-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, McS/Vt7uACTGbtI1xvIaZtM81gcjeW+WJV5Mx4IVwg/q2GHy+TtvZZ8ShRc578vP 1p2oTBlnTaBx+TCPLOeS2g== 0000745481-96-000006.txt : 19960816 0000745481-96-000006.hdr.sgml : 19960816 ACCESSION NUMBER: 0000745481-96-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 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: 96612986 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, 1996 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): Consolidated Balance Sheets -- June 30, 1996 and December 31, 1995 3-4 Consolidated Statements of Operations -- Three and Six Months Ended June 30, 1996 and 1995 5 Consolidated Statements of Partnership Capital -- Six Months Ended June 30, 1996 and the Years Ended December 31, 1995, and 1994 6 Consolidated Statements of Cash Flows -- Six Months Ended June 30, 1996 and 1995 7-8 Notes to Consolidated 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. CONSOLIDATED BALANCE SHEETS June 30, 1996 December 31, (Unaudited) 1995 ASSETS INVESTMENT PROPERTIES Land and buildings $ 16,516,137 $ 16,486,456 Furniture, fixtures and equipment 1,621,631 1,552,076 __________ __________ 18,137,768 18,038,532 Less accumulated depreciation and allowance for losses 6,366,387 6,078,281 __________ __________ 11,771,381 11,960,251 OTHER ASSETS Cash 216,880 161,414 Rents and other receivables, less allowance of $54,400 in 1996 and $57,200 in 1995 19,475 18,351 Prepaid expenses 34,143 8,257 Debt issuance costs, net of accumulated amortization of $52,838 in 1996 and $41,550 in 1995 140,943 149,231 Commercial commissions, deposits and other 21,897 27,591 Restricted deposits 28,006 73,299 __________ __________ 461,344 438,143 __________ __________ TOTAL ASSETS $ 12,232,725 $ 12,398,394 __________ __________ SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED BALANCE SHEETS--CONT'D. June 30, 1996 December 31, (Unaudited) 1995 LIABILITIES AND PARTNERSHIP CAPITAL Mortgage debt (Note B) $ 12,017,413 $ 11,826,431 Accrued interest 111,611 94,146 Accounts payable and accrued expenses 191,474 240,756 Due to related parties (Note C) 52,415 50,922 Unearned revenue 46,324 51,483 Tenant security deposits 84,813 79,383 __________ __________ TOTAL LIABILITIES 12,504,050 12,343,121 __________ __________ PARTNERSHIP CAPITAL General Partners Capital contribution 1,000 1,000 Partnership deficit (58,811) (55,545) __________ __________ (57,811) (54,545) __________ __________ Limited Partners Capital contributions 5,608,838 5,608,838 Partnership deficit (5,822,352) (5,499,020) __________ __________ (213,514) 109,818 TOTAL PARTNERSHIP CAPITAL (271,325) 55,273 __________ __________ $ 12,232,725 $ 12,398,394 __________ __________ See notes to consolidated financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Six Months Ended Three Months Ended June 30, June 30, 1996 1995 1996 1995 REVENUES Rents $1,082,812 $1,097,322 $ 541,189 $ 544,288 Interest 2,453 3,200 1,211 2,677 Maintenance escalations 37,013 39,681 17,578 7,719 __________ __________ __________ __________ 1,122,278 1,140,203 559,978 554,684 __________ __________ __________ __________ OPERATING AND ADMINISTRATIVE EXPENSES Property operating expenses 379,028 372,993 191,169 194,633 General and administrative expenses 25,990 28,592 14,091 15,048 Professional services 46,725 27,871 35,328 14,931 Management Fees 49,051 56,209 24,748 24,914 __________ __________ __________ __________ 500,794 485,665 265,336 249,526 __________ __________ __________ __________ NET OPERATING INCOME 621,484 654,538 294,642 305,158 NON-OPERATING EXPENSES Interest 648,688 566,383 327,636 287,359 Depreciation and amortization 299,394 303,873 148,692 152,527 __________ __________ __________ __________ 948,082 870,256 476,328 439,886 __________ __________ __________ __________ PARTNERSHIP LOSS $ (326,598) $ (215,718) $ (181,686) $(134,728) __________ __________ __________ __________ Allocation of loss: General Partners (3,266) (2,157) (1,817) (1,347) Limited Partners (323,332) (213,561) (179,869) (133,381) __________ __________ __________ __________ $ (326,598) $ (215,718) $ (181,686) $(134,728) __________ __________ __________ __________ Partnership loss per limited partnership unit $ (13.00) $ ( 8.58) $ (7.23) $ (5.36) __________ __________ __________ __________ See notes to consolidated financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED STATEMENTS OF PARTNERSHIP CAPITAL Six months Ended June 30, 1996 (Unaudited) and the Years Ended December 31, 1995 and 1994 General Limited Partners Partners Total Balances at January 1, 1994 $ (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 (4,853) (480,426) (485,279) __________ __________ __________ Balances at December 31, 1995 (54,545) 109,818 55,273 Partnership loss (3,266) (323,332) (326,598) __________ __________ __________ Balances at June 30, 1996 $ (57,811) $ (213,514) $ (271,325) __________ __________ __________ See notes to consolidated financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six Months Ended June 30, 1996 1995 OPERATING ACTIVITIES Partnership loss $ (326,598) $ (215,718) Adjustments to reconcile partnership loss to net cash provided by (used in) operating activities: Depreciation and amortization 305,734 310,533 Provision for losses on rents and other receivables (2,800) (64,264) Changes in assets and liabilities: Restricted deposits 45,292 (129,554) Rents and other receivables 1,676 287,611 Prepaid expenses (25,885) (14,377) Debt issuance costs (2,999) (43,869) Commercial commission, deposits and other (646) (11,772) Account payable and accrued expenses (49,282) (52,564) Accrued interest 17,465 (112,479 Unearned revenue (5,159) (5,782) Tenant security deposits 5,429 5,315 __________ __________ NET CASH USED IN OPERATING ACTIVITIES (37,773) (46,920) __________ __________ INVESTING ACTIVITIES Purchase of and improvements to investment property (99,235) (128,109) __________ __________ NET CASH USED IN INVESTING ACTIVITIES (99,235) (128,109) __________ __________ SECURED INVESTMENT RESOURCES FUND, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)--CONT'D. Six Months Ended June 30, 1996 1995 FINANCING ACTIVITIES Mortgage Proceeds $ 410,000 $ -0- Due To Related Parties 1,492 (202) Principal payments on long-term debt (219,018) 171,525 __________ __________ NET CASH PROVIDED BY FINANCING ACTIVITIES 192,474 171,323 __________ __________ INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 55,466 (3,706) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 161,414 182,262 __________ __________ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 216,880 $ 178,556 __________ __________ See notes to consolidated financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. NOTES TO FINANCIAL STATEMENTS (Unaudited) June 30, 1996 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, 1996 are not necessarily indicative of the results that may be expected for the year ended December 31, 1996. 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, 1995. NOTE B--MORTGAGE DEBT Mortgage debt consists of the following: June 30, December 31, 1996 1995 Collateralized by Investment Property: First Mortgages: The Colony Apartments $ 3,680,825 $ 3,699,260 Foothills Village S.C. 2,621,779 2,621,779 Cascade Apartments 1,895,400 1,914,656 The Market S.C./Hidden Valley Exchange S.C. 1,616,629 1,825,697 Hidden Valley Exchange S.C. 816,109 811,973 Second Mortgages: Foothills Village, S.C. 976,671 953,066 The Market S.C. 410,000 __________ __________ $ 12,017,413 $ 11,826,431 __________ __________ Interest expense totaled $648,688 and $566,383 for the six months ending June 30, 1996 and 1995, respectively. The mortgage for Cascade Apartments matured March 1, 1995. The present mortgage holder has verbally agreed to temporarily extend the mortgage on a month-to-month basis. NOTES TO FINANCIAL STATEMENTS--CONT'D. NOTE B--MORTGAGE DEBT--CONT'D. On May 28, 1996, the Partnership signed a note, collateralized by a second mortgage on The Market and Foothills Village, in the amount of $410,000 at 7% interest. The Partnership will make monthly principal and interest payments on this and the first note in the amount of $11,426 per month until June 25, 1998 when the entire amount becomes due and payable. The proceeds of this note were used to pay delinquent real estate taxes for both The Market and Foothills Village as well as related loan costs. NOTE C--RELATED PARTY TRANSACTIONS SPECS, Inc., a Kansas Corporation in which the individual General Partner has a minority interest, receives property management fees for providing property management services. SPECS, Inc. also performs various professional services for the Partnership, primarily tax accounting, audit preparation, SEC 10Q and 10K preparation, and investor services. Property management fees paid by the Partnership to SPECS, Inc. are as follows: Six Months Ended June 30, 1996 1995 Property management fees $ 49,051 $ 56,209 __________ __________ Amounts due (to) from related parties consist of the following: June 30, December 31, 1996 1995 Secured Investment Resources Fund, L.P. III $ (72,203) (74,643) Secured Investment Resources Fund, Inc. 19,788 23,721 __________ __________ Due (To) From Related Parties $ (52,415) $ (50,922) __________ __________ 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. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations Revenues for the first six months of 1996 decreased by $18,000 (1.6%) compared with the same period last year. Apartment rentals increased $12,000 and commercial properties accounted for decreases of $30,000. 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 have been negotiated at Foothills Shopping Center with move-in dates in third quarter which will bring occupancy to 100%. A major lease has been signed bringing occupancy to 100% at the Market Square effective June 1996 and will increase revenues for this and future quarters. Total operating and administrative expenses increased $3,400 (.8%) when comparing the first six months of 1996 to the first six months of 1995. Increased rental rates have resulted in increased resident turnover. This increased turnover has caused increased contracted services and payroll expenses. The Partnership anticipates that operating results for the first six months will show an increase in revenues due to new leases signed on the commercial properties. Liquidity and Capital Resources During the first six months of 1996 $37,800 of cash was consumed in operating activities, $99,000 was used for investing activities and $192,500 was provided through financing activities. In May 1996, a $410,000 note, collateralized by Hidden Valley and The Market, was signed. This loan matures June 25, 1998 and the interest rate is 7%. The mortgage for Cascade Apartments matured in March, 1995. The existing mortgage holder has verbally agreed to extend this note on a month-to-month basis. The General Partners also anticipate that 1996 cash flow from operations will continue to improve because of strong occupancy, rental rate increases, stabilized expenses, and new leases signed on commercial properties. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.--Cont'd. 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, 1996. 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, 1996 By: Secured Investment Resources, Inc. as Corporate General Partner By: James R. Hoyt, President Date: August 15, 1996 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: /s/ James R. Hoyt James R. Hoyt as Individual General Partner Date: August 15, 1996 By: Secured Investment Resources, Inc. as Corporate General Partner By: /s/ James R. Hoyt James R. Hoyt, President Date: August 15, 1996 EX-27 2
5 Unaudited. 1 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 216,880 0 73,875 54,400 0 461,344 18,137,768 6,366,387 12,232,725 486,637 12,017,413 0 0 0 0 12,232,725 0 1,122,278 0 500,794 299,394 0 648,688 0 0 0 0 0 0 (326,598) (13.00) 0
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