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CORRESP
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Correspondence

July 30, 2009

United States Securities and Exchange Commission

450 Fifth Street NW

Mail Stop 3010

Washington, D.C. 20549

    Attn:

    Mr. Tom Kluck, Legal Branch Chief

    Ms. Erin Martin, Attorney-Advisor

    Re:

    NetREIT

    Preliminary Proxy Statement on Schedule 14A

    Filed July 15, 2009

    File No. 000-53673

Ladies and Gentlemen:

NetREIT’s (“Company”) responses below are responding to the comments in the Staff’s letter of July
28, 2009 regarding the above-referenced Preliminary Proxy Statement filed on July 15, 2009.

The Company’s responses below are presented in the same numbers as the Staff’s comments in that
letter. Additions are shown in bold text, and deletions are shown in strikethrough.

General

Please disclose the vote required for approval or election of the proposal presented in your
preliminary proxy statement.

    1.

    The Company has amended the section titled “VOTING PROCEDURES” with the additional
information.

The presence of the holders of a majority of outstanding shares entitled to vote at the
Annual Meeting, present in person or represented by proxy, is necessary to constitute a
quorum for the transaction of business at the Annual Meeting. Shares that abstain from
voting on any proposal and “broker non-votes” are counted as present and entitled to vote
for purposes of determining a quorum. A “broker non-vote” occurs when a bank, broker, or
other holder of record holding shares for a beneficial owner does not vote because that
holder does not have discretionary voting power and has not received voting instructions
from the beneficial owner. Each outstanding share entitles the holder to one vote on all
matters presented to shareholders for a vote with the exception that shareholders have
cumulative voting rights with respect to the election of the Company’s Board of Directors.

Provided that a quorum exists, the eight nominees for Director who receive the most
votes will be elected. The provisions of the proposed revised Bylaws may only be amended or
repealed by the affirmative vote of a majority of the outstanding shares entitled to vote,
or 4,071,279 shares.

    2.

    Proposal 2, page 5

C. Proposal to Amend the Company’s Bylaws to require 66 2/3 Majority...page 6

    The SEC correctly noted that the proposed language was contradictory to Company’s stated
intent. It was the Company’s intent to conform the minimum number of Directors to match the
minimum number of five (5) and in conjunction with California law, require a super-majority
in order to reduce that minimum number of Directors to a number less than five (5). As
such, the language proposed for the amended bylaws has been revised as follows.

    Background of Proposal

    Article IV, Section 2 of the Bylaws currently states that an amendment reducing the fixed
number or the minimum directors to a number less than four (4) cannot be adopted if the
votes cast against its adoption at a meeting, or the shares not consenting in the case of an
action by written consent, are equal to more than sixteen and two-thirds percent (16-2/3) of
the outstanding shares entitled to vote thereon.

    The Board has reviewed the current Bylaws and California law and, in conjunction with
Proposal 2A, the Board recommends amending Article IV to state that a bylaw or amendment of
the articles reducing the fixed number or the minimum number of Directors to a number less
than five (5) cannot be adopted if the votes cast against its adoption at a meeting or the
 shares not consenting in the case of action by written consent are equal to more than 16
2/3% (sixteen and two thirds percent) of the outstanding shares entitled to vote.

    The pertinent section of California law, as written, states that after the issuance of
 shares, a bylaw or amendment of the articles reducing the fixed number or the minimum number
of directors to a number less than five cannot be adopted if the votes cast against its
adoption at a meeting or the shares not consenting in the case of action by written consent
are equal to more than 162/3 percent of the outstanding shares entitled to vote
[emphasis added].

    In order to maintain the integrity and consistency of the Directors and the Board and in
compliance with California law and in the best interest of the Shareholders, the Company
believes a super-majority vote of outstanding shares should be required to reduce the number
of Directors below the minimum number of less than five (5). The Company further believes
the threshold for the minimum number of Directors requiring the super majority vote should
equal the minimum number of five (5) Directors proposed in 2A. While the number written in
the California law is ambiguous and subject to potentially more than one mathematical
interpretation, a super-majority of sixty-six and two-thirds (66 & 2/3) would exceed any
minimum percentage that could be interpreted as required by California law.

Article IV Section 2 Number and Qualification of Directors

    New Bylaws

    Old Bylaws

    The indefinite number of Directors
may be changed, or a definite number
fixed without provision for an
indefinite number, but a duly
adopted amendment to the Articles of
Incorporation or by an amendment to
this Bylaw duly adopted by the vote
or written consent of holders of a
majority of outstanding shares
entitled to vote; provided however
than an amendment reducing the fixed
number or the minimum Directors to a
number less than five (5) cannot be
adopted if the votes cast against
its adoption at a meeting, or the
shares not consenting in the case of
an action by written consent, are
equal to or more than sixteen and
two-thirds percent (16 2/3%) of the
outstanding shares entitled to vote
thereon. No amendment may change the
stated maximum number of authorized
Directors to a number greater than
two times the stated minimum number
minus one.

    The indefinite number of directors
may be changed, or a definite number
fixed without provision for an
indefinite number, but a duly
adopted amendment to the Articles of
Incorporation or by an amendment to
this Bylaw duly adopted by the vote
or written consent of holders of a
majority of outstanding shares
entitled to vote; provided however
than an amendment reducing the fixed
number or the minimum directors to a
number less than four (4) cannot be
adopted if the votes cast against
its adoption at a meeting, or the
shares not consenting in the case of
an action by written consent, are
equal to or more than sixteen and
two-thirds percent (16 2/3%) of the
outstanding shares entitled to vote
thereon. No amendment may change the
stated maximum number of authorized
directors to a number greater than
two times the stated minimum number
minus one.

E. Proposal to Amend Bylaws to allow additional company structures...Page 7

The SEC has requested the Company disclose the reasons for the proposal to allow the use of
additional investment structures and the removal of the eighteen month restriction. The Company has
clarified the reasons for the proposal in the language identified in bold below.

Background of Proposal

Since the inception of the Company, the number of investment structures currently in use and
available to REITs has grown tremendously. As such, the Board believes that adding the additional
as vehicles for real property ownership , while removing the eighteen month restriction, allows the
Company greater flexibility and the ability to compete with other REITs that currently invest in
these types of structures. Therefore the Board recommends the Shareholders approve this change.

This restriction is not required by any applicable law or governmental regulation. The Company
placed this restriction on equity investments, including the 18 month restriction, in the Bylaws
upon the initial private placement offering in response to the concerns of certain members of our
selling group that the Company might invest in equity securities of other real estate programs
instead of investing directly in real estate. REIT investment structures have since changed and
greatly expanded as a result of federal income tax law changes and industry practices. As a
result, the Board believes that this restriction is no longer necessary or in the best interest of
our shareholders. The Board further believes that providing for specified equity investments and
the deletion of the 18 month restriction will allow our Company greater flexibility and enable it
to better compete with other REITs which take advantage of these types of investment structures.
The Board recommends the Shareholders approve this change.

The Company acknowledges the following:

    •

    The Company is responsible for the adequacy and accuracy of the disclosure in the
filing;

    •

    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 securities laws of the United States.

If, after review of this letter and the amended filings, you have additional comments or questions,
please contact Kathryn Richman at (760) 471-8536 at your convenience.

Very truly yours,

/s/ Kenneth W. Elsberry

KENNETH W. ELSBERRY

CHIEF FINANCIAL OFFICER

    cc:

    Bruce J. Rushall, Esq.