UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q
 
                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                       FOR THE QUARTER ENDED JUNE 30, 1998
 

                         Commission File Number 1-14179

                            INSIGNIA PROPERTIES TRUST
             (Exact Name of Registrant as Specified in Its Charter)
 

       Maryland                                         57-1045190
(State of Incorporation)                   (I.R.S. Employer Identification No.)


     One Insignia Financial Plaza, P.O. Box 19059
              Greenville, South Carolina                   29602
       (Address of Principal Executive Offices)         (Zip Code)


                                 (864) 239-1300
              (Registrant's Telephone Number, Including Area Code)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes No X .


 At September 16, 1998, the Registrant had 19,427,760 Common Shares outstanding.

<PAGE>


                            INSIGNIA PROPERTIES TRUST

                                    FORM 10-Q

                       FOR THE QUARTER ENDED JUNE 30, 1998

                                      INDEX


                                                                         Page 
PART I - FINANCIAL INFORMATION
   Item 1.  Consolidated Financial Statements..............................1
     Condensed Consolidated Balance Sheets
      as of June 30, 1998 and December 31, 1997............................1
     Condensed Consolidated Statements of Income
      for the Three and Six Months Ended June 30, 1998 and 1997 ...........2
     Condensed Consolidated Statements of Shareholders' Equity
      for the Six Months Ended June 30, 1998...............................3
     Condensed Consolidated Statements of Cash Flow
      for the Six Months Ended June 30, 1998 and 1997......................4
     Notes to Condensed Consolidated Financial Statements..................6
   Item 2.  Management's Discussion and Analysis of
        Financial Condition and Results of Operations......................15

PART II - OTHER INFORMATION
   Item 1.  Legal Proceedings..............................................18
   Item 4.  Submission of Matters to a Vote of Security Holders............18
   Item 6.  Exhibits and Reports on Form 8-K...............................18

SIGNATURES.................................................................19








<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

Item 1.  Financial Statements

a)  Balance Sheets

                            INSIGNIA PROPERTIES TRUST
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                       June 30,   December 31,
                                                         1998         1997
                                                     (Unaudited)     (Note)

Assets
<S>                                                    <C>          <C>     
 Cash and cash equivalents                            $ 14,639     $ 37,432
 Investments in real estate limited partnerships       192,832      159,469
 Apartment property, net of depreciation                25,808       22,357
 Other assets                                            6,996        6,810
 Total assets                                         $240,275     $226,068

Liabilities, Minority Interest and Shareholders' 
Equity
 Liabilities:
   Accounts payable - Due to Insignia                  $   122      $   841
   Distribution payable - Insignia                       1,490        1,260
   Distributions payable                                 2,914        2,786
   Accrued expenses                                      1,101        1,222
   Non-recourse mortgage notes payable                  21,951       19,300
 Total liabilities                                      27,578       25,409

Minority interest in Operating Partnership              59,181       54,447

Shareholders' Equity:
 Common shares, par value $.01 per share - 
   authorized 400,000,000 shares, 19,427,760 
   issued and outstanding (1998) and 18,573,151
   issued and outstanding (1997)                           194          186
 Additional paid-in capital                            154,984      145,594
 Unearned compensation                                  (5,173)          --
 Accumulated earnings in excess of distributions         3,511          432
Total shareholders' equity                             153,516      146,212

Total liabilities, minority interest and shareholders' 
equity                                                $240,275     $226,068


<FN>

NOTE:The Balance  Sheet at December  31, 1997 has been  derived from the audited
     financial  statements at that date but does not include all the information
     and footnotes  required by generally  accepted  accounting  principles  for
     complete financial statements.
</FN>
</TABLE>

See Notes to Condensed Consolidated Financial Statements.


<PAGE>

b)  Statements of Income

                            INSIGNIA PROPERTIES TRUST
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                 (in thousands, except share and per share data)
                                   (Unaudited)
                                                        
<TABLE>
<CAPTION>
                                        Three Months Ended     Six Months Ended
                                             June 30,              June 30,
                                         1998       1997       1998       1997
Revenues
<S>                                    <C>        <C>        <C>        <C>    
 Apartment rentals                     $ 1,856    $ 1,646    $ 3,627    $ 3,229
 Equity earnings - limited partner 
  interest                               4,736        789      8,097      2,993
 Other                                     628        152      1,253        493
                                         7,220      2,587     12,977      6,715
  
Costs and expenses
 Apartment property operating expenses     846        785      1,736      1,517
 Apartment property interest               422        372        828        744
 Apartment property depreciation           329        241        600        480
 Administrative                            223        282        575        553
 Amortization                              112         32        276         52
 Other interest                            119         35        206         42
                                         2,051      1,747      4,221      3,388
                                                                                         
Operating income                         5,169        840      8,756      3,327

Equity earnings - gain on sale 
  of properties                          5,772         --      5,772      --

Income before minority interest and                                                                                --
 extraordinary item                     10,941        840     14,528      3,327
Minority interest in consolidated                                                                      
 Subsidiaries and the Operating 
  Partnership                           (3,831)      (252)    (5,364)    (2,079)

Income before extraordinary item         7,110        588      9,164      1,248
Equity earnings - extraordinary loss 
 from property refinancings 
  (net of minority interest)              (283)        --       (257)        --

Net income                             $ 6,827     $  588    $ 8,907    $ 1,248

Net income per share - basic 
and diluted:
 Income before extraordinary item      $   .37     $  .05     $  .48     $  .11
 Extraordinary item                       (.01)        --       (.01)        --
 Net income                            $   .36     $ . 05     $  .47     $  .11

 Distributions declared per 
 Common Share                          $   .15     $   --     $  .30     $   --

 Weighted average Common Shares
   outstanding  - basic             18,917,760 11,891,528 18,822,564 11,539,240
 Weighted average Common Shares
   outstanding - diluted            18,975,719 11,891,528 18,880,523 11,539,240
<FN>


See Notes to Condensed Consolidated Financial Statement.
</FN>
</TABLE>


<PAGE>

c)  Statements of Shareholders' Equity

                            INSIGNIA PROPERTIES TRUST
            CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                        (in thousands, except share data)
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                          Accumulated
                                                          Earnings In  Total
                                       Additional Unearned Excess of   Share-
                                Common  Paid-In    Compen-  Distri-   holders'
                                Shares  Capital    sation   butions    Equity

  
<S>                 <C> <C>      <C>   <C>        <C>      <C>        <C>     
Balance at December 31, 1997     $186  $145,594   $    --  $    432   $146,212
 Issuance of 344,609                                                                 
  Common Shares                     3     3,625                          3,628
 Issuance of 548,000                                             --
  restricted Common Shares          5     5,765    (5,173)                 597
 Distributions declared and 
  paid                             --        --              (2,914)    (2,914)
 Distributions declared            --        --        --    (2,914)    (2,914)
 Net income for 1998               --        --        --     8,907      8,907
Balance at June 30, 1998         $194  $154,984   $(5,173)  $ 3,511   $153,516






























<FN>
 
See Notes to Condensed Consolidated Financial Statements.
</FN>
</TABLE>


<PAGE>

d)  Statements of Cash Flow

                            INSIGNIA PROPERTIES TRUST
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
                                 (in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                             Six Months Ended
                                                                  June 30,
                                                            1998          1997
 Operating Activities
<S>                                                       <C>           <C>    
  Net income                                              $ 8,907       $ 1,248
  Adjustments to reconcile net income to 
  net cash provided by operations:
    Amortization of organization and formation costs          276            52
    Amortization of loan costs                                175            --
    Apartment property depreciation                           600           480
    Equity earnings - partnership investments              (8,097)       (2,993)
    Equity earnings - gain on sale of properties           (5,772)           --
    Equity earnings - extraordinary loss from property
     refinancings                                             257            --
    Non-cash compensation                                     597            --
    Minority interests in the Operating Partnership and               
      consolidated Subsidiaries                             5,364         2,079
    Changes in operating assets and liabilities:
      Other assets                                            (84)         (301)
      Accounts payable and accrued expenses                  (888)          882
  Net cash provided by operating activities                 1,335         1,447

 Investing Activities
  Additions to apartment property                            (287)         (114)
  Organizational and formation costs                           (5)         (120)
  Purchase of real estate limited partnership interests   (20,369)       (1,852)
  Investment in apartment property, net of acquired cash   (3,804)           --
  Distributions from partnerships                           7,100        11,382
  Merger costs                                               (408)         (704)
    Net cash (used in) provided by investing activities   (17,773)        8,592

 Financing Activities
  Proceeds from issuance of Common Shares                      --        31,710
  Repayments of non-recourse mortgage notes                    (9)           --
  Payments on note payable                                     --          (430)
  Proceeds from note payable                                   --           650
  Proceeds from refinancing of non-recourse mortgage note   2,660            --
  Distributions made to minority investors of NPI 4          (494)       (1,420)
  Loan costs paid                                             (62)           --
  Distributions paid to Insignia by operating partnership  (2,750)       (4,077)
  Distributions paid to common shareholders                (5,700)       (5,880)
     Net cash (used in) provided by financing activities   (6,355)       20,553

 (Decrease) increase in cash and cash equivalents         (22,793)       30,592
 Cash and cash equivalents at beginning of period          37,432         4,928
 Cash and cash equivalents at end of period              $ 14,639      $ 35,520
<FN>
                                                                                                                 
See Notes Condensed Consolidated Financial Statements.
</FN>
</TABLE>


<PAGE>

d)  Statements of  Cash Flow (continued)

                            INSIGNIA PROPERTIES TRUST
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
                                 (in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                           Six Months Ended
                                                               June 30,   
                                                           1998         1997
Supplemental disclosure of non-cash financing
  and investing activities
Issuance of Common Shares and operating partnership 
<S>                                                     <C>          <C>     
  units in exchange for limited partner interests       $  6,656     $ 12,747
<FN>


Note:For the six months ending June 30, 1997,  other assets and accounts payable
     and accrued  expenses  were  adjusted by $236,000 for  non-cash  amounts in
     connection with organizational costs.



































                                                                                                                   
See Notes Condensed Consolidated Financial Statements.
</FN>
</TABLE>


<PAGE>

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


1. Organization and Basis of Presentation

          Insignia  Properties Trust ("IPT" or the "Company") is a Maryland real
     estate  investment trust formed in 1996 by Insignia  Financial Group,  Inc.
     ("Insignia")   for  the  purpose  of  acquiring  and  owning  interests  in
     multifamily residential  properties,  including limited and general partner
     interests in partnerships which hold such real estate  properties.  IPT has
     been  organized and is operated in a manner that allows it to be taxed as a
     real estate  investment  trust ("REIT") under the Internal  Revenue Code of
     1986, as amended.  IPT is the sole general partner of Insignia  Properties,
     L.P., a Delaware  limited  partnership  ("IPLP"),  which is IPT's operating
     partnership. Insignia is the sole limited partner of IPLP.

          Substantially all of IPT's assets consist of (i) interests in entities
     which  comprise or control  the  managing  general  partners of real estate
     limited partnerships (the "IPT Partnerships"),  which interests are held by
     IPT directly or through wholly-owned subsidiaries, and (ii) limited partner
     interests in the IPT  Partnerships,  which interests are held through IPLP.
     The IPT  Partnerships  own, in the  aggregate,  349  properties  containing
     approximately  73,000  residential  apartment units and  approximately  5.8
     million square feet of commercial space.

          The accompanying unaudited condensed consolidated financial statements
     have  been  prepared  in  accordance  with  generally  accepted  accounting
     principles for interim  financial  information and with the instructions to
     Form  10-Q and  Article  10 of  Regulation  S-X.  Accordingly,  they do not
     include all of the  information  and notes  required by generally  accepted
     accounting principles for complete financial statements.  In the opinion of
     management,  all  adjustments  (consisting  of normal  recurring  accruals)
     considered necessary for a fair presentation have been included.  Operating
     results for the three- and  six-month  periods  ended June 30, 1998 are not
     necessarily  indicative  of the results  that may be expected  for the year
     ended December 31, 1998. For further information, refer to the consolidated
     financial   statements   and  notes  thereto   included  in  the  Company's
     Registration  Statement  on Form  S-4  filed  August  10,  1998,  File  No.
     333-53815.

          Certain  amounts from 1997 have been  reclassified to conform with the
     1998 presentation.

2. Earnings Per Share

          In 1997, the Financial  Accounting Standard Board issued Statement No.
     128,  Earnings per Share.  Statement  No. 128 replaced the  calculation  of
     primary  and fully  diluted  earnings  per  share  with  basic and  diluted
     earnings per share.  Unlike primary earnings per share,  basic earnings per
     share excludes any dilutive  effects of options,  warrants and  convertible
     securities.  Diluted  earnings per share is very similar to the  previously
     reported fully diluted earnings per share.

          Earnings per share is computed based on the weighted average number of
     Common Shares outstanding.  An IPLP partnership  interest is not considered
     dilutive because the allocation of earnings to an IPLP partnership interest
     is equivalent to an IPT Common Share.

<PAGE>

<TABLE>
<CAPTION>
                                        Three Months Ended     Six Months Ended
                                             June 30,              June 30,
                                         1998       1997       1998       1997
                                 (in thousands, except share and per share data)

Numerator - basic and diluted
<S>                                   <C>          <C>      <C>        <C>     
 Income before extraordinary item     $  7,110     $  588   $  9,164   $  1,248
 Extraordinary loss                       (283)        --       (257)        --
   Net income                          $  6,827     $  588   $  8,907   $  1,248
Denominator
 Denominator for basic earnings 
  per share - weighted average  
  Common Shares                     18,917,760 11,891,528 18,822,564 11,539,240
 Effect of dilutive securities -
  Restricted shares and options         57,959         --     57,959         --
 Denominator for diluted earnings  
 per share -
  Adjusted weighted average Common 
  Shares and assumed conversions    18,975,719 11,891,528 18,880,523 11,539,240

Earnings per Common Share - basic 
and diluted
 Income before extraordinary item     $   .37     $   .05   $    .48   $    .11
 Extraordinary loss                      (.01)         --       (.01)        --
Net income                            $   .36     $   .05   $    .47   $    .11


</TABLE>

3. 1998 Acquisitions

     Tender Offers

          In December 1997, a wholly-owned  subsidiary of IPLP commenced  tender
     offers to purchase units of limited  partner  interest in the following IPT
     Partnerships: Multi-Benefit Realty Fund '87-1, Century Properties Fund XIV,
     Century  Properties Fund XV, Century  Properties  Fund XVIII,  Consolidated
     Capital  Growth  Fund,  Consolidated  Capital  Institutional  Properties/3,
     Consolidated Capital Properties V,  Johnstown/Consolidated  Income Partners
     and Shelter Properties VII Limited Partnership. These tender offers expired
     in January and  February  1998,  with IPLP  acquiring  additional  units of
     limited  partner  interest  in  these  partnerships  for a  total  cost  of
     approximately   $11.4   million   (inclusive   of   acquisition   costs  of
     approximately $1.0 million).

          In April 1998, a  wholly-owned  subsidiary  of IPLP  commenced  tender
     offers to purchase units of limited  partner  interest in the following IPT
     Partnership:  Angeles Income  Properties,  Ltd. II, Angeles Partners IX and
     Angeles  Partners XII. These tender offers  expired in May 1998,  with IPLP
     acquiring units of limited  partner  interest in these  partnerships  for a
     total cost of approximately  $6.6 million  (inclusive of acquisitions costs
     of approximately $0.3 million).

          As a result of the above  tender  offers,  IPLP  increased  its stated
     ownership interest in these partnerships by a range of 4.52% to 24.39% with
     total stated ownership interest in these  partnerships  ranging from 13.26%
     to 45.85% at June 30, 1998.  IPLP accounts for these  partnership  interest
     under the equity method.


          During the third  quarter of 1998, a  wholly-owned  subsidiary of IPLP
     commenced  tender offers to purchase units of limited  partner  interest in
     the following IPT Partnerships:  Shelter Properties I Limited  Partnership,
     Shelter  Properties II Limited  Partnership,  Shelter Properties IV Limited
     Partnership,  Shelter Properties V Limited Partnership,  Shelter Properties
     VI  Limited  Partnership,   Shelter  Properties  VII  Limited  Partnership,
     Consolidated  Capital   Institutional   Properties,   Consolidated  Capital
     Institutional    Properties/2,     Consolidated    Capital    Institutional
     Properties/3,  Consolidated  Capital Properties III,  Consolidated  Capital
     Properties  V,  Angeles   Income   Properties,   Ltd.  II,  Angeles  Income
     Properties,  Ltd. III, Angeles Income  Properties,  Ltd. IV, Angeles Income
     Properties,  Ltd. 6,  Angeles  Partners  IX,  Angeles  Partners X,  Angeles
     Partners XI, Angeles Partners XII, Angeles  Opportunity  Properties,  Ltd.,
     Davidson  Diversified  Real Estate I, LP, Davidson  Diversified Real Estate
     II, LP,  Davidson  Diversified  Real Estate III, LP,  Davidson  Income Real
     Estate,  LP and Davidson Growth Plus, LP. The tender offers for the Shelter
     Properties  partnerships  expired  in  August  1998,  with  IPLP  acquiring
     additional  units of limited partner  interest in these  partnerships for a
     total cost of approximately $7.5 million (inclusive of acquisition costs of
     approximately  $0.4  million).  As a  result,  IPLP  increased  its  stated
     ownership interest in these partnerships by a range of 5.19% to 8.36%, with
     total stated ownership interest in these  partnerships  ranging from 23.16%
     to 47.03% as of August 31, 1998.  The  remainder of these tender offers are
     scheduled to expire at various times during the fourth quarter of 1998.

     Property Acquisition

          On January 28,  1998,  a  wholly-owned  subsidiary  of IPT  acquired a
     168-unit apartment complex located in Pensacola,  Florida known as Raintree
     Apartments,  which is the only whole  asset  currently  owned by IPLP.  The
     aggregate purchase price paid for the Raintree Apartments was approximately
     $3.8  million,  approximately  $2.6 million of which was debt financed on a
     non-recourse basis.

     MAE GP Corporation Merger

          Effective February 25, 1998, MAE GP Corporation,  which until then was
     a wholly-owned subsidiary of Metropolitan Asset Enhancement,  L.P. ("MAE"),
     was merged with and into IPT (the "MAE GP Merger").  MAE is an affiliate of
     IPT and  Insignia.  As  consideration  for the MAE GP  Merger,  IPT  issued
     344,609 IPT Common Shares to MAE,  valued for purposes of the MAE GP Merger
     at  $10.53  per  share.  MAE GP  Corporation  owned  or  controlled  equity
     interests in entities which comprised or controlled the general partners of
     29 public and 61 private real estate  limited  partnerships  (collectively,
     the "MAE  Partnerships").  At that time, the MAE Partnerships owned, in the
     aggregate,  167  properties  containing  approximately  31,000  residential
     apartment  units and  approximately  2.2 million  square feet of commercial
     space.


     MAE Sale to IPLP

          In  connection  with the MAE GP Merger,  on February  17,  1998,  IPLP
     purchased the following assets from MAE for approximately $596,000 in cash:
     (i) a 99%  limited  partner  interest  in Insignia  Jacques  Miller,  L. P.
     ("IJM"),  which in turn owned non-controlling  equity interests in entities
     that comprise or control the general partners of 30 of the MAE Partnerships
     and various notes  receivable (the 1% general  partner  interest in IJM was
     acquired  by IPT  from  MAE GP in the MAE GP  Merger);  and  (ii) a  6.557%
     limited partner interest in Buccaneer Trace Limited Partnership, which owns
     a 208-unit residential apartment complex located in Savannah, Georgia.

     Insignia Contribution to IPLP

          Also in  connection  with the MAE GP Merger,  on  February  17,  1998,
     Insignia  contributed to IPLP all of the limited  partner  interests in the
     MAE  Partnerships  owned by Insignia and its  wholly-owned  subsidiaries in
     exchange for additional  limited  partner  interests in IPLP. The interests
     contributed were valued at approximately  $5,460,000, in exchange for which
     IPLP  issued  to  Insignia  518,528  additional  units of  limited  partner
     interest in IPLP (based on a value of $10.53 per  interest).  The interests
     in the MAE Partnerships were recorded at the historical cost of Insignia.

4.    Equity Earnings - Gain on Sale of Properties

          On April 16, 1998,  Consolidated Capital  Institutional  Partners,  LP
     ("CCIP"),  which is one of the IPT Partnerships,  sold Northlake Quadrangle
     (one of the properties  controlled by CCIP) to an unrelated third party for
     $2.3 million.  CCIP's net proceeds  from this sale were $2.1  million.  IPT
     owns  approximately  41% of the equity  interests in CCIP, and its share of
     the gain (included in IPT's equity earnings) was approximately $291,000.

          On June 30, 1998, National Property Investors 5 ("NPI 5") and National
     Property  Investors 6 ("NPI 6"), each an IPT Partnership,  sold the Village
     (an  apartment  property  jointly owned by NPI 5 and NPI 6) to an unrelated
     third party for approximately  $30.1 million.  Aggregate net sales proceeds
     to NPI 5 and NPI 6 from this sale were approximately  $18.1 million,  after
     repayment  of  the   mortgage   note  and  closing   expenses.   IPT  owned
     approximately  48%  and  44% of the  equity  interests  in NPI 5 and NPI 6,
     respectively, at the time of this sale, and its share of the gain (included
     in IPT's equity earnings) was approximately $5.5 million.

5.   Commitments and Contingencies

     General Partners

          Qualified REIT subsidiaries of IPT either control or serve as managing
     general  partner of the IPT  Partnerships,  and these  subsidiaries  may be
     liable for recourse  obligations of the IPT  Partnerships in the event that
     they are unable to satisfy  those  obligations.  IPT believes that each IPT
     Partnership  has more than  adequate  resources to  discharge  all recourse
     obligations and maintains adequate insurance.

     Loan Commitments

          IPT  is  obligated  to  loan  up  to  $500,000  each  to  certain  IPT
     Partnerships  ($2,600,000  in aggregate) and $150,000 each to certain other
     IPT Partnerships  ($6,000,000 in aggregate) at interest rates not to exceed
     the prime  rate plus 2%.  There  were no amounts  outstanding  under  these
     commitments at June 30, 1998.

     Obligations to Former General Partners

          Certain  corporate  general  partners  owned by IPT were  acquired  by
     Insignia  from  unaffiliated  prior  owners.  The  acquisition   agreements
     provided  that  Insignia  (now  IPT)  would  be  indemnified   from  claims
     attributable   to  events  or  actions  prior  to  Insignia's  (now  IPT's)
     ownership,  and that  Insignia  (now IPT) would  indemnify the prior owners
     from claims or causes of action  arising after the change in ownership.  In
     addition,  certain  former  owners  of the  general  partners  of seven IPT
     Partnerships retained 100% (and in some instances 75%) of the obligation to
     make  capital  contributions  that may be required by the general  partners
     upon windup of the applicable partnerships.

     Environmental Liabilities

          Under various federal and state environmental laws and regulations,  a
     current or  previous  owner or  operator  of real estate may be required to
     investigate and clean up certain hazardous or toxic substances or petroleum
     product releases at the property,  and may be held liable to a governmental
     entity or to third parties for property  damage and for  investigation  and
     cleanup costs incurred by such parties in connection with contamination. In
     addition, some environmental laws create a lien on the contaminated site in
     favor of the government for damages and costs it incurs in connection  with
     the  contamination.  The owner or  operator  of a site may be liable  under
     common  law to third  parties  for  damages  and  injuries  resulting  from
     environmental  contamination  emanating  from  the  site.  There  can be no
     assurance that IPT, any of its affiliates or any assets owned or controlled
     by IPT or any of its  affiliates  currently are in  compliance  with all of
     such laws and  regulations,  or that IPT or its affiliates  will not become
     subject to liabilities that arise in whole or in part out of any such laws,
     rules  or   regulations.   Management  is  not   currently   aware  of  any
     environmental  liabilities  that are  expected  to have a material  adverse
     effect on the Company's operations or financial condition.

     Litigation

          In January and February 1998, a limited  partner in several of the IPT
     Partnerships commenced arbitration proceedings and litigation against those
     partnerships and their general partners. The claims in both the arbitration
     and in complaints  filed in the circuit Court of Jackson  County,  Missouri
     assert  that  the  general  partners  controlled  by IPT  breached  certain
     contractual  and  fiduciary  duties  allegedly  owed to the  claimant.  IPT
     believes the claims asserted in these proceedings are without merit.

          On March 24, 1998,  certain  persons  claiming to own limited  partner
     interests in certain of the IPT  Partnerships  filed a purported  class and
     derivative  action in California  Superior Court in the County of San Mateo
     against IPT,  Insignia,  the general partners of the partnerships,  certain
     persons  and  entities  who  purportedly  formerly  controlled  the general
     partners,  and additional  entities affiliated with and individuals who are
     officers,  directors  and/or  principals of several of the defendants.  The
     complaint contains allegations that, among other things, (i) the defendants
     breached their fiduciary duties to the plaintiffs by selling or agreeing to
     sell their "fiduciary positions" as stockholders, officers and directors of
     the general  partners for a profit and  retaining  said profit  rather than
     distributing  it to the  plaintiffs;  (ii) the  defendants  breached  their
     fiduciary duties by mismanaging the partnerships and  misappropriating  the
     assets  of the  partnerships  by (a)  manipulating  the  operations  of the
     partnerships  to depress  the  trading  price of units of  limited  partner
     interest  in the  partnerships,  (b)  coercing  and  fraudulently  inducing
     unitholders to sell units to certain of the defendants at depressed  prices
     and (c) using the voting control  obtained by purchasing units at depressed
     prices to entrench certain of the defendants' positions of control over the
     partnerships;  and (iii) the defendants  breached their fiduciary duties to
     the plaintiffs by selling assets (such as mailing lists of  unitholders) of
     the  partnerships  and causing the general partners to enter into exclusive
     arrangements  with  their  affiliates  to sell  goods and  services  to the
     general  partners,  the unitholders and tenants of partnership  properties.
     The  complaint  also  alleges  that the  foregoing  allegations  constitute
     violations of various  California  securities,  corporate  and  partnership
     statutes,  as well as  conversion  and  common  law  fraud.  The San  Mateo
     Complaint  seeks  unspecified   compensatory  and  punitive   damages,   an
     injunction blocking the sale of control of the general partners and a court
     order directing the defendants to discharge  their fiduciary  duties to the
     plaintiffs.  On June 25, 1998, the general  partners filed a motion seeking
     dismissal  of the  action.  In  lieu of  responding  to  that  motion,  the
     plaintiffs  recently  filed an amended  complaint.  IPT  believes  that the
     allegations  contained  in the  amended  complaint  are  without  merit and
     intends to defend the action vigorously.

     On  July  30,  1998,  certain  entities  claiming  to own  limited  partner
     interests in 44 of the IPT  Partnerships  filed a complaint in the Superior
     Court of the  State of  California,  County  of Los  Angeles  against  IPT,
     Insignia,  the applicable IPT  Partnerships,  the general partners of those
     partnerships  and  additional  entities  affiliated  with  several  of  the
     defendants.  Plaintiffs allege that they have requested from, but have been
     denied  by each of the  partnerships,  lists  of their  respective  limited
     partners for the purpose of making  tender offers to purchase up to 4.9% of
     the units of limited partner  interest in each of those  partnerships.  The
     complaint also alleges that certain of the defendants made tender offers to
     purchase  units of limited  partner  interest in many of the  partnerships,
     with the alleged result that  plaintiffs have been deprived of the benefits
     they would have  realized  from  ownership  of the  additional  units.  The
     plaintiffs  assert eleven causes of action,  including  breach of contract,
     unfair business practices and violations of the partnership statutes of the
     states  in  which  the   partnerships   are  organized.   Plaintiffs   seek
     compensatory,  punitive  and treble  damages.  None of  defendants  has yet
     responded to the  complaint.  IPT believes the claims are without merit and
     intends to defend the action vigorously.

          In addition to the above,  certain of the IPT  Partnerships  and other
     subsidiaries  of IPT are  defendants  in lawsuits  arising in the  ordinary
     course of business. Such lawsuits are primarily insured claims arising from
     accidents at managed properties. Claims may demand substantial compensatory
     and punitive  damages.  Management  believes  that the  litigation  will be
     resolved without a material impact on the financial  position or results of
     operations of the IPT.

<PAGE>

6.   Angeles Mortgage Investment Trust Merger

          On  September  17,  1998,   Angeles  Mortgage   Investment  Trust,  an
     unincorporated California business trust ("AMIT"), was merged with and into
     IPT (the "AMIT  Merger").  In the AMIT Merger,  each issued and outstanding
     Class A common share of AMIT was converted  into 1.516 Common Shares of IPT
     and each issued and outstanding  Class B common share of AMIT was converted
     into 0.0309 Common Shares of IPT. IPT issued approximately 4,019,198 Common
     Shares to the AMIT shareholders in the AMIT Merger, including approximately
     146,779 Common Shares issued to a wholly-owned  subsidiary of Insignia as a
     result  of its  ownership  of  96,800  Class A  common  shares  of AMIT and
     approximately  51,826  Common  Shares  issued  to  MAE as a  result  of its
     ownership of 1,675,113  Class B common shares of AMIT.  IPT's Common Shares
     are  listed on the  American  Stock  Exchange  under the symbol  "FFO".  In
     connection with the AMIT Merger,  on September 16, 1998 Insignia  purchased
     senior  participation  interests in certain  loans of AMIT for an aggregate
     purchase  price of $11 million in cash.  IPT acquired such cash in the AMIT
     Merger,  but has no  interest  (nor will it acquire  any  interest)  in the
     senior participation interests sold to Insignia.

          Pro forma results of operations  for the six-month  periods ended June
     30, 1998 and 1997,  giving  effect to the AMIT Merger as if effected at the
     beginning of each period,  are as follows (in  thousands,  except share and
     per share data):


<TABLE>
<CAPTION>
                                                       1998               1997

<S>                                                 <C>                <C>     
      Revenues                                      $ 15,956           $  9,708
      Income before extraordinary item                11,808              3,592
      Net income                                      11,551              3,592

      Diluted earnings per Common Share:
         Income before extraordinary item           $    .52           $   .23
         Net income                                 $    .51           $   .23

      Weighed average Common Shares -                            
         diluted                                  22,899,721        15,558,438

</TABLE>






7.   Other Matters

     Winthrop Option

          On February 17, 1998,  Insignia  granted IPLP an option (the "Winthrop
     Option")  to acquire at any time on or before  December  31,  1998,  all of
     Insignia's  interest in certain limited partner interests in two public and
     11 private real estate limited partnerships which own, in the aggregate, 29
     properties  containing  approximately  12,100 residential  apartment units,
     together  with the right to  receive  certain  asset  management,  investor
     services and partnership  management  fees from ten of those  partnerships.
     Insignia  acquired such  interests from Winthrop  Financial  Associates and
     certain affiliates of Winthrop Financial Associates. The Winthrop Option is
     exercisable  by IPLP for an  aggregate  cash  amount of  approximately  $46
     million,  plus  interest on  approximately  $40 million of that amount at a
     rate  equal to  Insignia's  cost of funds  (based on the  interest  rate in
     effect from time to time under Insignia's  revolving credit facility) and a
     ratable portion of the transaction costs incurred by Insignia in connection
     with the acquisitions of those interests.

     Potential Apartment Investment and Management Company Merger

          On March 17,  1998,  Insignia  entered  into an agreement to merge its
     national   residential  property  management   operations,   including  its
     controlling  interest in IPT,  with  Apartment  Investment  and  Management
     Company  ("AIMCO"),  a publicly traded real estate  investment  trust.  The
     closing of that merger is expected to occur in October  1998. In connection
     with that transaction, AIMCO committed, contingent upon consummation of the
     merger,  to offer to acquire (by merger) all of the  outstanding IPT Common
     Shares not owned by Insignia for not less than $13.25 per share in cash and
     to use its  commercially  reasonable best efforts to consummate such merger
     within 90 days of the consummation of the merger of Insignia and AIMCO.

     Cost of Start-up Activities

          In 1998, the Accounting Standards Executive Committee issued Statement
     of  Position  98-5,  Reporting  on the Costs of Start-Up  Activities  ("SOP
     98-5"),  which is  effective  for  financial  statements  for fiscal  years
     beginning  after  December 15, 1998.  SOP 98-5  requires  costs of start-up
     activities  and  organization  costs to be  expensed as  incurred.  Initial
     application  should be  reported  as the  cumulative  effect of a change in
     accounting  principle  and  expensed  in the first  quarter  in the year of
     adoption.  At June 30,  1998,  IPT had  approximately  $1.0 million (net of
     accumulated amortization) capitalized as organizational costs that would be
     affected by the requirements of SOP 98-5.

     EITF 97-11

          IPT  has  not  capitalized  any  internal  costs  in  connection  with
     identifying and acquiring operating properties.  Therefore, EITF 97-11 will
     have no effect on IPT's financial statements.
 

     Comprehensive Income

          In 1997, the Financial Accounting Standards Board issued Statement No.
     130, Reporting  Comprehensive  Income ("Statement No. 130").  Statement No.
     130  establishes  new rules for the reporting and display of  comprehensive
     income and its components.  IPT adopted  Statement No. 130 as of January 1,
     1998. Statement No. 130 had no effect on IPT as of June 30, 1998.

<PAGE>

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

     Financial Condition

          At June 30, 1998,  IPT held assets of $240 million,  an increase of 6%
     from December 31, 1997. IPT's assets consist primarily of cash, investments
     in  real  estate  limited   partnerships  and  apartment  property.   Total
     liabilities  increased 9% to $27.6  million at June 30,  1998,  compared to
     $25.4 million at December 31, 1997.  IPT's  liabilities  consist  mostly of
     non-recourse   mortgage   notes   payable.   The  apartment   property  and
     non-recourse  mortgage  notes  payable  balances  constitute  the principal
     assets and  liabilities  of The Village of  Pennbrook in NPI 4 (which is an
     IPT  Partnership  of which  IPLP owns a  majority  of the  limited  partner
     interests) and Raintree Apartments in Raintree Pensacola,  L.P. (which is a
     wholly-owned  subsidiary of IPT), which are consolidated in IPT's financial
     statements.

          Cash and cash  equivalents  decreased 61% to $14.6 million at June 30,
     1998,  compared to $37.4  million at December  31,  1997.  The decrease was
     primarily  attributable to the purchase of limited partner interests during
     the six months  ended June 30,  1998.  During the first six months of 1998,
     IPT  expended  approximately  $20.4  million  for the  purchase  of limited
     partner  interests.  Also  contributing  to the  decrease  in cash  was the
     purchase of Raintree Apartments,  a 168-unit residential  apartment complex
     located in Pensacola,  Florida. The purchase resulted in a net cash outflow
     of approximately $1.1 million.

          Investments in real estate limited partnerships  increased from $159.5
     million at  December  31,  1997,  to $192.8  million at June 30,  1998,  an
     increase of 21%. The increase was  attributable  to the purchase of limited
     partner  interests  during the first six months of 1998 as noted above, the
     MAE GP Merger and related  contribution  of limited  partner  interests  by
     Insignia,  and an increase in  undistributed  equity earnings from property
     sales by IPT Partnerships.

          The increase in apartment  property and  non-recourse  mortgage  notes
     payable  balances  at June 30,  1998 was  attributable  to the  purchase of
     Raintree Apartments in January 1998.

     Results of Operations

          The following  discussion compares IPT's results of operations for the
     three-  and  six-month  periods  ended  June 30,  1998 with its  results of
     operations  for  the  corresponding   periods  in  1997.  The  table  below
     summarizes  certain  financial  information  extracted from IPT's financial
     statements:

<TABLE>
<CAPTION>
                                     Three Months Ended       Six Months Ended
                                           June 30,               June 30,
                                      1998        1997        1998        1997
                                          (in thousands, except share data)

<S>                             <C>         <C>         <C>         <C>        
     Revenues                   $     7,220 $     2,587 $    12,977 $     6,715
     Expenses                         2,051       1,747       4,221       3,388
     Funds from operations            9,386       3,522      16,825       8,666
     Net Income                       6,827         588       8,907       1,248
     Weighted average Common 
       Shares outstanding - 
       diluted                   18,975,719  11,891,528  18,880,523  11,539,240
</TABLE>
          Net income per share  increased to $.36 and $.47 for the three and six
     months ending June 30, 1998, respectively, as compared to $.05 and $.11 for
     the  corresponding  periods of 1997. Total revenues  increased 179% for the
     three months and 93% for the six months  ending June 30, 1998,  as compared
     to the same periods in 1997. Total expenses rose  approximately 17% and 25%
     for the three and six months  ending  June 30,  1998,  respectively.  IPT's
     funds from operations  ("FFO") increased 167% to $9.4 million for the three
     months  ending June 30, 1998,  and 94% to $16.8  million for the six months
     ending June 30, 1998.  The increases in revenue and expenses were primarily
     attributable to increases in equity  earnings  resulting from the continued
     acquisition of limited partner  interests in IPT  Partnerships and improved
     property operations.

          Contributing  to the  increase  in net  income  for the  three and six
     months  ending  June 30,  1998  was a gain of  approximately  $5.8  million
     realized on the sale of two  properties  during the second quarter of 1998.
     There were no gains from property  sales during the  comparable  periods of
     1997.  Partially  offsetting the gain was the realization of  approximately
     $257,000  in losses  related  to the  refinancings  of  several  investment
     properties.  These losses resulted from prepayment penalties and write-offs
     of unamortized loan costs and debt discounts.

          Minority  interest  reflected in the  statements of income  represents
     Insignia's interest in IPLP, the operating partnership of IPT.

          Funds from  operations  is defined as income or loss from real  estate
     operations,  which is net  income in  accordance  with  generally  accepted
     accounting  principles  excluding gains or losses for debt  restructurings,
     sales of property and minority  interests,  plus depreciation and provision
     for  impairment.  Depreciation of real estate is, except for two properties
     held by consolidated IPT  Partnerships,  reflected within equity earnings -
     limited  partner  interests.  The  difference  between  FFO and net  income
     consists of  consolidated  depreciation  and  depreciation  recorded within
     equity earnings, gain on sale of apartment property, extraordinary loss and
     minority interest.

     Investment Limited Partnership Operations

          IPT's FFO growth is  attributable  to both  acquisition  activity  and
     internal  growth.  Acquisitions at cost were an aggregate of  approximately
     $65  million  from  July 1,  1997 to June  30,  1998.  However,  comparable
     operations of properties owned by IPT Partnerships during the first half of
     both 1998 and 1997 met or exceeded management's expectations.
 
          Comparable  property  revenues  grew by almost 5% for both the  second
     quarter  and first half of 1998  compared to the  corresponding  periods in
     1997.  The growth was  primarily  attributable  to the average  increase in
     rental  rates  year  to  year,   increases  in  the  average  occupancy  of
     approximately  0.5%,  and the  renovation and re-leasing of The Sterling in
     Philadelphia.  Operating  expenses declined nearly 12% for the three months
     and 5% for the six months ending June 30, 1998, respectively. The reduction
     in expenses was primarily the result of above normal levels of  maintenance
     incurred  in 1997 as  management  implemented  plans to improve the overall
     appearance  of  the  properties.   Recurring  operating  expenses  remained
     relatively flat.  Results from comparable  partnerships  resulting from the
     comparable  revenue and expense changes accounted for FFO growth of 57% and
     31% for the three and six months  ending June 30, 1998,  respectively.  The
     remaining FFO growth is attributable to acquisitions.

     Liquidity and Capital Resources

          IPT's primary source of cash is the receipt of distributions  from the
     IPT  Partnerships.  Each IPT  Partnership  maintains its own cash reserves,
     which management  believes are adequate for most of the  partnerships.  IPT
     expects  distributions  from  IPT  Partnerships  to be  sufficient  for its
     current level of dividends on an annual basis.

          During  1997,  IPT raised  approximately  $62.3  million  through  the
     private placement of Common Shares primarily with institutional  investors.
     IPT  invested  approximately  $20.3  million of those  proceeds  to acquire
     additional  limited partner interests in IPT Partnerships  during the first
     half  of  1998,   and  through   June  30,1998  had  invested  a  total  of
     approximately  $49 million of the offering  proceeds to acquire  additional
     interests in IPT Partnerships.

          IPT also has available a revolving  credit  facility of $50 million to
     use for  acquisitions.  The line of  credit  is  secured  by a  pledge  and
     security  interest in all of the limited  partner  interests owned by IPLP.
     IPT expects  this  credit  facility to be  sufficient  for its  acquisition
     requirements  for the remainder of 1998. As of September 21, 1998,  IPT has
     committed  to  acquire  approximately  $25.3  million  of  limited  partner
     interests,  and  IPT has  borrowed  $30  million  of the  available  credit
     facility to finance these purchases.

          On July 15, 1998, IPT paid a second quarter dividend of $.15 per share
     to  shareholders of record as of the close of business on June 23, 1998. On
     September  21, 1998,  the Board of Trustees of IPT declared a third quarter
     dividend of $.16 per share,  payable on October 15, 1998 to shareholders of
     record as of the close of business on September 30, 1998.

     Year 2000 Compliance

          IPT is dependent  upon  Insignia  for  management  and  administrative
     services.  Insignia has completed an assessment and has determined  that it
     will  have to  modify  or  replace  portions  of its  software  so that its
     computer  systems will function  properly with respect to dates in the year
     2000 and  thereafter.  The project is estimated  to be completed  not later
     than  December 31, 1998,  which is prior to any  anticipated  impact on its
     operating  systems.  Insignia believes that with  modifications to existing
     software and conversions to new software, the year 2000 issue will not pose
     significant  operational  problems for its computer  systems.  IPT does not
     expect the conversion to have a material impact on its financial  positions
     or results of operations.  However,  if such  modifications and conversions
     are not made, or are not completed in a timely fashion, the year 2000 issue
     could have a material impact on the operations of IPT.

     Other

          Certain  items  discussed  in this  Quarterly  Report  may  constitute
     forward-looking  statements  within the meaning of the  Private  Securities
     Litigation  Reform Act of 1995 and, as such,  may involve known and unknown
     risks,  uncertainties and other factors which may cause the actual results,
     performance  or  achievements  of IPT to be materially  different  from any
     future results,  performance or  achievements  expressed or implied by such
     forward-looking  statements.  Such forward-looking statements speak only as
     of  the  date  of  this  Quarterly  Report.  IPT  expressly  disclaims  any
     obligation or undertaking  to release  publicly any updates or revisions to
     any  forward-looking  statements  contained herein to reflect any change in
     IPT's expectations with regard thereto or any change in events,  conditions
     or circumstances on which any such statement is based.


<PAGE>

                                     PART II
                                OTHER INFORMATION


Item 1.  Legal Proceedings

     See Note 5 in Notes to Condensed Consolidated Financial Statements herein.

Item 4.  Submission of Matters to a Vote of Security Holders

     IPT's  annual  meeting of  shareholders  was held on May 27,  1998.  At the
annual  meeting,  Frank M. Garrison was  re-elected as a Class I trustee of IPT,
with a term expiring upon the annual  meeting of IPT in 2001.  Mr.  Garrison was
re-elected  by the vote of  12,287,108  Common Shares in favor and none opposed.
Following the annual  meeting,  the other  trustees of IPT  continuing in office
were Andrew L.  Farkas and James A. Aston.  A proposal to ratify and approve the
appointment of Ernst & Young, L.L.P. as IPT's independent  auditors for the 1998
fiscal year was also presented to the  shareholders  at the 1998 annual meeting,
although all 12,287,108 Common Shares  represented at the meeting abstained from
voting.

Item 6.  Exhibits and Reports on Form 8-K

     a)  Exhibits

         Exhibit 27.  Financial Data Schedule for June 30, 1998.

     b)  Reports on Form 8-K

          No Reports on Form 8-K were filed  during the  quarter  ended June 30,
          1998.


<PAGE>

                                   SIGNATURES

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



 
                     INSIGNIA PROPERTIES TRUST



                     By: /s/ James A. Aston                      
                     --------------------------------------------
                         James A. Aston
                         President



                     By: /s/ William D. Falls                    
                     --------------------------------------------
                         William D. Falls
                         Controller