FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 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 -- March 31, 1995
and December 31, 1994 3-4
Statements of Operations -- Three
Months Ended March 31, 1995 and 1994 5
Statements of Partnership Capital --
Three Months Ended March 31, 1995 and
the Years Ended December 31, 1994 and 1993 6
Statements of Cash Flows -- Three Months
Ended March 31, 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
March 31,
1995 December 31,
(Unaudited) 1994
ASSETS
INVESTMENT PROPERTIES
Land and buildings $14,540,394 $14,539,780
Furniture, fixtures, and equipment 1,262,874 1,235,233
15,803,268 15,775,013
Less accumulated depreciation 3,819,058 3,695,423
__________ __________
11,984,210 12,079,590
RESTRICTED DEPOSIT
Certificate of Accrual on
Treasury Security 778,776 762,531
OTHER ASSETS
Cash 230,932 144,737
Rents and other receivables, less
allowance of $9,800 in 1995 and
$7,814 in 1994 64,383 51,184
Prepaid expenses and deposits 29,077 49,317
Due from related parties--Notes
D and E
Note Receivable 607,104 607,104
Syndication Costs 483,419 483,419
Debt issuance costs, net of
accumulated amortization of
$27,292 in 1995 and $26,042
in 1994 47,708 48,958
__________ __________
1,462,623 1,384,719
__________ __________
$ 14,225,609 $ 14,226,840
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
BALANCE SHEETS--CONT'D.
March 31,
1995 December 31,
(Unaudited) 1994
LIABILITIES AND PARTNERSHIP DEFICIT
Mortgage debt--Note B $ 13,733,570 $13,737,201
Notes payable - insurance --- 9,833
Accounts payable and
accrued expenses 579,331 586,076
Accrued interest 427,263 347,175
Unearned revenue 11,658 9,959
Tenant security deposits 76,183 72,459
TOTAL LIABILITIES 4,828,005 14,762,703
PARTNERSHIP DEFICIT
General Partners
Capital contributions 2,000 2,000
Partnership deficit (45,179) (44,514)
__________ __________
(43,179) (42,514)
Limited Partners
Capital contributions 3,915,084 3,915,084
Partnership deficit (4,474,301) (4,408,433)
__________ __________
(559,217) (493,349)
TOTAL PARTNERSHIP DEFICIT (602,396) (535,863)
__________ __________
$ 14,225,609 $ 14,226,840
See notes to financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended
March 31,
1995 1994
REVENUES
Rents $ 618,075 $ 538,583
Interest 30,310 23,703
__________ __________
648,385 562,286
OPERATING AND
ADMINISTRATIVE EXPENSES
Property operating
expenses 296,341 259,839
General and
administrative
expenses 16,845 17,407
Professional services 9,764 27,597
Management Fees 30,612 27,139
__________ __________
353,562 331,982
NET OPERATING INCOME 294,823 230,304
NON-OPERATING EXPENSES
Interest 236,472 241,834
Depreciation and
amortization 124,884 177,503
__________ __________
361,356 419,337
PARTNERSHIP LOSS $ (66,533) $ (189,033)
Allocation of loss:
General Partners (665) (1,890)
Limited Partners (65,868) (187,143)
__________ __________
$ (66,533) $ (189,033)
Partnership loss per
limited partnership
unit $ ( 6.80) $ (19.32)
See notes to financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
STATEMENTS OF PARTNERSHIP DEFICIT
Three Months Ended March 31, 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 (665) (65,868) (66,533)
Balances at March 31, 1995 $ (43,179) (559,217) (602,396)
See notes to financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended
March 31,
1995 1994
OPERATING ACTIVITIES
Partnership loss $ ( 66,533) (189,033)
Adjustments to reconcile
partnership loss to net
cash provided by (used in)
operating activities:
Depreciation and
amortization 124,884 177,503
Provision for losses on rents
and other receivables 2,911 6,500
Changes in assets and liabilities:
Rent and other receivables (16,110) (12,147)
Prepaid expenses and deposits 20,241 ( 3,613)
Note payable - insurance ( 9,833) ---
Accounts payable and
accrued expenses ( 6,745) 53,801
Accrued interest 80,089 (99,645)
Unearned revenue 1,699 5,433
Tenant security deposits 3,72 ( 4,475)
NET CASH PROVIDED BY OPERATING ACTIVITIES 134,327 (65,676)
INVESTING ACTIVITIES
Purchase of and improvements to
investment properties (28,256) ( 9,598)
Interest earned on certificate
of accrual on Treasury Security (16,245) (12,796)
NET CASH (USED IN) INVESTING ACTIVITIES (44,501) (22,394)
FINANCING ACTIVITIES
Principal payments on
long-term borrowings ( 3,631) (10,210)
NET CASH (USED IN) FINANCING ACTIVITIES ( 3,631) (10,210)
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 89,195 (98,280)
CASH AND CASH EQUIVALENTS BEGINNING
OF PERIOD 144,737 194,104
CASH AND CASH EQUIVALENTS END
OF PERIOD $ 230,932 $ 95,824
See notes to financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
NOTES TO FINANCIAL STATEMENTS (Unaudited)
March 31, 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 accruals)
considered necessary for a fair presentation have been included.
Operating results for the three month period ended March 31, 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:
March 31, December 31,
1995 1994
Collateralized by Investment
Property
KC Club Apartments $ 4,462,420 $ 4,466,051
Greenhills Bicycle Club
Apartments 9,271,150 9,271,150
__________ __________
$13,733,570 $13,737,201
Interest paid totaled $156,384 and $322,200 during the first
quarter 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.
March 31,
1995
1994
Property management fees $ 30,612 $ 27,139
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 second 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.
will 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:
March 31, December 31,
1995 1994
Hoyt Partners III, L.P. $ 522,004 $ 522,004
Secured Investment Resources
Fund, L.P. 85,100 85,100
__________ __________
$ 607,104 $ 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.
March 31, 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 quarter increased $79,000 (14.8%)
when compared to the same quarter 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 few 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 turnover rate, resulting in higher operating expenses.
Operating and administrative expenses increased $22,000 (6.5%)
when comparing first quarter's results with the same period of
1994. Property operating expenses increased $37,000 (14.1%) due
to increased repair, contracted services and payroll expenses.
Professional services declined $18,000 when compared to the first
quarter of last year because of lower use of legal services.
Interest expense declined $5,000 primarily due to a reduced
amount of delinquent real estate taxes on Bicycle Club
Apartments. Depreciation and amortization declined $53,000 from
the first quarter of last year, due to the fact that older assets
are becoming fully depreciated.
The Partnership anticipates that the operating results for the
first quarter will be approximate the performance for the
remaining three quarters.
Liquidity and Capital Resources
During the first quarter of 1995, $134,000 of working capital was
provided by operations, $44,000 was consumed in investing
activities and $4,000 was used for debt repayment. The
partnership has used this increased cash to reduce delinquent
real estate taxes and make some 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 on this mortgage for a
loan modification and extension.
Beginning May 1, 1995, the partnership will begin 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,
<PAGE>
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Cont'd.
Liquidity & Capital Resources
are due on demand and are available to fund working capital needs
of the Partnership, as considered necessary by the General Partners.
Based upon the above, 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 improvments 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 March 31, 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: /s/ James R. Hoyt
James R. Hoyt
as Individual General Partner
Date: April 30, 1995
By: Hoyt Partners III, L.P.
as General Partner
By: /s/ James R. Hoyt
James R. Hoyt
as Individual General Partner
Date: April 30, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Unaudited.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 230,932
<SECURITIES> 778,776
<RECEIVABLES> 74,183
<ALLOWANCES> 9,800
<INVENTORY> 0
<CURRENT-ASSETS> 1,462,623
<PP&E> 15,803,268
<DEPRECIATION> 3,819,058
<TOTAL-ASSETS> 14,225,609
<CURRENT-LIABILITIES> 1,094,435
<BONDS> 13,733,570
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 14,225,609
<SALES> 0
<TOTAL-REVENUES> 648,385
<CGS> 0
<TOTAL-COSTS> 353,562
<OTHER-EXPENSES> 124,884
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 236,472
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (66,533)
<EPS-PRIMARY> (6.80)
<EPS-DILUTED> 0
</TABLE>
