SECURED INCOME L P, SC 14D1, 1998-06-29

SECURED INCOME L P
SC 14D1, 1998-06-29
REAL ESTATE

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------

SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
-----------------------

SECURED INCOME L.P.
(Name of Subject Company)

ACCELERATED HIGH YIELD PENSION INVESTORS, L.P.
MACKENZIE PATTERSON SPECIAL FUND, L.P.;
MACKENZIE PATTERSON SPECIAL FUND 3, LLC;
MACKENZIE SPECIFIED INCOME FUND, L.P.;
MP VALUE FUND 5, LLC.;
CAL-KAN, INC.; JDF & ASSOCIATES, LLC;
MORAGA GOLD, LLC; AND
STEVEN GOLD
(Bidders)

UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class of Securities)

NONE
(CUSIP Number of Class of Securities)
-----------------------
Copy to:
C.E. Patterson Paul J. Derenthal, Esq.
MacKenzie Patterson, Inc. Derenthal & Dannhauser
1640 School Street 455 Market Street, Suite 1600
Moraga, California 94556 San Francisco, California 94105
(925) 631-9100 (415) 243-8070

(Name, Address and Telephone Number of
Person Authorized to Receive Notices and
Communications on Behalf of Bidder)

Calculation of Filing Fee

Transaction Amount of
Valuation* Filing Fee

$984,375 $196.88

* For purposes of calculating the filing fee only. Assumes the
purchase of 196,875 Units at a purchase price equal to $5.00 per
Unit in cash.

[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee
was previously paid. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.

Amount Previously Paid:
Form or Registration Number:
Filing Party:
Date Filed:

<PAGE>

CUSIP NO. None 14D-1 Page 2 of ___ Pages
--------

1. Name of Reporting Person
S.S. or I.R.S. Identification Nos. of Above Person

ACCELERATED HIGH YIELD PENSION INVESTORS, L.P.

2. Check the Appropriate Box if a Member of a Group
(See Instructions)

(a) __
(b) x

3. SEC Use Only

4. Sources of Funds (See Instructions)

5. Check if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) or 2(f)
--

6. Citizenship or Place of Organization

Florida

7. Aggregate Amount Beneficially Owned by Each Reporting Person 750

8. Check if the Aggregate in Row (7) Excludes Certain Shares
(See Instructions)

9. Percent of Class Represented by Amount in Row (7) 0.1%

10. Type of Reporting Person (See Instructions)

<PAGE>

CUSIP NO. None 14D-1 Page 3 of ___ Pages
--------

1. Name of Reporting Person
S.S. or I.R.S. Identification Nos. of Above Person

MACKENZIE PATTERSON SPECIAL FUND, L.P.

2. Check the Appropriate Box if a Member of a Group
(See Instructions)

(a) __
(b) x

3. SEC Use Only

4. Sources of Funds (See Instructions)

5. Check if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) or 2(f)
--

6. Citizenship or Place of Organization

California

7. Aggregate Amount Beneficially Owned by Each Reporting Person 750

8. Check if the Aggregate in Row (7) Excludes Certain Shares
(See Instructions)

9. Percent of Class Represented by Amount in Row (7) 0.1%

10. Type of Reporting Person (See Instructions)

<PAGE>

CUSIP NO. None 14D-1 Page 4 of ___ Pages
--------

1. Name of Reporting Person
S.S. or I.R.S. Identification Nos. of Above Person

MACKENZIE PATTERSON SPECIAL FUND 3, LLC

2. Check the Appropriate Box if a Member of a Group
(See Instructions)

(a) __
(b) x

3. SEC Use Only

4. Sources of Funds (See Instructions)

5. Check if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) or 2(f)
--

6. Citizenship or Place of Organization

California

7. Aggregate Amount Beneficially Owned by Each Reporting Person 750

8. Check if the Aggregate in Row (7) Excludes Certain Shares
(See Instructions)

9. Percent of Class Represented by Amount in Row (7) 0.1%

10. Type of Reporting Person (See Instructions)

<PAGE>

CUSIP NO. None 14D-1 Page 5 of ___ Pages
--------

1. Name of Reporting Person
S.S. or I.R.S. Identification Nos. of Above Person

MACKENZIE SPECIFIED INCOME FUND, L.P.

2. Check the Appropriate Box if a Member of a Group
(See Instructions)

(a) __
(b) x

3. SEC Use Only

4. Sources of Funds (See Instructions)

5. Check if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) or 2(f)
--

6. Citizenship or Place of Organization

California

7. Aggregate Amount Beneficially Owned by Each Reporting Person 750

8. Check if the Aggregate in Row (7) Excludes Certain Shares
(See Instructions)

9. Percent of Class Represented by Amount in Row (7) 0.1%

10. Type of Reporting Person (See Instructions)

<PAGE>

CUSIP NO. None 14D-1 Page 6 of ___ Pages
--------

1. Name of Reporting Person
S.S. or I.R.S. Identification Nos. of Above Person

STEVEN GOLD

2. Check the Appropriate Box if a Member of a Group
(See Instructions)

(a) __
(b) x

3. SEC Use Only

4. Sources of Funds (See Instructions)

5. Check if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) or 2(f)
--

6. Citizenship or Place of Organization

California

7. Aggregate Amount Beneficially Owned by Each Reporting Person 0

8. Check if the Aggregate in Row (7) Excludes Certain Shares
(See Instructions)

9. Percent of Class Represented by Amount in Row (7) 0%

10. Type of Reporting Person (See Instructions)

<PAGE>

CUSIP NO. None 14D-1 Page 7 of ___ Pages
--------

1. Name of Reporting Person
S.S. or I.R.S. Identification Nos. of Above Person

MP VALUE FUND 5, LLC.

2. Check the Appropriate Box if a Member of a Group
(See Instructions)

(a) __
(b) x

3. SEC Use Only

4. Sources of Funds (See Instructions)

5. Check if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) or 2(f)
--

6. Citizenship or Place of Organization

California

7. Aggregate Amount Beneficially Owned by Each Reporting Person 750

8. Check if the Aggregate in Row (7) Excludes Certain Shares
(See Instructions)

9. Percent of Class Represented by Amount in Row (7) 0.1%

10. Type of Reporting Person (See Instructions)

<PAGE>

CUSIP NO. None 14D-1 Page 8 of ___ Pages
--------

1. Name of Reporting Person
S.S. or I.R.S. Identification Nos. of Above Person

CAL-KAN, INC.

2. Check the Appropriate Box if a Member of a Group
(See Instructions)

(a) __
(b) x

3. SEC Use Only

4. Sources of Funds (See Instructions)

5. Check if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) or 2(f)
--

6. Citizenship or Place of Organization

Kansas

7. Aggregate Amount Beneficially Owned by Each Reporting Person 750

8. Check if the Aggregate in Row (7) Excludes Certain Shares
(See Instructions)

9. Percent of Class Represented by Amount in Row (7) 0.1%

10. Type of Reporting Person (See Instructions)

<PAGE>

CUSIP NO. None 14D-1 Page 9 of ___ Pages
--------

1. Name of Reporting Person
S.S. or I.R.S. Identification Nos. of Above Person

JDF & ASSOCIATES, LLC

2. Check the Appropriate Box if a Member of a Group
(See Instructions)

(a) __
(b) x

3. SEC Use Only

4. Sources of Funds (See Instructions)

5. Check if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) or 2(f)
--

6. Citizenship or Place of Organization

Texas

7. Aggregate Amount Beneficially Owned by Each Reporting Person 0

8. Check if the Aggregate in Row (7) Excludes Certain Shares
(See Instructions)

9. Percent of Class Represented by Amount in Row (7) 0%

10. Type of Reporting Person (See Instructions)

<PAGE>

CUSIP NO. None 14D-1 Page 10 of ___ Pages
--------

1. Name of Reporting Person
S.S. or I.R.S. Identification Nos. of Above Person

MORAGA GOLD, LLC

2. Check the Appropriate Box if a Member of a Group
(See Instructions)

(a) __
(b) x

3. SEC Use Only

4. Sources of Funds (See Instructions)

5. Check if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) or 2(f)
--

6. Citizenship or Place of Organization

California

7. Aggregate Amount Beneficially Owned by Each Reporting Person 750

8. Check if the Aggregate in Row (7) Excludes Certain Shares
(See Instructions)

9. Percent of Class Represented by Amount in Row (7) 0.1%

10. Type of Reporting Person (See Instructions)

<PAGE>

Item 1. Security and Subject Company.

(a) This Schedule relates to Units of limited partnership interest
(the "Units") in Secured Income L.P, a Delaware limited partnership (the
"Issuer"), the subject company. The address of the Issuer's principal executive
offices is 599 West Putnam Ave., Greenwich, Connecticut 06830.

(b) This Schedule relates to the offer by Accelerated High Yield
Pension Investors, L.P.; MacKenzie Patterson Special Fund, L.P.; MacKenzie
Patterson Special Fund 3, LLC; MacKenzie Specified Income Fund, L.P.; MP Value
Fund 5, LLC; Cal-Kan, Inc.; JDF & Associates, LLC; Moraga Gold, LLC; and Steven
Gold (collectively the "Purchasers") to purchase up to 196,875 Units at a
purchase price equal to $5.00 per Unit, less the amount of any distributions
declared or made with respect to the Units between June 29, 1998 (the "Offer
Date") and July 31, 1998 or such other date to which this Offer may be extended
(the "Expiration Date"), upon the terms and subject to the conditions set forth
in the Offer to Purchase dated June 29, 1998 (the "Offer to Purchase") and the
related Letter of Transmittal, copies of which are attached hereto as Exhibits
(a)(1) and (a)(2), respectively. The Issuer had 984,369 Units issued and
outstanding held by approximately 1,369 Unitholders as of December 31, 1997,
according to its annual report on Form 10-K for the year then ended.

(c) The information set forth under the captions "Introduction -
Establishment of the Offer Price" and "Effects of the Offer" in the Offer to
Purchase is incorporated herein by reference.

Item 2. Identity and Background.

(a)-(d) The information set forth in "Introduction," "Certain
Information Concerning the Purchasers" and in Schedule I and the Addendum of the
Offer to Purchase is incorporated herein by reference.

(e)-(g) The information set forth in "Certain Information
Concerning the Purchasers" and Schedule I and the Addendum in the Offer to
Purchase is incorporated herein by reference. During the last five years,
neither the Purchasers nor, to the best of the knowledge of the Purchasers, any
person named on Schedule I and the Addendum to the Offer to Purchaser nor any
affiliate of the Purchasers (i) has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding were or are subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities subject
to, Federal or state securities laws or finding any violation of such laws.

Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.

(a)-(b) See the discussion under the caption "Certain Information
Concerning the Purchasers" in the Offer to Purchase for information concerning
purchases of Units by certain of the Purchasers and their affiliates. Other than
the foregoing, since January 1, 1993, there have been no transactions between
any of the persons identified in Item 2 and the Issuer or, to the knowledge of
the Purchaser, any of the Issuer's affiliates or general partners, or any
directors or executive officers of any such affiliates or general partners.

Item 4. Source and Amount of Funds or Other Consideration.

(a) The information set forth under the caption "Source of
Funds" of the Offer to Purchase is incorporated herein by reference.

(b)-(c) Not applicable.

<PAGE>

Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.

(a) - (g) The information set forth under the caption "Future
Plans" in the Offer to Purchase is incorporated herein by reference. Other than
as set forth therein, the Purchasers have no plans or proposals that would
relate to or would result in any of the transactions, changes or other results
described in Item 5(a) through (g) of Schedule 14D-1.

(f) Not applicable.

Item 6. Interest in Securities of the Subject Company.

(a) and (b) The information set forth in "Certain Information
Concerning the Purchasers" of the Offer to Purchase is incorporated herein by
reference.

Item 7. Contracts, Arrangements, Understandings or Relationships with
Respect to the Subject Company's Securities.

The information set forth in "Certain Information Concerning the
Purchasers" of the Offer to Purchase is incorporated herein by reference.

Item 8. Persons Retained, Employed or To Be Compensated.

None.

Item 9. Financial Statements of Certain Bidders.

Not applicable.

Item 10. Additional Information.

(a) None.

(b)-(c) The information set forth in "Certain Legal Matters" of the
Offer to Purchase is incorporated herein by reference.

(d) None.

(e) None.

(f) Reference is hereby made to the Offer to Purchase and the
related Letter of Transmittal, copies of which are attached hereto as Exhibits
(a)(1) and (a)(2), respectively, and which are incorporated herein in their
entirety by reference.

Item 11. Material to be Filed as Exhibits.

(a)(1) Offer to Purchase dated June 29, 1998

(a)(2) Letter of Transmittal

(a)(3) Form of Letter to Unitholders dated June 29, 1998

(a)(4) Advertisement

(b)-(f) Not applicable.

<PAGE>

SIGNATURES

After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.

Dated: June 29, 1998

ACCELERATED HIGH YIELD PENSION INVESTORS, L.P.

By MacKenzie Patterson, Inc., General Partner

By: /s/ C. E. Patterson
C.E. Patterson, President

MP VALUE FUND 5, LLC.

By MacKenzie Patterson, Manager

By: /s/ C, E, Patterson
C.E. Patterson, President

MACKENZIE SPECIFIED INCOME FUND, L.P.

By MacKenzie Patterson, Inc., General Partner

By: /s/ C. E. Patterson
C.E. Patterson, President

MACKENZIE PATTERSON SPECIAL FUND, L.P.

By MacKenzie Patterson, Inc., General Partner

By: /s/ C. E. Patterson
C.E. Patterson, President

MACKENZIE PATTERSON SPECIAL FUND 3, LLC

By MacKenzie Patterson, Inc., Manager

By: /s/ C. E. Patterson
C.E. Patterson, President

CAL-KAN, INC.

By: /s/ C. E. Patterson
C.E. Patterson, President

<PAGE>

MORAGA GOLD, LLC

By Moraga Partners, Inc., Member

By: /s/ C. E. Patterson
C. E. Patterson, President

By The David B. Gold Trust, Member

By: /s/ Steven Gold
Steven Gold

JDF & ASSOCIATES, LLC

By: /s/ J. David Frantz
J. David Frantz, Manager

/s/ Steven Gold
Steven Gold

<PAGE>

EXHIBIT INDEX

Exhibit Description Page

(a)(1) Offer to Purchase dated June 29, 1998

(a)(2) Letter of Transmittal

(a)(3) Form of Letter to Unitholders dated June 29, 1998

(a)(4) Advertisement

Exhibit (a)(1)

<PAGE>

OFFER TO PURCHASE FOR CASH UP TO 196,875
UNITS OF LIMITED PARTNERSHIP INTEREST
OF
SECURED INCOME L.P.
AT
$5.00 PER UNIT

THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL EXPIRE AT 12:00
MIDNIGHT, PACIFIC DAYLIGHT TIME, ON JULY 31, 1998, UNLESS THE OFFER IS
EXTENDED.

Accelerated High Yield Pension Investors, L.P.; MacKenzie Patterson Special
Fund, L.P.; MacKenzie Patterson Special Fund 3, LLC; MacKenzie Specified Income
Fund, L.P.; MP Value Fund 5, LLC; Cal-Kan, Inc.; JDF & Associates, LLC; Moraga
Gold, LLC; and Steven Gold (collectively the "Purchasers") hereby seek to
acquire Units of limited partnership interest (the "Units") in Secured Income
L.P, a Delaware limited partnership (the "Partnership"). The Units are
collectively referred to as the "Units". The Purchasers are not affiliated with
the Partnership or its general partners. The Purchasers hereby offer to purchase
up to 196,875 Units at a purchase price equal to $5.00 per Unit, less the amount
of any distributions declared or made with respect to the Units between June 29,
1998 (the "Offer Date") and July 31, 1998, or such other date to which this
Offer may be extended (the "Expiration Date"), in cash, without interest, upon
the terms and subject to the conditions set forth in this Offer to Purchase (the
"Offer to Purchase") and in the related Letter of Transmittal, as each may be
supplemented or amended from time to time (which together constitute the
"Offer"). The 196,875 Units sought pursuant to the Offer represent approximately
20% of the Units outstanding as of December 31, 1997.

Holders of Units ("Unitholders") are urged to consider the following factors:

- Unitholders who tender their Units will give up the
opportunity to participate in any future benefits from the
ownership of Units, including potential future
distributions by the Partnership, and the purchase price
per Unit payable to a tendering Unitholder by the
Purchasers may be less than the total amount which might
otherwise be received by the Unitholder with respect to the
Unit over the remaining term of the Partnership.

- The Purchasers are making the Offer for investment purposes
and with the intention of making a profit from the
ownership of the Units. In establishing the purchase price
of $5.00 per Unit, the Purchasers are motivated to
establish the lowest price which might be acceptable to
Unitholders consistent with the Purchasers' objectives.

1
<PAGE>

- As a result of consummation of the Offer, the Purchaser may
be in a position to significantly influence all Partnership
decisions on which Unitholders may vote. The Purchaser will
vote the Units acquired in the Offer in its own interest,
which may be different from or in conflict with the
interests of the remaining Unitholders.

- The Purchasers may accept only a portion of the Units
tendered by a Unitholder in the event a total of more than
196,875 Units are tendered.

THE OFFER TO PURCHASE IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF UNITS BEING
TENDERED. IF MORE THAN 196,875 UNITS ARE VALIDLY TENDERED AND NOT WITHDRAWN, THE
PURCHASERS WILL ACCEPT FOR PURCHASE 196,875 UNITS FROM TENDERING UNITHOLDERS ON
A PRO RATA BASIS, SUBJECT TO THE TERMS AND CONDITIONS HEREIN.

A UNITHOLDER MAY TENDER ANY OR ALL UNITS OWNED BY SUCH UNITHOLDER.

The Purchasers expressly reserve the right, in their sole discretion, at any
time and from time to time, (i) to extend the period of time during which the
Offer is open and thereby delay acceptance for payment of, and the payment for,
any Units, (ii) upon the occurrence of any of the conditions specified in
Section 13 of this Offer to Purchase, to terminate the Offer and not accept for
payment any Units not theretofore accepted for payment or paid for, or to delay
the acceptance for payment of, or payment for, any Units not theretofore
accepted for payment or paid for, and (iii) to amend the Offer in any respect.
Notice of any such extension, termination or amendment will promptly be
disseminated to Unitholders in a manner reasonably designed to inform
Unitholders of such change in compliance with Rule 14d-4(c) under the Securities
Exchange Act of 1934 (the "Exchange Act"). In the case of an extension of the
Offer, such extension will be followed by a press release or public announcement
which will be issued no later than 9:00 a.m., Eastern Standard Time, on the next
business day after the scheduled Expiration Date, in accordance with Rule
14e-1(d) under the Exchange Act.

June 29, 1998

2
<PAGE>

IMPORTANT

Any Unitholder desiring to tender any or all of such Unitholder's Units should
complete and sign the Letter of Transmittal (a copy of which is enclosed with
this Offer to Purchase, printed on purple paper for the Units) in accordance
with the instructions in the Letter of Transmittal and mail, deliver or telecopy
the Letter of Transmittal and any other required documents to MacKenzie
Patterson, Inc. (the "Depositary"), an affiliate of certain of the Purchasers,
at the address or facsimile number set forth below.

MacKenzie Patterson, Inc.
1640 School Street
Moraga, California 94556
Telephone: 800-854-8357
Facsimile Transmission: 925-631-9119

Questions or requests for assistance or additional copies of this Offer to
Purchase or the Letter of Transmittal may be directed to the Purchasers at
1-800-854-8357.
- ---------------------------

NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION OR ANY REPRESENTATION
ON BEHALF OF THE PURCHASERS OR TO PROVIDE ANY INFORMATION OTHER THAN AS
CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. NO SUCH RECOMMENDATION,
INFORMATION OR REPRESENTATION MAY BE RELIED UPON AS HAVING BEEN AUTHORIZED.
- ---------------------------

The Partnership is subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is required to file reports and other
information with the Commission relating to its business, financial condition
and other matters. Such reports and other information are available on the
Commission's electronic data gathering and retrieval (EDGAR) system, at its
internet web site at www.sec.gov, may be inspected at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and are available for inspection and
copying at the regional offices of the Commission located in Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and at 7
World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can also be obtained from the Public Reference Room of the Commission
in Washington, D.C. at prescribed rates.

The Purchasers have filed with the Commission a Tender Offer Statement on
Schedule 14D-1 (including exhibits) pursuant to Rule 14d-3 of the General Rules
and Regulations under the Exchange Act, furnishing certain additional
information with respect to the Offer. Such statement and any amendments
thereto, including exhibits, may be inspected and copies may be obtained from
the offices of the Commission in the manner specified above.

3
<PAGE>

TABLE OF CONTENTS

Page

INTRODUCTION..................................................................5

TENDER OFFER..................................................................8

Section 1. Terms of the Offer..........................................8
Section 2. Proration; Acceptance for Payment and Payment for Units.....8
Section 3. Procedures for Tendering Units..............................9
Section 4. Withdrawal Rights...........................................11
Section 5. Extension of Tender Period; Termination; Amendment..........11
Section 6. Certain Federal Income Tax Consequences.....................12
Section 7. Effects of the Offer........................................14
Section 8. Future Plans................................................15
Section 9. The Business of the Partnership.............................15
Section 10. Conflicts of Interest.......................................16
Section 11. Certain Information Concerning the Purchasers...............16
Section 12. Source of Funds.............................................17
Section 13. Conditions of the Offer.....................................17
Section 14. Certain Legal Matters.......................................19
Section 15. Fees and Expenses...........................................19
Section 16. Miscellaneous...............................................20

Schedule I - The Purchasers and Their Respective Principals

4
<PAGE>

To the Unitholders of Secured Income L.P.

INTRODUCTION

The Purchasers hereby offer to purchase up to 196,875 Units at a
purchase price of $5.00 per Unit, less the amount of any distributions declared
or paid with respect to the Units between the Offer Date and the Expiration Date
("Offer Price"), in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer. Unitholders who tender their Units will not
be obligated to pay any Partnership transfer fees, or any other fees, expenses
or commissions in connection with the tender of Units. The Purchasers will pay
all such costs and all charges and expenses of the Depositary, an affiliate of
certain of the Purchasers, as depositary in connection with the Offer.

For further information concerning the Purchasers, see Section 11 below
and Schedule I.

None of the Purchasers nor the Depositary is affiliated with Wilder
Richman Resources Corporation, Real Estate Equity Partners, L.P., and WRC-87A
Corporation, the Partnership's general partners (the "General Partners"), or
with any affiliate of such persons.

Unitholders are urged to consider the following factors:

- Unitholders who tender their Units will give up the
opportunity to participate in any future benefits from the
ownership of Units, including potential future distributions
by the Partnership, and the purchase price per Unit payable to
a tendering Unitholder by the Purchasers may be less than the
total amount which might otherwise be received by the
Unitholder with respect to the Unit over the remaining term of
the Partnership.

- The Purchasers are making the Offer for investment purposes
and with the intention of making a profit from the ownership
of the Units. In establishing the purchase price of $5.00 per
Unit, the Purchasers are motivated to establish the lowest
price which might be acceptable to Unitholders consistent with
the Purchasers' objectives.

- As a result of consummation of the Offer, the Purchaser may be
in a position to significantly influence all Partnership
decisions on which Unitholders may vote. The Purchaser will
vote the Units acquired in the Offer in its own interest,
which may be different from or in conflict with the interests
of the remaining Unitholders.

- The Purchasers may accept only a portion of the Units tendered
by a Unitholder in the event a total of more than 196,875
Units are tendered.

The Offer will provide Unitholders with an opportunity to liquidate
their investment without the usual transaction costs associated with market
sales. Unitholders may have a more immediate need to use the cash now tied up in
an investment in the Units and wish to sell them to the Purchasers. Unit holders
who sell all of their Units will also eliminate the need to file form K-1
information with their federal tax returns for years after 1998.

5
<PAGE>

Establishment of the Offer Price

The Purchasers have set the Offer Price at $5.00 per Unit, less the
amount of any distributions declared or made with respect to the Units between
the Offer Date and Expiration Date. In determining the Offer Price, the
Purchasers analyzed a number of quantitative and qualitative factors,
including:(i) the lack of a secondary market for resales of the Units and the
resulting lack of liquidity of an investment in the Partnership; (ii) the
Purchasers' estimate of the potential liquidation value of the Partnership's
assets; and (iii) the costs to the Purchasers associated with acquiring the
Units.

The Partnership stated in its annual report on Form 10-K for the year
ended December 31, 1997, that there is no established trading market for the
Units. The Partnership Spectrum, an independent publisher of a secondary market
report, reported a single transaction during the period from December 31, 1997
through January 31, 1998 involving the sale of 750 Units at a price of $1.90 per
Unit. The Purchasers believe these reported market prices reflect a gross sales
price for the Units. Gross sales prices do not reflect the net sales proceeds
received by sellers of Units, which typically are reduced by commissions and
other secondary market transaction costs to amounts less than the reported
prices. In addition, the information published by the independent source is the
product of their market research and does not constitute the comprehensive
transaction reporting of a securities exchange. Accordingly, the Purchasers do
not know whether the foregoing sales price information is accurate or complete.

The Offer Price represents the price at which the Purchasers are
willing to purchase Units. No independent person has been retained to evaluate
or render any opinion with respect to the fairness of the Offer Price and no
representation is made by the Purchasers or any affiliate of the Purchasers as
to such fairness. Other measures of the value of the Units may be relevant to
Unitholders. Unitholders are urged to consider carefully all of the information
contained herein and consult with their own advisors, tax, financial or
otherwise, in evaluating the terms of the Offer before deciding whether to
tender Units.

The Purchasers are offering to purchase Units which are an illiquid
investment and are not offering to purchase the Partnership's underlying assets.
Consequently, the Purchasers do not believe that the underlying asset value of
the Partnership is determinative in arriving at the Offer Price. Nevertheless,
using publicly available information concerning the Partnership contained in the
Partnership's Form 10-K for the fiscal year ended December 31, 1997, the
Purchasers used an estimated asset value to derive an estimated market value for
the Units solely for purposes of formulating their offer.

In determining their estimated value of the Units, the Purchasers first
calculated the "Estimated Net Sales Value" of the Partnership's sole property.
The Estimated Net Sales Value was determined by first determining the property's
net operating income ("NOI"). The NOI was calculated by subtracting from rental
income the cost of rental income, general and administrative costs and then
adding back to that sum the partnership administrative costs. This NOI was then
divided by a 9.5% capitalization rate (the "Cap Rate") and the result reduced by
(i) 1.5% to take into account the estimated closing costs which would be
incurred upon sale by the Partnership of the property, including brokerage
commissions, title costs, surveys, appraisals, legal fees and transfer

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<PAGE>

taxes, and (ii) the mortgage debt encumbering the property.

The Purchaser believes that the Cap Rate utilized by it is within a
range of capitalization rates currently employed in the marketplace for
properties of similar type, age and quality. The utilization of different
capitalization rates, however, could also be appropriate. In this regard,
Unitholders should be aware that the use of lower capitalization rate would
result in a higher Estimated Net Sales Value.

To determine the Estimated Liquidation Value of the Partnership's
assets, the Purchaser added to the Estimated Net Sales Value of the
Partnership's property the approximately net current assets as reported in the
Partnership's most recent Form 10-K. The resulting Estimated Liquidation Value
of the Partnership's assets was approximately $12 per Unit. The Purchasers
emphasize that this value was calculated by them solely for purposes of
calculating the Offer Price. There can be no assurance as to the actual
liquidation value of Partnership assets or as to the amount or timing of
distributions of liquidation proceeds which may be received by Unitholders.

The Partnership owns interests in two apartment properties, a 252-unit
complex located in Frederick, Maryland, and a 163-unit complex in New York City.
Under the Partnership Agreement, the Partnership is not required to sell its
properties until the earlier of the date Unitholders holding a majority of the
Units vote to liquidate the Partnership or December 31, 2036. Accordingly, the
timing of the sale of Partnership's properties and resulting liquidation of the
Partnership remains uncertain, and, consequently, the timing of amounts to be
received by Unitholders in respect of such sale and liquidation cannot be
determined.

General Background Information

Certain information contained in this Offer to Purchase which relates
to, or represents, statements made by the Partnership or the General Partner,
has been derived from information provided in reports filed by the Partnership
with the Securities and Exchange Commission.

According to publicly available information, there were 984,369 Units
issued and outstanding held by approximately 1,369 Unitholders at December 31,
1997. As noted above, an affiliate of certain of the Purchasers currently
beneficially own 750 Units, equal to less than 0.1% of the total outstanding
Units.

Tendering Unitholders will not be obligated to pay transfer fees,
brokerage fees or commissions on the sale of the Units to the Purchasers
pursuant to the Offer. The Purchasers will pay all charges and expenses incurred
in connection with the Offer. The Purchasers desire to purchase all Units
tendered by each Unitholder.

If, prior to the Expiration Date, the Purchasers increase the
consideration offered to Unitholders pursuant to the Offer, such increased
consideration will be paid with respect to all Units that are purchased pursuant
to the Offer, whether or not such Units were tendered prior to such increase in
consideration.

Unitholders are urged to read this Offer to Purchase and the
accompanying Letter of Transmittal carefully before deciding whether to tender
their Units.

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<PAGE>

TENDER OFFER

Section 1. Terms of the Offer. Upon the terms and subject to the conditions of
the Offer, the Purchasers will accept for payment and pay for Units validly
tendered on or prior to the Expiration Date and not withdrawn in accordance with
Section 4 of this Offer to Purchase. The term "Expiration Date" shall mean 12:00
midnight, Pacific Standard Time, on July 31, 1998, unless and until the
Purchasers shall have extended the period of time for which the Offer is open,
in which event the term "Expiration Date" shall mean the latest time and date on
which the Offer, as so extended by the Purchasers, shall expire.

The Offer is conditioned on satisfaction of certain conditions. See
Section 13, which sets forth in full the conditions of the Offer. The Purchasers
reserve the right (but shall not be obligated), in their sole discretion and for
any reason, to waive any or all of such conditions. If, by the Expiration Date,
any or all of such conditions have not been satisfied or waived, the Purchasers
reserve the right (but shall not be obligated) to (i) decline to purchase any of
the Units tendered, terminate the Offer and return all tendered Units to
tendering Unitholders, (ii) waive all the unsatisfied conditions and, subject to
complying with applicable rules and regulations of the Commission, purchase all
Units validly tendered, (iii) extend the Offer and, subject to the right of
Unitholders to withdraw Units until the Expiration Date, retain the Units that
have been tendered during the period or periods for which the Offer is extended
or (iv) to amend the Offer.

The Purchasers do not anticipate and have no reason to believe that any
condition or event will occur that would prevent the Purchasers from purchasing
tendered Units as offered herein.

Section 2. Proration; Acceptance for Payment and Payment for Units. If the
number of Units validly tendered prior to the Expiration Date and not withdrawn
is 196,875 or less, the Purchasers, upon the terms and subject to the conditions
of the Offer, will accept for payment all Units so tendered. If the number of
Units validly tendered prior to the Expiration Date and not withdrawn exceeds
196,875, the Purchasers, upon the terms and subject to the conditions of the
Offer, will accept for payment Units so tendered on a pro rata basis.

In the event that proration is required, because of the difficulty of
immediately determining the precise number of Units to be accepted, the
Purchasers will announce the final results of proration as soon as practicable,
but in no event later than five business days following the Expiration Date. The
Purchasers will not pay for any Units tendered until after the final proration
factor has been determined.

Upon the terms and subject to the conditions of the Offer (including,
if the Offer is extended or amended, the terms and conditions of any extension
or amendment), the Purchasers will accept for payment, and will pay for, Units
validly tendered and not withdrawn in accordance with Section 4, as promptly as
practicable following the Expiration Date. In all cases, payment for Units
purchased pursuant to the Offer will be made only after timely receipt by the
Depositary of a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) and any other documents required by the Letter of
Transmittal.

For purposes of the Offer, the Purchasers shall be deemed to have
accepted for payment (and thereby purchased) tendered Units when, as and if the

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<PAGE>

Purchasers give oral or written notice to the Depositary of the Purchasers'
acceptance for payment of such Units pursuant to the Offer. Upon the terms and
subject to the conditions of the Offer, payment for Units purchased pursuant to
the Offer will in all cases be made by deposit of the Offer Price with the
Depositary, which will act as agent for the tendering Unitholders for the
purpose of receiving payment from the Purchasers and transmitting payment to
tendering Unitholders.

Under no circumstances will interest be paid on the Offer Price by
reason of any delay in making such payment.

If any tendered Units are not purchased for any reason, the Letter of
Transmittal with respect to such Units not purchased will be of no force or
effect. If, for any reason whatsoever, acceptance for payment of, or payment
for, any Units tendered pursuant to the Offer is delayed or the Purchasers are
unable to accept for payment, purchase or pay for Units tendered pursuant to the
Offer, then, without prejudice to the Purchasers' rights under Section 13 (but
subject to compliance with Rule 14e-1(c) under the Exchange Act), the Depositary
may, nevertheless, on behalf of the Purchasers, retain tendered Units, subject
to any limitations of applicable law, and such Units may not be withdrawn except
to the extent that the tendering Unitholders are entitled to withdrawal rights
as described in Section 4.

If, prior to the Expiration Date, the Purchasers shall increase the
consideration offered to Unitholders pursuant to the Offer, such increased
consideration shall be paid for all Units accepted for payment pursuant to the
Offer, whether or not such Units were tendered prior to such increase.

Section 3. Procedures for Tendering Units.

Valid Tender. For Units to be validly tendered pursuant to the Offer, a properly
completed and duly executed Letter of Transmittal (a copy of which is enclosed
with this Offer to Purchase, printed on purple paper for the Units) with any
other documents required by the Letter of Transmittal must be received by the
Depositary at its address set forth on the back cover of this Offer to Purchase
on or prior to the Expiration Date. A Unitholder may tender any or all Units
owned by such Unitholder.

In order for a tendering Unitholder to participate in the Offer, Units
must be validly tendered and not withdrawn prior to the Expiration Date, which
is 12:00 midnight, Pacific Standard Time, on July 31, 1998, or such date to
which the Offer may be extended.

The method of delivery of the Letter of Transmittal and all other required
documents is at the option and risk of the tendering Unitholder and delivery
will be deemed made only when actually received by the Depositary.

Backup Federal Income Tax Withholding. To prevent the possible application of
31% backup federal income tax withholding with respect to payment of the Offer
Price for Units purchased pursuant to the Offer, a tendering Unitholder must
provide the Depositary with such Unitholder's correct taxpayer identification
number and make certain certifications that such Unitholder is not subject to
backup federal income tax withholding. Each tendering Unitholder must insert in
the Letter of Transmittal the Unitholder's taxpayer identification number or
social security number in the space provided on the front of the Letter of
Transmittal. The Letter of Transmittal also includes a substitute Form W-9,
which contains the certifications referred to above. (See the Instructions to
the Letter of Transmittal.)

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<PAGE>

FIRPTA Withholding. To prevent the withholding of federal income tax in an
amount equal to 10% of the sum of the Offer Price plus the amount of Partnership
liabilities allocable to each Unit tendered, each Unitholder must complete the
FIRPTA Affidavit included in the Letter of Transmittal certifying such
Unitholder's taxpayer identification number and address and that the Unitholder
is not a foreign person. (See the Instructions to the Letter of Transmittal and
"Section 6. Certain Federal Income Tax Consequences.")

Other Requirements. By executing a Letter of Transmittal as set forth above, a
tendering Unitholder irrevocably appoints the designees of the Purchasers as
such Unitholder's proxies, in the manner set forth in the Letter of Transmittal,
each with full power of substitution, to the full extent of such Unitholder's
rights with respect to the Units tendered by such Unitholder and accepted for
payment by the Purchasers. Such appointment will be effective when, and only to
the extent that, the Purchasers accept such Units for payment. Upon such
acceptance for payment, all prior proxies given by such Unitholder with respect
to such Units will, without further action, be revoked, and no subsequent
proxies may be given (and if given will not be effective). The designees of the
Purchasers will, with respect to such Units, be empowered to exercise all voting
and other rights of such Unitholder as they in their sole discretion may deem
proper at any meeting of Unitholders, by written consent or otherwise. In
addition, by executing a Letter of Transmittal, a Unitholder also assigns to the
Purchasers all of the Unitholder's rights to receive distributions from the
Partnership with respect to Units which are accepted for payment and purchased
pursuant to the Offer, other than those distributions declared or paid during
the period commencing on the Offer Date and terminating on the Expiration Date.

Determination of Validity; Rejection of Units; Waiver of Defects; No Obligation
to Give Notice of Defects. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of Units
pursuant to the procedures described above will be determined by the Purchasers,
in their sole discretion, which determination shall be final and binding. The
Purchasers reserve the absolute right to reject any or all tenders if not in
proper form or if the acceptance of, or payment for, the absolute right to
reject any or all tenders if not in proper form or if the acceptance of, or
payment for, the Units tendered may, in the opinion of the Purchasers' counsel,
be unlawful. The Purchasers also reserve the right to waive any defect or
irregularity in any tender with respect to any particular Units of any
particular Unitholder, and the Purchasers' interpretation of the terms and
conditions of the Offer (including the Letter of Transmittal and the
Instructions thereto) will be final and binding. Neither the Purchasers, the
Depositary, nor any other person will be under any duty to give notification of
any defects or irregularities in the tender of any Units or will incur any
liability for failure to give any such notification.

A tender of Units pursuant to any of the procedures described above
will constitute a binding agreement between the tendering Unitholder and the
Purchasers upon the terms and subject to the conditions of the Offer, including
the tendering Unitholder's representation and warranty that (i) such Unitholder
owns the Units being tendered within the meaning of Rule 14e-4 under the
Exchange Act and (ii) the tender of such Unit complies with Rule 14e-4. Rule
14e-4 requires, in general, that a tendering security holder actually be able to
deliver the security subject to the tender offer, and is of concern particularly
to any Unitholders who have granted options to sell or purchase the Units, hold
option rights to acquire such securities, maintain "short" positions in the
Units (i.e., have borrowed the Units) or have loaned the Units to a short
seller. Because of the nature of limited partnership interests, the Purchasers
believe it is unlikely that any option trading or short selling activity exists

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<PAGE>

with respect to the Units. In any event, a Unit holder will be deemed to tender
Units in compliance with Rule 14e-4 and the Offer if the holder is the record
owner of the Units and the holder (i) delivers the Units pursuant to the terms
of the Offer, (ii) causes such delivery to be made, (iii) guarantees such
delivery, (iv) causes a guaranty of such delivery, or (v) uses any other method
permitted in the Offer (such as facsimile delivery of the Transmittal Letter).

Section 4. Withdrawal Rights. Except as otherwise provided in this Section 4,
all tenders of Units pursuant to the Offer are irrevocable, provided that Units
tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment as provided in this
Offer to Purchase, may also be withdrawn at any time on or after August 29,
1998.

For withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at the address or
the facsimile number set forth in the attached Letter of Transmittal. Any such
notice of withdrawal must specify the name of the person who tendered the Units
to be withdrawn and must be signed by the person(s) who signed the Letter of
Transmittal in the same manner as the Letter of Transmittal was signed.

If purchase of, or payment for, Units is delayed for any reason or if
the Purchasers are unable to purchase or pay for Units for any reason, then,
without prejudice to the Purchasers' rights under the Offer, tendered Units may
be retained by the Depositary on behalf of the Purchasers and may not be
withdrawn except to the extent that tendering Unitholders are entitled to
withdrawal rights as set forth in this Section 4, subject to Rule 14e-1(c) under
the Exchange Act, which provides that no person who makes a tender offer shall
fail to pay the consideration offered or return the securities deposited by or
on behalf of security holders promptly after the termination or withdrawal of
the tender offer.

All questions as to the form and validity (including time of receipt)
of notices of withdrawal will be determined by the Purchasers, in their sole
discretion, which determination shall be final and binding. Neither the
Purchasers, the Depositary, nor any other person will be under any duty to give
notification of any defects or irregularities in any notice of withdrawal or
will incur any liability for failure to give any such notification.

Any Units properly withdrawn will be deemed not to be validly tendered
for purposes of the Offer. Withdrawn Units may be re-tendered, however, by
following the procedures described in Section 3 at any time prior to the
Expiration Date.

Section 5. Extension of Tender Period; Termination; Amendment. The Purchasers
expressly reserve the right, in their sole discretion, at any time and from time
to time, (i) to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and the payment for, any Units by
giving oral or written notice of such extension to the Depositary, (ii) upon the
occurrence or failure to occur of any of the conditions specified in Section 13,
to delay the acceptance for payment of, or payment for, any Units not heretofore
accepted for payment or paid for, or to terminate the Offer and not accept for
payment any Units not theretofore accepted for payment or paid for, by giving
oral or written notice of such termination to the Depositary, and (iii) to amend
the Offer in any respect (including, without limitation, by increasing or
decreasing the consideration offered or the number of Units being sought in the
Offer or both or changing the type of consideration) by giving oral or written
notice of such amendment to the Depositary. Any extension, termination or
amendment will be followed as promptly as practicable by public announcement,

11
<PAGE>

the announcement in the case of an extension to be issued no later than 9:00
a.m., Eastern Standard Time, on the next business day after the previously
scheduled Expiration Date, in accordance with the public announcement
requirement of Rule 14d-4(c) under the Exchange Act. Without limiting the manner
in which the Purchasers may choose to make any public announcement, except as
provided by applicable law (including Rule 14d-4(c) under the Exchange Act), the
Purchasers will have no obligation to publish, advertise or otherwise
communicate any such public announcement, other than by issuing a release to the
Dow Jones News Service. The Purchasers may also be required by applicable law to
disseminate to Unitholders certain information concerning the extensions of the
Offer and any material changes in the terms of the Offer.

If the Purchasers extend the Offer, or if the Purchasers (whether
before or after its acceptance for payment of Units) are delayed in their
payment for Units or are unable to pay for Units pursuant to the Offer for any
reason, then, without prejudice to the Purchasers' rights under the Offer, the
Depositary may retain tendered Units on behalf of the Purchasers, and such Units
may not be withdrawn except to the extent tendering Unitholders are entitled to
withdrawal rights as described in Section 4. However, the ability of the
Purchasers to delay payment for Units that the Purchasers have accepted for
payment is limited by Rule 14e-1 under the Exchange Act, which requires that the
Purchasers pay the consideration offered or return the securities deposited by
or on behalf of holders of securities promptly after the termination or
withdrawal of the Offer.

If the Purchasers make a material change in the terms of the Offer or
the information concerning the Offer or waive a material condition of the Offer,
the Purchasers will extend the Offer to the extent required by Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act. The minimum period during which an
offer must remain open following a material change in the terms of the offer or
information concerning the offer, other than a change in price or a change in
percentage of securities sought, will depend upon the facts and circumstances,
including the relative materiality of the change in the terms or information.
With respect to a change in price or a change in percentage of securities sought
(other than an increase of not more than 2% of the securities sought), however,
a minimum ten business day period is generally required to allow for adequate
dissemination to security holders and for investor response. As used in this
Offer to Purchase, "business day" means any day other than a Saturday, Sunday or
a federal holiday, and consists of the time period from 12:01 a.m. through 12:00
midnight, Pacific Standard Time.

Section 6. Certain Federal Income Tax Consequences. THE FEDERAL INCOME TAX
DISCUSSION SET FORTH BELOW IS INCLUDED HEREIN FOR GENERAL
INFORMATION ONLY AND DOES NOT PURPORT TO ADDRESS ALL ASPECTS OF
TAXATION THAT MAY BE RELEVANT TO A PARTICULAR UNITHOLDER. For
example, this discussion does not address the effect of any applicable foreign,
state, local or other tax laws other than federal income tax laws. Certain
Unitholders (including trusts, foreign persons, tax-exempt organizations or
corporations subject to special rules, such as life insurance companies or S
corporations) may be subject to special rules not discussed below. This
discussion is based on the Internal Revenue Code of 1986, as amended (the
"Code"), existing regulations, court decisions and Internal Revenue Service
("IRS") rulings and other pronouncements. EACH UNITHOLDER TENDERING UNITS SHOULD
CONSULT SUCH UNITHOLDER'S OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES
TO SUCH UNITHOLDER OF ACCEPTING THE OFFER, INCLUDING THE APPLICATION OF THE
ALTERNATIVE MINIMUM TAX AND FEDERAL, FOREIGN, STATE, LOCAL AND OTHER TAX LAWS.

12
<PAGE>

The following discussion is based on the assumption that the
Partnership is treated as a partnership for federal income tax purposes and is
not a "publicly traded partnership" as that term is defined in the Code.

Gain or Loss. A taxable Unitholder will recognize a gain or loss on the
sale of such Unitholder's Units in an amount equal to the difference between (i)
the amount realized by such Unitholder on the sale and (ii) such Unitholder's
adjusted tax basis in the Units sold. The amount realized by a Unitholder will
include the Unitholder's share of the Partnership's liabilities, if any (as
determined under Code section 752 and the regulations thereunder). If the
Unitholder reports a loss on the sale, such loss generally could not be
currently deducted by such Unitholder except against such Unitholder's capital
gains from other investments. In addition, such loss would be treated as a
passive activity loss. (See "Suspended Passive Activity Losses" below.)

The adjusted tax basis in the Units of a Unitholder will depend upon
individual circumstances. (See also "Partnership Allocations in Year of Sale"
below.) Each Unitholder who plans to tender hereunder should consult with the
Unitholder's own tax advisor as to the Unitholder's adjusted tax basis in the
Unitholder's Units and the resulting tax consequences of a sale.

If any portion of the amount realized by a Unitholder is attributable
to such Unitholder's share of "unrealized receivables" or "substantially
appreciated inventory items" as defined in Code section 751, a corresponding
portion of such Unitholder's gain or loss will be treated as ordinary gain or
loss. It is possible that the basis allocation rules of Code Section 751 may
result in a Unitholder's recognizing ordinary income with respect to the portion
of the Unitholder's amount realized on the sale of a Unit that is attributable
to such items while recognizing a capital loss with respect to the remainder of
the Unit.

A tax-exempt Unitholder (other than an organization described in Code
Section 501(c)(7) (social club), 501(c)(9) (voluntary employee benefit
association), 501(c)(17) (supplementary unemployment benefit trust), or
501(c)(20) (qualified group legal services plan)) should not be required to
recognize unrelated trade or business income upon the sale of its Units pursuant
to the Offer, assuming that such Unitholder does not hold its Units as a
"dealer" and has not acquired such Units with debt financed proceeds.

Partnership Allocations in Year of Sale. A tendering Unitholder will be
allocated the Unitholder's pro rata share of the annual taxable income and
losses from the Partnership with respect to the Units sold for the period
through the date of sale, even though such Unitholder will assign to the
Purchasers their rights to receive certain cash distributions with respect to
such Units. Such allocations and any Partnership distributions for such period
would affect a Unitholder's adjusted tax basis in the tendered Units and,
therefore, the amount of gain or loss recognized by the Unitholder on the sale
of the Units.

Possible Tax Termination. The Code provides that if 50% or more of the capital
and profits interests in a partnership are sold or exchanged within a single
12-month period, such partnership generally will terminate for federal income
tax purposes. It is possible that the Partnership could terminate for federal
income tax purposes as a result of consummation of the Offer. If so, the
Partnership will be treated as having made a liquidating distribution of an
undivided interest in all of its assets to the Unitholders, the partners of the
Partnership after consummation of the Offer (i.e., the nontendering Unitholders
and the Purchasers) would be treated as having recontributed their interests in
Partnership assets to the Partnership, and the capital accounts of all partners

13
<PAGE>

would be restated. A Unitholder would recognize gain on the liquidating
distribution only to the extent that the amount of cash deemed distributed to
the Unitholder exceeded the Unitholder's basis in the Units. Depending on the
Unitholders' bases in their Units and the Partnership's tax basis in its
property, a tax termination could affect, perhaps adversely, the amount of
depreciation deductions reported by the Partnership for the period following the
date of such termination. A tax termination of the Partnership also could have
the adverse effect on Unitholders whose tax year is not the calendar year, of
the inclusion of more than one year of Partnership tax items in one tax return
of such Unitholders, resulting in a "bunching" of income. In addition, a tax
termination could have the adverse effect on non-tendering Unitholders who
subsequently dispose of their Units at a gain of requiring them to treat a
greater portion of such gain as ordinary income (due to the application of Code
Section 735) than would otherwise be required absent a tax termination of the
Partnership.

Suspended "Passive Activity Losses". A Unitholder who sells all of the
Unitholder's Units would be able to deduct "suspended" passive activity losses
from the Partnership, if any, in the year of sale free of the passive activity
loss limitation. As a limited partner of the Partnership, which was engaged in
real estate activities, the ability of a Unitholder, who or which is subject to
the passive activity loss rules, to claim tax losses from the Partnership was
limited. Upon sale of all of the Unitholder's Units, such Unitholder would be
able to use any "suspended" passive activity losses first against gain, if any,
on sale of the Unitholder's Units and then against income from any other source.

Foreign Unitholders. Gain realized by a foreign Unitholder on a sale of a Unit
pursuant to the Offer will be subject to federal income tax. Under Section 1445
of the Code, the transferee of a partnership interest held by a foreign person
is generally required to deduct and withhold a tax equal to 10% of the amount
realized on the disposition. The Purchasers will withhold 10% of the amount
realized by a tendering Unitholder from the purchase price payment to be made to
such Unitholder unless the Unitholder properly completes and signs the FIRPTA
Affidavit included as part of the Letter of Transmittal certifying the
Unitholder's TIN, that such Unitholder is not a foreign person and the
Unitholder's address. Amounts withheld would be creditable against a foreign
Unitholder's federal income tax liability and, if in excess thereof, a refund
could be obtained from the Internal Revenue Service by filing a U.S. income tax
return.

Section 7. Effects of the Offer.

Limitations on Resales. The Purchasers do not believe the provisions of the
Partnership Agreement should restrict transfers of Units.

Effect on Trading Market. There is no established public trading market for the
Units and, therefore, a reduction in the number of Unitholders should not
materially further restrict the Unitholders' ability to find purchasers for
their Units on any secondary market.

Voting Power of Purchasers. Depending on the number of Units acquired by the
Purchasers pursuant to the Offer, the Purchasers may have the ability to exert
certain influence on matters subject to the vote of Unitholders, though the
maximum number of Units sought hereunder would not give the Purchasers a
controlling voting interest.

The Units are registered under the Exchange Act, which requires, among
other things that the Partnership furnish certain information to its Unitholders

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<PAGE>

and to the Commission and comply with the Commission's proxy rules in connection
with meetings of, and solicitation of consents from, Unitholders. The Purchasers
do not believe that the purchase of Units pursuant to the Offer will result in
the Units becoming eligible for deregistration under the Exchange Act.

Section 8. Future Plans. Following the completion of the Offer, the
Purchasers, or their affiliates, may acquire additional Units. Any such
acquisitions may be made through private purchases, one or more future tender
offers or by any other means deemed advisable or appropriate. Any such
acquisitions may be at a consideration higher or lower than the consideration to
be paid for the Units purchased pursuant to the Offer.

The Purchasers are acquiring the Units pursuant to the Offer solely for
investment purposes. The Purchasers have no present intention to seek control of
the Partnership or to change the management or operations of the Partnership.
The Purchasers nevertheless reserve the right, at an appropriate time, to
exercise their rights as limited partners to vote on matters subject to a
limited partner vote, including, but not limited to, any vote to cause the sale
of the Partnership's properties and the liquidation and dissolution of the
Partnership.

Section 9. The Business of the Partnership. Information included herein
concerning the Partnership is derived from the Partnership's publicly-filed
reports. Additional information concerning the Partnership, its assets,
operations and management is contained in its Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q and other filings with the Securities and
Exchange Commission. Such reports and filings are available on the Commission's
EDGAR system, at its internet website at www.sec.gov, and are available for
inspection at the Commission's principal office in Washington, D.C. and at its
regional offices in New York, New York and Chicago, Illinois. The Purchasers
expressly disclaim any responsibility for the information included in such
reports and extracted in this discussion.

According to the Partnership's most recent 10-K, it was "organized to
invest in luxury multi-family residential housing complexes" by acquiring
substantially all the equity interest in operating partnerships that own the
complexes. The Partnership completed its capitalization through the sale of
Units in February 1989 and used the proceeds to acquire interests in two such
multi-family residential real properties, a 252-unit complex located in
Frederick, Maryland, and a 163-unit complex in New York City.

Selected Financial Data. Set forth below is a summary of certain financial data
for the Partnership which has been excerpted from the Partnership's Annual
Report on Form 10-K for the year ended December 31, 1997.

The following table sets forth in comparative tabular form a summary of
selected financial data for each of the Partnership's last five full years:

15
<PAGE>

The following is selected financial data for the five years ended
December 31, (in thousands, except per Unit data.)

<TABLE>
Year Ended December 31,

l997 l996 l995 l994 l993
------ ------ ------ ------ ------

<S> <C> <C> <C> <C> <C> <C>
Total revenue $6,787,l6l $6,434,698 $6,092,55l $5,880,772 $5,729,520

Net loss (596,273) (69,521) (397,620) (465,4l3) (1,219,746)

Net loss allocated
per unit of limited
partnership interest - - - (.39) (1.23)

At year end:
Total assets 38,149,194 39,322,376 40,458,675 41,709,487 43,416,439

Mortgages
payable 34,449,756 35,320,565 36,589,220 37,441,770 37,869,214

Long-term debt - - - - -

</TABLE>

Section 10. Conflicts of Interest. The Depositary is affiliated with
certain Purchasers. Therefore, by virtue of this affiliation, the Depositary may
have inherent conflicts of interest in acting as Depositary for the Offer.

Section 11. Certain Information Concerning the Purchasers. The Purchasers are
Accelerated High Yield Pension Investors, L.P.; MacKenzie Patterson Special
Fund, L.P.; MacKenzie Patterson Special Fund 3, LLC; MacKenzie Specified Income
Fund, L.P.; MP Value Fund 5, LLC; Cal-Kan, Inc.; JDF & Associates, LLC; Moraga
Gold, LLC; and Steven Gold. For information concerning the Purchasers and their
respective principals, please refer to Schedule I attached hereto. The principal
business of each of the entity Purchasers is investment in securities,
particularly real estate-based securities. The principal business address of the
Purchasers other than Steven Gold and JDF & Associates, LLC is 1640 School
Street, Moraga, California 94556. The principal business address of Steven Gold
is Four Embarcadero, Suite 3610, San Francisco, California 94111 and the
principal address of JDF & Associates, LLC is 118 Glynn Way, Houston, Texas
77056.

The Purchasers have made binding commitments to contribute and have
available sufficient amounts of liquid capital necessary to fund the acquisition
of all Units subject to the Offer, the expenses to be incurred in connection
with the Offer, and all other anticipated costs of the Purchasers. The
Purchasers are not public companies and have not prepared audited financial
statements. The Purchasers, their general partners, owners and members have an
aggregate net worth in excess of $15 million, including net liquid assets of
more than $5 million.

An affiliate of certain of the Purchasers acquired 750 Units in
February, 1998 in an individual privately negotiated transaction with total
acquisition costs (including all commissions, fees and expenses incurred in
connection with the acquisitions) equal to $3.03 per Unit. Other than these 750
Units owned by an affiliate (equal to less than 0.1% of the outstanding Units),
neither the Purchasers nor any of their affiliates are the beneficial owners of

16
<PAGE>

any Units.

Except as otherwise set forth herein, (i) neither the Purchasers nor,
to the best knowledge of the Purchasers, the persons listed on Schedule I nor
any affiliate of the Purchasers beneficially owns or has a right to acquire any
Units, (ii) neither the Purchasers nor, to the best knowledge of the Purchasers,
the persons listed on Schedule I nor any affiliate of the Purchasers, or any
director, executive officer or subsidiary of any of the foregoing has effected
any transaction in the Units within the past 60 days, (iii) neither the
Purchasers nor, to the best knowledge of the Purchasers, the persons listed on
Schedule I nor any affiliate of the Purchasers has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Partnership, including but not limited to, contracts,
arrangements, understandings or relationships concerning the transfer or voting
thereof, joint ventures, loan or option arrangements, puts or calls, guarantees
of loans, guarantees against loss or the giving or withholding of proxies,
consents or authorizations, (iv) there have been no transactions or business
relationships which would be required to be disclosed under the rules and
regulations of the Commission between any of the Purchasers or, to the best
knowledge of the Purchasers, the persons listed on Schedule I, or any affiliate
of the Purchasers on the one hand, and the Partnership or its affiliates, on the
other hand, and (v) there have been no contracts, negotiations or transactions
between the Purchasers, or to the best knowledge of the Purchasers any affiliate
of the Purchasers on the one hand, the persons listed on Schedule I, and the
Partnership or its affiliates, on the other hand, concerning a merger,
consolidation or acquisition, tender offer or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of
assets.

Section 12. Source of Funds. The Purchasers expect that approximately $984,375
would be required to purchase 196,875 Units, if tendered, and an additional
$15,000 may be required to pay related fees and expenses. The Purchasers
anticipate funding all of the purchase price and related expenses through their
existing liquid capital reserves.

Section 13. Conditions of the Offer. Notwithstanding any other term of the
Offer, the Purchasers shall not be required to accept for payment or to pay for
any Units tendered if all authorizations, consents, orders or approvals of, or
declarations or filings with, or expirations of waiting periods imposed by, any
court, administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, necessary for the consummation of the
transactions contemplated by the Offer shall not have been filed, occurred or
been obtained on or before the Expiration Date.

The Purchasers shall not be required to accept for payment or pay for
any Units not theretofore accepted for payment or paid for and may terminate or
amend the Offer as to such Units if, at any time on or after the date of the
Offer and before the Expiration Date, any of the following conditions exists:

(a) a preliminary or permanent injunction or other order of any federal
or state court, government or governmental authority or agency shall have been
issued and shall remain in effect which (i) makes illegal, delays or otherwise
directly or indirectly restrains or prohibits the making of the Offer or the
acceptance for payment of or payment for any Units by the Purchasers, (ii)
imposes or confirms limitations on the ability of the Purchasers effectively to

17
<PAGE>

exercise full rights of ownership of any Units, including, without
limitation, the right to vote any Units acquired by the Purchasers pursuant to
the Offer or otherwise on all matters properly presented to the Partnership's
Unitholders, (iii) requires divestiture by the Purchasers of any Units, (iv)
causes any material diminution of the benefits to be derived by the Purchasers
as a result of the transactions contemplated by the Offer or (v) might
materially adversely affect the business, properties, assets, liabilities,
financial condition, operations, results of operations or prospectus of the
Purchasers or the Partnership;

(b) there shall be any action taken, or any statute, rule, regulation
or order proposed, enacted, enforced, promulgated, issued or deemed applicable
to the Offer by any federal or state court, government or governmental authority
or agency, other than the application of the waiting period provisions of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which might,
directly or indirectly, result in any of the consequences referred to in clauses
(i) through (v) of paragraph (a) above;

(c) any change or development shall have occurred or been threatened
since the date hereof, in the business, properties, assets, liabilities,
financial condition, operations, results of operations or prospects of the
Partnership, which, in the reasonable judgment of the Purchasers, is or may be
materially adverse to the Partnership, or the Purchasers shall have become aware
of any fact that, in the reasonable judgment of the Purchasers, does or may have
a material adverse effect on the value of the Units;

(d) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange or
in the over-the-counter market in the United States, (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States, (iii) any limitation by any governmental authority on, or other
event which might affect, the extension of credit by lending institutions or
result in any imposition of currency controls in the United States, (iv) a
commencement of a war or armed hostilities or other national or international
calamity directly or indirectly involving the United States, (v) a material
change in United States or other currency exchange rates or a suspension of a
limitation on the markets thereof, or (vi) in the case of any of the foregoing
existing at the time of the commencement of the Offer, a material acceleration
or worsening thereof; or

(e) it shall have been publicly disclosed or the Purchasers shall have
otherwise learned that (i) more than fifty percent of the outstanding Units have
been or are proposed to be acquired by another person (including a "group"
within the meaning of Section 13(d)(3) of the Exchange Act), or (ii) any person
or group that prior to such date had filed a Statement with the Commission
pursuant to Sections 13(d) or (g) of the Exchange Act has increased or proposes
to increase the number of Units beneficially owned by such person or group as
disclosed in such Statement by two percent or more of the outstanding Units.

The foregoing conditions are for the sole benefit of the Purchasers and
may be asserted by the Purchasers regardless of the circumstances giving rise to
such conditions or may be waived by the Purchasers in whole or in part at any
time and from time to time in their sole discretion. Any termination by the
Purchasers concerning the events described above will be final and binding upon
all parties.

18
<PAGE>

Section 14. Certain Legal Matters.

General. Except as set forth in this Section 14, the Purchasers are not aware of
any filings, approvals or other actions by any domestic or foreign governmental
or administrative agency that would be required prior to the acquisition of
Units by the Purchasers pursuant to the Offer. Should any such approval or other
action be required, it is the Purchasers' present intention that such additional
approval or action would be sought. While there is no present intent to delay
the purchase of Units tendered pursuant to the Offer pending receipt of any such
additional approval or the taking of any such action, there can be no assurance
that any such additional approval or action, if needed, would be obtained
without substantial conditions or that adverse consequences might not result to
the Partnership's business, or that certain parts of the Partnership's business
might not have to be disposed of or held separate or other substantial
conditions complied with in order to obtain such approval or action, any of
which could cause the Purchasers to elect to terminate the Offer without
purchasing Units thereunder. The Purchasers' obligation to purchase and pay for
Units is subject to certain conditions, including conditions related to the
legal matters discussed in this Section 14.

Antitrust. The Purchasers do not believe that the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, is applicable to the acquisition
of Units pursuant to the Offer.

Margin Requirements. The Units are not "margin securities" under the regulations
of the Board of Governors of the Federal Reserve System and, accordingly, such
regulations are not applicable to the Offer.

State Takeover Laws. A number of states have adopted anti-takeover laws which
purport, to varying degrees, to be applicable to attempts to acquire securities
of corporations which are incorporated in such states or which have substantial
assets, security holders, principal executive offices or principal places of
business therein. These laws are directed at the acquisition of corporations and
not partnerships. The Purchasers, therefore, do not believe that any
anti-takeover laws apply to the transactions contemplated by the Offer.

Although the Purchasers have not attempted to comply with any state
anti-takeover statutes in connection with the Offer, the Purchasers reserve the
right to challenge the validity or applicability of any state law allegedly
applicable to the Offer and nothing in this Offer nor any action taken in
connection herewith is intended as a waiver of such right. If any state
anti-takeover statute is applicable to the Offer, the Purchasers might be unable
to accept for payment or purchase Units tendered pursuant to the Offer or be
delayed in continuing or consummating the Offer. In such case, the Purchasers
may not be obligated to accept for purchase or pay for any Units tendered.

Section 15. Fees and Expenses. The Purchasers have retained MacKenzie Patterson,
Inc., an affiliate of certain Purchasers, to act as Depositary in connection
with the Offer. The Purchasers will pay the Depositary reasonable and customary
compensation for its services in connection with the Offer, plus reimbursement
for out-of-pocket expenses, and will indemnify the Depositary against certain
liabilities and expenses in connection therewith, including liabilities under
the federal securities laws. The Purchasers will also pay all costs and expenses
of printing, publication and mailing of the Offer and all costs of transfer.

19
<PAGE>

Section 16. Miscellaneous. THE OFFER IS NOT BEING MADE TO (NOR WILL TENDERS
BE ACCEPTED FROM OR ON BEHALF OF) UNITHOLDERS IN ANY JURISDICTION IN WHICH THE
MAKING OF THE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH
THE LAWS OF SUCH JURISDICTION. THE PURCHASERS ARE NOT AWARE OF ANY JURISDICTION
WITHIN THE UNITED STATES IN WHICH THE MAKING OF THE OFFER OR THE ACCEPTANCE
THEREOF WOULD BE ILLEGAL.

No person has been authorized to give any information or to make any
representation on behalf of the Purchasers not contained herein or in the Letter
of Transmittal and, if given or made, such information or representation must
not be relied upon as having been authorized.

June 29, 1998

ACCELERATED HIGH YIELD PENSION INVESTORS, L.P.
MACKENZIE PATTERSON SPECIAL FUND, L.P.
MACKENZIE PATTERSON SPECIAL FUND 3, LLC
MACKENZIE SPECIFIED INCOME FUND, L.P.
MP VALUE FUND 5, LLC.
CAL-KAN, INC.
JDF & ASSOCIATES, LLC
MORAGA GOLD, LLC
STEVEN GOLD

20
<PAGE>

SCHEDULE I

THE PURCHASERS AND THEIR RESPECTIVE PRINCIPALS

The Purchasers are Accelerated High Yield Pension Investors, L.P.;
MacKenzie Patterson Special Fund, L.P.; MacKenzie Patterson Special Fund 3, LLC;
MacKenzie Specified Income Fund, L.P.; MP Value Fund 5, LLC; Cal-Kan, Inc.; JDF
& Associates, LLC; Moraga Gold, LLC; and Steven Gold. The General Partner of
each of Accelerated High Yield Pension Investors, L.P.; MacKenzie Patterson
Special Fund, L.P.; and MacKenzie Specified Income Fund, L.P. is MacKenzie
Patterson, Inc. The Managing Member of each of MacKenzie Patterson Special Fund
3, LLC and MP Value Fund 5, LLC is MacKenzie Patterson, Inc. The names of the
directors and executive officers of MacKenzie Patterson, Inc. and Cal-Kan, Inc.,
the principal officers and members of Moraga Gold, LLC and JDF & Associates, LLC
and the present principal occupations and five year employment histories of each
such person are set forth below. Each of the entity Purchasers is managed or
advised by affiliates of MacKenzie Patterson, Inc. The Purchasers have jointly
made the offer and are jointly and severally liable for satisfying its terms.
Other than the foregoing, the Purchasers' relationship consists of an informal
agreement to share the costs associated with making the offer and to allocate
any resulting purchases of Units among them in such manner and proportions as
they may determine in the future. Each individual is a citizen of the United
States of America.

MacKenzie Patterson, Inc.

C.E. Patterson is President of MacKenzie Patterson, Inc. He is the
co-founder and President of Patterson Financial Services, Inc. In 1981, Mr.
Patterson founded PFS with Berniece A. Patterson, as a financial planning firm.
Mr. Patterson founded Patterson Real Estate Services, a licensed California Real
Estate Broker, in 1982. As President of PFS, Mr. Patterson is responsible for
all investment counseling activities. He supervises the analysis of investment
opportunities for the clients of the firm. He is a trustee of Consolidated
Capital Properties Trust, a liquidating trust formed out of the bankruptcy court
proceedings involving Consolidated Capital Properties, Ltd. Mr. Patterson is
also an officer and controlling shareholder of Cal-Kan, Inc., an executive
officer and controlling shareholder of Moraga Partners, Inc., and trustee of the
Pat Patterson Western Securities, Inc. Profit Sharing Plan. Mr. Patterson,
through his affiliates, manages a number of investment and real estate
partnerships.

Berniece A. Patterson is a director of MacKenzie Patterson, Inc. In 1981,
Ms. Patterson and C.E. Patterson established Patterson Financial Services, Inc.
She serves as Chair of the Board and Vice President of PFS. Her responsibilities
with PFS include oversight of administrative matters and monitoring of past
projects underwritten by PFS. Ms. Patterson is Chief Executive Officer of an
affiliate, Pioneer Health Care Services, Inc., and is responsible for the
day-to-day operations of three nursing homes and over 300 employees.

Victoriaann Tacheira is senior vice president of MacKenzie Patterson, Inc.,
which she joined in 1988. Ms. Tacheira has eleven years of experience with the
NASD broker/dealer business and is experienced in all phases of broker/dealer
operations. She is licensed with the NASD as a General Securities Principal. She
is president and owner of North Coast Securities Corporation. Ms. Tacheira has
been certified by the College of Financial Planning in Denver, Colorado, as a
Financial ParaPlanner.

<PAGE>

Cal Kan, Inc.

Cal Kan, Inc. is a Kansas corporation owned by C. E. Patterson and Thomas
A. Frame. Mr. Patterson and Mr. Frame are also each an executive officer and
director of Cal Kan, Inc. Information regarding Mr. Patterson is set forth
above.

Thomas A. Frame has been the president of Paradigm Investment
Corporation, a real estate limited partnership secondary market firm, since
1986. In 1973, Mr. Frame was a co-founder of Transcentury Real Estate Masters,
Oakland, California, a residential and commercial real estate brokerage firm. In
1973 he also co-founded, and has since then been a partner in, Transcentury
Property Management Company, which as syndicated privately-placed real estate
limited partnerships owning multi-family residential properties. He is a trustee
of Consolidated Capital Properties Trust, a liquidating trust formed out of the
bankruptcy court proceedings involving Consolidated Capital Properties, Ltd. Mr.
Frame is co-owner and an executive officer and director of Cal Kan, Inc. Mr.
Frame, through his affiliates, manages over $6 million dollars in investor
capital and is currently managing a total of 1,150 residential units in four
states.

Moraga Gold, LLC

The members of Moraga Gold, LLC are Moraga Partners, Inc. and the David B.
Gold Trust. Information concerning Moraga Partners, Inc. is set forth below.

The David B. Gold Trust is a private trust of which Barbara Lurie is
the trustee and Steven Gold is responsible for certain investments. The sole
beneficiary of the trust is a nonprofit charitable foundation. The business
address of the trust is Four Embarcadero, Suite 3610, San Francisco, California
94111. Barbara Lurie has been employed for the last five years as a physician by
the University of California, San Francisco and the University of Minnesota.
Steven Gold, a California attorney, has been self-employed during the last five
years analyzing investments for his own account and for that of the trust. In
addition, he has participated in starting a number of business ventures,
including T/O devices, an import/export company.

Moraga Partners, Inc.

Moraga Partners, Inc. is a California corporation owned by C. E. Patterson.
Mr. Patterson is also an executive officer and director of Moraga Partners, Inc.
Information regarding Mr. Patterson is set forth above.

JDF & Associates, LLC

JDF & Associates is a Texas limited liability company engaged in real
estate investment activities. J. David Frantz is the general manager of JDF &
Associates LLC. Mr. Frantz has been an active investor in commercial real
estate, oil and gas investments and equity securities for the past 35 years. He
is currently chairman of Mexicali Borders Cafes, Inc., president of Frantz, Inc.
and eastern regional sales manager for a computer services firm. Mr. Frantz is a
graduate of the Wharton School of Finance. Patterson Financial Services, Inc.,
an affiliate of MacKenzie Patterson, Inc., has been engaged by Mr. Frantz to
provide certain real estate securities investment advice.

Exhibit (a)(2)

<PAGE>

LETTER OF TRANSMITTAL

THE OFFER, WITHDRAWAL RIGHTS AND PRORATION PERIOD WILL
EXPIRE AT 12:00 MIDNIGHT, PACIFIC STANDARD TIME, ON JULY
31, 1998 (the "Expiration Date") UNLESS EXTENDED.

Deliver to: MacKenzie Patterson, Inc.
1640 School Street
Moraga, California 94556

Via Facsimile: (925) 631-9119

For assistance: (800) 854-8357

(PLEASE INDICATE CHANGES
OR CORRECTIONS TO THE
ADDRESS PRINTED TO THE LEFT)

To participate in the Offer, a duly executed copy of this Letter of
Transmittal and any other documents required by this Letter of Transmittal must
be received by the Depositary on or prior to the Expiration Date. Delivery of
this Letter of Transmittal or any other required documents to an address other
than as set forth above does not constitute valid delivery. The method of
delivery of all documents is at the election and risk of the tendering
Unitholder. Please use the pre-addressed, postage-paid envelope provided.

This Letter of Transmittal is to be completed by holders of Units of
limited partnership interest in Secured Income L.P, a Delaware limited
partnership (the "Partnership"), pursuant to the procedures set forth in the
Offer to Purchase (as defined below). Capitalized terms used herein and not
defined herein have the meanings ascribed to such terms in the Offer to
Purchase.

PLEASE CAREFULLY READ THE ACCOMPANYING INSTRUCTIONS

Gentlemen:

The undersigned hereby tenders to Accelerated High Yield Pension Investors,
L.P.; MacKenzie Patterson Special Fund, L.P.; MacKenzie Patterson Special Fund
3, LLC; MacKenzie Specified Income Fund, L.P.; MP Value Fund 5, LLC; Cal-Kan,
Inc.; JDF & Associates, LLC; Moraga Gold, LLC; and Steven Gold (collectively the
"Purchasers") all of the Preferred Units of limited partnership interest
("Units") in the Partnership held by the undersigned as set forth above (or, if
less than all such Units, the number set forth below in the signature box), at a
purchase price equal to $5.00 per Unit, less the amount of any distributions
made or declared with respect to the Units between the Offer Date and the
Expiration Date, and upon the other terms and subject to the conditions set
forth in the Offer to Purchase, dated June 29, 1998 (the "Offer to Purchase")
and in this Letter of Transmittal, as each may be supplemented or amended from
time to time (which together constitute the "Offer"). Receipt of the Offer to
Purchase is hereby acknowledged. The undersigned recognizes that, if more than
196,875 Units are validly tendered prior to or on the Expiration Date and not
properly withdrawn, the Purchasers will, upon the terms of the Offer, accept for
payment from among those Units tendered prior to or on the Expiration Date
196,875 Units on a pro rata basis, with adjustments to avoid purchases of
certain fractional Units, based upon the number of Units validly tendered prior
to the Expiration Date and not withdrawn. Subject to and effective upon
acceptance for payment of any of the Units tendered hereby, the undersigned
hereby sells, assigns and transfers to, or upon the order of, Purchasers all
right, title and interest in and to such Units which are purchased pursuant to
the Offer. The undersigned hereby irrevocably constitutes and appoints the
Purchasers as the true and lawful agent and attorney-in-fact and proxy of the
undersigned with respect to such Units, with full power of substitution (such
power of attorney and proxy being deemed to be an irrevocable power and proxy
coupled with an interest), to

<PAGE>

deliver such Units and transfer ownership of such Units, on the books of the
Partnership, together with all accompanying evidences of transfer and
authenticity, to or upon the order of the Purchasers and, upon payment of the
purchase price in respect of such Units by the Purchasers, to exercise all
voting rights and to receive all benefits and otherwise exercise all rights of
beneficial ownership of such Units all in accordance with the terms of the
Offer. Subject to and effective upon the purchase of any Units tendered hereby,
the undersigned hereby requests that each of the Purchasers be admitted to the
Partnership as a "substitute Limited Partner" under the terms of the Partnership
Agreement of the Partnership. Upon the purchase of Units pursuant to the Offer,
all prior proxies and consents given by the undersigned with respect to such
Units will be revoked and no subsequent proxies or consents may be given (and if
given will not be deemed effective). In addition, by executing this Letter of
Transmittal, the undersigned assigns to the Purchasers all of the undersigned's
rights to receive distributions from the Partnership with respect to Units which
are purchased pursuant to the Offer, other than distributions declared or paid
on or after the Offer Date and through the Expiration Date. Upon request, the
Seller will execute and deliver, and irrevocably directs any custodian to
execute and deliver, any additional documents deemed by the Purchaser to be
necessary or desirable to complete the assignment, transfer and purchase of such
Units.

The undersigned hereby represents and warrants that the undersigned owns
the Units tendered hereby within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended, and has full power and authority to validly
tender, sell, assign and transfer the Units tendered hereby, and that when any
such Units are purchased by the Purchasers, the Purchasers will acquire good,
marketable and unencumbered title thereto, free and clear of all liens,
restrictions, charges, encumbrances, conditional sales agreements or other
obligations relating to the sale or transfer thereof, and such Units will not be
subject to any adverse claim. Upon request, the undersigned will execute and
deliver any additional documents deemed by the Purchasers to be necessary or
desirable to complete the assignment, transfer and purchase of Units tendered
hereby.

The undersigned understands that a tender of Units to the Purchasers will
constitute a binding agreement between the undersigned and the Purchasers upon
the terms and subject to the conditions of the Offer. The undersigned recognizes
the right of the Purchasers to effect a change of distribution address to
MacKenzie Patterson, Inc. at 1640 School Street, Moraga, California, 94556. The
undersigned recognizes that under certain circumstances set forth in the Offer
to Purchase, the Purchasers may not be required to accept for payment any of the
Units tendered hereby. In such event, the undersigned understands that any
Letter of Transmittal for Units not accepted for payment will be destroyed by
the Purchasers. All authority herein conferred or agreed to be conferred shall
survive the death or incapacity of the undersigned and any obligations of the
undersigned shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned. Except as stated in the Offer to
Purchase, this tender is irrevocable.

===============================================================================
SIGNATURE BOX
(Please complete Boxes A, B, C and D on the following page as necessary)
===============================================================================

- ----------------------------------------------------------------------------
Please sign exactly as your name is printed (or corrected) above, and insert
your Taxpayer Identification Number or Social Security Number in
the space provided below your X_______________________________
signature. For joint owners, (Signature of Owner) Date
each joint owner must sign.
(See Instructions 1) The
signatory hereto hereby certifies X_______________________________
under penalties of perjury the (Signature of Owner) Date
statements in Box B, Box C and,
if applicable, Box D. If the
undersigned is tendering less Taxpayer I.D. or Social # ____
than all Units held, the number Telephone No. (day) __________
of Units tendered is set forth (eve.)__________
below. Otherwise, all Units held
by the undersigned are tendered hereby.

<PAGE>

______________ Preferred Units

==============================================================================
BOX A
==============================================================================
Medallion Signature Guarantee
(Required for all Sellers)

(See Instruction 1)

Name and Address of Eligible Institution: ____________________________________
Authorized Signature _____________________________ Title _________________
Name ________________________________ Date _______________,199___
===============================================================================
===============================================================================
BOX B
SUBSTITUTE FORM W-9
(See Instruction 3 - Box B)
- -------------------------------------------------------------------------------
The person signing this Letter of Transmittal hereby certifies the
following to the Purchasers under penalties of perjury:

(i) The TIN set forth in the signature box on the front of
this Letter of Transmittal is the correct TIN of the Unitholder, or if this box
[ ] is checked, the Unitholder has applied for a TIN. If the Unitholder has
applied for a TIN, a TIN has not been issued to the Unitholder, and either: (a)
the Unitholder has mailed or delivered an application to receive a TIN to the
appropriate IRS Center or Social Security Administration Office, or (b) the
Unitholder intends to mail or deliver an application in the near future (it
being understood that if the Unitholder does not provide a TIN to the Purchasers
within sixty (60) days, 31% of all reportable payments made to the Unitholder
thereafter will be withheld until a TIN is provided to the Purchasers); and

(ii) Unless this box [ ] is checked, the Unitholder is not
subject to backup withholding either because the Unitholder: (a) is exempt from
backup withholding, (b) has not been notified by the IRS that the Unitholder is
subject to backup withholding as result of a failure to report all interest or
dividends, or (c) has been notified by the IRS that such Unitholder is no longer
subject to backup withholding.

Note: Place an "X" in the box in (ii) if you are unable to certify
that the Unitholder is not subject to backup withholding.

===============================================================================
===============================================================================
BOX C
FIRPTA AFFIDAVIT
(See Instruction 3 - Box C)
- -------------------------------------------------------------------------------
Under Section 1445(e)(5) of the Internal Revenue Code and Treas. Reg.
1.1445-11T(d), a transferee must withhold tax equal to 10% of the amount
realized with respect to certain transfers of an interest in a partnership if
50% or more of the value of its gross assets consists of U.S. real property
interests and 90% or more of the value of its gross assets consists of U.S. real
property interests plus cash equivalents, and the holder of the partnership
interest is a foreign person. To inform the Purchasers that no withholding is
required with respect to the Unitholder's interest in the Partnership, the
person signing this Letter of Transmittal hereby certifies the following under
penalties of perjury;
<PAGE>

(i) Unless this box [ ] is checked, the Unitholder, if an
individual, is a U.S. citizen or a resident alien for purposes of U.S. income
taxation, and if other than an individual, is not a foreign corporation, foreign
partnership, foreign estate or foreign trust (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations); (ii) the Unitholder's U.S.
social security number (for individuals) or employer identification number
(for non-individuals) is correctly printed in the signature box on the front of
this Letter of Transmittal; and (iii) the Unitholder's home address (for
individuals), or office address (for non-individuals), is correctly printed (or
corrected) on the front of this Letter of Transmittal. If a corporation, the
jurisdiction of incorporation is
- ----------.
The person signing this Letter of Transmittal understands that this
certification may be disclosed to the IRS by the Purchasers and that any false
statements contained herein could be punished by fine, imprisonment, or both.
===============================================================================
===============================================================================
BOX D
SUBSTITUTE FORM W-8
(See Instruction 4 - Box D)
- -------------------------------------------------------------------------------
By checking this box [ ], the person signing this Letter of
Transmittal hereby certifies under penalties of perjury that the Unitholder is
an "exempt foreign person" for purposes of the backup withholding rules under
the U.S. federal income tax laws, because the Unitholder:

(i) Is a nonresident alien individual or a foreign corporation,
partnership, estate or trust;
(ii) If an individual, has not been and plans not to be present in the
U.S. for a total of 183 days or more during the calendar year; and
(iii) Neither engages, nor plans to engage, in a U.S. trade or business
that has effectively connected gains from transactions with a
broker or barter exchange.
===============================================================================

INSTRUCTIONS

Forming Part of the Terms and Conditions of the Offer

1. Tender, Signature Requirements; Delivery. After carefully reading and
completing this Letter of Transmittal, in order to tender Units a Unitholder
must sign at the "X" on the bottom of the first page of this Letter of
Transmittal and insert the Unitholder's correct Taxpayer Identification Number
or Social Security Number ("TIN") in the space provided below the signature. The
signature must correspond exactly with the name printed (or corrected) on the
front of this Letter of Transmittal without any change whatsoever. If this
Letter of Transmittal is signed by the registered Unitholder of the Units a
Medallion signature guarantee on this Letter of Transmittal is required.
Similarly, if Units are tendered for the account of a member firm of a
registered national security exchange, a member firm of the National Association
of Securities Dealers, Inc. or a commercial bank, savings bank, credit union,
savings and loan association or trust company having an office, branch or agency
in the United States (each an "Eligible Institution"), a Medallion signature
guarantee is required. In all other cases, signatures on this Letter of

<PAGE>

Transmittal must be Medallion guaranteed by an Eligible Institution, by
completing the Signature guarantee set forth in BOX A of this Letter of
Transmittal. If any tendered Units are registered in the names of two or more
joint holders, all such holders must sign this Letter of Transmittal. If this
Letter of Transmittal is signed by trustees, administrators, guardians,
attorneys-in-fact, officers of corporations, or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing and must
submit proper evidence satisfactory to the Purchasers of their authority to so
act. For Units to be validly tendered, a properly completed and duly executed
Letter of Transmittal, together with any required signature guarantees in BOX A,
and any other documents required by this Letter of Transmittal, must be received
by the depositary prior to or on the Expiration Date at its address or facsimile
number set forth on the front of this Letter of Transmittal. No alternative,
conditional or contingent tenders will be accepted. All tendering Unitholders by
execution of this Letter of Transmittal waive any right to receive any notice of
the acceptance of their tender.

2. Transfer Taxes. The Purchasers will pay or cause to be paid all transfer
taxes, if any, payable in respect of Units accepted for payment pursuant to the
Offer.

3. U.S. Persons. A Unitholder who or which is a United States citizen or
resident alien individual, a domestic corporation, a domestic partnership, a
domestic trust or a domestic estate (collectively "United States persons") as
those terms are defined in the Internal Revenue Code and Income Tax Regulations,
should complete the following:

Box B - Substitute Form W-9. In order to avoid 31% federal income tax
backup withholding, the Unitholder must provide to the Purchasers the
Unitholder's correct Taxpayer Identification Number or Social Security
Number ("TIN") in the space provided below the signature line and
certify, under penalties of perjury, that such Unitholder is not
subject to such backup withholding. The TIN that must be provided is
that of the registered Unitholder indicated on the front of this Letter
of Transmittal. If a correct TIN is not provided, penalties may be
imposed by the Internal Revenue Service ("IRS"), in addition to the
Unitholder being subject to backup withholding. Certain Unitholders
(including, among others, all corporations) are not subject to backup
withholding. Backup withholding is not an additional tax. If
withholding results in an overpayment of taxes, a refund may be
obtained from the IRS.

Box C - FIRPTA Affidavit. To avoid potential withholding of tax
pursuant to Section 1445 of the Internal Revenue Code, each Unitholder
who or which is a United States Person (as defined Instruction 3 above)
must certify, under penalties of perjury, the Unitholder's TIN and
address, and that the Unitholder is not a foreign person. Tax withheld
under Section 1445 of the Internal Revenue Code is not an additional
tax. If withholding results in an overpayment of tax, a refund may be
obtained from the IRS.

4. Box D - Foreign Persons. In order for a Unitholder who is a foreign
person (i.e., not a United States Person as defined in 3 above) to qualify as
exempt from 31% backup withholding, such foreign Unitholder must certify, under
penalties of perjury, the statement in BOX D of this Letter of Transmittal
attesting to that foreign person's status by checking the box preceding such
statement. However, such person will be subject to withholding of tax under
Section 1445 of the Code.
<PAGE>

5. Additional Copies of Offer to Purchase and Letter of Transmittal.
Requests for assistance or additional copies of the Offer to Purchase and this
Letter of Transmittal may be obtained from the Purchasers by calling
800-854-8357.

Exhibit (a)(3)

<PAGE>

June 29, 1998

TO: UNIT HOLDERS OF SECURED INCOME L.P.

SUBJECT: OFFER TO PURCHASE UNITS

Dear Unit Holder:

As described in the enclosed Offer to Purchase and related Letters of
Transmittal (the "Offer"), Accelerated High Yield Pension Investors, L.P.;
MacKenzie Patterson Special Fund, L.P.; MacKenzie Patterson Special Fund 3, LLC;
MacKenzie Specified Income Fund, L.P.; MP Value Fund 5, LLC; Cal- Kan, Inc.; JDF
& Associates, LLC; Moraga Gold, LLC; and Steven Gold (collectively the
"Purchasers") are offering to purchase up to 196,875 Units of limited
partnership interest (the "Units") in Secured Income L.P, a Delaware limited
partnership (the "Partnership") at a purchase price equal to:

$5.00 per Unit

The Offer will provide you with an opportunity to liquidate all, or a
portion of, your investment in Secured Income L.P without the usual transaction
costs associated with market sales or partnership transfer fees.

After carefully reading the enclosed Offer, if you elect to tender your
Units, mail (using the enclosed pre-addressed, postage paid envelope) or
telecopy a duly completed and executed copy of the Letter of Transmittal (the
purple form)and Change of Address forms, and any other documents required by the
Letter of Transmittal, to the Depositary for the Offer at:

MacKenzie Patterson, Inc.,
1640 School Street
Moraga, California 94556
Telecopy: (925) 631-9119

If you have any questions or need assistance, please call the
Depository at 800-854-8357.

This Offer expires (unless extended) July 31, 1998

Exhibit (a)(4)

<PAGE>

This announcement is neither an offer to buy nor a solicitation of an offer to
sell Units. The Offer is being made solely by the formal Offer to Purchase
forwarded to Unitholders of record and is not being made to, nor will tenders be
accepted from or on behalf of, Unitholders residing in any jurisdiction in which
making or accepting the Offer would violate that jurisdiction's laws. In those
jurisdictions where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Purchasers only by one or more registered dealers licensed under the
laws of such jurisdiction.

Notice of Offer to Purchase for Cash
up to 196,875 Units of Limited Partnership Interest ("Units") of
SECURED INCOME L.P., a Delaware limited
partnership (the "Partnership") at
a price of $5.00 per Unit, by:
ACCELERATED HIGH YIELD PENSION INVESTORS, L.P.
MACKENZIE PATTERSON SPECIAL FUND, L.P.;
MACKENZIE PATTERSON SPECIAL FUND 3, LLC;
MACKENZIE SPECIFIED INCOME FUND, L.P.;
MP VALUE FUND 5, LLC.;CAL-KAN, INC.; JDF & ASSOCIATES, LLC;
MORAGA GOLD, LLC; AND
STEVEN GOLD (collectively the "Purchasers")

The Purchasers are offering to purchase for cash up to 196,875 Units held by the
Unitholders of SECURED INCOME L.P. (the "Partnership") at $5.00 per Unit upon
the terms and subject to the conditions set forth in Purchasers' Offer to
Purchase and in the related Letter of Transmittal (which together constitute the
"Offer" and the "Tender Offer Documents").

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, PACIFIC DAYLIGHT TIME,
ON JULY 31, 1998, UNLESS THE OFFER IS EXTENDED.

Funding for the purchase of the Units will be provided through the
Purchasers' existing working capital.
The Offer will expire at 12:00 midnight, Pacific Standard Time on July
31, 1998, unless and until Purchasers, in their sole discretion, shall have
extended the period of time for which the Offer is open (such date and time, as
extended the "Expiration Date").
If Purchasers make a material change in the terms of the Offer, or if
they waive a material condition to the Offer, Purchasers will extend the Offer
and disseminate additional tender offer materials to the extent required by
Rules 14d-4(c) and 14d-6(d) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The minimum period during which an offer must
remain open following any material change in the terms of the Offer, other than

<PAGE>

a change in price or a change in percentage of securities sought or a change in
any dealer's soliciting fee, will depend upon the facts and circumstances
including the materiality of the change with respect to a change in price or,
subject to certain limitations, a change in the percentage of securities ought
or a change in any dealer's soliciting fee. A minimum of ten business days from
the date of such change is generally required to allow for adequate
dissemination to Unitholders. Accordingly, if prior to the Expiration Date,
Purchasers increase (other than increases of not more than two percent of the
outstanding Units) or decrease the number of Units being sought, or increase or
decrease the consideration offered pursuant to the Offer, and if the Offer is
scheduled to expire at any time earlier than the period ending on the tenth
business day from the date that notice of such increase or decrease is first
published, sent or given to Unitholders, the Offer will be extended at least
until the expiration of such ten business days. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, Pacific
Standard Time.
In all cases payment for the Units purchased pursuant to the Offer will
be made only after timely receipt of the Letters of Transmittal (or facsimiles
thereof), properly completed and duly executed, with any required signature
guarantees, and any other documents required by such Letters of Transmittal.
Tenders of Units made pursuant to the Offer are irrevocable, except
that Unitholders who tender their Units in response to the Offer will have the
right to withdraw their tendered Units at any time prior to the Expiration Date
by sending a written or facsimile transmission notice of withdrawal to
Purchasers specifying the name of the person who tendered the Units to be
withdrawn. In addition, tendered Units may be withdrawn at any time after August
29, 1998, unless the tender has theretofore been accepted for payment as
provided above.
If tendering Unitholders tender more than the number of Units that
Purchasers seek to purchase pursuant to the Offer, Purchasers will take into
account the number of Units so tendered and take up and pay for as nearly as may
be pro rata, disregarding fractions, according to the number of Units tendered
by each tendering Unitholder during the period during which the Offer remains
open.
The terms of the Offer are more fully set forth in the formal Tender
Offer Documents which are available from Purchasers. The Offer contains terms
and conditions and the information required by Rule 14d-6(e)(1)(vii) under the
Exchange Act which are incorporated herein by reference.

The Tender Offer Documents contain important information which should be
read carefully before any decision is made with respect to the Offer.
<PAGE>

The Tender Offer Documents may be obtained by written request to Purchasers or
as set forth below. A request has been made to the Partnership pursuant to Rule
14d-5 under the Exchange Act for the use of its list of Unitholders for the
purpose of disseminating the Offer to Unitholders. Upon compliance by the
Partnership with such request, the Tender Offer Documents and, if required,
other relevant materials will be mailed to record holders of Units or persons
who are listed as participants in a clearing agency's security position listing,
for subsequent transmittal to beneficial owners of Units.

For Copies of the Tender Offer Documents Call Purchasers at 1-800-854-8357
or Make a Written Request Addressed to 1640 School Street, Moraga, California
94556

June 29, 1998