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EXHIBIT 99.0
FRANKEL FAMILY TRUST APARTMENTS
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 1999
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Independent Auditors' Report
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To the Board of Trustees
Income Opportunity Realty Investors, Inc.
We have audited the accompanying statement of revenues and direct operating
expenses of the Frankel Family Trust Apartments for the year ended December 31,
1999. This statement of revenues and direct operating expenses is the
responsibility of the Property's management. Our responsibility is to express
an opinion on this statement of revenues and direct operating expenses based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues and direct operating expenses
is free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement of revenues and
direct operating expenses. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall statement of revenues and direct operating expenses
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying financial statement is prepared for the purpose of complying
with the rules and regulations of the Securities and Exchange Commission (for
inclusion in Form 8-K of Income Opportunity Realty Trust, Inc.) and, as
described in Note 1, is not intended to be a complete presentation of the
results of operations.
In our opinion, the statement of revenues and direct operating expenses referred
to above presents fairly, in all material respects, the revenues and direct
operating expenses of the Frankel Family Trust Apartments for the year ended
December 31, 1999, in conformity with generally accepted accounting principles.
FARMER, FUQUA, HUNT & MUNSELLE, P.C.
Dallas, Texas
June 22, 2000
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FRANKEL FAMILY TRUST APARTMENTS
STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
Year Ended December 31, 1999
REVENUES
Net rental revenues $2,640,321
Other revenues 161,997
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Total revenues 2,802,318
DIRECT OPERATING EXPENSES
Salaries and benefits 413,108
Repairs and maintenance 350,732
Property taxes 286,140
Utilities 105,135
Insurance 30,922
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Total direct operating expenses 1,186,037
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REVENUES IN EXCESS OF DIRECT OPERATING EXPENSES $1,616,281
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The accompanying notes are an integral part of this statement.
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FRANKEL FAMILY TRUST APARTMENTS
NOTES TO STATEMENT OF REVENUES
AND DIRECT OPERATING EXPENSES
December 31, 1999
NOTE 1: ORGANIZATION AND BASIS OF PRESENTATION
The Frankel Family Trust Apartments is a group of five apartment
complexes located in Midland, Texas. The five complexes are Brighton
Court (60 units), Delmar Villas (92 units), The Enclave (68 units),
Signature Place (57 units) and Sinclair Place (114 units). During
1999, the properties were owned by the Frankel Family Trust.
The accompanying financial statement does not include a provision for
depreciation and amortization, bad debt expense, interest expense, or
income taxes. Accordingly, this statement is not intended to be a
complete presentation of the results of operations.
NOTE 2: 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 revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
NOTE 3: OTHER REVENUES
Other revenues consist of the following:
Rental income $ 77,119
Utility reimbursement 23,730
Cleaning fees 23,463
Damages income 12,556
Other 10,487
Pet deposit 8,684
Late charges 5,958
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$161,997
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NOTE 4: SUBSEQUENT EVENT
The property was sold to Income Opportunity Realty Investors, Inc., a
Nevada corporation, on June 23, 2000.
