FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period to
Commission file number 0-14542
SECURED INVESTMENT RESOURCES FUND, L.P.
(Exact name of registrant as specified in its charter)
Kansas 48-0979566
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5453 W. 61st Place, Mission, Kansas 66205
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number,
including area code) (913) 384-5700
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests ("Units")
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 such shorter
periods 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
SECURED INVESTMENT RESOURCES FUND, L.P.
Index
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements (Unaudited):
Balance Sheets -- March 31, 1995
and December 31, 1994 3-4
Statements of Operations -- Three
Months Ended March 31, 1995 and 1994 5
Statements of Partnership Capital --
Three Months Ended March 31, 1995
and the Years Ended December 31, 1994,
and 1993 6
Statements of Cash Flows -- Three Months
Ended March 31, 1995 and 1994 7-8
Notes to Financial Statements 9-10
Item 2. Managements Discussion and Analysis
of Financial Condition and Results
of Operations 11-12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of
Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
SECURED INVESTMENT RESOURCES FUND, L.P.
BALANCE SHEETS
March 31,
1995 December 31,
(Unaudited) 1994
ASSETS
INVESTMENT PROPERTIES
Land and buildings $ 16,377,255 $ 16,377,255
Furniture, fixtures and equipment 1,508,996 1,478,563
__________ __________
17,886,251 17,855,818
Less accumulated depreciation
and allowance for losses 5,637,590 5,493,355
__________ __________
12,248,661 12,362,463
RESTRICTED DEPOSITS
Capital Improvement Cash Reserves $ 183,090 ---
OTHER ASSETS
Cash 180,633 182,262
Rents and other receivables,less
allowance of $126,874 in 1995
and $141,476 in 1994 32,298 244,318
Prepaid expenses 50,145 20,932
Debt issuance costs, net of
accumulated amortization of
$20,654 in 1995 and $13,543
in 1994 170,129 133,371
Commercial commissions,
deposits and other 26,738 29,859
__________ __________
459,943 610,742
__________ __________
$ 12,891,694 $ 12,973,205
SECURED INVESTMENT RESOURCES FUND, L.P.
BALANCE SHEETS--CONT'D
March 31,
1995 December 31,
(Unaudited) 1994
LIABILITIES AND PARTNERSHIP CAPITAL
Mortgage debt--Note B $ 11,784,022 $ 11,575,692
Accrued interest 198,183 282,889
Accounts payable and accrued
expenses 251,821 371,896
Due to related parties--Note C 62,100 62,100
Unearned revenue 54,479 60,859
Tenant security deposits 81,527 79,217
TOTAL LIABILITIES 12,432,132 12,432,653
PARTNERSHIP CAPITAL
General Partners
Capital contribution 1,000 1,000
Partnership deficit (51,502) (50,692)
__________ __________
(50,502) (49,692)
Limited Partners
Capital contributions 5,608,838 5,608,838
Partnership deficit (5,098,774) (5,018,594)
__________ __________
510,064 590,244
TOTAL PARTNERSHIP CAPITAL 459,562 540,552
__________ __________
$ 12,891,694 $ 12,973,205
See notes to financial statements.
SECURED INVESTMENT RESOURCES FUND, L.P.
STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
March 31,
1995 1994
REVENUES
Rents $ 553,034 $490,606
Interest 523 7
Maintenance
escalations 31,962 25,110
________ ________
585,519 515,723
OPERATING AND
ADMINISTRATIVE EXPENSES
Property operating
expenses 178,360 164,706
General and
administrative
expenses 13,544 12,991
Professional services 12,940 30,594
Management Fees and Reimbursed
direct expenses 31,295 21,208
________ ________
236,139 229,499
NET OPERATING INCOME 349,380 286,224
NON-OPERATING EXPENSES
Interest 279,024 279,858
Depreciation and
amortization 151,346 149,435
________ ________
430,370 429,293
PARTNERSHIP LOSS $ (80,990) $(143,069)
Allocation of loss:
General Partners (810) (1,431)
Limited Partners (80,180) (141,638)
________ ________
$ (80,990) $(143,069)
Partnership loss per
limited partnership
unit $ (3.22) $ (5.70)
See notes to financial statements.
SECURED INVESTMENT RESOURCES FUND, L.P.
STATEMENTS OF PARTNERSHIP CAPITAL
Three months Ended March 31, 1995 (Unaudited) and
the Years Ended December 31, 1994 and 1993
General Limited
Partners Partners Total
Balances at January 31, 1993 $ (38,837) $ 1,664,886 $ 1,626,049
Partnership loss (5,846) (578,751) (584,597)
Balances at December 31, 1993 (44,683) 1,086,135 1,041,452
Partnership loss (5,009) (495,891) (500,900)
Balances at December 31, 1994 (49,692) 590,244 540,552
Partnership loss (810) (80,180) (80,990)
Balances at March 31, 1995 $ (50,502) $ 510,064 $ 459,562
See notes to financial statements.
SECURED INVESTMENT RESOURCES FUND, L.P.
STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended
March 31,
1995 1994
OPERATING ACTIVITIES
Partnership loss $ (80,990) $ (143,069)
Adjustments to reconcile
partnership loss to net cash
provided by (used in) operating
activities:
Depreciation and amortization 151,346 149,435
Provision for losses on rents
and other receivables 3,352 30,650
Changes in assets and liabilities:
Restricted Deposits (183,090) ---
Rents and other receivables 208,669 (55,875)
Prepaid expenses (29,213) 21,394
Debt issuance costs (43,869) (2,700)
Commercial commission, deposits
and other 3,121 2,761
Account payable and
accrued expenses (120,076) 36,726
Accrued interest (84,706) 26,465
Unearned revenue (6,380) (277)
Tenant security deposits 2,310 2,975
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (179,526) 68,485
INVESTING ACTIVITIES
Purchase of and improvements
to investment property (30,433) (9,944)
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (30,433) (9,944)
SECURED INVESTMENT RESOURCES FUND, L.P.
STATEMENTS OF CASH FLOWS (Unaudited)--CONT'D
Three Months Ended
March 31,
1995 1994
FINANCING ACTIVITIES
Mortgage Proceeds $ 3,728,000 $ ---
Payoff Matured Mortgage (3,500,000) ---
Principal payments on
long-term debt (19,670) (22,729)
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 208,330 (22,729)
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (1,629) 35,812
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 182,262 97,437
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 180,633 $ 133,249
See notes to financial statements.
SECURED INVESTMENT RESOURCES FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
March 31, 1995
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included. Operating results for the three month period ended March
31, 1995 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1995. For further
information, refer to the financial statements and footnotes thereto
included in the Partnership's annual report on Form 10-K for the year
ended December 31, 1994.
NOTE B--MORTGAGE DEBT
Mortgage debt consists of the following:
March 31, December 31,
1995 1994
First Mortgages:
The Colony Apartments $ 3,725,233 $ 3,500,000
Foothills Village S.C. 2,623,627 2,621,714
Cascade Apartments 1,941,822 1,950,441
Hidden Valley Exchange S.C. 814,035 814,035
The Market S.C./Hidden Valley
Exchange S.C. 1,694,632 1,702,916
Second Mortgages:
Foothills Village S.C. 984,673 986,586
__________ __________
$ 11,784,022 $ 11,575,692
Cash paid for interest totaled $363,730 and $253,393 for the three
months ending March 31, 1995 and 1994, respectively.
The mortgage for Cascade Apartments matured March 1, 1995. The
present mortgage holder has verbally agreed to temporarily extend the
mortgage until March 1, 1996 or until new replacement financing is put
in place, whichever comes first.
NOTES TO FINANCIAL STATEMENTS--CONT'D.
On January 17, 1995 the $3,500,000 Colony mortgage was paid off
through the issuance of a new $3,728,000 mortgage. This new mortgage
due in February 2020 has a fixed interest rate of 10.09%. The new
mortgage also funded restricted deposits which will be used for Colony
capital repairs and replacements.
NOTE C--RELATED PARTY TRANSACTIONS
Affiliates of the General Partners are entitled to receive payments
from the Partnership for management and other services. Specs, Inc.
(a corporation in which the General Partner has a minority interest)
receives property management fees for providing property management
services and direct cost reimbursements based upon time allocated to
performing certain Partnership functions. Amounts paid by the
Partnership to affiliates of the General Partners are as follows:
Three Months Ended
March 31,
1995 1994
Property management fees $ 31,295 $ 21,208
Amounts due to (from) related parties consist of the following:
March 31, December 31,
1995 1994
Secured Investment Resources
Fund, L.P. III $ 85,100 $ 85,100
The Hoyt Group (23,000) (23,000)
Due To (From) Related Parties $ 62,100 $ 85,100
In May 1995, the Partnership will begin repaying the monies owed to
Secured Investment Resources Fund, L.P. III at the rate of $3,000 per
month, which includes 9% interest.
NOTE D--CASH DISTRIBUTIONS
No distributions have been made since January 1990. Future
distributions will be made only from excess cash flow not needed for
working capital reserves.
(The remainder of this page intentionally left blank.)
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
Revenues for the first quarter of 1995 increased by $70,000
(13.5%) compared with the same period last year. Apartment
rentals comprised $24,000 of this increase and commercial
properties accounted for the remaining $46,000 increase. The
stronger apartment market allowed the Partnership to continue
increasing rental rates, and discontinue the offering of rental
concessions, while maintaining a high occupancy. Several smaller
leases were signed at Foothills Shopping Center and Hidden Valley
Shopping Center, which accounted for the higher rental revenues
in the commercial sector.
Total operating, administrative and non-operating expenses
increased $8,000 (0.1%) when comparing the first quarter of 1995
to the first quarter of 1994. Increased rental rates have
resulted in increased resident turnover. This increased turnover
has caused increased repair, contracted services and payroll
expenses. Professional services have declined due to the need
for decreased legal services.
The Partnership anticipates that operating results for the first
quarter will be representative of the results for the remainder
of the year.
Liquidity and Capital Resources
During the first quarter $180,000 of cash was consumed in
operating activities, $30,000 was used for investing activities
and $208,000 was provided through financing activities. During
the first quarter, the matured Colony mortgage of $3,500,000 was
paid off with a new mortgage in the amount of $3,728,000. Of the
additional funds from this new mortgage $180,000 are to be used
to renovate the Colony Apartments. These funds will be invested
into capital improvements, which will improve the curb appeal and
marketability of Colony, thus allowing it to increase it's rental
rates and maintain high occupancy levels.
During the first quarter the Partnership received $230,667 of
delinquent rent from The Sampler Shoppes, Inc., the anchor tenant
at Foothills Shopping Center and was able to pay $138,000 of
delinquent real estate taxes at Foothills Shopping Center.
The Partnership is currently past due on mortgage notes secured
by Foothills, Hidden Valley and The Market Shopping Centers. The
improved cash flow, the result of higher occupancy, will be used
to make these delinquent mortgage payments. In addition, beginning
on May 1, 1995 the Partnership will begin repaying it's advance from
Secured Investment Resources Fund, L.P. III at the rate of $3,000
per month,including interest.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.-- Cont'd.
The mortgage for Cascade Apartments came due in March, 1995. The
existing mortgage holder has verbally agreed to extend this note,
under the same terms and conditions, until March, 1996 or until
new financing can be put into place. This replacement financing
has not yet been put into place.
The General Partners also anticipate that 1995 cash flow from
operations will continue to improve because of strong occupancy,
rental rate increases, and stabilized expenses.
The General Partners have the option of offering one or more
properties for sale. Any net proceeds in excess of the
outstanding mortgage balance could be used to generate addtional
working capital.
The General Partners have determined it prudent to discontinue
cash distributions until such time that adequate working capital
and capital improvement reserves are in place.
PRT II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None.
Item 2. CHANGES IN SECURITIES
Inapplicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Inapplicable.
Item 5. OTHER INFORMATION
Inapplicable.
Item 6. EXHIBIT AND REPORTS ON FORM 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the
quarter ended March 31, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
SECURED INVESTMENT RESOURCES FUND, L.P.
A Kansas Limited Partnership
(Registrant)
By:
James R. Hoyt
as Individual General Partner
Date: April 20, 1995
By: Secured Investment Resources, Inc.
as Corporate General Partner
By:
James R. Hoyt, President
Date: April 20, 1995