SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1998 Commission File Number 0-17717
FOUNDATION REALTY FUND, LTD
(Exact name of Registrant as specified in its charter)
Florida 59-2802896
(State or other jurisdiction of (IRS Employer ID No.)
incorporation or organization)
880 Carillon Parkway, St. Petersburg, Florida 33716
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code - (813) 573-3800
Indicate by check mark whether the Registrant (1)
has filed all reports to be filed by Section 13 or
15(d) of the Securites Exchange Act of 1934 during
the preceeding 12 months (or shorter period 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
Number of share outstanding of each of Registrant's classes of securites.
Title of Each Class Number of Units
March 31, 1998
Units of Limited Partnership 9,407
Interest: $1,000 per unit
DOCUMENT INCORPORATION BY REFERENCE
Part IV - Registration Statement S-11, File No. 33-13849
FOUNDATION REALTY FUND, LTD.
(A Florida Limited Partnership)
INDEX TO FINANCIAL STATEMENTS
Part I - Financial Information
Page No.
Balance Sheets as of March 31, 1998 and December 31, 1997 3
Statements of Operations -
For the Three Months Ended March 31, 1998 and 1997 4
Statements of Partners' Equity -
For the Three Months Ended March 31, 1998 and 1997 5
Statements of Cash Flows -
For the Three Months Ended March 31, 1998 and 1997 6
Notes to Financial Statements 7-9
Management's Discussion and Analysis if Financial
Condition and Results of Operations 10-11
<TABLE>
FOUNDATION REALTY FUND, LTD.
(A Florida Limited Partnership)
<CAPTION>
BALANCE SHEET
March 31, 1998 December 31, 1997
(Unaudited) Audited
ASSETS
<S> <C> <C>
Aparment Properties, at Cost $22,311,294 $22,299,095
Less - Accumulated Depreciation (6,466,044) (6,304,794)
15,845,250 15,994,301
Cash and Cash Equivalents 1,109,029 981,983
Prepaid Expenses 31,823 549
Deferred Loan Cost (Net of Accumulated
Amortization of $20,778 and $10,389) 270,101 280,490
TOTAL ASSETS $17,256,203 $17,257,323
LIABILITIES AND PARTNERS' EQUITY
Liabilites:
Notes Payable $17,859,032 $17,898,206
Accounts Payable 126,417 49,114
Security Deposits 91,605 89,601
Unearned Rent 23,650 26,137
TOTAL LIABILITIES 18,100,704 18,063,058
Partner's Equity
Limited Partners' Equity (9,407 units
outstanding @ March 31, 1998 and
December 31, 1997 (576,193) (533,486)
General Partner's Equity (268,308) (272,249)
TOTAL PARTNERS' EQUITY (844,501) (805,735)
TOTAL LIABILITES AND PARTNERS' EQUITY $17,256,203 $17,257,323
</TABLE>
<TABLE>
FOUNDATION REALTY FUND, LTD.
<CAPTION> (A Florida Limited Partnership)
STATEMENT OF OPERATIONS
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31
<S> 1998 1997
Property Operations : <C> <C>
Rental Income $908,283 $876,584
Miscellaneous 19,997 22,860
928,280 899,444
Expenses:
Depreciation 161,250 173,001
Payroll 86,173 84,123
Real Estate Taxes 72,903 70,731
Utilities 46,822 49,727
Repairs & Maintenance 41,737 45,210
Property Management - General Partner 46,160 44,617
Landscaping 20,092 23,407
Other 28,152 29,985
503,289 520,801
Income from Property Operations 424,991 378,643
Interest Income 9,007 11,230
433,998 389,873
Other Exenses:
Amortization 10,389 0
Interest 343,094 403,662
General & Administrative - Affiliate 90 814
Other General & Administrative 1,603 4,566
355,176 409,042
Net Income (Loss) $ 78,822 $(19,169)
Allocation of Net Income (Loss) -
Limited Partners $ 74,881 $(18,211)
General Partners 3,941 (958)
$ 78,822 $(19,169)
Net Income (Loss) Per
Limited Partnership Unit $ 7.96 $ (1.94)
Number of Limited Partnership Units 9,407 9,407
</TABLE>
<TABLE>
FOUNDATION REALTY FUND, LTD.
(A Florida Limited Partnership)
<CAPTION>
STATEMENT OF PARTNERS' EQUITY
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
Limited General Total
Partners' Partners' Partners'
Equity Equity Equity
<S> <C> <C> <C>
Balance, December 31, 1996 $ 382,927 $ (227,730) $ 155,197
Distribution to Partners (188,140) (9,902) (198,042)
Net Loss (18,211) (958) (19,169)
Balance, March 31, 1997 $ 176,576 $ (238,590) $ (62,014)
Balance, December 31, 1997 $(533,486) $ (272,249) $ (805,735)
Distribution to Partners (117,588) 0 (117,588)
Net Income 74,881 3,941 78,822
Balance, March 31, 1998 $(576,193) $ (268,308) $ (844,501)
</TABLE>
<TABLE>
FOUNDATION REALTY FUND, LTD.
<CAPTION> (A Florida Limited Partnership)
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(Unaudited)
<S> 1998 1997
Net Cash Provided by Operating Activities: <C> <C>
Net Income (Loss) $ 78,822 $ (19,169)
Adjustments to Reconcile Net Loss to Net Cash
Provided by Operating Activities
Depreciation: 161,250 173,001
Amortization 10,389 0
Changes in Operating Assets and Liabilities:
(Increase) in Prepaids (31,274) (26,541)
Increase in Accounts Payable 77,303 88,176
Increase in Security Deposits 2,004 19
(Decrease) in Unearned Rents (2,487) (26,894)
Net Cash Provided by Operating Activities 296,007 188,592
Cash Flows from Investing Activities:
Improvements to Apartment Properties (12,199) (16,741)
Net Cash Used in Investing Activities (12,199) (16,741)
Cash Flows from Financing Activities:
Proceeds from Notes Payable 0 142,164
Payments from Notes Payable (39,174) (9,650)
Distributions to Partners (117,588) (198,042)
Net Cash used by Financing Activities (156,762) (65,528)
Increase (Decrease) in Cash 127,046 106,323
Cash and Cash Equivalents at Beginning of period 981,983 1,069,572
Cash and Cash Equivalents at End of period 1,109,029 1,175,895
Supplemental Cash Flow Information:
Interest Paid $ 343,094 $ 261,498
Supplemental Disclosure of Non-Cash
Financing Activities:
Deferred Interest on Mortgage Note Payable $ 0 $ 142,164
</TABLE>
FOUNDATION REALTY FUND, LTD
A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1 - ORGANIZATION
Foundation Realty Fund, Ltd., (the "Partnership"), a Florida Limited
Partnership, was formed April 14, 1987 under the laws of Florida.
Operations commenced on January 12, 1988. The Partnership operates
two apartment properties. The Partnership will terminate on
December 31, 2020, or sooner, in accordance with the terms of the
Limited Partnership Agreement. The Partnership has received Limited
and General Partner capital contributions of $9,407,000 and $1,000
respectively. J. Robert Love, an individual, and RJ Properties,
Inc., a majority-owned subsidiary of Raymond James Financial, Inc.
are the General Partners and they manage and control the business of
the Partnership.
Operating profits and losses are allocated 95% to the Limited Part-
ners and 5% to the General Partners. Cash from operations will be
shared 95% by the Limited Partners and 5% by the General Partners;
however, distributions to the General Partners are subordinated to
certain preferred returns to the Limited Partners. Profit or loss
and cash distributions from sales of property will be allocated as
formulated in the Limited Partnership Agreement.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting
The Partnership utilizes the accrual basis of accounting whereby
revenues are recongized when earned and expenses are recognized as
obligations are incurred.
Cash and Cash Equivalents
It is the Partnership's policy to include short-term investments
with an original maturity of three months or less in Cash and Cash
Equivalents. These short-term investments are comprised of money
market funds, and repurchase agreements.
Restricted Cash
Cash and Cash Equivalents include $204,320 at March 31, 1998 and
$243,556 at December 31, 1997 of cash held in escrow for the payment
of real estate taxes. Cash and Cash Equivalents also include
$91,605 at March 31, 1998 and $89,601 at December 31, 1997 of tenant
security deposits held in an escrow account.
Income Taxes
No provisions for income taxes has been made in these financial
statements, as income taxes are a liability of the partners rather
than of the Partnership.
Depreciation
The apartment buildings are being depreciated over 35 years using
the straight-line method. Furniture and fixtures are being depreci-
ated over 8 years using the straight-line method.
NOTE 3 - COMPENSATION, REIMBURSEMENTS AND ACCRUALS TO THE GENERAL
PARTNERS AND AFFILIATES:
The General Partners and affiliates are entitled to the following
types of compensation and reimbursment for costs and expenses
incured for the Partnership for the three months ended March
31, 1998.
Property Management Fees $ 46,160
General and Administrative Costs 90
NOTE 4 - LEASES AND APARTMENT PROPERTIES:
The Partnership owns apartment complexes leased to residents under
short term operating leases. A summary of the apartment properties
is as follows:
March 31, December 31
1998 1997
Land 3,141,510 3,141,510
Buildings 17,298,118 17,298,118
Furniture & Fixtures 1,871,666 1,859,467
Apartment Properties, at Cost 22,311,294 22,299,095
Less: Accumulated Depreciation (6,466,044) (6,304,794)
15,845,250 15,994,301
NOTE 5 - NOTES PAYABLE
The notes payable are secured by the apartment properties.
NOTE 6 - BASIS OF PREPARATION:
The unaudited financial statements presented herein have been pre-
pared in accordance with the instructions to Form 10-Q and do not
include all of the information and note disclosures required by
generally accepted accounting principals. These statements should
be read in conjuction with the financial statements and notes thereto
included in the Partnership's Form 10-K for the year ended December
31, 1997. In the opinion of management, such financial statements
include all adjustments, consisting only of normal recurring adjust-
ments, necessary to summarize fairly the Partnership's financial
position and results of operations. The results of operations for
the periods may not be indicative of the result to be expected for
the year.
NOTE 7 - SUBSEQUENT EVENT:
On April 30, 1998, the Partnership paid distributions of $129,346
to the Limited Partners and $-0- to the General Partners.
FOUNDATION REALTY FUND, LTD.
(A Florida LImited Partnership)
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Rental income for the three months ended March 31, 1998 was
$908,283 as compared to $876,584 for the comparable period ended
March 31, 1997. Income from property operations for the three months
ended March 31, 1998 was $424,991 as compared to $378,647 for the
comparable period ended March 31, 1997. The increase in rental
income was a result of higher rental rates being in effect in 1998.
Interest expense decreased from $403,662 for the three months ended
March 31, 1997 to $343,094 for the three months ended March 31, 1998.
This decrease in interest expense is a result of a refinancing of the
original debt to new loans with a lower interest rate and a replacement of
the Oakwood Village First Purchase Money Mortgage with a traditional
amortizing loan.
Net income for the three months ended March 31, 1998 was $78,822 or
$7.96 per Limited Partnership Unit outstanding as compared to a
loss of $19,169 or $1.94 per Limited Partnership Unit for the comparable
period ended March 31, 1997.
Liquidity and Capital Resources
In management's opinion, working capital reserves and liquidity are
sufficient to meet the short-term operating needs of the Partnership.
Cash provided by operating activities increased by $107,415 for the
three month period ended March 31, 1998 as compared to the three month
period ended March 31, 1997. The change resulted primarily from the
generation of net operating income of $78,822 for the three months ended
March 31, 1998 verse a loss of $19,169 for the three months ended
March 31, 1997.
Cash used by investing activities totaled $12,199 at March 31, 1998 as
compared to $16,741 at March 31, 1997. The $4,542 decrease for the three
month period ended March 31, 1998 is solely attributable to the decrease
in the number of carpets replaced in the apartment units of both
apartment communities.
Cash used by financing activities increased by $91,234 from the three
month period ended March 31, 1998 when compared to the three month
period ended March 31, 1997. The loan refinancing of the Oakwood Village
purchase money first mortgage with a traditional amortizing loan accounted
for $171,688 of the increase. The increased amount was offset by a
decrease in partner distributions for the comparative three month period
of $80,454.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
FOUNDATION REALTY FUND, LTD.
A Florida Limited Partnership
By: RJ PROPERTIES, INC. a General Partner
5/10/98 J. Robert Love - President
Date (Signature)
5/10/98 Alan G. Lee - Assitant Secretary
Date (Signature)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1998
<CASH> $1,109,029
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> $1,410,953
<PP&E> $22,311,294
<DEPRECIATION> $6,466,044
<TOTAL-ASSETS> $17,256,203
<CURRENT-LIABILITIES> $241,672
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> ($844,501)
<TOTAL-LIABILITY-AND-EQUITY> $17,256,203
<SALES> 0
<TOTAL-REVENUES> $937,287
<CGS> 0
<TOTAL-COSTS> $503,289
<OTHER-EXPENSES> $1,693
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> $343,094
<INCOME-PRETAX> $ 78,822
<INCOME-TAX> 0
<INCOME-CONTINUING> $78,822
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> $78,822
<EPS-PRIMARY> $7.96
<EPS-DILUTED> $7.96
</TABLE>
