Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended |
Sep. 30, 2013 | |
Document and Entity Information: | ' |
Entity Registrant Name | 'REAL ESTATE ASSOCIATES LTD/CA |
Document Type | '10-Q |
Document Period End Date | 30-Sep-13 |
Amendment Flag | 'false |
Entity Central Index Key | '0000225789 |
Current Fiscal Year End Date | '--12-31 |
Entity Common Stock, Shares Outstanding | 16,221 |
Entity Filer Category | 'Smaller Reporting Company |
Entity Current Reporting Status | 'Yes |
Entity Voluntary Filers | 'No |
Entity Well-known Seasoned Issuer | 'No |
Document Fiscal Year Focus | '2013 |
Document Fiscal Period Focus | 'Q3 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Assets | ' | ' |
Cash and cash equivalents | $136 | $185 |
Receivable - limited partners | 91 | 91 |
Restricted escrows | 455 | 412 |
Other assets | 6 | 163 |
Investment property: | ' | ' |
Land | 366 | 366 |
Buildings and related personal property | 3,860 | 3,703 |
Total investment property | 4,226 | 4,069 |
Less accumulated depreciation | -100 | -7 |
Investment property, net | 4,126 | 4,062 |
Total assets | 4,814 | 4,913 |
Liabilities: | ' | ' |
Accounts payable and accrued expenses | 130 | 104 |
Accrued fees due to General Partner | 576 | 535 |
Advances and accrued interest due to General Partner or affiliates | 536 | 877 |
Tenant security deposit liability | 65 | 63 |
Accrued property taxes | 63 | 85 |
Deferred revenue | 20 | 23 |
Mortgage notes payable | 2,977 | 3,221 |
Total liabilities | 4,367 | 4,908 |
Contingencies | ' | ' |
Partners' Capital Equity (Deficiency): | ' | ' |
General partner | -123 | -127 |
Limited partners | 570 | 132 |
Total partners' capital equity (deficiency) | 447 | 5 |
Total liabilities and partners' capital equity (deficiency) | $4,814 | $4,913 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenues: | ' | ' | ' | ' |
Rental income | $268 | ' | $711 | ' |
Other income | 64 | ' | 208 | ' |
Total revenues | 332 | ' | 919 | ' |
Operating Expenses: | ' | ' | ' | ' |
Operating Costs | 210 | ' | 591 | ' |
Depreciation and amortization | 31 | ' | -131 | ' |
Property taxes | 20 | ' | 60 | ' |
Management fees - General Partner | 14 | 14 | 41 | 41 |
General and administrative | 4 | ' | 7 | 5 |
Legal and accounting | 24 | 89 | 112 | 125 |
Interest expense | 19 | 11 | 61 | 33 |
Total operating expenses | 322 | 114 | 1,003 | 204 |
Income (Loss) from partnership operations | 10 | -114 | -84 | -204 |
Gain on sale of Limited Partner Interest in Local Partnerships | 483 | ' | 483 | ' |
Distributions in excess of investment in Local Partnerships | 8 | 8 | 43 | 136 |
Net Income (Loss) | 501 | -106 | 442 | -68 |
Net Income (Loss) allocated to general partner (1%) | 5 | -1 | 4 | -1 |
Net Income (Loss) allocated to limited partners (99%) | $496 | ($105) | $438 | ($67) |
Net Income (Loss) per limited partnership interest | $30.52 | ($6.45) | $26.95 | ($4.12) |
Consolidated_Statement_of_Shar
Consolidated Statement of Shareholder Deficit (USD $) | General Partner | Limited Partners | Total |
In Thousands | |||
Partners' capital equity (deficiency), beginning balance at Dec. 31, 2012 | ($127) | $132 | $5 |
Net Income (Loss) | 4 | 438 | 442 |
Partners' capital equity (deficiency), ending balance at Sep. 30, 2013 | ($123) | $570 | $447 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities: | ' | ' |
Net Income (Loss) | $442 | ($68) |
Adjustments to reconcile Net Income (Loss) to net cash provided by (used in) operating activities: | ' | ' |
Depreciation and amortization | 131 | ' |
Amortization of mortgage premium | -21 | ' |
Distributions in excess of investments | -43 | ' |
Gain on sale of Limited Partner interest | -483 | ' |
Change in accounts: | ' | ' |
Change in Receivables and deposits | ' | -5 |
Change in Restricted escrows | -43 | ' |
Change in Other assets | 140 | ' |
Change in Accounts payable and accrued expenses | 26 | 28 |
Change in Accrued fees due to General Partner | 41 | 41 |
Change in Accrued interest on advances | -192 | 33 |
Change in Tenant security deposit liability | 2 | ' |
Change in Accrued property tax | -22 | ' |
Change in Deferred Revenues | -3 | ' |
Net cash provided by (used in) operating activities | -25 | 29 |
Cash flows provided by (used in) investing activities: | ' | ' |
Increase in investment properties | -157 | ' |
Distributions in excess of investments | 43 | ' |
Gain on sale of Limited Partner interest | 483 | ' |
Net cash provided by (used in) investing activities | 369 | ' |
Cash flows provided by (used in) financing activities: | ' | ' |
Principal payments on mortgage notes payable | -244 | ' |
Repayment of advances from General Partner | -149 | ' |
Net cash flows provided by (used in) financing activities | -393 | ' |
Net increase (decrease) in cash and cash equivalents | 26 | 29 |
Cash and cash equivalents, beginning of period | 104 | 78 |
Cash and cash equivalents, end of period | $130 | $107 |
Note_1_Organization_and_Summar
Note 1 - Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
Note 1 - Organization and Summary of Significant Accounting Policies | ' |
Note 1 – Organization and Summary of Significant Accounting Policies | |
General | |
The information contained in the following notes to the unaudited consolidated financial statements is condensed from that which would appear in the annual audited consolidated financial statements; accordingly, the consolidated financial statements included herein should be reviewed in conjunction with the consolidated financial statements and related notes thereto contained in the annual report for the fiscal year ended December 31, 2012. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end. The results of operations for the interim periods presented are not necessarily indicative of the results expected for the entire year. | |
In the opinion of the Partnership’s management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting primarily of normal recurring items) considered necessary for a fair presentation. The consolidated balance sheet at December 31, 2012 has been derived from the audited financial statements at that date but does not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. | |
The general partner has a one percent interest in profits and losses of the Partnership. The limited partners have the remaining 99 percent interest in proportion to their respective investments. The general partner is National Partnership Investments, LLC, a California limited liability company (“NAPICO” or the "General Partner"). The General Partner is a subsidiary of Bethesda Holdings II, LLC, a privately held real estate asset management company (“Bethesda”). | |
At September 30, 2013 and December 31, 2012, the Partnership had outstanding 16,221 and 16,251 local limited partnership interests, respectively. | |
Basis of Presentation | |
The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States. | |
Principles of Consolidation | |
As a result of the assignment of the local operating general partner interest in Bethel Towers Limited Dividend Housing Association (“Bethel Towers”) to the Partnership on December 10, 2012 (as discussed in Note 2), the Partnership began consolidating the assets, liabilities, and operations of Bethel Towers as of December 10, 2012. The consolidated financial statements of the Partnership include its 99.99% general and limited partner interests in Bethel Towers. All significant inter-partnership balances have been eliminated. The apartment property owned by Bethel Towers is located in Detroit, Michigan. | |
Method of Accounting for Investments in Local Partnerships | |
With the exception of Bethel Towers, the investments in local partnerships (the “Local Partnerships”) are accounted for on the equity method. | |
Net Income (Loss) Per Local Limited Partnership Interest | |
Net income (loss) per local limited partnership interest was computed by dividing the limited partners’ share of net income (loss) by the number of local limited partnership interests outstanding at the beginning of the year. The number of local limited partnership interests used was 16,251 for the three and nine months ended September 30, 2013, respectively and 16,268 for the three and nine months ended September 30, 2012, respectively. | |
Variable Interest Entities | |
The Partnership consolidates any variable interest entities in which the Partnership holds a variable interest and is the primary beneficiary. Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group the holders of the equity investment at risk lack (i) the ability to make decisions about an entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The primary beneficiary of a VIE is generally the entity that has (a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. | |
In determining whether it is the primary beneficiary of a VIE, the Partnership considers qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of the Partnership’s investment; the obligation or likelihood for the Partnership or other investors to provide financial support; and the similarity with and significance to the business activities of the Partnership and the other investors. Significant judgments related to these determinations include estimates about the current and future fair values and performance of real estate held by these VIEs and general market conditions. | |
On December 10, 2012, the Partnership became the operating general partner of Bethel Towers, as a result of the assignment of the local operating general partner interest in Bethel Towers to the Partnership. Therefore, effective December 10, 2012, the Partnership began consolidating this Local Partnership and it is no longer considered a VIE (see Note 2). | |
At September 30, 2013 and December 31, 2012, the Partnership held variable interests in zero and four VIEs, respectively, for which the Partnership was not the primary beneficiary. The Partnership has concluded, based on its qualitative consideration of the partnership agreement, the partnership structure and the role of the general partner in each of the Local Partnerships, that the general partner of each of the Local Partnerships is the primary beneficiary of the respective Local Partnership. In making this determination, the Partnership considered the following factors: | |
· the general partners conduct and manage the business of the Local Partnerships; | |
· the general partners have the responsibility for and sole discretion over selecting a property management agent for the Local Partnerships’ underlying real estate properties; | |
· the general partners are responsible for approving operating and capital budgets for the properties owned by the Local Partnerships; | |
· the general partners are obligated to fund any recourse obligations of the Local Partnerships; | |
· the general partners are authorized to borrow funds on behalf of the Local Partnerships; and | |
· the Partnership, as a limited partner in each of the Local Partnerships, does not have the ability to direct or otherwise significantly influence the activities of the Local Partnerships that most significantly impact such entities’ economic performance. |
Note_2_Investments_in_and_Adva
Note 2 - Investments in and Advances To Local Partnerships | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
Note 2 - Investments in and Advances To Local Partnerships | ' |
Note 2 – Investment in and Advances to Local Partnerships | |
As of September 30, 2013 and December 31, 2012, the Partnership held local limited partnership interests in one and five Local Partnerships, respectively. The Local Partnerships as of September 30, 2013 and December 31, 2012, owned residential low income rental projects consisting of 146 and 350 apartment units, respectively. The mortgage loans for these projects are payable to or insured by various government agencies. | |
Effective December 10, 2012, the Partnership designated itself as the operating general partner of Bethel Towers pursuant to the terms of the partnership agreement for Bethel Towers whereby the Partnership was to be named the operating general partner of Bethel Towers upon the death of the existing operating general partner. Accordingly, the 0.99% local operating general partner interest in Bethel Towers was assigned to the Partnership as of December 10, 2012. As a result of this assignment, the Partnership now consolidates this Local Partnership (as discussed in Note 1). All assets and liabilities of Bethel Towers were consolidated, effective December 10, 2012, at fair value. The Partnership recorded an intangible asset for the value of the in-place lease assets of approximately $131,000 determined by using internal valuation techniques that consider the terms of the in-place leases and current market data for comparable leases. This intangible asset was amortized over a period of nine months and was fully amortized at September 30, 2013. The investment property was recorded at fair value determined by using internal valuation techniques that considered comparable market transactions, discounted cash flow techniques, replacement costs and other available information. The investment property will be depreciated over 30 years. The mortgage notes payable were recorded at fair value determined by discounting future cash flows using a discount rate commensurate with that currently believed to be available to the Partnership for similar term mortgage notes payable. Due to the short term nature of the balances, the Partnership assumed the fair value of all other current assets and liabilities approximated their carrying value and no adjustments were recorded. The consolidation resulted in a gain of $1,385,000 for the year ended December 31, 2012, as a result of the fair value of the assets of Bethel Towers | |
exceeding the fair value of Bethel Towers’ liabilities. The fair value measurements of the investment property, mortgage notes payable and intangible assets have been classified by the Partnership within Level 2 of the fair value hierarchy as defined in Note 4. | |
On August 14, 2012, Bethel Towers entered into a purchase and sale contract to sell its investment property to a third party for a gross sales price of $4,200,000. After payment of closing costs and repayment of the notes payable encumbering the property, the Partnership expects to receive a distribution of approximately $1,070,000. The sale is expected to close during the fourth quarter of 2013. | |
With the exception of its investment in Bethel Towers, the Partnership, as a limited partner, does not have a contractual relationship with the Local Partnerships or exercise control over the activities and operations, including refinancing or selling decisions, of the Local Partnerships that would require or allow for consolidation. Accordingly, the Partnership accounts for its investments in the Local Partnerships using the equity method. The Partnership is allocated profits and losses of the Local Partnerships based upon its respective ownership percentage (between 95% and 99%). Distributions of surplus cash from operations from most of the Local Partnerships are restricted by the Local Partnerships’ Regulatory Agreements with the United States Department of Housing and Urban Development (“HUD”). These restrictions limit the distribution to a portion, generally less than 10%, of the initial invested capital. The excess surplus cash is deposited into a residual receipts reserve, of which the ultimate realization by the Partnership is uncertain as HUD frequently retains it upon sale or dissolution of the Local Partnership. The Partnership is allocated profits and losses and receives distributions from refinancings and sales in accordance with the Local Partnerships’ partnership agreements. These agreements usually limit the Partnership’s distributions to an amount substantially less than its ownership percentage in the Local Partnership. | |
In July 2013, the Partnership sold its limited partnership interest in New-Bel-Mo Enterprises L.P. (Belleville Manor) to an affiliate of the Local Operating General Partner. The Partnership received $20,500 in proceeds from the sale. The Partnership's investment balance in this Local Partnership was zero at both September 30, 2013 and 2012. | |
In July 2013, the Partnership sold its limited partnership interest in Clinton Apartments, Ltd. to an affiliate of the Local Operating General Partner. The Partnership received $37,000 in proceeds from the sale. The Partnership's investment balance in this Local Partnership was zero at both September 30, 2013 and 2012. | |
In July 2013, the Partnership sold its limited partnership interest in Emporia Limited (Northwood Village) to an affiliate of the Local Operating General Partner. The Partnership received $400,000 in proceeds from the sale. The Partnership's investment balance in this Local Partnership was zero at both September 30, 2013 and 2012. | |
In August 2013, the Partnership sold its limited partnership interest in Williamson Towers to an affiliate of the Local Operating General Partner. The Partnership received $25,000 in proceeds from the sale. The Partnership's investment balance in this Local Partnership was zero at both September 30, 2013 and 2012. | |
The individual investments are carried at cost plus the Partnership’s share of the Local Partnership’s profits less the Partnership’s share of the Local Partnership’s losses, distributions and impairment charges. The Partnership is not legally liable for the obligations of the Local Partnerships and is not otherwise committed to provide additional support to them. Therefore, it does not recognize losses once its investment in each of the Local Partnerships reaches zero. Distributions from the Local Partnerships are accounted for as a reduction of the investment balance until the investment balance is reduced to zero. When the investment balance has been reduced to | |
zero, subsequent distributions received are recognized as income in the accompanying statements of operations. The Partnership received operating distributions of approximately $35,000 and $108,000 from Local Partnerships for the nine months ended September 30, 2013 and 2012, respectively. | |
For those investments where the Partnership has determined that the carrying value of its investments approximates the estimated fair value of those investments, the Partnership’s policy is to recognize equity in income of the Local Partnerships only to the extent of distributions received and amortization of acquisition costs from those Local Partnerships. Therefore, the Partnership limits its recognition of equity earnings to the amount it expects to ultimately realize. | |
Prior to January 1, 2012, the investment balance in four of the Local Partnerships had been reduced to zero. The Partnership’s investment balance in Bethel Towers was zero prior to its consolidation effective December 10, 2012. | |
At times, advances are made to the Local Partnerships. Advances made by the Partnership to the individual Local Partnerships are considered part of the Partnership's investment in the Local Partnerships. Advances made to Local Partnerships for which the investment has been reduced to zero are charged to expense. During the nine months ended September 30, 2013 and 2012 the Partnership made no such advances. |
Note_3_Transactions_With_Affil
Note 3 - Transactions With Affiliated Parties | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
Note 3 - Transactions With Affiliated Parties | ' |
Note 3 – Transactions with Affiliated Parties | |
Under the terms of the Restated Certificate and Agreement of Limited Partners, the Partnership is obligated to NAPICO for an annual management fee equal to 0.5 percent of the Partnership’s original invested assets of the local limited partnerships and is calculated at the beginning of each year. Invested assets are defined as the costs of acquiring project interests, including the proportionate amount of the mortgage loans related to the Partnership's interest in the capital accounts of the respective Local Partnerships. The management fee incurred was approximately $14,000 for the three and nine months ended September 30, 2013, respectively, and approximately $41,000 for the three and nine months ended September 30, 2012, respectively. At September 30, 2013 and December 31, 2012, the Partnership owed NAPICO approximately $525,000 and $471,000, respectively, for management fees and this amount is included in accrued fees due to General Partner. | |
The General Partner was entitled to receive a liquidation fee of approximately $51,000 related to the sale of the local limited partnership interest in Cherry Hill Apartments, which was sold in September 2003. This fee was accrued and is included in accrued fees due to General Partner. The fee will not be paid until the limited partners have received a return of their original invested capital. | |
The General Partner and its affiliates did not make advances to the Partnership during the nine months ended September 30, 2013 and 2012. Interest on advances is charged at prime plus 2%, or 5.25% at September 30, 2013. The expense was approximately $19,000 and $35,000 for the three and nine months ended September 30, 2013, respectively, and $11,000 and $33,000 for the three and nine months ended September 30, 2012, respectively. At September 30, 2013 and December 31, 2012, the Partnership owed approximately $536,000 and $877,000, respectively, in advances and related accrued interest to the General Partner and its affiliates. | |
As of September 30, 2013 and December 31, 2012, the accrued fees due to the General Partner exceeded the Partnership’s cash. The Partnership Agreement provides that the fees and advances due to the General Partner may only be paid from the Partnership’s available cash, however, the Partnership still remains liable for all such amounts. |
Note_4_Fair_Value_of_Financial
Note 4 - Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
Note 4 - Fair Value of Financial Instruments | ' |
Note 4 - Fair Value of Financial Instruments | |
Financial Accounting Standards Board Accounting Standards Codification Topic 825, “Financial Instruments”, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate fair value. Fair value is defined as the amount at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Partnership is required to classify these fair value measurements into one of three categories, based on the nature of the inputs used in the fair value measurement. Level 1 of the hierarchy includes fair value measurements based on unadjusted quoted prices in active markets for identical assets or liabilities the Partnership can access at the measurement date. Level 2 includes fair value measurements based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 includes fair value measurements based on unobservable inputs. The classification of fair value measurements is subjective and generally accepted accounting principles requires the Partnership to disclose more detailed information regarding those fair value measurements classified within the lower levels of the hierarchy. The Partnership believes that the carrying amount of its financial instruments approximates their fair value due to the short-term maturity of these instruments. At September 30, 2013, the Partnership believes that the carrying amount of assets and liabilities reported on the balance sheet that require such disclosure approximated their fair value. See Note 2 regarding fair value determinations for the assets and liabilities of Bethel Towers. |
Note_5_Contingencies
Note 5 - Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
Note 5 - Contingencies | ' |
Note 5 - Contingencies | |
The General Partner is involved in various lawsuits arising from transactions in the ordinary course of business. In the opinion of management and the General Partner, the claims will not result in any material liability to the Partnership. |
Note_6_Subsequent_Event
Note 6 - Subsequent Event | 9 Months Ended |
Sep. 30, 2013 | |
Notes | ' |
Note 6 - Subsequent Event | ' |
Note 6 - Subsequent Event | |
The Partnership’s management evaluated subsequent events through the time this Quarterly Report on Form 10-Q was filed. |
Note_1_Organization_and_Summar1
Note 1 - Organization and Summary of Significant Accounting Policies: General (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
General | ' |
General | |
The information contained in the following notes to the unaudited consolidated financial statements is condensed from that which would appear in the annual audited consolidated financial statements; accordingly, the consolidated financial statements included herein should be reviewed in conjunction with the consolidated financial statements and related notes thereto contained in the annual report for the fiscal year ended December 31, 2012. Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end. The results of operations for the interim periods presented are not necessarily indicative of the results expected for the entire year. | |
In the opinion of the Partnership’s management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting primarily of normal recurring items) considered necessary for a fair presentation. The consolidated balance sheet at December 31, 2012 has been derived from the audited financial statements at that date but does not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. | |
The general partner has a one percent interest in profits and losses of the Partnership. The limited partners have the remaining 99 percent interest in proportion to their respective investments. The general partner is National Partnership Investments, LLC, a California limited liability company (“NAPICO” or the "General Partner"). The General Partner is a subsidiary of Bethesda Holdings II, LLC, a privately held real estate asset management company (“Bethesda”). | |
At September 30, 2013 and December 31, 2012, the Partnership had outstanding 16,221 and 16,251 local limited partnership interests, respectively. |
Note_1_Organization_and_Summar2
Note 1 - Organization and Summary of Significant Accounting Policies: Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying unaudited consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States. |
Note_1_Organization_and_Summar3
Note 1 - Organization and Summary of Significant Accounting Policies: Principles of Consolidation (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Principles of Consolidation | ' |
Principles of Consolidation | |
As a result of the assignment of the local operating general partner interest in Bethel Towers Limited Dividend Housing Association (“Bethel Towers”) to the Partnership on December 10, 2012 (as discussed in Note 2), the Partnership began consolidating the assets, liabilities, and operations of Bethel Towers as of December 10, 2012. The consolidated financial statements of the Partnership include its 99.99% general and limited partner interests in Bethel Towers. All significant inter-partnership balances have been eliminated. The apartment property owned by Bethel Towers is located in Detroit, Michigan. |
Note_1_Organization_and_Summar4
Note 1 - Organization and Summary of Significant Accounting Policies: Method of Accounting For Investment in Local Partnerships (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Method of Accounting For Investment in Local Partnerships | ' |
Method of Accounting for Investments in Local Partnerships | |
With the exception of Bethel Towers, the investments in local partnerships (the “Local Partnerships”) are accounted for on the equity method. |
Note_1_Organization_and_Summar5
Note 1 - Organization and Summary of Significant Accounting Policies: Net Loss Per Limited Partnership Interest (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Net Loss Per Limited Partnership Interest | ' |
Net Income (Loss) Per Local Limited Partnership Interest | |
Net income (loss) per local limited partnership interest was computed by dividing the limited partners’ share of net income (loss) by the number of local limited partnership interests outstanding at the beginning of the year. The number of local limited partnership interests used was 16,251 for the three and nine months ended September 30, 2013, respectively and 16,268 for the three and nine months ended September 30, 2012, respectively. |
Note_1_Organization_and_Summar6
Note 1 - Organization and Summary of Significant Accounting Policies: Variable Interest Entities (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Policies | ' |
Variable Interest Entities | ' |
Variable Interest Entities | |
The Partnership consolidates any variable interest entities in which the Partnership holds a variable interest and is the primary beneficiary. Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group the holders of the equity investment at risk lack (i) the ability to make decisions about an entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The primary beneficiary of a VIE is generally the entity that has (a) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (b) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. | |
In determining whether it is the primary beneficiary of a VIE, the Partnership considers qualitative and quantitative factors, including, but not limited to: which activities most significantly impact the VIE’s economic performance and which party controls such activities; the amount and characteristics of the Partnership’s investment; the obligation or likelihood for the Partnership or other investors to provide financial support; and the similarity with and significance to the business activities of the Partnership and the other investors. Significant judgments related to these determinations include estimates about the current and future fair values and performance of real estate held by these VIEs and general market conditions. | |
On December 10, 2012, the Partnership became the operating general partner of Bethel Towers, as a result of the assignment of the local operating general partner interest in Bethel Towers to the Partnership. Therefore, effective December 10, 2012, the Partnership began consolidating this Local Partnership and it is no longer considered a VIE (see Note 2). | |
At September 30, 2013 and December 31, 2012, the Partnership held variable interests in zero and four VIEs, respectively, for which the Partnership was not the primary beneficiary. The Partnership has concluded, based on its qualitative consideration of the partnership agreement, the partnership structure and the role of the general partner in each of the Local Partnerships, that the general partner of each of the Local Partnerships is the primary beneficiary of the respective Local Partnership. In making this determination, the Partnership considered the following factors: | |
· the general partners conduct and manage the business of the Local Partnerships; | |
· the general partners have the responsibility for and sole discretion over selecting a property management agent for the Local Partnerships’ underlying real estate properties; | |
· the general partners are responsible for approving operating and capital budgets for the properties owned by the Local Partnerships; | |
· the general partners are obligated to fund any recourse obligations of the Local Partnerships; | |
· the general partners are authorized to borrow funds on behalf of the Local Partnerships; and | |
· the Partnership, as a limited partner in each of the Local Partnerships, does not have the ability to direct or otherwise significantly influence the activities of the Local Partnerships that most significantly impact such entities’ economic performance. |
Note_1_Organization_and_Summar7
Note 1 - Organization and Summary of Significant Accounting Policies: General (Details) | Sep. 30, 2013 | Dec. 31, 2012 |
Details | ' | ' |
Outstanding Limited Partnership Interests | 16,221 | 16,251 |
Note_1_Organization_and_Summar8
Note 1 - Organization and Summary of Significant Accounting Policies: Net Loss Per Limited Partnership Interest (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2013 | Sep. 30, 2013 | |
Details | ' | ' |
Number of limited partnership interests | 16,251 | 16,268 |