DiVall Properties 2 Posts $127K Loss Amid Wind-Down, Zero Rental Income

TL;DR

**DiVall Insured Income Properties 2 is officially in liquidation mode, expect final distributions, not income, as rental revenue has hit zero.**

AI Summary

DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP reported a net loss of $127,569 for the six months ended June 30, 2025, a significant decline from a net income of $21,483 in the same period of 2024. This downturn is primarily due to the complete cessation of rental income, which was $235,174 in the first six months of 2024, as the Partnership no longer owns any investment properties as of December 31, 2024. Total operating expenses decreased to $159,811 for the six months ended June 30, 2025, from $240,126 in 2024, largely driven by reduced partnership management fees and professional services. Cash and cash equivalents decreased by $348,280 to $493,834 at June 30, 2025, from $842,114 at December 31, 2024, primarily due to $231,000 in cash distributions to Limited Partners. The Partnership is in the process of winding up its operations, having sold all its properties in 2023 and 2024, and expects to focus on satisfying remaining obligations and distributing assets in 2025. The General Partner has proactively reduced its annual base fee from $180,000 to $90,000 effective January 1, 2025, and further to $60,000 effective October 1, 2025, reflecting the winding-up phase.

Why It Matters

This filing signals the near-complete dissolution of DIVALL INSURED INCOME PROPERTIES 2, with zero rental income and a net loss of $127,569 for the first half of 2025. For investors, particularly Limited Partners, this means the focus shifts entirely to the final liquidation process and potential remaining distributions from the Indemnification Trust. The competitive landscape for real estate limited partnerships is evolving, and DiVall's wind-down highlights the finite nature of such investment vehicles. Employees and customers are largely unaffected as the Partnership no longer owns properties, but the General Partner's reduced fees reflect the diminished operational scope.

Risk Assessment

Risk Level: high — The risk level is high because the Partnership has ceased all revenue-generating operations, reporting $0 in rental income for the six months ended June 30, 2025, compared to $235,174 in the prior year. It is actively winding up, with all properties sold, meaning future returns are solely dependent on the remaining asset liquidation and distribution, which carries inherent uncertainty regarding final amounts.

Analyst Insight

Investors should closely monitor the final wind-up activities and communications regarding distributions from the Indemnification Trust. Do not expect any operational income; instead, focus on the timing and amount of final capital distributions as the Partnership liquidates.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

$1,027,796

total Debt

$19,245

net Income

($127,569)

eps

($2.73)

gross Margin

N/A

cash Position

$493,834

revenue Growth

-100.0%

Revenue Breakdown

Key Numbers

• $127,569 — Net Loss (For the six months ended June 30, 2025, compared to $21,483 net income in 2024.)
• $0 — Rental Income (For the six months ended June 30, 2025, down from $235,174 in 2024, due to property sales.)
• $493,834 — Cash and Cash Equivalents (At June 30, 2025, a decrease from $842,114 at December 31, 2024.)
• $231,000 — Cash Distributions to Limited Partners (For the six months ended June 30, 2025.)
• $90,000 — Annual Base Fee for General Partner (Reduced from $180,000 effective January 1, 2025.)
• $60,000 — Annual Base Fee for General Partner (Further reduced effective October 1, 2025.)
• 46,280.3 — Limited Partnership Interests Outstanding (As of August 12, 2025.)
• $1,027,796 — Total Assets (At June 30, 2025, down from $1,385,153 at December 31, 2024.)

Key Players & Entities

• DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP (company) — Registrant
• General Partner (company) — Manages the Partnership and receives fees
• Limited Partners (person) — Investors in the Partnership
• Jesse Small (person) — Former Advisory Board Member and significant limited partnership interest holder
• TPG (company) — General Partner of the Partnership
• Wendy's (company) — Tenant of former properties
• Securities and Exchange Commission (regulator) — Regulatory body for the filing
• Wisconsin (company) — State of incorporation

FAQ

Risk Factors

• Dwindling Cash Reserves [medium — financial]: Cash and cash equivalents decreased by $348,280 to $493,834 as of June 30, 2025, from $842,114 at December 31, 2024. This decline is primarily due to $231,000 in cash distributions to Limited Partners, indicating a reduction in liquid assets available for ongoing operations or unforeseen liabilities during the winding-up phase.
• Winding Up Operations [medium — operational]: The Partnership is in the process of winding up its operations after selling all investment properties. While this simplifies operations, it also means the cessation of core revenue streams and a focus on asset distribution, which carries inherent risks in managing final obligations and stakeholder expectations.
• Negative Net Income [high — financial]: The Partnership reported a net loss of $127,569 for the six months ended June 30, 2025, a significant shift from a net income of $21,483 in the prior year. This loss is directly attributable to the absence of rental income, highlighting the financial impact of the transition to liquidation.
• Reduced General Partner Fees [low — financial]: The General Partner has proactively reduced its annual base fee from $180,000 to $90,000 effective January 1, 2025, and further to $60,000 effective October 1, 2025. While this conserves cash, it also reflects the diminished operational scope and potential impact on management's ongoing commitment during the winding-up phase.

Industry Context

The real estate investment partnership sector is characterized by its reliance on property income and asset appreciation. Companies in this space typically manage portfolios of income-generating properties. However, as DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP demonstrates, the lifecycle of such entities often involves strategic divestment and winding up of operations, especially after achieving investment objectives or facing market shifts.

Regulatory Implications

As a publicly reporting entity, DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP must adhere to SEC filing requirements, including the timely submission of Form 10-Q. The winding-up process itself may trigger specific regulatory considerations related to asset distribution and final dissolution, ensuring compliance with partnership laws and stakeholder rights.

What Investors Should Do

1. Monitor final asset distribution and liquidation timeline.
2. Review any disclosures regarding contingent liabilities.
3. Assess the efficiency of the winding-up process.

Key Dates

• 2025-06-30: Quarterly period ended June 30, 2025 — Reported a net loss of $127,569 and cessation of rental income, reflecting the ongoing winding-up of operations.
• 2025-01-01: General Partner's annual base fee reduced to $90,000 — Reflects the Partnership's transition phase and efforts to reduce operating expenses.
• 2024-12-31: Partnership no longer owns any investment properties — Marks the completion of property divestitures, leading to the cessation of rental income and a focus on liquidation.
• 2024-06-30: Six months ended June 30, 2024 — Reported net income of $21,483 and rental income of $235,174, representing the last period with active property operations.

Glossary

Limited Partnership Interests

Units of ownership in a limited partnership, representing a partner's stake and rights within the partnership. (The Partnership had 46,280.3 Limited Partnership Interests outstanding as of August 12, 2025, indicating the structure of ownership and potential distribution of remaining assets.)

Indemnification Trust

A trust established to hold assets for the purpose of indemnifying or protecting against potential losses or liabilities. (The Partnership held $533,962 in an Indemnification Trust as of June 30, 2025, suggesting provisions for potential future claims or obligations.)

Winding Up

The process of dissolving a company or partnership, involving the settlement of debts, distribution of assets, and termination of business operations. (The Partnership is actively engaged in winding up its operations, which is the primary driver of its current financial activities and reporting.)

Net Income (Loss)

The profit or loss remaining after all revenues and expenses have been accounted for over a specific period. (The Partnership reported a net loss of $127,569 for the six months ended June 30, 2025, a critical indicator of its financial performance during the liquidation phase.)

Year-Over-Year Comparison

Compared to the six months ended June 30, 2024, DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP has experienced a significant financial downturn. Revenue has dropped from $235,174 to $0 due to the sale of all investment properties. This has resulted in a shift from a net income of $21,483 to a net loss of $127,569. While operating expenses have decreased from $240,126 to $159,811, largely due to reduced management fees, the absence of rental income is the primary driver of the negative profitability. Cash reserves have also decreased substantially, reflecting distributions and the ongoing liquidation.

Filing Documents

• form10-q.htm (10-Q) — 481KB
• ex31-1.htm (EX-31.1) — 19KB
• ex32-1.htm (EX-32.1) — 7KB
• 0001641172-25-025401.txt ( ) — 2075KB
• divvz-20250630.xsd (EX-101.SCH) — 22KB
• divvz-20250630_cal.xml (EX-101.CAL) — 43KB
• divvz-20250630_def.xml (EX-101.DEF) — 35KB
• divvz-20250630_lab.xml (EX-101.LAB) — 171KB
• divvz-20250630_pre.xml (EX-101.PRE) — 114KB
• form10-q_htm.xml (XML) — 226KB

Signatures

Signatures 18 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP CONDENSED BALANCE SHEETS June 30, 2025 and December 31, 2024 June 30, December 31, 2025 2024 (unaudited) INVESTMENT PROPERTIES: (Note 2) Land $ - $ - Buildings - - Accumulated depreciation - - Net investment properties - - Properties held for sale - - OTHER ASSETS: Cash and cash equivalents 493,834 842,114 Investments held in Indemnification Trust (Note 6) 533,962 514,687 Security deposits escrow - 18,130 Rents and other receivables - - Prepaid state income tax - 10,222 Deferred closing costs - - Prepaid insurance - - Deferred charges, net - - Total other assets 1,027,796 1,385,153 Total assets $ 1,027,796 $ 1,385,153 The accompanying notes to the financial statements are an integral part of these statements. 3 DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP CONDENSED BALANCE SHEETS June 30, 2025 and December 31, 2024 LIABILITIES AND PARTNERS' CAPITAL June 30, December 31, 2025 2024 (unaudited) LIABILITIES: Accounts payable and accrued expenses $ 19,245 $ 17,866 Due to General Partner (Note 4) - 166 Distributions payable (Note 7) - 231,000 Security deposits - - Total liabilities 19,245 249,032 CONTINGENCIES AND COMMITMENTS (Notes 5 and 6) - - PARTNERS' CAPITAL: (Notes 1 and 3) General Partner (1993-Present) Cumulative net income (retained earnings) 618,933 620,209 Cumulative cash distributions ( 269,558 ) ( 269,558 ) Total general partners' capital 349,375 350,651 Limited Partners ( 46,280.3 interests outstanding at September 30, 2024 and December 31, 2023) Distributions payable - - Capital contributions 46,280,300 46,280,300 Offering costs ( 6,921,832 ) ( 6,921,832 ) Cumulative net income (retained earnings) 67,640,241 67,766,535 Cumulative cash distributions ( 105

View Full Filing

View this 10-Q filing on SEC EDGAR