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        February 2, 2009  Mr. Jack K. Heilbron, CEO NetREIT 1282 Pacific Oaks Place Escondido, CA 92029-2900

Re: NetREIT
 Amendment No. 2 to Form 10
Filed December 31, 2008
 File No. 001-39049

Dear Mr. Heilbron:

We have reviewed your response letter  dated December 30, 2008 and have the
following additional comments. Where indicated, we think you should revise your document in response to these comments.  If you disagree, we will consider your
explanation as to why our comment is inappl icable or a revision is unnecessary.  Please
be as detailed as necessary in your explanat ion.  In some of our comments, we may ask
you to provide us with information so we may better understand your disclosure.  After
reviewing this information, we may raise additional comments.

 Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure  requirements and to  enhance the overall
disclosure in your filing.  We look forward to  working with you in these respects. We
welcome any questions you may have about our  comments or any other aspect of our
review. Feel free to call us at the telephone numbers listed at th e end of this letter.  Please
note that references to prior comments refer to our letter dated September 26, 2008.  General

1. We note your response to prior comment two and we reissue the comment.
Please file your next amendment as an initial Form 10 under Section 12(g) of the
Exchange Act.  Please note that after you file your next amendment under 12(g), and if you choose not to withdraw your Form 10 under Section 12(b), your Form
10 under Section 12(g) become s effective by lapse of time 60 days after the
original filing date of May 6, 2008, pursuan t to Section 12(g)(1)  of the Exchange
Act.  At that time, you will be subject to the reporting requirements under Section
13(a) of the Exchange Act.   In addi tion, please note that if you choose to
withdraw the filing made under Secti on 12(b), the Form 10 filing made under
Section 12(g) will be considered a new filing and it will not go effective until 60 days from the recent date that it is filed.

Mr. Jack K. Heilbron
Chief Executive Officer NetREIT February 2, 2009 Page 2  2. Please update throughout the registrati on statement, where appropriate,
information as of a recent practicable date.  For example, we note on page 21
under “Mortgage Loan Receivables” that you r describe several loans as due and
payable that appear to have been re paid.  On page 21 under “Revenues,” you
discuss acquisitions that you expect to have completed in June and July 2008.

3. We read your response to our prior comment 4 and will review once the revised
certifications are filed.
Item 2. Financial Information

 Management’s Discussion and Analys is of Financial Condition…, page 17

 4. We have reviewed your response to our prior comment 9; however, the last
sentence of the preamble beginning “For a discussion of importan t risks related to
your business….” still appears to be incomplete.  Please revise.
 Overview and Background, page 17

 5. We have reviewed your response to our prior comment 10 and reissue the
comment in part.  Please revise your di sclosure here to include balancing
language noting that you have had a loss fr om continuing operations in your last
two fiscal years.
 Liquidity and Capital Resources

 Non-GAAP Supplemental Financial Measure: Funds from Operations (“FFO”), page 26

6. Based upon your response to comment 12 and the disclosure included in your
amended Form 10, it appears that you added $2.9 million and $48,000 in gains from the sale of real estate to net in come in your calculati on of FFO for 2007 and
2006, respectively.  Tell us your basis for th is presentation.  Additionally, tell us
where the $48,000 gain is reflected on your Statement of Operations for 2006.
Lastly, we note that the total FFO reported  in the table does not appear to be the
sum of the line items.  Please revise your disclosure accordingly.
 Our Objectives and Policies, page 38

 7. Please disclose here or in another sec tion whether the company intends or is
required to have its securities listed on an  exchange or to become publicly traded.
If not, please disclose whether the comp any has or intends to adopt any stock
repurchase or redemption plan.   Also, th e company may want to consider a risk
factor that discusses in more detail th e illiquid nature of its securities.

Mr. Jack K. Heilbron
Chief Executive Officer NetREIT February 2, 2009 Page 3   Financial Statements and Notes

 Note 1 – Organization, page 62

8. Based upon your response to comment 21, it appears that you propose to restate
your December 31, 2007 financial statements to reflect the equity method upon the sale of 48.601% interest in your 7- 11 property and have characterized the
restatement as a change in accounting policy.  As this appears to be a correction of an error, please confir m that you will account for it as such and provide the
relevant disclosures in accordance wi th paragraphs 25-26 of SFAS 154.
 9. We note that during 2008 you and the co-o wner of the 7-11 property contributed
your respective interests to a limited partnership, of whic h you are the general
partner.  Per your response to comment 21, you intend to record your interest in
the limited partnership using the equity  method, rather than consolidating the
limited partnership as indicated in your previous response.  Based on paragraph 9
of SOP 78-9, general partners are presum ed to control the li mited partnership.
Please describe your analysis under EITF 04- 5 and advise us what rights are held
by the limited partners that overcome th e presumption of control by the general
partner.   Additionally please tell us how the contributions of the 7-11 property interests were recorded by the limited partnership.
 10. We read your response to comment 22.  Pl ease further expand to clarify how your
gain recognition policy complies with SFAS 66.  In this regard, tell us how your
continuing involvement with the property is  considered in the timing and extent to
which a gain was recorded.

Note 2 – Significant Accounting Policies
 Property Acquisitions, pages 62-63

11. We have reviewed the schedule included  in your response to comment 23.  Please
substantially revise to incl ude footnotes to disclose th e amortization periods used
to derive the adjustments to your Statem ents of Operations.  Explain how these
assets were depreciated under the original  accounting treatment and how that has
been corrected in the proposed restatement.  Lastly, it does not appear that the subtotals in your proposed schedule 3 fo r accumulated depreciation agree to the
balance sheet schedule of adjustments.  Please advise.
 12. We note that you filed an Item 7.01 8-K to discuss your poten tial restatements
instead of under Item 4.02.  Please advise.

Mr. Jack K. Heilbron
Chief Executive Officer NetREIT February 2, 2009 Page 4  13. We read your response to comment 24.  Pl ease note that to the extent you are
unable to provide the financial informa tion for your acquisitions, requests for a
waiver on financial statements required by Rule 8-06 of Regulation S-X must be
made through the Division of Corporation Finance’s Office of Chief Accountant.
 14. We read your response to comment 25 and your proposal to reflect the option as
an intangible asset. To the extent that  you believe this is an intangible asset,
please clarify how the value ascribed to the asset is consistent with SFAS 141 and
tell us the amortization pe riod that you plan to assi gn to this intangible.
Alternatively, given that you estimated the fair value of the option at $1.4 million
but are only required to pay $181,710 to purch ase the land at the end of the lease
term, tell us how you evaluated whether th is is a bargain purchase option as
defined in paragraph 5(d) of SFAS 13 a nd if so, tell us what consideration was
given to recording the transaction as a capital lease under paragraphs 10 – 14 and
25 of SFAS 13.  Lastly, tell us what speci fic amount was paid for the purchase of
the option.

Federal Income Taxes, page 65

15. We read your response to comment 26.  Give n that you reported a gain from sale
of real estate, please explain to us wh y a portion of your distributions were not
considered to be a capital gain.  Similarly advise why no portion of your
distributions was characterize d as ordinary income.

*  *  *  *
As appropriate, please amend your filing and respond to these comments within
ten (10) business days or tell us when you will provide us with a response.  You may
wish to provide us with marked copies of th e amendment to expedite our review.  Please
furnish a cover letter with your amendment th at keys your responses to our comments
and provides any requested information.  Deta iled cover letters greatly facilitate our
review.  Please understand that we may have  additional comments after reviewing your
amendment and responses to our comments.

Mr. Jack K. Heilbron
Chief Executive Officer NetREIT February 2, 2009 Page 5   You may contact Jaime J ohn, Staff Accountant, at (202) 551-3446 or Cicely
Lamothe, Accounting Branch Chief, at ( 202) 551-3413 if you have questions regarding
comments on the financial statements and related matters.  Please contact Kristina Aberg, Attorney-Advisor, at (202) 551-3404 or me at (202) 551-3233 with any other questions.

Sincerely,

Tom Kluck  Legal Branch Chief
cc: Bruce J. Rushall, Esq.  Rushall & McGeever
 Via facsimile (760) 438-3026