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, 1996
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
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]
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PART I
Item 1. Business
Secured Investment Resources Fund, L.P. III
("Partnership") is a Missouri limited partnership formed
pursuant to the Missouri Revised Uniform Limited
Partnership Act on April 20, 1988. James R. Hoyt is the
Individual General Partner. SIR Partners III, L.P., a
Missouri limited partnership, and Nichols Resources Ltd.,
a Missouri corporation, are the General Partners. James
R. Hoyt is the managing General Partner. The Partnership
has no predecessors or subsidiaries. The Partnership was
formed 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 of
Partnership properties; and (iv) increasing equity in
property ownership by the reduction of mortgage loans on
Partnership properties.
On December 7, 1990, the Partnership closed its offering
having received gross proceeds of $4,842,500 from the
sale of 9,685 units of limited partnership interests.
The Partnership acquired two apartment communities in
1989. The General Partners feel that these properties
met the Partnership's investment criteria and objectives.
Because of many factors, the Partnership did not raise
the level of capital anticipated. Accordingly, the
General Partners were unable to obtain the targeted
leveraged ratio and a residential/commercial property
mix.
As of December 31, 1996, the Partnership has made cash
distributions to Limited Partners of $363,928 for the
period April 1, 1989 through December 31, 1996. No
distributions have been made since July 1990. Future
distributions will only be made from excess cash flow not
needed for working capital reserves.
As of December 31, 1996, the Partnership had no
employees. Employees of SPECS, Inc. provide services to
the Partnership. The individual General Partner is a
shareholder in SPECS, Inc.
Competition
The real estate business is highly competitive and the
Partnership competes with numerous entities engaged in
real estate activities, some of which may have greater
financial resources than those of the Partnership. The
Partnership's management believes that success against
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Item 1. Business--Cont'd.
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.
Item 2. Properties.
The following table sets forth the investment portfolio of the
Partnership at December 31, 1996:
Average
Properties at Occupancy(*)
Property Description Initial Cost Date Acquired Percentage
1996 1995
KC Club
Apartments
Kansas City, MO 200 units $ 5,070,992 June 14, 1989 88% 89%
Greenhills Bicycle
Club Apartments
Kansas City, MO 312 units $11,251,613 Oct. 27, 1989 91% 93%
(*) Based upon vacancy amount (in dollars) as a percent
of gross possible rents.
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
<PAGE>
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, 1996, the Partnership had admitted 539 Limited
Partners who purchased 9,685 units.
Item 6. Selected Financial Data.
Years Ended December 31,
OPERATING DATA 1996 1995 1994 1993 1992
(In Thousands)
Rents $ 2,768 $ 2,697 $ 2,299 $ 2,261 $ 2,297
Interest on short-
term investments 90 128 106 103 69
Property operating
expense 1,504 1,560 1,454 1,260 1,293
Interest expense 1,202 930 931 974 1,033
Depreciation/
Amortization 530 507 648 711 712
Partnership loss (378) (172) (628) (581) (672)
PER LIMITED PARTNERSHIP UNIT
Partnership Loss (1) ( 38.64) $( 17.54) $ (64.23) $ (59.39) $ (68.68)
Cash distributions $ --- $ --- $ --- $ --- $ ---
BALANCE SHEET DATA 1996 1995 1994 1993 1992
(In Thousands)
Total assets $ 12,749 $ 13,223 $ 14,227 $ 14,779 $ 15,305
Mortgage debt $ 12,931 $ 12,851 $ 13,737 $ 13,770 $ 13,820
(1) Partnership 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.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
Revenue for the partnership achieved an all time high in 1996 of
$2,858,000 compared to $2,825,000 (1.2%) in 1995. This increased
revenue was the result of a marketing plan implemented by
management in early 1991 that was designed to simultaneously
increase gross possible rental rates and increase occupancy levels.
During 1996 the operating and administrative costs decreased
$44,000 (3.4%) primarily in the areas of services, payroll and
marketing.
Total expenses decreased $56,000 (3.5%) for 1996 operations
compared to 1995 results. The decrease in expenses was primarily
due to a decrease in administrative, marketing, and payroll costs.
Interest expense increased from $930,000 in 1995 to $1,202,000
(29.2%) in 1996. Depreciation and amortization expense increased
4.3% from $507,000 to $530,000. The 1996 net loss increased by
$206,000 or 120.3%.
Revenue for the partnership was $2,825,000 for 1995 as compared to
$2,400,000 (17.5%) in 1994. During 1995 the operating costs
increased only slightly, $20,000 (1.7%) primarily in the areas of
repairs, payroll, and utilities.
Interest expense declined slightly from $931,000 in 1994 to
$930,000 (.1%) in 1995. Depreciation and amortization declined
21.6% from $648,000 to $507,000. The 1995 net loss decreased by
$457,000 or 72.7% primarily due to the increase in revenues.
Total expenses increased $106,000 (7.3%) for 1995 operations
compared to 1994 results. The increase in expenses was primarily
due to an increase in professional services of $64,000.
Revenue for the partnership achieved an increase in 1994 of
$2,404,000 compared to $2,364,000 in 1993. The operating costs
increased $172,000 (16.7) primarily in the areas of repairs,
payroll, and utilities.
The partnership anticipates that 1997 operations will improve as
the result of planned increases in rental rates and decreased
promotional rental incentives. This planned increase in net rental
income will be coupled with a close monitoring of costs.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Liquidity and Sources of Capital
During 1996, the primary source of working capital was provided by
existing cash balances. Operations used $26,000, investing
activities consumed $207,000 and financing activities used
$170,000. During the year accounts payable and accrued expenses
decreased by $339,000 and accrued interest increased by $142,000.
On July 8, 1996 the partnership refinanced the matured $8,400,000
first mortgage on Greenhills Bicycle Club Apartments. The terms of
the new mortgage are $8,100,000 at 9.0% interest with monthly
principal and interest payments in the amount of $65,000 through
the loan maturity date of August 1, 2001 (5 years).
In addition, a second mortgage note was signed by the Partnership.
The terms of the new note are $400,000 with interest paid monthly
at the rate of 9% with a maturity date of July 31, 2001 at which
time the principal shall be due. The past due real estate taxes on
Greenhills Bicycle Club Apartments were paid in full from a portion
of the proceeds of this note.
During 1995, the primary source of working capital was provided by
existing cash balances and net cash provided by operating
activities. Operations generated $666,000, investing activities
consumed $230,000 and financing activities used $94,000. During
1995 accounts payable and accrued expenses decreased $12,000 and
accrued interest payable increased by $240,000.
During 1994, the primary source of working capital was provided by
existing cash balances and net cash provided by operating
activities. Operations generated $132,700 investing activities
consumed $151,000 and financing activities consumed $31,000.
During the year accounts payable and accrued expenses increased
$67,000 and accrued interest increased by $37,000.
As a result of declining cash flows for KC Club Apartments, at
December 31, 1996, the mortgage interest was delinquent by $466,490
and principal payments have been suspended. 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 funds due from Secured Investment Resources Fund, L.P. began to
be repaid including 9% interest, beginning in May, 1995. Principal
payments received in 1996 aggregated $2,440, while interest accrued
into the note balance was $6,142.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations--Cont'd.
Liquidity and Sources of Capital--Cont'd.
The General Partners believe that sufficient working capital will
be available during 1997 to fund known, ongoing operating and
capital requirements of the Partnership. In 1997, the Partnership
anticipates cash flow from operations will improve because
management intends to 1) achieve rental rate increases; 2) decrease
the amount of promotional rent discounts offered on the residential
properties; and 3) 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.
All statements contained herein that are not historical facts
including the Partnership's current business strategy, the
Partnership's projected sources and uses of cash, and the
Partnership's plans for future operations, are based upon current
expectations. These statements are forward-looking in nature and
involve a number of risks and uncertainties. Actual results may
differ materially. Among the factors that could cause actual
results to differ materially are the following: the availability of
sufficient capital to finance the Partnership's business plans on
terms satisfactory to the Partnership; competitive factors; changes
in regulations affecting the Partnership's business; general
businesses and economic conditions; and other factors described
from time to time in the Partnership's reports filed with the
Securities and Exchange Commission. The Partnership cautions
readers not to place undue reliance on any such forward-looking
statements, which statements are made pursuant to the Private
Litigation Reform Act of 1995 and, as such, speak only as of the
date made.
<PAGE>
Item 8. Financial Statements and Supplementary Data.
SECURED INVESTMENT RESOURCES FUND, L.P. III
Index
Page
Independent Auditors' Report 9
Financial Statements:
Consolidated Balance Sheets - December 31,
1996 and 1995 10-11
Consolidated Statements of Operations -
Years ended December 31, 1996, 1995
and 1994 12
Consolidated Statements of Partnership Capital -
Years ended December 31, 1996, 1995
and 1994 13
Consolidated Statements of Cash Flows -
Years ended December 31, 1996,
1995 and 1994 14-15
Notes to Consolidated Financial Statements 16-25
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
Secured Investment Resources Fund, L.P. III
Mission, KS
We have audited the accompanying consolidated balance sheets of
Secured Investment Resources Fund, L.P. III and affiliated companies as
of December 31, 1996 and 1995, and the related statements of operations,
partnership (deficit) capital and cash flows for each of the three years
in the period ended December 31, 1996. 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 a mortgage loan that is
delinquent on scheduled payments and real estate taxes. The Partnership
is in current negotiations with the mortgage holder to extend or
refinance this obligation.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of Secured Investment Resources Fund, L.P. III at December 31, 1996 and
1995, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1996 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
February 7, 1997
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED BALANCE SHEETS
December 31,
1996 1995
ASSETS
INVESTMENT PROPERTIES (Notes B and C)
Land and buildings $14,569,699 $14,561,536
Furniture, fixtures and equipment 1,471,943 1,377,961
16,041,642 15,939,497
Less accumulated depreciation 4,732,073 4,202,665
11,309,569 11,736,832
RESTRICTED DEPOSIT
Certificate of Accrual on
Treasury Security (Note D) 898,023 827,509
Restricted Reserve Fund 34,490 ---
932,513 827,509
Cash 82,985 486,886
Rents and other receivables, less
allowance of $12,000 in 1996 an
$7,150 in 1995 5,106 3,785
Prepaid expenses and deposits 29,161 27,169
Due from related parties (Notes F and G)
Notes receivable 78,345 74,643
Syndication costs 21,751 21,751
Debt issuance costs, net of
accumulated amortization of
$31,627 in 1996 and $31,042
in 1995 289,913 44,193
507,261 658,427
$12,749,343 $13,222,768
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED BALANCE SHEETS--CONT'D
December 31,
1996 1995
LIABILITIES AND PARTNERSHIP DEFICIT
Mortgage debt (Note C) $ 12,931,003 $ 12,851,382
Accounts payable and accrued expenses--
(Note H) 244,253 583,739
Accrued interest 527,106 385,380
Unearned revenue 30,360 27,479
Tenant security deposits 102,050 82,210
TOTAL LIABILITIES 13,834,772 13,930,190
PARTNERSHIP DEFICIT
General Partners
Capital contributions 2,000 2,000
Partnership deficit (50,009) (46,229)
(48,009) (44,229)
Limited Partners
Capital contributions 3,915,084 3,915,084
Partnership deficit (4,952,504) (4,578,277)
(1,037,420) (663,193)
TOTAL PARTNERSHIP DEFICIT (1,085,429) (707,422)
$ 12,749,343 $ 13,222,768
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31,
1996 1995 1994
REVENUES
Rents $ 2,767,870 $ 2,697,035 $ 2,298,739
Interest (Note F) 90,428 128,763 105,581
2,858,298 2,825,798 2,404,320
OPERATING AND ADMINISTRATIVE
EXPENSES
Property operating
expenses 1,177,374 1,222,240 1,202,660
General and
administrative
expenses 70,752 70,672 62,742
Professional services (Note E) 118,896 136,955 73,200
Management fees (Note E) 137,449 130,229 115,393
1,504,471 1,560,096 1,453,995
NET OPERATING INCOME 1,353,827 1,265,702 950,325
NON-OPERATING EXPENSES
Interest 1,201,841 930,019 930,606
Depreciation and
amortization 529,993 507,242 648,093
1,731,834 1,437,261 1,578,699
PARTNERSHIP LOSS $ (378,007) $ (171,559) $ (628,374)
Allocation of loss
General Partners $ (3,780) $ (1,715) $ (6,284)
Limited Partners (374,227) (169,844) (622,090)
$ (378,007) $ (171,559) $ (628,374)
Partnership loss per
limited partnership
unit (Note A) $ (38.64) $ (17.54) $ (64.23)
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED STATEMENTS OF PARTNERSHIP (DEFICIT) CAPITAL
Years Ended December 31, 1996, 1995 and 1994
General Limited
Partners Partners Total
Balances at January 1, 1994 $(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 (1,715) (169,844) (171,559)
Balances at December 31, 1995 (44,229) (663,193) (707,422)
Partnership loss (3,780) (374,227) (378,007)
Balances at December 31, 1996 $(48,009) $(1,037,420) $(1,085,429)
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31,
1996 1995 1994
OPERATING ACTIVITIES
Partnership loss $ (378,007) $ (171,559) $ (628,374)
Adjustments to reconcile
partnership loss to net
cash used in operating
activities:
Depreciation and
amortization 529,993 512,242 653,093
Provision for losses on rents
and other receivables 4,850 ( 664) (13,186)
Changes in assets
and liabilities:
Rent and other receivables (6,171) 48,063 24,686
Prepaid expenses and deposits (1,992) 22,148 (11,996)
Accounts payable and
accrued expenses (339,486) (12,170) 66,919
Accrued interest 141,726 240,385 37,037
Unearned revenue 2,881 17,520 4,414
Tenant security deposits 19,840 9,751 107
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES (26,366) 665,716 132,700
INVESTING ACTIVITIES
Improvements to investment
properties (102,145) (164,484) (87,282)
Interest earned on certificate
of accrual on Treasury Security (70,514) (64,978) (63,864)
Restricted deposits (34,490) --- ---
NET CASH USED IN INVESTING
ACTIVITIES (207,149) (229,462) (151,146)
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSOLIDATED STATEMENTS OF CASH FLOWS--CONT'D
Years Ended December 31,
1996 1995 1994
FINANCING ACTIVITIES
Debt issuance costs $ (246,305) $ (235) $ ---
Principal payments on debt (8,420,379) (14,669) (32,582)
Borrowings on debt 8,500,000 --- ---
Received from related parties --- 18,879 1,661
Note receivable from related
parties (3,702) (98,080) ---
NET CASH USED IN
FINANCING ACTIVITIES (170,386) (94,105) (30,921)
INCREASE/(DECREASE) IN CASH (403,901) 342,149 (49,367)
CASH BEGINNING OF PERIOD 486,886 144,737 194,104
CASH END OF PERIOD $ 82,985 $ 486,886 $ 144,737
See notes to consolidated financial statements.
<PAGE>
SECURED INVESTMENT RESOURCES FUND, L.P. III
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A--SIGNIFICANT ACCOUNTING POLICIES
Organization and Business--Secured Investment Resources Fund, L.P.
III ("Partnership") is a Missouri limited partnership formed
pursuant to the Missouri Revised Uniform Limited Partnership Act on
April 20, 1988. 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 12% (14%
for those investors who subscribed for units on or before 90 days
after December 7, 1988) or the increase in the consumer price index
per annum, cumulative non-compounded on their adjusted invested
capital, net income or loss will be allocated 15% to the General
Partners and 85% to the Limited Partners.
Consolidated Limited Partnerships
To satisfy current real estate lending requirements that real
estate assets be in single asset partnerships, the Partnership has
formed a new single asset partnership by the name of Bicycle Club
Joint Venture, L.P. The partnership retained the same partnership
structure as Secured Investment Resources Fund, L.P. III, with
Secured Investment Resources Fund, L.P. III being the sole Limited
Partner. The result of operations of this single asset partnership
have been consolidated with the Partnership.
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 the
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 Loss Per Limited Partnership Unit--Partnership loss per
limited partnership unit is computed by dividing the loss allocated
to the Limited Partners by the weighted average number of limited
partnership units sold. The per unit information has been computed
based on 9,685 weighted average limited partnership units
outstanding.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE A--SIGNIFICANT ACCOUNTING POLICIES--CONT'D.
Debt Issuance Costs--Loan costs, when incurred, are capitalized by
the Partnership. These costs are amortized over the term of the
related loans.
Restricted Deposits--Certificates of Accrual on Treasury Security
are anticipated to be held to maturity as they are pledged as
collateral as described in Note D. These instruments are reported
at cost, adjusted for accretion of discounts which are recognized
in interest income using the interest method over the period to
maturity.
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
intangible 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. The
application of this pronouncement did not have a material effect on
the financial statements of the Partnership.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D
NOTE B--INVESTMENT PROPERTIES
Investment properties consists
of the following:
December 31,
1996 1995
Cost (including capital improvements
subsequent to acquisition):
Greenhills Bicycle
Club Apartments $ 10,988,697 $ 10,937,724
KC Club Apartments 5,040,765 4,989,593
Office Equipment 12,180 12,180
16,041,642 15,939,497
Less:
Accumulated depreciation 4,732,073 4,202,665
$ 11,309,569 $ 11,736,832
Depreciation expense was $529,408, $507,242, and $647,836 for the
years ended December 31, 1996, 1995, and 1994 respectively.
(The remainder of this page intentionally left blank.)
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE C--NON-RECOURSE MORTGAGE DEBT
Non-recourse mortgage debt consists of the following:
December 31,
1996 1995
Collateralized by Investment Property:
First Mortgages:
Greenhills Bicycle
Club Apartments $ 8,082,102 $ 8,400,000
KC Club Apartments 4,451,382 4,451,382
Second Mortgage:
Greenhills Bicycle
Club Apartments 397,519 ---
$12,931,003 $12,851,382
KC Club Apartments
The KC Club Apartments' mortgage note payable is collateralized by
the apartment buildings, personal property and assignment of its
leases and rents. The interest rate for this mortgage as of
December 31, 1996 was 8.45%.
As a result of the declining cash flows for the KC Club Apartments,
at December 31, 1996, the mortgage interest was delinquent by
$466,490 and principal payments have been suspended. The General
Partner and the lender are engaged in ongoing negotations to
restructure this debt. It is anticipated that the restructuring
will be completed in 1997. The Partnership is currently paying
debt service of $25,000 per month which represents the cash flow of
the property. It is anticipated those payments will continue until
a restructuring or refinance is completed.
The net book value of this property was $3,562,000 as of December
31, 1996.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE C--NON-RECOURSE MORTGAGE DEBT--CONT'D.
Greenhills Bicycle Club Apartments
On July 8, 1996 the partnership refinanced the matured $8,400,000
first mortgage on Greenhills Bicycle Club Apartments. The terms of
the new mortgage are $8,100,000 at 9.0% interest with monthly
principal and interest payments in the amount of $65,000 through
the loan maturity date of August 1, 2001 (5 years).
In addition, a second mortgage note was signed by the Partnership.
The terms of the new note are $400,000 with interest paid monthly
at the rate of 9% with a maturity date of July 31, 2001 at which
time the principal shall be due. The past due real estate taxes on
Greenhills Bicycle Club Apartments were paid in full from a portion
of the proceeds of this note.
Cash paid for interest totaled $984,531, $886,813, and $888,570
during 1996, 1995, and 1994, respectively.
Maturities of mortgage debt are as follows:
1997 $ 4,508,400
1998 62,367
1999 68,217
2000 74,616
2001 8,217,403
$12,931,003
NOTE D--LEASES
The Partnership entered into a land lease agreement for the land
underlying the KC Club Apartments for a term of twenty years. The
lease payments for years 1 to 15 are calculated at 50% of that
year's net operating income in excess of an ascending scale from
$650,000 to $800,000. During years 16 to 20, the annual lease
payments are 10% of the land's then appraised value. For the years
ended December 31, 1996, 1995 and 1994, the net operating income
did not exceed the land lease requirements which resulted in no
lease payments. In addition, the Partnership is obligated to pay
real estate taxes assessed on the land value.
At all times during the term of the lease, the Partnership (or its
assignee) has the right to purchase the land at a price equal to
the greater of $2,000,000 or fair market value at the time the
option is exercised. Should the buildings and improvements be sold
prior to the end of the land lease agreement (20 years), the
Partnership is under no obligation for payment of the land rental
assessments for the remaining portion of the land lease agreement.
The Partnership invested $500,000 (currently held as a Certificate
of Accrual with a market value of $1,037,000 as of December 31,
1996) which is pledged as collateral until the property's net
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE D--LEASES--CONT'D.
operating income achieves the level of 120% of the debt service on
the first mortgages for a consecutive 24-month period or May 31,
2004, whichever is earlier.
NOTE E--RELATED PARTY--MANAGEMENT FEES
Through December 31, 1994, property management services were
provided by The Hoyt Group, a Kansas Corporation in which the
individual General Partner had an interest. As of January 1, 1995,
SPECS, Inc., a Kansas Corporation in which the individual General
Partner has an 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,
1996 1995 1994
Property management fees $ 137,449 $ 130,229 $ 115,393
Professional services 45,335 44,000 ---
$ 182,784 $ 174,229 $ 115,393
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.
There was no management fee due for years ending December 31, 1996,
1995 and 1994.
NOTE F--RELATED PARTY--NOTE RECEIVABLE
On April 12, 1995, the SIR Partners III, L.P. executed a note in
the amount of $522,004. The interest rates on the notes for 1993
and 1994 ranged from 6.5% to 8.5%. Interest during 1995 was 9%.
Interest earnings for the combined notes were $50,509 in 1995 and
$44,821 in 1994.
On December 28, 1995, the note principal and all accrued interest
through that date was retired in full pursuant to an assumption
agreement between the Partnership,SIR Partners III, and James R.
Hoyt. In exchange for payment of the note (and excess costs/fees
described in Note G), the General Partner assumed full
responsiblity for the matured second mortgage on Greenhills
Apartments. The Partnership was provided with an executed release
of the note and second deed of trust relating to the Greenhills
mortgage.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE F--RELATED PARTY--NOTE RECEIVABLE--CONT'D.
Funds advanced to Secured Investment Resources Fund, L.P. is being
repaid beginning May 1, 1995 including 9% interest. Principal
payments received in 1996 aggregated $2,440, while interest accrued
into the note balance was $6,142.
Amounts due from related parties consist of the following:
December 31,
1996 1995
Secured Investment Resources
Fund, L.P. $ 78,345 $ 74,643
NOTE G--SYNDICATION FEES AND ACQUISITION FEES
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 and the Related Party Note
Receivable, outlined in Note F, exceeded the amount allowed per the
Partnership Agreement. The General Partners are obligated to
reimburse these excess costs/fees.
SIR 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.
On December 28, 1995, the excess costs and fees were reduced to
$21,751 pursuant to an assumption agreement between the
Partnership, SIR Partners III, and James R. Hoyt. In exchange for
payment of the excess costs and fees, (as well as the note
receivable described in Note F) the General Partner assumed full
responsibility for the matured second mortgage on Greenhills
Apartments. Subsequent to year end, the Partnership was provided
with an executed release of the note and second deed of trust
relating to the Greenhills mortgage.
December 31,
1996 1995
General Partners--Excess
Syndication Costs:
Paid by the Partnership $ 21,751 $ 21,751
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D
NOTE H--ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following:
December 31,
1996 1995
Vendor accounts payable $ 15,417 $ 34,648
Property taxes 127,938 465,872
Professional fees 55,986 29,562
Utilities 25,054 25,618
Insurance 8,352 14,145
Payroll reimbursement 11,506 13,894
$ 244,253 $ 583,739
Real estate taxes for the Partnership include $59,100 of delinquent 1995
taxes and $62,422 of 1996 taxes which are now due on KC Club Apartments.
NOTE I--INCOME TAXES
The Partners' capital accounts differ for financial reporting purposes and
federal income tax purposes. The primary differences result from
depreciation. The effect of these items is summarized as follows:
December 31,
1996 1995
Financial reporting basis:
Total assets $ 12,749,343 $ 13,222,768
Total liabilities (13,834,772) (13,930,190)
Total Partners' (deficit) capital $ (1,085,429) $ (707,422)
Tax basis:
Total assets $ 13,139,467 $ 13,645,396
Total liabilities (12,710,475) (12,808,552)
Total Partners' capital $ 428,992 $ 836,844
Years Ended December 31,
1996 1995 1994
Partnership loss-financial
reporting purposes $ (378,007) $ (171,559) $ (628,374)
Book versus tax differences
due to:
Depreciation and
amortization (37,354) (57,303) 100,745
Other 8,821 27,037 (12,681)
(28,533) (30,266) 88,064
Partnership loss-federal
income tax purp $ (406,540) $ (201,825) $(540,310)
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE J--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.
NOTE K--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 the 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 1997. The
anticipated working capital sources are payments received on notes
and miscellaneous receivables and cash flow from operations during
1997, which is expected to improve over that of the previous year.
Several factors which could positively affect 1997 operations are
the implementation of rental rate increases at both properties and
decreases in the amount of promotional rent discounts allowed for
the leasing of apartment units. Accomplishment of these objectives
is partially predicated on the real estate economic conditions
discussed above, which are beyond the control of the Partnership,
and will influence the achieved results.
The Partnership is currently in negotiations with the mortgage
holder on KC Club Apartments concerning a restructure of that debt.
More favorable interest rates and possible principal write downs
are under consideration. The Partnership currently makes monthly
cash flow payments of $25,000 on this mortgage and anticipates
making those payments until a restructure is completed.
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.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--CONT'D.
NOTE L--DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying values reflected in the balance sheets at December 31,
1996, reasonably approximate the fair values for cash and cash
equivalents. The Partnership cannot estimate the fair value of its
fixed-rate borrowings at December 31, 1996, as there is no readily
available market value for instruments with similar
characteristics.
NOTE M--SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Non cash activity for the year ended December 31, 1995 is as
follows:
Assumption agreement with General Partners,
James R. Hoyt and SIR Partners III
Mortgage debt assumed by General Partner $871,150
Accrued interest assumed by General Partner $202,180
Notes receivable retired $611,662
Syndication costs refunded $461,668
(The remainder of this page intentionally left blank.)
<PAGE>
Item 9. Changes in and Disagreements 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
(individual),SIR Partners III, L.P. (partnership) and
Nichols Resources, Ltd. (corporation).
Nichols Resources, Ltd. (the Corporate General Partner)
is a Missouri corporation formed on August 22, 1988 for
the purpose of acting as a general partner of public real
estate programs and otherwise investing in and dealing
with limited partnerships, property management and the
real estate syndication business. The Corporate General
Partner is a wholly-owned subsidiary of the J.C. Nichols
Company. Nichols Resources, Ltd. issued 15,000 shares of
common stock for $1,500,000 on August 22, 1988.
James R. Hoyt (the Individual General Partner), age 59,
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. and Secured
Investment Resources Fund, L.P. II. Since 1983, Mr. Hoyt
has been involved as the Individual General Partner in
ten specified real estate private placement offerings.
As of December 31, 1996, these partnerships, including
Secured Investment Resources Fund, L.P. III, have raised
a total of $60,709,750.
SIR Partners III, L.P. f/k/a Hoyt Partners III, L.P.,
(the Partnership General Partner) is a limited
partnership organized on February 23, 1988 under the
statutes of the State of Missouri. James R. Hoyt is the
General Partner. The Partnership was formed for the
purpose of acting as a general partner and acquisition
agent of Secured Investment Resources Fund, L.P. III.
<PAGE>
Item 11. Management Compensation
During 1996, The partnership paid $137,449 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(b)(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, Notes F and G
appearing in Item 8.
(The remainder of this page intentionally left blank.)
<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. III, are
included in Item 8:
SECURED INVESTMENT RESOURCES FUND, L.P.III Page
(i) Independent Auditors' Report 9
(ii) Consolidated Balance Sheets -
December 31, 1996 and 1995 10-11
(iii) Consolidated Statements of Operations -
Years Ended December 31, 1996,
1995, and 1994 12
(iv) Consolidated Statements of Partnership
Capital - Years Ended December 31,
1996, 1995, and 1994 13
(v) Consolidated Statements of Cash Flows -
Years Ended December 31, 1996,
1995, and 1994 14-15
(vi) Notes to Consolidated Financial
Statements 16-25
(a)(2) The following Financial Statement Schedules as
part of this report:
(i) Schedule II - Allowance For Doubtful
Accounts 31
(ii) Schedule III - Real Estate and
Accumulated Depreciation 32-33
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>
(a)(3) The following Exhibits are Incorporated by
Reference and are an integral part of this
Form 10-K.
Exhibit Number Description
(3) (a) Amended and Restated Agreement
of Limited Partnership. (iii)
(b) Certificate of Limited
Partnership. (i)
(4) (a) Form of Subscription Agreement.
(iii)
(b) Form of Certificate evidencing
units. (I)
(10) (a) Property Management Agreement
between Partnership and The
Hoyt Group Limited Partnership
(formerly En-Com Properties,
Ltd.). (ii)
(b) Escrow Agreement between the
Partnership and The Mission
Bank. (i)
(c) Real Estate Contract of Sale
for the Brywood Hills
Apartments. (iv)
(d) Real Estate Contract of Sale
for The Greenhills Bicycle
Club (formerly Candlewyck
Apartments). (v)
(e) Deed of Trust and Promissory
Note for Brywood Hills
Apartments. (vii)
(f) Deed of Trust and Promissory
Notes for Greenhills Bicycle
Club (formerly Candlewyck
Apartments). (vii)
(16) (a) Letter regarding change in
certifying accountant. (vi)
(25) (a) Power of Attorney. (i)
(28) (b) Guarantee of General Partners.
(I)
<PAGE>
(i) Previously filed on September 13, 1988 as an Exhibit to
the Registration Statement on Form S-11 (file no. 33- 24235)
such Exhibit and Registration Statement
incorporated herein by reference.
(ii) Previously filed on December 7, 1988 as an Exhibit to
Amendment #1 to registration Statement of Form S-11
such Exhibit and Registration Statement incorporated
herein by reference.
(iii) Previously filed on December 7, 1988 as part of
Amendment #1 to Registration Statement and incorporated
herein by reference.
(iv) Previously filed as an exhibit to a current report on
Form 8-K dated June 12, 1989 which exhibit and Form is
incorporated herein by reference.
(v) Previously filed as an exhibit to a current report on
Form 8-K dated October 30, 1989 which exhibit and Form
is incorporated herein by reference.
(vi) Previously filed as an exhibit to a current report on
Form 8-K dated December 4, 1989 which exhibit and Form
incorporated herein by reference.
(vii) Filed herewith.
(b) Report of Form 8-K filed during the fourth quarter.
None.
(The remainder of this page intentionally left blank.)
<PAGE>
Secured Investment Resources Fund L.P. III
Schedule II - Allowance for Doubtful Accounts
December 31, 1996
Balance at Bad Debt Write Balance at
Beginning of Charged to Offs Deducted End
Period Operations From Allowance of Period
For Years Ended Dec 31,
1994 $21,000 $(13,186) $ --- $ 7,814
1995 $ 7,814 $( 664) $ --- $ 7,150
1996 $ 7,150 $ 4,850 $ --- $12,000
<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. III
A Missouri 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: SIR Partners III, L.P.
as General Partner
By:
James R. Hoyt
as Individual General Partner
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. III
A Missouri Limited Partnership
(Registrant)
By: /s/ James R. Hoyt
James R. Hoyt
as Individual General Partner
Date: April 11, 1997
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: SIR Partners III, L.P.
as General Partner
By: /s/ James R. Hoyt
James R. Hoyt
as Individual General Partner
Date: April 11, 1997
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>
<TABLE>
Secured Investment Resources Fund, L.P. III
Schedule III - Real Estate & Accumulated Depreciation
December 31, 1996
<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>
Garden Apartments:
KC Club Apartments $ 4,451,382 $ --- $ 4,775,465 $ 295,527 $ 185,794 $(216,021)
Kansas City, MO
Green Hills Bike Club 8,479,621 430,937 9,988,057 832,619 313,926 (576,842)
Kansas City, MO
Other Equipment --- --- --- --- 12,180 ---
TOTALS $12,931,003 $ 430,937 $14,763,522 $ 1,128,146 $ 511,900 $(792,863)
</TABLE>
<TABLE>
<CAPTIONS>
Gross Amount at Which
Carried at Close of Period
Buildings & Furniture Accumulated Date Depreciation
Land Improvements Equipment Total Depreciation Acquired Life
<S> <C> <C> <C> <C> <C> <C> <C>
Garden Apartments:
KC Club Apartments $ $ 4,641,246 $ 399,520 $ 5,040,766 $1,478,685 30-Jun-89 30 Yrs <F1>
Kansas City, MO 5 Yrs <F2>
Greenhills Bike Club 407,226 9,521,227 1,060,243 10,988,696 3,241,208 27-Oct-89 30 Yrs <F1>
Kansas City, MO 5 Yrs <F2>
Other Equipment --- --- 12,180 12,180 12,180 5 Yrs <F2>
$ 407,226 $14,162,473 $ 1,471,943 $16,041,642 $4,732,073
<FN>
<F1> Estimated useful life of buildings.
<F2> Estimated useful life of furniture and fixtures.
NOTES:
(a) The initial cost to the Partnership represents the original purchase
price of the properties, including $205,562 and $145,578 of improvements
<PAGE>
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.
</TABLE>
<TABLE>
(c) Reconciliation of Real Estate Owned:
<CAPTION>
<S> <C> <C> <C> <C>
Buildings & Furniture &
Total Land Improvements Equipment
Balance at January 1, 1994 $15,687,731 $ 407,226 $ 14,094,982 $ 1,185,523
Additions during year:
Reclassifications --- --- --- ---
Improvements 87,282 37,572 49,710
Balance at December 31, 1994 15,775,013 407,226 14,132,554 1,235,233
Additions during year:
Improvements 164,484 --- 21,756 142,728
Balance at December 31, 1995 15,939,497 407,226 14,154,310 1,377,961
Additions during year: --- --- --- ---
Improvements 102,145 --- 8,163 93,982
Balance at December 31, 1996 $16,041,642 $ 407,226 $14,162,473 $1,471,943
(d) Reconciliation of Accumulated Depreciation:
Balance at January 1, 1994 $3,047,587 $ --- $2,096,903 $ 950,684
Additions during year:
Depreciation Expense 647,836 --- 477,883 169,953
Balance at December 31, 1994 3,695,423 --- 2,574,786 1,120,637
Additions during year:
Depreciation Expense 507,242 --- 437,578 69,664
Balance at December 31, 1995 4,202,665 --- 3,012,364 1,190,301
Additions during year:
Depreciation Expense 529,408 --- 435,991 93,417
Balance at December 31, 1996 $4,732,073 $ --- $3,448,355 $1,283,718
(e) The total gross amount of real estate at December 31, 1996 includes
$566,888 of acquisition fees paid to affiliates.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 82,985
<SECURITIES> 932,513
<RECEIVABLES> 17,106
<ALLOWANCES> 12,000
<INVENTORY> 0
<CURRENT-ASSETS> 507,261
<PP&E> 16,041,642
<DEPRECIATION> 4,732,073
<TOTAL-ASSETS> 12,749,343
<CURRENT-LIABILITIES> 903,769
<BONDS> 12,931,003
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 12,749,343
<SALES> 0
<TOTAL-REVENUES> 2,858,298
<CGS> 0
<TOTAL-COSTS> 1,504,471
<OTHER-EXPENSES> 529,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,201,841
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (378,007)
<EPS-PRIMARY> (38.64)
<EPS-DILUTED> 0
</TABLE>
