DiVall Properties 2 Posts $195K Loss Amid Wind-Up, Zero Rental Income

TL;DR

**DiVall Properties 2 is officially a ghost town, with zero rental income and a hefty loss; expect final distributions, not a turnaround.**

AI Summary

DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP reported a net loss of $195,461 for the nine months ended September 30, 2025, a significant decline from a net income of $58,368 in the same period of 2024. This shift is primarily due to the complete cessation of rental income, which dropped from $352,761 in 2024 to $0 in 2025, as the Partnership no longer owns any investment properties. Total assets decreased by 55.05% from $1,385,153 at December 31, 2024, to $622,806 at September 30, 2025, largely driven by a 90.07% reduction in cash and cash equivalents from $842,114 to $83,844. The Partnership is in the process of winding up operations, having sold its remaining eight properties in fiscal years 2023 and 2024. Expenses, while still substantial, saw a decrease in partnership management fees from $135,000 in 2024 to $67,500 in 2025, reflecting management's decision to reduce the base fee from $180,000 to $90,000 annually, and further to $60,000 effective October 1, 2025. Limited Partners received $559,315 in cash distributions during the nine months ended September 30, 2025, compared to $234,495 in 2024, as the Partnership distributes proceeds from asset sales.

Why It Matters

This filing signals the near-complete dissolution of DIVALL INSURED INCOME PROPERTIES 2, with no remaining real estate assets and a significant net loss. For investors, particularly Limited Partners, the focus shifts entirely to the final distributions from the Indemnification Trust and the winding-up process, rather than operational performance. The competitive landscape is irrelevant as the Partnership is liquidating. Employees are likely minimal, and customers (tenants) are no longer a factor. The broader market impact is negligible given the small scale and specific nature of this limited partnership's liquidation.

Risk Assessment

Risk Level: high — The Partnership is in the process of winding up operations, having sold all its investment properties, resulting in $0 rental income for the nine months ended September 30, 2025. Cash and cash equivalents plummeted by 90.07% from $842,114 to $83,844, indicating a rapid depletion of liquid assets. The future value for Limited Partners hinges entirely on the liquidation of the Indemnification Trust and satisfaction of remaining obligations.

Analyst Insight

Investors should closely monitor the final stages of the Partnership's wind-up, specifically any announcements regarding distributions from the Indemnification Trust. Given the complete cessation of operations and significant cash burn, new investment is not applicable, and existing Limited Partners should manage expectations for final capital returns.

Financial Highlights

debt To Equity

0.01

revenue

$0

operating Margin

N/A

total Assets

$622,806

total Debt

$6,146

net Income

-$195,461

eps

N/A

gross Margin

N/A

cash Position

$83,844

revenue Growth

-100.0%

Revenue Breakdown

Key Numbers

• $195,461 — Net Loss (for the nine months ended September 30, 2025, compared to $58,368 net income in 2024.)
• $0 — Rental Income (for the nine months ended September 30, 2025, down from $352,761 in 2024, due to property sales.)
• $83,844 — Cash and Cash Equivalents (at September 30, 2025, a 90.07% decrease from $842,114 at December 31, 2024.)
• $622,806 — Total Assets (at September 30, 2025, a 55.05% decrease from $1,385,153 at December 31, 2024.)
• $559,315 — Cash Distributions to Limited Partners (for the nine months ended September 30, 2025, up from $234,495 in 2024.)
• $67,500 — Partnership Management Fees (for the nine months ended September 30, 2025, reduced from $135,000 in 2024.)
• 46,280.3 — Limited Partnership Units Outstanding (unchanged at September 30, 2025 and December 31, 2024.)
• $60,000 — Annual Base Fee (effective October 1, 2025, reduced from $90,000 per year.)

Key Players & Entities

• DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP (company) — registrant
• Securities and Exchange Commission (regulator) — filing oversight
• Jesse Small (person) — former Advisory Board Member and significant unit holder
• $195,461 (dollar_amount) — net loss for nine months ended September 30, 2025
• $58,368 (dollar_amount) — net income for nine months ended September 30, 2024
• $0 (dollar_amount) — rental income for nine months ended September 30, 2025
• $352,761 (dollar_amount) — rental income for nine months ended September 30, 2024
• $83,844 (dollar_amount) — cash and cash equivalents at September 30, 2025
• $842,114 (dollar_amount) — cash and cash equivalents at December 31, 2024
• $559,315 (dollar_amount) — cash distributions to Limited Partners for nine months ended September 30, 2025

Forward-Looking Statements

• DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP will continue to report net losses in the near term. (DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP) — high confidence, target: December 31, 2004
• The partnership's total assets will remain at a very low level or continue to decline. (DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP) — medium confidence, target: December 31, 2004

FAQ

Risk Factors

• Dwindling Cash Reserves [high — financial]: Cash and cash equivalents decreased by 90.07% from $842,114 to $83,844 between December 31, 2024, and September 30, 2025. This significant reduction is a direct consequence of the partnership's winding-up process and distributions to partners.
• Cessation of Operations [high — operational]: The partnership has sold all its investment properties and is in the process of winding up operations. This means there is no ongoing revenue generation from its core business, leading to a net loss of $195,461 for the nine months ended September 30, 2025.
• Declining Asset Base [medium — financial]: Total assets have fallen by 55.05% from $1,385,153 to $622,806 between December 31, 2024, and September 30, 2025. This decline is primarily driven by the sale of properties and the subsequent distribution of proceeds.
• Reduced Management Fees [low — financial]: Partnership management fees decreased from $135,000 to $67,500 for the nine months ended September 30, 2025, reflecting a reduction in the annual base fee from $180,000 to $90,000, and further to $60,000 effective October 1, 2025. While this reduces expenses, it also signals the winding down of management activities.

Industry Context

The real estate investment partnership sector is characterized by the acquisition, management, and disposition of properties to generate income and capital appreciation for investors. Companies in this space often operate with leverage and are sensitive to interest rate changes, property market cycles, and regulatory environments. As DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP is winding down, it is exiting this competitive landscape.

Regulatory Implications

As a limited partnership, DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP is subject to partnership laws and tax regulations. The winding-up process requires adherence to procedures for asset liquidation, debt settlement, and partner distributions, which may involve regulatory oversight depending on jurisdiction. Compliance with reporting requirements for the 10-Q filing is also a key regulatory aspect.

What Investors Should Do

1. Monitor final distribution amounts and timeline.
2. Review the utilization of funds in the Indemnification Trust.
3. Assess the impact of reduced management fees.

Key Dates

• 2025-09-30: Nine months ended September 30, 2025 — Reported a net loss of $195,461 and $0 rental income, reflecting the cessation of operations and sale of assets.
• 2024-09-30: Nine months ended September 30, 2024 — Reported net income of $58,368 and rental income of $352,761, prior to the complete sale of investment properties.
• 2025-10-01: Effective date for reduced annual base fee — Partnership management's annual base fee reduced to $60,000, further indicating the winding-down phase.

Glossary

Winding up operations

The process of closing down a company or partnership, selling its assets, paying off its debts, and distributing any remaining funds to its owners. (This is the current state of DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP, explaining the cessation of rental income and asset sales.)

Limited Partners

Investors who have contributed capital to a partnership but have limited liability and typically no management control. (These partners are receiving substantial cash distributions as the partnership liquidates its assets.)

Indemnification Trust

A trust established to hold assets that may be used to cover potential liabilities or claims against the partnership. (Investments held in such a trust represent a significant portion of the partnership's 'Other Assets'.)

Cumulative net income (retained earnings)

The total net income earned by the partnership over its lifetime that has not been distributed to partners. (This figure is part of the partners' capital accounts and reflects historical profitability before distributions.)

Cumulative cash distributions

The total amount of cash that has been paid out to partners from the partnership's inception. (This shows the extent to which partners have received proceeds from the partnership's operations and asset sales.)

Year-Over-Year Comparison

Compared to the prior period, DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP has experienced a dramatic shift from profitability to a net loss of $195,461 for the nine months ended September 30, 2025, primarily due to the complete cessation of rental income ($0 vs. $352,761). Total assets have significantly decreased by 55.05% to $622,806, driven by asset sales and distributions. Cash reserves have also dwindled by 90.07% to $83,844, reflecting the ongoing liquidation and distribution of proceeds to limited partners, which have increased substantially.

Filing Documents

• form10-q.htm (10-Q) — 543KB
• ex31-1.htm (EX-31.1) — 12KB
• ex32-1.htm (EX-32.1) — 4KB
• 0001493152-25-023483.txt ( ) — 2181KB
• divvz-20250930.xsd (EX-101.SCH) — 23KB
• divvz-20250930_cal.xml (EX-101.CAL) — 40KB
• divvz-20250930_def.xml (EX-101.DEF) — 38KB
• divvz-20250930_lab.xml (EX-101.LAB) — 170KB
• divvz-20250930_pre.xml (EX-101.PRE) — 113KB
• form10-q_htm.xml (XML) — 260KB

Financial Information

PART I. Financial Information

Financial Statements (unaudited)

Item 1. Financial Statements (unaudited) 3

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13

Quantitative and Qualitative Disclosure About Market Risk

Item 3. Quantitative and Qualitative Disclosure About Market Risk 16

Controls and Procedures

Item 4. Controls and Procedures 16

Other Information

PART II. Other Information

Legal Proceedings

Item 1. Legal Proceedings 17

Risk Factors

Item 1A. Risk Factors 17

Unregistered Sale of Equity Securities and Use of Proceeds

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds 17

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 17

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 17

Other Information

Item 5. Other Information 17

Exhibits

Item 6. Exhibits 17

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements DIVALL INSURED INCOME PROPERTIES 2 LIMITED PARTNERSHIP CONDENSED BALANCE SHEETS September 30, 2025 and December 31, 2024 September 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 83,844 842,114 Investments held in Indemnification Trust (Note 6) 533,962 514,687 Security deposits escrow - 18,130 Prepaid state income tax - 10,222 Prepaid fees 5,000 - Total other assets 622,806 1,385,153 Total assets $ 622,806 $ 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 September 30, 2025 and December 31, 2024 LIABILITIES AND PARTNERS' CAPITAL September 30, December 31, 2025 2024 (unaudited) LIABILITIES: Accounts payable and accrued expenses $ 6,146 $ 13,551 Due to General Partner (Note 4) - 166 Distributions payable (Note 7) - 231,000 Total liabilities 6,146 244,717 CONTINGENCIES AND COMMITMENTS (Notes 5 and 6) - - PARTNERS' CAPITAL: (Notes 1 and 3) General Partner (1993-Present) Cumulative net income (retained earnings) 618,254 620,209 Cumulative cash distributions ( 269,558 ) ( 269,558 ) Total General Partners' capital 348,696 350,651 Limited Partners ( 46,280.3 units outstanding at September 30, 2025 and December 31, 2024) Capital contributions 46,280,300 46,280,300 Offering costs ( 6,921,832 ) ( 6,921,832 ) Cumulative net income (retained earnings) 67,573,029 67,766,535 Cumulative cash distributions ( 105,823,304 ) ( 105,494,989 ) Total Limited Partners' capital 1,108,193 1,630,014 Former General Partner (1987-1993) Cumulative net income (retained earnings) 707,513 707,513 Cumulative cash

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