<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, 1995
Commission File Number
2-82090
-------
REAL ESTATE ASSOCIATES LIMITED VI
A CALIFORNIA LIMITED PARTNERSHIP
I.R.S. Employer Identification No. 95-3778627
------------
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 VI ("REAL VI" or the "Partnership") is a limited
partnership which was formed under the laws of the State of California on
October 12, 1982. On April 22, 1983, REAL VI offered 4,200 units consisting of
8,400 limited partnership interests and warrants to purchase a maximum of 8,400
additional limited partnership interests through a public offering managed by
Lehman Brothers Inc.
The general partners of REAL VI are National Partnership Investments Corp.
("NAPICO"), a California corporation, (the "Corporate General Partner"), and
Coast Housing Investment Associates ("CHIA"). CHIA 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 Mr.
Charles H. Boxenbaum as limited partner. The business of REAL VI is conducted
primarily by its general partners as REAL VI has no employees of its own.
Casden Investment Corporation ("CIC") owns 100 percent of NAPICO's stock. The
current members of NAPICO's Board of Directors are Charles H. Boxenbaum, Bruce
E. Nelson, Alan I Casden, Henry C. Casden and Brian D. Goldberg.
REAL VI holds limited partnership interests in 27 local limited partnerships
and a general partner interest in one general partnership. REAL VI also holds
a general partner interest in Real Estate Associates III ("REA III") which, in
turn, holds a general partner interest in one local general partnership and
limited partner interests in seven local limited partnerships. The other
general partner of REA III is NAPICO. Therefore, REAL VI holds interests
either directly or indirectly in 34 local limited partnerships and 2 local
general partnerships which 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 among others, interest subsidies, rent
supplements, and mortgage insurance, with the intent of reducing certain market
risks and providing investors with certain tax benefits, plus limited cash
distributions and the possibility of long-term capital gains. There remain,
however, significant risks. The long-term nature of investments in government
assisted housing limits the ability of REAL VI to vary its portfolio in
response to changing economic, financial and investment conditions; such
investments are also subject to changes in local economic circumstances and
housing patterns, as well as rising operating costs, vacancies, rent collection
difficulties, energy shortages and other factors which have an impact on real
estate values. These projects also require greater management expertise and
may have higher operating expenses than conventional housing projects.
The local partnerships in which REAL VI 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 VI became the
principal limited or general partner in these local partnerships pursuant to
arm's-length negotiations with these developers, or others, who normally act as
general partners. As a limited partner, REAL VI's liability for obligations of
the local limited partnership is limited to its investment. The local general
partner of the local limited partnership retains responsibility for developing,
constructing, maintaining, operating and managing the project. Under certain
circumstances, REAL VI has the right to replace the general partner of the
local limited partnerships. As discussed above, REAL VI is a general partner
in certain of the local partnerships.
Although each of the partnerships in which REAL VI has invested will generally
own 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> 3
During 1995, projects in which REAL VI had invested were substantially rented.
The following is a schedule of the status, as of December 31, 1995, of the
projects owned by local partnerships in which REAL VI, either directly or
indirectly through REA III, has invested.
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED
AND GENERAL PARTNERSHIPS
IN WHICH REAL VI HAS AN INVESTMENT
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Units Authorized
For Rental
No. of Assistance Under Units Percentage of
Name & Location Units Section 8 Occupied Total Units
- --------------- ----- ----------------- ----------- ------------
Limited Partnerships
- --------------------
<S> <C> <C> <C> <C>
Boynton Terrace 89 89 88 99%
Boynton Beach, FL
Cady Brook Apts. 40 None 40 100%
Charlton, MA
Cassidy Village 98 50 92 94%
Columbus, Ohio
Century Plaza 120 120 120 100%
Hampton, VA
City Heights
Senior Citizens 151 150 151 100%
Wilkes-Bar, PA
Crockett Manor 38 38 36 95%
Trenton, TN
Denny Place 17 4 16 94%
Los Angeles, CA
Drexel Park III 72 8 68 94%
Laurel, MD
Eastridge Apts. 96 65 92 96%
Briston, VA
Echo Valley Apts. 100 100 98 98%
Warwick, RI
Filmore I 32 32 30 94%
Phoenix, AZ
Grant-Ko Enterprises 40 None 35 88%
Platteville, WI
</TABLE>
<PAGE> 4
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED
AND GENERAL PARTNERSHIPS
IN WHICH REAL VI HAS AN INVESTMENT
DECEMBER 31, 1995
CONTINUED
<TABLE>
<CAPTION>
Units Authorized
For Rental
No. of Assistance Under Units Percentage of
Name & Location Units Section 8 Occupied Total Units
- --------------- ----- ----------------- ----------- ------------
<S> <C> <C> <C> <C>
Hudson Gardens 41 41 41 100%
Pasadena, CA
Hummelstown Manor 51 50 51 100%
Hummelstown, PA
Kentucky Manor 48 None 46 96%
Oak Grove, KY
Lonsdale Housing 131 131 130 99%
Providence, RI
Mariner's Cove 500 100 487 97%
San Diego, CA
Marshall Plaza I 40 40 40 100%
Lorain, Ohio
Marshall Plaza II 50 48 49 98%
Lorain, Ohio
Menlo Estates 80 80 79 99%
Riverside County, CA
Mulberry Towers 206 205 206 100%
Scranton, PA
New-Bel-Mo 34 None 29 85%
New Glarus, Bellemont,
Monticello, WI
Oakridge Apts. II 48 0 47 98%
Biloxi, MS
Oakwood Manor 34 34 33 97%
Milan, TN
Park Place 126 125 126 100%
Ewing, NJ
</TABLE>
<PAGE> 5
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED
AND GENERAL PARTNERSHIPS
IN WHICH REAL VI HAS AN INVESTMENT
DECEMBER 31, 1995
CONTINUED
<TABLE>
<CAPTION>
Units Authorized
For Rental
No. of Assistance Under Units Percentage of
Name & Location Units Section 8 Occupied Total Units
- --------------- ----- ----------------- ----------- ------------
<S> <C> <C> <C> <C>
Park Place Apts. 60 60 58 97%
Cleveland, TX
Parkesedge Elderly Apts. 45 45 45 100%
Parkesedge, PA
Penneco II 76 76 72 95%
Johnstown, PA
Sauk-Ko Enterprises 30 None 26 87%
Baraboo, WI
Sol 413 12 12 12 100%
Old San Juan, PR
Valley Oaks Senior 50 None 50 100%
Gault, CA
Victory Square 81 81 78 96%
Canton, Ohio
Villas de Orocovix 41 41 40 98%
Orocovix, PR
Willow Wood 19 4 19 100%
Los Angeles, CA
General Partnerships
- --------------------
Drexel Park I 231 None 202 87%
Laurel, MD
Peppertree 136 None 132 97%
Cypress, CA
------ ----- ----- ----
TOTALS 3,063 1,709 2,964 97%
====== ===== =====
</TABLE>
<PAGE> 6
ITEM 2. PROPERTIES
Through its investment in local limited and general partnerships, REAL VI holds
interests in real estate properties. See Item 1 and Schedule XI for
information pertaining to these properties.
ITEM 3. LEGAL PROCEEDINGS
As of December 31, 1995, the Partnership's General Partner was a plaintiff or
defendant in several suits. In addition, the Partnership is involved in the
following lawsuits. In the opinion of management and the Corporate General
Partner, these claims will not result in any material liability to the
Partnership.
Real Estate Associates Limited VI vs. Jansen Properties of Florida, Inc.,
Jeffrey Auslander and Peck, Shaffer & Williams, as Escrow Agents, Case No.
95-7005 AO, Circuit Court, 15th Judicial Circuit, Palm Beach County, Florida.
On September 5, 1995, REAL VI filed a declaratory judgment action claiming that
it is entitled to $376,500 of funds presently held in escrow which funds were
realized from a refinancing of an apartment project in Boynton Beach, Florida
in which REAL VI is the limited partner. The contestants to the escrow fund,
in addition to REAL VI, are the general partners, Jeffrey Auslander and Jansen
Properties of Florida, Inc., and Keith Rothchild, a judgment creditor of
Auslander. The case is in its early stages and there is an appeal pending from
an order which denied Auslander and Jansen's motion to compel arbitration of
the dispute. There are settlement discussions pending between the parties.
Rhonda Harris v. HAPI Management Inc., The Carlton Arms Venture, Rosewood
Apartments Corporation and Real Estate Associated Limited VI, Case No.
CI90-7512, Circuit Court, 9th Judicial Circuit, Orange County, Florida. The
Plaintiff is an acquaintance of a tenant. Plaintiff alleges that on August 13,
1990, while descending the outside wooden staircase one of the steps broke
causing Plaintiff to fall down the remainder of the stairs. While the property
has been foreclosed on, the alleged incident occurred prior to the foreclosure.
Accordingly, this matter was turned over to the Partnership's insurer.
Currently no dollar amount has been demanded by the Plaintiff and no medical
report or supporting evidence validating this claim has been submitted.
Rosa Cunningham v. Drexel Park Apartments, Drexel Park Limited Partnership and
(NAPICO), Case No. C-94-12276 OT, Circuit Court of Maryland, Anne Arundel
County, Maryland. On May 2, 1994, the Plaintiff filed a lawsuit. Plaintiff
alleges that on December 22, 1992, while exiting her apartment building, she
slipped and fell on ice and/or snow. As a result of the fall, the Plaintiff
allegedly sustained personal injuries. This matter has been sent to the
Partnership's insurer.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS AND RELATED
SECURITY HOLDER MATTERS
The Limited Partnership Interests are not traded on a public exchange but were
sold through a public offering managed by Lehman Brothers Inc. It is not
anticipated that any public market will develop for the purchase and sale of
any partnership interests. Limited Partnership Interests may be transferred
only if certain requirements are satisfied. At December 31, 1995, there were
3,613 registered holders of units in REAL VI. Distributions have not been made
from the inception of the Partnership to December 31, 1995. 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,
----------------------------------------------------------------------------
1995 1994 1993 1992 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
(Loss) Income from
Rental Operations $ (246,036) $ (238,520) $ (105,574) $ 37,498 $ (347,697)
Loss from Partnership
Operations (1,307,251) (1,110,060) (1,422,906) (1,037,379) (1,043,966)
Gain on Foreclosure - - 4,095,110 - -
Equity in Income (Loss)
of Limited Partnerships
and Amortization of
Acquisition Costs 415,526 433,356 (111,547) (130,549) (34,295)
Distribution from
Limited Partnerships
Recognized as Income 347,163 500,498 247,782 524,913 276,087
----------- ----------- ----------- ----------- -----------
Net Income (Loss) $ (790,598) $ (414,726) $ 2,702,865 $ (605,517) $(1,149,871)
=========== =========== =========== =========== ===========
Net Income (Loss) per
Limited Partnership
Interest $ (47) $ (24) $ 159 $ (36) $ (68)
=========== =========== =========== =========== ===========
Total Assets $18,337,139 $18,725,681 $18,810,269 $19,980,037 $20,154,882
=========== =========== =========== =========== ===========
Investments in
Limited
Partnerships $ 5,619,146 $ 5,213,864 $ 5,032,639 $ 5,415,475 $ 5,826,500
=========== =========== =========== =========== ===========
Rental Property $ 7,285,002 $ 7,638,829 $ 7,937,314 $ 8,288,223 $ 8,565,167
=========== =========== =========== =========== ===========
Mortgage
Notes Payable $ 9,890,564 $ 9,993,001 $10,086,190 $10,170,965 $10,248,144
=========== =========== =========== =========== ===========
Notes Payable and
Amounts Due for
Partnership
Interests $ 5,795,000 $ 5,795,000 $ 5,795,000 $ 5,795,000 $ 5,795,000
=========== =========== =========== =========== ===========
</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
partnership in which the Partnership has invested. It is not expected that any
of the local 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.
The financial statements of the three general partnerships in which REAL VI or
REA III are the majority general partners, have been consolidated in the
accompanying financial statements. Two of these partnerships are local
operating partnerships which own and operate apartment buildings. The units
are leased primarily on a month-to-month basis. These partnerships' primary
source of funds are the rental payments from tenants. Expenditures primarily
include normal operating expenses and debt service.
CAPITAL RESOURCES
REAL VI received $42,000,000 in subscriptions for units of limited partnership
interests (at $5,000 per unit) during the period April 22, l983, to March 31,
1984, pursuant to a registration statement on Form S-11.
The Partnership has committed, as of December 31, 1995, to investments
requiring additional capital contributions of $90,500. The Partnership
normally makes its capital contributions to the local limited partnerships in
stages, over a period of two to five years, with each contribution due on a
specified date, provided that certain conditions regarding construction or
operation of the project have been fulfilled. The Partnership has no
significant commitments once the capital contributions have been made. The
Partnership has no significant commitments for additional capital expenditures
to the general partnerships which have been consolidated.
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 partnerships in which
REAL VI has invested could produce tax losses for as long as 20 years. The
Partnership will seek to defer limited partner income taxes from capital gains
by not selling any projects or project interests within 10 years, except to
qualified tenant cooperatives, or when proceeds of the sale would supply
sufficient cash to distribute to limited partners to enable the partners to pay
applicable taxes.
Tax benefits will decline over time as the advantages of accelerated
depreciation are greatest in the earlier years, as deductions for interest
expense decrease as mortgage principal is amortized, and as the Tax Reform Act
of 1986 limits the deductions available.
Rental revenues remain steady over the past 3 years. Expenses incurred to
operate the properties are consistent with prior years.
On February 2, 1996, one of the consolidated general partnerships (Drexel Park)
sold its property for $6,300,000. The property as of December 31, 1995, had an
outstanding loan of approximately $5,100,000 and a net book value of
approximately $3,900,000. After payment of closings costs, the Partnership
realized a gain of approximately $2,000,000 and cash of $837,000.
The Partnership ceased making mortgage payments in June 1991 on one its
properties (Carlton Arms). Subsequently, a new management company was
appointed by the lender and the Partnership entered into an agreement with the
lender whereby the Partnership was given until January 1993 to cure any
defaults on the mortgage. Failure to cure the defaults would result in the
immediate transfer of title, which was placed in escrow,
<PAGE> 9
to the lender. The property continued to operate at a deficit and the
Partnership was unable to cure the defaults. The assets and liabilities of the
property were eliminated from the balance sheet at December 31, 1991 because
the partnership no longer controlled the property. In addition, the related
statements of operations reflect operations only through June 30, 1991. The
deferred gain of $4,095,110 was recognized when title transferred to the
mortgage holder in April 1993.
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.
Losses incurred after the limited partnership investment account is reduced to
zero are not recognized.
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.
Except for certificates of deposit and money market funds, the Partnership's
investments are entirely interests in other limited and general partnerships
owning government assisted projects. Funds temporarily not required for such
investments in projects are invested providing interest income as reflected in
the statement of operations. These funds can be converted to cash to meet
obligations as they arise. The Partnership intends to continue investing
available funds in this manner.
A recurring partnership expense is the annual management fee. The fee is
payable to the Corporate General Partner of the Partnership and is calculated
as a percentage of the Partnership's invested assets. The management fee 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 partnership.
Partnership operating expenses, exclusive of management fees, consist
substantially of professional fees for services rendered to the Partnership.
Such expenses are consistent with prior years.
The Partnership, as a limited or general partner in the local partnerships in
which it has invested, is subject to the risks incident to the construction,
management, and ownership of improved real estate. The Partnership investments
are also subject to adverse general economic conditions and accordingly, the
status of the national economy, including substantial unemployment and
concurrent inflation, could increase vacancy levels, rental payment defaults,
and operating expenses, which in turn, could substantially increase the risk of
operating losses for the projects.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Financial Statements and Supplementary Data are listed under Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
<PAGE> 10
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(A California limited partnership)
FINANCIAL STATEMENTS,
FINANCIAL STATEMENT SCHEDULES
AND INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
DECEMBER 31, 1995
<PAGE> 11
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
Real Estate Associates Limited VI
(A California limited partnership)
We have audited the accompanying balance sheets of Real Estate Associates
Limited VI (a California limited partnership) and subsidiaries as of December
31, 1995 and 1994, and the related consolidated statements of operations,
partners' deficiency and cash flows for each of the three years in the period
ended December 31, 1995. 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 15 percent and 28 percent of total assets as of December 31, 1995 and
1994, respectively, and the equity in income (loss) of these limited
partnerships represents 13 percent, 9 percent and 26 percent of the total net
income (loss) of the Partnership for the years ended December 31, 1995, 1994
and 1993, 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 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 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 VI and
subsidiaries as of December 31, 1995 and 1994, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1995 in conformity with generally accepted accounting principles.
Also, in our opinion, based on our audits and the reports of other auditors,
such financial statement schedules, when considered in relation to the basic
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.
DELOITTE & TOUCHE LLP
Los Angeles, California
March 29, 1996
<PAGE> 12
REAL ESTATE ASSOCIATES LIMITED VI
(a California limited partnership)
BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
ASSETS
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2) $ 5,619,146 $ 5,213,864
RENTAL PROPERTY, net of accumulated depreciation (Note 1) 7,285,002 7,638,829
CASH AND CASH EQUIVALENTS (Note 1) 4,895,340 5,072,944
CASH, restricted (Note 3) 84,338 84,900
SHORT TERM INVESTMENTS (NOTE 1) 125,000 125,000
RECEIVABLES FROM LIMITED PARTNERSHIPS (Note 2) 1,000 257,250
OTHER ASSETS 327,313 332,894
----------- -----------
TOTAL ASSETS $18,337,139 $18,725,681
=========== ===========
LIABILITIES AND PARTNERS' DEFICIENCY
LIABILITIES:
Mortgage notes payable related to properties
(Notes 4 and 9) $ 9,890,564 $ 9,993,001
Notes payable and amounts due for partnership
interests (Notes 5 and 9) 5,795,000 5,795,000
Accrued interest payable (Notes 5 and 9) 5,253,980 4,834,545
Accounts payable 193,501 106,495
Other liabilities 131,171 133,119
----------- -----------
21,264,216 20,862,160
----------- -----------
COMMITMENTS AND CONTINGENCIES (Notes 2, 6 and 7)
PARTNERS' DEFICIENCY:
General partners (380,460) (372,554)
Limited partners (2,546,617) (1,763,925)
----------- -----------
(2,927,077) (2,136,479)
----------- -----------
TOTAL LIABILITIES AND PARTNERS' EQUITY $18,337,139 $18,725,681
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 13
REAL ESTATE ASSOCIATES LIMITED VI
(a California limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
RENTAL OPERATIONS:
Revenues $ 2,715,123 $ 2,680,834 $ 2,696,843
------------ ------------ ------------
Expenses:
General and administrative 429,258 430,353 371,028
Operating 1,040,846 991,264 938,799
Management fees - affiliate (Note 6) 165,018 169,372 151,667
Depreciation and amortization (Note 1) 381,897 374,903 378,979
Interest 944,140 953,462 961,944
------------ ------------ ------------
2,961,159 2,919,354 2,802,417
------------ ------------ ------------
(LOSS) INCOME FROM RENTAL OPERATIONS (246,036) (238,520) (105,574)
------------ ------------ ------------
PARTNERSHIP OPERATIONS:
Interest income 168,911 221,268 71,954
------------ ------------ ------------
Expenses:
Management fees - general partner (Note 3) 535,489 624,120 624,120
Mortgage brokerage fees - general partner
(Note 6) 131,100 - 157,000
General and administrative 289,923 187,558 194,090
Interest expense 519,650 519,650 519,650
------------ ------------ ------------
1,476,162 1,331,328 1,494,860
------------ ------------ ------------
LOSS FROM PARTNERSHIP OPERATIONS (1,307,251) (1,110,060) (1,422,906)
------------ ------------ ------------
GAIN ON FORECLOSURE (Note 1) - - 4,095,110
EQUITY IN INCOME (LOSS) LIMITED
PARTNERSHIPS AND AMORTIZATION
OF ACQUISITION COSTS 415,526 433,356 (111,547)
DISTRIBUTIONS FROM LIMITED
PARTNERSHIPS RECOGNIZED AS
INCOME (Note 2) 347,163 500,498 247,782
------------ ------------ ------------
NET INCOME (LOSS) $ (790,598) $ (414,726) $ 2,702,865
============ ============ ============
NET INCOME PER LIMITED PARTNERSHIP
INTEREST (Note 1) $ (47) $ (24) $ 159
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 14
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
CONSOLIDATED STATEMENTS OF PARTNERS' DEFICIENCY
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
---------- ------------ ------------
<S> <C> <C> <C>
DEFICIENCY, January 1, 1993 $ (395,436) $ (4,029,182) $ (4,424,618)
Net loss, 1993 27,029 2,675,836 2,702,865
---------- ------------ ------------
DEFICIENCY, December 31, 1993 (368,407) (1,353,346) (1,721,753)
Net loss, 1994 (4,147) (410,579) (414,726)
---------- ------------ ------------
DEFICIENCY, December 31, 1994 (372,554) (1,763,925) (2,136,479)
Net loss, 1995 (7,906) (782,692) (790,598)
---------- ------------ ------------
DEFICIENCY, December 31, 1995 $ (380,460) $ (2,546,617) $ (2,927,077)
========== ============ ============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE> 15
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (790,598) $ (414,726) $ 2,702,865
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Gain from foreclosure - - (4,095,110)
Equity in (income) loss of limited partnerships
and amortization of acquisition costs (415,526) (433,356) 111,547
Depreciation 353,827 346,832 378,979
(Increase decrease in receivables from limited partnerships 256,250 126,500 (376,277)
(Increase) decrease in other assets 5,581 25,164 (54,555)
Increase in accrued interest payable 419,435 359,641 447,823
(Decrease) increase in accounts payable 87,006 43,161 (97,678)
(Decrease) increase in other liabilities (1,948) 20,525 (42,893)
---------- ---------- ------------
Net cash provided by (used in) operating activities (85,973) 73,741 (1,025,299)
---------- ---------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions to limited partnerships recognized
as a return of capital 201,288 257,425 364,636
Decrease in restricted cash 562 2,841 1,929
Increase in short term investments - (125,000) -
Capital contribution to investee limited partnership (191,044) (5,294) (93,347)
Addition to rental property - (48,347) (28,070)
---------- ---------- ------------
Net cash provided by investing activities 10,806 81,625 245,148
---------- ---------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of mortgages (102,437) (93,189) (84,775)
---------- ---------- ------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (177,604) 62,177 (864,926)
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 5,072,944 5,010,767 5,875,693
---------- ---------- ------------
CASH AND CASH EQUIVALENTS,
END OF YEAR $4,895,340 $5,072,944 $ 5,010,767
========== ========== ============
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid during the year for interest $1,044,356 $ 160,009 $ 514,121
========== ========== ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 16
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Real Estate Associates Limited VI (the "Partnership"), was formed
under the California Limited Partnership Act on October 12, 1982. The
Partnership was formed to invest primarily in other limited
partnerships or joint ventures which own and operate primarily
federal, state or local government-assisted housing projects and to
acquire, lease, sell or mortgage real or personal property. The
general partners are Coast Housing Investments Associates (CHIA), a
limited partnership, and National Partnership Investments Corp.
(NAPICO), the corporate general partner. Casden Investment
Corporation owns 100 percent of NAPICO's stock. The limited partner
of CHIA is an officer of NAPICO.
The Partnership offered and issued 4,200 units of limited partner
interests through a public offering. Each unit was comprised of two
limited partner interests and a warrant granting the investor the
right to purchase two additional limited partner interests. An
additional 8,410 interests were issued from the exercise of warrants
and the sale of interests associated with warrants not exercised. 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 50
complete calendar years (December 31, 2032) from the date of the
formation of the partnership or the occurrence of various other events
as specified in the Partnership agreement.
Upon total or partial liquidation of the Partnership or the
disposition or partial disposition of a project or project interest
and distribution of the proceeds, the general partners will be
entitled to a liquidation fee as stipulated in the Partnership
agreement. The limited partners will have a priority return equal to
their invested capital attributable to the project(s) or project
interest(s) sold and shall receive from the sale of the project(s) or
project interest(s) an amount sufficient to pay state and federal
income taxes, if any, calculated at the maximum rate then in effect.
The general partner's 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.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Real
Estate Associates Limited VI and its majority-owned general
partnerships. All significant intercompany accounts and transactions
have been
5
<PAGE> 17
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
eliminated in consolidation. Losses in excess of the minority
interest is equity that would otherwise be attributed to the minority
interest are being allocated to the Partnership.
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.
RENTAL PROPERTY AND DEPRECIATION
Rental property is stated at cost. Depreciation is provided on the
straight-line and accelerated methods over the estimated useful lives
of the buildings and equipment. Pursuant to a purchase agreement in
which the Partnership acquired its interest from independent
withdrawing general partners, certain rental property was revalued to
reflect the purchase price.
Substantially all of the apartment units are leased on a
month-to-month basis.
The costs of rental property and estimated useful lives for
depreciation are as follows:
<TABLE>
<CAPTION>
Estimated
Useful
Lives 1995 1994
---------- -------------- ---------------
<S> <C> <C> <C>
Land $ 1,935,839 $ 1,935,839
Buildings 25 years 9,317,202 9,317,202
Equipment 3 to 5 years 824,580 824,580
----------- -----------
12,077,621 12,077,621
Less-Accumulated Depreciation
and Amortization 4,792,619 4,438,792
----------- -----------
$ 7,285,002 $ 7,638,829
=========== ===========
</TABLE>
On February 2, 1996, one of the consolidated general partnerships
(Drexel Park) sold its property for $6,300,000. The property as of
December 31, 1995, had an outstanding loan of approximately $5,100,000
and a net book value of approximately $3,900,000. After payment of
closings costs, the Partnership realized a gain of approximately
$2,000,000 and cash of $837,000.
The Partnership ceased making mortgage payments in June 1991 on one of
its properties (Carlton Arms). Subsequently, a new management company
was appointed by the lender and the Partnership entered into an
agreement with the lender whereby the Partnership was given until
January 1993 to cure any defaults on the mortgage. Failure to cure
the defaults would result in the immediate transfer of title, which
was placed in escrow, to the lender. The property continued to
operate at a deficit and the Partnership was unable to cure the
defaults. The assets and liabilities of the property were eliminated
6
<PAGE> 18
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
from the balance sheet at December 31, 1991 because the partnership no
longer controlled the property. In addition, the related statements
of operations reflect operations only through June 30, 1991. The
deferred gain of $4,095,110 was recognized when title transferred to
the mortgage holder in April 1993.
NET INCOME (LOSS) PER LIMITED PARTNERSHIP INTEREST
Net income (loss) per limited partnership interest was computed by
dividing the limited partners' share of net income (loss) by the
number of limited partnership interests outstanding during the year.
The number of limited partnership interests was 16,810 for all years
presented.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of unrestricted cash and bank
certificates of deposit with maturities of three months or less.
SHORT TERM INVESTMENTS
Short term investments consist of bank certificates of deposit with
original maturities ranging from more than three months to twelve
months. The fair value of these securities, which have been
classified as held for sale, approximates their carrying value.
2. INVESTMENTS IN LIMITED PARTNERSHIPS
The Partnership holds limited partnership interests in 27 limited
partnerships and a general partner interest in one general
partnership. In addition, REAL VI holds a general partner interest in
Real Estate Associates III ("REA III"), a California general
partnership. NAPICO is also a general partner in REA III. REA III,
in turn, holds a general partner interest in one general partnership
and limited partner interests in seven limited partnerships. In
total, therefore, the Partnership holds interests, either directly or
indirectly through REA III, in 34 limited partnerships and 2 general
partnerships which own residential low income rental projects
consisting of 3,063 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 90
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 III. REA
III holds a 99 percent interest in each of the limited partnerships in
which it has invested.
As of December 31, 1995, the Partnership is obligated, if certain
conditions are met, to invest an additional $90,500 in its investee
partnerships at various times in the future. This amount has not been
recorded as a liability in the accompanying financial statements.
In 1993, a limited partnership (Lincoln Mariner's Associates Limited)
entered into a Loan Agreement with the City of San Diego to issue
$15,700,000 of new Mortgage Revenue Funding Bonds to refinance the
mortgage and refund the bonds. The annual interest rate on the
mortgage was reduced from 10.85
7
<PAGE> 19
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
percent to 9.36 percent through August 1, 1995, and 5.575 percent
thereafter through maturity on August 1, 2015. The Partnership and
N.C. Lincoln Company (an affiliate of the general partner of Lincoln
Mariner's Associates Limited) each loaned Lincoln Mariner's Associates
Limited $382,500, to pay the costs and expenses in connection with the
refunding and refinancing. These loans bear interest at 12 percent
per annum and will be fully amortized and paid by August 1, 1995.
In 1995, two local limited partnerships refinanced their Taxable
Mortgage Revenue Refunding Bonds. Fillmore Investors, Ltd. refunded
the bond issue, consisting of $5,185,000 and $2,515,000 in Tax-Exempt
Mortgage Revenue Refunding Bonds, Series 1995A and Series 1995A-1,
respectively, and $160,000 in Taxable Mortgate Revenue Refunding
Bonds, Series 1995B, for a total of $7,860,000. By completing the
transaction, the local partnership benefits from a reduction of the
mortgage interest rate, from 11.61% to a rate not to exceed 8.75%.
Furthermore, all costs associated with the transaction were born by
the U.S. Department of Housing and Urban Development ("HUD"). All
debt service savings will be realized by the City of Phoenix and HUD
until the expiration of the Housing Assistance Payments ("HAP")
Contract in 2003; thereafter, the local partnership will realize all
debt service savings from 2003 until the mortgage matures in 2024.
Also, Boynton Associates, Ltd. refunded bond issue, consisting of
$4,375,000 of Multifamily Housing Revenue Refunding Bonds, Series
1995A and $875,000 in Taxable Multifamily Housing Revenue Refunding
Bonds, Series 1995B, for a total of $5,250,000.
By completing this transaction, the local partnership will benefit by
sharing in the debt service savings resulting from a reduction in the
mortgage interest rate. Ten percent (10%) of these savings will be
deposited in the Replacement Reserve account, under the control of
HUD, for the benefit of the property.
Equity in losses of unconsolidated limited partnerships are recognized
in the financial statements until the limited partnership investment
account is reduced to a zero balance or to a negative amount equal to
further capital contributions required. 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 unconsolidated limited partnerships was approximately
$24,636,000 and $21,908,000 as of December 31, 1995 and 1994,
respectively.
Distributions from the unconsolidated limited partnerships are
accounted for as a return of capital until the investment balance is
reduced to zero. Subsequent distributions received are recognized as
income.
The following is a summary of the investments in unconsolidated
limited partnerships and reconciliation to the limited partnership
accounts:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Investment balance, beginning of year $5,213,864 $5,032,639
Capital contributions to limited partnerships 191,044 5,294
Cash distributions recognized as a return of capital (201,288) (257,425)
Amortization of additional basis and capitalized
acquisition costs and fees (244,391) (244,391)
Equity in income of limited partnerships 659,917 677,747
---------- ----------
Investment balance, end of year $5,619,146 $5,213,864
========== ==========
</TABLE>
8
<PAGE> 20
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
The difference between the investment per the accompanying balance
sheets at December 31, 1995 and 1994, and the deficiency per the
limited partnerships' combined financial statements is due primarily
to cumulative unrecognized equity in losses of 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, 1995 and 1994 and for each of the three years in the
period ended December 31, 1995, of the limited partnerships in which
the Partnership has invested directly or indirectly, is as follows:
Balance Sheets
<TABLE>
<CAPTION>
1995 1994
-------- --------
(in thousands)
<S> <C> <C>
Land and buildings, net $ 56,724 $ 59,324
======== ========
Total assets $ 72,743 $ 74,350
======== ========
Mortgage loans payable $ 72,765 $ 73,248
======== ========
Total liabilities $ 98,041 $ 96,519
======== ========
Deficiency of the Real Estate Associates Limited VI $(23,999) $(21,353)
======== ========
Deficiency of other partners $ (1,299) $ (816)
======== ========
</TABLE>
Statements of Operations
<TABLE>
<CAPTION>
1995 1994 1993
------- -------- -------
(in thousands)
<S> <C> <C> <C>
Total revenue $20,571 $20,662 $20,363
======= ======= =======
Interest expense $ 5,720 $ 5,954 $ 6,871
======== ======= =======
Depreciation $ 3,529 $ 3,521 $ 3,568
======== ======= =======
Total expenses $ 23,034 $22,295 $22,307
======== ======= =======
Net loss $ (2,463) $(1,633) $(1,944)
======== ======= =======
Net loss allocable to the Partnership $ (2,214) $(1,621) $(1,728)
======== ======= =======
</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
9
<PAGE> 21
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
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 10 of the limited
partnerships included above, and another affiliate receives property
management fees ranging from 5 percent to 7 percent of the revenue
from six of these partnerships. The affiliate received property
management fees of $178,106, $173,152 and $172,713 in 1995, 1994 and
1993 respectively. The following sets forth the significant data for
the partnerships in which an affiliate of NAPICO was the general
partner, reflected in the accompanying financial statements using the
equity method of accounting:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Total assets $12,225 $11,715
======= =======
Total liabilities $14,616 $13,707
======= =======
Deficiency of Real Estate Associates
Limited VI $(2,307) $(1,921)
======= =======
Deficiency of other partners $ (85) $ (71)
======= =======
Total revenue $ 3,136 $ 2,912 $ 2,661
======= ======= =======
Net loss $ (502) $ (214) $ (288)
======= ======= =======
</TABLE>
3. CASH, RESTRICTED
Restricted cash at December 31, 1995 and 1994 consists of tenants'
security deposits.
4. MORTGAGE NOTES PAYABLE RELATED TO PROPERTIES
Mortgage notes bear interest at 9.5 percent per annum, with monthly
principal and interest payments of $88,000, due from September 1996 to
January 1997.
A mortgage note for $4,838,169 is due on September 1, 1996. The
Partnership is in the process of refinancing the loan and is of the
opinion that it will obtain financing at comparable terms.
These notes are collateralized by the underlying rental properties.
10
<PAGE> 22
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995
4. MORTGAGE NOTES PAYABLE RELATED TO PROPERTIES (CONTINUED)
Principal maturities on the above debt are as follows:
<TABLE>
<CAPTION>
Years Ending December 31,
-------------------------
<S> <C>
1996 $4,872,339
1997 5,018,225
----------
$9,890,564
==========
</TABLE>
5. NOTES PAYABLE AND AMOUNTS DUE FOR PARTNERSHIP INTERESTS
Certain of the Partnership's investments involved purchases of
partnership interests from partners who subsequently withdrew from the
operating partnership. The purchase of these interests provides for
additional cash payments of approximately $325,000, based upon
specified events as outlined in the purchase agreements. Such amounts
have been recorded as liabilities. In addition, the Partnership is
obligated on non-recourse notes payable of $5,470,000 which bear
interest at 9.5 percent per annum and have principal maturities
ranging from December 1996 to December 2012. 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.
Maturity dates on the notes payable and amounts due are as follows:
<TABLE>
<CAPTION>
Years Ending December 31,
-------------------------
<S> <C>
1997 -
1998 -
1999 940,000
Thereafter 4,530,000
----------
$5,470,000
==========
</TABLE>
6. FEES AND EXPENSES DUE TO GENERAL PARTNER AND AFFILIATE
Under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to NAPICO for an annual
management fee equal to .4 percent of the original invested assets of
the 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 interests in the capital
accounts of the respective partnerships.
11
<PAGE> 23
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995
6. FEES AND EXPENSES DUE TO GENERAL PARTNER AND AFFILIATE
For one of the properties owned by the Partnership, an affiliate of
NAPICO receives a management fee of 5 percent of its gross revenues
plus reimbursement of certain expenses. The Partnership paid
management fees to the affiliate of approximately $107,000, $106,000
and $92,000 in 1995, 1994 and 1993, respectively. An affiliate of the
minority general partner of a general partnership that is
consolidated, manages the property owned by that partnership. The fee
is calculated based on five percent of gross collections plus
reimbursement of certain expenses. The Partnership paid management
fees to the affiliate of approximately $58,000, $63,000 and $60,000 in
1995, 1994 and 1993, respectively. In 1995 and 1993, NAPICO received
mortgage brokerage fees of $131,000 and $157,000, respectively, for
NAPICO's involvement with the refinancing of limited partnerships'
mortgages (Note 2).
The Partnership reimburses NAPICO for certain expenses. The
reimbursement to NAPICO was $43,729, $42,142 and $41,831 in 1995, 1994
and 1993, respectively, and is included in operating expenses.
7. 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
addition, the Partnership is involved in several lawsuits. In the
opinion of management and the corporate general partner, the claims
will not result in any material liability to the Partnership.
8. 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 as well as
the gain resulting from the foreclosure of the Carlton Arms property
(Note 1). 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 or to a negative amount
equal to further capital contributions required.
9. 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 mortgage notes payable are insured by HUD
and are collateralized by the rental properties. The operations
generated by the properties and investee limited
12
<PAGE> 24
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995
9. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
partnerships are subject to various government rules, regulations and
restrictions which make it impracticable to estimate the fair value of
the mortgage 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.
10. FOURTH-QUARTER ADJUSTMENT
The Partnership's policy is to record its equity in the 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 annual consolidated financial statements is based
primarily upon audited financial statements of the investee limited
partnerships. The increase, approximately $137,000, between the
estimated nine-month equity in income and the actual 1995 year end
equity in income has been recorded in the fourth quarter.
13
<PAGE> 25
SCHEDULE
REAL ESTATE ASSOCIATES LIMITED VI
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Year Ended December 31, 1995
--------------------------------------------------------------------------------------
Cash Equity
Balance Capital Distri- In Balance Future
January Contri- butions Income December Capital
Limited Partnerships 1, 1995 butions Received (Loss) 31, 1995 Contributions
- -------------------- ------- ------- -------- ------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Boynton Terrace $ $ $ $ $ $
Cady Brook Apts. 259,446 38,683 298,129
Cassidy Village 336,069 (27,228) 308,841
City Heights
Crockett Manor 20,000 (20,000)
Denny Place 95,000 (95,000)
Drexel Park III 563,333 (16,035) 25,204 572,502
Eastridge Apts.
Echo Valley Apts.
Filmore I
Grant-Ko Enterprises
Hudson Gardens 296,493 (76,161) 72,683 293,015
Hummelstown Manor
Kentucky Manor
Lakewind East Apts.
Lonsdale Elderly 669,175 (34,888) 135,061 769,348
Mariner's Cove
Marshall Plaza I
Marshall Plaza II
Menlo Estates
Mulberry Towers 2,522,709 (55,252) 195,014 2,662,471
New-Bel-Mo Enterprises (25,500) (25,500) 25,500
Oakridge Apts. II
Oakwood Manor 160,734 250 (5,444) 10,525 166,065
Park Place Apts., TX
Park Place Apts., NJ 104,301 (3,196) 129,402 230,507
Parkesedge Elderly Apts. 139,401 56,643 196,044 18,000
</TABLE>
<PAGE> 26
SCHEDULE
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED VI
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Year Ended December 31, 1995
--------------------------------------------------------------------------------------
Cash Equity
Balance Capital Distri- In Balance Future
January Contri- butions Income December Capital
Limited Partnerships 1, 1995 butions Received (Loss) 31, 1995 Contributions
- -------------------- ------- ------- -------- ------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Paula Maria Apts. 5,294 (5,294)
Penneco II (25,000) (25,000) 25,000
Sauk-Ko Enterprises
SOL 413 (22,000) (22,000) 22,000
Valley Oak Apts.
Victory Square 234,703 (5,018) (34,961) 194,724
Villas de Orocovix
Willow Wood 70,500 (70,500)
---------- -------- ---------- --------- ---------- ---------
$5,213,864 $191,044 $ (201,288) $ 415,526 $5,619,146 $ 90,500
========== ======== ========== ========= ========== =========
</TABLE>
<PAGE> 27
SCHEDULE
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED VI
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Year Ended December 31, 1995
--------------------------------------------------------------------------------------
Cash Equity
Balance Capital Distri- In Balance Future
January Contri- butions Income December Capital
Limited Partnerships 1, 1995 butions Received (Loss) 31, 1995 Contributions
- -------------------- ------- ------- -------- ------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Boynton Terrace $ $ $ $ $ $
Cady Brook Apts. 249,053 (4,778) 15,171 259,446
Cassidy Village 401,239 (20,131) (45,039) 336,069
City Heights 77,039 (70,800) (6,239)
Crockett Manor
Denny Place
Drexel Park III 562,274 (32,070) 33,129 563,333
Eastridge Apts.
Echo Valley Apts.
Filmore I
Grant-Ko Enterprises
Hudson Gardens 52,709 243,784 296,493
Hummelstown Manor
Kentucky Manor
Lakewind East Apts.
Lonsdale Elderly 783,611 (114,436) 669,175
Mariner's Cove
Marshall Plaza I
Marshall Plaza II
Menlo Estates
Mulberry Towers 2,395,953 (55,252) 182,008 2,522,709
New-Bel-Mo Enterprises (25,500) (25,500) 25,500
Oakridge Apts. II
Oakwood Manor 147,621 (5,444) 18,557 160,734
Park Place Apts., TX
Park Place Apts., NJ (40,301) 144,602 104,301
Parkesedge Elderly Apts. 153,437 (14,036) 139,401 18,000
</TABLE>
<PAGE> 28
SCHEDULE
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED VI
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Year Ended December 31, 1995
--------------------------------------------------------------------------------------
Cash Equity
Balance Capital Distri- In Balance Future
January Contri- butions Income December Capital
Limited Partnerships 1, 1995 butions Received (Loss) 31, 1995 Contributions
- -------------------- ------- ------- -------- ------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Paula Maria Apts. 5,294 (5,294)
Penneco II (25,000) (25,000) 25,000
Sauk-Ko Enterprises
SOL 413 (22,000) (22,000) 22,000
Valley Oak Apts.
Victory Square 282,203 (23,355) (24,145) 234,703
Villas de Orocovix
Willow Wood
----------- --------- ---------- ---------- ---------- ---------
$ 5,032,639 $ 5,294 $ (257,425) $ 433,356 $5,213,864 $ 90,500
=========== ========= ========== ========== ========== =========
</TABLE>
<PAGE> 29
SCHEDULE
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED VI
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Year Ended December 31, 1995
--------------------------------------------------------------------------------------
Cash Equity
Balance Capital Distri- In Balance Future
January Contri- butions Income December Capital
Limited Partnerships 1, 1995 butions Received (Loss) 31, 1995 Contributions
- -------------------- ------- ------- -------- ------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Boynton Terrace $ $ $ $ $ $
Cady Brook Apts. 211,499 37,554 249,053
Cassidy Village 430,741 (29,502) 401,239
City Heights 316,510 (70,800) (168,671) 77,039
Crockett Manor 41,000 (41,000)
Denny Place 18,500 (18,500)
Drexel Park III 583,567 (16,035) (5,258) 562,274
Eastridge Apts.
Echo Valley Apts. 142,517 (142,517)
Filmore I
Grant-Ko Enterprises
Hudson Gardens 82,100 (15,492) (13,899) 52,709
Hummelstown Manor
Kentucky Manor
Lakewind East Apts.
Lonsdale Elderly 747,143 (152,259) 188,727 783,611
Mariner's Cove
Marshall Plaza I
Marshall Plaza II
Menlo Estates
Mulberry Towers 2,314,143 (55,252) 137,062 2,395,953
New-Bel-Mo Enterprises (25,500) (25,500) 25,500
Oakridge Apts. II
Oakwood Manor 149,979 (2,358) 147,621
Park Place Apts., TX
Park Place Apts., NJ 3,409 (31,738) 28,329
Parkesedge Elderly Apts. 170,593 (17,156) 153,437 18,000
</TABLE>
<PAGE> 30
SCHEDULE
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED VI
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Year Ended December 31, 1995
--------------------------------------------------------------------------------------
Cash Equity
Balance Capital Distri- In Balance Future
January Contri- butions Income December Capital
Limited Partnerships 1, 1995 butions Received (Loss) 31, 1995 Contributions
- -------------------- ------- ------- -------- ------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Paula Maria Apts. 5,347 (5,347)
Penneco II (25,000) (25,000) 25,000
Sauk-Ko Enterprises
SOL 413 (22,000) (22,000) 22,000
Valley Oak Apts.
Victory Square 335,774 (17,713) (35,858) 282,203
Villas de Orocovix
Willow Wood 28,500 (28,500)
----------- --------- ---------- ---------- ---------- ---------
$ 5,415,475 $ 93,347 $ (364,636) $ (111,547) $5,032,639 $ 90,500
=========== ========= ========== ========== ========== =========
</TABLE>
<PAGE> 31
SCHEDULE
(Continued)
REAL ESTATE ASSOCIATES LIMITED VI
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED
DECEMBER 31, 1995, 1994 AND 1993
NOTES: 1. Equity in losses represents the Partnership's allocable share
of the net loss from the limited partnerships for the year.
Equity in losses of the limited partnerships will be
recognized until the investment balance is reduced to zero or
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 of 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> 32
REAL ESTATE ASSOCIATES LIMITED VI SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL VI HAS INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Buildings, Furnishings Total
& Equipment Land
Number Outstanding Amount Carried Buildings,
of Mortgage at Close of Furnishings Accumulated Construction
Partnership/Location Units Loan Land Period & Equipment Depreciation Period
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Boynton Terrace 89 $5,250,000 $208,001 $4,124,446 $4,332,447 $1,714,108 1983-1984
Boyton Beach, FL
Cadybrook 40 1,092,821 89,225 1,741,764 1,830,989 490,463 (A)
Charlton, MA
City Heights 151 3,956,390 0 5,134,325 5,134,325 3,424,961 (A)
Wilkes-Barre, PA
Crockett Manor 38 1,062,073 10,000 1,259,214 1,269,214 559,632 (A)
Trenton, TN
Eastridge Apts. 96 682,757 101,500 1,505,995 1,607,495 1,162,354 (A)
Bristol, VA
Echo Valley 100 1,482,778 88,900 3,841,785 3,930,685 3,184,726 (A)
Warwick, RI
Filmore I 32 1,207,658 115,000 1,312,495 1,427,495 578,784 (A)
Phoenix, AZ
Grant-Ko Enterprises 40 1,238,700 100,000 1,382,979 1,482,979 582,247 (A)
Platteville, WS
Hudson Gardens 41 1,562,165 252,855 2,011,719 2,264,574 906,273 (A)
Pasadena, CA
Hummelstown Manor 51 1,749,063 96,839 1,735,548 1,832,387 1,490,572 1983
Hummelstown, PA
Kentucky Manor 48 1,405,206 100,696 1,389,374 1,490,070 761,314 (A)
Oak Grove, KY
Lonsdale Housing 131 3,427,111 214,833 6,358,011 6,572,844 3,204,504 (A)
Providence, RI
Mariner's Cove 500 14,299,976 0 15,776,843 15,776,843 7,107,949 1983-1984
San Diego, CA
Menlo Estates 80 2,903,789 492,061 3,696,059 4,188,120 1,799,585 (A)
Riverside, CA
Mullberry Towers 206 6,019,293 199,754 7,295,566 7,495,320 2,636,045 (A)
Scranton, PA
New-Bel-Mo Enterprises 34 1,015,413 76,000 1,133,183 1,209,183 457,196 (A)
New Glarus, Belleville,
Monticello, WS
Oakridge Apts. 48 1,209,263 55,000 1,444,529 1,499,529 1,166,264 (A)
Biloxi, MS
Oakwood 34 680,111 61,538 777,542 839,080 261,181 (A)
Milan, TN
Park Place 126 6,082,594 298,556 7,250,369 7,548,925 2,317,607 1983-1984
Ewing, NJ
Park Place Apts. 60 1,930,285 146,305 2,205,284 2,351,589 1,161,590 (A)
Cleveland, TX
Parkesedge Elderly Apts. 45 1,497,240 160,000 1,765,103 1,925,103 596,367 (A)
Parkesedge, PA
Penneco II 76 2,055,450 79,627 2,791,863 2,871,490 1,295,650 (A)
Johnstown, PA
Sauk-Ko Enterprises 30 852,532 60,000 1,153,263 1,213,263 459,330 (A)
Baraboo, WS
SOL - 413 12 371,149 50,000 349,429 399,429 182,383 (A)
Old San Juan, PR
Valley Oaks Senior 50 1,771,000 121,464 1,878,473 1,999,937 884,480 (A)
Galt, CA
Villas de Orocovix 41 1,440,953 59,550 1,714,313 1,773,863 796,769 (A)
Orocovix, PR
Cassidy Village 98 1,173,138 156,850 2,095,121 2,251,971 842,835 (A)
Columbus, OH
Denny Place 17 422,646 290,000 1,070,594 1,360,594 429,385 (A)
Los Angeles, CA
Drexel Park III 72 1,621,766 79,520 2,228,343 2,307,863 764,127 (A)
Partnership
Laurel, MD
Marshall Plaza I 40 249,624 68,414 739,014 807,428 299,821 (A)
Loraine, OH
Marshall Plaza II 50 349,625 78,901 957,354 1,036,255 387,558 (A)
Loraine, OH
Paula Maria I 120 1,162,365 215,730 2,680,544 2,896,274 1,390,538 (A)
Hampton, VA
Victory Square 81 1,053,242 36,630 1,855,595 1,892,225 743,787 (A)
Canton, OH
Willow Wood 19 487,191 290,000 1,097,181 1,387,181 443,743 (A)
Los Angeles, CA
Additional basis of real estate
due to REAL VI's captital
contribution to limited partnership
not recorded by investee limited
partnership 107,796 6,537,625 6,645,421 3,644,132
--------------------------------------------------------------------------------
2,696 72,765,367 4,561,545 100,290,845 104,852,390 48,128,260
--------------------------------------------------------------------------------
</TABLE>
(A) This project was completed when REAL VI entered the Partnership.
<PAGE> 33
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED VI
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL VI HAS INVESTMENTS
DECEMBER 31, 1995
NOTES: 1. Each local partnership has developed, owns and operates the
housing project. Substantially all project costs, including
construction period interest expense, were capitalized by the
local partnerships.
2. Depreciation is provided for by various methods over the
estimated useful lives of the projects. The estimated
composite useful lives of the buildings are generally from 25
to 40 years.
3. Investments in property and equipment - limited partnerships:
<TABLE>
<CAPTION>
Buildings,
Furnishings,
And
Land Equipment Total
---- ---------- -----
<S> <C> <C> <C>
Balance, January 1, 1993 $4,553,258 $ 98,137,771 $102,691,029
Net additions, 1993 - 567,154 567,154
---------- ------------ ------------
Balance, December 31, 1993 4,553,258 98,704,925 103,258,183
Net additions, 1994 (2,078) 837,154 835,076
---------- ------------ ------------
Balance, December 31, 1994 4,551,180 99,542,079 104,093,259
Net additions, 1995 10,365 748,766 759,131
---------- ------------ ------------
Balance, December 31, 1995 $4,561,545 $100,290,845 $104,852,390
========== ============ ============
</TABLE>
<PAGE> 34
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED VI
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL VI HAS INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Buildings,
Furnishings
And
Equipment
------------
ACCUMULATED DEPRECIATION:
- -------------------------
<S> <C>
Balance at January 1, 1993 $37,690,868
Net additions for 1993 3,670,890
-----------
Balance at December 31, 1993 41,361,758
Net additions for 1994 3,407,125
-----------
Balance at December 31, 1994 44,768,883
Net additions for 1995 3,359,377
-----------
Balance at December 31, 1995 $48,128,260
===========
</TABLE>
<PAGE> 35
SCHEDULE III
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED VI
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY CONSOLIDATED LOCAL LIMITED
PARTNERSHIPS IN WHICH REAL VI HAS INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Total Land,
Buildings, Buildings,
Partnership - Number of Oustanding Furnishings and Furnishings and Accumulated Construction
Location Units Mortgage Land Equipment Equipment Depreciation Period
- -------------- ---------- ------------ ----------- ---------------- --------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Drexel Park I
Laurel, MD 231 $ 5,052,395 $ 378,659 $ 6,033,543 $ 6,412,202 $ 2,428,091 (A)
Peppertree
Cypress, CA 136 4,838,169 1,557,180 4,108,239 5,665,419 2,364,528 (A)
---------- ------------ ----------- ---------------- --------------- -------------
367 9,890,564 1,935,839 10,141,782 12,077,621 4,792,619
---------- ------------ ----------- ---------------- --------------- -------------
TOTAL 3063 $ 82,655,931 $ 6,497,384 $ 110,432,627 $ 116,930,011 $ 52,920,879
========== ============ =========== ================ =============== =============
</TABLE>
(A). This project was completed when REAL VI entered the Partnership.
<PAGE> 36
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED VI
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY CONSOLIDATED LOCAL PARTNERSHIPS
IN WHICH REAL VI HAS INVESTMENTS
DECEMBER 31, 1995
Investments in property and equipment - general partnerships (continued):
The total cost of land, buildings, and equipment for federal income
tax purposes at December 31, 1995 is approximately $12,026,975.
<TABLE>
<CAPTION>
Buildings
Furnishings,
And
Land Equipment Total
------------ ------------ ------------
<S> <C> <C> <C>
Balance, January 1, 1993 $ 1,935,839 $ 10,121,505 $ 12,057,344
Additions during 1993 - - -
------------ ------------ ------------
Balance, December 31, 1993 1,935,839 10,121,505 12,057,344
Additions during 1994 - 20,277 20,277
------------ ------------ ------------
Balance, December 31, 1994 1,935,839 10,141,782 12,077,621
Additions during 1995 - - -
------------ ------------ ------------
Balance, December 31, 1995 $ 1,935,839 $ 10,141,782 $ 12,077,621
============ ============ ============
</TABLE>
<PAGE> 37
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED VI
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY CONSOLIDATED LOCAL PARTNERSHIPS
IN WHICH REAL VI HAS INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Buildings,
Furnishings,
And
Equipment
------------
ACCUMULATED DEPRECIATION:
<S> <C>
Balance at January 1, 1993 $ 3,769,121
Net additions for 1993 350,909
------------
Balance at December 31, 1993 4,120,030
Net additions for 1994 318,762
------------
Balance at December 31, 1994 4,438,792
Net additions for 1995 353,827
------------
Balance at December 31, 1995 $ 4,792,619
============
</TABLE>
<PAGE> 38
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:
REAL ESTATE ASSOCIATES LIMITED VI (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, 66, 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, 44, 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, 50, 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> 39
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, 52, President, Chief Operating Officer and Secretary of The
Casden Company and a director and secretary of NAPICO.
Mr. Casden has been President and Chief Operating Officer of The Casden
Company, as well as a director of NAPICO since February 1988. He became
secretary of both companies in late 1994. From 1982 to 1988, Mr. Casden was of
counsel and a partner in the Los Angeles law firm of Troy, Casden & Gould.
From 1978 to 1981, he was of counsel and a partner in the Los Angeles law firm
of Loeb & Loeb. From 1972 to 1978, Mr. Casden was a member of the Beverly
Hills law firm of Fink & Casden, Professional Corporation.
Mr. Casden received his Bachelor of Arts degree from the University of
California at Los Angeles, and is a graduate of the University of San Diego Law
School. Mr. Casden is a member of the State Bar of California and has numerous
professional affiliations.
BRIAN D. GOLDBERG, 32, Chief Financial Officer of The Casden Company and a
director of NAPICO.
Mr. Goldberg joined The Casden Company in 1990 as Vice President of Finance and
became Chief Financial Officer in March 1991. Prior to joining The Casden
Company, Mr. Goldberg was with Arthur Andersen & Co., an international public
accounting firm, from August 1985 until July 1990 in their Los Angeles office.
He received his bachelor of science degree in Accounting from the University of
Denver. Mr. Goldberg is a member of the American Institute of Certified Public
Accountants and the California Society of Certified Public Accountants.
SHAWN HORWITZ, 36, Executive Vice President and Chief Financial Officer.
Mr. Horwitz joined NAPICO in 1990 and is responsible for the financial affairs
of NAPICO and the limited partnerships sponsored by NAPICO. Prior to joining
NAPICO, Mr. Horwitz was President for approximately one year of Star Sub Shops,
Inc., a corporation engaged in the business of selling fast food franchises,
for approximately one year, was an audit manager in the real estate industry
group for Altschuler, Melvin & Glasser for six years, and was an auditor with
Arthur Young & Co. for 3 years.
Mr. Horwitz received his Bachelor of Commerce degree in accounting from Rhodes
University in South Africa and is a member of the Illinois Society of Certified
Public Accountants, the American Institute of Certified Public Accountants and
the South African Institute of Chartered Accountants.
BOB SCHAFER, 54, Vice President and Corporate Controller.
Mr. Schafer joined NAPICO in 1984 and is the Corporate Controller responsible
for the financial reporting function of the Company. Prior to this, he was a
Group and Division Controller at Bergen Brunswig for over eight years,
Controller at a Flintkote subsidiary for over four years, and Assistant
Controller at an electronics subsidiary of General Electric for two years.
Mr. Schafer is a member of the California Society of Certified Public
Accountants. He holds a Bachelor of Science degree in accounting from Woodbury
University, Los Angeles.
<PAGE> 40
PATRICIA W. TOY, 66, 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, 35, Executive Vice President, General Counsel and Assistant
Secretary.
Mr. Walther joined NAPICO in 1987 and is responsible for the legal affairs of
the NAPICO sponsored limited partnerships. Prior to joining NAPICO, Mr.
Walther worked in the San Francisco law firm of Browne and Kahn which
specialized in construction litigation. Mr. Walther received his Bachelor of
Arts Degree in Political Science from the University of California, Santa
Barbara and is a graduate of the University of California, Davis, School of
Law. He is a member of the State Bar of Hawaii.
<PAGE> 41
ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS
Real Estate Associates Limited VI has no officers, employees, or directors.
However, under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to pay the Corporate General Partner
an annual management fee. The annual management fee is approximately equal to
.5 percent of the invested assets, including the Partnership's allocable share
of the mortgages related to real estate properties held by local limited
partnerships. The fee is earned beginning in the month the Partnership makes
its initial contribution to the local partnership. In addition, the Partnership
reimburses the Corporate General Partner for certain expenses.
The Corporate General Partner received mortgage brokerage fees in connection
with the refinancing of certain limited partnerships' mortgages. In addition,
an affiliate of the Corporate General Partner is responsible for the on-site
property management for a property owned by the Partnership and 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 VI; no person is known to own beneficially in
excess of 5% of the outstanding limited partnership interests.
(b) With the exception of the initial limited partner, Bruce Nelson, who
is an officer of the corporate general partner, none of the officers
or directors of the corporate general partner own directly or
beneficially any limited partnership interests in REAL VI.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership has no officers, directors or employees of its own. All of its
affairs are managed by the Corporate General Partner, National Partnership
Investments Corp. The transactions with the Corporate General Partner are
primarily in the form of fees paid by the Partnership to the general partner
for services rendered to the Partnership, as discussed in Item 11 and in the
notes to the accompanying financial statements.
<PAGE> 42
ITEM 14. FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS AND REPORT ON FORM 8-K
FINANCIAL STATEMENTS
Report of Independent Public Accountants.
Consolidated Balance Sheets as of December 31, 1995 and 1994.
Consolidated Statements of Operations for the years ended December 31, 1995,
1994 and 1993.
Consolidated Statements of Partners' Equity (Deficiency) for the years ended
December 31, 1995, 1994 and 1993.
Consolidated Statements of Cash Flows for the years ended December 31, 1995,
1994 and 1993.
Notes to Consolidated Financial Statements.
FINANCIAL STATEMENT SCHEDULES
APPLICABLE TO REAL ESTATE ASSOCIATES LIMITED VI REAL ESTATE III AND THE LIMITED
PARTNERSHIPS:
Schedule - Investments in Limited Partnerships, December 31, 1995, 1994 and
1993.
Schedule III - Real Estate and Accumulated Depreciation, December 31, 1995.
The remaining schedules are omitted because any required information is
included in the financial statements and notes thereto.
EXHIBITS
<TABLE>
<S> <C>
(3) Articles of incorporation and bylaws: The registrant is not
incorporated. The Partnership Agreement was filed with Form S-11
#2-82090 incorporated herein by reference.
(10) Material contracts: The registrant is not party to any material
contracts, other than the Restated Certificate and Agreement of
Limited Partnership dated October 12, l982, and the forty contracts
representing the partnership investment in local limited and general
partnerships as previously filed at the Securities Exchange
Commission, File #2-282090 which is hereby incorporated by reference.
(13) Annual report to security holders: Pages ____ to ____.
</TABLE>
REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the year ended December 31, 1995.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 4,895,340
<SECURITIES> 0
<RECEIVABLES> 1,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,020,340
<PP&E> 11,942,849
<DEPRECIATION> 4,753,314
<TOTAL-ASSETS> 18,337,139
<CURRENT-LIABILITIES> 193,501
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (2,927,077)
<TOTAL-LIABILITY-AND-EQUITY> 18,337,139
<SALES> 0
<TOTAL-REVENUES> 3,646,723
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,973,531
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,463,790
<INCOME-PRETAX> (790,598)
<INCOME-TAX> 0
<INCOME-CONTINUING> (790,598)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (790,598)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
