Reagan,

Just wanted to give you an update. I have changed the unit mix to include
some 1 bedrooms and reduced the number of buildings to 12. Kipp Flores is
working on the construction drawings. At the same time I am pursuing FHA
financing. Once the construction drawings are complete I will send them to
you for a revised bid. Your original bid was competitive and I am still
attracted to your firm because of your strong local presence and contacts.

Phillip