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, 1997
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, 1997 and December 31, 1996 3-4
Consolidated Statements of Operations --
Three Months Ended March 31, 1997 and 1996 5
Consolidated Statements of Partnership
Capital -- Three Months Ended March 31, 1997
and the Years Ended December 31, 1996,
and 1995 6
Consolidated Statements of Cash Flows --
Three Months Ended March 31, 1997 and 1996 7-8
Notes to Consolidated Financial Statements 9-10
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of
Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 13
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
SECURED INVESTMENT RESOURCES FUND, L.P.
CONSOLIDATED BALANCE SHEETS
March 31,
1997 December 31,
(Unaudited) 1996
ASSETS
INVESTMENT PROPERTIES
Land and buildings $ 16,526,120 $ 16,523,135
Furniture, fixtures and equipment 1,722,198 1,714,939
18,248,318 18,238,074
Less accumulated depreciation
and allowance for losses 6,813,876 6,667,531
11,434,442 11,570,543
OTHER ASSETS
Cash 225,756 206,974
Rents and other receivables,
less allowance of $54,900 in 1997
and $42,350 in 1996 9,222 10,236
Prepaid expenses 51,847 368
Debt issuance costs, net of
accumulated amortization of
$65,035 in 1997 and $63,135
in 1996 149,565 141,488
Commercial commissions,
deposits and other 23,823 17,015
Restricted deposits 12,143 15,105
472,356 391,186
TOTAL ASSETS $ 11,906,798 $ 11,961,729
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
CONSOLIDATED BALANCE SHEETS--CONT'D.
March 31,
1997 December 31,
(Unaudited) 1996
LIABILITIES AND PARTNERSHIP CAPITAL
Mortgage debt (Note B) $ 11,918,925 $ 11,952,227
Accrued interest 146,600 128,096
Accounts payable and accrued
expenses 185,593 106,926
Due to related parties (Note C) 58,658 57,416
Unearned revenue 101,973 110,733
Tenant security deposits 75,183 75,485
TOTAL LIABILITIES 12,486,932 12,430,883
PARTNERSHIP CAPITAL
General Partners
Capital contribution 1,000 1,000
Partnership deficit (61,898) (60,789)
(60,898) (59,789)
Limited Partner
Capital contributions 5,608,838 5,608,838
Partnership deficit (6,128,074) (6,018,203)
(519,236) (409,365)
TOTAL PARTNERSHIP CAPITAL (580,134) (469,154)
$ 11,906,798 $ 11,961,729
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
March 31,
1997 1996
REVENUES
Rents $ 537,801 $ 541,623
Interest 837 1,242
Maintenance
escalations 17,697 19,435
556,335 562,300
OPERATING AND
ADMINISTRATIVE EXPENSES
Property operating
expenses 181,653 187,859
General and
administrative
expenses 10,705 11,899
Professional services 22,977 11,397
Management fees 27,149 24,303
242,484 235,458
NET OPERATING INCOME 313,851 326,842
NON-OPERATING EXPENSES
Interest 276,587 321,052
Depreciation and
amortization 148,244 150,702
424,831 471,754
PARTNERSHIP LOSS $ (110,980) $ (144,912)
Allocation of loss:
General Partner (1,109) (1,449)
Limited Partner (109,871) (143,463)
$ (110,980) $ (144,912)
Partnership loss per
limited partnership
unit $ (4.42) $ (5.77)
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
CONSOLIDATED STATEMENTS OF PARTNERSHIP CAPITAL (Unaudited)
Three Months Ended March 31, 1997 (Unaudited) and
the Years Ended December 31, 1996 and 1995
General Limited
Partners Partners Total
Balances at January 1, 1995 (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 (5,244) (519,183) (524,427)
Balances at December 31, 1996 $ (59,789) $ (409,365) $ (469,154)
Partnership loss (1,109) (109,871) (110,980)
Balances at March 31, 1997 $ (60,898) $ (519,236) $ (580,134)
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended
March 31,
1997 1996
OPERATING ACTIVITIES
Partnership income $ (110,980) $ (144,911)
Adjustments to reconcile
partnership loss to net cash
provided by (used in) operating
activities:
Depreciation and amortization 151,728 150,702
Provision for losses on rents
and other receivables 12,550 (12,100)
Changes in assets and liabilities:
Restricted deposits 2,962 (14,328)
Rents and other receivables (11,535) 9,715
Prepaid expenses (51,479) (53,050)
Debt issuance costs (8,735) (200)
Commercial commissions, deposits
and other (10,291) 3,345
Accounts payable and
accrued expenses 78,666 62,519
Accrued interest 18,505 20,880
Unearned revenue (8,760) (3,007)
Tenant security deposits (303) (7,096)
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (71,063) (41,125)
INVESTING ACTIVITIES
Purchases of and improvements
to investment properties (10,244) (49,744)
NET CASH USED IN
INVESTING ACTIVITIES (10,244) (49,744)
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)--CONT'D.
Three Months Ended
March 31,
1997 1996
FINANCING ACTIVITIES
Debt Issuance Costs (9,977) (200)
Due To (From) Related Parties 1,242 2,026
Principal payments on
long term debt (33,302) 4,993
NET CASH PROVIDED BY
FINANCING ACTIVITIES (42,037) 6,819
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 18,782 (1,600)
CASH AND CASH EQUIVALENTS
BEGINNING OF PERIOD 206,974 161,414
CASH AND CASH EQUIVALENTS
END OF PERIOD $ 225,756 $ 159,814
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
March 31, 1997
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, 1997 are not necessarily indicative
of the results that may be expected for the year ended December 31, 1997.
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, 1996.
NOTE B--MORTGAGE DEBT
Mortgage debt consists of the following:
March 31, December 31,
1997 1996
Collateralized by Investment
Property
First Mortgages:
The Colony Apartments $ 3,651,377 3,661,657
Foothills Village S.C. 2,617,773 2,621,779
Cascade Apartments 1,864,680 1,875,173
The Market S.C./Hidden Valley
Exchange S.C. 1,595,461 1,601,745
Hidden Valley Exchange S.C. 811,389 813,628
Second Mortgages:
Foothills Village, S.C. 968,245 968,245
The Market S.C./Hidden Valley
Exchange S.C. 410,000 410,000
$ 11,918,925 $ 11,952,227
Interest expense totaled $276,587 and $321,052 for the three months
ending March 31, 1997 and 1996, respectively.
The mortgage for Cascade Apartments matured March 1, 1995. The
present mortgage holder has agreed to temporarily extend the
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (Unaudited)--CONT'D.
NOTE B--MORTGAGE DEBT--CONT'D.
mortgage on a month-to-month basis and the Partnership continues to
make principal and interest payments of $18,900 to said mortgage
holder.
On May 28, 1996, the Partnership signed a note, collateralized by a
second mortgage on The Market and Hidden Valley Exchange, in the
amount of $410,000 at 7% interest. The Partnership will make
consolidated monthly principal and interest payments on this and the
first mortgage 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 The
Market and Hidden Valley Exchange as well as accrued interest and
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:
Three Months Ended
March 31,
1997 1996
Property Management Fees $ 27,149 $ 24,303
Amounts due (to) from related parties consist of the following:
March 31, December 31,
1997 1996
Secured Investment Resources
Fund, L.P. III $ (80,120) $ (78,345)
Secured Investment Resources
Fund, L.P. II (5,000) (5,000)
SIR, Inc. 26,462 25,929
$ (58,658) $ (57,416)
NOTE D--CASH DISTRIBUTIONS
No cash distributions have been made since January 1990. Future
distributions will only be made from excess cash flow not needed for
working capital reserves.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
Revenues for the first three months of 1997 decreased by $16,000
(1.1%) compared with the same period of last year. Apartment rentals
decreased $5,000 and commercial properties decreased $1,000. Both
<PAGE>
apartment rental rates and commercial rental rates and expenses have
stabilized for the first quarter of 1997.
Total operating and administrative expenses decreased $7,400 (3.7%)
when comparing the first three months of 1997 to the first three
months of 1996.
The Partnership anticipates that operating results for the year
ending December 31, 1997 will show an increase in revenues due to
new leases signed on the commercial properties.
Liquidity and Capital Reserves
During the first three months of 1997 $71,100 of cash was provided
by operating activities, $10,300 was used for investing activities
and $42,000 was used in 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 agreed to extend this note on a month-to-month basis
and the Partnership makes monthly principal and interest payments of $18,900.
The General Partners also anticipate the at 1997 cash flow from
operations will continue to improve because of strong occupancy,
stabilized rental rates, stabilized expenses, and new leases
stabilized 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, 1997.
<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, 1997
By: Secured Investment Resources, Inc.
as Corporate General Partner
By:
James R. Hoyt, President
Date: May 15, 1997
<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, 1997
By: Secured Investment Resources, Inc.
as Corporate General Partner
By: /s/ James R. Hoyt
James R. Hoyt, President
Date: May 15, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Unaudited.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 225,756
<SECURITIES> 0
<RECEIVABLES> 64,122
<ALLOWANCES> (54,900)
<INVENTORY> 0
<CURRENT-ASSETS> 472,356
<PP&E> 18,248,318
<DEPRECIATION> 6,813,876
<TOTAL-ASSETS> 11,906,798
<CURRENT-LIABILITIES> 568,007
<BONDS> 11,918,925
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 11,906,798
<SALES> 0
<TOTAL-REVENUES> 556,335
<CGS> 0
<TOTAL-COSTS> 242,484
<OTHER-EXPENSES> 148,244
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 276,587
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (110,980)
<EPS-PRIMARY> (4.42)
<EPS-DILUTED> 0
</TABLE>
