGE>

     Item 9 - Changes in and  Disagreements  with  Accountants on Accounting and
Financial Disclosure

     There  were no  disagreements  with the  partnership's  independent  public
accountants during the years ended December 31, 2003 and 2002.

     Item 9a. - Controls and Procedures

     The partnership  carried out an evaluation,  under the supervision and with
the participation of the general partners of the effectiveness of the design and
operation of the partnership's  disclosure controls and procedures as of the end
of the period covered by this report pursuant to the Securities and Exchange Act
of 1934.  Based upon that evaluation,  the general  partners  concluded that the
partnership's disclosure controls and procedures were effective.

     There were no significant  changes in the  partnership's  internal  control
over  financial  reporting  during the  partnership's  fourth fiscal quarter and
through the date of this report that have materially affected,  or are likely to
materially affect, the partnership's internal control over financial reporting.


                                    Part III


     Item 10 - Directors and Executive Officers of the Registrant

     The Partnership has no Officers or Directors. Rather, the activities of the
Partnership  are  managed  by  the  two  general  partners,  one of  whom  is an
individual, Michael R. Burwell. The second general partner is Gymno Corporation,
a  California  corporation,  formed  in  1986.  Mr.  Burwell  is one of the  two
shareholders  of Gymno  Corporation,  a  California  corporation,  and has a 50%
interest in the corporation.

The General Partners.

     Michael R.  Burwell.  Michael R. Burwell,  age 46,  General  Partner,  past
member  of  Board  of  Trustees  and  Treasurer,   Mortgage  Brokers   Institute
(1984-1986);  President,  Director,  Chief Financial  Officer,  Redwood Mortgage
Corp.  (1979-present);  Director,  Secretary  and  Treasurer  A  &  B  Financial
Services, Inc. (1980-present);  President, Director, Chief Financial Officer and
Secretary (since 1986) of Gymno Corporation;  President, Director, Secretary and
Treasurer of The Redwood Group, Ltd. (1979-present).  Mr. Burwell is licensed as
a real estate sales person.

     Gymno  Corporation.  Gymno  Corporation,  General Partner,  is a California
corporation  formed in 1986 for the  purpose  of acting as a general  partner of
this  partnership  and of other limited  partnerships  formed by the  individual
general partners. The shares in Gymno Corporation are held equally by Michael R.
Burwell  and the  estate  of D.  Russell  Burwell.  Upon the  completion  of the
administration of D. Russell  Burwell's  estate,  Michael R. Burwell will have a
controlling  interest in Gymno Corporation.  Michael R. Burwell is a director of
Gymno and the director  position held by D. Russell Burwell is currently vacant.
Michael R. Burwell is its President, Chief Financial Officer and Secretary.

Financial Oversight by General Partners.

     The partnership  does not have a board of directors or an audit  committee.
Accordingly,  the general  partners  serve the  equivalent  function of an audit
committee  for,  among  other  things,  the  following  purposes:   appointment,
compensation,  review  and  oversight  of the  work  of our  independent  public
accountants,  and  establishing  the  enforcing of the Code of Ethics.  However,
since the partnership  does not have an audit committee and the general partners
are not independent of the partnership,  the partnership does not have an "audit
committee financial expert."

Code of Ethics.

     The  general  partners  have  adopted  a Code of Ethics  applicable  to the
general partners and to any agents, employees or independent contractors engaged
by the  general  partners  to perform the  functions  of a  principal  financial
officer, principal accounting officer or controller of the partnership,  if any.
You may obtain a copy of this Code of Ethics,  without  charge,  upon request by
calling our Investor Services Department at (650) 365-5341.


                                       39
<PAGE>

Item 11 - Executive Compensation

       COMPENSATION OF THE GENERAL PARTNERS AND AFFILIATES BY PARTNERSHIP

     As  indicated  above  in  item  10,  the  Partnership  has no  officers  or
directors. The Partnership is managed by the general partners. There are certain
fees and other items paid to  management  and related  parties.  A more complete
description of management compensation is found in the Prospectus,  pages 11-12,
under the section  "Compensation  of the General  Partners and the  Affiliates",
which is incorporated by reference. Such compensation is summarized below.

     The  following  compensation  has been  paid to the  general  partners  and
affiliates  for services  rendered  during the year ended December 31, 2003. All
such compensation is in compliance with the guidelines and limitations set forth
in the Prospectus.
<TABLE>
<S>                                  <C>                                                            <C>
Entity Receiving Compensation        Description of Compensation and Services Rendered              Amount
-----------------------------------------------------------------------------------------------------------
I. Redwood Mortgage Corp.            Loan Servicing Fee for servicing loans.........................$48,759

General Partners &/or Affiliates     Asset Management Fee for managing assets........................$8,427

General Partners                     1% interest in profits..........................................$3,331
</TABLE>

     II. FEES PAID BY BORROWERS ON MORTGAGE LOANS PLACED WITH THE PARTNERSHIP BY
COMPANIES  RELATED TO THE GENERAL  PARTNERS  (EXPENSES OF  BORROWERS  NOT OF THE
PARTNERSHIP)
<TABLE>
<S>                                  <C>                                                            <C>
Redwood Mortgage Corp.               Mortgage Brokerage Commissions for services in
                                     connection with the review, selection, evaluation,
                                     negotiation, and extension extension of the loans
                                     paid by the borrowers and not by the Partnership...............$42,407

Redwood Mortgage Corp.               Processing and Escrow Fees for services in
                                     connection with notary, document preparation,
                                     credit investigation, and escrow fees payable by
                                     the borrowers and not by the Partnership........................$1,044

Gymno Corporation                    Reconveyance Fee..................................................$261
</TABLE>

     III. IN ADDITION, THE GENERAL PARTNERS AND/OR RELATED COMPANIES PAY CERTAIN
EXPENSES ON BEHALF OF THE PARTNERSHIP FOR WHICH IT IS REIMBURSED AS NOTED IN THE
STATEMENT OF INCOME . . . . . . . . . . . . . . . . . . . . .. . . . . . $17,039


                                       40
<PAGE>



Item 12 - Security Ownership of Certain Beneficial Owners and Management

     The  general  partners  receive  a  combined  total  of  a 1%  interest  in
Partnership   income  and  losses  and   distributions  of  cash  available  for
distribution.


Item 13 - Certain Relationships and Related Transactions

     Refer to footnotes 3 and 4 of the Notes to Financial  Statements in Part II
item 8, which describes related party fees and data.

     Also refer to sections of the Prospectus  "Compensation of General Partners
and Affiliates",  page 11, and "Conflicts of Interest",  page 13, as part of the
above-referenced Registration Statement, which is incorporated by reference.


Item 14 - Principal Accountant Fees and Services

     Fees for services performed for the Partnership by the principal accountant
for 2003 and 2002 are as follows:

     Audit Fees The aggregate  fees billed  during the years ended  December 31,
2003  and  2002  for  professional  services  rendered  for  the  audit  of  the
Partnership's  annual financial  statements included in the Partnership's Annual
Report  on  Form  10-K  and  review  of  financial  statements  included  in the
Partnership's   Quarterly  Reports  on  Form  10-Q  were  $32,090  and  $26,919,
respectively.

     Audit  Related  Fees  There  were no fees  billed  during  the years  ended
December 31, 2003 and 2002 for audit-related services.

     Tax fees The  aggregate  fees billed for tax  services  for the years ended
December  31, 2003 and 2002,  were $2,675 and $3,969,  respectively.  These fees
relate to professional services rendered primarily for tax compliance.

     All Other  Fees  There were no other  fees  billed  during the years  ended
December 31, 2003 and 2002.

     All audit and non-audit  services are approved by the general partner prior
to the accountant being engaged by the Partnership.

                                       41
<PAGE>


                                     Part IV


Item 15 - Exhibits, Financial Statements Schedules, and Reports on Form 8-K

(A)  Documents filed as part of this report:

     1. The Financial Statements are listed in Part II, Item 8 under
        A-Financial Statements.

     2. The Financial Statement Schedules are listed in Part II, Item 8 under
        B-Financial Statement Schedules.

     3. Exhibits.


Exhibit No        Description of Exhibits
-----------      ---------------------------------------------------------------

  3.1            Limited Partnership Agreement
  3.2            Form of Certificate of Limited Partnership Interest
  3.3            Certificate of Limited Partnership
  10.1           Escrow Agreement (1)
  10.2           Servicing Agreement (1)
  10.3      (a)  Form of Note secured by Deed of Trust which provides for
                 principal and interest payments (1)
            (b)  Form of Note secured by Deed of Trust which provides
                 principal and interest payments and right of assumption (1)
            (c)  Form of Note secured by Deed of Trust which provides for
                 interest only payments (1) (d) Form of Note (1)
  10.4      (a)  Deed of Trust and Assignment of Rents to accompany Exhibits
                 10.3 (a) and (c) (1)
            (b)  Deed of Trust and Assignment of Rents to accompany Exhibits
                 10.3 (b) (1)
            (c)  Deed of Trust to accompany Exhibit 10.3 (d) (1)
  10.5           Promissory Note for Formation Loan (1)
  10.6           Agreement to Seek a Lender (1)


     All of these exhibits were previously filed as the exhibits to Registrant's
Statement on Form S-11 (Registration No. 33-12519) and incorporated by reference
herein.

(B)   Reports on form 8-K

      No reports on Form 8-K have been filed during the last quarter of the
      period covered by this report.

(C)   See (A) 3 above

(D)   See (A) 2 above. Additional reference is made to prospectus (S-11)
      dated September 3, 1987 to pages 56 through 59 and supplement #6 dated
      May 16, 1989 pages 16-18, for financial data related to Gymno
      Corporation, a general partner.



                                       42
<PAGE>


                                   Signatures

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934 the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereto duly authorized on the 30th day of March,
2004.

REDWOOD MORTGAGE INVESTORS VI


By:  /S/ Michael R. Burwell
     -----------------------------------
     Michael R. Burwell, General Partner


By:  Gymno Corporation, General Partner



     By: /S/ Michael R. Burwell
         ----------------------------------------
         Michael R. Burwell, President, Secretary
         & Chief Financial Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report has been signed below by the following person on behalf of the registrant
and in the capacity indicated on the 30th day of March, 2004.

       Signature                       Title                         Date



/S/ Michael R. Burwell
----------------------
Michael R. Burwell                General Partner                March 30, 2004





/S/ Michael R. Burwell
----------------------
Michael R. Burwell           President, Secretary & Chief        March 30, 2004
                              Financial Officer of Gymno
                           Corporation (Principal Financial
                               and Accounting Officer);
                            Director of Gymno Corporation



                                       43
<PAGE>

                                                                   Exhibit 99.1

                          GENERAL PARTNER CERTIFICATION


     I, Michael R. Burwell, General Partner, certify that:

     1. I have  reviewed  this  annual  report on Form 10-K of Redwood  Mortgage
Investors VI, a California Limited Partnership (the "Registrant");

     2. Based on my  knowledge,  this annual  report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
Registrant as of, and for, the periods presented in this annual report;

     4. The  Registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

     (a)  designed  such  disclosure  controls  and  procedures  to ensure  that
material  information  relating to the  Registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this annual report is being prepared;

     (b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures as of December 31, 2003 (the "Evaluation Date"); and

     (c) presented in this annual report our conclusions about the effectiveness
of the  disclosure  controls and  procedures  based on our  evaluation as of the
Evaluation Date.

     5. The Registrant's other certifying  officers and I have disclosed,  based
on our most  recent  evaluation,  to the  Registrant's  auditors  and the  audit
committee  of  Registrant's  board  of  directors  (or  persons  performing  the
equivalent function):

     (a) all  significant  deficiencies  in the design or  operation of internal
controls  which  could  adversely  affect  the  Registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
Registrant's auditors any material weaknesses in internal controls; and

     (b) any fraud,  whether or not material,  that involves management or other
employees who have a significant role in the Registrant's internal controls.

     6. The Registrant's other certifying  officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.



/s/ Michael R. Burwell
-----------------------------------
Michael R. Burwell, General Partner
March 30, 2004


                                       44
<PAGE>
                                                                   Exhibit 99.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Annual Report of Redwood Mortgage  Investors VI (the
"Partnership") on Form 10-K for the period ended December 31, 2003 as filed with
the  Securities  and  Exchange  Commission  on the date hereof  (the  "Report"),
pursuant  to 18  U.S.C.  (S)  1350,  as  adopted  pursuant  to  (S)  906  of the
Sarbanes-Oxley  Act of 2002,  I,  Michael  R.  Burwell,  General  Partner of the
Partnership, certify that to the best of my knowledge:

     (1) The Report fully  complies  with the  requirements  of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Partnership.


/s/ Michael R. Burwell
-----------------------------------
Michael R. Burwell, General Partner
March 30, 2004



                                       45
<PAGE>
                                                                   Exhibit 99.2

               PRESIDENT AND CHIEF FINANCIAL OFFICER CERTIFICATION

     I,  Michael R.  Burwell,  President  and Chief  Financial  Officer of Gymno
Corporation, General Partner, certify that:

     1. I have  reviewed  this  annual  report on Form 10-K of Redwood  Mortgage
Investors VI, a California Limited Partnership (the "Registrant");

     2. Based on my  knowledge,  this annual  report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made,  not  misleading  with  respect to the period  covered by this annual
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included  in this annual  report,  fairly  present in all  material
respects the financial  condition,  results of operations  and cash flows of the
Registrant as of, and for, the periods presented in this annual report;

     4. The  Registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

     (a)  designed  such  disclosure  controls  and  procedures  to ensure  that
material  information  relating to the  Registrant,  including its  consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this annual report is being prepared;

     (b) evaluated the effectiveness of the Registrant's disclosure controls and
procedures as of December 31, 2003 (the "Evaluation Date"); and

     (c) presented in this annual report our conclusions about the effectiveness
of the  disclosure  controls and  procedures  based on our  evaluation as of the
Evaluation Date.

     5. The Registrant's other certifying  officers and I have disclosed,  based
on our most  recent  evaluation,  to the  Registrant's  auditors  and the  audit
committee  of  Registrant's  board  of  directors  (or  persons  performing  the
equivalent function):

     (a) all  significant  deficiencies  in the design or  operation of internal
controls  which  could  adversely  affect  the  Registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
Registrant's auditors any material weaknesses in internal controls; and

     (b) any fraud,  whether or not material,  that involves management or other
employees who have a significant role in the Registrant's internal controls.

     6. The Registrant's other certifying  officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.



/s/ Michael R. Burwell
---------------------------------
Michael R. Burwell, President and
Chief Financial Officer of Gymno
Corporation, General Partner
March 30, 2004


                                       46
<PAGE>
                                                                   Exhibit 99.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Annual Report of Redwood Mortgage  Investors VI (the
"Partnership") on Form 10-K for the period ended December 31, 2003 as filed with
the  Securities  and  Exchange  Commission  on the date hereof  (the  "Report"),
pursuant  to 18  U.S.C.  (S)  1350,  as  adopted  pursuant  to  (S)  906  of the
Sarbanes-Oxley Act of 2002, I, Michael R. Burwell, President and Chief Financial
Officer of Gymno Corporation,  General Partner of the Partnership,  certify that
to the best of my knowledge:

     (1) The Report fully  complies  with the  requirements  of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Partnership.


/s/ Michael R. Burwell
---------------------------------
Michael R. Burwell, President and
Chief Financial Officer of Gymno
Corporation, General Partner
March 30, 2004




                                       47