10-K 1 foundation10k_2001.txt DECEMBER 31, 2001 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, 2001 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) 1100 Abernathy Road NE, Building 500, Suite 700 Atlanta, GA 30328 ----------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's Telephone Number, Including Area Code - (770) 551-0007 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. [X] 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 securities. Title of Each Class Number of Units December 31, 2001 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 wholly-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, 2001, the Partnership owned the properties listed below: Purchase Current Property Name and Location Date Cost -------------------------- -------- ------- Oakwood Village Apartments 1/22/88 $ 9,466,117 Atlanta, Georgia Springfield Apartments 9/22/88 $13,164,984 Durham, North Carolina December 31, 2001 December 31, 2000 ----------------- ----------------- Land $ 3,141,510 $ 3,141,510 Buildings 17,298,118 17,298,118 Furniture & Fixtures 2,191,473 2,114,164 Apartment Properties, at Cost 22,631,101 22,553,792 Less: Accumulated Depreciation -8,559,129 -7,986,885 $14,071,972 $14,566,907 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 A solicitation of proxy was made to the security holders during 2001. The subject matter the proxy dealt with was the corporate general partner seeking approval from the limited partners to sell the assets owned by the partnership and approval to windup partnership operations. A majority of the limited partners voted to approve the sale of the partnership assets and windup the partnership operations. 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, 2001 -------------- ------------------------ Units of Limited Partnership Interest 731 General Partner Interest 2 Item 6. Selected Financial Data

** 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 statement's 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, 2001 was $3,771,408 as compared to $3,686,506 and $3,621,098 for the comparable periods ended December 31, 2000 and December 31, 1999, respectively. Income from property operations for the twelve months ended December 31, 2001 was $1,257,891 as compared to $1,382,498 and $1,472,740 for the comparable periods ended December 31, 2000 and December 31, 1999. The $90,242 decrease in income from property operations in 2000 was a result of several factors; including a $35,043 increase in payroll expense at the Springfield Apartments due to the hiring of an additional office worker, a $24,237 increase in property taxes at the Oakwood Village Apartments due to an increased property tax assessment by the county the property is located within, repair and maintenance cost increases at both property locations for such items as landscaping improvement--$26,599; plumbing replacements and interior repairs due to pipe breaks at the Springfield Apartments totaling $39,913; and exterior wood replacement and roof repairs totaling $32,563. The $124,607 decrease in income from property operations in 2001 was also a result of several factors. During 2001 the partnership incurred approximately $110,000 in expenses in connection with the Proxy Solicitation discussed in Part I. Item 4. above. The expenses included professional services for legal, property appraisals and accounting, printing and mailing fee expenses and filing fees paid to the Securities and Exchange Commission. The remaining factors attributed to the decrease in income from property operations is an increase of $115,138 in operating expenses offset by an increase in rental and related income of $92,835. The $115,138 increase in operating expenses was caused by the wood replacement and repainting of the Springfield Apartments for $100,225 in 2001 and an increase of $10,659 in advertising related costs offset by a $7,465 reduction in utility expense at both properties and $3,020 reduction in landscaping expenses at both properties. Net income for the twelve months ended December 31, 2000 was $85,094 or $9.05 per Limited Partnership Unit outstanding as compared to a net loss of $36,307 or $3.86 per Limited Partnership Unit for the comparable period ended December 31, 2001. The primary source of funds in 2002 will accumulate from rental operations and investment earnings. Cash distributions of $423,316, $423,316 and $352,763 were paid to limited partners in 2001, 2000, and 1999 respectively. The distribution of cash to limited partners was $129,346 lower in 1999 compared to 1998. The lower 1999 distribution is a result of the partnership setting aside $107,875 of operating funds for planned capital expenditures in 2000. The higher distribution in 2000 of $70,553 reflects the prior year set aside of $107,875 offset primarily by a $35,537 decrease in property cash flow. Year 2000 Disclosure The partnership's operations were not affected negatively by the advent of the year 2000. The partnership spent between five and seven thousand dollars towards Y2K preparations and these amounts were expensed. 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 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 coperations 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 from property operations are sufficient to meet the short-term operating needs of the Partnership. The sole long-term commitment of the Partnership is the mortgages payable which have balloon payments due November 2004. Management plans to meet the long-term commitment through a property sale or through approaching lenders to refinance the Partnership mortgages. We are currently in the process of marketing both properties for sale. If offers at acceptable prices are received, it is probable that we may sell one or both of the properties. Capital expenditures for any material commitments, should they occur, will be funded from two sources-working capital reserves and proceeds earned from property operations. Cash provided by operating activities decreased by $108,966 from 2000 to 2001. The primary reason for the change is the result of the partnership experiencing a net loss in 2001 verse net income in 2000. Factors contributing to the operational net loss in 2001 are presented in the Management Discussion and Analysis section above. Cash provided by operating activities increased by $30,829 from 1999 to 2000. The decrease was caused by an increase in unearned rents of $32,075 and a smaller increase in restricted cash offset by a lower net income of $63,831. Cash used by investing activities totaled $68,870 in 2000. The $34,112 decrease from 1999 is attributable to the purchase and capitalization of exercise equipment and masonry work at the Oakwood Village Apartments and concrete and landscaping improvements at the Springfield Apartments. The cash used by investing activities in 2001 was $77,309 and is comparable to the prior year amount. The monthly debt service commitments total $52,777 for Oakwood Village and $74,644 for Springfield. The debt service is adequately funded from Partnership operations. Cash used by financing activities totaled $611,922 for 2000 as compared to $626,907 for 2001. This increase was caused by the increased pay down of partnership debt principal as required in the new loan agreements entered into during 1997. The change in cash used by financing activities was more dramatic in 2000 verse 1999. The $84,436 increase was a result of an increase in partnership distributions of $70,533 coupled with a $13,883 increase in principal payments on the partnership debt. Item 8. Financial Statements and Supplementary Data FOUNDATION REALTY FUND, LTD. (A Florida Limited Partnership) INDEX TO FINANCIAL STATEMENTS Page No. Part I - Financial Information Independent Auditor's Report 7 Balance Sheets as of December 31, 2001 8 And December 31, 2000 Statements of Operations - For the 9 Years Ended December 31, 2001, 2000 and 1999 Statements of Partners' Equity - For the 10 Years Ended December 31, 2001, 2000 and 1999 Statements of Cash Flows - For the Years 11 Ended December 31, 2001, 2000 and 1999 Notes to Financial Statements 12-15 Supplementary Financial Data 16 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. 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, 2001 and 2000, and the related statements of operations, partners' deficit and cash flows for each of the three years in the period ended December 31, 2001. 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 auditing standards generally accepted in the United States of America. 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, 2001 and 2000 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America. Our audits were made for the purpose of forming an opinion on the basic financial Statements taken as a whole. The schedules listed under items 14(2) in the index are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, based on our audits, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole. As discussed in note 7, the partnership is winding down its operations. SPENCE,MARSTON,BUNCH,MORRIS & CO. Certified Public Accountants Clearwater, Florida February 10,2002 (A Florida Limited Partnership) BALANCE SHEETS

The accompanying notes are an integral part of these financial statements. FOUNDATION REALTY FUND, LTD. (A Florida Limited Partnership) STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31

The accompanying notes are an integral part of these financial statements. FOUNDATION REALTY FUND, LTD. (A Florida Limited Partnership) STATEMENTS OF PARTNERS' EQUITY (DEFICIT) FOR THE YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999

The accompanying notes are an integral part of these financial statements. FOUNDATION REALTY FUND, LTD. (A Florida Limited Partnership) STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31,

The accompanying notes are an integral part of these financial statements. FOUNDATION REALTY FUND, LTD. (A Florida Limited Partnership) NOTES TO FINANCIAL STATEMENTS December 31, 2001 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 wholly 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. The Limited Partnership Agreement states that no cash from operations shall be distributed to the General Partners in any year until Limited Partners have received distributions in such year in an amount equal to 7% of their adjusted capital contribution. Profit and loss and cash distributions from sales of properties will be allocated as formulated in the Limited Partnership Agreement. The Limited Partnership Agreement states that cash distributions from sales will be distributed first to the General Partners until they receive 5% of aggregate distributions of cash from operations. Cash distributions from sales will be distributed second to each Limited Partner an amount equal to their adjusted capital contribution plus an amount equal to an 8% per annum, cumulative but non-compounded return. Cash distributions from sales will be distributed third to the General Partners until they have received cumulative distributions in an amount equal to 3% of the aggregate disposition price of properties sold by the Partnership. Cash distributions from sales will be distributed fourth, the balance, if any, 85% to the Limited Partners and 15% to the General Partners. NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES: Basis of Accounting/Revenue Recognition The Partnership utilizes the accrual basis of accounting whereby rental revenues and other fees are recognized when earned and expenses are recognized as obligations when incurred. The Partnership does not recognize revenue upon the collection of security deposits but sets up a liability for the amount received. 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 is not included in cash and cash equivalents. Restricted Cash Restricted cash includes $378,296 at December 31, 2001 and $401,199 at December 31, 2000 of cash held in escrow for the payment of real estate taxes and capital replacement items. Restricted cash also includes $99,399 at December 31, 2001 and $102,515 at December 31, 2000 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 reclassified 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: 2001 2000 1999 ---- ---- ---- Property Management Fees $197,363 $190,347 $184,729 General and Administrative Costs 1,030 1,998 1,090 The terms of the property management agreement call for the Corporate General Partner to receive a monthly fee of up to 5% of the monthly gross receipts from residential property operations. Property management fees in the amount of $15,801 are due to the Corporate General Partner at December 31, 2001. Property management fees in the amount of $11,100 were due to the Corporate General Partner at December 31, 2000. There were no amounts due from related parties at December 31, 2001 or December 31, 2000. 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, 2001 December 31, 2000 ----------------- ----------------- Land $ 3,141,510 $ 3,141,510 Buildings 17,298,118 17,298,118 Furniture & Fixtures 2,191,473 2,114,164 Apartment Properties at 22,631,101 22,553,792 Cost Less: Accumulated (8,559,129) (7,986,885) Depreciation $ 14,071,972 $ 14,566,907 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 income (loss) as reported and partnership income (loss) for tax purposes: 2001 2000 1999 ---- ---- ---- Net income(loss) per financial statements $ (38,218) $ 89,573 $ 153,404 Tax depreciation in excess of or (less than) financial depreciation (131,635) (140,113) (140,947) Prepaid rents added to taxable income (17,826) 11,680 (8,725) Partnership income(loss) for tax purposes $ (187,679) $ (38,860) $ 3,732 NOTE 6 - NOTES PAYABLE: The notes payable at December 31, 2001 and 2000 consist of the following: 2001 2000 ---- ---- 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 October 2004. There is a balloon payment of $6,834,354 due on this loan of the remaining principal and any unpaid interest in November 2004. $ 7,111,459 $ 7,195,785 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 October 2004. There is a balloon payment of $9,666,045 due on this loan of the remaining principal and any unpaid interest in November 2004. 10,057,964 10,177,229 $ 17,169,423 $ 17,373,014 The aggregate amount of principal payments due in the years after December 31, 2001 are: 2002 218,372 2003 235,722 2004 16,715,329 $17,169,423 NOTE 7 - OTHER MATTERS: A solicitation of proxy was made to the limited partners during 2001. The subject matter of the proxy involved the Corporate General Partner seeking approval from the limited partners to sell the assets owned by the partnership and approval to windup partnership operations. A majority of limited partners voted to approve the sale of the partnership assets and windup the partnership operations. NOTE 8 - SUBSEQUENT EVENT: On February 15, 2002, the Partnership paid distributions of $105,829 to the Limited Partners. NOTE 9 - Selected Quarterly Financial Data (Unaudited) 2000 Q-1-00 Q-2-00 Q-3-00 Q-4-00 ---- ------ ------ ------ ------ Rental Income $ 880,875 $ 897,338 $ 934,732 $ 973,561 Income from Property 358,410 308,167 332,013 383,908 Operations Net Income (Loss) 31,289 (18,214) 7,054 69,444 Net Income (Loss) Per Limited Partnership unit 3.16 (1.83) .71 7.01 2001 Q-1-01 Q-2-01 Q-3-01 Q-4-01 ---- ------ ------ ------ ------ Rental Income $ 963,995 $ 934,034 $ 940,223 $ 933,156 Income from Property 389,169 149,457 332,591 386,674 Operations Net Income (Loss) 66,096 (177,592) 7,494 65,784 Net Income (Loss)Per Limited Partnership Unit 6.68 (17.93) .75 6.64 The significant drop in income from property operations during the second quarter of 2001 was a result of $87,588 of expenses incurred in connection with the Proxy Solicitation and an increase in property expenditures of roof replacements totaling $27,135 and painting and wood replacement of $90,578. For comparability, the 2000 figures have been reclassified, where appropriate to conform with the financial statement presentation used in 2001. 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, 2001 2000 1999 ---- ---- ---- 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. $ 197,363 $ 190,347 $ 184,729 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. 1,030 1,998 1,090 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- -0- -0- PART 4 Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 1. Financial Statements - see accompanying index to financial statements, Item 8. 2. Financial Statements Schedules - Schedule III Real Estate and Accumulated Depreciation 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 Foundation Realty Fund, Ltd. (A Florida Limited Partnership) Schedule III - Real Estate and Accumulated Depreciation for the Years Ended December 31, 2001, 2000 and 1999

Foundation Realty Fund, Ltd. (A Florida Limited Partnership) Schedule III - Real Estate and Accumulated Depreciation for the Years Ended December 31, 2001, 2000 and 1999

FOUNDATION REALTY FUND, LTD. (A Florida Limited Partnership) SCHEDULE III - Real Estate and Accumulated Depreciation FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 Balance at (Deletions) Balance at Beginning Additions Close of of Year Year ----------- ---------- --------- 1999 Land $3,141,510 $-0- $3,141,510 Buildings 17,298,118 -0- 17,298,118 Equipment 1,942,312 102,982 2,045,294 Total $22,381,940 $102,982 $22,484,922 2000 Land $3,141,510 $-0- $3,141,510 Buildings 17,298,118 -0- 17,298,118 Equipment 2,045,294 68,870 2,114,164 Total $22,484,922 $68,870 $22,553,792 2001 Land $3,141,510 $-0- $3,141,510 Buildings 17,298,118 -0- 17,298,118 Equipment 2,114,164 77,309 2,191,473 Total $22,553,792 $77,309 $22,631,101 SCHEDULE III - Real Estate and Accumulated Depreciation FOR THE YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999 Balance at Depreciation Balance at Close Beginning Expense of Year of Year ---------- ------------ ---------------- 1999 Buildings $5,229,191 $494,232 $5,723,423 Equipment 1,625,825 67,670 1,693,495 Total $6,855,016 $561,902 $7,416,918 2000 Buildings $5,723,423 $494,232 $6,217,655 Equipment 1,693,495 75,735 1,769,230 Total $7,416,918 $569,967 $7,986,885 2001 Buildings $6,217,655 $494,232 $6,711,887 Equipment 1,769,230 78,012 1,847,242 Total $7,986,885 $572,244 $8,559,129 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 21, 2002 By: J. Robert Love President (Signature) Date: March 21, 2002 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 21, 2002 By: J. Robert Love President (Signature) Date: March 21, 2002 By: Alan G. Lee Secretary (Signature)

FOUNDATION REALTY FUND LTD 10-K