<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, 1997
Commission File Number
0-12439
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REAL ESTATE ASSOCIATES LIMITED IV
A CALIFORNIA LIMITED PARTNERSHIP
I.R.S. Employer Identification No. 95-3718731
9090 WILSHIRE BLVD., 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 IV ("REAL IV" or the "Partnership") is a limited
partnership which was formed under the laws of the State of California on August
24, 1981. On March 12, 1982, REAL IV offered 3,000 units consisting of 6,000
Limited Partnership Interests and Warrants to purchase a maximum of 6,000
Additional Limited Partnership Interests through a public offering managed by
E.F. Hutton, Inc.
The general partners of Real IV are National Partnership Investments Corp.
("NAPICO"), a California corporation (the "Corporate General Partner"), and
National Partnership Investment Associates ("NAPIA"). NAPIA is a limited
partnership formed under the California Limited Partnership Act and consists of
Messrs. Nicholas G. Ciriello, an unrelated individual, as general partner, and
Charles H. Boxenbaum as limited partner. The business of REAL IV is conducted
primarily by NAPICO.
NAPICO is a wholly owned subsidiary of Casden Investment Corporation ("CIC"),
which is wholly owned by Alan I. Casden. The current members of NAPICO's Board
of Directors are Charles H. Boxenbaum, Bruce E. Nelson, Alan I. Casden and Henry
C. Casden.
REAL IV holds limited partnership interests in twenty-two local limited
partnerships as of December 31, 1997 and a general partner interest in Real
Estate Associates II ("REA II") which in turn holds limited partnership
interests in an additional seven limited partnerships. Therefore, REAL IV holds
directly or indirectly through REA II investments in twenty-nine local limited
partnerships. The general partners of REA II are REAL IV and NAPICO. Each of the
local partnerships own a 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 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 IV to vary its portfolio in response to
changing economic, financial and investment conditions. These 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.
Under recent adopted law and policy, HUD has determined not to renew HAP
Contracts on a long term basis on the existing terms. In connection with
renewals of the HAP Contracts under such new law and policy, the amount of
rental assistance payments under renewed HAP Contracts will be based on market
rentals instead of above market rentals, which was generally the case under
existing HAP Contracts. As a result, existing HAP Contracts that are renewed in
the future on projects insured by the FHA will not provide sufficient cash flow
to permit owners of properties to meet the debt service requirements of these
existing FHA-insured mortgages. In order to address the reduction in payments
under HAP Contracts as a result of this new policy, the Multi-family Assisted
Housing Reform and Affordability Act of 1997 (the "MAHRAA"), which was adopted
in October 1997, provides for the restructuring of mortgage loans insured by
the FHA with respect to properties subject to HAP Contracts that have been
renewed under the new policy. The restructured loans will be held by the
current lender or another lender. Under MAHRAA, an FHA-insured mortgage loan
can be restructured to reduce the annual debt service on such loan. There can
be no assurance that the Partnership will be permitted to restructure its
mortgage indebtedness pursuant to the new HUD rules implementing MAHRAA or that
the Partnership would choose to restructure such mortgage indebtedness if it
were eligible to participate in the MAHRAA program. It should be noted that
there are uncertainties as to the economic impact on the Partnership of the
combination of the reduced payments under the HAP Contracts and the
restructuring of the existing FHA-insured mortgage loans under MAHRAA.
Accordingly, the General Partners are unable to predict with certainty their
impact on the Partnership's future cash flow.
<PAGE> 3
The partnerships in which REAL IV 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 IV 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 IV'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 of default, REAL IV has the right to replace the general partner
of the local limited partnerships but otherwise does not have control of sale or
refinance etc.
Although each of the partnerships in which REAL IV has invested generally 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.
<PAGE> 4
During 1997, the projects in which REAL IV had invested were substantially
rented. The following is a schedule of the status as of December 31, 1997, of
the projects owned by local limited partnerships in which REAL IV, either
directly or indirectly, has invested.
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL IV HAS AN INVESTMENT
DECEMBER 31, 1997
<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>
Alliance Towers
Alliance, OH 101 101/0 100 99%
Antelope Valley Apartments
Lancaster, CA 121 121/0 120 99%
Armitage Commons
Chicago, IL 104 104/0 103 99%
Barnesboro Family Project
(Cherry Ridge Terrace)
Barnesboro, PA 62 62/0 53 85%
Baughman Towers
Philippi, WV 104 104/0 102 98%
Beacon Hill/
Hillsdale Place
Hillsdale, MI 199 199/0 195 98%
Branford Elderly II
Branford, CT 44 44/0 43 98%
Buckingham Apartments
Los Angeles, CA 83 83/0 83 100%
Coatesville Towers
Coatesville, PA 90 90/0 89 99%
Daniel Scott Commons
Chester, PA 72 72/0 72 100%
Ethel Arnold Bradley Gardens
Los Angeles, CA 80 80/0 80 100%
Glenoaks Townhouses
Los Angeles, CA 48 48/0 48 100%
Lakeland Place
Waterford, MI 200 200/0 200 100%
Loch Haven Apartments
Lauderhill, FL 208 None 206 99%
Ninety-Five Vine Street
Hartford, CT 31 31/0 30 97%
Oakridge Park Apartments
North Biloxi, MS 40 0/40 40 100%
O'Fallon Apartments
O'Fallon, IL 132 132/0 132 100%
One Madison Avenue
Madison, ME 27 27/0 26 96%
Pacific Coast Villa
Long Beach, CA 50 50/0 49 98%
Queensbury Heights
Middlesboro, KY 64 0/64 58 91%
Rosewood Apartments
Camarillo, CA 150 None 143 95%
Sandwich Apartments
Sandwich, IL 90 90/0 90 100%
Scituate Vista
Cranston, RI 230 230/0 228 99%
Sterling Village
San Bernardino, CA 80 80/0 79 99%
Villa del Sol
Norwalk, CA 120 None 108 90%
</TABLE>
<PAGE> 5
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL IV HAS AN INVESTMENT
DECEMBER 31, 1997
(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>
Village of Albany/
Village of Brodhead
Albany & Brodhead, WI 32 0/32 26 81%
Vista Park Chino
Chino, CA 40 40/0 39 98%
Wasco Arms Apartments
Wasco, CA 78 78/0 77 99%
Wright Park Phase II
Rome, NY 99 20/20 25 25%
----- --------- -----
TOTALS 2,779 2,087/156 2,644 95%
===== ========= =====
</TABLE>
<PAGE> 6
ITEM 2. PROPERTIES:
The local limited partnerships in which REAL IV holds interests own various
multi-family rental properties. See Item 1 for information pertaining to these
properties.
ITEM 3. LEGAL PROCEEDINGS:
As of December 31, 1997, the Partnership's Corporate General Partner was a
plaintiff or defendant in several lawsuits. None of these suits were related to
REAL IV.
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 E.F. Hutton 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, 1997, there were 2,703
registered holders of units in REAL IV. No distributions have been made from the
inception of the Partnership to December 31, 1997. 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> 7
ITEM 6. SELECTED FINANCIAL DATA:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------------------------------
1997 1996 1995 1994 1993
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Loss From Operations $ (643,236) $ (636,501) $ (654,466) $ (680,262) $ (697,033)
Distributions From
Limited Partnerships
Recognized as Income 1,406,888 1,107,630 1,222,286 1,053,488 948,374
Equity in Income (Loss)
of Limited Partnerships
and Amortization of
Acquisition Costs 355,483 483,414 487,116 314,015 372,206
------------ ------------ ------------ ------------ ------------
Net Income $ 1,119,135 $ 954,543 $ 1,054,936 $ 687,241 $ 623,547
============ ============ ============ ============ ============
Net Income per Limited
Partnership Interest $ 85 $ 72 $ 80 $ 52 $ 47
============ ============ ============ ============ ============
Total assets $ 10,896,957 $ 9,774,550 $ 8,997,384 $ 7,954,058 $ 7,226,884
============ ============ ============ ============ ============
Investments in Limited
Partnerships $ 3,374,262 $ 3,098,674 $ 3,221,339 $ 3,234,884 $ 3,289,353
============ ============ ============ ============ ============
Notes Payable $ 1,042,524 $ 1,230,743 $ 1,230,743 $ 1,230,743 $ 1,230,743
============ ============ ============ ============ ============
</TABLE>
<PAGE> 8
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 funds 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 IV received $16,500,000 in subscriptions for units of limited partnership
interests (at $5,000 per unit) during the period March 12, 1982 to July 15,
1982, pursuant to a registration statement on Form S-11. As of March 31, 1983,
REAL IV received an additional $16,500,000 in subscriptions pursuant to the
exercise of warrants and the sale of additional limited partnership interests.
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 IV has invested could produce tax losses for as long as 20 years. Tax
benefits will decline over time as the advantages of accelerated depreciation
are greatest in the earlier years, as deductions for interest expense will
decrease as mortgage principal is amortized and as the Tax Reform Act of 1986
limits the deductions available.
At December 31, 1997, the Partnership has investments in 22 limited
partnerships, all of which own housing projects that were substantially all
rented. The Partnership, as a limited partner, is entitled to 80% to 99% of the
profits and losses of the local limited partnerships. 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. Equity in losses of limited
partnerships is 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. Limited partners are not liable for losses beyond their contributed
capital. At December 31, 1997, the Partnership has a positive investment balance
in only six local limited partnerships.
Distributions received from limited partnerships are recognized as 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.
The total income (losses) from the 22 local limited partnerships that were
allocated to the Partnership were $317,000, $(1,123,000) and $269,000 for the
years ended December 31, 1997, 1996 and 1995, respectively. However, because
losses incurred after the investment account is reduced to a zero balance are
not recognized, the Partnership recognized equity in income of limited
partnerships, substantially all from the six partnerships with a positive
investment balance, of $355,483, $483,414 and $487,116 for the years ended
December 31, 1997, 1996 and 1995, respectively. The cumulative amount of the
unrecognized equity in losses of certain limited partnerships was approximately
$11,268,000 and $11,201,000 as of December 31, 1997 and 1996, respectively.
Distributions from the local limited partnerships in which the Partnership did
not have a positive investment balance were $1,406,888, $1,107,630 and
$1,222,286 for the years ended December 31, 1997, 1996 and 1995, respectively.
These amounts were recognized as income on the accompanying statements of
operations, in accordance with the equity method of accounting.
As of December 31, 1997, 1996 and 1995, the Partnership has cash and cash
equivalents of $7,430,796, $6,603,047 and $5,561,045, respectively.
Substantially all of these amounts are on deposit primarily with two high credit
quality financial institutions, earning interest. In addition, as a result of
changing financial institutions where the cash and cash equivalents
<PAGE> 9
are on deposit, the interest rate earned on such deposits in 1997 was
significantly greater than in prior years. This resulted in the Partnership
earning approximately $326,000, $173,000 and $152,000 in interest income for the
years ended December 31, 1997, 1996 and 1995, respectively. The amount of
interest income varies with market rates available on deposits and with the
amount of funds available for investment. As a result of the changing financial
institutions, interest rate earned on investments in 1997 was approximately 5%,
compared to approximately 2.5% in prior years. Cash equivalents can be converted
to cash to meet obligations of the Partnership as they arise. The Partnership
intends to continue investing available funds in this manner. Should the
Partnership complete the sale of interests, its obligations may be reduced and a
distribution of cash may be disbursed to the partners.
A recurring partnership expense is the annual management fee. The fee is payable
to the Corporate General Partner of the Partnership and is calculated at .4
percent of the Partnership's invested assets. The management fee is paid to the
Corporate General Partner for its continuing management of partnership affairs.
The fee is payable beginning with the month following the Partnership's initial
investment in a local limited partnership. Since the invested assets have not
changed during each of the three years in the period ended December 31, 1997,
management fees have remained constant at $505,392 for each of these years.
The Partnership is obligated on non-recourse notes payable of $1,042,524 which
bear interest at 10 percent per annum and have principal maturities ranging from
2015 to 2022. The notes and related interest are payable from cash flow
generated from operations of the related rental properties as defined in the
notes. These obligations are collateralized by the Partnership's investments in
the limited partnerships. Unpaid interest is due at maturity of the notes.
Interest expense was $74,057, $123,000 and $123,000 for the years ended December
31, 1997, 1996 and 1995, respectively.
Under recent adopted law and policy, HUD has determined not to renew HAP
Contracts on a long term basis on the existing terms. In connection with
renewals of the HAP Contracts under such new law and policy, the amount of
rental assistance payments under renewed HAP Contracts will be based on market
rentals instead of above market rentals, which was generally the case under
existing HAP Contracts. As a result, existing HAP Contracts that are renewed in
the future on projects insured by the FHA will not provide sufficient cash flow
to permit owners of properties to meet the debt service requirements of these
existing FHA-insured mortgages. In order to address the reduction in payments
under HAP Contracts as a result of this new policy, the Multi-family Assisted
Housing Reform and Affordability Act of 1997 (the "MAHRAA"), which was adopted
in October 1997, provides for the restructuring of mortgage loans insured by
the FHA with respect to properties subject to HAP Contracts that have been
renewed under the new policy. The restructured loans will be held by the
current lender or another lender. Under MAHRAA, an FHA-insured mortgage loan
can be restructured to reduce the annual debt service on such loan. There can
be no assurance that the Partnership will be permitted to restructure its
mortgage indebtedness pursuant to the new HUD rules implementing MAHRAA or that
the Partnership would choose to restructure such mortgage indebtedness if it
were eligible to participate in the MAHRAA program. It should be noted that
there are uncertainties as to the economic impact on the Partnership of the
combination of the reduced payments under the HAP Contracts and the
restructuring of the existing FHA-insured mortgage loans under MAHRAA.
Accordingly, the General Partners are unable to predict with certainty their
impact on the Partnership's future cash flow.
As a result of the foregoing, the Partnership is undergoing an extensive review
of disposition, refinancing or re-engineering alternatives for the properties
in which the limited partnerships have invested and are subject to HUD mortgage
and rental subsidy programs. The Partnership has incurred expenses in
connection with this review by various third party professionals, including
accounting, legal, valuation, structural and engineering costs, which amounted
to $185,099 for the year ended December 31, 1997.
A real estate investment trust ("REIT") organized by an affiliate of NAPICO
has advised the Partnership that it intends to make a proposal to purchase from
the Partnership certain of the limited partnership interests held for
investment by the Partnership.
The REIT proposes to purchase such limited partner interests for cash, which it
plans to raise in connection with a private placement of its equity securities.
The purchase is subject to, among other things, (i) consummation of such
private placement by the REIT; (ii) the purchase of the general partner
interests in the local limited partnerships by the REIT; (iii)
<PAGE> 10
the approval of HUD and certain state housing finance agencies; (iv) the consent
of the limited partners to the sale of the local limited partnership interests
held for investment by REAL IV; and (v) the consummation of a minimum number of
purchase transactions with other Casden affiliated partnerships. As of March 31,
1998, the REIT had completed buy-out negotiations with a majority of the general
partners of the local limited partnerships.
A proxy is contemplated to be sent to the limited partners setting forth the
terms and conditions of the purchase of the limited partners' interests held for
investment by the Partnership, together with certain amendments to the
Partnership Agreement and other disclosures of various conflicts of interest in
connection with the transaction.
Operating expenses, other than management fees and interest expense, consist of
legal and accounting fees for services rendered to the Partnership and
administrative expenses, which were generally consistent for the three years
presented. Legal and accounting fees were $109,635, $101,255 and $89,895 for the
years ended December 31, 1997, 1996 and 1995, respectively. Administrative
expenses were $279,994, $79,999 and $88,629 for the years ended December 31,
1997, 1996 and 1995, respectively. Included in administrative expenses are
reimbursements to NAPICO for certain expenses, which totalled $37,681, $34,565
and $32,004 for the years ended December 31, 1997, 1996 and 1995, respectively.
Also included in administrative expenses for 1997 is $185,099, approximately
$128,000 of which is included in accounts payable at December 31, 1997, related
to the aforementioned third party review of the properties owned by the local
partnerships.
The results of operations of the local limited partnerships were fairly constant
during the years ended December 31, 1997, 1996 and 1995. Contributing to the
relative stability of operations at the local partnerships is the fact that
substantially all of the local partnerships are operating apartment projects
which are subsidized and have mortgage notes payable to or insured by agencies
of the federal or local government.
Total revenue for the 22 local partnerships has remained fairly constant, and
was $24,215,000, $23,947,000 and $23,498,000 for the years ended December 31,
1997, 1996 and 1995, respectively.
Total expenses for the 22 local partnerships were $23,897,000, $25,017,000 and
$23,559,000 for the years ended December 31, 1997, 1996 and 1995, respectively.
Expenses in 1996 were approximately $1,400,000 greater than 1997 and 1995
primarily as a result of an approximately $1,600,000 loss in 1996 from the
foreclosure of a property owned by one partnership.
The total net income (loss) for the 22 local partnerships for 1997, 1996 and
1995 aggregated $319,000, $(1,070,000) and $(61,000), respectively. The income
(losses) allocated to the Partnership were $317,000, $(1,123,000) and $269,000
for 1997, 1996 and 1995, respectively.
The Partnership, as a limited partner in the local limited partnerships in which
it has invested, is subject to the risks incident to the 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, concurrent inflation, and
changing legislation could increase vacancy levels, rental payment defaults, and
operating expenses, which in turn, could substantially increase the risk of
operating losses for the projects.
The Partnership has assessed the potential impact of the Year 2000 computer
systems issue on its operations. The Partnership believes that no significant
actions are required to be taken by the Partnership to address the issue and
that the impact of the Year 2000 computer systems issue will not materially
affect the Partnership's future operating results or financial condition.
<PAGE> 11
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:
The Financial Statements and Supplementary Data are listed under Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE:
Not applicable.
<PAGE> 12
REAL ESTATE ASSOCIATES LIMITED IV
(A California limited partnership)
FINANCIAL STATEMENTS,
FINANCIAL STATEMENT SCHEDULES
AND INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
DECEMBER 31, 1997
<PAGE> 13
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
Real Estate Associates Limited IV
(A California limited partnership)
We have audited the accompanying balance sheets of Real Estate Associates
Limited IV (a California limited partnership) as of December 31, 1997 and 1996,
and the related statements of operations, partners' equity (deficiency) and cash
flows for each of the three years in the period ended December 31, 1997. 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 23 percent and 23 percent of
total assets as of December 31, 1997 and 1996, respectively, and the equity in
income of these limited partnerships represents 19 percent, 23 percent and 27
percent of the total net income of the Partnership for the years ended December
31, 1997, 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 IV as of December 31,
1997 and 1996, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1997 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
April 6, 1998
<PAGE> 14
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
AND ADDITIONAL FINANCIAL DATA REQUIRED BY
THE PENNSYLVANIA HOUSING FINANCE AGENCY
To the Partners of
Barnesboro Associates
We have audited the accompanying balance sheets of BARNESBORO ASSOCIATES, PHFA
Project No. R-1046-8F (Partnership), as of December 31, 1997 and 1996, and the
related statements of operations, changes in partners' 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 Barnesboro Associates as of
December 31, 1997 and 1996, and its results of operations, changes in partners'
equity and 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 accompanying financial data (shown
on pages 12 through 25) are presented for the purpose of additional analysis
and are not a required part of the basic financial statements of the
Partnership. Such information has subjected to the auditing procedures applied
in the audits of the 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> 15
In accordance with Government Auditing Standards, we have also issued a report
dated January 23, 1998 on our consideration of the Partnership's internal
control and a report dated January 23, 1998, on its compliance with laws and
regulations.
/s/ ALTSCHULER, MELVOIN AND GLASSER LLP
- ----------------------------------------------
Chicago, Illinois
January 23, 1998
<PAGE> 16
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
AND ADDITIONAL FINANCIAL DATA REQUIRED BY
THE PENNSYLVANIA HOUSING FINANCE AGENCY
To the Partners of
Barnesboro Associates
We have audited the balance sheet of BARNESBORO ASSOCIATES, PHFA Project Number
R-1046-4F, as of December 31, 1996 and 1995, and the statements of operations,
changes in 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 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 audits 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 Barnesboro Associates as of
December 31, 1996 and 1995, and the results of its operations, changes in
partners' equity 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 January 14, 1997, on our consideration of the Partnership's internal
control structure and a report dated January 14, 1997, on its compliance with
laws and regulations.
2.
<PAGE> 17
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional financial data on pages 13
through 21 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/ ALTSCHULER, MELVOIN AND GLASSER LLP
Chicago, Illinois
January 14, 1997
3.
<PAGE> 18
[RIZZO & AMORE, P.C. LETTERHEAD]
To The General Partner
The Branford Group Limited Partnership
Woodbridge, Connecticut
We have audited the accompanying statement of financial position of The Branford
Group Limited Partnership (a limited partnership), Connecticut Housing Finance
Authority Project Number 81-019M as of December 31, 1997 and 1996, and the
related statements of profit and loss, changes in partners' equity and cash
flows for the three years then ended. These financial statements are the
responsibility of the 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 the 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 The Branford Group Limited
Partnership as of December 31, 1997 and 1996, and the results of operations,
changes in partners' equity and cash flows for the three years in the period
ended December 31, 1997 in conformity with generally accepted accounting
principles.
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental data included in the report (shown
on pages 15 through 20) are presented for the purpose of additional analysis and
are not a required part of the basic financial statements of The Branford Group
Limited Partnership. Such information has been subjected to the same auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly presented in all material respects in relation to the
financial statements taken as a whole.
-3-
<PAGE> 19
In accordance with Government Auditing Standards, we have also issued a report
dated February 16, 1998 on our consideration of The Branford Group Limited
Partnership's internal controls and a report dated February 16, 1998 on its
compliance with laws and regulations.
[SIG]
------------------------
West Haven Connecticut
April 6, 1998
-4-
<PAGE> 20
[LITZ & COMPANY LETTERHEAD]
Normandie Avenue Development Company
aka Ethel Arnold Bradley Gardens Apartments
6330 San Vicente Boulevard, Suite 270
Los Angeles, California 90048
INDEPENDENT AUDITORS' REPORT
Gentlemen:
We have audited the accompanying balance sheet of Ethel Arnold Bradley
Gardens Apartments (HUD Project No. 122-35548-PM-L8) as of December 31, 1997,
and the related statements of profit and loss, changes in 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 include 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 Ethel Arnold Bradley
Gardens Apartments as of December 31, 1997, and the results of its operations,
changes in equity and cash flows for the year then ended in conformity with
generally accepted accounting principles, except for the basis of the property
as explained in Note 1, applied on a basis consistent with prior periods and
HUD requirements.
In accordance with Government Auditing Standards, we have also issued
reports dated February 9, 1998 on our consideration of Ethel Arnold Bradley
Gardens Apartments' internal control structure and 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 supporting information included in
the report (see Index to the Financial Statements) is presented for the purpose
of additional analysis and is not a required part of the basic financial
statements of Ethel Arnold Bradley Gardens Apartments. 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/ LITZ & COMPANY
-----------------------------------
February 9, 1998
Erica M. Kish, CPA
Litz & Company
8906 W. Olympic Boulevard
Beverly Hills, CA 90211
(213) 272-1505
95-3537761
<PAGE> 21
[LITZ & COMPANY LETTERHEAD]
Normandie Avenue Development Company
aka Ethel Arnold Bradley Gardens Apartments
6330 San Vicente Boulevard, Suite 270
Los Angeles, California 90048
INDEPENDENT AUDITORS' REPORT
----------------------------
Gentlemen:
We have audited the accompanying balance sheet of Ethel Arnold Bradley
Gardens Apartments (HUD Project No. 122-35548-PM-L8) as of December 31, 1996,
and the related statements of profit and loss, changes in 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 HUD Project
No. 122-35548-PM-L8 as of December 31, 1996, and the results of its operations,
changes in equity and cash flows for the year then ended in conformity with
generally accepted accounting principles, applied on a basis consistent with
prior periods and HUD requirements.
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 January 19,
1997 on our consideration of Ethel Arnold Bradley Gardens Apartments' internal
control structure, and reports dated January 19, 1997 on its compliance with
specific requirements applicable to major HUD programs and specific
requirements applicable to Affirmative Pair Housing.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information, as shown in
the attached Index, included in the report is presented for the purposes of
additional analysis and is not a required part of the basic financial statements
of HUD Project No. 122-35548-PM-L8. 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/ LITZ & COMPANY
January 19, 1997
Erica M. Kish, CPA
Litz & Company
8906 W. Olympic Boulevard
Beverly Hills, CA 90211
(213) 272-1505
95-3537761
<PAGE> 22
[Altschuler, Melvoin 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
Normandie Avenue Development Co.
We have audited the accompanying balance sheet of NORMANDIE AVENUE DEVELOPMENT
CO. (a California limited partnership) aka Ethel Bradley Gardens Apartments, FHA
Project Number 122-35548-L8, (the "Partnership") as of December 31, 1995, and
the related statements of operations, changes in 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. The financial statements of the
Partnership as of and for the year ended December 31, 1994 were audited by other
auditors whose report dated February 9, 1995 expressed an unqualified opinion on
those statements.
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 1995 financial statements referred to above present fairly,
in all material respects, the financial position of Normandie Avenue Development
Co., aka Ethel Arnold Bradley Garden Apartments, at December 31, 1995, and the
results of its operations, changes in its partners' equity, 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 2, 1996 on our consideration of the Partnership's internal
control structure and a report dated February 2, 1996 on its compliance with
laws and regulations.
2.
<PAGE> 23
Our audit was conducted for the purpose of forming an opinion on the financial
statements takes as a whole. The accompanying additional financial data shown
on pages 15 through 21 is presented for purposes 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 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 2, 1996
3.
<PAGE> 24
[COOPERS & LYBRAND LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Lakeland Place Associates
Limited Dividend Housing Association
We have audited the accompanying balance sheets of Lakeland Place Associates
Limited Dividend Housing Association (A Michigan Limited Partnership, MSHDA
Development Number 513), as of December 31, 1997 and 1996, and the related
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 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 Lakeland Place Associates
Limited Dividend Housing Association, MSHDA No. 513, as of December 31, 1997
and 1996, and the results of its operations, and its cash flows for the years
then ended in conformity with generally accepted accounting principles.
Our 1997 audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The other financial information of
Lakeland Place Associates Limited Dividend Housing Association, MSHDA No. 513,
on pages 9 through 18 is presented for purposes of additional analysis and is
not a required part of the basic financial statements. The 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 our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have issued a report dated
February 2, 1998 on our consideration of Lakeland Place Associates Limited
Dividend Housing Association's internal control structure and a report dated
February 2, 1998 on its compliance with laws and regulations.
/s/ COOPERS & LYBRAND L.L.P.
Cleveland, Ohio
February 2, 1998
<PAGE> 25
[COOPERS & LYBRAND LETTERHEAD]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Lakeland Place Associates
Limited Dividend Housing Association
We have audited the accompanying balance sheets of Lakeland Place Associates
Limited Dividend Housing Association (A Michigan Limited Partnership, MSHDA
Development Number 513), as of December 31, 1996 and 1995, and the related
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 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 Lakeland Place Associates
Limited Dividend Housing Association, MSHDA No. 513, 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 1997 audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The other financial information of
Lakeland Place Associates Limited Dividend Housing Association, MSHDA No. 513,
on pages 9 through 17 is presented for purposes of additional analysis and is
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 our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
In accordance with Government Auditing Standards, we have issued a report dated
January 27, 1997 on our consideration of Lakeland Place Associates Limited
Dividend Housing Association's internal control structure and a report dated
January 27, 1997 on its compliance with laws and regulations.
/s/ COOPERS & LYBRAND L.L.P.
Cleveland, Ohio
January 27, 1997
1
<PAGE> 26
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Lauderhill Apartment Investors Limited Partnership
We have audited the accompanying balance sheets of LAUDERHILL APARTMENT
INVESTORS LIMITED PARTNERSHIP as of December 31, 1997 and 1996, and the related
statements of income, 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. 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 Lauderhill Apartment Investors
Limited Partnership as of December 31, 1997 and 1996, and the results of its
operations, changes in partners' equity, and cash flows for the years then ended
in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The additional 1997 financial data, listed in the
Table of Contents, are presented for the purposes of additional analysis and are
not a required part of the financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the 1997 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 10, 1998
2
<PAGE> 27
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Lauderhill Apartment Investors Limited Partnership
We have audited the accompanying balance sheets of LAUDERHILL APARTMENT
INVESTORS LIMITED PARTNERSHIP as of December 31, 1996 and 1995, and the related
statements of income, 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. 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 Lauderhill Apartment Investors
Limited Partnership as of December 31, 1996 and 1995, and its results of
operations, changes in partners' deficiency, and cash flows for the years then
ended in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the financial
statements taken as a whole. The additional 1996 financial data, listed in the
Table of Contents, are presented for the purposes of additional analysis and are
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
2.
<PAGE> 28
[PAUL DAMIANO LETTERHEAD]
The Partners
Scituate Vista Associates
(A Limited Partnership)
Cranston, RI
We have audited the accompanying balance sheet of RIHMFC Project No.
RI-43-H023-115 of Scituate Vista Associates (a limited partnership) as of
February 28, 1997, and the related statements of income and changes in partners'
equity and cash flows 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 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 the 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 RIHMFC Project No.
RI-43-H023-115 as of February 28, 1997 and the results of its operations and the
changes in partners' equity and cash flows for the year ended in conformity with
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report shown on pages 13-18 are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of the
RIHMFC Project No. RI-43-H023-115. 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.
In accordance with Government Auditing Standards, we have also issued a
report dated April 29, 1997 on our consideration of the Scituate Vista
Associates' internal control structure and a report dated April 29, 1997 on its
compliance with specific requirements applicable to RIHMFC programs.
/s/ PAUL DAMIANO CPA, P.C.
-----------------------------------
Lincoln, Rhode Island 02865
April 29, 1997
<PAGE> 29
[PAUL DAMIANO LETTERHEAD]
The Partners
Scituate Vista Associates
(A Limited Partnership)
Cranston, RI
We have audited the accompanying balance sheet of RIHMFC Project No.
RI-43-H023-115 of Scituate Vista Associates (a limited partnership) as of
February 29, 1996, and the related statements of income and changes in partners'
equity and cash flows 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 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 the 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 RIHMFC Project No.
RI-43-H023-115 as of February 29, 1996 and the results of its operations and the
changes in partners' equity and cash flows for the year then ended in conformity
with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supporting information included in
the report shown on pages 12-18 are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of the
RIHMFC Project No. RI-43-H023-115. 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.
In accordance with Government Auditing Standards, we have also issued a
report dated May 14, 1996 on our consideration of the Scituate Vista
Associates' internal control structure and a report dated May 14, 1996 on its
compliance with specific requirements applicable to RIHMFC programs.
/s/ PAUL DAMIANO CPA, P.C.
-----------------------------------
Lincoln, Rhode Island 02865
May 14, 1996
<PAGE> 30
REAL ESTATE ASSOCIATES LIMITED IV
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1997 AND 1996
ASSETS
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2) $ 3,374,262 $ 3,098,674
CASH AND CASH EQUIVALENTS (Note 1) 7,430,796 6,603,047
OTHER ASSETS 91,899 72,829
------------ ------------
TOTAL ASSETS $ 10,896,957 $ 9,774,550
============ ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIENCY)
LIABILITIES:
Notes payable (Notes 3 and 7) $ 1,042,524 $ 1,230,743
Interest payable (Notes 3 and 7) 320,101 244,760
Accounts payable 130,851 14,701
------------ ------------
1,493,476 1,490,204
------------ ------------
COMMITMENTS AND CONTINGENCIES (Notes 4 and 5)
PARTNERS' EQUITY (DEFICIENCY):
General partners (177,995) (189,186)
Limited partners 9,581,476 8,473,532
------------ ------------
9,403,481 8,284,346
------------ ------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 10,896,957 $ 9,774,550
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 31
REAL ESTATE ASSOCIATES LIMITED IV
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
INTEREST INCOME $ 325,842 $ 173,145 $ 152,450
----------- ----------- -----------
OPERATING EXPENSES:
Legal and accounting 109,635 101,255 89,895
Management fees - general partner (Note 4) 505,392 505,392 505,392
Interest (Note 3) 74,057 123,000 123,000
Administrative (Note 4) 279,994 79,999 88,629
----------- ----------- -----------
TOTAL OPERATING EXPENSES 969,078 809,646 806,916
----------- ----------- -----------
LOSS FROM OPERATIONS (643,236) (636,501) (654,466)
DISTRIBUTIONS FROM LIMITED
PARTNERSHIPS RECOGNIZED AS
INCOME (Note 2) 1,406,888 1,107,630 1,222,286
EQUITY IN INCOME OF LIMITED
PARTNERSHIPS AND AMORTIZATION
OF ACQUISITION COSTS 355,483 483,414 487,116
----------- ----------- -----------
NET INCOME $ 1,119,135 $ 954,543 $ 1,054,936
=========== =========== ===========
NET INCOME PER LIMITED PARTNERSHIP
INTEREST (Note 1) $ 85 $ 72 $ 80
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 32
REAL ESTATE ASSOCIATES LIMITED IV
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
---------- ---------- ----------
<S> <C> <C> <C>
EQUITY (DEFICIENCY),
January 1, 1995 $ (209,281) $6,484,148 $6,274,867
Net income for 1995 10,549 1,044,387 1,054,936
---------- ---------- ----------
EQUITY (DEFICIENCY),
December 31, 1995 (198,732) 7,528,535 7,329,803
Net income for 1996 9,545 944,998 954,543
---------- ---------- ----------
EQUITY (DEFICIENCY),
December 31, 1996 (189,186) 8,473,532 8,284,346
Net income for 1997 11,191 1,107,944 1,119,135
---------- ---------- ----------
EQUITY (DEFICIENCY),
December 31, 1997 $ (177,995) $9,581,476 $9,403,481
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 33
REAL ESTATE ASSOCIATES LIMITED IV
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,119,135 $ 954,543 $ 1,054,936
Adjustments to reconcile net income to net cash
provided by operating activities:
Equity in income of limited partnerships and amorti-
zation of additional basis and acquisition costs (355,483) (483,414) (487,116)
(Increase) decrease in other assets (19,070) 17,171 (90,000)
Increase (decrease) in accounts payable and
interest payable 191,491 (177,377) (11,610)
------------ ------------ ------------
Net cash provided by operating activities 936,073 310,923 466,210
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in short term investments -- 125,000 --
Distributions from limited partnerships
recognized as return of capital 79,895 606,079 500,661
------------ ------------ ------------
Net cash provided by investing activities 79,895 731,079 500,661
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of notes payable (188,219) -- --
------------ ------------ ------------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 827,749 1,042,002 966,871
CASH AND CASH EQUIVALENTS,
beginning of year 6,603,047 5,561,045 4,594,174
------------ ------------ ------------
CASH AND CASH EQUIVALENTS,
end of year $ 7,430,796 $ 6,603,047 $ 5,561,045
============ ============ ============
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid during the year for interest $ 1,284 $ 285,751 $ 147,896
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 34
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Real Estate Associates Limited IV (the Partnership) was formed under the
California Limited Partnership Act on August 24, 1981. The Partnership
was formed to invest either directly or indirectly 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 Coast Housing Investments Associates (CHIA), a limited partnership.
Casden Investment Corp. owns 100 percent of NAPICO's stock. The limited
partner of CHIA is an officer of NAPICO. The business of REAL IV is
conducted primarily by NAPICO.
These financial statements include the accounts of the Partnership and
Real Estate Associates II (REA II), a California general partnership in
which the Partnership holds a 99.9 percent general partner interest.
Losses in excess of the minority interest in equity that would otherwise
be attributed to the minority interest, are being allocated to the
Partnership.
The Partnership issued 13,200 limited partner interests through a public
offering. The general partners have a 1 percent interest in operating
profits and losses of the Partnership. The limited partners have the
remaining 99 percent interest in proportion to their respective
investments.
The Partnership shall be dissolved only upon the expiration of 52
complete calendar years (December 31, 2033) from the date of 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 item equal to their invested capital attributable
to the project(s) or project interest(s) sold and shall receive from the
sale of the project(s) or project interest(s) sold an amount 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.
5
<PAGE> 35
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 have been capitalized as part of 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.
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 13,202 for all years presented.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and bank certificates of
deposit with an original maturity date of three months or less. The
Partnership has its cash and cash equivalents on deposit primarily with
two high credit quality financial institutions. Such cash and cash
equivalents are in excess of the FDIC insurance limit.
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 twenty-two
limited partnerships. In addition, the Partnership holds a general
partner interest in REA II. NAPICO is also a general partner in REA II.
REA II, in turn, holds limited partner interests in seven additional
limited partnerships. In total, therefore, the Partnership holds
interests, either directly or indirectly through REA II, in twenty-nine
partnerships which own residential low income rental projects consisting
of 2,783 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 80 percent
and 99 percent of the profits and losses of the limited partnerships it
has invested in directly. The Partnership is also entitled to 99.9
percent of the profits and losses of REA II. REA II is entitled to a 99
percent interest in each of the limited partnerships in which it has
invested.
6
<PAGE> 36
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
Equity in loss of the limited partnerships is recognized until the
investment balance is reduced to zero. 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 approximately $11,268,000 and $11,201,000 as of
December 31, 1997 and 1996, respectively.
Distributions from the limited partnerships are accounted for as a
return of capital until the investment balance is reduced to zero or to
a negative amount equal to further capital contributions required.
Subsequent distributions received are recognized as income.
The following is a summary of the investments in limited partnerships
and reconciliation to the limited partnership accounts:
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Investment balance, beginning of year $ 3,098,674 $ 3,221,339
Equity in income of limited partnerships 534,320 662,251
Amortization of capitalized additional basis
and acquisition costs and fees (178,837) (178,837)
Distributions recognized as return of capital (79,895) (606,079)
------------ ------------
Investment balance, end of year $ 3,374,262 $ 3,098,674
============ ============
</TABLE>
The difference between the investment per the accompanying balance
sheets at December 31, 1997 and 1996, and the deficiency per the limited
partnerships' combined financial statements is due primarily to
cumulative unrecognized equity in losses of certain limited
partnerships, additional basis and costs capitalized to the investment
account and cumulative distributions recognized as income.
Selected financial information from the combined financial statements at
December 31, 1997 and 1996 and for each of the three years in the period
ended December 31, 1997, of the limited partnerships in which the
Partnership has invested directly or indirectly, is as follows:
7
<PAGE> 37
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
Balance Sheets
<TABLE>
<CAPTION>
1997 1996
-------- --------
(in thousands)
<S> <C> <C>
Land and buildings, net $ 59,032 $ 61,270
======== ========
Total assets $ 75,218 $ 77,145
======== ========
Mortgages payable $ 90,566 $ 91,965
======== ========
Total liabilities $ 95,985 $ 96,702
======== ========
Deficiency of Real Estate Associates Limited IV $(19,801) $(18,647)
======== ========
Deficiency of other partners $ (965) $ (910)
======== ========
</TABLE>
Statements of Operations
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Total revenue $ 24,215 $ 23,947 $ 23,498
======== ======== ========
Interest expense $ 7,975 $ 8,173 $ 8,088
======== ======== ========
Depreciation $ 3,725 $ 3,690 $ 3,764
======== ======== ========
Total expenses $ 23,830 $ 25,017 $ 23,559
======== ======== ========
Net income (loss) $ 319 $ (1,070) $ (61)
======== ======== ========
Net income (loss) allocable to the Partnership $ 317 $ (1,123) $ 269
======== ======== ========
</TABLE>
Land and buildings above have been adjusted for the amount by which the
investments in the limited partnerships exceed the Partnership's share
of the net book value of the underlying net assets of the investee which
are recorded at historical costs. Depreciation on the adjustment is
provided for over the estimated remaining useful lives of the
properties.
An affiliate of NAPICO is the general partner in two of the limited
partnerships included above, and another affiliate receives property
management fees of 5 percent of their revenue. The affiliate received
property management fees of $120,971, $120,956 and $120,060 in 1997,
1996 and 1995, respectively. The following sets forth the significant
data for these partnerships, reflected in the accompanying financial
statements using the equity method of accounting:
8
<PAGE> 38
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
(in thousands)
<S> <C> <C>
Total assets $ 5,448 $ 5,343
======= =======
Total liabilities $ 8,748 $ 8,689
======= =======
Deficiency of Real Estate Associates Limited IV $(3,270) $(3,316)
======= =======
Deficiency of other partners $ (31) $ (31)
======= =======
Total revenue $ 2,949 $ 2,879 $ 2,831
======= ======= =======
Net income $ 139 $ 33 $ 220
======= ======= =======
</TABLE>
Under recent adopted law and policy, HUD has determined not to renew HAP
Contracts on a long term basis on the existing terms. In connection with
renewals of the HAP Contracts under such new law and policy, the amount
of rental assistance payments under renewed HAP Contracts will be based
on market rentals instead of above market rentals, which was generally
the case under existing HAP Contracts. As a result, existing HAP
Contracts that are renewed in the future on projects insured by the FHA
will not provide sufficient cash flow to permit owners of properties to
meet the debt service requirements of these existing FHA-insured
mortgages. In order to address the reduction in payments under HAP
Contracts as a result of this new policy, the Multi-family Assisted
Housing Reform and Affordability Act of 1997 (the "MAHRAA"), which was
adopted in October 1997, provides for the restructuring of mortgage
loans insured by the FHA with respect to properties subject to HAP
Contracts that have been renewed under the new policy. The restructured
loans will be held by the current lender or another lender. Under
MAHRAA, an FHA-insured mortgage loan can be restructured to reduce the
annual debt service on such loan. There can be no assurance that the
Partnership will be permitted to restructure its mortgage indebtedness
pursuant to the new HUD rules implementing MAHRAA or that the
Partnership would choose to restructure such mortgage indebtedness if it
were eligible to participate in the MAHRAA program. It should be noted
that there are uncertainties as to the economic impact on the
Partnership of the combination of the reduced payments under the HAP
Contracts and the restructuring of the existing FHA-insured mortgage
loans under MAHRAA. Accordingly, the General Partners are unable to
predict with certainty their impact on the Partnership's future cash
flow.
As a result of the foregoing, the Partnership is undergoing an extensive
review of disposition, refinancing or re-engineering alternatives for
the properties in which the limited partnerships have invested and are
subject to HUD mortgage and rental subsidy programs. The Partnership has
incurred expenses in connection with this review by various third party
professionals, including accounting, legal, valuation, structural and
engineering costs, which amounted to $185,099 for the year ended
December 31, 1997.
A real estate investment trust ("REIT") organized by an affiliate of
NAPICO has advised the Partnership that it intends to make a proposal to
purchase from the Partnership certain of the limited partnership
interests held for investment by the Partnership.
9
<PAGE> 39
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
The REIT proposes to purchase such limited partner interests for cash,
which it plans to raise in connection with a private placement of its
equity securities. The purchase is subject to, among other things, (i)
consummation of such private placement by the REIT; (ii) the purchase of
the general partner interests in the local limited partnerships by the
REIT; (iii) the approval of HUD and certain state housing finance
agencies; (iv) the consent of the limited partners to the sale of the
local limited partnership interests held for investment by REAL IV; and
(v) the consummation of a minimum number of purchase transactions with
other Casden affiliated partnerships. As of March 31, 1998, the REIT had
completed buy-out negotiations with a majority of the general partners
of the local limited partnerships.
A proxy is contemplated to be sent to the limited partners setting forth
the terms and conditions of the purchase of the limited partners'
interests held for investment by the Partnership, together with certain
amendments to the Partnership Agreement and other disclosures of various
conflicts of interest in connection with the transaction.
3. NOTES PAYABLE
Certain of the Partnership's investments involved purchases of
partnership interests from partners who subsequently withdrew from the
operating partnership. The Partnership is obligated on non-recourse
notes payable of $1,042,524 bearing interest at 10 percent, to the
sellers of the partnership interests. The notes and the related interest
are payable by the Partnership through REA II, and have principal
maturity dates ranging from 2015 to 2022 or upon sale or refinancing of
the underlying partnership properties. The notes are collateralized by
REA II's investment in the respective limited partnerships and are
payable only out of cash distributions from the investee partnerships as
defined in the notes. Unpaid interest is due at maturity of the notes.
Maturity dates on the notes payable are as follows:
<TABLE>
<CAPTION>
Years Ending December 31
------------------------
<S> <C>
1997 $ --
1998 --
1999 --
2000 --
2001 --
Thereafter 1,042,524
----------
$1,042,524
==========
</TABLE>
10
<PAGE> 40
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1997
4. FEES AND EXPENSES DUE GENERAL PARTNER
Under the terms of the Restated Certificate and Agreement of Limited
Partners, the Partnership is obligated to NAPICO for an annual
management fee equal to .4 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 Partnerships interest in the capital
accounts of the respective partnerships.
The Partnership reimburses NAPICO for certain expenses. The
reimbursement to NAPICO was $37,681, $34,565 and $32,004 in 1997, 1996
and 1995, respectively, and is included in operating expenses.
5. 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.
The Partnership has assessed the potential impact of the Year 2000
computer systems issue on its operations. The Partnership believes that
no significant actions are required to be taken by the Partnership to
address the issue and that the impact of the Year 2000 computer systems
issue will not materially affect the Partnership's future operating
results or financial condition.
6. 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.
7. 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 notes payable are collateralized by the
Partnership's investments in the investee limited partnerships and are
payable only out of cash distributions from the investee partnerships.
The operations generated by the investee limited partnerships are
subject to various government rules, regulations and restrictions which
make it impracticable to estimate the fair value of the notes payable
and related accrued interest. 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.
11
<PAGE> 41
8. FOURTH-QUARTER ADJUSTMENT
The Partnership's policy is to record its equity in the income (loss) of
limited partnerships on a quarterly basis, using estimated financial
information furnished by the various local operating general partners.
The equity in income (loss) of limited partnerships reflected in the
accompanying financial statements is based primarily upon audited
financial statements of the investee limited partnerships. The increase
of approximately $313,483, between the estimated nine-month equity in
income and the actual 1997 income has been recorded in the fourth
quarter.
12
<PAGE> 42
SCHEDULE
REAL ESTATE ASSOCIATES LIMITED IV
INVESTMENTS IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
Year Ended December 31, 1997
-------------------------------------------------------------
Cash
Balance Capital Distri- Equity Balance
January 1, Contri- butions in December 31,
Limited Partnerships 1997 butions Received Income(Loss) 1997
----------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Alliance Towers $ $ $ $ $
Antelope Village Apts.
Armitage Commons
Barnesboro Family Project 263,910 (21,033) (17,002) 225,875
Baughman Towers
Beacon Hill/Hillsdale Place
Branford Elderly II 215,082 (18,124) 46,328 243,286
Buckingham Apts.
Coatesville Towers
Daniel Scott Commons
Ethel Arnold Bradley 275,218 (13,223) 30,951 292,946
Glen Oaks Townhomes
Lakeland Place 153,592 (27,515) 55,268 181,345
Loch Haven Apts. 437,851 18,930 456,781
Ninety-Five Vine St.
Oakridge Park Apts.
O'Fallon Apts.
One Madison
Pacific Coast Villa
Queensbury Heights
Rosewood Apts.
Sandwich Apts.
Scituate Vista 1,753,021 221,008 1,974,029
Sterling Village
Villa del Sol
Village of Albany/Brodhead
Vista Chino Park
Wasco Arms Apts.
Wright Park Phase II
---------- -------- -------- -------- ----------
$3,098,674 $ -- $(79,895) $355,483 $3,374,262
========== ======== ======== ======== ==========
</TABLE>
<PAGE> 43
SCHEDULE
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED IV
INVESTMENTS IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
Year Ended December 31, 1996
-------------------------------------------------------------------------
Cash
Balance Capital Distri- Equity Balance
January 1, Contri- butions in December 31,
Limited Partnerships 1996 butions Received Income (Loss) 1996
-------------- ----------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Alliance Towers $ -- $ $ (42,868) $ 42,868 $ --
Antelope Village Apts. -- (109,976) 109,976 --
Armitage Commons
Barnesboro Family Project 296,837 (27,661) (5,266) 263,910
Baughman Towers
Beacon Hill/Hillsdale Place
Branford Elderly II 188,495 (22,828) 49,415 215,082
Buckingham Apts.
Coatesville Towers -- (47,274) 47,274 --
Daniel Scott Commons
Ethel Arnold Bradley 280,238 (10,578) 5,558 275,218
Glen Oaks Townhomes
Lakeland Place 140,541 (37,632) 50,683 153,592
Loch Haven Apts. 790,250 (307,262) (45,137) 437,851
Ninety-Five Vine St.
Oakridge Park Apts.
O'Fallon Apts.
One Madison
Pacific Coast Villa
Queensbury Heights
Rosewood Apts.
Sandwich Apts.
Scituate Vista 1,524,978 228,043 1,753,021
Sterling Village
Villa del Sol
Village of Albany/Brodhead
Vista Chino Park
Wasco Arms Apts.
Wright Park Phase II
------------ ----------- ----------- ------------- -------------
$ 3,221,339 $ -- $ (606,079) $ 483,414 $ 3,098,674
============ =========== =========== ============= =============
</TABLE>
<PAGE> 44
SCHEDULE
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED IV
INVESTMENTS IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<TABLE>
<CAPTION>
Year Ended December 31, 1995
-------------------------------------------------------------------------
Cash
Balance Capital Distri- Equity Balance
January 1, Contri- butions in December 31,
Limited Partnerships 1996 butions Received Income (Loss) 1996
-------------- ----------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Alliance Towers $ $ $ (57,930) $ 57,930 $ --
Antelope Village Apts. (57,433) 57,433 --
Armitage Commons
Barnesboro Family Project 482,115 (139,741) (45,537) 296,837
Baughman Towers
Beacon Hill/Hillsdale Place
Branford Elderly II 157,786 (14,900) 45,609 188,495
Buckingham Apts.
Coatesville Towers -- (85,185) 85,185 --
Daniel Scott Commons 7,262 (7,262) --
Ethel Arnold Bradley 324,129 (10,578) (33,313) 280,238
Glen Oaks Townhomes
Lakeland Place 110,512 (37,632) 67,632 140,541
Loch Haven Apts. 834,403 (90,000) 45,847 790,250
Ninety-Five Vine St.
Oakridge Park Apts.
O'Fallon Apts.
One Madison
Pacific Coast Villa
Queensbury Heights
Rosewood Apts.
Sandwich Apts.
Scituate Vista 1,318,677 206,301 1,524,978
Sterling Village
Villa del Sol
Village of Albany/Brodhead
Vista Chino Park
Wasco Arms Apts.
Wright Park Phase II
------------ ----------- ----------- ------------- -------------
TOTAL $ 3,234,884 $ -- $ (500,661) $ 487,116 $ 3,221,339
============ =========== =========== ============= =============
</TABLE>
<PAGE> 45
SCHEDULE
(Continued)
REAL ESTATE ASSOCIATES LIMITED IV
INVESTMENT IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
NOTES: 1. Equity in income (losses) of the limited partnerships
represents the Partnership's allocable share of the net income
(loss) from the limited partnerships for the year. Equity in
income (losses) of the limited partnerships will be recognized
until the investment balance is reduced to zero, or below zero to
an amount equal to future capital contributions to be made by the
Partnership.
2. Cash distributions from the limited partnerships will be treated
as a return on the investment and will reduce the investment
balance until such time as the investment is reduced to an amount
equal to additional contributions. Distributions subsequently
received will be recognized as income.
<PAGE> 46
SCHEDULE III
REAL ESTATE ASSOCIATES LIMITED IV
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL IV HAS INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Number Outstanding Buildings,
of Mortgage Furnishing Accumulated Construction
Partnership/Location Units Loan Land & Equipment Total Depreciation Period
- ------------------------------ ------ ----------- ----------- ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Alliance Towers 101 $ 2,384,263 $ 306,054 $ 3,216,205 $ 3,522,259 $ 2,315,058 (A)
Alliance, OH
Antelope Valley Apartments 121 5,287,604 377,311 6,888,886 7,266,197 3,578,424 1982-1983
Lancaster, CA
Armitage Commons 104 4,825,321 234,000 4,816,326 5,050,326 2,619,900 1982-1983
Chicago, IL
Barnesboro Family Project 62 1,836,415 55,247 2,855,076 2,910,323 1,400,226 1982-1983
Barnesboro, PA
Baughman Towers 104 3,559,555 291,192 4,067,671 4,358,863 2,839,475 (A)
Phillippi, WV
Beacon Hill/Hillsdale Place 199 6,687,323 1,265,981 8,292,529 9,558,510 5,916,469 (A)
Hillsdale, MI
Branford Elderly II 44 1,409,023 306,089 1,661,831 1,967,920 610,808 1982-1983
Brandford, CT
Buckingham Apartments 83 3,522,111 608,527 4,085,653 4,694,180 2,093,858 1982-1983
Los Angeles, CA
Coatesville Towers 90 2,481,841 429,145 3,067,895 3,497,040 2,136,767 (A)
Coatesville, PA
Daniel Scott Commons 72 3,180,483 91,864 3,854,498 3,946,362 1,463,585 1982-1983
Chester, PA
Ethel Arnold 81 4,023,482 1,020,762 3,996,838 5,017,600 1,503,628 1982-1983
Los Angeles, CA
Glenoaks Townhouses 48 2,638,858 716,570 2,575,016 3,291,586 1,332,029 1982-1983
Los Angeles, CA
Lakeland Place 200 4,750,777 663,771 5,371,116 6,034,887 4,107,468 (A)
Waterford, MI
Loch Haven Apartments 208 2,875,309 402,000 4,385,299 4,787,299 3,407,664 (A)
Lauderhill, FL
Oakridge Park Apts. 40 956,303 40,000 1,174,448 1,214,448 1,072,398 1982-1983
North Biloxi, MS
One Madison Avenue 27 911,944 83,750 1,076,522 1,160,272 591,576 1982-1983
Madison, ME
O'Fallon Apartments 132 4,368,888 149,211 4,796,200 4,945,411 2,452,708 1981-1982
O'Fallon, IL
Pacific Coast Villa 50 1,206,899 100,000 1,607,587 1,707,587 900,048 (A)
Long Beach, CA
Queensbury Heights 64 1,883,251 50,000 2,571,951 2,621,951 1,195,413 1982-1983
Middleboro, KY
Rosewood apartments 150 5,416,370 541,000 5,864,975 6,405,975 3,471,599 (A)
Camarillo, CA
Sandwich Apartments 90 2,295,000 60,000 3,609,152 3,669,152 2,618,241 (A)
Sandwich, IL
Scituate Vista 232 6,751,656 414,914 10,186,593 10,601,507 4,718,610 1981-1983
Cranston, RI
Sterling Village 80 2,745,812 280,000 3,589,630 3,869,630 2,267,468 1982-1983
San Bernardino, CA
Villa del Sol 121 3,498,961 345,959 4,038,693 4,384,652 2,789,325 (A)
Norwalk, CA
Village of Albany/ 32 1,051,862 59,850 1,155,511 1,215,361 565,744 1982-1983
Village of Brodhead
Albany & Brodhead, WI
95 Vine Street 31 1,351,103 280,000 1,742,796 2,022,796 670,557 1982-1983
Hartford, CT
Vista Park Chino 40 1,927,775 261,548 2,350,219 2,611,767 1,242,864 1982-1983
Chino, CA
Wasco Arms Apartments 78 3,217,060 160,991 4,264,387 4,425,378 2,284,488 1981-1983
Wasco, CA
Wright Park Phase II 99 3,521,029 17,530 4,012,635 4,030,165 3,407,860 (A)
Rome, NY
Additional carrying value of
real estate on investee
limited partnerships not
recorded on said limited
partnerships 941,860 9,200,516 10,142,376 6,325,525
------ ----------- ----------- ------------ ------------ -----------
TOTAL 2,783 $90,566,278 $10,555,126 $120,376,654 $130,931,780 $71,899,783
====== =========== =========== ============ ============ ===========
</TABLE>
<PAGE> 47
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED IV
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL IV HAS INVESTMENTS
DECEMBER 31, 1997
NOTES: 1. Each local limited partnership has developed, owns and operates
the housing project. Substantially all project costs, including
construction period interest expense, are being capitalized by
the limited partnerships.
2. Depreciation is, or will be, provided for by various methods over
the estimated useful lives of the projects. The estimated
composite useful lives of the buildings are generally from 25 to
40 years.
3. Investments in property and equipment:
<TABLE>
<CAPTION>
Buildings,
Furnishings,
And
Land Equipment Total
------------- ------------- -------------
<S> <C> <C> <C>
Balance, January 1, 1995 $ 10,307,003 $ 118,388,833 $ 128,695,836
Net additions during 1995 177,017 84,592 261,609
------------- ------------- -------------
Balance, December 31, 1995 10,484,020 118,473,425 128,957,445
Net deletions during 1996 (8,700) (2,810,957) (2,819,657)
------------- ------------- -------------
Balance, December 31, 1996 10,475,320 115,662,468 126,137,788
Net deletions during 1997 79,806 4,714,186 4,793,992
------------- ------------- -------------
Balance, December 31, 1997 $ 10,555,126 $ 120,376,654 $ 130,931,780
============= ============= =============
</TABLE>
<PAGE> 48
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED IV
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL IV HAS INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Buildings
Furnishings
and Equipment
------------
<S> <C>
Accumulated Depreciation:
Balance, January 1, 1995 $59,548,690
Net additions during 1995 3,655,616
-----------
Balance, December 31, 1995 63,204,306
Net additions during 1996 1,663,591
-----------
Balance, December 31, 1996 64,867,897
Net additions during 1997 7,031,886
-----------
Balance, December 31, 1997 $71,899,783
===========
</TABLE>
<PAGE> 49
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:
REAL ESTATE ASSOCIATES LIMITED IV (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, 68, 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, 46, 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, 52, 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> 50
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, 54, 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.
BOB SCHAFER, 56, Senior Vice President of Finance.
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.
PATRICIA W. TOY, 68, 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, 37, 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.
NAPICO and several of its officers, directors and affiliates, including Charles
H. Boxenbaum, Bruce E. Nelson and Alan I. Casden, consented to the entry, on
June 25, 1997, of an administrative cease and desist order by the U.S.
Securities and Exchange Commission (the "Commission"), without admitting or
denying any of the findings made by the Commission. The Commission found that
NAPICO and others had violated certain federal securities laws in connection
with transactions unrelated to the Partnership. The Commission's order did not
impose any cost, burden or penalty on any partnership managed by NAPICO and
does not impact NAPICO's ability to serve as the Partnership's Managing General
Partner.
<PAGE> 51
ITEM 11. MANAGEMENT RENUMERATION AND TRANSACTIONS:
Real Estate Associates Limited IV 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 .4
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 General Partner is responsible for the on-site property
management for certain 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 IV; no person is known to own beneficially in excess of 5 percent of the
outstanding limited partnership interests.
(b) At December 31, 1997, security ownership of management is as listed:
<TABLE>
<CAPTION>
Percentage of
Outstanding
Amount and Limited
Name of Nature of Partnership
Title of Class Owner Beneficial Owner Interests
- -------------- --------------------- --------------- ---------------
<S> <C> <C> <C>
Limited Charles H. Boxenbaum
Partnership 780 Latimer Road
Interest Santa Monica, CA 90402 $ 7,500 *
</TABLE>
* Cumulative limited partnership interests owned by corporate officers or the
General Partner is less than 1 percent interest of total outstanding
Limited Partnership interests.
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 Partnership is obligated to NAPICO for an annual
management fee equal to .4 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. The management fee was $505,392 for each of the three years in the
period ended December 31, 1997.
The Partnership reimburses NAPICO for certain expenses. The reimbursement to
NAPICO was $37,681, $34,565 and $32,004 in 1997, 1996 and 1995, respectively,
and is included in operating expenses.
An affiliate of NAPICO is the general partner in two of the limited partnerships
in which the Partnership has an investment, and another affiliate receives
property management fees of approximately 5 percent of their revenue. The
affiliate received property management fees of $120,971, $120,956 and $120,060
in 1997, 1996 and 1995, respectively.
<PAGE> 52
A real estate investment trust ("REIT") organized by an affiliate of NAPICO
has advised the Partnership that it intends to make a proposal to purchase
from the Partnership certain of the limited partnership interests held for
investment by the Partnership.
The REIT proposes to purchase such limited partner interests for cash, which it
plans to raise in connection with a private placement of its equity securities.
The purchase is subject to, among other things, (i) consummation of such
private placement by the REIT; (ii) the purchase of the general partner
interests in the local limited partnerships by the REIT; (iii) the approval of
HUD and certain state housing finance agencies; (iv) the consent of the limited
partners to the sale of the local limited partnership interests held for
investment by REAL IV; and (v) the consummation of a minimum number of purchase
transactions with other Casden affiliated partnerships. As of March 31, 1998,
the REIT had completed buy-out negotiations with a majority of the general
partners of the local limited partnerships.
A proxy is contemplated to be sent to the limited partners setting forth the
terms and conditions of the purchase of the limited partners' interests held
for investment by the Partnership, together with certain amendments to the
Partnership Agreement and other disclosures of various conflicts of interest in
connection with the transaction.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K:
FINANCIAL STATEMENTS
Report of Independent Public Accountants.
Balance Sheets as of December 31, 1997 and December 31, 1996.
Statements of Operations for the years ended December 31, 1997, 1996 and 1995.
Statements of Partners' Equity (Deficiency) for the years ended December 31,
1997, 1996 and 1995.
Statements of Cash Flows for the years ended December 31, 1997, 1996 and 1995.
Notes to Financial Statements December 31, 1997.
FINANCIAL STATEMENT SCHEDULES
APPLICABLE TO REAL ESTATE ASSOCIATES LIMITED IV, REAL ESTATE ASSOCIATES II AND
TO THE LIMITED PARTNERSHIPS IN WHICH REAL ESTATE ASSOCIATES IV AND REAL ESTATE
ASSOCIATES II HAVE INVESTMENTS:
Schedule - Investment in Limited Partnerships, December 31, 1997, 1996 and 1995.
Schedule III - Real Estate and Accumulated Depreciation, December 31, 1997.
The remaining schedules are omitted because any required information is included
in the financial statements and notes thereto.
EXHIBITS
(3) Articles of incorporation and bylaws: The registrant is not incorporated.
The Partnership Agreement was filed with Form S-11, File #274063 which is
hereby incorporated 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 August 24, 1981, and the twenty-nine contracts representing the
Partnership investment directly or indirectly in local limited partnerships
as previously filed at the Securities Exchange Commission, File #274063
which is hereby incorporated by reference.
REPORTS ON FORM 8-K
A report on Form 8-K dated November 6, 1996, was filed with the Securities and
Exchange Commission. This Form 8-K disclosed that the registrant became aware of
an entity conducting a tender offer for units in the registrant. The general
partners on behalf of the registrant, by letter, dated November 6, 1996, advised
the limited partners that the general partners expressed no opinion regarding
this offer, but urged the limited partners to consult with their tax advisors
about the tax consequences that could result from a sale of their units.
<PAGE> 53
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 IV
By: NATIONAL PARTNERSHIP INVESTMENTS CORP.
General Partner
/s/ CHARLES H. BOXENBAUM
- --------------------------------------
Charles H. Boxenbaum
Chairman of the Board of Directors
and Chief Executive Officer
/s/ BRUCE E. NELSON
- --------------------------------------
Bruce E. Nelson
Director and President
/s/ ALAN I. CASDEN
- --------------------------------------
Alan I. Casden
Director
/s/ HENRY C. CASDEN
- --------------------------------------
Henry C. Casden
Director
/s/ BOB E. SCHAFER
- --------------------------------------
Bob E. Schafer
Senior Vice President of Finance
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 7,430,796
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,430,796
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,896,957
<CURRENT-LIABILITIES> 130,851
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,403,481
<TOTAL-LIABILITY-AND-EQUITY> 10,896,957
<SALES> 0
<TOTAL-REVENUES> 2,088,213
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 895,021
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 74,057
<INCOME-PRETAX> 1,119,135
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,119,135
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,119,135
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
