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DSI REALTY INCOME FUND XI
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/ x /Annual Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 [Fee Required] for the fiscal year ended December 31, 2003.
or / /Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required] for the transition period from
____________ to _____________.
Commission File No. 33-26038.
DSI REALTY INCOME FUND XI, a California Limited Partnership
(Exact name of Registrant as specified in governing instruments)
__________California_________________________33-0324161_______
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification
number)
6700 E. Pacific Coast Hwy., Long Beach, California 90803
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code-(562)493-8881
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Units.
Indicate by check mark, whether the Registrant (l) 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 for 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_____.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) 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/
The Registrant is a limited partnership and there is no voting stock. All units
of limited partnership are owned by non-affiliates of the Registrant. All units
sold to date were sold at $500.00 per unit.
DOCUMENTS INCORPORATED BY REFERENCE
Item 8. Registrant's Financial Statements for its fiscal year ended December
31, 2003, incorporated by reference to Form 10-K, Part II.
Item 11. Registrant's Financial Statements for its fiscal year ended December
31, 2003, incorporated by reference to Form 10-K, Part III.
Item 12. Registration Statement on Form S-11, as amended, previously filed with
the Securities and Exchange Commission pursuant to the Securities Act of
1933, as amended, incorporated by reference to Form 10-K, Part III.
Item 13. Registrant's financial statements for its fiscal year ended December
31, 2003, together with report of independent public accountants,
incorporated by reference to Form 10-K, Part III.
PART I
Item l. BUSINESS
Registrant (the "Partnership") is a publicly held limited partnership
organized under the California Uniform Limited Partnership Act pursuant to
Agreement of Limited Partnership (the "Agreement") dated December 7, 1988. The
General Partners are DSI Properties, Inc., a California corporation, ROBERT J.
CONWAY and JOSEPH W. CONWAY. The General Partners are affiliates of the Selling
Agent, Diversified Securities, Inc., a wholly-owned subsidiary of DSI Financial,
Inc. The General Partners provide similar services to other partnerships.
The Partnerships's public offering was completed on February 12, 1991, with
20,000 Units ($10,000,000) of limited partnership interests having been
subscribed for. The General Partners have retained a l% interest in all profits,
losses and distributions (subject to certain conditions) without making any
capital contributions to the Partnership. The General Partners are not required
to make any contributions to capital in the future. The General Partners and the
Partnership have obtained a ruling from the Internal Revenue Service, that under
present provisions of the Internal Revenue Code, current Treasury Regulations
thereunder and the interpretations thereof by the Service and the courts, the
Partnership should be treated for federal income tax purposes as a partnership
and not as an association, which is taxable as a corporation. Such ruling was
based upon certain representations contained in the ruling request.
The Partnership is engaged in the business of investing in and operating
mini-storage facilities with the primary objectives of generating, for its
partners, cash flow, capital appreciation of its properties and obtaining
federal income tax deductions in order to shelter a portion of cash distributed
from taxation. The Partnership has interests in joint ventures which purchased
four mini-storage facilities. See discussion under Item 2 - Properties for
further information.
The Partnership does not intend to sell additional limited partnership
interests in the future. The term of the Partnership is fifty years, however, it
is anticipated that all properties will be sold and/or refinanced prior thereto.
The Partnership is intended to be self-liquidating and it is not anticipated
that proceeds from the sale or refinancing of its operating properties will be
reinvested. The Registrant has no full time employees other than on-site
managers at each mini-storage facility. However, the Partnership shares the
expenses of one or more employees with its various affiliated Limited
Partnerships. The general management and supervision of the business and affairs
of the Registrant is vested exclusively in the General Partners. Limited
Partners have no right to participate in the management or conduct of the
Registrant's business and affairs. An independent management company has been
retained to provide day-to-day management services with respect to all of the
Partnership's investment properties.
The average occupancy levels for each of the Partnership's four properties
for the years ended December 31, 2003 and December 31, 2002 were as follows:
Location of Property Average Occupancy Average Occupancy
for the Level for the
Year Ended Year Ended
Dec. 31, 2003 Dec. 31, 2002
Whittier, CA(1) 93% 92%
Bloomingdale, IL(2) 80% 82%
Edgewater, NJ(3) 87% 86%
Sterling Heights, MI(4) 82% 81%
(1) The Partnership owns a 90% interest in this property.
(2) The Partnership owns a 90% interest in this property.
(3) The Partnership owns an 85% interest in this property.
(4) The Partnership owns a 75% interest in this property.
The business in which the Partnership is engaged is highly competitive.
Each of its mini-storage facilities is located in or near a major urban area,
and accordingly, will compete with a significant number of individuals and
organizations with respect to both the purchase and sale of its properties and
for rentals.
Item 2. PROPERTIES
Location Size of Net Rentable No. of Completion
Parcel Area Rental Date
Whittier, CA(1) 3.92 acres 60,249 513 3/90
Bloomingdale,
IL(2) 3.542 acres 60,624 571 1/31/91
Edgewater,NJ(2) 4.118 acres 52,940 447 8/21/90
Sterling
Heights, MI(4) 3.76 acres 58,198 515 7/17/91
(1) The Partnership owns a 90% interest in this property.
(2) The Partnership owns a 90% interest in this property.
(3) The Partnership owns an 85% interest in this property.
(4) The Partnership owns a 75% interest in this property.
Item 3. LEGAL PROCEEDINGS
Registrant is not a party to any material pending proceedings.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.
Registrant, a publicly-held limited partnership, had approximately 530
Limited Partners at December 31, 2003. The Registrant completed its public
offering of limited partnership Units. There is no public market for the resale
of these Units.
Average cash distributions of $13.85 per Limited Partnership Unit were
declared and paid each quarter for the year ended December 31, 2003 and $11.25
per Limited Partnership Unit were declared and paid each quarter for the year
ended December 31, 2002 and $12.50 per Limited Partnership Unit were declared
and paid each quarter for the year ended December 31, 2001. It is Registrant's
expectations that distributions will continue to be paid in the future.
Item 6. SELECTED FINANCIAL DATA
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
- ----------------------------------------------
SELECTED FINANCIAL DATA
FIVE YEARS ENDED DECEMBER 31, 2003
- -----------------------------------------------------------------
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
TOTAL REVENUES
AND OTHER
INCOME $2,335,866 $2,334,725 $2,336,174 $2,181,934 $2,108,447
TOTAL
EXPENSES 1,444,226 1,453,731 1,303,980 1,262,117 1,238,034
MINORITY INTEREST
IN INCOME OF
REAL ESTATE JOINT
VENTURE (204,804) (190,054) (204,104) (194,204) (186,102)
--------- --------- --------- --------- ---------
NET INCOME $ 686,836 $ 690,940 $ 828,090 $ 725,613 $ 684,311
========= ========= ========= ========= =========
TOTAL ASSETS $4,676,176 $5,091,587 $5,293,797 $5,485,221 $5,841,106
========== ========== ========== ========== ==========
CASH FLOWS FROM:
OPERATING $1,254,113 $1,262,126 $1,335,572 $1,287,282 $1,202,051
INVESTING - (17,459) (32,468) (18,864) -
FINANCING (1,323,888) (1,099,145) (1,214,205) (1,305,315) (1,196,203)
NET INCOME
PER LIMITED
PARTNERSHIP
UNIT $ 34.00 $ 34.20 $ 40.99 $ 35.92 $ 33.87
======== ========= ======== ======== ========
CASH
DISTRIBUTIONS
PER LIMITED
PARTNERSHIP
UNIT $ 55.39 $ 45.00 $ 50.00 $ 55.00 $ 50.00
======== ======== ======== ======== ========
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Partnership holds a 90% interest in a joint venture that owns an operating
mini-storage facility in Whittier, California, an 85% interest in an operating
mini-storage facility in Edgewater Park, New Jersey, a 90% interest in an oper-
ating mini-storage facility in Bloomingdale, Illinois and a 75% interest in an
operating facility in Sterling Heights, Michigan. Occupancy levels for the
Partnership's four mini-storage facilities at December 31, 2003, were: Whittier
91%, Edgewater Park 87%, Bloomingdale 81% and Sterling Heights 78%.
RESULTS OF OPERATIONS
2003 COMPARED TO 2002
Total revenues increased from $2,333,960 in 2002 to $2,335,465 in 2003, total
expenses decreased from $1,453,731 to $1,444,226, other income decreased from
$765 to $401 and minority interest in real estate joint ventures increased
from $190,054 to $204,804. As a result, net income decreased from $690,940 to
$686,836. Rental revenues remained constant. Occupancy levels for the Part-
nership's four mini-storage facilities averaged 85.8% for the year ended
December 31, 2003, compared to 85.5% for the year ended December 31, 2002.
Operating expenses decreased approximately $57,200 (8.2%) primarily as a result
of decreases in yellow pages advertising, repairs and maintenance, real estate
tax, salaries and wages and workers compensation insurance expenses. General
and administrative expenses increased approximately $30,500 (16.6%) primarily
as a result of increases in legal and professional and New Jersey Partner
annual processing fee expenses, partially offset by a decrease in office
supplies and equipment and computer lease expenses. Legal expense increased
as a result of legal challenges by dissident Limited Partners to a proposed
amendment to the Partnership Agreement (see paragraph below). Incentive
management fees, which are based on distributions paid to limited partners,
increased as a result of the increase in distributions to limited partners.
Property management fees, which are computed as a percentage of rental revenues,
remained relatively constant.
2002 COMPARED TO 2001
Total revenues increased from $2,333,037 in 2001 to $2,333,960 in 2002, total
expenses increased from $1,303,980 to $1,453,731, other income decreased from
$3,137 to $765 and minority interest in real estate joint ventures decreased
from $204,104 to $190,054. As a result, net income decreased from $828,090 to
$690,940. Rental revenues remained constant as higher unit rental rates were
offset by lower occupancy rates. Occupancy levels for the Partnership's four
mini-storage facilities averaged 85.5% for the year ended December 31, 2002,
compared to 88.1% for the year ended December 31, 2001. Operating expenses
increased approximately $74,700 (12.1%) primarily as a result of increases in
yellow pages advertising, repairs and maintenance, real estate tax, salaries
and wages and workers compensation insurance expenses. General and admini-
stative expenses increased approximately $48,600 (36.1%) primarily as a
result of increases in legal and professional, equipment and computer lease
and New Jersey Partner annual processing fee expenses, partially offset by a
decrease in travel expense. On July 3, 2002, the New Jersey legislature en-
acted the New Jersey Business Tax Reform Act effective retroactively to
January 1, 2002. The Act institutes a $150 per Partner annual processing fee
plus a tax of 6.37% on the apportioned New Jersey net income allocated to non-
resident Partners. Incentive management fees, which are based on distributions
paid to limited partners, decreased as result of the decrease in distributions
to limited partners. Property management fees, which are computed as a per-
centage of rental revenues, remained relatively constant.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities decreased approximately $8,000 (0.6%)
in 2003 compared to 2002 primarily as a result of the decrease in net income.
Net cash provided by operating activities decreased approximately $73,400
(5.5%) in 2002 compared to 2001 primarily as a result of the decrease in net
income, partially offset by changes in other assets and liabilities.
Cash used in financing activities consisted of cash distributions to partners
in 2003, 2002, and 2001. Additionally, cash distributions were paid to
the minority interests in the real estate joint ventures in 2003, 2002, and
2001. In December 2003, 2002 and 2001, the General Partners declared and paid
a special distribution equal to 3%, 1%, and 2%, respectively of capital
contributed by the limited partners.
Cash used in investing activities, as set forth in the statement of cash flows,
consists of acquisitions of equipment for the Partnership's mini storage
facilities in 2002 and 2001. The Partnership has no material commitments
for capital expenditures.
On April 5, 2002, the General Partners received a copy of a hostile tender
offer from MacKenzie Patterson, Inc. and associated corporations and limited
partnerships to purchase all of the Units in the Partnership. This offer was
also filed with the Securities and Exchange Commission on the same date. The
General Partners have determined that the hostile tender offer was not in the
best interests of the Limted Partners, that the tender offer was grossly in-
adequate given the performance history of the Partnership and the inherent
value of the Units, and recommended that the Limited Partners reject the
hostile tender offer and not tender their Units pursuant thereto. The offer
was subsequently increased and extended to June 30, 2002 and again to July 22,
2002. The General Partners' initial determination regarding the offer has not
changed. Prior to the expiration date of the offer, Limited Partners tendered
30 Units representing (0.15%) of the outstanding Units in the Partnership.
The Limited Partners have approved an amendment to the Partnership Agreement
granting the General Partners ten days to review certain types of transfers
during which the General Partners may match, exceed or approve the proposed
transfers. The Court has rejected all preliminary attempts to halt the imple-
mentation of the amendment. Subsequently, the dissident Limited Partners who
initiated the legal proceedings decided not to pursue the matter any further.
The General Partners plan to continue their policy of funding the continuing
improvement and maintenance of the Partnership properties with cash generated
from operations. The Partnership anticipates that cash flows generated from
operations of the Partnership's rental real estate operations will be
sufficient to cover operating expenses and distributions for the next twelve
months and beyond.
The General Partners are not aware of any environmental problems which could
have a material adverse effect upon the financial position of the Partnership.
QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Summarized quarterly financial data for the years ended December 31, 2003 and
2002 was as follows:
2003 QUARTER ENDED
------------------
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
Total revenues $598,595 $566,320 $587,206 $583,344
Income before minority
interest in
joint venture 265,613 210,842 226,436 188,749
Net income 265,613 210,842 71,582 138,799
Net income per
limited partnership
unit $ 13.15 $ 10.44 $ 3.54 $ 6.87
Weighted average
number of limited
partnership units
outstanding 20,000 20,000 20,000 20,000
2002 QUARTER ENDED
------------------
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
Total revenues $629,233 $562,263 $585,847 $556,627
Income before minority
interest in
joint venture 297,014 230,217 154,174 199,589
Net income 297,014 230,217 11,720 159,989
Net income per
limited partnership
unit $ 14.70 $ 11.40 $ 0.58 $ 7.52
Weighted average
number of limited
partnership units
outstanding 20,000 20,000 20,000 20,000
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Attached hereto as Exhibit l is the information required to be set forth as
item 8, Part II hereof.
Item 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT'S
GENERAL PARTNER
The General Partners of Registrant are the same as when the Partnership was
formed, i.e., DSI Properties, Inc., a California corporation, Robert J. Conway
and Joseph W. Conway, brothers. As of December 31, 2003, Messrs. Robert J.
Conway and Joseph W. Conway, each of whom own approximately 48.4% of the issued
and outstanding capital stock of DSI Financial, Inc., a California corporation,
together with Mr. Joseph W. Stok, currently comprise the entire Board of
Directors of DSI Properties, Inc.
Mr. Robert J. Conway is 70 years of age and is a licensed California real
estate broker, and since 1965 has been President and a member of the Board of
Directors of Diversified Securities, Inc., and since 1973 President, Chief
Financial Officer and a member of the Board of Directors of DSI Properties, Inc.
Mr. Conway received a Bachelor of Science Degree from Marquette University with
majors in Corporate Finance and Real Estate.
Mr. Joseph W. Conway is age 75 and has been Executive Vice President,
Treasurer and a member of the Board of Directors of Diversified Securities, Inc.
since 1965 and since 1973 the Vice President, Treasurer and member of the Board
of Directors of DSI Properties, Inc. Mr. Conway received a Bachelor of Arts
Degree from Loras College with a major in Accounting.
Mr. Joseph W. Stok is age 81 and has been a member of the Board of
Directors of DSI Properties, Inc. since 1994, a Vice President of Diversified
Securities, Inc. since 1973, and an Account Executive with Diversified
Securities, Inc. since 1967.
Item 11. MANAGEMENT REMUNERATION AND TRANSITIONS
The information required to be furnished in Item 11 of Part III is
contained in Registrant's Financial Statements for its fiscal year ended
December 31, 2003, which together with the report of its independent auditors,
Deloitte & Touche LLP, is attached hereto as Exhibit 1 and incorporated herein
by this reference. In addition to such information:
(a) No annuity, pension or retirement benefits are proposed to be paid by
the Registrant to any of the General Partners or to any officer or
director of the corporate General Partner;
(b) No standard or other agreement exists by which directors of the
Registrant are compensated;
(c) The Registrant has no plan, nor does the Registrant presently propose
a plan, which will result in any remuneration being paid to any
officer or director upon termination of employment.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
As of the December 31, 2003, no person of record owns more than 5% of the
limited partnership units of the Registrant, nor was any person known by the
Registrant to own of record and beneficially, or beneficially only, more than 5%
thereof. The balance of the information required to be furnished in Item 12 of
Part III is contained in the Registrant's Registration Statement on Form S-11,
previously filed pursuant to the Securities Act of 1933, as amended, and which
is incorporated herein by this reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required to be furnished in Item 13 of Part III is
contained in the Registrant's Financial Statements and Financial Statement
Schedule for it fiscal year ended December 31, 2003, attached hereto as Exhibit
l and incorporated herein by this reference.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
(a)(l) Attached hereto and incorporated herein by this reference as Exhibit
l are Registrant's Financial Statements for its fiscal year ended
December 31, 2003, together with the reports of its independent
auditors, Deloitte, & Touche LLP.
(a)(2) Attached hereto and incorporated herein by this reference as Exhibit
2 is Registrant's Letter to Limited Partners regarding the Annual
Report for its fiscal year ended December 31, 2003.
(b) There have been no 8K's filed during the last quarter of the period
covered by this Report.
SIGNATURES
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, thereunto duly authorized.
DSI REALTY INCOME FUND XI
by: DSI Properties, Inc., a
California corporation, as
General Partner
By_______________________________ Dated: March 31, 2004
ROBERT J. CONWAY (President,
Chief Executive Officer, Chief
Financial Officer and Director)
By_______________________________ Dated: March 31, 2004
JOSEPH W. CONWAY (Executive
Vice President and Director)
Pursuant to the requirements of the Securities and Exchange
Act of 1934, this report has been signed by the following persons on behalf of
the Registrant and in the capacities and on the date indicated.
DSI REALTY INCOME FUND XI
by: DSI Properties, Inc., a
California corporation, as
General Partner
By_______________________________ Dated: March 31, 2004
ROBERT J. CONWAY (President,
Chief Executive Officer, Chief
Financial Officer and Director)
By______________________________ Dated: March 31, 2004
JOSEPH W. CONWAY (Executive
Vice President and Director)
DSI REALTY INCOME FUND XI
CROSS REFERENCE SHEET
FORM 1O-K ITEMS TO ANNUAL REPORT
PART I, Item 3. There are no legal proceedings pending or threatened.
PART I, Item 4. Not applicable.
PART II, Item 5. Not applicable.
PART II, Item 6. The information required is contained in Registrant's Financial
Statements for its fiscal year ended December 31, 2003, attached as Exhibit l to
Form 10-K.
PART II, Item 8. See Exhibit l to Form 10-K filed herewith.
PART II, Item 9. Not applicable.
EXHIBIT l
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
SELECTED FINANCIAL DATA
FIVE YEARS ENDED DECEMBER 31, 2003
- -----------------------------------------------------------------------------
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
TOTAL REVENUES
AND OTHER
INCOME $2,335,866 $2,334,725 $2,336,174 $2,181,934 $2,108,447
TOTAL
EXPENSES 1,444,226 1,453,731 1,303,980 1,262,117 1,238,034
MINORITY INTEREST
IN INCOME OF
REAL ESTATE JOINT
VENTURE (204,804) (190,054) (204,104) (194,204) (186,102)
--------- --------- --------- --------- ---------
NET INCOME $ 686,836 $ 690,940 $ 828,090 $ 725,613 $ 684,311
========= ========= ========= ========= =========
TOTAL ASSETS $4,676,176 $5,091,587 $5,293,797 $5,485,221 $5,841,106
========== ========== ========== ========== ==========
CASH FLOWS FROM:
OPERATING $1,254,113 $1,262,126 $1,335,572 $1,287,282 $1,202,051
INVESTING - (17,459) (32,468) (18,864) -
FINANCING (1,323,888) (1,099,145) (1,214,205) (1,305,315) (1,196,203)
NET INCOME
PER LIMITED
PARTNERSHIP
UNIT $ 34.00 $ 34.20 $ 40.99 $ 35.92 $ 33.87
======== ========= ======== ======== ========
CASH
DISTRIBUTIONS
PER LIMITED
PARTNERSHIP
UNIT $ 55.39 $ 45.00 $ 50.00 $ 55.00 $ 50.00
======== ======== ======== ======== ========
The following are reconciliations between the operating results and partners'
equity per the financial statements and the Partnership's income tax return for
the year ended December 31, 2003.
Net Partners'
Income Equity
Per financial statements $ 686,836 $ 4,307,857
Excess financial statement depreciation 143,257 1,582,620
Excess book distributions 202,026
Deferred rental revenues 68,995
New Jersey filing fee 7,973
Tax expense adjustment 58,999
Accrued incentive management fee 443,214
Acquisition costs capitalized
for tax purposes 1,033,227
----------- -----------
Per Partnership income tax return $ 889,092 $ 7,645,912
=========== ===========
Net taxable income per
limited partnership unit $ 44.01
===========
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
Page
Independent Auditors' Report F-1
FINANCIAL STATEMENTS:
Consolidated Balance Sheets at December 31, 2003 and 2002 F-2
Consolidated Statements of Income for the Three
Years Ended December 31, 2003 F-3
Consolidated Statements of Changes in Partners' Equity(Deficit)
for the Three Years Ended December 31, 2003 F-4
Consolidated Statements of Cash Flows for the Three Years
Ended December 31, 2003 F-5
Notes to Consolidated Financial Statements F-6
SUPPLEMENTAL SCHEDULE:
Schedule III - Real Estate and Accumulated Depreciation F-10
SCHEDULES OMITTED:
Financial statements and schedules not listed above are omitted because of the
absence of conditions under which they are required or because the
information is included in the financial statements named above, or in the
notes thereto.
CONTROLS AND PROCEDURES
Within 90 days prior to the date of this report, the Partnership evaluated
the effectiveness of its disclosure controls and procedures. This evalu-
ation was performed by the Partnership's Controller with the assistance of
the Partnership's President and the Chief Executive Officer. These dis-
closure controls and procedures are designed to ensure that the information
required to be disclosed by the Partnership in its periodic reports filed
with the Securities and Exchange Commission (the "Commission") is recorded,
processed, summarized and reported, within the time periods specified by
the certifying officers on a timely basis. Based on this evaluation, the
Partnership concluded that its disclosure controls and procedures were
effective. There have been no significant changes in the Partnerhip's
internal controls or in other factors that could significantly affect the
internal controls subsequent to the date of their evaluation.
INDEPENDENT AUDITORS' REPORT
Partners
DSI Realty Income Fund XI:
We have audited the accompanying balance sheets of DSI Realty Income Fund XI, a
California Real Estate Limited Partnership (the "Partnership") as of December
31, 2003 and 2002, and the related consolidated statements of income, changes
in partners' equity (deficit), and cash flows for each of the three years in the
period ended December 31, 2003. Our audits also included the financial state-
ment schedule listed in the Index at Item 14. These financial statements and
the financial statement schedule are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements and financial statement schedule based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial statement schedule are free of material misstatement.
An audit 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 manage-
ment, as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consoldiated financial statements present fairly,
in all material respects, the financial position of DSI Realty Income Fund
XI at December 31, 2003 and 2002, and the results of its operations and its
cash flows for each of the three years in the period ended December 31,
2003 in conformity with accounting principles generally accepted in the United
States of America. Also, in our opinion, such financial statement schedule,
when considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects, the information set forth therein.
Deloitte & Touche
March 20, 2004
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2003 AND 2002
- -------------------------------------------------------------------------------
ASSETS 2003 2002
CASH AND CASH EQUIVALENTS $ 527,509 $ 597,284
PROPERTY, net (Note 3) 4,100,678 4,454,466
OTHER ASSETS 47,989 39,837
----------- -----------
TOTAL $4,676,176 $ 5,091,587
=========== ===========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
LIABILITIES:
Distribution due partners (Note 4) $ 202,020 $ 202,020
Property management
fees payable 11,357 10,570
Other liabilities 154,942 138,892
----------- ----------
Total liabilities 368,319 351,482
----------- ----------
PARTNERS' EQUITY (DEFICIT)(Note 4):
General partners (46,589) (42,266)
Limited partners (20,000 limited
partnership units outstanding
at December 31, 2003 and 2002) 4,354,446 4,782,371
------------ -----------
Total partners' equity 4,307,857 4,740,105
------------ -----------
TOTAL $ 4,676,176 $ 5,091,587
============ ===========
See accompanying notes to consolidated financial statements.
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
CONSOLIDATED STATEMENTS OF INCOME
THREE YEARS ENDED DECEMBER 31, 2003
- --------------------------------------------------------------------------------
2003 2002 2001
REVENUES:
Rental $2,335,465 $2,333,960 $2,333,037
---------- ---------- ----------
EXPENSES:
Depreciation 353,788 353,787 318,792
Operating 637,126 694,329 619,662
General and administrative 213,639 183,184 134,634
General partners' incentive
management fee (Note 4) 100,001 81,819 90,910
Property management fees 139,672 140,612 139,982
---------- ---------- ----------
Total expenses 1,444,226 1,453,731 1,303,980
---------- ---------- ----------
OPERATING INCOME 891,239 880,229 1,029,057
OTHER INCOME -
Interest income 401 765 3,137
INCOME BEFORE MINORITY INTERESTS
IN INCOME OF REAL ESTATE
JOINT VENTURES 891,640 880,994 1,032,194
MINORITY INTERESTS IN INCOME OF
REAL ESTATE JOINT VENTURES (204,804) (190,054) (204,104)
---------- ---------- ----------
NET INCOME $ 686,836 $ 690,940 $ 828,090
========== ========== ==========
AGGREGATE NET INCOME ALLOCATED
TO (Note 4):
General partners 6,868 6,909 8,281
Limited partners $ 679,968 $ 684,031 $ 819,809
---------- ---------- ----------
TOTAL $ 686,836 $ 690,940 $ 828,090
========== ========== ==========
NET INCOME PER LIMITED PARTNERSHIP
UNIT (Notes 2 and 4) $ 34.00 $ 34.20 $ 40.99
========== ========== ==========
See accompanying notes to financial statements.
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY (DEFICIT)
THREE YEARS ENDED DECEMBER 31, 2003
- --------------------------------------------------------------------------------
General Limited
Partners Partners Total
BALANCE, JANUARY 1, 2001 $(38,264) $ 5,178,531 $ 5,140,267
Net income 8,281 819,809 828,090
Distributions (10,101) (1,000,000) (1,010,101)
-------- ----------- -----------
BALANCE, DECEMBER 31, 2001 $(40,084) $ 4,998,340 $ 4,958,256
Net income 6,909 684,031 690,940
Distributions (9,091) (900,000) (909,091)
-------- ----------- -----------
BALANCE, DECEMBER 31, 2002 $(42,266) $ 4,782,371 $ 4,740,105
Net income 6,868 679,968 686,836
Distributions (11,191) (1,107,893) (1,119,084)
-------- ---------- -----------
BALANCE,DECEMBER 31, 2003 $(46,589) $4,354,446 $ 4,307,857
======== =========== ===========
See accompanying notes to consolidated financial statements.
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE YEARS ENDED DECEMBER 31, 2003
- --------------------------------------------------------------------------------
2003 2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 686,836 $ 690,940 $ 828,090
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 353,788 353,787 318,792
Minority interests in income
of real estate joint ventures 204,804 190,054 204,104
Changes in assets and liabilities:
Other assets (8,152) 11,404 (6,001)
Property management fees payable 787 (1,009) 560
Customer deposits
and other liabilities 16,050 16,950 (9,973)
---------- ----------- ----------
Net cash provided by operating
activities 1,254,113 1,262,126 1,335,572
CASH FLOWS FROM INVESTING ACTIVITIES -
Additions to property (17,459) (32,468)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to partners (1,119,084) (909,091) (1,010,101)
Distributions paid to minority inter-
ests in real estate joint ventures (204,804) (190,054) (204,104)
----------- ----------- ----------
Net cash used in
financing activities (1,323,888) (1,099,145) (1,214,205)
----------- ----------- ----------
NET (DECREASE)INCREASE IN CASH AND
CASH EQUIVALENTS (69,775) 145,522 88,899
CASH AND CASH EQUIVALENTS,
AT BEGINNING OF YEAR 597,284 451,762 362,863
----------- ----------- -----------
CASH AND CASH EQUIVALENTS,
AT END OF YEAR $ 527,509 $ 597,284 $ 451,762
=========== =========== ===========
See accompanying notes to financial statements.
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE YEARS ENDED DECEMBER 31, 2003
1. GENERAL
DSI Realty Income Fund XI, a California Limited Partnership (the
"Partnership"), has three general partners (DSI Properties, Inc.,
Robert J. Conway and Joseph W. Conway) and limited partners owning 20,000
limited partnership units as of December 31, 2003, which were purchased
for $500 a unit. The general partners have made no capital contribution
to the Partnership and are not required to make any capital contribution
in the future. The Partnership has a maximum life of 50 years and was
formed on December 7, 1986 under the California Uniform Limited Partner-
ship Act for the primary purpose of acquiring and operating real estate.
The Partnership has entered into four joint venture arrangements with
affiliates of Dahn Corporation ("Dahn"). The Partnership and its joint
venture partners have acquired four mini-storage properties located in
Whittier, California; Edgewater, New Jersey; Bloomingdale, Illinois; and
Sterling Heights, Michigan. The properties were acquired from Dahn.
Under the terms of the property purchase agreements, the Partnership and
its joint venture partners (Whittier Mini, Bloomingdale Mini, Edgewater
Mini, and Sterling Heights Mini, each a California Limited Partnership and
an affiliate of Dahn, and hereinafter referred to as the "Joint Venture
Partners") own an undivided interest in the mini-storage facilities as
follows:
Joint Venture
Mini-Storage Property Partnership Partner
Whittier, CA 90% 10%
Bloomingdale, IL 90% 10%
Edgewater, NJ 85% 15%
Sterling Heights, MI 75% 25%
The Joint Venture Partners have made no cash contributions to any of the
joint ventures. Rather, each Joint Venture Partner's interest in each
respective mini-storage property was obtained in consideration of a
reduction in the purchase price of the property by Dahn. The Partnership
has control over the business and operations of the mini-storage
facilities.
Pursuant to the terms of each joint venture agreement, annual profits
(before depreciation) of each joint venture will be allocated to the
Joint Venture Partners on the basis of actual distributions received,
while annual losses (before depreciation) are to be allocated in pro-
portion to the ownership percentages as specified above. Cash distri-
butions are to be made to each Joint Venture Partner based upon each
Joint Venture Partner's ownership percentage. However, the Joint Venture
Partners have subordinated their rights to any distributions to the
Partnership's receipt of an annual, noncumulative, 8% return (7.75%
for the Whittier Mini) from the operation of the joint ventures.
Requirements under the subordination agreement were met during 2002,
2001 and 2000. A minority interest in real estate joint venture is
recorded to the extent of any distributions due to the Joint Venture
Partners. The Joint Venture Partners are also entitled to receive
a percentage, based upon a pre-determined formula, of the net proceeds
from the sale of the properties.
The Partnership is required by the agreements to pay Dahn a management
fee equal to 6% of gross revenue from operations, defined as the
entire amount of all receipts from the renting or leasing of storage
compartments and sale of locks.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principals of Consolidation - The accompanying consolidated finacial
statements include the accounts of the Partnership and its joint venture
investments. All significant intercompany balances and transactions have
been eliminated.
Cash and Cash Equivalents - The Partnership classifies its short-term
investments purchased with an original maturity of three months or less as
cash equivalents.
Property and Depreciation - Property is recorded at cost and consists
primarily of mini-storage facilities. Depreciation is provided for using
the straight-line method over an estimated useful life of 20 years.
Building improvements are depreciated over a five-year period.
Income Taxes - No provision has been made for income taxes in the
accompanying consolidated financial statements. The taxable income
or loss of the Partnership is allocated to each partner in accordance
with the terms of the Agreement of Limited Partnership. Each partner's
tax status, in turn, determines the appropriate income tax for its
allocated share of the Partnership taxable income or loss. The net
difference between the basis of the Partnership's asset and liabilities
for federal income tax purposes and as reported for financial statement
purposes is $202,256.
On February 27, 2003, New Jersey adopted new regulations effective retro-
actively to January 1, 2002 that impose a filing fee of $150 per each New
Jersey resident partner and a filing fee of $150 multiplied by the corpor-
ate allocation factor of the Partnership for each non-resident partner.
As a result, the Partnership recorded $46,466 and $21,244 in partnership
filing fees during the years ended December 31, 2003 and 2002, respectively
which are included in general and administrative expenses.
Revenues - Rental revenue is recognized using the accrual method based
on contractual amounts provided for in the lease agreements, which
approximates recognition on a straight-line basis. The term of the lease
agreements is usually less than one year.
Net Income per Limited Partnership Unit - Net income per limited
partnership unit is computed by dividing net income allocated to the
limited partners by the weighted average number of limited partnership
units outstanding during each period.
Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires the Partnership's management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of
the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
Impairment of Long-Lived Assets - The Partnership regularly reviews long-
lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable. If
the sum of the expected undiscounted future cash flow is less than the
carrying amount of the asset, the Partnership would recognize an impair-
ment loss to the extent that the carrying value exceeded the fair value of
the property. No impairment losses were required in 2003, 2002 or 2001.
Fair Value of Financial Instruments - The Partnership's financial
instruments consist primarily of cash, receivables, accounts payable and
accrued liabilities. The carrying values of all financial instruments are
representative of their fair values due to their short-term maturities.
Concentrations of Credit Risk - Financial instruments that potentially
subject the Partnership to concentrations of credit risk consist
primarily of cash equivalents and rent receivables. The Partnership
places its cash and cash equivalents with high credit quality institutions.
Impact of Recent Accounting Pronouncement - In December 2002, the Partner-
ship adopted the following pronouncements: Statement of Financial Account-
ing Standards ("SFAS") No. 144, Accounting for Impairment or Disposal of
Long-Lived Assets, and SFAS No. 145, Rescission of FASB Statements No. 4,
44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.
The adoption of these pronouncements did not have a material impact on
the Partnership's financial position or results of operations. The Part-
nership believes the adoption of Financial Accounting Standards Board
Interpretation No. 46, Consolidation of Variable Interest Entities, will
not have a material impact on the consolidated financial statements.
3. PROPERTY
The total cost of property and accumulated depreciation is as follows
as of December 31:
2003 2002
Land $ 1,894,250 $ 1,894,250
Buildings 6,550,726 6,550,726
----------- -----------
Total 8,444,976 8,444,976
Less accumulated depreciation 4,344,298 3,990,510
----------- ----------
Property, net $ 4,100,678 $ 4,454,466
=========== ===========
4. ALLOCATION OF PROFITS AND LOSSES AND GENERAL PARTNERS' INCENTIVE
MANAGEMENT FEE
Under the Agreement of Limited Partnership, the general partners are to be
allocated 1% of the net profits or losses from operations and the
limited partners are to be allocated the balance of the net profits
or losses from operations in proportion to their limited partnership
interests. The general partners are also entitled to receive a percent-
age, based on a predetermined formula, of any cash distribution from
the sale, other disposition, or refinancing of a real estate project.
In addition, the general partners are entitled to receive an incentive
management fee for supervising the operations of the Partnership. The
fee is equal to 9% per annum of the Partnership distributions made
from cash available for distribution calculated as cash generated
from operations less capital expenditures.
5. BUSINESS SEGMENT INFORMATION
The following disclosure about segment reporting of the Partnership is
made in accordance with the requirements of SFAS No. 131, Disclosures
about Segments of an Enterprise and Related Information. The Partnership
operates under a single segment; storage facility operations, under which
the Partnership rents its storage facilities to its customers on a need
basis and charges rent on a predetermined rate.
DSI REALTY INCOME FUND XI
(A California Real Estate Limited Partnership)
REAL ESTATE AND ACCUMULATED DEPRECIATION
- --------------------------------------------------------------------------------
Costs Capitalized
Initial Cost to Subsequent to Gross Amount at Which Carried
Partnership Acquisition at Close of Period
------------------- ----------------- -----------------------------
Buildings Buildings Date
and Improve- Carrying and Accum. of Date
Description Encumbrances Land Improvements ments Costs Land Improvements Total Deprec. Const. Acq. Life
MINI-U-STORAGE
Whittier, CA None $845,000 $1,969,083 $11,719 $845,000 $1,980,802 $2,825,802 $1363,635 04/90 03/90 20 Yrs
Edgewater, NJ None 191,250 2,358,780 44,706 191,250 2,403,486 2,594,736 1601,335 06/89 09/90 20 Yrs
Bloomingdale, IL None 442,000 1,579,879 71,517 442,000 1,651,396 2,093,396 1056,936 07/88 01/91 20 Yrs
Sterling Heights, MI None 416,000 467,979 47,063 416,000 515,042 931,042 322,392 06/77 07/91 20 Yrs
-------- ---------- ------- -------- ---------- ---------- ----------
$1,894,250 $6,375,721 $175,005 $1,894,250 $6,550,726 $ 8,444,976*$4,344,298
========== ========== ======== ========== ========== =========== ==========
Real Estate Accumulated
at Cost Depreciation
Balance at January 1, 2001 $ 8,395,049 $3,317,931
Additions 32,468 318,792
----------- ----------
Balance at December 31, 2001 $ 8,427,517 $3,636,723
Additions 17,459 353,787
----------- ----------
Balance at December 31, 2002 $ 8,444,976 $3,990,510
Additions 353,788
----------- ----------
Balance at December 31, 2003 $ 8,444,976 $4,344,298
=========== ==========
EXHIBIT 2
March 20, 2004
ANNUAL REPORT TO LIMITED PARTNERS OF
DSI REALTY INCOME FUND XI
Dear Limited Partner:
This report contains the Partnership's balance sheets as of December 31,
2003 and 2002, and the related statements of income, changes in partners' equity
and cash flows for each of the three years in the period ended December 31, 2003
accompanied by an independent auditors' report. The Partnership owns an
interest in four mini-storage. Partnership's properties were each purchased
for all cash and funded solely from subscriptions for limited partnership
interests without the use of mortgage financing.
Your attention is directed to the section entitled Management's Discussion
and Analysis of Financial Condition and Results of Operations for the General
Partners' discussion and analysis of the financial statements and operations of
the Partnership.
Average occupancy levels for each of the Partnership's four properties for
the years ended December 31, 2003 and December 31, 2002 were as follows:
Location of Property Average Occupancy Average Occupancy
Levels for the Levels for the
Year Ended Year Ended
Dec. 31, 2003 Dec. 31, 2002
Whittier, CA(1) 93% 92%
Bloomingdale, IL(2) 80% 82%
Edgewater, NJ(3) 87% 86%
Sterling Heights, MI(4) 82% 81%
(1) The Partnership owns a 90% interest in this property.
(2) The Partnership owns a 90% interest in this property.
(3) The Partnership owns an 85% interest in this property.
(4) The Partnership owns a 75% interest in this property.
We will keep you informed of the activities of DSI Realty Income Fund XI as
they develop. If you have any questions, please contact us at your convenience
at (562) 493-3022.
If you would like a copy of the Partnership's Annual Report on Form 10-K
for the year ended December 31, 2003, which was filed with the Securities
and Exchange Commission (which report includes the enclosed Financial
Statements), we will forward a copy of the report to you upon written request.
Very truly yours,
DSI REALTY INCOME FUND XI
By: DSI Properties, Inc.
By_______________________________
ROBERT J. CONWAY, President
CERTIFICATIONS
I, Robert J. Conway, certify that:
1. I have reviewed this annual report on Form 10-K of DSI Realty Income
Fund XI;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period cover-
ed by this annual report.
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its con-
solidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effec-
tiveness of the disclosure controls and procedures based on our evalu-
ation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to re-
cord, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's in-
ternal controls; and
6. The registrnat's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls sub-
sequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: March 20, 2004
Robert J. Conway
Chief Executive Officer
CERTIFICATIONS
I, Richard P. Conway, certify that:
1. I have reviewed this annual report on Form 10-K of DSI Realty Income
Fund XI;
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period cover-
ed by this annual report.
3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this annual report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its con-
solidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this annual report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
c) presented in this annual report our conclusions about the effec-
tiveness of the disclosure controls and procedures based on our evalu-
ation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to re-
cord, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's in-
ternal controls; and
6. The registrnat's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls sub-
sequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: March 20, 2004
Richard P. Conway
Vice President
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of DSI Realty Income Fund XI (the
"Partnership") on Form 10-K for the period ending December 31, 2003 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Robert J. Conway, Chief Executive Officer of the Partnership, certify,
pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
Robert J. Conway
Chief Executive Officer
March 20, 2004
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of DSI Realty Income Fund XI (the
"Partnership") on Form 10-K for the period ending December 31, 2003 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Richard P. Conway, Chief Executive Officer of the Partnership, certify,
pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Partnership.
Richard P. Conway
Vice President
March 20, 2004