CAPITAL REALTY INVESTORS IV LIMITED PARTNERSHIP, 10-Q, 1997-07-23

CAPITAL REALTY INVESTORS IV LIMITED PARTNERSHIP
10-Q, 1997-07-23
OPERATORS OF APARTMENT BUILDINGS

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<PAGE>

FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the Quarter Ended June 30, 1997
-------------

Commission file number 0-13523
-------------

CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP
- --------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Maryland 52-1328767
- ----------------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

11200 Rockville Pike, Rockville, Maryland 20852
- ----------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)

(301) 468-9200
- -------------------------------------------------------------------------
(Registrant's telephone number, including area code)

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 and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

Class Outstanding at June 30, 1997
- ---------------------------------- ----------------------------------
(Not applicable) (Not applicable)
<PAGE>
CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

INDEX TO FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 1997

Page
----

PART I. Financial Information (Unaudited)

Item 1. Financial Statements

Consolidated Balance Sheets - June 30, 1997 and
December 31, 1996 . . . . . . . . . . . . . . . . 1

Consolidated Statements of Operations - for the
three and six months ended June 30, 1997 and 1996 2

Consolidated Statements of Cash Flows - for the
six months ended June 30, 1997 and 1996 . . . . . 3

Notes to Consolidated Financial Statements . . . . 4

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . 13

PART II. Other Information

Item 3. Defaults upon Senior Securities . . . . . . . . . . 21

Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 21

Signature . . . . . . . . . . . . . . . . . . . . . . . . . 22

Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . 23
<PAGE>
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
--------------------

CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS

ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------- ------------
(Unaudited)
<S> <C> <C>
Investments in and advances to partnerships $ 30,663,512 $ 30,456,822
Cash and cash equivalents 9,435,327 8,871,297
Restricted cash equivalents 50,400 585,810
Assets held for sale 35,350 --
Acquisition fees, principally paid to related parties, net of
accumulated amortization of $364,080 and $358,374, respectively 785,683 819,825
Property purchase costs, net of accumulated amortization of
$353,246 and $346,512, respectively 747,334 777,328
Other assets 29,631 37,157
------------- -------------
Total assets $ 41,747,237 $ 41,548,239
============= =============

LIABILITIES AND PARTNERS' DEFICIT

Due on investments in partnerships, net of unamortized discount
on purchase money notes of $14,366,633 and $16,874,671, respectively $ 28,865,871 $ 26,931,672
Accrued interest payable 83,274,611 78,413,302
Accounts payable and accrued expenses 116,375 99,062
Consulting fees payable to related parties 8,869 8,869
------------- -------------
Total liabilities 112,265,726 105,452,905
------------- -------------

Commitments and contingencies

Partners' capital (deficit):

Capital paid-in:
General Partners 2,000 2,000
Limited Partners 73,501,500 73,501,500
------------- -------------
73,503,500 73,503,500
Less:
Accumulated distributions to partners (5,451,702) (5,451,702)
Offering costs (7,562,894) (7,562,894)
Accumulated loss (131,007,393) (124,393,570)
------------- -------------
Total partners' deficit (70,518,489) (63,904,666)
------------- -------------
Total liabilities and partners' deficit $ 41,747,237 $ 41,548,239
============= =============
</TABLE>

The accompanying notes are an integral part
of these consolidated financial statements.

-1-
<PAGE>
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
--------------------

CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
<TABLE>
<CAPTION>
For the three months ended For the six months ended
June 30, June 30,
----------------------------- -----------------------------
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Share of income from partnerships $ 963,509 $ 340,623 $ 1,139,618 $ 547,367
------------- ------------- ------------- -------------
Other revenue and expenses:

Revenue:
Interest and other income 122,058 112,547 259,053 300,867
------------- ------------- ------------- -------------
Expenses:
Interest 3,809,045 3,980,014 7,662,161 7,979,328
Management fee 93,750 93,750 187,500 187,500
General and administrative 41,630 37,542 83,761 73,527
Professional fees 24,985 26,173 50,286 54,878
Amortization 14,393 15,848 28,786 31,696
------------- ------------- ------------- -------------
3,983,803 4,153,327 8,012,494 8,326,929
------------- ------------- ------------- -------------
Total other revenue and expenses (3,861,745) (4,040,780) (7,753,441) (8,026,062)
------------- ------------- ------------- -------------
Loss before gain on disposition of investment in partnerships (2,898,236) (3,700,157) (6,613,823) (7,478,695)

Gain on disposition of investment in partnerships -- -- -- 2,853,278
------------- ------------- ------------- -------------
Loss before extraordinary gain from extinguishment of debt (2,898,236) (3,700,157) (6,613,823) (4,625,417)

Extraordinary gain from extinguishment of debt -- -- -- 1,502,698
------------- ------------- ------------- -------------
Net loss (2,898,236) (3,700,157) (6,613,823) (3,122,719)

Accumulated losses, beginning of period (128,109,157) (130,161,539) (124,393,570) (130,738,977)
------------- ------------- ------------- -------------
Accumulated losses, end of period $(131,007,393) $(133,861,696) $(131,007,393) $(133,861,696)
============= ============= ============= =============
Loss allocated to General Partners (1.51%) $ (43,764) $ (55,872) $ (99,869) $ (47,153)
============= ============= ============= =============
Loss allocated to Initial and Special Limited Partners (1.49%) $ (43,183) $ (55,133) $ (98,546) $ (46,529)
============= ============= ============= =============
Loss allocated to Additional Limited Partners (97%) $ (2,811,289) $ (3,589,152) $ (6,415,408) $ (3,029,037)
============= ============= ============= =============
Loss per unit of Additional Limited Partnership Interest
based on 73,500 units outstanding $ (38.24) $ (48.83) $ (87.28) $ (41.21)
============= ============= ============= =============
</TABLE>

The accompanying notes are an integral part
of these consolidated financial statements.

-2-
<PAGE>
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
--------------------

CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
<TABLE>
<CAPTION>
For the six months ended
June 30,
-----------------------------
1997 1996
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (6,613,823) $ (3,122,719)

Adjustments to reconcile net loss to net cash
used in operating activities:
Share of income from partnerships (1,139,618) (547,367)
Decrease (increase) in accrued interest receivable on advances to partnerships 2,738 (9,269)
Amortization of deferred costs 28,786 31,696
Amortization of discount on purchase money notes 2,508,038 2,182,479
Gain on disposition of investment in partnerships -- (2,853,278)
Extraordinary gain from extinguishment of debt -- (1,502,698)
Payment of purchase money note interest (292,814) (273,908)

Changes in assets and liabilities:
Decrease (increase) in other assets 7,526 (4,359)
Increase in accrued interest payable 5,154,124 5,796,849
Increase (decrease) in accounts payable and accrued expenses 17,313 (4,905)
------------ ------------
Net cash used in operating activities (327,730) (307,479)
------------ ------------

Cash flows from investing activities:
Receipt of distributions from partnerships 849,449 560,941
Repayment of advances to partnerships 80,740 67,239
Decrease in restricted cash equivalents 535,410 --
Net proceeds from disposition of investment in partnerships -- 4,333,142
------------ ------------
Net cash provided by investing activities 1,465,599 4,961,322
------------ ------------

Cash flows from financing activities:
Payment of purchase money note principal (42,739) (8,865)
Pay-off of purchase money notes and related interest (531,100) (3,296,401)
------------ ------------
Net cash used in financing activities (573,839) (3,305,266)
------------ ------------
Net increase in cash and cash equivalents 564,030 1,348,577
Cash and cash equivalents, beginning of period 8,871,297 6,801,118
------------ ------------
Cash and cash equivalents, end of period $ 9,435,327 $ 8,149,695
============ ============
</TABLE>

The accompanying notes are an integral part
of these consolidated financial statements.

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<PAGE>
CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION

In the opinion of C.R.I., Inc. (CRI), the Managing General Partner, the
accompanying unaudited consolidated financial statements of Capital Realty
Investors-IV Limited Partnership (the Partnership) contain all adjustments of a
normal recurring nature necessary to present fairly the Partnership's
consolidated financial position as of June 30, 1997 and December 31, 1996 and
the consolidated results of its operations for the three and six months ended
June 30, 1997 and 1996 and its consolidated cash flows for the six months ended
June 30, 1997 and 1996.

These unaudited financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in consolidated financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. While the Managing General Partner believes
that the disclosures presented are adequate to make the information not mis-
leading, it is suggested that these consolidated financial statements be read in
conjunction with the consolidated financial statements and the notes included in
the Partnership's Annual Report filed on Form 10-K for the year ended December
31, 1996.

Certain amounts in the 1996 financial statements have been reclassified to
conform to the 1997 presentation.

2. INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS

The Partnership's obligations with respect to its investments in Local
Partnerships, in the form of purchase money notes having a principal balance of
$43,232,504 (exclusive of unamortized discount on purchase money notes of
$14,366,633) plus accrued interest of $83,274,611 as of June 30, 1997, are
payable in full upon the earliest of: (i) sale or refinancing of the respective
Local Partnership's rental property; (ii) payment in full of the respective
Local Partnership's permanent loan; or (iii) maturity. Purchase money notes in
an aggregate principal amount of $1,370,000 matured in 1994 but have not been
paid, as discussed below. Purchase money notes in an aggregate principal amount
of $1,330,000 mature on August 31, 1997, as discussed below. Purchase money
notes originally due to mature on September 1, 1999, were retired at a discount
on January 2, 1997, in connection with the terms of an escrow agreement, as
discussed below. The remaining purchase money notes mature from 1999 to 2025.
The purchase money notes are generally secured by the Partnership's interest in
the respective Local Partnerships. There is no assurance that the underlying
properties will have sufficient appreciation and equity to enable the
Partnership to pay the purchase money notes' principal and accrued interest when
due. If a purchase money note is not paid in accordance with its terms, the
Partnership will either have to renegotiate the terms of repayment or risk
losing its partnership interest in the Local Partnership. The Managing General
Partner is continuing to investigate possible alternatives to reduce the
Partnership's long-term debt obligations. These alternatives include, among
others, retaining the cash available for distribution to meet the purchase money
note requirements, buying out certain purchase money notes at a discounted
price, extending the due dates of certain purchase money notes, or refinancing
the respective properties' underlying debt and using the Partnership's share of
the proceeds to pay off or buy down certain purchase money note obligations.

-4-
<PAGE>
CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

Interest expense on the Partnership's purchase money notes for the three
and six months ended June 30, 1997 was $3,809,045 and $7,662,161 respectively,
and by $3,980,014 and $7,979,328 during the three and six months ended June 30,
1996, respectively. Amortization of the imputed interest on purchase money
notes increased interest expense during the three and six months ended June 30,
1997 by $1,124,660 and $2,508,038, respectively, and by $1,091,239 and
$2,182,479 during the three and six months ended June 30, 1996, respectively.
The accrued interest on the purchase money notes of $83,274,611 and $78,413,302
as of June 30, 1997 and December 31, 1996, respectively, is due on the
respective maturity dates of the purchase money notes or earlier, in some
instances, if the pertinent Local Partnership has distributable net cash flow,
as defined in the relevant Local Partnership agreements.

Purchase money notes plus accrued interest relating to Redden Development
Company (Redden Gardens) in the principal amount of $1,330,000 mature on August
31, 1997. The Managing General Partner proposed a five year extension on the
purchase money notes. This offer was rejected by the purchase money note
holders, and the Managing General Partner anticipates receiving a counter offer
from the purchase money note holders. No agreement has been reached as of July
18, 1997. There is no assurance that an agreement will be reached.
Accordingly, there can be no assurance that the Partnership will be able to
retain its interest in the Local Partnership. The uncertainty about the
continued ownership of the Partnership's interest in the related Local
Partnership does not impact the Partnership's financial condition because the
related purchase money note is nonrecourse and secured solely by the
Partnership's interest in the Local Partnership. Therefore, should the
investment in Redden Gardens not produce sufficient value to satisfy the
purchase money notes related to Redden Gardens, the Partnership's exposure to
loss is limited since the amount of the nonrecourse indebtedness exceeds the
carrying amount of the investment in and advances to the Local Partnership.
Thus, even a complete loss of this investment would not have a material impact
on the operations of the Partnership.

On May 22, 1992, Clearfield Hills I Limited Partnership (Clearfield Hills
I) filed a notice of intent to participate under the Low Income Housing
Preservation and Resident Homeownership Act of 1990 (LIHPRHA). The sale of the
property was completed on February 6, 1996. The sale price of approximately
$3.2 million generated sufficient proceeds to the Partnership to retire, at a
discount, the purchase money note obligation of the Partnership with respect to
such property, which matured on October 30, 1994. The sale provided proceeds to
the Partnership in excess of its investment in the Local Partnership, and
resulted in a net financial statement gain in 1996 of approximately $1.8
million, of which approximately $50,000 resulted from the retirement of the
purchase money note obligation with respect to the property. The federal tax
gain was approximately $2.4 million.

On March 1, 1994, New Village Apartments North (Village North) filed a
notice of intent to participate under the LIHPRHA program. The sale of the
property was completed on February 6, 1996. The sale price of approximately
$2.86 million generated sufficient proceeds to the Partnership to retire, at a
discount, the purchase money note obligation of the Partnership with respect to
such property, which matured on September 27, 1994. The sale provided proceeds
to the Partnership in excess of its investment in the Local Partnership, and
resulted in a net financial statement gain in 1996 of approximately $2.6
million, of which approximately $1.5 million resulted from the retirement of the

-5-
<PAGE>
CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

purchase money note obligation with respect to the property. The federal tax
gain was approximately $3.3 million.

On September 19, 1996, the local general partner of New Forest Park
Associates Limited Partnership (Forest Park) sold the property under the LIHPRHA
program. In connection with the sale of Forest Park, the Partnership purchased
a certificate of deposit in the principal amount of $531,100 which was held in
escrow until January 2, 1997, at which time all principal and interest accrued
thereon up to three percent per annum was used to retire the Partnership's
remaining purchase money note obligation with respect to Forest Park. All
interest that accrued on the certificate of deposit in excess of three percent
per annum was received by the Partnership. Accordingly, the accompanying
financial statements include $535,410 of restricted cash equivalents as of
December 31, 1996, which represents the remaining principal and interest which
was paid on January 2, 1997, in accordance with the escrow agreement.

The Partnership defaulted on its purchase money note relating to Holiday
Village Apartments on July 27, 1994 when the note matured and was not paid. The
defaulted amount included principal and accrued interest of $1,370,000 and
$2,862,342, respectively. As of July 23, 1997, principal and accrued interest
totalling $1,370,000 and $4,558,803, respectively, were due. In June 1994, an
offer was made to extend the maturity date of this note to coincide with the
potential refinancing of the first mortgage. There is no assurance that a
refinancing of the first mortgage will be obtained. The Managing General
Partner and the noteholder continue to negotiate settlement options, and as of
July 23, 1997, negotiations between the Managing General Partner and the
noteholder were ongoing. There is no assurance that an agreement will be
reached. Should the noteholder begin foreclosure proceedings on the
Partnership's interest in the related Local Partnership, the Partnership intends
to vigorously defend any action by the noteholder. However, there is no
assurance that the Partnership will be able to retain its interest in the Local
Partnership. The uncertainty about the continued ownership of the Partnership's
interest in the related Local Partnership does not impact the Partnership's
financial condition because the related purchase money note is nonrecourse and
secured solely by the Partnership's interest in the Local Partnership.
Therefore, should the investment in Holiday Village Apartments not produce
sufficient value to satisfy the related purchase money note, the Partnership's
exposure to loss is limited since the amount of the nonrecourse indebtedness
exceeds the carrying amount of the investment in and advances to the Local
Partnership. Thus, even a complete loss of this investment would not have a
material impact on the operations of the Partnership.

-6-
<PAGE>
CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

accounts related to Second Lakewood. Additionally, on July 11, the Partnership
received $154,536 representing the release of the property's real estate tax
escrows. The Partnership anticipates that additional funds may be received
related to the closing out of the property's remaining accounts. The proceeds
received at and subsequent to closing are in excess of the Partnership's
investment in the Local Partnership and will result in a net financial statement
gain of approximately $1.9 million. The federal tax gain is estimated to be
approximately $10.9 million.

In 1989, Second Lakewood was experiencing rent losses due to units being
taken off the market because of roof leakage. The Partnership advanced a total
of $750,000 during 1990 to fund roof replacement in order to maintain the
marketability and income of the property. As of June 30, 1997 and December 31,
1996, the outstanding loan to Second Lakewood totalled $0 and $80,740,
respectively. Accrued interest on the loan was $0 and $2,738 as of June 30,
1997 and December 31, 1996, respectively.

Valley Vista Apartments (Valley Vista), a 124 unit high rise apartment
located in Syracuse, New York, filed a Notice of Intent to participate in the
LIHPRHA program with the U.S. Department of Housing and Urban Development (HUD)
in November 1992. After a series of delays, Valley Vista was accepted into the
LIHPRHA program on September 2, 1993. Due to unforseen delays in determining a
final property valuation, Valley Vista was removed from the Preservation Funding
Queue (a mechanism for allocating available LIHPRHA funds). In June 1997,
Congress approved the 1997 Emergency Supplemental Appropriations Act for
Recovery from National Disasters, and for Overseas Peacekeeping Efforts,
including those in Bosnia. This Act included $3.5 million to process the
refinancing of Valley Vista's mortgage loan under the Capital Grant's program.
Closing is expected on the refinancing during the third quarter of 1997.

The letter of credit related to the tax-exempt bonds on Lakes of Northdale,
which originally matured in June 1995, had been extended to February 15, 1996.
The letter of credit fee increased from its previous level of 1% per annum to a
maximum of 4% per annum in October 1995. During June 1996, the Local
Partnership received a new letter of credit with a three-year term and a three-
year renewal option. In conjunction with the new letter of credit, the
Partnership successfully negotiated with the holder of the related purchase
money note to extend the term thereof to that of the letter of credit.

The Managing General Partner is currently negotiating with the purchase
money note holders related to Jewish Federation Apartments Associates (Jewish
Federation) to extend the maturity dates of the associated purchase money notes
for an additional five years. The purchase money notes, which aggregate a
principal amount of $1.3 million, are due to mature on October 31, 1999. There
is no assurance that an agreement will be reached with the purchase money note
holders.

The report of the auditors on the financial statements of Garden Court
Associates Limited Partnership (Garden Court) for the year ended December 31,
1996 indicated that substantial doubt exists about the ability of the Local

-7-
<PAGE>
CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

Partnership to continue as a going concern due to negative cash flow resulting
from decreasing occupancy levels. As of June 30, 1997, Garden Court reported a
net operating loss of approximately $42,000 for 1997 and a 65% occupancy level.
Garden Court has been accruing management fees payable to the local managing
general partner in order to remain current on the mortgage related to the
property. The local managing general partner expects to meet with the lender
and HUD, the insurer of the mortgage, to discuss possible alternatives to
address cash flow issues at the property. The Partnership's investment in
Garden Court was previously reduced to zero as a result of losses from the Local
Partnership during prior years. In addition, the Partnership did not issue any
purchase money notes or debt instruments in connection with its investment in
Garden Court. Therefore, the uncertainty about the Local Partnership's
continued ownership of the property does not impact the Partnership's financial
condition. Furthermore, the complete loss of this investment would not have a
material impact on the operations of the Partnership.

The Managing General Partner is currently negotiating an extension on the
purchase money notes related to Highland Village. The purchase money notes,
which aggregate a principal amount of $1.1 million are due to mature on October
31, 1999. In connection with the proposed extension of the purchase money
notes, the Managing General Partner, the local managing general partner and the
purchase money note holders are jointly exploring various options to refinance
the MHFA and HUD Section 236 interest rate subsidized mortgage loan related to
this property. There is no assurance that the noteholders will agree to an
extension on the purchase money notes, or that a refinancing of the mortgage
loan will be obtained.

Some of the rental properties owned by the Local Partnerships have
mortgages which are federally insured under Section 236 or Section 221(d)(3)of
the National Housing Act, as amended. LIHPRHA, which provided property owners
with restricted opportunities to sell low income housing, ended effective
September 30, 1996. However, HUD received approximately $175 million to fund
sales of qualifying properties under the LIHPRHA program during the federal
government's fiscal year 1997, which began October 1, 1996. Continued funding
of the LIHPRHA program after fiscal year 1997 is uncertain. There is no
assurance that a sale of any properties that previously qualified under the
LIHPRHA program will occur.

Some of the rental properties owned by the Local Partnerships are financed
by state housing agencies. The Managing General Partner has been working to
develop strategies to sell or refinance certain properties pursuant to programs
developed by these agencies or other potential buyers. These programs may
include opportunities to sell the property to a qualifying purchaser who would
agree to maintain the property as low to moderate income housing in perpetuity,
or to refinance the property, or to obtain supplemental financing. The Managing
General Partner continues to monitor certain state housing agency programs
and/or programs provided by certain lenders, to ascertain whether the properties
would qualify within the parameters of a given program and whether these
programs would provide an appropriate economic benefit to the limited partners
of the Partnership.

-8-
<PAGE>
CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

contained proposals that have come to be known as "Mark-to-Market". Congress,
HUD and the Clinton Administration continue to struggle with the Mark-to-Market
initiative. This initiative was intended to deal with HUD's increasing burden
of funding HAP contracts. Under the initiative, HUD would eliminate the
project-based subsidy and provide the residents with "sticky vouchers" which
would allow residents to move to other developments should they so choose. The
initiative will impact those properties that have HAP contracts with shorter
terms than that of the underlying property mortgage. For instance, some
properties may have a 20-year HAP contract while the underlying mortgage has a
40-year term. In the interim, Congress has authorized one-year extensions for
properties with HAP contracts expiring during the government's fiscal year 1997,
which began October 1, 1996. In light of recent political scrutiny of
appropriations for HUD programs, a one year extension of Section 8 HAP contracts
expiring during the government's fiscal year 1998 is possible, however, such an
extension, and continued funding of annual renewals for Section 8 HAP contracts
expiring after fiscal year 1998 is uncertain. The Section 8 HAP contracts for
the following properties expire during the government's fiscal year 1998:

-9-
<PAGE>
CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

<TABLE>
<CAPTION>
Units
Authorized for Expiration of
Number of Rental Assistance Section 8
Property Rental Units Under Section 8 HAP Contract
-------- ------------ ----------------- -------------
<S> <C> <C> <C>
Chippewa County 109 108 07/14/98
Cottonwood Park 126 6 06/30/98
Holiday Village 80 6 06/01/98
Matthew XXV 95 95 06/18/98
Pilgrim Tower North 258 205 10/31/97
Redden Gardens 150 29 09/30/98
Tradewinds Terrace 122 52 09/30/98
Westport Village 121 12 01/01/98

</TABLE>

With the potential elimination of the Section 8 HAP contracts, there is no
assurance that these rental properties would be able to maintain the rental
income and occupancy levels necessary to pay operating costs and debt service.

With the ending of the LIHPRHA program and with the uncertainty surrounding
renewals of expiring Section 8 HAP contracts, the Managing General Partner is
developing new strategies to deal with the ever changing environment of
affordable housing policy. Section 236 and Section 221(d)(3) properties that
are in the 18th year of their mortgage may be eligible for pre-payment of the
mortgage. Properties with expiring Section 8 HAP contracts may become
convertible to market-rate apartment properties. Currently, there are a few
lenders that will provide financing either to prepay the existing mortgage or
provide additional funds to allow the property to convert to market rate units.
Where opportunities exist, the Managing General Partner will continue to work
with the Local Partnerships to develop a strategy that makes economic sense for
all parties involved.

The following are combined statements of operations for the thirty-eight
and forty-three Local Partnerships in which the Partnership had invested as of
June 30, 1997 and 1996, respectively. The 1996 statements contain information
on Clearfield Hills I and Village North through the date of sale. The state-
ments are compiled from information supplied by the management agents of the
projects and are unaudited.

-10-
<PAGE>
CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

COMBINED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>

For the three months ended For the six months ended
June 30, June 30,
----------------------------- -----------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue:
Rental revenue $ 9,196,035 $ 9,799,585 $ 18,360,167 $ 19,559,928
Other 567,695 509,370 1,138,780 1,068,751
------------ ------------ ------------ ------------
9,763,730 10,308,955 19,498,947 20,628,679
------------ ------------ ------------ ------------
Expenses:
Operating 5,619,590 6,319,800 11,727,779 12,754,594
Interest 1,886,105 1,991,938 3,772,208 3,984,918
Depreciation and amortization 1,907,005 2,007,456 3,814,010 4,026,497
------------ ------------ ------------ ------------
9,412,700 10,319,194 19,313,997 20,766,009
------------ ------------ ------------ ------------
Net gain (loss) $ 351,030 $ (10,239) $ 184,950 $ (137,330)
============ ============ ============ ============

</TABLE>

As of June 30, 1997 and December 31, 1996, the Partnership's share of
cumulative losses of ten and eleven, respectively of the thirty-eight Local
Partnerships exceeds the amount of the Partnership's investments in and advances
to those Local Partnerships by $15,875,254 and $15,165,646, respectively. Since
the Partnership has no further obligation to advance funds or provide financing
to these Local Partnerships, the excess losses have not been reflected in the
accompanying consolidated financial statements.

3. RELATED-PARTY TRANSACTIONS

In accordance with the terms of the Partnership Agreement, the Partnership
is obligated to reimburse the Managing General Partner for its direct expenses
in managing the Partnership. The Partnership paid $22,274 and $43,381 for the
three and six months ended June 30, 1997, respectively, and $23,147 and $59,325
for the three and six months ended June 30, 1996, respectively, as direct
reimbursement of expenses incurred on behalf of the Partnership. Additionally,
the Partnership is obligated to pay an annual incentive management fee
(Management Fee), after all other expenses of the Partnership are paid. The
Partnership paid the Managing General Partner a Management Fee, as discussed
above, of $93,750 and $187,500 for the three and six months ended June 30, 1997
and 1996, respectively.

4. CONTINGENCIES

In 1990, CRI, as Managing General Partner of the Partnership and various
other entities, subcontracted certain property-level asset management functions

-11-
<PAGE>
CAPITAL REALTY INVESTORS-IV LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

4. CONTINGENCIES - Continued

for certain properties to Capital Management Strategies, Inc. (CMS). Among
these properties were properties owned by some of the Local Partnerships in
which the Partnership invested. CMS was formed by Martin C. Schwartzberg, a
nominal general partner of the Partnership and a former stockholder of CRI, when
he retired from CRI and its related businesses as of January 1, 1990. Mr.
Schwartzberg agreed not to act as a general partner with respect to any of the
CRI-sponsored partnerships, including this Partnership, and has not done so
since that time. In late 1995, a dispute arose between CRI and CMS over the
funding level of the 1996 contract for CMS. On November 9, 1995, CRI filed a
complaint against CMS to determine the proper amount of fees to be paid in 1996
under the asset management agreement. CMS answered on January 10, 1996, but
asserted no counterclaims.

Thereafter, Mr. Schwartzberg launched a hostile consent solicitation to be
designated as managing general partner of approximately 125 private partnerships
sponsored by CRI. On January 18, 1996, Mr. Schwartzberg and CMS filed a
complaint in the Circuit Court of Montgomery County, Maryland (the Circuit
Court), against CRI and Messrs. Dockser and Willoughby (who are general partners
of the Partnership) alleging, among other things, that CRI and Messrs. Dockser
and Willoughby breached the asset management agreement pursuant to which Mr.
Schwartzberg's company, CMS, agreed to perform limited functions related to
property-level issues for a portion of CRI's subsidized housing portfolio
(including some of the properties in which the Partnership invested), by
reducing the proposed budget for 1996. The Partnership was not named as a
defendant in this action. Messrs. Dockser and Willoughby entered an answer
denying all of Mr. Schwartzberg's claims. On February 6, 1996, CRI terminated
the CMS contract for cause. (CRI subsequently retained an independent asset
management company to perform functions previously performed by CMS.) Mr.
Schwartzberg and CMS responded to the contract termination by filing a motion
for injunctive relief in the Circuit Court, asking the court to enjoin CRI from
terminating the contract. In a ruling issued on February 12, 1996, the Circuit
Court, among other things, refused to grant the injunction requested by CMS. On
February 12, 1996, the Circuit Court also issued a memorandum opinion and order
enjoining CMS and Mr. Schwartzberg from disclosing information made confidential
under the asset management agreement.

Following subsequent litigation, none of which involved the Partnership, on
June 12, 1996, Mr. Schwartzberg, CRI and others entered an agreement (which
contemplates the execution of a subsequent definitive agreement) to resolve the
disputes between CRI and CMS. The Partnership was not a signatory to the
agreement. As part of the resolution, Mr. Schwartzberg withdrew any derogatory
statements he made about CRI and its principals. Upon execution of the
definitive agreement, Mr. Schwartzberg shall withdraw as a General Partner of
this Partnership and his interest will become that of a Special Limited Partner.
As of July 18, 1997, CRI and Mr. Schwartzberg were unable to agree on the
language of various provisions of the definitive agreement and have agreed to
submit the open issues to arbitration. The Partnership is not a party to the
arbitration proceeding.

-12-
<PAGE>
PART I. FINANCIAL INFORMATION
---------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------

Capital Realty Investors-IV Limited Partnership's (the Partnership)
Management's Discussion and Analysis of Financial Condition and Results of
Operations contains information that may be considered forward looking. This
information contains a number of risks and uncertainties, as discussed herein
and in the Partnership's Annual Report filed on Form 10-K, that could cause
actual results to differ materially.

Financial Condition/Liquidity
----------------------------

The Partnership's liquidity, with unrestricted cash resources of $9,435,327
(or approximately $124.52 per Additional Limited Partner unit) and $8,871,297
(or approximately $117.08 per Additional Limited Partner unit) as of June 30,
1997 and December 31, 1996, respectively, along with anticipated future cash
distributions from the Local Partnerships, is expected to meet its current and
anticipated operating cash needs. As of June 30, 1997, $50,400 of cash
resources was restricted for future interest payments on one of the purchase
money notes. On January 2, 1997 $535,410 of restricted cash resources was used
to retire the Partnership's remaining purchase money note obligation with
respect to the Forest Park property. As of July 18, 1997, there were no
material commitments for capital expenditures.

-13-
<PAGE>
PART I. FINANCIAL INFORMATION
---------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS - Continued
-----------------------------------

18, 1997. There is no assurance that an agreement will be reached.
Accordingly, there can be no assurance that the Partnership will be able to
retain its interest in the Local Partnership. The uncertainty about the
continued ownership of the Partnership's interest in the related Local
Partnership does not impact the Partnership's financial condition because the
related purchase money note is nonrecourse and secured solely by the
Partnership's interest in the Local Partnership. Therefore, should the
investment in Redden Gardens not produce sufficient value to satisfy the
purchase money notes related to Redden Gardens, the Partnership's exposure to
loss is limited since the amount of the nonrecourse indebtedness exceeds the
carrying amount of the investment in and advances to the Local Partnership.
Thus, even a complete loss of this investment would not have a material impact
on the operations of the Partnership.

-14-
<PAGE>
PART I. FINANCIAL INFORMATION
---------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS - Continued
-----------------------------------

totalling $1,370,000 and $4,558,803, respectively, were due. In June 1994, an
offer was made to extend the maturity date of this note to coincide with the
potential refinancing of the first mortgage. There is no assurance that a
refinancing of the first mortgage will be obtained. The Managing General
Partner and the noteholder continue to negotiate settlement options, and as of
July 23, 1997, negotiations between the Managing General Partner and the
noteholder were ongoing. There is no assurance that an agreement will be
reached. Should the noteholder begin foreclosure proceedings on the
Partnership's interest in the related Local Partnership, the Partnership intends
to vigorously defend any action by the noteholder. However, there is no
assurance that the Partnership will be able to retain its interest in the Local
Partnership. The uncertainty about the continued ownership of the Partnership's
interest in the related Local Partnership does not impact the Partnership's
financial condition because the related purchase money note is nonrecourse and
secured solely by the Partnership's interest in the Local Partnership.
Therefore, should the investment in Holiday Village Apartments not produce
sufficient value to satisfy the related purchase money note, the Partnership's
exposure to loss is limited since the amount of the nonrecourse indebtedness
exceeds the carrying amount of the investment in and advances to the Local
Partnership. Thus, even a complete loss of this investment would not have a
material impact on the operations of the Partnership.

The Managing General partner received $1,000 on January 5, 1996 for an
option to purchase the Partnership's limited partner interest in New Second
Lakewood Associates Limited Partnership (Second Lakewood) and an additional
$1,000 on May 3, 1996, to extend the term of the option. Negotiations between
the Managing General Partner and the option holder continued following the
expiration of the option until November 1996, when they were terminated. In
January 1997, the local managing general partner received an offer to purchase
the property from a third party, and a purchase agreement was signed effective
February 17, 1997. On July 2, 1997, Second Lakewood sold the property, a 219-
unit apartment complex located in Schaumberg, Illinois. The sale of the
property generated cash proceeds to the Partnership of approximately $1.7
million at closing. On July 9, 1997, the Partnership received $91,066
representing the release of funds held in security deposit and insurance
accounts related to Second Lakewood. Additionally, on July 11, the Partnership
received $154,536 representing the release of the property's real estate tax
escrows. The Partnership anticipates that additional funds may be received
related to the closing out of the property's remaining accounts. The proceeds
received at and subsequent to closing are in excess of the Partnership's
investment in the Local Partnership and will result in a net financial statement
gain of approximately $1.9 million. The federal tax gain is estimated to be
approximately $10.9 million.

The Partnership closely monitors its cash flow and liquidity position in an
effort to ensure that sufficient cash is available for operating requirements.
For the six months ended June 30, 1997, the receipt of distributions from Local
Partnerships was adequate to support operating cash requirements and the pay-off
of the remaining Forest Park purchase money note obligation, as discussed above.
Cash and cash equivalents increased for the six months ended June 30, 1997
primarily due to cash flow distributions and repayment of advances to
partnerships received by the Partnership from the Local Partnerships during the
period then ended.

-15-
<PAGE>
PART I. FINANCIAL INFORMATION
---------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS - Continued
-----------------------------------

Results of Operations
---------------------

The Partnership's net loss for the three months ended June 30, 1997
decreased from the corresponding period in 1996 primarily due to an increase in
share of income from partnerships resulting from a loan repayment and a cash
flow distribution received from Second Lakewood during 1997 which were in excess
of the Partnership's investment in the property and due to decreased in
operating expenses at two properties. Contributing to the decrease in the
Partnership's net loss was a decrease in interest expense due to the pay-off at
purchase money notes related to properties during 1996.

The Partnership's net loss for the six months ended June 30, 1997 increased
from the corresponding period in 1996 primarily due to the gain on disposition
of investment in partnerships and extraordinary gain on extinguishment of debt
recognized by the Partnership during 1996 related to the sales of Clearfield
Hills I and Village North. Contributing to the increase in the Partnership's
net loss was a decrease in interest income due to the receipt of surplus cash
distributions during 1996 from one former Limited Partnership which had been
sold in 1995. Partially offsetting the increase in the Partnership's net loss
was an increase in share of income from partnerships and a decrease in interest
expense, as discussed above.

For financial reporting purposes, the Partnership, as a limited partner in
the Local Partnerships, does not record losses from the Local Partnerships in
excess of its investment to the extent the Partnership has no further obligation
to advance funds or provide financing to the Local Partnerships. As a result,
the Partnership's recognized losses for the three and six months ended June 30,
1997 did not include losses of $369,791 and $709,608, respectively, compared to
excluded losses of $350,456 and $681,415 for the three and six months ended June
30, 1996, respectively.

-16-
<PAGE>
PART I. FINANCIAL INFORMATION
---------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS - Continued
-----------------------------------

maximum of 4% per annum in October 1995. During June 1996, the Local
Partnership received a new letter of credit with a three-year term and a three-
year renewal option. In conjunction with the new letter of credit, the
Partnership successfully negotiated with the holder of the related purchase
money note to extend the term thereof to that of the letter of credit.

The local managing general partner of Jewish Federation has agreed to
donate a portion of land at the property to an affiliated entity of the local
managing general partner, subject to all necessary governmental approvals.
There can be no assurance that the approvals will be obtained.
The report of the auditors on the financial statements of Garden Court
Associates Limited Partnership (Garden Court) for the year ended December 31,
1996 indicated that substantial doubt exists about the ability of the Local
Partnership to continue as a going concern due to negative cash flow resulting
from decreasing occupancy levels. As of June 30, 1997, Garden Court reported a
net operating loss of approximately $42,000 for 1997 and a 65% occupancy level.
Garden Court has been accruing management fees payable to the local managing
general partner in order to remain current on the mortgage related to the
property. The local managing general partner expects to meet with the lender
and HUD, the insurer of the mortgage, to discuss possible alternatives to
address cash flow issues at the property. The Partnership's investment in
Garden Court was previously reduced to zero as a result of losses from the Local
Partnership during prior years. In addition, the Partnership did not issue any
purchase money notes or debt instruments in connection with its investment in
Garden Court. Therefore, the uncertainty about the Local Partnership's
continued ownership of the property does not impact the Partnership's financial
condition. Furthermore, the complete loss of this investment would not have a
material impact on the operations of the Partnership.

-17-
<PAGE>
PART I. FINANCIAL INFORMATION
---------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS - Continued
-----------------------------------

assurance that a sale of any properties that previously qualified under the
LIHPRHA program will occur.

Some of the rental properties owned by the Local Partnerships are dependent
on the receipt of project-based Section 8 Rental Housing Assistance Payments
(HAP) provided by HUD pursuant to HAP contracts. In 1995 and 1996, HUD released
its Reinvention Blueprint and a revision to its Reinvention Blueprint which
contained proposals that have come to be known as "Mark-to-Market". Congress,
HUD and the Clinton Administration continue to struggle with the Mark-to-Market
initiative. This initiative was intended to deal with HUD's increasing burden
of funding HAP contracts. Under the initiative, HUD would eliminate the
project-based subsidy and provide the residents with "sticky vouchers" which
would allow residents to move to other developments should they so choose. The
initiative will impact those properties that have HAP contracts with shorter
terms than that of the underlying property mortgage. For instance, some
properties may have a 20-year HAP contract while the underlying mortgage has a
40-year term. In the interim, Congress has authorized one-year extensions for
properties with HAP contracts expiring during the government's fiscal year 1997,
which began October 1, 1996. In light of recent political scrutiny of
appropriations for HUD programs, a one year extension of Section 8 HAP contracts
expiring during the government's fiscal year 1998 is possible, however, such an
extension, and continued funding of annual renewals for Section 8 HAP contracts
expiring after fiscal year 1998 is uncertain. The Section 8 HAP contracts for
the following properties expire during the government's fiscal year 1998:

-18-
<PAGE>
PART I. FINANCIAL INFORMATION
---------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS - Continued
-----------------------------------

Units
Authorized for Expiration of
Number of Rental Assistance Section 8
Property Rental Units Under Section 8 HAP Contract
-------- ------------ ----------------- -------------
<S> <C> <C> <C>
Chippewa County 109 108 07/14/98
Cottonwood Park 126 6 06/30/98
Holiday Village 80 6 06/01/98
Matthew XXV 95 95 06/18/98
Pilgrim Tower North 258 205 10/31/97
Redden Gardens 150 29 09/30/98
Tradewinds Terrace 122 52 09/30/98
Westport Village 121 12 01/01/98

</TABLE>

No other significant changes in the Partnership's operations have taken
place during this period.

General
-------

In 1990, CRI, as Managing General Partner of the Partnership and various
other entities, subcontracted certain property-level asset management functions
for certain properties to Capital Management Strategies, Inc. (CMS). Among
these properties were properties owned by some of the Local Partnerships in
which the Partnership invested. CMS was formed by Martin C. Schwartzberg, a
nominal general partner of the Partnership and a former stockholder of CRI, when
he retired from CRI and its related businesses as of January 1, 1990. Mr.
Schwartzberg agreed not to act as a general partner with respect to any of the
CRI-sponsored partnerships, including this Partnership, and has not done so
since that time. In late 1995, a dispute arose between CRI and CMS over the
funding level of the 1996 contract for CMS. On November 9, 1995, CRI filed a
complaint against CMS to determine the proper amount of fees to be paid in 1996

-19-
<PAGE>
PART I. FINANCIAL INFORMATION
---------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS - Continued
-----------------------------------

under the asset management agreement. CMS answered on January 10, 1996, but
asserted no counterclaims.

PART II. OTHER INFORMATION
-----------------
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
-------------------------------

-20-
<PAGE>
PART II. OTHER INFORMATION
-----------------
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - Continued
-------------------------------

reached. Should the noteholder begin foreclosure proceedings on the
Partnership's interest in the related Local Partnership, the Partnership intends
to vigorously defend any action by the noteholder. However, there is no
assurance that the Partnership will be able to retain its interest in the Local
Partnership. The uncertainty about the continued ownership of the Partnership's
interest in the related Local Partnership does not impact the Partnership's
financial condition because the related purchase money note is nonrecourse and
secured solely by the Partnership's interest in the Local Partnership.
Therefore, should the investment in Holiday Village Apartments not produce
sufficient value to satisfy the related purchase money note, the Partnership's
exposure to loss is limited since the amount of the nonrecourse indebtedness
exceeds the carrying amount of the investment in and advances to the Local
Partnership. Thus, even a complete loss of this investment would not have a
material impact on the operations of the Partnership.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------

No reports on Form 8-K were filed with the Commission during the quarter
ended June 30, 1997.

All other items are not applicable.

-21-
<PAGE>
SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

CAPITAL REALTY INVESTORS-IV
LIMITED PARTNERSHIP
(Registrant)

By: C.R.I., Inc.
Managing General Partner

July 23, 1997 By: /s/ Susan R. Campbell
- -------------------- ---------------------------------
Date Susan R. Campbell
Executive Vice President and
Chief Operating Officer

Signing on behalf of the
Registrant and as Acting
Chief Accounting Officer,
Principal Financial and
Principal Accounting Officer

-22-
<PAGE>

EXHIBIT INDEX
-------------

Exhibit Method of Filing
- ------- -----------------------------

27 Financial Data Schedule Filed herewith electronically

-23-

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE SECOND QUARTER 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH 10-Q.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 9,435,327
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 41,747,237
<CURRENT-LIABILITIES> 0
<BONDS> 112,140,482
0
0
<COMMON> 0
<OTHER-SE> (70,518,489)
<TOTAL-LIABILITY-AND-EQUITY> 41,747,237
<SALES> 0
<TOTAL-REVENUES> 1,398,671
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 350,333
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,662,161
<INCOME-PRETAX> (6,613,823)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,613,823)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,613,823)
<EPS-PRIMARY> (87.28)
<EPS-DILUTED> (87.28)

</TABLE>