FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 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 0-16798
SECURED INVESTMENT RESOURCES FUND, L.P. II
(Exact name of registrant as specified in its charter)
Delaware 36-3451000
(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
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
<PAGE>
PART I
Item 1. Business
Secured Investment Resources Fund, L.P. II ("Partnership") is a
Delaware limited partnership formed pursuant to the Delaware
Revised Uniform Limited Partnership Act on July 1, 1986. James R.
Hoyt is the Individual General Partner and Secured Investment
Resources, II Inc., a Missouri corporation, is the Corporate General
Partner. The Partnership has no predecessors or subsidiaries. The
Partnership was formed with the intent to engage in the business of
acquiring,improving, developing, operating and holding for investment,
income-producing real properties with the objectives of (i)
preserving and protecting the Partnership's capital; (ii) providing
cash distributions from operations; (iii) providing capital growth
through property appreciation; and (iv) increasing equity in property
ownership by the reduction of mortgage loans on Partnership
properties.
On September 24, 1988, the Partnership closed its offering, having
received gross proceeds of $26,830,500 from the sale of 53,661 units
of limited partnership interests.
The Partnership originally acquired eight properties, which included
four apartment communities, three shopping centers and a health care
facility. The General Partners feel that all of these properties met
the Partnership's investment criteria and objectives. Since the
inception of the Partnership, two properties (one apartment community
and one shopping center) have been sold.
As of December 31, 1995, the Partnership has made cash distributions
to Limited Partners of $4,724,456 for the period April 1, 1987
through December 31, 1995. No distributions have been made since
April 1990. Future distributions will only be made from excess cash
flow not needed for working capital reserves.
As of December 31, 1995, the Partnership had no employees. Employees
of SPECS, Inc. provide services to the Partnership. The individual
General Partner is a minority shareholder in SPECS, Inc.
<PAGE>
Item 1. Business--Cont'd.
Competition
The real estate business is highly competitive and the Partnership
competes with numerous entities engaged in real estate activities,
some of which have greater financial resources than those of the
Partnership. The Partnership's management believes that success
against such competition is dependent upon the geographic location
of the property, the performance of property managers, the amount of
new construction in the area and the maintenance and appearance of
the property. With respect to residential property, competition is
also based upon the design and mix of the units and the ability to
provide a community atmosphere for the tenants. The Partnership's
management believes that general economic circumstances and trends
and new properties in the vicinity of each of the Partnership's
properties will also be competitive factors.
Inflation
The effects of inflation on the Partnership's operations or
investments are not quantifiable. Revenues from property operations
fluctuate proportionately with increases and decreases in housing
costs. Fluctuations in the rate of inflation also affect the sales
values of properties and, correspondingly, the ultimate gains to be
realized by the Partnership from property sales.
<PAGE>
Item 2. Properties.
The following table sets forth the investment portfolio
of the Partnership at December 31, 1995:
Average
Properties at Occupancy(*)
Property Description Initial Cost Date Acquired Percentage
1995 1994
Sunwood Village
Apartments 252 Units $10,954,651 May 15, 1987 97% 95%
Las Vegas, NV
Bayberry Crossing
Shopping Center 56,113 Sq.Ft. $ 4,175,012 Jun. 30, 1987 91% 88%
Lee's Summit, MO
Oak Terrace Active
Retirement
Center 129 Units $ 8,604,769 Aug. 31, 1988 91% 96%
Springfield, IL
Oak Terrace
Healthcare Center 98 Beds $ 3,980,340 Aug. 31, 1988 100% 100%
Springfield, IL
Thomasbrook
Apartments 196 Units $ 5,992,092 Aug. 26, 1988 91% 93%
Shawnee, KS
Forest Park
Shopping Center 19,980 Sq.Ft. $ 2,871,199 Nov. 23, 1988 100% 96%
St. Louis, MO
(*) Based upon vacancy amount (in dollars) as a percent of
gross possible rents.
(The remainder of this page left blank intentionally.)
<PAGE>
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market for Registrant's Common Equity and Related Security Holder
Matters.
(A) There is no established public trading market for the Units
of the Partnership.
(B) There have been no distributions the last three years.
(C) As of December 31, 1995, the Partnership had admitted 2,722
Limited Partners who purchased 53,661 units.
(The remainder of this page left blank intentionally.)
<PAGE>
Item 6. Selected Financial Data.
Years Ended December 31,
OPERATING DATA 1995 1994 1993 1992 1991
(In Thousands)
Rents $5,583 $5,435 $5,674 $6,102 $6,129
Maintenance
Escalations and
Other Income 314 256 287 322 337
Property Operating
Expenses 3,021 2,878 2,960 3,308 3,655
Interest Expense (1) 2,429 2,322 2,725 3,426 3,419
Depreciation/
Amortization 1,388 1,380 1,957 2,264 2,377
Provision For
Losses on Invest-
ment Properties (2) --- --- --- --- 430
(Gain) Loss on sale
of Investment
Property --- --- (1,946) --- 2,789
Extraordinary
gain on debt
restructuring 890 --- 913 --- ---
Partnership Income
(Loss) $ (51) $ (889) $1,178 $(2,574) (6,204)
Partnership Income
(Loss) Per Limited
Partnership
Unit (3) $( .95) $(16.40) $ 21.74 $(47.48) $(114.47)
Cash Distributions
Per Limited
Partnership
Unit (4) $ --- $ --- $ --- $ --- $ ---
BALANCE SHEET DATA 1995 1994 1993 1992 1991
(In Thousands)
Total Assets 30,294 30,963 32,012 40,550 42,258
Mortgage Debt 27,581 28,556 28,677 38,361 37,761
(1) Certain reclassifications have been made from interest expense to
amortization to more accurately reflect the change in the bond
discount amortization related to the Oak Terrace bond financing.
There was no income effect as a result of these reclassifications.
<PAGE>
Item 6. Selected Financial Data--Cont'd.
(2) During the fourth quarter of 1991, the Partnership reduced
the carrying value of its commercial property portfolio
to reflect market conditions within the real estate industry.
(3) Partnership income (loss) per limited partnership unit is
computed by dividing the income (loss) allocated to the
Limited Partners by the weighted average number of limited
partnership units outstanding. Per unit information has been
computed based on 53,661 weighted average limited partnership
units outstanding.
(4) Cash distributions per limited partnership unit has been
computed by dividing distributions paid to the Limited
Partners by 53,661 weighted average limited partnership
units outstanding.
(The remainder of this page intentionally left blank.)
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Results of Operations
When comparing 1995 and 1994 operations, total revenues increased
$206,000 (3.6%) primarily due to increased occupancy on both
residential and commercial properties.
Interest expense increased $107,000 (4.6%) to $2,429,000 for 1995.
Depreciation and amortization went from $1,381,000 in 1994 to
$1,388,000 in 1995.
Total operating expenses for 1995 increased $143,000 (5.0%) from
1994 levels. Professional services decreased $7,000 (6.9%).
Management fees increased $8,000 (3.2%), while general and
administrative expenses increased $7,000 (5.3%). In 1995 the loss
increased from ($889,000) in 1994 to ($942,000) in 1995 (5.9%).
In The Pines revenues for 1993 were $682,000, while operating
expenses were $315,000. Interest for 1993 was $369,000 and
depreciation was $112,000. The following comparisons between
the Partnership's 1994 and 1993 operations do not include these
figures in order to provide a fair operational comparison for 1994
and 1993.
The 1994 Partnership loss of $(889,000) is much better than the
1993 amount of $(1,681,000), prior to gains associated with debt
restructuring and the sale of In The Pines. When comparing 1994
and 1993 operations, total revenues increased $413,000 (7.8%) to
$5,691,000.
Of this increase $308,000 was from residential property and $105,000
was from commercial property. These increases came about due to
higher average rental rates, decreased rental concessions and
improved occupancy levels. The higher residential rental rates,
resulted in increased resident turnover and higher operating
expenses. Operating expenses increased $233,000 (8.8%) to
$2,878,000. These increases were primarily in the areas of
repairs, supplies, payroll, and utilities.
Operational results and respective comparisons to prior years are
dramatically impacted by the extensive debt restructuring achieved
by the Partnership during 1993. This 1993 restructuring primarily
consisted of the Partnership conveying In The Pines (ITP), which it
purchased in 1987 for $6,367,000, to the property's second mortgage
holder in exchange for the following consideration: (1) assumption
by the conveyee of the first mortgage on ITP in the amount of
$2,799,000; and (2) retirement of two existing lines of credit
totaling $5,703,000. The total partnership debt retired by this
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations--Cont'd.
Results of Operations--Cont'd.
conveyance in 1993 was $8,501,000, which exceeded the original
purchase price by approximately $2,100,000.
The agreement also modified the debt service on the two short-term
lines of credit for the period December 1, 1992 through date of
conveyance. The modified debt service during this term was equal
to the monthly cash flow generated by ITP. The General Partners
determined that it was in the Partnership's best interest to complete
the transaction, which resulted in a gain in the conveyance of
the property measured at its fair market value in the amount of
$1,946,000.
In conjunction with the ITP agreement, the Partnership obtained a
release of bond cash reserves of $2,100,000 from the lenders on
Oak Terrace Active Retirement Center (OTARC). These funds were then
used for a principal paydown of $1,900,000 on the hedged portion of
the bonds on OTARC, which represented a prepayment of scheduled
principal reductions through December 31, 1998. No additional
principal payments are required until December, 1999. Upon receipt
of the $1,900,000 paydown, the lender then released its mortgage on
ITP, which allowed the Partnership to complete the ITP transaction
as described above. The Partnership additionally reduced the bond
discount balance to reflect this principal paydown.
The General Partners anticipate 1996 operating results will continue
to improve over 1995 and 1994 as a result of the continued planned
increase in rental rates and decreased rental incentives. This
planned increase in net rental income will be combined with continued
efforts to reduce expenses.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations--Cont'd.
Liquidity and Capital Resources
During 1995, the primary source of working capital was provided by
net cash from operating activities of $936,000. Investing activities
for new equipment and additional bond reserves consumed $363,000 and
financing activities consumed an additional $333,000. This resulted
in an increase of cash of $239,000 during the year. Accrued interest
increased during the year by $435,000. Thomasbrook Apartments'
mortgage is past due by $540,296 as of December 31, 1995. The cash
generated from operations for that property is insufficient to
service the mortgage under the current payment requirements. The
General Partner has had ongoing negotiations with the lender
concerning a complete restructure of the mortgage and related debt
service.
The Sunwood Village Apartment mortgage matures on April 1, 1996.
The Partnership is aggressively seeking replacement financing and
has had extensive negotiations with the current lender concerning an
extension of the existing debt. Placement of new mortgages or
extensions of existing debt could have a significant impact on the
Partnership's cash flow.
During 1994, the primary source of working capital was provided by
operating activities. Operations generated $541,000, while investing
activities for new equipment and additional bond reserves consumed
$229,000 and financing activities consumed an additional $236,000,
resulting in an increase of cash of $76,000 during the year. The
increased cash flow from improved rent receivable collections and
improved operations, allowed the partnership to reduce accounts
payable by $145,000.
Accrued interest increased during the year by $78,000.
During 1993, $10,700,000 of debt was scheduled to mature. The
conveyance of In The Pines eliminated approximately $8,501,000 of
debt. Additionally, $1,900,000 of restricted deposits related to
the Oak Terrace financing agreement were applied toward the unpaid
principal balance of the bonds outstanding. A $2,000,000 promissory
note was obtained during the first quarter of 1993, with the proceeds
used to retire a like amount of existing debt. These transactions,
as well as approximately $100,000 of cash flow from operations, were
used to satisfy the $10,700,000 of debt maturities during 1993.
The General Partners believe that sufficient working capital will be
available during 1996 to fund known, on-going operating and capital
requirements of the
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations--Cont'd.
Liquidity and Capital Resources--Cont'd.
Partnership. In 1996, the Partnership anticipates cash flow from
operations will improve because management intends to 1) improve
occupancy on the commercial properties; 2) achieve rental rate
increases; 3) decrease the amount of promotional rent discounts
offered on the residential properties; and 4) continue to maintain
stringent controls over expenses.
The General Partners intend to evaluate the property portfolio to
determine if it is prudent to offer one or more properties for sale
or possibly restructure the related financing packages. Any
unleveraged portion of the net sales proceeds or favorable
refinancing terms will generate additional working capital.
The General Partners have determined it prudent to discontinue cash
distributions until such time that adequate working capital reserves
are available.
<PAGE>
Item 8. Financial Statements and Supplementary Data.
SECURED INVESTMENT RESOURCES FUND, L.P. II
Index
Page
Independent Auditors' Report 13
Financial Statements:
Balance Sheets - December 31,
1995 and 1994 14-15
Statements of Operations -
Years Ended December 31, 1995, 1994
and 1993 16
Statements of Partnership Capital -
Years Ended December 31, 1995,
1994 and 1993 17
Statements of Cash Flows - Years
Ended December 31, 1995, 1994
and 1993 18-19
Notes to Financial Statements 20-32
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
Secured Investment Resources Fund, L.P. II
Mission, KS
We have audited the accompanying balance sheets of Secured
Investment Resources Fund, L.P. II as of December 31, 1995 and
1994, and the related statements of operations, partnership
capital and cash flows for each of the three years in the period
ended December 31, 1995. We have also audited the schedules
listed in the accompanying index. These financial statements and
schedules are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial
statements and schedules based upon our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements and schedules are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements and schedules. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the
financial statements and schedules. We believe that our audits
provide a reasonable basis for our opinion.
As discussed in Note C, the Partnership has mortgage loans
that mature during the next fiscal year or is delinquent on
scheduled payments. The Partnership is in current negotiations
with these mortgage holders to extend or refinance these
obligations.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Secured Investment Resources Fund, L.P. II at December 31,
1995 and 1994, and the results of its operations and its cash
flows for each of the three years in the period ended December
31, 1995 in conformity with generally accepted accounting
principles.
Also in our opinion, the schedules present fairly, in all
material respects, the information set forth therein.
s/ BDO Seidman, LLP
St. Louis, Missouri
April 10, 1996
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. II
BALANCE SHEETS
December 31,
1995 1994
ASSETS
INVESTMENT PROPERTIES (Notes B and C)
Land and buildings $ 36,217,082 $36,167,642
Furniture, fixtures and equipment 1,797,522 1,488,893
38,014,604 37,656,535
Less accumulated depreciation
and allowance for losses 10,725,975 9,529,532
27,288,629 28,127,003
RESTRICTED DEPOSITS
Bond cash reserves (Note C) 1,510,000 1,510,000
Bond principal reduction reserves 429,924 424,464
1,939,924 1,934,464
OTHER ASSETS
Cash 522,835 284,224
Rents and other receivables, less
allowance of $45,475 in 1995 and
$47,282 in 1994 12,069 21,472
Due from related parties (Note D) 174,423 173,996
Prepaid expenses 111,061 130,672
Debt issuance costs, net of accumulated
amortization of $129,854 in 1995 and
$88,602 in 1994 89,487 129,775
Commercial commissions, deposits and
other 155,700 161,674
1,065,575 901,813
$ 30,294,128 $30,963,280
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. II
BALANCE SHEETS--CONT'D.
December 31,
1995 1994
LIABILITIES AND PARTNERSHIP CAPITAL
Mortgage debt (Note C) $ 27,581,485 $28,555,529
Deferred interest (Note C) 1,126,213 1,108,465
Accrued interest 688,468 368,403
Accounts payable and accrued
expenses (Note G) 398,997 391,988
Unearned revenue 14,358 14,012
Tenant security deposits 140,325 129,306
TOTAL LIABILITIES 29,949,846 30,567,703
PARTNERSHIP CAPITAL
General Partners
Capital contribution 1,000 1,000
Partnership deficit (185,586) (185,073)
(184,586) (184,073)
Limited Partners
Capital contributions 18,901,831 18,901,831
Partnership deficit (18,372,963) (18,322,181)
528,868 579,650
TOTAL PARTNERSHIP CAPITAL 344,282 395,577
$ 30,294,128 $30,963,280
See notes to financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. II
STATEMENTS OF OPERATIONS
Years Ended December 31,
1995 1994 1993
REVENUES
Rents $ 5,583,063 $ 5,435,088 $ 5,674,072
Interest 3,601 --- 709
Maintenance escalations 310,848 256,181 286,067
5,897,512 5,691,269 5,960,848
OPERATING AND ADMINISTRATIVE
EXPENSES
Property operating
expenses 2,514,846 2,379,688 2,415,631
General and administrative
expenses 136,511 129,607 132,319
Professional services (Note D) 96,400 103,593 133,889
Management fees (Note D) 273,304 264,876 277,925
3,021,061 2,877,764 2,959,764
NET OPERATING INCOME 2,876,451 2,813,505 3,001,084
NON-OPERATING EXPENSES
Interest 2,429,217 2,322,166 2,724,453
Depreciation and
amortization 1,388,895 1,380,517 1,957,380
Gain on sale of
investment property --- --- (1,946,430)
3,818,112 3,702,683 2,735,403
Partnership income (loss)
before extraordinary item ( 941,661) ( 889,178) 265,681
Extraordinary gain on
debt restructuring--
(Note C) 890,366 --- 912,660
PARTNERSHIP INCOME (LOSS) $( 51,295) $ ( 889,178) $ 1,178,341
Allocation of income (loss)
General Partners $( 513) $ ( 8,892) $ 11,783
Limited Partners ( 50,782) ( 880,286) 1,166,558
$( 51,295) $( 889,178) $ 1,178,341
Per Limited Partnership Unit
Income (loss) before
extraordinary item $ (17.37) $ (16.40) $ 4.90
Extraordinary item 16.42 --- 16.84
Total per Limited
Partnership Unit $ ( .95) $ (16.40) $ 21.74
See notes to financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. II
STATEMENTS OF PARTNERSHIP CAPITAL
Years Ended December 31, 1995, 1994 and 1993
General Limited
Partners Partners Total
Balances at January 1, 1993 (186,964) 293,378 106,414
Partnership income 11,783 1,166,558 1,178,341
Balances at December 31, 1993 (175,181) 1,459,936 1,284,755
Partnership loss ( 8,892) ( 880,286) ( 889,178)
Balances at December 31, 1994 (184,073) 579,650 395,577
Partnership loss ( 513) ( 50,782) ( 51,295)
Balances at December 31, 1995 $ (184,586) $ 528,868 $ 344,282
See notes to financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. II
STATEMENTS OF CASH FLOWS
Years Ended December 31,
1995 1994 1993
OPERATING ACTIVITIES
Partnership (loss) income $ ( 51,295) $ ( 889,178) $ 1,178,341
Adjustments to reconcile
partnership (loss) income to net
cash provided by operating activities:
Depreciation and amortization 1,388,895 1,380,517 1,957,380
Gain on sale of
investment property --- --- (1,946,430)
Gain on debt restructuring ( 890,366) --- ( 912,660)
Provision for losses on rents
and other receivables ( 24,638) ( 16,385) ( 137,741)
Changes in assets and liabilities:
Rents and other receivables 34,041 52,251 144,999
Prepaid expenses 19,611 48,381 74,156
Commercial commissions,
deposits and other 5,974 42,313 (141,166)
Accounts payable
and accrued expenses 7,009 (144,774) (181,157)
Accrued interest 435,431 78,117 123,471
Unearned revenue 346 ( 3,520) (12,373)
Tenant security deposits 11,019 ( 6,187) (66,409)
NET CASH PROVIDED BY
OPERATING ACTIVITIES 936,027 541,535 80,411
INVESTING ACTIVITIES
Improvements to investment
properties (358,069) (226,809) (222,028)
Increase in restricted bond
cash reserves ( 5,460) ( 2,592) ---
Restricted deposits used to fund
principal payment on bonds
payable and accounts payable --- --- 2,096,949
NET CASH (USED IN) PROVIDED BY
INVESTING ACTIVITIES (363,529) (229,401) 1,874,921
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. II
STATEMENTS OF CASH FLOWS--CONT'D.
Years Ended December 31,
1995 1994 1993
FINANCING ACTIVITIES
Deferral of interest payable $ 17,748 $ 38,154 $ 176,833
Debt issuance costs ( 964) ( 2,708) ( 66,033)
Advances (to) from related
parties ( 427) 1,138 86,235
Proceeds from issuance of debt --- --- 800,000
Principal payments on debt (350,244) (273,009) (3,051,644)
NET CASH USED IN
FINANCING ACTIVITIES (333,887) (236,425) (2,054,609)
INCREASE (DECREASE) IN CASH 238,611 75,709 ( 99,277)
CASH BEGINNING OF YEAR 284,224 208,515 307,792
CASH END OF YEAR $ 522,835 $ 284,224 $ 208,515
See notes to financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. II
NOTES TO FINANCIAL STATEMENTS
Note A--SIGNIFICANT ACCOUNTING POLICIES
Organization and Business--Secured Investment Resources Fund, L.P. II
(the Partnership) is a Delaware limited partnership formed pursuant to the
Delaware Revised Uniform Limited Partnership Act on July 1, 1986. The
General Partners' and Limited Partners' interest in Partnership earnings or
loss initially amounts to 1% and 99%, respectively. The allocation of the
1% interest between the General Partners is discretionary. At such point in
time cash distributions to the Limited Partners amount to their original
invested capital plus interest at a rate of the greater of 8% (10% for those
investors who subscribed for units on or before December 31, 1986) or the
increase in the consumer price index per annum, cumulative non-compounded on
their adjusted invested capital, earnings or loss will be allocated 15% to
the General Partners and 85% to the Limited Partners.
Restricted Deposits--These restricted deposits are deposited into Money Market
Treasury Funds and Certificates of Deposits. The Partnership expects to hold
these until bond maturity. The amortized cost carrying value equals market
value. Depreciation--Investment property is depreciated on a straight-line
basis over the estimated useful life of the property (30 years for buildings
and 5 years for furniture, fixtures and equipment). Improvements are
capitalized and depreciated over their estimated useful lives. Maintenance
and repair expenses are charged to operations as incurred.
Income Taxes--Any tax liabilities or benefits arising from Partnership
operations are recognized individually by the respective partners and,
consequently, no provision will be made by the Partnership for income taxes
or income tax benefits.
Partnership Income or Loss Per Limited Partnership Unit--
Partnership income or loss per limited partnership unit is computed by
dividing loss allocated to the Limited Partners by the weighted average
number of limited partnership units outstanding. Per unit information has
been computed based on 53,661 weighted average limited partnership units
outstanding.
Debt Issuance and Refinancing Costs--Loan costs in the amount of $964, $2,708
and $66,033 were incurred and capitalized by the Partnership in 1995, 1994 and
1993, respectively. These costs are being amortized over the term of the
related loans.
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONT'D.
NOTE A--SIGNIFICANT ACCOUNTING POLICIES--CONT'D.
Reclassifications--Certain items in the 1995, 1994 and 1993 financial
statements have been reclassified. No income effect resulted from these
reclassifications.
Accounting Estimates--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statement and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
New Accounting Standards--In March 1995, the FASB issued its Statement of
Financial Accounting Standards No. 121, Accounting for the Impairment of
Long-Lived Assets and For Long-Lived Assets to Be Disposed Of ("SFAS 121").
SFAS 121 requires that long-lived assets and certain intangibles to be held
and used by an entity be reviewed for impairment when events or changes in
circumstances indicate that the carrying amount may not be recoverable. In
addition, SFAS 121 requires long-lived assets and certain intangibles to be
disposed of to be reported at the lower of carrying amount or fair value less
costs to sell. SFAS 121 is effective for fiscal years beginning after
December 15, 1995. Management does not expect the application of this
pronouncement to have a material effect on the financial statements of the
Partnership.
(The remainder of this page intentionally left blank.)
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONT'D.
NOTE B--INVESTMENT PROPERTIES
Investment properties consists of the following:
December 31,
1995 1994
Cost (including capital
improvements subsequent
to acquisition):
Bayberry Crossing Shopping
Center $ 4,451,962 $ 4,340,260
Forest Park Shopping Center 2,944,655 2,943,642
Thomasbrook Apartments 6,579,745 6,461,987
Sunwood Village Apartments 11,285,696 11,192,956
Oak Terrace Healthcare Center 3,980,340 3,980,340
Oak Terrace Active Retirement
Center 8,763,727 8,728,871
Other equipment 8,479 8,479
38,014,604 37,656,535
Less
Accumulated depreciation 9,975,975 8,779,532
Allowance for losses on
investment properties 750,000 750,000
$ 27,288,629 $28,127,003
During 1991 and 1990, the Partnership reduced the carrying value of its
commercial property portfolio to reflect real estate market conditions.
This change is reflected in Allowance for Losses on Investment Properties.
Sunwood Village Apartments is security to a non-recourse purchase money note
as disclosed in Note C which is due April 1, 1996. The net book value of this
property at December 31, 1995 was $8,303,000 as compared to long-term debt of
$8,137,000.
Thomasbrook Apartments is security to a non-recourse purchase money note as
disclosed in Note C which is currently past due as well as one-half of 1994
and all of 1995 real estate taxes. The net book value of this property at
December 31, 1995 was $4,219,000 as compared to long-term debt of $4,984,000,
accrued interest payable of $540,000 and delinquent real estate taxes of
$116,000.
Depreciation expense was $1,196,443, $1,189,238 and $1,414,146 for the year
ended December 31, 1995, 1994 and 1993, respectively.
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONT'D.
NOTE C--MORTGAGE DEBT
Non-recourse mortgage debt consists of the following:
December 31,
1995 1994
Collateralized by Investment Property:
First Mortgages:
Bayberry Crossing Shopping Center $ 831,023 $ 835,292
Forest Park Shopping Center 1,288,958 1,383,627
Thomasbrook Apartments 4,984,179 4,995,784
Sunwood Village Apartments 8,136,792 8,264,056
Oak Terrace Active Retirement
Center (OTARC) and Oak Terrace
Healthcare Center (OTHCC) 12,800,000 12,800,000
Less bond discount (2,353,042) (2,504,242)
Second Mortgages:
Bayberry Crossing Shopping Center 1,893,575 1,931,012
Thomasbrook Apartments --- 850,000
$27,581,485 $28,555,529
Bayberry Crossing Shopping Center (Bayberry)
A purchase money note in the original amount of $1,850,000 is collateralized
by Bayberry. A principal paydown of $845,000 was made in March 1993 and the
note was rewritten with a principal balance of $841,761. Principal and
interest payments are due monthly at a fixed amount of $6,358. The interest
rate is prime plus 2.00% and amortization is adjusted, based upon the change
in the interest rate, to maintain a 28 year amortization schedule through the
maturity date of March 1998. The interest rate at December 31, 1995 was 10.5%.
Also in March 1993, the Partnership placed a second mortgage on Bayberry
in the amount of $2,000,000. Proceeds from the loan were used to retire
a $1,200,000 line of credit and reduce the first mortgage to $841,761.
Principal and interest payments are due monthly with a fixed interest rate
of 8.00% and an amortization of 25 years through the maturity date of
February 1998.
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONT'D.
NOTE C--MORTGAGE DEBT--CONT'D.
Forest Park Shopping Center (Forest Park)
A bond financing agreement with a current balance of $1,288,958 is
collateralized by Forest Park. Principal and interest payments are due
monthly. Interest is calculated at 80% of the current prime rate and
adjusted annually. Monthly principal is due at an amortization rate of 17
1/2 years, which fully amortizes the loan through the maturity date of March,
2008. The bonds are callable on April 1, 1998 and 2003. The interest rates
at the adjustment dates of April 1, 1995, 1994 and 1993 were 7.20%, 6.25%,
and 6.0% respectively.
Thomasbrook Apartments (Thomasbrook)
A purchase money note with a current balance of $4,984,179 is collateralized
by Thomasbrook. Principal and interest payments are due monthly in an amount
necessary to amortize the principal over thirty years. The current interest
rate is 9.25% and increases to 9.5% on September 1, 1996, which remains in
effect through the maturity date of September 1, 2000.
As of December 31, 1995, the mortgage for Thomasbrook Apartments is past due
by $540,296 due to the negative cash flow status of the apartment complex.
The General Partner and the lender are engaged in ongoing negotiations related
to a restructure of this debt and it is anticipated that a restructure will be
completed in 1996.
Related to the Thomasbrook Apartments, the second mortgage of $850,000 was
paid in full on May 25, 1995 for the discounted amount of $75,000. That
payment fully retired the principal amount of $850,000 as well as accrued
interest in the amount of $115,366 resulting in a gain to the Partnership of
$890,366.
Sunwood Village Apartments (Sunwood)
A purchase money note with a current balance of $8,136,792 is collateralized
by Sunwood. Principal and interest payments are due monthly at the current
interest rate of 9.93% through the maturity date of April 1, 1996. The loan
structure includes a credit enhancement fee due at maturity. The cost of the
credit enhancement has been charged to interest expense. As of December
31, 1995 and 1994, $371,095 has been accrued.
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONT'D.
NOTE C--MORTGAGE--CONT'D.
Oak Terrace Active Retirement Center (OTARC) and Oak Terrace
Healthcare Center (OTHCC)
A bond financing agreement is collateralized by OTARC, OTHCC, and interest
earned on bond cash reserves and debt service reserves invested in Money
Market Mutual Funds ($1,510,000) and Certificates of Deposit ($429,924).
The original principal balance of $15,100,000 consisted of variable rate
demand multi-family housing revenue bonds, which mature serially from December
31, 1991 to December 2015. The effective rate was fixed on the commencement
date of the bonds based on 20 Year U.S. Treasury Bonds futures contracts. The
bonds contained a financing agreement providing for the financial institution
to receive a fee to fix the interest rate at 6.2% on $10,700,000 of the
principal balance. The bond discount paid to obtain this agreement is
amortized over the life of the bonds using an effective interest rate method.
The remaining $4,400,000 of the original principal balance bears interest at
variable rates. This rate, which is determined weekly by the Remarketing
Agent, is based upon his opinion as to the minimum rate necessary to sell the
Bonds (at par) in a secondary market. At December 31, 1995 the variable rate
was 6.2%. The current $12,800,000 balance of bonds consist $4,400,000 at an
variable interest rates and $8,400,000 at the fixed interest rates.
The Partnership had the option to pay or defer payment on the difference
in the fixed rate 6.2% on the $10,700,000 bonds and the reduced rate of
4.22%. On April 20, 1994 the fixed rate was reduced to 4.22%. The balance
of deferred interest was then fixed at $737,370. This amount has been
accrued and is reflected in deferred interest.
Pursuant to the terms of the bond financing agreement, certain cash reserves
are required and are designated for scheduled principal payments and
replacement reserves. Interest earned on these reserves is recorded as a
reduction of interest expense and is considered in the computation of the
amortization of the bond discount. As of December 31, 1995 and 1994, the
unamortized balance of the bond discount was $2,353,042 and $2,504,242,
respectively.
In 1993, the Partnership reached an agreement with the lender whereby the
lender released $2,096,949 of bond cash reserves to the Partnership in
exchange for a principal paydown of $1,900,000 on the variable rate portion
of the bonds. The principal paydown was a prepayment of scheduled principal
reductions through December 31, 1998. Therefore, no additional principal
payments are required until December 1999.
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONT'D.
NOTE C--MORTGAGE--CONT'D.
Upon receipt of the $1,900,000 paydown, the lender then released its second
mortgage on a property disposed of in 1993. The Partnership additionally
reduced the bond discount balance to reflect this principal paydown.
Cash paid for interest totaled $2,220,221, $2,209,797 and $2,482,926 during
1995, 1994, and 1993, respectively.
Maturities of mortgage debt are as follows:
Year
1996 $ 8,295,000
1997 164,525
1998 2,783,637
1999 135,362
2000 4,903,980
Thereafter 13,652,023
29,934,527
Bond discount (2,353,042)
Net debt outstanding $27,581,485
NOTE D--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, 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. Amounts paid by the Partnership to The Hoyt Group and SPECS,
Inc. are as follows:
Years Ended December 31,
1995 1994 1993
Property management fees $273,304 $264,876 $277,925
Professional services 48,000 -0- -0-
$321,304 $264,876 $277,925
These professional services were provided by an unrelated entity previous to
January 1, 1995.
The General Partners are entitled to receive a Partnership Management Fee
equal to 5% of Cash Flow From Operations (as defined) for managing the normal
operations of the Partnership exception for Forest Park whose Management Fee
is equal to 3% and Oak Terrace Health Care which pays 2% in Management Fees.
There was no management fee due for the years ended December 31, 1995,
1994 and 1993.
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONT'D.
NOTE D--RELATED PARTY TRANSACTIONS--CONT'D.
Amounts due from (to) related parties consist of the following:
December 31,
1995 1994
Secured Investment Resources II, Inc. $ 174,423 $ 173,996
$ 174,423 $ 173,996
The amount due from Secured Investment Resources II, Inc. represents excess
syndication costs. Because of many factors, the Partnership did not raise
the level of capital anticipated during the initial offering period. As a
result, syndication and acquisition costs exceeded the amount allowed per the
Partnership Agreement. The General Partners are obligated to reimburse these
excess costs/fees.
NOTE E--CASH DISTRIBUTIONS
No distributions have been made since April 1990. Future distributions will
only be made from excess cash flow not needed for working capital reserves.
NOTE F--PARTNERSHIP LIQUIDITY
The Partnership operates within the real estate industry and is subject to
its economic forces, which contributes additional liquidity risk to the
Partnership's investment portfolio. These risks include, but are not limited
to, changes in general or local economic conditions, changes in interest rates
and the availability of permanent mortgage financing which may render the
acquisition, sale or refinancing of a property difficult or unattractive,
changes in real estate and zoning laws, increases in real estate taxes,
federal or local economic or rent controls, floods, earthquakes and other acts
of God and other factors beyond the control of the Partnership's management.
The illiquidity of real estate investments generally may impair the ability
of the Partnership to respond promptly to changing economic conditions.
The General Partners believe that sufficient working capital will be available
to fund known, ongoing operating and capital expenditure requirements of the
Partnership during 1996. The primary source of working capital is expected to
be cash flow from operations which is expected to improve over that of the
previous year due to improved operations.
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONT'D.
NOTE F--PARTNERSHIP LIQUIDITY--CONT'D.
Certain positive factors that are expected to affect 1996 operations are
improved occupancy on the commercial properties, residential rental rate
increases and decreased usage of promotional rent discounts. It is also
expected that stringent controls over expenditures will be maintained.
The availability of the liquidity sources and accomplishment of these
objectives are partially predicated on the real estate economic conditions
discussed above, which are beyond the control of the Partnership, and will
influence the achieved results.
NOTE G--ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consists of the following:
December 31,
1995 1994
Vendor accounts payable $ 47,135 $ 79,889
Real estate / property taxes 246,510 191,535
Commercial lease commissions --- 11,364
Professional fees 53,733 55,704
Utilities 23,652 30,229
Payroll reimbursement 27,967 23,267
$ 398,997 $ 391,988
As of December 31, 1995, delinquent real estate taxes are $116,441 and consist
of one-half of 1994 and all of 1995 for Thomasbrook Apartments.
(The remainder of this page intentionally left blank.)
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONT'D.
NOTE H--INCOME TAXES
The Partners' capital accounts differ for financial reporting purposes and
federal income tax purposes. The primary differences result from: 1)
depreciation and amortization; 2) losses and provision for losses on
investment properties; and 3) provision for doubtful accounts. The effect
of these items is summarized as follows:
December 31,
1995 1994
Financial reporting basis:
Total assets $ 30,294,128 $30,963,280
Total liabilities (29,949,846) (30,567,703)
Total Partners' capital $ 344,282 $ 395,577
Tax basis:
Total assets $ 37,895,516 $38,611,186
Total liabilities (34,718,036) (35,382,139)
Total Partners' capital $ 3,177,480 $ 3,229,047
Years Ended December 31,
1995 1994 1993
Partnership income
(loss)--financial
reporting purposes $( 51,295) $( 889,178) $1,178,341
Book versus tax differences
due to:
Deferred interest 129,977 ( 129,977) ---
Depreciation and
amortization (44,713) (46,211) 238,815
Bond discount
amortization (98,010) ( 139,719) 546,600
Gain (loss) on sale of
investment property --- --- (340,361)
Unearned income 14,358 --- ---
Provision for doubtful
accounts (1,805) ( 16,120) (210,189)
Other 1,921 1,961 ---
1,728 (330,066) 234,865
Partnership income
(loss)--federal income
tax purposes $( 49,567) $(1,219,244) $1,413,206
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONT'D.
NOTE I--LEASES
Rental income on investment properties is reported when earned. The
Partnership leases its commercial properties under non-cancelable
operating lease agreements. The Partnership's residential properties are
leased under short-term lease agreements. Future minimum rents to be
received as of December 31, 1995 are as follows:
1996 $ 618,863
1997 425,564
1998 219,516
1999 170,551
2000 111,071
TOTAL $1,545,565
NOTE J--SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Non-cash activity for the year ended December 31, 1993 follows:
1993
Conveyance of the In The Pines Apartments and
OTARC principal paydown:
Net book value of assets conveyed $ 5,153,570
Mortgage debt retired (8,501,360)
Other liabilities assumed (net) (57,900)
Reduction in bond discount 546,600
$ (2,859,090)
(The remainder of this page intentionally left blank.)
<PAGE>
NOTES TO FINANCIAL STATEMENTS--CONT'D.
NOTE K--DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value
of each class of financial instrument for which it is practicable to estimate
that value:
Cash and Short-term Investments. The carrying amount approximates fair value
because of the short maturity of those instruments.
Long-Term Debt. The fair value of the Partnership's long-term debt is
estimated based on the quoted market prices for the same or similar issues
or on the current rates offered to the Partnership for debt of the same
remaining maturities.
The estimated fair values of the Partnership's financial instruments are as
follows:
Carrying Fair
1995 Amount Value
Cash and short-term investments $ 2,462,800 $ 2,462,800
Long-term debt $27,581,500 $27,210,000
<PAGE>
Item 9. Changes in and Disagreement with Registrant's Certifying
Accountants on Accounting and Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The General Partners of the Partnership are James R. Hoyt and
Secured Investment Resources II, Inc.
Secured Investment Resources II, Inc. (the Corporate General
Partner) was incorporated under the laws of the state of
Missouri on June 20, 1986 for the purpose of acting as General
Partner and Acquisition Agent of the Partnership.
As of December 31, 1995, Mr. James R. Hoyt is the sole officer
and director.
James R. Hoyt (the Individual General Partner), age 58, holds a
Bachelor's Degree in Business Administration and is a licensed
real estate broker in two states. Mr. Hoyt has been actively
involved for more than the past twenty years in various real estate
endeavors including development, syndication, property management
and brokerage.
Mr. Hoyt is the Individual General Partner and sponsor of Secured
Investment Resources Fund, L.P. (S.I.R.) and Secured Investment
Resources Fund, L.P. III, (S.I.R. III). Since 1983, Mr. Hoyt has
also been involved as the Individual General Partner in ten
specified real estate private placement offerings. As of December
31, 1995, these partnerships, including Secured Investment Resources
Fund, L.P. II, have raised a total of $60,709,750.
<PAGE>
Item 11. Management Compensation
During 1995, the Partnership paid $273,304 in fees to related
parties for property management services.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
(a) Security Ownership of certain beneficial owners.
No individual or group as defined by Section 13(d)(3)
of the Securities Exchange Act of 1934, known to the
registrant is the beneficial owner of more than 5 percent
of the registrant's securities.
(b) Security ownership of Management.
The General Partners own less than 1%.
(c) Change in Control.
None.
Item 13. Certain Relationships and Related Transactions.
See Notes to Financial Statements, Note D appearing in Item 8.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K.
(a)(1) The following Financial Statements of Secured
Investment Resources Fund, L.P. II are included in
Item 8:
Page
(i) Independent Auditors' Report 13
(ii) Balance Sheets -
December 31, 1995 and 1994 14-15
(iii) Statements of Operations -
Years Ended December 31, 1995,
1994 and 1993 16
(iv) Statements of Partnership
Capital - Years Ended December 31,
1995, 1994 and 1993 17
(v) Statements of Cash Flows -
Years Ended December 31, 1995,
1994 and 1993 18-19
(vi) Notes to Financial Statements 20-32
(a)(2) The following Financial Statement Schedules are
filed as part of this report:
(i) Schedule II - Allowance for Doubtful
Accounts Statement Information 37
(ii) Schedule III - Real Estate and
Accumulated Depreciation 41-42
All schedules other than those indicated in the index have been
omitted as the required information is presented in the financial
statements, related notes or is inapplicable.
<PAGE>Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K--Cont'd.
(a)(3) The following Exhibits are Incorporated by Reference
and are an integral part of this Form 10-K.
Exhibit Number Description
(1) (a) Amendment to Dealer Manager
Agreement dated April 30, 1987.
(ix)
(3) (a) Amended and Restated Agreement of
Limited Partnership. (iii)
(b) Second Amendment to Restated
Certificate and Agreement of
Limited Partnership. (vii)
(c) Certificate of Limited Partnership. (i)
(4) (a) Form of Subscription Agreement. (iii)
(b) Form of Certificate evidencing
units. (i)
(c) See 3(a) & 3(b) above. (iii)
(d) See 3(c) above. (i)
(10) (a) Property Management Agreement
between the Partnership and The
Hoyt Group Limited Partnership. (i)
(b) Escrow Agreement between the
Partnership and The Mission Bank. (ii)
(c) Administrative Services Agreement
between Secured Investment
Resources II, Inc. and the
Partnership. (i)
(d) Real Estate Contract of Sale and
Exhibit for Sunwood Apartments. (iv)
(e) Deed of Trust, Promissory Note and
Exhibits for Sunwood Apartments. (vi)
(f) Real Estate Contract of Sale and
Exhibits for Bayberry Crossing
Shopping Center. (v)
<PAGE>
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K--Cont'd.
Exhibit Number Description
(g) Deed of Trust, Promissory Note and
Exhibits for Bayberry Crossing
Shopping Center. (vi)
(h) Real Estate Purchase Agreement and
Exhibits for Country Club Place
Shopping Center. (vi)
(i) Deed of Trust, Promissory Note and
Exhibits for Country Club Place
Shopping Center. (vi)
(j) Real Estate Purchase Agreement and
Exhibits for In The Pines
Apartments. (viii)
(k) Deed of Trust, Promissory Note and
Exhibits for In The Pines
Apartments. (viii)
(l) Asset Purchase Agreement and
Exhibits for Oak Terrace Active
Retirement Community. (x)
(m) Asset Purchase Agreement and
Exhibits for Oak Terrace Health
Care Center. (x)
(n) Lease for Oak Terrace Health Care
Center. (x)
(o) Loan Agreement for Bond Financing
on Oak Terrace Active Retirement
Community. (x)
(p) Real Estate Contract of Sale and
Exhibits for Forest Park Shopping
Center. (xi)
(q) Real Estate Contract of Sale and
Exhibits for Thomasbrook
Apartments. (xii)
(r) Loan Assumption Documents for
Thomasbrook Apartments. (xii)
(16) (a) Letter regarding Change in
Certified Accountant. (xi), (xiii)
(25) (a) Power of Attorney (i)
(28) (a) Guarantee of General Partners. (i)
<PAGE>
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K--Cont'd.
(i) Previously filed on July 17, 1986 as an Exhibit to the
Registration Statement on Form S-11 (file no. 33-7302)
such Exhibit and Registration Statement incorporated
herein by reference.
(ii) Previously filed on September 25, 1986 as an Exhibit to
Amendment #1 to the Registration Statement of Form S-11
such Exhibit and Registration Statement incorporated
herein by reference.
(iii) Previously filed on September 25, 1986 in the
Prospectus as part of Amendment #1 to Registration
Statement and incorporated herein by reference.
(iv) Previously filed as an exhibit to Form 8-K dated June
2, 1987 and incorporated herein by reference.
(v) Previously filed as an exhibit to Form 8-K dated June
5, 1987 and incorporated herein by reference.
(vi) Previously filed as an exhibit to Registration
Statement on Form S-11 (file No. 33-7302) dated August
13, 1987 and incorporated herein by reference.
(vii) Previously filed as an Exhibit to the Supplement
Prospectus dated August 13, 1987 as part of Post-
effective Amendment No. 4 to the Registration Statement
on Form S-11 (file No. 33-7302) and incorporated herein
by reference.
(viii Previously filed as an Exhibit to Form 8-K dated
January 13, 1988 and incorporated herein by reference.
(ix) Previously filed as an Exhibit to Form 8, amendment to
Form 8-K dated February 29, 1988 and incorporated
herein by reference.
(x) Previously filed as an Exhibit to Form 8-K dated
September 14, 1988 and incorporated herein by
reference.
(xi) Previously filed as an Exhibit to Form 8-K dated
December 7, 1988 and incorporated herein by reference.
(xii) Previously filed as an Exhibit to Form 10-K dated March
30, 1989 and incorporated herein by reference.
(xiii) Previously filed as an Exhibit to Form 8-K dated
December 4, 1989 and incorporated herein by reference.
(b) Report of Form 8-K filed during the fourth quarter
None.
<PAGE>
Secured Investment Resources Fund L.P. II
Schedule II - Allowance for Doubtful Accounts
December 31, 1995
Balance at Additions Bad Debt Write Balance at
Beginning of Charged to Offs Deducted End
Period Operations From Allowance of Period
For Years Ended December 31,
1993 $273,589 $(137,741) $ 72,448 $63,400
1994 63,400 ( 16,385) 267 47,282
1995 47,282 ( 24,638) 22,831 45,475
<PAGE>
<TABLE>
Secured Investment Resources Fund, L.P. II
Schedule III - Real Estate & Accumulated Depreciation
December 31, 1995
<CAPTION>
Initial Cost to Partnership (A) Subsequent to Acquisition
Buildings & Furniture Reduction
Encumbrances Land Improvements Equipment Improvements of Basis (B)
<S> <C> <C> <C> <C> <C> <C>
Other Equipment $ 8,479
Garden Apartments:
Sunwood Apartments $8,136,792 $1,375,448 $9,706,178 $123,000 350,960 (269,890)
Las Vegas, NV
Thomasbrook Apartments 4,984,179 655,327 5,305,193 847,647 (228,422)
Shawnee, KS
Strip Shopping Centers
Bayberry Crossings 2,724,598 607,184 3,729,847 355,815 (240,885)
Lee's Summit, MO
Forest Park 1,288,958 504,761 2,372,378 110,727 (43,211)
St. Louis, MO
Retirement Center:
Retirement Center
Springfield, IL 11,744,225 258,269 8,174,500 172,000 158,958
Nursing Home:
Oak Terrace Health
Care Center 1,055,775 273,834 3,412,956 293,550
Springfield, IL
Less Bond Discount on
Oak Terrace Active
Retirement Center and (2,353,042)
Health Care Center
$27,581,485 $3,674,823 $32,701,052 $ 588,550 $1,832,586 $(782,408)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Gross Amount at Which
Carried at Close of Period
Buildings & Furniture Accumulated Date Depreciation
Land Improvements Equipment Total Depreciation(3) Acquired Life
<S> <C> <C> <C> <C> <C> <C> <C>
Other Equipment 8,479 8,479 8,210 5 Yrs (2)
Garden Apartments:
Sunwood Apartments 1,340,364 9,535,429 409,903 11,285,696 2,982,600 15-May-87 30 Yrs (1)
Las Vegas, NV 5 Yrs (2)
Thomasbrook Apartments 451,058 5,709,188 419,499 6,579,745 1,909,546 26-Aug-88 30 Yrs (1)
Shawnee, KS 5 Yrs (2)
Strip Shopping Centers
Bayberry Crossings 574,761 3,615,680 261,521 4,451,962 1,141,514 30-Jun-87 30 Yrs (1)
Lee's Summit, MO 5 Yrs (2)
Forest Park Shopping Center 492,694 2,356,817 95,144 2,944,655 1,318,772 23-Nov-88 30 Yrs (1)
St. Louis, MO 5 Yrs (2)
Retirement Center:
Oak Terrace Active
Retirement Center
Springfield, IL 258,269 8,196,032 309,426 8,763,727 2,237,505 31-Aug-88 30 Yrs (1)
5 Yrs (2)
Nursing Home:
Oak Terrace Health
Care Center 273,834 3,412,956 293,550 3,980,340 1,127,828 31-Aug-88 30 Yrs (1)
Springfield, IL 5 Yrs (2)
$3,390,980 $32,826,102 $1,797,522 $38,014,604 $10,725,975
</TABLE>
<PAGE>
(1) Estimated useful life of buildings.
(2) Estimated useful life of furniture and fixtures.
(3) Includes allowance for losses of $750,000.
NOTES:
(A) The initial cost to the Partnership represents the original
purchase price of the properties, including $205,582 and $145,578
of improvements incurred in 1988 and 1987, respectively, which
were contemplated at the time the property was acquired.
(B) Receipts received under the terms of certain guarantee agreements
are recorded by the Partnership as a reduction of the basis of the
property to which the guaranteed income relates.
<PAGE>
<TABLE>
Secured Investment Resources Fund, L.P. II
Schedule III - Real Estate & Accumulated Depreciation -- Continued
<CAPTION>
December 31, 1995
Buildings & Furniture #
Total Land Improvements Equipment
<S> <C> <C> <C> <C>
(C) Reconciliation of Real Estate owned:
Balance at January 1, 1993 $44,067,964 $3,844,064 $38,151,746 $2,072,154
Additions during year:
Improvements 222,029 115,482 106,547
Reclassifications 107,214 (107,214)
Dispositions during year (6,860,267) (453,085) (5,631,896) (775,286)
Balance at December 31, 1993 $37,429,726 $3,390,979 $32,742,546 $1,296,201
Additions during year:
Improvements 226,809 --- 34,117 192,692
Balance at December 31, 1994 37,656,535 3,390,979 32,776,663 1,488,893
Additions during year:
Improvements 358,069 --- 49,439 308,629
Balance at December 31, 1995 $38,014,604 $3,390,979 $36,217,081 $1,797,522
(D) Reconciliation of Accumulated Depreciation
Balance at January 1, 1993 8,632,839 --- 7,005,614 1,627,225
Additions during year:
Depreciation Expense 1,414,152 1,203,371 210,781
Reclassifications (131,407) 131,407
Dispositions during year (1,706,698) --- (1,042,565) (664,133)
Balance at December 31, 1993 8,340,293 --- 7,035,013 1,305,280
Additions during year:
Depreciation Expense 1,189,239 --- 1,100,507 88,732
Balance at December 31, 1994 9,529,532 --- 8,135,520 1,394,012
Additions during year:
Depreciation Expense 1,196,443 --- 877,397 319,046
Balance at December 31, 1995 $10,725,975 --- $9,012,917 $1,713,058
</TABLE>
(E) The total gross amount of real estate at December 31, 1995 includes
$3,085,450 of acquisition fees paid to affiliates.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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. II
A Delaware Limited Partnership
(Registrant)
By:
James R. Hoyt
as Individual General Partner
Date:
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
By: Secured Investment Resources II, Inc.
as Corporate General Partner
By:
James R. Hoyt, President
Date:
Supplemental Information to be Furnished With Reports Filed
Pursuant to Section 15(d) of the Act by Registrants Which Have
Not Registered Securities Pursuant to Section 12 of the Act.
No annual report or proxy material has been sent to security
holders.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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. II
A Delaware Limited Partnership
(Registrant)
By: /s/ James R. Hoyt
James R. Hoyt
as Individual General Partner
Date: April 10, 1996
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
By: Secured Investment Resources II, Inc.
as Corporate General Partner
By: /s/ James R. Hoyt
James R. Hoyt, President
Date: April 10, 1996
Supplemental Information to be Furnished With Reports Filed
Pursuant to Section 15(d) of the Act by Registrants Which Have
Not Registered Securities Pursuant to Section 12 of the Act.
No annual report or proxy material has been sent to security
holders.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 522,835
<SECURITIES> 1,939,924
<RECEIVABLES> 57,544
<ALLOWANCES> 45,475
<INVENTORY> 0
<CURRENT-ASSETS> 1,065,575
<PP&E> 38,014,604
<DEPRECIATION> 10,725,975
<TOTAL-ASSETS> 30,294,128
<CURRENT-LIABILITIES> 2,368,361
<BONDS> 27,581,485
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 30,294,128
<SALES> 0
<TOTAL-REVENUES> 5,897,512
<CGS> 0
<TOTAL-COSTS> 3,021,061
<OTHER-EXPENSES> 1,388,895
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,429,217
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (51,295)
<EPS-PRIMARY> (.95)
<EPS-DILUTED> 0
</TABLE>
