-----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, SM2pGy8QkrZBTo7XgXRmm6S7uwzGqcdIbQ3V8lHDAsTSJ2ng2UXQ9kEiTcWE3km/ z1WE+iTLObYIwX7gLd6dLA== 0000797331-96-000001.txt : 19960416 0000797331-96-000001.hdr.sgml : 19960416 ACCESSION NUMBER: 0000797331-96-000001 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960415 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SECURED INVESTMENT RESOURCES FUND LP II CENTRAL INDEX KEY: 0000797331 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 363451000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-16798 FILM NUMBER: 96547209 BUSINESS ADDRESS: STREET 1: 5453 W 61ST PL CITY: MISSION STATE: KS ZIP: 66205 BUSINESS PHONE: 9133845700 10-K 1 FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the year ended December 31, 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 0-16798 SECURED INVESTMENT RESOURCES FUND, L.P. II (Exact name of registrant as specified in its charter) Delaware 36-3451000 (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 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] PART I Item 1. Business Secured Investment Resources Fund, L.P. II ("Partnership") is a Delaware limited partnership formed pursuant to the Delaware Revised Uniform Limited Partnership Act on July 1, 1986. James R. Hoyt is the Individual General Partner and Secured Investment Resources, II Inc., a Missouri corporation, is the Corporate General Partner. The Partnership has no predecessors or subsidiaries. The Partnership was formed with the intent to engage in the business of acquiring,improving, developing, operating and holding for investment, income-producing real properties with the objectives of (i) preserving and protecting the Partnership's capital; (ii) providing cash distributions from operations; (iii) providing capital growth through property appreciation; and (iv) increasing equity in property ownership by the reduction of mortgage loans on Partnership properties. On September 24, 1988, the Partnership closed its offering, having received gross proceeds of $26,830,500 from the sale of 53,661 units of limited partnership interests. The Partnership originally acquired eight properties, which included four apartment communities, three shopping centers and a health care facility. The General Partners feel that all of these properties met the Partnership's investment criteria and objectives. Since the inception of the Partnership, two properties (one apartment community and one shopping center) have been sold. As of December 31, 1995, the Partnership has made cash distributions to Limited Partners of $4,724,456 for the period April 1, 1987 through December 31, 1995. No distributions have been made since April 1990. Future distributions will only be made from excess cash flow not needed for working capital reserves. As of December 31, 1995, the Partnership had no employees. Employees of SPECS, Inc. provide services to the Partnership. The individual General Partner is a minority shareholder in SPECS, Inc. Item 1. Business--Cont'd. Competition The real estate business is highly competitive and the Partnership competes with numerous entities engaged in real estate activities, some of which have greater financial resources than those of the Partnership. The Partnership's management believes that success against such competition is dependent upon the geographic location of the property, the performance of property managers, the amount of new construction in the area and the maintenance and appearance of the property. With respect to residential property, competition is also based upon the design and mix of the units and the ability to provide a community atmosphere for the tenants. The Partnership's management believes that general economic circumstances and trends and new properties in the vicinity of each of the Partnership's properties will also be competitive factors. Inflation The effects of inflation on the Partnership's operations or investments are not quantifiable. Revenues from property operations fluctuate proportionately with increases and decreases in housing costs. Fluctuations in the rate of inflation also affect the sales values of properties and, correspondingly, the ultimate gains to be realized by the Partnership from property sales. Item 2. Properties. The following table sets forth the investment portfolio of the Partnership at December 31, 1995: Average Properties at Occupancy(*) Property Description Initial Cost Date Acquired Percentage 1995 1994 Sunwood Village Apartments 252 Units $10,954,651 May 15, 1987 97% 95% Las Vegas, NV Bayberry Crossing Shopping Center 56,113 Sq.Ft. $ 4,175,012 Jun. 30, 1987 91% 88% Lee's Summit, MO Oak Terrace Active Retirement Center 129 Units $ 8,604,769 Aug. 31, 1988 91% 96% Springfield, IL Oak Terrace Healthcare Center 98 Beds $ 3,980,340 Aug. 31, 1988 100% 100% Springfield, IL Thomasbrook Apartments 196 Units $ 5,992,092 Aug. 26, 1988 91% 93% Shawnee, KS Forest Park Shopping Center 19,980 Sq.Ft. $ 2,871,199 Nov. 23, 1988 100% 96% St. Louis, MO (*) Based upon vacancy amount (in dollars) as a percent of gross possible rents. (The remainder of this page left blank intentionally.) Item 3. Legal Proceedings. None. Item 4. Submission of Matters to a Vote of Security Holders. None. PART II Item 5. Market for Registrant's Common Equity and Related Security Holder Matters. (A) There is no established public trading market for the Units of the Partnership. (B) There have been no distributions the last three years. (C) As of December 31, 1995, the Partnership had admitted 2,722 Limited Partners who purchased 53,661 units. (The remainder of this page left blank intentionally.) Item 6. Selected Financial Data. Years Ended December 31, OPERATING DATA 1995 1994 1993 1992 1991 (In Thousands) Rents $5,583 $5,435 $5,674 $6,102 $6,129 Maintenance Escalations and Other Income 314 256 287 322 337 Property Operating Expenses 3,021 2,878 2,960 3,308 3,655 Interest Expense (1) 2,429 2,322 2,725 3,426 3,419 Depreciation/ Amortization 1,388 1,380 1,957 2,264 2,377 Provision For Losses on Invest- ment Properties (2) --- --- --- --- 430 (Gain) Loss on sale of Investment Property --- --- (1,946) --- 2,789 Extraordinary gain on debt restructuring 890 --- 913 --- --- Partnership Income (Loss) $ (51) $ (889) $1,178 $(2,574) (6,204) Partnership Income (Loss) Per Limited Partnership Unit (3) $( .95) $(16.40) $ 21.74 $(47.48) $(114.47) Cash Distributions Per Limited Partnership Unit (4) $ --- $ --- $ --- $ --- $ --- BALANCE SHEET DATA 1995 1994 1993 1992 1991 (In Thousands) Total Assets 30,294 30,963 32,012 40,550 42,258 Mortgage Debt 27,581 28,556 28,677 38,361 37,761 (1) Certain reclassifications have been made from interest expense to amortization to more accurately reflect the change in the bond discount amortization related to the Oak Terrace bond financing. There was no income effect as a result of these reclassifications. Item 6. Selected Financial Data--Cont'd. (2) During the fourth quarter of 1991, the Partnership reduced the carrying value of its commercial property portfolio to reflect market conditions within the real estate industry. (3) Partnership income (loss) per limited partnership unit is computed by dividing the income (loss) allocated to the Limited Partners by the weighted average number of limited partnership units outstanding. Per unit information has been computed based on 53,661 weighted average limited partnership units outstanding. (4) Cash distributions per limited partnership unit has been computed by dividing distributions paid to the Limited Partners by 53,661 weighted average limited partnership units outstanding. (The remainder of this page intentionally left blank.) Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations When comparing 1995 and 1994 operations, total revenues increased $206,000 (3.6%) primarily due to increased occupancy on both residential and commercial properties. Interest expense increased $107,000 (4.6%) to $2,429,000 for 1995. Depreciation and amortization went from $1,381,000 in 1994 to $1,388,000 in 1995. Total operating expenses for 1995 increased $143,000 (5.0%) from 1994 levels. Professional services decreased $7,000 (6.9%). Management fees increased $8,000 (3.2%), while general and administrative expenses increased $7,000 (5.3%). In 1995 the loss increased from ($889,000) in 1994 to ($942,000) in 1995 (5.9%). In The Pines revenues for 1993 were $682,000, while operating expenses were $315,000. Interest for 1993 was $369,000 and depreciation was $112,000. The following comparisons between the Partnership's 1994 and 1993 operations do not include these figures in order to provide a fair operational comparison for 1994 and 1993. The 1994 Partnership loss of $(889,000) is much better than the 1993 amount of $(1,681,000), prior to gains associated with debt restructuring and the sale of In The Pines. When comparing 1994 and 1993 operations, total revenues increased $413,000 (7.8%) to $5,691,000. Of this increase $308,000 was from residential property and $105,000 was from commercial property. These increases came about due to higher average rental rates, decreased rental concessions and improved occupancy levels. The higher residential rental rates, resulted in increased resident turnover and higher operating expenses. Operating expenses increased $233,000 (8.8%) to $2,878,000. These increases were primarily in the areas of repairs, supplies, payroll, and utilities. Operational results and respective comparisons to prior years are dramatically impacted by the extensive debt restructuring achieved by the Partnership during 1993. This 1993 restructuring primarily consisted of the Partnership conveying In The Pines (ITP), which it purchased in 1987 for $6,367,000, to the property's second mortgage holder in exchange for the following consideration: (1) assumption by the conveyee of the first mortgage on ITP in the amount of $2,799,000; and (2) retirement of two existing lines of credit totaling $5,703,000. The total partnership debt retired by this Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations--Cont'd. Results of Operations--Cont'd. conveyance in 1993 was $8,501,000, which exceeded the original purchase price by approximately $2,100,000. The agreement also modified the debt service on the two short-term lines of credit for the period December 1, 1992 through date of conveyance. The modified debt service during this term was equal to the monthly cash flow generated by ITP. The General Partners determined that it was in the Partnership's best interest to complete the transaction, which resulted in a gain in the conveyance of the property measured at its fair market value in the amount of $1,946,000. In conjunction with the ITP agreement, the Partnership obtained a release of bond cash reserves of $2,100,000 from the lenders on Oak Terrace Active Retirement Center (OTARC). These funds were then used for a principal paydown of $1,900,000 on the hedged portion of the bonds on OTARC, which represented a prepayment of scheduled principal reductions through December 31, 1998. No additional principal payments are required until December, 1999. Upon receipt of the $1,900,000 paydown, the lender then released its mortgage on ITP, which allowed the Partnership to complete the ITP transaction as described above. The Partnership additionally reduced the bond discount balance to reflect this principal paydown. The General Partners anticipate 1996 operating results will continue to improve over 1995 and 1994 as a result of the continued planned increase in rental rates and decreased rental incentives. This planned increase in net rental income will be combined with continued efforts to reduce expenses. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations--Cont'd. Liquidity and Capital Resources During 1995, the primary source of working capital was provided by net cash from operating activities of $936,000. Investing activities for new equipment and additional bond reserves consumed $363,000 and financing activities consumed an additional $333,000. This resulted in an increase of cash of $239,000 during the year. Accrued interest increased during the year by $435,000. Thomasbrook Apartments' mortgage is past due by $540,296 as of December 31, 1995. The cash generated from operations for that property is insufficient to service the mortgage under the current payment requirements. The General Partner has had ongoing negotiations with the lender concerning a complete restructure of the mortgage and related debt service. The Sunwood Village Apartment mortgage matures on April 1, 1996. The Partnership is aggressively seeking replacement financing and has had extensive negotiations with the current lender concerning an extension of the existing debt. Placement of new mortgages or extensions of existing debt could have a significant impact on the Partnership's cash flow. During 1994, the primary source of working capital was provided by operating activities. Operations generated $541,000, while investing activities for new equipment and additional bond reserves consumed $229,000 and financing activities consumed an additional $236,000, resulting in an increase of cash of $76,000 during the year. The increased cash flow from improved rent receivable collections and improved operations, allowed the partnership to reduce accounts payable by $145,000. Accrued interest increased during the year by $78,000. During 1993, $10,700,000 of debt was scheduled to mature. The conveyance of In The Pines eliminated approximately $8,501,000 of debt. Additionally, $1,900,000 of restricted deposits related to the Oak Terrace financing agreement were applied toward the unpaid principal balance of the bonds outstanding. A $2,000,000 promissory note was obtained during the first quarter of 1993, with the proceeds used to retire a like amount of existing debt. These transactions, as well as approximately $100,000 of cash flow from operations, were used to satisfy the $10,700,000 of debt maturities during 1993. The General Partners believe that sufficient working capital will be available during 1996 to fund known, on-going operating and capital requirements of the Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations--Cont'd. Liquidity and Capital Resources--Cont'd. Partnership. In 1996, the Partnership anticipates cash flow from operations will improve because management intends to 1) improve occupancy on the commercial properties; 2) achieve rental rate increases; 3) decrease the amount of promotional rent discounts offered on the residential properties; and 4) continue to maintain stringent controls over expenses. The General Partners intend to evaluate the property portfolio to determine if it is prudent to offer one or more properties for sale or possibly restructure the related financing packages. Any unleveraged portion of the net sales proceeds or favorable refinancing terms will generate additional working capital. The General Partners have determined it prudent to discontinue cash distributions until such time that adequate working capital reserves are available. Item 8. Financial Statements and Supplementary Data. SECURED INVESTMENT RESOURCES FUND, L.P. II Index Page Independent Auditors' Report 13 Financial Statements: Balance Sheets - December 31, 1995 and 1994 14-15 Statements of Operations - Years Ended December 31, 1995, 1994 and 1993 16 Statements of Partnership Capital - Years Ended December 31, 1995, 1994 and 1993 17 Statements of Cash Flows - Years Ended December 31, 1995, 1994 and 1993 18-19 Notes to Financial Statements 20-32 INDEPENDENT AUDITORS' REPORT The Partners Secured Investment Resources Fund, L.P. II Mission, KS We have audited the accompanying balance sheets of Secured Investment Resources Fund, L.P. II as of December 31, 1995 and 1994, and the related statements of operations, partnership capital and cash flows for each of the three years in the period ended December 31, 1995. We have also audited the schedules listed in the accompanying index. These financial statements and schedules are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements and schedules based upon our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and schedules are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and schedules. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and schedules. We believe that our audits provide a reasonable basis for our opinion. As discussed in Note C, the Partnership has mortgage loans that mature during the next fiscal year or is delinquent on scheduled payments. The Partnership is in current negotiations with these mortgage holders to extend or refinance these obligations. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Secured Investment Resources Fund, L.P. II at December 31, 1995 and 1994, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1995 in conformity with generally accepted accounting principles. Also in our opinion, the schedules present fairly, in all material respects, the information set forth therein. s/ BDO Seidman, LLP St. Louis, Missouri April 10, 1996 SECURED INVESTMENT RESOURCES FUND, L.P. II BALANCE SHEETS December 31, 1995 1994 ASSETS INVESTMENT PROPERTIES (Notes B and C) Land and buildings $ 36,217,082 $36,167,642 Furniture, fixtures and equipment 1,797,522 1,488,893 38,014,604 37,656,535 Less accumulated depreciation and allowance for losses 10,725,975 9,529,532 27,288,629 28,127,003 RESTRICTED DEPOSITS Bond cash reserves (Note C) 1,510,000 1,510,000 Bond principal reduction reserves 429,924 424,464 1,939,924 1,934,464 OTHER ASSETS Cash 522,835 284,224 Rents and other receivables, less allowance of $45,475 in 1995 and $47,282 in 1994 12,069 21,472 Due from related parties (Note D) 174,423 173,996 Prepaid expenses 111,061 130,672 Debt issuance costs, net of accumulated amortization of $129,854 in 1995 and $88,602 in 1994 89,487 129,775 Commercial commissions, deposits and other 155,700 161,674 1,065,575 901,813 $ 30,294,128 $30,963,280 SECURED INVESTMENT RESOURCES FUND, L.P. II BALANCE SHEETS--CONT'D. December 31, 1995 1994 LIABILITIES AND PARTNERSHIP CAPITAL Mortgage debt (Note C) $ 27,581,485 $28,555,529 Deferred interest (Note C) 1,126,213 1,108,465 Accrued interest 688,468 368,403 Accounts payable and accrued expenses (Note G) 398,997 391,988 Unearned revenue 14,358 14,012 Tenant security deposits 140,325 129,306 TOTAL LIABILITIES 29,949,846 30,567,703 PARTNERSHIP CAPITAL General Partners Capital contribution 1,000 1,000 Partnership deficit (185,586) (185,073) (184,586) (184,073) Limited Partners Capital contributions 18,901,831 18,901,831 Partnership deficit (18,372,963) (18,322,181) 528,868 579,650 TOTAL PARTNERSHIP CAPITAL 344,282 395,577 $ 30,294,128 $30,963,280 See notes to financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. II STATEMENTS OF OPERATIONS Years Ended December 31, 1995 1994 1993 REVENUES Rents $ 5,583,063 $ 5,435,088 $ 5,674,072 Interest 3,601 --- 709 Maintenance escalations 310,848 256,181 286,067 5,897,512 5,691,269 5,960,848 OPERATING AND ADMINISTRATIVE EXPENSES Property operating expenses 2,514,846 2,379,688 2,415,631 General and administrative expenses 136,511 129,607 132,319 Professional services (Note D) 96,400 103,593 133,889 Management fees (Note D) 273,304 264,876 277,925 3,021,061 2,877,764 2,959,764 NET OPERATING INCOME 2,876,451 2,813,505 3,001,084 NON-OPERATING EXPENSES Interest 2,429,217 2,322,166 2,724,453 Depreciation and amortization 1,388,895 1,380,517 1,957,380 Gain on sale of investment property --- --- (1,946,430) 3,818,112 3,702,683 2,735,403 Partnership income (loss) before extraordinary item ( 941,661) ( 889,178) 265,681 Extraordinary gain on debt restructuring-- (Note C) 890,366 --- 912,660 PARTNERSHIP INCOME (LOSS) $( 51,295) $ ( 889,178) $ 1,178,341 Allocation of income (loss) General Partners $( 513) $ ( 8,892) $ 11,783 Limited Partners ( 50,782) ( 880,286) 1,166,558 $( 51,295) $( 889,178) $ 1,178,341 Per Limited Partnership Unit Income (loss) before extraordinary item $ (17.37) $ (16.40) $ 4.90 Extraordinary item 16.42 --- 16.84 Total per Limited Partnership Unit $ ( .95) $ (16.40) $ 21.74 See notes to financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. II STATEMENTS OF PARTNERSHIP CAPITAL Years Ended December 31, 1995, 1994 and 1993 General Limited Partners Partners Total Balances at January 1, 1993 (186,964) 293,378 106,414 Partnership income 11,783 1,166,558 1,178,341 Balances at December 31, 1993 (175,181) 1,459,936 1,284,755 Partnership loss ( 8,892) ( 880,286) ( 889,178) Balances at December 31, 1994 (184,073) 579,650 395,577 Partnership loss ( 513) ( 50,782) ( 51,295) Balances at December 31, 1995 $ (184,586) $ 528,868 $ 344,282 See notes to financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. II STATEMENTS OF CASH FLOWS Years Ended December 31, 1995 1994 1993 OPERATING ACTIVITIES Partnership (loss) income $ ( 51,295) $ ( 889,178) $ 1,178,341 Adjustments to reconcile partnership (loss) income to net cash provided by operating activities: Depreciation and amortization 1,388,895 1,380,517 1,957,380 Gain on sale of investment property --- --- (1,946,430) Gain on debt restructuring ( 890,366) --- ( 912,660) Provision for losses on rents and other receivables ( 24,638) ( 16,385) ( 137,741) Changes in assets and liabilities: Rents and other receivables 34,041 52,251 144,999 Prepaid expenses 19,611 48,381 74,156 Commercial commissions, deposits and other 5,974 42,313 (141,166) Accounts payable and accrued expenses 7,009 (144,774) (181,157) Accrued interest 435,431 78,117 123,471 Unearned revenue 346 ( 3,520) (12,373) Tenant security deposits 11,019 ( 6,187) (66,409) NET CASH PROVIDED BY OPERATING ACTIVITIES 936,027 541,535 80,411 INVESTING ACTIVITIES Improvements to investment properties (358,069) (226,809) (222,028) Increase in restricted bond cash reserves ( 5,460) ( 2,592) --- Restricted deposits used to fund principal payment on bonds payable and accounts payable --- --- 2,096,949 NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (363,529) (229,401) 1,874,921 SECURED INVESTMENT RESOURCES FUND, L.P. II STATEMENTS OF CASH FLOWS--CONT'D. Years Ended December 31, 1995 1994 1993 FINANCING ACTIVITIES Deferral of interest payable $ 17,748 $ 38,154 $ 176,833 Debt issuance costs ( 964) ( 2,708) ( 66,033) Advances (to) from related parties ( 427) 1,138 86,235 Proceeds from issuance of debt --- --- 800,000 Principal payments on debt (350,244) (273,009) (3,051,644) NET CASH USED IN FINANCING ACTIVITIES (333,887) (236,425) (2,054,609) INCREASE (DECREASE) IN CASH 238,611 75,709 ( 99,277) CASH BEGINNING OF YEAR 284,224 208,515 307,792 CASH END OF YEAR $ 522,835 $ 284,224 $ 208,515 See notes to financial statements. SECURED INVESTMENT RESOURCES FUND, L.P. II NOTES TO FINANCIAL STATEMENTS Note A--SIGNIFICANT ACCOUNTING POLICIES Organization and Business--Secured Investment Resources Fund, L.P. II (the Partnership) is a Delaware limited partnership formed pursuant to the Delaware Revised Uniform Limited Partnership Act on July 1, 1986. The General Partners' and Limited Partners' interest in Partnership earnings or loss initially amounts to 1% and 99%, respectively. The allocation of the 1% interest between the General Partners is discretionary. At such point in time cash distributions to the Limited Partners amount to their original invested capital plus interest at a rate of the greater of 8% (10% for those investors who subscribed for units on or before December 31, 1986) or the increase in the consumer price index per annum, cumulative non-compounded on their adjusted invested capital, earnings or loss will be allocated 15% to the General Partners and 85% to the Limited Partners. Restricted Deposits--These restricted deposits are deposited into Money Market Treasury Funds and Certificates of Deposits. The Partnership expects to hold these until bond maturity. The amortized cost carrying value equals market value. Depreciation--Investment property is depreciated on a straight-line basis over the estimated useful life of the property (30 years for buildings and 5 years for furniture, fixtures and equipment). Improvements are capitalized and depreciated over their estimated useful lives. Maintenance and repair expenses are charged to operations as incurred. Income Taxes--Any tax liabilities or benefits arising from Partnership operations are recognized individually by the respective partners and, consequently, no provision will be made by the Partnership for income taxes or income tax benefits. Partnership Income or Loss Per Limited Partnership Unit-- Partnership income or loss per limited partnership unit is computed by dividing loss allocated to the Limited Partners by the weighted average number of limited partnership units outstanding. Per unit information has been computed based on 53,661 weighted average limited partnership units outstanding. Debt Issuance and Refinancing Costs--Loan costs in the amount of $964, $2,708 and $66,033 were incurred and capitalized by the Partnership in 1995, 1994 and 1993, respectively. These costs are being amortized over the term of the related loans. NOTES TO FINANCIAL STATEMENTS--CONT'D. NOTE A--SIGNIFICANT ACCOUNTING POLICIES--CONT'D. Reclassifications--Certain items in the 1995, 1994 and 1993 financial statements have been reclassified. No income effect resulted from these reclassifications. Accounting Estimates--The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. New Accounting Standards--In March 1995, the FASB issued its Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and For Long-Lived Assets to Be Disposed Of ("SFAS 121"). SFAS 121 requires that long-lived assets and certain intangibles to be held and used by an entity be reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. In addition, SFAS 121 requires long-lived assets and certain intangibles to be disposed of to be reported at the lower of carrying amount or fair value less costs to sell. SFAS 121 is effective for fiscal years beginning after December 15, 1995. Management does not expect the application of this pronouncement to have a material effect on the financial statements of the Partnership. (The remainder of this page intentionally left blank.) NOTES TO FINANCIAL STATEMENTS--CONT'D. NOTE B--INVESTMENT PROPERTIES Investment properties consists of the following: December 31, 1995 1994 Cost (including capital improvements subsequent to acquisition): Bayberry Crossing Shopping Center $ 4,451,962 $ 4,340,260 Forest Park Shopping Center 2,944,655 2,943,642 Thomasbrook Apartments 6,579,745 6,461,987 Sunwood Village Apartments 11,285,696 11,192,956 Oak Terrace Healthcare Center 3,980,340 3,980,340 Oak Terrace Active Retirement Center 8,763,727 8,728,871 Other equipment 8,479 8,479 38,014,604 37,656,535 Less Accumulated depreciation 9,975,975 8,779,532 Allowance for losses on investment properties 750,000 750,000 $ 27,288,629 $28,127,003 During 1991 and 1990, the Partnership reduced the carrying value of its commercial property portfolio to reflect real estate market conditions. This change is reflected in Allowance for Losses on Investment Properties. Sunwood Village Apartments is security to a non-recourse purchase money note as disclosed in Note C which is due April 1, 1996. The net book value of this property at December 31, 1995 was $8,303,000 as compared to long-term debt of $8,137,000. Thomasbrook Apartments is security to a non-recourse purchase money note as disclosed in Note C which is currently past due as well as one-half of 1994 and all of 1995 real estate taxes. The net book value of this property at December 31, 1995 was $4,219,000 as compared to long-term debt of $4,984,000, accrued interest payable of $540,000 and delinquent real estate taxes of $116,000. Depreciation expense was $1,196,443, $1,189,238 and $1,414,146 for the year ended December 31, 1995, 1994 and 1993, respectively. NOTES TO FINANCIAL STATEMENTS--CONT'D. NOTE C--MORTGAGE DEBT Non-recourse mortgage debt consists of the following: December 31, 1995 1994 Collateralized by Investment Property: First Mortgages: Bayberry Crossing Shopping Center $ 831,023 $ 835,292 Forest Park Shopping Center 1,288,958 1,383,627 Thomasbrook Apartments 4,984,179 4,995,784 Sunwood Village Apartments 8,136,792 8,264,056 Oak Terrace Active Retirement Center (OTARC) and Oak Terrace Healthcare Center (OTHCC) 12,800,000 12,800,000 Less bond discount (2,353,042) (2,504,242) Second Mortgages: Bayberry Crossing Shopping Center 1,893,575 1,931,012 Thomasbrook Apartments --- 850,000 $27,581,485 $28,555,529 Bayberry Crossing Shopping Center (Bayberry) A purchase money note in the original amount of $1,850,000 is collateralized by Bayberry. A principal paydown of $845,000 was made in March 1993 and the note was rewritten with a principal balance of $841,761. Principal and interest payments are due monthly at a fixed amount of $6,358. The interest rate is prime plus 2.00% and amortization is adjusted, based upon the change in the interest rate, to maintain a 28 year amortization schedule through the maturity date of March 1998. The interest rate at December 31, 1995 was 10.5%. Also in March 1993, the Partnership placed a second mortgage on Bayberry in the amount of $2,000,000. Proceeds from the loan were used to retire a $1,200,000 line of credit and reduce the first mortgage to $841,761. Principal and interest payments are due monthly with a fixed interest rate of 8.00% and an amortization of 25 years through the maturity date of February 1998. NOTES TO FINANCIAL STATEMENTS--CONT'D. NOTE C--MORTGAGE DEBT--CONT'D. Forest Park Shopping Center (Forest Park) A bond financing agreement with a current balance of $1,288,958 is collateralized by Forest Park. Principal and interest payments are due monthly. Interest is calculated at 80% of the current prime rate and adjusted annually. Monthly principal is due at an amortization rate of 17 1/2 years, which fully amortizes the loan through the maturity date of March, 2008. The bonds are callable on April 1, 1998 and 2003. The interest rates at the adjustment dates of April 1, 1995, 1994 and 1993 were 7.20%, 6.25%, and 6.0% respectively. Thomasbrook Apartments (Thomasbrook) A purchase money note with a current balance of $4,984,179 is collateralized by Thomasbrook. Principal and interest payments are due monthly in an amount necessary to amortize the principal over thirty years. The current interest rate is 9.25% and increases to 9.5% on September 1, 1996, which remains in effect through the maturity date of September 1, 2000. As of December 31, 1995, the mortgage for Thomasbrook Apartments is past due by $540,296 due to the negative cash flow status of the apartment complex. The General Partner and the lender are engaged in ongoing negotiations related to a restructure of this debt and it is anticipated that a restructure will be completed in 1996. Related to the Thomasbrook Apartments, the second mortgage of $850,000 was paid in full on May 25, 1995 for the discounted amount of $75,000. That payment fully retired the principal amount of $850,000 as well as accrued interest in the amount of $115,366 resulting in a gain to the Partnership of $890,366. Sunwood Village Apartments (Sunwood) A purchase money note with a current balance of $8,136,792 is collateralized by Sunwood. Principal and interest payments are due monthly at the current interest rate of 9.93% through the maturity date of April 1, 1996. The loan structure includes a credit enhancement fee due at maturity. The cost of the credit enhancement has been charged to interest expense. As of December 31, 1995 and 1994, $371,095 has been accrued. NOTES TO FINANCIAL STATEMENTS--CONT'D. NOTE C--MORTGAGE--CONT'D. Oak Terrace Active Retirement Center (OTARC) and Oak Terrace Healthcare Center (OTHCC) A bond financing agreement is collateralized by OTARC, OTHCC, and interest earned on bond cash reserves and debt service reserves invested in Money Market Mutual Funds ($1,510,000) and Certificates of Deposit ($429,924). The original principal balance of $15,100,000 consisted of variable rate demand multi-family housing revenue bonds, which mature serially from December 31, 1991 to December 2015. The effective rate was fixed on the commencement date of the bonds based on 20 Year U.S. Treasury Bonds futures contracts. The bonds contained a financing agreement providing for the financial institution to receive a fee to fix the interest rate at 6.2% on $10,700,000 of the principal balance. The bond discount paid to obtain this agreement is amortized over the life of the bonds using an effective interest rate method. The remaining $4,400,000 of the original principal balance bears interest at variable rates. This rate, which is determined weekly by the Remarketing Agent, is based upon his opinion as to the minimum rate necessary to sell the Bonds (at par) in a secondary market. At December 31, 1995 the variable rate was 6.2%. The current $12,800,000 balance of bonds consist $4,400,000 at an variable interest rates and $8,400,000 at the fixed interest rates. The Partnership had the option to pay or defer payment on the difference in the fixed rate 6.2% on the $10,700,000 bonds and the reduced rate of 4.22%. On April 20, 1994 the fixed rate was reduced to 4.22%. The balance of deferred interest was then fixed at $737,370. This amount has been accrued and is reflected in deferred interest. Pursuant to the terms of the bond financing agreement, certain cash reserves are required and are designated for scheduled principal payments and replacement reserves. Interest earned on these reserves is recorded as a reduction of interest expense and is considered in the computation of the amortization of the bond discount. As of December 31, 1995 and 1994, the unamortized balance of the bond discount was $2,353,042 and $2,504,242, respectively. In 1993, the Partnership reached an agreement with the lender whereby the lender released $2,096,949 of bond cash reserves to the Partnership in exchange for a principal paydown of $1,900,000 on the variable rate portion of the bonds. The principal paydown was a prepayment of scheduled principal reductions through December 31, 1998. Therefore, no additional principal payments are required until December 1999. NOTES TO FINANCIAL STATEMENTS--CONT'D. NOTE C--MORTGAGE--CONT'D. Upon receipt of the $1,900,000 paydown, the lender then released its second mortgage on a property disposed of in 1993. The Partnership additionally reduced the bond discount balance to reflect this principal paydown. Cash paid for interest totaled $2,220,221, $2,209,797 and $2,482,926 during 1995, 1994, and 1993, respectively. Maturities of mortgage debt are as follows: Year 1996 $ 8,295,000 1997 164,525 1998 2,783,637 1999 135,362 2000 4,903,980 Thereafter 13,652,023 29,934,527 Bond discount (2,353,042) Net debt outstanding $27,581,485 NOTE D--RELATED PARTY TRANSACTIONS Through December 31, 1994, property management services were provided by The Hoyt Group, a Kansas Corporation in which the individual general Partner had a majority interest. As of January 1, 1995, 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. Amounts paid by the Partnership to The Hoyt Group and SPECS, Inc. are as follows: Years Ended December 31, 1995 1994 1993 Property management fees $273,304 $264,876 $277,925 Professional services 48,000 -0- -0- $321,304 $264,876 $277,925 These professional services were provided by an unrelated entity previous to January 1, 1995. The General Partners are entitled to receive a Partnership Management Fee equal to 5% of Cash Flow From Operations (as defined) for managing the normal operations of the Partnership exception for Forest Park whose Management Fee is equal to 3% and Oak Terrace Health Care which pays 2% in Management Fees. There was no management fee due for the years ended December 31, 1995, 1994 and 1993. NOTES TO FINANCIAL STATEMENTS--CONT'D. NOTE D--RELATED PARTY TRANSACTIONS--CONT'D. Amounts due from (to) related parties consist of the following: December 31, 1995 1994 Secured Investment Resources II, Inc. $ 174,423 $ 173,996 $ 174,423 $ 173,996 The amount due from Secured Investment Resources II, Inc. represents excess syndication costs. Because of many factors, the Partnership did not raise the level of capital anticipated during the initial offering period. As a result, syndication and acquisition costs exceeded the amount allowed per the Partnership Agreement. The General Partners are obligated to reimburse these excess costs/fees. NOTE E--CASH DISTRIBUTIONS No distributions have been made since April 1990. Future distributions will only be made from excess cash flow not needed for working capital reserves. NOTE F--PARTNERSHIP LIQUIDITY The Partnership operates within the real estate industry and is subject to its economic forces, which contributes additional liquidity risk to the Partnership's investment portfolio. These risks include, but are not limited to, changes in general or local economic conditions, changes in interest rates and the availability of permanent mortgage financing which may render the acquisition, sale or refinancing of a property difficult or unattractive, changes in real estate and zoning laws, increases in real estate taxes, federal or local economic or rent controls, floods, earthquakes and other acts of God and other factors beyond the control of the Partnership's management. The illiquidity of real estate investments generally may impair the ability of the Partnership to respond promptly to changing economic conditions. The General Partners believe that sufficient working capital will be available to fund known, ongoing operating and capital expenditure requirements of the Partnership during 1996. The primary source of working capital is expected to be cash flow from operations which is expected to improve over that of the previous year due to improved operations. NOTES TO FINANCIAL STATEMENTS--CONT'D. NOTE F--PARTNERSHIP LIQUIDITY--CONT'D. Certain positive factors that are expected to affect 1996 operations are improved occupancy on the commercial properties, residential rental rate increases and decreased usage of promotional rent discounts. It is also expected that stringent controls over expenditures will be maintained. The availability of the liquidity sources and accomplishment of these objectives are partially predicated on the real estate economic conditions discussed above, which are beyond the control of the Partnership, and will influence the achieved results. NOTE G--ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consists of the following: December 31, 1995 1994 Vendor accounts payable $ 47,135 $ 79,889 Real estate / property taxes 246,510 191,535 Commercial lease commissions --- 11,364 Professional fees 53,733 55,704 Utilities 23,652 30,229 Payroll reimbursement 27,967 23,267 $ 398,997 $ 391,988 As of December 31, 1995, delinquent real estate taxes are $116,441 and consist of one-half of 1994 and all of 1995 for Thomasbrook Apartments. (The remainder of this page intentionally left blank.) NOTES TO FINANCIAL STATEMENTS--CONT'D. NOTE H--INCOME TAXES The Partners' capital accounts differ for financial reporting purposes and federal income tax purposes. The primary differences result from: 1) depreciation and amortization; 2) losses and provision for losses on investment properties; and 3) provision for doubtful accounts. The effect of these items is summarized as follows: December 31, 1995 1994 Financial reporting basis: Total assets $ 30,294,128 $30,963,280 Total liabilities (29,949,846) (30,567,703) Total Partners' capital $ 344,282 $ 395,577 Tax basis: Total assets $ 37,895,516 $38,611,186 Total liabilities (34,718,036) (35,382,139) Total Partners' capital $ 3,177,480 $ 3,229,047 Years Ended December 31, 1995 1994 1993 Partnership income (loss)--financial reporting purposes $( 51,295) $( 889,178) $1,178,341 Book versus tax differences due to: Deferred interest 129,977 ( 129,977) --- Depreciation and amortization (44,713) (46,211) 238,815 Bond discount amortization (98,010) ( 139,719) 546,600 Gain (loss) on sale of investment property --- --- (340,361) Unearned income 14,358 --- --- Provision for doubtful accounts (1,805) ( 16,120) (210,189) Other 1,921 1,961 --- 1,728 (330,066) 234,865 Partnership income (loss)--federal income tax purposes $( 49,567) $(1,219,244) $1,413,206 NOTES TO FINANCIAL STATEMENTS--CONT'D. NOTE I--LEASES Rental income on investment properties is reported when earned. The Partnership leases its commercial properties under non-cancelable operating lease agreements. The Partnership's residential properties are leased under short-term lease agreements. Future minimum rents to be received as of December 31, 1995 are as follows: 1996 $ 618,863 1997 425,564 1998 219,516 1999 170,551 2000 111,071 TOTAL $1,545,565 NOTE J--SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Non-cash activity for the year ended December 31, 1993 follows: 1993 Conveyance of the In The Pines Apartments and OTARC principal paydown: Net book value of assets conveyed $ 5,153,570 Mortgage debt retired (8,501,360) Other liabilities assumed (net) (57,900) Reduction in bond discount 546,600 $ (2,859,090) (The remainder of this page intentionally left blank.) NOTES TO FINANCIAL STATEMENTS--CONT'D. NOTE K--DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practicable to estimate that value: Cash and Short-term Investments. The carrying amount approximates fair value because of the short maturity of those instruments. Long-Term Debt. The fair value of the Partnership's long-term debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the Partnership for debt of the same remaining maturities. The estimated fair values of the Partnership's financial instruments are as follows: Carrying Fair 1995 Amount Value Cash and short-term investments $ 2,462,800 $ 2,462,800 Long-term debt $27,581,500 $27,210,000 Item 9. Changes in and Disagreement with Registrant's Certifying Accountants on Accounting and Financial Disclosure. None. PART III Item 10. Directors and Executive Officers of the Registrant. The General Partners of the Partnership are James R. Hoyt and Secured Investment Resources II, Inc. Secured Investment Resources II, Inc. (the Corporate General Partner) was incorporated under the laws of the state of Missouri on June 20, 1986 for the purpose of acting as General Partner and Acquisition Agent of the Partnership. As of December 31, 1995, Mr. James R. Hoyt is the sole officer and director. James R. Hoyt (the Individual General Partner), age 58, holds a Bachelor's Degree in Business Administration and is a licensed real estate broker in two states. Mr. Hoyt has been actively involved for more than the past twenty years in various real estate endeavors including development, syndication, property management and brokerage. Mr. Hoyt is the Individual General Partner and sponsor of Secured Investment Resources Fund, L.P. (S.I.R.) and Secured Investment Resources Fund, L.P. III, (S.I.R. III). Since 1983, Mr. Hoyt has also been involved as the Individual General Partner in ten specified real estate private placement offerings. As of December 31, 1995, these partnerships, including Secured Investment Resources Fund, L.P. II, have raised a total of $60,709,750. Item 11. Management Compensation During 1995, the Partnership paid $273,304 in fees to related parties for property management services. Item 12. Security Ownership of Certain Beneficial Owners and Management. (a) Security Ownership of certain beneficial owners. No individual or group as defined by Section 13(d)(3) of the Securities Exchange Act of 1934, known to the registrant is the beneficial owner of more than 5 percent of the registrant's securities. (b) Security ownership of Management. The General Partners own less than 1%. (c) Change in Control. None. Item 13. Certain Relationships and Related Transactions. See Notes to Financial Statements, Note D appearing in Item 8. PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K. (a)(1) The following Financial Statements of Secured Investment Resources Fund, L.P. II are included in Item 8: Page (i) Independent Auditors' Report 13 (ii) Balance Sheets - December 31, 1995 and 1994 14-15 (iii) Statements of Operations - Years Ended December 31, 1995, 1994 and 1993 16 (iv) Statements of Partnership Capital - Years Ended December 31, 1995, 1994 and 1993 17 (v) Statements of Cash Flows - Years Ended December 31, 1995, 1994 and 1993 18-19 (vi) Notes to Financial Statements 20-32 (a)(2) The following Financial Statement Schedules are filed as part of this report: (i) Schedule II - Allowance for Doubtful Accounts Statement Information 37 (ii) Schedule III - Real Estate and Accumulated Depreciation 41-42 All schedules other than those indicated in the index have been omitted as the required information is presented in the financial statements, related notes or is inapplicable. Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K--Cont'd. (a)(3) The following Exhibits are Incorporated by Reference and are an integral part of this Form 10-K. Exhibit Number Description (1) (a) Amendment to Dealer Manager Agreement dated April 30, 1987. (ix) (3) (a) Amended and Restated Agreement of Limited Partnership. (iii) (b) Second Amendment to Restated Certificate and Agreement of Limited Partnership. (vii) (c) Certificate of Limited Partnership. (i) (4) (a) Form of Subscription Agreement. (iii) (b) Form of Certificate evidencing units. (i) (c) See 3(a) & 3(b) above. (iii) (d) See 3(c) above. (i) (10) (a) Property Management Agreement between the Partnership and The Hoyt Group Limited Partnership. (i) (b) Escrow Agreement between the Partnership and The Mission Bank. (ii) (c) Administrative Services Agreement between Secured Investment Resources II, Inc. and the Partnership. (i) (d) Real Estate Contract of Sale and Exhibit for Sunwood Apartments. (iv) (e) Deed of Trust, Promissory Note and Exhibits for Sunwood Apartments. (vi) (f) Real Estate Contract of Sale and Exhibits for Bayberry Crossing Shopping Center. (v) Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K--Cont'd. Exhibit Number Description (g) Deed of Trust, Promissory Note and Exhibits for Bayberry Crossing Shopping Center. (vi) (h) Real Estate Purchase Agreement and Exhibits for Country Club Place Shopping Center. (vi) (i) Deed of Trust, Promissory Note and Exhibits for Country Club Place Shopping Center. (vi) (j) Real Estate Purchase Agreement and Exhibits for In The Pines Apartments. (viii) (k) Deed of Trust, Promissory Note and Exhibits for In The Pines Apartments. (viii) (l) Asset Purchase Agreement and Exhibits for Oak Terrace Active Retirement Community. (x) (m) Asset Purchase Agreement and Exhibits for Oak Terrace Health Care Center. (x) (n) Lease for Oak Terrace Health Care Center. (x) (o) Loan Agreement for Bond Financing on Oak Terrace Active Retirement Community. (x) (p) Real Estate Contract of Sale and Exhibits for Forest Park Shopping Center. (xi) (q) Real Estate Contract of Sale and Exhibits for Thomasbrook Apartments. (xii) (r) Loan Assumption Documents for Thomasbrook Apartments. (xii) (16) (a) Letter regarding Change in Certified Accountant. (xi), (xiii) (25) (a) Power of Attorney (i) (28) (a) Guarantee of General Partners. (i) Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K--Cont'd. (i) Previously filed on July 17, 1986 as an Exhibit to the Registration Statement on Form S-11 (file no. 33-7302) such Exhibit and Registration Statement incorporated herein by reference. (ii) Previously filed on September 25, 1986 as an Exhibit to Amendment #1 to the Registration Statement of Form S-11 such Exhibit and Registration Statement incorporated herein by reference. (iii) Previously filed on September 25, 1986 in the Prospectus as part of Amendment #1 to Registration Statement and incorporated herein by reference. (iv) Previously filed as an exhibit to Form 8-K dated June 2, 1987 and incorporated herein by reference. (v) Previously filed as an exhibit to Form 8-K dated June 5, 1987 and incorporated herein by reference. (vi) Previously filed as an exhibit to Registration Statement on Form S-11 (file No. 33-7302) dated August 13, 1987 and incorporated herein by reference. (vii) Previously filed as an Exhibit to the Supplement Prospectus dated August 13, 1987 as part of Post- effective Amendment No. 4 to the Registration Statement on Form S-11 (file No. 33-7302) and incorporated herein by reference. (viii Previously filed as an Exhibit to Form 8-K dated January 13, 1988 and incorporated herein by reference. (ix) Previously filed as an Exhibit to Form 8, amendment to Form 8-K dated February 29, 1988 and incorporated herein by reference. (x) Previously filed as an Exhibit to Form 8-K dated September 14, 1988 and incorporated herein by reference. (xi) Previously filed as an Exhibit to Form 8-K dated December 7, 1988 and incorporated herein by reference. (xii) Previously filed as an Exhibit to Form 10-K dated March 30, 1989 and incorporated herein by reference. (xiii) Previously filed as an Exhibit to Form 8-K dated December 4, 1989 and incorporated herein by reference. (b) Report of Form 8-K filed during the fourth quarter None. Secured Investment Resources Fund L.P. II Schedule II - Allowance for Doubtful Accounts December 31, 1995 Balance at Additions Bad Debt Write Balance at Beginning of Charged to Offs Deducted End Period Operations From Allowance of Period For Years Ended December 31, 1993 $273,589 $(137,741) $ 72,448 $63,400 1994 63,400 ( 16,385) 267 47,282 1995 47,282 ( 24,638) 22,831 45,475 Secured Investment Resources Fund, L.P. II Schedule III - Real Estate & Accumulated Depreciation December 31, 1995
Initial Cost to Partnership (A) Subsequent to Acquisition Buildings & Furniture Reduction Encumbrances Land Improvements Equipment Improvements of Basis (B) Other Equipment $ 8,479 Garden Apartments: Sunwood Apartments $8,136,792 $1,375,448 $9,706,178 $123,000 350,960 (269,890) Las Vegas, NV Thomasbrook Apartments 4,984,179 655,327 5,305,193 847,647 (228,422) Shawnee, KS Strip Shopping Centers Bayberry Crossings 2,724,598 607,184 3,729,847 355,815 (240,885) Lee's Summit, MO Forest Park 1,288,958 504,761 2,372,378 110,727 (43,211) St. Louis, MO Retirement Center: Retirement Center Springfield, IL 11,744,225 258,269 8,174,500 172,000 158,958 Nursing Home: Oak Terrace Health Care Center 1,055,775 273,834 3,412,956 293,550 Springfield, IL Less Bond Discount on Oak Terrace Active Retirement Center and (2,353,042) Health Care Center $27,581,485 $3,674,823 $32,701,052 $ 588,550 $1,832,586 $(782,408)
Gross Amount at Which Carried at Close of Period Buildings & Furniture Accumulated Date Depreciation Land Improvements Equipment Total Depreciation(3) Acquired Life Other Equipment 8,479 8,479 8,210 5 Yrs (2) Garden Apartments: Sunwood Apartments 1,340,364 9,535,429 409,903 11,285,696 2,982,600 15-May-87 30 Yrs (1) Las Vegas, NV 5 Yrs (2) Thomasbrook Apartments 451,058 5,709,188 419,499 6,579,745 1,909,546 26-Aug-88 30 Yrs (1) Shawnee, KS 5 Yrs (2) Strip Shopping Centers Bayberry Crossings 574,761 3,615,680 261,521 4,451,962 1,141,514 30-Jun-87 30 Yrs (1) Lee's Summit, MO 5 Yrs (2) Forest Park Shopping Center 492,694 2,356,817 95,144 2,944,655 1,318,772 23-Nov-88 30 Yrs (1) St. Louis, MO 5 Yrs (2) Retirement Center: Oak Terrace Active Retirement Center Springfield, IL 258,269 8,196,032 309,426 8,763,727 2,237,505 31-Aug-88 30 Yrs (1) 5 Yrs (2) Nursing Home: Oak Terrace Health Care Center 273,834 3,412,956 293,550 3,980,340 1,127,828 31-Aug-88 30 Yrs (1) Springfield, IL 5 Yrs (2) $3,390,980 $32,826,102 $1,797,522 $38,014,604 $10,725,975
(1) Estimated useful life of buildings. (2) Estimated useful life of furniture and fixtures. (3) Includes allowance for losses of $750,000. NOTES: (A) The initial cost to the Partnership represents the original purchase price of the properties, including $205,582 and $145,578 of improvements incurred in 1988 and 1987, respectively, which were contemplated at the time the property was acquired. (B) Receipts received under the terms of certain guarantee agreements are recorded by the Partnership as a reduction of the basis of the property to which the guaranteed income relates. Secured Investment Resources Fund, L.P. II Schedule III - Real Estate & Accumulated Depreciation -- Continued
December 31, 1995 Buildings & Furniture # Total Land Improvements Equipment (C) Reconciliation of Real Estate owned: Balance at January 1, 1993 $44,067,964 $3,844,064 $38,151,746 $2,072,154 Additions during year: Improvements 222,029 115,482 106,547 Reclassifications 107,214 (107,214) Dispositions during year (6,860,267) (453,085) (5,631,896) (775,286) Balance at December 31, 1993 $37,429,726 $3,390,979 $32,742,546 $1,296,201 Additions during year: Improvements 226,809 --- 34,117 192,692 Balance at December 31, 1994 37,656,535 3,390,979 32,776,663 1,488,893 Additions during year: Improvements 358,069 --- 49,439 308,629 Balance at December 31, 1995 $38,014,604 $3,390,979 $36,217,081 $1,797,522 (D) Reconciliation of Accumulated Depreciation Balance at January 1, 1993 8,632,839 --- 7,005,614 1,627,225 Additions during year: Depreciation Expense 1,414,152 1,203,371 210,781 Reclassifications (131,407) 131,407 Dispositions during year (1,706,698) --- (1,042,565) (664,133) Balance at December 31, 1993 8,340,293 --- 7,035,013 1,305,280 Additions during year: Depreciation Expense 1,189,239 --- 1,100,507 88,732 Balance at December 31, 1994 9,529,532 --- 8,135,520 1,394,012 Additions during year: Depreciation Expense 1,196,443 --- 877,397 319,046 Balance at December 31, 1995 $10,725,975 --- $9,012,917 $1,713,058
(E) The total gross amount of real estate at December 31, 1995 includes $3,085,450 of acquisition fees paid to affiliates. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. II A Delaware Limited Partnership (Registrant) By: James R. Hoyt as Individual General Partner Date: Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: Secured Investment Resources II, Inc. as Corporate General Partner By: James R. Hoyt, President Date: Supplemental Information to be Furnished With Reports Filed Pursuant to Section 15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to Section 12 of the Act. No annual report or proxy material has been sent to security holders. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. II A Delaware Limited Partnership (Registrant) By: /s/ James R. Hoyt James R. Hoyt as Individual General Partner Date: April 10, 1996 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: Secured Investment Resources II, Inc. as Corporate General Partner By: /s/ James R. Hoyt James R. Hoyt, President Date: April 10, 1996 Supplemental Information to be Furnished With Reports Filed Pursuant to Section 15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to Section 12 of the Act. No annual report or proxy material has been sent to security holders. EX-27 2
5 1 12-MOS DEC-31-1995 JAN-01-1995 DEC-31-1995 522,835 1,939,924 57,544 45,475 0 1,065,575 38,014,604 10,725,975 30,294,128 2,368,361 27,581,485 0 0 0 0 30,294,128 0 5,897,512 0 3,021,061 1,388,895 0 2,429,217 0 0 0 0 0 0 (51,295) (.95) 0
-----END PRIVACY-ENHANCED MESSAGE-----