5. MORTGAGE NOTES PAYABLE

Mortgage notes payable as of December 31, 2011 and December 31, 2010 consisted of the following:

	December 31,		December 31,
	2011		2010
Mortgage note payable in monthly installments of $24,330
through July 1, 2016, including interest at a fixed rate of 6.51%,
collateralized by the Havana/Parker Complex property.	$	3,242,767	$	3,323,714

Mortgage note payable in monthly installments of $71,412 through April 5,
2014, including interest at a fixed rate of 6.08%; collateralized by the leases
and office buildings of the Garden Gateway Plaza property. Certain
obligations under the note are guaranteed by the executive officers.		9,533,849		9,823,854

Mortgage note payable in monthly installments of $27,088 through February
1, 2012, including interest at a fixed rate of 5.31%; collateralized by the
World Plaza property.		-		3,231,661

Mortgage note payable in monthly installments of $25,995 through September
1, 2015, including interest at a fixed rate of 6.5%; collateralized by the
Waterman Plaza property.		3,621,057		3,700,953

Mortgage note payable in monthly installments of $28,842 through March 1,
2034, including interest at a variable rate ranging from 5.5% to 10.5%;
with a current rate of 5.5% collateralized by the
Sparky’s Thousand Palms Self-Storage property.		4,431,783		4,539,478

Mortgage note payable in monthly installments of $9,432 through December
18, 2016, including interest at a fixed rate of 5.00%; collateralized by the
Sparky’s Hesperia East Self-Storage property.		1,690,301		1,717,059

Mortgage note payable in monthly installments of $17,226 through May 3, 2015,
including interest at a fixed rate of 5.00%; monthly installments of $19,323 from
June 3, 2012, including interest at 6.25% to maturity, collateralized
by the Sparky’s Rialto Self-Storage property.		2,820,793		2,887,597

Mortgage note payable in monthly installments of $28,219 through September 1,
2015, including interest at a fixed rate of 4.65%; collateralized
by the Genesis Plaza property.		4,854,307		4,973,365

Mortgage note payable in monthly installments of $6,638 through July 1,
2018, including interest at a fixed rate of 5.80%; collateralized
by the Casa Grande Apartment property (1).		1,040,762		-

Mortgage note payable in monthly installments of $26,962 through July 1,
2025, including interest at a fixed rate of 5.79% through July 1, 2018;
collateralized by the Executive Office Park property.		4,572,161		-

Mortgage note payable in monthly installments sufficient to amortize the note
on a 25 year schedule and the current month interest charge (currently,
approximately $36,200), interest at a variable rate of 3.0% over the one month
libor with a floor of 5.75% and a ceiling of 9.75% through May 31, 2016;
collateralized by the Dakota Bank Building property.		5,640,568		-

Mortgage note payable in monthly installments of $23,919 through April 11,
2015, including interest at a fixed rate of 5.62%; collateralized
by the Yucca Valley Retail Center.		3,304,120		-

Mortgage note payable in monthly installments of $9,858 through January 1,
2019, including interest at a fixed rate of 4.95%; collateralized
by the Rangewood Medical Office Building.		1,150,000

Mortgage note payable in monthly installments of $7,562 through January 1,
2019, including interest at a fixed rate of 4.95%; collateralized
by Regatta Square.		1,300,000

Mortgage note payable in monthly installments of $82,627 through June 20,
2013, including interest at a variable rate of 1% over a published prime rate
with a floor of 6% (the current rate); collateralized by the Port of San
Diego Complex.		9,500,000

Subtotal, NetREIT, Inc. properties		56,702,468		34,197,681

Mortgage notes payable in monthly installments of $24,137 through February 10,
2012, including interest at a fixed rate of 5.50%;
collateralized by 10 model home properties.		2,088,868		2,937,316

Mortgage notes payable in monthly installments of $20,153 through September
18, 2012, including interest at a fixed rate of 6.50%;
collateralized by 4 model home properties.		-		1,873,193

Mortgage notes payable in monthly installments of $3,767 through September
15, 2012, including interest at a fixed rate of 5.75%;
collateralized by 4 model home properties.		428,203		447,822

Mortgage notes payable in monthly installments of $19,792 through December
15, 2015, including interest at a fixed rate of 5.75%;
collateralized by 22 model home properties.		2,205,798		2,374,881

Mortgage notes payable in monthly installments of $4,308 maturity date of
October 5, 2011, including interest at a fixed rate of 2.38%;
collateralized by 1 model home property. (2)		420,830		2,583,323

Mortgage notes payable in monthly installments of $6,984 maturities varying
from October 5, 2011 to March 5, 2012, including interest at fixed
rates from 2.38%, to 2.55%; collateralized by 3 model home properties. (2)		670,207		1,994,260

Mortgage notes payable in monthly installments of $1,798 with a
of December 5, 2011, including interest at 7.16% collateralized by
1 model home properties. (2)		89,811		2,836,311

Mortgage notes payable in monthly installments of $23,686 maturities varying
from February 15, 2016 to August 15, 2016, including interest at
fixed rates from 5.75%, to 6.30%; collateralized by 23 model home properties.		2,747,709		-

Mortgage notes payable in monthly installments of $6,091 maturities varying
from June 30, 2012 to December 15, 2016, including interest at
fixed rates from 5.50%, to 7.13%; collateralized by 3 model home properties.		575,903

Subtotal, model home properties		9,227,329		15,047,106

	$	65,929,797	$	49,244,787

As of December 31, 2011, The Company is in compliance with all conditions and covenants of its mortgage notes payable.

As of December 31, 2011 and 2010, the recorded value and fair market value of notes payable are approximately equal.

Scheduled principal payments of mortgage notes payable as of December 31, 2011 are as follows: