NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

Since November 2001, the Partnership has invested in nine limited partnerships and limited liability companies, the majority of which have invested in residential apartment complexes, with three partnerships investing in commercial property. The Partnership has between a 40% - 50% ownership interests in each investment. The other investors are Harold Brown, the President of the Management Company and five other employees of the Management Company. Harold Brown’s ownership interest is between 43.2% and 57%, with the balance owned by the others. A description of each investment is as follows:

On October 28, 2009 the Partnership invested approximately $15,925,000 in a joint venture to acquire a 40% interest in a residential property located in Brookline, Massachusetts. The property, referred to as Dexter Park, is a 409 unit residential complex. The purchase price was $129,500,000. The total mortgage was $89,914,000 with an interest rate of 5.57% and it matures in 2019. The mortgage calls for interest only payments for the first two years of the loan and amortized over 30 years thereafter. The balance of this mortgage is approximately $85,897,000 at March 31, 2015. This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

On October 3, 2005, the Partnership invested $2,500,000 for a 50% ownership interest in a 168-unit apartment complex in Quincy, Massachusetts. The purchase price was $30,875,000. The Partnership sold 120 units as condominiums and retained 48 units for long-term investment. In February 2007, the Partnership refinanced the 48 units with a new mortgage in the amount of $4,750,000 with an interest rate of 5.57%, interest only for five years. The loan will be amortized over 30 years thereafter and matures in March 2017. As of March 31, 2015, the balance of the mortgage is approximately $4,556,000. This investment is referred to as Hamilton Bay Apartments, LLC. In April 2008, the Partnership refinanced an additional 20 units and obtained a new mortgage in the amount of $2,368,000 with interest at 5.75%, interest only, which matured in 2013. On October 18, 2013, the Partnership and its joint venture partner each made capital contributions to the entity of $660,000. The capital was used to pay off the outstanding mortgage. As of May 5, 2015, 7 units are still owned by the Partnership. This investment is referred to as Hamilton Bay, LLC.

On March 7, 2005, the Partnership invested $2,000,000 for a 50% ownership interest in a building comprising 48 apartments, one commercial space and a 50-car surface parking lot located in Boston, Massachusetts. The purchase price was $14,300,000, with a $10,750,000 mortgage. The Partnership plans to operate the building and may initiate development of the parking lot. In June 2007, the Partnership separated the parcels, formed an additional limited liability company for the residential apartments and obtained a mortgage on the property. The new limited liability company formed for the residential apartments and commercial space is referred to as Hamilton Essex 81, LLC. In August 2008, the Partnership restructured the mortgages on both parcels at Essex 81 and transferred the residential apartments to Hamilton Essex 81, LLC. The mortgage balance on Hamilton Essex 81, LLC is approximately $8,076,000, at March 31, 2015, amortizing over 30 years at 5.79% due in August 2016. The mortgage on Essex Development, LLC, or the parking lot is approximately $1,975,000 with a variable interest rate of 2.25% over the daily Libor rate (0.171%) at March 31, 2015. In September 2013, this loan was extended for an additional two years to August 2015 with the same conditions except for the increased principal payments of $4,443 per month. The costs associated with the extension were approximately $9,000. Harold Brown has issued a personal guaranty up to $1,000,000 of this mortgage. In the event that he is obligated to make payments to the lender as a result of this guaranty, the Partnership and other investors have, in turn, agreed to indemnify him for their proportionate share of any such payments. The investment in the parking lot is referred to as Hamilton Essex Development, LLC; the investment in the apartments is referred to as Hamilton Essex 81, LLC.

On March 2, 2005, the Partnership invested $2,352,000 for a 50% ownership interest in a 176-unit apartment complex with an additional small commercial building located in Quincy, Massachusetts. The purchase price was $23,750,000. The Partnership sold 127 of the units as condominiums and retained 49 units for long-term investment. The Partnership obtained a new 10-year mortgage in the amount of $5,000,000 on the units to be retained by the Partnership. The interest on the new loan is 5.67% fixed for the 10 year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan term. The balance of this mortgage is approximately $4,787,000 at March 31, 2015. This investment is referred to as Hamilton 1025, LLC.

In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. In October 2004, the Joint Venture Partnership obtained a mortgage on the property in the amount of $8,025,000 and returned $3,775,000 to the Partnership. The Partnership obtained a new 10- year mortgage in the amount of $5,500,000 in January 2007. The interest on the new loan is 5.67% fixed for the ten year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan. This loan required a cash contribution by the Partnership of $1,250,000 in December 2006. At March 31, 2015, the balance of this mortgage is approximately $5,272,000. This investment is referred to as Hamilton Minuteman, LLC.

In August 2004, the Partnership invested $8,000,000 for a 50% ownership interest in a 280-unit apartment complex located in Watertown, Massachusetts. The total purchase price was $56,000,000. The Partnership sold 137 units as condominiums. The assets were combined with Hamilton on Main Apartments. Hamilton on Main, LLC is known as Hamilton Place.

In 2005, Hamilton on Main Apartments, LLC obtained a ten year mortgage on the three buildings to be retained. The mortgage was $16,825,000, with interest only of 5.18% for three years and amortizing on a 30 year schedule for the remaining seven years when the balance is due. The net proceeds after funding escrow accounts and closing costs on the mortgage were approximately $16,700,000, which were used to reduce the existing mortgage. In August 2014, the property was refinanced with a 10 year mortgage in the amount of $16,900,000 at 4.34% interest only. The Joint Venture Partnership paid off the prior mortgage of approximately $15,205,000 with the proceeds of the new mortgage and distributed $850,000 to the Partnership. The costs associated with the refinancing were approximately $161,000.

In November 2001, the Partnership invested approximately $1,533,000 for a 50% ownership interest in a 40-unit apartment building in Cambridge, Massachusetts. In June 2013, the property was refinanced with a 15 year mortgage in the amount of $10,000,000 at 3.87%, interest only for 3 years and is amortized on a 30-year schedule for the balance of the term. The Partnership paid off the prior mortgage of approximately $6,776,000 with the proceeds of the new mortgage. After the refinancing, the property made a distribution of $1,610,000 to the Partnership. As a result of the distribution, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting. Although the Partnership has no legal obligation, the Partnership intends to fund its share of any future operating deficits if needed. At March 31, 2015, the balance of this mortgage is approximately $10,000,000. This investment is referred to as 345 Franklin, LLC.

Summary financial information as of March 31, 2015

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total

ASSETS
Rental Properties	$	8,636,396		$	2,620,789		$	7,040,787		$	5,097,980		$	802,055		$	6,344,523		$	6,483,432		$	19,225,373		$	96,374,735		$	152,626,070
Cash & Cash Equivalents	53,122			49,826			107,441			36,196			15,110			30,261			51,370			191,526			985,394			1,520,246
Rent Receivable	30,694			—			5,470			3,077			—			8,531			287			8,901			71,152			128,112
Real Estate Tax Escrow	114,280			—			41,532			73,919			—			51,749			39,769			78,483			260,698			660,430
Prepaid Expenses & Other Assets	76,589			224			26,198			47,558			20,197			49,482			42,326			92,912			1,800,526			2,156,012
Financing & Leasing Fees	25,978			3,524			88,225			8,337			—			11,929			7,020			151,150			266,643			562,806
Total Assets	$	8,937,059		$	2,674,363		$	7,309,653		$	5,267,067		$	837,362		$	6,496,475		$	6,624,204		$	19,748,345		$	99,759,148		$	157,653,676
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,075,681		$	1,974,501		$	10,000,000		$	4,787,315		$	—		$	4,556,075		$	5,271,998		$	16,900,000		$	85,896,923		$	137,462,493
Accounts Payable & Accrued Expense	44,904			4,941			81,557			21,772			20,019			13,657			52,119			142,669			626,221			1,007,859
Advance Rental Pmts& Security Deposits	174,416			—			203,975			95,932			11,114			93,589			96,246			316,025			2,480,438			3,471,735
Total Liabilities	8,295,001			1,979,442			10,285,532			4,905,019			31,133			4,663,321			5,420,363			17,358,694			89,003,582			141,942,087
Partners’ Capital	642,058			694,921			(2,975,879		)	362,048			806,229			1,833,154			1,203,841			2,389,651			10,755,566			15,711,589
Total Liabilities and Capital	$	8,937,059		$	2,674,363		$	7,309,653		$	5,267,067		$	837,362		$	6,496,475		$	6,624,204		$	19,748,345		$	99,759,148		$	157,653,676

Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	321,028		$	347,460		$	—		$	181,023		$	403,114		$	916,577		$	601,920		$	1,194,825		$	4,302,225		8,268,172
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,487,939	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,487,939		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	6,780,233

Total units/condominiums
Apartments	48			—			40			175			120			48			42			148			409			1,030
Commercial	1			1			—			1			—			—			—			—			—			3
Total	49			1			40			176			120			48			42			148			409			1,033
Units to be retained	49			1			40			49			—			48			42			148			409			786
Units to be sold	—			—			—			127			120			—			—			—			—			247
Units sold through May 1, 2015	—			—			—			127			113			—			—			—			—			240
Unsold units	—			—			—			—			7			—			—			—			—			7
Unsold units with deposits for future sale as of May 1, 2015	—			—			—			—			—			—			—			—			—			—

Financial information for the three months ended March 31, 2015

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total

Revenues
Rental Income	$	358,551		$	72,523		$	335,475		$	240,400		$	29,295		$	250,573		$	233,897		$	761,273		$	3,488,805		$	5,770,792
Laundry and Sundry Income	3,842			—			323			—			—			—			—			10,641			19,245			34,051
	362,393			72,523			335,798			240,400			29,295			250,573			233,897			771,914			3,508,050			5,804,843
Expenses
Administrative	3,936			583			7,761			1,992			2,779			1,814			1,624			9,276			52,330			82,095
Depreciation and Amortization	111,469			2,822			93,793			60,029			8,987			79,328			81,518			240,762			814,969			1,493,677
Management Fees	15,345			2,901			14,108			9,439			1,274			9,495			9,825			30,080			74,951			167,418
Operating	37,532			—			40,071			125			24			665			32,547			138,255			455,656			704,875
Renting	500			—			6,345			—			(459		)	2,350			3,742			1,766			16,293			30,537
Repairs and Maintenance	25,683			—			5,988			76,497			11,944			84,858			15,124			84,161			216,618			520,873
Taxes and Insurance	53,418			13,421			29,937			43,051			5,881			37,830			30,958			83,506			361,255			659,257
	247,883			19,727			198,003			191,133			30,430			216,340			175,338			587,806			1,992,072			3,658,732
Income Before Other Income	114,510			52,796			137,795			49,267			(1,135		)	34,233			58,559			184,108			1,515,978			2,146,111
Other Income (Loss)
Interest Expense	(118,233		)	(13,552		)	(97,936		)	(68,488		)	(110		)	(64,464		)	(75,491		)	(185,810		)	(1,210,300		)	(1,834,384		)
Interest Income	—			—			—			6			—			—			—			—			—			6
Gain on Sale of Real Estate	—			—			—			—			—			—			—			—			—			—
Other Income (Expenses)	—			—			—			—			(125		)	—			—			—			—			(125		)
	(118,233		)	(13,552		)	(97,936		)	(68,482		)	(235		)	(64,464		)	(75,491		)	(185,810		)	(1,210,300		)	(1,834,503		)
Net Income (Loss)	$	(3,723	)	$	39,244		$	39,859		$	(19,215	)	$	(1,370	)	$	(30,231	)	$	(16,932	)	$	(1,702	)	$	305,678		$	311,608

Net Income (Loss) - NERA 50%	$	(1,862	)	$	19,622		$	19,929		$	(9,608	)	$	(685	)	$	(15,116	)	$	(8,466	)	$	(851	)				2,963
Net Income (Loss) - NERA 40%																									$	122,271		122,271
																												$	125,234

Future annual mortgage maturities at March 31, 2015 are as follows:

															Hamilton
			Hamilton												Park Towers
	Hamilton		Essex 81		345		Hamilton		Hamilton		Hamilton		Hamilton on		(Dexter
Period End	Essex 81		Development		Franklin		1025		Bay Apts		Minuteman		Main Apts		Park)		Total
3/31/2016	145,622		1,974,501		—		73,013		75,910		79,962		—		1,439,081		3,788,089
3/31/2017	7,930,059		—		131,657		4,714,302		78,894		5,192,036		—		1,521,316		19,568,264
3/31/2018	—		—		185,410		—		4,401,271		—		—		1,608,251		6,194,932
3/31/2019	—		—		192,714		—		—		—		—		1,700,153		1,892,867
3/31/2020	—		—		200,305		—		—		—		—		79,628,122		79,828,427
Thereafter	—		—		9,289,914		—		—		—		16,900,000		—		26,189,914
	$	8,075,681	$	1,974,501	$	10,000,000	$	4,787,315	$	4,556,075	$	5,271,998	$	16,900,000	$	85,896,923	$	137,462,493

At March 31, 2015 the weighted average interest rate on the above mortgages was 5.27%. The effective rate was 5.36% including the amortization expense of deferred financing costs.

Summary financial information as of March 31, 2014

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total

ASSETS
Rental Properties	$	8,665,490		$	2,623,618		$	7,409,606		$	5,331,142		$	1,626,115		$	6,604,500		$	6,702,438		$	20,026,347		$	100,826,473		$	159,815,729
Cash & Cash Equivalents	31,408			61,603			26,136			23,018			124,765			25,766			80,847			118			1,027,202			1,400,862
Rent Receivable	28,674			—			2,565			995			1,793			4,641			737			8,623			74,141			122,170
Real Estate Tax Escrow	101,256			—			40,681			68,445			—			37,283			35,466			43,577			339,330			666,038
Prepaid Expenses & Other Assets	71,795			222			32,078			37,561			206,859			35,603			42,400			712,377			1,607,358			2,746,253
Financing & Leasing Fees	42,259			11,982			94,884			13,363			—			18,291			10,989			6,001			325,532			523,300
Total Assets	$	8,940,881		$	2,697,426		$	7,605,950		$	5,474,523		$	1,959,533		$	6,726,084		$	6,872,876		$	20,797,043		$	104,200,037		$	165,274,352
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,202,370		$	2,027,817		$	10,000,000		$	4,856,961		$	—		$	4,622,842		$	5,348,277		$	15,263,225		$	87,179,208		$	137,500,700
Accounts Payable & Accrued Expense	52,518			6,373			81,538			27,653			19,186			10,896			64,247			172,902			708,297			1,143,611
Advance Rental Pmts& Security Deposits	163,668			—			190,001			91,568			20,483			95,060			80,327			291,564			2,294,713			3,227,383
Total Liabilities	8,418,556			2,034,190			10,271,539			4,976,181			39,668			4,728,798			5,492,851			15,727,691			90,182,218			141,871,694
Partners’ Capital	522,325			663,236			(2,665,589		)	498,342			1,919,864			1,997,286			1,380,025			5,069,351			14,017,818			23,402,658
Total Liabilities and Capital	$	8,940,881		$	2,697,426		$	7,605,950		$	5,474,523		$	1,959,533		$	6,726,084		$	6,872,876		$	20,797,043		$	104,200,037		$	165,274,352

Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	261,162		$	331,618		$	—		$	249,171		$	959,932		$	998,643		$	690,012		$	2,534,676		$	5,607,127		11,632,342
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,332,795	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,332,795		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	10,299,547

Total units/condominiums
Apartments	48			—			40			175			120			48			42			148			409			1,030
Commercial	1			1			—			1			—			—			—			—			—			3
Total	49			1			40			176			120			48			42			148			409			1,033
Units to be retained	49			1			40			49			—			48			42			148			409			786
Units to be sold	—			—			—			127			120			—			—			—			—			247
Units sold through May 1, 2014	—			—			—			127			106			—			—			—			—			233
Unsold units	—			—			—			—			14			—			—			—			—			14
Unsold units with deposits for future sale as of May 1, 2014	—			—			—			—			—			—			—			—			—			—

Financial information for the three months ended March 31, 2014

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total

Revenues
Rental Income	$	328,770		$	73,236		$	327,740		$	231,187		$	62,798		$	238,891		$	223,942		$	717,680		$	3,357,055		$	5,561,299
Laundry and Sundry Income	3,920			—			(423		)	—			—			—			169			9,456			25,380			38,501
	332,690			73,236			327,317			231,187			62,798			238,891			224,111			727,136			3,382,434			5,599,800
Expenses
Administrative	3,178			317			6,823			1,968			705			4,845			3,003			9,485			54,543			84,868
Depreciation and Amortization	107,903			2,822			99,725			60,152			19,175			79,314			79,402			236,015			1,345,463			2,029,971
Management Fees	13,275			2,929			13,666			9,231			2,384			9,460			9,310			28,263			71,898			160,417
Operating	44,972			—			24,823			160			251			459			32,854			142,160			488,785			734,463
Renting	117			—			3,443			5,753			753			3,492			2,466			6,829			18,590			41,441
Repairs and Maintenance	32,278			—			12,337			80,443			23,824			73,437			16,887			90,518			196,494			526,219
Taxes and Insurance	58,284			13,569			29,644			40,604			11,899			40,759			29,572			95,639			381,185			701,154
	260,008			19,638			190,461			198,311			58,990			211,766			173,493			608,908			2,556,958			4,278,532
Income Before Other Income	72,682			53,598			136,856			32,876			3,808			27,125			50,619			118,227			825,476			1,321,267
Other Income (Loss)
Interest Expense	(119,368		)	(13,919		)	(97,753		)	(69,560		)	(195		)	(65,465		)	(76,500		)	(200,379		)	(1,227,695		)	(1,870,833		)
Interest Income	—			—			—			4			—			—			—			—			—			4
Interest Income from Note	—			—			—			—			334			—			—			—			—			334
Gain on Sale of Real Estate	—			—			—			—			52,283			—			—			—			—			52,283
Other Income (Expenses)	—			—			—			—			—			—			—			—			—			—
	(119,368		)	(13,919		)	(97,753		)	(69,555		)	52,422			(65,465		)	(76,500		)	(200,379		)	(1,227,695		)	(1,818,212		)
Net Income (Loss)	$	(46,687	)	$	39,679		$	39,104		$	(36,679	)	$	56,230		$	(38,340	)	$	(25,881	)	$	(82,152	)	$	(402,219	)	$	(496,945	)
Net Income (Loss) - NERA 50%	$	(23,343	)	$	19,840		$	19,552		$	(18,340	)	$	28,115		$	(19,170	)	$	(12,941	)	$	(41,076	)				(47,363		)
Net Income (Loss) - NERA 40%																									$	(160,888	)	(160,888		)
																												$	(208,250	)