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 March 31, 2005
/___/ 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.
DSI REALTY INCOME FUND VII
(A California Real Estate Limited Partnership)
BALANCE SHEETS(UNAUDITED)
MARCH 31, 2005 AND DECEMBER 31, 2004
March 31, December 31,
2005 2004
ASSETS
CASH AND CASH EQUIVALENTS $ 640,004 $ 616,045
PROPERTY, NET 2,268,876 2,268,876
OTHER ASSETS 74,890 67,773
---------- ----------
TOTAL $2,983,770 $2,952,694
========== ==========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Distribution to Partners $ 242,424 $ 242,424
Capital lease obligation 132,604 146,354
Other liabilities 361,178 371,428
---------- ----------
Total liabilities $ 736,206 $ 760,206
---------- ----------
PARTNERS' EQUITY (DEFICIT):
General Partners (85,293) (85,844)
Limited Partners 2,332,857 2,278,332
---------- ----------
Total partners' equity 2,247,564 2,192,488
TOTAL $2,983,770 $2,952,694
========== ==========
See accompanying notes to financial statements(unaudited).
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
March 31, March 31,
2005 2004
REVENUES:
Rental $ 644,047 $ 642,833
---------- ---------
EXPENSES:
Operating 269,036 245,685
General and administrative 77,670 69,740
---------- ---------
Total expenses 346,706 315,423
---------- ---------
OPERATING INCOME 297,341 327,408
OTHER INCOME
Interest 159 160
---------- ---------
NET INCOME $ 297,500 $ 327,568
========== =========
AGGREGATE NET INCOME ALLOCATED TO:
Limited partners $ 294,525 $ 324,292
General partners 2,975 3,276
---------- ---------
TOTAL $ 297,500 $ 327,568
========== =========
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 12.27 $ 13.51
========== =========
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 24,000 24,000
====== ======
See accompanying notes to financial statements(unaudited).
STATEMENT OF CHANGES IN PARTNERS' EQUITY (DEFICIT)(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2005
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
BALANCE AT JANUARY 1, 2005 ($85,844) $2,278,332 $2,192,488
NET INCOME 2,975 294,525 297,500
DISTRIBUTIONS (2,424) (240,000) (242,424)
-------- ---------- ----------
BALANCE AT MARCH 31, 2005 ($85,293) $2,332,857 $2,247,564
======== ========== ==========
See accompanying notes to financial statements(unaudited).
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
March 31, March 31,
2005 2005
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 297,500 $ 327,568
Adjustments to reconcile net
income to net cash provided
by operating activities:
Changes in assets and
liabilities:
Decrease in other assets (7,117) (198)
Decrease in liabilities (24,000) (31,746)
------- -------
Net cash provided by
operating activities 266,383 295,624
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners (242,424) (242,424)
NET INCREASE IN CASH AND
CASH EQUIVALENTS 23,959 53,200
CASH AND CASH EQUIVALENTS:
At beginning of period 616,045 674,918
--------- ---------
At end of period $ 640,004 $ 728,118
========= =========
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 Partnership has acquired six mini-storage facilities located in
Chico, Fairfield, La Verne, and Riverside, California and Ft. Collins
and Littleton, Colorado. All facilities were purchased from Dahn
Corporation ("Dahn"). Dahn is not affiliated with the Partnership. Dahn
is affiliated with other partnerships in which DSI Properties, Inc. is a
general partner. The mini-storage facilities are operated for the
Partnership by Dahn under various agreements that are subject to renewal
annually. Under the terms of the agreements, the Partnership is required
to pay Dahn a property management fee equal to 5% of gross revenue from
operations, defined as the entire amount of all receipts from the rent-
ing or leasing of storage compartments and sale of locks.
The accompanying financial information as of March 31, 2005, and for
the periods ended March 31, 2005, and 2004 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 is calculated using the straight line method over the
estimated useful life of 15 years. The total cost of property and
accumulated depreciation at March 31, 2005, is as follows:
March 31, 2005 December 31, 2004
Land $ 2,089,800 $ 2,089,800
Buildings and improvements 7,685,522 7,685,522
Equipment 242,222 242,222
------------ ------------
Total 10,017,544 10,017,544
Less: Accumulated Depreciation ( 7,748,668) ( 7,748,668)
------------ ------------
Property - Net $ 2,268,876 $ 2,268,876
============ ============
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. ALLOCATION OF PROFITS AND LOSSES AND GENERAL PARTNERS' INCENTIVE
MANAGEMENT FEE
Under the Agreement of limited Partnership, the general partners are to
be allocated 1% of the net profits or losses from operations, and the
limited partners are to be allocated the balance of the net profits or
losses from operations in proportion to their limited partnership
interests.
The General Partners are also entitled to receive a percentage, based on
a predetermined formula, of any cash distribution from the sale, other
disposition or refinancing of the project.
In addition, the General Partners are entitled to receive an incentive
management fee for supervising the operations of the Partnership. The
fee is to be paid in an amount equal to 9% per annum of the cash available
for distribution on a cumulative basis, calculated as cash generated from
operations less capital expenditures.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
We are pleased to enclose the Partnership's unaudited financial statements
for the period ended March 31, 2005. 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 March 31, 2005 and 2004, total revenues
increased 0.2% from $642,833 to $644,047, total expenses increased 9.9% from
$315,425 to $346,706 and other income decreased from $160 to $159. As a
result, net income decreased 9.2% from $327,568 for the three-month period
ended March 31, 2004, to $297,500 for the same period in 2005. Occupancy
levels for the Partnership's six mini-storage facilities averaged 83.0% for
the three month period ended March 31, 2004, and 82.6% for the same period
in 2004. Rental revenue remained relatively constant. The Partnership is
continuing its marketing effort to attract and keep new tenants in its various
mini-storage facilities. Operating expenses increased approximately $23,400
(9.5%) primarily as a result of increases in advertising, purchase of locks,
maintenance and repair office supplies and truck insurance expenses. General
and administrative increased approximately $7,900 (11.3%) primarily as a
result of increases in legal and professional expneses, partially offset by
a decrease in incentive management fees.
The General Partners will continue their policy of funding the continuing
improvement 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.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
NONE
Item 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 Parnership's internal controls or in
other factors that could significantly affect the internal controls sub-
sequent to the date of their evaluation.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Registrant is not a party to any material pending legal proceedings.
Item 2. Unregistered Sales of Equity Securities nad Use of Proceeds
NONE
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
Item 5. Other Information
NONE
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 March 31,
2005.
(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: May 13, 2005 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: May 13, 2005 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
CERTIFICATIONS
I, Robert J. 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 cover-
ed 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-15e and 15d-15e) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our super-
vision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this
annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of our annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors:
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to affect the registrant's ability to record, pro-
cess, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's in-
ternal controls over financial reporting.
Date: May 13, 2005
Robert J. Conway
Chief Executive Officer
CERTIFICATIONS
I, Richard P. 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 cover-
ed 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-15e and 15d-15e) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our super-
vision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this
annual report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this report based on such evaluation; and
c) disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter (the registrant's fourth fiscal quarter in
the case of our annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation of internal control over financial reporting,
to the registrant's auditors:
a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to affect the registrant's ability to record, pro-
cess, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's in-
ternal controls over financial reporting.
Date: May 13, 2005
Richard P. Conway
Vice President
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of DSI Realty Income Fund VII (the
"Partnership") on Form 10-Q for the period ending March 31, 2005 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Robert J. Conway, Chief Executive Officer of the Partnership, certify,
pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
Robert J. Conway
Chief Executive Officer
April 29, 2005
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of DSI Realty Income Fund VII (the
"Partnership") on Form 10-Q for the period ending March 31, 2005 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Richard P. Conway, Vice President of the Corporate General Partner, certify,
pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act
of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
Richard P. Conway
Vice President
April 29, 2005