SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

       DIVISION OF
CORPORATION FINANCE

July 27 , 2012

Via e -mail
Mr. Kenneth W. Elsberry
Chief Financial  Officer
NetREIT, Inc.
1282 Pacific Oaks Place
Escondido, CA 92029

 RE: NetREIT, Inc.
Form 10 -K for the Fiscal Year Ended December 31, 20 11
  Filed March  28, 2012
  File No. 0-53673

Dear Mr. Elsberry :

We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.

Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advising us when you will provide the requested
response.   If you do not believe our comments apply to your facts and circumstances or do not
believe an amendment is appropriate, please te ll us why in your response.

After reviewing any amendment to your filing and the  information  you provide in
response to these comments, we may have  additional comments.

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of
Operations

Critical Accounting Policies, page 54
1. In future filings, please include a critical accounting policy and a significant accounting
policy that clearly describes your cap italization policy as it relates to capital expenditures
and tenant improvement costs including interest, salaries and G&A, real estate taxes and
any other significant amounts that are capitalized during the construction phase.   As part
of this critical ac counting policy and significant accounting policy you should discuss the
periods of capitalization including a discussion of when the capitalization period ends.

Mr. Kenneth W. Elsberry
NetREIT, Inc.
July 27, 2012
Page 2

 Liquidity and Capital Resources

Overview, page 67
2. We note your disclosure that you have an  estimated borrowing capacity of $20 million
from potential mortgages on unencumbered properties.  Please clarify whether you have
existing agreements with lenders to fund such mortgages at your option.

Consolidated Statements of Cash Flows, page F -6
3. In future filings please present separate line items for acquisitions of real estate and
capital expenditures for existing properties.

Note 1. Organization, page F -7
4. We note that you hold limited partner interests in a number of limited partnerships, which
you consolidate.  Please clarify to us how you evaluated your rights for each such
partnership and determined that the presumption of control by the general partner(s) is
overcome.  Refer to ASU 810 -20.

Note 2. Significant Accounting Policies

Acquisition o f Dubose Model Home Income Funds #3 LTD, Dubose Model Home Income Fund
#4 LTD and Dubose Model Income Fund #5 LTD and Dubose Model Home Investors Fund
#113 (“MH Income Funds”), page F -11
5. We note your disclosure which indicates that you have recognized a ga in of
approximately $872,000 related to the acquisition of significant interests in MH Income
Funds #3, #4, and #5 during 2010. Please provide us with the purchase price allocation
for each fund and how you reached the conclusion that gain recognition on t he
acquisition was appropriate. Specifically tell us how the assets acquired and liabilities
assumed were valued.  Also tell us how the stock portion of the consideration was valued.
Cite your references to GAAP. Also, advise us if the transaction was with  related parties.

 We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing inclu des the  information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require.  Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosure s they have made.

 In responding to our commen ts, please provide a written  statement from the company
acknowledging that

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

Mr. Kenneth W. Elsberry
NetREIT, Inc.
July 27, 2012
Page 3

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal secur ities laws of the United States.

You may contact William Demarest, Staff Accountant, at (202) 551 -3432 or me at (202)
551-3486 with any questions .

        Sincerely,

        /s/ Daniel L. Gordon

        Daniel L. Gordon
        Branch Chief