<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended DECEMBER 31, 1996
Commission File Number
2-82090
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 limited partner interests in seven local limited partnerships. The
other general partner of REA III is NAPICO. Therefore, REAL VI currently holds
interests either directly or indirectly in 34 local limited partnership and one
local general partnership, 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. During 1996, projects in which REAL VI had
invested were substantially rented. The following is a schedule
<PAGE> 3
During 1996, projects in which REAL VI had invested were substantially rented.
The following is a schedule of the status, as of December 31, 1996, 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, 1996
<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>
Limited Partnerships
Boynton Terrace 89 89 87 98%
Boynton Beach, FL
Cady Brook Apts. 40 None 38 95%
Charlton, MA
Cassidy Village 98 50 90 92%
Columbus, Ohio
Century Plaza 120 120 119 99%
Hampton, VA
City Heights
Senior Citizens 151 150 151 100%
Wilkes-Barre, PA
Crockett Manor 38 38 37 97%
Trenton, TN
Denny Place 17 4 14 82%
Los Angeles, CA
Drexel Park III 72 8 71 99%
Laurel, MD
Eastridge Apts. 96 65 93 97%
Briston, VA
Echo Valley Apts. 100 100 95 95%
Warwick, RI
Filmore I 32 32 32 100%
Phoenix, AZ
Grant-Ko Enterprises 40 None 36 90%
Platteville, WI
</TABLE>
<PAGE> 4
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED
AND GENERAL PARTNERSHIPS
IN WHICH REAL VI HAS AN INVESTMENT
DECEMBER 31, 1996
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 50 98%
Hummelstown, PA
Kentucky Manor 48 None 39 81%
Oak Grove, KY
Lonsdale Housing 131 131 131 100%
Providence, RI
Mariner's Cove 500 100 495 99%
San Diego, CA
Marshall Plaza I 40 40 38 95%
Lorain, Ohio
Marshall Plaza II 50 48 50 100%
Lorain, Ohio
Menlo Estates 80 80 80 100%
Riverside County, CA
Mulberry Towers 206 205 206 100%
Scranton, PA
New-Bel-Mo 34 None 31 91%
New Glarus, Bellemont,
Monticello, WI
Oakridge Apts. II 48 0 47 98%
Biloxi, MS
Oakwood Manor 34 34 34 100%
Milan, TN
Park Place 126 125 121 96%
Ewing, NJ
</TABLE>
<PAGE> 5
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED
AND GENERAL PARTNERSHIPS
IN WHICH REAL VI HAS AN INVESTMENT
DECEMBER 31, 1996
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 61 80%
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 49 98%
Gault, CA
Victory Square 81 81 78 96%
Canton, Ohio
Villas de Orocovix 41 41 41 100%
Orocovix, PR
Willow Wood 19 4 17 89%
Los Angeles, CA
Peppertree 136 None 133 98%
Cypress, CA
--------- --------- --------- ----------
TOTALS 2,832 1,829 2,746 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, 1996, the Partnership's General Partner was a plaintiff or
defendant in several suits. None pf these lawsuits were related to the
Partnership.
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, 1996, 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, 1996. The Partnership
has invested in certain government assisted projects under programs which in
many instances restrict the cash return available to project owners. The
Partnership was not designed to provide cash distributions to investors in
circumstances other than refinancing or disposition of its investments in
limited partnerships.
<PAGE> 7
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------------------------------------------
1996 1995 1994 1993 1992
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
(Loss) Income from
Rental Operations $ (175,242) $ (246,036) $ (238,520) $ (105,574) $ 37,498
Loss from Partnership
Operations (1,129,499) (1,307,251) (1,110,060) (1,422,906) (1,037,379)
Gain on Foreclosure 1,902,022 -- -- 4,095,110 --
Equity in Income (Loss)
of Limited Partnerships
and Amortization of
Acquisition Costs 603,934 415,526 433,356 (111,547) (130,549)
Distribution from
Limited Partnerships
Recognized as Income 597,425 347,163 500,498 247,782 524,913
------------ ------------ ------------ ------------ ------------
Net Income (Loss) $ 1,798,640 $ (790,598) $ (414,726) $ 2,702,865 $ (605,517)
============ ============ ============ ============ ============
Net Income (Loss) per
Limited Partnership
Interest $ 107 $ (47) $ (24) $ 159 $ (36)
============ ============ ============ ============ ============
Total Assets $ 15,286,368 $ 18,337,139 $ 18,725,681 $ 18,810,269 $ 19,980,037
============ ============ ============ ============ ============
Investments in
Limited
Partnerships $ 6,051,522 $ 5,619,146 $ 5,213,864 $ 5,032,639 $ 5,415,475
============ ============ ============ ============ ============
Rental Property $ 3,158,470 $ 7,285,002 $ 7,638,829 $ 7,937,314 $ 8,288,223
============ ============ ============ ============ ============
Mortgage
Notes Payable $ 4,886,300 $ 9,890,564 $ 9,993,001 $ 10,086,190 $ 10,170,965
============ ============ ============ ============ ============
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 two general partnerships in which REAL VI is
the majority general partner, have been consolidated in the accompanying
financial statements. One of these partnerships is a local operating
partnership which owns and operates an apartment building. 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, 1996, to make additional
capital contributions of $90,500 to its investee limited partnerships, if
certain conditions are met. This amount has not been reflected as a liability
in the accompany financial statements. The Partnership has no significant
commitments for additional capital expenditures to the general partnership
which has 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.
In 1996, the sale of one property reduced rental operations as compared with
the prior two years.
On February 2, 1996, one of the consolidated general partnerships (Drexel Park)
sold its property for $6,300,000. After payment of closings costs, the
Partnership realized a gain of approximately $1,902,000 and received cash of
$830,000.
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.
<PAGE> 9
Except for certificates of deposit and money market funds, the Partnership's
investments are primarily, 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 the prior year.
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, 1996
<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) as of December 31, 1996 and 1995,
and the related statements of operations, partners' deficiency and cash flows
for each of the three years in the period ended December 31, 1996. Our audits
also included the financial statement schedules listed in the index on item 14.
These financial statements and financial statement schedules are the
responsibility of the management of the Partnership. Our responsibility is to
express an opinion on these financial statements and financial statement
schedules based on our audits. We did not audit the financial statements of
certain limited partnerships, the investments in which are reflected in the
accompanying financial statements using the equity method of accounting. The
investments in these limited partnerships represent 27 percent and 15 percent
of total assets as of December 31, 1996 and 1995, respectively, and the equity
in income of these limited partnerships represents 12 percent, 13 percent and 9
percent of the total net income of the Partnership for the years ended December
31, 1996, 1995 and 1994, 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 as of
December 31, 1996 and 1995, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles. Also, in our
opinion, based on our audits and the reports of other auditors, such financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
DELOITTE & TOUCHE LLP
Los Angeles, California
March 26, 1997
<PAGE> 12
[LOGO]
[SANSIVERI, KIMBALL & MCNAMEE, LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Charlton Housing Associates
(A Limited Partnership)
We have audited the accompanying balance sheet of Charlton Housing
Associates (A Limited Partnership) (the Partnership) as of December 31, 1996,
1995 and 1994, and the related statements of revenue and expenses, cash flows,
and changes in partners' capital (deficit) for each of 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 Charlton
Housing Associates as of December 31, 1996, 1995 and 1994, and the
results of its operations, its cash flows, and its changes in partners' capital
(deficit) for each of the years then ended in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental
information is presented for the purpose of additional analysis, as required by
USDA Rural Development, and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ Sansiveri, Kimball & McNamee, L.L.P.
January 15, 1997
<PAGE> 13
[LOGO]
[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
Cassady Village Apartments, Ltd.
We have audited the balance sheets of CASSADY VILLAGE APARTMENTS, LTD., FHA
Project Number 043-44028-LDP, as of December 31, 1996 and 1995, and the
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
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 Cassady
Village Apartments, Ltd. 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.
<PAGE> 14
In accordance with Government Auditing Standards, we have also issued a report
dated January 21, 1997, on our consideration of the Partnership's internal
control structure and a report dated January 21, 1997, on its compliance with
laws and regulations.
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
14 through 20 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 & Glasser, LLP
Chicago, Illinois
January 21, 1997
<PAGE> 15
[LOGO]
[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
PM-1 Associates, Ltd.
We have audited the accompanying balance sheets of PM-1 ASSOCIATES,
LTD., FHA Project Number 051-35031-LDI-SUP, as of December 31, 1996 and 1995,
and the related statements of operations, changes in partners' deficiency and
cash flows for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of PM-1
Associates, Ltd. as of December 31, 1996 and 1995, and the results of
its operations, changes in its partners' deficiency and cash flows for the
years then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 17, 1997, on our consideration of the Partnership's internal
control structure and a report dated February 17, 1997 on its compliance with
laws and regulations.
<PAGE> 16
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying additional 1996
financial data shown on pages 13 through 20 are presented for 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 stated fairly in
all material respects in relation to the financial statements taken as a whole.
/s/Altschuler, Melvoin and Glasser LLP
Los Angeles, California
February 17, 1997
<PAGE> 17
[LOGO]
[PARENTE RANDOLPH ORLANDO CAREY & ASSOCIATES LETTERHEAD]
To the Partners
City Heights Development Company:
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheets of City Heights Development
Company (a limited partnership), FHA Project No. 034-32029, as of December 31,
1996 and 1995, and the related statements of income, 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 City Heights Development
Company (a limited partnership) as of December 31, 1996 and 1995, and the
results of its operations, changes in partners' deficit and its cash flows for
the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards and the
Consolidated Audit Guide for Audits of HUD Programs issued by the U.S.
Department of Housing and Urban Development, we have also issued a report dated
January 29, 1997, on our consideration of City Heights Development Company's (a
limited partnership) internal control structure, and reports dated January 29,
1997, on its compliance with specific requirements applicable to major HUD
programs and specific requirements applicable to Affirmative Fair Housing.
<PAGE> 18
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 14 to 22 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of City Heights
Development Company (a limited partnership) Such information has been subjected
to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
/s/ Parente Randolph Orlando Carey & Associate
Wilkes-Barre, Pennsylvania
January 29, 1997
<PAGE> 19
[LOGO]
[LANDSMAN, FRANK AND BLOCH LETTERHEAD]
Independent Auditors' Report
To the Partners
Crockett Manor Apartments
(A Limited Partnership)
We have audited the accompanying balance sheets of Crockett Manor
Apartments (A Limited Partnership), FHA Project Number 086-35171-PM-L8, as of
December 31, 1996 and 1995, and the related statements of operations, changes
in partners' deficiency and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Crockett Manor Apartments
(A Limited Partnership) as of December 31, 1996 and 1995, and the results of
its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
<PAGE> 20
In accordance with Government Auditing Standards, we have also issued a
report dated February 20, 1997 on our consideration of the Partnership's
internal control structure and reports dated February 20, 1997 on its
compliance with specific requirements applicable to major and nonmajor HUD
programs and affirmative fair housing.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplementary
information (shown on pages 12 through 21) is presented for purposes of
additional analysis and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/ LANDSMAN, FRANK AND BLOCH
Beverly Hills, California
February 20, 1997
<PAGE> 21
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
To the Partners of
Denny Place
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheets of DENNY PLACE (a California
limited partnership), CHFA Project No. 82-63-S (the "Partnership"), as of
December 31, 1996 and 1995, and the related statements of operations, changes
in partners' deficiency and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Denny Place as of
December 31, 1996 and 1995, and the results of its operations, changes in its
partners' deficiency, and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 17, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 17, 1997 on its compliance with
laws and regulations.
/s/Altschuler, Melvoin and Glasser LLP
Los Angeles, California
February 17, 1997
<PAGE> 22
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE MARYLAND DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
To the Partners of
Drexel Park Three Limited Partnership
We have audited the accompanying balance sheets of DREXEL PARK THREE LIMITED
PARTNERSHIP, CDA Project Number ANN-7, (the "Partnership") as of December 31,
1996 and 1995, 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 Drexel Park Three
Limited Partnership at December 31, 1996 and 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 15, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 15, 1997 on its compliance with
laws and regulations.
<PAGE> 23
Our audits were conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The additional 1996 financial data shown
on pages 13 through 23 are presented for the purpose of additional analysis and
are not a required part of the financial statements. Such information, except
for the Monthly Income and Expense Statement (Cash Basis) shown on pages 19 and
20, not audited, on which we expressed no opinion, 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
Chicago, Illinois
February 15, 1997
<PAGE> 24
[LOGO]
[McCURRY & ASSOCIATES, CPA, PC LETTERHEAD]
Eastridge Associates
Bristol, Virginia
We have audited the accompanying balance sheet of Eastridge Associates,HUD
Project No. 051-55021-LDC (a limited partnership), as of December 31, 1996, and
the related statements of income, 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 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 Eastridge
Associates at December 31, 1996, and the results of its operations,
changes in partners' equity and cash flows for the year then ended in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated
Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing
and Urban Development, we have also issued a report dated January 21, 1997, on
our consideration of Eastridge Associates' internal control structure, and
reports dated January 21, 1997, on its compliance with specific requirements
applicable to major HUD programs, specific requirements applicable to
Affirmative Fair Housing, and specific requirements applicable to nonmajor HUD
program transactions.
/s/McCurry & Associates, CPA
<PAGE> 25
[LOGO]
[PAUL DAMIANO LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Partners
Riverpoint Aasociatea
a/k/a Echo Valley Aasociatea
(A Limited Partnership)
W. Warwick, RI
We have audited the accompanying balance sheet of RIHMFC Project No.
RI-43-H023-021 of Rivarpoint Aasociatea, ask/a Echo Valley Aasociatea (a
limited partnership) as of June 30, 1996, and the related statements of profit
and lose and changes in partners' capital deficiency and cash flows for the
year than ended. These financial stataments 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 Auditina 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 stataments. 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.
As more fully described in Note 1 to the financial statments, the partnership
has computed depreciation on several major assets in accordance, with
accelerated cost recovery system (ACRS) required for federal income tax
purposes, which does not allocate depreciation to expense over the estimated
useful lives to conform with generally accepted accounting principles. If the
financial statements were corrected for that departure from generally accepted
accounting principles, based on a straight-line depreciation method,
accumulated depreciation would be decreased by $2,078,375 as of June 30, 1996
and net income would be increased by $67,629 for the year then ended.
In our opinion, except for the effects of computing depreciation as discussed
in the proceeding paragraph, the financial statements referred to above present
fairly in all material respects, the financial position of RIHMFC Project No.
RI-43-023-021 as of June 30, 1996 and the results of its operations and the
changes in partners' capital deficiency and cash flow for the year then ended
in conformity with generally accepted accounting principles.
<PAGE> 26
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 11-16 are presented for the purposes of additional
analysis and are not a required part of the basic financial statements of
RIHMFC Project No. RI-43-H023-021. 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 September 17, 1996 on our consideration of Riverpoint Associates'
internal control structure and a report dated September 17, 1996 on its
compliance with specific requirements applicable to RIHMFC-programs.
/s/Paul Damiano CPA PC
September 17, 1996
<PAGE> 27
[LOGO]
[Eide Helmeke PLLP LETTERHEAD]
The Partners
Fillmore Investors, Ltd.
Phoenix, Arizona
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of Fillmore Investors, Ltd. (an
Arizona limited partnership) (Federal Housing Administration Project No.
123-35128) as of December 31, 1996 and 1995, and the related statements of
revenue and expense, partners' deficit, and cash flows for the years then
ended. These financial statements are the responsibility of the 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 Fillmore Investors, Ltd. as of
December 31, 1996 and 1995, and the results of its operations and the changes
in partner's deficit and cash flows for the years then ended in conformity with
generally accepted accounting principles.
In accordance with Government Auditing Standards and the "Consolidated Audit
Guide for Audits of HIJD Programs," we have also issued reports dated January
23, 1997 on our consideration of Fillmore Investors, Ltd.'s internal control
structure and on its compliance with specific requirements applicable to major
HUD programs, affimnative fair housing, and laws and regulations applicable to
the financial statements.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supporting data included in the report (shown
on pages 12 through 18) are presented for the purposes of additional analysis
and are not a required part of the basic financial statements of Fillmore
Investors, Ltd. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/Eide Helmeke PLLP
Phoenix, Arizona
January 23, 1997
<PAGE> 28
[LOGO]
[NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP LETTERHEAD]
The Partners
Hudson Street Apartments
Culver City, California
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheets of Hudson Street Apartments (a
California partnership), CHFA Project No. 79-19-S, as of December 31, 1996 and
1995 and the related statements of operations, 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
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 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 Hudson Street Apartments as of
December 31, 1996 and 1995, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards we have also issued reports
dated January 22, 1997 on our consideration of Hudson Street Apartments'
Internal Control Structure an on its compliance with laws and regulations
applicable to the California Housing Financing Agency's financial assistance
programs.
/s/ Nanas, Stern, Biers, Neinstein and Co. LLP
January 22, 1997
<PAGE> 29
[LOGO]
[MCKONLY & ASBURY LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
The Partners of
Hummelstown Housing Associates
Hummelstown, Pennsylvania
We have audited the accompanying statements of assets, liabilities, and
partners' equity of Hummelstown Housing Associates (a limited partnership), RD
Project No. 44-22-370571782, as of December 31, 1996 and 1995, and the related
statements of revenues and expenses, partners' equity, and cash flows, all
prepared on the income tax reporting basis 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 with 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 that our audits provide a
reasonable basis for our opinion.
As described in the notes to the financial statements, the Partnership's policy
is to prepare its financial statements on the accounting basis used for income
tax purposes; consequently, depreciation methods have been used which do not
relate to the useful life of the property. In addition, interest paid during
the construction period was expensed. This differs from generally accepted
accounting principles which require construction period interest to be
capitalized and depreciated over the useful lives of the fixed assets.
Accordingly, the accompanying financial statements are not intended to present
the financial position and results of operations in conformity with generally
accepted accounting principles.
<PAGE> 30
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets, liabilities and partners' equity of
Hummelstown Housing Associates (a limited partnership) at December 31, 1996 and
1995, and its revenues and expenses, changes in partners' equity and its cash
flows for the years then ended on the basis of accounting described in the
notes to the financial statements.
In accordance with Government Auditing Standards, we have also issued a report
dated January 9, 1997 on our consideration of Hummelstown Housing Associates'
internal control structure and a report dated January 9, 1997 on its compliance
with laws and regulations.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary information on pages
18 through 22 is presented for the purpose of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ McKonly & Asbury
Harrisburg, Pennsylvania
January 9, 1997
<PAGE> 31
INDEPENDENT AUDITOR'S REPORT
To the Partners
Kentucky Manor Apartments, LTD.
Oak Grove, Kentucky
We have audited the accompanying balance sheet of Kentucky Manor
Apartments, LTD. (a limited partnership), RHCD Project No. 20-024-611005769,
as of December 31, 1996 and 1995, and the related statements of operations,
changes in partners' equity (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 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,and the U.S. Department of Agriculture, Farmers Home
Administration Audit Program. 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 Kentucky Manor Apartments,
LTD. (a limited partnership) as of December 31, 1996 and 1995, and the results
of its operations, the changes in partner's equity (deficit) and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
In accordance with Government Auditing Standards, we have also issued a
report dated January 27, 1997 on our consideration of Kentucky Manor
Apartments, LTD.'s internal control structure and a report dated January 27,
1997 on it's compliance with laws and regulations.
/s/ Thurman Campbell & Co.
January 27, 1997
<PAGE> 32
[LOGO]
[KPMG PEAT MARWICK LLP LETTERHEAD]
Report on Audited Financial Statements and Supplementary Information
Independent Auditors' Report
The Partners
Lonsdale Housing Associates
(A Limited Partnership):
We have audited the accompanying balance sheet of Lonsdale Housing Associates
(A Limited Partnership)(the "Partnership"), HUD Project No. RI-43-HO23-087, as
of May 31, 1996, and the related statements of profit and loss (on HUD Form
92410), 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.
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 the Partnership as of May 31,
1996 and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued reports
dated June 21, 1996 on: our consideration of the Partnership's internal
control structure, the Partnership's compliance with specific requirements
applicable to major HUD programs, and the Partnership's compliance with
specific requirements applicable to affirmative fair housing.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information included in Schedules 1 through 7 is presented for purposes of
additional analysis and is not a required part of the basic financial
statements. Such information has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the financial statements
taken as a whole.
/s/ KPMG PEAT MARWICK LLP
June 21, 1996
<PAGE> 33
[LOGO]
[WILSON, MCCALL & DAORO LETTERHEAD]
The Partners
Lincoln Mariners Associates Limited
a California limited partnership)
Independent Auditors' Report
We have audited the accompanying statement of assets, liabilities and
project deficit of Mariners Cove Apartments ("Project"), FHA Project No.
129-35077-PM-LS, owned by Lincoln Mariners Associates Limited (a California
limited partnership), as of December 31, 1996, and the related statements of
project profit and loss, changes in project deficit, and project 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 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 Project as of December 31,
1996, and the results of its operations and the changes in project deficit and
project 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 13, 1997 on our consideration of the Project's internal
control structure and reports dated February 13, 1997 on its compliance with
laws and regulations.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information is
presented for the purposes of additional analysis and is not a required part of
the basic financial statements. Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
/s/Wilson McCall & Daoro
San Francisco, California
February 13, 1997
<PAGE> 34
[LOGO]
[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 Venturers of
Civic Housing Associates I
aka Marshall Plaza Apartments - Phase I
We have audited the balance sheets of CIVIC HOUSING ASSOCIATES I AKA MARSHALL
PLAZA APARTMENTS - PHASE I, FHA Project Number 042-55046-LDP, as of December
31, 1996 and 1995, and the statements of operations, changes in venturers'
equity and cash flows for the years then ended. These financial statements are
the responsibility of the Venture's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall financial
statement presentation. We believe our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Civic Housing Associates I -
Phase I aka Marshall Plaza Apartments - Phase I as of December 31, 1996 and
1995, and the results of its operations, changes in venturers' 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 21, 1997, on our consideration of the Venture's internal control
structure and a report dated January 21, 1997, on its compliance with laws and
regulations.
<PAGE> 35
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
14 through 20 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/Alschuler, Melvoin and Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 36
[LOGO]
[ALSCHULER, 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
Civic Housing Associates II
aka Marshall Plaza Apartments - Phase II
We have audited the balance sheets of CIVIC HOUSING ASSOCIATES II, aka MARSHALL
PLAZA APARTMENTS - PHASE II, FHA Project Number 042-55054-LDP, as of December
31, 1996 and 1995, and the 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
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 Civic Housing Associates II,
aka Marshall Plaza Apartments - Phase II, 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 21, 1997, on our consideration of the Partnership's internal
control structure and a report dated January 21, 1997, on its compliance with
laws and regulations.
<PAGE> 37
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
14 through 20 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
Chicago, Illinois
January 21, 1997
<PAGE> 38
[LOGO]
[NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Partners
Hemet Estates
Los Angeles, California
We have audited the accompanying balance sheets of Hemet Estates (a California
partnership), CHFA Project No. 79-104-S, as of December 31, 1996 and 1995 and
the related statements of operations, 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 Hemet Estates as of December
31, 1996 and 1995, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards we have also issued reports
dated February 6, 1997 on our consideration of Hemet Estates' Internal Control
Structure and its compliance with requirements applicable to the California
Housing Finance Agency's financial assistance programs.
/s/ NANAS, STERN, BIERS, NEINSTEIN AND CO. LLP
February 6, 1997
<PAGE> 39
[LOGO]
[PARENTE.RANDOLPH.ORLANDO.CAREY &ASSOCIATES LETERHEAD]
To the Partners
Mulberry Associates.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheets of Mulberry Associates (a
limited partnership), FHA Project No. 034-35146-LD, as of December 31, 1996 and
1995, and the related statements of income, partners' equity (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 Mulberry Associates (a
limited partnership) as of December 31, 1996 and 1995, and the results of its
operations, changes in partners' equity (deficit) and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs issued by the U.S. Department of Housing and
Urban Development, we have also issued a report dated January 29, 1997, on our
consideration of Mulberry Associates' (a limited partnership) internal control
structure, and reports dated January 29,1997, on its compliance with specific
requirements applicable to major HUD programs and specific requirements
applicable to Affirmative Fair Housing.
<PAGE> 40
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information on pages 14 to 22 is presented for purposes of additional analysis
and is not a required part of the basic financial statements of Mulberry
Associates (a limited partnership). Such information has been subjected to the
auditing procedures applied in the audit of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/PARENTE RANDOLPH ORLANDO CAREY & ASSOCIATES
Wilkes-Barre, Pennsylvania
January 29, 1997
<PAGE> 41
[LOGO]
[R. BEN YOUNG & ASSOCIATES LETTERHEAD]
Partners
Oak Ridge Park Apartments, Ltd.
Phase II
D'Iberville, Mississippi
INDEPENDENT AUDITORS' REPORT
I have audited the balance sheets of Oak Ridge Park Apartments, Ltd. (Phase
II) as of December 31, 1996 and 1995, and the related statements of income,
partner's equity, and cash flows for the years then ended. These financial
statements are the responsibility of the partnership's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards
and generally accepted government auditing standards, as set forth in
Government Auditing Standards (1988 Revision) issued by the Comptroller General
of the United States. Those standards require that I plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit rovides a reasonable basis for
my opinion.
As described in NOTE A to the financial statements, the partnership's policy is
to prepare its financial statements on the basis of accounting used for income
tax purposes. Accordingly, the accompanying financial statements are not
intended to present financial position and results of operation in conformity
with generally accepted accounting principles.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oak Ridge Park Apartments,
Ltd. (Phase II) as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended on the basis of
accounting described in NOTE A
/s/R. Ben Young CPA
February 26, 1997
<PAGE> 42
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS AND
ADDITIONAL FINANCIAL DATA REQUIRED BY
THE TENNESSEE HOUSING DEVELOPMENT AGENCY AND THE
U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
To the Partners of
Oakwood Manor Associates, Ltd.
We have audited the accompanying balance sheets of OAKWOOD MANOR ASSOCIATES,
LTD. (a Tennessee limited partnership) THDA Project No. 8.9.02 (the
"Partnership") as of December 31, 1996 and 1995, and the related statements of
income, 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 and 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 Oakwood Manor Associates, Ltd.
as of December 31, 1996 and 1995, and the results of its operations, changes in
its partners' equity, and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 17, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 17, 1997 on its compliance with
laws and regulations.
<PAGE> 43
Our audits were conducted for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying additional 1996
financial data shown on pages 13 through 20 are presented for 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/Alschuler, Melvoin and Glasser LLP
Los Angeles, California
February 17, 1997
<PAGE> 44
[LOGO]
[FISHBEIN & COMPANY, P.C. LETTERHEAD]
Partners
Park Place Associates
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of PARK PLACE ASSOCIATES (A
New Jersey Limited Partnership) as of December 31, 1996, 1995, and 1994, and
the related statements of income, equity (deficiency) and cash flows for the
years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and "Government Auditing Standards" issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
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 that our audits provide a
reasonable basis for our opinion.
The Partnership's policy is to prepare its financial statements on the
basis of accounting practices prescribed or permitted by the New Jersey Housing
& Mortgage Finance Agency. These practices differ in some respects from
generally accepted accounting principles as more fully described in Note 1-b to
the financial statements. Accordingly, the accompanying statement of operations
is not intended to present the results of operations in conformity with
generally accepted accounting principles.
In our opinion, except as noted in the preceding paragraph, the financial
statements referred to above present fairly, in all material respects, the
financial position of Park Place Associates as of December 31, 1996, 1995 and
1994, and the results of its operations and its cash flows for the years then
ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental information
included in this report (shown on pages 11 through 18) is presented for
purposes of additional analysis and is not a required part of the basic
financial statements of the Partnership. Such information has been subjected to
the auditing procedures applied in the audits of the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the financial statements taken as a whole.
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 17,
1997, on our consideration of Park Place Associates' internal control structure
and reports dated January 17, 1997, on its compliance with specific
requirements applicable to major HUD programs and affirmative fair housing.
/s/Fishbein & Company, PC
<PAGE> 45
[LOGO]
[SCOTT & COMPANY LETTERHEAD]
To the Partners of
Park Place Apartments, Ltd.
Cleveland, Texas
Independent Auditor's Report
We have audited the accompanying balance sheet of Park Place Apartments, Ltd.,
FHA Project No. 114-35316-PM-L8 (a limited partnership), as of December 31,
1996, and the related statements of profit and loss, 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.
We conducted our audit in accordance with generally accepted auditing
standards, Government Auditing Standards issued by the Comptroller General of
the United States and the July, 1993, Consolidated Audit Guide for Audits of
HUD Programs. 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 above mentioned financial statements present fairly, in all
material respects, the financial position of Park Place Apartments, Ltd. as of
December 31, 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.
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, we have also issued a report dated February
13, 1997 on our consideration of the Partnership's internal control structure
and two reports dated February 13, 1997 on its compliance with specific
requirements applicable to major HUD programs and Affirmative Fair Housing.
<PAGE> 46
Park Place Apartments, Ltd
Independent Auditor's Report
Page 2
Our audit was conducted for the purpose of forming an opinion on the financial
statements taken as a whole. The supporting data (shown on pages 13 through 18)
are presented for the purposes of additional analysis and are not a required
part of the basic financial statements of Park Place Apartments, Ltd. Such
information has been subjected to the 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.
/s/Scott & Company
February 13, 1997
<PAGE> 47
[LOGO]
[LEONIAK, BAIR & COMPANY LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
Partners
Parkesedge Associates
State College, Pennsylvania
We have audited the accompanying balance sheets of Parkesedge Associates as
of December 31, 1996 and 1995, and the related statements of income and
partnership 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 Parkesedge
Associates as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 1, 1997 on our consideration of Parkesedge Associates' internal
control structure and a report dated February 1, 1997 on its compliance with
laws and regulations.
/s/Leoniak, Bair & Company
State College, Pennsylvania
February 1, 1997
<PAGE> 48
[LOGO]
[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 Owners of
Penneco Associates of Johnstown II
We have audited the balance sheets of PENNECO ASSOCIATES OF JOHNSTOWN
II, FHA Project Number PA-28-0004-025, as of December 31, 1996 and 1995, and
the statements of operations, changes in project deficit and cash flows for the
years 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 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 Penneco Associates of
Johnstown II as of December 31, 1996 and 1995, and the results of its
operations, changes in project deficit and cash flows for the years then ended
in conformity with generally accepted accounting principles.
The financial statements have been prepared assuming the Project will continue
as a going concern. As discussed in Notes 3 and 6 to the financial statements,
the Project's capital deficit, unpaid property taxes and legal judgment raise
substantial doubt about the Project's ability to continue as a going concern.
Management's plans regarding these matters are described in Note 6. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
<PAGE> 49
In accordance with Government Auditinq Standards, we have also issued a report
dated February 6, 1997, on our consideration of the Project's internal control
structure and a report dated February 6, 1997, on its compliance with laws and
regulations.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The additional 1996 financial data on
pages 13 through 17 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 & Glasser LLP
Chicago, Illinois
February 6, 1997
<PAGE> 50
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners of
Peppertree Associates
We have audited the accompanying balance sheets of PEPPERTREE ASSOCIATES (a
general partnership) as of December 31, 1996 and 1995, and the related
statements of operations, changes in partners' deficiency and cash flows for
the years then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 Peppertree Associates at
December 31, 1996 and 1995, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/Altschuler, Melvoin & Glasser LLP
Los Angeles, California
January 29, 1997
<PAGE> 51
[LOGO]
[SANTIAGO, RILEY & REZNICK LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
To the Partners
Sol 413 Limited Dividend Partnership
We have audited the accompanying balance sheet of Sol 413 Limited Dividend
Partnership as of December 31, 1996, and the related statements of profit and
loss (on HUD Form No. 92410), partners' deficit and cash flows for the year
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Sol 413 Limited Dividend
Partnership, as of December 31, 1996, and the results of its operations,
changes in partners' deficit and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information on pages 20
through 25 is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such formation has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, except for the effects, if any, of
the items discussed in the third paragraph, such information is fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
<PAGE> 52
In accordance with Government Auditing Standards and the Consolidated Audit
Guide for Audits of HUD Programs, we have also issued reports dated January
13,1997, on our consideration of Sol 413 Limited Dividend Partnership's
internal control structure and on its compliance with specific requirements
applicable to major and nonmajor HUD programs, affirmative fair housing, and
laws and regulations applicable to the financial statements.
/s/Santiago, Riley & Reznick
San Juan, Puerto Rico
January 13,1997
<PAGE> 53
[LOGO]
[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
Victory Square Apartments,
Limited Partnership
We have audited the balance sheets of VICTORY SQUARE APARTMENTS, LIMITED
PARTNERSHIP, FHA Project Number 042-35196-LDP, as of December 31, 1996 and
1995, and the statements of operations, changes in partners' equity and cash
flows for the years then ended. These financial statements are the
responsibility of the Partnerships management. Our responsibility is to express
an opinion on these financial statements based on our audit.
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 Victory Square Apartments,
Limited Partnership at 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 21, 1997, on our consideration of the Partnership's internal
control structure and a report dated January 21, 1997, on its compliance with
laws and regulations.
<PAGE> 54
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 19 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/Alschuler, Melvoin and Glasser LLP
Chicago, Illinois
January 21, 1997
<PAGE> 55
[LOGO]
[HORWATH VELEZ SEMPRIT & CO LETTERHEAD]
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS
Partners
Orocovix Limited Dividend Partnership
(A Limited Partnership)
San Juan, Puerto Rico
We have audited the accompanying balance sheets of Orocovix Limited Dividend
Partnership (a limited partnership), HUD Project No. RQ46R000031 and FmHA
Project No. 63-02-60660405607, as of December 31, 1996 and 1995, and the
related statements of operations, partners' equity (deficiency), and cash flows
for the years then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Orocovix Limited Dividend
Partnership as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
/s/ Horwath Velez Semprit & Co
January 24, 1997
<PAGE> 56
[LOGO]
[ALTSCHULER, MELVOIN AND GLASSER LLP LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying balance sheets of WILLOW WOOD APARTMENTS (a
California limited partnership), CHFA Project No. 82-70-S (the "Partnership")
as of December 31, 1996 and 1995, and the related statements of operations,
changes in partners' deficiency and cash flows for the years then ended. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards and Government Auditing Standards, issued by the Comptroller General
of the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Willow Wood Apartments as of
December 31, 1996 and 1995, and the results of its operations, changes in its
partners' deficiency, and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued a report
dated February 17, 1997 on our consideration of the Partnership's internal
control structure and a report dated February 17, 1997 on its compliance with
laws and regulations.
/s/Altschuler, Melvoin and Glasser LLP
Los Angeles, California
February 17, 1997
<PAGE> 57
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1996 AND 1995
ASSETS
<TABLE>
<CAPTION>
1996 1995
------------ -------------
<S> <C> <C>
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2) $ 6,051,522 $ 5,619,146
RENTAL PROPERTY, net of accumulated depreciation (Note 1) 3,158,470 7,285,002
CASH AND CASH EQUIVALENTS (Note 1) 5,849,983 4,895,340
CASH, restricted (Note 3) 35,750 84,338
SHORT TERM INVESTMENTS (Note 1) - 125,000
RECEIVABLES FROM LIMITED PARTNERSHIPS (Note 2) - 1,000
OTHER ASSETS 190,643 327,313
------------ -------------
TOTAL ASSETS $ 15,286,368 $ 18,337,139
============ =============
LIABILITIES AND PARTNERS' DEFICIENCY
LIABILITIES:
Mortgage notes payable related to properties (Notes 4 and 9) $ 4,886,300 $ 9,890,564
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) 5,650,383 5,253,980
Accounts payable 47,372 193,501
Other liabilities 35,750 131,171
------------ -------------
16,414,805 21,264,216
------------ -------------
COMMITMENTS AND CONTINGENCIES (Notes 2, 6 and 7)
PARTNERS' DEFICIENCY:
General partners (362,474) (380,460)
Limited partners (765,963) (2,546,617)
------------ -------------
(1,128,437) (2,927,077)
------------ -------------
TOTAL LIABILITIES AND PARTNERS' DEFICIENCY $ 15,286,368 $ 18,337,139
============ =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
1
<PAGE> 58
REAL ESTATE ASSOCIATES LIMITED VI
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
RENTAL OPERATIONS:
Revenues $ 1,211,516 $ 2,715,123 $ 2,680,834
------------ ------------ ------------
Expenses:
General and administrative 162,929 429,258 430,353
Operating 395,170 1,040,846 991,264
Management fees - affiliate (Note 6) 76,862 165,018 169,372
Depreciation and amortization (Note 1) 210,414 381,897 374,903
Interest 541,383 944,140 953,462
------------ ------------ ------------
1,386,758 2,961,159 2,919,354
------------ ------------ ------------
LOSS FROM RENTAL OPERATIONS (175,242) (246,036) (238,520)
------------ ------------ ------------
PARTNERSHIP OPERATIONS:
Interest income 165,591 168,911 221,268
------------ ------------ ------------
Expenses:
Management fees - general partner (Note 6) 513,393 535,489 624,120
Mortgage brokerage fees - general partner
(Note 6) - 131,100 -
General and administrative 262,047 289,923 187,558
Interest 519,650 519,650 519,650
------------ ------------ ------------
1,295,090 1,476,162 1,331,328
------------ ------------ ------------
LOSS FROM PARTNERSHIP OPERATIONS (1,129,499) (1,307,251) (1,110,060)
------------ ------------ ------------
GAIN ON SALE OF RENTAL PROPERTY (Note 1) 1,902,022 - -
EQUITY IN INCOME OF LIMITED
PARTNERSHIPS AND AMORTIZATION
OF ACQUISITION COSTS 603,934 415,526 433,356
DISTRIBUTIONS FROM LIMITED
PARTNERSHIPS RECOGNIZED AS
INCOME (Note 2) 597,425 347,163 500,498
------------ ------------ ------------
NET INCOME (LOSS) $ 1,798,640 $ (790,598) $ (414,726)
============ ============ ============
NET INCOME (LOSS) PER LIMITED
PARTNERSHIP INTEREST (Note 1) $ 107 $ (47) $ (24)
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE> 59
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF PARTNERS' DEFICIENCY
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
------------- ------------- -------------
<S> <C> <C> <C>
DEFICIENCY, January 1, 1994 $ (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)
Net income, 1996 17,986 1,780,654 1,798,640
------------- ------------- -------------
DEFICIENCY, December 31, 1996 $ (362,474) $ (765,963) $ (1,128,437)
============= ============= =============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE> 60
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(A CALIFORNIA LIMITED PARTNERSHIP)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 1,798,640 $ (790,598) $ (414,726)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Gain on sale of rental property (1,902,022) - -
Equity in (income) loss of limited partnerships
and amortization of acquisition costs (603,934) (415,526) (433,356)
Depreciation and amortization 210,414 353,827 346,832
Decrease in receivables from limited partnerships 1,000 256,250 126,500
Decrease in other assets 136,670 5,581 25,164
Increase in accrued interest payable 396,403 419,435 359,641
(Decrease) increase in accounts payable (146,129) 87,006 43,161
(Decrease) increase in other liabilities (95,421) (1,948) 20,525
------------ ------------ ------------
Net cash provided by (used in) operating activities (204,379) (85,973) 73,741
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Distributions to limited partnerships recognized
as a return of capital 176,852 201,288 257,425
Decrease in restricted cash 48,588 562 2,841
Decrease (increase) in short term investments 125,000 - (125,000)
Capital contribution to investee limited partnership (5,294) (191,044) (5,294)
Addition to rental property - - (48,347)
Proceeds from sale of rental property 5,818,140 - -
------------ ------------ ------------
Net cash provided by investing activities 6,163,286 10,806 81,625
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of mortgages (5,004,264) (102,437) (93,189)
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 954,643 (177,604) 62,177
------------ ------------ ------------
CASH AND CASH EQUIVALENTS,
BEGINNING OF YEAR 4,895,340 5,072,944 5,010,767
------------ ------------ ------------
CASH AND CASH EQUIVALENTS,
END OF YEAR $ 5,849,983 $ 4,895,340 $ 5,072,944
============ ============ ============
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid during the year for interest $ 664,630 $ 1,044,356 $ 160,009
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 61
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
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 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 eliminated in consolidation. 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 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.
5
<PAGE> 62
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
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.
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 1996 1995
---------- ----------- ------------
<S> <C> <C> <C>
Land $1,557,180 $1,935,839
Buildings 25 years 3,283,659 9,317,202
Equipment 3 to 5 years 824,580 824,580
----------- -----------
5,665,419 12,077,621
Less-Accumulated Depreciation
and Amortization 2,506,949 4,792,619
----------- -----------
$ 3,158,470 $ 7,285,002
=========== ===========
</TABLE>
On February 2, 1996, one of the consolidated general partnerships
(Drexel Park) sold its property for $6,300,000. After payment of
closings costs, the Partnership realized a gain of approximately
$1,902,000.
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.
6
<PAGE> 63
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of unrestricted cash and bank
certificates of deposit with maturities of three months or less. The
Partnership has its cash and cash equivalents on deposit primarily with
one high credit quality financial institution. Such cash and cash
equivalents are in excess of the FDIC insurance limit.
SHORT TERM INVESTMENTS
Short term investments consist of bank certificates of deposit with
original maturities ranging from more than three months to twelve
months. The fair value of these securities, which have been classified
as held for sale, approximates their carrying value.
IMPAIRMENT OF LONG-LIVED ASSETS
The Partnership reviews long-lived assets to determine if there has been
any permanent impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable.
If the sum of the expected future cash flows is less than the carrying
amount of the assets, the Partnership recognizes an impairment loss.
2. INVESTMENTS IN LIMITED PARTNERSHIPS
The Partnership holds limited partnership interests in 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 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 one general partnership, which
own residential low income rental projects consisting of 2,832 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, 1996, 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 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
7
<PAGE> 64
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
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 bore interest at 12 percent per
annum and were 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 benefits 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 $27,372,000 and
$24,636,000 as of December 31, 1996 and 1995, 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>
1996 1995
---------- ----------
<S> <C> <C>
Investment balance, beginning of year $5,619,146 $5,213,864
Capital contributions to limited partnerships 5,294 191,044
Cash distributions recognized as a return of capital (176,852) (201,288)
Amortization of additional basis and capitalized
acquisition costs and fees (244,391) (244,391)
Equity in income of limited partnerships 848,325 659,917
----------- -----------
Investment balance, end of year $6,051,522 $5,619,146
========== ==========
</TABLE>
8
<PAGE> 65
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
The difference between the investment per the accompanying balance
sheets at December 31, 1996 and 1995, and the deficiency per the limited
partnerships' combined financial statements is due primarily to
cumulative unrecognized equity in losses of 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, 1996 and 1995 and for each of the three years in the period
ended December 31, 1996, of the limited partnerships in which the
Partnership has invested directly or indirectly, is as follows:
Balance Sheets
<TABLE>
<CAPTION>
1996 1995
-------- --------
(in thousands)
<S> <C> <C>
Land and buildings, net $ 54,130 $ 56,724
======== ========
Total assets $ 72,075 $ 72,743
======== ========
Mortgage loans payable $ 71,021 $ 72,765
======== ========
Total liabilities $100,740 $ 98,041
======== ========
Deficiency of the Real Estate Associates Limited VI $(26,876) $(23,999)
======== ========
Deficiency of other partners $ (1,777) $ (1,299)
======== ========
</TABLE>
Statements of Operations
<TABLE>
<CAPTION>
1996 1995 1994
------- -------- -------
(in thousands)
<S> <C> <C> <C>
Total revenue $ 21,246 $ 20,571 $20,662
======== ======== =======
Interest expense $ 5,561 $ 5,720 $ 5,954
======== ======== =======
Depreciation $ 3,597 $ 3,529 $ 3,521
======== ======== =======
Total expenses $ 23,123 $ 23,034 $22,295
======== ======== =======
Net loss $ (1,877) $ (2,463) $(1,633)
======== ======== =======
Net loss allocable to the Partnership $ (1,869) $ (2,214) $(1,621)
======== ======== =======
</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> 66
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
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 $179,660, $178,106 and $173,152 in 1996, 1995 and 1994
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>
1996 1995 1994
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Total assets $12,049 $12,225
======= =======
Total liabilities $14,813 $14,616
======= =======
Deficiency of Real Estate Associates
Limited VI $(2,674) $(2,307)
======= =======
Deficiency of other partners $ (89) $ (85)
======= =======
Total revenue $ 3,213 $ 3,136 $ 2,912
======= ======= =======
Net loss $ (340) $ (502) $ (214)
======= ======= =======
</TABLE>
3. CASH, RESTRICTED
Restricted cash at December 31, 1996 and 1995 consists of tenants'
security deposits.
10
<PAGE> 67
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
4. MORTGAGE NOTE PAYABLE RELATED TO PROPERTY
Mortgage notes payable related to properties consist of the following at
December 31, 1996 and 1995:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Mortgage note bears interest
at 9.5 percent per annum, with
monthly principal and interest
payments of $42,724, due
January 1, 1997. The note was
repaid in 1996 in connection with
the sale of the property $ - $ 5,052,395
Mortgage note bears interest at 8.78
percent (9.5 percent in 1995) per annum,
with monthly principal and interest
payments of $40,385, due September 10, 2006. 4,886,300 4,838,169
----------- -----------
$ 4,886,300 $ 9,890,564
=========== ===========
</TABLE>
The notes are collateralized by the rental properties.
The mortgage note payable at December 31, 1996 requires principal
payments as follows:
<TABLE>
<S> <C>
1997 $ 57,896
1998 63,189
1999 68,966
2000 75,270
2001 82,152
Thereafter through 2006 4,538,827
----------
$4,886,300
==========
</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.
11
<PAGE> 68
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
5. NOTES PAYABLE AND AMOUNTS DUE FOR PARTNERSHIP INTERESTS (CONTINUED)
Maturity dates of the notes payable and related accrued interest are as
follows:
<TABLE>
<CAPTION>
Accrued
Years Ending December 31, Notes Interest
------------------------- -------------- ------------
<S> <C> <C>
1997 $ $
1998
1999 940,000 1,060,938
2000
2001 2,810,000 2,677,979
Thereafter 1,720,000 1,911,466
----------- -----------
$ 5,470,000 $ 5,650,383
=========== ===========
</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.
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 $12,000, $107,000 and $106,000 in
1996, 1995 and 1994, 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
$65,000, $58,000 and $63,000 in 1996, 1995 and 1994, respectively. In
1995, NAPICO received mortgage brokerage fees of $131,000 for its
involvement with the refinancing of limited partnerships' mortgages
(Note 2).
The Partnership reimburses NAPICO for certain expenses. The
reimbursement to NAPICO was $47,231, $43,729 and $42,142 in 1996, 1995
and 1994, 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.
12
<PAGE> 69
REAL ESTATE ASSOCIATES LIMITED VI AND SUBSIDIARIES
(a California limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
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.
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 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 $85,000, between the estimated nine-month equity
in income and the actual 1996 year end equity in income has been
recorded in the fourth quarter.
13
<PAGE> 70
SCHEDULE
REAL ESTATE ASSOCIATES LIMITED VI
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
Year Ended December 31, 1996
----------------------------------------------------------------------------------------
Cash
Balance Distri- Balance Future
January Capital butions Equity in December Capital
Limited Partnerships 1, 1996 Contributions Received Income/(Loss) 31, 1996 Contributions
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Boynton Terrace $ $ $ $ $ $
Cady Brook Apts. 298,129 (4,778) 42,100 335,451
Cassidy Village 308,841 (2,397) (41,740) 264,704
City Heights
Crockett Manor
Denny Place
Drexel Park III 572,502 (16,035) 41,134 597,601
Eastridge Apts.
EchoValley Apts. 22,392 22,392
Filmore I
Grant-Ko Enterprises
Hudson Gardens 293,015 (19,747) 77,678 350,946
Hummelstown Manor
Kentucky Manor
Lakewind East Apts.
Lonsdale Elderly 769,348 (34,597) 148,676 883,427
Mariner's Cove
Marshall Plaza I
Marshall Plaza II
Menlo Estates
Mulberry Towers 2,662,471 (55,252) 193,117 2,800,336
New-Bel-Mo Enterprises (25,500) (25,500) 25,500
Oakridge Apts.
Oakwood Manor 166,065 (5,390) 13,014 173,689
Park Place Apts., TX
Park Place Apts., NJ 230,507 (33,362) 107,882 305,027
Parkesedge Elderly Apts. 196,044 17,972 214,016 18,000
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 194,724 (18,291) 176,433
Villas de Orocovix
Willow Wood
------------- ------------- ------------- ------------- ------------- -------------
$ 5,619,146 $ 5,294 $ (176,852) $ 603,934 $ 6,051,522 $ 90,500
============= ============= ============= ============= ============= =============
</TABLE>
<PAGE> 71
SCHEDULE
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED VI
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
Year Ended December 31, 1995
-------------------------------------------------------------------------------------------------
Cash
Balance Distri- Balance Future
January 1, Capital butions Equity in December 31, Capital
Limited Partnerships 1995 Contributions Received Income (Loss) 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
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> 72
SCHEDULE
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED VI
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
<CAPTION>
Year Ended December 31, 1994
--------------------------------------------------------------------------------------------
Cash
Balance Distri- Balance Future
January 1, Capital butions Equity in December 31, Capital
Limited Partnerships 1994 Contributions Received Income (Loss) 1994 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
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> 73
SCHEDULE
(Continued)
REAL ESTATE ASSOCIATES LIMITED VI
INVESTMENTS IN LIMITED PARTNERSHIPS
FOR THE YEARS ENDED
DECEMBER 31, 1996, 1995 AND 1994
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> 74
SCHEDULE III
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 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 $5,150,000 $208,001 $4,124,458 $4,332,457 $1,848,686 1983-1984
Boyton Beach, FL
Cadybrook 40 1,088,670 89,225 1,771,838 1,861,103 535,471 (A)
Charlton, MA
City Heights 151 3,891,383 0 5,182,544 5,182,544 3,511,927 (A)
Wilkes-Barre, PA
Crockett Manor 38 1,049,836 10,000 1,259,214 1,269,214 589,528 (A)
Trenton, TN
Eastridge Apts. 96 540,904 101,500 1,526,277 1,627,777 1,257,059 (A)
Bristol, VA
Echo Valley 100 1,199,574 103,011 3,854,928 3,957,939 3,386,543 (A)
Warwick, RI
Filmore I 32 1,207,779 115,000 1,312,495 1,427,495 825,977 (A)
Phoenix, AZ
Grant-Ko Enterprises 40 1,238,220 100,000 1,395,975 1,495,975 630,800 (A)
Platteville, WS
Hudson Gardens 41 1,522,520 252,855 2,011,719 2,264,574 972,861 (A)
Pasadena, CA
Hummelstown Manor 51 1,749,434 96,839 1,743,738 1,840,577 1,555,858 1983
Hummelstown, PA
Kentucky Manor 48 1,402,311 100,888 1,403,559 1,504,255 819,238 (A)
Oak Grove, KY
Lonsdale Housing 131 3,245,874 214,833 6,362,322 6,577,155 3,506,009 (A)
Providence, RI
Mariner's Cove 500 13,888,101 0 15,920,233 15,920,233 7,869,855 1983-1984
San Diego, CA
Menlo Estates 80 2,832,582 492,061 3,696,060 4,188,121 1,909,599 (A)
Riverside, CA
Mullberry Towers 206 5,939,506 199,754 7,549,738 7,749,492 2,872,180 (A)
Scranton, PA
New-Bel-Mo Enterprises 34 1,005,894 76,000 1,142,836 1,218,836 496,504 (A)
New Glarus, Belleville,
Monticello, WS
Oakridge Apts. 48 1,206,700 55,000 1,471,041 1,520,041 1,241,719 (A)
Biloxi, MS
Oakwood 34 667,041 61,538 777,542 839,080 279,307 (A)
Milan, TN
Park Place 126 5,953,875 304,100 7,274,747 7,578,913 2,506,032 1983-1984
Ewing, NJ
Park Place Apts. 60 1,921,041 146,305 2,225,581 2,371,866 1,249,940 (A)
Cleveland, TX
Parkesedge Elderly Apts. 45 1,490,767 180,000 1,785,320 1,945,326 651,426 (A)
Parkesedge, PA
Penneco II 76 1,996,450 79,627 2,792,000 2,871,627 1,384,800 (A)
Johnstown, PA
Sauk-Ko Enterprises 30 833,875 60,000 1,180,973 1,220,973 504,341 (A)
Baraboo, WS
SOL - 413 12 368,668 50,000 354,982 404,982 192,911 (A)
Old San Juan, PR
Valley Oaks Senior 50 1,771,000 121,464 1,888,640 2,010,104 938,870 (A)
Galt, CA
Villas de Orocovix 41 1,433,182 59,550 1,714,747 1,774,297 854,588 (A)
Orocovix, PR
Cassidy Village 98 1,137,391 156,850 2,095,121 2,251,971 910,222 (A)
Columbus, OH
Denny Place 17 419,028 290,000 1,070,594 1,360,594 483,276 (A)
Los Angeles, CA
Drexel Park III 72 1,589,408 79,520 2,228,343 2,307,863 838,883 (A)
Partnership
Laurel, MD
Marshall Plaza I 40 235,265 68,414 739,014 807,428 323,455 (A)
Loraine, OH
Marshall Plaza II 50 330,365 78,901 957,354 1,038,255 418,220 (A)
Loraine, OH
Paula Maria I 120 1,125,442 215,730 2,852,574 3,068,304 1,490,281 (A)
Hampton, VA
Victory Square 81 1,030,554 36,630 1,855,595 1,892,225 803,815 (A)
Canton, OH
Willow Wood 19 483,008 290,000 1,097,181 1,387,181 478,445 (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 3,879,626
----------- ---------------- ----------- ----------------- ------------ ----------
2,696 71,020,503 4,581,268 101,136,992 105,718,258 51,588,132
----------- ---------------- ----------- ----------------- ------------ ----------
</TABLE>
(A) This project was completed when REAL VI entered the Partnership.
<PAGE> 75
SCHEDULE III
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED VI
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY CONSOLIDATED LOCAL GENERAL
PARTNERSHIP IN WHICH REAL VI HAS AN INVESTMENT
DECEMBER 31, 1996
<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>
Peppertree
Cypress, CA 136 4,886,300 1,557,180 4,108,239 5,665,419 2,506,949 (A)
---------- ----------- ---------- --------------- ---------------- ------------
TOTAL 2832 $75,906,803 $6,138,446 $ 105,245,231 $ 111,383,677 $ 54,095,081
---------- ----------- ---------- --------------- ---------------- ------------
</TABLE>
(A). This project was completed when REAL VI entered the Partnership.
<PAGE> 76
SCHEDULE III
(CONTINUED)
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL VI HAS INVESTMENTS
DECEMBER 31, 1996
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, 1994 $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
Net additions, 1996 19,721 846,147 865,868
---------- ------------ ------------
Balance, December 31, 1996 $4,581,266 $101,136,992 $105,718,258
========== ============ ============
</TABLE>
<PAGE> 77
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, 1996
<TABLE>
<CAPTION>
Buildings,
Furnishings
And
Equipment
------------
<S> <C>
ACCUMULATED DEPRECIATION:
- -------------------------
Balance at January 1, 1994 $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
Net additions for 1996 3,459,872
-----------
Balance at December 31, 1996 $51,588,132
===========
</TABLE>
<PAGE> 78
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, 1996
Investments in property and equipment - general partnerships (continued):
The total cost of land, buildings, and equipment for federal income tax
purposes at December 31, 1996 is approximately $5,665,419.
<TABLE>
<CAPTION>
Buildings
Furnishings,
And
Land Equipment Total
---------- ------------ -----------
<S> <C> <C> <C>
Balance, January 1, 1994 $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
Deletions during 1996 (378,659) (6,033,543) (6,412,202)
---------- ----------- -----------
Balance, December 31, 1996 $1,557,180 $ 4,108,239 $ 5,665,419
========== =========== ===========
</TABLE>
<PAGE> 79
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, 1996
<TABLE>
<CAPTION>
Buildings,
Furnishings,
And
Equipment
------------
<S> <C>
Accumulated Depreciation:
Balance at January 1, 1994 $ 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
Net additions for 1996 198,237
Net deletions for 1996 (2,483,907)
------------
Balance at December 31, 1996 $ 2,506,949
============
</TABLE>
<PAGE> 80
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, 67, Chairman of the Board of Directors and Chief
Executive Officer of NAPICO.
Mr. Boxenbaum has been associated with NAPICO since its inception. He has been
active in the real estate industry since 1960, and prior to joining NAPICO was
a real estate broker with the Beverly Hills firm of Carl Rhodes Company.
Mr. Boxenbaum has been a guest lecturer at national and state realty
conventions, certified properties exchanger's seminars, Los Angeles Town Hall,
National Association of Home Builders, International Council of Shopping
Centers, Society of Conventional Appraisers, California Real Estate
Association, National Institute of Real Estate Brokers, Appraisal Institute,
various mortgage banking seminars, and the North American Property Forum held
in London, England. In 1963, he was the winner of the Snyder Award, the
highest annual award offered by the National Association of Real Estate Boards
for Best Exchange. He is one of the founders and a past director of the First
Los Angeles Bank, organized in November 1974. Mr. Boxenbaum was a member of
the Board of Directors of the National Housing Council. Mr. Boxenbaum received
his Bachelor of Arts degree from the University of Chicago.
BRUCE E. NELSON, 45, President and a director of NAPICO.
Mr. Nelson joined NAPICO in 1980 and became President in February 1989. He is
responsible for the operations of all NAPICO sponsored limited partnerships.
Prior to that he was primarily responsible for the securities aspects of the
publicly offered real estate investment programs. Mr. Nelson is also involved
in the identification, analysis, and negotiation of real estate investments.
From February 1979 to October 1980, Mr. Nelson held the position of Associate
General Counsel at Western Consulting Group, Inc., private residential and
commercial real estate syndicators. Prior to that time, Mr. Nelson was engaged
in the private practice of law in Los Angeles. Mr. Nelson received his
Bachelor of Arts degree from the University of Wisconsin and is a graduate of
the University of Colorado School of Law. He is a member of the State Bar of
California and is a licensed real estate broker in California and Texas.
ALAN I. CASDEN, 51, Chairman of The Casden Company, an affiliate of Casden
Properties (formerly CoastFed Properties), a director and member of the audit
committee of NAPICO, and chairman of the Executive Committee of NAPICO.
Mr. Casden is Chairman of the Board, Chief Executive Officer and sole
shareholder of The Casden Company and Casden Investment Company. Prior to
that, he was the president and chairman of Mayer Group, Inc., which he joined
in 1975. He is also chairman of Mayer Management, Inc., a real estate
management firm. Mr. Casden has been involved in approximately $3 billion of
real estate financings and sales and has been responsible for the development
and construction of more than 12,000 apartment units and 5,000 single-family
homes and condominiums.
<PAGE> 81
Mr. Casden is a member of the American Institute of Certified Public
Accountants and of the California Society of Certified Public Accountants. Mr.
Casden is a member of the advisory board of the National Multi-Family Housing
Conference, the Multi-Family Housing Council, and the President's Council of
the California Building Industry Association. He also serves on the advisory
board to the School of Accounting of the University of Southern California. He
holds a Bachelor of Science degree and a Masters in Business Administration
degree from the University of Southern California.
HENRY C. CASDEN, 53, President, Chief Operating Officer and Secretary of The
Casden Company and a director and secretary of NAPICO.
Mr. Casden has been President and Chief Operating Officer of The Casden
Company, as well as a director of NAPICO since February 1988. He became
secretary of both companies in late 1994. From 1982 to 1988, Mr. Casden was of
counsel and a partner in the Los Angeles law firm of Troy, Casden & Gould.
From 1978 to 1981, he was of counsel and a partner in the Los Angeles law firm
of Loeb & Loeb. From 1972 to 1978, Mr. Casden was a member of the Beverly
Hills law firm of Fink & Casden, Professional Corporation.
Mr. Casden received his Bachelor of Arts degree from the University of
California at Los Angeles, and is a graduate of the University of San Diego Law
School. Mr. Casden is a member of the State Bar of California and has numerous
professional affiliations.
BRIAN D. GOLDBERG, 33, Chief Financial Officer of The Casden Company and a
director of NAPICO.
Mr. Goldberg joined The Casden Company in 1990 as Vice President of Finance and
became Chief Financial Officer in March 1991. Prior to joining The Casden
Company, Mr. Goldberg was with Arthur Andersen & Co., an international public
accounting firm, from August 1985 until July 1990 in their Los Angeles office.
He received his bachelor of science degree in Accounting from the University of
Denver. Mr. Goldberg is a member of the American Institute of Certified Public
Accountants and the California Society of Certified Public Accountants.
SHAWN HORWITZ, 37, Executive Vice President and Chief Financial Officer.
Mr. Horwitz joined NAPICO in 1990 and is responsible for the financial affairs
of NAPICO and the limited partnerships sponsored by NAPICO. Prior to joining
NAPICO, Mr. Horwitz was President for approximately one year of Star Sub Shops,
Inc., a corporation engaged in the business of selling fast food franchises,
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, 55, Senior Vice President and Corporate Controller.
Mr. Schafer joined NAPICO in 1984 and is the Corporate Controller responsible
for the financial reporting function of the Company. Prior to this, he was a
Group and Division Controller at Bergen Brunswig for over eight years,
Controller at a Flintkote subsidiary for over four years, and Assistant
Controller at an electronics subsidiary of General Electric for two years. Mr.
Schafer is a member of the California Society of Certified Public Accountants.
He holds a Bachelor of Science degree in accounting from Woodbury University,
Los Angeles.
<PAGE> 82
PATRICIA W. TOY, 67, Senior Vice President - Communications and Assistant
Secretary.
Mrs. Toy joined NAPICO in 1977, following her receipt of an MBA from the
Graduate School of Management, UCLA. From 1952 to 1956, Mrs. Toy served as a
U.S. Naval Officer in communications and personnel assignments. She holds a
Bachelor of Arts Degree from the University of Nebraska.
MARK L. WALTHER, 36, Executive Vice President, General Counsel and Assistant
Secretary.
Mr. Walther joined NAPICO in 1987 and is responsible for the legal affairs of
the NAPICO sponsored limited partnerships. Prior to joining NAPICO, Mr.
Walther worked in the San Francisco law firm of Browne and Kahn which
specialized in construction litigation. Mr. Walther received his Bachelor of
Arts Degree in Political Science from the University of California, Santa
Barbara and is a graduate of the University of California, Davis, School of
Law. He is a member of the State Bar of Hawaii.
<PAGE> 83
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> 84
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, 1996 and 1995.
Consolidated Statements of Operations for the years ended December 31, 1996,
1995 and 1994
Consolidated Statements of Partners' Equity (Deficiency) for the years ended
December 31, 1996, 1995 and 1994.
Consolidated Statements of Cash Flows for the years ended December 31, 1996,
1995 and 1994.
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, 1996, 1995 and
1994.
Schedule III - Real Estate and Accumulated Depreciation, December 31, 1996.
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
#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 ____.
REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the year ended December 31, 1996.
<PAGE> 85
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 VI
By: NATIONAL PARTNERSHIP INVESTMENTS CORP.
The General Partner
- ---------------------------------------------
Charles H. Boxenbaum
Chairman of the Board of Directors
and Chief Executive Officer
- ---------------------------------------------
Bruce E. Nelson
Director and President
- ---------------------------------------------
Alan I. Casden
Director
- ---------------------------------------------
Henry C. Casden
Director
- ---------------------------------------------
Brian D. Goldberg
Director
- ---------------------------------------------
Shawn D. Horwitz
Executive Vice President and
Chief Financial Officer
- ---------------------------------------------
Bob E. Schafer
Senior Vice President and Corporate Controller
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 5,849,983
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,849,983
<PP&E> 5,665,419
<DEPRECIATION> 2,506,949
<TOTAL-ASSETS> 15,286,368
<CURRENT-LIABILITIES> 47,372
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> (1,128,437)
<TOTAL-LIABILITY-AND-EQUITY> 15,286,368
<SALES> 0
<TOTAL-REVENUES> 2,578,466
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,386,758
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,295,090
<INCOME-PRETAX> 1,798,640
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,798,640
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,798,640
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
