EX-99.0 4 dex990.htm CORRESPONDENCE TO THE LIMITED PARTNERS WHICH IS SCHEDULED TO BE MAILED Correspondence to the Limited Partners which is scheduled to be mailed

Exhibit 99.0

 

DiVall Insured Income Properties 2, L.P.

 

QUARTERLY NEWS

 

A publication of The Provo Group, Inc.   Second QUARTER 2005

 

The “Consent for Sale” Results Are In . . .

 

On May 13, 2005 investors were mailed the Biennial Consent for Sale of the Limited Partnership. The results were independently tabulated by Phoenix American Financial Services. In accordance with the terms of the consent’s voting procedures, 85% of the units were deemed to have voted “AGAINST” a sale. Correspondingly, fifteen percent (15%) of the units voted “FOR” a sale, which was significantly below the majority required of fifty-one percent (51%). Below please find a summary of past and present “Consent for Sale” results:

 

     FOR
   AGAINST
2001    26%   74%
2003    14%   86%
2005    15%   85%

 

The 20 largest DiVall 2 investors own 33% of the Partnership. An interesting sidebar to the above voting was that only 2 out of the largest 20 investors voted “FOR” a sale. The Advisory Board believes that when only 10% of the largest investors want to sell, the vast majority of the partners are satisfied with the Partnership’s yield as well as the quality and integrity of its management.

 

We believe that the Partnership can continue to provide a steady cash flow to the partners, and additional value can be achieved by continuing the strategy of selectively selling the properties which are not leased to prime quality tenants.

 

Consistent with our two year voting cycle, we will circulate the next biennial consent in May 2007.

 

DISTRIBUTION HIGHLIGHTS

 

•      $435,000 total amount distributed for the First Quarter 2005, as budgeted.

 

•      $9.40 per unit (approx.) for the First Quarter 2005. The approximate annualized “operating return” is 8.5% based on the most recent net asset value as of December 31, 2004.

   

•      $1,295 to $1,146 range of distributions per unit from the first unit sold to the last unit sold before the offering closed (2/90) respectively. (Distributions are from both cash flow from operations and “net” cash activity from financing and investing activities).

PAGE 2   DIVALL 2   2 Q 05

 

QUESTIONS & ANSWERS

 

• When can I expect my next distribution mailing?

 

Your distribution correspondence for the Third Quarter of 2005 is scheduled to be mailed on November 15, 2005.

 

• What was the December 31, 2004 net asset value?

 

Approximately $440 per unit.

 

• I’ve moved how do I update my account registration?

 

Please mail or fax to us a signed letter stating your new address and telephone number. Updates cannot be accepted over the telephone or via voicemail messages.

 

• If I have questions or comments, how can I reach your office?

 

You can reach us at our address listed below:

 

MAIL:

    DiVall Investor Relations
     c/o The Provo Group, Inc.
     1100 Main Street, Suite 1830
     Kansas City, MO 64105

PHONE:

    800-547-7686

FAX:

    (816) 221-2130

E-MAIL:

    mevans@theprovogroup.com

DIVALL INSURED INCOME PROPERTIES 2 L.P.

STATEMENTS OF INCOME AND CASH FLOW CHANGES

FOR THE THREE MONTH PERIOD ENDED JUNE 30, 2005

 

     PROJECTED
     ACTUAL
     VARIANCE
  
    

2ND

QUARTER
06/30/2005

     2ND
QUARTER
06/30/2005
     BETTER
(WORSE)
  

OPERATING REVENUES

                         

Rental income

    $ 450,395     $ 442,226     $ (8,169 )

Interest income

      2,550       3,951       1,401  

Real estate tax recoveries

      11,211       13,911       2,700  

Other income

      0       3,401       3,401  
    
 
 

TOTAL OPERATING REVENUES

    $ 464,156     $ 463,489     $ (667 )
    
 
 

OPERATING EXPENSES

                         

Insurance

    $ 9,729     $ 9,728     $ 1  

Management fees

      52,230       53,114       (884 )

Overhead allowance

      4,311       4,296       15  

Advisory Board

      3,500       3,500       0  

Administrative

      38,680       26,410       12,270  

Professional services

      19,940       20,923       (983 )

Auditing

      16,200       15,900       300  

Legal

      9,000       13,096       (4,096 )

Property Expenses

      3,750       490       3,260  
    
 
 

TOTAL OPERATING EXPENSES

    $ 157,340     $ 147,458     $ 9,882  
    
 
 

INVESTIGATION AND RESTORATION EXPENSES

    $ 0     $ 136     $ (136 )
    
 
 

NON-OPERATING EXPENSES

                         

Depreciation

      65,358       65,357       1  

Amortization

      3,198       3,198       (0 )
    
 
 

TOTAL NON-OPERATING EXPENSES

    $ 68,556     $ 68,555     $ 1  
    
 
 

TOTAL EXPENSES

    $ 225,896     $ 216,150     $ 9,746  
    
 
 

NET INCOME

    $ 238,260     $ 247,340     $ 9,080  
                 VARIANCE
  

OPERATING CASH RECONCILIATION:

                         

Depreciation and amortization

      68,556       68,555       (1 )

Recovery of amounts previously written off

      0       (3,401 )     (3,401 )

(Increase) Decrease in current assets

      222,237       8,406       (213,831 )

Increase (Decrease) in current liabilities

      (10,725 )     (104,421 )     (93,696 )

(Increase) Decrease in cash reserved for payables

      9,772       103,432       93,660  

Current cash flows advanced from (reserved for) future distributions

      (83,100 )     146,687       229,787  
    
 
 

Net Cash Provided From Operating Activities

    $ 445,000     $ 466,597     $ 21,597  
    
 
 

CASH FLOWS (USED IN) FROM INVESTING AND FINANCING ACTIVITIES

                         

Indemnification Trust (Interest earnings reinvested)

      (1,500 )     (2,494 )     (994 )

Recovery of amounts previously written off

      0       3,401       3,401  
    
 
 

Net Cash (Used In) From Investing And Financing Activities

    $ (1,500 )   $ 907     $ 2,407  
    
 
 

Total Cash Flow For Quarter

    $ 443,500     $ 467,505     $ 24,005  

Cash Balance Beginning of Period

      805,510       1,148,932       343,422  

Less 1st quarter 2005 distributions paid 5/05

      (430,000 )     (435,000 )     (5,000 )

Change in cash reserved for payables or future distributions

      73,328       (250,119 )     (323,447 )
    
 
 

Cash Balance End of Period

    $ 892,337     $ 931,318     $ 38,981  

Cash reserved for 2nd quarter 2005 L.P. distributions

      (430,000 )     (435,000 )     (5,000 )

Cash reserved for payment of accrued expenses

      (90,134 )     (97,533 )     (7,399 )

Cash advanced from (reserved for) future distributions

      (278,613 )     (278,613 )     0  
    
 
 

Unrestricted Cash Balance End of Period

    $ 93,590     $ 120,172     $ 26,582  
    
 
 
     PROJECTED
     ACTUAL
     VARIANCE
  

*  Quarterly Distribution

    $ 430,000     $ 435,000     $ 5,000  

Mailing Date

      08/15/2005       (enclosed)       —    
* Refer to distribution letter for detail of quarterly distribution.

PROJECTIONS FOR

DISCUSSION PURPOSES

 

DIVALL INSURED INCOME PROPERTIES 2 LP

2005 PROPERTY SUMMARY

AND RELATED RECEIPTS

FOR CURRENT OPERATING PROPERTIES

AS OF JUNE 30, 2005

 

PORTFOLIO   (Note 1)                                                         
        REAL ESTATE
     EQUIPMENT
     TOTALS
  

CONCEPT

  

LOCATION

   COST
   ANNUAL
BASE
RENT
    % YIELD
     LEASE
EXPIRATION
DATE
    COST
    PRINCIPAL
RETURNED
AS OF 1/1/94
    ANNUAL
LEASE
RECEIPTS
    %
RETURN
     COST
    ANNUAL
RECEIPTS
    RETURN
  

APPLEBEE’S

   COLUMBUS, OH   1,059,465   135,780    12.82 %        84,500    29,849    0    0.00 %   1,143,965    135,780    11.87 %

BLOCKBUSTER

   OGDEN, UT   646,425   110,750    17.13 %                             646,425    110,750    17.13 %

DENNY’S

   PHOENIX, AZ   972,726   65,000    6.68 %        183,239    0    0    0.00 %   1,155,965    65,000    5.62 %

CHINESE SUPER BUFFET

   PHOENIX, AZ   865,900   66,000    7.62 %        221,237    0    0    0.00 %   1,087,137    66,000    6.07 %

HOOTER’S

   R. HILLS, TX   1,246,719   95,000    7.62 %                             1,246,719    95,000    7.62 %

DAYTONA’S All SPORTS CAFÉ

   DES MOINES, IA   845,000   60,000    7.10 %        52,813    0    0    0.00 %   897,813    60,000    6.68 %

KFC

   SANTA FE, NM   451,230   60,000    13.30 %                             451,230    60,000    13.30 %

Note:

 

  1: This property summary includes only property and equipment held by the Partnership during 2005.

 

Page 1 of 2

PROJECTIONS FOR

DISCUSSION PURPOSES

 

DIVALL INSURED INCOME PROPERTIES 2 LP

2005 PROPERTY SUMMARY

AND RELATED RECEIPTS

FOR CURRENT OPERATING PROPERTIES

AS OF JUNE 30, 2005

 

PORTFOLIO    (Note 1)                                                          
         REAL ESTATE
     EQUIPMENT
     TOTALS
  

CONCEPT

    LOCATION
   COST
    ANNUAL
BASE
RENT
    %
YIELD
     LEASE
EXPIRATION
DATE
    COST
    PRINCIPAL
RETURNED
AS OF 1/1/94
    ANNUAL
LEASE
RECEIPTS
    %
RETURN
     COST
    ANNUAL
RECEIPTS
    RETURN
  

POPEYE’S

    PARK FOREST, IL   580,938    77,280    13.30 %                             580,938    77,280    13.30 %

SUNRISE PRESCHOOL

    PHOENIX, AZ   1,084,503    123,318    11.37 %        79,219    33,047    0    0.00 %   1,182,735    123,318    10.43 %
                              19,013    6,710    0    0.00 %                

PANDA BUFFET

    GRAND FORKS, ND   739,375    34,000    4.60 %                             739,375    34,000    4.60 %

WENDY’S

    AIKEN, SC   633,750    90,480    14.28 %                             633,750    90,480    14.28 %

WENDY’S

    CHARLESTION, SC   580,938    77,280    13.30 %                             580,938    77,280    13.30 %

WENDY’S

    N. AUGUSTA, SC   660,156    87,780    13.30 %                             660,156    87,780    13.30 %

WENDY’S

    AUGUSTA, GA   728,813    96,780    13.28 %                             728,813    96,780    13.28 %

WENDY’S

    CHARLESTON, SC   596,781    76,920    12.89 %                             596,781    76,920    12.89 %

WENDY’S

    AIKEN, SC   776,344    96,780    12.47 %                             776,344    96,780    12.47 %

WENDY’S

    AUGUSTA, GA   649,594    86,160    13.26 %                             649,594    86,160    13.26 %

WENDY’S

    CHARLESTON, SC   528,125    70,200    13.29 %                             528,125    70,200    13.29 %

WENDY’S

    MT. PLEASANT, SC   580,938    77,280    13.30 %                             580,938    77,280    13.30 %

WENDY’S

    MARTINEZ, GA   633,750    84,120    13.27 %                             633,750    84,120    13.27 %
        
  
  
      
  
  
  
 
  
  

PORTFOLIO TOTALS

        14,861,470    1,670,908    11.24 %        640,021    69,606    0    0.00 %   15,501,491    1,670,908    10.78 %
        
  
  
      
  
  
  
 
  
  

Note:

 

  1: This property summary includes only property and equipment held by the Partnership during 2005.

 

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