SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/_x_/ Quarterly report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934.
For the quarterly period ended September 30, 2004
/___/ Transition report pursuant to Section 13 or 15(d) of the
Securities Act of 1934
for the transition period from ______________ to ________________.
Commission File Number 2-83291
DSI REALTY INCOME FUND VII, A California Limited Partnership
(Exact name of registrant as specified in its charter)
California_______________________________________95-3871044
(State or other jurisdiction of (I.R.S. Employer
incorporation) Identification No.)
6700 E. Pacific Coast Hwy, Long Beach, California 90803
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code-(562)493-8881
_________________________________________________________________
Former name, former address and former fiscal year, if changed
since last report.
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 for such shorter period 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__.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The information required by Rule 10-01 of Regulation S-X is
included in the Quarterly Report to the Limited Partners of Registrant for
the period ended September 30, 2004,which is attached hereto as Exhibit "20"
and incorporated herein by this reference.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Registrant incorporates by this reference its Quarterly Report to
Limited Partners for the period ended September 30, 2004.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8K.
(a) Attached hereto as Exhibit "20" is Registrant's Quarterly
Report to Limited Partners for the period ended September 30, 2004.
(b) Registrant did not file any reports on Form 8-K for the
period reported upon.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: October 29, 2004 DSI REALTY INCOME FUND VII
A California Limited Partnership
(Registrant)
By____\s\ Robert J. Conway_____
DSI Properties, Inc., as General
Partner by ROBERT J. CONWAY,
President and Chief Financial Officer
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: October 29, 2004 DSI REALTY INCOME FUND VII
A California Limited Partnership
(Registrant)
By__\s\ Robert J. Conway________
DSI Properties, Inc., as General
Partner by ROBERT J. CONWAY,
President and Chief Financial Officer
October 29, 2004
QUARTERLY REPORT TO THE LIMITED PARTNERS
OF DSI REALTY INCOME FUND VII
DEAR LIMITED PARTNERS:
We are pleased to enclose the Partnership's unaudited financial statements
for the period ended September 30, 2004. The following is Management's
discussion and analysis of the Partnership's financial condition and
results of its operations.
For the three-month periods ended September 30, 2004 and 2003, total revenues
decreased 2.6% from $652,525 to $635,270 and total expenses decreased 10.7%
from $361,792 to $323,105 and other income remained constant. As a result,
net income increased 7.4% from $290,895 for the three-month period ended
September 30, 2003, to $312,327 for the same period in 2004. Rental revenue
decreased as a result of lower occupancy rates partially offset by higher
unit rental rates. Occupancy levels for the Partnership's six mini-storage
facilities averaged 84.8% for the three-month period ended September 30, 2004
and 86.7% for the same period in 2003. The Partnership is continuing its
marketing efforts to attract and keep new tenants in its various mini-storage
facilities. Operating expenses increased approximately $20,700 (8.0%)
primarily as a result of increases in advertising, maintenance and repair and
office supplies expenses. General and administrative expenses decreased
approximately $59,400 (58.5%) primarily as a result of a decrease in legal
and professional expense. The decrease in legal and professional expense is
related to unsuccessful legal challenges by two dissident Limited Partners to
an amendment to the Partnership Agreement in the prior period.
For the nine-month periods ended September 30, 2004, and 2003, total revenues
decreased 2.1% from $1,952,007 to $1,911,132 and total expenses decreased 1.5%
from $999,100 to $984,355 and other income increased from $465 to $482. As a
result, net income decreased 2.7% from $953,372 for the nine months ended
September 30, 2003, to $927,259 for the same period in 2004. Rental revenue
decreased as a result of lower occupancy rates partially offset by higher
unit rental rates. Operating expenses increased approximately $47,500 (6.2%)
primarily as a result of increases in maintenance and repair and office
expenses, partially offset by a decrease in advertising expnese. General and
administrative expenses decreased approximately $62,300 (26.1%) primarily as
a result of a decrease in legal and professional expnese. The decrease in
legal and professional expnese was discussed above.
The General Partners will continue their policy of funding improvements and
maintenance of Partnership properties with cash generated from operations.
The Partnership's financial resources appear to be adequate to meet its needs.
The General Partners anticipate distributions to the Limited Partners
to remain at the current level for the foreseeable future.
We are not enclosing a copy of the Partnership Form 10-Q as filed with the
Securities and Exchange Commission since all the information set forth
therein is contained either in this letter or in the attached financial
statements. However, if you wish to receive a copy of said report, please
send a written request to DSI Realty Income Fund VII, P.O. Box 357,
Long Beach, California 90801.
Very truly yours,
DSI REALTY INCOME FUND VII
By: DSI Properties, Inc., as
General Partner
By /s/ Robert J. Conway
____________________________
ROBERT J. CONWAY, President
DSI REALTY INCOME FUND VII
(A California Real Estate Limited Partnership)
BALANCE SHEETS(UNAUDITED)
SEPTEMBER 30, 2004 AND DECEMBER 31, 2003
September 30, December 31,
2004 2003
ASSETS
CASH AND CASH EQUIVALENTS $ 886,161 $ 674,918
PROPERTY, Net 2,089,800 2,089,800
OTHER ASSETS 68,916 68,718
TOTAL $3,044,877 $2,833,436
LIABILITIES AND PARTNERS' EQUITY(DEFICIT)
LIABILITIES $ 616,428 $ 604,974
PARTNERS' EQUITY (DEFICIT):
General Partners (83,484) (85,484)
Limited Partners 2,511,933 2,313,946
Total partners' equity 2,428,449 2,228,462
TOTAL $3,044,877 $2,833,436
See accompanying notes to financial statements (unaudited).
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
September 30, September 30,
2004 2003
REVENUES:
Rental $ 635,270 $ 652,525
EXPENSES:
Operating 281,021 260,275
General and administrative 42,084 101,517
Total expenses 323,105 361,792
OPERATING INCOME $ 312,165 $ 290,733
OTHER INCOME
Interest 162 162
NET INCOME 312,327 290,895
AGGREGATE NET INCOME ALLOCATED TO:
Limited partners $ 309,204 $ 287,986
General partners 3,123 2,909
TOTAL $ 312,327 $ 290,895
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 12.88 $ 12.00
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 24,000 24,000
See accompanying notes to financial statements (unaudited).
STATEMENTS OF INCOME (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
September 30, September 30,
2004 2003
REVENUES:
Rental $1,911,132 $1,952,007
EXPENSES:
Operating 807,541 760,030
General and administrative 176,814 239,070
Total expenses 984,355 999,100
OPERATING INCOME $ 926,777 $ 952,907
OTHER INCOME
Interest 482 465
NET INCOME 927,259 953,372
AGGREGATE NET INCOME ALLOCATED TO:
Limited partners 917,987 943,838
General partners 9,272 9,534
TOTAL 927,259 953,372
NET INCOME PER LIMITED
PARTNERSHIP UNIT $38.25 $39.33
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 24,000 24,000
See accompanying notes to financial statements (unaudited).
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)(UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
BALANCE AT JANUARY 1, 2004 ($85,484) $2,313,946 $2,228,462
NET INCOME 9,272 917,987 927,259
DISTRIBUTIONS (7,272) (720,000) (727,272)
BALANCE AT SEPTEMBER 30, 2004 ($83,484) $2,511,933 $2,428,449
See accompanying notes to financial statements(unaudited).
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 AND 2003
September 30, September 30,
2004 2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 927,259 $ 953,371
Adjustments to reconcile net
income to net cash provided
by operating activities:
Changes in assets and
liabilities:
Increase in assets (198) 0
Increase in liabilities: 11,454 116,784
Net cash provided by
operating activities 938,515 1,070,155
CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners (727,272) (727,272)
NET INCREASE IN CASH AND
CASH EQUIVALENTS 211,243 342,883
CASH AND CASH EQUIVALENTS:
At beginning of period 674,918 497,970
At end of period $ 886,161 $ 840,853
See accompanying notes to financial statements(unaudited).
DSI REALTY INCOME FUND VII
(A California Real Estate Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
DSI Realty Income Fund VII (the "Partnership"), has two general partners
(DSI Properties, Inc., and Diversified Investors Agency) and limited
partners owning 24,000 limited partnership units. The Partnership was formed
under the California Uniform Limited Partnership Act for the primary purpose
of acquiring and operating real estate.
The accompanying financial information as of September 30, 2004, and for
the periods ended September 30, 2004, and 2003 is unaudited. Such financial
information includes all adjustments, which are considered necessary by the
Partnership's management for a fair presentation of the results for the
periods indicated.
2. PROPERTY
Properties owned by the Partnership are all mini-storage facilities.
Depreciation was calculated using the straight line method over the
estimated useful life of 15 years. The total cost of property and
accumulated depreciation at September 30, 2004, is as follows:
Land $ 2,089,800
Buildings and improvements 7,685,522
Equipment 60,760
Total 9,836,082
Less: Accumulated Depreciation ( 7,746,282)
Property - Net $ 2,089,800
3. NET INCOME PER LIMITED PARTNERSHIP UNIT
Net income per limited partnership unit is calculated by dividing the
net income allocated to the limited partners by the number of limited
partnership units outstanding during the period.
4. CONTROLS AND PROCEDURES
Within 90 days prior to the date of this report, the Partnership evaluated
the effectiveness of its disclosure controls and procedures. This evaluation
was performed by the Partnership's Controller with the assistance of the
Partnership's President and the Chief Executive Officer. These disclosure
controls and procedures are designed to ensure that the information required
to be disclosed by the Partnership in its periodic reports filed with the
Securities and Exchange Commission (the "Commission") is recorded, processed,
summarized and reported, within the time periods specified by the Commission's
rules and forms, and that the information is communicated to the certifying
officers on a timely basis. Based on this evaluation, the Partnership con-
cluded that its disclosure controls and procedures were effective. There have
been no significant changes in the Partnership's internal controls or in other
factors that could significantly affect the internal controls subsequent to
the date of their evaluation.
DSI REALTY INCOME FUND VII
Form 10-Q
CERTIFICATION
Each of the undersigned hereby certifies in his capacity as an officer of
DSI Properties, Inc. (corporate General Partner) of DSI REALTY INCOME FUND VII
(the "Partnership") that the Quarterly Report of the Partnership on Form 10-Q
for the periods ended September 30, 2004 fully complies with the requirements
of Section 13(a) of the Securities and Exchange Act of 1934 and that inform-
ation contained in such report fairly presents, in all material respects, the
financial condition of the Partnership at the end of such periods and the
results of operations of the Partnership for such periods.
ROBERT J. CONWAY, CEO RICHARD P. CONWAY, VP
CERTIFICATIONS
I, Robert Conway, certify that:
1. I have reviewed this quarterly report on Form 10-Q of DSI Realty Income
Fund VII;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consoli-
dated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effec-
tiveness of the disclosure controls and procedures based on our evalu-
ation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit com-
mitee of registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls sub-
sequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November, 2004
Robert Conway
President
CERTIFICATIONS
I, Richard Conway, certify that:
1. I have reviewed this quarterly report on Form 10-Q of DSI Realty Income
Fund VII;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consoli-
dated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the effec-
tiveness of the disclosure controls and procedures based on our evalu-
ation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit com-
mitee of registrant's board of directors (or persons performing the equivalent
functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls sub-
sequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November, 2004
Richard Conway
Vice President