<TABLE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
ANNUAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Year Ended December 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 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 by Part III of this Form 10-K or any
amendment to this Form 10-K.
XX
Indicate by check mark whether the Registrant (1) has filed all reports
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 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
December 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)
PART I
Item 1. Business
General Development of Business -
The Registrant is a Florida Limited Partnership ("Partnership") whose
General Partners are RJ Properties, Inc. ("RJP"), a majority-owned
subsidiary of Raymond James Financial, Inc., and J. Robert Love, an
individual (collectively, the "General Partners"). The Partnership was
formed under the laws of Florida and commenced operations
on January 12, 1988.
Financial Information about Industry Segments -
The Registrant is engaged in only one industry segment, the acquisition,
management and disposition of apartment properties.
Narrative Description of Business -
The Partnership's business is to acquire, manage, and eventually sell
apartment properties which offer the potential for providing periodic,
cash distributions to Limited Partners, capital appreciation, and
preservation and protection of the Limited Partners' Capital Contributions.
The Registrant has no direct employees. The General Partners have full
and exclusive discretion in management and control of the Partnership.
Item 2. Properties
As of December 31, 1998, the Partnership owned the properties listed below:
Purchase Current
Property Name and Location Date Cost
Oakwood Village Apartments
Atlanta, Georgia 1/22/88 $ 9,354,874
Springfield Apartments
Durham, North Carolina 9/22/88 $13,027,066
A summary of the apartment properties is as follows:
December 31, December 31,
1998 1997
Land $ 3,141,510 $ 3,141,510
Buildings 17,298,118 17,298,118
Furniture & Fixtures 1,942,312 1,859,467
Apartment Properties, at Cost 22,381,940 22,299,095
Less: Accumulated Depreciation (6,855,016) (6,304,794)
$15,526,924 $15,994,301
Item 3. Legal Proceedings
The Registrant is not a party to material pending legal proceedings.
Item 4. Submission of Matters to Vote of Security Holders
No matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise during 1998.
PART II
Item 5. Market for the Registrant's Securities and Related Security
Holder Matters
(A) The Registrant's Limited Partnership interests are not publicly
traded. There is no market for the Registrant's Limited Partnership
interests and it is unlikely that any will develop.
(B) Approximate Number of Equity Security Holders:
Number of Record Holders
Title of Class as of December 31, 1998
Units of Limited Partnership Interest 731
General Partner Interest 2
<CAPTION>
Item 6. Selected Financial Data
<S> <C> <C> <C> <C> <C>
1998 1997 1996 1995 1994
Total Revenues $ 3,681,292 $ 3,653,810 $ 3,541,450 $ 3,485,761 $ 3,285,708
Net Income (Loss) 194,764 (296,253) (150,117) (179,145) (273,540)
Total Assets 16,826,009 17,257,323 17,530,937 1,7963,566 18,443,434
Notes Payable 17,736,343 17,898,206 17,196,565 16,700,035 16,278,673
Distributions to
Limited Partners
Per Partnership
Unit** $ 51.25 $ 67.50 $ 79.37 $ 76.87 $ 70.63
Income (Loss) Per $1,000
Limited Partners
Unit Outstanding $ 19.67 $ (29.92) $ (15.16) $ (18.09) $ (27.62)
Occupancy % 93.1% 94.7% 94.9% 95.4% 96.0%
Revenue per
Sq. Ft. $ 8.85 $ 8.78 $ 8.51 $ 8.37 $ 7.89
</TABLE>
** For an investor admitted in January, 1988. None of the distribution
to Limited Partners represents a return of capital.
The above selected financial data should be read in conjunction with the
financial statements related notes appearing elsewhere in this report.
This statement is not covered by the auditor's opinion included elsewhere
in this report.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Rental income for the twelve months ended December 31, 1998 was $3,545,122
as compared to $3,524,105 and $3,400,522 for the comparable periods ended
December 31, 1997 and December 31, 1996, respectively. Income from
property operations for the twelve months ended December 31, 1998 was
$1,578,145 as compared to $1,441,200 and $1,402,132 for the comparable
periods ended December 31, 1997 and December 31, 1996. The increase in
income from property operations was a result of the implementation of
several rental rate increases over the past two years which offset a slight
decrease in the occupancy rate. The increase in 1998 is also attributable
to the fact that operating expenses were lower by approximately $110,000
and is explained further below. Depreciation expense decreased 13.3% or
$84,021 from 1996 to 1997. This decrease is a result of the appliance and
equipment fixed assets purchased in 1988 and 1989 have reached their maximum
depreciable lives. The change in depreciation expense from 1997 to 1998
totaled $4,781 or less than 1%. Repairs and maintenance expense increased
34.8% or $94,973 from 1996 to 1997. This 1997 increase and corresponding
1998 decrease was primarily caused by the repainting of the apartment
buildings and clubhouse at the Springfield Apartments in 1997 at a cost
of $78,593 and $8,305 of exterior building repairs at the Oakwood Village
Apartments in the same year. The increase in other operating cost of $23,030
from 1996 to 1997 is primarily attributable to the higher costs and
increased volume of advertising and promotions at both properties. The
change in other operating costs from 1997 to 1998 totaled $8,914.
Interest expense decreased from $1,578,445 for the twelve months ended
December 31, 1997 to $1,367,180 for the twelve months ended December 31,
1998. This decrease in interest expense is a result of a refinancing of
the original debt to loans with a lower interest rate and a replacement
of the Oakwood Village First Purchase Money Mortgage with a traditional
amortizing loan. In addition, a prepayment penalty of $176,500 was in-
curred in 1997 with the replacement of the Springfield Purchase Money First
Mortgage. The change in the amount of interest expense from 1996 to 1997
totaled $2,819 and is considered immaterial.
Net income for the twelve months ended December 31, 1998 was $194,764 or
$19.67 per Limited Partnership Unit outstanding as compared to a loss of
$296,253 or $(29.92) per Limited Partnership Unit for the comparable period
ended December 31, 1997 and a loss of $150,117 or ($15.16) per Limited
Partnership Unit for the comparable period ended December 31, 1996. The
primary source of funds in 1999 will accumulate from rental operations and
investment earnings.
Cash distributions of $482,109, $634,973 and $746,634 were paid to limited
partners and cash distributions of $-0-, $29,706, and $39,296 were paid
to the general partners in 1998, 1997, and 1996 respectively. The dis-
tributions of cash flow from operations was lower in 1998 as a direct result
of the increase in the annual debt service of $332,510 in 1998.
Year 2000 Disclosure
The partnership continues to make progress on the steps outlined in its Y2K
Plan Summary. The steps completed to date include:
-Y2K Plan written and approved
-SEC Form ADV-Y2K - Part 1 completed and submitted
-All home office and field computer upgraded to pentium level
-The Y2K compliant version of accounts payable and general ledger loaded
-The Y2K compliant version of revenue software ordered and received
The progress to date is slightly ahead of the Y2K Plan Summary schedule.
The costs the partnership expects to incur in order to meet its Y2K
financial accounting and financial reporting issues is between five and
seven thousand dollars. Because of the immateriality of these amounts,
the costs are being expensed as incurred. There are no significant costs
anticipated from an operations standpoint relative to Y2K issues.
The risks of not meeting the year 2000 issures are minimal from a financial
accounting and financial reporting standpoint. The partnership's contin-
gency plans will allow it to continue to process and report financial
information. The risks of not meeting the year 2000 issues are also
considered minimal from an operations standpoint assuming the represen-
tations made by our outside vendors are correct. The outside vendors
supply electricity, water, gas, etc. to our customers. The non-interrup-
tion of these services are not within the partnership's control and no
contingency plans have been developed.
Other Disclosure
At the inception of the partnership, Foundation Realty Fund, Ltd. entered
into a property management agreement with RJ Properties, Inc., a general
partner, for management of the apartment properties. On March 31, 1998, a
subsidiary and certain assets of RJ Properties, Inc. were sold to SHLP
Realty Corp. and the existing employees of RJ Properties, Inc. and its
affiliate
transferred to the buyer. To avoid any loss of continuity, RJ Properties,
Inc. entered into a submanagement agreement with SHLP Realty Corp. for
management of the partnership's properties. This new agreement in no way
changes the management fee expense nor the personnel assigned to the
day-to-day opertations of the properties. This submanagement agreement
installs SHLP Realty Corp. as the named management entity for the
Partnership's properties and J. Robert Love remains President of
RJ Properties, Inc. as well as individual General Partner.
Liquidity and Capital Resources
In management's opinion, working capital reserves and liquidity are
sufficient to meet the short-term operating need of the Partnership.
Cash provided by operating activities increased by $104,685 from 1997 to
1998. The increase is primarily attributed to a $526,963 increase in net
income before depreciation offset by a $442,001 decrease in deferred
interest on the refinanced Oakwood Village purchase money first mortgage.
Cash provided by operating activites decreased by $311,513 from 1996 to
1997. This decrease resulted from a larger net loss in 1997 compared to
1996 and a decrease in non-cash expenses including depreciation and
deferred interest. The depreciation decrease as described above was
caused by the "retirement" of fully depreciated assets purchased in 1988
and 1989. The decrease in deferred interest was a result of the debt
refinancing on the Oakwood Village loan on October 2, 1997.
Cash used by investing activities totaled $82,845 for 1998 as compared
to $89,194 for 1997. The decrease of $6,349 is primarily attributed to
the decline in the number of carpet replacements at both apartment
communities. A similar decrease ocurred from 1996 to 1997 for the same
reason.
Cash used by financing activities totaled $643,971 for 1998 as compared to
$695,918 for 1997. The decrease is attributable to a $182,570 decrease in
partner distributions offset by the costs and related proceeds and payment
of the new partnership debt. Cash used by financing
activities totaled $695,918 for 1997 as compared to $822,438 for 1996.
This decline was primarily caused by a reduction of $121,251 in partnership
distributions from 1996 to 1997 and secondarily by the debt refinancing
and related costs of replacing the original Oakwood Village and Springfield
mortgages.
Item 8. Financial Statements and Supplementary Data
FOUNDATION REALTY FUND, LTD.
(A Florida Limited Partnership)
INDEX TO FINANCIAL STATEMENTS
Part I - Financial Information
Page No.
Independent Auditor's Report 7
Balance Sheets as of December 31, 1998
and December 31, 1997 8
Statements of Operations -
For the Years Ended December 31, 1998,
1997 and 1996 9
Statements of Partners' Equity -
For the Years Ended December 31, 1998,
1997 and 1996 10
Statements of Cash Flows -
For the Years Ended December 31, 1998
1997 and 1996 11
Notes to Financial Statements 12-15
Financial Statement Schedules:
Schedule V - Land, Buildings and Equipment 20
Schedule VI - Accumulated Depreciation of
Buildings and Equipment 20
All other schedules have been omitted as not required, not applicable,
or the information required to be shown therein is included in the
financial statements and related notes.
<AUDIT-REPORT>
To the Partners of Foundation Realty Fund, Ltd.
We have audited the accompanying balance sheets of Foundation Realty Fund
Ltd. (a Florida Limited Partnership) as of December 31, 1998 and 1997, and
the related statements of operations, partners' equity (deficit) and cash
flows for each of the three years in the period ended December 31, 1998.
These financial statements are the responsibility of the partnership's
management. Our responsibility is to express an opinion of these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Foundation Realty Fund,
Ltd. as of December 31, 1998 and 1997 and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1998 in conformity with generally accepted accounting principles.
SPENCE,MARSTON,BUNCH,MORRIS & CO.
Certified Public Accountants
Clearwater, Florida
February 13, 1999
</AUDIT-REPORT>
<TABLE>
FOUNDATION REALTY FUND, LTD.
(A Florida Limited Partnership)
<CAPTION>
BALANCE SHEET
December 31, 1998 December 31, 1997
ASSETS
<S> <C> <C>
Apartment Properties, at Cost $22,381,940 $22,299,095
Less - Accumulated Depreciation (6,855,016) (6,304,794)
15,526,924 15,994,301
Cash and Cash Equivalents 1,057,375 981,983
Prepaid Expenses 2,774 549
Deferred Loan Cost (Net of Accumulated
Amortization of $51,943 and $10,389) 238,936 280,490
TOTAL ASSETS $16,826,009 $17,257,323
LIABILITIES AND PARTNERS' (DEFICIT)
Liabilities:
Notes Payable $17,736,343 $17,898,206
Accounts Payable 41,444 49,114
Security Deposits 87,647 89,601
Unearned Rent 53,655 26,137
TOTAL LIABILITIES 17,919,089 18,063,058
Partners' (Deficit):
Limited Partners' (Deficit) (9,407 units)
outstanding @ December 31, 1998 and
December 31, 1997 (830,569) (533,486)
General Partners' (Deficit) (262,511) (272,249)
TOTAL PARTNERS'(DEFICIT) (1,093,080) (805,735)
TOTAL LIABILITIES AND PARTNERS'
(DEFICIT) $16,826,009 $17,257,323
</TABLE>
<TABLE>
FOUNDATION REALTY FUND, LTD.
<CAPTION> (A Florida Limited Partnership)
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31
1998 1997 1996
<S> <C> <C> <C>
Property Operations:
Rental Income $3,545,122 $3,524,105 $3,400,522
Miscellaneous 98,288 87,747 95,477
3,643,410 3,611,852 3,495,999
Expenses:
Depreciation & Amortization 591,775 555,829 629,461
Payroll 342,704 347,319 327,101
Real Estate Taxes 280,369 293,574 287,944
Utilities 209,073 216,738 207,051
Repairs & Maintenance 295,625 367,929 272,956
Property Management -
General Partner 182,858 179,576 173,690
Landscaping 79,118 85,865 84,483
Other 125,297 134,211 111,181
General and Administrative -
Affiliate 950 2,304 3,970
Other General and
Administrative 11,579 11,773 12,466
2,119,348 2,195,118 2,110,303
Income from Property
Operations 1,524,062 1,416,734 1,385,696
Interest Income 37,882 41,958 45,451
1,561,944 1,458,692 1,431,147
Other Expenses:
Interest 1,367,180 1,578,445 1,581,264
Net Income (Loss) before
Extraordinary Items 194,764 (119,753) (150,117)
Early Extinguishment of Debt -0- (176,500) -0-
Net Income (Loss) $ 194,764 (296,253) $ (150,117)
Allocation of Net Income (Loss) -
Limited Partners $ 185,026 (281,440) $ (142,611)
General Partners 9,738 (14,813) (7,506)
$ 194,764 (296,253) $ (150,117)
Net Income (Loss) Per Limited
Partnership Unit $ 19.67 (29.92) $ (15.16)
Number of Limited
Partnership Units 9,407 9,407 9,407
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
FOUNDATION REALTY FUND, LTD.
(A Florida Limited Partnership)
<CAPTION>
STATEMENT OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
Limited General Total
Partners' Partners' Partners'
Equity Equity Equity
(Deficit) (Deficit) (Deficit)
<S> <C> <C> <C>
Balance, December 31, 1995 1,272,172 (180,928) 1,091,244
Distribution to Partners (746,634) (39,296) (785,930)
Net Loss (142,611) (7,506) (150.117)
Balance, December 31, 1996 382,927 (227,730) 155,197
Distribution to Partners (634,973) (29,706) (664,679)
Net Loss (281,440) (14,813) (296,253)
Balance, December 31, 1997 (533,486) (272,249) (805,735)
Distribution to Partners (482,109) -0- (482,109)
Net Income 185,026 9,738 194,764
Balance, December 31, 1998 $(830,569) $(262,511) $(1,093,080)
</TABLE>
<TABLE>
FOUNDATION REALTY FUND, LTD.
<CAPTION> (A Florida Limited Partnership)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
1998 1997 1996
<S> <C> <C> <C>
Net Cash Provided by
Operating Activities:
Net Income (Loss) $ 194,764 $(296,253) $ (150,117)
Adjustments to Reconcile
Net Income (Loss) to Net Cash
Provided by Operating
Activities:
Depreciation & Amortization 591,775 555,829 629,461
Deferred Interest on
Notes Payable -0- 442,001 533,038
Changes in Operating
Assets and Liabilities:
(Increase) Decrease
in Prepaid Expense (2,225) 10,269 (10,234)
Increase (Decrease)
in Accounts Payable (7,670) 19,573 (20,381)
Increase (Decrease)
in Unearned Rents 27,518 (29,700) 29,102
Increase (Decrease)
in Security Deposits (1,954) (4,196) (1,833)
Net Cash Provided
by Operating Activities 802,208 697,523 1,009,036
Net Cash Flows from Investing
Activities:
Improvements to Apartment
Properties (82,845) (89,194) (95,756)
Net Cash Used in Investing
Activities (82,845) (89,194) (95,756)
Net Cash Flows from Financing
Activities:
Cost to Obtain New Loan -0- (290,879) -0-
Distributions to Partners (482,109) (664,679) (785,930)
Proceeds from Notes Payable -0- 17,924,000 -0-
Payments of Notes Payable (161,862) (17,664,360) (36,508)
Net Cash Used by Financing
Activities (643,971) (695,918) (822,438)
Increase (Decrease) in Cash 75,392 (87,589) 90,842
Cash at Beginning of Year 981,983 1,069,572 978,730
Cash at End of Year $1,057,375 $ 981,983 $1,069,572
Supplemental Cash Flow Information:
Interest Paid $1,367,180 $1,136,044 $1,048,083
Deferred Interest Paid $ -0- $3,895,048 $ -0-
Supplemental Disclosure of Non-Cash
Financing Activities:
Deferred Interest on Mortgage
Note Payable $ -0- $442,001 $ 533,038
</TABLE>
FOUNDATION REALTY FUND, LTD.
(A Florida Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
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 manage
and control the business of the Partnership.
Operating profits and losses are allocated 95% to the limited partners 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 and loss and cash distributions from sales
of properties 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 recognized 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 $328,132 at December 31, 1998 and
$243,556 at December 31, 1997 of cash held in escrow for the payment of
real estate taxes and capital replacement items. Cash and cash equivalents
also include $87,647 at December 31, 1998 and $89,601 at December 31, 1997
of tenant security deposits held in escrow account.
Income Taxes
No provision for income taxes has been made in these financial statements,
as income taxes are a liability of the partners rather than of the
Partnership.
Concentrations of Credit Risk
Financial instruments which potentially subject the partnership to
concentrations of credit risk consist principally of cash investments
in high credit quality financial institutions.
Depreciation
The apartment buildings are being depreciated over 35 years using the
straight-line method. Furniture and fixtures are being depreciated over
eight years using the straight-line method.
Reclassifications
Certain accounts in the prior year financial statements have been
reclassed for comparison purposes to conform with the presentation
in the current year financial statements.
Risks and Uncertainties
The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates that
affect certain reported amounts and disclosures. These estimates are
based on management's knowledge and experience. Accordingly, actual
results could differ from these estimates.
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 reimbursement for costs and expenses incurred for
the Partnership for the years ended December 31:
1998 1997 1996
Property Management Fees $ 182,858 $ 179,576 $ 173,690
General & Administrative Costs 950 2,304 3,970
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:
December 31, 1998 December 31, 1997
Land $ 3,141,510 $ 3,141,510
Buildings 17,298,118 17,298,118
Furniture & Fixtures 1,942,312 1,859,467
Apartment Properties at Cost 22,381,940 22,299,095
Less: Accumulated Depreciation (6,855,016) (6,304,794)
$ 15,526,924 $ 15,994,301
NOTE 5 - TAXABLE INCOME:
The Partnership's taxable income differs from financial income primarily
due to depreciation which is recorded under the Modified Accelerated
Cost Recovery System (MACRS) and the presentation of prepaid rents.
The following is a reconciliation
between net loss as reported and partnership loss for tax purposes:
1998 1997 1996
Net income(loss) per financial statements $194,764 ($296,253) ($150,117)
Tax depreciation in excess of or
(less than) financial depreciation (139,706) (137,773) (45,473)
Prepaid rents added to taxable income 53,655 0 0
Partnership income(loss) for tax purposes $108,713 ($434,026) ($195,590)
NOTE 6 - NOTES PAYABLE:
The notes payable at December 31, 1998 and 1997 consist of the following:
1998 1997
Oakwood Village
The first mortgage note, which has an interest
rate of 7.67%, is payable in monthly
installments including principal and interest of
$52,777 through December 2004. There is a balloon
payment of $6,825,260 due on this loan of the
remaining principal and any unpaid interest in
December 2004.
$7,346,274 $7,413,316
Springfield
The first mortgage note, which has an interest
rate of 7.67%, is payable in monthly installments
including principal and interest of $74,644 through
December 2004. A prepayment penalty of $176,500 was
incurred due to the early loan payoff. There is a
balloon payment of $9,653,184 due on this loan of
the remaining principal and any unpaid interest in
December 2004.
10,390,069 10,484,890
$17,736,343 $17,898,206
The aggregate amount of principal and deferred interest payments due
in the years after December 31, 1997 are:
1999 $ 159,647
2000 187,408
2001 202,298
2002 218,372
2003 235,722
Thereafter 16,732,896
$17,736,343
NOTE 7 - EXTRAORDINARY ITEM:
In October 1997, the Springfield purchase money first mortgage was
refinanced. A prepayment penalty of $176,500 was incurred because of
the early payoff.
NOTE 8 - SUBSEQUENT EVENT:
On February 17, 1999, the Partnership paid distributions of $105,829 to
the Limited Partners.
NOTE 9 - COMMITMENT AND CONTINGENCIES:
Upon sale of the Partnership's properties, the General Partners are to
receive their undistributed 5% of cash from operations as a priority
distribution of the sale proceeds. Cumulative undistributed General Partner
distributions totaled $221,352 at December 31, 1998.
Item 9. Disagreements on Accounting and Financial Disclosures
Not applicable.
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or officers.
Item 11. Executive Compensation
The Partnership has no directors or officers.
Item 12. Security Ownership of Certain Beneficial Owners & Management
The Registrant is a Limited Partnership and therefore does not
have voting shares of stock. To the knowledge of the Partnership,
no person owns a record or beneficially, more than 5% of the
Partnership's outstanding units.
Item 13. Certain Relationships and Related Transactions
The General Partners and affiliates are entitled to the following
types of compensation and reimbursements for costs and expenses:
Total Incurred by the Partnership
for the period ended December 31,
1998 1997 1996
Property management fees are paid to
the General Partners for services
performed in connection with, among
other things, the day to day
management to the Limited Partnership's
properties. As compensation for
management services they perform, the
General Partners are paid a monthly fee
equal to 5% of the monthly gross receipts
from residential property. These fees are
included in the Statement of Operations. $182,858 $179,576 $173,690
Affiliates of the General Partners are
reimbursed for general and administrative
expenses of the partnership on an
accountable basis. This expense is included
in the Statement of Operations. Direct
costs are paid by the Partnership. 950 2,304 3,970
The General Partners receive 5% of cash
from operations subject to certain
subordination agreements. In addition,
the General Partners are allocated 5%
of all tax items. -0- 29,706 39,296
PART 4
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
A. 1. Financial Statements - see accompanying index to financial
statements, Item 8.
2. Financial Statements Schedules - see accompanying index
to financial statements, Item 8.
3. Exhibit Index -
Table Number Page
1.1 Form of Soliciting Dealer Agreement *
1.2 Form of Escrow Agreement between Foundation Realty Fund, Ltd.
and Southeast Bank, NA *
2 Plan of acquisition, organization, arrangement, liquidation
or succession **
3.1 The form of Partnership Agreement of the Partnership *
3.2 Articles of Incorporation of RJ Properties, Inc. *
3.2.1 By-laws of RJ Properties, Inc. *
3.3 Certificate of Limited Partnership of Foundation Realty Fund,Ltd. *
4 Instruments defining the rights of security holders
including debentures **
5.1 Summary of appraisal of Oakwood Village Apartments **
8.1 Tax opinion and consent of Schifino, Fleischer & Neal, P.A. *
9 Voting Trust Agreement **
10.1 Oakwood Village Apartments Real Estate Acquisition Contract
and Exhibits thereto *
11 Computation of per share earnings **
12 Computation of ratios **
13 Annual report to security holders **
18 Letter re: change in accounting principles **
19 Previously unfiled documents **
22 Subsidiaries of the Registrant **
23 Published report regarding matters submitted to vote of
security holders **
24 Consents of experts and counsel
24.1 The consent of Spence, Marston & Bunch *
24.2 The consent of Charles Smallwood, CPA *
24.3 The consent of Schifino, Fleischer & Neal, PA to all references
made to them in the Prospectus included as part of the
Registration Statement of Foundation Realty Fund, Ltd., and
all amendments thereto, is included in their opinions
filed as Exhibit 8.1 to the Registration Statement *
25 Power of Attorney **
28.1 Table 6 (Acquisition of Properties by Program) of Appendix
2 to Industry Guide 5, Preparation of Registration
Statements Relating to Interests in Real Estate Limited
Partnerships *
29 Information from reports furnished to state insurance
regulatory authorities **
* Included with Form S-11, Registration No. 33-13849, previously
filed with the Securities and Exchange Commission.
** Exhibits were omitted as not required, not applicable or the
information required to be shown therein is included elsewhere
in this report.
B. Reports filed on Form 8-K - None
C. Exhibits filed with this Report - None
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)
(Registrant)
By: RJ PROPERTIES, INC.
a General Partner
Date: March 19, 1999 By: J.Robert Love President
(Signature)
Date: March 19, 1999 By: Alan G. Lee Secretary
(Signature)
Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned duly authorized.
FOUNDATION REALTY FUND, LTD.
(A Florida Limited Partnership)
(Registrant)
By: RJ PROPERTIES, INC.
a General Partner
Date: March 19, 1999 By: J. Robert Love President
(Signature)
Date: March 19, 1999 By: Alan G. Lee Secretary
(Signature)
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