##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-K

|                                                                |  |                                                                                         
|--------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------
|(Mark one)                                                     
|                                                               
|[X]                                                             |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|For the fiscal year ended September 30, 2003                   
|Or                                                             
|[  ]                                                            |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period from _______________ to _____________

Commission File Number 333-32800

VESTIN FUND I, LLC

(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|NEVADA                                                         |  | 88-0446244                          
|(State or other jurisdiction of
Incorporation or organization) |  | (I.R.S. Employer
Identification No.)

2901 EL CAMINO AVENUE, LAS VEGAS, NEVADA 89102
(Address of principal executive offices) (Zip Code)

Registrants telephone number, including area code 702.227.0965

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

Securities registered pursuant to Section 12(g) of the Act:
NONE

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [  ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Sec 229.405) of this chapter) is not contained herein, and
will not be contained, to the best of the registrants knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [  ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).
Yes [  ] No [ X ]

State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as
of the last business day of the registrants most recently completed second
fiscal quarter. Not applicable.

As of November 30, 2003, the Company had 9,093,748 Units outstanding.





---

TABLE OF CONTENTS



|              |                                                                                                       |  |  |  |  |  |  | 
|------------- | ----------------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I       
|              | ITEM 1. BUSINESS                                                                                     
|              | ITEM 2. PROPERTIES                                                                                   
|              | ITEM 3. LEGAL PROCEEDINGS                                                                            
|              | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                          
|PART II      
|              | ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                        
|              | ITEM 6. SELECTED FINANCIAL DATA                                                                      
|              | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS        
|              | ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                  
|              | ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                  
|              | ITEM 9. CHANGES IN AND DISAGREEMENTS WITH INDEPENDENT AUDITORS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|PART III     
|              | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT                                              
|              | ITEM 11. EXECUTIVE COMPENSATION                                                                      
|              | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                              
|              | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                              
|              | ITEM 14. CONTROL AND PROCEDURES                                                                      
|PART IV      
|              | ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K                            
|EXHIBIT INDEX
|SIGNATURES   
|EXHIBIT 31.1 
|EXHIBIT 31.2 
|EXHIBIT 32   



---



##### Table of Contents



TABLE OF CONTENTS

|              |                                                                                                     |  |    |      |  | 
|------------- | --------------------------------------------------------------------------------------------------- |  | -- | ---- |  | 
|              |                                                                                                     |  |    | PAGE
|PART I        |                                                                                                     |  |    |     
|              | ITEM 1. BUSINESS                                                                                    |  |    | 3    | 
|              | ITEM 2. PROPERTIES                                                                                  |  |    | 13   | 
|              | ITEM 3. LEGAL PROCEEDINGS                                                                           |  |    | 13   | 
|              | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                         |  |    | 13   | 
|PART II       |                                                                                                     |  |    |     
|              | ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS                       |  |    | 14   | 
|              | ITEM 6. SELECTED FINANCIAL DATA                                                                     |  |    | 14   | 
|              | ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS       |  |    | 15   | 
|              | ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                 |  |    | 25   | 
|              | ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                 |  |    | 26   | 
|              | ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE        |  |    | 26   | 
|PART III      |                                                                                                     |  |    |     
|              | ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT                                             |  |    | 27   | 
|              | ITEM 11. EXECUTIVE COMPENSATION                                                                     |  |    | 28   | 
|              | ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT RELATED STOCKHOLDER MATTERS |  |    | 28   | 
|              | ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                             |  |    | 29   | 
|              | ITEM 14. CONTROLS AND PROCEDURES                                                                    |  |    | 30   | 
|PART IV       |                                                                                                     |  |    |     
|              | ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K                           |  |    | 31   | 
|EXHIBIT INDEX |                                                                                                     |  | 31 |     
|SIGNATURES    |                                                                                                     |  | 32 |     

2



---



##### Table of Contents






PART I

Note Regarding Forward Looking Statements

This report and other written reports and oral statements made from time to
time by us may contain forward looking statements. Such forward looking
statements may be identified by the use of such words as expects, plans,
estimates, forecasts, projects, anticipates, believes and words of
similar meaning. Forward looking statements are likely to address such matters
as our business strategy, future operating results, future sources of funding
for mortgage loans purchased by us, future economic conditions and pending
litigation involving us. Some of the factors which could affect future results
are set forth in the discussion under Managements Discussion and Analysis of
Financial Condition and Results of Operations - Factors Affecting Our Operating
Results.




ITEM 1. BUSINESS

General

We were organized on December 14, 1999 and will continue until December 31,
2019 unless dissolved prior thereto or extended by vote of members in
accordance with the provisions of our Operating Agreement. On July 9, 2001, we
changed our name from DM Mortgage Investors, LLC to Vestin Fund I, LLC (the
Company). We do not operate as an investment company within the meaning of
the Investment Company Act of 1940.

Prior to September 1, 2000, we were a development stage company. On August 23,
2000, our Form S-11/A filed with the Securities and Exchange Commission became
effective for the initial public offering of 10,000,000 Units at $10 per Unit
(Unit). We commenced operations on September 1, 2000. By June 2001, we had
sold all of the 10,000,000 Units offered pursuant to our registration
statement. No additional Units will be sold; however, current members may
continue to participate in our Distribution Reinvestment Plan whereby the
members distributions may be used to purchase additional Units at $10 per
Unit. As of September 30, 2003, an additional 779,092 Units have been
purchased under this plan.

Our manager is Vestin Mortgage, Inc., (doing business as Vestin) a licensed
mortgage company in the State of Nevada (Vestin Mortgage, or Manager).
Vestin Mortgage is a wholly-owned subsidiary of Vestin Group, Inc., a Delaware
corporation, whose common stock is publicly held and traded on the Nasdaq
National Market under the ticker symbol VSTN. Through its subsidiaries,
Vestin Group, Inc. is engaged in asset management, real estate lending and
other financial services. The Company issued 100,000 units to its Manager for
offering costs paid by them to unrelated third parties on the Companys behalf.
On June 24, 2002, we changed our fiscal year end from
December 31 to September 30. The financial statements for the twelve-month period ended September 30,
2002 reflects twelve months of operational activities and are unaudited as a
result of the change in fiscal year end.

We invest in mortgage loans throughout the areas in which Vestin Mortgage and
its correspondents have experience, primarily Arizona, California, Hawaii,
Nevada and Texas. The loans we invest in are selected for us by Vestin Mortgage
from among loans originated by Vestin Mortgage or non-affiliated mortgage
brokers. When Vestin Mortgage or a non-affiliated mortgage broker originates a
loan for us, that entity identifies the borrower, processes the loan
application, makes or invests in the loan, and brokers or sells the loan to us.
We believe that our loans are attractive to borrowers because of the expediency
of Vestin Mortgages loan approval process, which takes about ten to 20 days.

As a non-conventional lender, we are more willing to invest in mortgage loans
to borrowers that conventional lenders would not deem to be creditworthy.
Because of our increased willingness to fund riskier loans and borrowers,
borrowers are willing to pay us an interest rate that is two to five points
above the rates charged by conventional lenders. We invest a significant amount
of our funds in loans in which the real property being developed is not
generating any income to the borrower. The balloon payment loans and bridge
loans in which we

3



---



##### Table of Contents



invest are riskier because the borrowers repayment depends on its ability to
refinance the loan or develop the property so it can refinance the loan.

Our principal investment objectives are to:



| |  |  | Produce revenues from the interest income on our mortgage loans;                       
| | - |  | ---------------------------------------------------------------------------------------
|
| |  |  | Provide monthly cash distributions from the net income earned on our mortgage loans;   
|
| |  |  | Preserve capital contributions; and                                                    
|
| |  |  | Reinvest, to the extent permissible, payments of principal and sales (net of expenses).

Acquisition and Investment Policies

We seek to invest about 97% of our assets in mortgage loans. Approximately 3%
will be held as a working capital cash reserve. We currently have 45% of our
assets classified as investments in mortgage loans.

The majority of our collateral on our mortgage loans is the real property that
the borrower is purchasing or developing with the funds that we make available.
We sometimes refer to these real properties as the security properties. While
we may invest in other types of loans, most of the loans in which we invest
have been made to real estate developers with a lesser proportion of loans
involving land loans and bridge financing.

Our mortgage investments are not insured or guaranteed by any government
agency.

Vestin Mortgage continuously evaluates prospective investments, selects the
mortgages in which we invest and makes all investment decisions on our behalf
in its sole discretion. In evaluating prospective mortgage loan investments,
Vestin Mortgage considers such factors as the following:



| |  |  | the ratio of the amount of the investment to the value
of the property by which it is secured (loan-to-value ratio);
| | - |  | --------------------------------------------------------------------------------------------------------------------
|
| |  |  | the potential for capital appreciation or depreciation
of the property securing the investment;                     
|
| |  |  | expected levels of rental and occupancy rates (if applicable);                                                      
|
| |  |  | potential for rental increases (if applicable);                                                                     
|
| |  |  | current and projected revenues from the property (if applicable);                                                   
|
| |  |  | the status and condition of the record title of the property securing the investment;                               
|
| |  |  | geographic location of the property securing the investment; and                                                    
|
| |  |  | the financial condition of the borrowers and their
principals, if any, who guarantee the loan.                      

Vestin Mortgage may obtain our loans from non-affiliated mortgage brokers and
previous borrowers, and by solicitation of new borrowers in those states where
permissible. We may purchase existing loans that were originated by third party
lenders and acquired by Vestin Mortgage to facilitate our purchase of the
loans. Vestin Mortgage will sell the loans to us for no greater than Vestin
Mortgages cost, not including its service fees and compensation. There are no
specific requirements or guidelines governing Vestin Mortgages discretion in
determining which mortgage loans it will place with us and which it will place
with other funding sources.

4



---



##### Table of Contents



When selecting mortgage loans for us, Vestin Mortgage adheres to the following
guidelines, which are intended to control the quality of the collateral given
for our loans:



|1. |  | Priority of Mortgages.Generally, our assets are secured by first
mortgages. First mortgages are mortgages secured by a full or divided
interest in a first deed of trust secured by the property. Other mortgages
that we invest in on the security property will not be junior to more than
one other mortgage. As of September 30, 2003, 100% of the principal amount
of our outstanding interest in loans was secured by first mortgages.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Loan-to-Value Ratio.The amount of our loan combined with the outstanding
debt secured by a senior mortgage on a security property does not exceed
the following percentage of the appraised value of the security property
at origination:                                                                                                                                                                                                  

|                            |  |                                            |  | 
|--------------------------- |  | ------------------------------------------ |  | 
|Type of Secured Property    |  | Loan-to-Value Ratio                       
|Residential                 |  | 75%                                       
|Unimproved Land             |  | 60% (of anticipated as-if developed value)
|Acquisition and Development |  | 60% (of anticipated as-if developed value)
|Commercial Property         |  | 75% (of anticipated as-if developed value)
|Construction                |  | 75% (of anticipated post-developed value) 
|Bridge                      |  | 75% (of anticipated as-if developed value)
|Leasehold Interest          |  | 75% (of value of leasehold interest)      



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The target loan-to-value ratio for our loan portfolio as a whole is
approximately 70%. However, we may deviate from these guidelines under
certain circumstances. For example, Vestin Mortgage, in its discretion, may
increase any of the above loan-to-value ratios if a given loan is supported
by credit adequate to justify a higher loan-to-value ratio, including
personal guarantees. Occasionally, our collateral may include personal
property as well as real property. We do not have specific requirements with
respect to the projected income or occupancy levels of a property securing
our investment in a particular loan. These loan-to-value ratios will not
apply to financing offered by us to the purchaser of any real estate
acquired through foreclosure, or to refinance an existing loan that is in
default when it matures. In those cases, Vestin Mortgage, in its sole
discretion, shall be free to accept any reasonable financing terms it deems
to be in our best interest.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Manager receives an appraisal at the time of loan underwriting, which
may have been commissioned by the borrower and also may precede the
placement of the loan with the Company. Such appraisals are generally dated
no greater than 12 months prior to the date of loan origination. The
appraisal may be for the current estimate of the as-if developed value of
the property which approximates the post-construction value of the
collateralized property assuming that such property is developed. As-if
developed values on raw land loans or acquisition and development loans
often dramatically exceed the immediate sales value and may include
anticipated zoning changes, selection by a purchaser against multiple
alternatives, and successful development by the purchaser; upon which
development is dependent on availability of financing. As most of the
appraisals will be prepared on an as-if developed basis, if a loan goes into
default prior to any development of a project, the market value of the
property may be substantially less than the appraised value. As a result,
there may be less security than anticipated at the time the loan was
originally made. If there is less security and a default occurs, the
Company may not recover the full amount of the loan.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We retain appraisers who are licensed or qualified as independent appraisers
and certified by or hold designations from one or more of the following
organizations: the Federal National Mortgage Association, the Federal Home
Loan Mortgage Corporation, the National Association of Review Appraisers,
the Appraisal Institute, the Society of Real Estate Appraisers, M.A.I.,
Class IV Savings and Loan appraisers or from among appraisers with other
qualifications acceptable to Vestin Mortgage. However, appraisals are only
estimates of value and cannot be relied on as measures of realizable value.
The appraisal may be for the current estimated as-if developed or as-if
completed value of the property or, in the case of acquisition and
development

5



---



##### Table of Contents





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | loans or construction loans, for the estimated value of the property upon
completion of the project. As-if completed or as-if developed values on raw
land loans or acquisition and development loans often dramatically exceed
the immediate sales value and may include anticipated zoning changes,
selection by a purchaser against multiple alternatives, and successful
development by the purchaser; upon which development is dependent on
availability of financing. An employee or agent of Vestin Mortgage will
review each appraisal report and will
conduct a physical inspection for each property. A physical inspection
includes an assessment of the subject property, the adjacent properties and
the neighborhood but generally does not include entering any structures on
the property.



|3. |  | Construction Mortgage Loans. We invest in construction loans other than
home improvement loans on residential property, when the loan-to-value
ratio does not exceed 75% of the appraised, completed value of the
security property at origination.                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|4. |  | Terms of Mortgage Loans.Our loans in 2003 range from a two-month term to
a 30-month term. Most of our loans are for a term of 12 months. Our
original loan agreements, however, permit extensions to the term of the
loan by mutual consent. Such extensions are generally provided on loans
where the original term was 12 months or less and where a borrower
requires additional time to complete a construction project or negotiate
take out financing. However, the Companys Manager only grants extensions
when a borrower is in full compliance with the terms of the loan,
including, but not limited to the borrowers obligation to make interest
payments on the loan.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Currently all of our loans provide for payments of interest only with a
balloon payment of principal payable in full at the end of the term. In
addition, we invest in mortgage loans which require borrowers to maintain
interest reserves funded from the principal amount of the loan for a period
of time. At September 30, 2003, we had interest reserves in the amount of
approximately $6,583,000 related to mortgage loans that if fully funded
would have a principal balance of approximately $105,174,000.



|5. |  | Escrow Conditions.Our loans will often be funded by us through an escrow
account held by a title insurance company, subject to the following
conditions:
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Borrowers will obtain title insurance coverage for all
loans, with the title insurance policy naming us as the
insured and providing title insurance in an amount at least
equal to the principal amount of the loan. Title insurance
insures only the validity and priority of our deed of trust,
and does not insure us against loss by other causes, such as
diminution in the value of the security property.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Borrowers will obtain fire and casualty insurance for
all loans secured by improved real property, naming us as
loss payee in an amount sufficient to cover the replacement
cost of improvements.                                                                                                                                                                                                                
|
| |  |  | All insurance policies, notes, deeds of trust or
mortgages, escrow agreements, and any other loan documents
for a particular transaction will name us as payee and
beneficiary. Mortgage loans will not be written in the name
of Vestin Mortgage or any other nominee.                                                                                                                                          



|6. |  | Purchase of Mortgage Investments from Affiliates.We may acquire mortgage
loans from our affiliates, including Vestin Mortgage, for a price not in
excess of the par value of the note, plus allowable fees and expenses, but
without the allowance of any other compensation for the loans.                                                                                                                                                                                                                                                                
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|7. |  | Note Hypothecation.We may also acquire mortgage loans secured by
assignments of secured promissory notes. These mortgage loans must satisfy
our stated investment standards, including our loan-to-value ratios, and
also may not exceed 80% of the principal amount of the assigned note upon
acquisition. For example, if the property securing a note we acquire is
commercial property, the total amount of outstanding debts secured by the
property must not exceed 75% of the appraised value of the property, and
the mortgage loan will not exceed

6



---



##### Table of Contents





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 80% of the principal amount of the assigned note. For mortgage loans secured
by promissory notes, we will rely on the appraised value of the underlying
property, as determined by an independent written appraisal which was
conducted within the then-preceding twelve months. If an appraisal was not
conducted within that period, then we will arrange for a new appraisal to be
prepared for the property prior to acquisition of the loan.



|8. |  | Participation.We participate in loans with other lenders, including
affiliates as permitted by the North American Securities Administrators
Association guidelines (NASAA Guidelines), by providing funds for or
purchasing an undivided interest in a loan meeting our investment
guidelines described above. Typically, we participate in loans if:
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We did not have sufficient funds to invest in an entire loan.                                                                                                                                                                        
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | We are seeking to increase the diversification of our loan portfolio.                                                                                                                                                                
|
| |  |  | Vestin Mortgage originated a loan that fit within our
investment guidelines but it would constitute more than 20%
of our anticipated capital contribution or otherwise be
disproportionately large given our then existing portfolio.



| |                                                                                                   
| | --------------------------------------------------------------------------------------------------
| | As of September 30, 2003, 96% of our loans were loans in which we
participated with other lenders.



|9.  |  | Diversification.The NASAA Guidelines provide that we neither invest in
or make mortgage loans on any one property which would exceed, in the
aggregate, an amount equal to 20% of our capital nor may we invest in or
make mortgage loans to or from any one borrower which would exceed, in the
aggregate, an amount greater than 20% of our capital. As of September 30,
2003, we had one mortgage loan which accounted for approximately 5.2% of
our members equity. The outstanding balance of the loan was approximately
$4.5 million. The loans maturity date is August 2005.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|10. |  | Reserve Fund.We have established contingency working capital reserves of
approximately 3% of our capital to cover our unexpected cash needs.                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|11. |  | Credit Evaluations.When reviewing a loan proposal, Vestin Mortgage
determines whether a borrower has sufficient equity in the security
property. Vestin Mortgage may also consider the income level and
creditworthiness of a borrower to determine its ability to repay the
mortgage loan.                                                                                                                                                                                                                                                                                          
|   
|12. |  | Sale of Mortgage Investments. Although Vestin Mortgage has no plans to
do so, Vestin Mortgage may sell our mortgage loans or interest in our
loans to either affiliates or non-affiliated parties when Vestin Mortgage
believes that it is advantageous to us to do so. However, we do not
expect that the loans will be marketable or that a secondary market will
ever develop for them.                                                                                                                                                                                           

Mortgage Loans to Affiliates

We will not invest in mortgage loans made to Vestin Mortgage, Vestin Group or
any of our affiliates. However, we may acquire an investment in a mortgage loan
payable by Vestin Mortgage when Vestin Mortgage has assumed the obligations of
the borrower under that loan, through a foreclosure on the property.

Purchase of Loans from Vestin Mortgage and its Affiliates

In addition to those loans Vestin Mortgage selects for us, we purchase loans
that were originated by Vestin Mortgage or other parties and first held for
Vestin Mortgages own portfolio, as long as the loan is not in default and
otherwise satisfies all of our lending criteria. This requirement also applies
to any loan originated by an affiliate of Vestin Mortgage, such as Vestin
Group, Michael Shustek, Chief Executive Officer of Vestin Group or another
principal of Vestin Mortgage. However, we will not acquire a loan from or sell
a loan to a mortgage program in which Vestin Mortgage has an interest except in
compliance with NASAA Guidelines.

7



---



##### Table of Contents



Types of Loans We Invest In

We primarily invest in loans which are secured by first or second mortgages on
real property. Such loans fall into the following categories: raw and
unimproved land, acquisition and development, construction, commercial,
residential and bridge loans.

Raw and Unimproved Land Loans

Approximately 15% to 25% of the loans invested in by us may be loans made for
the purchase or development of raw, unimproved land. Generally, we determine
whether to invest in these loans based upon the appraised value of the property
and the borrowers actual capital investment in the property. We will generally
invest in loans for up to 60% of the as-if developed appraised value of the
property and we generally require that the borrower has invested in the
property actual capital expenditures of at least 25% of the propertys value.
As-if developed values on raw and unimproved land loans often dramatically
exceed the immediate sales value and may include anticipated zoning changes,
selection of a purchaser against multiple alternatives, and successful
development by the purchaser, upon which development is dependent on
availability of financing. As of September 30, 2003, approximately 4% of our
loans were in this category.

Acquisition and Development Loans

Approximately ten percent to 25% of the loans invested in by us may be
acquisition and development loans. These loans enable borrowers to acquire
and/or complete the basic infrastructure and development of their property
prior to the construction of buildings or structures. Such development may
include installing utilities, sewers, water pipes, and/or streets. We will
generally invest in loans with a face value of up to 60% of the appraised value
of the property. Loan to value ratios on acquisition and development loans are
calculated using as-if developed appraisals. Such appraisals have the same
valuation limitations as raw and unimproved land loans, described above. As of
September 30, 2003, approximately 14% of our loans were in this category.

Construction Loans

Approximately ten percent to 70% of our loans may be construction loans. A
construction loan provides funds for the construction of one or more structures
on developed land. Funds under this type of loan will generally not be
forwarded to the borrower until work in the previous phase of the project has
been completed and an independent inspector has verified certain aspects of the
construction and its costs. We will typically require material and labor lien
releases by the borrower per completed phase of the project. We will review the
appraisal of the value of the property and proposed improvements, and will
generally finance up to 75% of the appraised value of the property and proposed
improvements. Such appraisals have the same valuation limitations as raw and
unimproved land loans, described above. As of September 30, 2003,
approximately 22% of our loans were in this category.

Commercial Property Loans

Approximately 20% to 50% of the loans invested in by us may be commercial
property loans. Commercial property loans provide funds to allow commercial
borrowers to acquire income producing property or to make improvements or
renovations to the property in order to increase the net operating income of
the property so that it may qualify for institutional refinancing. We will
review the appraisal of the as-if developed value of the property and will
generally invest in loans for up to 75% of such appraised value of the
property. As of September 30, 2003, approximately 44% of our loans were in
this category.

Residential Loans

A small percentage of the loans invested in by us may be residential loans.
Such loans facilitate the purchase or

8



---



##### Table of Contents



refinance of one to four family residential property units provided the
borrower uses one of the units on the property as such borrowers principal
residence. We will generally invest in loans for up to 75% of the value of the
property. As of September 30, 2003, less than 1% of our loans were in this
category.

Bridge Loans

Up to 15% of our loans may be bridge loans. Such loans provide interim
financing (12 to 24 months) to enable commercial borrowers to qualify for
permanent refinancing. We will review the appraisal of the value of the
property and will generally invest in loans of up to 75% of that value of the
property. Such appraisals may be based on either an as-is basis or as-if
developed basis, depending on the circumstances, and therefore, may not be an
accurate indicator of the fair value of the property. As of September 30,
2003, approximately 15% of our loans were in this category.

Collateral

The types of collateral that will secure the loans include a first deed of
trust, a second deed of trust or a leasehold interest.

First Deed of Trust

Most of our loans are secured by a first deed of trust. Thus as a lender, we
will have rights as a first mortgage lender of the collateralized property. As
of September 30, 2003, 100% of our loans were secured by a first deed of trust.

Second Deed of Trust

In the future, up to 10% of our loans may be secured by second deeds of trust.
In a second mortgage loan, the rights of the lender (such as the right to
receive payment on foreclosure) will be subject to the rights of the first
mortgage lender. In a wraparound loan, the lenders rights will be comparably
subject to the rights of a first mortgage lender, but the aggregate
indebtedness evidenced by the loan documentation will be the first mortgage
loan plus the new funds the lender invests. The lender would receive all
payments from the borrower and forward to the senior lender its portion of the
payments the lender receives. As of September 30, 2003, none of our loans were
secured by a second deed of trust.

Leasehold Interest

Up to 20% of the loans invested in by us may be in loans where the collateral
is an interest in a lease. As of September 30, 2003, we did not have any loans
secured by a leasehold interest.

Prepayment Penalties and Exit Fees

Generally, the loans we invest in will not contain prepayment penalties or exit
fees. If our loans are at a high rate of interest in a market of falling
interest rates, the failure to have a prepayment penalty provision or exit fee
in the loan allows the borrower to refinance the loan at a lower rate of
interest, thus providing a lower yield to us on the reinvestment of the
prepayment proceeds. However, these loans will usually be written with
relatively high minimum interest rates, which we would expect to minimize the
risk of lower yields.

Extensions to Term of Loan

Our original loan agreements permit extensions to the term of the loan by mutual
consent. Such extensions are generally provided on loans where the original
term was 12 months or less and where a borrower requires additional time to
complete a construction project or negotiate take out financing. However, we
only grant extensions when a borrower is in full compliance with the terms of
the loan, including, but not limited to, the borrowers obligation to make
interest payments on the loan.

9



---



##### Table of Contents



Balloon Payment

Currently all of the loans we invest in or purchase will require the borrower
to make a balloon payment on the principal amount upon maturity of the loan.
There are no specific criteria used in evaluating the credit quality of
borrowers for mortgage loans requiring balloon payments. Furthermore, a
substantial period of time may elapse between the review of the financial
statements of the borrower and the date when the balloon payment is due. As a
result, there is no assurance that a borrower will have sufficient resources to
make a balloon payment when due. To the extent that a borrower has an
obligation to pay mortgage loan principal in a large lump sum payment, its
ability to repay the loan may be dependent upon its ability to sell the
property, obtain suitable refinancing or otherwise raise a substantial amount
of cash. As a result, these loans can involve a higher risk of default than
loans where the principal is paid at the same time as the interest payments.

Repayment of Mortgages on Sale of Properties

We may require a borrower to repay a mortgage loan upon the sale of the
mortgaged property rather than allow the buyer to assume the existing loan. We
will require repayment if we determine that repayment appears to be
advantageous to us based upon then-current interest rates, the length of time
that the loan has been held by us, the creditworthiness of the buyer and our
objectives. We will either invest our net proceeds from any capital
transaction in new mortgage loans, hold the net proceeds as cash or distribute
them to our members. These net proceeds will also include the principal of a
loan deemed to be repaid for tax purposes as a result of the nature of a loan
modification or loan extension. Our operating agreement provides that whether
we choose to distribute the proceeds or reinvest them, our members will be
deemed to have received a distribution of capital and recontributed the same
amount to us. Capital transactions include payments of principal, foreclosures
and prepayments of mortgages to the extent classified as a return of capital
under the Internal Revenue Code and any other disposition of a mortgage or
property.

Variable Rate Loans

Occasionally we may acquire variable rate loans. Variable rate loans originated
by Vestin Mortgage may use as indices the one and five year Treasury Constant
Maturity Index, the Prime Rate Index and the Monthly Weighted Average Cost of
Funds Index for Eleventh District Savings Institutions (Federal Home Loan Bank
Board). Vestin Mortgage may negotiate spreads over these indices of 2.5% to
5.5%, depending upon market conditions when the loan is made. As of September
30, 2003, we did not hold any variable rate loans, and all of the loans in the
mortgage loans portfolio were fixed rate loans.

It is possible that the interest rate index used in a variable rate loan will
rise (or fall) more slowly than the interest rate of other loan investments
available to us. Vestin Mortgage attempts to minimize this interest rate
differential by tying variable rate loans to indices that are sensitive to
fluctuations in market rates. Additionally, most variable rate loans originated
by Vestin Mortgage contain provisions under which the interest rate cannot fall
below the initial rate.

Variable rate loans generally have interest rate caps. We anticipate that the
interest rate cap will be a ceiling that is 2% to 4% above the starting rate
with a floor rate equal to the starting rate. For these loans there is the risk
that the market rate may exceed the interest cap rate.

Variable rate loans of five to ten year maturities are not assumable without
the prior consent of Vestin Mortgage. We do not expect to invest in or purchase
a significant amount of other assumable loans. To minimize our risk, any
borrower assuming an existing mortgage loan will be subject to the same
underwriting criteria as the original borrower.

10



---



##### Table of Contents



Borrowing

We may incur indebtedness:



| |  |  | to finance our investments in mortgage loans,                                                               
| | - |  | ------------------------------------------------------------------------------------------------------------
|
| |  |  | to prevent a default under mortgage loans that are senior to our mortgage loans,                            
|
| |  |  | to discharge senior mortgage loans if this becomes
necessary to protect our investment in mortgage loans, or
|
| |  |  | to operate or develop a property that we acquired
under a defaulted loan.                                   

Our indebtedness will not exceed 70% of the fair market value of our mortgage
loans. This indebtedness may be with recourse to our assets.

In addition, we may enter into structured arrangements with other lenders in
order to provide them with a senior position in mortgage loans which we might
jointly fund. For example, we might establish a wholly-owned special purpose
corporation which would borrow funds from an institutional lender under an
arrangement where the resulting mortgage loans would be assigned to a trust,
and the trust would issue a senior certificate to the institutional lender and
a junior certificate to the special purpose corporation. This would assure the
institutional lender of repayment in full prior to our receipt of any repayment
on the jointly funded mortgage loans.

Competition

There are hundreds of commercial banks, insurance companies, mortgage brokers,
pension funds and other institutional lenders competing to make the type of
loans in which we invest. No particular competitor dominates the market. We
anticipate substantial competition for investments in mortgages secured by
commercial properties, which creates pressure on lenders to lower interest
rates. Consequently, we may not be able to obtain as high interest rates on
mortgage investments as we would otherwise obtain, which would affect our
revenues and the distributions made to our investors.

Regulation

Our operations are conducted by Vestin Mortgage. Vestin Mortgages operations
as a mortgage company are subject to extensive regulation by federal, state and
local laws and governmental authorities. Vestin Mortgage conducts its real
estate mortgage business under a license issued by the State of Nevada Mortgage
Industry Division. Under applicable Nevada law, the division has broad
discretionary authority over Vestin Mortgages activities, including the
authority to conduct periodic regulatory audits of all aspects of Vestin
Mortgages operations.

We and Vestin Mortgage are also subject to the Equal Credit Opportunity Act of
1974, which prohibits creditors from discriminating against loan applicants on
the basis of race, color, sex, age or marital status, and the Fair Credit
Reporting Act of 1970, which requires lenders to supply applicants with the
name and address of the reporting agency if the applicant is denied credit. We
are also subject to various other federal and state securities laws regulating
the issuance and sale of securities, as well as the Employee Retirement Income
Security Act of 1974.

Employees

The Company does not have any employees. Our Manager, Vestin Mortgage, and its
parent company, Vestin Group, Inc., provide all of the employees necessary for
the operations of the Company. As of November 30, 2003, those entities had a
total of 82 full-time employees and one part-time employee. All employees are
at-will employees and none are covered by collective bargaining agreements.

11



---



##### Table of Contents



Available Information

Our Internet website address is www.vestinfund.com. We make available free of
charge through www.vestingroup.com our Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those
reports as soon as reasonably practicable after such material is electronically
filed with or furnished to the Securities and Exchange Commission.

12



---



##### Table of Contents






ITEM 2. PROPERTIES

Our Manager, Vestin Mortgage, operates from its executive offices at 2901 El
Camino Avenue, Las Vegas, Nevada 89102. The Company does not have any separate
offices.




ITEM 3. LEGAL PROCEEDINGS

The Company is involved in a number of legal proceedings concerning matters
arising in connection with the conduct of their business activities. The
Company believes it has meritorious defenses to each of these actions and
intends to defend them vigorously. The Company believes that it is not a party
to any pending legal or arbitration proceedings that would have a material
adverse effect on the Companys financial condition or results of operations or
cash flows, although it is possible that the outcome of any such proceedings
could have a material impact on the Companys net income in any particular
period.

Litigation involving the Manager

Vestin Mortgage, Inc., Vestin Group, Inc., and Del Mar Mortgage, Inc., a
company wholly owned by Michael Shustek, the largest shareholder and CEO of
Vestin Group, Inc., are defendants in a civil action entitled Desert Land,
L.L.C. et al. v. Owens Financial Group, Inc. (the Action). The Action was
initiated by Desert Land, L.L.C. (Desert Land) on various loans arranged by
Del Mar Mortgage, Inc. and/or Vestin Mortgage. On April 10, 2003, the United
States District Court for the District of Nevada (the Court) entered judgment
jointly and severally in favor of Desert Land against Vestin Group, Vestin
Mortgage and Del Mar Mortgage, Inc. Judgment was predicated upon the Courts
finding that Del Mar Mortgage, Inc. received an unlawful penalty fee from the
plaintiffs.

Defendants subsequently filed a motion for reconsideration. The Court denied
the motion and, on August 13, 2003, held that Vestin Group, Vestin Mortgage,
and Del Mar Mortgage, Inc. are jointly and severally liable for the judgment in
the amount of $5,683,312.19 (which amount includes prejudgment interest and
attorneys fees). On August 27, 2003, the Court stayed execution of the
judgment against Vestin Group and Vestin Mortgage based upon the posting of a
bond in the amount of $5,830,000. The bond was arranged by Michael Shustek and
was posted without any cost or obligation to Vestin Group and Vestin Mortgage.
Additionally, Del Mar Mortgage, Inc. has indemnified Vestin Group and Vestin
Mortgage for any losses and expenses in connection with the Action, and Mr.
Shustek has guaranteed the indemnification. On September 12, 2003 all of the
defendants held liable to Desert Land appealed the judgment to the Ninth
Circuit United States Court of Appeals. The Company is not a party to the
Action.




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

None.

13



---



##### Table of Contents






PART II




ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information



|a. |  | There is no established public trading market for the trading of Units.                                                                                                                                                                                                                                                                                                                        
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|b. |  | As of September 30, 2003, approximately 1,474 Unit holders held 9,124,566
Units of interest in the Company.                                                                                                                                                                                                                                                                                    
|  
|c. |  | We generally distribute significantly all net income generated by us to
Unit holders on a monthly basis. We made distributions of net income to
our Unit holders of approximately $10,363,438 (prior to reinvested
distributions) during the fiscal year ended September 30, 2003. It is our
intention to continue to distribute significantly all net income earned by
us to the Unit holders.




ITEM 6. SELECTED FINANCIAL DATA

Vestin Fund I, LLC

|                                                     |  |               |             |               |              |      |             |  |  |   |             | 
|---------------------------------------------------- |  | ------------- | ----------- | ------------- | ------------ | ---- | ----------- |  |  | - | ----------- | 
|                                                     |  | September 30, |             | September 30, | December 31,
|                                                     |  | 2003          |             | 2002          |              | 2001
|                                                     |  |               |             |               |              |     
|Balance Sheet Data:                                  |  |               |             |               |              |      |             |  |  |   |             | 
|Cash, cash equivalents, and certificates of
deposits |  | $             | 14,882,547  |               |              | $    | 5,537,334   |  |  | $ | 4,256,750   | 
|Investments in mortgage loans (net of allowance)     |  | $             | 51,694,617  |               |              | $    | 91,091,308  |  |  | $ | 97,228,156  | 
|Interest and other receivables                       |  | $             | 1,632,327   |               |              | $    | 1,175,972   |  |  | $ | 1,037,218   | 
|Real estate held for sale                            |  | $             | 26,523,340  |               |              | $    | 1,541,258   |  |  | $ |            | 
|Assets under secured borrowing                       |  | $             | 20,323,719  |               |              | $    | 6,637,370   |  |  | $ |            | 
|Other assets                                         |  | $             | 7,650       |               |              | $    | 83,631      |  |  | $ |            | 
|Total assets                                         |  | $             | 115,064,200 |               |              | $    | 106,066,873 |  |  | $ | 102,522,124 | 
|Liabilities                                          |  | $             | 28,549,132  |               |              | $    | 7,067,817   |  |  | $ | 66,525      | 
|Members equity                                      |  | $             | 86,515,068  |               |              | $    | 98,999,056  |  |  | $ | 102,455,599 | 
|Total liabilities and members equity                |  | $             | 115,064,200 |               |              | $    | 106,066,873 |  |  | $ | 102,522,124 | 

|                                                                      |  |               |            |               |  |              |            |  |  |   |            | 
|--------------------------------------------------------------------- |  | ------------- | ---------- | ------------- |  | ------------ | ---------- |  |  | - | ---------- | 
|                                                                      |  | 12 months     |            | 12 months     |  | 12 months   
|                                                                      |  | ended         |            | ended         |  | ended       
|                                                                      |  | September 30, |            | September 30, |  | December 31,
|                                                                      |  | 2003          |            | 2002          |  | 2001        
|                                                                      |  |               |            |               |  |             
|                                                                      |  |               |            |               |  | (unaudited)  |            |  |  |  
|Income Statement Data:                                                |  |               |            |               |  |              |            |  |  |   |            | 
|Revenues                                                              |  | $             | 10,364,448 |               |  | $            | 13,151,400 |  |  | $ | 11,564,761 | 
|Expenses                                                              |  | $             | 6,052,089  |               |  | $            | 566,193    |  |  | $ | 176,906    | 
|Net income                                                            |  | $             | 4,312,359  |               |  | $            | 12,585,207 |  |  | $ | 11,387,855 | 
|Net income allocated to members                                       |  | $             | 4,312,359  |               |  | $            | 12,585,207 |  |  | $ | 11,387,855 | 
|Net income allocated to members per weighted
average membership units |  | $             | 0.45       |               |  | $            | 1.23       |  |  | $ | 1.34       | 
|Weighted average membership units                                     |  |               | 9,668,310  |               |  |              | 10,193,776 |  |  |   | 8,519,804  | 

The information in this table should be read in conjunction with the
accompanying audited financial statements and notes to financial statements
included elsewhere in this document.

14



---



##### Table of Contents








ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS


Prior to September 1, 2000, we were a development stage company with no
operational activities. We commenced the offering of our Units in September
2000; by June 2001, the Company had sold all of the 10,000,000 Units offered.
Our financial results reflect the amount of capital we had available for
investment in mortgage loans. Our past performance may not be indicative of
future results. This discussion should be read in conjunction with our
financial statements and accompanying notes and other detailed information
regarding the Company appearing elsewhere in this Form 10-K.

RESULTS OF OPERATIONS

OVERVIEW

Our primary business objective is to generate monthly income by investing in
mortgage loans. We believe there is a significant market opportunity to make
mortgage loans to owners and developers of real property whose financing needs
are not met by traditional mortgage lenders. The loan underwriting standards
our Manager utilizes are less strict than traditional mortgage lenders. In
addition, one of our competitive advantages is our ability to approve loan
applications more quickly than traditional lenders. As a result, in certain
cases, we may make mortgage loans which are riskier than mortgage loans made by
commercial banks. However, in return we seek a higher interest rate and our
Manager takes steps to attempt to mitigate the lending risks such as imposing a lower loan
to value ratio. While we may assume more risk than traditional mortgage
lenders, in return, we seek to generate higher yields from our mortgage loans.

Our operating results are affected primarily by: (i) the amount of capital we
have to invest in mortgage loans, (ii) the level of real estate lending
activity in the markets we service, (iii) our ability to identify and work with
suitable borrowers, (iv) the interest rates we are able to charge on our loans
and (v) the level of foreclosures and related loan losses which we may
experience. These funds, subject to a 3% reserve, will constitute the bulk of
the funds we have available for investment in mortgage loans. We do not have
any arrangements in place to materially increase the funds we will have
available to invest from any other sources. See discussion - Capital and
Liquidity.

The US economy has suffered from a mild recession over the recent past few
years, and we have experienced a slowdown in commercial real estate lending in
the markets which we service. A prolonged recession may continue to dampen real
estate development activity, thereby diminishing the market for our loans. In
addition, the continuing decline in interest rates, which is largely
attributable to the weak economy, may be expected to diminish the interest
rates we can charge on our loans. The average interest rate on our loans at
September 30, 2003 was 12.3% as compared to 13.8% at September 30, 2002.
Moreover, a prolonged recession or poor credit decisions by our Manager may
continue the increase in non-performing assets. Non-performing assets total
$39.5 million or 34.4% of our total assets as of September 30, 2003 as compared
to $13.2 million or 12.5% of our assets as of September 30, 2002. To the
extent that the efforts of our borrowers to develop and sell commercial real
estate projects are adversely impacted by the status of the economy, we may
experience an increase in loan defaults which may reduce the amount of funds we
have for distribution to our members. In this regard, it should be noted that
the average maturity of our outstanding loans as of September 30, 2003
was 13.0 months, compared to 12.0 months at September 30, 2002. As a of result
of these factors, our annualized rate of return to members for the fiscal year
September 30, 2003 was 4.5%, compared to 12.3% for the fiscal year ended
September 30, 2002.

Adverse economic conditions during the next year could have a material impact
on the collectibility of our loans. Recognizing this risk, we seek to maintain
a low loan-to-value ratio which, as of September 30, 2003, was 60.6% on a
weighted average basis, generally using appraisals prepared on an as-if
developed basis in connection with the loan origination. In this manner, we
hope to retain sufficient cushion in the underlying equity position to protect
the value of our loan in the event of a default. Nevertheless, no assurances
can be given that a marked increase in loan

15



---



##### Table of Contents



defaults accompanied by a rapid decline in real estate values will not have a
material adverse effect upon our financial condition and operating results.

Historically, our Manager has focused its operations on Nevada and certain
Western states. Because our Manager has a significant degree of knowledge with
respect to the real estate markets in such states, it is likely most of our
loans will be concentrated in such states. As of September 30, 2003, 33.9% of
the principal amount of our loans were secured by real estate in Nevada, while
21.1%, 11.7% and 11.0% were secured by real estate in Hawaii, Texas, and
California, respectively. Such geographical concentration creates greater risk
that any downturn in such local real estate markets could have a significant
adverse effect upon our results of operations. Commercial real estate markets
in Nevada have continued to prosper, with significant borrowing activity,
throughout the current recession. However, the rate of growth appears to be
slowing. The commercial real estate markets in Texas, Hawaii and California
also appear to be relatively unaffected by the recession. As noted above, if
the recession continues for an extended period or deepens, particularly in any
of the identified states, our operating results could be adversely affected.

Fiscal Year Ended September 30, 2003 Compared to September 30, 2002 (unaudited)

|                                                                      |  |                    |            |                    |  |             |            |  
|--------------------------------------------------------------------- |  | ------------------ | ---------- | ------------------ |  | ----------- | ---------- | -
|                                                                      |  | FOR THE YEAR ENDED |            | FOR THE YEAR ENDED
|RESULTS OF OPERATIONS                                                 |  | SEPTEMBER 30, 2003 |            | SEPTEMBER 30, 2002
|                                                                      |  |                    |            |                   
|                                                                      |  |                    |            |                    |  | (unaudited)
|Total revenues                                                        |  | $                  | 10,364,448 |                    |  | $           | 13,151,400 |  
|Total expenses                                                        |  |                    | 6,052,089  |                    |  |             | 566,193    |  
|                                                                      |  |                    |            |                    |  |             |            |  
|Net income                                                            |  | $                  | 4,312,359  |                    |  | $           | 12,585,207 |  
|                                                                      |  |                    |            |                    |  |             |            |  
|Net income allocated to members per weighted
average Membership units |  | $                  | 0.45       |                    |  | $           | 1.23       |  
|                                                                      |  |                    |            |                    |  |             |            |  
|Annualized rate of return to members (a)                              |  |                    | 4.5        | %                  |  |             | 12.3       | %
|                                                                      |  |                    |            |                    |  |             |            |  
|Weighted average membership units                                     |  |                    | 9,668,310  |                    |  |             | 10,193,776 |  
|                                                                      |  |                    |            |                    |  |             |            |  



| | (a) | The annualized rate of return to members is calculated based upon
the net income allocated to members per weighted average units as of
September 30, 2003 and 2002 divided by ten (the $10 cost per unit).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Total Revenues. For the fiscal year ended September 30, 2003, total revenues
were approximately $10.4 million compared to $13.2 million for the fiscal year
ended September 30, 2002, a decrease of $2.8 million or 21.2%. The decline in
revenue was mainly due to lower interest income from investment in mortgage
loans as a result of the increase in non-performing assets to $39.5 million as
of September 30, 2003 compared to $13.2 million as of September 30, 2002 offset by an
increase in interest income from assets under secured borrowings. Our
average interest yields on our investments in mortgage loans for the year ended
September 30, 2003 was 12.3% compared to 13.8% for the year ended September 30,
2002. Our Manager believes that the increase in non-performing assets is
primarily the result of the individual circumstances of the borrowers involved.
The increase in non-performing assets may also reflect the continued weakness
in the economy and the risks inherent in our business strategy which entails
more lenient underwriting standards and expedited loan approval procedures.
Our revenues will continue to suffer until we are able to convert these
non-performing assets into interest paying mortgage loans. We will attempt to
accomplish this by working with the borrower where possible and by foreclosing
on the underlying property where necessary. We intend to sell properties
acquired through foreclosure as soon as practicable, consistent with our
objective of avoiding a loss of principal on our loans. However, we cannot
predict how quickly we will be able to sell the foreclosed properties.

Total revenues have also decreased due to the increase in the amount of cash
and cash equivalents. At September 30, 2003, cash and certificates of deposit
totaled $14.9 million compared to $5.5 million at September 30, 2002. Because
these assets earn interest at a much lower rate than investments in mortgage
loans, revenues are reduced.

16



---



##### Table of Contents



Total Expenses. In fiscal 2003, total expenses were $6.1 million compared to
$0.6 million for fiscal 2002, an increase of $5.6 million. The increase in
total expenses primarily related to interest expense related to secured
borrowing (see Note F), a provision for loan losses (see Note C), losses on
real estate held for sale (see Note D) and the write-off of deferred offering
costs (see Note H). See also  Asset Quality and Loan Reserves.

Net Income. Overall, net income for fiscal 2003 was $4.3 million compared to
$12.6 million in fiscal 2002, a decrease of $8.3 million or 65.7%. The
decrease was primarily the result of lower revenues because of the increase in
non-performing assets and the write-offs recognized during the year ended
September 30, 2003.

Annualized Rate of Return to Members. For fiscal 2003, the annualized rate of
return to members was 4.5% compared to 12.3% for fiscal 2002. The decrease in
annualized rate of return to members was primarily related to the increase in
total expenses as outlined above.

Investment in Mortgage Loans

Investment in mortgage loans as of September 30, 2003 was as follows:

|                            |  |        |    |         |  |               |            |            |  |           |       |      |  |          |        |   |  |  |       |  
|--------------------------- |  | ------ | -- | ------- |  | ------------- | ---------- | ---------- |  | --------- | ----- | ---- |  | -------- | ------ | - |  |  | ----- | -
|                            |  | Number |    |         |  |               |            | Weighted   |  |           |       |      |  | Weighted
|Loan                        |  | of     |    |         |  |               |            | Average    |  | Portfolio |       | Loan
|Type                        |  | Loans  |    | Balance |  | Interest Rate |            | Percentage |  | To Value*
|                            |  |        |    |         |  |               |            |            |  |          
|Acquisition and development |  |        | 4  |         |  | $             | 7,430,353  |            |  |           | 13.70 | %    |  |          | 14.24  | % |  |  | 46.46 | %
|Bridge                      |  |        | 7  |         |  |               | 8,035,547  |            |  |           | 12.14 | %    |  |          | 15.40  | % |  |  | 60.50 | %
|Commercial                  |  |        | 22 |         |  |               | 23,210,297 |            |  |           | 11.82 | %    |  |          | 44.47  | % |  |  | 67.52 | %
|Construction                |  |        | 6  |         |  |               | 11,510,498 |            |  |           | 12.66 | %    |  |          | 22.05  | % |  |  | 56.77 | %
|Land                        |  |        | 5  |         |  |               | 1,839,922  |            |  |           | 11.84 | %    |  |          | 3.52   | % |  |  | 53.62 | %
|Residential                 |  |        | 1  |         |  |               | 168,000    |            |  |           | 12.50 | %    |  |          | 0.32   | % |  |  | 70.00 | %
|                            |  |        |    |         |  |               |            |            |  |           |       |      |  |          |        |   |  |  |       |  
|                            |  |        | 45 |         |  | $             | 52,194,617 |            |  |           | 12.32 | %    |  |          | 100.00 | % |  |  | 60.59 | %
|                            |  |        |    |         |  |               |            |            |  |           |       |      |  |          |        |   |  |  |       |  

Investment in mortgage loans as of September 30, 2002 was as follows:

|                            |  |        |    |         |  |               |            |            |  |           |       |      |  |          |        |   |  |  |       |  
|--------------------------- |  | ------ | -- | ------- |  | ------------- | ---------- | ---------- |  | --------- | ----- | ---- |  | -------- | ------ | - |  |  | ----- | -
|                            |  | Number |    |         |  |               |            | Weighted   |  |           |       |      |  | Weighted
|Loan                        |  | of     |    |         |  |               |            | Average    |  | Portfolio |       | Loan
|Type                        |  | Loans  |    | Balance |  | Interest Rate |            | Percentage |  | To Value*
|                            |  |        |    |         |  |               |            |            |  |          
|Acquisition and development |  |        | 11 |         |  | $             | 17,379,074 |            |  |           | 14.38 | %    |  |          | 19.06  | % |  |  | 79.91 | %
|Bridge                      |  |        | 3  |         |  |               | 9,129,025  |            |  |           | 13.73 | %    |  |          | 10.01  | % |  |  | 68.79 | %
|Commercial                  |  |        | 10 |         |  |               | 28,181,705 |            |  |           | 13.40 | %    |  |          | 30.90  | % |  |  | 54.11 | %
|Construction                |  |        | 11 |         |  |               | 26,241,223 |            |  |           | 14.21 | %    |  |          | 28.78  | % |  |  | 50.41 | %
|Land                        |  |        | 4  |         |  |               | 10,260,281 |            |  |           | 13.13 | %    |  |          | 11.25  | % |  |  | 48.85 | %
|                            |  |        |    |         |  |               |            |            |  |           |       |      |  |          |        |   |  |  |       |  
|                            |  |        | 39 |         |  | $             | 91,191,308 |            |  |           | 13.82 | %    |  |          | 100.00 | % |  |  | 53.43 | %
|                            |  |        |    |         |  |               |            |            |  |           |       |      |  |          |        |   |  |  |       |  

* Loan to value ratios are based on appraisals obtained at the time of loan
origination and may not reflect subsequent changes in value estimates. Such
appraisals are generally dated no greater than 12 months prior to the date of
loan origination and may have been commissioned by the borrower. The appraisals
may be for the current estimate of the as-if developed value of the property,
and which approximates the post-construction value of the collateralized
property assuming that such property is developed. As-if developed values on
raw land loans or acquisition and development loans often dramatically exceed
the immediate sales value and may include anticipated zoning changes, selection
by a purchaser against multiple alternatives, and successful development by the
purchaser; upon which development is dependent on availability of financing.
As most of the appraisals will be prepared on an as-if developed basis, if a
loan goes into default prior to any development of a project, the market value
of the property may be substantially less than the appraised value. As a
result, there may be less security than anticipated at the time the loan was
originally made. If there is less security and a default occurs, the Company
may not recover the full amount of the loan.

17



---



##### Table of Contents



|                   |  |                    |            |            |  |                    |        |            |  |   |            |  |  |  |        |  
|------------------ |  | ------------------ | ---------- | ---------- |  | ------------------ | ------ | ---------- |  | - | ---------- |  |  |  | ------ | -
|                   |  | September 30, 2003 |            | Portfolio  |  | September 30, 2002 |        | Portfolio 
|Loan Type          |  | Balance            |            | Percentage |  | Balance            |        | Percentage
|                   |  |                    |            |            |  |                    |        |           
|First mortgages    |  | $                  | 52,194,617 |            |  |                    | 100.00 | %          |  | $ | 91,180,814 |  |  |  | 99.99  | %
|Second mortgages** |  |                    |           |            |  |                    |       | %          |  |   | 10,494     |  |  |  | 0.01   | %
|                   |  |                    |            |            |  |                    |        |            |  |   |            |  |  |  |        |  
|                   |  | $                  | 52,194,617 |            |  |                    | 100.00 | %          |  | $ | 91,191,308 |  |  |  | 100.00 | %
|                   |  |                    |            |            |  |                    |        |            |  |   |            |  |  |  |        |  



|** |  | All of the Companys second mortgages were junior to a first trust deed
position held by either the Company or the Companys Manager.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------

The following is a schedule of maturities of investments in mortgage loans as
of September 30, 2003:

|     |  |   |            | 
|---- |  | - | ---------- | 
|2003 |  | $ | 29,714,657 | 
|2004 |  |   | 12,305,206 | 
|2005 |  |   | 10,174,754 | 
|     |  |   |            | 
|     |  | $ | 52,194,617 | 
|     |  |   |            | 

The following is a schedule by geographic location of investments in mortgage
loans as of:

|           |  |                    |            |            |  |                    |        |            |  |   |            |  |  |  |        |  
|---------- |  | ------------------ | ---------- | ---------- |  | ------------------ | ------ | ---------- |  | - | ---------- |  |  |  | ------ | -
|           |  | September 30, 2003 |            | Portfolio  |  | September 30, 2002 |        | Portfolio 
|           |  | Balance            |            | Percentage |  | Balance            |        | Percentage
|           |  |                    |            |            |  |                    |        |           
|Arizona    |  | $                  | 4,887,202  |            |  |                    | 9.36   | %          |  | $ | 16,225,981 |  |  |  | 17.79  | %
|California |  |                    | 5,751,298  |            |  |                    | 11.02  | %          |  |   | 1,247,876  |  |  |  | 1.37   | %
|Colorado   |  |                    | 163,333    |            |  |                    | 0.31   | %          |  |   | 983,217    |  |  |  | 1.08   | %
|Florida    |  |                    | 115,450    |            |  |                    | 0.22   | %          |  |   |           |  |  |  |       | %
|Hawaii     |  |                    | 10,992,254 |            |  |                    | 21.06  | %          |  |   | 11,750,000 |  |  |  | 12.88  | %
|Nevada     |  |                    | 17,691,975 |            |  |                    | 33.90  | %          |  |   | 43,288,748 |  |  |  | 47.47  | %
|New Mexico |  |                    | 168,000    |            |  |                    | 0.32   | %          |  |   | 1,157,505  |  |  |  | 1.27   | %
|New York   |  |                    | 2,000,000  |            |  |                    | 3.83   | %          |  |   |           |  |  |  |       | %
|Ohio       |  |                    | 400,000    |            |  |                    | 0.77   | %          |  |   |           |  |  |  |       | %
|Texas      |  |                    | 6,080,095  |            |  |                    | 11.65  | %          |  |   | 11,568,971 |  |  |  | 12.69  | %
|Utah       |  |                    | 3,369,010  |            |  |                    | 6.46   | %          |  |   | 3,369,010  |  |  |  | 3.69   | %
|Washington |  |                    | 576,000    |            |  |                    | 1.10   | %          |  |   | 1,600,000  |  |  |  | 1.76   | %
|           |  |                    |            |            |  |                    |        |            |  |   |            |  |  |  |        |  
|           |  | $                  | 52,194,617 |            |  |                    | 100.00 | %          |  | $ | 91,191,308 |  |  |  | 100.00 | %
|           |  |                    |            |            |  |                    |        |            |  |   |            |  |  |  |        |  

Asset Quality and Loan Reserves

Losses may occur from investing in mortgage loans. The amounts of losses will
vary as the loan portfolio is affected by changing economic conditions and the
financial condition of borrowers.

The conclusion that a mortgage loan is uncollectible or that collectibility is
doubtful is a matter of judgment. On a quarterly basis, the Manager evaluates
the Companys mortgage loan portfolio for impairment. The fact that a loan is
temporarily past due does not necessarily mean that the loan is impaired.
Rather, all relevant circumstances are considered by our Manager to determine
impairment and the need for specific reserves. Such evaluation, which includes
a review of all loans on which full collectibility may not be reasonably
assured, considers among other matters:



| |  |  | prevailing economic conditions;             
| | - |  | --------------------------------------------
|
| |  |  | historical experience;                      
|
| |  |  | the nature and volume of the loan portfolio;

18



---



##### Table of Contents





| |  |  | the borrowers financial condition and adverse situations that may
affect the borrowers ability to pay;
| | - |  | --------------------------------------------------------------------------------------------------------
|
| |  |  | evaluation of industry trends; and                                                                      
|
| |  |  | estimated net realizable value of any underlying collateral in relation to the loan amount.             

Based upon this evaluation, a determination is made as to whether the allowance
for loan losses is adequate to cover any potential losses. Additions to the
allowance for loan losses are made by charges to the provision for loan losses.
Recoveries of previously charged off amounts are credited to the allowance for
loan losses. As of September 30, 2003, our Manager had established a general
allowance for loan losses of $0.5 million. At September 30, 2003, seven of our
loans were non-performing (more than 90 days past due on principal or interest
payments) totaling $11.0 million. Our Manager evaluated the loans and
concluded that the underlying collateral was sufficient to protect us against a
loss of principal or interest with the exception on the loan described below.
Our Manager will continue to evaluate these loans in order to determine if any
other allowance for loan losses should be recorded.

On June 25, 2003, the Company and Fund II refinanced a $15.2 million note due
on August 19, 2003 as a new note with the interest rate reduced from 11.0% to
5.5%. No specific reserve has been provided for this loan based on the
underlying collateral value. The new loan has a term of 24 months. Interest
income not recognized by the Company during the period as a result of the
restructuring was $20,430.

On July 22, 2003, the Company entered into a stipulation with a borrower which
among other things reduced the interest rate to 7.0% from 12.5% on the
principal balance of $2.0 million (which represents a 10% pari passu interest
in a first trust deed of $20.0 million), deferred interest payments through
October 31, 2003, and extended the maturity date from June 14, 2003 to June 14,
2005. The borrower filed Chapter 11 Bankruptcy on June 26, 2003. The United
States Bankruptcy Court approved the stipulation. The borrower has defaulted
on the stipulation and the bankruptcy stay has been lifted. The borrower paid
interest payments due on November 15, 2003 and December 15, 2003. The Company
has the right to complete the foreclosure, but is in continuing discussions
with the borrower.

In addition to the above-mentioned loans, at September 30, 2003, our Manager
had granted extensions on 12 loans pursuant to the terms of the original loan
agreements which permit extensions by mutual consent. Such extensions are
generally provided on loans where the original term was 12 months or less and
where a borrower requires additional time to complete a construction project or
negotiate take out financing. The aggregate amount due to us from borrowers
whose loans had been extended as of September 30, 2003 was approximately $16.4
million. At September 30, 2003, all such loans were performing. Accordingly,
our Manager concluded that no additional allowance for loan losses was
necessary with respect to such loans.

Because of the fact that any decision regarding the allowance for loan losses
reflects a judgment about the probability of future events, there is an
inherent risk that such judgments will prove incorrect. In such event, actual
losses may exceed (or be less than) the amount of any reserve. To the extent
that we experience losses greater than the amount of our reserves, we may incur
a charge to our earnings that will adversely affect our operating results and
the amount of any distributions payable to our members.

19



---



##### Table of Contents



Nine Months Ended September 30, 2002 Compared to Nine Months Ended September
30, 2001

|                                                                      |  |                    |            |                    |  |             |           |  
|--------------------------------------------------------------------- |  | ------------------ | ---------- | ------------------ |  | ----------- | --------- | -
|                                                                      |  | FOR THE TRANSITION |            | FOR THE NINE      
|                                                                      |  | PERIOD ENDED       |            | MONTHS ENDED      
|RESULTS OF OPERATIONS                                                 |  | SEPTEMBER 30, 2002 |            | SEPTEMBER 30, 2001
|                                                                      |  |                    |            |                   
|                                                                      |  |                    |            |                    |  | (UNAUDITED)
|Total revenues                                                        |  | $                  | 9,726,881  |                    |  | $           | 8,140,242 |  
|Total expenses                                                        |  |                    | 442,559    |                    |  |             | 53,272    |  
|                                                                      |  |                    |            |                    |  |             |           |  
|Net income                                                            |  | $                  | 9,284,322  |                    |  | $           | 8,086,970 |  
|                                                                      |  |                    |            |                    |  |             |           |  
|Net income allocated to
Members per weighted
average membership units |  | $                  | 0.92       |                    |  | $           | 1.02      |  
|                                                                      |  |                    |            |                    |  |             |           |  
|Annualized net rate of
return to Members(b)                           |  |                    | 12.2       | %                  |  |             | 13.6      | %
|                                                                      |  |                    |            |                    |  |             |           |  
|Weighted average
membership units(a)                                  |  |                    | 10,142,982 |                    |  |             | 7,942,536 |  
|                                                                      |  |                    |            |                    |  |             |           |  



| |                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) The weighted average number of outstanding units for the transition
period ended September 30, 2002 is calculated based upon the daily number
of outstanding units beginning on January 1, 2002. The weighted average
number of outstanding units for the nine months ended September 30, 2001
is calculated based upon the daily number of outstanding units beginning
on January 1, 2001.
|
| | (b) The annualized net rate of return to unit holders is calculated
based upon the net income allocated to unit holders per weighted average
units then divided by the number of months during each period and
multiplied by 12 months, then divided by ten (the $10 cost per unit).                                                                                                           

Total Revenues. For the nine months ended September 30, 2002, revenues totaled
$9.7 million compared to $8.1 million for the same period in 2001, an increase
of $1.6 million or 19%. The increase in revenue was primarily due to an
increase in our average daily investments in mortgage loans of approximately
26%. Additionally, during the nine months ended September 30, 2002, we did not
share in loan origination fees with our manager as we did for the same period
in 2001.

Total Expenses. For the nine months ended September 30, 2002, expenses totaled
$442,559 compared to $53,272 for the same period in 2001, an increase of
$389,287. Increase in total expenses for 2002 primarily related to an
approximate $180,000 increase in managements fees, the provision for loan
losses totaling $100,000, and interest expense approximating $114,000 related
to secured borrowings.

Net Income. Overall, net income for the nine months ended September 30, 2002
totaled $9.3 million compared to $8.1 million for the same period in 2001, an
increase of $1.2 million or 15%.

Annualized Rate of Return to Members. For the nine months ended September 30,
2002, annualized net rate of return to members totaled 12.2% compared to 13.6%
for the same period in 2001. The decrease in annualized net rate of return to
members was primarily related to an allowance for loan losses of $100,000,
which our Manager decided to establish during the transition period ended
September 30, 2002. See discussion - Asset Quality and Loan Reserves.

20



---



##### Table of Contents



CRITICAL ACCOUNTING POLICIES

Revenue Recognition

Interest is recognized as revenue when earned according to the terms of the
loans, using the effective interest method. The Company does not recognize
interest income on loans once they are determined to be impaired. A loan is
impaired when based on current information and events, it is probable that the
Company will be unable to collect all amounts due according to the contractual
terms of the loan agreement. Cash receipts will be allocated to interest
income, except when such payments are specifically designated by the terms of
the loan as principal reduction or when management does not believe the
Companys investment in the loan is fully recoverable. Fee
income and other income are recognized as revenue when earned.

Investments in Mortgage Loans

Investment in mortgage loans secured by trust deeds and mortgages are
originated by our Manager in accordance with terms contained in our operating
agreement. Currently, all of the mortgage loans are fixed rate loans with
maturities ranging from two months to 30 months, secured by first and second
deeds of trust on properties securing commercial, land, construction,
residential, bridge, and acquisition and development loans. Bridge loans
provide interim financing (12 to 24 months) to enable commercial borrowers to
attempt to qualify for permanent financing. Currently, all of our mortgage
loans require interest only payments with a balloon payment of the principal at
maturity. We have both the intent and ability to hold mortgage loans until
maturity and, therefore, mortgage loans are classified and accounted for as
held for investment and are carried at cost.

Allowance for Loan Losses

We maintain an allowance for loan losses on our investment in mortgage loans
for estimated and expected credit impairment which is considered inherent to
our investment in mortgage loans portfolio. Our Managers estimate of expected
losses is based on a number of factors including the types and dollar amounts
of loans in the portfolio, adverse situations that may effect the borrowers
ability to repay, prevailing economic conditions and the underlying collateral
securing the loan. Additions to the reserve are provided through a charge to
earnings and are based on an assessment of certain factors including, but not
limited to, estimated losses on the loans. Actual losses on loans are recorded
as a reduction to the allowance for loan losses. Subsequent recoveries of
amounts previously charged off are added back to the reserve. Our Manager
believes that the allowance for loan losses totaling $0.5 million as of
September 30, 2003, included in the accompanying balance sheet is adequate to
address estimated and expected credit impairment.

Real Estate Held For Sale

Real estate held for sale includes real estate acquired through foreclosure and
is carried at the lower of the recorded amount, inclusive of any senior
indebtedness, or the propertys estimated fair value, less estimated costs to
sell. At September 30, 2003 and September 30, 2002, the Company had $26.5
million and $1.5 million, respectively, in real estate held for sale.

FACTORS AFFECTING OUR OPERATING RESULTS

Our business is subject to numerous factors affecting our operating results. In
addition to the factors discussed above, our operating results may be affected
by:

Risks of Investing in Mortgage Loans



| |  |  | Our underwriting standards and procedures are more
lenient than conventional lenders in that we will invest in
loans to borrowers who will not be required to meet the
credit standards of conventional mortgage lenders.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

21



---



##### Table of Contents





| |  |  | We approve mortgage loans more quickly than other
mortgage lenders. Due to the nature of loan approvals, there
is a risk that the credit inquiry our Manager performs will
not reveal all material facts pertaining to the borrower and
the security.                                                                                                                                                                                                                                                                                                                   
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Our results of operations will vary with changes in
interest rates and with the performance of the relevant real
estate markets.                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  |  | If the economy is healthy, we expect that more people
will borrow money to acquire, develop or renovate real
property. However, if the economy grows too fast, interest
rates may increase too much and the cost of borrowing may
become too expensive. This could result in a slowdown in real
estate lending which may mean we will have fewer loans to
acquire, thus reducing the our revenues and the distributions
to our members.                                                                                                                                 
|
| |  |  | If, at a time of relatively low interest rates, a
borrower should prepay obligations that have a higher
interest rate from an earlier period, investors will likely
not be able to reinvest the funds in mortgage loans earning
that higher rate of interest. In the absence of a prepayment
fee, the investors will receive neither the anticipated
revenue stream at the higher rate nor any compensation for
their loss. This in turn could harm our reputation and make
it more difficult for us to attract investors willing to
acquire interest in mortgage loans.

Risk of Defaults

Our performance will be directly impacted by any defaults on the loans in our
portfolio. As noted above, we may experience a higher rate of defaults than
conventional mortgage lenders. We seek to mitigate the risk by estimating the
rate of the underlying collateral and insisting on low loan to value ratios.
However, no assurance can be given that these efforts will fully protect us
against losses on defaulted loans. Moreover, during the period of time when a
defaulted loan is the subject of foreclosure proceedings, it is likely that we
will earn less (if any) income from such loans, thereby reducing our earnings.

Competition for Borrowers

We consider our competitors for borrowers to be the providers of
non-conventional mortgage loans, that is, lenders who offer short-term,
equity-based loans on an expedited basis for higher fees and rates than those
charged by conventional lenders and mortgage loans investors, such as
commercial banks, thrifts, conduit lenders, insurance companies, mortgage
brokers, pension funds and other financial institutions that offer conventional
mortgage loans. Many of the companies against which we compete have
substantially greater financial, technical and other resources than we do.
Competition in our market niche depends upon a number of factors including
price and interest rates of the loan, speed of loan processing, cost of
capital, reliability, quality of service and support services.

Effect of Fluctuations in the Economy

Our sole business, making loans secured by real estate, is particularly
vulnerable to changes in macroeconomic conditions. Any significant decline in
economic activity, particularly in the geographical markets in which we
concentrate our loans, could result in a decline in the demand for real estate
development loans. In order to stay fully invested during a period of declining
demand for real estate loans, we may be required to make loans on terms less
favorable to us or to make loans involving greater risk to us. Declines in
economic activity are often accompanied by a decline in prevailing interest
rates. Although our lending rates are not directly tied to the Federal Reserve
Boards discount rate, a sustained and widespread decline in interest rates
will impact the interest we are able to earn on our loans. Since our loans
generally do not have prepayment penalties, declining interest rates may also
cause our borrowers to prepay their loans and we may not be able to reinvest
the amounts prepaid in loans generating a comparable yield. Moreover, any
significant decline in economic activity could adversely impact the ability of
our borrowers to complete their projects and obtain take out financing. This in
turn could increase the level of defaults we may experience.

22



---



##### Table of Contents



CAPITAL AND LIQUIDITY

Liquidity is a measure of a companys ability to meet potential cash
requirements, including ongoing commitments to fund lending activities and for
general operating purposes. Subject to a 3% reserve, we endeavor to use all of
our available funds to invest in mortgage loans. Income generated from such
loans is paid out to our members unless they have elected to reinvest their
dividends. We do not anticipate the need for hiring any employees, acquiring
fixed assets such as office equipment or furniture, or incurring material
office expenses during the next twelve months because Vestin Mortgage will
manage our affairs. We may pay Vestin Mortgage a monthly management fee of up
to 0.25% of our aggregate capital contributions.

During the year ended September 30, 2003, cash flows provided by our operating
activities approximated $12.5 million. Our investing activities for the year
ended September 30, 2003 consisted of investment in loans secured by real
estate in the amount of $15.3 million (net of proceeds from payoffs and sales
of mortgage loans), and redemption of certificates of deposits of $1.6 million.
Our financing activities primarily consisted of member withdrawals of $10.3
million and members distributions, net of reinvestments, of $8.0 million.
Approximately 377 of our members currently reinvest their distributions.

Any significant level of defaults on outstanding loans could reduce the funds
we have available for investment in new loans. Resulting foreclosure
proceedings may not generate full repayment of our loans and may result in
significant delays in the return of invested funds. This would diminish our
capital resources and would impair our ability to invest in new loans. See the
discussion Asset Quality and Loan Reserves. The mortgage loans in which we
invest are not federally insured as are certain bank deposits and are generally
illiquid as compared to government and certain corporate bonds. In addition,
redemptions by our Members would reduce the capital we have available for
investment. Such redemptions are limited by the terms of our operating
agreement to not more than 10% per year and not more than $100,000 per member
per calendar year and are subject to other conditions.

In addition, redemptions by our members reduce the capital we have available
for investment. Such redemptions are limited by the terms of our operation
agreement to not more than 10% per year and not more than $100,000 per member
per calendar year and are subject to other conditions. Beginning capital as of
January 1, 2003 was $97.5 million, which would limit redemptions to $9.75
million for calendar 2003. On June 17, 2003, the Company discontinued
accepting requests for the redemption of units for the 2003 calendar year. As
of November 30, 2003, the total of redemptions made and redemptions requested
and awaiting payments was $9.2 million. All redemptions request received after
that date have been logged for redemption beginning in January 2004. As of
November 30, 2003, requests to redeem 814,536 Units in 2004, 554,104 Units in
2005 and 302,613 Units in 2006 had been logged.

Our Manager believes that total non-performing assets at September 30, 2003
have increased primarily as a result of factors unique to specific borrowers.
Because of the estimated value of the underlying properties, the Company does
not believe that any losses beyond those already recognized will be incurred
from these assets upon final disposition. However, it is possible that the
Company will not be able to realize the full estimated carrying values upon
disposition, particularly if continuing economic weakness results in declining
real estate values.

As of September 30, 2003, the Company had secured borrowings of $20.3 million
related to intercreditor and participation agreements. Pursuant to the
intercreditor agreements, the Investor may participate in certain loans with
Vestin Mortgage, Vestin Fund II, and the Company (collectively, the Lead
Lenders). In the event of borrower non-performance, the intercreditor
agreements gives the Lead Lenders the right to either (i) continue to remit to
the investor the interest due on the participation amount; (ii) substitute an
alternative loan acceptable to the investor; or (iii) repurchase the
participation from the investor for the outstanding balance of the
participation plus accrued interest. Consequently, mortgage loan financing
under the intercreditor agreements are accounted for as a secured
borrowing in accordance with SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities.

23



---



##### Table of Contents



Pursuant to the participation agreements, the Investor may participate in
certain loans with Vestin Fund II and the Company (collectively, the Lead
Lenders). In the event of borrower non-performance, the participation
agreements gives the participant the right to require substitution of its
interest with another loan, or, if the right of substitution is not exercised
and the participant holds more than 50% of the loan, the participant may
request that the Lead Lender purchase a portion so that the Lead Lender has at
least a 50% pro rata share of the non-performing loan. Consequently, mortgage
loan financing under the participation arrangement is accounted for as a
secured borrowing in accordance with SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities.

As of September 30, 2003, we have only one revolving line of credit, which is
from First Hawaiian Bank in the amount of $1,000,000. The balance as of
September 30, 2003 for that line of credit was $0. As of September 30, 2003,
the Company was in compliance with all applicable covenants related to the line
of credit. The line of credit expires on December 31, 2003 and the Company
expects to renew the line of credit at that time.

We may seek to expand our capital resources through borrowings from
institutional lenders or through securitization of our loan portfolio or
similar arrangements. Other than the line of credit mentioned above, we
currently do not have in place any commitments to borrow any funds or
securitize any of our assets. No assurance can be given that, if we should seek
to borrow funds or to securitize our assets we would be able to do so on
commercially attractive terms. Our ability to expand our capital resources in
this manner is subject to many factors, some of which are beyond our control,
including the state of the economy, the state of the capital markets and the
perceived quality of our loan portfolio.

We do not currently have any interest in any special purpose entities nor do we
have any commitments or obligations which are not reflected on our balance
sheet. We do not have any interest in derivative contracts.

We maintain working capital reserves of approximately 3% of aggregate members
capital accounts in cash and cash equivalents, certificates of deposits and
short-term investments. This reserve is available to pay expenses in excess of
revenues, satisfy obligations of underlying security properties, expend money
to satisfy our unforeseen obligations and for other permitted uses of the
working capital. At September 30, 2003, the Company had $13.7 million in cash,
$1.2 million in certificates of deposit, and $115.1 million in total assets. It
appears the Company has sufficient working capital to meet its operating needs
in the near term.

24



---



##### Table of Contents






ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk, primarily from changes in interest rates. We do
not deal in any foreign currencies and do not own any options, futures or other
derivative instruments. We do not have a significant amount of debt.

Most of our assets consist of investments in mortgage loans. At September 30,
2003, our aggregate investment in mortgage loans was approximately $52,194,617
with a weighted average effective interest rate of 12.3%. Most of the mortgage
loans have a term of 12 months; the average term of outstanding loans at
September 30, 2003 was 13.0 months. All of the outstanding mortgage loans at
September 30, 2003 were fixed rate loans. All of the mortgage loans are held
for investment purposes; none are held for sale. We intend to hold such
mortgage loans to maturity. None of the mortgage loans have prepayment
penalties.

Market fluctuations in interest rates generally do not affect the carrying
value of our investment in mortgage loans. However, significant and sustained
changes in interest rates could affect our operating results. If interest rates
decline significantly, some of the borrowers could prepay their loans with the
proceeds of a refinancing at lower interest rates. This would reduce our
earnings and funds available for distribution to members. On the other hand, a
significant increase in interest rates could result in a slowdown in real
estate development activity which would reduce the demand for commercial
mortgage loans. As a result, we might encounter greater difficulty in
identifying appropriate borrowers. We are not in a position to quantify the
potential impact on our operating results from a material change in interest
rates.

At September 30, 2003, we also had approximately $14.9 million invested in cash
and cash equivalents, and certificates of deposit. Approximately 3% of our
assets will be held in such accounts as a cash reserve; additional deposits in
such accounts will be made as funds are received from new investors and
repayment of loans pending the deployment of such funds in new mortgage loans.
We believe that these financial assets do not give rise to significant interest
rate risk due to their short-term nature.

25



---



##### Table of Contents






ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and supplementary data are indexed in Item 15 of this
report.






ITEM 9. CHANGES IN AND
DISAGREEMENTS WITH INDEPENDENT AUDITORS ON ACCOUNTING AND FINANCIAL DISCLOSURE


There were no changes in or disagreements on any items dealing with accounting
and financial disclosure with the independent auditors during the past two
fiscal years.

26



---



##### Table of Contents






PART III




ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT

The Company does not have any directors or officers. The Company is managed by
Vestin Mortgage. Vestin Mortgage is a wholly-owned subsidiary of Vestin Group,
Inc., a Delaware corporation, whose common stock is publicly held and is traded
on the NASDAQ under the symbol VSTN. Through its subsidiaries, Vestin Group,
Inc. is engaged in asset management, real estate lending and other financial
services.

The directors and executive officers of Vestin Mortgage, Inc. are listed below:

|                     |  |     |    |       |  |                                                           
|-------------------- |  | --- | -- | ----- |  | ----------------------------------------------------------
|Name                 |  | Age |    | Title
|Michael V. Shustek   |  |     | 45 |       |  | Chief Executive Officer, Chairman and Director            
|Peggy S. May         |  |     | 34 |       |  | President                                                 
|Stephen A. Schneider |  |     | 57 |       |  | Vice President                                            
|Lance K. Bradford    |  |     | 37 |       |  | Chief Financial Officer, Treasurer, Secretary
and Director

The principal occupation and business experience for each of our officers and
directors and key employees, for at least the last five years, are as follows:

Michael V. Shustek has been a director of Vestin Mortgage and Chairman of the
Board of Directors, Chief Executive Officer and a director of Vestin Group
since April 1999. In 2003, Mr. Shustek became the Chief Executive Officer of
Vestin Mortgage. In 1995, Mr. Shustek founded Del Mar Mortgage, and has been
involved in various aspects of the real estate industry in Nevada since 1990.
In 1993, he founded Foreclosures of Nevada, Inc., a company specializing in
non-judicial foreclosures. In 1993, Mr. Shustek also started Shustek
Investments, a company that originally specialized in property valuations for
third-party lenders or investors and which continues today as the primary
vehicle for his private investment portfolio. In 1997, Mr. Shustek was involved
in the initial founding of Nevada First Bank, with the largest initial capital
base of any new state charter in Nevadas history. In 2000, Mr. Shustek
co-authored a book, Trust Deed Investments, on the topic of private mortgage
lending. Mr. Shustek is a guest lecturer at the University of Nevada, Las
Vegas, where he also teaches a course in Real Estate Law and Ethics. Mr.
Shustek received a Bachelor of Science degree in Finance at the University of
Nevada, Las Vegas.

On March 26, 1999, Del Mar Mortgage, Inc. ,the stock of which is wholly-owned
by Mr. Shustek, entered into a stipulated court order (the Order) with the
State of Nevada, Department of Business and Industry, Financial Institutions
Division (the Division) resolving a dispute regarding Del Mar Mortgage,
Inc.s alleged noncompliance with various Nevada regulatory statutes. Without
admitting any facts, and solely to settle these matters, Del Mar Mortgage, Inc.
agreed to assure compliance with applicable Nevada law in all of its record
keeping, advertising and solicitation of mortgage borrowers and in its making
and servicing of mortgage loans. Del Mar Mortgage, Inc. paid the Division an
aggregate of $50,000 to cover the Divisions costs. The Order contained no
findings of wrongful conduct by Del Mar Mortgage, Inc. or Mr. Shustek. Mr.
Shustek was apparently named by the Division because he was the controlling
person of Del Mar Mortgage, Inc. In April 1999, Vestin Group (then known as
Sunderland Acquisition Corporation) acquired the customer lists, goodwill and
certain other intangible assets of Del Mar Mortgage, Inc. and assumed
liabilities related to such assets. Neither Vestin Group (then Sunderland
Acquisition Corporation) nor Vestin Mortgage (then known as Capsource, Inc.)
acquired any loans or other financial assets of Del Mar Mortgage, Inc., which
continued to operate as an independent business. In contemplation of such
acquisition, Vestin Group (then Sunderland Acquisition Corporation) and Vestin
Mortgage (then Capsource, Inc.) agreed to be bound by the terms of the Order.

Peggy S. May has been with Vestin Group since September 1995, and has been the
President of Vestin Mortgage since January 2001. From 1997 to 2000, Ms. May was
the Senior Vice President of Vestin Mortgage. She is responsible for all new and existing clients, loan packages and manages
investor relationships and serves as the administrator of the corporate
offices. Ms. May has over ten years of experience in title, escrow and private
lending.

27



---



##### Table of Contents



Stephen A. Schneider has been Vice President of Vestin Mortgage since January
2001. From July 2000 to December 2000, Mr. Schneider was the Chief Operation
Officer of Vestin Group. Mr. Schneider is responsible for the maintenance of
all banking and financial relationships. Mr. Schneider has over 26 years
experience in the financial services industry. He worked at US Bank where he
managed the banks business banking department and underwrote loans for
companies with sales of $1 million to $10 million and maintained relationships
with the banks business customers. Mr. Schneider sits on the boards of Focus
Las Vegas and Leadership Las Vegas Youth as well as several other
organizations. He is responsible for the Vestin Foundation, a non-profit
organization aimed at funding local charitable organizations.

Lance K. Bradford has been the Chief Financial Officer, Treasurer, Secretary
and a director of Vestin Mortgage since April 1999. Mr. Bradford has been the
Chief Financial Officer, President, Treasurer, and a director of Vestin Group
since April 1999. From 1999 to 2000, Mr. Bradford was also the Corporate
Secretary of Vestin Group. Since 1992, Mr. Bradford has been a partner in L.L.
Bradford & Company, Las Vegas, Nevada, a Certified Public Accounting firm that
he founded. From 1988 to 1991, Mr. Bradford served as an accountant with Ernst
& Young International. Mr. Bradford received a Bachelor of Science degree in
Accounting from the University of Nevada, in Reno, Nevada.




ITEM 11. EXECUTIVE COMPENSATION

Not Applicable.




ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

No person or entity owns beneficially more than 5% of the ownership interests
in us. Our Manager owns approximately 100,000 units or 1.1% of our capital as
of September 30, 2003.

28



---



##### Table of Contents






ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions with Management and Others

Management Fee

Our Manager is entitled to receive from us a management fee of up to 0.25% of
our aggregate capital contribution, paid monthly in arrears. The amount of
management fees incurred to our Manager for the fiscal years ended September 30, 2003
and 2002, approximated $253,000 and $310,000, respectively.

Amount Due to Managing Member

As of September 30, 2003 and September 30, 2002, we owed our Manager
approximately $362,000 and $430,000, respectively, for expenses advanced on our
behalf and distributions due related to units owned by our Manager.

Purchase of Loans from Vestin Fund II, LLC

During the fiscal years ended September 30, 2003 and 2002, the Company
purchased approximately $15,056,000 and $9,100,000 in mortgage loans from
Vestin Fund II, LLC, a company managed by our Manager. During the fiscal years
ended September 30, 2003 and 2002, the Company sold approximately $27,460,000
and $13,137,000 in mortgage loans to Vestin Fund II, LLC.

Other Transactions with the Manager

During the transition period ended September 30, 2002, the Company purchased
$479,000 in mortgage loans from the Companys Manager at their historical cost
pursuant to Section 4.4.1 of the Companys Operating Agreement.

Accounting Fees

During the year ended September 30, 2003, the Company paid $5,000 to L.L.
Bradford & Company, LLC, a certified public accounting firm for accounting
services. Vestin Mortgages Chief Financial Officer, Treasurer, Secretary and
Director is an equity owner in that firm.

29



---



##### Table of Contents






ITEM 14. CONTROL AND PROCEDURES

The Company has evaluated the effectiveness of the design and operation of its
disclosure controls and procedures as of September 30, 2003 (the Evaluation
Date). Such evaluation was conducted under the supervision and with the
participation of the Chief Executive Officer (CEO) and the Chief Financial
Officer (CFO) of Vestin Mortgage, Inc., the Companys Manager, who function
as the equivalent of the CEO and CFO of the Company. Based upon such
evaluation, the Companys CEO and CFO have concluded that, as of the Evaluation
Date, the Companys disclosure controls and procedures were effective. There
have been no significant changes in the Companys internal controls over
financial reporting that occurred during the Companys most recent fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, the Companys internal controls over financial reporting.

30



---



##### Table of Contents






PART IV




ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K



|(a) |  | The financial statement are contained on Pages F-2 through F-25 on this
Annual Report on Form 10-K, and the list of the financial statement
contained herein is set forth on page F-1, which is hereby incorporated by
reference.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) |  | The Company did not have any Current Reports on Form 8-K filing during
the fourth fiscal quarter of 2003.                                                                                                                        




EXHIBIT INDEX

|            |  |                                                 
|----------- |  | ------------------------------------------------
|Exhibit No. |  | Description of Exhibits                         
|            |  |                                                 
|3.1(1)      |  | Articles of Organization                        
|3.1(2)      |  | Amended and Restated Operating Agreement        
|31.1        |  | Section 302 Certification of Michael V. Shustek 
|31.2        |  | Section 302 Certification of Lance K. Bradford  
|32          |  | Certification Pursuant to U.S.C. 18 Section 1350



|(1) |  | Incorporated herein by reference to our S-11 Registration Statement filed on December 21, 2000.              
|--- |  | -------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Incorporated herein by reference to Amendment No. 2 to our S-11 Registration Statement filed on July
3, 2002.

31



---



##### Table of Contents






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 thereunto duly authorized.

| |                    |                                                                                  
| | ------------------ | ---------------------------------------------------------------------------------
| | Vestin Fund I, LLC
| |                    |                                                                                  
| |                    | By: Vestin Mortgage, Inc., its sole manager                                      
| |                    |                                                                                  
| |                    | By: /s/ Michael V. Shustek                                                       
| |                    | Michael V. Shustek                                                               
| |                    | Chief Executive Officer and Director of
the
Manager(Principal
Officer of Manager)
| |                    |                                                                                  
| |                    | By: /s/ Lance K. Bradford                                                        
| |                    | Lance K. Bradford                                                                
| |                    | Director, Secretary and Treasurer
(Chief Financial Officer of the
Manager)       

Dated: December 23, 2003

32



---



##### Table of Contents



CONTENTS

|                               |                                |                                                           |     |      |      | 
|------------------------------ | ------------------------------ | --------------------------------------------------------- | --- | ---- | ---- | 
|                               |                                |                                                           |     | PAGE
|REPORT OF INDEPENDENT AUDITORS |                                |                                                           | F-2 |     
|FINANCIAL STATEMENTS          
|                               | Balance Sheets                 |                                                           |     | F-3  |     
|                               | Statements of Income           |                                                           |     | F-4  |     
|                               | Statements of Members Equity  |                                                           |     | F-5  |     
|                               | Statements of Cash Flows       |                                                           |     | F-6  |     
|                               | Notes to Financial Statements  |                                                           |     | F-8  |     
|SUPPLEMENTARY INFORMATION     
|                               | Mortgage Loans on Real Estate: |                                                           |     |      |     
|                               |                                | Mortgage Loan Rollforward                                 |     |      | F-20 | 
|                               |                                | Mortgage Loans by Type of Property                        |     |      | F-21 | 
|                               |                                | Mortgage Loans by Lien Position                           |     |      | F-22 | 
|                               |                                | Mortgage Loans that Exceed Three Percent of the Portfolio |     |      | F-23 | 

F-1



---



##### Table of Contents



Report of Independent Auditors

Members of Vestin Fund I, LLC

We have audited the accompanying balance sheets of Vestin Fund I, LLC (the
Company) as of September 30, 2003 and 2002, and the related statements of
income, members equity, and cash flows for the year ended September 30, 2003,
the nine-month period ended September 30, 2002 and the year ended December 31,
2001. These financial statements are the responsibility of the Company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. 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 Vestin Fund I, LLC as of
September 30, 2003 and 2002, and the results of its operations and its cash
flows for the year ended September 30, 2003, the nine-month period ended
September 30, 2002, and the year ended December 31, 2001, in conformity with
accounting principles generally accepted in the United States.

Our audits were conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The Mortgage Loan Rollforward, Mortgage
Loans by Type of Property, Mortgage Loan by Lien Position, and Mortgage Loans
That Exceed Three Percent of the Portfolio are presented for purposes of
additional analysis and are not a required part of the financial statements.
Such information has been subjected to the auditing procedures applied in our
audits of the financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.



| | /s/ Ernst & Young LLP
| | ---------------------

Phoenix, Arizona
December 18, 2003

F-2



---



##### Table of Contents



Vestin Fund I, LLC

BALANCE SHEETS

|                                                                                                                                                                |                                |                                       |            |            |             |                    |            |                    |             |  |  |  | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------ | ------------------------------------- | ---------- | ---------- | ----------- | ------------------ | ---------- | ------------------ | ----------- |  |  |  | 
|                                                                                                                                                                |                                |                                       |            |            |             | SEPTEMBER 30, 2003 |            | SEPTEMBER 30, 2002 |            
|                                                                                                                                                                |                                |                                       |            |            |             |                    |            |                    |            
|ASSETS                                                                                                                                                          |                                |                                       |            |            |             |                    |            |                    |            
|Cash                                                                                                                                                            |                                | $                                     | 13,707,547 |            |             | $                  | 2,762,334  |                    |            
|Certificates of deposit                                                                                                                                         |                                |                                       | 1,175,000  |            |             |                    | 2,775,000  |                    |            
|Interest and other receivables                                                                                                                                  |                                |                                       | 1,632,327  |            |             |                    | 1,175,972  |                    |            
|Real estate held for sale                                                                                                                                       |                                |                                       | 26,523,340 |            |             |                    | 1,541,258  |                    |            
|Investment in mortgage loans, net of allowance for loan
losses of $500,000 and $100,000, respectively                                                           |                                |                                       | 51,694,617 |            |             |                    | 91,091,308 |                    |            
|Assets under secured borrowings                                                                                                                                 |                                |                                       | 20,323,719 |            |             |                    | 6,637,370  |                    |            
|Other assets                                                                                                                                                    |                                |                                       | 7,650      |            |             |                    | 83,631     |                    |            
|                                                                                                                                                                |                                |                                       |            |            |             |                    |            |                    |             | 
|                                                                                                                                                                |                                | Total assets                          |            | $          | 115,064,200 |                    |            | $                  | 106,066,873 |  | 
|                                                                                                                                                                |                                |                                       |            |            |             |                    |            |                    |             | 
|LIABILITIES AND MEMBERS EQUITY                                                                                                                                 |                                |                                       |            |            |             |                    |           
|Liabilities                                                                                                                                                    
|                                                                                                                                                                | Accounts payable               |                                       | $          | 22,955     |             |                    | $          |                   |             | 
|                                                                                                                                                                | Due to Manager                 |                                       |            | 361,607    |             |                    |            | 430,447            |             | 
|                                                                                                                                                                | Due to related parties         |                                       |            | 1,079,423  |             |                    |            |                   |             | 
|                                                                                                                                                                | Note payable                   |                                       |            | 2,000,000  |             |                    |            |                   |             | 
|                                                                                                                                                                | Note payable - related parties |                                       |            | 4,733,311  |             |                    |            |                   |             | 
|                                                                                                                                                                | Secured borrowings             |                                       |            | 20,323,719 |             |                    |            | 6,637,370          |             | 
|                                                                                                                                                                | Deferred income                |                                       |            | 28,117     |             |                    |            |                   |             | 
|                                                                                                                                                                |                                |                                       |            |            |             |                    |            |                    |             | 
|                                                                                                                                                                |                                | Total liabilities                     |            |            | 28,549,132  |                    |            |                    | 7,067,817   |  | 
|                                                                                                                                                                |                                |                                       |            |            |             |                    |            |                    |             | 
|Members equity - authorized 10,000,000 units
9,124,566 and 9,928,052 units at $10 per unit issued
and outstanding at September 30, 2003 and 2002,
respectively |                                |                                       | 86,515,068 |            |             |                    | 98,999,056 |                    |            
|                                                                                                                                                                |                                |                                       |            |            |             |                    |            |                    |             | 
|                                                                                                                                                                |                                | Total members equity                 |            |            | 86,515,068  |                    |            |                    | 98,999,056  |  | 
|                                                                                                                                                                |                                |                                       |            |            |             |                    |            |                    |             | 
|                                                                                                                                                                |                                | Total liabilities and members equity |            | $          | 115,064,200 |                    |            | $                  | 106,066,873 |  | 
|                                                                                                                                                                |                                |                                       |            |            |             |                    |            |                    |             | 

The accompanying notes are an integral part of these statements.

F-3



---



##### Table of Contents



Vestin Fund I, LLC

STATEMENTS OF INCOME

|                                                                      |                                                   |                          |           |               |            |               |            |               |            |              |            |              |           |   |            |            |            |  | 
|--------------------------------------------------------------------- | ------------------------------------------------- | ------------------------ | --------- | ------------- | ---------- | ------------- | ---------- | ------------- | ---------- | ------------ | ---------- | ------------ | --------- | - | ---------- | ---------- | ---------- |  | 
|                                                                      |                                                   |                          |           |               |            |               |            |               |            |              |            | FOR THE NINE |           |   |            |            |           
|                                                                      |                                                   |                          |           |               |            |               |            |               |            |              |            | MONTHS       |           |   |            |            |           
|                                                                      |                                                   |                          |           | FOR THE YEAR  |            | FOR THE YEAR  |            | TRANSITION    |            | FOR THE YEAR |            |              |           |  
|                                                                      |                                                   |                          |           | ENDED         |            | ENDED         |            | PERIOD ENDED  |            | ENDED        |           
|                                                                      |                                                   |                          |           | SEPTEMBER 30, |            | SEPTEMBER 30, |            | SEPTEMBER 30, |            | DECEMBER 31, |           
|                                                                      |                                                   |                          |           |               |            |               |            |               |            |              |           
|                                                                      |                                                   |                          |           | 2003          |            | 2002          |            | 2002          |            | 2001         |           
|                                                                      |                                                   |                          |           |               |            |               |            |               |            |              |           
|                                                                      |                                                   |                          |           |               |            |               |            | (UNAUDITED)   |            |              |            |              |           |   |            |            |           
|Revenues                                                              |                                                   |                          |           |               |            |               |            |               |            |              |            |              |           |   |            |            |           
|                                                                      | Interest income from investment in
mortgage loans |                          | $         | 9,194,054     |            |               | $          | 12,904,243    |            |              | $          | 9,612,827    |           |   | $          | 11,051,141 |            | 
|                                                                      | Loan fees                                         |                          |           | 526,756       |            |               |            |              |            |              |            |             |           |   |            | 256,230    |            | 
|                                                                      | Other income                                      |                          |           | 643,638       |            |               |            | 247,157       |            |              |            | 114,054      |           |   |            | 257,390    |            | 
|                                                                      |                                                   |                          |           |               |            |               |            |               |            |              |            |              |           |   |            |            |            | 
|                                                                      |                                                   | Total revenues           |           |               | 10,364,448 |               |            |               | 13,151,400 |              |            |              | 9,726,881 |   |            |            | 11,564,761 |  | 
|                                                                      |                                                   |                          |           |               |            |               |            |               |            |              |            |              |           |   |            |            |            | 
|Operating expenses                                                    |                                                   |                          |           |               |            |               |            |               |            |              |            |              |           |   |            |            |           
|                                                                      | Interest expense                                  |                          |           | 1,120,556     |            |               |            | 113,689       |            |              |            | 113,689      |           |   |            |           |            | 
|                                                                      | Management fees to Manager                        |                          |           | 253,100       |            |               |            | 310,448       |            |              |            | 186,781      |           |   |            | 130,851    |            | 
|                                                                      | Valuation adjustment on real estate held for      |                          |           | 3,382,622     |            |               |            |              |            |              |            |             |           |   |            |           |            | 
|                                                                      | Write-off of deferred bond offering costs         |                          |           | 203,517       |            |               |            |              |            |              |            |             |           |   |            |           |            | 
|                                                                      | Expenses related to real estate held for sale     |                          |           | 466,623       |            |               |            |              |            |              |            |             |           |   |            |           |            | 
|                                                                      | Legal and accounting expenses                     |                          |           | 194,674       |            |               |            |              |            |              |            |             |           |   |            |           |            | 
|                                                                      | Provision for loan losses                         |                          |           | 400,000       |            |               |            | 100,000       |            |              |            | 100,000      |           |   |            |           |            | 
|                                                                      | Other                                             |                          |           | 30,997        |            |               |            | 42,056        |            |              |            | 42,089       |           |   |            | 46,055     |            | 
|                                                                      |                                                   |                          |           |               |            |               |            |               |            |              |            |              |           |   |            |            |            | 
|                                                                      |                                                   | Total operating expenses |           |               | 6,052,089  |               |            |               | 566,193    |              |            |              | 442,559   |   |            |            | 176,906    |  | 
|                                                                      |                                                   |                          |           |               |            |               |            |               |            |              |            |              |           |   |            |            |            | 
|                                                                      |                                                   | NET INCOME               |           | $             | 4,312,359  |               |            | $             | 12,585,207 |              |            | $            | 9,284,322 |   |            | $          | 11,387,855 |  | 
|                                                                      |                                                   |                          |           |               |            |               |            |               |            |              |            |              |           |   |            |            |            | 
|Net income allocated to members                                       |                                                   | $                        | 4,312,359 |               |            | $             | 12,585,207 |               |            | $            | 9,284,322  |              |           | $ | 11,387,855 |            |           
|                                                                      |                                                   |                          |           |               |            |               |            |               |            |              |            |              |           |   |            |            |            | 
|Net income allocated to members per
weighted average membership units |                                                   | $                        | 0.45      |               |            | $             | 1.23       |               |            | $            | 0.92       |              |           | $ | 1.34       |            |           
|                                                                      |                                                   |                          |           |               |            |               |            |               |            |              |            |              |           |   |            |            |            | 
|Weighted average membership units                                     |                                                   |                          | 9,668,310 |               |            |               | 10,193,776 |               |            |              | 10,142,982 |              |           |   | 8,519,804  |            |           
|                                                                      |                                                   |                          |           |               |            |               |            |               |            |              |            |              |           |   |            |            |            | 

The accompanying notes are an integral part of these statements.

F-4



---



##### Table of Contents



Vestin Fund I, LLC

STATEMENTS OF MEMBERS EQUITY

|                                          |  |       |            |        |  |  |  |  |  |   |             |  
|----------------------------------------- |  | ----- | ---------- | ------ |  |  |  |  |  | - | ----------- | -
|                                          |  | Units |            | Amount
|                                          |  |       |            |       
|Members equity at December 31, 2000      |  |       | 4,173,990  |        |  |  |  |  |  | $ | 41,381,211  |  
|Issuance of units (net of offering costs) |  |       | 5,923,233  |        |  |  |  |  |  |   | 59,030,659  |  
|Distributions                             |  |       |           |        |  |  |  |  |  |   | (10,756,770 | )
|Reinvestments of distributions            |  |       | 211,553    |        |  |  |  |  |  |   | 2,115,528   |  
|Members withdrawals                      |  |       | (70,288    | )      |  |  |  |  |  |   | (702,884    | )
|Net income                                |  |       |           |        |  |  |  |  |  |   | 11,387,855  |  
|                                          |  |       |            |        |  |  |  |  |  |   |             |  
|Members equity at December 31, 2001      |  |       | 10,238,488 |        |  |  |  |  |  |   | 102,455,599 |  
|Distributions                             |  |       |           |        |  |  |  |  |  |   | (9,636,502  | )
|Reinvestments of distributions            |  |       | 208,237    |        |  |  |  |  |  |   | 2,082,370   |  
|Members withdrawals                      |  |       | (518,673   | )      |  |  |  |  |  |   | (5,186,733  | )
|Net income                                |  |       |           |        |  |  |  |  |  |   | 9,284,322   |  
|                                          |  |       |            |        |  |  |  |  |  |   |             |  
|Members equity at September 30, 2002     |  |       | 9,928,052  |        |  |  |  |  |  |   | 98,999,056  |  
|Distributions                             |  |       |           |        |  |  |  |  |  |   | (10,363,632 | )
|Capital contribution from Manager         |  |       |           |        |  |  |  |  |  |   | 1,600,000   |  
|Reinvestments of distributions            |  |       | 231,487    |        |  |  |  |  |  |   | 2,314,870   |  
|Members withdrawals                      |  |       | (1,034,973 | )      |  |  |  |  |  |   | (10,347,585 | )
|Net income                                |  |       |           |        |  |  |  |  |  |   | 4,312,359   |  
|                                          |  |       |            |        |  |  |  |  |  |   |             |  
|Members equity at September 30, 2003     |  |       | 9,124,566  |        |  |  |  |  |  | $ | 86,515,068  |  
|                                          |  |       |            |        |  |  |  |  |  |   |             |  

The accompanying notes are an integral part of these statements.

F-5



---



##### Table of Contents



Vestin Fund I, LLC

STATEMENTS OF CASH FLOWS

|                                      |                                                                                   |                                             |                                                     |             |               |             |               |             |                    |             |              |             |           |             |           |              |            |             |  
|------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------------- | --------------------------------------------------- | ----------- | ------------- | ----------- | ------------- | ----------- | ------------------ | ----------- | ------------ | ----------- | --------- | ----------- | --------- | ------------ | ---------- | ----------- | -
|                                      |                                                                                   |                                             |                                                     |             | FOR THE YEAR  |             | FOR THE YEAR  |             | FOR THE TRANSITION |             | FOR THE YEAR
|                                      |                                                                                   |                                             |                                                     |             | ENDED         |             | ENDED         |             | PERIOD ENDED       |             | ENDED       
|                                      |                                                                                   |                                             |                                                     |             | SEPTEMBER 30, |             | SEPTEMBER 30, |             | SEPTEMBER 30,      |             | DECEMBER 31,
|                                      |                                                                                   |                                             |                                                     |             | 2003          |             | 2002          |             | 2002               |             | 2001        
|                                      |                                                                                   |                                             |                                                     |             |               |             |               |             |                    |             |             
|                                      |                                                                                   |                                             |                                                     |             |               |             | (unaudited)   |             |                    |             |              |             |           |             |          
|Cash
flows from operating activities: |                                                                                   |                                             |                                                     |             |               |             |               |             |                    |             |              |             |           |             |           |             
|                                      | Net income                                                                        |                                             | $                                                   | 4,312,359   |               |             | $             | 12,585,207  |                    |             | $            | 9,284,322   |           |             | $         | 11,387,855   |           
|                                      | Adjustments to reconcile net income to net
cash provided by operating activities: |                                             |                                                     |             |               |             |               |             |                    |             |              |             |           |             |           |              |           
|                                      |                                                                                   | Provision for loan losses                   |                                                     |             | 400,000       |             |               |             | 100,000            |             |              |             | 100,000   |             |           |              |           |            
|                                      |                                                                                   | Write down of real estate held for sale     |                                                     |             | 3,259,361     |             |               |             |                   |             |              |             |          |             |           |              |           |            
|                                      |                                                                                   | Write off of deferred offering costs        |                                                     |             | 203,517       |             |               |             |                   |             |              |             |          |             |           |              |           |            
|                                      |                                                                                   | Change in operating assets and liabilities: |                                                     |             |               |             |               |             |                    |             |              |             |           |             |           |              |            |            
|                                      |                                                                                   |                                             | Due to Manager                                      |             |               | 272,217     |               |             |                    | 439,582     |              |             |           | 280,291     |           |              |            | 265,921     |  
|                                      |                                                                                   |                                             | Due to related parties                              |             |               | 475,867     |               |             |                    |            |              |             |           |            |           |              |            |            |  
|                                      |                                                                                   |                                             | Interest and other receivables                      |             |               | (450,129    | )             |             |                    | (95,087     | )            |             |           | (138,754    | )         |              |            | (546,096    | )
|                                      |                                                                                   |                                             | Real estate held for sale                           |             |               | 3,246,909   |               |             |                    |            |              |             |           |            |           |              |            |            |  
|                                      |                                                                                   |                                             | Other assets                                        |             |               | (7,650      | )             |             |                    |            |              |             |           |            |           |              |            |            |  
|                                      |                                                                                   |                                             | Accounts payable                                    |             |               | 22,955      |               |             |                    |            |              |             |           |            |           |              |            |            |  
|                                      |                                                                                   |                                             | Note receivable from manager                        |             |               | 723,763     |               |             |                    |            |              |             |           |            |           |              |            |            |  
|                                      |                                                                                   |                                             | Deferred income                                     |             |               | 28,117      |               |             |                    |            |              |             |           |            |           |              |            | (256,230    | )
|                                      |                                                                                   |                                             |                                                     |             |               |             |               |             |                    |             |              |             |           |             |           |              |           
|                                      |                                                                                   |                                             | Net cash provided by operating activities           |             |               | 12,487,286  |               |             |                    | 13,029,702  |              |             |           | 9,525,859   |           |              |            | 10,851,450  |  
|                                      |                                                                                   |                                             |                                                     |             |               |             |               |             |                    |             |              |             |           |             |           |              |           
|Cash flows from investing activities: |                                                                                   |                                             |                                                     |             |               |             |               |             |                    |             |              |             |           |             |           |             
|                                      | Purchase of investments in mortgage loans                                         |                                             |                                                     | (31,267,192 | )             |             |               | (38,623,318 | )                  |             |              | (40,070,662 | )         |             |           | (136,896,686 | )         
|                                      | Purchase of investments in mortgage loans from:                                   |                                             |                                                     |             |               |             |               |             |                    |             |              |             |           |             |           |              |           
|                                      |                                                                                   | Vestin Fund II, LLC                         |                                                     |             | (14,469,950   | )           |               |             | (9,100,000         | )           |              |             |          |             |           |              |           |            
|                                      |                                                                                   | Vestin Mortgage                             |                                                     |             | (478,829      | )           |               |             | (3,706,186         | )           |              |             |          |             |           |              |           |            
|                                      |                                                                                   | Other related party                         |                                                     |             | (6,509,307    | )           |               |             | (60,000            | )           |              |             | (60,000   | )           |           |              |           |            
|                                      |                                                                                   | Private investor                            |                                                     |             | (380,403      | )           |               |             | (25,405,212        | )           |              |             |          |             |           |              |           |            
|                                      | Proceeds received from sale of mortgage loans to:                                 |                                             |                                                     |             |               |             |               |             |                    |             |              | 8,457,865   |           |             |           | 29,160,894   |           
|                                      |                                                                                   | Vestin Fund II, LLC                         |                                                     |             | 27,460,214    |             |               |             | 13,136,674         |             |              |             | 1,815,000 |             |           |              | 21,289,763 |            
|                                      |                                                                                   | Vestin Group, Inc.                          |                                                     |             | 4,500,000     |             |               |             | 996,000            |             |              |             |          |             |           |              |           |            
|                                      |                                                                                   | Vestin Mortgage                             |                                                     |             |              |             |               |             |                   |             |              |             |          |             |           |              | 2,925,000  |            
|                                      |                                                                                   | Other related party                         |                                                     |             | 290,938       |             |               |             | 4,114,973          |             |              |             | 914,973   |             |           |              |           |            
|                                      |                                                                                   | Private investor                            |                                                     |             | 1,030,000     |             |               |             | 8,457,865          |             |              |             |          |             |           |              |           |            
|                                      | Proceeds from loans paid off                                                      |                                             |                                                     | 35,078,803  |               |             |               | 54,905,439  |                    |             |              | 33,438,414  |           |             |           | 25,669,492   |           
|                                      | Proceeds from certificates of deposit                                             |                                             |                                                     | 1,600,000   |               |             |               | 225,000     |                    |             |              | (325,000    | )         |             |           | (1,250,000   | )         
|                                      |                                                                                   |                                             |                                                     |             |               |             |               |             |                    |             |              |             |           |             |           |              |           
|                                      |                                                                                   |                                             | Net cash provided by (used in) investing activities |             |               | 16,854,274  |               |             |                    | 4,941,235   |              |             |           | 4,170,590   |           |              |            | (59,101,537 | )
|                                      |                                                                                   |                                             |                                                     |             |               |             |               |             |                    |             |              |             |           |             |           |              |           
|Cash flows from financing activities: |                                                                                   |                                             |                                                     |             |               |             |               |             |                    |             |              |             |           |             |           |             
|                                      | Proceeds from issuance of membership units                                        |                                             |                                                     |            |               |             |               | (146,127    | )                  |             |              |            |           |             |           | 59,030,659   |           
|                                      | Members withdrawals                                                              |                                             |                                                     | (10,347,585 | )             |             |               | (5,131,584  | )                  |             |              | (5,186,733  | )         |             |           | (702,884     | )         
|                                      | Members distributions, net of reinvestments                                      |                                             |                                                     | (8,048,762  | )             |             |               | (10,329,154 | )                  |             |              | (7,554,132  | )         |             |           | (8,641,242   | )         
|                                      |                                                                                   |                                             |                                                     |             |               |             |               |             |                    |             |              |             |           |             |           |              |           
|                                      |                                                                                   |                                             | Net cash provided by (used in) financing activities |             |               | (18,396,347 | )             |             |                    | (15,606,865 | )            |             |           | (12,740,865 | )         |              |            | 49,686,533  |  
|                                      |                                                                                   |                                             |                                                     |             |               |             |               |             |                    |             |              |             |           |             |           |              |           
|                                      |                                                                                   |                                             | NET INCREASE IN CASH                                |             |               | 10,945,213  |               |             |                    | 2,364,072   |              |             |           | 955,584     |           |              |            | 1,436,446   |  
|Cash, beginning                       |                                                                                   |                                             | 2,762,334                                           |             |               |             | 398,262       |             |                    |             | 1,806,750    |             |           |             | 370,304   |             
|                                      |                                                                                   |                                             |                                                     |             |               |             |               |             |                    |             |              |             |           |             |           |              |           
|Cash, ending                          |                                                                                   | $                                           | 13,707,547                                          |             |               | $           | 2,762,334     |             |                    | $           | 2,762,334    |             |           | $           | 1,806,750 |             
|                                      |                                                                                   |                                             |                                                     |             |               |             |               |             |                    |             |              |             |           |             |           |              |           

The accompanying notes are an integral part of these statements.

F-6



---



##### Table of Contents



Vestin Fund I, LLC

STATEMENTS OF CASH FLOWS

(CONTINUED)

|                                                    |                                              |                                                                                                   |  |               |            |               |  |                    |           |              |  |   |           |  |  |   |         | 
|--------------------------------------------------- | -------------------------------------------- | ------------------------------------------------------------------------------------------------- |  | ------------- | ---------- | ------------- |  | ------------------ | --------- | ------------ |  | - | --------- |  |  | - | ------- | 
|                                                    |                                              |                                                                                                   |  | FOR THE YEAR  |            | FOR THE YEAR  |  | FOR THE TRANSITION |           | FOR THE YEAR
|                                                    |                                              |                                                                                                   |  | ENDED         |            | ENDED         |  | PERIOD ENDED       |           | ENDED       
|                                                    |                                              |                                                                                                   |  | SEPTEMBER 30, |            | SEPTEMBER 30, |  | SEPTEMBER 30,      |           | DECEMBER 31,
|                                                    |                                              |                                                                                                   |  | 2003          |            | 2002          |  | 2002               |           | 2001        
|                                                    |                                              |                                                                                                   |  |               |            |               |  |                    |           |             
|                                                    |                                              |                                                                                                   |  |               |            | (unaudited)   |  |                    |           |              |  |   |           | 
|Supplemental disclosures of cash flows information: |                                              |                                                                                                   |  |               |            |               |  |                    |           |              |  |   |           |  |  |  
|                                                    | Non-cash investing and financing activities: |                                                                                                   |  |               |            |               |  |                    |           |              |  |   |           |  |  |   |        
|                                                    |                                              | Conversion of deferred offering costs to
membership units                                         |  | $             |           |               |  | $                  |          |              |  | $ |          |  |  | $ | 201,666 | 
|                                                    |                                              |                                                                                                   |  |               |            |               |  |                    |           |              |  |   |           |  |  |  
|                                                    |                                              | Deferred debt offering costs paid by Manager                                                      |  | $             | 124,694    |               |  | $                  | 83,631    |              |  | $ | 83,631    |  |  | $ |        | 
|                                                    |                                              |                                                                                                   |  |               |            |               |  |                    |           |              |  |   |           |  |  |  
|                                                    |                                              | Deferred debt offering costs paid by Related Party                                                |  | $             | 15,069     |               |  | $                  |          |              |  | $ |          |  |  | $ |        | 
|                                                    |                                              |                                                                                                   |  |               |            |               |  |                    |           |              |  |   |           |  |  |  
|                                                    |                                              | Distributions payable to Manager                                                                  |  | $             | 101,183    |               |  | $                  | 93,500    |              |  | $ | 93,500    |  |  | $ |        | 
|                                                    |                                              |                                                                                                   |  |               |            |               |  |                    |           |              |  |   |           |  |  |   |         | 
|                                                    |                                              | Real estate held for sale acquired through foreclosure                                            |  | $             | 32,960,248 |               |  | $                  | 1,541,258 |              |  | $ | 1,541,258 |  |  | $ |        | 
|                                                    |                                              |                                                                                                   |  |               |            |               |  |                    |           |              |  |   |           |  |  |   |         | 
|                                                    |                                              | Investment in mortgage loans in real estate acquired for
investments in real estate held for sale |  | $             | 478,829    |               |  | $                  |          |              |  | $ |          |  |  | $ |        | 
|                                                    |                                              |                                                                                                   |  |               |            |               |  |                    |           |              |  |   |           |  |  |   |         | 
|                                                    |                                              | Loans funded through secured borrowing                                                            |  | $             | 13,686,349 |               |  | $                  | 6,637,370 |              |  | $ | 6,637,370 |  |  | $ |        | 
|                                                    |                                              |                                                                                                   |  |               |            |               |  |                    |           |              |  |   |           |  |  |   |         | 
|                                                    |                                              | Payoff of payable to Manager related to capital contribution                                      |  | $             | 876,237    |               |  | $                  |          |              |  | $ |          |  |  | $ |        | 
|                                                    |                                              |                                                                                                   |  |               |            |               |  |                    |           |              |  |   |           |  |  |   |         | 
|                                                    |                                              | Sale of rights to receive proceeds of guaranty                                                    |  | $             | 3,084,000  |               |  | $                  |          |              |  | $ |          |  |  | $ |        | 
|                                                    |                                              |                                                                                                   |  |               |            |               |  |                    |           |              |  |   |           |  |  |   |         | 
|                                                    |                                              | Investment in mortgage loans in real estate transferred
from Related Party                        |  | $             | 586,489    |               |  | $                  |          |              |  | $ |          |  |  | $ |        | 
|                                                    |                                              |                                                                                                   |  |               |            |               |  |                    |           |              |  |   |           |  |  |   |         | 
|                                                    |                                              | Expenses related to real estate held for sale paid by
Related Party                               |  | $             | 1,997      |               |  | $                  |          |              |  | $ |          |  |  | $ |        | 
|                                                    |                                              |                                                                                                   |  |               |            |               |  |                    |           |              |  |   |           |  |  |   |         | 

The accompanying notes are an integral part of these statements.

F-7



---



##### Table of Contents



NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.     Organization

Vestin Fund I, LLC, a Nevada limited liability company, (the Company) is
primarily engaged in the business of mortgage lending. The Company invests in
loans secured by real estate through deeds of trust and mortgages. The Company
was organized on December 14, 1999 and will continue until December 31, 2019
unless dissolved prior or extended thereto under the provisions of its
operating agreement.

On August 23, 2000, the Companys Form S-11/A filed with the Securities and
Exchange Commission became effective for the initial public offering of
10,000,000 units at $10 per unit. Consequently, the Company commenced
operations on September 1, 2000. By June 2001, the Company had sold all of the
10,000,000 Units offered pursuant to its registration statement. No additional
Units will be sold, however, current members may continue to participate in our
Distribution Reinvestment Plan whereby the members distributions may be used
to purchase additional Units at $10.00 per Unit. As of September 30, 2003, an
additional 779,092 Units have been purchased under this plan. Additionally,
the Company issued 100,000 units to its Manager for offering costs paid by them
to unrelated third parties on the Companys behalf.

The Manager of the Company is Vestin Mortgage, Inc. (the Manager), a Nevada
corporation engaged in the business of brokerage, placement and servicing of
commercial loans secured by real property. The Manager is a wholly-owned
subsidiary of Vestin Group, Inc., a Delaware corporation, whose common stock is
publicly held and traded on the Nasdaq National Market under the symbol VSTN.
Through its subsidiaries, Vestin Group, Inc. is engaged in asset management,
real estate lending and other financial services and has originated over $1.5
billion in real estate loans. The operating agreement provides that the
Manager controls the daily operations of the Company; including the power to
assign duties, to determine how to invest the Companys assets, to sign bills
of sale, title documents, leases, notes, security agreements, mortgage
investments and contracts, and to assume direction of the business operations.
The operating agreement also provides that the members have certain rights,
including the right to terminate the Manager subject to a majority vote of the
members.

Vestin Mortgage, Inc. is also the Manager of Vestin Fund II, LLC, (Fund II),
Vestin Fund III, LLC, (Fund III) and inVestin Nevada, Inc., entities in the
same business as the Company.

In June 2002, the Company changed its fiscal year end from December 31 to
September 30. The transition period ended September 30, 2002 reflects nine
months of operational activities as a result of the change in fiscal year end.
Unaudited financial statements for the 12 months ended September 30, 2002 are
shown for comparative purposes. Certain amounts of prior periods have been
classified to conform to the current year presentation.

See Note K for detail of transactions with the Manager.

2.     Management Estimates

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

F-8



---



##### Table of Contents



3.     Income Taxes

Income tax effects resulting from the Companys operations pass through to the
members individually and, accordingly, no provision for income taxes is
included in the financial statements.

4.     Cash and Cash Equivalents

Cash and cash equivalents include interest-bearing and noninterest-bearing bank
deposits, money market accounts, short-term certificates of deposit with
original maturities of three months or less, and short-term instruments with a
liquidation provision of one month or less (see Note B).

5.     Investment in Mortgage Loans

Investment in mortgage loans secured by trust deeds and mortgages are
originated by the Manager in accordance with terms contained in the Companys
operating agreement. Currently, all of the mortgage loans are fixed rate loans
with maturities ranging from two months to 30 months, secured by first or
second deeds of trust on properties securing commercial, land, construction,
residential, bridge, and acquisition and development loans. Bridge loans
provide interim financing (12 to 24 months) to enable commercial borrowers to
attempt to qualify for permanent financing. Currently, all of the Companys
mortgage loans require interest only payments with a balloon payment of the
principal at maturity. The Company has both the intent and ability to hold
mortgage loans until maturity and, therefore, mortgage loans are classified and
accounted for as held for investment and are carried at cost. Interest income
on loans is accrued by the effective interest method.

The Company also invests in mortgage loans that have interest reserves. Loans
with interest reserves require the borrowers to maintain interest reserves
funded from the principal amount of the loan for a period of time. At September
30, 2003 and September 30, 2002, the Company had interest reserves of
approximately $6,583,000 and $4,185,835, related to mortgage loans that if
fully funded would have a principal balance of $105,174,000, and $84,261,625.

The Company also sells full or partial interests in loans to related and third
parties at the discretion of the Manager. During the fiscal years ended
September 30, 2003 and 2002, the Company sold loans to third parties in the
amount of $1,030,000 and $8,457,865, respectively. During the fiscal years
ended September 30, 2003 and 2002, the Company sold loans to related parties in
the amount of $32,251,152 and $18,247,647, respectively. During the fiscal
years ended September 30, 2003 and 2002, the Company purchased loans from third
parties in the amount of $380,403 and $25,405,212, respectively. During the
fiscal years ended September 30, 2003 and 2002, the Company purchased loans
from related parties in the amount of $21,458,086 and $12,866,186,
respectively. The sale of all loans resulted in no gain or loss in the
accompanying financial statements.

6.     Revenue Recognition

Interest is recognized as revenue when earned according to the terms of the
loans, using the effective interest method. The Company does not recognize
interest income on loans once they are determined to be impaired. A loan is
impaired when based on current information and events, it is probable that the
Company will be unable to collect all amounts due according to the contractual
terms of the loan agreement. Cash receipts will be allocated to interest
income, except when such payments are specifically designated by the terms of
the loan as principal reduction or when management does not believe the
Companys investment in the loan is fully recoverable. Fee
income and other income are
recognized as revenue when earned.

F-9



---



##### Table of Contents



7.     Allowance for Loan Losses

The Company maintains an allowance for loan losses on its investment in
mortgage loans for estimated and expected credit impairment which is considered
inherent to the Companys investment in mortgage loans. The Managers estimate
of expected losses is based on a number of factors including the types and
dollar amounts of loans in the portfolio, adverse situations that may effect
the borrowers ability to repay, prevailing economic conditions and the
underlying collateral securing the loan. Additions to the reserve are provided
through a charge to earnings and are based on an assessment of certain factors
including, but not limited to, estimated losses on the loans. Actual losses on
loans are recorded as a charge-off or a reduction to the allowance for loan
losses reserve. Subsequent recoveries of amounts previously charged off are
added back to the reserve.

8.     Real
Estate Held For Sale
Real estate held for sale includes real estate acquired through foreclosure and
is carried at the lower of the recorded amount, inclusive of any senior
indebtedness, or the propertys estimated fair value, less estimated costs to
sell.

9.     Fair Value of Financial Instruments

The Financial Accounting Standards Boards Statement No. 107, Disclosures about
Fair Value of Financial Instruments, requires the determination of fair value
of the Companys financial assets. The following methods and assumptions were
used to estimate the fair value of financial statements included in the
following categories:



| | (a) |  | Certificate of Deposits and Short Term Investments: The carrying
amount of these instruments are at amortized cost which approximates
fair value.                                                                                                    
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | Investment in Mortgage Loans: The carrying value of these
instruments, net of the allowance for loan losses, approximates the
fair value due to their short-term maturities.                                                                         
|
| | (c) |  | Assets under Secured Borrowing. The carrying amount of these
instruments approximate fair value. The fair value is estimated based
upon projected cash flows discounted at the estimated current interest
rates at which similar loans would be made.

10.     Net Income Allocated to Members

Net income allocated to members is computed by dividing income available to
members by the weighted average number of membership units outstanding for the
year.

11.     Segments

The Company operates as one business segment.

NOTE B - FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK

Financial instruments with concentration of credit and market risk include cash
and loans secured by trust deeds.

The Company maintains cash deposit accounts and certificates of deposit which,
at times, may exceed federally insured limits. The Company has not experienced
any losses in such accounts and believes it is not exposed to any significant
credit risk on cash. As of September 30, 2003 and 2002, the Company had
approximately $13,983,000 and $6,089,000, respectively, in excess of the
federally insured limits.

As of September 30, 2003, 33.9% of the Companys mortgage loans were in Nevada
compared to 47.5% at September 30, 2002 and 21.1% of the Companys mortgage
loans were in Hawaii compared to 12.9% at

F-10



---



##### Table of Contents



September 30, 2002. As a result of this geographical concentration of the
Companys mortgage loans, a downturn in the local real estate markets in Nevada
and/or Hawaii could have a material adverse effect on the Company.

At September 30, 2003, the aggregate amount of loans to the Companys three
largest borrowers represented 23.0% of the Companys total investment in
mortgage loans. These mortgage loans consisted of bridge, construction and
commercial loans, located in Hawaii and Nevada, with a first lien position,
earning between 10.5% and 14.0%, outstanding balances of approximately
$12,006,000 and maturing from March 2004 through August 2005. At September 30,
2002, the aggregate amount of loans to the Companys three largest borrowers
represented 31% of the Companys total mortgage loans. These mortgage loans
consisted of commercial and bridge loans, located in Arizona and Nevada, with a
first lien position, earning between 13% and 14.5%, outstanding balances of
approximately $28,399,000 and maturing from November 2002 through June 2004.
Because the Company has a significant concentration of credit risk with its
three largest borrowers, a default by any of the borrowers could have a
material adverse effect on the Company.

All of the Companys mortgage loans will require the borrower to make a balloon
payment of the principal at maturity. The success of a borrowers ability to
repay its mortgage loan obligation in a large lump-sum payment may be dependent
upon the borrowers ability to refinance the obligation or otherwise raise a
substantial amount of cash. An increase in interest rates over the mortgage
rate applicable at origination of the loan may have an adverse effect on the
borrowers ability to refinance.

NOTE C - INVESTMENT IN MORTGAGE LOANS

Investment in mortgage loans as of September 30, 2003 was as follows:

|                            |  |        |    |         |  |               |            |            |  |           |       |      |  |          |        |   |  |  |       |  
|--------------------------- |  | ------ | -- | ------- |  | ------------- | ---------- | ---------- |  | --------- | ----- | ---- |  | -------- | ------ | - |  |  | ----- | -
|                            |  | Number |    |         |  |               |            | Weighted   |  |           |       |      |  | Weighted
|Loan                        |  | of     |    |         |  |               |            | Average    |  | Portfolio |       | Loan
|Type                        |  | Loans  |    | Balance |  | Interest Rate |            | Percentage |  | To Value*
|                            |  |        |    |         |  |               |            |            |  |          
|Acquisition and development |  |        | 4  |         |  | $             | 7,430,353  |            |  |           | 13.70 | %    |  |          | 14.24  | % |  |  | 46.46 | %
|Bridge                      |  |        | 7  |         |  |               | 8,035,547  |            |  |           | 12.14 | %    |  |          | 15.40  | % |  |  | 60.50 | %
|Commercial                  |  |        | 22 |         |  |               | 23,210,297 |            |  |           | 11.82 | %    |  |          | 44.47  | % |  |  | 67.52 | %
|Construction                |  |        | 6  |         |  |               | 11,510,498 |            |  |           | 12.66 | %    |  |          | 22.05  | % |  |  | 56.77 | %
|Land                        |  |        | 5  |         |  |               | 1,839,922  |            |  |           | 11.84 | %    |  |          | 3.52   | % |  |  | 53.62 | %
|Residential                 |  |        | 1  |         |  |               | 168,000    |            |  |           | 12.50 | %    |  |          | 0.32   | % |  |  | 70.00 | %
|                            |  |        |    |         |  |               |            |            |  |           |       |      |  |          |        |   |  |  |       |  
|                            |  |        | 45 |         |  | $             | 52,194,617 |            |  |           | 12.32 | %    |  |          | 100.00 | % |  |  | 60.59 | %
|                            |  |        |    |         |  |               |            |            |  |           |       |      |  |          |        |   |  |  |       |  

Investment in mortgage loans as of September 30, 2002 was as follows:

|                            |  |        |    |         |  |               |            |            |  |           |       |      |  |          |        |   |  |  |       |  
|--------------------------- |  | ------ | -- | ------- |  | ------------- | ---------- | ---------- |  | --------- | ----- | ---- |  | -------- | ------ | - |  |  | ----- | -
|                            |  | Number |    |         |  |               |            | Weighted   |  |           |       |      |  | Weighted
|Loan                        |  | of     |    |         |  |               |            | Average    |  | Portfolio |       | Loan
|Type                        |  | Loans  |    | Balance |  | Interest Rate |            | Percentage |  | To Value*
|                            |  |        |    |         |  |               |            |            |  |          
|Acquisition and development |  |        | 11 |         |  | $             | 17,379,074 |            |  |           | 14.38 | %    |  |          | 19.06  | % |  |  | 79.91 | %
|Bridge                      |  |        | 3  |         |  |               | 9,129,025  |            |  |           | 13.73 | %    |  |          | 10.01  | % |  |  | 68.79 | %
|Commercial                  |  |        | 10 |         |  |               | 28,181,705 |            |  |           | 13.40 | %    |  |          | 30.90  | % |  |  | 54.11 | %
|Construction                |  |        | 11 |         |  |               | 26,241,223 |            |  |           | 14.21 | %    |  |          | 28.78  | % |  |  | 50.41 | %
|Land                        |  |        | 4  |         |  |               | 10,260,281 |            |  |           | 13.13 | %    |  |          | 11.25  | % |  |  | 48.85 | %
|                            |  |        |    |         |  |               |            |            |  |           |       |      |  |          |        |   |  |  |       |  
|                            |  |        | 39 |         |  | $             | 91,191,308 |            |  |           | 13.82 | %    |  |          | 100.00 | % |  |  | 53.43 | %
|                            |  |        |    |         |  |               |            |            |  |           |       |      |  |          |        |   |  |  |       |  

*Loan to value ratios are based on appraisals obtained at the time of loan
origination and may not reflect subsequent changes in value estimates. Such
appraisals are generally dated no greater than 12 months prior to the date of
loan origination and may have been commissioned by the borrower. The appraisals
may be for the current estimate of the as-if developed value of the property,
and which approximates the post-construction value of the collateralized
property assuming that such property is developed. As-if developed values on
raw land loans or

F-11



---



##### Table of Contents



acquisition and development loans often dramatically exceed the immediate sales
value and may include anticipated zoning changes, selection by a purchaser
against multiple alternatives, and successful development by the purchaser;
upon which development is dependent on availability of financing. As most of
the appraisals will be prepared on an as-if developed basis, if a loan goes
into default prior to any development of a project, the market value of the
property may be substantially less than the appraised value. As a result,
there may be less security than anticipated at the time the loan was originally
made. If there is less security and a default occurs, the Company may not
recover the full amount of the loan.

|                   |  |                    |            |            |  |                    |        |            |  |   |            |  |  |  |        |  
|------------------ |  | ------------------ | ---------- | ---------- |  | ------------------ | ------ | ---------- |  | - | ---------- |  |  |  | ------ | -
|                   |  | September 30, 2003 |            | Portfolio  |  | September 30, 2002 |        | Portfolio 
|Loan Type          |  | Balance            |            | Percentage |  | Balance            |        | Percentage
|                   |  |                    |            |            |  |                    |        |           
|First mortgages    |  | $                  | 52,194,617 |            |  |                    | 100.00 | %          |  | $ | 91,180,814 |  |  |  | 99.99  | %
|Second mortgages** |  |                    |           |            |  |                    |       | %          |  |   | 10,494     |  |  |  | 0.01   | %
|                   |  |                    |            |            |  |                    |        |            |  |   |            |  |  |  |        |  
|                   |  | $                  | 52,194,617 |            |  |                    | 100.00 | %          |  | $ | 91,191,308 |  |  |  | 100.00 | %
|                   |  |                    |            |            |  |                    |        |            |  |   |            |  |  |  |        |  



|** |  | All of the Companys second mortgages were junior to a first trust deed
position held by either the Company or the Companys Manager.
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------

The following is a schedule of maturities of investments in mortgage loans as
of September 30, 2003:

|     |  |   |            | 
|---- |  | - | ---------- | 
|2003 |  | $ | 29,714,657 | 
|2004 |  |   | 12,305,206 | 
|2005 |  |   | 10,174,754 | 
|     |  |   |            | 
|     |  | $ | 52,194,617 | 
|     |  |   |            | 

The following is a schedule by geographic location of investments in mortgage
loans as of:

|           |  |                    |            |            |  |                    |        |            |  |   |            |  |  |  |        |  
|---------- |  | ------------------ | ---------- | ---------- |  | ------------------ | ------ | ---------- |  | - | ---------- |  |  |  | ------ | -
|           |  | September 30, 2003 |            | Portfolio  |  | September 30, 2002 |        | Portfolio 
|           |  | Balance            |            | Percentage |  | Balance            |        | Percentage
|           |  |                    |            |            |  |                    |        |           
|Arizona    |  | $                  | 4,887,202  |            |  |                    | 9.36   | %          |  | $ | 16,225,981 |  |  |  | 17.79  | %
|California |  |                    | 5,751,298  |            |  |                    | 11.02  | %          |  |   | 1,247,876  |  |  |  | 1.37   | %
|Colorado   |  |                    | 163,333    |            |  |                    | 0.31   | %          |  |   | 983,217    |  |  |  | 1.08   | %
|Florida    |  |                    | 115,450    |            |  |                    | 0.22   | %          |  |   |           |  |  |  |       | %
|Hawaii     |  |                    | 10,992,254 |            |  |                    | 21.06  | %          |  |   | 11,750,000 |  |  |  | 12.88  | %
|Nevada     |  |                    | 17,691,975 |            |  |                    | 33.90  | %          |  |   | 43,288,748 |  |  |  | 47.47  | %
|New Mexico |  |                    | 168,000    |            |  |                    | 0.32   | %          |  |   | 1,157,505  |  |  |  | 1.27   | %
|New York   |  |                    | 2,000,000  |            |  |                    | 3.83   | %          |  |   |           |  |  |  |       | %
|Ohio       |  |                    | 400,000    |            |  |                    | 0.77   | %          |  |   |           |  |  |  |       | %
|Texas      |  |                    | 6,080,095  |            |  |                    | 11.65  | %          |  |   | 11,568,971 |  |  |  | 12.69  | %
|Utah       |  |                    | 3,369,010  |            |  |                    | 6.46   | %          |  |   | 3,369,010  |  |  |  | 3.69   | %
|Washington |  |                    | 576,000    |            |  |                    | 1.10   | %          |  |   | 1,600,000  |  |  |  | 1.76   | %
|           |  |                    |            |            |  |                    |        |            |  |   |            |  |  |  |        |  
|           |  | $                  | 52,194,617 |            |  |                    | 100.00 | %          |  | $ | 91,191,308 |  |  |  | 100.00 | %
|           |  |                    |            |            |  |                    |        |            |  |   |            |  |  |  |        |  

At September 30, 2003, eight of our loans were non-performing (more than 90
days past due on principal or interest payments) totaling $13.0 million. Our
Manager evaluated the loans and concluded that the underlying collateral was
sufficient to protect us against a loss of principal or interest with the
exception of the loan described elsewhere in this footnote. Our Manager will
continue to evaluate these loans to determine if an allowance for loan losses
should be recorded.

As of September 30, 2003, all
loans, except for the eight loans, were current and performing according to their terms.

F-12



---



##### Table of Contents



In addition, the Companys Manager granted extensions on 12 loans and 9 loans
as of September 30, 2003 and September 30, 2002, respectively, pursuant to the
terms of the original loan agreements which permit extensions by mutual
consent. Such extensions are generally provided on loans where the original
term was twelve months or less and where a borrower requires additional time to
complete a construction project or negotiate take out financing. However, the
Companys Manager only grants extensions when a borrower is in full compliance
with the terms of the loan, including, but not limited to the borrowers
obligation to make interest payments on the loan. The aggregate amount due to
the Company from borrowers whose loans have been extended as of September 30,
2003 and 2002, was approximately $16.4 million and $30.3 million, respectively.

The Companys Manager has evaluated the collectibility of the loans in light of
the types and dollar amounts of loans in the portfolio, adverse situations that
may effect the borrowers ability to repay, prevailing economic conditions and
the underlying collateral securing the loan. The Companys Manager believes
that the allowance for loan losses totaling $0.5 million and $0.1 million
included in the accompanying balance sheet as of September 30, 2003 and 2002,
respectively, is adequate to address estimated and expected credit impairment
which is considered inherent in the Companys investment in mortgage loans as
of that date.

The Company has six mortgage loan products consisting of land, construction,
commercial building, bridge, residential, and acquisition and development
loans. Mortgage loans have effective interest rates ranging from 5.5% to 14.5%
and 10% to 17% at September 30, 2003 and 2002, respectively. Revenue by
product will fluctuate based upon relative balances during the period.

On June 25, 2003, the Company and Fund II refinanced a $15.2 million note due
on August 19, 2003 as a new note with the interest rate reduced from 11.0% to
5.5%. No specific reserve has been provided for this loan based on the
underlying collateral value. The new loan has a term of 24 months. Interest
income not recognized by the Company during the period as a result of the
restructure was $20,430.

On July 22, 2003, the Company entered into a stipulation with a borrower which
among other things reduced the interest rate to 7.0% from 12.5% on the
principal balance of $2.0 million (which represents a 10% pari passu interest
in a first trust deed of $20.0 million), deferred interest payments through
October 31, 2003, and extended the maturity date from June 14, 2003 to June 14,
2005. The borrower filed Chapter 11 Bankruptcy on June 26, 2003. The United
States Bankruptcy Court approved the stipulation. The borrower has defaulted
on the stipulation and the bankruptcy stay has been lifted. The borrower paid
interest payments due on November 15, 2003 and December 15, 2003. The Company
has the right to complete the foreclosure, but is in continuing discussions
with the borrower.

As approved by the United States Bankruptcy Court, the Company, Fund II and a
third-party participant have advanced an additional $2.2 million of
post-petition financing to the borrower. No specific reserve has been provided
for this loan based on the underlying collateral value.

NOTE D - REAL ESTATE HELD FOR SALE

As of September 30, 2003, the Company had eight properties with a total
carrying value of $26.5 million, which were acquired through foreclosure and
recorded as investments in real estate held for sale. The Company may share
ownership of such properties with Fund II, the Manager, or other unrelated
parties. The summary below includes the Companys percentage ownership in each
property. These investments in real estate held for sale are accounted for at
the lower of cost or fair value, less selling costs, based on appraisals and
knowledge of local market conditions. It is not the Companys intent to invest
in or own real estate as a long-term investment. The Company seeks to sell
properties acquired through foreclosure as quickly as circumstances permit.
The following is a summary of real estate held for sale as of September 30,
2003:

F-13



---



##### Table of Contents



|                                                                       |  |                |     |                |  |   |            | 
|---------------------------------------------------------------------- |  | -------------- | --- | -------------- |  | - | ---------- | 
|Description                                                            |  | % of ownership |     | Carrying Value
|                                                                       |  |                |     |               
|Custom residential property located in Santa Fe, New Mexico            |  |                | 93  | %              |  | $ | 1,191,055  | 
|40 acres of land containing 354 residential lots in Henderson, Nevada  |  |                | 66  | %              |  |   | 6,917,600  | 
|An uncompleted 162-bed assisted living facility in Las Vegas, Nevada   |  |                | 100 | %              |  |   | 11,776,730 | 
|An approximate 200-unit apartment complex located in Las Vegas,
Nevada |  |                | 2   | %              |  |   | 112,312    | 
|An approximate 30-unit apartment complex located in Las Vegas, Nevada  |  |                | 17  | %              |  |   | 215,431    | 
|An uncompleted golf course in Mesquite, Nevada                         |  |                | 64  | %              |  |   | 2,171,812  | 
|65 acres of raw land in Mesquite, Nevada                               |  |                | 58  | %              |  |   | 2,796,137  | 
|Raw land in Mesquite, Nevada                                           |  |                | 60  | %              |  |   | 1,342,263  | 
|                                                                       |  |                |     |                |  |   |            | 
|Total                                                                  |  |                |     |                |  | $ | 26,523,340 | 
|                                                                       |  |                |     |                |  |   |            | 

Based on managements estimate of fair value of these assets, adjustments to
carrying value of $3.4 million were recorded in the year ended September 30,
2003, including the adjustments described below.

The Company entered into an agreement for the sale of a portion of the
Companys interest in 40 acres of land containing 354 residential lots in
Henderson, Nevada. The agreement requires the buyer to purchase 138 lots for
cash and gives the buyer an option to purchase the remaining 216 lots over the
next three years at a predetermined price, which may be adjusted for potential
value increases. The buyer completed the purchase of the 138 lots on July 14,
2003. The Company recorded a valuation adjustment as of June 30, 2003 of
approximately $1.7 million to write down the carrying value of the Companys
interest in the parcel to the amount corresponding to the negotiated sale and
option price.

The Company sold an uncompleted golf course, 65 acres of raw land and an
additional parcel of raw land in Mesquite, Nevada in August 2003. However, the
Company financed 100% of the sale. GAAP requires 20% of the sales price to be
funded by the buyer to record a sale. Once the sale is recorded, the Company
will have remaining a 58% interest in 28 acres of commercial land in Mesquite,
Nevada valued at approximately $2.3 million.

Through foreclosure proceedings in the first calendar quarter of 2003, the
Company assumed an approximate 2% ownership of a 200-unit apartment complex as
described above. The other 98% is owned by Fund II and a private investor. The
Company had engaged an outside management company to manage the apartment
complex, pending its sale. The Companys share of income from operations for
the three months ended September 30, 2003 totaled approximately $3,000 which is
included in other income on the accompanying statements of income. On October
20, 2003, the Company sold the property to a third party. However, the Company
financed 100% of the sale. GAAP requires 20% of the sales price to be funded
by the buyer to record a sale.

On July 25, 2003, the Company foreclosed on a second deed of trust held on a
162-bed assisted living facility under construction in Las Vegas, Nevada. The
property was also subject to a first deed on trust of which the Company held a
42.2% interest, Fund II held a 40.5% interest and a private investor held a
17.3% interest. As a result of foreclosing on the second deed of trust, the
Company recorded real estate held for sale of $11.6 million subject to notes
payable of $4.7 million to Fund II and $2.0 million to a private investor. The
facility is approximately 90% complete. The Company has obtained bids to
complete the facility and is actively marketing it for sale.

NOTE F  SECURED BORROWING

As of September 30, 2003 and 2002, the Company had approximately $20,324,000
and $6,637,000, respectively, in secured borrowings pursuant to intercreditor
and participation agreements with the related amounts included in assets under
secured borrowing. For the years ended September 30, 2003 and 2002, the
Company recorded interest expense of $1,120,556 and $113,689, respectively,
related to the secured borrowing.

F-14



---



##### Table of Contents



NOTE G  NOTE RECEIVABLE

The Company received a note receivable from an unaffiliated borrower in the
amount of $4,666,667 in connection with the sale of real estate. The note
requires monthly interest payments at a rate of 8.5% per annum and is payable
in full on June 13, 2005. The note is personally guaranteed by the owner of
the borrower and is secured by a second deed of trust on 756 acres purchased by
the borrower. The note resulted from the Companys financing of a mortgage
note due June 13, 2004 from the borrower for the sale of real estate located in
the City of Mesquite, Nevada. The Company is using the cost recovery method of
accounting for the financing. Accordingly, the Company will not recognize any
income or the note receivable related to this transaction until the principal
balance of the underlying notes in the amount of $11,659,000 are paid in full.
Payments received by the Company in excess of the principal balance will be
recorded as income when, and if, received. As of September 30, 2003, $99,248
of payments had been applied as principal payments to this loan.

NOTE H  DEFFERRED OFFERING COSTS

As of September 30, 2003, the Company expensed previously deferred bond
offering costs in the amount of $203,517. The Companys Manager determined
that, due to the current interest rate environment, it is not feasible to
proceed with the securitization of the Companys mortgage loans through the
sale of bonds secured by those mortgages, and accordingly, has expensed the
costs incurred to date. As of September 30, 2002, deferred bond offering costs
totaled $84,000.

NOTE I  REVOLVING LINE OF CREDIT

The Company has a revolving line of credit with a financial institution, which
provides for borrowing up to $1,000,000. The balances at September 30, 2003 and
2002 were $0. The line of credit, which is secured by the Companys
certificates of deposit with First Hawaiian Bank, is payable in monthly
installments of interest only at 1.50% over the weighted average interest rate
paid on the First Hawaiian Bank certificates of deposit. The line of credit
matures December 31, 2003. The interest rate will be reset upon the occurrence
of either a new drawing on the revolving line of credit or at the maturity of
the certificate of deposit. The agreement contains covenants which the Company
was in compliance with as of September 30, 2003.

NOTE J  MEMBERS EQUITY



|1. |  | Membership Units
|-- |  | ----------------

As of September 30, 2003, the Manager contributed $1,000,000 to the Company in
connection with offering costs incurred on behalf of the Company in return for
100,000 units. Members contributed to the capital of the Company an amount
equal to $10 for each unit subscribed for by each member, with a minimum
subscription of 200 units per member. The total capital contribution of the
members will not exceed $100,000,000 not including reinvested distributions.
As of June 2001, the fund had reached the maximum Unit subscription of
$100,000,000 not including reinvested distributions.



|2. |  | Allocations and Distributions
|-- |  | -----------------------------

In accordance with the operating agreement, the Companys profits, gains and
losses are to be credited to and charged against each member in proportion to
their respective capital accounts as of the close of business on the last day
of each calendar month.

F-15



---



##### Table of Contents



Interest received on mortgage loans is distributed monthly to members, members
may elect to reinvest their distributions.

Distributions of proceeds from the repayment of principal on a mortgage loan
will be made to the members pro rata based on their capital accounts.



|3. |  | Working Capital Reserves
|-- |  | ------------------------

The Company is required by the operating agreement to maintain working capital
reserves of at least 3% of the aggregate capital accounts of the members. This
reserve is available to pay any future expenses in excess of revenues, satisfy
obligations of underlying security properties, expend money to satisfy the
Companys unforeseen obligations and for other permitted uses of its working
capital. Working capital reserves of up to 3% in cash or cash equivalents,
short-term investments and certificates of deposit are excluded from the funds
committed to mortgage investments in determining what portion of the offering
proceeds and reinvested distributions have been invested in mortgage loans. As
of September 30, 2003 and 2002, the Company had approximately $14.9 million and
$5.5 million, respectively, for its working capital reserves.

NOTE K  TRANSACTIONS WITH THE MANAGER AND ITS AFFILIATES



|1. |  | Fees Paid by the Company
|-- |  | ------------------------



| | a. |  | The Companys Manager is entitled to receive from the Company a
monthly management fee of up to 0.25% of the aggregate capital
contributions, paid monthly in arrears. For the years ended September
30, 2003 and 2002, management fees to the Manager approximated
$253,000 and $310,000, respectively.
| | -- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b. |  | The Manager may receive fees for reselling foreclosed
properties. These fees may not be greater than 3.0% of the proceeds
where substantial service has been performed by the Manager. As of
September 30, 2003 and 2002, no payments were required to be paid to
the Manager.                          



|2. |  | Purchases and Sales of Loans with Vestin Fund II, LLC
|-- |  | -----------------------------------------------------

During the fiscal years ended September 30, 2003 and 2002, the Company
purchased approximately $15,056,000 and $9,100,000, respectively, in mortgage
loans from Vestin Fund II, LLC, a Company managed by the Manager. During the
fiscal years ended September 30, 2003 and 2002, the Company sold approximately
$27,460,000 and $13,137,000, respectively, in mortgage loans from Vestin Fund
II, LLC, a Company managed by the Manager.



|3. |  | Due to the Manager
|-- |  | ------------------

Due to Manager at September 30, 2003 consisted of approximately $366,974 in
advances and unpaid management fees and distributions payable totaling $45,150
on units owned by the Manager offset by a receivable from Manager of $50,517.
Due to the Manager at September 30, 2002 consisted of $270,412 in advances by
the Manager and of distributions payable to the Manager in the amount of
$244,815 offset by a receivable from Manager of $84,780. These advances do not
accrue interest and are due on demand.

F-16



---



##### Table of Contents





|4. |  | Other Transactions with the Manager
|-- |  | -----------------------------------

During the fiscal years ended September 30, 2003 and 2002, the Company
purchased $479,000 and $3,706,000, respectively, in mortgage loans from the
Companys Manager at their historical cost pursuant to Section 4.4.1 of the
Companys Operating Agreement. During the fiscal years ended September 30,
2003 and 2002, the Company sold $0 and $4,500,000, respectively to the
Companys Manager.

The Manager may purchase from the Company the interest receivable or principal
on delinquent loans held by the Company. The Company shall not sell a
foreclosed property to the Manager or to another program in which the Manager
or its affiliates has an interest. As of September 30, 2003 and 2002, no such
transaction occurred.

NOTE L  NEW ACCOUNTING PRONOUNCEMENT

On December 17, 2003 the FASB completed its deliberations of the proposed
modifications to FASB Interpretation No. 46, Consolidation of Variable Interest
Entities (FIN 46). The FASB decided to codify both the proposed
modifications and other decisions previously issued into on document that will
be issued prior to December 31, 2003. Among other things, the FASB decided
that the Revised Interpretation will provide that an enterprise need not
determine if an entity is a Variable Interest Entity (VIE) unless certain
conditions listed in the Revised Interpretation exist. The Company has
evaluated its relationships and interest in entities that might be considered
VIEs and concluded that none of the prerequisite conditions exist. Accordingly,
the Company believes that the adoption of FIN 46 will have no effect on the
Companys financial statements.

NOTE M  COMMITMENTS AND CONTINGENCIES

LITIGATION INVOLVING THE MANAGER

Vestin Mortgage, Inc., Vestin Group, Inc., and Del Mar Mortgage, Inc., a
company wholly owned by Michael Shustek, the largest shareholder and CEO of
Vestin Group, Inc., are defendants in a civil action entitled Desert Land,
L.L.C. et al. v. Owens Financial Group, Inc. (the Action). The Action was
initiated by Desert Land, L.L.C. (Desert Land) on various loan arranged by
Del Mar Mortgage, Inc. and/or Vestin Mortgage. On April 10, 2003, the United
States District Court for the District of Nevada (the Court) entered judgment
jointly and severally in favor of Desert Land against Vestin Group, Vestin
Mortgage and Del Mar Mortgage, Inc. Judgment was predicated upon the Courts
finding that Del Mar Mortgage, Inc. received an unlawful penalty fee from the
plaintiffs.

Defendants subsequently filed a motion for reconsideration. The court denied
the motion and, on August 13, 2003, held that Vestin Group, Vestin Mortgage,
and Del Mar Mortgage, Inc. are jointly and severally liable for the judgment in
the amount of $5,683,312.19 (which amount includes prejudgment interest and
attorneys fees). On August 27, 2003, the Court stayed execution of the
judgment against Vestin Group and Vestin Mortgage based upon the posting of a
bond in the amount of $5,830,000. The bond was arranged by Michael Shustek and
was posted without any cost or obligation to Vestin Group and Vestin Mortgage.
Additionally, Del Mar Mortgage, Inc. has indemnified Vestin Group and Vestin
Mortgage for any losses and expenses in connection with the Action, and Mr.
Shustek has guaranteed the indemnification. On September 12, 2003 all of the
defendants held liable to Desert Land appealed the judgment to the Ninth
Circuit United States Court of Appeals. The Company is not a party to the
Action.

LITIGATION INVOLVING THE COMPANY

The Company is involved in a number of legal proceedings concerning matters
arising in connection with the conduct of their business activities. The
Company believes it has meritorious defenses to each of these actions and

F-17



---



##### Table of Contents



intends to defend them vigorously. The Company believes that it is not a party
to any pending legal or arbitration proceedings that would have a material
adverse effect on the Companys financial condition or results of operations or
cash flows, although it is possible that the outcome of any such proceedings
could have a material impact on the Companys net income in any particular
period.

NOTE N  REDEMPTION LIMITATION

In order to comply with the Companys operating agreement and the Internal
Revenue Service tax code, the Company may redeem no more than 10% of the
members capital in any calendar year. Beginning capital as of January 1, 2003
was $97.5 million, which would limit redemptions to $9.75 million for calendar
2003. On June 17, 2003, the Company discontinued accepting requests for the
redemption of units for the 2003 calendar year. As of November 30, 2003, the
total of redemptions made and redemptions requested and awaiting payment was
$9.2 million. All redemption requests received after that date have been
logged for redemption beginning in January 2004. As of November 30, 2003,
requests to redeem 814,536 Units in 2004, 554,104 Units in 2005 and 302,613
Units in 2006 had been logged.

NOTE O  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

The following schedule is a selected quarterly financial date for fiscal year
ended September 30, 2003:

|                                                                      |  |         |           |         |  |         |           |         |  |      |            |   |  |   |           |  |  |   |            | 
|--------------------------------------------------------------------- |  | ------- | --------- | ------- |  | ------- | --------- | ------- |  | ---- | ---------- | - |  | - | --------- |  |  | - | ---------- | 
|                                                                      |  | First   |           | Second  |  | Third   |           | Fourth  |  |      |            |  
|                                                                      |  | Quarter |           | Quarter |  | Quarter |           | Quarter |  | Year
|                                                                      |  |         |           |         |  |         |           |         |  |     
|Revenues                                                              |  | $       | 2,656,246 |         |  | $       | 2,512,144 |         |  | $    | 2,642,236  |   |  | $ | 2,553,822 |  |  | $ | 10,364,448 | 
|Expenses                                                              |  |         | 369,043   |         |  |         | 395,572   |         |  |      | 4,063,827  |   |  |   | 1,223,647 |  |  |   | 6,052,089  | 
|                                                                      |  |         |           |         |  |         |           |         |  |      |            |   |  |   |           |  |  |   |            | 
|Net income                                                            |  | $       | 2,287,203 |         |  | $       | 2,116,572 |         |  | $    | (1,421,591 | ) |  | $ | 1,330,175 |  |  | $ | 4,312,359  | 
|                                                                      |  |         |           |         |  |         |           |         |  |      |            |   |  |   |           |  |  |   |            | 
|Net income allocated to members
per weighted average membership
units |  | $       | 0.23      |         |  | $       | 0.22      |         |  | $    | (0.15      | ) |  | $ | 0.14      |  |  | $ | 0.45       | 
|                                                                      |  |         |           |         |  |         |           |         |  |      |            |   |  |   |           |  |  |   |            | 
|Weighted average membership units                                     |  |         | 9,920,256 |         |  |         | 9,838,467 |         |  |      | 9,553,031  |   |  |   | 9,270,833 |  |  |   | 9,668,310  | 
|                                                                      |  |         |           |         |  |         |           |         |  |      |            |   |  |   |           |  |  |   |            | 

F-18



---



##### Table of Contents



The following schedule is a selected quarterly financial date for the
nine-month transition period ended September 30, 2002:

|                                                                      |  |         |            |         |  |         |            |                    |  |   |            |  |  |   |            | 
|--------------------------------------------------------------------- |  | ------- | ---------- | ------- |  | ------- | ---------- | ------------------ |  | - | ---------- |  |  | - | ---------- | 
|                                                                      |  | First   |            | Second  |  | Third   |            | Nine months ended 
|                                                                      |  | Quarter |            | Quarter |  | Quarter |            | September 30, 2002
|                                                                      |  |         |            |         |  |         |            |                   
|Revenues                                                              |  | $       | 3,429,547  |         |  | $       | 3,043,778  |                    |  | $ | 3,253,556  |  |  | $ | 9,726,881  | 
|Expenses                                                              |  |         | 62,405     |         |  |         | 79,099     |                    |  |   | 301,055    |  |  |   | 442,559    | 
|                                                                      |  |         |            |         |  |         |            |                    |  |   |            |  |  |   |            | 
|Net income                                                            |  | $       | 3,367,142  |         |  | $       | 2,964,679  |                    |  | $ | 2,952,501  |  |  | $ | 9,284,322  | 
|                                                                      |  |         |            |         |  |         |            |                    |  |   |            |  |  |   |            | 
|Net income
allocated to
members per
weighted average
membership units |  | $       | 0.33       |         |  | $       | 0.29       |                    |  | $ | 0.29       |  |  | $ | 0.92       | 
|                                                                      |  |         |            |         |  |         |            |                    |  |   |            |  |  |   |            | 
|Weighted average
membership units                                     |  |         | 10,246,023 |         |  |         | 10,230,168 |                    |  |   | 10,067,132 |  |  |   | 10,142,982 | 
|                                                                      |  |         |            |         |  |         |            |                    |  |   |            |  |  |   |            | 

F-19



---



##### Table of Contents



Schedule I

Vestin Fund I, LLC

MORTGAGE LOANS ON REAL ESTATE
MORTGAGE LOAN ROLLFORWARD

|                            |                              |                              |                                              |  |  |             | 
|--------------------------- | ---------------------------- | ---------------------------- | -------------------------------------------- |  |  | ----------- | 
|Balance, December 31, 2000  |                              | $                            | 39,376,619                                   | 
|                            | Additions during the period` |                              |                                              |  | 
|                            |                              |                              | New mortgage loans                           |  |  | 136,896,686 | 
|                            | Deductions during the period |                              |                                              |  | 
|                            |                              |                              | Collections of principal                     |  |  | 25,669,492  | 
|                            |                              |                              | Mortgage loans sold                          |  |  | 53,375,657  | 
|                            |                              |                              |                                              | 
|                            |                              |                              | 79,045,149                                   | 
|                            |                              |                              |                                              | 
|Balance, December 31, 2001  |                              |                              | 97,228,156                                   | 
|                            |                              | Additions during the period  |                                              |  |  |            
|                            |                              |                              | New mortgage loans                           |  |  | 40,070,662  | 
|                            |                              |                              | Mortgage loans purchased                     |  |  | 60,000      | 
|                            |                              |                              |                                              | 
|                            |                              |                              | 40,130,662                                   | 
|                            |                              | Deductions during the period |                                              |  |  |            
|                            |                              |                              | Collections of principal                     |  |  | 33,438,414  | 
|                            |                              |                              | Foreclosed loans (Real estate held for sale) |  |  | 1,541,258   | 
|                            |                              |                              | Mortgage loans sold                          |  |  | 11,187,838  | 
|                            |                              |                              |                                              | 
|                            |                              |                              | 46,167,510                                   | 
|                            |                              |                              |                                              | 
|Balance, September 30, 2002 |                              |                              | 91,191,308                                   | 
|                            |                              | Additions during the period  |                                              |  |  |            
|                            |                              |                              | New mortgage loans                           |  |  | 36,814,532  | 
|                            |                              |                              | Mortgage loans purchased                     |  |  | 21,359,660  | 
|                            |                              |                              | Mortgage loans transferred                   |  |  | 4,149,318   | 
|                            |                              |                              |                                              | 
|                            |                              |                              | 62,323,510                                   | 
|                            |                              | Deductions during the period |                                              |  |  |            
|                            |                              |                              | Collections of principal                     |  |  | 35,078,802  | 
|                            |                              |                              | Foreclosed loans (Real estate held for sale) |  |  | 32,960,248  | 
|                            |                              |                              | Mortgage loans sold                          |  |  | 33,281,151  | 
|                            |                              |                              |                                              | 
|                            |                              |                              | 101,320,201                                  | 
|                            |                              |                              |                                              | 
|Balance, September 30, 2003 |                              | $                            | 52,194,617                                   | 
|                            |                              |                              |                                              | 

F-20



---



##### Table of Contents



Schedule II

Vestin Fund I, LLC

MORTGAGE LOANS ON REAL ESTATE
MORTGAGE LOANS BY TYPE OF PROPERTY

As of September 30, 2003:

|                            |  |               |          |          |  |                |             |           |  |             |            |            |  |  |            |        |  |   |           | 
|--------------------------- |  | ------------- | -------- | -------- |  | -------------- | ----------- | --------- |  | ----------- | ---------- | ---------- |  |  | ---------- | ------ |  | - | --------- | 
|                            |  |               |          |          |  |                |             |           |  | Carrying    |            |            |  |  |            | Amount
|                            |  |               |          |          |  | Face Amount of |             | amount of |  | Maturity    |            | Subject to
|Type of Property            |  | Interest Rate |          | Mortgage |  | mortgage       |             | Date      |  | Delinquency
|                            |  |               |          |          |  |                |             |           |  |            
|Commercial                  |  |               | 5.5%-14  | %        |  | $              | 222,160,000 |           |  | $           | 23,210,297 |            |  |  | 12/02-6/05 |        |  | $ | 4,750,000 | 
|Construction                |  |               | 12%-14.5 | %        |  | $              | 88,150,000  |           |  | $           | 11,510,498 |            |  |  | 11/01-8/05 |        |  | $ | 3,847,345 | 
|Acquisition and
Development |  |               | 12%-14   | %        |  | $              | 76,700,000  |           |  | $           | 7,430,353  |            |  |  | 2/02-9/04  |        |  | $ | 3,369,010 | 
|Land                        |  |               | 10%-13   | %        |  | $              | 14,859,500  |           |  | $           | 1,839,922  |            |  |  | 3/01-6/04  |        |  | $ | 220,780   | 
|Bridge                      |  |               | 11%-14   | %        |  | $              | 73,565,000  |           |  | $           | 8,035,547  |            |  |  | 7/03-6/05  |        |  | $ | 816,155   | 
|Residential                 |  |               | 12.5     | %        |  | $              | 168,000     |           |  | $           | 168,000    |            |  |  | 8/03-8/04  |        |  | $ |          | 

As of September 30, 2002:

|                            |  |               |           |          |  |                |             |           |  |             |            |            |  |  |            |        |  |   |           | 
|--------------------------- |  | ------------- | --------- | -------- |  | -------------- | ----------- | --------- |  | ----------- | ---------- | ---------- |  |  | ---------- | ------ |  | - | --------- | 
|                            |  |               |           |          |  |                |             |           |  | Carrying    |            |            |  |  |            | Amount
|                            |  |               |           |          |  | Face Amount of |             | amount of |  | Maturity    |            | Subject to
|Type of Property            |  | Interest Rate |           | Mortgage |  | mortgage       |             | Date      |  | Delinquency
|                            |  |               |           |          |  |                |             |           |  |            
|Commercial                  |  |               | 10%-17.5  | %        |  | $              | 151,206,092 |           |  | $           | 28,181,705 |            |  |  | 9/02-7/05  |        |  | $ |          | 
|Construction                |  |               | 12%-15.75 | %        |  | $              | 85,270,644  |           |  | $           | 26,241,223 |            |  |  | 6/02-6/04  |        |  | $ | 7,260,989 | 
|Acquisition and
Development |  |               | 12%-17    | %        |  | $              | 68,618,381  |           |  | $           | 17,379,074 |            |  |  | 2/02-9/03  |        |  | $ | 4,405,632 | 
|Land                        |  |               | 10%-14.75 | %        |  | $              | 21,630,500  |           |  | $           | 10,260,281 |            |  |  | 10/02-6/03 |        |  | $ |          | 
|Bridge                      |  |               | 14        | %        |  | $              | 20,061,996  |           |  | $           | 9,129,025  |            |  |  | 11/02-9/03 |        |  | $ |          | 

F-21



---



##### Table of Contents



Schedule III

Vestin Fund I, LLC

MORTGAGE LOANS ON REAL ESTATE
MORTGAGE LOANS BY LIEN POSITION

As of September 30, 2003:

|              |  |                |             |               |  |          |           |                    |  |             |            |            |  |  |           |  |  |        |            | 
|------------- |  | -------------- | ----------- | ------------- |  | -------- | --------- | ------------------ |  | ----------- | ---------- | ---------- |  |  | --------- |  |  | ------ | ---------- | 
|              |  |                |             |               |  |          |           |                    |  |             |            |            |  |  |           |  |  | Amount
|              |  | Face Amount of |             |               |  |          |           | Carrying amount of |  | Maturity    |            | Subject to
|Lien Position |  | Mortgage       |             | Interest Rate |  | mortgage |           | Date               |  | Delinquency
|              |  |                |             |               |  |          |           |                    |  |            
|1st           |  | $              | 475,602,500 |               |  |          | 5.5%-14.5 | %                  |  | $           | 52,194,617 |            |  |  | 2/02-8/05 |  |  | $      | 13,003,290 | 
|2nd           |  | $              |            |               |  |          |           |                    |  | $           |           |            |  |  |           |  |  | $      |           | 

As of September 30, 2002:

|              |  |                |             |               |  |          |           |                    |  |             |            |            |  |  |             |  |  |        |            | 
|------------- |  | -------------- | ----------- | ------------- |  | -------- | --------- | ------------------ |  | ----------- | ---------- | ---------- |  |  | ----------- |  |  | ------ | ---------- | 
|              |  |                |             |               |  |          |           |                    |  |             |            |            |  |  |             |  |  | Amount
|              |  | Face Amount of |             |               |  |          |           | Carrying amount of |  | Maturity    |            | Subject to
|Lien Position |  | Mortgage       |             | Interest Rate |  | mortgage |           | Date               |  | Delinquency
|              |  |                |             |               |  |          |           |                    |  |            
|1st           |  | $              | 335,984,301 |               |  |          | 10%-17    | %                  |  | $           | 91,180,814 |            |  |  | 10/01-10/03 |  |  | $      | 11,666,621 | 
|2nd           |  | $              | 10,803,312  |               |  |          | 14%-14.75 | %                  |  | $           | 10,494     |            |  |  | 1/02-6/02   |  |  | $      |           | 

F-22



---



##### Table of Contents



Schedule IV

Vestin Fund I, LLC

MORTGAGE LOANS ON REAL ESTATE
MORTGAGE LOANS THAT EXCEED THREE PERCENT
OF THE PORTFOLIO

As of September 30, 2003:

|                            |  |          |       |          |  |          |            |                |  |           |  |             |            |  |  |   |           |          |  |        |           |  |  | 
|--------------------------- |  | -------- | ----- | -------- |  | -------- | ---------- | -------------- |  | --------- |  | ----------- | ---------- |  |  | - | --------- | -------- |  | ------ | --------- |  |  | 
|                            |  |          |       |          |  |          |            |                |  |           |  |             |            |  |  |   |           | Carrying |  | Amount
|Description of              |  | Interest |       | Maturity |  | Lien     |            | Face Amount of |  | Amount of |  | Subject to 
|Loan                        |  | Rate     |       | Date     |  | Position |            | Mortgage       |  | Mortgage  |  | Delinquency
|                            |  |          |       |          |  |          |            |                |  |           |  |            
|Acquisition and
Development |  |          | 14.00 | %        |  |          | 2/1/2002   |                |  | 1st       |  | $           | 7,000,000  |  |  | $ | 3,369,010 |          |  | $      | 3,369,010 | 
|Acquisition and
Development |  |          | 14.00 | %        |  |          | 6/28/2003  |                |  | 1st       |  | $           | 32,000,000 |  |  | $ | 2,759,100 |          |  | $      |          | 
|Bridge                      |  |          | 11.00 | %        |  |          | 6/30/2003  |                |  | 1st       |  | $           | 23,000,000 |  |  | $ | 2,000,000 |          |  | $      |          | 
|Bridge                      |  |          | 12.50 | %        |  |          | 8/19/2004  |                |  | 1st       |  | $           | 20,500,000 |  |  | $ | 3,398,779 |          |  | $      |          | 
|Commercial                  |  |          | 7.00  | %        |  |          | 6/14/2005  |                |  | 1st       |  | $           | 2,000,000  |  |  | $ | 2,000,000 |          |  | $      | 2,000,000 | 
|Commercial                  |  |          | 14.00 | %        |  |          | 4/6/2003   |                |  | 1st       |  | $           | 8,400,000  |  |  | $ | 2,500,000 |          |  | $      | 2,500,000 | 
|Commercial                  |  |          | 12.00 | %        |  |          | 11/27/2003 |                |  | 1st       |  | $           | 8,000,000  |  |  | $ | 1,799,950 |          |  | $      |          | 
|Commercial                  |  |          | 12.00 | %        |  |          | 11/27/2003 |                |  | 1st       |  | $           | 29,000,000 |  |  | $ | 2,079,484 |          |  | $      |          | 
|Commercial                  |  |          | 14.00 | %        |  |          | 3/31/2004  |                |  | 1st       |  | $           | 34,000,000 |  |  | $ | 4,138,662 |          |  | $      |          | 
|Construction                |  |          | 14.00 | %        |  |          | 11/18/2001 |                |  | 1st       |  | $           | 4,500,000  |  |  | $ | 2,083,050 |          |  | $      | 2,083,050 | 
|Construction                |  |          | 14.50 | %        |  |          | 6/18/2003  |                |  | 1st       |  | $           | 6,700,000  |  |  | $ | 2,140,270 |          |  | $      |          | 
|Construction                |  |          | 14.50 | %        |  |          | 6/8/2003   |                |  | 1st       |  | $           | 6,100,000  |  |  | $ | 1,764,295 |          |  | $      | 1,764,295 | 
|Construction                |  |          | 13.50 | %        |  |          | 8/13/2005  |                |  | 1st       |  | $           | 51,450,000 |  |  | $ | 4,468,942 |          |  | $      |          | 

F-23



---



##### Table of Contents



Schedule IV
(continued)

Vestin Fund I, LLC

MORTGAGE LOANS ON REAL ESTATE
MORTGAGE LOANS THAT EXCEED THREE PERCENT
OF THE PORTFOLIO

As of September 30, 2002:

|                            |  |          |       |          |  |          |         |                |  |           |  |             |            |  |  |   |            |          |  |        |           |  |  | 
|--------------------------- |  | -------- | ----- | -------- |  | -------- | ------- | -------------- |  | --------- |  | ----------- | ---------- |  |  | - | ---------- | -------- |  | ------ | --------- |  |  | 
|                            |  |          |       |          |  |          |         |                |  |           |  |             |            |  |  |   |            | Carrying |  | Amount
|Description of              |  | Interest |       | Maturity |  | Lien     |         | Face Amount of |  | Amount of |  | Subject to 
|Loan                        |  | Rate     |       | Date     |  | Position |         | Mortgage       |  | Mortgage  |  | Delinquency
|                            |  |          |       |          |  |          |         |                |  |           |  |            
|Acquisition and
Development |  |          | 15.50 | %        |  |          | 2/2002  |                |  | 1st       |  | $           | 7,232,712  |  |  | $ | 2,774,412  |          |  | $      | 2,774,412 | 
|Acquisition and
Development |  |          | 14.00 | %        |  |          | 2/2002  |                |  | 1st       |  | $           | 6,999,043  |  |  | $ | 3,369,009  |          |  | $      |          | 
|Land                        |  |          | 14.00 | %        |  |          | 10/2002 |                |  | 1st       |  | $           | 12,500,000 |  |  | $ | 4,500,000  |          |  | $      |          | 
|Construction                |  |          | 14.50 | %        |  |          | 6/2004  |                |  | 1st       |  | $           | 17,201,520 |  |  | $ | 11,674,035 |          |  | $      |          | 
|Construction                |  |          | 14.00 | %        |  |          | 6/2002  |                |  | 1st       |  | $           | 9,998,926  |  |  | $ | 6,103,484  |          |  | $      | 6,103,484 | 
|Commercial                  |  |          | 14.00 | %        |  |          | 11/2002 |                |  | 1st       |  | $           | 49,379,591 |  |  | $ | 6,650,000  |          |  | $      |          | 
|Bridge                      |  |          | 14.00 | %        |  |          | 11/2002 |                |  | 1st       |  | $           | 11,500,000 |  |  | $ | 7,145,803  |          |  | $      |          | 
|Acquisition and
Development |  |          | 13.00 | %        |  |          | 10/2002 |                |  | 1st       |  | $           | 7,097,517  |  |  | $ | 3,082,017  |          |  | $      |          | 
|Commercial                  |  |          | 12.50 | %        |  |          | 3/2003  |                |  | 1st       |  | $           | 20,000,000 |  |  | $ | 2,800,000  |          |  | $      |          | 
|Commercial                  |  |          | 13.00 | %        |  |          | 11/2003 |                |  | 1st       |  | $           | 29,000,000 |  |  | $ | 9,579,582  |          |  | $      |          | 
|Construction                |  |          | 13.50 | %        |  |          | 5/2003  |                |  | 1st       |  | $           | 18,129,043 |  |  | $ | 3,050,000  |          |  | $      |          | 

F-24



---



##### Table of Contents



EXHIBIT INDEX

|            |  |                                                 
|----------- |  | ------------------------------------------------
|Exhibit No. |  | Description of Exhibits                         
|            |  |                                                 
|3.1(1)      |  | Articles of Organization                        
|10(2)       |  | Amended and Restated Operating Agreement        
|31.1        |  | Section 302 Certification of Michael V. Shustek 
|31.2        |  | Section 302 Certification of Lance K. Bradford  
|32          |  | Certification Pursuant to U.S.C. 18 Section 1350



|(1) |  | Incorporated herein by reference to our S-11 Registration Statement filed on December 21, 2000.              
|--- |  | -------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Incorporated herein by reference to Amendment No. 2 to our S-11 Registration Statement filed on July
3, 2002.