Note 5 - Real Estate Held for Sale

6 Months Ended

Jun. 30, 2011

Real Estate Owned [Text Block]

NOTE 5 - REAL ESTATE HELD FOR SALE

Real estate properties held for sale as of June 30, 2011 and December 31, 2010 consists of the following properties acquired through foreclosure:

	2011		2010
Manufactured home subdivision development, Ione, California	$	347,730	$	347,730
Commercial building, Roseville, California		204,803		204,804
Office condominium complex (16 units), Roseville, California		7,320,738		7,312,518
Industrial building, Sunnyvale, California (held within Wolfe Central, LLC)		3,383,205		3,376,827
Commercial buildings, Sacramento, California		3,890,968		3,890,968
Manufactured home subdivision development, Lake Charles, Louisiana (held within Dation, LLC)		2,025,493		—
Apartment building, Miami, Florida (held within TOTB Miami, LLC) – see Note 6		12,480,000		—
1/7th interest in single family home, Lincoln City, Oregon		85,259		—
	$	29,738,196	$	15,132,847

During the six months ended June 30, 2011, the Partnership foreclosed on a first mortgage loan secured by a 1/7th interest in a single family home located in Lincoln City, Oregon in the amount of approximately $75,000 and obtained the property via the trustee’s sale.  In addition, accrued interest and advances made on the loan or incurred as part of the foreclosure (such as legal fees and delinquent property taxes) in the total amount of approximately $10,000 were capitalized to the basis of the property. The property is classified as held for sale as it is listed for sale and the Partnership expects to complete a sale within the next year.

Dation, LLC

Dation, LLC (“Dation”) was formed in 2001 between the Partnership and an unrelated developer for the purpose of developing and selling lots in a manufactured home park located in Lake Charles, Louisiana, which were acquired by the Partnership via a deed in lieu of foreclosure. The Partnership advances funds to Dation as needed. The Partnership owns 50% of Dation and is the sole general manager of Dation (pursuant to an amendment to the Partnership Agreement executed in October 2007). Pursuant to the Operating Agreement, the Partnership is to receive 50% of Dation’s profits and losses after receipt of all interest on the original loan and priority return on partner contributions allocated at the rate of 12% per annum. The Partnership has recorded 100% of Dation’s net income and losses since inception because it has the majority of the risks and rewards of ownership. The assets, liabilities, income and expenses of Dation have been consolidated into the accompanying consolidated balance sheet and statement of operations of the Partnership.

The Partnership received repayment of capital contributions of $84,000 during the three months ended June 30, 2010.

The net operating loss to the Partnership from Dation was approximately $10,000 and $7,000 for the three months ended June 30, 2011 and 2010, respectively, and $24,000 and $26,000 for the six months ended June 30, 2011 and 2010, respectively.

During the first quarter of 2011, the Partnership transferred Dation from real estate held for investment to real estate held for sale as it is now listed for sale and the Partnership expects to complete a sale within the next year.

During the quarter ended June 30, 2010, the Partnership sold one house in the manufactured home subdivision development located in Ione, California for net sales proceeds of approximately $88,000, resulting in a loss to the Partnership of approximately $6,000.

During the quarter ended June 30, 2010, the Partnership recorded an impairment loss of approximately $465,000 on 8 units in the office condominium complex located in Roseville, California based on updated sales data obtained, which is reflected in losses on real estate properties in the accompanying consolidated statements of income.

During the six months ended June 30, 2010, the Partnership sold one commercial building located in Roseville, California for net sales proceeds of approximately $359,000, resulting in a gain to the Partnership of approximately $183,000.