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deficits through April 15, 1983, and $1,165,334 of the
offering proceeds would be available for cash-flow
deficits after that date. The projected annual income
and operating costs of EA 83-XII as set forth in the 83
offering memorandum show an annual operating deficit of
$345,344 calculated as follows:
Percentage of
Projected Annual Income Amount Total Income
Builder lease $65,784 20.30
Rental income (less 20%
vacancy & expense factor) 258,240 79.70
Total projected income 324,024 100.00
Annual Operating Expenditures
Aggregate first mortgage
principal & interest $546,102 168.54
Real estate taxes 49,213 15.19
Insurance & homeowner's dues 21,500 6.64
Audit expenses 4,877 1.51
Property administration fee 30,600 9.44
Allowance for maintenance & repairs17,076 5.27
Total projected cash expenditures 669,368 206.59
Projected operating deficit 345,344 106.59
The 83 offering memorandum also includes a cash-flow
analysis for EA 83-XII from inception to June 30, 1987,
as set forth in appendix A to this opinion.
In the 83 offering memorandum, it was contemplated that
EPIC would finance the partnership's operating deficits by
advancing funds to the partnership. The 83 partnership
agreement provides that EA 83-XII would pay interest on all
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