SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/_x_/ Quarterly report pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934.
For the quarterly period ended September 30, 1998
/___/ Transition report pursuant to Section 13 or 15(d) of the
Securities Act of 1934
for the transition period from ______________ to ________________.
Commission File Number 2-83291
DSI REALTY INCOME FUND VII, A California Limited Partnership
(Exact name of registrant as specified in its charter)
California_______________________________________95-3871044
(State or other jurisdiction of (I.R.S. Employer
incorporation) Identification No.)
6700 E. Pacific Coast Hwy, Long Beach, California 90801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code-(562)493-8881
_________________________________________________________________
Former name, former address and former fiscal year, if changed
since last report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for 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__.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The information required by Rule 10-01 of Regulation S-X is
included in the Quarterly Report to the Limited Partners of Registrant for
the period ended September 30, 1998 which is attached hereto as Exhibit "20"
and incorporated herein by this reference.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Registrant incorporates by this reference its Quarterly Report to
Limited Partners for the period ended September 30, 1998.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8K.
(a) Attached hereto as Exhibit "20" is Registrant's Quarterly
Report to Limited Partners for the period ended September 30, 1998.
(b) Registrant did not file any reports on Form 8-K for the
period reported upon.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: October 31, 1998 DSI REALTY INCOME FUND VII
A California Limited Partnership
(Registrant)
By____\s\ Robert J. Conway_____
DSI Properties, Inc., as General
Partner by ROBERT J. CONWAY,
President and Chief Financial Officer
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
Dated: October 31, 1998 DSI REALTY INCOME FUND VII
A California Limited Partnership
(Registrant)
By__\s\ Robert J. Conway________
DSI Properties, Inc., as General
Partner by ROBERT J. CONWAY,
President and Chief Financial Officer
October 31, 1998
QUARTERLY REPORT TO THE LIMITED PARTNERS
OF DSI REALTY INCOME FUND VII
DEAR LIMITED PARTNERS:
We are pleased to enclose the Partnership's unaudited financial statements
for the period ended September 30, 1998. The following is Management's
discussion and analysis of the Partnership's financial condition and
results of its operations.
For the three month periods ended September 30, 1998 and 1997, total revenues
increased 11.5% from $500,523 to $557,846 and total expenses increased 11.1%
from $349,716 to $388,467. As a result, net income increased 12.3% from
$150,807 for the three-month period ended September 30, 1997, to $169,379 for
the same period in 1998. Rental revenue increased as a result of higher
occupancy and unit rental rates. Operating expenses increased approximately
$38,000 (12.2%) as a result of increases in yellow pages advertising costs,
maintenance and repair, real estate tax and salaries and wage expenses.
General and administrative expenses remained constant. Occupancy levels for
the Partnership's six mini-storage facilities averaged 89.2% for the three-
month period ended September 30, 1998, and 87.6% for the same period in 1997.
The Partnership is continuing its marketing efforts to attract and keep new
tenants in its various mini-storage facilities.
For the nine month periods ended September 30, 1998, and 1997 total revenues
increased 10.6% from $1,462,813 to $1,617,793 and total expenses increased
3.1% from $1,109,904 to $1,144,235. As a result, net income increased 34.2%
from $352,909 for the nine months ended September 30, 1997, to $473,558 for
the same period in 1998. Rental revenue increased primarily as a result of
higher unit rental rates during the nine months of the period. Operating
expenses increased approximately $20,900 (2.2%) primarily due to increases in
yellow pages advertising costs, property management fees, real estate tax
and salaries and wage expenses, partially offset by a decrease in maintenance
and repair expenses. Property management fees, which are based on rental
income, increased as a result of the increase in rental revenue. General and
administrative expenses increased approximately $13,400 (9.5%) primarily as
a result of an increase in incentive management fees. Incentive management
fees, which are based on cash available for distribution, increased as a result
of the increase in net income.
The General Partners will continue their policy of funding improvements and
maintenance of Partnership properties with cash generated from operations.
The Partnership's financial resources appear to be adequate to meet its needs.
The General Partners anticipate distributions to the Limited Partners
to remain at the current level for the foreseeable future.
The Year 2000 issue refers to the inability of certain computer systems to
recognize a date using "00" as the Year 2000. The Partnership has implemented
a Year 2000 program, which has three phases: (1) identification;
(2) remediation; and (3) testing and verification. The Partnership, as well
as the property management company and the Partnership's warehouse facilities
have completed those phases. Computer programs have been upgraded and tested
to function properly with respect to the dates in the Year 2000 and thereafter.
Year 2000 compliance costs are nominal and have been expensed in the regular
course of business. The Partnership provides no assurance that third-party
suppliers and customers will be compliant. Nevertheless, the Partnership does
not believe that the Year 2000 issue will have a material adverse effect on
its financial condition or results of operations.
We are not enclosing a copy of the Partnership Form 10-Q as filed with the
Securities and Exchange Commission since all the information set forth
therein is contained either in this letter or in the attached financial
statements. However, if you wish to receive a copy of said report, please
send a written request to DSI Realty Income Fund VII, P.O. Box 357,
Long Beach, California 90801.
Very truly yours,
DSI REALTY INCOME FUND VII
By: DSI Properties, Inc., as
General Partner
By /s/ Robert J. Conway
____________________________
ROBERT J. CONWAY, President
DSI REALTY INCOME FUND VII
(A California Real Estate Limited Partnership)
BALANCE SHEETS(UNAUDITED)
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
<S> <C> <C>
ASSETS
CASH AND CASH EQUIVALENTS $ 638,498 $ 500,294
PROPERTY 2,799,431 3,181,412
OTHER ASSETS 62,752 37,660
TOTAL $3,500,681 $3,719,366
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES $ 579,173 $ 544,144
PARTNERS' EQUITY:
General Partners (78,551) (76,015)
Limited Partners 3,000,059 3,251,237
Total partners' equity 2,921,508 3,175,222
TOTAL $3,500,681 $3,719,366
See accompanying notes to financial statements (unaudited).
</TABLE>
STATEMENTS OF INCOME (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
<TABLE>
<CAPTION>
September 30, September 30,
1998 1997
<S> <C> <C>
REVENUES:
Rental Income $ 554,104 $ 498,008
Interest 3,742 2,515
Total revenues 557,846 500,523
EXPENSES:
Operating Expenses 350,881 312,840
General and administrative 37,586 36,876
Total expenses 388,467 349,716
NET INCOME $ 169,379 $ 150,807
AGGREGATE NET INCOME ALLOCATED TO:
Limited partners $ 167,685 $ 149,299
General partners 1,694 1,508
TOTAL $ 169,379 $ 150,807
NET INCOME PER LIMITED
PARTNERSHIP UNIT $ 6.99 $ 6.22
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 24,000 24,000
See accompanying notes to financial statements (unaudited).
</TABLE>
STATEMENTS OF INCOME (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
<TABLE>
<CAPTION>
September 30, September 30,
1998 1997
<S> <C> <C>
REVENUES:
Rental Income $1,607,726 $1,455,385
Interest 10,067 7,428
Total Revenues 1,617,793 1,462,813
EXPENSES:
Operating Expenses 989,595 968,702
General and administrative 154,640 141,202
Total expenses 1,144,235 1,109,904
NET INCOME $473,558 $352,909
AGGREGATE NET INCOME ALLOCATED TO:
Limited partners 468,822 349,380
General partners 4,736 3,529
TOTAL 473,558 352,909
NET INCOME PER LIMITED
PARTNERSHIP UNIT $19.53 $14.56
LIMITED PARTNERSHIP UNITS
USED IN PER UNIT CALCULATION 24,000 24,000
See accompanying notes to financial statements (unaudited).
</TABLE>
STATEMENTS OF CHANGES IN PARTNERS' EQUITY (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
<TABLE>
<CAPTION>
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
<S> <C> <C> <C>
EQUITY AT JANUARY 1, 1997 ($ 71,568) $3,691,570 $3,620,002
NET INCOME 3,529 349,380 352,909
DISTRIBUTIONS (7,272) (720,000) (727,272)
EQUITY AT SEPTEMBER 30, 1997 ($75,311) $3,320,950 $3,245,639
EQUITY AT JANUARY 1, 1998 ($76,015) $3,251,237 $3,175,222
NET INCOME 4,736 468,822 473,558
DISTRIBUTIONS (7,272) (720,000) (727,272)
EQUITY AT SEPTEMBER 30, 1998 ($78,551) $3,000,059 $2,921,508
See accompanying notes to financial statements(unaudited).
</TABLE>
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
<TABLE>
<CAPTION>
September 30, September 30,
1998 1997
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 473,558 $ 352,909
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 381,981 381,981
Changes in assets and
liabilities:
Increase in other assets (25,092) (20,666)
Increase in liabilities: 35,029 13,029
Net cash provided by
operating activities 865,476 727,853
CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions to partners (727,272) (727,272)
NET INCREASE IN CASH AND
CASH EQUIVALENTS 138,204 581
CASH AND CASH EQUIVALENTS:
At beginning of period 500,294 481,301
At end of period $ 638,498 $ 481,882
See accompanying notes to financial statements(unaudited).
</TABLE>
DSI REALTY INCOME FUND VII
(A California Real Estate Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
DSI Realty Income Fund VII (the "Partnership"), has two general partners
(DSI Properties, Inc., and Diversified Investors Agency) and limited
partners owning 24,000 limited partnership units. The Partnership was formed
under the California Uniform Limited Partnership Act for the primary purpose
of acquiring and operating real estate.
The accompanying financial information as of September 30, 1998, and for
the periods ended September 30, 1998, and 1997 is unaudited. Such financial
information includes all adjustments which are considered necessary by the
Partnership's management for a fair presentation of the results for the
periods indicated.
2. PROPERTY
Properties owned by the Partnership are all mini-storage facilities.
Depreciation is calculated using the straight line method over the
estimated useful life of 15 years. The total cost of property and
accumulated depreciation at September 30, 1998, is as follows:
<TABLE>
<S> <C>
Land $ 2,089,800
Buildings and equipment 7,662,434
Equipment 55,058
Total 9,807,292
Less: Accumulated Depreciation ( 7,007,861)
Property - Net $ 2,799,431
</TABLE>
3. NET INCOME PER LIMITED PARTNERSHIP UNIT
Net income per limited partnership unit is calculated by dividing the net
income allocated to the limited partners by the number of limited
partnership units outstanding during the period.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1998
<PERIOD-END> SEP-30-1998 DEC-31-1998
<CASH> 638498 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 9807292 0
<DEPRECIATION> 7007861 0
<TOTAL-ASSETS> 3500681 0
<CURRENT-LIABILITIES> 0 0
<BONDS> 0 0
<COMMON> 0 0
0 0
0 0
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 3500681 0
<SALES> 1607726 0
<TOTAL-REVENUES> 1617793 0
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 473558 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 473558 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 473558 0
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
