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 June 30, 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 --
June 30, 1996 and December 31, 1995 3-4
Consolidated Statements of Operations --
Three and Six Months Ended June 30,
1996 and 1995 5
Consolidated Statements of Partnership
Capital -- Six Months Ended June 30, 1996
and the Years Ended December 31, 1995,
and 1994 6
Consolidated Statements of Cash Flows --
Six Months Ended June 30, 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
June 30,
1996 December 31,
(Unaudited) 1995
ASSETS
INVESTMENT PROPERTIES
Land and buildings $ 16,516,137 $ 16,486,456
Furniture, fixtures and equipment 1,621,631 1,552,076
__________ __________
18,137,768 18,038,532
Less accumulated depreciation
and allowance for losses 6,366,387 6,078,281
__________ __________
11,771,381 11,960,251
OTHER ASSETS
Cash 216,880 161,414
Rents and other receivables, less
allowance of $54,400 in 1996
and $57,200 in 1995 19,475 18,351
Prepaid expenses 34,143 8,257
Debt issuance costs, net of
accumulated amortization of
$52,838 in 1996 and $41,550
in 1995 140,943 149,231
Commercial commissions,
deposits and other 21,897 27,591
Restricted deposits 28,006 73,299
__________ __________
461,344 438,143
__________ __________
TOTAL ASSETS $ 12,232,725 $ 12,398,394
__________ __________
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
CONSOLIDATED BALANCE SHEETS--CONT'D.
June 30,
1996 December 31,
(Unaudited) 1995
LIABILITIES AND PARTNERSHIP CAPITAL
Mortgage debt (Note B) $ 12,017,413 $ 11,826,431
Accrued interest 111,611 94,146
Accounts payable and accrued
expenses 191,474 240,756
Due to related parties (Note C) 52,415 50,922
Unearned revenue 46,324 51,483
Tenant security deposits 84,813 79,383
__________ __________
TOTAL LIABILITIES 12,504,050 12,343,121
__________ __________
PARTNERSHIP CAPITAL
General Partners
Capital contribution 1,000 1,000
Partnership deficit (58,811) (55,545)
__________ __________
(57,811) (54,545)
__________ __________
Limited Partners
Capital contributions 5,608,838 5,608,838
Partnership deficit (5,822,352) (5,499,020)
__________ __________
(213,514) 109,818
TOTAL PARTNERSHIP CAPITAL (271,325) 55,273
__________ __________
$ 12,232,725 $ 12,398,394
__________ __________
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Six Months Ended Three Months Ended
June 30, June 30,
1996 1995 1996 1995
REVENUES
Rents $1,082,812 $1,097,322 $ 541,189 $ 544,288
Interest 2,453 3,200 1,211 2,677
Maintenance
escalations 37,013 39,681 17,578 7,719
__________ __________ __________ __________
1,122,278 1,140,203 559,978 554,684
__________ __________ __________ __________
OPERATING AND
ADMINISTRATIVE EXPENSES
Property operating
expenses 379,028 372,993 191,169 194,633
General and
administrative
expenses 25,990 28,592 14,091 15,048
Professional services 46,725 27,871 35,328 14,931
Management Fees 49,051 56,209 24,748 24,914
__________ __________ __________ __________
500,794 485,665 265,336 249,526
__________ __________ __________ __________
NET OPERATING INCOME 621,484 654,538 294,642 305,158
NON-OPERATING EXPENSES
Interest 648,688 566,383 327,636 287,359
Depreciation and
amortization 299,394 303,873 148,692 152,527
__________ __________ __________ __________
948,082 870,256 476,328 439,886
__________ __________ __________ __________
PARTNERSHIP LOSS $ (326,598) $ (215,718) $ (181,686) $(134,728)
__________ __________ __________ __________
Allocation of loss:
General Partners (3,266) (2,157) (1,817) (1,347)
Limited Partners (323,332) (213,561) (179,869) (133,381)
__________ __________ __________ __________
$ (326,598) $ (215,718) $ (181,686) $(134,728)
__________ __________ __________ __________
Partnership loss per
limited partnership
unit $ (13.00) $ ( 8.58) $ (7.23) $ (5.36)
__________ __________ __________ __________
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
CONSOLIDATED STATEMENTS OF PARTNERSHIP CAPITAL
Six months Ended June 30, 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 (3,266) (323,332) (326,598)
__________ __________ __________
Balances at June 30, 1996 $ (57,811) $ (213,514) $ (271,325)
__________ __________ __________
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended
June 30,
1996 1995
OPERATING ACTIVITIES
Partnership loss $ (326,598) $ (215,718)
Adjustments to reconcile
partnership loss to net cash
provided by (used in) operating
activities:
Depreciation and amortization 305,734 310,533
Provision for losses on rents
and other receivables (2,800) (64,264)
Changes in assets and liabilities:
Restricted deposits 45,292 (129,554)
Rents and other receivables 1,676 287,611
Prepaid expenses (25,885) (14,377)
Debt issuance costs (2,999) (43,869)
Commercial commission, deposits
and other (646) (11,772)
Account payable and
accrued expenses (49,282) (52,564)
Accrued interest 17,465 (112,479
Unearned revenue (5,159) (5,782)
Tenant security deposits 5,429 5,315
__________ __________
NET CASH USED IN
OPERATING ACTIVITIES (37,773) (46,920)
__________ __________
INVESTING ACTIVITIES
Purchase of and improvements
to investment property (99,235) (128,109)
__________ __________
NET CASH USED IN
INVESTING ACTIVITIES (99,235) (128,109)
__________ __________
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)--CONT'D.
Six Months Ended
June 30,
1996 1995
FINANCING ACTIVITIES
Mortgage Proceeds $ 410,000 $ -0-
Due To Related Parties 1,492 (202)
Principal payments on
long-term debt (219,018) 171,525
__________ __________
NET CASH PROVIDED BY
FINANCING ACTIVITIES 192,474 171,323
__________ __________
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 55,466 (3,706)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 161,414 182,262
__________ __________
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 216,880 $ 178,556
__________ __________
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
June 30, 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 six month period ended June 30, 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:
June 30, December 31,
1996 1995
Collateralized by Investment
Property:
First Mortgages:
The Colony Apartments $ 3,680,825 $ 3,699,260
Foothills Village S.C. 2,621,779 2,621,779
Cascade Apartments 1,895,400 1,914,656
The Market S.C./Hidden Valley
Exchange S.C. 1,616,629 1,825,697
Hidden Valley Exchange S.C. 816,109 811,973
Second Mortgages:
Foothills Village, S.C. 976,671 953,066
The Market S.C. 410,000
__________ __________
$ 12,017,413 $ 11,826,431
__________ __________
Interest expense totaled $648,688 and $566,383 for the six months
ending June 30, 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 B--MORTGAGE DEBT--CONT'D.
On May 28, 1996, the Partnership signed a note, collateralized by
a second mortgage on The Market and Foothills Village, in the
amount of $410,000 at 7% interest. The Partnership will make
monthly principal and interest payments on this and the first
note in the amount of $11,426 per month until June 25, 1998 when
the entire amount becomes due and payable. The proceeds of this
note were used to pay delinquent real estate taxes for both The
Market and Foothills Village as well as related loan costs.
NOTE C--RELATED PARTY TRANSACTIONS
SPECS, Inc., a Kansas Corporation in which the individual General
Partner has a minority interest, receives 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. Property management fees
paid by the Partnership to SPECS, Inc. are as follows:
Six Months Ended
June 30,
1996 1995
Property management fees $ 49,051 $ 56,209
__________ __________
Amounts due (to) from related parties consist of the following:
June 30, December 31,
1996 1995
Secured Investment Resources
Fund, L.P. III $ (72,203) (74,643)
Secured Investment Resources
Fund, Inc. 19,788 23,721
__________ __________
Due (To) From Related Parties $ (52,415) $ (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.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
Revenues for the first six months of 1996 decreased by
$18,000 (1.6%) compared with the same period last year.
Apartment rentals increased $12,000 and commercial
properties accounted for decreases of $30,000. 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 have been negotiated at Foothills
Shopping Center with move-in dates in third quarter which
will bring occupancy to 100%. A major lease has been signed
bringing occupancy to 100% at the Market Square effective
June 1996 and will increase revenues for this and future
quarters.
Total operating and administrative expenses increased $3,400
(.8%) when comparing the first six months of 1996 to the
first six months of 1995. Increased rental rates have
resulted in increased resident turnover. This increased
turnover has caused increased contracted services and
payroll expenses.
The Partnership anticipates that operating results for the
first six months will show an increase in revenues due to
new leases signed on the commercial properties.
Liquidity and Capital Resources
During the first six months of 1996 $37,800 of cash was
consumed in operating activities, $99,000 was used for
investing activities and $192,500 was provided through
financing activities.
In May 1996, a $410,000 note, collateralized by Hidden
Valley and The Market, was signed. This loan matures June 25,
1998 and the interest rate is 7%.
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.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.--Cont'd.
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 June 30, 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: August 15, 1996
By: Secured Investment Resources, Inc.
as Corporate General Partner
By:
James R. Hoyt, President
Date: August 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: August 15, 1996
By: Secured Investment Resources, Inc.
as Corporate General Partner
By: /s/ James R. Hoyt
James R. Hoyt, President
Date: August 15, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Unaudited.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 216,880
<SECURITIES> 0
<RECEIVABLES> 73,875
<ALLOWANCES> 54,400
<INVENTORY> 0
<CURRENT-ASSETS> 461,344
<PP&E> 18,137,768
<DEPRECIATION> 6,366,387
<TOTAL-ASSETS> 12,232,725
<CURRENT-LIABILITIES> 486,637
<BONDS> 12,017,413
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 12,232,725
<SALES> 0
<TOTAL-REVENUES> 1,122,278
<CGS> 0
<TOTAL-COSTS> 500,794
<OTHER-EXPENSES> 299,394
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 648,688
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (326,598)
<EPS-PRIMARY> (13.00)
<EPS-DILUTED> 0
</TABLE>
