FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period to
Commission file number 0-14542
SECURED INVESTMENT RESOURCES FUND, L.P.
(Exact name of registrant as specified in its charter)
Kansas 48-0979566
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5453 W. 61st Place, Mission, Kansas 66205
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number,
including area code) (913) 384-5700
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests ("Units")
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 such shorter periods 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
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
Index
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements (Unaudited):
Balance Sheets -- September 30, 1995
and December 31, 1994 3-4
Statements of Operations -- Nine Months
Ended September 30, 1995 and 1994 and Three
Months Ended September 30, 1995 and 1994 5
Statements of Partnership Capital --
Nine Months Ended September 30, 1995
and the Years Ended December 31, 1994,
and 1993 6
Statements of Cash Flows -- Nine Months
Ended September 30, 1995 and 1994 7-8
Notes to Financial Statements 9-10
Item 2. Managements Discussion and Analysis
of Financial Condition and Results
of Operations 11-12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of
Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
SECURED INVESTMENT RESOURCES FUND, L.P.
BALANCE SHEETS
September 30,
1995 December 31,
(Unaudited) 1994
ASSETS
INVESTMENT PROPERTIES
Land and buildings $ 16,478,248 $ 16,377,255
Furniture, fixtures and equipment 1,528,972 1,478,563
__________ __________
18,007,220 17,855,818
Less accumulated depreciation
and allowance for losses 5,926,061 5,493,355
__________ __________
12,081,159 12,362,463
__________ __________
RESTRICTED DEPOSITS
Capital Improvement Cash Reserves $ 68,855 ---
__________ __________
OTHER ASSETS
Cash 157,248 182,262
Rents and other receivables, less
allowance of $47,300 in 1995
and $141,476 in 1994 22,026 244,318
Prepaid expenses 27,830 20,932
Debt issuance costs, net of
accumulated amortization of
$37,237 in 1995 and $13,543
in 1994 153,545 133,371
Commercial commissions,
deposits and other 30,463 29,859
__________ __________
391,112 610,742
__________ __________
$ 12,541,126 $ 12,973,205
__________ __________
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
BALANCE SHEETS--CONT'D
September 30,
1995 December 31,
(Unaudited) 1994
LIABILITIES AND PARTNERSHIP CAPITAL
Mortgage debt--Note B $ 11,700,395 $ 11,575,692
Accrued interest 140,971 282,889
Accounts payable and accrued
expenses 276,236 371,896
Due to related parties--Note C 52,930 62,100
Unearned revenue 50,416 60,859
Tenant security deposits 81,262 79,217
__________ __________
TOTAL LIABILITIES 12,302,210 12,432,653
__________ __________
PARTNERSHIP CAPITAL
General Partners
Capital contribution 1,000 1,000
Partnership deficit (53,708) (50,692)
__________ __________
(52,708) (49,692)
__________ __________
Limited Partners
Capital contributions 5,608,838 5,608,838
Partnership deficit (5,317,214) (5,018,594)
__________ __________
291,624 590,244
__________ __________
TOTAL PARTNERSHIP CAPITAL 238,916 540,552
__________ __________
$ 12,541,126 $ 12,973,205
__________ __________
See notes to financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
STATEMENTS OF OPERATIONS (Unaudited)
Nine Months Ended Three Months Ended
September 30, September 30,
1995 1994 1995 1994
REVENUES
Rents $1,675,133 $ 1,535,732 $ 577,810 $ 520,698
Interest 3,962 756 762 745
Maintenance
escalations 62,454 71,552 22,774 15,338
__________ _________ _________ _________
1,741,549 1,608,040 601,346 536,781
__________ _________ _________ _________
OPERATING AND
ADMINISTRATIVE EXPENSES
Property operating
expenses 554,455 513,973 181,461 176,122
General and
administrative
expenses 42,283 33,009 13,691 10,643
Professional services 62,483 72,411 34,612 23,499
Mgmt Fees & Reimbursed
direct expenses 82,206 70,516 25,996 22,742
__________ _________ _________ _________
741,427 689,909 255,760 233,006
__________ _________ _________ _________
NET OPERATING INCOME 1,000,122 918,131 345,586 303,775
NON-OPERATING EXPENSES
Interest 845,358 857,427 278,976 294,701
Depreciation and
amortization 456,400 451,099 152,527 151,094
__________ _________ _________ _________
1,301,758 1,308,526 431,503 445,795
__________ _________ _________ _________
PARTNERSHIP LOSS $ (301,636) $ (390,395) $ (85,917) $ (142,020)
__________ _________ _________ _________
Allocation of loss:
General Partners (3,016) (3,904) (859) (1,420)
Limited Partners (298,620) (386,491) (85,058) (140,600)
__________ _________ ___________ _________
$ (301,636) $(390,395) $ (85,917) $ (142,020)
__________ _________ _________ _________
Partnership loss per
limited partnership
unit $ (12.01) $ (15.54) $ (3.42) $ (5.65)
__________ _________ _________ _________
See notes to financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
STATEMENTS OF PARTNERSHIP CAPITAL
Nine months Ended September 30, 1995 (Unaudited) and
the Years Ended December 31, 1994 and 1993
General Limited
Partners Partners Total
Balances at January 1, 1993 $ (38,837) $ 1,664,886 $ 1,626,049
Partnership loss (5,846) (578,751) (584,597)
_________ _________ _________
Balances at December 31, 1993 (44,683) 1,086,135 1,041,452
Partnership loss (5,009) (495,891) (500,900)
_________ _________ _________
Balances at December 31, 1994 (49,692) 590,244 540,552
Partnership loss (3,016) (298,620) (301,636)
_________ _________ _________
Balances at September 30, 1995 $ (52,708) $ 291,624 $ 238,916
_________ _________ _________
See notes to financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended
September 30,
1995 1994
OPERATING ACTIVITIES
Partnership loss $ (301,635) $ (390,395)
Adjustments to reconcile
partnership loss to net cash
provided by (used in) operating
activities:
Depreciation and amortization 467,567 451,099
Provision for losses on rents
and other receivables (59,802) 17,976
Changes in assets and liabilities:
Restricted Deposits (68,855) ---
Rents and other receivables 282,094 12,526
Prepaid expenses (6,897) 65,496
Debt issuance costs (43,869) (34,700)
Commercial commission, deposits
and other (11,772) 943
Account payable and
accrued expenses (95,659) 54,836
Accrued interest (141,918) 72,135
Unearned revenue (10,443) 8,822
Tenant security deposits 2,045 2,558
________ _________
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 10,856 261,296
________ _________
INVESTING ACTIVITIES
Purchase of and improvements
to investment property (151,402) (121,249)
________ _________
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (151,402) (121,249)
________ _________
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
STATEMENTS OF CASH FLOWS (Unaudited)--CONT'D
Nine Months Ended
September 30,
1995 1994
FINANCING ACTIVITIES
Due To/From $ (9,170) $ (19,687)
Principal payments on
long-term debt 124,703 (52,251)
________ _________
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 115,533 (71,938)
________ _________
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (25,013) 68,109
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 182,261 97,437
________ _________
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 157,248 $ 165,546
________ _________
See notes to financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
September 30, 1995
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared
in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the nine month period
ended September 30, 1995 are not necessarily indicative of the
results that may be expected for the year ended December 31, 1995.
For further information, refer to the financial statements and
footnotes thereto included in the Partnership's annual report on
Form 10-K for the year ended December 31, 1994.
NOTE B--MORTGAGE DEBT
Mortgage debt consists of the following:
September 30, December 31,
1995 1994
First Mortgages:
The Colony Apartments $ 3,708,136 $ 3,500,000
Foothills Village S.C. 2,621,779 2,621,714
Cascade Apartments 1,923,935 1,950,441
Hidden Valley Exchange S.C. 810,795 814,035
The Market S.C./Hidden Valley
Exchange S.C. 1,672,185 1,702,916
Second Mortgages:
Foothills Village S.C. 959,590 986,586
__________ __________
$ 11,696,420 $ 11,575,692
__________ __________
Cash paid for interest totaled $987,276 and $785,292 for the nine
months ending September 30, 1995 and 1994, respectively.
The mortgage for Cascade Apartments matured March 1, 1995. The
present mortgage holder has verbally agreed to temporarily extend
the mortgage until March 1, 1996 or until new replacement financing
is put in place, whichever comes first.
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONT'D.
On January 17, 1995 the $3,500,000 Colony mortgage was paid off
through the issuance of a new $3,728,000 mortgage. This new
mortgage matures in February 2020 has a fixed interest rate of
10.09%. The new mortgage also funded restricted deposits which
will be used for Colony capital repairs and replacements.
NOTE C--RELATED PARTY TRANSACTIONS
Affiliates of the General Partners are entitled to receive payments
from the Partnership for management and other services. SPECS, INC.
(a corporation in which the General Partner has a minority interest)
receives property management fees for providing property management
services and direct cost reimbursements based upon time allocated to
performing certain Partnership functions. Amounts paid by the
Partnership to affiliates of the General Partners are as follows:
Nine Months Ended
September 30,
1995 1994
Property management fees $ 82,206 $ 70,516
________ ________
Amounts due to (from) related parties consist of the following:
September 30, December 31,
1995 1994
Secured Investment Resources
Fund, L.P. III $ 75,150 $ 85,100
Secured Investment Resources, Inc. (22,220) (23,000)
__________ __________
Due To (From) Related Parties $ 52,930 $ 62,100
__________ __________
As of May 1, 1995, the Partnership began repayment of its debt to
Secured Investment Resources Fund, L.P. III of $3,000 per month,
which includes interest of 9%.
NOTE D--CASH DISTRIBUTIONS
No distributions have been made since January 1990. Future
distributions will be made only from excess cash flow not needed
for working capital reserves.
(The remainder of this page intentionally left blank.)
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
Revenues for the first nine months of 1995 increased by $133,500
(8.3%) compared with the same period last year. Apartment rentals
comprised $89,000 of this increase and commercial properties
accounted for the remaining $44,500 increase. The stronger apartment
market allowed the Partnership to continue increasing rental rates,
and discontinue the offering of rental concessions, while maintaining
a high occupancy. Several smaller leases were signed at Foothills
Shopping Center and Hidden Valley Shopping Center, which accounted
for the higher rental revenues in the commercial sector.
Total operating and administrative expenses increased $50,000 (9.1%)
when comparing the first nine months of 1995 to the first nine months
of 1994. Increased rental rates have resulted in increased resident
turnover. This increased turnover has caused increased repair,
contracted services and payroll expenses. Professional services have
declined $10,000 (13.8%).
The Partnership anticipates that operating results for thefirst nine
months will be representative of the results for the remainder of the
year.
Liquidity and Capital Resources
During the first nine months of 1995 $11,000 of cash was generated
in operating activities, $151,000 was used for investing activities
and $115,500 was provided through financing activities. The matured
Colony mortgage of $3,500,000 was paid off with a new mortgage in the
amount of $3,728,000. Of the additional funds from this new mortgage
$180,000 are being used to renovate the Colony Apartments. These
funds will be invested into capital improvements, which will improve
the curb appeal and marketability of Colony, thus allowing management
to increase rental rates and maintain high occupancy levels.
During the first nine months the Partnership received $230,667 of
delinquent rent from The Sampler Shoppes, Inc., the anchor tenant at
Foothills Shopping Center and was able to pay $138,000 of delinquent
real estate taxes at Foothills Shopping Center.
The Partnership is currently past due on mortgage notes secured by
Hidden Valley and The Market Shopping Centers. The improved cash
flow, the result of higher occupancy, will be used to make these
delinquent mortgage payments. In addition, as of May 1, 1995 the
Partnership began repaying the advance from Secured Investment
Resources Fund, L.P. III at the rate of $3,000 per month, including
interest.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.-- Cont'd.
The mortgage for Cascade Apartments came due in March, 1995. The
existing mortgage holder has verbally agreed to extend this note,
under the same terms and conditions, until March, 1996 or until new
financing can be put into place.
The General Partners also anticipate that 1995 cash flow from
operations will continue to improve because of strong occupancy,
rental rate increases, and stabilized expenses.
The General Partners have the option of offering one or more
properties for sale. Any net proceeds in excess of the outstanding
mortgage balance could be used to generate additional working capital.
The General Partners have determined it prudent to discontinue cash
distributions until such time that adequate working capital and
capital improvement reserves are in place.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None.
Item 2. CHANGES IN SECURITIES
Inapplicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Inapplicable.
Item 5. OTHER INFORMATION
Inapplicable.
Item 6. EXHIBIT AND REPORTS ON FORM 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during
the quarter ended September 30, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
SECURED INVESTMENT RESOURCES FUND, L.P.
A Kansas Limited Partnership
(Registrant)
By:
James R. Hoyt
as Individual General Partner
Date: November 15, 1995
By: Secured Investment Resources, Inc.
as Corporate General Partner
By:
James R. Hoyt, President
Date: November 15, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Unaudited.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 157,248
<SECURITIES> 0
<RECEIVABLES> 69,326
<ALLOWANCES> 47,300
<INVENTORY> 0
<CURRENT-ASSETS> 391,112
<PP&E> 18,007,220
<DEPRECIATION> 5,926,061
<TOTAL-ASSETS> 12,541,126
<CURRENT-LIABILITIES> 601,815
<BONDS> 11,700,395
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 12,541,126
<SALES> 0
<TOTAL-REVENUES> 1,741,549
<CGS> 0
<TOTAL-COSTS> 741,427
<OTHER-EXPENSES> 456,400
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 845,358
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (301,636)
<EPS-PRIMARY> (12.01)
<EPS-DILUTED> 0
</TABLE>
