Cover
Cover | 9 Months Ended |
Sep. 30, 2021shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Sep. 30, 2021 |
Document Fiscal Period Focus | Q3 |
Document Fiscal Year Focus | 2021 |
Current Fiscal Year End Date | --12-31 |
Entity File Number | 0-17686 |
Entity Registrant Name | DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP |
Entity Central Index Key | 0000825788 |
Entity Tax Identification Number | 39-1606834 |
Entity Incorporation, State or Country Code | WI |
Entity Address, Address Line One | 1900 W 75th Street |
Entity Address, Address Line Two | Suite 100 |
Entity Address, City or Town | Prairie Village |
Entity Address, State or Province | KS |
Entity Address, Postal Zip Code | 66208 |
City Area Code | (816) |
Local Phone Number | 421-7444 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 0 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
INVESTMENT PROPERTIES: (Note 3) | ||
Land | $ 2,527,947 | $ 2,794,122 |
Buildings | 3,649,837 | 4,017,412 |
Accumulated depreciation | (3,646,204) | (3,985,582) |
Net investment properties | 2,531,580 | 2,825,952 |
OTHER ASSETS: | ||
Cash | 234,208 | 72,244 |
Investments held in Indemnification Trust (Note 7) | 480,024 | 479,805 |
Security deposits escrow | 64,417 | 64,393 |
Rents and other receivables | 131,840 | 665,415 |
Deferred tenant award proceeds escrow | 18,290 | |
Prepaid insurance | 507 | 5,068 |
Deferred closing costs | 36,064 | |
Properties held for sale | 266,175 | |
Deferred charges, net | 356,451 | 171,213 |
Total other assets | 1,569,686 | 1,476,428 |
Total assets | 4,101,266 | 4,302,380 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 98,531 | 16,047 |
Due to General Partner (Note 5) | 1,151 | 718 |
Deferred rent | 100,005 | 18,289 |
Security deposits | 64,340 | 64,340 |
Total current liabilities | 264,027 | 99,394 |
CONTINGENCIES AND COMMITMENTS (Notes 6 and 7) | ||
General Partner - | ||
Cumulative net income (retained earnings) | 390,419 | 384,051 |
Cumulative cash distributions | (161,491) | (158,944) |
Total general partners’ capital | 228,928 | 225,107 |
Limited Partners (46,280.3 interests outstanding at September 30, 2021 and December 31, 2020) | ||
Capital contributions | 46,280,300 | 46,280,300 |
Offering costs | (6,921,832) | (6,921,832) |
Cumulative net income (retained earnings) | 45,017,340 | 44,386,908 |
Cumulative cash distributions | (79,927,268) | (78,927,268) |
Total limited partners’ capital | 4,448,540 | 4,818,108 |
Former General Partner - | ||
Cumulative net income (retained earnings) | 707,513 | 707,513 |
Cumulative cash distributions | (1,547,742) | (1,547,742) |
Total former general partners’ capital | (840,229) | (840,229) |
Total partners’ capital | 3,837,239 | 4,202,986 |
Total liabilities and partners’ capital | $ 4,101,266 | $ 4,302,380 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - shares | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Statement of Financial Position [Abstract] | |||
Limited partners, interests outstanding | 46,280.3 | 46,280.3 | 46,280.3 |
Condensed Statements of Income
Condensed Statements of Income (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
OPERATING REVENUES: | ||||
Rental income (Note 3) | $ 415,633 | $ 511,603 | $ 1,122,570 | $ 1,113,879 |
TOTAL OPERATING REVENUES | 415,633 | 511,603 | 1,122,570 | 1,113,879 |
EXPENSES: | ||||
Partnership management fees (Note 5) | 68,079 | 72,075 | 206,901 | 215,371 |
Insurance | 1,520 | 1,495 | 4,561 | 4,441 |
General and administrative | 12,353 | 16,899 | 54,897 | 64,375 |
Advisory Board fees and expenses | 1,750 | 1,750 | 5,250 | 5,250 |
Professional services | 26,441 | 48,204 | 148,862 | 186,169 |
Depreciation | 5,449 | 15,795 | 28,198 | 76,360 |
Amortization | 12,465 | 6,899 | 37,395 | 20,697 |
TOTAL OPERATING EXPENSES | 128,057 | 163,117 | 486,064 | 572,663 |
OTHER INCOME | ||||
Other interest income | 239 | 52 | 294 | 4,093 |
TOTAL OTHER INCOME | 239 | 52 | 294 | 4,093 |
NET INCOME | 287,815 | 348,538 | 636,800 | 545,309 |
NET INCOME ALLOCATED- GENERAL PARTNER | 2,878 | 3,485 | 6,368 | 5,453 |
NET INCOME ALLOCATED- LIMITED PARTNERS | $ 284,937 | $ 345,053 | $ 630,432 | $ 539,856 |
Based on 46,280.3 interests outstanding: (Basic and diluted) | ||||
NET INCOME PER LIMITED PARTNERSHIP INTEREST | $ 6.16 | $ 7.46 | $ 13.62 | $ 11.66 |
Condensed Statements of Incom_2
Condensed Statements of Income (Unaudited) (Parenthetical) - shares | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Income Statement [Abstract] | |||
Limited partners capital account, interests outstanding | 46,280.3 | 46,280.3 | 46,280.3 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income from continuing operations | $ 636,800 | $ 545,309 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 65,593 | 97,056 |
Changes in operating assets and liabilities | ||
Decrease in rents and other receivables | 532,604 | 169,847 |
Increase in long-term rent receivable | 971 | (21,448) |
Decrease in security deposit escrow | (24) | 5,092 |
Increase in deferred closing costs | (36,064) | |
Decrease in deferred rent award escrow | (52) | |
Decrease in prepaid insurance | 4,561 | 4,484 |
Decrease in accounts payable and accrued expenses | 82,484 | (1,073) |
Increase in unearned rental income | 100,005 | 5,000 |
Payment of leasing commission | (222,633) | |
Security deposit refund | (5,000) | |
Increase in due to General Partner | 433 | 49 |
Net cash from operating activities | 1,164,730 | 799,264 |
CASH FLOWS USED IN INVESTING ACTIVITIES: | ||
Interest applied to Indemnification Trust account | (219) | (3,862) |
Net cash used in investing activities | (219) | (3,862) |
CASH FLOWS USED IN FINANCING ACTIVITIES: | ||
Cash distributions to Limited Partners | (1,000,000) | (700,000) |
Cash distributions to General Partner | (2,547) | (2,181) |
Net cash used in financing activities | (1,002,547) | (702,181) |
NET INCREASE (DECREASE) IN CASH | 161,964 | 93,221 |
CASH AT BEGINNING OF PERIOD | 72,244 | 39,221 |
CASH AT END OF PERIOD | $ 234,208 | $ 132,442 |
Condensed Statements of Partner
Condensed Statements of Partner's Capital (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
BEGINNING BALANCE | $ 3,750,574 | $ 3,735,256 | $ 4,202,986 | $ 3,877,164 | $ 3,652,254 | $ 4,281,180 | $ 4,202,986 | $ 4,281,180 |
Net Income | 287,815 | 216,183 | 132,802 | 348,538 | 225,697 | (28,926) | 636,800 | 545,309 |
Cash Distributions | (201,151) | (200,865) | (600,531) | (101,394) | (787) | (600,000) | ||
ENDING BALANCE | 3,837,239 | 3,750,574 | 3,735,256 | 4,124,308 | 3,877,164 | 3,652,254 | 3,837,239 | 4,124,308 |
General Partner [Member] | ||||||||
BEGINNING BALANCE | 227,201 | 225,904 | 225,107 | 221,940 | 220,470 | 220,759 | 225,107 | 220,759 |
Net Income | 2,878 | 2,162 | 1,328 | 3,485 | 2,257 | (289) | ||
Cash Distributions | (1,151) | (865) | (531) | (1,394) | (787) | |||
ENDING BALANCE | 228,928 | 227,201 | 225,904 | 224,031 | 221,940 | 220,470 | 228,928 | 224,031 |
Limited Partner [Member] | ||||||||
BEGINNING BALANCE | 3,523,373 | 3,509,352 | 3,977,878 | 3,655,224 | 3,431,784 | 4,060,421 | 3,977,878 | 4,060,421 |
Net Income | 284,937 | 214,021 | 131,474 | 345,053 | 223,440 | (28,637) | ||
Cash Distributions | (200,000) | (200,000) | (600,000) | (100,000) | (600,000) | |||
ENDING BALANCE | 3,608,310 | 3,523,373 | 3,509,352 | 3,900,277 | 3,655,224 | 3,431,784 | 3,608,310 | 3,900,277 |
Cumulative Net Income [Member] | General Partner [Member] | ||||||||
BEGINNING BALANCE | 387,541 | 385,379 | 384,051 | 378,772 | 376,515 | 376,804 | 384,051 | 376,804 |
Net Income | 2,878 | 2,162 | 1,328 | 3,485 | 2,257 | (289) | ||
Cash Distributions | ||||||||
ENDING BALANCE | 390,419 | 387,541 | 385,379 | 382,257 | 378,772 | 376,515 | 390,419 | 382,257 |
Cumulative Net Income [Member] | Limited Partner [Member] | ||||||||
BEGINNING BALANCE | 44,732,402 | 44,518,381 | 44,386,908 | 43,864,253 | 43,640,813 | 43,669,450 | 44,386,908 | 43,669,450 |
Net Income | 284,937 | 214,021 | 131,474 | 345,053 | 223,440 | (28,637) | ||
Cash Distributions | ||||||||
ENDING BALANCE | 45,017,340 | 44,732,402 | 44,518,381 | 44,209,306 | 43,864,253 | 43,640,813 | 45,017,340 | 44,209,306 |
Cumulative Cash Distributions [Member] | General Partner [Member] | ||||||||
BEGINNING BALANCE | (160,340) | (159,475) | (158,944) | (156,832) | (156,045) | (156,045) | (158,944) | (156,045) |
Net Income | ||||||||
Cash Distributions | (1,151) | (865) | (531) | (1,394) | (787) | |||
ENDING BALANCE | (161,491) | (160,340) | (159,475) | (158,226) | (156,832) | (156,045) | (161,491) | (158,226) |
Cumulative Cash Distributions [Member] | Limited Partner [Member] | ||||||||
BEGINNING BALANCE | (79,727,268) | (79,527,268) | (78,927,268) | (78,727,268) | (78,727,268) | (78,127,268) | (78,927,268) | (78,127,268) |
Net Income | ||||||||
Cash Distributions | (200,000) | (200,000) | (600,000) | (100,000) | (600,000) | |||
ENDING BALANCE | (79,927,268) | (79,727,268) | (79,527,268) | (78,827,268) | (78,727,268) | (78,727,268) | (79,927,268) | (78,827,268) |
Capital Contributions Net of Offering Costs [Member] | Limited Partner [Member] | ||||||||
BEGINNING BALANCE | 39,358,468 | 39,358,468 | 39,358,468 | 39,358,468 | 39,358,468 | 39,358,468 | 39,358,468 | 39,358,468 |
Net Income | ||||||||
Cash Distributions | ||||||||
ENDING BALANCE | 39,358,468 | 39,358,468 | 39,358,468 | 39,358,468 | 39,358,468 | 39,358,468 | 39,358,468 | 39,358,468 |
Reallocation [Member] | Limited Partner [Member] | ||||||||
BEGINNING BALANCE | (840,229) | (840,229) | (840,229) | (840,229) | (840,229) | (840,229) | (840,229) | (840,229) |
Net Income | ||||||||
Cash Distributions | ||||||||
ENDING BALANCE | $ (840,229) | $ (840,229) | $ (840,229) | $ (840,229) | $ (840,229) | $ (840,229) | $ (840,229) | $ (840,229) |
Condensed Statements of Partn_2
Condensed Statements of Partner's Capital (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | ||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Mar. 31, 2020 | |
Equity [Abstract] | |||||
Cash distributions per limited partnership interest | $ 4.32 | $ 4.32 | $ 12.96 | $ 2.16 | $ 12.96 |
ORGANIZATION
ORGANIZATION | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | 1. ORGANIZATION DiVall Insured Income Properties 2 LP (the “Partnership”) was formed on November 20, 1987, pursuant to the Uniform Limited Partnership Act of the State of Wisconsin. The initial capital, contributed during 1987, consisted of $ 300 200 100 46,280.3 39,358,468 The Partnership is currently engaged in the business of owning and operating its investment portfolio of commercial real estate properties (each a “Property”, and collectively, the “Properties”). The Properties are leased on a triple net basis primarily to, and operated by, franchisors or franchisees of national, regional, and local retail chains under primarily long-term leases. The lessees are operators of fast food, family style, and casual/theme restaurants. As of September 30, 2021, the Partnership owned 10 three The Limited Partnership Agreement, as amended from time to time (collectively, the “Partnership Agreement”), stipulates that the Partnership is scheduled to be dissolved on November 30, 2023, or earlier upon the prior occurrence of any of the following events: (a) the disposition of all its Properties; (b) the written determination by the General Partner, that the Partnership’s assets may constitute “plan assets” for purposes of ERISA; (c) the agreement of limited partners owning a majority of the outstanding limited partner interests to dissolve the Partnership; or (d) the dissolution, bankruptcy, death, withdrawal, or incapacity of the last remaining General Partner, unless an additional General Partner is elected by a majority of the limited partners. During the second and third quarters of the nine odd numbered years from 2001 through 2017, consent solicitations were circulated to the Partnership’s limited partners which, if approved by the limited partners, would have authorized the General Partner to initiate the potential sale of all of the Properties and the dissolution of the Partnership (each a “Consent”). Limited partners owning a majority of the outstanding limited partnership interests did not vote in favor of any of the Consents. Therefore, the Partnership continues to operate as a going concern. During the 2020 consent solicitation process, the Limited Partners approved two separate amendments to the Partnership Agreement. The amendments served to: (i) extend the term of the Partnership by three (3) years to November 30, 2023, and (ii) permit the General Partner to effect distributions at times that it deems appropriate, but no less often than semi-annually. |
RECENTLY ISSUED ACCOUNTING PRIN
RECENTLY ISSUED ACCOUNTING PRINCIPLES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
RECENTLY ISSUED ACCOUNTING PRINCIPLES | 2. RECENTLY ISSUED ACCOUNTING PRINCIPLES In April 2020, the Financial Accounting Standards Board (FASB) issued a question-and-answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of a novel strain of coronavirus (“COVID-19”). Under existing lease guidance, an entity would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant or if a lease concession was under the enforceable rights and obligations within the existing lease agreement. The Lease Modification Q&A clarifies that entities may elect to not evaluate whether lease-related relief that lessors provide to mitigate the economic effects of COVID-19 on lessees is a lease modification under current lease guidance. Instead, an entity that elects not to evaluate whether a concession directly related to COVID-19 is a modification can then elect whether to apply the modification guidance. During the year ended December 31, 2020, the Partnership provided a lease concession to one tenant in response to the impact of COVID-19, in the form of a short term rent reduction. The Partnership has made an election to account for such lease concession consistent with how this concession would be accounted for under lease guidance if enforceable rights and obligations for this concession had already existed in the lease. This election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in the rights as lessor, including concessions that result in the total payments required by the modified lease being substantially the same as or less than total payments required by the original lease. The Partnership’s concession provided for a reduction of payments with no substantive changes to the consideration in the original lease. The reduction affected the amount of the lease payments during the months of April, May and June of 2020. The Partnership is accounting for this reduction as if no changes to the lease were made. During the year ended December 31, 2020, the Partnership entered into one lease modification that eliminated an amount that was immaterial to the Partnership. DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS |
INVESTMENT PROPERTIES AND PROPE
INVESTMENT PROPERTIES AND PROPERTIES HELD FOR SALE | 9 Months Ended |
Sep. 30, 2021 | |
Real Estate [Abstract] | |
INVESTMENT PROPERTIES AND PROPERTIES HELD FOR SALE | 3. INVESTMENT PROPERTIES AND PROPERTIES HELD FOR SALE The total cost of the Properties includes the original purchase price plus acquisition fees and other capitalized costs paid to an affiliate of the former general partners of the Partnership. As of September 30, 2021, the Partnership owned 10 The following are operated by tenants at the aforementioned Properties: eight separate Wendy’s restaurants, an Applebee’s restaurant and a Brakes 4 Less store. The 10 three On April 23, 2020, the Partnership executed three Amended and Restated Restaurant Absolutely Net Leases to the Original Leases dated January 30, 1989, by and between the Partnership and Wendgusta LLC (“Tenant”, as successor in interest to Wensouth Corporation) with the intent that these Leases will amend, restate and replace the Original Leases. Effective January 1, 2021, for the restaurant property located at 1901 Whiskey Road, Aiken, South Carolina, per the terms of the Amendment, the Tenant will pay $ 210,632 7% 2,632,900 (January 1, 2021 to December 31, 2040) Effective January 1, 2021, for the restaurant property located at 1004 Richland Ave, Aiken, South Carolina, per the terms of the Amendment, the Tenant will pay $ 167,500 7% 2,093,750 (January 1, 2021 to December 31, 2040) 188,000 7% 2,350,000 (January 1, 2021 to December 31, 2040) On April 28, 2020, the Partnership executed a Third Amendment to Lease with RMH Franchise Corporation in response to changed circumstances arising from the COVID-19 pandemic. The term of the amendment was April 1, 2020 through June 30, 2020 and during that time suspended the amount and timing of the payment of the monthly base rent, as defined in the Lease. The revised monthly base rent for the months of April and May 2020 was equal to six percent 5,750 On July 21, 2020, the Partnership executed two Amended and Restated Restaurant Absolutely Net Leases to the Original Leases dated January 30, 1989, by and between the Partnership and WendCharles I, LLC (“Tenant”, as successor in interest to Wensouth Corporation) with the intent that these Leases will amend, restate and replace the Original Leases. Effective January 1, 2021, for the restaurant property located at 361 Highway 17 Bypass, Mt. Pleasant, South Carolina, per the terms of the Amendment, the Tenant will pay $ 146,520 7% 1,831,500 136,000 7% 1,700,000 (January 1, 2021 to December 31, 2040) Property Held for Sale The Brakes 4 Less property in Martinez, GA, was listed for sale on July 5, 2021. A signed offer of $ 890,000 478,098 The components of property held for sale in the balance sheets as of September 30, 2021 and December 31, 2020 are outlined below: SCHEDULE OF PROPERTY HELD FOR SALE September 30, 2021 December 31, Balance Sheet: Land $ 266,175 $ - Building 367,575 - Accumulated Depreciation (367,575 ) - Properties held for sale $ 266,175 $ - DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS |
PARTNERSHIP AGREEMENT
PARTNERSHIP AGREEMENT | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
PARTNERSHIP AGREEMENT | 4. PARTNERSHIP AGREEMENT The Partnership Agreement was amended, effective as of October 20, 2020, to extend the term of the Partnership to November 30, 2023 Under the terms of the Partnership Agreement, as amended, net profits or losses from operations are allocated 99% 1% 99% 1% The provisions regarding distribution of Net Proceeds, as defined, provide that Net Proceeds are to be distributed as follows: (a) to the limited partners, an amount equal to 100% 13.5 99% 1% DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS |
TRANSACTIONS WITH GENERAL PARTN
TRANSACTIONS WITH GENERAL PARTNER AND ITS AFFILIATES | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH GENERAL PARTNER AND ITS AFFILIATES | 5. TRANSACTIONS WITH GENERAL PARTNER AND ITS AFFILIATES Pursuant to the terms of the Permanent Manager Agreement (“PMA”) executed in 1993 and renewed for an additional two-year term as of January 1, 2021, the General Partner receives a base fee (the “Base Fee”) for managing the Partnership equal to four 13,250 5.54% 272,316 23,256 For purposes of computing the four percent overall fee paid to the General Partner, gross receipts include amounts recovered in connection with the misappropriation of assets by the former general partners and their affiliates. The fee received by the General Partner from the Partnership on any amounts recovered reduce the four percent minimum fee by that same amount. Amounts paid and/or accrued to the General Partner and its affiliates for the three and six month periods ended September 30, 2021 and 2020 are as follows: SCHEDULE OF AMOUNTS PAID AND/OR ACCRUED TO GENERAL PARTNER AND ITS AFFILIATES Incurred for the Incurred for the Incurred for the Incurred for the Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 (unaudited) (unaudited) (unaudited) (unaudited) General Partner Management fees $ 68,079 $ 72,075 $ 206,901 $ 215,371 Overhead allowance 5,814 5,814 17,442 17,374 Leasing commissions - - 222,633 - Reimbursement for out-of-pocket expenses - - 2,500 2,500 Cash distribution 1,151 1,394 2,547 2,181 Amounts paid and/or accrued to the General Partner $ 75,044 $ 79,283 $ 452,023 $ 237,426 At September 30, 2021 and December 31, 2020, $ 73,784 and $ 718 , respectively, was payable to the General Partner. Effective with the six Wendy’s lease amendments on January 1, 2021, the General Partner earned a leasing commission of $ 222,633 81,935 The commission was included in accounts payable and accrued expenses as of the end of the first quarter. One $ 75,000 installment payment was made during each of the second and third quarters. The General Partner will determine the available cash flow throughout 2021 to satisfy the obligation, which will entail installment payments. In no event will the sales commissions earned on liquidation of these six Wendy’s and the unamortized portion of the above noted commissions, at the sale date, exceed an aggregate commission of 3% to the General Partner. DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS As of September 30, 2021, Jesse Small, an Advisory Board Member, beneficially owned greater than ten percent of the Partnership’s outstanding limited partnership interests. Amounts paid to Mr. Small for his services as a member of the Advisory Board for the three- and nine-month periods ended September 30, 2021 and 2020 are as follows: SCHEDULE OF ADVISORY BOARD FEES PAID TO JESSE SMALL Three Month Three Month Nine Month Nine Month (Unaudited) (Unaudited) (Unaudited) (Unaudited) Advisory Board Fees paid $ 875 $ 875 $ 2,625 $ 2,625 At September 30, 2021 and December 31, 2020 there were no |
CONTINGENT LIABILITIES
CONTINGENT LIABILITIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENT LIABILITIES | 6. CONTINGENT LIABILITIES According to the Partnership Agreement, TPG, as General Partner may receive a disposition fee not to exceed three In addition, fifty percent of all such disposition fees earned by TPG were to be escrowed until the aggregate amount of recovery of the funds misappropriated from the three original partnerships by the former general partners was greater than $4,500,000. Upon reaching such recovery level, full disposition fees would thereafter be payable, and fifty 4,500,000 6,000,000 16,296 6,000,000 6,000,000 |
PMA INDEMNIFICATION TRUST
PMA INDEMNIFICATION TRUST | 9 Months Ended |
Sep. 30, 2021 | |
PMA INDEMNIFICATION TRUST | 7. PMA INDEMNIFICATION TRUST The PMA provides that TPG will be indemnified from any claims or expenses arising out of, or relating to, TPG serving in the capacity of General Partner or as substitute general partner, so long as such claims do not arise from fraudulent or criminal misconduct by TPG. The PMA provides that the Partnership will fund this indemnification obligation by establishing a reserve of up to $ 250,000 230,024 DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | 8. FAIR VALUE DISCLOSURES The Partnership has determined the fair value based on hierarchy that gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. The three levels of the fair value hierarchy under the accounting principle are described below: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Quoted prices for similar investments in active markets, quoted prices for identical or similar investments in markets that are not active, and inputs other than quoted prices that are observable for the investment. Level 3 Unobservable inputs for which there is little, if any, market activity for the investment. The inputs into the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation and the use of discounted cash flow models to value the investment. The fair value hierarchy is based on the lowest level of input that is significant to the fair value measurements. The Partnership’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. The assets held in indemnification trust account are invested in one year treasury bills which are measured using level 1 fair value inputs. The Partnership assesses the levels of the investments at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfer in accordance with the Partnership’s accounting policy regarding the recognition of transfers between levels of the fair value hierarchy. For the nine-month period ended September 30, 2021 and for the year ended December 31, 2020, there were no |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 9. SUBSEQUENT EVENTS We have reviewed all material events through the issuance of this report in accordance with ASC 855-10. |
INVESTMENT PROPERTIES AND PRO_2
INVESTMENT PROPERTIES AND PROPERTIES HELD FOR SALE (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Real Estate [Abstract] | |
SCHEDULE OF PROPERTY HELD FOR SALE | The components of property held for sale in the balance sheets as of September 30, 2021 and December 31, 2020 are outlined below: SCHEDULE OF PROPERTY HELD FOR SALE September 30, 2021 December 31, Balance Sheet: Land $ 266,175 $ - Building 367,575 - Accumulated Depreciation (367,575 ) - Properties held for sale $ 266,175 $ - DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS |
TRANSACTIONS WITH GENERAL PAR_2
TRANSACTIONS WITH GENERAL PARTNER AND ITS AFFILIATES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
SCHEDULE OF AMOUNTS PAID AND/OR ACCRUED TO GENERAL PARTNER AND ITS AFFILIATES | Amounts paid and/or accrued to the General Partner and its affiliates for the three and six month periods ended September 30, 2021 and 2020 are as follows: SCHEDULE OF AMOUNTS PAID AND/OR ACCRUED TO GENERAL PARTNER AND ITS AFFILIATES Incurred for the Incurred for the Incurred for the Incurred for the Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 (unaudited) (unaudited) (unaudited) (unaudited) General Partner Management fees $ 68,079 $ 72,075 $ 206,901 $ 215,371 Overhead allowance 5,814 5,814 17,442 17,374 Leasing commissions - - 222,633 - Reimbursement for out-of-pocket expenses - - 2,500 2,500 Cash distribution 1,151 1,394 2,547 2,181 Amounts paid and/or accrued to the General Partner $ 75,044 $ 79,283 $ 452,023 $ 237,426 |
SCHEDULE OF ADVISORY BOARD FEES PAID TO JESSE SMALL | SCHEDULE OF ADVISORY BOARD FEES PAID TO JESSE SMALL Three Month Three Month Nine Month Nine Month (Unaudited) (Unaudited) (Unaudited) (Unaudited) Advisory Board Fees paid $ 875 $ 875 $ 2,625 $ 2,625 |
ORGANIZATION (Details Narrative
ORGANIZATION (Details Narrative) | Feb. 22, 1990USD ($)shares | Nov. 20, 1987USD ($) | Sep. 30, 2021RestaurantNumber |
Partners' capital account, contributions | $ 300 | ||
Partners' capital account, units, sale of units | shares | 46,280.3 | ||
Partners' capital account, public sale of units net of offering costs | $ 39,358,468 | ||
Concentration risk, benchmark description | As of September 30, 2021, the Partnership owned 10 Properties, which are located in a total of three states. | ||
Number of real estate properties | Restaurant | 10 | ||
Number of states in which entity operates | Number | 3 | ||
General Partner [Member] | |||
Partners' capital account, contributions | 200 | ||
Limited Partner [Member] | |||
Partners' capital account, contributions | $ 100 |
SCHEDULE OF PROPERTY HELD FOR S
SCHEDULE OF PROPERTY HELD FOR SALE (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Real Estate [Abstract] | ||
Land | $ 266,175 | |
Building | 367,575 | |
Accumulated Depreciation | (367,575) | |
Properties held for sale | $ 266,175 |
INVESTMENT PROPERTIES AND PRO_3
INVESTMENT PROPERTIES AND PROPERTIES HELD FOR SALE (Details Narrative) | Sep. 27, 2021USD ($) | Jul. 21, 2020USD ($) | Apr. 23, 2020USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2021USD ($)RestaurantNumber |
Property leased to fully constructed fast-food restaurants | Restaurant | 10 | ||||
Location of properties | Number | 3 | ||||
Property held for sale | $ 890,000 | ||||
Brakes Four Less Property [Member] | |||||
Gain on property held for sale | $ 478,098 | ||||
Wensouth Corporation [Member] | 361 Highway 17 Bypass Mt Pleasant South Carolina [Member] | |||||
Lease extension description | The following are operated by tenants at the aforementioned Properties: eight separate Wendy’s restaurants, an Applebee’s restaurant and a Brakes 4 Less store. The 10 Properties are located in a total of three states. | ||||
Rent payments | $ 146,520 | ||||
Annual sale over percentage | 7.00% | ||||
Annual breakpoint lease amount | $ 1,831,500 | ||||
Wensouth Corporation [Member] | 1901 Whiskey Road Aiken South Carolina [Member] | |||||
Rent payments | $ 210,632 | ||||
Annual sale over percentage | 7.00% | ||||
Annual breakpoint lease amount | $ 2,632,900 | ||||
Lease extension description | (January 1, 2021 to December 31, 2040) | ||||
Wensouth Corporation [Member] | 1004 Richland Ave Aiken South Carolina [Member] | |||||
Rent payments | $ 167,500 | ||||
Annual sale over percentage | 7.00% | ||||
Annual breakpoint lease amount | $ 2,093,750 | ||||
Lease extension description | (January 1, 2021 to December 31, 2040) | ||||
Wensouth Corporation [Member] | 3013 Peach Orchard Road Augusta Georgia [Member] | |||||
Rent payments | $ 188,000 | ||||
Annual sale over percentage | 7.00% | ||||
Annual breakpoint lease amount | $ 2,350,000 | ||||
Lease extension description | (January 1, 2021 to December 31, 2040) | ||||
Wensouth Corporation [Member] | 343 Folly Road Charleston South Carolina [Member] | |||||
Rent payments | $ 136,000 | ||||
Annual sale over percentage | 7.00% | ||||
Annual breakpoint lease amount | $ 1,700,000 | ||||
Lease extension description | (January 1, 2021 to December 31, 2040) | ||||
RMH Franchise Corporation [Member] | |||||
Rent payments | $ 5,750 | ||||
Lease gross sale, percentage. | six percent |
PARTNERSHIP AGREEMENT (Details
PARTNERSHIP AGREEMENT (Details Narrative) | 1 Months Ended | |
Sep. 11, 2009 | Sep. 30, 2021 | |
Partnership agreement extended date | Nov. 30, 2023 | |
Limited Partner [Member] | ||
Net profits or losses from operations amended | 99.00% | |
Cumulative simple return on adjusted original capital | 100.00% | |
Liquidation preference of limited partners amended | 13.50% | |
General Partner [Member] | ||
Net profits or losses from operations amended | 1.00% |
SCHEDULE OF AMOUNTS PAID AND_OR
SCHEDULE OF AMOUNTS PAID AND/OR ACCRUED TO GENERAL PARTNER AND ITS AFFILIATES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Related Party Transactions [Abstract] | ||||
Management fees | $ 68,079 | $ 72,075 | $ 206,901 | $ 215,371 |
Overhead allowance | 5,814 | 5,814 | 17,442 | 17,374 |
Leasing commissions | 222,633 | |||
Reimbursement for out-of-pocket expenses | 2,500 | 2,500 | ||
Cash distribution | 1,151 | 1,394 | 2,547 | 2,181 |
Amounts paid and/or accrued to the General Partner | $ 75,044 | $ 79,283 | $ 452,023 | $ 237,426 |
SCHEDULE OF ADVISORY BOARD FEES
SCHEDULE OF ADVISORY BOARD FEES PAID TO JESSE SMALL (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Related Party Transactions [Abstract] | ||||
Advisory Board Fees paid | $ 875 | $ 875 | $ 2,625 | $ 2,625 |
TRANSACTIONS WITH GENERAL PAR_3
TRANSACTIONS WITH GENERAL PARTNER AND ITS AFFILIATES (Details Narrative) - USD ($) | Mar. 02, 2021 | Jan. 02, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Due to Affiliate | $ 73,784 | $ 73,784 | $ 718 | ||
Leasing commision description | the General Partner earned a leasing commission of $222,633 representing 3% of only the first 10 years of a 20 year term and reduced by the unamortized portion of previously earned commissions on the six Wendy’s in the amount of $81,935. | ||||
Outstanding advisory board fees | 0 | $ 0 | $ 0 | ||
Lease Commission [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Debt Instrument, Periodic Payment | $ 75,000 | ||||
[custom:AggregateCommissionPercentage-0] | 3.00% | 3.00% | |||
Permanent Manager Agreement [Member] | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Percentage of base fee on gross receipts | 400.00% | ||||
Maximum reimbursement on office rent and related expenses | $ 272,316 | $ 13,250 | |||
Percentage of increase in base fee and expenses reimbursement | 5.54% | ||||
Fees received from partnership, by general partner | $ 23,256 | ||||
Leasing commission | 222,633 | ||||
Previously earned leasing commissions | $ 81,935 |
CONTINGENT LIABILITIES (Details
CONTINGENT LIABILITIES (Details Narrative) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Maximum percentage of disposition fees on sale of partnership properties | 300.00% |
Recovery level description | In addition, fifty percent of all such disposition fees earned by TPG were to be escrowed until the aggregate amount of recovery of the funds misappropriated from the three original partnerships by the former general partners was greater than $4,500,000. Upon reaching such recovery level, full disposition fees would thereafter be payable, and fifty percent of the previously escrowed amounts would be paid to TPG. At such time as the recovery exceeded $6,000,000 in the aggregate, the remaining escrowed disposition fees were to be paid to TPG. If such levels of recovery were not achieved, TPG would contribute the amounts escrowed toward the recovery until the three original partnerships were made whole. In lieu of a disposition fee escrow, fifty percent of all such disposition fees previously discussed were paid directly to a restoration account and then distributed among the three original partnerships; whereby the three original partnerships recorded the recoveries as income. After the recovery level of $4,500,000 was exceeded, fifty percent of the total disposition fee amount paid to the three original partnerships recovery through the restoration account (in lieu of the disposition fee escrow) was refunded to TPG during March 1996. The remaining fifty percent amount allocated to the Partnership through the restoration account, and which was previously reflected as Partnership recovery income, may be owed to TPG if the $6,000,000 recovery level is met. As of September 30, 2021, the Partnership may owe TPG $16,296 if the $6,000,000 recovery level is achieved. TPG does not expect any future refund, as it is uncertain that such a $6,000,000 recovery level will be achieved. |
Percentage of disposition fees to be escrowed | 5000.00% |
Amount of recovery of funds | $ 4,500,000 |
Aggregate recovery of funds value | 6,000,000 |
Payable fee on achieving recovery level | $ 16,296 |
PMA INDEMNIFICATION TRUST (Deta
PMA INDEMNIFICATION TRUST (Details Narrative) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Reserve related to partnership assets | $ 250,000 |
Earnings credited to the trust | $ 230,024 |
FAIR VALUE DISCLOSURES (Details
FAIR VALUE DISCLOSURES (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | ||
Recognition of transfers between levels of the fair value hierarchy | $ 0 | $ 0 |