Letter from our President--September 30, 2012

To our M1 family members,

MONOPOLY I, LLC (M1) set a new company record for rental income for the third quarter in a row, increased the size of our securities portfolio, and implemented debt conversions to strengthen our balance sheet and keep our financial leverage in line within the industry average during 3Q12.

The “Review of 3Q 2012 Financial Results” section of this report will identify many trends, but here are some highlights:

-Quarterly rental income remains on a positive trend.  During 3Q12 our rental revenue was $83,723-New Company Record.  Compare these results to a year ago—our 3Q11 rental income was $52,472.  We began our positive trend during the 1Q12 with record setting revenue of $81,728, and then followed it up with $82,883 in 2Q12. Now that our apartment renovations are complete we expect to continue to deliver consistent rental income increases as we get closer to full occupancy.

-Securities portfolio growth is in line with our goal.  Our securities portfolio’s value increased $48,070 during 3Q12 to $519,146.  This follows $43,131 in growth during 2Q12.  The dividends earned in our securities portfolio will be used to fund dividend distributions to our share members with our first payment on January 31, 2013.  Dividends received in 3Q12 were $4,999, an increase of 11.7% over 2Q12.

-Stronger balance sheet and financial leverage. We refinanced $192K in short-term debt with a long-term mortgage (5.25%) and reduced our financial leverage from 53% to 50% this quarter. Our cost of capital on $1.84 million is 5.69%.

With our operational initiatives in mind, M1 will continue to focus on growing our assets by increasing our market securities portfolio, accomplishing steady income and broad diversification both geographically and by industry.  We will continue to look for ways to reduce our cost of capital by lowering interest expense—as this expense accounts for 36% of our total expenses.  We will continue to plan and budget repair/renovation projects to improve the quality of our properties attracting quality tenants.  Lastly, we will continue to be good stewards of the capital our share members contribute, investing each dollar with a long-term focus on return on investment.

As always, thank you for your continued support. I am humbled to be the leader of M1 and if you would like a more detailed conversation, I would welcome an opportunity to talk.

God bless,

BILL