<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended DECEMBER 31, 1996
Commission File Number
2-60561
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REAL ESTATE ASSOCIATES LIMITED
A CALIFORNIA LIMITED PARTNERSHIP
I.R.S. Employer Identification No. 95-3187912
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9090 WILSHIRE BOULEVARD, SUITE 201, BEVERLY HILLS, CALIFORNIA 90211
Registrant's Telephone Number, Including Area Code (310) 278-2191
Securities Registered Pursuant to Section 12(b) or 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed with the Commission by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding twelve months (or 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
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
<PAGE> 2
PART I.
ITEM 1. BUSINESS:
Real Estate Associates Limited ("REAL" or the "Partnership") is a limited
partnership which was formed under the laws of the State of California on
September 15, 1977. On October 27, 1978, REAL offered 16,500 Limited
Partnership Interests through a public offering managed by Lehman Brothers Inc.
The general partners of Real Estate Associates Limited are Charles H.
Boxenbaum, an individual residing in California, and National Partnership
Investments Corp. ("NAPICO"), a California Corporation (the Corporate General
Partner). The business of REAL is conducted primarily by its general partners
as REAL has no employees of its own.
Casden Investment Corporation ("CIC") owns 100 percent of NAPICO's stock. The
current members of NAPICO's Board of Directors are Charles H. Boxenbaum, Bruce
E. Nelson, Alan I. Casden, Henry C. Casden and Brian D. Goldberg.
REAL holds limited partnership interests in eighteen local limited partnerships
as of December 31, 1996. Each of these limited partnerships owns a single low
income housing project which is subsidized and/or has a mortgage note payable
to or insured by agencies of the federal or local government.
In order to stimulate private investment in low income housing, the federal
government and certain state and local agencies have provided significant
ownership incentives, including among others, interest subsidies, rent
supplements, and mortgage insurance, with the intent of reducing certain market
risks and providing investors with certain tax benefits, plus limited cash
distributions and the possibility of long- term capital gains. There remains,
however, significant risks. The long-term nature of investments in government
assisted housing limits the ability of REAL to vary its portfolio in response
to changing economic, financial and investment conditions; such investments are
also subject to changes in local economic circumstances and housing patterns,
as well as rising operating costs, vacancies, rent collection difficulties,
energy shortages and other factors which have an impact on real estate values.
These Projects also require greater management expertise and may have higher
operating expenses than conventional housing projects.
The partnerships in which REAL has invested were, at least initially, organized
by private developers who acquired the sites, or options thereon, and applied
for applicable mortgage insurance and subsidies. REAL became the principal
limited partner in these local limited partnerships pursuant to arm's-length
negotiations with these developers, or others, who act as general partners. As
a limited partner, REAL's liability for obligations of the local limited
partnership is limited to its investment. The local general partner of the
local limited partnership retains responsibility for developing, constructing,
maintaining, operating and managing the project. Under certain circumstances,
REAL has the right to replace the general partner of the local limited
partnerships.
<PAGE> 3
Although each of the partnerships in which REAL has invested owns a project
which must compete in the market place for tenants, interest subsidies and rent
supplements from governmental agencies make it possible to offer these dwelling
units to eligible "low income" tenants at a cost significantly below the market
rate for comparable conventionally financed dwelling units in the area.
During 1996, all of the projects in which REAL had invested were substantially
rented. The following is a schedule of the status as of December 31, 1996, of
the projects owned by local limited partnerships in which REAL is a limited
partner.
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL HAS AN INVESTMENT
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Units Authorized
For Rental
Assistance Under
Section 8 or
Other Rent
No. of Supplement Units Percentage of
Name & Location Units Program Occupied Total Units
- --------------- ------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
Bedford House 48 48/ 0 47 98%
Falmouth, KY
Belleville Manor 32 32/ 0 32 100%
Marion, KY
Bethel Towers 146 93/ 53 142 97%
Detroit, MI
Cherry Hill Place 186 186/ 0 172 93%
Inkster, MI
Chidester Place 151 151/ 0 137 91%
Ypsilanti, MI
Clinton Apts. 32 32/ 0 31 97%
Clinton, KY
East Central Twrs 166 166/ 0 159 96%
Fort Wayne, IN
Gadsden Towers 101 101/ 0 101 100%
Gadsden, AL
Norristown Housing 175 175/ 0 175 100%
for the Elderly
Norristown, PA
Northwood Village 72 72/ 0 70 97%
Emporia, VA
</TABLE>
<PAGE> 4
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL HAS AN INVESTMENT
DECEMBER 31, 1996
(CONTINUED)
<TABLE>
<CAPTION>
Units Authorized
For Rental
Assistance Under
Section 8 or
Other Rent
No. of Supplement Units Percentage of
Name & Location Units Program Occupied Total Units
- --------------- ------- -------------- ----------- -------------
<S> <C> <C> <C> <C>
Park View Apts. 97 97/ 0 97 100%
Sacramento, CA
Ridgeview Estates 32 0/ 32 30 94%
Lewisburg, W. VA.
Ridgewood/LaLoma 75 75/ 0 74 99%
Sacramento, CA
Riverside Towers 200 200/ 0 200 100%
Medford, MA
Van Nuys Bldg. 299 299/ 0 299 100%
Los Angeles, CA
Wedgewood Village 32 0/ 32 32 100%
Ripley, W. VA
W. Lafayette Apts. 49 49/ 0 47 96%
W. Lafayette, OH
Williamson Towers 76 76/ 0 76 100%
Williamson, W. VA
------ --------- ----- ----
1,969 18521/117 1,921 98%
====== ========= =====
</TABLE>
<PAGE> 5
ITEM 2. PROPERTIES:
Through its investments in local limited partnerships, REAL holds interests in
real estate properties. See Item 1 and Schedule for information pertaining to
these properties.
ITEM 3. LEGAL PROCEEDINGS:
As of December 31, 1996, REAL's Corporate General Partner was a plaintiff or
defendant in several lawsuits. None of these suits were related to REAL.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
Not applicable.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS AND RELATED
SECURITY HOLDER MATTERS:
The Limited Partnership Interests are not traded on a public exchange but were
sold through a public offering managed by Lehman Brothers Inc. It is not
anticipated that any public market will develop for the purchase and sale of
any partnership interest. Limited Partnership Interests may be transferred
only if certain requirements are satisfied. At December 31, 1996, there were
1,108 registered holders of units in REAL. Distributions have not been made
from the inception of the Partnership to December 31, 1996. The Partnership
has invested in certain government assisted projects under programs which in
many instances restrict the cash return available to project owners. The
Partnership was not designed to provide cash distributions to investors in
circumstances other than refinancing or disposition of its investments in
limited partnerships.
<PAGE> 6
ITEM 6. SELECTED FINANCIAL DATA:
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Loss from Operations $ (490,373) $ (490,021) $ (462,078) $ (483,950) $ (478,213)
Distributions from Limited
Partnerships Recognized
as Income 465,403 1,373,243 321,584 590,286 301,975
Equity in Income of
Limited Partnerships
and Amortization of
Acquisition Costs 177,874 384,476 226,840 317,720 114,649
----------- ----------- ----------- ----------- ----------
Net Income (Loss) $ 152,904 $ 1,267,698 $ 86,346 $ 424,056 $ (61,589)
=========== =========== =========== =========== ==========
Net Income (Loss) per limited
Partnership Interest $ 9 $ 77 $ 5 $ 25 $ (4)
=========== =========== =========== =========== ==========
Total assets $ 2,863,973 $ 2,715,836 $ 2,491,676 $ 2,318,253 $1,790,584
=========== =========== =========== =========== ==========
Investments in Limited
Partnerships $ 2,486,997 $ 2,191,335 $ 1,843,340 $ 1,643,500 $1,352,780
=========== =========== =========== =========== ==========
Accrued Fees and Expenses
Due General Partner $ 1,021,677 $ 1,014,337 $ 1,396,997 $ 1,989,657 $1,882,317
=========== =========== =========== =========== ==========
</TABLE>
<PAGE> 7
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS:
LIQUIDITY
The Partnership's primary sources of funds include interest income on money
market accounts and certificates of deposit and distributions from local
partnerships in which the Partnership has invested. It is not expected that
any of the local limited partnerships in which the Partnership has invested
will generate cash flow sufficient to provide for distributions to the
Partnership's limited partners in any material amount.
CAPITAL RESOURCES
REAL received $16,500,000 in subscriptions for units of Limited Partnership
Interests (at $1,000 per unit) during the period October 27, 1978 through
August 31, 1979 pursuant to a registration statement on Form S-11.
RESULTS OF OPERATIONS
The Partnership was formed to provide various benefits to its partners as
discussed in Item 1. It is anticipated that the local limited partnerships in
which REAL has invested could produce tax losses for as long as 20 years. The
Partnership will seek to defer income taxes from a sale by not selling any
projects or project interests within 10 years, except to qualified tenant
cooperatives, or when proceeds of the sale would supply sufficient cash to
enable the partners to pay applicable taxes.
Tax benefits will decline over time as the advantages of accelerated
depreciation are greatest in the earlier years, as deductions for interest
expense decrease as mortgage principal is amortized and as the Tax Reform Act
of 1986 limits the deductions available.
The Partnership accounts for its investments in the local limited partnerships
on the equity method, thereby adjusting its investment balance by its
proportionate share of the income or loss of the local limited partnerships.
The equity in income of limited partnerships is realized from two investee
limited partnerships. All other investee limited partnerships have reduced
their investment balances to zero and as a result thereof, the Partnership does
not recognize equity in losses from those investments.
Distributions received from limited partnerships are recognized as a return of
capital until the investment balance has been reduced to zero or to a negative
amount equal to future capital contributions required. Subsequent
distributions received are recognized as income.
In 1994, the Partnership received a cash distribution from a limited
partnership (Van Nuys Associates) in the amount of $672,626. The distribution
was in part the result of a settlement for rent subsidy payments from prior
periods awarded to a group of property owners (including Van Nuys Associates)
who participated in a lawsuit against the U.S. Department of Housing and Urban
Development ("HUD"). HUD demanded the return of a substantial portion of these
funds based on the 9th Circuit Court's decision to overturn the injunctions
granted against HUD. As a result, the distribution was recorded as a liability
at December 31, 1994. Van Nuys Associates engaged Alexander Consultants Inc.
("ACI") to review the demand by HUD and perform an independent accounting of
the amounts due pursuant to the 9th Circuit Court's decision. Based on ACI's
findings, HUD agreed that the local partnership would be required to pay HUD
only $489,039, over the remaining seven year term of the Housing Assistance
Payments Contract. Since the Partnership's investment account in Van Nuys
Associates has been reduced to zero, the distribution of $672,626 was
recognized as income in 1995.
<PAGE> 8
The limited partnership which owns Chidester Place Apartments, has executed,
with the Corporate General Partner's consent, an Agreement for Purchase and
Sale of the Chidester Place apartment complex. The pending sale is predicated
on a $4,800,000 purchase offer from a Tennessee Limited Partnership sponsored
by Brencor Capital Funding ("Brencor").
Brencor has obtained preliminary approval from the Ypsilanti Downtown
Development Authority to finance the acquisition of the property with a new
tax-exempt bond issue which will qualify the prospective buyer to receive an
allocation of Low Income Housing Tax Credits. If the sale is completed, it is
anticipated that the Partnership will receive sale proceeds more than
sufficient to return the Partnership's original capital investment and to
offset the projected tax liability associated with the Partnership's
disposition of the property. The Partnership has a zero carrying value for
this investment at December 31, 1996 and 1995.
Except for certificates of deposit and money market funds, the Partnership's
investments are entirely interests in other limited partnerships owning
government assisted projects. Available cash is invested in short-term
investments and cash equivalents, earning interest income as reflected in the
statements of operations. These short-term investments and cash equivalents
can be converted to cash to meet obligations as they arise. The Partnership
intends to continue investing available funds in this manner.
A recurring Partnership expense is the annual management fee. The fee is
payable to the Corporate General Partner of the Partnership and is calculated
as a percentage of the Partnership's invested assets. The management fee
represents the annual recurring fee which is paid to the Corporate General
Partner for its continuing management of Partnership affairs.
Operating expenses, other than management fees of the Partnership, consist
substantially of professional fees for services rendered to the Partnership.
The Partnership, as a Limited Partner in the local limited partnerships in
which it has invested, is subject to the risks incident to the construction,
management, and ownership of improved real estate. The Partnership investments
are also subject to adverse general economic conditions, and accordingly, the
status of the national economy, including substantial unemployment and
concurrent inflation, could increase vacancy levels, rental payment defaults,
and operating expenses, which in turn, could substantially increase the risk of
operating losses for the projects.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:
The Financial Statements and Supplementary Data are listed under Item 14.
ITEM 9. CHANGES WITH AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE:
Not applicable.
<PAGE> 9
REAL ESTATE ASSOCIATES LIMITED
(A California limited partnership)
FINANCIAL STATEMENTS,
FINANCIAL STATEMENT SCHEDULES
AND INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
DECEMBER 31, 1996
<PAGE> 10
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
Real Estate Associates Limited
(A California limited partnership)
We have audited the accompanying balance sheets of Real Estate Associates
Limited (a California limited partnership) as of December 31, 1996 and 1995,
and the related statements of operations, partners' equity (deficiency) and
cash flows for each of the three years in the period ended December 31, 1996.
Our audits also included the financial statement schedules listed in the index
on item 14. These financial statements and financial statement schedules are
the responsibility of the management of the Partnership. Our responsibility is
to express an opinion on these financial statements and financial statement
schedules based on our audits. We did not audit the financial statements of
certain limited partnerships, the investments in which are reflected in the
accompanying financial statements using the equity method of accounting. The
investments in these limited partnerships represent 4 percent and 1 percent of
total assets as of December 31, 1996 and 1995, respectively, and the equity in
income of these limited partnerships represent 17 percent and 8 percent of the
total net income of the Partnership for the years ended December 31, 1996 and
1995, respectively, and represent a substantial portion of the investee
information in Note 2 and the financial statement schedules. The financial
statements of these limited partnerships are audited by other auditors. Their
reports have been furnished to us and our opinion, insofar as it relates to the
amounts included for these limited partnerships, is based solely on the reports
of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe our audits and the reports of other
auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material
respects, the financial position of Real Estate Associates Limited as of
December 31, 1996 and 1995, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles. Also, in our
opinion, based on our audits and the reports of other auditors, such financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
DELOITTE & TOUCHE LLP
Los Angeles, California
March 26, 1997
<PAGE> 11
[LOGO]
[LANDSMAN, FRANK AND BLOCH LETTERHEAD]
Independent Auditors' Report
To the Partners
The Bedford House, Ltd.
(A Limited Partnership)
We have audited the accompanying balance sheets of The Bedford House, Ltd. (A
Limited Partnership), FHA Project Number 083-35232-L8-PM-WAH as of December 31,
1996 and 1995, and the related statements of operations, changes in partners'
deficiency and cash flows for the years then ended. These financial statements
are the responsibility of the Partnership's management. Our responsibility is
to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of The Bedford House, Ltd. (A
Limited Partnership) as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
<PAGE> 12
In accordance with Government Auditing Standards, we have also issued a report
dated February 18, 1997 on our consideration of the Partnership's internal
control structure and reports dated February 18, 1997 on its compliance with
specific requirements applicable to major and nonmajor HUD programs and
affirmative fair housing.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information (shown on pages 12 through 20) is presented for purposes of
additional analysis and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/ LANDSMAN, FRANK AND BLOCH
An Accountancy Corporation
Beverly Hills, California
February 18, 1997
Employer Identification
Number 95-2783759
Audit Principal:
Alan H. Salz, C.P.A.
<PAGE> 13
[LOGO]
[BURKHALTER, RYAN & COMPANY, P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Belleville Manor Apartments, Ltd.
(A Limited Partnership)
Marion, Kentucky
We have audited the accompanying balance sheet of Belleville Manor Apartments,
Ltd., Project No. 083-35219-L8-PM-PAH (a limited partnership), as of December
31, 1996, and the related statements of income, and cash flows and changes in
partner's deficit for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit. The
financial statements of Belleville Manor Apartments, Ltd. as of December 31,
1995 were audited by other auditors whose report dated February 20, 1996,
expressed an unqualified opinion on those statements.
We have conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the 1996 financial statements referred to above present fairly,
in all material respects, the financial position of Belleville Manor
Apartments, Ltd. at December 31, 1996, and the result of its operations and its
cash flows and its changes in partners' deficit for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 7, 1997, on our consideration of Belleville Manor Apartments'
internal control structure and a report dated February 7, 1997, on its
compliance with laws and regulations.
The accompanying supplementary information (shown on pages 13-23) is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ BURKHALTER, RYAN & COMPANY, P.C.
February 7, 1997
<PAGE> 14
[LOGO]
[J. MICHAEL WOODGATE, P.C. LETTERHEAD]
Independent Auditor's Report
To the Partners
Bethel Towers Limited
Dividend Housing Association
(a Michigan limited partnership)
Detroit, Michigan
Gentlemen:
I have audited the accompanying Balance Sheet of Bethel Towers Limited Dividend
Housing Association, (a Michigan limited partnership), FHA Project No.
044-27-NI-RAP, MSHDA No. 213, as of December 31, 1996, and the related
Statements of Profit and Loss (HUD Form 92410), Partners' Equity (Deficit) and
Cash Flows for the year then ended. These financial statements are the
responsibility of the Partnership's management. My responsibility is to express
an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards
and Government Auditing Standards issued by the Comptroller General of the
United States.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bethel Towers Limited Dividend
Housing Association at December 31, 1996 and the results of its operations and
its cash flows for the year then ended in conformity with generally accepted
accounting principles.
My audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data on pages 13
through 19 is presented for purposes of additional analysis and are not a
required part of the basic financial statements. This additional information is
the responsibility of the partnership's management. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in my opinion, is fairly presented, in all material
respects, in relation to the basic financial statements taken as a whole.
In accordance with Government Auditing Standards, I have also issued a report
dated January 17, 1997 on my consideration of the partnership's internal
control structure and a report dated January 17, 1997 on its compliance with
laws and regulations.
/s/ J. MICHAEL WOODGATE, P.C.
Certified Public Accountants
January 17, 1997
<PAGE> 15
[LOGO]
[COOPERS & LYBRAND LLP LETTERHEAD]
Report of Independent Accountants
To the Partners of
Cherry Hill Limited Dividend
Housing Association:
We have audited the accompanying balance sheet of Cherry Hill Limited Dividend
Housing Association (a Michigan limited partnership), MSHDA Development No.
559, as of December 31, 1996 and the related statements of profit and loss,
partners' equity, and cash flows for the year then ended. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cherry Hill Limited Dividend
Housing Association as of December 31, 1996 and the results of its operations
and its cash flows for the year then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 1, 1997 on our consideration of Cherry Hill Limited Dividend
Housing Association's internal control structure and a report dated February 1,
1997 on its compliance with laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental data included on pages
12 and 13 is presented for purposes of additional analysis and is not a
required part of the basic financial statements of Cherry Hill Limited Dividend
Housing Association. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated, in all material respects, in relation to the basic
financial statements taken as a whole.
<PAGE> 16
We have previously audited and expressed an unqualified opinion on the basic
financial statements of Cherry Hill Limited Dividend Housing Association for
the years 1990 through 1995. The supplemental data included on page 14,
relating to the years 1990 through 1996, is fairly stated, in all material
respects, in relation to the basic financial statements from which it has been
derived. The data on page 14 for the years 1980 through 1989 was not audited by
us and, accordingly, we do not express an opinion on such data. That data was
audited by other auditors who have ceased operations and whose report, dated
January 17, 1990, stated that such information was fairly stated, in all
material respects, in relation to the basic financial statements taken as a
whole.
/s/ COOPERS & LYBRAND LLP
Detroit, Michigan
February 1, 1997
<PAGE> 17
[LOGO]
[POLK AND ASSOCIATES LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of Chidester Place Limited Dividend
Housing Association Beverly Hills, Michigan
We have audited the accompanying balance sheet of Chidester Place Limited
Dividend Housing Association (a Michigan limited partnership), as of December
31, 1996, and the related statements of partners' equity, profit and loss and
cash flows and schedule of reconciliation of net income to net cash flows
provided by operating activities for the year then ended. These financial
statements are the responsibility of the Project's management. Our
responsibility is to express an opinion on these financial statements 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 financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Chidester Place Limited
Dividend Housing Association at December 31, 1996, and the results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/ POLK AND ASSOCIATES, P.C
38-2964068
Lead Auditor:
Richard G. Williams, Jr., C.P.A.
(810) 642-5700
February 12, 1997
<PAGE> 18
[LOGO]
[BURKHALTER, RYAN & COMPANY, P.C. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Partners
Clinton Apartments, Ltd.
(A Limited Partnership)
Clinton, Kentucky
We have audited the accompanying balance sheet of Clinton Apartments, Ltd.,
Project No. 083-35225-L8-PM-PAH (a limited partnership), as of December 31,
1996, and the related statements of income, and cash flows and changes in
partner's deficit for the year then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit. The
financial statements of Clinton Apartments, Ltd. as of December 31, 1995 were
audited by other auditors whose report dated February 20, 1996, expressed an
unqualified opinion on those statements.
We have conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the 1996 financial statements referred to above present fairly,
in all material respects, the financial position of Clinton Apartments, Ltd. at
December 31, 1996, and the result of its operations and its cash flows and its
changes in partners' deficit for the year then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 31, 1997, on our consideration of Clinton Apartments' internal
control structure and a report dated January 31, 1997, on its compliance with
laws and regulations.
The accompanying supplementary information (shown on pages 13-23) is presented
for purposes of additional analysis and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ BURKHALTER, RYAN & COMPANY, P.C.
January 31, 1997
<PAGE> 19
[LOGO]
[MARCINIAK & OLSZEWSKI LETTERHEAD]
Independent Auditor's Report
To the Partners of
East Central Towers Associates
We have audited the accompanying balance sheet of East Central Towers
Associates (an Indiana limited partnership, FHA Project No. 073-35307-PM-L8) as
of December 31, 1996, and the related statements of profit and loss, changes in
partners' equity (deficit) and cash flows for the year then ended. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of East Central Towers Associates
as of December 31, 1996, and the results of its operations and cash flows for
the year then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated February 4, 1997 on our
consideration of East Central Towers Associates' internal control structure and
reports dated February 4, 1997 on its compliance with specific requirements
applicable to major HUD programs and specific requirements applicable to
Affirmative Fair Housing.
The supplemental information on pages 15 to 21 is presented for the purposes of
additional analysis and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s MARCINIAK & OLSZEWSKI
February 4, 1997
<PAGE> 20
[LOGO]
[E.H. JOHNSON & COMPANY, P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Gadsden Towers, Ltd.
We have audited the accompanying balance sheet of Gadsden Towers, Ltd. (a
limited partnership) as of December 31, 1996 and the related statements of
operations, changes in partners' deficit and cash flows for the year then
ended. The financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on the financial
statements 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 financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Gadsden Towers, Ltd. at
December 31, 1996 and the results of its operations and its cash flows, for the
year then ended in conformity with generally accepted accounting principles.
Our examination was made for the purpose of forming an opinion on the basic
financial statements, pages 2 through 9, inclusive, taken as a whole. The other
data on pages 10 through 12, inclusive, is presented for purposes of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the
examination of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ E.H. JOHNSON & COMPANY, P.C.
Knoxville, Tennessee
January 27, 1997
<PAGE> 21
[LOGO]
[COOPERS & LYBRAND LLP LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Pennsylvania Associates
Limited Partnership:
We have audited the accompanying balance sheets of Pennsylvania Associates
Limited Partnership, PHFA Project No. R-438-8E, as of December 31, 1996 and
1995, and the related statements of profit and loss, partners' capital
deficiency, and cash flows for the years then ended. These financial statements
are the responsibility of the management of Pennsylvania Associates Limited
Partnership. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pennsylvania Associates
Limited Partnership, PHFA Project No. R-438-8E, as of December 31, 1996 and
1995, and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 31, 1997 on our consideration of Pennsylvania Associates Limited
Partnership's internal control structure and a report dated January 31, 1997,
on its compliance with laws and regulations.
/s/ COOPERS & LYBRAND LLP
Boston, Massachusetts
January 31, 1997
<PAGE> 22
[LOGO]
[ERNST & YOUNG LLP LETTERHEAD]
Report of Independent Auditors
Partners
Emporia Limited
We have audited the accompanying balance sheets of Emporia Limited (a Virginia
Limited Partnership) as of December 31, 1996 and 1995, and the related
statements of operations, changes in partners' (deficit) equity, and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Emporia Limited at December
31, 1996 and 1995, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have issued a report dated
January 24, 1997, on our consideration of Emporia Limited's internal control
structure and a report dated January 24, 1997, on its compliance with laws and
regulations.
/s/ ERNST & YOUNG LLP
January 24, 1997
<PAGE> 23
[LOGO]
[BDO SEIDMAN, LLP LETTERHEAD]
Independent Auditors' Report
To the Partners
Parkview Associates, Ltd.
Chicago, Illinois
We have audited the accompanying balance sheets of Parkview Associates, Ltd.
(a Limited Partnership) (CHFA Project No. 78049-N) as of December 31, 1996 and
1995, and the related statements of income, changes in partners' deficit and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Parkview Associates, Ltd. as
of December 31, 1996 and 1995, and the results of its operations, changes in
partners' deficit and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 7, 1997 on our consideration of Parkview Associates, Ltd.'s
internal control structure and a report dated February 7, 1997 on its
compliance with laws and regulations.
/s/ BDO SEIDMAN, LLP
Chicago, Illinois
February 7, 1997
<PAGE> 24
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Roebern, Ltd.
We have audited the balance sheets of ROEBERN, LTD., FmHA Project Number 57-
13-1332862, as of December 31, 1996 and 1995, and the statements of operations,
changes in partners' deficit and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall financial
statement presentation. We believe our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Roebern, Ltd. at December 31,
1996 and 1995, and the results of its operations and cash flows for the years
then ended in conformity with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The additional 1996 financial data on pages 11
through 18 are presented for purposes of additional analysis and are not a
required part of the financial statements. This information has been subjected
to the procedures applied in the audits of the financial statements and, in our
opinion, is stated fairly in all material respects in relation to the financial
statements taken as a whole.
/s/ ATSCHULER, MELVOIN AND GLASSER LLP
Chicago, Illinois
February 17, 1997
<PAGE> 25
[LOGO]
[BDO SEIDMAN, LLP LETTERHEAD]
Independent Auditors' Report
To the Partners
La Loma Associates. Ltd.
San Francisco, California
We have audited the accompanying balance sheets of La Loma Associates, Ltd. (a
Limited Partnership) (CHFA Project No. 78048-N) as of December 31, 1996 and
1995, and the related statements of income, changes in partners' deficit and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management. as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of La Loma Associates, Ltd. as of
December 31, 1996 and 1995, and the results of its operations, changes in
partners' deficit and cash flows for the years then ended, in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 7, 1997 on our consideration of La Loma Associates, Ltd.'s
internal control structure and a report dated February 7, 1997 on its
compliance with laws and regulations.
/s/ BDO SEIDMAN, LLP
Chicago, Illinois
February 7, 1997
<PAGE> 26
[LOGO]
[COOPERS & LYBRAND LLP LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Riverside Towers Associates Limited Partnership:
We have audited the accompanying balance sheet of Riverside Towers Associates
Limited Partnership as of December 31, 1996, and the related statements of
profit and loss, partners' capital (deficiency), and cash flows for the year
then ended. These financial statements are the responsibility of the management
of Riverside Towers Associates Limited Partnership. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards
and Government Auditing Standards, issued by the Comptroller General of the
United States. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Riverside Towers Associates
Limited Partnership, as of December 31, 1996, and the results of its operations
and its cash flows for the year then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated January 31, 1997 on our consideration of Riverside Towers Associates
Limited Partnership's internal control structure and a report dated January 31,
1997 on its compliance with laws and regulations.
/s/ COOPERS & LYBRAND LLP
Boston, Massachusetts
January 31, 1997
<PAGE> 27
[LOGO]
[ALTSCHULER, MELVIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Van Nuys Associates
We have audited the accompanying balance sheets of VAN NUYS ASSOCIATES (a
limited partnership), FHA Project No. 122-35481-PM-WAH-L8 (the "Partnership")
as of December 31, 1996 and 1995, and the related statements of operations,
changes in partners' deficiency and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Van Nuys Associates as of
December 31, 1996 and 1995, and the results of its operations, changes in its
partners' deficiency, and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 17, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 17, 1997 on its compliance with
laws and regulations.
<PAGE> 28
Our audits were conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying additional 1996
financial data shown on pages 14 through 21 are presented for purposes of
additional analysis and are not a required part of the basic financial
statements of the Partnership. Such information has been subjected to the
auditing procedures applied in the audit of the 1996 financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/ ALTSCHULER, MELVOIN AND GLASSER LLP
Los Angeles, California
February 17, 1997
<PAGE> 29
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Bernroe, Ltd.
We have audited the balance sheets of BERNROE, LTD., FmHA Project Number 57-
18-1333001, as of December 31, 1996 and 1995, and the statements of operations,
changes in partners' deficit and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall financial
statement presentation. We believe our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bernroe, Ltd. at December 31,
1996 and 1995, and the results of its operations and cash flows for the years
then ended in conformity with generally accepted accounting principles.
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The additional 1996 financial data are presented
for purposes of additional analysis and are not a required part of the
financial statements. This information has been subjected to the procedures
applied in the audits of the 1996 financial statements and, in our opinion, is
stated fairly in all material respects in relation to the financial statements
taken as a whole.
/s/ ATSCHULER, MELVOIN AND GLASSER LLP
Chicago, Illinois
February 17, 1997
<PAGE> 30
[LOGO]
[ALTSCHULER, MELVIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
AND SUPPLEMENTARY INFORMATION REQUIRED BY
FARMERS HOME ADMINISTRATION
To the Partners of
West Lafayette, Ltd.
We have audited the accompanying balance sheets of WEST LAFAYETTE, LTD. (a
limited partnership), FmHA Project No. OH16-R000-008 (the "Partnership"), as of
December 31, 1996 and 1995, and the related statements of operations, changes
in partners' deficiency and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of West Lafayette, Ltd. as of
December 31, 1996 and 1995, and the results of its operations and its cash
flows for the years then ended, in conformity with generally accepted
accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 17, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 17, 1997 on its compliance with
laws and regulations.
<PAGE> 31
Our audits were conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The 1996 supplementary information is
presented for the purpose of additional analysis and is not a required part of
the financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the 1996 financial statements and, in our
opinion, is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ ALTSCHULER, MELVOIN AND GLASSER LLP
Los Angeles, California
February 17, 1997
<PAGE> 32
[LOGO]
[DELOITTE & TOUCHE LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Williamson Towers Associates:
We have audited the accompanying balance sheets of Williamson Towers
Associates, a limited partnership, (Project No. 045-35100) as of December 31,
1996 and 1995, and the related statements of operations and partners' deficit
and of cash flows for the years then ended. These financial statements are the
responsibility of the General Partner. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by the General Partner, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Williamson Towers Associates (Project No.
045-35100) as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information of Williamson
Towers Associates (Project No. 045-35100) on pages 8 through 19 is presented
for the purpose of additional analysis and is not a required part of the basic
financial statements, but pages 8 through 18 are required by the Consolidated
Audit Guide for Audits of HUD Programs, issued July 1993 by the U.S. Department
of Housing and Urban Development, Office of the Inspector General. This
additional information is the responsibility of the General Partner. Such
additional information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects when considered in relation to the basic
financial statements taken as a whole.
In accordance with Government Auditing Standards, we have also issued a report
dated January 15, 1997, on our consideration of the Partnership's internal
control structure and a report dated January 15, 1997, on its compliance with
laws and regulations.
/s/ DELOITTE & TOUCHE
January 15, 1997
<PAGE> 33
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
ASSETS
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2) $ 2,486,997 $ 2,191,335
CASH AND CASH EQUIVALENTS (Note 1) 376,976 250,570
SHORT TERM INVESTMENTS (Note 1) - 125,000
RECEIVABLES FROM LIMITED
PARTNERSHIPS (Note 2) - 148,931
----------- -----------
TOTAL ASSETS $ 2,863,973 $ 2,715,836
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Accounts payable $ 7,929 $ 20,036
Accrued fees and expenses due
general partner (Notes 3 and 6) 1,021,677 1,014,337
----------- -----------
1,029,606 1,034,373
----------- -----------
COMMITMENTS AND CONTINGENCIES (Notes 3 and 4)
PARTNERS' EQUITY (DEFICIENCY):
General partners (108,726) (110,255)
Limited partners 1,943,093 1,791,718
----------- -----------
1,834,367 1,681,463
----------- -----------
TOTAL LIABILITIES AND PARTNERS'
EQUITY $ 2,863,973 $ 2,715,836
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 34
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
---------- ------------ ----------
<S> <C> <C> <C>
INTEREST AND OTHER INCOME $ 17,526 $ 20,135 $ 22,596
---------- ------------ ----------
OPERATING EXPENSES:
Legal and accounting 52,552 53,400 29,198
Management fees - general partner (Note 3) 407,340 407,340 407,340
Administrative (Note 3) 48,007 49,416 48,136
---------- ------------ ----------
Total operating expenses 507,899 510,156 484,674
---------- ------------ ----------
LOSS FROM OPERATIONS (490,373) (490,021) (462,078)
DISTRIBUTIONS FROM LIMITED
PARTNERSHIPS RECOGNIZED AS
INCOME (Note 2) 465,403 1,373,243 321,584
EQUITY IN INCOME OF LIMITED
PARTNERSHIPS AND AMORTIZATION
OF ACQUISITION COSTS (Note 2) 177,874 384,476 226,840
---------- ------------ ----------
NET INCOME $ 152,904 $ 1,267,698 $ 86,346
========== ============ ==========
NET INCOME PER LIMITED
PARTNERSHIP INTEREST (Note 1) $ 9 $ 77 $ 5
========== ============ ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 35
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
---------- ------------ ------------
<S> <C> <C> <C>
EQUITY (DEFICIENCY),
January 1, 1994 $ (123,795) $ 451,214 $ 327,419
Net income for 1994 863 85,483 86,346
---------- ------------ ------------
EQUITY (DEFICIENCY),
December 31, 1994 (122,932) 536,697 413,765
Net income for 1995 12,677 1,255,021 1,267,698
---------- ------------ ------------
EQUITY (DEFICIENCY),
December 31, 1995 (110,255) 1,791,718 1,681,463
Net income for 1996 1,529 151,375 152,904
---------- ------------ ------------
EQUITY (DEFICIENCY),
December 31, 1996 $ (108,726) $ 1,943,093 $ 1,834,367
========== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 36
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
---------- ----------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 152,904 $ 1,267,698 $ 86,346
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Equity in income of limited partnerships
and amortization of acquisition costs (177,874) (384,476) (226,840)
Increase (decrease) in accrued fees and
expenses due general partner 7,340 (382,660) (592,660)
Increase (decrease) in accounts payable (12,107) 11,749 7,110
Increase (decrease) in deferred distribution - (672,627) 672,627
Increase (decrease) in receivables from
limited partnerships 148,931 (32,306) (13,626)
---------- ----------- ----------
Net cash provided by (used in)
operating activities 119,194 (192,622) (67,043)
---------- ----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease (increase) in short term investments 125,000 - (125,000)
Distributions from limited partnership
recognized as return of capital 36,482 36,481 27,000
Capital contribution to limited partnerships (154,270) - -
---------- ----------- ----------
Net cash provided by (used in) investing
activities 7,212 36,481 (98,000)
---------- ----------- ----------
NET INCREASE (DECREASE) IN CASH
CASH EQUIVALENTS 126,406 (156,141) (165,043)
CASH AND CASH EQUIVALENTS,
beginning of year 250,570 406,711 571,754
---------- ----------- ----------
CASH AND CASH EQUIVALENTS,
end of year $ 376,976 $ 250,570 $ 406,711
========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 37
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Real Estate Associates Limited (the "Partnership") was formed under
the California Limited Partnership Act on September 15, 1977. The
Partnership was formed to invest in other limited partnerships which
own and operate primarily federal, state and local government-
assisted housing projects. The general partners are National
Partnership Investments Corp. (NAPICO), the corporate general partner,
and Charles H. Boxenbaum, an officer of NAPICO. Casden Investment
Corporation owns 100 percent of NAPICO'S stock.
The Partnership issued 16,505 units of limited partnership interests
through a public offering. The general partners have a 1 percent
interest in the profits and losses of the Partnership. The limited
partners have the remaining 99 percent interest which is allocated in
proportion to their respective individual investments.
The Partnership shall be dissolved only upon the expiration of 53
complete calendar years (December 31, 2031) from the date of the
formation of the Partnership or the occurrence of various other events
as specified in the terms of the Partnership agreement.
Upon total or partial liquidation of the Partnership or the
disposition or partial disposition of a project or project interest
and distribution of the proceeds, the general partners will be
entitled to a liquidation fee as stipulated in the Partnership
agreement. The limited partners will have a priority return equal to
their invested capital attributable to the project(s) or project
interest(s) sold and shall have received an amount from the sale of
the project(s) or project interest(s) sufficient to pay state and
federal income taxes, if any, calculated at the maximum rate then in
effect. The general partners' liquidation fee may accrue but shall
not be paid until the limited partners have received distributions
equal to 100 percent of their capital contributions.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ
from those estimates.
Method of Accounting for Investments in Limited Partnerships
The investments in limited partnerships are accounted for on the
equity method. Acquisition, selection and other costs related to the
acquisition of the projects are capitalized to the investment account
and are being amortized on a straight line basis over the estimated
lives of the underlying assets, which is generally 30 years.
5
<PAGE> 38
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Net Income Per Limited Partnership Interest
Net income per limited partnership interest was computed by dividing
the limited partners' share of net income by the number of limited
partnership interests outstanding during the year. The number of
limited partnership interests was 16,505 for all years presented.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and bank certificates of
deposit with an original maturity of three months or less.
Short Term Investments
Short term investments consist of bank certificates of deposit with
original maturities ranging from more than three months to twelve
months. The fair value of these securities, which have been
classified as held for sale, approximates their carrying value.
Impairment of Long-Lived Assets
The Partnership reviews long-lived assets to determine if there has
been any permanent impairment whenever events or changes in
circumstances indicate that the carrying amount of the asset may not
be recoverable. If the sum of the expected future cash flows is less
than the carrying amount of the assets, the Partnership recognizes an
impairment loss.
2. INVESTMENTS IN LIMITED PARTNERSHIPS
The Partnership holds limited partnership interests in 18 limited
partnerships. The limited partnerships own residential low income
rental projects consisting of 1,969 apartment units. The mortgage
loans of these projects are payable to or insured by various
governmental agencies.
The Partnership, as a limited partner, is entitled to between 50
percent and 99 percent of the profits and losses in the limited
partnerships.
Equity in losses of limited partnerships are recognized in the
financial statements until the limited partnership investment account
is reduced to a zero balance. Losses incurred after the limited
partnership investment account is reduced to zero are not recognized.
The cumulative amount of the unrecognized equity in losses of certain
limited partnerships was in aggregate approximately $12,317,000 and
$12,403,000 as of December 31, 1996 and 1995, respectively.
Distributions from the limited partnerships are accounted for as a
return of capital until the investment balance is reduced to zero.
Subsequent distributions received are recognized as income.
6
<PAGE> 39
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
In 1994, the Partnership received a cash distribution from a limited
partnership (Van Nuys Associates) in the amount of $672,626 as part of
a settlement for rent subsidy payments from prior periods awarded to a
group of property owners (including Van Nuys Associates) who
participated in a lawsuit against the U.S. Department of Housing and
Urban Development ("HUD"). HUD demanded the return of a substantial
portion of these funds based on the 9th Circuit Court's decision to
overturn the injunctions granted against HUD. As a result, the
distribution was recorded as a liability at December 31, 1994. In
1995, HUD agreed that the local partnership would only be required to
pay HUD $489,039, by reducing the monthly rental assistance receipts
from HUD over the remaining seven year term of the Housing Assistance
Payments Contract. Since the Partnership's investment account in Van
Nuys Associates was reduced to zero, the distribution of $672,626 was
recognized as income in 1995.
The limited partnership which owns Chidester Place Apartments, has
executed, with NAPICO's consent, an Agreement for Purchase and Sale of
the Chidester Place apartment complex. The pending sale is predicated
on a $4,800,000 purchase offer from a Tennessee Limited Partnership
sponsored by Brencor Capital Funding ("Brencor").
Brencor has obtained preliminary approval from the Ypsilanti Downtown
Development Authority to finance the acquisition of the property with
a new tax-exempt bond issue which will qualify the prospective buyer
to receive an allocation of Low Income Housing Tax Credits. If the
sale is completed, it is anticipated that the Partnership will receive
sale proceeds more than sufficient to return the Partnership's
original capital investment and to offset the projected tax liability
associated with the Partnership's disposition of the property. The
Partnership has a zero carrying value for this investment at December
31, 1996 and 1995.
The following is a summary of the investments in limited partnerships
and reconciliation to the limited partnership accounts:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Investment balance, beginning of year $2,191,335 $1,843,340
Capital contribution 154,270 -
Equity in income of limited partnerships 180,660 387,262
Amortization of capitalized acquisition costs and fees (2,786) (2,786)
Cash distributions recognized as return of capital (36,482) (36,481)
---------- ----------
Investment balance, end of year $2,486,997 $2,191,335
========== ==========
</TABLE>
The difference between the investment per the accompanying balance
sheets at December 31, 1996 and 1995, and the deficiency per the limited
partnerships' combined financial statements is due primarily to
cumulative unrecognized equity in losses of certain limited
partnerships, costs capitalized to the investment account and cumulative
distributions recognized as income.
7
<PAGE> 40
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
Selected financial information from the combined financial statements of
the limited partnerships at December 31, 1996 and 1995 and for each of
three years in the period ended December 31, 1996 is as follows:
<TABLE>
<CAPTION>
Balance Sheets
--------------
1996 1995
-------- --------
(in thousands)
<S> <C> <C>
Land and buildings, net $ 34,996 $ 36,863
======== ========
Total assets $ 49,128 $ 50,498
======== ========
Mortgages payable $ 66,196 $ 64,896
======== ========
Total liabilities $ 68,748 $ 69,877
======== ========
Deficiency of Real Estate Associates Limited $(15,743) $(15,662)
======== ========
Deficiency of other partners $ (3,877) $ (3,717)
======== ========
</TABLE>
Statements of Operations
------------------------
<TABLE>
<CAPTION>
1996 1995 1994
------- ------- -------
(in thousands)
<S> <C> <C> <C>
Total revenues $16,955 $16,566 $16,783
======= ======= =======
Interest expense $ 4,935 $ 4,774 $ 5,009
======= ======= =======
Depreciation and amortization $ 2,610 $ 2,679 $ 2,725
======= ======= =======
Total expenses $16,384 $16,246 $16,241
======= ======= =======
Net income $ 571 $ 320 $ 542
======= ======= =======
Net income allocable to the Partnership $ 420 $ 380 $ 503
======= ======= =======
</TABLE>
8
<PAGE> 41
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
NAPICO, or one of its affiliates, is the general partner in five of the
limited partnerships included above, and another affiliate receives
property management fees of approximately 5 to 6 percent of the revenue
from three of these partnerships. The affiliate received property
management fees of $206,629, $215,133 and $195,590 in 1996, 1995 and
1994, respectively. The following sets forth significant data for the
partnerships, in which an affiliate of NAPICO was the general partner,
reflected in the accompanying financial statements using the equity
method of accounting:
<TABLE>
<CAPTION>
1996 1995 1994
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Total assets $ 17,025 $ 17,959
======== ========
Total liabilities $ 25,477 $ 25,669
======== ========
Deficiency of Real Estate Associates Limited $ (8,111) $ (7,401)
======== ========
Deficiency of other partners $ (341) $ (309)
======== ========
Total revenue $ 4,205 $ 3,922 $ 4,408
======== ======== ========
Net loss $ (454) $ (768) $ (272)
======== ======== ========
</TABLE>
In certain cases, the Partnership is making loans to fund deficits at
the limited partnerships.
3. FEES AND EXPENSES DUE GENERAL PARTNER
Under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to NAPICO for an annual
management fee equal to .5 percent of the original invested assets of
the limited partnerships. Invested assets is defined as the costs of
acquiring project interests, including the proportionate amount of the
mortgage loans related to the Partnership's interest in the capital
accounts of the respective partnerships.
As of December 31, 1996, the fees and expenses due NAPICO exceeded the
Partnership's cash. NAPICO, during the forthcoming year, will not
demand payment of amounts due in excess of such cash or such that the
Partnership would not have sufficient operating cash; however, the
Partnership will remain liable for all such amounts.
The Partnership reimburses NAPICO for certain expenses. The
reimbursement to NAPICO was $22,039, $20,617 and $19,871 in 1996, 1995
and 1994, respectively, and is included in operating expenses.
9
<PAGE> 42
REAL ESTATE ASSOCIATES LIMITED
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1996
4. CONTINGENCIES
The corporate general partner of the Partnership is a plaintiff in
various lawsuits and has also been named a defendant in other lawsuits
arising from transactions in the ordinary course of business. In the
opinion of management and the corporate general partner, the claims will
not result in any material liability to the Partnership.
5. INCOME TAXES
No provision has been made for income taxes in the accompanying
financial statements since such taxes, if any, are the liability of the
individual partners. The major differences in tax and financial
reporting result from the use of different bases and depreciation
methods for the properties held by the limited partnerships.
Differences in tax and financial reporting also arise as losses are not
recognized for financial reporting purposes when the investment balance
has been reduced to zero.
6. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about
Fair Value of Financial Instruments," requires disclosure of fair value
information about financial instruments, when it is practicable to
estimate that value. The operations generated by the investee limited
partnerships, which account for the Partnership's primary source of
revenues, are subject to various government rules, regulations and
restrictions which make it impracticable to estimate the fair value of
accrued fees and expenses due general partner. The carrying amount of
other assets and liabilities reported on the balance sheets that require
such disclosure approximates fair value due to their short-term
maturity.
7. FOURTH QUARTER ADJUSTMENT
The Partnership's policy is to record its equity in the income of
limited partnerships on a quarterly basis, using estimated financial
information furnished by the various local operating general partners.
The equity in income of limited partnerships reflected in the
accompanying annual financial statements is based primarily upon audited
financial statements of the investee limited partnerships. The
increase, approximately $155,000, between the estimated nine-month
equity in income and the actual 1996 year end equity in income has been
recorded in the fourth quarter.
10
<PAGE> 43
SCHEDULE
REAL ESTATE ASSOCIATES LIMITED
INVESTMENT IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
Year Ended December 31, 1996
----------------------------------------------------------------------
Cash
Balance Capital Distri- Equity Balance
January Contri- butions in December
Limited Partnerships 1, 1996 butions Received Income/(Loss) 31, 1996
- -------------------- ------- ------- -------- ------------- --------
<S> <C> <C> <C> <C> <C>
Bedford House, Ltd. $ $ $ $ $
Belleville Manor Apts. Ltd.
Bernroe, Ltd. (Wedgewood) 55,392 (53,392)
Bethel Towers, Ltd.
Cherry Hill, Ltd.
Dividend Housing Assn. 2,019,420 (27,000) 230,330 2,222,750
Chidester Place, Ltd.
Dividend Housing Assn.
Clinton Apts., Ltd.
East Central Towers
Associates
Emporia Ltd. (Northwood) 171,915 (9,482) 101,814 264,247
Gadsden Towers, Ltd.
LaLoma Assoc., Ltd.
Parkview Assoc.,
Pennsylvania Assoc.
(Norristown)
Riverside Towers Assoc.
Roebern, Ltd.
(Ridgeview) 72,878 (72,878)
Van Nuys Assoc.
West Lafayette, Ltd. 26,000 (26,000)
Williamson Towers, Ltd.
---------- ----------- ---------- --------- ----------
$2,191,335 $ 154,270 $ (36,482) $ 177,874 $2,486,997
========== =========== ========== ========= ==========
</TABLE>
<PAGE> 44
SCHEDULE (CONTINUED)
REAL ESTATE ASSOCIATES LIMITED
INVESTMENT IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
Year Ended December 31, 1995
----------------------------------------------------------------------
Cash
Balance Capital Distri- Equity Balance
January Contri- butions in December
Limited Partnerships 1, 1995 butions Received Income/(Loss) 31, 1995
- -------------------- ------- ------- -------- ------------- --------
<S> <C> <C> <C> <C> <C>
Bedford House, Ltd. $ $ $ $ $
Belleville Manor Apts. Ltd.
Bernroe, Ltd. (Wedgewood)
Bethel Towers, Ltd.
Cherry Hill, Ltd.
Dividend Housing Assn. 1,843,340 (27,000) 203,080 2,019,420
Chidester Place, Ltd.
Dividend Housing Assn.
Clinton Apts., Ltd.
East Central Towers
Associates
Emporia Ltd. (Northwood) - (9,481) 181,396 171,915
Gadsden Towers, Ltd.
LaLoma Assoc., Ltd.
Parkview Assoc.,
Pennsylvania Assoc.
(Norristown)
Riverside Towers Assoc.
Roebern, Ltd.
(Ridgeview)
Van Nuys Assoc.
West Lafayette, Ltd.
Williamson Towers, Ltd.
---------- ----------- ---------- --------- ----------
$1,843,340 $ - $ (36,481) $ 384,476 $2,191,335
========== =========== ========== ========= ==========
</TABLE>
<PAGE> 45
SCHEDULE (CONTINUED)
REAL ESTATE ASSOCIATES LIMITED
INVESTMENT IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
Year Ended December 31, 1994
----------------------------------------------------------------------
Cash
Balance Capital Distri- Equity Balance
January Contri- butions in December
Limited Partnerships 1, 1994 butions Received Income/(Loss) 31, 1994
- -------------------- ------- ------- -------- ------------- --------
<S> <C> <C> <C> <C> <C>
Bedford House, Ltd. $ $ $ $ $
Belleville Manor Apts. Ltd.
Bernroe, Ltd. (Wedgewood)
Bethel Towers, Ltd.
Cherry Hill, Ltd.
Dividend Housing Assn. 1,643,500 (27,000) 226,840 1,843,340
Chidester Place, Ltd.
Dividend Housing Assn.
Clinton Apts., Ltd.
East Central Towers
Associates
Emporia Ltd. (Northwood)
Gadsden Towers, Ltd.
LaLoma Assoc., Ltd.
Parkview Assoc.,
Pennsylvania Assoc.
(Norristown)
Riverside Towers Assoc.
Roebern, Ltd.
(Ridgeview)
Van Nuys Assoc.
West Lafayette, Ltd.
Williamson Towers, Ltd.
---------- --------- ---------- --------- ----------
$1,643,500 $ - $ (27,000) $ 226,840 $1,843,340
========== ========= ========== ========= ==========
</TABLE>
<PAGE> 46
SCHEDULE
(Continued)
REAL ESTATE ASSOCIATES LIMITED
INVESTMENT IN, EQUITY IN EARNINGS OF, AND DIVIDENDS RECEIVED
FROM AFFILIATES AND OTHER PERSONS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
NOTES: 1. Equity in income (losses) of the limited partnerships
represents the Partnership's allocable share of the net
results of operations from the limited partnerships for the
year. Equity in losses of the limited partnerships will be
recognized until the investment balance is reduced to zero or
a negative balance equal to further commitments by the
Partnership.
2. Cash distributions from the limited partnerships are treated
as a return of the investment and reduce the investment
balance until such time as the investment is reduced to zero
or a negative balance equal to further commitments by the
Partnership. Distributions subsequently received are
recognized as income.
<PAGE> 47
SCHEDULE III
REAL ESTATE ASSOCIATES LIMITED
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL HAS INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Buildings, Furnishings
& Equipment - Initial
Cost to Partnership
Number Outstanding and Amount Carried
of Mortgage at Close of Accumulated Construction
Partnership/Location Units Loan Land Year Total Depreciation Period
- -------------------- ----- ----------- ---------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
The Bedford House, Ltd. 48 $ 1,105,975 $22,055 $1,263,745 $1,285,800 $866,968 1978-1979
Pendleton Co, KY
Belleville Manor, Ltd. 32 568,162 - 718,712 718,712 414,639 1978-1979
Benton, KY
Bethel Towers, Ltd. 146 3,275,245 67,400 4,042,766 4,110,188 2,641,484 (A)
Detroit, MI
Cherry Hill, Ltd. 186 5,230,479 448,460 7,572,010 8,020,470 4,144,771 1978-1980
Dividend Housing Assn.
Southfield, MI
Chidester Place, Ltd. 151 3,585,000 180,130 4,580,412 4,760,542 2,949,664 1979-1980
Ypsilanti, MI
Clinton Apts. Ltd. 32 367,461 - 652,254 652,254 499,379 1977-1980
Calvert City, KY
East Central Twrs. Ass. 166 3,999,445 37,600 4,855,061 4,892,661 2,647,640 1979-1980
Fort Wayne, IN
Gadsden Towers, Ltd. 101 2,056,160 51,700 3,046,353 3,098,053 2,516,079 1978-1980
Knoxville, TN
Pennsylvania Assoc. 175 5,628,113 49,400 8,004,566 8,053,966 5,649,337 1978-1980
(Norristown)
Montgomery Co., PA
Emporia, Ltd. (Northwood) 72 1,330,351 39,500 2,349,334 2,388,834 1,729,801 1978-1980
Greensville Co., VA
Parkview Assoc., Ltd. 97 3,247,708 424,196 3,481,188 3,905,384 2,647,390 1979-1980
Sacramento, CA
Roebern, Ltd. (Ridgeview) 32 663,833 26,000 1,005,309 1,031,309 792,280 1978-1979
Columbus, OH
LaLoma Assoc., Ltd 75 2,346,189 226,729 2,595,172 2,821,901 1,946,650 1979-1980
Sacramento, CA
Riverside Towers, Assoc. 200 7,608,888 230,264 10,515,769 10,746,033 7,030,111 1979-1980
Medford, MA
Van Nuys Assoc. 299 21,005,696 700,000 23,375,878 24,075,878 11,009,297 1980-1983
Los Angeles, CA
Bernroe, Ltd. (Wedgewood) 32 670,375 45,000 1,035,966 1,080,966 822,089 1978-1979
Columbus, OH
West Lafayette, Ltd. 49 973,819 35,000 1,255,470 1,290,470 928,559 1979-1980
West Lafayette, OH
Williamson Towers, Ltd. 76 2,533,144 - 3,177,605 3,177,605 1,678,432 1979-1981
Minroe Co., WV
----- ----------- ---------- ----------- ----------- -----------
TOTAL 1,969 $68,195,841 $2,583,434 $83,527,570 $86,111,004 $51,114,600
===== =========== ========== =========== =========== ===========
</TABLE>
(A) This project was complete when REAL entered the Partnership.
<PAGE> 48
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED
REAL ESTATE AND ACCUMULATED
DEPRECIATION OF PROPERTYC
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL HAS INVESTMENTS
DECEMBER 31, 1996
NOTES: 1. Each local limited partnership has developed, owns and
operates the housing project. Substantially all project
costs, including construction period interest expense, were
capitalized by the limited partnerships.
2. Depreciation is provided for by various methods over the
estimated useful lives of the Projects. The estimated
composite useful lives of the buildings are from 25 to 40
years.
3. Investments in property and equipment:
<TABLE>
<CAPTION>
Buildings,
Furnishings
And
Land Equipment Total
---------- ----------- -----------
<S> <C> <C> <C>
Balance at January 1, 1994 $2,710,800 $81,291,508 $84,002,308
Net additions during 1994 8,813 604,200 613,013
---------- ----------- -----------
Balance at December 31, 1994 2,719,613 81,895,708 84,615,321
Net additions during 1995 22,483 853,540 876,023
---------- ----------- -----------
Balance at December 31, 1995 2,742,096 82,749,248 85,491,344
Net additions (deletions) during 1996 (158,662) 778,322 619,660
---------- ----------- -----------
Balance at December 31, 1996 $2,583,434 $83,527,570 $86,111,004
========== =========== ===========
</TABLE>
<PAGE> 49
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL HAS INVESTMENTS
DECEMBER 31, 1996
<TABLE>
<CAPTION>
Buildings,
Furnishings
And
Equipment
-----------
<S> <C>
Accumulated Depreciation:
- -------------------------
Balance at January 1, 1994 $43,350,939
Net additions during 1994 2,665,494
-----------
Balance at December 31, 1994 46,016,433
Net additions during 1995 2,611,487
-----------
Balance at December 31, 1995 48,627,920
Net additions during 1996 2,486,680
-----------
Balance at December 31, 1996 $51,114,600
===========
</TABLE>
<PAGE> 50
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:
REAL ESTATE ASSOCIATES LIMITED (the "Partnership") has no directors or
executive officers of its own.
National Partnership Investment Corp. ("NAPICO" or "the Managing General
Partner") is a wholly-owned subsidiary of Casden Investment Corporation, an
affiliate of The Casden Company. The following biographical information is
presented for the directors and executive officers of NAPICO with principal
responsibility for the Partnership's affairs.
CHARLES H. BOXENBAUM, 67, Chairman of the Board of Directors and Chief
Executive Officer of NAPICO.
Mr. Boxenbaum has been associated with NAPICO since its inception. He has been
active in the real estate industry since 1960, and prior to joining NAPICO was
a real estate broker with the Beverly Hills firm of Carl Rhodes Company.
Mr. Boxenbaum has been a guest lecturer at national and state realty
conventions, certified properties exchanger's seminars, Los Angeles Town Hall,
National Association of Home Builders, International Council of Shopping
Centers, Society of Conventional Appraisers, California Real Estate
Association, National Institute of Real Estate Brokers, Appraisal Institute,
various mortgage banking seminars, and the North American Property Forum held
in London, England. In 1963, he was the winner of the Snyder Award, the
highest annual award offered by the National Association of Real Estate Boards
for Best Exchange. He is one of the founders and a past director of the First
Los Angeles Bank, organized in November 1974. Mr. Boxenbaum was a member of
the Board of Directors of the National Housing Council. Mr. Boxenbaum received
his Bachelor of Arts degree from the University of Chicago.
BRUCE E. NELSON, 45, President and a director of NAPICO.
Mr. Nelson joined NAPICO in 1980 and became President in February 1989. He is
responsible for the operations of all NAPICO sponsored limited partnerships.
Prior to that he was primarily responsible for the securities aspects of the
publicly offered real estate investment programs. Mr. Nelson is also involved
in the identification, analysis, and negotiation of real estate investments.
From February 1979 to October 1980, Mr. Nelson held the position of Associate
General Counsel at Western Consulting Group, Inc., private residential and
commercial real estate syndicators. Prior to that time, Mr. Nelson was engaged
in the private practice of law in Los Angeles. Mr. Nelson received his
Bachelor of Arts degree from the University of Wisconsin and is a graduate of
the University of Colorado School of Law. He is a member of the State Bar of
California and is a licensed real estate broker in California and Texas.
ALAN I. CASDEN, 51, Chairman of The Casden Company, an affiliate of Casden
Properties (formerly CoastFed Properties), a director and member of the audit
committee of NAPICO, and chairman of the Executive Committee of NAPICO.
Mr. Casden is Chairman of the Board, Chief Executive Officer and sole
shareholder of The Casden Company and Casden Investment Company. Prior to
that, he was the president and chairman of Mayer Group, Inc., which he joined
in 1975. He is also chairman of Mayer Management, Inc., a real estate
management firm. Mr. Casden has been involved in approximately $3 billion of
real estate financings and sales and has been responsible for the development
and construction of more than 12,000 apartment units and 5,000 single-family
homes and condominiums.
<PAGE> 51
Mr. Casden is a member of the American Institute of Certified Public
Accountants and of the California Society of Certified Public Accountants. Mr.
Casden is a member of the advisory board of the National Multi-Family Housing
Conference, the Multi-Family Housing Council, and the President's Council of
the California Building Industry Association. He also serves on the advisory
board to the School of Accounting of the University of Southern California. He
holds a Bachelor of Science degree and a Masters in Business Administration
degree from the University of Southern California.
HENRY C. CASDEN, 53, President, Chief Operating Officer and Secretary of The
Casden Company and a director and secretary of NAPICO.
Mr. Casden has been President and Chief Operating Officer of The Casden
Company, as well as a director of NAPICO since February 1988. He became
secretary of both companies in late 1994. From 1982 to 1988, Mr. Casden was of
counsel and a partner in the Los Angeles law firm of Troy, Casden & Gould.
From 1978 to 1981, he was of counsel and a partner in the Los Angeles law firm
of Loeb & Loeb. From 1972 to 1978, Mr. Casden was a member of the Beverly
Hills law firm of Fink & Casden, Professional Corporation.
Mr. Casden received his Bachelor of Arts degree from the University of
California at Los Angeles, and is a graduate of the University of San Diego Law
School. Mr. Casden is a member of the State Bar of California and has numerous
professional affiliations.
BRIAN D. GOLDBERG, 33, Chief Financial Officer of The Casden Company and a
director of NAPICO.
Mr. Goldberg joined The Casden Company in 1990 as Vice President of Finance and
became Chief Financial Officer in March 1991. Prior to joining The Casden
Company, Mr. Goldberg was with Arthur Andersen & Co., an international public
accounting firm, from August 1985 until July 1990 in their Los Angeles office.
He received his bachelor of science degree in Accounting from the University of
Denver. Mr. Goldberg is a member of the American Institute of Certified Public
Accountants and the California Society of Certified Public Accountants.
SHAWN HORWITZ, 37, Executive Vice President and Chief Financial Officer.
Mr. Horwitz joined NAPICO in 1990 and is responsible for the financial affairs
of NAPICO and the limited partnerships sponsored by NAPICO. Prior to joining
NAPICO, Mr. Horwitz was President for approximately one year of Star Sub Shops,
Inc., a corporation engaged in the business of selling fast food franchises,
was an audit manager in the real estate industry group for Altschuler, Melvin &
Glasser for six years, and was an auditor with Arthur Young & Co. for 3 years.
Mr. Horwitz received his Bachelor of Commerce degree in accounting from Rhodes
University in South Africa and is a member of the Illinois Society of Certified
Public Accountants, the American Institute of Certified Public Accountants and
the South African Institute of Chartered Accountants.
BOB SCHAFER, 55, Senior Vice President and Corporate Controller.
Mr. Schafer joined NAPICO in 1984 and is the Corporate Controller responsible
for the financial reporting function of the Company. Prior to this, he was a
Group and Division Controller at Bergen Brunswig for over eight years,
Controller at a Flintkote subsidiary for over four years, and Assistant
Controller at an electronics subsidiary of General Electric for two years.
Mr. Schafer is a member of the California Society of Certified Public
Accountants. He holds a Bachelor of Science degree in accounting from Woodbury
University, Los Angeles.
<PAGE> 52
PATRICIA W. TOY, 67, Senior Vice President - Communications and Assistant
Secretary.
Mrs. Toy joined NAPICO in 1977, following her receipt of an MBA from the
Graduate School of Management, UCLA. From 1952 to 1956, Mrs. Toy served as a
U.S. Naval Officer in communications and personnel assignments. She holds a
Bachelor of Arts Degree from the University of Nebraska.
MARK L. WALTHER, 36, Executive Vice President, General Counsel and Assistant
Secretary.
Mr. Walther joined NAPICO in 1987 and is responsible for the legal affairs of
the NAPICO sponsored limited partnerships. Prior to joining NAPICO, Mr.
Walther worked in the San Francisco law firm of Browne and Kahn which
specialized in construction litigation. Mr. Walther received his Bachelor of
Arts Degree in Political Science from the University of California, Santa
Barbara and is a graduate of the University of California, Davis, School of
Law. He is a member of the State Bar of Hawaii.
<PAGE> 53
ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS:
Real Estate Associates Limited has no officers, employees, or directors.
However, under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to pay the Corporate General Partner
an annual management fee. The annual management fee is approximately equal to
.5 percent of the invested assets, including the Partnership's allocable share
of the mortgages related to real estate properties held by local limited
partnerships. The fee is earned beginning in the month the Partnership makes
its initial contribution to the limited partnership. In addition, the
Partnership reimburses the Corporate General Partner for certain expenses.
An affiliate of the Corporate General Partner is responsible for the on-site
property management for certian properties owned by the limited partnerships in
which the Partnership has invested.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:
(a) Security Ownership of Certain Beneficial Owners
The general partners own all of the outstanding general partnership
interests of REAL; no person is known to own beneficially in excess of
5 percent of the outstanding limited partnership interests.
(b) None of the officers or directors of the Corporate General Partner own
directly or beneficially any limited partnership interests in REAL.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
The Partnership has no officers, directors, or employees of its own. All of
its affairs are managed by the Corporate General Partner, National Partnership
Investments Corp. The transactions with the Corporate General Partner are
primarily in the form of fees paid by the Partnership to the general partner
for services rendered to the Partnership, as discussed in Item 11 and in the
notes to the accompanying financial statements.
<PAGE> 54
PART IV.
ITEM 14. FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS AND REPORTS ON FORM 8-K:
FINANCIAL STATEMENTS
Report of Independent Public Accountants.
Balance Sheets as of December 31, 1996 and 1995.
Statements of Operations for the years ended December 31, 1996, 1995 and 1994.
Statements of Partners' Equity (Deficiency) for the years ended December 31,
1996, 1995 and 1994.
Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994.
Notes to Financial Statements.
FINANCIAL STATEMENT SCHEDULES
APPLICABLE TO REAL ESTATE ASSOCIATES LIMITED AND THE LIMITED PARTNERSHIPS IN
WHICH REAL ESTATE ASSOCIATES LIMITED HAS INVESTMENTS:
Schedule - Investments in Limited Partnerships, December 31, 1996, 1995 and
1994.
Schedule III - Real estate and accumulated depreciation, December 31, 1996.
The remaining schedules are omitted because the required information is
included in the financial statements and notes thereto as they are not
applicable or not required.
EXHIBITS
(3) Articles of incorporation and bylaws: The registrant is not
incorporated. The Partnership Agreement was filed with Form S-11
Registration # 260561 incorporated herein by reference.
(10) Material contracts: The registrant is not party to any material
contracts, other than the Restated Certificate and Agreement of Limited
Partnership dated September 15, 1979 previously filed and which is
hereby incorporated by reference.
(13) Annual report to security holders: Pages __ to __.
REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the year ended December 31, 1996.
<PAGE> 55
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, thereunto duly authorized in the City of Los
Angeles, State of California.
REAL ESTATE ASSOCIATES LIMITED
By: NATIONAL PARTNERSHIP INVESTMENTS CORP.
The General Partner
______________________________________________
Charles H. Boxenbaum
Chairman of the Board of Directors
and Chief Executive Officer
______________________________________________
Bruce E. Nelson
Director and President
______________________________________________
Alan I. Casden
Director
______________________________________________
Henry C. Casden
Director
______________________________________________
Brian D. Goldberg
Director
______________________________________________
Shawn D. Horwitz
Executive Vice President and
Chief Financial Officer
______________________________________________
Bob E. Schafer
Senior Vice President and Corporate Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 376,976
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 376,976
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,863,973
<CURRENT-LIABILITIES> 7,929
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,834,367
<TOTAL-LIABILITY-AND-EQUITY> 2,863,973
<SALES> 0
<TOTAL-REVENUES> 660,803
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 507,899
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 152,904
<INCOME-TAX> 0
<INCOME-CONTINUING> 152,904
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 152,904
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
