radiant homes booklet 01

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CONFIDENTIALPRIVATEPLACEMENTMEMORANDUM

August8,2011 1

RADIANTHOMES,LLC

aNevadalimitedliabilitycompany

OFFERING

TenMillionDollars

($10,000,000)

Of

2000MembershipUnits

$5,000perUnit

5Unit($25,000)MinimumIndividualInvestment

SECURITIESDISCLOSURES

The securities offered herebyhave not been registered under the Securities Actof 1933, as

amended, or the securities laws of any state and are being offered and sold in reliance on

exemptionsfromtheregistrationrequirementsoftheSecuritiesActandsuchlaws.

Furthermore, the securities offered hereby have not been approved or disapproved by the

SecuritiesAndExchangeCommissionorotherregulatoryauthorityofanystate,norhaveanyof

theforegoingauthoritiespassedupontheaccuracyoradequacyofthisdocumentorendorsed

themeritsofthisoffering.Anyrepresentationtothecontraryisacriminaloffense.

IMPORTANTCONSIDERATIONS

Thismemorandumisbeingfurnishedtoprospectiveinvestorstoconsideraninvestmentinthe

Fund.Duetoitsconfidentialnature,thismemorandummaynotbereproducedorusedforany

otherpurpose.Byacceptingdeliveryofthismemorandum,eachprospectiveinvestoragreesthathe, she or it will not divulge its contents to any person other than his, her or its attorney,

accountantorotherrepresentative,ifany,andwillreturnitwithallaccompanyingdocumentsto

theManageruponrequestiftheinvestordoesnotmakeaninvestmentintheFund.

Thesecuritiesofferedherebywillbeofferedinatransactionnotinvolvingapublicofferingin

relianceupontheexemptionfromregistrationaffordedbysection4(2)oftheSecuritiesActand

theregulationspromulgatedthereunder,andmayonlybeofferedandsoldtocertainqualified

investors.Subscriberswillberequiredtorepresentthattheyarefamiliarwithandunderstand

thetermsofthisoffering,andthattheymeetcertainsuitabilityrequirements.

Thismemorandumdoesnotconstituteanofferorsolicitationbyortoanyoneinanyjurisdiction

in which such an offer or solicitation would be unlawful. In addition, this memorandum

constitutesanofferonlyiftheOffererisaqualifiedOffereeunderapplicablesecuritieslaws.

Thismemorandumcontainsasummaryofthematerialtermsofcertaindocuments.However,

the description of the documents summarized herein is incomplete andshould notbe relied

upon by any investor without a complete reading of all of such documents and a full

understandingoftheircontents.Alldocumentsrelatingtoaninvestmentintheinterests(and


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anyadditionalinformationinconnectionwiththisofferingthatisavailableorcanbeobtained

without unreasonable expense) will be made available to the Offeree provided with this

memorandumorto his, her orits representatives,if any, upon request.TheManager and its

representativeswillbeavailabletotheOffereeortosuchrepresentativestoprovideanswersto

questions concerning this offering. Neither the Fund nor the Manager has authorized, andOffereesshouldnotrelyupon:(a)anyrepresentations(whetheroralorwritten)otherthanthose

set forth in this memorandum and the enclosures hereto or (b) any additional information

(whetheroral orwritten) except that contained indocumentsprepared anddelivered to the

OffereebytheFundpriortoamonthlytransactiondate.

Prospectiveinvestorsshouldnotconstruethecontentsofthismemorandumasindividuallegal,

taxorinvestmentadvice.Eachinvestorshouldconsulthis,heroritsowncounsel,accountantor

businessadvisersastolegal,taxandrelatedmattersconcerningthisinvestment.

Noofferingliteratureoradvertisingmaterialwillbeemployedintheofferingoftheinterests,

except the information contained in this memorandum, the operating agreement, the

subscriptionmaterials,anyinvestmentsummaryandadviserprofiles,otherenclosures,andthe

coverletterorlettersaccompanyingsuchdocuments.

ThisofferingwillcontinueuntilterminatedbytheManager.TheManagerintheexerciseofits

solediscretion,reservestherighttosuspendtheofferingtemporarilyandtoreopenthesame

without such action being considered a closure or termination of the offering, or the

commencementofa new offering. Furthermore, inconnectionwith the offerand saleofthe

interests, theManager reserves the right, in its sole discretion, to reject anysubscription, in

wholeorinpart,ortoallottoanyprospectiveinvestoralesserinterestthantheonesubscribed

forbysuchinvestor.

Theinformationcontainedinthismemorandumisintendedtobecurrentasofthedateofthis

memorandum.No representationorwarranty ismadeasto the accuracy orcompleteness of

such information, and nothing in this memorandum is, orwill be relied on as, a promise or

representationastothefuture.

AllStates

Thepresenceofalegendforanygivenstatereflectsonlythatalegendmayberequiredbythat

stateandshouldnotbeconstruedtomeananofferorsalemaybemadeinanyparticularstate.

ThisMemorandummaybesupplementedbyadditionalstatelegends.Ifyouareuncertainasto

whether or not offers or salesmay be lawfullymade in any given state, you are advised to

contacttheManagerforacurrentlistofstatesinwhichoffersorsalesmaybelawfullymade.


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August8,2011 3

NoticetoCaliforniaResidents

Thesesecuritieshavenotbeenregisteredunderthe1933act,orqualifiedundertheCalifornia

Corporations code by reason of specific exemptions thereunder relating to the limited

availabilityoftheoffering.Thesesecuritiescannotbesold,transferredorotherwisedisposedof

toanypersonorentityunlesssubsequentlyregisteredunderthe1933actandqualifiedunder

theCaliforniaCorporationscode,ifsuchregistrationandqualificationisrequired.

ForFloridaResidentsOnly

Whensalesaremadeto fiveormorepersonsinFlorida,anysale inFloridamadepursuantto

section517.061(11)isvoidablebythepurchaserinsuchsaleeitherwithin3daysafterthefirst

tenderofconsiderationismadebysuchpurchaserto theissuer,anagentofthe issuer,or an

escrow agentor within 3days afterthe availabilityof that privilegeis communicated tosuch

purchaser,whicheveroccurslater.

SpecialU.S.TaxDisclosure

Thetaxpayer(andeachemployee,representative,orotheragentofthetaxpayer)maydisclose

toanyandallpersons,withoutlimitationsofanykind,thetaxtreatmentandtaxstructureofthe

transactions and all materials of any kind (including opinions or other tax analysis) that are

providedtothetaxpayerrelatingtosuchtaxtreatmentandtaxstructure.

SpeculativeNatureofInvestment

InvestmentintheUnitsisspeculativeandbyinvesting,eachMemberassumestheriskoflosing

the entire investment. TheFundhasnooperations asof the date ofthisofferingandwill be

solely dependent upon theManager.Therecan beno assurances that the Fund's investment

returnobjectives will be realized,or that significantcapitallosseswill notoccur. Accordingly,

Investorsmustbeabletobearthelossoftheirentireinvestment.

FORWARD-LOOKINGSTATEMENTS

Certain statements in thismemorandum constitute '"Forward-LookingStatements"withinthe

meaning of section 27A of The SecuritiesAct Of 1933, as amended. And section 21E of The

Securities Exchange Act Of 1934, as amended. All statements that address expectations or

projectionsaboutthefuture,includingstatementsaboutinvestments,marketposition,expected

expendituresandfinancialresults,areforward-lookingstatements.Someoftheforward-looking

statements may be identified by words like "expects," "anticipates," "plans," "intends,"

"projects," "indicates,"and similar expressions. Any statements containedherein thatarenot

statements of historical fact may be deemed to be forward-looking statements. These

statements are not guarantees of future performance and involve a number of risks,

uncertaintiesandassumptions.Accordingly,actualresultsorperformanceoftheFundmaydiffer

significantly, positively or negatively, from forward-looking statements made herein.

Unanticipated events and circumstances are likely to occur. Factors that might cause suchdifferencesinclude,butarenotlimitedto,thosediscussedundertheheading"AdditionalRisk

Factors,"which investors should carefully consider. The Fund will undertake noobligation to

updateanyforward-lookingstatements.


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Contents1 PRIVATEPLACEMENTDOCUMENTS................................... ...................................... .................6

2 WHYMANAGEDRENTALPROPERTIES?...................................................................................6

3 SUMMARYOFOFFERING...............................................................................................................7 3.01 TheFund..................................................................................................................................................7 3.02 TermoftheFund..................................................................................................................................7 3.03 InvestmentObjectiveandProcess................................................................................................7 3.04 Advantagesofbuyingdistressedproperties............................................................................7 3.05 DistressedPropertyInvestmentRisks.......................................................................................7 3.06 Advantagesoftrusteesalepurchases.........................................................................................8 3.07 TrusteeSaleInvestmentRisks.......................................................................................................8 3.08 EligibleInvestors..................................................................................................................................9 3.09 HowtoPurchaseInterests...............................................................................................................9 3.10 NetAssetValue....................... ....................... ........................ ........................ ....................... ...............103.11 HowtoRedeemInterests................................. ........................ ....................... ........................ .......10

3.12 StartupFeesandExpenses........... ....................... ........................ ....................... ........................ ...113.13 DistributionsandTaxes................. ....................... ........................ ....................... ........................ ...113.14 RedemptionandTaxes........... ....................... ........................ ....................... ........................ ...........113.15 BusinessOperationsoftheFund....................... ........................ ....................... ........................ ...11

4 THEMANAGER................................................................................................................................114.01 Manager:LarryRoberts................. ....................... ........................ ....................... ........................ ...124.02 ManagerCompensation...................... ....................... ........................ ....................... .......................124.03 SharedProfitsandAlignmentofInterests........................................... ........................ ...........134.04 ManagersholdingsintheFund..................... ........................ ....................... ........................ .......134.05 ManagersPurchaseofPropertiesfromtheFund..................... ....................... ...................13

5 INVESTMENTOBJECTIVEANDAPPROACH...........................................................................13 5.01 MarketEnvironmentandOpportunity....................... ........................ ....................... ...............135.02 PhilosophyandStrategy............ ....................... ........................ ....................... ........................ .......145.03 RiskofDiminishedReturns............................. ........................ ....................... ........................ .......14

(a) Idlemoney.....................................................................................................................145.04 RiskofLoss.......................... ....................... ........................ ....................... ........................ ...................145.05 InvestmentProcess.............................. ....................... ........................ ....................... .......................15

(a) SelectPropertiesforInitialResearch................................................................15 (b) FilterPropertieswithFinalResearch................................................................15(c) BidatSale.......................................................................................................................15(d) TakePossessionafterSale......................................................................................16(e) PrepareforRental......................................................................................................16(f) HoldasLong-TermRental.......................................................................................16(g) LiquidatePropertiesasInvestorsRedeemInterests..................................16

5.06 TypicalInvestmentParameters,CostsandFees................................ ....................... ...........16

5.07 BreakevenAnalysisforTypicalInvestment........................................ ........................ ...........185.08 UseofPropertyandFundDebt...................... ........................ ....................... ........................ .......185.09 Appreciationand10-YearInternalRateofReturn............... ....................... .......................205.10 Ten-YearProjectionsforatypicalproperty..................... ....................... ........................ .......215.11 RentalStrategies........................ ....................... ........................ ........................ ....................... ...........22

(a) Rentingtotheformerowner.................................................................................22(b) Rentingtotheholdovertenant............................................................................22


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(c) Rentingtoanewtenant...........................................................................................22(d) Pricingstrategy...........................................................................................................22

5.12 DispositionTacticsandResponsibilities............... ....................... ........................ ...................22(a) 3%to5%ProfitTarget............................................................................................23

(b) LowerpricetoNetAssetValue............................................................................23(c) 45DaysonMLSbeforeredeemingforlessthanNetAssetValue.........23 5.13 FundtoPurchasefromAppleBlossomArbitrageLLC................ ....................... ...............235.14 InvestorsPurchaseofPropertiesfromtheFund................................. ........................ .......23

6 ADDITIONALRISKFACTORS......................................................................................................236.01 RelianceonManagement....................... ....................... ....................... ........................ ...................246.02 DiversificationRisk.............................. ....................... ........................ ....................... .......................246.03 LeverageRisk...................... ....................... ........................ ........................ ....................... ...................246.04 AbsenceofOperatingHistoryRisk........................................... ....................... ........................ ...246.05 LimitedTransferability....................... ....................... ........................ ....................... .......................246.06 AmendmentsofOperatingAgreement................................... ....................... ........................ ...246.07 SpecialConsiderationsforERISAFiduciaries...................... ....................... ........................ ...246.08 ChangesinApplicableLaw........... ....................... ........................ ....................... ........................ ...25

6.09 EffectsofSubstantialRedemptions...................... ........................ ....................... .......................257 CONFLICTSOFINTEREST............................................................................................................25

7.01 ServicesoftheManager......... ....................... ........................ ....................... ........................ ...........257.02 OtherSourcesofManagerCompensation.................................... ........................ ...................267.03 ManagerBuyoutofFundsInterest...................... ........................ ....................... .......................267.04 TradingByAffiliatedPersons............................. ........................ ....................... ........................ ...267.05 OtherAdvisoryAccounts............................... ....................... ....................... ........................ ...........267.06 NoIndependentCounsel........................ ....................... ....................... ........................ ...................26

8 HOWTOPURCHASEINTERESTS...............................................................................................268.01 EligibleInvestors....................... ....................... ........................ ........................ ....................... ...........268.02 PaymentofPurchasePrice.............................. ........................ ....................... ........................ .......28

9 HOWTOREDEEMINTERESTS...................................................................................................28 9.01 RedemptionInstructions.................................. ........................ ....................... ........................ .......289.02 InvoluntaryRedemptions...................... ....................... ....................... ........................ ...................289.03 FiduciaryResponsibilities,Exculpation,andIndemnification.......................................28

10 TAXASPECTS................................................................................................................................29 10.01 DISTRIBUTIONSANDTAXES........................ ........................ ....................... ........................ .......2910.02 FederalTaxAspects....................... ....................... ........................ ........................ ....................... ...2910.03 PartnershipStatus;PubliclyTradedPartnershipStatus..................... ........................ ...2910.04 Members,NotFund,SubjecttoTax....................................... ........................ ....................... ...3010.05 PassiveActivityIncomeandLoss....................... ........................ ....................... .......................3010.06 LiquidationoftheFund........................ ....................... ....................... ........................ ...................3010.07 AlternativeMinimumTax.......................................... ....................... ........................ ...................3010.08 UnrelatedBusinessTaxableIncome............................. ........................ ....................... ...........3010.09 StateandLocalTaxAspects...................... ........................ ....................... ........................ ...........3010.10 ForeignTaxes............................... ....................... ........................ ....................... ........................ .......3010.11 ERISAAspectsandRisks................. ....................... ........................ ....................... .......................30

11 DEFINITIONS.................................................................................................................................31


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1 PRIVATEPLACEMENTDOCUMENTSThepackageofmaterialsthatcamewiththisbookletcontainsthefollowing:

1. DisclosureDocument,2. OperatingAgreement,3. InvestorQuestionnaireand4. SubscriptionAgreement.

The DisclosureDocument explainstheOperatingAgreementand describeshow theFundwill

conductbusiness.TheSubscriptionAgreementisfilledoutbytheinvestorasanofferingtothe

Fund to accept the subscribers cash contribution in exchange for a claim to the assets and

profitsoftheFundsoperations.

TheOperatingAgreementaddressesitemslikethecompanyname,Managerandmembers,the

investmentplan,typicaltransactions,expenses,profitsandlosses,capitalcontributions,capital

distributionsandwithdrawals,andvariousproceduralandlegalnotes.

TheDisclosureDocumentdoesnothavethelegaleseoftheOperatingAgreement.Theintentofa

DisclosureDocumentistoinformcompletelyandmakeeverythingastransparentaspossible.

TheInvestorQuestionnaireisdesignedtohelpthepotentialinvestordetermineifthetypeof

investmentpresentedisrightforthem.Itestablishesthecontactinformation,investorfinancial

status,andotherdatatohelptheManagerevaluatethesuitabilityofthepotentialSubscriber.

The Subscription Agreement is the investors petition to the Fund for admission. The Fund

ManagermayacceptSubscribersintotheFundbyprocessingtheSubscriptionAgreementand

returning to the Investor a copy of the Subscription Agreement signed by the Manager. It is

recommendedthatthesedocumentsandfutureFundPerformanceReportsbekepttogetherfor

theinvestorsrecords.

2 WHYMANAGEDRENTALPROPERTIES?Rentalpropertiesofferthestabilityofregularcashflowandthepotentialforappreciationand

profiton resale. Investing in rental properties has lower risk than other formsof real estate

speculation.Withrentalproperties,unlesstheinvestorisforcedtoliquidateatapoortimeata

loss,the questionbecomes not oneof lossbuthow toachieve the highest rate ofreturn on

investedcapital.

TheanticipatedannualreturnstotheFundarebetween6%and8%.

The Manager may use leverage to increase overall Fund returns at the expense of current

cashflow.TheManagerwilltargeta2%yearlycashyieldor25%ofnetincometoprovidecurrentincometopaytaxes.TheremainderwillbetiedupinloanamortizationorFundreserves.Ifthe

ManagerisunabletofinddebtattermsthatwillmagnifyFundreturns,nodebtwillbeused.

Leveragedreturnscouldgreatlyexceedthe6%to8%rangeasthedebtwillbeusedtopurchase

additionalpropertieswithcurrentcashflowandappreciationpotential.Aswithanyinvestment,

there is no guarantee of success, and any investor should be prepared to lose their entire


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investment. However, if the Manager is successful, annualized returns of 12% to 15% are

possible. If the valueof therental properties appreciates significantly, returns could beeven

higher.

3 SUMMARYOFOFFERINGThisConfidentialPrivatePlacementMemorandumdescribestheofferingofanunlimitednumber

ofmembership interests in the Fund, RADIANT HOMES, LLC. An indexofdefined terms used

herein(whicharecapitalized)appearsatthebackofthisMemorandum.

3.01 THEFUNDTheFundisRADIANTHOMES,LLC,aNevadalimitedliabilitycompany.TheFundwasformedto

operate as a private investment company that will invest its assets according to a specified

investmentobjectiveandstatedinvestmentpolicies.

A copy of the Operating Agreement is enclosed with this Memorandum as APPENDIX A:

OPERATINGAGREEMENTOFRADIANTHOMES,LLC.

3.02 TERMOFTHEFUNDThe Fund is established for an indefinite period. The Fund will terminatewhen all Investors

redeemtheirownershipinterestsortheManagerdeclarestheFundclosed,liquidatesremaining

properties,andreturnsallfundstoInvestors.

3.03 INVESTMENTOBJECTIVEANDPROCESSTheinvestmentobjectiveoftheFundismaximumcurrentcashflowandcapitalappreciation.The

Fundwillbuyrealestateattrusteesale,improvepropertiesasnecessary,holdthemindefinitely

forrentalcashflow,andresellthemforprofitwhenanInvestordesiresliquidation.TheFundis

formedtoprovideinvestorswiththeopportunitytopurchaseinterestsinpropertieschosenby

theManager,LawrenceRoberts.

3.04 ADVANTAGESOFBUYINGDISTRESSEDPROPERTIES TheFundwillbebuyingpropertiesinadecliningmarket.For18to36months,itisanticipated

that prices will either remain flat or declinemodestly. The advantage to buyingunder these

circumstancesisthatpropertiesmeetingFundobjectiveswillbemoreplentifulasotherinvestors

speculating on appreciation and owner occupants will not be competing to acquire these

properties.DuringtheinitialperiodofFundacquisition,dealqualitymayimproveaslowerresale

pricesmakeforgreaterratesofreturnoninvestedcapital.

Since distressed properties are ostensibly trading below their true value, obtaining these

propertieswhile they are distressed and holding them untiltheyarenot distressed creates a

potentialforappreciationinexcessofnon-distressedproperties.

3.05 DISTRESSEDPROPERTYINVESTMENTRISKSTherisksforbuyingdistressedpropertiesaretoboththecashflowduringtheownershipperiod,

andtothedispositionresalevalue.Pricesofdistressedpropertiesmayfallfurtherandremain


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depressedforaverylongtimecreatinglossesatliquidation.Further,itmaybedifficulttofind

renters to obtain the income stream in the financial projections. Distressed properties may

requiregreaterupkeepthananticipatedduetotheiroften-dilapidatedstate.

3.06

ADVANTAGESOFTRUSTEESALEPURCHASES Duringthenextseveralyears,Nevadawillturnoverasignificantpercentageofitshousingstock

through foreclosure auctions (AKA trustee sales). Trustee sale purchases represent the best

methodforsophisticatedinvestorstoacquirerealestatebecausethesavingsmaypotentiallybe

quite significant. Typically,properties acquired at Trustee sale are 20% ormore under resale

valueafterfeesandcosts.Nomattertheenduse,theabilitytopurchaseatalowerpriceoffers

uniqueadvantages.

3.07 TRUSTEESALEINVESTMENTRISKSTheonlytransactionsanticipatedfortheFundareTrusteeSalepurchasesandresales,although

othertypesoftransactionsincludingshortsalesanddistressedMLSresalesarepermitted.The

purchaseofrealestateataTrusteeSaleisinherentlymorespeculative,complicated,andriskythanpurchasebyconventionalmeans.Theabove-averageriskisduetosuchconsiderationsas

potentialtitleproblems,thepossibilityofunknownliens,unpaidpropertytaxes,delayedholding

periods,unknownpropertyconditionpriortopurchase,potentialactsofvandalism,unforeseen

governmentalintervention,etc.Themajorrisksandlimitationsareasfollows:

CashOnly:TrusteeSalesonlyallowcashbids.Theexclusionoffinancebuyerscreatesthediscountatauction.

EvaluationofResaleComparables:TheManageroftheFundandhisrepresentativesresearchpropertyvaluesintheresalemarket,buttheirevaluationmaybeinerror.This

errormaycausetheManagertooverpayforpropertyonbehalfoftheFund.Insuch

instancestheFundmaylosemoney.

Selection:ApropertyfittingaFund'spropertyparametersandpricerangemaynotbescheduledforaTrusteeSaleinareasonabletime.Theresultofscarceopportunityisidle

moneyandadiminishedrateofreturn.

NoInspection:TheManageroftheFundandhisrepresentativeswillnotbeabletoviewtheinsideofthepropertypriortothesaleunlessthepropertyisactivelylistedinthe

MultipleListingService,orintheunusualcasewherethecurrentownerallowsaccess.

Thepropertyisacquired"asis"whichmayincludeundetectablephysicaldamage.

NoInsurance:TheManageroftheFundcan'tpurchasetitleinsuranceatthesaleandprotectagainstunrecordedmechanic'sliensorjudgmentliensagainsttheowner.Thisis

rare,butitdoeshappen,andthebuyerisliablefortheseclaimsagainsttheproperty.

NoRemorse:TheSaleisfinal. Unannounced Postponements and Late Cancellations: Most Trustee Sales are

postponedat leastonce,andmany are postponednumeroustimes, sometimes for a

periodofseveralweeksormonths.IftheSaleispostponed,thepostponementmaynot

beannounceduntilbuyerattendsthescheduledsale,unusedcashier'schecksinhand.


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Someownersareabletosellorrefinancetheirpropertiesatthelastminute,cancelling

theTrusteeSalealtogether.

High Opening Bids: Most or all properties fitting Fund's criteria may be overencumbered, and the published opening bids are often higher than the property's

marketvalue.Theforeclosinglenderhastheoptionofstartingthebiddingatlessthan

marketvalue,andtheymaynotdecidewhetherornottodosountiltheauctioneer

beginstocalltheSale.

Competition:TherewilloftenbecompetingbiddersattheSale,andsomewillbidabovetheproperty'smarketvalue.

3.08 ELIGIBLEINVESTORSInterestsintheFundwillbeofferedto"accreditedinvestors"andsophisticatedinvestorsas

thattermisdefinedinRegulationDunderSection4(2)oftheSecuritiesAct.

3.09 CLOSINGDATETheFundwillbeclosedtoallnewinvestmentonDecember31,2012orearlierattheManagers

discretion.

3.10 HOWTOPURCHASEINTERESTSTheFundwillprovideanunlimitednumberofaccreditedinvestorswithopportunitytopurchase

MemberInterests.

The Fund will be closed to sophisticated investors once 35 sophisticated investors have

purchasedFundshares.TheFundwillbeclosedtoallnewinvestmentonDecember31,2012or

earlierattheManagersdiscretion.

TheminimuminitialCapitalContributionofaMemberisfiveunitsof$5,000eachwhichequals

$25,000. Subsequent units canbe purchased for$5,000 each. TheManager maypermit anyMembertomakefractionalunitpurchasesathisdiscretion.AllInterestswillbefullypaidand

non-assessable;andnoMemberwillbepersonallyliableforthedebts,obligationsorliabilitiesof

theFundinexcessoftheamountstheMemberisobligatedtopayasthepurchasepriceforthe

Member'sInterestsintheFund.

EachInterestrepresentsapercentageinterestinFundcapital,profitsandlosses,asdescribed

morefullyintheOperatingAgreementattachedasAppendixA:OperatingAgreementofRadiant

Homes,LLC.EachMemberwillreceiveanacknowledgmentoftheirInterest,butnocertificate

willbeissuedtoevidencetheinvestment.AllmembershiprecordsofInterestswillbemaintained

bytheFund.

MembershipInterestswillbesubjecttoongoingdeductionsformanagementfees,advisoryfees

andotheroperatingexpensesoftheFundasdescribedmorefullyintheOperatingAgreementattachedasAppendixA:OperatingAgreementofRadiantHomes,LLC.

Payment for purchasesof Interests must bedeliveredeitherby check (fourbusinessdays in

advance) or wire (two business days in advance) according to instructions provided by the

Manager.


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3.11 NETASSETVALUEWhile the Fund isopen tonew investment (December31, 2012 at the latest), theNet Asset

Value is the total of the Investors Contributed Capital. Once the Fund is closed to new

investment,The NetAssetValue isdetermined ona quarterly basisby a brokers opinion of

value.

TheNetAssetValueisdeterminedasshown

on the table to the left. First, a schedule is

generated with properties owned by the

Fund.Basedonrecentcomparablesales,the

Manager determines comparable values and

assigns those values to the appropriate

property.Thesumofallpropertiesisreduced

by8%toallowforLiquidationcostsincluding

a full 6% commission (3% list, 3% buy) and

allowing2%forsellerclosingcosts.Theresult

is the total cash value of the propertiesowned.

Each property also has its own reserve

accountwheremoney isset aside for future

repairandrenovationexpenses.Thiscash-on-

hand is not available for investment in new

properties.Theremainderofcash-on-handis

availableforInvestment.

NetAssetValueisthesumofthefollowing:

TotalCashValueofProperties, TotalMaintenanceReserves,and TotalCashonhandforinvestment.3.12 HOWTOREDEEMINTERESTSDuringtheFiscalYear,profitsaredistributed

quarterly, and beginning in 2013, the Net

Asset Value of the Fund is reevaluated by a

brokers opinion of value and the Member's

CapitalAccountsareadjusted.

All petitions for return of Capital Accounts

must be in writing to the Manager andacknowledgedbysame.

IntheeventaMemberpetitionstoManagerforreleaseofCapitalContribution,theManagerhas

oneyeartoliquidatesufficientCompanyholdingstoreturnmember'sContributedCapital.Inthe

eventsufficientworkingcapitalisreleasedpriortotheone-yearperiodandtheManagerdeems


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returningtheamountoftheCapitalAccountwillnotdisrupttheworkingsoftheCompany,the

Managermayathissolediscretionreturnthefundsduringtheone-yearwaitingperiod.

3.13 STARTUPFEESANDEXPENSESInterestswillbesoldprimarilybytheFunditselfthroughtherecommendationofitsManager,althoughtheManagerandFundreservetherighttohireaplacementagentorotherbrokeror

agenttosellInterestsintheFund.Therearenosaleschargesorplacementfees.TheFundmay,

atManager'sdiscretion,payanyagentorthirdpartywhorefersinvestorsmorethananominal

amount.Paymentandfeemaybecontingentonwhether the referral resultsin a transaction,

howeverthereferralfeeisnotbasedontheamountofthetransactionbutaflatfee.TheFund

paysitscreation,syndicationandoperatingexpensesoutoftheinvestableassetsoftheFund,

andpaymentofsuchexpensesisreflectedintheNetAssetValueoftheFund.

The Fund bears the costs of the custody and valuation of its properties, transaction costs,

organizational,syndicationandstartupcosts,andadministrative,legalandaccountingfees.The

startupfeesandmanagementandoperationsfeesareprojectedtobeapproximately$5,000,but

itmaybehigher.

3.14 DISTRIBUTIONSANDTAXESAllprofits,ifany,aredistributedattheendofeachquarter. Inordertopreventdilutionofearly

investors,no investor will receive any payments on the first quarterly paymentafter they

invest.Sinceitwilltake90to150daysfortheManagertoinvestthecontributedcapitalandget

thepropertyrented,thisdelayisexperiencedbyallFundinvestorsregardlessofthetimingof

theirinvestment.

After theFund is closedNetAssetValueof eachMember's Capital Accountis adjusted ona

quarterlybasisbasedonabrokersopinionofvalueforeachoftheFundsholdings.

Investorswillberequiredtopaytaxesonrentalincome,andtheFundwillnotwithholdfortaxes.

MemberswillreceiveacopyoftheannualfinancialstatementandtaxreportsonIRSformK-1.

3.15 REDEMPTIONANDTAXESAll investorswillbepartoftheFundforat leastoneyeardueto restrictionsonthe timingof

redemptions.When fundsare redeemed, the Fundwill repurchase sharesfor theirNetAsset

Valueadjustedforactualcosts.Thisredemptionwillbereportedasacapitalgaintotheinvestor.

3.16 BUSINESSOPERATIONSOFTHEFUNDTheManagerisresponsibleformakingallbusinessandinvestmentdecisionswithrespecttothe

Fund.

4 THEMANAGERTheactingManageroftheFundisLarryRoberts.TheManagerhasexperienceineveryaspectof

theFundsoperation.However,itmaybeinthebestinterestoftheFundtohavetheManager

supervisetheworkofothersandworkasa teamtodeliverpotentiallyprofitabledealstothe


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Fund.TheManagerwill hireoutside consultantsasnecessaryto performFundfunctions.The

Fundwillhavenoemployees.

4.01 MANAGER:LARRYROBERTSCredentials:

ManagerofAppleBlossomArbitrageLLC,a$2,000,000purchase-to-saleflippingFundoperatinginLasVegas,NV.

ProjectManagerresponsibleforevaluation,acquisition,development,anddispositionofover$100millioninrealestateassets.

LicensedCaliforniaRealEstateAgent#1868521 MasterofScienceinLandDevelopment-TexasA&MUniversity1994 BachelorsofScience-UniversityofWisconsinatStevensPoint1992 PrimarywriterfortheIrvineHousingBlog AuthorofTheGreatHousingBubble

The Fund is the primary responsibility of Larry Roberts. He has extensive experience with

managinglargerealestatefundsdevotedtospecificprojects.Muchofhisexperiencehasbeen

withhomebuilders,so he fullyunderstandsthe constructionand renovation issuesassociated

with single-family homes. Since September 2010, Larry Roberts has been managing Apple

BlossomArbitrageLLC,apurchase-to-saleflippingfundoperatinginLasVegas.Inthefirstyearof

operations, he oversaw the purchase, renovation and sale of more than 30 homes. This

experiencemakeshimanexpertinLasVegasrealestate.

ThecontractbetweenLawrenceRobertsandtheFundistheOperatingAgreementattachedas

APPENDIXA:OPERATINGAGREEMENTOFRADIANTHOMES,LLC.

4.02 MANAGERCOMPENSATIONTheManagerreceivescompensationthroughfourevents:

5%ofinvestedcapitalretainedasaFundownershippositionbyMontereyCypressLLC. 1%grosscommissiononpropertyacquisitions. 10%ofnetoperatingincome. 3%typicallistingcommissiononsale.

TheManageralsohastherighttopurchasepropertiesfromtheFundat-costasanindirectform

ofcompensation.

Managermaytake compensationpersonally,or itmaybeputto abusinessentitywithwhich

Manager hasan interest such as IdealHome Brokers orMonterey Cypress LLC.Manager will

determinewhethertotakeanyincomepersonallyorfunnelitthroughanentityathisdiscretion.


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4.03 SHAREDPROFITSANDALIGNMENTOFINTERESTSTheprimarycompensationfortheManagerisfromsharedprofitswiththeFund.Thiscreatesan

alignmentofinterestswherebythemanagerisstronglyencouragedtomaximizetheprofiton

eachtransaction.

4.04 MANAGERSHOLDINGSINTHEFUNDInadditiontoanydirectFundinvestment,theManagerwillobtaina5%ownershipstakeinthe

company as properties are acquired. As each property is acquired, the Managers account

holdingswillbeincreasedby5%ofthetotalproformacostoftheproperty.TheManagerhasno

ownershipclaimtoInvestorcapitaluntilpropertiesarepurchased.

TheManagermaynotredeemhisinterestintheFundacquiredthroughacquisitionofproperties

forthefirsttwoyearsoftheFundsoperation.Thisongoingownershipinterestistheprimary

reasontheManagerhaspreparedtheFundandofferedownershipinteresttoothers.

4.05 MANAGERSPURCHASEOFPROPERTIESFROMTHEFUNDTheManagermaypurchaseanypropertypurchasedbytheFundwithin90daysofcashingthe

firstrentalcheckfromthefirsttenanttooccupytheproperty.ThisprovidestheManagertimeto

securefinancingtopurchasetheFundsinterest.TheFundwillsellthepropertyforits invested

costwith noprofitotherthan rentalfeesobtainedwhiletheManager isprocessing theloan

financing. TheManagermaypurchaseanypropertybeforeits leasedalso at the Fundscost

basisresultinginnoprofitfortheFund.

4.06 MANAGERSDELEGATIONOFPOWERSManager has appointed Jacqueline Evansasvice president ofoperations. She, or someother

designeeasManagermayappoint, has thepower toenter into contracts on theCompanys

behalf.

5 INVESTMENTOBJECTIVEANDAPPROACHThepurposeofthissectionistodetailtheinvestmentactivityoftheFund.Itwillanswermany

basicquestions:

Whydoesthisopportunityexist? Whataretherisksassociatedwithtakingthisopportunity? Whatistheprocessforidentifyingopportunities? HowdoestheFundparticipateandprofitfromtheopportunity? Whatisthebreakevenpointandparametersforriskofloss? Howwillothersparticipateinthisopportunity?

5.01 MARKETENVIRONMENTANDOPPORTUNITYThe entire nationexperiencedan unprecedented real estatebubble fueled byloosecredit.In

Nevada,whereRadiantHomeswillprimarilyoperate,theupsanddownsofthehousingbubble

havebeenthemostextreme.Asaresultofthecollapseofthebubble,manyhomeownersarein

distress,andmanywilllosetheirhomestoforeclosure,alsoknownastrusteesale,ortheywill


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sell the house on the MLS in a short sale. Residents who sell either through short sale or

foreclosurehavedamagedcredit,andtheyareunabletoqualifytopurchaseanotherhomefor

anextendedperiodoftime.Iftheystillhaveajobinthelocaleconomy,mostwillstayonand

rent.

Thesecircumstancescreateauniquesituationwheretheexcesssupplyhaspushedpricesdown

significantly relative to the cost of a comparable rental. This Fund seeks to profit from this

situationintwoways:first,sincethecostofownershipismuchlowerthanmarketrents,buying

andholdingthesepropertiesofferssignificantreturnsfromcurrentcashflow,andsecond,since

pricesaresolowrelativetorentsandincomes,whenthecreditscoresoflocalresidentsimprove,

thenewdemandwillpushpriceshighercreatingtheopportunitytoprofitfromappreciation.

5.02 PHILOSOPHYANDSTRATEGYThe investment objective of the Fund is profit through buying real estate at trustee sale,

improvingpropertiesasnecessary,rentingthemoutforcurrentcashflow,andresellingthemin

theopenmarketwherebuyerscanobtainfinancingafterpricesreboundbacktorentalparity

levels.

5.03 RISKOFDIMINISHEDRETURNSTherisksofthisFundcomeintwoforms.Oneisatrueriskoflosstooriginalcapital.Thesecond

isariskthereturnswillnotbeashighastheproformawouldsuggest.Thissecondriskisoneof

diminishedreturns.

The riskofdiminished returns tothe Fund comes from,but isnot limited to,severalprimary

sources:

1. Overestimation ofresalemarketcomparables that prompted the Fund tooverbid forproperty,and

2. Underestimationofacquisitioncostsorrenovationcostsrequiredtobringthepropertytoarentableorsalablestandard.

3. Overestimationofmarketrents.4. Underestimationofvacancylosses,maintenance,andrepairs.

Managing these risks requires good data and sound analysis. The skills and efforts of the

ManagertomanageriskwilldeterminethesuccessoftheFund.

(a) IdlemoneyFindingdealsthatmatchesinvestmentparametersmaybecomedifficult,andsuchdealsmaynot

bepresentinthemarketforlongperiodsoftime.Idlemoneylowerstherateofreturn.Ifittakes

twoorthreemonthstoacquireaproperty,aninvestormissedpotentialrentalincomeduring

thatperiod.Further,onceapropertyispurchased,itmaynotberentedforasignificantperiodof

timewhileformeroccupantsareevicted,renovationsarecompleted,andarenterisfound.

5.04 RISKOFLOSSTheriskoflosstotheFundcomesprimarilyfrommarketriskatresale.Thecurrentstateofthe

marketisfallingprices.Ifpricescontinuetofallandfailtorecover,andiftheinvestorwantsto


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liquidatetheirholdingswhilepricesaredepressed,theinvestormayexperiencelossoforiginal

capital.

Toavoidriskoforiginalcapital,investorsmustanticipateatleastathreetofiveyearholding

timewhilethemarketdropsthenrecovers.

Sincethecurrentcashflowofthesepropertiesyieldshighreturns,investorswillnotbepressured

bycarryingcostsorotherinvestmentrelatedneedsforliquidation.Onlyaninvestorspersonal

circumstancesmyrequireredemptionandsubsequentpropertyliquidationwhilepricesarestill

depressed.Forthisreason,investorswhoanticipateneedingtheirfundsinthenextfiveyears

shouldnotinvestinthisFund.

5.05 INVESTMENTPROCESSThis section contains a conceptualoverviewof the Trustee Sale processwhich is the primary

methodofpropertyacquisitionforthisFund.

(a) SelectPropertiesforInitialResearchThe Fund has identified certain market areas where it has expertise in determining resaleproperty values. The Manager will contract with a service to function as the

Trustee Sale Buyer. Any possible acquisition targets are further researched to obtain the

followinginformation:

DetaileddescriptionofProperty Propertytaxinformation(taxrate,MelloRoosstatus,etc.) BasicHomeOwnersAssociationinformation,ifany Recentmarketcomparablerentals Recentmarketcomparablesales Recentcomparableforeclosuresales,ifany

(b) FilterPropertieswithFinalResearchForthosePropertiesinwhichManagerhasacontinuedinterest,TrusteeSaleBuyerwillprovide

thefollowing:

PhotographsonthemorningofthesaleeachprospectivepropertyscheduledforauctionisphotographedandprovidedtotheManager.

Title-allpersonscurrentlyvestedontitle,orpreviouslyvestedatanytimeasoforsincetheacquisitionoftheProperty.

Liens-allTrustDeedsandallotherlienscurrentlyencumberingProperty,andananalysisoftheireffectorstanding,ifany,atorfollowingtheSale.

PropertyTaxStatus-totalpropertytaxesowedagainsttheproperty,ifany,includingcurrenttaxes,delinquenttaxes,andpenalties.

PriortotheSale,Managerwill(1)reviewtheaboveinformation,(2)makea finaldeterminationastowhetherornottobidattheSale,and,ifso,(3)determinethemaximumbid.

(c) BidatSaleOnthedayofthescheduledSaleTrusteeSaleBuyerwillattendtheSaleandbidonPropertyon

Fund's behalf. If there is no bidding competition and opening bid is less than the Buyer's


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determinedmaximumbid,Brokerwillbid$.01morethantheopeningbid,andtheFundwillbe

the winning bidder. If there is active bidding competition, Trustee Sale Buyer will continue

bidding by increasing each higherbid by a predetermined increment,until the Fund has the

winningbidoruntilManager'smaximumbidamountisreached.

IftheFund isthewinning bidder, Trustee Sale Buyerwillprovide paymentfroma third-party

escrowcompanyto theTrustee,and TrusteewillprovideTrusteeSaleBuyerwitha receiptof

transaction.

TheTrusteewillmailtheTrustee'sDeedUponSale,whichtransferstitletoFund.Thisdeedmust

berecordedwithin 15calendardaysofthe Sale for Fund's ownership tobe ofrecord onthe

morningofthedateofthesale.Atthetimeofrecordation,theFundwillberequiredtopaythe

StateTransferTax,$1.10perthousanddollarsofpurchaseprice.

(d) TakePossessionafterSaleIfPropertyisoccupied,ListingAgentwillattempttonegotiateanewrentalagreementwiththe

occupants.Formerownersaresometimeswillingto stayonandpaya premium rent toavoid

movingout oftheirfamily homes.Former tenants are also sometimeswilling tostay on,butmanytenantshavebeengivenbelowmarketrentsbyformerownerswhowereskimmingtheir

rentpaymentsandnotpayingthelender.Inthosecircumstances,therentermaynotbeableto

affordfair-marketrentsandwillneedtomoveout.

If unsuccessful, Listing Agent will attempt to negotiate a voluntary vacancy, whereby the

occupantleavesaccordingtoatimeframeapprovedbytheManager.

Ifalsounsuccessful,theManagerwillattempttonegotiateaCash-For-Keysagreement,approved

byManager andat Fund's expense,whereby occupant vacates the property andremoves all

personalpropertybyacertaindateinexchangeforaspecifiedsumofmoney.

If also unsuccessful, Manager will contact a qualified eviction attorney to begin the eviction

processalsoattheFundsexpense.

(e) PrepareforRentalManagerisresponsibleforrenovationandresale.Managerwillapproveabudgetandscopeof

workrequiredtobringeachpropertyuptoarentablestandard.

(f) HoldasLong-TermRentalManager will contract with a local property management company to deal with day-to-day

managementissuesonthevariousproperties.

(g) LiquidatePropertiesasInvestorsRedeemInterestsManager will liquidate properties as investors want to redeem their interests. Due to rent

rolloversandleaseobligations,investorsmustallowtheManageroneyeartoobtainfair-market

valueforthepropertiesandreturninvestedcapital.

5.06 TYPICALINVESTMENTPARAMETERS,COSTSANDFEESAtypicaltransactioninvolvespurchasingatrusteesalepropertyat22.5%orgreaterdiscountto

resalevalue.Theactualdiscountiscalculatedbysubtractingknownandestimatedcostsfrom

theprojectedresalevalue.


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Theknownandestimatedcostsincludethefollowing:

MaximumbidforacquiringpropertyatTrusteeSale, trusteesalefeesandcommissions, realestateimprovements, backandcurrentpropertytaxes, carrycostsduringthepre-leaseperiod, tenantmove-outcosts, transfertaxes, marketrent, propertytaxes, homeownersinsurance, homeownersassociationfees, propertymanagementfees, maintenance and replacement

reserves,

vacancyandcollectionlosses, anydebtapplied,and othercosts.

Thefollowingisareportdemonstratingthe

typical costs associated with acquiring,

improving and reselling a trustee sale

property.

Atypicalpropertywillhavea resalevalue

of approximately $100,000. Liquidation

costs include a 6% commission (3% listgoestoManager,and3%tobuyersagent)

and a 2% allowance for sellers closing

costs.TheLiquidationValueisalsotheNet

AssetValueoftheproperty.

TrusteeSaleFeesincludetheserviceused

by the Manager to acquire the property

which typically charges 3%, and a 1%

acquisitionfeechargedbytheManager.

The Managers compensation includes a

feeequal to5%of the total cost basis in

the property. The primary acquisitionmethodforthisFundwillbetrusteesales.

Sincethesepropertiesarepurchased ata

22.5% or more discount to resale price,

partoftheManagerscompensation(5%of

total cost basis), is made up for by the


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savingsonacquisitionsatauction.ThenetassetvalueoftheInvestorsholdingsisequaltothe

acquisitioncosts.Inotherwords,savingsatauctionindirectlypaystheManagersfee.

Real estateimprovements areapproximately 5%of theauctioncosts. Anycosts not spenton

improvementsatthetimeofpurchasewillbeaddedtoareservefundforfuturemaintenance

andrepairs.

Carryingcostsassumethreemonthsofexpensesfortaxes,insurancehomeownersassociation

fees,propertymanagementandotherexpenses.

Projectmanagement includes the compensation for theprojectmanager whocoordinates all

activitiesbetweentheauctionandleasingoftheproperty.

The allowances for tenantmove-out andmove-inmaybeavoidedif eitherthe property was

emptywhenacquired,oriftheexistingoccupantcanbeconvincedtostay.TheFundwillseekto

keepexistingoccupantsinplacewheneverpossible.

Transfertaxesandrecordingfeesarerequiredwheneverapropertyissold.

The operating expenses are broken down into two categories: cash expenses and reserveexpenses.Cashexpensesarepaidouteachmonthorinthecaseofpropertytaxeseachquarter.

Property taxesare typically1%,and homeowners insurance isapproximately0.65%of value.

Homeownersassociationsvary considerably,but typically theFundwill targetpropertieswith

lowfeesornofees.Associationfeesaretypicallyadrainoncashflow,althoughtheydoprovide

someoffsettoongoingmaintenanceexpenses.TheFundwillemployapropertymanagement

servicetodealwiththeday-to-dayoperationalissuesofdealingwithmultipleproperties.

Thereserveexpensesincludeallowancesformaintenanceandforvacancyandcollectionlosses.

Sincetheseexpensesarevariableandunpredictable,eachmonthmoneyissetasideinareserve

accounttopaytheseexpenseswhentheyoccur.

The gross rent minus cash expenses and minus reserve expenses equals the net operating

incomeoftheproperty.TheManagerchargesa10%FundAdministrationfeebasedontheNetOperating Income. This encourages the Manager tomaximize Net Operating Income thereby

aligningtheinterestsoftheManagerwiththeInvestors.

Afterallexpenses,investorscananticipatean8%returnonatypicalpropertyresultingina6%

to8%returnonallmoneyinvestedafterotherFundexpensessuchasaccountingandallowing

foridlemoney.

5.07 BREAKEVENANALYSISFORTYPICALINVESTMENTForatypicalinvestment,liquidationcostsplusthecostoftheManagersownershipshareare

builtintotheprojections.Atthetimeofpropertypurchase,theInvestorsFundinterestsare

alreadyatbreakeven.ThisisoneofthecompellingreasonstoacquirepropertiesatTrusteeSale.

5.08 USEOFPROPERTYANDFUNDDEBTIf debt can be obtained under terms that would magnify the returns to the investors, the

Managermayathissolediscretionobtainfirstmortgagedebtusingcash-outrefinancingorsome


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formofacquisitiondebttoacquiremoreproperties.Anydebtappliedtothepropertieswillbe

usedtoacquireotherpropertiesormakeimprovementstoexistingproperties.

TheManagerwillseektoensureatleast25%ofthenetoperatingincomeispaidouttoinvestors

eachquartertoprovideenoughcashflowtopaythetaxburdenontheinvestors.Theremaining

cashflowmaybetiedupinloanamortizationandserveasaformofretainedearnings.However,

theFundwillreportthisasadistributionevenifthecashisnotactuallypaidtotheInvestors.

This phantom income cancreate a taxburden inexcess of themoney paid from the Fund

duringtheyear.Furthertheuseofpropertydebtcreatesunrelatedbusinessincometaxmaking

thisinvestmentunsuitableforself-directedretirementfunds.

Thedebtmaybeeitheraclaimagainstindividualproperties,groupsofproperties,ortheFundas

awhole.Nomemberwillbeliableforanydebtappliedasitwilleitherbenon-recoursedebt,or

personallyguaranteedbytheManager.

Thedebtassumptionsaboveareconservative.Thedebtwillneedtobenon-recoursedebtissued

toanLLC.TheManagerknowsofseveralsourcesofprivatefundingwillingtomaketheseloans

atrateslessthan7%withloan-to-valuesof50%orhigher.Thelowertheinterestrateandthe


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higher the loan to value, the greater the potential investment returns to the investors. The

MangerwillbeconstantlysearchingforbetterdebttermstoimproveFundperformance.

Theuseofdebtmayleveragethecurrentcashreturnssomewhat,butthemainreasonforusing

debtistoacquiremorepropertywhichwillprovidemorepotentialforgainsfromappreciation

andgreatercashflowoncethedebtisfinallyretired.

5.09 APPRECIATIONAND10-YEARINTERNALRATEOFRETURNThe Las Vegas housingmarket held steadyat rentalparity levelsprior to the Great Housing

Bubble.Asiscommonwhenfinancialbubblesburst,themarkethasovershottothedownside.

Whentheinventoryproblemscausedbytheplethoraofforeclosureabates.Theopportunityto

buy cashflow properties with tremendous capitalization rates will disappear. However, the

reboundappreciationmaybequitesignificant.Themarketiscurrently40%belowrentalparity.

Theasymmetricnatureofdrawdownsmeansthatpricesneedtoreboundfarmorethan40%to

reachthepriorequilibrium.LasVegascouldeasilyseedouble-digitappreciationfivetotenyears

from now. Ifprices rise80% during the next ten years whichwouldstill leaveprices below

rentalparitytheappreciationreturnswillbetremendous.

Whena10yearholdingperiodwithan80%increaseinpricesisfactoredin,theinternalrateof

returncomesto13.2%onanall-cashbasis.Withleveragethereturnscanexceed20%.


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5.10 TEN-YEARPROJECTIONSFORATYPICALPROPERTY

Toestimatetheperformanceofa$10,000,000fund,takealltheabovenumberstimes100.Theratesof

returnwillbe the sameasfor the individual propertiesexcept forsomereduction for idlemoneyand

generalfundexpenses.


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5.11 RENTALSTRATEGIESPurchasingpropertiesatTrusteeSalecreatesuniqueopportunitiesfortheFundtoobtainbetter

thanexpectedresults.Manyofthepropertiespurchasedatauctionarealreadyoccupied.Funds

withabusinessplanto flippropertieswillgenerallyevict anyoccupants inorderto resell the

property to a new owner-occupant. This Fund focused on rental cashflow will seek to keep

occupantsinplacebeforeresortingtoevictionorcash-for-keystoclearthepropertyforanew

tenant.

The advantages to keeping a holdover occupant in place are twofold: first, the property has

immediate cashflow when the occupant is willing to stay on and pay rent, and second, the

renovation budget can be saved as reserves for futuremaintenance as renovation costs are

minimalwhenanoccupiedhouseremainsoccupied.

(a) RentingtotheformerownerTheformerownersarethebestpossibletenants.First,theywilltreatthepropertyastheirown,

afterall,itusedtobe.Formerownerswilloftenpayabove-marketrentsinordertostayinthe

property they viewastheirfamily home. Inthe future, ifthe Fundneedsto liquidatedue toredemption,theformerownersareprimecandidatestopurchaselater.

(b) RentingtotheholdovertenantThenextbestscenario istokeepaholdoverrenter intheproperty.This isnotaseasyasone

mightthink.Inmanycases,thetenantispayingbelow-marketrentastheformer-owneroften

rentsthepropertyoutforwhatevertheycanandskimstherent.Manyofthesetenantscannot

affordmarketrents,andmanywillmoveoutwhenaskedtopaymore.

(c) RentingtoanewtenantIn theevent a deal cannot be reached to keep the holdover occupant inplace, negotiations

ensuetopaycash-for-keys.Ifthesenegotiationsfail,theFundwillresorttoevictionstoclearthe

property and prepare for a new tenant. Once the previous tenants are out, any necessary

renovationsarecompletedtoprepareforoccupancy.Thisisthecostliestmethod,soitisthelast

optionchosen.

(d) PricingstrategyWhenthepropertyisfirstputonthemarket,askingrentis$50overrecentcompsunlessthere

are manymodel match comps in a tight range. After twoweeks,the rent is lowered to the

proformarate.Attwotofourweekintervals,therentisloweredby$50untilarenterisfound.

5.12 DISPOSITIONTACTICSANDRESPONSIBILITIESWhen anInvestorprovideswrittennoticerequestinga redemption, theManagerwill identify

specificpropertiestobeliquidatedtofreeupthecapitaltosatisfytheredemption.TheManager

will select those properties with thehighest resale value relative to itsmarket rent. Inotherwords,theManagerwillsellthepropertieswiththelowestcapitalizationratesfirst.Thisislogical

for two reasons; first, investors seeking a redemption were likely primarily motivated by

appreciation,andtheyshouldbecompensatedbythepropertiesthatgavethegreatestchange

invaluerelativetorents.Second,theremainingInvestorswanttoobtainthegreatestcashflow

relative to theirinvestments, so retaining thepropertieswiththegreatest capitalizationrates


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bestservestheirinterests.TheresultoftheseredemptionsovertimewilllikelybethattheFund

willendupwiththeleastdesirablepropertiesintheFundsholdingsasowner-occupantswillbid

upthepricesofthemostdesirablepropertiesovertime.

Oncethepropertiesforliquidationhavebeenidentified,theManagerwillputalargernumberof

propertiesforsaleandletthemarketdecidewhichonessellfirstandobtainthebestprices.The

ManagerwillbasehisselectionsontheNetAssetValueoftheproperties,butiftheactualsales

pricesandproceedsarelowerthanthebookNetAssetValue,theredemptionamountwillbe

adjustedbythedownwardbythedifference.

TheManagercannotguaranteetheFundwillnotlosemoneyonanytransaction.TheManageris

duty boundto prevent orminimizeFund losses,butif theManager deemsa sale ata loss is

preferabletosustainedownership,theManagerhastheunrestrictedrighttosellforaloss.

(a) 3%to5%ProfitTargetTheManagerwilllistthepropertiesforsaleata3%to5%markupoverNetAssetValuefortwo

tofourweeks.

(b) LowerpricetoNetAssetValueIftheManagercannotobtainabidresultingina3%to5%profittotheredeeminginvestor,the

ManagerwilllowerthepricetotheNetAssetValueforanadditionaltwotofourweeks.

(c) 45DaysonMLSbeforeredeemingforlessthanNetAssetValueToensureredemptionsmeetorexceedNetAssetValue,allpropertieswillbeadvertisedonthe

MLSforatleast45dayspriortosellingforaresultlessthantheNetAssetValue.After45days,

theManagermayreducepricebelowNetAssetValueathissolediscretionuntiltheproperties

aresold.

5.13 FUNDTOPURCHASEFROMAPPLEBLOSSOMARBITRAGELLCThisFundmaypurchasepropertiesdirectlyfromanotherFundoperatedbytheManager,AppleBlossom Arbitrage LLC. Any purchases would be at cost plus a 6% profit to Apple Blossom

ArbitrageLLC.Thismaybeanimportanttoolforusingfirstmortgagedebttoacquireproperties

forRadiantHomes,LLC.

5.14 INVESTORSPURCHASEOFPROPERTIESFROMTHEFUNDAnyinvestorin the Fundmayalsopurchasea property from the Fundat theManagers sole

discretion. The Fund must obtain a price equal to the net asset value of the property. The

manager will charge a 3% commission, but the 3% that would typically be a buyers agent

commissionwillberetained asFundprofit tocompensatefor the lostrentrevenuewhilethe

capitalisredeployed.

6 ADDITIONALRISKFACTORSProspectiveinvestorsshouldcarefullyconsiderthefollowingriskfactorsamongtheotherrisks

describedinthisMemorandum:


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6.01 RELIANCEONMANAGEMENTTheFund'sinvestmentsuccessdependsontheskillandtheinvestmentmanagementexpertise

oftheAdviseranditspersonnelresponsibleformanagingtheFund'sassets.Aninvestmentinthe

FundissubjecttotheriskthattheAdvisermaynotobtaintheperformanceanticipatedfromthe

Fund'sassets.

AlldecisionswithrespecttotheFund'sinvestmentobjectiveandpoliciesandthemanagement

oftheFundwillbemadeexclusivelybytheManager.Investorshavenorightorpowertotake

part in the management or affairs of the Fund or to participate in the Fund's investment

decisions.

TheMembersalsoagreetoholdtheManagerharmlessfromtheconsequencesofsuchdecisions

providedtheManageractsingoodfaithandisnotfoundtohaveengagedingrossnegligence.

6.02 DIVERSIFICATIONRISKTheOperatingAgreementdoesnotrequirediversificationoftheFund'sinvestments.Therefore,

theFundmayinvestitsassetsinarelativelysmallnumberofproperties.

6.03 LEVERAGERISKTheuseofleveragewillbeemployedtoenhancetheFund'sreturns.DebtwillmagnifytheFunds

interestinthepropertyanditwillexposetheFundtoagreaterriskofloss.

6.04 ABSENCEOFOPERATINGHISTORYRISKTheFunddoesnothaveanoperatinghistoryfromwhichprospectiveinvestorsmayevaluatethe

likelihoodofsuccessfulinvestmentperformance.TheManagerisexperiencedwithoperatinga

similarFundpurchasingthesepropertieswithadifferentfinancialobjective,buttheManager

hasneveroperatedaFunddevotedtomanagingrentalproperties.

6.05 LIMITEDTRANSFERABILITYThe Interests have not been registered under the Securities Act of 1933 or applicable state

securitieslawsand,therefore,aresubjecttorestrictionsontransfer.Inaddition,theOperating

AgreementcontainssignificantrestrictionsontheabilityofMemberstotransfertheirInterests.

Inmost instances, Interests may not be transferred by a Memberwithout the prior written

approvaloftheManager.

6.06 AMENDMENTSOFOPERATINGAGREEMENTTheOperatingAgreement canbeamendedby thewrittenconsentof both theManager inits

capacityassuchandthemajorityinInterestoftheMembers.TheManageralsomay,however,

without the approval of the Members, modify the Operating Agreement under certaincircumstances.

6.07 SPECIALCONSIDERATIONSFORERISAFIDUCIARIESAfiduciaryofanemployeebenefitplansubjecttotheU.S.EmployeeRetirementIncomeSecurity

Actof1974,asamended("ERISA"),shouldbearinmindatleastthreeimportantconsiderations


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indeterminingwhethertheplanshouldinvestintheFund.First,underERISA,fiduciariesmust

dischargetheirduties solely in the interestofthe plan'sparticipants andbeneficiaries andin

accordancewiththeso-called"prudentman"rule.

Second, ERISA fiduciaries must also satisfy themselves that only the interest in the Fund

constitutesa"planasset,"andtheunderlyinginvestmentsoftheFunddonot.Iftheunderlying

assets of the Fundwere determined tobe "planassets," (i) the requirement that plan assets

mustbeheldin trustmay beviolatedand (ii) Fund transactionscouldbecome subject tothe

"prohibited transaction" rules of ERISA. The issue of whether the underlying assets of an

investmentfundsuchastheFundconstituteplanassetsissubjecttoU.S.DepartmentofLabor

RegulationSection2510.3-101.TheManagerwillrestrictthenumberofInterestsoftheFund

thatmaybepurchasedbyemployeebenefitplansandbenefitplaninvestors(withinthemeaning

of U.S. Department of Labor Regulation Section 2510.3-101(0 (2)) so as to avoid possible

characterizationoftheFund'sunderlyingassetsasplanassets.

Third,as discussed ingreaterdetailunder the heading "TAX ASPECTSANDRISKS"below,it is

possible that a portion of the income of the Fund and, therefore, a portion of the income

allocatedtoeachMembertherein,includingERISAplansandothertaxexemptentities,couldbeunrelatedbusinesstaxableincomesubjecttofederaltaxation.

6.08 CHANGESINAPPLICABLELAWTheFundmustcomplywithvariouslegalrequirements,includingrequirementsimposedbythe

U.S.Federalandvariousstatesecuritieslaws,taxlaws,commoditieslaws,andpensionlaws,and

therespectiveregulationsthereunder.Shouldanyofthoselawsorregulationschange,thelegal

requirementstowhichtheFundandtheMembersmaybesubjectcoulddiffermateriallyfrom

currentrequirements.

6.09 EFFECTSOFSUBSTANTIALREDEMPTIONSSubstantial voluntary redemptions within a limited period of time could require the Fund toliquidateinvestmentssoonerthanwouldotherwisebedesirable,andthiscouldadverselyaffect

theperformanceoftheFund.Inaddition,regardlessoftheperiodoftimeinwhichredemptions

occur,theresultingreductionintheFund'sNetAssetValue,andthusinitsequitybase,could

makeitmoredifficultfortheFundtodiversifyitsholdingsandachieveitsinvestmentobjective.

Under certain circumstances, the Manager may suspend or limit redemptions as it deems

necessaryinitssolediscretion.

7 CONFLICTSOFINTERESTVariousconflictsofinterestmayariseinconnectionwiththeoperationsoftheFundandthesale

of Interests. These conflicts of interest, which should be carefully considered before an

investmentdecisionismade,include,butarenotlimitedto,thefollowing:

7.01 SERVICESOFTHEMANAGERTheOperatingAgreementprovidesthattheManager,itsaffiliates,andtheirofficers,directors,

shareholders,employees,limitedpartnersandagentsarenotexpectedtodevotetheirfulltime

tothebusinessoftheFundandtheperformanceoftheirduties,butarerequiredtodevoteonly


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August8,2011 26

suchtimetotheaffairsoftheFundaswillbenecessaryfortheproperperformanceofitsand

theirduties.

7.02 OTHERSOURCESOFMANAGERCOMPENSATIONSincetheManagerisreceivingsomecompensationthroughhisbrokeragearrangementsfromthe transaction irrespective of profit and loss, the incentive exists to enter unprofitable

transactionsinordertogeneratefees.

7.03 MANAGERBUYOUTOFFUNDSINTERESTSincetheManagerhas theoptionofbuyinganyFundproperty,theManagerhas incentiveto

cherrypickwhathebelievestobethebestdealsandleavetheFundwiththeworstperforming

propertiesobtained.

7.04 TRADINGBYAFFILIATEDPERSONSOfficers,directorsandemployeesoftheManagermayalsoinvestfortheirpersonalaccountsin

thesameareasofinvestmentopportunityasthoseinwhichtheFundproposestoinvest.Thepersonal records of such persons or anyother affiliates of the Manager will notbe open to

inspectionbytheMembers.

The Manager, or any of its officers, directors or employees, may become aware of, and

participate in, business opportunities inwhich the Fund will not be given an opportunity to

participate.

7.05 OTHERADVISORYACCOUNTSTheManagermayformandmanageasimilaryetcompetingFund.

7.06 NOINDEPENDENTCOUNSELNoindependentlegalcounselhasbeenengagedtorepresenttheinterestsoftheMembers,and

therehavebeennonegotiationsbetweentheManagerandanyotherpartyinconnectionwith

the terms of the Operating Agreement or any other matter affecting remuneration to the

Manager,orthefinancesoroperationsoftheFund.CounselfortheFundmayhaveacontinuing

relationshipwiththeManageranditsaffiliatesapartfromtheFund.

8 HOWTOPURCHASEINTERESTS8.01 ELIGIBLEINVESTORS

TheunitsarebeingofferedonlytoaccreditedInvestorsorsophisticatedinvestorspursuant

to certain exemptions from the registration of securities afforded issuers of securities under

Section4(2)oftheSecuritiesActof1933andRule506ofRegulationDpromulgatedthereunder.Inordertoqualify,investorsmustrepresentandwarrantthattheyqualifyundereitherSection1

or2.


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August8,2011 27

Section1.

a._____I,eitherindividuallyorwithmyspouse,haveanetworth(i.e.,totalassetsinexcessof

totalliabilities)currentlyexceeds$1,000,000;or

b._____Iamanaturalpersonwhohadanindividualincomeinexcessof$200,000,or$300,000jointlywithmy spouse, in the last two years and reasonably expect an income in excess of

$200,000,ifanindividual,or$300,000ifjointlywithmyspouse,inthisyear.

c._____Iqualifyasatrust,withtotalassetsinexcessof$5,000,000,notformedforthespecific

purposeofacquiringunits,whosepurchaseisdirectedbyasophisticatedpersonasdescribedin

Rule506(b)(2)(ii)underthefederalSecuritiesActof1933.

d._____IamanexecutiveofficerordirectoroftheCompany;or

e._____Iqualifyasaninstitutionthatqualifiesasanaccreditedinvestor,whichisdefinedas

AnybankasdefinedinSection3(a)(2)ofthefederalSecuritiesActof1933,oranysavingsand

loanassociationorotherinstitutionasdefinedinSection3(a)(5)(A)ofthefederalSecuritiesAct

of1933,whether actingin its individualor fiduciarycapacity;any brokeror dealerregistered

pursuant to Section 15 of the federal Securities Exchange Act of 1934, as amended; any

insurance company as defined in Section 2(13) of the federal Securities Act of 1933; any

investmentcompanyregisteredunderthefederalInvestmentCompanyActof1940orabusiness

developmentcompanyasdefinedinSection2(a)(48)ofthatAct;anySmallBusinessInvestment

CompanylicensedbytheU.S.SmallBusinessInvestmentActof1958,asamended;anyemployee

benefitplanwithin themeaningof TitleI oftheEmployeeRetirementIncome SecurityActof

1974,asamended,iftheinvestmentdecisionismadebyaplanfiduciary,asdefinedinSection

3(21)of suchAct,whichiseither abank,savingsandloanassociation,insurancecompany,or

registered investment adviser, or if the employee benefit plan has total assets in excess of

$5,000,000or,ifaself-directedplan,withinvestmentdecisionsmadesolelybypersonsthatare

accredited investors or ; Any private business development company as defined in Section

202(a)(22) of the federal Investment Advisers Act of 1940; or Any organization described inSection501(c)(3)of the InternalRevenueCodeof 1986,corporation,Massachusetts orsimilar

businesstrust,orpartnership,notformedforthespecificpurposeofacquiringtheUnits,with

totalassetsinexcessof$5,000,000;or

f._____IfIamanentityinwhichalloftheequityownersmeetthecriteriasetforthundereither

(a),(b),(c),(d),or(e)above.

OR

Section2.

_____I, either individually or through my Purchaser Representative, am not an accredited

investorbuthavesuchknowledgeandexperienceinfinancialandbusinessmatterssoastobe

capableofevaluatingthemeritsandrisksof,andprotectingmyowninterestinconnectionwithinvesting in the Interests. The total investment in the Interest does not exceed 20% of the

Investors net worth at the time of purchase of the Units (excluding personal residence(s),

furnishings,andautomobiles).


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August8,2011 28

8.02 PAYMENTOFPURCHASEPRICETheinvestormusteither:

1. ProvideachecktotheManager,MontereyCypressLLC,atleastfourbusinessdays(fivebusinessdaysforinitialpurchases)(unlesseithersuchrequirementiswaivedinwholeorinpartbytheManagerinitssolediscretion)beforetheClosingDatemadepayableto

theFund;or

2. WireFederalFundsby3:00P.M.atleasttwobusinessdays(unlesssuchrequirementiswaivedinwholeorinpartbytheManagerinitssolediscretion)beforetheClosingDate.

9 HOWTOREDEEMINTERESTS9.01 REDEMPTIONINSTRUCTIONS

RedemptionrequestsmustbeprovidedinwritingtotheManageratleastoneyearinadvance.

IntheeventaMemberpetitionstoManagerforreleaseofCapitalContribution,theManagerhas

oneyeartoliquidatesufficientCompanyholdingstoreturnmember'sContributedCapital.Inthe

eventsufficientworkingcapitalisreleasedpriortotheone-yearperiodandtheManagerdeems

returningtheamountoftheCapitalAccountwillnotdisrupttheworkingsoftheCompany,the

Managermayathissolediscretionreturnthefundsduringtheone-yearwaitingperiod.

A redemptionrequestmustinclude:(i) a letter ofinstructionor anassignment specifying the

dollar amount to bewithdrawn from the Member's capital account, signed by all registered

owners of the Interests in the exact names in which they are registered; and (ii) any other

necessary legal documents, if required, in the case of estates, trusts, guardianships,

custodianships, corporations, partnerships, pension and profit sharing plans, and other

organizations. Signature guarantees will be required at the discretion of the Manager for

redemption requests where proceeds are to be sent to someone other than the registered

ownersandtheregisteredaddress,orforInteresttransferrequests.

9.02 INVOLUNTARYREDEMPTIONSBecauseonlyalimitednumberofbeneficialownersareallowed,theManagerreservestheright

toredeemaninvestor'scapitalaccountwhenthevalueoftheInterestheldbysuchinvestoris

lessthan$25,000.Managermayalsoinvoluntarilyexcludeanyinvestorforreasonsincludingthe

event of their legal incapacity, liquidation or bankruptcy, all as provided in the Operating

Agreement.

9.03 FIDUCIARYRESPONSIBILITIES,EXCULPATION,ANDINDEMNIFICATIONInvestors should be aware that, subject to possible contractual limitations, the Manager is

generally accountable to a Fund as a fiduciaryandmust exercise good faith and integrity inhandlingFundaffairs.InvestorswhohavequestionsconcerningthedutiesoftheManagershould

consultwiththeircounsel.

TheOperatingAgreementprovidesthattheManagerwillnotbeliabletotheMembersforthe

returnofanycontributionsmadetotheFundbytheMembersthereof.Inaddition,theManager


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August8,2011 29

willnotbeliabletotheMembersortheFundfor,andtheFundwill,tothemaximumextent

permittedbyapplicablelaw,indemnifytheManagertotheextentofitsownassetsfrom,any

lossordamageincurredbyreasonofanyactoromissionundertakenbytheManageronbehalf

oftheFundingoodfaith,providedthatsuchconductdoesnotconstitutegrossnegligence,bad

faith, fraud,orwillfulmisconduct. TheManager will not be responsibleor liable forany act,omission, debt or obligation of any service provider of the Fund, suchas a prime broker or

custodian bank. In view of these provisions and the provisions contained in the Operating

AgreementforindemnificationoftheManageragainstvariousliabilities,purchasersofInterests

willhaveamorelimitedrightofactionagainsttheManagerthantheywouldhaveintheabsence

of such provisions. To the extent that indemnification provisions purport to include

indemnificationforliabilitiesarisingundertheSecuritiesAct,suchindemnification,intheopinion

of the U.S. Securities andExchange Commission, is contrary to public policy, and, therefore,

unenforceable.

10 TAXASPECTS10.01 DISTRIBUTIONSANDTAXES

TheCompanyoperatesasa growthfund.Allprofits,ifany,aredistributedat theendofeach

quarter.TheNetAssetValueofeachMember'sCapitalAccountisupdatedeachquarterbased

ontheFundsNetAssetValue.

10.02 FEDERALTAXASPECTSThisdiscussionwilloutlinesomeofthemostsignificantaspectsofU.S.federalincometaxlaw

thatmightaffect,orresultfrom,aninvestmentintheFund.

ProspectiveMembersshouldnotethatnorulingshavebeenorareexpectedtobesoughtfrom

theUnitedStates InternalRevenueService (the "IRS")with respect toany oftheU.S. federal

incometaxconsequencesdiscussedbelow,andnoassurancecanbegiventhattheIRSwillnot

takecontrarypositions.

Because it is impractical in this Memorandum to cover all the U.S. federal income tax

consequences of an investment in the Fund, each prospective Member should consult the

Member'sowntaxadvisertosatisfytheMemberastotheincomeandothertaxconsequences

oftheMember'snewinvestment.

10.03 PARTNERSHIPSTATUS;PUBLICLYTRADEDPARTNERSHIPSTATUSTheFundwillbeclassifiedasapartnershipforU.S.federalincometaxpurposes.Whetherthe

Fundwillbetreatedasapartnershipunderthevariousstateandlocalpartnershiplawsthatmay

applytoMembersdependsonthespecificlawsofeachsuchjurisdiction.

The Fund, as currently structured and intended to be operated, shouldnotbe consideredapubliclytradedpartnership("PTP")undertheCode.


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August8,2011 30

10.04 MEMBERS,NOTFUND,SUBJECTTOTAXTheFunditselfwillnotbeliableforanyfederalincometax.Rather,eachMemberoftheFund

willberequiredtotakeintoaccountincomputingtheMember'sfederalincometaxliabilitythe

Member'sallocableshareoftheFund'sincomeorlosses.

10.05 PASSIVEACTIVITYINCOMEANDLOSSTheCodegenerallydisallowsthedeductionofpassiveactivitylossesagainstnon-passiveactivity

incomebyan individual, estate, trust,or personal service corporationor,withmodifications,

certain closelyheldcorporations.TheFunddoesnotexpect torealizepassive incomeor loss.

Rather,itiscontemplatedthattheincomegeneratedbytheFundwillbeclassifiedasportfolio

income.

10.06 LIQUIDATIONOFTHEFUNDUponliquidationgainwillberecognizedbyaMembertotheextentthatanymoneydistributed

exceedstheadjustedtaxbasisofhisInterests.

10.07 ALTERNATIVEMINIMUMTAXDue to the complexity of thealternative minimum tax ("AMT") calculations, investors should

consultwiththeirtaxadvisersastowhetherthepurchase,holdingorredemptionofanInterest

mightcreateorincreaseAMTliability.

10.08 UNRELATEDBUSINESSTAXABLEINCOMEAlmostallentitiesthatareexemptfromfederalincometaxundertheCodemustnevertheless

paytaxontheirunrelatedbusinesstaxableincome("UBTI")attheregularincometaxrates.UBTI

includesdividends,interest,andgainsfromsalesandotherdispositionsofpropertyonlyifthey

are attributable to "debt-financed property." To the extent that the Fund or an investment

vehicleinwhichitinvests,incursindebtedness,aportionoftheFund'snetincomewillconstituteUBTI.TheFundwillincurgeneralobligationdebtinconnectionwithitsactivities;therefore,itis

anticipatedthatunrelatedbusinesstaxableincomewillresult.

10.09 STATEANDLOCALTAXASPECTSAsa result oftheirownershipofInterests,Membersmaybe subject tostateand localtaxes.

Membersmayberequiredtofileincometaxreturnsinthosestatesandmaybesubjecttoa

penaltyifnoreturnisfiled.

10.10 FOREIGNTAXESShouldanyinvestorwhoiseitheracitizenoraresidentofacountryotherthantheUnitedStates

acquireInterests,thetaxconsequencesofhisinvestmentunderthelawsofthecountryofhiscitizenshiporresidencymightdiffersubstantiallyfromthosedescribedabove.

10.11 ERISAASPECTSANDRISKSSection 406 ofERISAandSection4975of the Codeprohibit certain transactions involvingthe

assetsofanERISAPlan[aswellasthoseplansthatarenotobjecttoERISAbutwhicharesubject


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August8,2011 31

toSection4975oftheCode,suchasindividualretirementaccounts(togetherwithERISAPlans,

"Plans") ] and certain persons (referred to as "parties in interest" or "disqualified persons")

having certain relationships to such Plans, unless a statutory or administrative exemption is

applicable to the transaction. A party in interest or disqualified person who engages in a

prohibitedtransactionmaybesubjecttoexcisetaxesandotherpenaltiesandliabilitiesunderERISAandtheCode.

The foregoingdiscussion isnot intendedasa substitute for careful tax planning.Taxmatters

relating tothe Fundandto the transactionsdescribedhereinarecomplexand aresubjectto

varyinginterpretations.Moreover,theeffectofexistingincometaxlawsandpossiblechangesin

suchlawswillvarywiththeparticularcircumstancesofeachinvestor.Noopinionastothetax

statusoftheFundorthetaxconsequencesofaninvestmentintheFundhasbeenobtainedby

theFund.Accordingly,aspreviouslystated,eachprospectiveMembershouldconsultwithand

relyonhisownadviserswithrespecttothepossibletaxconsequences(includingstateandlocal

taxconsequences)ofaninvestmentintheFund.

11DEFINITIONS

The following terms, as used in this Memorandum, have the following respective meanings.

Capitalized terms defined in the Operating Agreement and not otherwise defined in this

MemorandumwillhavethemeaningssetforthintheOperatingAgreement.

"AccreditedInvestor"willhavethemeaningsetforthinRule501ofRegulationD,promulgated

undertheSecuritiesAct.

"AdvisersAct"meanstheInvestmentAdvisersActof1940,asamended.

"ERISA"meanstheU.S.EmployeeRetirementIncomeSecurityActof1974,asamended.

"Fund"meanstheRADIANTHOMES,LLC,aNevadalimitedliabilitycompany.

"Investment Company Act" or "1940 Act" means the Investment Company Act of 1940, asamended.

"Manager"meansLarryRoberts.

"Members"meanstheManagerandotherPersonsadmittedtotheFundasinvestors.

"Offering"means the offer and sale of an unlimitednumberofmembership interests (called

"Interests")intheFund.

"OperatingAgreement"meanstheOperatingAgreement,intheformprovidedasanenclosure

withthisMemorandum,asthesamemaybeamended,modifiedorsupplementedfromtimeto

time.

"PercentageInterest"willhavethemeaningascribedtosuchtermintheOperatingAgreement.

"Regulations" means regulations promulgated by the Department of Treasury of the United

StateswithrespecttotheCode.

SecuritiesAct"meanstheSecuritiesActof1933,asamended.

"UBTI"meansunrelatedbusinesstaxableincome,assuchtermisusedintheCode.


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APPENDIXA:

OPERATINGAGREEMENTOFRADIANTHOMES,LLC

August8,2011 A-1

THESEMEMBERSHIPUNITSOFRADIANTHOMES,LLC,ANEVADALIMITEDLIABILITYCOMPANYHAVE

NOTBEENREGISTEREDUNDERTHESECURITIESACTOF1933ORANYAPPLICABLESTATESECURITIES

LAWS. THE MEMBERSHIP UNITS CANNOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE

DISPOSEDOFEXCEPTINCOMPLIANCEWITHTHEAPPLICABLEFEDERALANDSTATESECURITIES

LAWS, THE LIMITED LIABILITY COMPANY OPERATING AGREEMENT, AND WELL NOT BE

TRANSFERRED OF RECORD EXCEPT IN COMPLIANCEWITH SUCH LAWS ANDAGREEMENTS. THE

PURCHASEROFTHESESHARESHASREPRESENTEDTHATHEORSHEPURCHASEDTHEMFORHISORHER

OWNACCOUNTORFORATRUSTACCOUNT,IFTHEPURCHASERISATRUSTEE,FORINVESTMENTPURPOSESAND

NOTWITHAVIEWTOWARDRESALE.

OPERATINGAGREEMENT

OF

RADIANTHOMES,LLC


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APPENDIXA:


August8,2011 A-2

THIS OPERATING AGREEMENT is made asof September 1, 2011 of Radiant Homes, LLC (the

"Company"),aNevadalimitedliabilitycompany("RADIANTHOMES,LLC").

TheManagerisLarryRoberts.AlsoasignerfortheFundisvice-president,JacquelineEvans.Larry

RobertsmaychangetheoperatingentityunderwhichofRadiantHomesLLCisoperated,buthe

willalwaysremainthepersonoperatingthefund.

TheMembers,listedonSchedule1,areadmittedasmembersoftheCompany.

Background

TheManagerformedtheCompanyasalimitedliabilitycompany.

TheManagerfiledArticlesofOrganization(the"ArticlesofOrganization")withtheSecretaryof

StateoftheStateofNevadaonAugust9,2011.

LarryRoberts ishereby authorizedto sign the ArticlesofOrganizationasManager ofRadiant

HomesLLC.

Thepartiesherebyagreeasfollows:

1 THECOMPANY1.01 NAME

The name of the Companywill beRadiantHomes, LLC. The businessof the companywill be

conductedinthatnameor anyothertheManagerdeemsnecessaryorappropriatetocomply

withanylegalorotherrequirementsoftheUnitedStatesofAmerica,theStateofNevadaorany

otherjurisdictioninwhichoperationsoftheCompanyareconducted.

1.02 REGISTEREDAGENTANDOFFICETheregisteredagentfortheserviceofprocessandtheregisteredofficeshallbethatPersonand

locationreflectedintheArticlesasfiledintheofficeoftheSecretaryofState.

TheRegisteredAgentisEastbiz.com,Inc.

TheManager,may,fromtimetotime,changetheregisteredagentorofficethroughappropriate

filingswiththeSecretaryofState.Intheeventtheregisteredagentceasestoactassuchforany

reasonortheregisteredofficeshallchange,theManagershallpromptlydesignateareplacement

registeredagentorfileanoticeofchangeofaddressasthecasemaybe.IftheManagersshall

failtodesignateareplacementregisteredagentorchangeofaddressoftheregisteredoffice,

anyMembermaydesignateareplacementregisteredagentorfileanoticeofchangeofaddress.

1.03 PRINCIPALOFFICETheprincipalofficeis:

6069S.FortApache,Suite100

LasVegas,NV89148

The Companymay have a principal place ofbusiness andother offices as the Manager may

designate.


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APPENDIXA:


August8,2011 A-3

1.04 PURPOSETheinvestmentobjectiveoftheFundismaximumcurrentcashflowandcapitalappreciation.The

Fundwillbuyrealestateattrusteesale,improvepropertiesasnecessary,holdthemindefinitely

forrentalcashflow,andresellthemforprofitwhenanInvestordesiresliquidation.

2 TERMTheCompanywilloperateuntiloneofthefollowingtwoconditionsismet:

aslongasInvestorswishtohavecapitalinvestedincashflowproperties,and aslongastheManageriswillingandabletooperatethefund.

Members will receive the balance of their accounts at termination of the fund unless they

requestdistributioninwritingsubjecttothelimitationsofSection7.

2.01 CLOSINGDATETheFundwillbeclosedtoallnewinvestmentonDecember31,2012orearlierattheManagersdiscretion.

3 MANAGERANDMEMBERS3.01 MANAGER

The Manager is Larry Roberts who will serve as operationsManager until his resignation or

dissolutionofthefund.

3.02 MEMBERSTheManagerherebyagreestotheadmissionofnewMemberstotheCompanyontheClosing

Date.AdatalistwillbemaintainedbytheManagerinordertoidentifytheMembersbeingso

admitted byname, address, andCapital Contributionof suchMember. A current scheduleof

MemberswillbekeptattheprincipalofficeoftheCompany.TheinterestsoftheMembersinthe

Companyaredescribedherein.

3.03 LIABILITYOFMEMBERSNoMember will be liable to creditors of the Company for the repayment, satisfaction and

dischargeofanydebts,liabilitiesandotherobligationsoftheCompanyinexcessoftheamount

ofsuchMember'sCapitalAccountatsuchtime.PropertiestheFundinvestsinmaycarrydebt,

butthedebtiseithernon-recourseorpersonallyguaranteedbyLarryRoberts.

3.04 ADMISSIONOFNEWMEMBERSThisisaclosedfund.Nonewmemberswillbeadmittedaftertheclosingdate.

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