0000745481-95-000003.txt : 19950821 0000745481-95-000003.hdr.sgml : 19950821 ACCESSION NUMBER: 0000745481-95-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950818 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SECURED INVESTMENT RESOURCES FUND LP CENTRAL INDEX KEY: 0000745481 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 480979566 STATE OF INCORPORATION: KS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14542 FILM NUMBER: 95565382 BUSINESS ADDRESS: STREET 1: 5453 W 61ST PL CITY: MISSION STATE: KS ZIP: 66205 BUSINESS PHONE: 9133845700 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter ended June 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period to Commission file number 0-14542 SECURED INVESTMENT RESOURCES FUND, L.P. (Exact name of registrant as specified in its charter) Kansas 48-0979566 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5453 W. 61st Place, Mission, Kansas 66205 (Address of principal executive offices) (Zip Code) (Registrant's telephone number, including area code) (913) 384-5700 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Limited Partnership Interests ("Units") Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No SECURED INVESTMENT RESOURCES FUND, L.P. Index PART I. FINANCIAL INFORMATION Page Item 1. Financial Statements (Unaudited): Balance Sheets -- June 30, 1995 and December 31, 1994 3-4 Statements of Operations -- Six Months Ended June 30, 1995 and 1994 and Three Months Ended June 30, 1995 and 1994 5 Statements of Partnership Capital -- Six Months Ended June 30, 1995 and the Years Ended December 31, 1994, and 1993 6 Statements of Cash Flows -- Six Months Ended June 30, 1995 and 1994 7-8 Notes to Financial Statements 9-10 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations 11-12 PART II. OTHER INFORMATION Item 1. Legal Proceedings 13 Item 2. Changes in Securities 13 Item 3. Defaults Upon Senior Securities 13 Item 4. Submission of Matters to a Vote of Security Holders 13 Item 5. Other Information 13 Item 6. Exhibits and Reports on Form 8-K 13 SIGNATURES 14 PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS SECURED INVESTMENT RESOURCES FUND, L.P. BALANCE SHEETS June 30, 1995 December 31, (Unaudited) 1994 ASSETS INVESTMENT PROPERTIES Land and buildings $ 16,377,255 $ 16,377,255 Furniture, fixtures and equipment 1,606,673 1,478,563 ------------ ------------ 17,983,928 17,855,818 Less accumulated depreciation and allowance for losses 5,781,826 5,493,355 ------------ ------------ 12,202,102 12,362,463 ------------ ------------ RESTRICTED DEPOSITS Capital Improvement Cash Reserves $ 129,554 --- ------------ ------------ OTHER ASSETS Cash 178,556 182,262 Rents and other receivables, less allowance of $42,838 in 1995 and $141,476 in 1994 20,971 244,318 Prepaid expenses 35,309 20,932 Debt issuance costs, net of accumulated amortization of $28,945 in 1995 and $13,543 in 1994 161,837 133,371 Commercial commissions, deposits and other 34,971 29,859 ------------ ------------ 431,644 610,742 ------------ ------------ $ 12,763,300 $ 12,973,205 ------------ ------------ SECURED INVESTMENT RESOURCES FUND, L.P. BALANCE SHEETS--CONT'D June 30, 1995 December 31, (Unaudited) 1994 LIABILITIES AND PARTNERSHIP CAPITAL Mortgage debt--Note B $ 11,747,217 $ 11,575,692 Accrued interest 170,411 282,889 Accounts payable and accrued expenses 319,332 371,896 Due to related parties--Note C 61,897 62,100 Unearned revenue 55,078 60,859 Tenant security deposits 84,532 79,217 ------------ ------------ TOTAL LIABILITIES 12,438,467 12,432,653 ------------ ------------ PARTNERSHIP CAPITAL General Partners Capital contribution 1,000 1,000 Partnership deficit (52,849) (50,692) ------------ ------------ (51,849) (49,692) ------------ ------------ Limited Partners Capital contributions 5,608,838 5,608,838 Partnership deficit (5,232,156) (5,018,594) ------------ ------------ 376,682 590,244 ------------ ------------ TOTAL PARTNERSHIP CAPITAL 324,833 540,552 ------------ ------------ $ 12,763,300 $ 12,973,205 ------------ ------------ See notes to financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. STATEMENTS OF OPERATIONS (Unaudited) Six Months Ended Three Months Ended June 30, June 30, 1995 1994 1995 1994 REVENUES Rents $1,097,322 $ 1,015,034 $ 544,288 $ 490,606 Interest 3,200 11 2,677 7 Maintenance escalations 39,681 56,214 7,719 25,110 --------- --------- --------- --------- 1,140,203 1,071,259 554,684 515,723 --------- --------- --------- --------- OPERATING AND ADMINISTRATIVE EXPENSES Property operating expenses 372,993 337,850 194,633 164,706 General and administrative expenses 28,592 22,366 15,048 12,991 Professional services 27,871 48,913 14,931 30,594 Mgmt Fees & Reimbursed direct expenses 56,209 47,774 24,914 21,208 --------- --------- --------- --------- 485,665 456,903 249,526 229,499 --------- --------- --------- --------- NET OPERATING INCOME 654,538 614,356 305,158 286,224 NON-OPERATING EXPENSES Interest 566,383 562,726 287,359 279,858 Depreciation and amortization 303,873 300,005 152,527 149,435 --------- --------- --------- --------- 870,256 862,731 439,886 429,293 --------- --------- --------- --------- PARTNERSHIP LOSS $ (215,718) $ (248,375) $ (134,728) $ (143,069) --------- --------- --------- --------- Allocation of loss: General Partners (2,157) (2,484) (1,347) (1,431) Limited Partners (213,561) (245,891) (133,381) (141,638) --------- --------- --------- --------- $ (215,718) $(248,375) $ (134,728) $ (143,069) --------- --------- --------- --------- Partnership loss per limited partnership unit $ (8.58) $ (9.89) $ (5.36) $ (5.70) --------- --------- --------- --------- See notes to financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. STATEMENTS OF PARTNERSHIP CAPITAL Six months Ended June 30, 1995 (Unaudited) and the Years Ended December 31, 1994 and 1993 General Limited Partners Partners Total Balances at January 31, 1993 $ (38,837) $ 1,664,886 $ 1,626,049 Partnership loss (5,846) (578,751) (584,597) ---------- --------- --------- Balances at December 31, 1993 (44,683) 1,086,135 1,041,452 Partnership loss (5,009) (495,891) (500,900) ---------- --------- --------- Balances at December 31, 1994 (49,692) 590,244 540,552 Partnership loss (2,157) (213,561) (215,718) ---------- --------- --------- Balances at June 30, 1995 $ (51,849) $ 376,683 $ 324,834 ---------- --------- --------- See notes to financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, 1995 1994 OPERATING ACTIVITIES Partnership loss $ (215,718) $ (248,375) Adjustments to reconcile partnership loss to net cash provided by (used in) operating activities: Depreciation and amortization 310,533 300,005 Provision for losses on rents and other receivables (64,264) 5,860 Changes in assets and liabilities: Restricted Deposits (129,554) --- Rents and other receivables 287,611 58,158 Prepaid expenses (14,377) 47,312 Debt issuance costs (43,869) (19,700) Commercial commission, deposits and other (11,772) 5,522 Account payable and accrued expenses (52,564) 34,419 Accrued interest (112,479) 126,847 Unearned revenue (5,782) (803) Tenant security deposits 5,315 4,700 ---------- ---------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (46,920) 313,945 ---------- ---------- INVESTING ACTIVITIES Purchase of and improvements to investment property (128,109) (44,385) ---------- ---------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (128,109) (44,385) ---------- ---------- SECURED INVESTMENT RESOURCES FUND, L.P. STATEMENTS OF CASH FLOWS (Unaudited)--CONT'D Six Months Ended June 30, 1995 1994 FINANCING ACTIVITIES Due To/From $ (202) $ (17,943) Principal payments on long-term debt 171,525 (32,437) ---------- ---------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 171,323 (50,380) ---------- ---------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3,706) 219,180 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 182,262 97,437 ---------- ---------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 178,556 $ 316,617 ---------- ---------- See notes to financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. NOTES TO FINANCIAL STATEMENTS (Unaudited) June 30, 1995 NOTE A--BASIS OF PRESENTATION The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six month period ended June 30, 1995 are not necessarily indicative of the results that may be expected for the year ended December 31, 1995. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-K for the year ended December 31, 1994. NOTE B--MORTGAGE DEBT Mortgage debt consists of the following: June 30, December 31, 1995 1994 First Mortgages: The Colony Apartments $ 3,716,792 $ 3,500,000 Foothills Village S.C. 2,621,779 2,621,714 Cascade Apartments 1,932,988 1,950,441 Hidden Valley Exchange S.C. 814,035 814,035 The Market S.C./Hidden Valley Exchange S.C. 1,680,684 1,702,916 ---------- ---------- Second Mortgages: Foothills Village S.C. 980,939 986,586 ---------- ---------- $ 11,747,217 $ 11,575,692 ---------- ---------- Cash paid for interest totaled $678,861 and $431,765 for the six months ending June 30, 1995 and 1994, respectively. The mortgage for Cascade Apartments matured March 1, 1995. The present mortgage holder has verbally agreed to temporarily extend the mortgage until March 1, 1996 or until new replacement financing is put in place, whichever comes first. NOTES TO FINANCIAL STATEMENTS--CONT'D. On January 17, 1995 the $3,500,000 Colony mortgage was paid off through the issuance of a new $3,728,000 mortgage. This new mortgage due in February 2020 has a fixed interest rate of 10.09%. The new mortgage also funded restricted deposits which will be used for Colony capital repairs and replacements. NOTE C--RELATED PARTY TRANSACTIONS Affiliates of the General Partners are entitled to receive payments from the Partnership for management and other services. Specs, Inc. (a corporation in which the General Partner has a minority interest) receives property management fees for providing property management services and direct cost reimbursements based upon time allocated to performing certain Partnership functions. Amounts paid by the Partnership to affiliates of the General Partners are as follows: Six Months Ended June 30, 1995 1994 Property management fees $ 56,209 $ 47,774 ---------- ---------- Amounts due to (from) related parties consist of the following: June 30, December 31, 1995 1994 Secured Investment Resources Fund, L.P. III $ 82,351 $ 85,100 Secured Investment Resources, Inc. (20,454) (23,000) ---------- ---------- Due To (From) Related Parties $ 61,897 $ 62,100 ---------- ---------- As of May 1, 1995, the Partnership began repayment of its debt to Secured Investment Resources Fund, L.P. III of $3,000 per month, which includes interest of 9%. NOTE D--CASH DISTRIBUTIONS No distributions have been made since January 1990. Future distributions will be made only from excess cash flow not needed for working capital reserves. (The remainder of this page intentionally left blank.) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations Revenues for the first six months of 1995 increased by $69,000 (6.4%) compared with the same period last year. Apartment rentals comprised $24,000 of this increase and commercial properties accounted for the remaining $45,000 increase. The stronger apartment market allowed the Partnership to continue increasing rental rates, and discontinue the offering of rental concessions, while maintaining a high occupancy. Several smaller leases were signed at Foothills Shopping Center and Hidden Valley Shopping Center, which accounted for the higher rental revenues in the commercial sector. Total operating and administrative expenses increased $41,000 (11.5%) when comparing the first six months of 1995 to the first six months of 1994. Increased rental rates have resulted in increased resident turnover. This increased turnover has caused increased repair, contracted services and payroll expenses. Professional services have declined $21,000 (42.9%) due to the need for decreased legal services. The Partnership anticipates that operating results for the first six months will be representative of the results for the remainder of the year. Liquidity and Capital Resources During the first six months of 1995 $47,000 of cash was consumed in operating activities, $128,000 was used for investing activities and $171,000 was provided through financing activities. The matured Colony mortgage of $3,500,000 was paid off with a new mortgage in the amount of $3,728,000. Of the additional funds from this new mortgage $180,000 are being used to renovate the Colony Apartments. These funds will be invested into capital improvements, which will improve the curb appeal and marketability of Colony, thus allowing management to increase rental rates and maintain high occupancy levels. During the first six months the Partnership received $230,667 of delinquent rent from The Sampler Shoppes, Inc., the anchor tenant at Foothills Shopping Center and was able to pay $138,000 of delinquent real estate taxes at Foothills Shopping Center. The Partnership is currently past due on mortgage notes secured by Hidden Valley and The Market Shopping Centers. The improved cash flow, the result of higher occupancy, will be used to make these delinquent mortgage payments. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.-- Cont'd. In addition, as of May 1, 1995 the Partnership began repaying the advance from Secured Investment Resources Fund, L.P. III at the rate of $3,000 per month, including interest. The mortgage for Cascade Apartments came due in March, 1995. The existing mortgage holder has verbally agreed to extend this note, under the same terms and conditions, until March, 1996 or until new financing can be put into place. The General Partners also anticipate that 1995 cash flow from operations will continue to improve because of strong occupancy, rental rate increases, and stabilized expenses. The General Partners have the option of offering one or more properties for sale. Any net proceeds in excess of the outstanding mortgage balance could be used to generate additional working capital. The General Partners have determined it prudent to discontinue cash distributions until such time that adequate working capital and capital improvement reserves are in place. PART II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS None. Item 2. CHANGES IN SECURITIES Inapplicable. Item 3. DEFAULTS UPON SENIOR SECURITIES None. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Inapplicable. Item 5. OTHER INFORMATION Inapplicable. Item 6. EXHIBIT AND REPORTS ON FORM 8-K (a) Exhibits None. (b) Reports on Form 8-K There were no reports on Form 8-K filed during the quarter ended June 30, 1995. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SECURED INVESTMENT RESOURCES FUND, L.P. A Kansas Limited Partnership (Registrant) By: James R. Hoyt as Individual General Partner Date: August 15, 1995 By: Secured Investment Resources, Inc. as Corporate General Partner By: James R. Hoyt, President Date: August 15, 1995 EX-27 2
5 Unaudited. 1 6-MOS DEC-31-1995 JAN-01-1995 JUN-30-1995 178,556 0 63,809 42,838 0 431,644 17,983,928 5,781,826 12,763,300 691,250 11,747,217 0 0 0 0 12,763,300 0 1,140,203 0 485,665 303,873 0 566,383 0 0 0 0 0 0 (215,718) (8.58) 0