MULTI BENEFIT REALTY FUND 87-1, 10KSB, 1999-03-29

MULTI BENEFIT REALTY FUND 87-1
10KSB, 1999-03-29
OPERATORS OF NONRESIDENTIAL BUILDINGS

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FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(D)

FORM 10-KSB

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [No Fee Required]

For the fiscal year ended December 31, 1998

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [No Fee Required]

For the transition period to

Commission file number 0-16684

MULTI-BENEFIT REALTY FUND '87-1
(Name of small business issuer in its charter)

California 94-3026785
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)

Issuer's telephone number (864) 239-1000

Securities registered under Section 12(b) of the Exchange Act:

None

Securities registered under Section 12(g) of the Exchange Act:

Units of Depositary Receipts
(Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year. $5,195,000

State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests, as of December 31, 1998. No market exists for the limited
partnership interests of the Registrant, and, therefore, no aggregate market
value can be determined.

DOCUMENTS INCORPORATED BY REFERENCE

None

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Multi-Benefit Realty Fund '87-1 (the "Partnership" or "Registrant") was
organized on September 8, 1986, as a limited partnership under the California
Revised Limited Partnership Act. ConCap Equities, Inc. ("CEI") is the general
partner of the Partnership (see additional information below). CEI (the
"General Partner") is a subsidiary of Apartment Investment and Management
Company ("AIMCO").

The Registrant is engaged in the business of operating and holding real
properties for investment. By the end of the Partnership's fiscal year 1988,
three apartment properties had been acquired. The Registrant continues to own
and operate these properties. The Partnership Agreement provides that the
Partnership is to terminate on December 31, 2036, unless terminated prior to
such date.

Commencing December 10, 1986, the Registrant offered, pursuant to a Registration
Statement filed with the Securities and Exchange Commission, $60,000,000 of
Units of Depositary Receipts (collectively, the "Units," and individually,
"Unit"). Two classes of Units ("A" Units and "B" Units, herein so called),
entitled to different rights and priorities as to cash distributions and
partnership allocations, were offered. The Units represent economic rights
attributable to the limited partnership interests in the Partnership and entitle
the holders ("Unit holders") thereof to participate in certain allocations and
distributions of the Partnership. The General Partner of the Partnership
intended that the "A" Units and "B" Units be allocated such that the "B" Units
would not exceed 25% nor be less than 20% of the total amount of the Units sold.
At the end of the current fiscal year, the "B" Units represented approximately
44% of the total amount of the Units sold. The General Partner is currently
considering several alternative procedures to conform the unit allocations more
closely to the intended investment objectives. The General Partner intends to
continue such consideration, but has not yet determined a feasible alternative.
The corporate limited partner of the Partnership was Multi-Benefit '87-1
Depositary Corporation, an affiliate of the General Partner. The corporate
limited partner served as depositary for the Units pursuant to a Depositary
Agreement entered into with the Partnership. The sale of Units closed on
September 30, 1988, with 172,436 Units sold at $100 each, or gross proceeds of
approximately $17,200,000 to the Partnership. The Partnership may repurchase or
retire any Units, at its absolute discretion, but is under no obligation to do
so. Since its initial offering, the Partnership has not received, nor are
limited partners required to make, additional capital contributions.

Upon the Partnership's formation in 1986, Consolidated Capital Equities
Corporation ("CCEC"), a Colorado corporation, was the sole general partner of
the Partnership and the corporate limited partner, a wholly-owned subsidiary of
CCEC, was the sole limited partner. In 1988, through a series of transactions,
Southmark Corporation ("Southmark") acquired a controlling interest in CCEC. In
December 1988, CCEC filed for reorganization under Chapter 11 of the United
States Bankruptcy Code. In 1990, as part of CCEC's reorganization plan, ConCap
Equities, Inc. ("CEI") acquired CCEC's general partner interest in the
Partnership and in 15 other affiliated public limited partnerships (the
"Affiliated Partnerships"), acquired the stock of the corporate limited partner,
and CEI replaced CCEC as managing general partner in all 16 partnerships. The
selection of CEI as the sole managing general partner was approved by a majority
of the Unit holders in the Partnership and of the limited partners in each of
the Affiliated Partnerships pursuant to a solicitation of the Unit holders dated
August 10, 1990. As part of this solicitation, the Unit holders also approved
an amendment to the Partnership Agreement to limit changes of control of the
Partnership. All of CEI's outstanding stock was owned by Insignia Properties
Trust("IPT"), which acquired the stock through two transactions in December
1994, and October 1995. Effective February 26, 1999, IPT was merged with and
into AIMCO (see "Transfer of Control" below). As of December 31, 1998, Insignia
Properties, L.P., owned 1,933 (2.01%) and 210 (.28%) of the outstanding "A" and
"B" Units, respectively.

During December 1997, an affiliate of the General Partner (the "Purchaser")
commenced a tender offer for limited partnership interests in the Partnership.
The Purchaser offered to purchase up to 24,000 and 23,000 of the outstanding "A"
and "B" Units, respectively, of limited partnership interest in the Partnership
at $50 and $25 per Unit, respectively, net to the seller in cash. As a result
of the tender offer, the Purchaser acquired 21,457 (22.285%) and 13,822
(18.392%) of the outstanding "A" and "B" Units, respectively.

A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operation" included in "Item 6" of this Form
10-KSB.

The Registrant has no employees. Property management and administrative
services are provided by the General Partner and by agents retained by the
General Partner. The property manager is responsible for the day-to-day
management of each property.

The business in which the Partnership is engaged is highly competitive. There
are other residential properties within the market area of the Partnership's
properties. The number and quality of competitive properties, including those
which may be managed by an affiliate of the General Partner, in such market area
could have a material effect on the rental market for the apartments at the
Partnership's properties and the rents that may be charged for such apartments.
While the General Partner and its affiliates are a significant factor in the
United States in the apartment industry, competition for apartments is local.
In addition, various limited partnerships have been formed by the General
Partner and/or affiliates to engage in business which may be competitive with
the Partnership.

Both the income and expenses of operating the properties owned by the
Partnership are subject to factors outside of the Partnership's control, such as
an oversupply of similar properties resulting from overbuilding, increases in
unemployment or population shifts, reduced availability of permanent mortgage
financing, changes in zoning laws, or changes in patterns or needs of users. In
addition, there are risks inherent in owning and operating residential
properties because such properties are susceptible to the impact of economic and
other conditions outside of the control of the Partnership.

There have been, and it is possible there may be other, Federal, state and local
legislation and regulations enacted relating to the protection of the
environment. The Partnership is unable to predict the extent, if any, to which
such new legislation or regulations might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.

The Partnership monitors its properties for evidence of pollutants, toxins and
other dangerous substances, including the presence of asbestos. In certain
cases environmental testing has been performed, which resulted in no material
adverse conditions or liabilities. In no case has the Partnership received
notice that it is a potentially responsible party with respect to an
environmental clean up site.

Transfer of Control

Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and IPT merged into AIMCO, a
publicly traded real estate investment trust, with AIMCO being the surviving
corporation (the "Insignia Merger"). As a result, AIMCO ultimately acquired a
100% ownership interest in IPT, the sole shareholder of the General Partner.
The General Partner does not believe that this transaction will have a material
effect on the affairs and operations of the Partnership.

ITEM 2. DESCRIPTION OF PROPERTIES

The following table sets forth the Partnership's investments in properties:

Date of
Property Purchase Type of Ownership Use

Carlin Manor Apartments 11/87 Fee ownership, subject Apartment
Columbus, Ohio to first mortgage. 278 units

Hunt Club Apartments 05/87 Fee ownership, subject Apartment
Indianapolis, Indiana to first mortgage. (1) 200 units

Shadow Brook Apartments 05/87 Fee ownership, subject Apartment
West Valley City, Utah to first mortgage. 300 units

(1) The property is held by a limited partnership in which the Partnership owns
a 99% interest.

SCHEDULE OF PROPERTIES:

Set forth below for each of the Partnership's properties is the gross carrying
value, accumulated depreciation, depreciable life, method of depreciation and
Federal tax basis.

Gross

Carrying Accumulated Federal

Property Value Depreciation Rate Method Tax Basis

(in thousands) (in thousands)

Carlin Manor Apartments $ 6,900 $ 3,782 5-30 SL $ 5,319

Hunt Club Apartments 7,005 3,801 5-30 SL 4,060

Shadow Brook Apartments 10,506 4,351 5-30 SL 6,256

Total $24,411 $11,934 $ 15,635

See "Note A" to the consolidated financial statements in "Item 7. Financial
Statements" for a further description of the Partnership's depreciation policy.

SCHEDULE OF PROPERTY INDEBTEDNESS:

The following table sets forth certain information relating to the loans
encumbering the Registrant's properties.

Principal Principal

Balance At Stated Balance

December 31, Interest Period Maturity Due At

Property 1998 Rate Amortized Date Maturity (2)

(in thousands) (in thousands)

Carlin Manor

1st Mortgage $ 2,500 7.33% (1) 11/03 $ 2,500

Hunt Club

1st Mortgage 3,714 8.30% 84 mo. 10/00 3,575

Shadow Brook

1st Mortgage 6,000 7.33% (1) 11/03 6,000

$12,214 $12,075

(1) Payments consist of interest only.
(2) See "Item 7. Financial Statements - Note C" for information with respect to
the Partnership's ability to prepay these loans and other specific details
about the loans.

SCHEDULE OF RENTAL RATES AND OCCUPANCY:

Average annual rental rates and occupancy for 1998 and 1997 for each property:

Average Annual Average Annual

Rental Rates Occupancy

1998 1997 1998 1997

Carlin Manor $5,847/unit $5,685/unit 92% 89%

Hunt Club 7,504/unit 7,267/unit 95% 93%

Shadow Brook 7,156/unit 6,933/unit 96% 96%

As noted under "Item 1. Description of Business", the real estate industry is
highly competitive. All of the properties are subject to competition from other
residential apartment complexes in the area. The General Partner believes that
all of the properties are adequately insured. Each property is an apartment
complex which leases units for lease terms of one year or less. No residential
tenant leases 10% or more of the available rental space. All of the properties
are in good physical condition, subject to normal depreciation and deterioration
as is typical for assets of this type and age.

SCHEDULE OF REAL ESTATE TAXES AND RATES:

Real estate taxes and rates in 1998 for each property are as follows:

1998 1998

Billing Rate

(in thousands)

Carlin Manor $110 5.6%

Hunt Club 155 9.6%

Shadow Brook 78 1.3%

CAPITAL IMPROVEMENTS:

During 1998, the Partnership completed approximately $239,000 of capital
improvements at Carlin Manor consisting primarily of floor replacement and
building improvements. These improvements were funded from operating cash flow.
Based on a report received from an independent third party consultant analyzing
necessary exterior improvements and estimates made by the General Partner on
interior improvements, it is estimated that the property requires approximately
$303,000 of capital improvements over the near-term. Capital improvements
budgeted for 1999 include, but are not limited to, interior and exterior
building improvements, which are expected to cost approximately $437,000.

In 1998, the Partnership completed approximately $94,000 of capital improvements
and replacements at Hunt Club consisting of floor covering and appliances. These
improvements were funded from operating cash flow and replacement reserves.
Based on a report received from an independent third party consultant analyzing
necessary exterior improvements and estimates made by the General Partner on
interior improvements, it is estimated that the property requires approximately
$303,000 of capital improvements over the near-term. Capital improvements
budgeted for 1999 include, but are not limited to, landscaping, carpet
replacement, plumbing improvements, and other structural improvements, which are
expected to cost approximately $386,000.

During 1998, the Partnership also completed approximately $174,000 of capital
improvements and replacements at Shadow Brook consisting of floor covering,
building improvements, and roof replacement. These improvements were funded
from operating cash flow and replacement reserves. Based on a report received
from an independent third party consultant analyzing necessary exterior
improvements and estimates made by the General Partner on interior improvements,
it is estimated that the property requires approximately $303,000 of capital
improvements over the near-term. Capital improvements budgeted for 1999 include,
but are not limited to, roof replacement, major carpet replacement, landscaping,
parking lot repairs and building improvements, which are expected to cost
approximately $260,000.

The capital improvements planned for 1999 at the Partnership's properties will
be made only to the extent of cash available from operations and Partnership
reserves.

ITEM 3. LEGAL PROCEEDINGS

In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the General Partner and several of their affiliated
partnerships and corporate entities. The complaint purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia and entities which were, at
the time, affiliates of Insignia ("Insignia Affiliates") of interests in certain
general partner entities, past tender offers by Insignia Affiliates as well as a
recently announced agreement between Insignia and AIMCO. The complaint seeks
monetary damages and equitable relief, including judicial dissolution of the
Partnership. On June 25, 1998, the General Partner filed a motion seeking
dismissal of the action. In lieu of responding to the motion, the plaintiffs
have filed an amended complaint. The General Partner filed demurrers to the
amended complaint which were heard during February 1999. No ruling on such
demurrers has been received. The General Partner does not anticipate that costs
associated with this case, if any, will be material to the Partnership's
overall operations.

On July 30, 1998, certain entities claiming to own limited partnership interests
in certain limited partnerships whose general partners were, at the time,
affiliates of Insignia filed a complaint entitled Everest Properties, LLC, et.
al. v. Insignia Financial Group, Inc., et. al. in the Superior Court of the
State of California, County of Los Angeles. The action involves 44 real estate
limited partnerships (including the Partnership) in which the plaintiffs
allegedly own interests and which Insignia Affiliates allegedly manage or
control (the "Subject Partnerships"). This case was settled on March 3, 1999.
The Partnership is responsible for a portion of the settlement costs. This
expense will not have a material effect on the Partnership's net income.

The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF PARTNERS

During the quarter ended December 31, 1998, no matter was submitted to a vote of
the Unit holders through the solicitation of proxies or otherwise.

PART II

ITEM 5.MARKET FOR THE REGISTRANT'S UNITS OF DEPOSITORY RECEIPTS AND RELATED
SECURITY HOLDER MATTERS

(A) No established public trading market has developed for the Units and it is
not anticipated that such a market will develop in the future.

(B) Title of Class: Number of Record Unit holders:

Units of Depositary Receipts
A Units 659 as of December 31, 1998
B Units 760 as of December 31, 1998

The Partnership offered and sold 172,436 "A" and "B" Units. At December
31, 1998, the Partnership had 96,284 "A" Units and 75,152 "B" Units
outstanding. Affiliates of the General Partner held 28,573 "A" Units
(29.68%) and 18,440 "B" Units (24.54%) at December 31, 1998.

(C) Total cash distributed was approximately $594,000 ($6.11 per Limited
Partnership "A" Units) and $1,377,000 ($14.16 per Limited Partnership "A"
Units) for the years ended December 31, 1998 and 1997, respectively. All
of the distributions in 1998 and 1997 were generated from operations.
Future distributions will depend on the levels of net cash generated from
operations, refinancings, property sales and the availability of cash
reserves. The Partnership's distribution policy will be reviewed on a
quarterly basis. There can be no assurance, however, that the Partnership
will generate sufficient funds from operations after required capital
expenditures to permit further distributions to its partners in 1999 or
subsequent periods.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The matters discussed in this Form 10-KSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the disclosure
contained in this Form 10-KSB and the other filings with the Securities and
Exchange Commission made by the Registrant from time to time. The discussion of
the Registrant's business and results of operations, including forward-looking
statements pertaining to such matters, does not take into account the effects of
any changes to the Registrant's business and results of operation. Accordingly,
actual results could differ materially from those projected in the forward-
looking statements as a result of a number of factors, including those
identified herein.

This item should be read in conjunction with the consolidated financial
statements and other items contained elsewhere in this report.

Results of Operations

The Partnership had net income of approximately $246,000 for the year ended
December 31, 1998 as compared to net income of approximately $15,000 for the
year ended December 31, 1997. The increase in net income for the year ended
December 31, 1998, is primarily attributable to an increase in revenues and to a
lesser extent a decrease in total expenses. The increase in revenues is
attributable to an increase in rental income due to increased average annual
rental rates at all of the Partnership's investment properties and improved
occupancy at two of the Partnership's three investment properties. Also
contributing to the increase in net income are decreases in general and
administrative expenses and in losses recognized on disposals in 1998. The
decrease in general and administrative expenses is a result of lower management
fees related to decreased distributions in 1998. Included in general and
administrative expenses are reimbursements to the General Partner allowed under
the Partnership Agreement associated with its management of the Partnership. In
addition, costs associated with the quarterly and annual communications with
investors and regulatory agencies and the annual audit required by the
Partnership Agreement are also included. The decrease in losses recognized on
property disposals is the result of less roof replacement work necessary in
1998. Partially offsetting the increase in net income is an increase in
depreciation expense. The increase in depreciation expense is primarily the
result of a full year of depreciation taken on the approximately $569,000 of
capital improvements added during 1997.

As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expense. As part of
this plan, the General Partner attempts to protect the Partnership from the
burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.

Liquidity and Capital Resources

At December 31, 1998, the Partnership had cash and cash equivalents of
approximately $1,291,000 as compared to approximately $1,139,000 at December 31,
1997. The net increase in cash and cash equivalents for the year ended December
31, 1998 is due to $1,317,000 of cash provided by operating activities, which
was partially offset by $500,000 and $665,000 of cash used in investing and
financing activities, respectively. Cash used in investing activities primarily
consisted of capital improvements. Cash used in financing activities consisted
primarily of principal payments made on the mortgage encumbering the Hunt Club
property and, to a lesser extent, distributions to partners. The Partnership
invests its working capital reserves in money market accounts.

The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Partnership and to comply with Federal,
state and local legal and regulatory requirements. The Partnership has budgeted
approximately $1,083,000 in capital improvements for its properties in 1999.
Budgeted capital improvements at Shadow Brook include, but are not limited to,
roof replacement, major carpet replacement, landscaping, parking lot repairs and
building improvements. Budgeted capital improvements at Carlin Manor include,
but are not limited to, interior and exterior building improvements. Budgeted
capital improvements at Hunt Club include, but are not limited to, landscaping,
carpet replacement, plumbing improvements, and other structural improvements.
The capital expenditures will be incurred only if cash is available from
operations or from Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Partnership's distributable cash flow,
if any, may be adversely affected at least in the short term.

The Partnership's assets are currently thought to be sufficient for any near-
term needs (exclusive of capital improvements) of the Partnership. The mortgage
indebtedness of approximately $12,214,000 is amortized over varying periods and
requires one balloon payment in October 2000 and two in November 2003. The
General Partner will attempt to refinance such indebtedness and/or sell the
properties prior to such maturity dates. If the properties cannot be refinanced
or sold for a sufficient amount, the Partnership will risk losing such
properties through foreclosure. During the years ended December 31, 1998 and
1997, distributions of cash from operations of approximately $594,000 and
$1,377,000, respectively, were paid to the partners. The Partnership's
distribution policy will be reviewed on a quarterly basis. There can be no
assurance, however, that the Partnership will generate sufficient funds from
operations after required capital expenditures to permit further distributions
to its partners in 1999 or subsequent periods.

Year 2000 Compliance

General Description of the Year 2000 Issue and the Nature and Effects of the
Year 2000 on Information Technology (IT) and Non-IT Systems

The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. The Partnership
is dependent upon the General Partner and its affiliates for management
and administrative services ("Managing Agent"). Any of the computer programs or
hardware that have date-sensitive software or embedded chips may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.

Over the past two years, the Managing Agent has determined that it will be
required to modify or replace significant portions of its software and certain
hardware so that those systems will properly utilize dates beyond December 31,
1999. The Managing Agent presently believes that with modifications or
replacements of existing software and certain hardware, the Year 2000 issue can
be mitigated. However, if such modifications and replacements are not made or
not completed in time, the Year 2000 issue could have a material impact on the
operations of the Partnership.

The Managing Agent's plan to resolve Year 2000 issues involves four Phases:
assessment, remediation, testing, and implementation. To date, the Managing
Agent has fully completed its assessment of all the information systems that
could be significantly affected by the Year 2000, and has begun the remediation,
testing and implementation phases on both hardware and software systems.
Assessments are continuing in regards to embedded systems. The status of each
is detailed below.

Status of Progress in Becoming Year 2000 Compliant, Including Timetable for
Completion of Each Remaining Phase

Computer Hardware:

During 1997 and 1998, the Managing Agent identified all of the computer systems
at risk and formulated a plan to repair or replace each of the affected systems.
In August 1998, the mainframe system used by the Managing Agent became fully
functional. In addition to the mainframe, PC-based network servers and routers
and desktop PCs were analyzed for compliance. The Managing Agent has begun to
replace each of the non-compliant network connections and desktop PCs and, as of
December 31, 1998, had completed approximately 75% of this effort.

The total cost to the Managing Agent to replace the PC-based network servers,
routers and desktop PCs is expected to be approximately $1.5 million of which
$1.3 million has been incurred to date. The remaining network connections and
desktop PCs are expected to be upgraded to Year 2000 compliant systems by March
31, 1999.

Computer software:

The Managing Agent utilizes a combination of off-the-shelf, commercially
available software programs as well as custom-written programs that are designed
to fit specific needs. Both of these types of programs were studied, and
implementation plans written and executed with the intent of repairing or
replacing any non-compliant software programs.

During 1998, the Managing Agent began converting the existing property
management and rent collection systems to its management properties Year 2000
compliant systems. The estimated additional costs to convert such systems at
all properties, is $200,000, and the implementation and the testing process is
expected to be completed by March 31, 1999.

The final software area is the office software and server operating systems.
The Managing Agent has upgraded all non-compliant office software systems on
each PC and has upgraded 80% of the server operating systems. The remaining
server operating systems are planned to be upgraded to be Year 2000 compliant by
March 31, 1999.

Operating Equipment:

The Managing Agent has operating equipment, primarily at the property sites,
which needed to be evaluated for Year 2000 compliance. In September 1997, the
Managing Agent began taking a census and inventory of embedded systems
(including those devices that use time to control systems and machines at
specific properties, for example elevators, heating, ventilating, and air
conditioning systems, security and alarm systems, etc.).

The Managing Agent has chosen to focus its attention mainly upon security
systems, elevators, heating, ventilating and air conditioning systems, telephone
systems and switches, and sprinkler systems. While this area is the most
difficult to fully research adequately, management has not yet found any major
non-compliance issues that put the Managing Agent at risk financially or
operationally. The Managing Agent intends to have a third-party conduct an
audit of these systems and report their findings by March 31, 1999.

Any of the above operating equipment that has been found to be non-compliant to
date has been replaced or repaired. To date, these have consisted only of
security systems and phone systems. As of December 31, 1998 the Managing Agent
has evaluated approximately 86% of the operating equipment for the Year 2000
compliance.

The total cost incurred for all properties managed by the Managing Agent as of
December 31, 1998 to replace or repair the operating equipment was approximately
$400,000. The Managing Agent estimates the cost to replace or repair any
remaining operating equipment is approximately $325,000, which is expected to be
completed by April 30, 1999.

The Managing Agent continues to have "awareness campaigns" throughout the
organization designed to raise awareness and report any possible compliance
issues regarding operating equipment within our enterprise.

Nature and Level of Importance of Third Parties and Their Exposure to the Year
2000

The Managing Agent continues to conduct surveys of its banking and other vendor
relationships to assess risks regarding their Year 2000 readiness. The Managing
Agent has banking relationships with three major financial institutions, all of
which have indicated their compliance efforts will be complete before May 1999.
The Managing Agent has updated data transmission standards with two of the three
financial institutions. The Managing Agent's contingency plan in this regard is
to move accounts from any institution that cannot be certified Year 2000
compliant by June 1, 1999.

The Partnership does not rely heavily on any single vendor for goods and
services, and does not have significant suppliers and subcontractors who share
information systems (external agent). To date the Partnership is not aware of
any external agent with a Year 2000 compliance issue that would materially
impact the Partnership's results of operations, liquidity, or capital resources.
However, the Partnership has no means of ensuring that external agents will be
Year 2000 compliant.

The Managing Agent does not believe that the inability of external agents to
complete their Year 2000 remediation process in a timely manner will have a
material impact on the financial position or results of operations of the
Partnership. However, the effect of non-compliance by external agents is not
readily determinable.

Costs to Address Year 2000

The total cost of the Year 2000 project to the Managing Agent is estimated at
$3.5 million and is being funded from operating cash flows. To date, the
Managing Agent has incurred approximately $2.8 million ($0.6 million expensed
and $2.2 million capitalized for new systems and equipment) related to all
phases of the Year 2000 project. Of the total remaining project costs,
approximately $0.5 million is attributable to the purchase of new software and
operating equipment, which will be capitalized. The remaining $0.2 million
relates to repair of hardware and software and will be expensed as incurred.
The Partnership's portion of these costs are not material.

Risks Associated with the Year 2000

The Managing Agent believes it has an effective program in place to resolve the
Year 2000 issue in a timely manner. As noted above, the Managing Agent has not
yet completed all necessary phases of the Year 2000 program. In the event that
the Managing Agent does not complete any additional phases, certain worst case
scenarios could occur. The worst case scenarios could include elevators,
security and heating, ventilating and air conditioning systems that read
incorrect dates and operate with incorrect schedules (e.g., elevators will
operate on Monday as if it were Sunday). Although such a change would be
annoying to residents, it is not business critical.

In addition, disruptions in the economy generally resulting from Year 2000
issues could also adversely affect the Partnership. The Partnership could be
subject to litigation for, among other things, computer system failures,
equipment shutdowns or failure to properly date business records. The amount of
potential liability and lost revenue cannot be reasonably estimated at this
time.

Contingency Plans Associated with the Year 2000

The Managing Agent has contingency plans for certain critical applications and
is working on such plans for others. These contingency plans involve, among
other actions, manual workarounds and selecting new relationships for such
activities as banking relationships and elevator operating systems.

ITEM 7. FINANCIAL STATEMENTS

MULTI-BENEFIT REALTY FUND '87-1

LIST OF FINANCIAL STATEMENTS

Report of Ernst & Young LLP, Independent Auditors

Consolidated Balance Sheet - December 31, 1998

Consolidated Statements of Operations - Years ended December 31, 1998 and 1997

Consolidated Statements of Changes in Partners' Capital (Deficit) - Years ended
December 31, 1998 and 1997

Consolidated Statements of Cash Flows - Years ended December 31, 1998 and 1997

Notes to Consolidated Financial Statements

Report of Ernst & Young LLP, Independent Auditors

The Partners
Multi-Benefit Realty Fund '87-1

We have audited the accompanying consolidated balance sheet of Multi-Benefit
Realty Fund '87-1 as of December 31, 1998, and the related consolidated
statements of operations, changes in partners' capital (deficit) and cash flows
for each of the two years in the period ended December 31, 1998. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Multi-Benefit
Realty Fund '87-1 at December 31, 1998, and the consolidated results of its
operations and its cash flows for each of the two years in the period ended
December 31, 1998, in conformity with generally accepted accounting principles.

/s/ERNST & YOUNG LLP

Greenville, South Carolina
March 3, 1999

MULTI-BENEFIT REALTY FUND '87-1

CONSOLIDATED BALANCE SHEET
(in thousands, except unit data)

December 31, 1998

Assets

Cash and cash equivalents $ 1,291

Receivables and deposits 317

Restricted escrows 365

Other assets 234

Investment properties (Notes A, C and G):

Land $ 1,742

Buildings and related personal property 22,669

24,411

Less accumulated depreciation (11,934) 12,477

$ 14,684

Liabilities and Partners' Capital (Deficit)

Liabilities

Accounts payable $ 79

Tenant security deposit liabilities 111

Accrued property taxes 275

Other liabilities 239

Mortgage notes payable (Note C) 12,214

Partners' Capital (Deficit)

General Partner $ (136)

Limited Partner "A" Unit holders -

96,284 units issued and outstanding (2,044)

Limited Partner "B" Unit holders -

75,152 units issued and outstanding 3,946 1,766

$ 14,684

See Accompanying Notes to Consolidated Financial Statements

MULTI-BENEFIT REALTY FUND '87-1

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)

Years Ended December 31,

1998 1997

Revenues:

Rental income $ 4,885 $ 4,693

Other income 310 315

Total revenues 5,195 5,008

Expenses:

Operating 2,296 2,272

General and administrative 248 275

Depreciation 1,037 984

Interest 995 1,003

Property taxes 350 353

Loss on disposal of property 23 106

Total expenses 4,949 4,993

Net income $ 246 $ 15

Net income allocated to general partner (1%) $ 2 $ --

Net income allocated to limited partners (99%) 244 15

$ 246 $ 15

Net income per limited partnership "A" and "B" units $ 1.42 $ .09

Distributions per limited partnership "A" units $ 6.11 $ 14.16

See Accompanying Notes to Consolidated Financial Statements

MULTI-BENEFIT REALTY FUND '87-1

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(in thousands, except unit data)

Total

Partners'

General Limited Partners Capital

Partner "A" Units "B" Units (Deficit)

Original capital contributions $ 1 $ 9,706 $ 7,538 $ 17,245

Limited partnership units at

December 31, 1998 and

December 31, 1997 -- 96,284 75,152 171,436

Partners' (deficit) capital at

December 31, 1996 $ (118) $ (238) $ 3,832 $ 3,476

Distributions to partners (14) (1,363) -- (1,377)

Net income for the year ended

December 31, 1997 -- 8 7 15

Partners' (deficit) capital at

December 31, 1997 (132) (1,593) 3,839 2,114

Distributions to partners (6) (588) -- (594)

Net income for the year ended

December 31, 1998 2 137 107 246

Partners' (deficit) capital at

December 31, 1998 $ (136) $(2,044) $ 3,946 $ 1,766

See Accompanying Notes to Consolidated Financial Statements

MULTI-BENEFIT REALTY FUND '87-1

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Years Ended December 31,

1998 1997

Cash flows from operating activities:

Net income $ 246 $ 15

Adjustments to reconcile net income to

net cash provided by operating activities:

Depreciation 1,037 984

Amortization of loan costs 61 63

Loss on disposal of property 23 106

Change in accounts:

Receivables and deposits (50) 128

Other assets 13 (1)

Accounts payable (26) (59)

Tenant security deposit liabilities (7) (22)

Accrued property taxes 4 7

Other liabilities 16 5

Net cash provided by operating activities 1,317 1,226

Cash flows from investing activities:

Property improvements and replacements (507) (569)

Net withdrawals from restricted escrows 7 65

Net cash used in investing activities (500) (504)

Cash flows from financing activities:

Loan costs paid -- (1)

Payments on mortgage notes payable (71) (65)

Distributions to partners (594) (1,377)

Net cash used in financing activities (665) (1,443)

Net increase (decrease) in cash and cash equivalents 152 (721)

Cash and cash equivalents at beginning of period 1,139 1,860

Cash and cash equivalents at end of period $ 1,291 $ 1,139

Supplemental disclosure of cash flow information:

Cash paid for interest $ 935 $ 938

See Accompanying Notes to Consolidated Financial Statements

MULTI-BENEFIT REALTY FUND '87-1

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998

NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization: Multi-Benefit Realty Fund '87-1 (the "Partnership") was organized
as a limited partnership under the laws of the State of California pursuant to a
Certificate and Agreement of Limited Partnership filed September 8, 1986. The
Partnership commenced operations on February 27, 1987, the date on which impound
requirements were met. The Partnership operates three apartment properties
located in the Mid-west and West. ConCap Equities, Inc. ("CEI" or the "General
Partner") is a subsidiary of Apartment Investment and Management Company
("AIMCO") (see "Note B - Transfer of Control"). The director and officers of
the General Partner also serve as executive officers of AIMCO. The Partnership
Agreement provides that the Partnership is to terminate on December 31, 2036,
unless terminated prior to such date.

Upon the Partnership's formation in 1986, Consolidated Capital Equities
Corporation ("CCEC"), a Colorado corporation, was the sole general partner of
the Partnership and the Corporate Limited Partner, a wholly-owned subsidiary of
CCEC, was the sole limited partner. In 1988, through a series of transactions,
Southmark Corporation ("Southmark") acquired a controlling interest in CCEC. In
December 1988, CCEC filed for reorganization under Chapter 11 of the United
States Bankruptcy Code. In 1990, as part of CCEC's reorganization plan, ConCap
Equities, Inc. ("CEI"), acquired CCEC's general partner interest in the
Partnership and in 15 other affiliated public limited partnerships (the
"Affiliated Partnerships"), acquired the stock of the Corporate Limited Partner,
and CEI replaced CCEC as managing general partner in all 16 partnerships. The
selection of CEI as the sole managing general partner was approved by a majority
of the Unit holders in the Partnership and of the limited partners in each of
the Affiliated Partnerships pursuant to a solicitation of the Unit holders dated
August 10, 1990. As part of this solicitation, the Unit holders also approved
an amendment to the Partnership Agreement to limit changes of control of the
Partnership. All of CEI's outstanding stock is owned by Insignia Properties
Trust, which acquired the stock through two transactions in December 1994 and
October 1995. At December 31, 1998, affiliates of the General Partner owned
28,573 "A" Units and 18,400 "B" Units.

Principles of Consolidation: The consolidated financial statements of the
Partnership include its 99% limited partnership interest in Hunt Club
Associates, Ltd. The Partnership may remove the General Partner of Hunt Club
Associates, Ltd.; therefore, the consolidated partnership is controlled and
consolidated by the Partnership. All significant interpartnership balances have
been eliminated.

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 amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Partners' Capital (Deficit): The Partnership has issued two classes of Units of
Depositary Receipts ("Units"), "A" Units and "B" Units. The two classes of
units are entitled to different rights and priorities as to cash distributions
and partnership allocations. The Units represent economic rights attributable
to the limited partnership interests in the Partnership and entitle the holders
thereof ("Unit holders") to participate in certain allocations and distributions
of the Partnership.

The Partnership Agreement("Agreement") provides for the allocation of net income
and net losses from operations for both financial and tax reporting purposes as
follows: net profits are first allocated in the reverse order of any net losses
then are allocated 99% to the holders of "A" Units until they have been
allocated income equal to their priority return, and 1% to the General Partner.
The priority return represents 9% per annum return on invested capital for the
Partnership's first fiscal year, 9.5% for the second year and 10% per annum
thereafter. Additional net profits are allocated 1% to the General Partner and
99% to the Unit holders. Net losses are allocated 1% to the General Partner and
99% to the Unit holders until their capital accounts are depleted. Additional
net losses are allocated to the General Partner. Net income per limited
partnership unit for both 1998 and 1997 was computed as 99% of net income
divided by 171,436 units outstanding.

Distributable cash from operations is allocated 1% to the General Partner and
99% to the Unit holders with holders of "A" Units first receiving their priority
return, then the balance is split equally between holders of "A" Units and "B"
Units. The General Partner receives 1% of surplus funds and holders of "A"
Units will receive their priority return, then both classes of Unit holders will
receive a return of their invested capital. Any remainder will be allocated 10%
to holders of "A" Units and 90% to holders of "B" Units.

Cash and Cash Equivalents: Includes cash on hand and in banks, demand deposits,
money market funds and certificates of deposit with original maturities less
than 90 days. At certain times, the amount of cash deposited at a bank may
exceed the limit on insured deposits.

Tenant Security Deposits: The Partnership requires security deposits from
lessees for the duration of the lease and such deposits are included in
receivables and deposits. The security deposits are refunded when the tenant
vacates, provided the tenant has not damaged the space and is current on its
rental payments.

Escrows for Taxes: Escrows for Hunt Club are held by the mortgagor. Escrows
for Carlin Manor and Shadow Brook are held by the Partnership. All escrowed
funds are designated for the payment of real estate taxes and insurance. These
escrows totaling approximately $202,000 are included in receivables and
deposits.

Restricted Escrows: In relation to the mortgages at all three properties, the
mortgage lenders have required a "replacement reserve" for certain capital
improvements. At December 31, 1998, the balance was approximately $365,000.

Investment Properties: Investment properties consist of three apartment
complexes and are stated at cost. Acquisition fees are capitalized as a cost of
real estate. The Partnership records impairment losses on long-lived assets
used in operations when events and circumstances indicate that the assets might
be impaired and the undiscounted cash flows estimated to be generated by those
assets are less than the carrying amounts of those assets. For 1998 and 1997,
no adjustments for impairment of value were recorded.

Depreciation: Depreciation is provided by the straight-line method over the
estimated lives of the apartment properties and related personal property. For
Federal income tax purposes, the modified accelerated cost recovery method is
used for depreciation of (1) real property additions over 27 1/2 years and (2)
personal property additions over 5-15 years.

Loan Costs: Loan costs of approximately $404,000 less accumulated amortization
of approximately $182,000 are included in other assets and are being amortized
on a straight-line basis over the lives of the loans. These loan costs include
an additional $1,000 paid in 1997 in connection with the 1996 financing of the
debt for Carlin Manor and Shadow Brook.

Leases: The Partnership generally leases apartment units for twelve-month terms
or less. The Partnership recognizes income as earned on its leases. In
addition, the General Partner's policy is to offer rental concessions during
particularly slow months or in response to heavy competition from other similar
complexes in the area. Concessions are charged against rental income as
incurred.

Segment Reporting: In June 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards ("SFAS") No. 131, "Disclosure
about Segments of an Enterprise and Related Information" ("Statement 131"),
which is effective for years beginning after December 15, 1997. Statement 131
established standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports. It also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
See "Note I" for required disclosure.

Advertising: The Partnership expenses the costs of advertising as incurred.
Advertising expense, included in operating expenses, was approximately $108,000
and $98,000 for the years ended December 31, 1998 and 1997, respectively.

Fair Value of Financial Instruments: The Partnership believes that the carrying
amount of its financial instruments (except for long term debt) approximates
their fair value due to the short term maturity of these instruments. The fair
value of the Partnership's long term debt, after discounting the scheduled loan
payments at an estimated borrowing rate currently available to the Partnership,
approximates its carrying balance.

Reclassifications: Certain reclassifications have been made to the 1997
information to conform to the 1998 presentation.

NOTE B - TRANSFER OF CONTROL

NOTE C - MORTGAGE NOTES PAYABLE

The principle terms of mortgage notes payable are as follows:

Principal Monthly Principal

Balance At Payment Stated Balance

December 31, Including Interest Maturity Due At

Property 1998 Interest Rate Date Maturity

(in thousands) (in thousands)

Carlin Manor

1st mortgage $ 2,500 $ 15 7.33% 11/01/03 $ 2,500

Hunt Club

1st mortgage 3,714 32 8.30% 10/01/00 3,575

Shadow Brook

1st mortgage 6,000 37 7.33% 11/01/03 6,000

Totals $12,214 $ 84 $12,075

The mortgage notes payable are non-recourse and are secured by pledge of all of
the Partnership's apartment properties and by pledge of revenues from the
apartment properties. Certain of the notes require prepayment penalties if
repaid prior to maturity and prohibit resale of the properties subject to
existing indebtedness. Further, the properties may not be sold subject to
existing indebtedness.

Scheduled principal payments of mortgage notes payable subsequent to December
31, 1998, are as follows (in thousands):

1999 $ 77

2000 3,637

2001 --

2002 --

2003 8,500

$12,214

NOTE D - INCOME TAXES

The Partnership has received a ruling from the Internal Revenue Service that it
will be classified as a partnership for Federal income tax purposes. Taxable
income or loss of the Partnership is reported in the income tax returns of its
partners. Accordingly, no provision for income taxes is made in the financial
statements of the Partnership.

The following is a reconciliation of reported net income and Federal taxable
income (in thousands, except per unit data):

1998 1997

Net income as reported $ 246 $ 15

Add (deduct):

Write-downs of fixed asset values 23 106

Depreciation differences 41 64

Change in prepaid rental 27 49

Other 40 3

Federal taxable income $ 377 $ 237

Federal taxable income per limited

partnership unit $ 2.18 $ 1.37

The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities:

Net assets as reported $1,766

Land and buildings 2,277

Accumulated depreciation 880

Syndication fees 1,975

Other 163

Net assets - tax basis $7,061

NOTE E - RELATED PARTY TRANSACTIONS

The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all partnership activities.
The Partnership Agreement provides for certain payments to affiliates for
services and as reimbursement of certain expenses incurred by affiliates on
behalf of the Partnership. The following transactions with the General Partner
and/or its affiliates were incurred during the years ended December 31, 1998 and
1997:
1998 1997

(in thousands)

Property management fees (included in operating

expenses) $260 $248

Reimbursement for services of affiliates

(included in operating, general and

administrative expenses, and investment

properties) (1) 113 124

Partnership management fees (2) 53 123

(1) Included in "Reimbursements for services of affiliates" for the years ended
December 31, 1998 and 1997, is approximately $4,000 and $11,000,
respectively, in reimbursements for construction oversight costs.

(2) The Agreement provides for a fee equal to 9% of distributable cash from
operations (as defined in the Agreement) received by the limited partners
to be paid to the General Partner for executive and administrative
management services. These fees are included in general and administrative
expenses.

During the years ended December 31, 1998 and 1997, affiliates of the General
Partner were entitled to receive 5% of gross receipts from all of the
Partnership's properties as compensation for providing property management
services. The Partnership paid to such affiliates approximately $260,000 and
$248,000 for the years ended December 31, 1998 and 1997 respectively.

An affiliate of the General Partner received reimbursements of accountable
administrative expenses amounting to approximately $113,000 and $124,000 for the
years ended December 31, 1998 and 1997, respectively.

For the period of January 1, 1997 to August 31, 1997, the Partnership insured
its properties under a master policy through an agency affiliated with the
General Partner with an insurer unaffiliated with the General Partner. An
affiliate of the General Partner acquired, in the acquisition of a business,
certain financial obligations from an insurance agency which was later acquired
by the agent who placed the master policy. The agent assumed the financial
obligations to the affiliate of the General Partner, who receives payments on
these obligations from the agent. The amount of the Partnership's insurance
premiums accruing to the benefit of the affiliate of the General Partner by
virtue of the agent's obligations is not significant.

During December 1997, an affiliate of the General Partner (the "Purchaser")
commenced a tender offer for limited partnership interests in the Partnership.
The Purchaser offered to purchase up to 24,000 and 23,000 of the outstanding "A"
and "B" Units, respectively, of limited partnership interest in the Partnership
at $50 and $25 per Unit, respectively, net to the seller in cash. During
February 1998 the offer was completed and the Purchaser acquired 21,457 and
13,822 of the outstanding "A" and "B" Units, respectively, which represents
approximately 22% and 18% of the total outstanding "A" and "B" Units,
respectively.

AIMCO currently owns, through its affiliates, a total of 28,573 "A" Units
and 18,440 "B" Units or 29.675% and 24.54%, respectively. Consequently,
AIMCO could be in a position to significantly influence all voting decisions
with respect to the Registrant. Under the Partnership Agreement, unitholders
holding a majority of the Units are entitled to take action with respect to a
variety of matters. When voting on matters, AIMCO would in all likelihood vote
the Units it acquired in a manner favorable to the interest of the General
Partner because of their affiliation with the General Partner.

NOTE F - COMMITMENTS

The Partnership is required by the Agreement to maintain working capital
reserves of not less than 5% of Net Invested Capital, as defined in the
Agreement. In the event expenditures are made from this reserve, operating
revenue shall be allocated to such reserve to the extent necessary to maintain
the foregoing level. Reserves, including cash and cash equivalents totaling
approximately $1,291,000, exceeded the reserve requirement of approximately
$759,000 at December 31, 1998.

NOTE G - REAL ESTATE AND ACCUMULATED DEPRECIATION

Investment Properties

Initial Cost

To Partnership

(in thousands)

Net Cost

Buildings Capitalized

and Related (Written Down)

Personal Subsequent to

Description Encumbrances Land Property Acquisition

(in thousands) (in thousands)

Carlin Manor Apartments

Columbus, Ohio $ 2,500 $ 408 $ 6,582 $ (90)

Hunt Club Apartments

Indianapolis, Indiana 3,714 485 5,673 847

Shadow Brook Apartments

West Valley City, Utah 6,000 961 8,263 1,282

Totals $12,214 $ 1,854 $20,518 $ 2,039

Gross Amount At Which Carried

At December 31, 1998

(in thousands)

Buildings

And

Personal Accumulated Date of Date Depreciable

Description Land Property Total Depreciation Construction Acquired Life-Years
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>

Carlin Manor Apartments

Columbus, Ohio $ 295 $ 6,605 $ 6,900 $ 3,782 Phase I 11/87 5-30

1967

Phase II

1972

Hunt Club Apartments

Indianapolis, Indiana 485 6,520 7,005 3,801 1979 05/87 5-30

Shadow Brook Apartments

West Valley City, Utah 962 9,544 10,506 4,351 1985 05/87 5-30

Totals $1,742 $22,669 $24,411 $11,934

</TABLE>

Reconciliation of Real Estate and Accumulated Depreciation:

Years Ended December 31,

1998 1997

(in thousands)

Real Estate

Balance at beginning of year $23,943 $23,554

Property improvements 507 569

Disposals of property (39) (180)

Balance at end of year $24,411 $23,943

Accumulated Depreciation

Balance at beginning of year $10,913 $10,003

Additions charged to expense 1,037 984

Disposals of property (16) (74)

Balance at end of year $11,934 $10,913

The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1998 and 1997, is approximately $26,688,000 and $26,178,000,
respectively. Accumulated depreciation for Federal income tax purposes at
December 31, 1998 and 1997, is approximately $11,053,000 and $10,057,000,
respectively.

NOTE H - DISTRIBUTIONS

The Partnership distributed cash from operations of approximately $588,000 and
$6,000 to the "A" unit limited partners and General Partner, respectively,
during the year ended December 31, 1998. Distributions of approximately
$1,363,000 and $14,000 were made to the "A" unit limited partners and General
Partner, respectively, during the year ended December 31, 1997 from cash from
operations.

NOTE I - SEGMENT INFORMATION

Description of the types of products and services from which the reportable
segment derives its revenues:

As defined by SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information" the Partnership has one reportable segment: residential
properties. The Partnership's residential property segment consists of three
apartment complexes in three states in Ohio, Indiana and Utah. The Partnership
rents apartment units to people for terms that are typically twelve months or
less.

Measurement of segment profit or loss:

The Partnership evaluates performance based on net income. The accounting
policies of the reportable segment are the same as those described in the
summary of significant accounting policies.

Factors management used to identify the Partnership's reportable segments:

The Partnership's reportable segment consists of investment properties that
offer similar products and services. Although each of the investment properties
are managed separately, they have been aggregated into one segment as they
provide services with similar types of products and customers.

Segment information for the years 1998 and 1997 is shown in the tables below (in
thousands). The "Other" column includes partnership administration related
items and income and expense not allocated to the reportable segment.

1998
Residential Other Totals
Rental income $ 4,885 $ -- $ 4,885
Other income 262 48 310
Interest expense 995 -- 995
Depreciation 1,037 -- 1,037
General and administrative expense -- 248 248
Loss on disposal of assets (23) -- (23)
Segment profit (loss) 446 (200) 246
Total assets 13,589 1,095 14,684
Capital expenditures for investment
properties 507 -- 507

1997
Residential Other Totals
Rental income $ 4,693 $ -- $ 4,693
Other income 254 61 315
Interest expense 1,003 -- 1,003
Depreciation 984 -- 984
General and administrative expense -- 275 275
Loss on disposal of assets (106) -- (106)
Segment profit (loss) 229 (214) 15
Total assets 14,062 1,054 15,116
Capital expenditures for investment
properties 569 -- 569

NOTE J - LEGAL PROCEEDINGS

On July 30, 1998, certain entities claiming to own limited partnership interests
in certain limited partnerships whose general partners were, at the time,
affiliates of Insignia filed a complaint entitled Everest Properties, LLC, et.
al. v. Insignia Financial Group, Inc., et. al. in the Superior Court of the
State of California, County of Los Angeles. The action involves 44 real estate
limited partnerships (including the Partnership) in which the plaintiffs
allegedly own interests and which Insignia Affiliates allegedly manage or
control (the "Subject Partnerships"). This case was settled on March 3, 1999.
The Partnership is responsible for a portion of the settlement costs. The
expense will not have a material effect on the Partnership's net income.

The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.

ITEM 8.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

PART III

ITEM 9.DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT

The General Partner of Multi-Benefit Realty Fund '87-1 (the "Partnership" or the
"Registrant") is ConCap Equities, Inc. ("CEI" or the "General Partner"). The
names of the directors and executive officers of the General Partner, their ages
and the nature of all positions with CEI presently held by them are as follows:

Name Age Position

Patrick J. Foye 41 Executive Vice President and Director

Timothy R. Garrick 42 Vice President - Accounting and Director

Patrick J. Foye has been Executive Vice President and Director of the General
Partner since October 1, 1998. Mr. Foye has served as Executive Vice President
of Apartment Investment and Management Company ("AIMCO") since May 1998. Prior
to joining AIMCO, Mr. Foye was a partner in the law firm of Skadden, Arps,
Slate, Meagher & Flom LLP from 1989 to 1998 and was Managing Partner of the
firm's Brussels, Budapest and Moscow offices from 1992 through 1994. Mr. Foye
is also Deputy Chairman of the Long Island Power Authority and serves as a
member of the New York State Privatization Council. He received a B.A. from
Fordham College and a J.D. from Fordham University Law School.

Timothy R. Garrick has served as Vice President-Accounting of AIMCO and Vice
President - Accounting and Director of the General Partner since October 1,
1998. Prior to that date, Mr. Garrick served as Vice President-Accounting
Services of Insignia Financial Group since June of 1997. From 1992 until June of
1997, Mr. Garrick served as Vice President of Partnership Accounting and from
1990 to 1992 as an Asset Manager for Insignia Financial Group. From 1984 to
1990, Mr. Garrick served in various capacities with U.S. Shelter Corporation.
From 1979 to 1984, Mr. Garrick worked on the audit staff of Ernst & Whinney.
Mr. Garrick received his B.S. Degree from the University of South Carolina and
is a Certified Public Accountant.

ITEM 10. EXECUTIVE COMPENSATION

The Registrant was not required to and did not pay remuneration to officers or
directors of the General Partner during 1998 or 1997. However, reimbursements
and other payments have been made to the Partnership's General Partner and its
affiliates, as described in "Item 12. Certain Relationships and Related
Transactions" below.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a) Security Ownership of Certain Beneficial Owners

Except as provided below, as of December 31, 1998, no person or entity was
known to CEI to own of record or beneficially more than 5 percent of the
Units of the Partnership.

Number of Percent
Name and Address Units of Total

Insignia Properties, L.P. (1) 1,933 A units 2.01%
210 B units .28%

Madison River Properties LLC (1) 21,457 A units 22.29%
13,822 B units 18.39%

Cooper River Properties LLC (1) 5,183 A units 5.38%
4,408 B units 5.87%

(1) Entity is indirectly ultimately owned by AIMCO. Its business address
is 55 Beattie Place, Greenville, SC 29601.

(b) Beneficial Owners of Management

Neither CEI nor any of its directors or officers or associates of CEI own
any units of the Partnership of record or beneficially.

Beneficial Owners of CEI

As of December 31, 1998, the following entity was known to CEI to be the
beneficial owner of more than 5 percent of its common stock:

Name and address Number of CEI SHARES Percent of Total

Insignia Properties Trust (1) 100,000 100%

(1) Entity is indirectly ultimately owned by AIMCO. Its business address
is 55 Beattie Place, Greenville, SC 29601.

On October 1, 1998, Insignia merged into AIMCO, a real estate investment trust,
whose Class A Common Shares are listed on the New York Stock Exchange. As a
result of such merger, AIMCO and AIMCO Properties, L.P., a Delaware limited
partnership and the operating partnership of AIMCO ("AIMCO OP") acquired
indirect control of the General Partner. AIMCO and its affiliates currently own
29.675% and 24.54%, respectively, of the "A" and 'B" Units of limited
partnership interests in the Partnership. AIMCO is presently considering whether
it will engage in an exchange offer for additional limited partnership interests
in the Partnership. There is a substantial likelihood that, within a short
period of time, AIMCO OP will offer to acquire limited partnership interests in
the Partnership for cash or preferred units or common units of limited
partnership interests in AIMCO OP. While such an exchange offer is possible, no
definite plans exist as to when or whether to commence such an exchange offer,
or as to the terms of any such exchange offer, and it is possible that none will
occur.

A registration statement relating to these securities has been filed with the
Securities and Exchange Commission but has not yet become effective. These
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This Form 10-KSB shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such state.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Partnership paid distributions of approximately $6,000 and $14,000 to the
General Partner during the years ended December 31, 1998 and 1997, respectively.

1998 1997

(in thousands)

Property management fees $260 $248

Reimbursement for services of affiliates (1) 113 124

Partnership management fees (2) 53 123

During the years ended December 31, 1998 and 1997, affiliates of the General
Partner were entitled to receive 5% of gross receipts from all of the
Partnership's properties as compensation for providing property management
services. The Partnership paid to such affiliates $260,000 and $248,000 for the
years ended December 31, 1998 and 1997 respectively.

During December 1997, an affiliate of the General Partner (the "Purchaser")
commenced a tender offer for limited partnership interests in the Partnership.
The Purchaser offered to purchase up to 24,000 and 23,000 of the outstanding "A"
and "B" units, respectively, of limited partnership interest in the Partnership
at $50 and $25 per Unit, respectively, net to the seller in cash. During
February 1998 the offer was completed and the Purchaser acquired 21,457 and
13,822 of the outstanding "A" and "B" units, respectively, which represents
approximately 22% and 18% of the total outstanding "A" and "B" units,
respectively.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)Exhibits:

Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report.

(b)Reports on Form 8-K for the quarter ended December 31, 1998:

Current Report on Form 8-K dated as of October 1, 1998 and filed on October
16, 1998, disclosing change in control of Registrant from Insignia Financial
Group, Inc. to AIMCO.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

MULTI-BENEFIT REALTY FUND '87-1

By: CONCAP EQUITIES, INC.
Its General Partner,

By: /s/ Patrick J. Foye
Patrick J. Foye
Executive Vice President

By: /s/ Timothy R. Garrick
Timothy R. Garrick
Vice President - Accounting

Date: March 29, 1999

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

/s/ Patrick J. Foye Executive Vice President Date: March 29, 1999
Patrick J. Foye and Director

/s/ Timothy R. Garrick Vice President - Accounting Date: March 29, 1999
Timothy R. Garrick and Director

EXHIBIT INDEX

S-K REFERENCE SEQUENTIAL
NUMBER DOCUMENT DESCRIPTION

2.1 Agreement and Plan of Merger, dated as of October 1, 1998 by and
between AIMCO and IPT, incorporated by reference to Registrant's
Current Report on Form 8-K dated October 1, 1998.

3 Certificate of Limited Partnership, as amended to date.

4 Depositary Agreement (Incorporated by reference to Registration
Statement of Registrant (File No. 33-8908) filed December 10,
1986, as amended to date).

10.1 Property Management Agreement No. 310 dated October 23, 1990, by
and between the Partnership and CCEC (Incorporated by reference
to the Quarterly Report on Form 10-Q for the quarter ended
September 30, 1990).

10.2 Bill of Sale and Assignment dated October 23, 1990, by and
between CCEC and ConCap Services Company (Incorporated by
reference to the Quarterly Report on Form 10-Q for the quarter
ended September 30, 1990).

10.3 Assignment and Assumption Agreement dated October 23, 1990, by
and between CCEC and ConCap Management Limited Partnership
("CCMLP") (Incorporated by reference to the Quarterly Report on
Form 10-Q for the quarter ended September 30, 1990).

10.4 Assignment and Agreement as to Certain Property Management
Services dated October 23, 1990, by and between CCMLP and ConCap
Capital Company (Incorporated by reference to the Quarterly
Report on Form 10-Q for the quarter ended September 30, 1990).

10.5 Assignment and Assumption Agreement dated October 23, 1990, by
and between CCMLP and Metro ConCap, Inc. (300 Series of Property
Management Contracts) (Incorporated by reference to the Quarterly
Report on Form 10-Q for the quarter ended September 30, 1990).

10.6 Construction Management Cost Reimbursement Agreement dated
January 1, 1991, by and between the Partnership and Metro ConCap,
Inc. (Incorporated by reference to the Annual Report on Form 10-
K for the year ended December 31, 1991).

10.9 Construction Management Cost Reimbursement Agreement dated
January 1, 1991, by and between the Partnership and The Hayman
Company. (Incorporated by reference to the Annual Report on Form
10-K for the year ended December 31, 1991).

10.10 Investor Services Agreement dated October 23, 1990, by and
between the Partnership and CCEC (Incorporated by reference to
the Quarterly Report on Form 10-Q for the quarter ended September
30, 1990).

10.11 Assignment and Assumption Agreement (Investor Services Agreement)
dated October 23, 1990, by and between CCEC and ConCap Services
Company (Incorporated by reference to the Annual Report on Form
10-K for the year ended December 31, 1990).

10.12 Letter of Notice dated December 20, 1991, from Partnership
Services, Inc. ("PSI") to the Partnership regarding the change in
ownership and dissolution of ConCap Services Company whereby PSI
assumed the Investor Services Agreement. (Incorporated by
reference to the Annual Report on Form 10-K for the year ended
December 31, 1991).

10.13 Financial Services Agreement dated October 23, 1990, by and
between the Partnership and CCEC (Incorporated by reference to
the Quarterly Report on Form 10-Q for the quarter ended September
30, 1990).

10.14 Assignment and Assumption Agreement (Financial Services
Agreement) dated October 23, 1990, by and between CCEC and ConCap
Capital Company (Incorporated by reference to the Quarterly
Report on Form 10-Q for the quarter ended September 30, 1990).

10.15 Letter of Notice dated December 20, 1991, from PSI to the
Partnership regarding the change in ownership and dissolution of
ConCap Capital Company whereby PSI assumed the Financial Services
Agreement. (Incorporated by reference to the Annual Report on
Form 10-K for the year ended December 31, 1991).

10.16 Property Management Agreement No. 518 dated June 1, 1993, by and
between the Partnership and Coventry Management, Inc.

10.17 Assignment and Assumption Agreement (Financial Services
Agreement) dated October 23, 1990, by and between CCEC and ConCap
Capital Company (Incorporated by reference to the Quarterly
Report on Form 10-Q for the quarter ended September 30, 1990).

10.18 Letter dated December 8, 1994 reporting a change in control of
the General partner of the Registrant. (Incorporated by reference
to Form 8-K dated December 8, 1994).

10.19 Multifamily Note dated November 1, 1996, between Multi-Benefit
Realty Fund '87-1, a California limited partnership, and Lehman
Brokers Holdings Inc. d/b/a Lehman Capital, A Division of Lehman
Brothers Holdings, Inc.

10.20 Multifamily Note dated November 1, 1996, between Multi-Benefit
Realty Fund '87-1, a California limited partnership, and Lehman
Brokers Holdings Inc. d/b/a Lehman Capital, A Division of Lehman
Brothers Holdings, Inc.

11 Statement regarding computation of Net Income per Unit of
DepositaryReceipt (Incorporated by reference to Note 5 of Item 8
- Financial Statements of this Form 10-K)

16 Letter, Dated August 12, 1992, from Ernst & Young to the
Securities and Exchange Commission regarding change in certifying
accountant. (Incorporated by reference to Form 8-K dated August
6, 1992)

16.1 Letter dated May 3, 1995, from Arthur Anderson to the Securities
and Exchange Commission regarding change in Certifying
Accountant. (Incorporated by reference to Form 8-K dated May 3,
1995).

27 Financial Data Schedule is filed as an Exhibit to this report.

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Multi-Benefit Realty Fund '87-1 1998 Year-End 10-KSB and is qualified in its
entirety by reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000802200
<NAME> MULTI-BENEFIT REALTY FUND '87-1
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 1,291
<SECURITIES> 0
<RECEIVABLES> 317
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 24,411
<DEPRECIATION> (11,934)
<TOTAL-ASSETS> 14,684
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 12,214
0
0
<COMMON> 0
<OTHER-SE> 1,766
<TOTAL-LIABILITY-AND-EQUITY> 14,684
<SALES> 0
<TOTAL-REVENUES> 5,195
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,949
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 995
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 246
<EPS-PRIMARY> 1.42<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>

</TABLE>