FORM 10-Q
SECURITIES & EXCHANGE COMMISSION
WASHINGTON DC 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For Period Ended September 30,1996.
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Commission file number 33-12519
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REDWOOD MORTGAGE INVESTORS VI
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(exact name of registrant as specified in its charter)
California 94-3031211
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(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.
650 El Camino Real, Suite G, Redwood City, CA. 94063
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(address of principal executive office)
(415) 365-5341
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(Registrants telephone number, including area code)
NOT APPLICABLE
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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 reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES XX__________ NO___________
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
YES________ NO________ NOT APPLICABLE ____XX___
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuers class of
common stock, as of the latest date.
NOT APPLICABLE
Part I
Item 1
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
Balance Sheets
December 31, 1995 (audited) and
September 30, 1996 (unaudited)
ASSETS
Sept. 30, 1996 Dec. 31, 1995
(unaudited) (audited)
================= ================
cash ............................................................................. $ 862,968 $ 283,976
Accounts receivable:
Mortgage Investments, secured by deeds of trust ............................ 9,319,813 10,402,491
Accrued interest on mortgage investments ................................... 351,505 445,816
Advances on mortgage investments ........................................... 93,427 131,936
Accounts receivable-unsecured .............................................. 251,531 322,913
----------- -----------
10,016,276 11,303,156
Less allowance for doubtful accounts ....................................... 228,000 283,284
----------- -----------
$ 9,788,276 $11,019,872
----------- -----------
Real Estate Owned, acquired through foreclosure, at
estimated net realizable value ............................................. 1,261,322 1,501,712
Partnership Interest ............................................................. 458,206 456,821
Formation loan due from Redwood Home Loan Co. .................................... 135,402 184,177
Prepaid expenses and other assets ................................................ 0.00 935
----------- -----------
$12,506,174 $13,447,493
=========== ===========
LIABILITIES AND PARTNERS CAPITAL
Liabilities:
Note payable - bank line of credit ......................................... $ 1,715,011 $ 2,041,011
----------- -----------
1,715,011 2,041,011
Partners capital ................................................................. 10,791,163 11,406,482
----------- -----------
$12,506,174 $13,447,493
=========== ===========
<FN>
See accompanying notes to financial statements.
</FN>
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (unaudited)
9 mos. 9 mos. ended 3 mos. ended 3 mos. ended
ended
Sept. 30, Sept. 30, Sept. 30, Sept 30, 1995
1996 1995 1996
(unaudited) (unaudited) (unaudited) (unaudited)
============= ============== ============= =============
Revenues:
Interest on mortgage investments ....................... $836,853 933,809 280,793 286,241
Interest on bank deposits .............................. 3,565 4,813 2,238 1,305
Late charges & other ................................... 13,471 8,339 4,176 3,792
Miscellaneous .......................................... 10,461 2,953 9,001 784
-------- -------- -------- --------
864,350 949,914 296,208 292,122
-------- -------- -------- --------
Expenses:
Interest on bank loan ................................... 130,233 162,160 40,027 54,338
General Partner management fees ......................... 0.00 0.00 0.00 0.00
Clerical costs through Redwood Home Loan Co.............. 24,156 16,221 8,055 6,941
Professional fees ....................................... 16,800 18,292 521 1,546
Other ................................................... 11,999 13,718 2,162 2,695
Provision for loss on real estate acquired
through foreclosure and doubtful accounts............... 234,909 274,073 99,321 71,647
-------- -------- -------- --------
418,097 484,464 150,086 137,167
-------- -------- -------- --------
Net Income ............................................... $446,253 465,450 146,122 154,955
======== ======== ======== ========
Net Income: to General Partners (1%) ..................... $ 4,463 4,654 1,462 1,549
to Limited Partners (99%...................... 441,790 460,796 144,660 153,406
======== ======== ======== ========
$446,253 465,450 146,122 154,955
======== ======== ======== ========
Net income for $1,000 invested by Limited
Partners for entire period:
- where income is reinvested and compounded............. $ 39.94 $ 39.42 $ 13.12 $ 13.40
======== ======== ======== ========
- where Partner received income in monthly
distributions ..................................... $ 39.25 $ 38.75 $ 13.07 $ 13.04
======== ======== ======== ========
<FN>
See accompanying notes to financial statements
</FN>
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
AND 1995 (unaudited)
Sept. 30, 1996 Sept. 30, 1995
(unaudited) (unaudited)
================== =================
Cash flows from operating activities:
Net Income ......................................................................... $ 446,253 $ 465,450
Adjustments to reconcile net income to net cash
provided by operating activities:
Increase (decrease) in allowance for doubtful accounts ......................... (55,284) 78,502
(Increase) decrease in accrued interest and advances ........................... 132,820 (135,289)
(Increase) decrease in prepaid expenses and other assets ...................... 935 0.00
----------- -----------
Net cash provided by operating activities .......................................... 524,724 408,663
----------- -----------
Cash flows from investing activities:
Net (increase) decrease in:
Real estate acquired through foreclosure .......................................... 240,390 656,191
Mortgage Investments .............................................................. 1,082,678 143,729
Formation loan .................................................................... 48,775 (24,892)
Partnership Interest .............................................................. (1,385) 33,717
Accounts receivable -unsecured .................................................... 71,382 (456,821)
----------- -----------
Net cash provided by investing activities .................................... 1,441,840 351,924
----------- -----------
Cash flows from financing activities:
Net increase (decrease) in note payable - bank ..................................... (326,000) (305,000)
Partners withdrawals ............................................................... (1,058,039) (863,715)
Early withdrawal penalties, net .................................................... (3,533) (4,029)
----------- -----------
Net cash provided by or (used in) financing activities ...................... (1,387,572) (1,172,744)
----------- -----------
Net increase (decrease) in cash and cash equivalents ................................. 578,992 (412,157)
Cash and cash equivalents at the beginning of period ................................. 283,976 447,804
=========== ===========
Cash and cash equivalents at the end of period ....................................... $ 862,968 $ 35,647
=========== ===========
<FN>
See accompanying notes to financial statements.
</FN>
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS CAPITAL
FOR THE THREE YEARS ENDED DECEMBER 31, 1995 (audited)
AND NINE MONTHS ENDED SEPTEMBER 30, 1996 (unaudited)
PARTNERS CAPITAL
---------------------------------------------------------------------
UNALLOCATED
GENERAL LIMITED SYNDICATION
PARTNERS PARTNERS COSTS TOTAL
-------------- ------------- ----------------- ------------
Balances at December 31, 1992 .................... $ 9,773 $ 12,374,013 $ (26,879) $ 12,356,907
Net Income ....................................... 8,978 888,810 0.00 897,788
Allocation of Syndication Costs .................. (232) (22,947) 23,179 0.00
Early withdrawal penalties ....................... 0.00 (10,365) 3,700 (6,665)
Partners withdrawals ............................. (8,746) (887,338) 0.00 (896,084)
------------ ------------ ---------- ------------
Balances at December 31, 1993 .................... 9,773 12,342,173 0.00 12,351,946
Net Income ....................................... 6,647 658,055 0.00 664,702
Early withdrawal penalties ....................... 0.00 (12,790) 0.00 (12,790)
Partners withdrawals ............................. (6,654) (1,013,019) 0.00 (1,019,673)
------------ ------------ ---------- ------------
Balances at December 31, 1994 .................... 9,766 11,974,419 0.00 11,984,185
Net Income ....................................... 6,183 612,165 0.00 618,348
Early withdrawal penalties ....................... 0.00 (4,336) 0.00 (4,336)
Partners withdrawals ............................. (6,183) (1,185,532) 0.00 (1,191,715)
------------ ------------ ---------- ------------
Balances at December 31, 1995 .................... 9,766 11,396,716 0.00 11,406,482
Net Income ....................................... 4,463 441,790 0.00 446,253
Early withdrawal penalties ....................... 0.00 (3,533) 0.00 (3,533)
Partners withdrawals ............................. (4,463) (1,053,576) 0.00 (1,058,039)
------------ ------------ ---------- ------------
Balances at September 30, 1996 ................... $ 9,766 $ 10,781,397 0.00 $ 10,791,163
============ ============ ========== ============
<FN>
See accompanying notes to financial statements
</FN>
REDWOOD MORTGAGE INVESTORS VI
(A California Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 (audited) and
SEPTEMBER 30, 1996 (unaudited)
NOTE 1 ORGANIZATION AND GENERAL
Redwood Mortgage Investors VI, (the Partnership) is a California Limited
partnership, of which the General Partners are D. Russell Burwell, Michael R.
Burwell and Gymno Corporation, a California corporation owned and operated by
the individual General Partners. The partnership was organized to engage in
business as a mortgage lender for the primary purpose of making loans secured by
Deeds of Trust on California real estate. Mortgage Investments are being
arranged and serviced by Redwood Home Loan Co., dba Redwood Mortgage, an
affiliate of the General Partners. At December 31, 1989, the offering was closed
with contributed capital totaling $9,781,366.
Each months income is distributed to partners based upon their
proportionate share of partners capital. Some partners have elected to withdraw
income on a monthly, quarterly or annual basis. A. Sales Commissions - Formation
Loan
Sales commissions ranging from 0% (units sold by General Partners) to 10%
of gross proceeds were paid to RHL Co., an affiliate of the General Partners
that arranges and services the mortgage investments. To finance the sales
commissions, the Partnership loaned to Redwood Mortgage $623,255 relating to
contributed capital of $9,781,366. The formation loan is unsecured, and is being
repaid, without interest, in ten annual installments of principal, commencing
December 31, 1989.
The following reflects transactions in the Formation Loan account through
September 30, 1996:
Amount loaned during 1987,1988 and 1989 $623,255
Less:
Cash repayments $447,901
Allocation of early withdrawal penalties 39,952 487,853
=========== -----------
Balance September 30, 1996 $135,402
===========
B. Other Organizational and Offering Expenses
Organizational and offering expenses, other than sales commissions,
(including printing costs, attorney and accountant fees, and other costs), paid
by the Partnership from the offering proceeds totaled $360,885 or 3.69% of the
gross proceeds contributed by the Partners.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenues and expenses are accounted for on the accrual basis of accounting.
The Partnership bears its own organization and syndication costs (other
than certain sales commissions and fees described above) including legal and
accounting expenses, printing costs, selling expenses, a 1% wholesale brokerage
fee and filing fees. Organizational costs of $14,750 were capitalized and were
amortized over a five year period. Syndication costs of $346,135 were charged
against partners capital and were allocated to individual partners consistent
with the partnership agreement over a five year period.
Property acquired through foreclosure will be held for sale at its
estimated narket value. Such property is recorded at cost which includes the
principal balance of the former mortgage investment made by the Partnership plus
accrued interest, payments made to keep the senior loans current, costs of
obtaining title and possession, less rental income or at estimated net
realizable value, if less. The difference between such costs and estimated net
realizable value is deducted from cost in the Balance Sheet to arrive at the
carrying value of such property.
In preparing the financial statements, management is required to make
estimates based on the information available that affect the reported amounts of
assets and liabilities as of the balance sheet date and revenues and expenses
for the related periods. Such estimates relate principally to the determination
of the allowance for doubtful accounts and the valuation of real estate acquired
through foreclosure. Actual results could differ significantly from these
estimates.
Mortgage investments and the related accrued interest, fees and advances
are analyzed on a continuous basis for recoverability. Delinquencies are
identified and followed as part of the mortgage investment system. A provision
is made for doubtful accounts to adjust the allowance for doubtful accounts to
an amount considered by management to be adequate to provide for unrecoverable
accounts receivable.
Amounts reflected in the statements of income as net income per $1,000
invested by Limited Partners for the entire period are actual amounts allocated
to Limited Partners who have their investment throughout the period and have
elected to either leave their earnings to compound or have elected to receive
monthly distributions of their net income. Individual limited partner income is
allocated each month based on the limited partners pro rata share of
partnership capital. Because the net income percentage varies from month to
month, amounts per $1,000 will vary for those individuals who make or withdraw
investments during the period, or select other options. However, the net income
per $1,000 average invested has approximated those reflected for those whose
investments and options have remained constant.
No provision for Federal and State income taxes is made in the financial
statements since income taxes are the obligation of the partners if and when
income taxes apply.
The interim financial statements dated September 30, 1996 are unaudited,
but in the opinion of the General Partners all adjustments (consisting solely of
normal recurring adjustments) necessary to a fair presentation of the financial
statements at September 30, 1996 have been made.
NOTE 3 - GENERAL PARTNERS AND RELATED PARTIES
The following are commissions and/or fees which are paid to the General
Partners and/or related parties.
A. Loan Brokerage Commissions
Loan brokerage commissions for services in connection with the review,
selection, evaluation, negotiation and extension of the mortgage investments
were limited up to 12% of the principal amount of the mortgage investments
through the period ending 6 months after the termination date of the offering.
Thereafter, commissions are limited to an amount not to exceed 4% of the total
Partnership assets per year. Such commissions are paid by the borrowers, thus,
not an expense of the Partnership.
B. Loan Servicing Fees
Monthly loan servicing fees are paid to Redwood Home Loan Co. up to 1/8 of
1% (1.5% annual) of the unpaid principal, or such lesser amount as is reasonable
and customary in the geographic area where the property securing the loan is
located (currently at 1/12 of 1% or 1% annual). The amount remitted to the
partnership and recorded as interest on mortgage investments is net of such
fees. In 1993, $27,532 of the total loan servicing fee of $121,838; in 1994
$123,758 of the total loan service fees of $123,758; in 1995 $50,741 of the
total loan service fees of $92,797 and for the nine months through September 30,
1996, $26,075 of the total loan servicing fee of $70,423, were waived by Redwood
Mortgage.
C. Asset Management Fee
Pursuant to the partnership agreement, the General Partners receive a
monthly fee for managing the Partnerships mortgage investment portfolio and
operations equal to 1/32 of 1% (3/8 of 1% annual) of the net asset value. Such
fees were reduced from $46,569 to $15,523 in 1993; $45,974 to $8,942 in 1994,
and $44,336 to $-0- in 1995 with the difference being waived by the General
Partners. For the nine months through September 30 1996, all of the management
fee totalling $31,660 also waived by the General Partners.
D. Other Fees
The Partnership Agreement provides for other fees such as reconveyance,
loan assumption and loan extension fees. These fees are paid by the borrowers to
parties related to the General Partners.
E. Income and Losses
All income is credited or charged to partners in relation to their
respective partnership interests. The partnership interest of the General
Partners (combined) is a total of 1%.
F. Operating Expenses
The General Partners or their affiliate (Redwood Mortgage.) are reimbursed
by the Partnership for all operating expenses actually incurred by them on
behalf of the Partnership, including without limitation, out-of-pocket general
and administration expenses of the Partnership, accounting and audit fees, legal
fees and expenses, postage and preparation of reports to Limited Partners. In
1993, 1994 and 1995 clerical costs totaling $31,642, $-0- and $23,341,
respectively, were reimbursed to Redwood Mortgage and are included in expenses
in the Statements of Income. The 1994 expenses were absorbed by the Redwood
Mortgage. For the nine months through September 30, 1996, $24,156 was reimbursed
to Redwood Mortgage.
NOTE 4 OTHER PARTNERSHIP PROVISIONS
A. Term of the Partnership
The term of the Partnership is approximately 40 years, unless sooner
terminated as provided. The provisions provided for no capital withdrawal for
the first five years, subject to the penalty provision set forth in (D) below.
Thereafter, investors have the right to withdraw over a five-year period, or
longer.
B. Election to Receive Monthly, Quarterly or Annual Distributions
Upon subscriptions, investors elected either to receive monthly, quarterly
or annual distributions of earnings allocations, or to allow earnings to
compound for at least a period of 5 years.
C. Profits and Losses
Profits and losses are allocated monthly among the Limited Partners
according to their respective capital accounts after 1% is allocated to the
General Partners.
D. Withdrawal From Partnership
A Limited Partner had no right to withdraw from the Partnership or to
obtain the return of his capital account for at least five years after such
units are purchased which in all instances has occurred by September 30, 1996.
After that time, at the election of the Partner, capital accounts can be
returned over a five year period in 20 equal quarterly installments or such
longer period as is requested.
Notwithstanding the above, in order to provide a certain degree of
liquidity to the Limited Partners, the General Partners will liquidate a Limited
Partners entire capital account in four quarterly installments beginning on the
last day of the calendar quarter following the quarter in which the notice of
withdrawal is given. Such liquidations shall, however, be subject to a 10% early
withdrawal penalty applicable to any sums withdrawn prior to the time when such
sums otherwise could have been withdrawn pursuant to the liquidation procedure
set forth above. The 10% early withdrawal penalty will be received by the
Partnership, and a portion of the sums collected as such penalty will be applied
toward the next installment(s) of principal under the Formation Loan owed to the
Partnership by Redwood Home Loan Co. Such portion shall be determined by the
ratio between the initial amount of Formation Loan and the total amount of other
organization and syndication costs incurred by the Partnership in this offering.
The balance of any such early withdrawal penalties shall be retained by the
Partnership for its own account and applied against syndication costs. Since the
syndication costs have been fully amortized as of December 31, 1993, the early
withdrawal penalties gained in the future will be applied on the same basis as
before with the amount otherwise being credited to the syndication costs being
credited to income for the period.
The Partnership will not establish a reserve from which to fund withdrawals
and, accordingly, the Partnerships capacity to return a Limited Partners
capital account is restricted to the availability of Partnership cash flow.
Furthermore, no more than 20% of the total Limited Partners capital accounts
outstanding at the beginning of any year shall be liquidated during any calendar
year.
NOTE 5 - INVESTMENT IN PARTNERSHIP.
The Partnerships interest in land acquired through foreclosure, located in
East Palo Alto, California with costs totalling $458,206 has been invested with
that of two other Partnerships (total cost $945,554) in a partnership which is
in the preliminary process of getting approval to construct approximately 72
single family homes for sale. Redwood Mortgage Investors V, VI, and VII have
first priority on return of investment plus interest thereon, in addition to a
share of profits realized.
NOTE 6 - NOTES PAYABLE - BANK LINE OF CREDIT
The Partnership has a bank line of credit secured by its mortgage
investment portfolio up to $2,500,000 at 1% over prime. The balances were
$2,041,011 and $1,715,011 at December 31, 1995 and September 30, 1996,
respectively, and the interest rate at September 30, 1996 was 9.25% (8.25% prime
+ 1%).
NOTE 7 - LEGAL PROCEEDINGS
The Partnership is not a defendant in any legal actions. However, legal
actions against borrowers and other involved parties have been initiated by the
Partnership to help assure payments against unsecured accounts receivable
totaling $251,531.
Management anticipates that the ultimate outcome of the legal matters will
not have a material adverse effect on the net assets of the Partnership, with
due consideration having been given in arriving at the allowance for doubtful
accounts.
NOTE 8 - ASSET CONCENTRATIONS AND CHARACTERISTICS
The mortgage investments are secured by recorded deeds of trust. At
September 30, 1996, there were 63 mortgage investmensts outstanding with the
following characteristics:
Number of mortgage invesments outstanding 63
Total mortgage investments outstanding $9,319,813
Average mortgage investment outstanding $147,934
Average mortgage investment as percent of total 1.59%
Average mortgage investment as percent of Partners Capital 1.37%
Largest mortgage investment outstanding $1,376,117
Largest mortgage investment as percent of total 14.77%
Largest mortgage investment as percent of Partners Capital 12.75%
Number of counties where security is located
(all California) 13
Largest percentage of mortgage investments in one county 29.89%
Average mortgage investment to appraised value of security
at time mortgage investment was consummated 65.60%
Number of mortgage investments in foreclosure status 2
Amount of mortgage investments in foreclosure $169,952
The cash balance at September 30, 1996 of $862,968 was in one bank with
interest bearing balance totalling $823,391. The balance exceeded the FDIC
insurance limit (up to $100,000 per bank) by $762,968.
Item 7 - Managements Discussion and Analysis of Financial Condition and
Results of Operations
On September 30, 1996, the Partnerships net capital totalled $10,791,163.
The Partnership began funding mortgage investments in October 1987, and as
of September 30, 1996 had distributed income at an average annualized
(compounded) yield of 8.01%. Current earnings are lower than those prevalent at
the outset, primarily because interest rates generally have dropped dramatically
since 1988. The Partnership does not anticipate a significant increase or
decrease in mortgage rates in the foreseeable future and expects the prevailing
interest rates to fluctuate in a narrow range in the near future. Management
expects the yield, net of provision for losses, to increase slightly in 1996.
Currently, mortgage interest rates are lower than those prevalent at the
inception of the Partnership. New Mortgage investments are being originated at
these lower interest rates. The result is a reduction of the average return
across the entire mortgage investment portfolio held by the Partnership. In the
future, interest rates likely will change from their current levels. The General
Partners cannot at this time predict at what levels interest rates will be in
the future. The General Partners believe the rates charged by the Partnership to
its borrowers will not change significantly in the immediate future. Based upon
the rates payable in connection with the existing mortgage investments, the
current and anticipated interest rates to be charged by the Partnerships, and
current reserve requirements, the General Partners anticipate that the
annualized yield next year will range only slightly higher from its current
rate.
Each year, the Partnership negotiates a line of credit with a commercial
bank which is secured by its mortgage investment portfolio. Currently, it has
the capacity to borrow up to $2,500,000 at Prime plus 1%, (9.25%). Current
borrowings of $1,715,011 have the effect of leveraging the portfolio about 20%.
The Partnership relies upon the line of credit, amortization of notes, pay-off
of notes, and the re-investment of earnings, after paying Partnership
distributions and operating costs, for the creation of new capital for mortgage
(loan) investments.
The General Partners regularly review the mortgage investment portfolio,
examining the status of delinquencies, the underlying collateral securing these
mortgage investments, REO expenses, sales activities, and borrowers payment
records and other data relating to the mortgage investment portfolio. Data on
the local real estate market, and on the national and local economy are studied.
Based upon this information and more, mortgage investment loss reserves and
allowance for doubtful accounts are increased or decreased. Because of the
number of variables involved, the magnitude of possible swings and the General
Partners inability to control many of these factors, actual results may and do
sometimes differ significantly from estimates made by the General Partners.
Its now clear the Northern California recession reached bottom in 1993.
Since then, the California economy has been improving, slowly at first, but now,
more vigorously. A wide variety of indicators suggest that the economy in
California was strong in the first half of 1996, and the State is well -
positioned for fast growth in the second half of the year. This improvement is
reflective in increasing property values, in job growth, personal income growth,
etc., which all translates into more loan activity. Which of course, is healthy
for our lending activity.
I.
COMPENSATION OF THE GENERAL PARTNERS AND AFFILIATES BY PARTNERSHIP
The following compensation has been paid to the General Partners and
Affiliates for services rendered during the nine months ending September 30,
1996. All such compensation is in compliance with the guidelines and limitations
set forth in the Prospectus and Partnership Agreement. In addition, the General
Partners and/or related companies pay certain expenses on behalf of the
Partnership for which it is reimbursed as noted in the Statement of Income.
Entity Receiving Description of Compensation Amount
Compensation and Services Rendered
====================== ============================================ ============
Redwood Mortgage Loan Servicing Fee for servicing loans $44,348
($26,075 waived by RHL Co.)
- ------------------------- ----------------------------------------- -----------
General Partners Asset Management Fee for managing
&/or Affiliates assets ($31,660 waived by the General Partners) $ 0.00
- ------------------------- ----------------------------------------- ------------
General Partners 1% interest in profits,losses and distributions
of cash available for distribution $ 4,463
- ------------------------- ----------------------------------------- ------------
II. FEES PAID BY BORROWERS ON MORTGAGE LOANS PLACED BY COMPANIES RELATED TO
THE GENERAL PARTNERS WITH THE PARTNERSHIP (EXPENSES OF BORROWERS NOT OF THE
PARTNERSHIP)
Redwood Mortgage Loan Brokerage Commissions for services in
connection with the review, selection,
evaluation, negotiation, and extension of the
Mortgage Investments paid by the borrowers and
not by the Partnership $ 20,150
- ------------------------- ------------------------------------------------------
Redwood Mortgage Processing and Escrow Fees for services in
connection with notary, document preparation,
credit investigation, and escrow fees payable
by the borrower and not by the Partnership $ 732
- ------------------------- ------------------------------------------------------
MORTGAGE INVESTMENT SUMMARY AS OF SEPTEMBER 30, 1996
Partnership Highlights
Mortgage Investment to Value ratio
First Trust Deed Mortgage Investments $4,854,836.73
Appraised Value of Properties * 7,388,667.00
Total Investment as a % of Appraisal 65.71%
First Trust Deed Mortgage Investments $4,854,836,.73
Second Trust Deed Mortgage Investments 3,812,281.73
Third Trust Deed Mortgage Investments 405,763.34
Fourth Trust Deed Mortgage Investments ** 246,931.03
---------------------
$9,319,812.83
First Trust Deeds due other Lenders $14,610,509.00
Second Trust Deeds due other Lenders 1,174,343.00
Third Trust Deeds due other Lenders 178,571.00
---------------------
Total Debt $25,283,235.83
Appraised Property Value $38,542,563.00
Total Investment as a % of Appraisal 65.60%
Number of Mortgage Investments Outstanding 63
Average Investment $147,933.54
Average Investment as a % of Net Partners Capital 1.37%
Largest Investment Outstanding $1,376,117.03
Largest Investment as a % of Net Partners Capital 12.75%
* Amounts shown reflect the aggregate appraisal values utilized at the time
the mortgage investments were consummated.
** This consists of a mortgage investment in which Redwood Mortgage
Investors VI, together with other Redwood partnerships, holds a second and a
fourth trust deed against the secured property. In addition, the principals
behind the borrower corporation have given personal guarantees as collateral.
The overall loan to value ratio on this loan is 76.52%. Besides the borrower
paying an interest rate of 12.25%, the partnership and other lenders will
participate in profits. The General Partners and its affiliates have previously
entered into loan transactions with this borrower, all of which have been
concluded successfully, with extra earnings earned for the other lenders.
Mortgage Investments as a Percentage of Total Mortgage Investments
First Trust Deed Mortgage Investments 52.09%
Second Trust Deed Mortgage Investments 40.91%
Third Trust Deed Mortgage Investments 4.35%
Fourth Trust Deed Mortgage Investments 2.65%
-----------
Total 100.00%
Mortgage Investments by Type of Property
Owner Occupied Homes $1,558,100.26 16.72%
Non Owner Occupied Homes 777,492.45 8.34%
Apartments 809,567.12 8.69%
Commercial 6,174,653.00 66.25%
----------------- -----------
Total $9,319,812.83 100.00%
Statement of Conditions of Mortgage Investments
Number of Mortgage Investments in Foreclosure 2
Diversification by County
County
Santa Clara $2,785,661.72 29.89%
Alameda 1,804,678.07 19.36%
San Mateo 1,436,632.43 15.42%
Contra Costa 766,899.18 8.23%
Stanislaus 765,516.84 8.21%
Sacramento 475,590.39 5.10%
San Francisco 474,043.57 5.09%
Sonoma 378,318.28 4.06%
El Dorado 214,773.21 2.30%
Shasta 82,562.52 0.89%
Monterey 72,380.95 0.78%
Santa Cruz 38,619.50 0.41%
Solano 24,136.17 0.26%
----------------- -----------
Total $9,319,812.83 100.00%
PART 2
OTHER INFORMATION
Item 1. Legal Proceedings
No legal action has been initiated against the Partnership.
The Partnership had filed a legal action for collection
against borrowers, which is routine litigation incidental
to its business.
Please refer to note (7) of financial statements.
Item 2. Changes in the Securities
Not Applicable
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Not Applicable
(b) Form 8-K
The registrant has not filed any reports on Form 8-K during
the nine month period ending September 30, 1996.
Signatures
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934 the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereto duly authorized on the 4th day of
November, 1996.
REDWOOD MORTGAGE INVESTORS VI
By:
---------------------------------------------
D. Russell Burwell, General Partner
By:
---------------------------------------------
Michael R. Burwell, General Partner
By: Gymno Corporation, General Partner
By:
---------------------------------------------
D. Russell Burwell, President
By:
---------------------------------------------
Michael R. Burwell, Secretary/Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person on behalf of the registrant
and in the capacity indicated on the 4th day of November, 1996.
Signature Title Date
- ---------------------------
D. Russell Burwell General Partner November 4, 1996
- ---------------------------
Michael R. Burwell General Partner November 4, 1996
- ---------------------------
D. Russell Burwell President of Gymno Corporation, November 4, 1996
(Principal Executive Officer);
Director of Gymno Corporation
- --------------------------
Michael R. Burwell Secretary/Treasurer of Gymno November 4, 1996
Corporation (Principal Financial
and Accounting Officer);
Director of Gymno Corporation