##### Table of Contents



FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2001
OR
[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from  to 
 
Commission file number 0-24594
 WEST COAST REALTY INVESTORS, INC.
(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|DELAWARE                                                       |  | 95-4246740                          
|                                                              
|                                                              
|                                                              
|                                                              
|(State or other Jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)

5933 W. CENTURY BLVD., 9TH, FLOORLOS ANGELES, CALIFORNIA 90045
(Address of principal executive offices)
(Zip Code)
 (310) 670-0800
(Registrants telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) 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 such 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 [   ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuers classes
of common stock, as of the latest practicable date. 2,927,967 shares
outstanding as of August 14, 2001.




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TABLE OF CONTENTS



|                              |                                                                                               |                                    |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------- |  |  |  |  |  | 
|PART 1. FINANCIAL INFORMATION
|                              |                                                                                               | BALANCE SHEETS                    
|                              |                                                                                               | STATEMENTS OF STOCKHOLDERS EQUITY
|                              |                                                                                               | STATEMENTS OF INCOME              
|                              |                                                                                               | STATEMENTS OF CASH FLOWS          
|                              |                                                                                               | Summary of Accounting Policies    
|                              |                                                                                               | Notes to Financial Statements     
|                              | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|PART II OTHER INFORMATION    
|                              | ITEM 1. LEGAL PROCEEDINGS                                                                    
|                              | ITEM 2. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                   



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##### Table of Contents



WEST COAST REALTY INVESTORS, INC.
 INDEX

Part I  Financial Information

|                            |                                                                                       |  |    |  | 
|--------------------------- | ------------------------------------------------------------------------------------- |  | -- |  | 
|                            | Page No.                                                                             
|                            |                                                                                      
|Item 1.                     | Financial Statements                                                                 
|                           
|                            | Balance Sheets 
June 30, 2001 and December 31, 2000                                  |  | 3 
|                           
|                            | Statements of Stockholders Equity -
Six Months Ended June 30, 2001 and 2000          |  | 4 
|                           
|                            | Statements of Income -
Three Months and Six Months Ended June 30, 2001 and 2000       |  | 5 
|                           
|                            | Statements of Cash Flows -
Six Months Ended June 30, 2001 and 2000                    |  | 6 
|                           
|                            | Summary of Accounting Policies                                                        |  | 7 
|                           
|                            | Notes to Financial Statements                                                         |  | 10
|                           
|Item 2.                     | Managements Discussion and Analysis of
Financial Condition and Results of Operations |  | 17
|                           
|Part II  Other Information
|                           
|Item 1.                     | Legal Proceedings                                                                     |  | 23
|                           
|Item 2.                     | Exhibits and Reports on Form 8-K                                                      |  | 24



2



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##### Table of Contents






PART 1. FINANCIAL INFORMATION




WEST COAST REALTY INVESTORS, INC.
 BALANCE SHEETS

|                                                                                                               |                                    |   |            |               |  |                   |            |            |  | 
|-------------------------------------------------------------------------------------------------------------- | ---------------------------------- | - | ---------- | ------------- |  | ----------------- | ---------- | ---------- |  | 
|                                                                                                               |                                    |   |            | June 30, 2001 |  | December 31, 2000
|                                                                                                               |                                    |   |            |               |  |                  
|                                                                                                               |                                    |   |            | (Unaudited)   |  | (Audited)        
|Assets                                                                                                         |                                    |   |            |               |  |                   |            |           
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Rental real estate, less accumulated
depreciation (Note 1)                                                     |                                    | $ | 38,628,599 |               |  | $                 | 38,871,691 |           
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Cash and cash equivalents                                                                                      |                                    |   | 1,630,500  |               |  |                   | 1,248,335  |           
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Deferred rent                                                                                                  |                                    |   | 616,548    |               |  |                   | 596,254    |           
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Accounts receivable                                                                                            |                                    |   | 312,869    |               |  |                   | 307,176    |           
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Loan origination fees, net of accumulated Amortization of $122,849 and $101,927                                |                                    |   | 178,279    |               |  |                   | 198,054    |           
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Other assets                                                                                                   |                                    |   | 29,649     |               |  |                   | 8,240      |           
|                                                                                                               |                                    |   |            |               |  |                   |            |           
|Total assets                                                                                                   |                                    | $ | 41,396,444 |               |  | $                 | 41,229,750 |           
|                                                                                                               |                                    |   |            |               |  |                   |            |           
|Liabilities and Stockholders Equity                                                                           |                                    |   |            |               |  |                   |            |           
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Liabilities                                                                                                    |                                    |   |            |               |  |                   |            |           
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Accounts payable                   |   | $          | 580           |  |                   | $          | 5,028      | 
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Due to related party (Note 2(d))   |   |            | 29,977        |  |                   |            | 72,267     | 
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Dividends payable                  |   |            | 439,195       |  |                   |            |           | 
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Security deposits and prepaid rent |   |            | 374,795       |  |                   |            | 319,861    | 
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Other liabilities                  |   |            | 186,039       |  |                   |            | 267,033    | 
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                               | Notes payable (Note 3)             |   |            | 20,037,998    |  |                   |            | 20,263,273 | 
|                                                                                                               |                                    |   |            |               |  |                   |            |           
|Total liabilities                                                                                              |                                    |   | 21,068,584 |               |  |                   | 20,927,462 |           
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Commitments and Contingencies (Note 7)                                                                         |                                    |   |            |               |  |                   |            |           
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Stockholders equity                                                                                           |                                    |   |            |               |  |                   |            |           
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Common stock, $.01 par-shares authorized,
5,000,000
shares, issued and outstanding 2,927,967,
in 2001 and 2000 |                                    |   | 29,280     |               |  |                   | 29,280     |           
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Additional paid-in capital                                                                                     |                                    |   | 27,090,888 |               |  |                   | 26,977,370 |           
|                                                                                                              
|                                                                                                              
|                                                                                                              
|                                                                                                              
|Dividends in excess of retained earnings
(Note 4)                                                              |                                    |   | (6,792,308 | )             |  |                   | (6,704,362 | )         
|                                                                                                               |                                    |   |            |               |  |                   |            |           
|Total stockholders equity                                                                                     |                                    |   | 20,327,860 |               |  |                   | 20,302,288 |           
|                                                                                                               |                                    |   |            |               |  |                   |            |           
|Total liabilities and stockholders equity                                                                     |                                    | $ | 41,396,444 |               |  | $                 | 41,229,750 |           
|                                                                                                               |                                    |   |            |               |  |                   |            |           

See accompanying notes to financial statements.



3



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##### Table of Contents






WEST COAST REALTY INVESTORS, INC.
 STATEMENTS OF STOCKHOLDERS EQUITY
Six Months Ended June 30, 2001(Unaudited)

|                                                                              |  |              |           |                 |  |                    |        |              |  |   |            |  |  |   |            |  
|----------------------------------------------------------------------------- |  | ------------ | --------- | --------------- |  | ------------------ | ------ | ------------ |  | - | ---------- |  |  | - | ---------- | -
|
|                                                                              |  | Common Stock |           |                 |  |                    |        | Dividends in
|                                                                              |  |              |           | Additional Paid |  | Excess of Retained
|                                                                              |  | Shares       |           | Amount          |  | Capital            |        | Earnings    
|                                                                              |  |              |           |                 |  |                    |        |             
|Balance at December 31, 2000                                                  |  |              | 2,927,967 |                 |  | $                  | 29,280 |              |  | $ | 26,977,370 |  |  | $ | (6,704,362 | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Equity contribution by
Affiliates through expense
reimbursements (Note 2 (e)) |  |              |          |                 |  |                    |       |              |  |   | 113,518    |  |  |   |           |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Net income                                                                    |  |              |          |                 |  |                    |       |              |  |   |           |  |  |   | 790,444    |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Dividends declared (Note 4 and 5)                                             |  |              |          |                 |  |                    |       |              |  |   |           |  |  |   | (878,390   | )
|                                                                              |  |              |           |                 |  |                    |        |              |  |   |            |  |  |   |            |  
|Balance at June 30, 2001                                                      |  |              | 2,927,967 |                 |  | $                  | 29,280 |              |  | $ | 27,090,888 |  |  | $ | (6,792,308 | )
|                                                                              |  |              |           |                 |  |                    |        |              |  |   |            |  |  |   |            |  

Six Months Ended June 30, 2000(Unaudited)

|                                                                              |  |              |           |                 |  |                    |        |              |  |   |            |  |  |   |            |  
|----------------------------------------------------------------------------- |  | ------------ | --------- | --------------- |  | ------------------ | ------ | ------------ |  | - | ---------- |  |  | - | ---------- | -
|
|                                                                              |  | Common Stock |           |                 |  |                    |        | Dividends in
|                                                                              |  |              |           | Additional Paid |  | Excess of Retained
|                                                                              |  | Shares       |           | Amount          |  | Capital            |        | Earnings    
|                                                                              |  |              |           |                 |  |                    |        |             
|Balance at December 31, 1999                                                  |  |              | 2,927,967 |                 |  | $                  | 29,280 |              |  | $ | 26,738,963 |  |  | $ | (3,294,775 | )
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Equity contribution by
Affiliates through expense
reimbursements (Note 2 (e)) |  |              |          |                 |  |                    |       |              |  |   | 125,137    |  |  |   |           |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Net income                                                                    |  |              |          |                 |  |                    |       |              |  |   |           |  |  |   | 2,869,469  |  
|                                                                             
|                                                                             
|                                                                             
|                                                                             
|Dividends declared (Note 4 and 5)                                             |  |              |          |                 |  |                    |       |              |  |   |           |  |  |   | (5,738,816 | )
|                                                                              |  |              |           |                 |  |                    |        |              |  |   |            |  |  |   |            |  
|Balance at June 30, 2000                                                      |  |              | 2,927,967 |                 |  | $                  | 29,280 |              |  | $ | 26,864,100 |  |  | $ | (6,164,122 | )
|                                                                              |  |              |           |                 |  |                    |        |              |  |   |            |  |  |   |            |  

See accompanying notes to financial statements.



4



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##### Table of Contents






WEST COAST REALTY INVESTORS, INC.
 STATEMENTS OF INCOME

|                                         |                                       |                |                |           |               |         |               |           |               |         |               |           |           |           |           |           |           |           | 
|---------------------------------------- | ------------------------------------- | -------------- | -------------- | --------- | ------------- | ------- | ------------- | --------- | ------------- | ------- | ------------- | --------- | --------- | --------- | --------- | --------- | --------- | --------- | 
|                                         |                                       |                |                |           | Three Months  |         | Three Months  |           | Six Months    |         | Six Months   
|                                         |                                       |                |                |           | Ended         |         | Ended         |           | Ended         |         | Ended        
|                                         |                                       |                |                |           | June 30, 2001 |         | June 30, 2000 |           | June 30, 2001 |         | June 30, 2000
|                                         |                                       |                |                |           | (Unaudited)   |         | (Unaudited)   |           | (Unaudited)   |         | (Unaudited)  
|                                         |                                       |                |                |           |               |         |               |           |               |         |              
|Revenues                                 |                                       |                |                |           |               |         |               |           |               |         |               |           |           |           |           |          
|                                        
|                                        
|                                        
|                                        
|                                         | Rental (Notes 1)                      |                | $              | 1,114,875 |               |         | $             | 1,289,790 |               |         | $             | 2,286,527 |           |           | $         | 2,652,539 |          
|                                        
|                                        
|                                        
|                                        
|                                         | Gain on sale of property              |                |                |          |               |         |               | 2,154,727 |               |         |               |          |           |           |           | 2,154,727 |          
|                                        
|                                        
|                                        
|                                        
|                                         | Interest                              |                |                | 15,370    |               |         |               | 33,211    |               |         |               | 32,773    |           |           |           | 58,058    |          
|                                         |                                       |                |                |           |               |         |               |           |               |         |               |           |           |           |           |          
|                                         |                                       | Total Revenues |                |           | 1,130,245     |         |               |           | 3,477,728     |         |               |           | 2,319,300 |           |           |           | 4,865,324 |          
|                                         |                                       |                |                |           |               |         |               |           |               |         |               |           |           |           |           |          
|Costs and expenses                       |                                      
|                                        
|                                        
|                                        
|                                        
|                                         | Operating                             |                |                | 80,800    |               |         |               | 53,259    |               |         |               | 147,084   |           |           |           | 142,081   |          
|                                        
|                                        
|                                        
|                                        
|                                         | Property taxes                        |                |                | 32,840    |               |         |               | 41,229    |               |         |               | 65,681    |           |           |           | 87,598    |          
|                                        
|                                        
|                                        
|                                        
|                                         | Property management fees
(Note 2 (c)) |                |                | 37,243    |               |         |               | 50,435    |               |         |               | 86,532    |           |           |           | 104,043   |          
|                                        
|                                        
|                                        
|                                        
|                                         | Interest expense                      |                |                | 380,173   |               |         |               | 426,662   |               |         |               | 781,992   |           |           |           | 986,916   |          
|                                        
|                                        
|                                        
|                                        
|                                         | General and administrative            |                |                | 99,839    |               |         |               | 124,989   |               |         |               | 232,564   |           |           |           | 256,835   |          
|                                        
|                                        
|                                        
|                                        
|                                         | Depreciation and amortization         |                |                | 187,377   |               |         |               | 204,394   |               |         |               | 380,056   |           |           |           | 418,382   |          
|                                         |                                       |                |                |           |               |         |               |           |               |         |               |           |           |           |           |          
|                                         |                                       |                | Total Expenses |           |               | 818,272 |               |           |               | 900,968 |               |           |           | 1,693,909 |           |           |           | 1,995,855 | 
|                                         |                                       |                |                |           |               |         |               |           |               |         |               |           |           |           |           |          
|Net income from operations               |                                       |                | 311,973        |           |               |         | 2,576,760     |           |               |         | 625,391       |           |           |           | 2,869,469 |          
|                                        
|                                        
|                                        
|                                        
|Insurance recovery from
lawsuit (Note 6) |                                       |                |                |           |               |         |               |           |               |         | 165,053       |           |           |           |           |          
|                                         |                                       |                |                |           |               |         |               |           |               |         |               |           |           |           |           |          
|Net income                               |                                       | $              | 311,973        |           |               | $       | 2,576,760     |           |               | $       | 790,444       |           |           | $         | 2,869,469 |          
|                                        
|                                        
|                                        
|                                        
|Net income per share (Note 4)            |                                       | $              | .11            |           |               | $       | .88           |           |               | $       | .27           |           |           | $         | .98       |          

See accompanying notes to financial statements.



5



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##### Table of Contents






WEST COAST REALTY INVESTORS, INC.
 STATEMENTS OF CASH FLOWS

|                                                                                  |                                          |                                                                  |           |               |         |               |            |           |            |  
|--------------------------------------------------------------------------------- | ---------------------------------------- | ---------------------------------------------------------------- | --------- | ------------- | ------- | ------------- | ---------- | --------- | ---------- | -
|                                                                                  |                                          |                                                                  |           | Six Months    |         | Six Months   
|                                                                                  |                                          |                                                                  |           | Ended         |         | Ended        
|                                                                                  |                                          |                                                                  |           | June 30, 2001 |         | June 30, 2000
|                                                                                  |                                          |                                                                  |           |               |         |              
|Increase in Cash and Cash Equivalents                                             |                                          | (Unaudited)                                                      |           | (Unaudited)  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Cash flows from operating activities                                              |                                          |                                                                  |           |               |         |               |            |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Net income                                                                        |                                          | $                                                                | 790,444   |               |         | $             | 2,869,469  |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Adjustments to reconcile net income to net cash
provided by operating activities: |                                          |                                                                  |           |               |         |               |            |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                          | Depreciation and amortization                                    |           |               | 360,281 |               |            |           | 402,174    |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                          | Interest expense on amortization of loan
origination fees        |           |               | 19,775  |               |            |           | 16,208     |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                          | Gain on sale of property                                         |           |               |        |               |            |           | (2,154,727 | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                          | Equity contribution by Affiliates through expense
reimbursements |           |               | 113,518 |               |            |           | 125,137    |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Increase (decrease) from changes in:                                              |                                          |                                                                  |           |               |         |               |            |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                          | Deferred rent                                                    |           |               | (20,294 | )             |            |           | (37,133    | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                          | Accounts receivable                                              |           |               | (5,693  | )             |            |           | 19,139     |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                          | Other assets                                                     |           |               | (21,409 | )             |            |           | (25,519    | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                          | Accounts payable                                                 |           |               | (4,448  | )             |            |           | (730       | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                          | Due to related party                                             |           |               | (42,290 | )             |            |           | 130,753    |  
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                          | Security deposits and prepaid rent                               |           |               | 54,934  |               |            |           | (86,786    | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  |                                          | Other liabilities                                                |           |               | (80,994 | )             |            |           | 44,666     |  
|                                                                                  |                                          |                                                                  |           |               |         |               |            |          
|Net cash provided by operating activities                                         |                                          |                                                                  | 1,163,824 |               |         |               | 1,302,651  |          
|                                                                                  |                                          |                                                                  |           |               |         |               |            |          
|Cash flows from investing activities                                              |                                          |                                                                  |           |               |         |               |            |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Additions to rental real estate          |                                                                  |           | (117,189      | )       |               |            | ---       |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Proceeds from sale of rental real estate |                                                                  |           |              |         |               |            | 7,999,102 |           
|                                                                                  |                                          |                                                                  |           |               |         |               |            |          
|Net cash provided by (used in) investing activities                               |                                          |                                                                  | (117,189  | )             |         |               | 7,999,102  |          
|                                                                                  |                                          |                                                                  |           |               |         |               |            |          
|Cash flows from financing activities                                              |                                          |                                                                  |           |               |         |               |            |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Dividends declared and paid                                                       |                                          |                                                                  | (439,195  | )             |         |               | (2,591,251 | )        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Payments on notes payable                                                         |                                          |                                                                  | (225,275  | )             |         |               | (4,167,036 | )        
|                                                                                  |                                          |                                                                  |           |               |         |               |            |          
|Net cash used in financing activities                                             |                                          |                                                                  | (664,470  | )             |         |               | (6,758,287 | )        
|                                                                                  |                                          |                                                                  |           |               |         |               |            |          
|Net increase in cash and cash equivalents                                         |                                          |                                                                  | 382,165   |               |         |               | 2,543,466  |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Cash and cash equivalents, beginning of period                                    |                                          |                                                                  | 1,248,335 |               |         |               | 1,874,880  |          
|                                                                                  |                                          |                                                                  |           |               |         |               |            |          
|Cash and cash equivalents, end of period                                          |                                          | $                                                                | 1,630,500 |               |         | $             | 4,418,346  |          
|                                                                                  |                                          |                                                                  |           |               |         |               |            |          

See accompanying notes to financial statements.



6



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##### Table of Contents






WEST COAST REALTY INVESTORS, INC.
Summary of Accounting Policies

Business

West Coast Realty Investors, Inc. (the Company) is a corporation formed on
October 26, 1989 under the laws of the State of Delaware. The Company exists
as a Real Estate Investment Trust (REIT) under Sections 856 to 860 of the
Internal Revenue Service Code. The Company has complied with all requirements
imposed on REITs for the 2000, 1999 and 1998 tax years; however qualification
as a REIT for future years is dependent upon future operations of the Company.
The Company was organized to acquire interests in income-producing residential,
industrial, retail or commercial properties located primarily in California and
the west coast of the United States. The Company acquires property for cash or
on a moderately leveraged basis and intends to own and operate such properties
for investment over an anticipated holding period of five to ten years.

Rental Real Estate and Depreciation

Assets are stated at lower of cost or net realizable value. Depreciation is
computed using the straight-line method over their estimated useful lives of
31.5 to 39 years for financial and income tax reporting purposes.

In the event that facts and circumstances indicate that the cost of an asset
may be impaired, an evaluation of recoverability would be performed. If an
evaluation is required, the estimated future undiscounted cash flows associated
with the asset would be compared to the carrying amount to determine if a
write-down to market value is required.

Rental Income

Rental revenue is recognized on a straight-line basis to the extent that rental
revenue is deemed collectible. Where there is uncertainty of collecting higher
scheduled rental amounts, due to the tendency of tenants to renegotiate their
leases at lower amounts, rental income is recognized as the amounts are
collected.

Acquisition Costs

The Company expenses internal acquisition costs in accordance with Emerging
Issues Task Force 97-11, Accounting for Internal Costs Relating to Real Estate
Property Acquisitions. Acquisition costs are paid to an affiliate, West Coast
Realty Advisors, (WCRA) who incurs such internal acquisition costs.

Loan Origination Fees

Loan origination fees are capitalized and amortized over the life of the loan.



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##### Table of Contents



WEST COAST REALTY INVESTORS, INC.
Summary of Accounting Policies

Cash and Cash Equivalents

The Company considers cash in the bank, liquid money market funds, and all
highly liquid certificates of deposit, with original maturities of three months
of less, to be cash and cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent 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.

Presentation of Interim Information

In the opinion of the Advisor of West Coast Realty Investors, Inc. (the
Company), the accompanying unaudited financial statements include all normal
adjustments considered necessary to present fairly the financial position as of
June 30, 2001 and the results of operations and cash flows for the three and
six months ended June 30, 2001 and 2000. Interim results are not necessarily
indicative of results for a full year.

The financial statements and notes are presented as permitted by Form 10-Q, and
do not contain certain information included in the Companys audited financial
statements and notes for the fiscal year ended December 31, 2000.

Net Income Per Share

Net income per share is calculated by dividing the net income by the weighted
average number of shares outstanding for the period.

Comprehensive Income

Statement of Financial Accounting Standards No. 130, Reporting Comprehensive
Income, (SFAS 130) establishes standards for reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. Comprehensive income is comprised of net income and all
changes to stockholders equity except those due to investments by owners and
distribution to owners. The Company does not have any components of
comprehensive income for each of the three or six month periods ended June 30,
2001 and 2000.



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##### Table of Contents



WEST COAST REALTY INVESTORS, INC.
Summary of Accounting Policies

New Accounting Pronouncements

Effective January 1, 2001, the Company adopted the requirements of Financial
Accounting Standards Board (FASB) Statement of Financial Accounting Standards
(SFAS) No. 133, Accounting for Derivative Instruments and Hedging
Activities, as amended by SFAS No. 137, Accounting for Derivative Instruments
and Hedging Activities  Deferral of the Effective Date of FASB Statement No.
133, and SFAS No. 138, Accounting for Derivative Instruments and Certain
Hedging Activities  an amendment of FASB Statement 133, and supplemented by
implementation guidance issued by FASBs Derivative Implementation Group. SFAS
No. 133 requires, among other things, that all derivatives be recognized as
either assets or liabilities and measured at estimated fair value. The
corresponding derivative gains and losses should be reported based upon the
hedge relationship, if such a relationship exists. Changes in the estimated
fair value of derivatives that are not designated as hedges or that do not meet
the hedge accounting criteria in SFAS No. 133 are required to be reported in
income. Implementation of SFAS No. 133, as amended, did not have a material
impact on the Companys financial statements.

In June 2001, the Financial Accounting Standards Board finalized FASB
Statements No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and
Other Intangible Assets (SFAS 142). SFAS 141 requires the use of the purchase
method of accounting and prohibits the use of the pooling-of-interests method
of accounting for business combinations initiated after June 30, 2001. SFAS 141
also requires that the Company recognize acquired intangible assets apart from
goodwill if the acquired intangible assets meet certain criteria. SFAS 141
applies to all business combinations initiated after June 30, 2001 and for
purchase business combinations completed on or after July 1, 2001. It also
requires, upon adoption of SFAS 142, that the Company reclassify the carrying
amounts of intangible assets and goodwill based on the criteria in SFAS 141.

SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that the Company identify reporting units for the
purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142. SFAS 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and other
intangible assets recognized at that date, regardless of when those assets were
initially recognized. SFAS 142 requires the Company to complete a transitional
goodwill impairment test six months from the date of adoption. The Company is
also required to reassess the useful lives of other intangible assets within
the first interim quarter after adoption of SFAS 142. The Company had no
previous transactions that resulted in the recognition of goodwill. The
adoption of SFAS 141 and SFAS 142 had no material affect on the Companys
financial results.



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WEST COAST REALTY INVESTORS, INC.
Notes to Financial Statements
Three and Six Months Ended June 30, 2001 and 2000(Unaudited)and December 31, 2000

Note 1  Rental Properties

The Company owns the following income-producing properties:

|                                           |  |                   |  |             |           | 
|------------------------------------------ |  | ----------------- |  | ----------- | --------- | 
|                                           |  |                   |  | Original   
|                                           |  |                   |  | Acquisition
|Location (Property Name)                   |  | Date Purchased    |  | Cost       
|                                           |  |                   |  |            
|Huntington Beach, California (Blockbuster) |  | February 26, 1991 |  | $           | 1,676,210 | 
|                                          
|                                          
|                                          
|                                          
|Fresno, California                         |  | May 14, 1993      |  |             | 1,414,893 | 
|                                          
|                                          
|                                          
|                                          
|Riverside, California                      |  | November 29, 1994 |  |             | 3,655,500 | 
|                                          
|                                          
|                                          
|                                          
|Tustin, California (Safeguard)             |  | May 22, 1995      |  |             | 4,862,094 | 
|                                          
|                                          
|                                          
|                                          
|Sacramento, California (Java City)         |  | August 2, 1996    |  |             | 1,828,500 | 
|                                          
|                                          
|                                          
|                                          
|Irvine, California (Tycom)                 |  | January 17, 1997  |  |             | 4,907,440 | 
|                                          
|                                          
|                                          
|                                          
|Roseville, California (Applebees)         |  | October 31, 1997  |  |             | 1,976,484 | 
|                                          
|                                          
|                                          
|                                          
|Corona, California                         |  | December 31, 1997 |  |             | 1,904,452 | 
|                                          
|                                          
|                                          
|                                          
|Sacramento, California (Horn Road)         |  | January 15, 1998  |  |             | 2,141,200 | 
|                                          
|                                          
|                                          
|                                          
|Chino, California                          |  | April 19, 1998    |  |             | 1,859,338 | 
|                                          
|                                          
|                                          
|                                          
|Vacaville, California                      |  | May 20, 1998      |  |             | 2,735,308 | 
|                                          
|                                          
|                                          
|                                          
|Cerritos, California                       |  | December 23, 1998 |  |             | 2,314,569 | 
|                                          
|                                          
|                                          
|                                          
|Ontario, California                        |  | January 12, 1999  |  |             | 4,614,964 | 
|                                          
|                                          
|                                          
|                                          
|Folsom, California                         |  | May 1, 1999       |  |             | 6,010,956 | 

The major categories of property are:

|                              |  |          |            |              |  |   |            | 
|----------------------------- |  | -------- | ---------- | ------------ |  | - | ---------- | 
|                              |  | June 30, |            | December 31,
|                              |  | 2001     |            | 2000        
|                              |  |          |            |             
|Land                          |  | $        | 13,658,414 |              |  | $ | 13,658,414 | 
|                             
|                             
|                             
|                             
|Buildings and improvements    |  |          | 28,060,683 |              |  |   | 27,943,494 | 
|                              |  |          |            |              |  |   |            | 
|                              |  |          | 41,719,097 |              |  |   | 41,601,908 | 
|                             
|                             
|                             
|                             
|Less accumulated depreciation |  |          | 3,090,498  |              |  |   | 2,730,217  | 
|                              |  |          |            |              |  |   |            | 
|Net rental properties         |  | $        | 38,628,599 |              |  | $ | 38,871,691 | 
|                              |  |          |            |              |  |   |            | 

A significant portion of the Companys rental revenue was earned from tenants
whose individual rents represented more than 10% of total rental revenue.
Specifically:

Two tenants accounted for 14.68%, and 12.01%, respectively, for the six months
ended June 30, 2001.

One tenant accounted for 12.19% for the six months ended June 30, 2000.



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##### Table of Contents



WEST COAST REALTY INVESTORS, INC.
Notes to Financial Statements
Three and Six Months Ended June 30, 2001 and 2000(Unaudited)and December 31, 2000

Note 2  Related Party Transactions

Sales commissions and wholesaling fees, representing 7% of the gross proceeds
from the sale of common shares, were paid to Associated Securities Corp.
(ASC), a member of the National Association of Securities Dealers, Inc.
(NASD) and an affiliate of the Advisor.

The Advisor has an agreement with the Company to provide advice on investments
and to administer the day-to-day operations of the Company. At June 30, 2001,
the Advisor owned 22,556 shares of the Company. Property management services
for the Companys properties are provided by West Coast Realty Management, Inc.
(WCRM), an affiliate of the Advisor.

Certain officers and directors of the Company are also officers and directors
of the Advisor and its affiliates.

During the periods presented, the Company had the following related party
transactions:

(a)In accordance with the advisory agreement, compensation earned by, or
services reimbursed or reimbursable to the advisor, consisted of the following:

|                                               |  |                  |        |                    |  |   |         | 
|---------------------------------------------- |  | ---------------- | ------ | ------------------ |  | - | ------- | 
|                                               |  | Six Months Ended |        | For the Year Ended
|                                               |  | June 30, 2001    |        | December 31, 2000 
|                                               |  |                  |        |                   
|Acquisition, disposition, and
refinancing fees |  | $                |       |                    |  | $ | 255,750 | 
|                                              
|                                              
|                                              
|                                              
|Overhead expenses                              |  |                  | 12,000 |                    |  |   | 24,000  | 
|                                               |  |                  |        |                    |  |   |         | 
|                                               |  | $                | 12,000 |                    |  | $ | 279,750 | 
|                                               |  |                  |        |                    |  |   |         | 

(b)At June 30, 2001 and December 31, 2000, the Advisor owned 22,556
shares of the issued and outstanding shares of the Company.

(c)Property management fees earned by WCRM totaled $86,532 and $104,043
for the six months ended June 30, 2001 and 2000, respectively.



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WEST COAST REALTY INVESTORS, INC.
Notes to Financial Statements
Three and Six Months Ended June 30, 2001 and 2000(Unaudited)and December 31, 2000

Note 2  Related Party Transactions (Continued)

(d)The Corporation had related party accounts payable as follows:

|                             |  |               |        |                   |  |   |        | 
|---------------------------- |  | ------------- | ------ | ----------------- |  | - | ------ | 
|                             |  | June 30, 2001 |        | December 31, 2000
|                             |  |               |        |                  
|Associated Securities Corp.  |  | $             | 11,000 |                   |  | $ | 22,500 | 
|                            
|                            
|                            
|                            
|West Coast Realty Management |  |               | 12,977 |                   |  |   | 43,767 | 
|                            
|                            
|                            
|                            
|West Coast Realty Advisors   |  |               | 6,000  |                   |  |   | 6,000  | 
|                             |  |               |        |                   |  |   |        | 
|                             |  | $             | 29,977 |                   |  | $ | 72,267 | 
|                             |  |               |        |                   |  |   |        | 

(e)Advisory fees earned by WCRA totaled $113,518 and $125,137 for the
six months ended June 30, 2001 and 2000, respectively. WCRA waived collection
of $113,518, (or 100%) and $125,137 (or 100%) respectively, of these fees which
are included in additional paid-in capital.

Note 3  Notes Payable

|                                                                                                                                                                                                                                                            |  |          |           |              |  |   |           | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | --------- | ------------ |  | - | --------- | 
|                                                                                                                                                                                                                                                            |  | June 30, |           | December 31,
|                                                                                                                                                                                                                                                            |  | 2001     |           | 2000        
|                                                                                                                                                                                                                                                            |  |          |           |             
|8.25% promissory note secured
by a Deed of Trust on the
Blockbuster property, interest
rate adjusts to the 5-year
Treasury rate plus 350 basis
points on February 1, 1999,
monthly principal and interest
payments are $4,934, balance
due February 1, 2004 |  | $        | 502,630   |              |  | $ | 511,291   | 
|                                                                                                                                                                                                                                                           
|8.25% promissory note secured
by a Deed of Trust on the
Fresno Property, monthly
principal and interest
payments are $5,244 balance
due August 1, 2003                                                                                                      |  |          | 572,782   |              |  |   | 579,083   | 
|                                                                                                                                                                                                                                                           
|8.25% promissory note secured
by a Deed of Trust on the
Riverside property, monthly
principal and interest
payments are $9,116, balance
due November 8, 2004                                                                                                |  |          | 1,121,668 |              |  |   | 1,129,406 | 
|                                                                                                                                                                                                                                                           
|9.625% promissory note secured
by a Deed of Trust on the
Safeguard property, monthly
principal and interest
payments are $24,190, balance
due February 1, 2005                                                                                              |  |          | 1,691,447 |              |  |   | 1,753,440 | 
|                                                                                                                                                                                                                                                           
|8% promissory note secured by
a Deed of Trust on the Java
City property, monthly
principal and interest
payments are $3,126, balance
due June 1, 2018                                                                                                       |  |          | 345,181   |              |  |   | 350,053   | 



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WEST COAST REALTY INVESTORS, INC.
Notes to Financial Statements
Three and Six Months Ended June 30, 2001 and 2000(Unaudited)and December 31, 2000

Note 3  Notes Payable (Continued)

|                                                                                                                                                                                                                                                                                                                                                                                                                |  |          |           |              |  |  |           | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | --------- | ------------ |  |  | --------- | 
|                                                                                                                                                                                                                                                                                                                                                                                                                |  | June 30, |           | December 31,
|                                                                                                                                                                                                                                                                                                                                                                                                                |  | 2001     |           | 2000        
|                                                                                                                                                                                                                                                                                                                                                                                                                |  |          |           |             
|Variable rate promissory note secured by a
Deed of Trust on the Tycom property,
interest rate margin is 1.9% over the 3
month LIBOR with right of conversion after
the first year (7.23% at June 30, 2001),
monthly payments of principal and interest
are $16,693, balance due August 1, 2007                                                                                                                  |  |          | 2,168,127 |              |  |  | 2,189,455 | 
|                                                                                                                                                                                                                                                                                                                                                                                                               
|8.33% promissory note secured by a Deed of
Trust on the Roseville property, monthly
principal and interest payments are
$11,510 balance due July 1, 2008                                                                                                                                                                                                                                                        |  |          | 1,394,813 |              |  |  | 1,405,518 | 
|                                                                                                                                                                                                                                                                                                                                                                                                               
|7.375% promissory note secured by a Deed
of Trust on the Corona property, monthly
principal and interest payments are $7,309
balance due June 1, 2011 (rate is
adjustable on the fourth and eighth
anniversary years of the loan, to the
weekly average of the five-year Treasury
Note yield for the seventh week prior to
the Adjustment Date plus 195 basis points,
but no less than the existing rate)       |  |          | 953,292   |              |  |  | 961,809   | 
|                                                                                                                                                                                                                                                                                                                                                                                                               
|7.375% promissory note secured by a Deed
of Trust on the Horn Road property,
monthly principal and interest payments
are $7,309, balance due June 1, 2011 (rate
is adjustable on the fourth and eighth
anniversary years of the loan, to the
weekly average of the five-year Treasury
Note yield for the seventh week prior to
the Adjustment Date plus 195 basis points,
but no less than the existing rate)   |  |          | 953,292   |              |  |  | 961,810   | 
|                                                                                                                                                                                                                                                                                                                                                                                                               
|7.5% promissory note secured by a Deed of
Trust on the Chino property, monthly
principal and interest payments are
$6,836, balance due October 1, 2010 (rate
is adjustable on the fourth and eighth
anniversary years of the loan, to the
weekly average of the five-year Treasury
Note yield for the seventh week prior to
the Adjustment Date plus 200 basis points,
but no less than the existing rate)      |  |          | 887,764   |              |  |  | 895,323   | 
|                                                                                                                                                                                                                                                                                                                                                                                                               
|7.5% promissory note secured by a Deed of
Trust on the Vacaville property, monthly
principal and interest payments are
$10,346, balance due October 1, 2010 (rate
is adjustable on the fourth and eighth
anniversary years of the loan, to the
weekly average of the five-year Treasury
Note yield for the seventh week prior to
the Adjustment Date plus 200 basis points,
but no less than the existing rate) |  |          | 1,343,657 |              |  |  | 1,355,094 | 



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##### Table of Contents



WEST COAST REALTY INVESTORS, INC.
Notes to Financial Statements
Three and Six Months Ended June 30, 2001 and 2000(Unaudited)and December 31, 2000

Note 3  Notes Payable (Continued)

|                                                                                                                                                                                                                                                                                                                                                                                                            |  |          |            |              |  |   |            | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------- | ---------- | ------------ |  | - | ---------- | 
|                                                                                                                                                                                                                                                                                                                                                                                                            |  | June 30, |            | December 31,
|                                                                                                                                                                                                                                                                                                                                                                                                            |  | 2001     |            | 2000        
|                                                                                                                                                                                                                                                                                                                                                                                                            |  |          |            |             
|7.50% promissory note secured by a
Deed of Trust on the Cerritos
property, monthly principal and
interest payments are $9,238 balance
due April 1, 2011 (rate is adjustable
on the fourth and eighth anniversary
years of the loan, to the weekly
average of the five-year Treasury
Note yield for the seventh week prior
to the Adjustment Date plus 275 basis
points, but no less than the existing
rate) |  |          | 1,209,891  |              |  |   | 1,219,732  | 
|                                                                                                                                                                                                                                                                                                                                                                                                           
|7.50% promissory note secured by a
Deed of Trust on the Ontario
property, monthly principal and
interest payments are $22,390 balance
due March 1, 2004                                                                                                                                                                                                                                                     |  |          | 2,904,309  |              |  |   | 2,927,989  | 
|                                                                                                                                                                                                                                                                                                                                                                                                           
|1.75% plus LIBOR rate (5.76125% at
June 30, 2001) promissory note
secured by a deed of trust of the
Folsom property, monthly principal is
$5,640 and interest calculated on the
outstanding balance, due September 1,
2001                                                                                                                                                                                  |  |          | 3,989,145  |              |  |   | 4,023,270  | 
|                                                                                                                                                                                                                                                                                                                                                                                                            |  |          |            |              |  |   |            | 
|Total                                                                                                                                                                                                                                                                                                                                                                                                       |  | $        | 20,037,998 |              |  | $ | 20,263,273 | 
|                                                                                                                                                                                                                                                                                                                                                                                                            |  |          |            |              |  |   |            | 

The aggregate annual future maturities for each year ending June 30 are as
follows:

|           |  |   |            | 
|---------- |  | - | ---------- | 
|2002       |  | $ | 4,397,913  | 
|          
|          
|          
|          
|2003       |  |   | 444,128    | 
|          
|          
|          
|          
|2004       |  |   | 4,188,164  | 
|          
|          
|          
|          
|2005       |  |   | 2,538,537  | 
|          
|          
|          
|          
|2006       |  |   | 236,562    | 
|          
|          
|          
|          
|Thereafter |  |   | 8,232,694  | 
|           |  |   |            | 
|Total      |  | $ | 20,037,998 | 
|           |  |   |            | 

Note 4  Net Income and Dividends Per Share

Dividends are declared and accrued based approximately upon the previous
quarters income from operations before depreciation and amortization.

Net Income Per Share for the six months ended June 30, 2001 and 2000 was
computed using the weighted average number of outstanding shares of 2,927,967
for both six month periods.



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##### Table of Contents



WEST COAST REALTY INVESTORS, INC.
Notes to Financial Statements
Three and Six Months Ended June 30, 2001 and 2000(Unaudited)and December 31, 2000

Note 4  Net Income and Dividends Per Share (continued)

Dividends declared during the first six months of 2001 and 2000 were as
follows:

|                  |  |             |           |           |  |          |       |  |  |   |           | 
|----------------- |  | ----------- | --------- | --------- |  | -------- | ----- |  |  | - | --------- | 
|                  |  | Outstanding |           | Amount    |  | Total   
|Record Date       |  | Shares      |           | Per Share |  | Dividend
|                  |  |             |           |           |  |         
|March 31, 2001    |  |             | 2,927,967 |           |  | $        | 0.15  |  |  | $ | 439,195   | 
|                 
|                 
|                 
|                 
|June 30, 2001     |  |             | 2,927,967 |           |  |          | 0.15  |  |  |   | 439,195   | 
|                  |  |             |           |           |  |          |       |  |  |   |           | 
|Total 2001        |  |             |           |           |  |          |       |  |  | $ | 878,390   | 
|                  |  |             |           |           |  |          |       |  |  |   |           | 
|December 31, 1999 |  |             | 2,927,967 |           |  | $        | 0.060 |  |  | $ | 175,678   | 
|                 
|                 
|                 
|                 
|March 31, 2000    |  |             | 2,927,967 |           |  |          | 0.175 |  |  |   | 512,394   | 
|                 
|                 
|                 
|                 
|May 23, 2000      |  |             | 2,927,967 |           |  |          | 0.650 |  |  |   | 1,903,179 | 
|                 
|                 
|                 
|                 
|June 30, 2000     |  |             | 2,927,967 |           |  |          | 1.075 |  |  |   | 3,147,565 | 
|                  |  |             |           |           |  |          |       |  |  |   |           | 
|Total 2000        |  |             |           |           |  |          |       |  |  | $ | 5,738,816 | 
|                  |  |             |           |           |  |          |       |  |  |   |           | 

Note 5  Supplemental Disclosures of Cash Flow Information

|                                                          |                                                                   |   |         |         |      |   |         |           | 
|--------------------------------------------------------- | ----------------------------------------------------------------- | - | ------- | ------- | ---- | - | ------- | --------- | 
|                                                          |                                                                   |   | 2001    |         | 2000
|                                                          |                                                                   |   |         |         |     
|Cash paid during the period for interest:                 |                                                                   | $ | 795,357 |         |      | $ | 986,916 |          
|                                                         
|                                                         
|                                                         
|                                                         
|Supplemental Disclosure of non-cash financing
activities: |                                                                   |   |         |         |      |   |         |          
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Equity contributed by an affiliate through expense
reimbursement: |   | $       | 113,518 |      |   | $       | 125,138   | 
|                                                         
|                                                         
|                                                         
|                                                         
|                                                          | Dividends declared net of dividends paid:                         |   | $       | 439,195 |      |   | $       | 3,147,565 | 

Note 6 Insurance Recovery from Lawsuit

In March 2001 the Company received $165,053 from Bankers Standard in partial
settlement of a lawsuit regarding Bankers Standards responsibility to defend
the Company in the Market Place Cinema lawsuit. See Note 7 below. Bankers
Standard is also required to pay the subsequent costs of this action. Such
legal costs had previously been expensed by the Company and as a result the
proceeds of the settlement were taken into income in March 2001.



15



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##### Table of Contents



WEST COAST REALTY INVESTORS, INC.
Notes to Financial Statements
Three and Six Months Ended June 30, 2001 and 2000(Unaudited)and December 31, 2000

Note 7 Litigation

The Company is a defendant in a lawsuit entitled JOHN LONBERG & RUTHEE GOLDKORN
V. SANBORN THEATERS, INC. A CALIFORNIA CORPORATION DOING BUSINESS AS MARKET
PLACE CINEMA; SO-CAL CINEMA, INC., A CALIFORNIA CORPORATION; AND
SALTS-TROUTMAN-KANESHIRO, INC., WEST COAST REALTY INVESTORS, INC., USDC Central
District of California, Eastern Division Case No. CV-97-6598AHM (JGx). This is
an Americans with Disabilities Act claim brought against the Market Place
Cinema located in Riverside, California. The theater is owned by the Company
and leased to and operated by Sanborn Theaters. Plaintiffs allege certain
features of the theater discriminated against them and violated state and
federal disabled access laws. Plaintiffs demand statutory damages, damages for
emotional distress, a lodestar multiplier, attorneys fees, and punitive
damages. Plaintiffs have not quantified their damages, however, it is expected
that Plaintiffs claims will exceed $300,000. The United States Department of
Justice has intervened in this suit. This case has now been stayed pending the
outcome of a similar case filed against AMC Theaters. Defendants have asked the
court to lift the stay, to take advantage of recent favorable court decisions
in other jurisdictions. If the stay is lifted, defendants will then ask the
court to dismiss all of the plaintiffs claims entirely, which would then end
this entire case.
Management cannot determine the likelihood of an unfavorable outcome or
range of potential loss, if any. The Management believes it has complied with
all applicable provisions of law and intends to vigorously defend the
allegations contained in the lawsuit. The Management believes that the lawsuit
will not have a material impact on the Companys continuing operations or
overall financial condition.

Note 8  Subsequent Events

On July 15, 2001, the Company paid dividends totaling $439,195 ($0.15 per
share), payable to shareholders of record as of June 30, 2001. This cash
distribution was based on the operations for the quarter ended June 30, 2001.



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WEST COAST REALTY INVESTORS, INC.




|        |                                                                                      
|------- | -------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Certain statements in the Management Discussion and Analysis constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (the Reform Act). Such forward-looking
statements involve known and unknown risks, uncertainties, and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or
achievements, expressed or implied by such forward-looking statements.

Introduction

West Coast Realty Investors, Inc. (the Company) was organized in October 1989
under the laws of the State of Delaware. The Company qualifies as a Real
Estate Investment Trust (REIT) for federal and state income tax purposes.
The Company is advised by West Coast Realty Advisors, Inc. (the Advisor), a
wholly owned subsidiary of Associated Financial Group, Inc. The Advisor will
oversee the investments of the Company, subject to the direction of the
Companys Board of Directors.

The Company is organized for the purpose of investing in, holding, and managing
income-producing retail or commercial properties located primarily in
California and on the West Coast of the United States. Properties have been and
will be acquired for cash or on a moderately leveraged basis. The Company
intended on holding each property for approximately seven to ten years.

The Companys principal goals are to:



|1. |  | Invest in properties which will preserve and protect capital;                                       
|-- |  | ----------------------------------------------------------------------------------------------------
|  
|2. |  | Provide shareholders with cash dividends, a portion of which will not
constitute taxable income; and
|  
|3. |  | Provide capital gains through potential appreciation of properties.                                 

The ownership and operation of any income-producing real estate is subject to
those risks inherent in all real estate investments, including national and
local economic conditions, the supply and demand for similar types of real
property, competitive marketing conditions, zoning changes, possible casualty
losses, and increases in real estate taxes, assessments, and operating
expenses, as well as others.



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WEST COAST REALTY INVESTORS, INC.

|        |                                                                                                  
|------- | -------------------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

Introduction (Continued)

In addition, the Company is subject to the usual competitive factors that are
common in real estate including new construction, changes in the economy, and
vacancy factors at other rental real estate locations.

The Company is operated by the Advisor, subject to the terms of the Amended
Advisory Agreement dated January 1, 1992. The Company has no employees, and all
administrative services are provided by the Advisor.

Results of Operations  Six months ended June 30, 2001 vs. six months ended
June 30, 2000

Operations for the six months ended June 30, 2001 represented a full six months
of rental operations for all properties except for the OPTO-22 property which
was sold on April 12, 2000 and the Fremont property which was sold on June 30,
2000. Operations for the six months ended June 30, 2000 represented a full six
months of rental operations for all properties except for the OPTO-22 property.

The net income for the six months ended June 30, 2001 of $790,444 decreased
significantly from the six months ended June 30, 2000 of $2,869,469, primarily
due to the gain on sale of the OPTO-22 and Fremont properties, both of which
were recorded in the six months ended June 30, 2000.

Rental revenue decreased for the six months ended June 30, 2001 by $366,012
(13.8%) primarily due to the sales of OPTO-22 on April 12, 2000 and the Fremont
property on June 30, 2000.

Operating expenses, property taxes, and property management fees decreased
$34,425 (10.3%) for the six months ended June 30, 2001, compared to the six
months ended June 30, 2000, primarily due to the sales of the OPTO-22 and
Fremont properties. Interest expense decreased $204,924 (20.8%) primarily due
to the payoff of the notes payable on the OPTO-22 property on April 12, 2000,
and the Fremont and Java City properties on June 30, 2000. Depreciation and
amortization expense decreased $38,326 (9.2%) because fewer properties were
owned during the six months ended June 30, 2001.

Insurance recovery from lawsuit of $165,053 resulted from the insurance
reimbursement of previously expensed legal expenses associated with the
Riverside Marketplace Cinema lawsuit.



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WEST COAST REALTY INVESTORS, INC.

|        |                                                                                                  
|------- | -------------------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations  Six month ended June 30, 2001 vs. six months ended June
30, 2000 (Continued)

The average number of shares outstanding for both the six months ended June 30,
2001 and June 30, 2000 was 2,927,967. Net income per share decreased from $.98
in 2000 to $.27 in 2001.

For the six months ended June 30, 2001, the Company generated $1,118,965 in
cash basis net income from operations before depreciation and amortization
expense of $380,056 and equity contribution by Affiliate through expense
reimbursement of $113,518. For the six months ended June 30, 2000, the Company
generated $1,258,261 in cash basis net income from operations before
depreciation and amortization expense of $418,382, equity contribution by
Affiliate through expense reimbursements of $125,137, and the combined gain
from the sales of the OPTO-22 and Fremont properties of $2,154,727.

Results of Operations  Three months ended June 30, 2001 vs. three months ended
June 30, 2000

Operations for the quarter ended June 30, 2001 represented a full three months
of rental operations for all properties except for the OPTO-22 property which
was sold April 12, 2000 and the Fremont property which was sold June 30, 2000.
Operations for the quarter ended June 30, 2000 represented a full three months
of rental operations for all properties except for the OPTO-22 property.

The net income for the quarter ended June 30, 2001 of $311,973 decreased
significantly from the quarter ended June 30, 2000 of $2,576,760, primarily
due to the gain on sale of the OPTO-22 and Fremont properties.

Rental revenue decreased for the quarter ended June 30, 2001 by $174,915
(13.6%) primarily due to the sale of OPTO-22 on April 12, 2000. Interest
income decreased $17,841 (53.7%) due to lower average balances invested in
interest earning assets during the quarter ended June 30, 2001. Proceeds from
the sale of the OPTO-22 property were invested during the quarter ended June
30, 2000 until distributed to the shareholders on May 31, 2000.

Operating expenses increased $27,541 (51.7%) for the quarter ended June 30,
2001 compared to the quarter ended June 30, 2000, primarily due to higher
repairs and maintenance costs associated with the Cerritos property, and higher
legal fees resulting from the renegotiation of leases on Cerritos and other
properties. Property taxes and



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WEST COAST REALTY INVESTORS, INC.

|        |                                                                                                  
|------- | -------------------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

Results of Operations  Three months ended June 30, 2001 vs. three months ended
June 30, 2000 (Continued)

property management fees decreased $21,581 (23.5%), and depreciation and
amortization expense decreased $17,017 (8.3%) for the quarter ended June 30,
2001, compared to the
quarter ended June 30, 2000, primarily due to the sales of the OPTO-22 and
Fremont properties. Interest expense decreased $46,489 (10.9%) primarily due to
the payoff of the notes payable on the OPTO-22 property on April 12, 2000, and
the Fremont and Java City properties on June 30, 2000. General and
administrative costs decreased $25,150 (20.1%) primarily due to lower legal and
accounting fees incurred in the three months ended June 30, 2001.

The average number of shares outstanding for both the quarter ended June 30,
2001 and June 30, 2000 was 2,927,967. Net income per share decreased from $.88
for the quarter ended June 30, 2000 to $.11 for the quarter ended June 30,
2001.

For the quarter ended June 30, 2001, the Company generated $556,350 in cash
basis net income from operations before depreciation and amortization expenses
of $187,377 and equity contribution by Affiliate through expense reimbursement
of $57,000. For the quarter ended June 30, 2000, the Company generated $678,340
in cash basis net income from operations before depreciation and amortization
expense of $204,394, equity contribution by Affiliate through expense
reimbursements of $51,913, and the combined gain from the sales of the OPTO-22
and Fremont properties of $2,154,727.

Liquidity and Capital Resources

During the six months ended June 30, 2001, the Company declared dividends
totaling $878,390 of which $439,195 was paid prior to June 30, 2001 and
$439,195 was paid subsequent to June 30, 2001. During the six months ended June
30, 2000 the Company declared dividends totaling $5,738,816, which included a
1999 Spill-Over Dividend of $175,678. Of this total $2,591,251 was paid prior
to June 30, 2000, and $3,147,565 was paid subsequent to June 30, 2000.
Dividends are determined by management based on cash flows and the liquidity
position of the Company. It is the intention of management to declare quarterly
dividends, subject to the maintenance of reasonable reserves.



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WEST COAST REALTY INVESTORS, INC.

|        |                                                                                                  
|------- | -------------------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (Continued)

Management uses cash and cash equivalents as its primary measure of the
Companys liquidity. The amount of cash that represents adequate liquidity for
a real estate investment company is dependent on several factors. Among them
are:



| | 1. |  | Relative risk of the Companys operations;                                                                    
| | -- |  | --------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Condition of the Companys properties;                                                                        
|
| | 3. |  | Stage in the Companys operating cycle (e.g., money-raising,
acquisition, operating or disposition phase); and
|
| | 4. |  | Shareholders dividends.                                                                                       

The Company is adequately liquid and management believes it has the ability to
generate sufficient cash to meet both short-term and long-term liquidity needs,
based upon the above four factors.

The first factor refers to the risk of the Companys investments. At June 30,
2001, the Companys excess funds were invested in short-term money market
funds. The Company acquires rental property either entirely for cash or with
moderate financing. Although the notes payable, which evidence such financing,
are set up on an amortization schedule allowing for the repayment of principal
over time, most of the principal on the notes is due in balloon payments that
come due in the years 2001 through 2011. The Company is aware that the balloon
payments must be satisfied either through refinancing of the loans or the sale
of the property(ies) in order to protect the interests of the Companys
shareholders. Furthermore, most of the properties tenants are nationally
known retailers or well-established businesses committed under long-term
leases.

The second factor refers to the condition of the Companys properties. The
Companys properties are in good condition without significant deferred
maintenance obligations and are leased under triple-net leases, which reduces
the Companys risk pertaining to excessive maintenance and operating costs.

The third factor refers to operating cycle. The Company was liquid at June 30,
2001 and is in the operating stage of its life cycle. Virtually all excess
funds were invested in a short-term money market fund. At quarter-end, the
Company has allocated approximately $400,000 towards reserves, $440,000 of
cash held for dividend distributions to stockholders, which was paid July 15,
2001, $200,000 of cash to be paid for current mortgage and accounts payable
commitments, $375,000 in tenant security deposits and



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WEST COAST REALTY INVESTORS, INC.

|        |                                                                                                  
|------- | -------------------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)

Liquidity and Capital Resources (Continued)

prepaid rents, and the balance of approximately $215,000, held for working
capital purposes. The Companys operations generated $1,118,965 in net
operating cash flow during the six months ended June 30, 2001 (net income from
operations before depreciation expense and equity contribution by Affiliate
through expense reimbursements). Thus, the Company is generating significant
amounts of cash flow and could withhold payment of all or a portion of
dividends, if necessary, in order to rebuild cash balances.

The fourth factor refers to distribution of dividends to shareholders.
Dividends to shareholders were made at a level consistent with the amount of
net income available after application of expenses. The Advisor is careful not
to make distributions in excess of the available income.

Inflation and changing prices have not had a material effect on the Companys
operations. Operations in the near future may be materially affected as and
when the Company acquires additional property.

Cash Flows  June 30, 2001 vs. June 30, 2000

Cash resources increased $382,165 during the six months ended June 30, 2001
compared to a $2,543,466 increase in cash resources for the six months ended
June 30, 2000. Cash provided by operating activities increased by $1,163,824
with the largest contributor being $1,284,018 in cash basis net income for the
six months ended June 30, 2001. In contrast, the six months ended June 30, 2000
provided $1,302,651 in cash from operating activities due primarily to
$1,258,261 in cash basis net income. Cash required by investing activities for
the six months ended June 30, 2001 of $117,189 was due to additions to real
estate. Cash provided by investing activities for the six months ended June 30,
2000 was the result of proceeds from the sales of the OPTO-22 and Fremont
properties. For the six months ended June 30, 2001, financing activities
required $664,470 for principal repayments of $225,275 on notes payable and
$439,195 for dividends paid. For the six months ended June 30, 2000, financing
activities required $6,758,287 resulting from the pay-off of the OPTO-22,
Fremont, and Java City property notes payable as well as principal repayments
on other notes payable totaling $4,167,036 and due to dividends paid of
$2,591,251.



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WEST COAST REALTY INVESTORS, INC.
 PART II
 O T H E R    I N F O R M A T I O N




ITEM 1. LEGAL PROCEEDINGS

The Company is a defendant in a lawsuit entitled John Lonberg; Ruthee Goldkorn
v. Sanborn Theaters, Inc.; So-Cal Cinema, Inc.; Salts, Troutman and Kaneshiro,
Inc.; West Coast Realty Investors, Inc., in the U.S. District Court for the
Central District of California. (Case #CV-97-6598AHM(JGx)

The Company was added as a defendant in the plaintiffs First Amended Complaint
filed May 7, 1998, apparently due to the Companys status as landlord for a
movie theater known as the Riverside Market Place Cinema.

The plaintiffs alleged violations of the federal Americans with Disabilities
Act and the California Unruh Civil Rights Act with respect to their movie-going
experiences, including inadequate physical accommodations for wheelchair-bound
guests and insensitive theater personnel. Sanborn is the tenant and theater
operator. Troutman is the architect who designed the theater and its
interiors.

The plaintiffs seek actual damages of $1,000 for each violation of law; three
times actual damages; and attorneys fees, expenses and costs. The plaintiffs
also seek mandatory injunctive relief requiring the defendants to make the
theater accessible to and useable by disabled individuals.

The plaintiffs have agreed to dismiss their claims under the Unruh Civil Rights
Act.

The U.S. Department of Justice, Civil Rights Division (DOJ) filed a Motion to
Intervene in the case on March 1, 1999. DOJ has sued Sanborn Theaters only and
preliminary discussions have been held between the DOJ and Sanborn. Sanborn
intends to vigorously defend against the DOJ.

Management cannot determine the likelihood of an unfavorable outcome or range
of potential loss, if any. The Company believes it has complied with all
applicable provisions of law and intends to vigorously defend the allegations
contained in the lawsuit. The Company believes that the lawsuit will not have
a material impact on the Companys continuing operations or overall financial
condition.



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WEST COAST REALTY INVESTORS, INC.
 PART II
 O T H E R    I N F O R M A T I O N (Continued)




ITEM 2. EXHIBITS AND REPORTS ON FORM 8-K



| | (a) |  | Information required under this section has been included
in the financial statements.
| | --- |  | --------------------------------------------------------------------------------------
|
| | (b) |  | Reports on Form 8-K
None                                                              
|
| |     |  | None                                                                                  



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S I G N A T U R E S

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.





|Date: August 14, 2001 | WEST COAST REALTY INVESTORS, INC.
(Registrant)
 /s/  W. THOMAS MAUDLIN JR.W. THOMAS MAUDLIN JR.
(Director, President and Principal Executive Officer)
|--------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------



|Date: August 14, 2001 | /s/  JOHN R. LINDSEY
        JOHN R. LINDSEY
(Vice President/Treasurer,
Principal Financial Officer, and
Principal Accounting Officer)
|--------------------- | --------------------------------------------------------------------------------------------------------------------------------------



25