Exhibit
Number         Exhibit Description

EX - 21.1      Financial  Statements of Laurel Creek  Apartments,  for the years
               ended  December  31,  1999 and  1998  together  with  Independent
               Auditors'  Report  Thereon;  a  significant   subsidiary  of  the
               Partnership.











                                       46
<PAGE>


                             Laurel Creek Apartments

                                Table of Contents

                                                                      Page

Independent Auditors' Report                                           48

Financial Statements

Balance Sheet                                                          49
Statement of Income, Expenses And Changes In Partners' Capital         50
Statement of Cash Flows                                                51
Notes to Financial Statements                                          52






                                       47


<PAGE>






                          INDEPENDENT AUDITORS' REPORT



To the Board of Directors
Laurel Creek Apartments
San Luis Obispo, California

We have audited the  accompanying  balance  sheet of Laurel Creek  Apartments (A
California  Limited  Partnership)  as of  December  31,  1999  and  the  related
statements of income, expenses, and changes in partners' capital, and cash flows
for the year then ended.  These financial  statements are the  responsibility of
the  Partnerships'  management.  Our  responsibility is to express an opinion on
these financial statements based on our audit.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of Laurel Creek Apartments as of
December 31, 1999,  and the results of its operations for the year then ended in
conformity with generally accepted accounting principles.


                         /s/ Wallace, Rowe & Associates
                             Wallace, Rowe & Associates

January 31, 2000




                                       48
<PAGE>
                             LAUREL CREEK APARTMENTS
                                  BALANCE SHEET
                                DECEMBER 31, 1999

ASSETS

CURRENT ASSETS
 Cash (Note 2)                                     $     29,210
 Accounts receivable                                      1,231
 Prepaid expenses                                           711
                                                     -----------

         TOTAL CURRENT ASSETS                            31,152

Restricted reserves (Note 3)                             22,819

Land, structures and equipment, net of
 accumulated depreciation of $392,698 (Note 4)        1,772,656

Organizational costs, net of accumulated
 amortization of $10,657 (Note 5)                        16,261
                                                     -----------

         TOTAL ASSETS                              $  1,842,888
                                                     ===========

LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES
 Accounts payable - related party (Note 7)         $     20,352
 Accounts payable - other                                 8,485
 Security deposits payable                                7,030
 Current portion of long-term debt (Note 6)              24,669
                                                     -----------

         TOTAL CURRENT LIABILITIES                       60,536

Long-term debt (Note 6)                                 635,217
                                                     -----------

                  TOTAL LIABILITIES                     695,753

Partners' capital                                     1,147,135
                                                     -----------
         TOTAL LIABILITIES AND PARTNERS' CAPITAL   $  1,842,888
                                                     ===========




                             See accompanying notes.
                                       49

<PAGE>
                             LAUREL CREEK APARTMENTS
                        STATEMENT OF INCOME, EXPENSES AND
                          CHANGES IN PARTNERS' CAPITAL
                      FOR THE YEAR ENDED DECEMBER 31, 1999



OPERATING INCOME
 Rental income                                         $    166,207
 Tenant charges                                               2,492
                                                         -----------

         TOTAL INCOME                                       168,699
                                                         -----------
OPERATING EXPENSES
 Administration                                              15,702
 Insurance and taxes                                          3,729
 Maintenance                                                 29,035
 Utilities                                                   20,559
 Depreciation and amortization                               72,922
                                                         -----------

         TOTAL EXPENSES                                     141,947
                                                         -----------

         NET INCOME (LOSS)  FROM OPERATIONS                  26,752
                                                         -----------
OTHER INCOME AND EXPENSES

 Interest income                                              3,071
 Income expense                                             (55,227)
                                                         -----------
         NET OTHER INCOME UNDER EXPENSES                    (52,156)
                                                         -----------
         NET LOSS                                           (25,404)

BEGINNING PARTNERS' CAPITAL                               1,190,974

Partner withdrawals                                         (18,435)
                                                         -----------
ENDING PARTNERS' CAPITAL                               $  1,147,135
                                                         ===========







                             See accompanying notes.
                                       50

<PAGE>
                             LAUREL CREEK APARTMENTS
                             STATEMENT OF CASH FLOWS
                          YEAR ENDED DECEMBER 31, 1999



CASH FLOWS FROM OPERATING ACTIVITIES

 Net loss                                             $     (25,404)
 Adjustments to reconcile net loss to
   Net cash provided by operating activities
    Depreciation and amortization                            72,922
    (Increase) decrease in:
             Accounts receivable                                 92
             Prepaid expenses                                   418
             Restricted reserves                             (1,455)
    Increase (decrease) in:
             Accounts payable - other                        (3,506)
             Accounts payable - related parties             (55,722)
             Security deposits payable                          401
                                                        ------------

       NET CASH PROVIDED BY OPERATING ACTIVITIES            (12,254)
                                                        ------------


CASH FLOWS FROM FINANCING ACTIVITIES

 Capital withdrawals                                        (18,435)
 Payment of debt                                            (21,439)
                                                        ------------
         NET CASH USED IN FINANCING ACTIVITIES              (39,874)
                                                        ------------

NET INCREASE IN CASH                                        (52,128)

CASH - BEGINNING OF YEAR                                     81,338
                                                        ------------

CASH - END OF YEAR                                    $      29,210
                                                        ============




                             See accompanying notes.
                                       51

<PAGE>
                             LAUREL CREEK APARTMENTS
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

                                   (Continued)

Note 1 -  DEFINITION OF REPORTING  ENTITY AND SUMMARY OF SIGNIFICANT  ACCOUNTING
          POLICIES

          The Laurel Creek Apartments is a California Limited  Partnership which
          was formed on May 17, 1994. The  partnership  was formed to construct,
          acquire,  own, operate,  maintain,  manage,  lease, sell,  mortgage or
          otherwise  dispose of a 24 unit apartment  complex located in the City
          of San Luis Obispo, California.

          As of the  report  date  there are two  partners  in the  partnership,
          consisting of one general and one limited partner.

          Summary of Significant Accounting Policies

                    a.   Basis of accounting

                         The  partnership  is accounted for on the accrual basis
                         of   accounting.   Under  this  method   revenues   are
                         recognized  when  they  are  earned  and  expenses  are
                         recognized when they are incurred.

                    b.   Fixed assets and depreciation

                         Fixed assets are carried at cost.  Expenditures for the
                         fixed assets are  capitalized.  Maintenance and repairs
                         are charged to operations.  Depreciation  is calculated
                         using the straight-line basis over the estimated useful
                         lives.

                    c.   Income taxes

                         Taxable  income or expenses and related tax credits are
                         not   reflected   as   expenses   or   credits  of  the
                         partnership.  These items are the  responsibilities  of
                         the individual partners.
Note 2 -  CASH

          Cash consists of $28,505 deposited into savings or checking  accounts,
          and $705 is on  deposit  with the  State of  California  Local  Agency
          Investment  Fund. At December 31, 1999 the amount  deposited  into the
          savings accounts and the Local Agency  Investment Fund earned interest
          at rates from 1.25% to 5.49% respectively.

Note 3 -  RESTRICTED CASH

          Restricted  cash  consists  of $22,819  maintained  in a money  market
          account  earning 5.49%.  This cash is reserved for the  replacement of
          structures and equipment.

                                       52
<PAGE>
                             LAUREL CREEK APARTMENTS
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

                                   (Continued)

Note 4 -  LAND, STRUCTURES AND EQUIPMENT

          Property and equipment  and  accumulated  depreciation  consist of the
          following:

                                                            Accumulated
                                              Cost          Depreciation

          Land                       $       275,000    $                -
          Building                         1,868,634               376,532
          Equipment                           21,720                16,166
                                         ------------          ------------

                                     $     2,165,354    $          392,698
                                        =============          ============

Note 5 -  ORGANIZATION COSTS

          Organization  costs  and  accumulated   amortization  consist  of  the
          following:


                                                             Accumulated
                                              Cost           Amortization

          Organization costs         $        26,918    $           10,657
                                         ============          ============
Note 6 - NOTE PAYABLE

          The Agency has a mortgage  note  payable to the First Bank of San Luis
          Obispo.  The note requires  principal and interest  payments  totaling
          $6,381 each month until  9/1/2014.  The note bears  interest at 8% per
          annum. The following is a schedule of the debt payment requirements to
          maturity:

                    Year ending
                    December 31

                         2000                          $         76,569
                         2001                                    76,569
                         2002                                    76,569
                         2003                                    76,569
                         2004                                    76,569
                         Thereafter                             740,164
                                                             -----------

                             Total                            1,123,009

                         Less amounts representing
                          interest                              487,792
                                                             -----------
                                                       $        635,217
                                                             ===========

                                       53
<PAGE>
                             LAUREL CREEK APARTMENTS
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 1999

                                   (Continued)

Note 7 -  RELATED PARTIES

          The accounting and  administrative  functions of the  partnership  are
          performed  by  employees  of the Housing  Authority of the City of San
          Luis Obispo (the Authority). Two members of the general partner's (San
          Luis Obispo Nonprofit Housing Corporation) board of directors are also
          members of the board of commissioner's of the Housing Authority of the
          City of San Luis Obispo.

          At December 31, 1999 the  partnership  owed the Authority  $20,163 and
          the Nonprofit  Corporation  $189.  During the year ended  December 31,
          1999, the  partnership  paid the Authority  $12,002 in  administration
          costs and management fees.

Note 8 -  LAND DONATION AND LEASE

          The land  upon  which  the  Laurel  Creek  Apartments  were  built was
          originally  leased  from the City of San Luis Obispo (the City) by the
          Housing Authority of the City of San Luis Obispo (the Authority). This
          lease  agreement was later assigned from the Authority to the San Luis
          Obispo Nonprofit Housing Corporation (the Corporation).  The lease was
          later assigned to the Laurel Creek Apartments Partnership. Each of the
          above  mentioned  agencies  have common board members or in some other
          manner have oversight  responsibilities  over the other organizations;
          which would qualify them as related parties.

          The lease expires on April 29, 2046.  The  provisions for extending or
          renewing the lease term are not specified and are contingent  upon the
          continuation of the project being used to provide  affordable  housing
          to lower income families. The annual lease payments are $1 per year.

          The  land was  recorded  on the  Agency's  books  of  accounts  at the
          appraised value on the date the land lease was assigned to the Agency.
          This  appraised  value  was  $275,000.  The value of the land was also
          recorded as a capital  contribution  from the general  partner on that
          date.


                                       54