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EXHIBIT 99.3
Independent Auditors' Report
Board of Directors
Apartment Investment and Management Company
We have audited the accompanying Combined Historical Summary of Gross Income
and Direct Operating Expenses of the Realty Investment Apartment Communities II
(the "Communities"), as described in Note 1 for the year ended December 31,
1997. This Combined Historical Summary is the responsibility of the
Communities' management. Our responsibility is to express an opinion on this
Combined Historical Summary based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the Combined Historical Summary is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Combined Historical Summary. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of
the Combined Historical Summary. We believe that our audit provides a
reasonable basis for our opinion.
The Combined Historical Summary has been prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission for
inclusion in the Current Report on Form 8-K of AIMCO Properties, L.P., as
described in Note 1 and is not intended to be a complete presentation of the
income and expenses of the Communities.
In our opinion, the Combined Historical Summary referred to above presents
fairly, in all material respects, the gross income and direct operating
expenses of the Realty Investment Apartment Communities II, as described in
Note 1, for the year ended December 31, 1997, in conformity with generally
accepted accounting principles.
/s/ BEERS & CULTER PLLC
January 28, 1998, except for Note 1, as to
which the date is July 24, 1998
Washington, D.C.
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Realty Investment Apartment Communities II
Combined Historical Summary of
Gross Income and Direct Operating Expenses
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1997 1998
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(unaudited)
GROSS INCOME
Net rental income $ 10,585,834 $
Service and other income 425,795
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Total gross income 11,011,629
DIRECT OPERATING EXPENSES
Furnished apartment expense 74,899
Marketing 140,666
Management fees 602,208
Administrative expenses 195,260
Utilities 1,340,891
Maintenance and repairs 857,966
Taxes and insurance 869,742
Personnel costs 1,443,381
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Total direct operating expenses 5,525,013
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Excess of gross income over direct operating expenses $ 5,486,616 $
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See accompanying notes.
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Realty Investment Apartment Communities II
Notes to Combined Historical Summary of Gross Income
and Direct Operating Expenses
Year Ended December 31, 1997 and
Nine Months Ended September 30, 1998 (unaudited)
1. ORGANIZATION AND BASIS OF PRESENTATION
The Realty Investment Apartment Communities II (the "Communities") include two
separate residential apartment communities located in Maryland and Indiana. The
Communities, which are under common management and control, have been summarized
as follows:
COMMUNITY LOCATION NUMBER OF UNITS
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Seven Springs Village College Park, MD 983
The Bluffs Lafayette, IN 181
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Total 1,164
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On July 24, 1998, AIMCO Properties, L.P., a majority-owned subsidiary of
Apartment Investment and Management Company, a publicly traded real estate
investment trust, entered into acquisition and contribution agreements to
acquire the partnership interests of the partnerships owning the Communities.
The transaction is expected to close in December 1998.
The accompanying Combined Historical Summary has been prepared for the purpose
of complying with the rules and regulations of the Securities and Exchange
Commission for inclusion in the Current Report on Form 8-K of AIMCO Properties,
L.P.
The Combined Historical Summary is not intended to be a complete presentation
of income and expenses of the Communities, as certain costs such as
depreciation, amortization, interest, and other debt service costs have been
excluded. These costs are not considered to be direct operating expenses.
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Realty Investment Apartment Communities II
Notes to Combined Historical Summary of Gross Income
and Direct Operating Expenses (continued)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of the Combined Historical Summary in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts included in the Combined
Historical Summary and accompanying notes thereto. Actual results could differ
from those estimates.
REVENUE RECOGNITION
Rental income for occupied units is recorded as earned based on the amount
reflected in the lease.
INTERIM UNAUDITED FINANCIAL INFORMATION
The accompanying interim unaudited Combined Historical Summary has been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission and was prepared on the same basis as the Combined Historical
Summary for the year ended December 31, 1997. In the opinion of management of
the Communities, all material adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the information for this
interim period have been made. The excess of gross income over direct operating
expenses for such interim period is not necessarily indicative of the excess of
gross income over direct operating expenses for the full year.
3. TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEES
Realty Investment Company, Inc., an affiliate of the Communities, receives
management fees relating to the Communities. The management fee ranges from
5.25% to 7.40% of gross receipts, as defined in the management agreement.
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