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 March 31, 1996
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):
Consolidated Balance Sheets --
March 31, 1996 and December 31, 1995 3-4
Consolidated Statements of Operations --
Three Months Ended March 31, 1996 and 1995 5
Consolidated Statements of Partnership
Capital -- Three Months Ended March 31, 1996
and the Years Ended December 31, 1995,
and 1994 6
Consolidated Statements of Cash Flows --
Three Months Ended March 31, 1996 and 1995 7-8
Notes to Consolidated 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.
CONSOLIDATED BALANCE SHEETS
March 31,
1996 December 31,
(Unaudited) 1995
ASSETS
INVESTMENT PROPERTIES
Land and buildings $ 16,498,400 $ 16,486,456
Furniture, fixtures and equipment 1,589,876 1,552,076
18,088,276 18,038,532
Less accumulated depreciation
and allowance for losses 6,222,339 6,078,281
11,865,937 11,960,251
OTHER ASSETS
Cash 159,814 161,414
Rents and other receivables, less
allowance of $45,100 in 1996
and $57,200 in 1995 20,736 18,351
Prepaid expenses 61,307 8,257
Debt issuance costs, net of
accumulated amortization of
$48,194 in 1996 and $41,550
in 1995 142,788 149,231
Commercial commissions,
deposits and other 24,245 27,591
Restricted deposits 58,971 73,299
467,861 438,143
TOTAL ASSETS $ 12,333,798 $ 12,398,394
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
CONSOLIDATED BALANCE SHEETS--CONT'D.
March 31,
1996 December 31,
(Unaudited) 1995
LIABILITIES AND PARTNERSHIP CAPITAL
Mortgage debt (Note B) $ 11,831,424 $ 11,826,431
Accrued interest 115,025 94,146
Accounts payable and accrued
expenses 303,276 240,756
Due to related parties (Note C) 52,948 50,922
Unearned revenue 48,476 51,483
Tenant security deposits 72,288 79,383
TOTAL LIABILITIES 12,423,437 12,343,121
PARTNERSHIP CAPITAL
General Partners
Capital contribution 1,000 1,000
Partnership deficit (56,994) (55,545)
(55,994) (54,545)
Limited Partners
Capital contributions 5,608,838 5,608,838
Partnership deficit (5,642,483) (5,499,020)
(33,645) 109,818
TOTAL PARTNERSHIP CAPITAL (89,639) 55,273
$ 12,333,798 $ 12,398,394
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
March 31,
1996 1995
REVENUES
Rents $ 541,623 $ 553,034
Interest 1,242 523
Maintenance
escalations 19,435 31,962
562,300 585,519
OPERATING AND
ADMINISTRATIVE EXPENSES
Property operating
expenses 187,859 178,360
General and
administrative
expenses 11,899 13,544
Professional services 11,397 12,940
Mgmt Fees & Reimbursed
direct expenses 24,303 31,295
235,458 236,139
NET OPERATING INCOME 326,842 349,380
NON-OPERATING EXPENSES
Interest 321,052 279,024
Depreciation and
amortization 150,702 151,346
471,754 430,370
PARTNERSHIP LOSS $ (144,912) $ ( 80,990)
Allocation of loss:
General Partners (1,449) ( 810)
Limited Partners (143,463) ( 80,180)
$ (144,912) $( 80,990)
Partnership loss per
limited partnership
unit $ ( 5.77) $ ( 3.22)
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
CONSOLIDATED STATEMENTS OF PARTNERSHIP CAPITAL
Three months Ended March 31, 1996 (Unaudited) and
the Years Ended December 31, 1995 and 1994
General Limited
Partners Partners Total
Balances at January 1, 1994 $ (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 (4,853) (480,426) (485,279)
Balances at December 31, 1995 (54,545) 109,818 55,273
Partnership loss (1,449) (143,463) (144,912)
Balances at March 31, 1996 $ (55,994) $ (33,645) $ (89,639)
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended
March 31,
1996 1995
OPERATING ACTIVITIES
Partnership loss $ (144,911) $ ( 80,990)
Adjustments to reconcile
partnership loss to net cash
provided by (used in) operating
activities:
Depreciation and amortization 150,702 151,346
Provision for losses on rents
and other receivables (12,100) 3,352
Changes in assets and liabilities:
Restricted deposits 14,328 (183,090)
Rents and other receivables 9,715 208,669
Prepaid expenses (53,050) (29,213)
Debt issuance costs ( 200) (43,869)
Commercial commission, deposits
and other 3,345 3,121
Account payable and
accrued expenses 62,519 (120,076)
Accrued interest 20,880 (84,706
Unearned revenue ( 3,007) (6,380)
Tenant security deposits (7,096) 2,310
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 41,125 (179,526)
INVESTING ACTIVITIES
Purchase of and improvements
to investment property ( 49,744) ( 30,433)
NET CASH USED IN
INVESTING ACTIVITIES ( 49,744) ( 30,433)
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)--CONT'D.
Three Months Ended
March 31,
1996 1995
FINANCING ACTIVITIES
Mortgage Proceeds $ -0- $3,728,000
Payoff Matured Mortgage -0- (3,500,000)
Due To Related Parties 2,026 -0-
Principal payments on
long-term debt 4,993 (19,670)
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 7,019 208,330
DECREASE IN CASH
AND CASH EQUIVALENTS ( 1,600) (1,629)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 161,414 182,262
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 159,814 $ 180,633
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
March 31, 1996
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 three month period ended March 31, 1996
are not necessarily indicative of the results that may be
expected for the year ended December 31, 1996. 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, 1995.
NOTE B--MORTGAGE DEBT
Mortgage debt consists of the following:
March 31, December 31,
1996 1995
First Mortgages:
The Colony Apartments $ 3,690,158 $ 3,699,260
Foothills Village S.C. 2,621,779 2,621,779
Cascade Apartments 1,905,146 1,914,656
The Market S.C./Hidden Valley
Exchange S.C. 1,825,697 1,825,697
Hidden Valley Exchange S.C. 811,973 811,973
Second Mortgages:
Foothills Village S.C. 976,671 953,066
$ 11,831,424 $ 11,826,431
Interest expense totaled $321,052 and $279,024 for the three
months ending March 31, 1996 and 1995, respectively.
The mortgage for Cascade Apartments matured March 1, 1995. The
present mortgage holder has verbally agreed to temporarily extend
the mortgage on a month-to-month basis.
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONT'D.
NOTE C--RELATED PARTY TRANSACTIONS
Through December 31, 1994, property management services were
provided by The Hoyt Group, a Kansas Corporation in which the
individual General Partner had a majority interest. As of
January 1, 1995, SPECS, Inc., a Kansas Corporation in which the
individual General Partner has a minority interest, received
property management fees for providing property management
services. SPECS, Inc. also performs various professional
services for the Partnership, primarily tax accounting, audit
preparation, SEC 10Q and 10K preparation, and investor services.
Amounts paid by the Partnership to The Hoyt Group and SPECS, Inc.
are as follows:
Three Months Ended
March 31,
1996 1995
Property management fees $ 24,303 $ 31,295
Professional services 2,500 -0-
$ 26,803 $ 31,295
Amounts due to (from) related parties consist of the following:
March 31, December 31,
1996 1995
Secured Investment Resources
Fund, L.P. II $ (5,000) $ -0-
Secured Investment Resources
Fund, L.P. III (72,202) (74,643)
Secured Investment Resources
Fund, L.P. 24,254 23,721
Due From Related Parties $ (52,948) $ (50,922)
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 three months of 1996 decreased by
$23,000 (4.0%) compared with the same period last year.
Apartment rentals increased $10,000 and commercial
properties accounted for decreases of $33,000. 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 are in negotiations at Foothills
Shopping Center and Hidden Valley Shopping Center. A major
lease has been signed at the Market Square which will go
into effect in the second quarter and will increase revenues
for future quarters.
Total operating and administrative expenses increased $7,900
(4.1%) when comparing the first three months of 1996 to the
first three months of 1995. Increased rental rates have
resulted in increased resident turnover. This increased
turnover has caused increased contracted services and
payroll expenses. Professional services have declined
$1,500 (11.6%).
The Partnership anticipates that operating results for the
first three months will show an increase in revenues due to
new leases signed on the commercial properties.
Liquidity and Capital Resources
During the first three months of 1996 $41,000 of cash was
generated in operating activities, $50,000 was used for
investing activities and $7,000 was provided through
financing activities.
The mortgage for Cascade Apartments matured in March, 1995.
The existing mortgage holder has verbally agreed to extend
this note on a month-to-month basis.
The General Partners also anticipate that 1996 cash flow
from operations will continue to improve because of strong
occupancy, rental rate increases, stabilized expenses, and
new leases signed on commercial properties.
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.
<PAGE>
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 March 31, 1996.
<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: May 15, 1996
By: Secured Investment Resources, Inc.
as Corporate General Partner
By:
James R. Hoyt, President
Date: May 15, 1996
<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: /s/ James R. Hoyt
James R. Hoyt
as Individual General Partner
Date: May 15, 1996
By: Secured Investment Resources, Inc.
as Corporate General Partner
By: /s/ James R. Hoyt
James R. Hoyt, President
Date: May 15, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Unaudited.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 159,814
<SECURITIES> 0
<RECEIVABLES> 68,836
<ALLOWANCES> 45,100
<INVENTORY> 0
<CURRENT-ASSETS> 467,861
<PP&E> 18,088,276
<DEPRECIATION> 6,222,339
<TOTAL-ASSETS> 12,333,798
<CURRENT-LIABILITIES> 592,013
<BONDS> 11,831,424
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 12,333,798
<SALES> 0
<TOTAL-REVENUES> 562,300
<CGS> 0
<TOTAL-COSTS> 235,458
<OTHER-EXPENSES> 150,702
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 321,052
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (144,912)
<EPS-PRIMARY> (5.77)
<EPS-DILUTED> 0
</TABLE>
