FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 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 33-24235
SECURED INVESTMENT RESOURCES FUND, L.P. III
(Exact name of registrant as specified in its charter)
Missouri 48-6291172
(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, (913) 384-5700
including area code
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests ("Units")
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or such shorter periods
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
Index
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements (Unaudited):
Balance Sheets -- September 30, 1995
and December 31, 1994 3-4
Statements of Operations -- Three and Nine
Months Ended September, 1995 and 1994 5
Statements of Partnership Capital --
Nine Months Ended September 30, 1995 and
the Years Ended December 31, 1994 and 1993 6
Statements of Cash Flows -- Nine Months
Ended September 30, 1995 and 1994 7
Notes to Financial Statements 8-10
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 11-12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of
Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
SECURED INVESTMENT RESOURCES FUND, L.P. III
BALANCE SHEETS
September 30,
1995 December 31,
(Unaudited) 1994
ASSETS
INVESTMENT PROPERTIES
Land and buildings $ 14,558,009 $ 14,539,780
Furniture, fixtures, and equipment 1,338,411 1,235,233
__________ __________
15,896,420 15,775,013
Less accumulated depreciation 4,066,327 3,695,423
__________ __________
11,830,093 12,079,590
__________ __________
RESTRICTED DEPOSIT
Certificate of Accrual on
Treasury Security 811,264 762,531
__________ __________
OTHER ASSETS
Cash 531,818 144,737
Rents and other receivables, less
allowance of $8,500 in 1995 and
$7,814 in 1994 74,377 51,184
Prepaid expenses, deposits and other 33,701 49,317
Due from related parties--Notes
D and E
Note Receivable 586,184 607,104
Syndication Costs 483,419 483,419
Debt issuance costs, net of
accumulated amortization of
$29,792 in 1995 and $26,042
in 1994 45,208 48,958
__________ __________
1,754,707 1,384,719
__________ __________
$ 14,396,064 $ 14,226,840
__________ __________
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
BALANCE SHEETS--CONT'D.
September 30,
1995 December 31,
(Unaudited) 1994
LIABILITIES AND PARTNERSHIP DEFICIT
Mortgage debt--Note B $ 13,693,550 $ 13,737,201
Notes payable - insurance --- 9,833
Accounts payable and
accrued expenses 925,965 586,076
Accrued interest 421,125 347,175
Unearned revenue 18,243 9,959
Tenant security deposits 79,366 72,459
__________ __________
TOTAL LIABILITIES 15,138,249 14,762,703
__________ __________
PARTNERSHIP DEFICIT
General Partners
Capital contributions 2,000 2,000
Partnership deficit (46,577) (44,514)
__________ __________
(44,577) (42,514)
__________ __________
Limited Partners
Capital contributions 3,915,084 3,915,084
Partnership deficit (4,612,692) (4,408,433)
__________ __________
(697,608) (493,349)
__________ __________
TOTAL PARTNERSHIP DEFICIT (742,185) (535,863)
__________ __________
$ 14,396,064 $ 14,226,840
__________ __________
See notes to financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
STATEMENTS OF OPERATIONS (Unaudited)
Nine Months Ended Three Months Ended
September 30, September 30,
1995 1994 1995 1994
REVENUES
Rents $ 1,931,677 $ 1,700,163 $ 653,131 $ 581,365
Interest 69,531 63,638 19,707 33,242
_________ _________ ________ ________
2,001,208 1,763,801 672,838 614,607
_________ _________ ________ ________
OPERATING AND
ADMINISTRATIVE EXPENSES
Property operating
expenses 929,181 874,937 307,147 291,280
General and
administrative
expenses 51,895 42,751 16,640 12,374
Professional services 46,994 64,412 25,747 16,536
Management Fees 96,358 85,017 32,567 29,456
_________ _________ ________ ________
1,124,428 1,067,117 382,101 349,646
_________ _________ ________ ________
NET OPERATING INCOME 876,780 696,684 290,737 264,961
NON-OPERATING EXPENSES
Interest 708,447 704,973 233,383 260,070
Depreciation and
amortization 374,655 530,456 124,885 176,733
_________ _________ ________ ________
1,083,102 1,235,429 358,268 436,803
_________ _________ ________ ________
PARTNERSHIP LOSS $ (206,322) $ (538,745) $ (67,531) $ (171,842)
_________ _________ ________ ________
Allocation of loss:
General Partners (2,063) (5,387) (675) (1,718)
Limited Partners (204,259) (533,358) (66,856) (170,124)
_________ _________ ________ ________
$ (206,322) $ (538,745) $ (67,531) $ (171,842)
_________ _________ ________ ________
Partnership loss per
limited partnership
unit $ (21.09) $ (55.07) $ (6.90) $ (17.57)
_________ _________ ________ ________
See notes to financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
STATEMENTS OF PARTNERSHIP DEFICIT
Nine Months Ended September 30, 1995 (Unaudited)
and the Years Ended December 31, 1994 and 1993
General Limited
Partners Partners Total
Balances at January 1, 1993 $ (30,420) $ 703,971 $ 673,551
Partnership loss (5,810) (575,230) (581,040)
_________ _______ ________
Balances at December 31, 1993 (36,230) 128,741 92,511
Partnership loss (6,284) (622,090) (628,374)
_________ _______ ________
Balances at December 31, 1994 (42,514) (493,349) (535,863)
Partnership loss (2,063) (204,259) (206,322)
_________ _______ ________
Balances at September 30, 1995 $ (44,577) $ (697,608) $ (742,185)
_________ _______ ________
See notes to financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended
September 30,
1995 1994
OPERATING ACTIVITIES
Partnership loss $ (206,322) $ (538,745)
Adjustments to reconcile
partnership loss to net
cash provided by (used in)
operating activities:
Depreciation and
amortization 374,654 530,456
Provision for losses on rents
and other receivables 686 9,114
Changes in assets and liabilities:
Rent and other receivables (23,879) 14,670
Prepaid expenses, deposits, and other 15,614 (15,185)
Note payable - insurance ( 9,833) ---
Accounts payable and
accrued expenses 339,890 135,491
Accrued interest 73,951 (8,388)
Unearned revenue 8,284 90
Tenant security deposits 6,907 104
________ ________
NET CASH PROVIDED BY OPERATING ACTIVITIES 579,952 127,607
________ ________
INVESTING ACTIVITIES
Purchase of and improvements to
investment properties (121,407) (54,607)
Interest earned on certificate
of accrual on Treasury Security (48,733) (38,389)
________ ________
NET CASH (USED IN) INVESTING ACTIVITIES (170,140) (92,996)
________ ________
FINANCING ACTIVITIES
Principal payments on
long-term borrowings (43,650) (24,119)
Note Receivable from Related Party 20,919 1,700
________ ________
NET CASH (USED IN) FINANCING ACTIVITIES (22,731) (22,419)
________ ________
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 387,081 12,192
CASH AND CASH EQUIVALENTS BEGINNING
OF PERIOD 144,737 194,104
________ ________
CASH AND CASH EQUIVALENTS END
OF PERIOD $ 531,818 $ 206,296
________ ________
See notes to financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
NOTES TO FINANCIAL STATEMENTS (Unaudited)
September 30, 1995
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions for Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring ccruals)
considered necessary for a fair presentation have been included.
Operating results for the nine month period ended September 30, 1995
are not necessarily indicative of the results that may be expected for
the year ended December 31, 1995. For further information, refer to the
financial statements and footnotes thereto included in the Partnership's
annual report on Form 10-K for the year ended December 31, 1994.
NOTE B--MORTGAGE DEBT
Mortgage debt consists of the following:
September 30, December 31,
1995 1994
Collateralized by Investment
Property
KC Club Apartments $ 4,422,400 $ 4,466,051
Greenhills Bicycle Club
Apartments 9,271,150 9,271,150
__________ __________
$13,693,550 $13,737,201
__________ __________
Interest paid totaled $634,497 and $713,361 during the first three
quarters of 1995 and 1994, respectively.
NOTE C--SYNDICATION COSTS, MISC. RECEIVABLES AND OTHER RELATED
PARTY TRANSACTIONS
Affiliates of the General Partners are entitled to receive payments
from the Partnership for management and other services. SPECS, INC.
(a corporation in which the General Partner has a minority interest)
receives property management fees for providing property management
services and direct cost reimbursements based upon time allocated to
performing certain Partnership functions. Amounts paid by the
Partnership to affiliates of the General Partners are as follows:
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)--CONT'D.
NOTE C--SYNDICATION COSTS, MISC. RECEIVABLES AND OTHER RELATED
PARTY TRANSACTIONS--CONT'D.
September 30,
1995 1994
Property management fees $ 96,358 $ 85,017
________ _______
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. There was no management fee
due for the years ending December 31, 1994 or 1993.
NOTE D--RELATED PARTY--RECEIVABLES
On April 12, 1995, the Hoyt Partners III, L.P. executed a note in the
amount of $522,004. This note consolidated several smaller notes.
The 1994 interest earnings of $44,821 are expected to be received in the
fourth quarter of 1995. Principal repayments of $35,000 per year plus
9% interest will begin on December 31, 1995. Funds advanced to Secured
Investment Resources Fund, L.P. has begun to be repaid at the rate of
$3,000 per month beginning May 1, 1995 including 9% interest.
Amounts due from related parties consist of the following:
September 30, December 31,
1995 1994
Hoyt Partners III, L.P. $ 511,033 $ 522,004
Secured Investment Resources
Fund, L.P. 75,150 85,100
_______ _______
$ 586,183 $ 607,104
_______ _______
Because of many factors, the Partnership did not raise the level of
capital anticipated during the 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.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)--CONT'D.
NOTE E--SYNDICATION COSTS AND ACQUISITION FEES
Hoyt Partners III, L.P., a General Partner of the Partnership (or its
assignee) has been paid an acquisition fee of $680,000. This fee was
for selecting, evaluating, negotiating and closing services on the
acquisition of KC Club Apartments and Greenhills Bicycle Club
Apartments. As stated in the Prospectus, acquisition fees may not
exceed 11.5% of the gross proceeds of limited partnership interests
issued ($556,888). The General Partners are obligated to reimburse
these excess costs/fees.
September 30, December 31,
1995 1994
General Partners--Excess
Syndication Costs:
Paid by the Partnership $ 365,057 $ 365,057
Excess acquisition fees 118,362 118,362
________ __________
Total $ 483,419 $ 483,419
________ __________
NOTE F--CASH DISTRIBUTIONS
No distributions have been made since July 1990. Future distributions
will only be made from excess cash flow not needed for working capital
reserves.
(The remainder of this page intentionally left blank.)
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Total revenues for the first nine months increased $237,500 (13.5%) when
compared to the same period in 1994. This increase is due to a stronger
rental market, which allowed the Partnership to increase rental rates
upon lease renewals. These higher market rates are being achieved, with
fewer rent concessions, and should continue through the remainder of 1995
and into 1996.
Due to the higher rental rates, the properties have experienced a higher
resident turnover rate, resulting in higher operating expenses. Operating
and administrative expenses increased $63,500 (6.9%) when comparing first
nine months' results with the same period of 1994. Property operating
expenses increased $54,000 (6.2%) due to increased repair, contracted
services and payroll expenses. Professional services declined $17,500
(27.0%) when compared to the first nine months of last year because of
declined need for legal services.
Interest expense increased $3,500 (.5%) primarily due to the increase in
the interest rates. Depreciation and amortization declined $155,800
(29.4%) from the first nine months of last year, due to the fact that older
assets are becoming fully depreciated.
The Partnership anticipates that the operating results for the first nine
months will be representative of the results for the remaining portion of
the year.
Liquidity and Capital Resources
During the first nine months of 1995, $580,000 of working capital
was provided by operations, $121,500 was consumed in investing
activities and $48,500 was used for debt repayment. The Partnership
has used this increased cash to reduce delinquent real estate taxes
and make additional capital improvements to the properties.
The Partnership is currently past due on the mortgage secured by
K C Club Apartments. Cash generated by increased occupancy will
be used to service this mortgage. The second mortgage at Bicycle
Club Apartments matured on October 15, 1994. The General Partner
is currently negotiating with the lender regarding this mortgage
and expects to complete the negotiations prior to year end.
As of May 1, 1995, the Partnership began receiving $3,000 per month
as repayment of funds advanced to Secured Investment Resources Fund,
L.P. Prior to 1995, the Partnership loaned funds via a note receivable
to the Corporate General Partner, Hoyt Partners III, L.P. The Partnership
is scheduled to receive an annual $35,000 principal reduction on this note
plus interest at 9% beginning December 31, 1995. These notes, however,
are due on demand and are available to fund working capital needs of the
Partnership,as considered necessary by the General Partners.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Cont'd.
Liquidity & Capital Resources
Based upon the above, the General Partners feel that adequate working
capital is available to maintain the solvency of this entity. In addition,
the General Partners also anticipate that 1995 cash flow from operations
will continue to improve because of strong occupancy, rental rate
increases, and stabilized expenses.
The General Partners have determined it prudent to discontinue cash
distributions until such time that adequate working capital and capital
improvements reserves are in place.
(The remainder of this page intentionally left blank.)
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None.
Item 2. CHANGES IN SECURITIES
Inapplicable.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
Inapplicable.
Item 5. OTHER INFORMATION
Inapplicable.
Item 6. EXHIBIT AND REPORTS ON FORM 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
The Partnership filed no report on Form 8-K
during the Quarter ended September 30, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
SECURED INVESTMENT RESOURCES FUND, L.P. III
A Missouri Limited Partnership
(Registrant)
By:
James R. Hoyt
as Individual General Partner
Date: November 15, 1995
By: Hoyt Partners III, L.P.
as General Partner
By:
James R. Hoyt
as Individual General Partner
Date: November 15, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Unaudited.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 531,818
<SECURITIES> 811,264
<RECEIVABLES> 82,877
<ALLOWANCES> 8,500
<INVENTORY> 0
<CURRENT-ASSETS> 1,754,707
<PP&E> 15,896,420
<DEPRECIATION> 4,066,327
<TOTAL-ASSETS> 14,396,064
<CURRENT-LIABILITIES> 1,444,699
<BONDS> 13,693,550
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 14,396,064
<SALES> 0
<TOTAL-REVENUES> 2,001,208
<CGS> 0
<TOTAL-COSTS> 1,124,428
<OTHER-EXPENSES> 374,655
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 708,447
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (206,322)
<EPS-PRIMARY> (21.09)
<EPS-DILUTED> 0
</TABLE>
