<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                                   FORM 10-K
             [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
              THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

                  For the fiscal year ended December 31, 2000

                                      OR

         [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
               For the transaction period from __________ to __________

                        Commission File Number 0-15571

               CAROLINA INVESTMENT PARTNERS, LIMITED PARTNERSHIP
            (Exact name of registrant as specified in its charter)

North Carolina                                       56-1494619
(State or other jurisdiction of                      (I.R.S. Employer
incorporation or organization)                       Identification No.)

Suite 100, 4000 Blue Ridge Road
Raleigh, North Carolina                              27612
(Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code (919) 781-1700

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: 5,900 Units of
Limited Partnership Interests.

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of the registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K [X].

Market Value of 5,875 Units held by nonaffiliates as of March 21, 2001 was
$2,621,000 (based upon the offering price of $1,000 less the amount distributed
per Unit).

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

5,900 Units outstanding as of March 21, 2001
--------------------------------------------

This Exhibit Index appears on Page 16.
<PAGE>

                                    PART I

Item 1.  Business.
         --------

Carolina Investment Partners, Limited Partnership (the "Registrant") is a
limited partnership organized in 1985 under the North Carolina Uniform Limited
Partnership Act. The Registrant was formed for the purpose of investing in
certain unimproved real properties located in Cary, North Carolina. The
Registrant acquired these properties, commonly known as the Martin Parcel and
the Wellington Parcel, in 1986. See "Properties." The Registrant has the option
to develop the Martin Parcel for office and institutional uses or hold it for
resale. The only option for the Wellington Parcel was to hold it for resale. At
this time the Registrant is not developing the Martin Parcel and is attempting
to sell it. However, the Registrant will consider its options with respect to
development of the Martin Parcel and is formulating a plan for development of
the Martin Parcel. As of April 9, 1998 all of the Wellington Parcel was sold.

Item 2.  Properties.
         ----------

The Martin Parcel is located in the southern portion of Cary, North Carolina, a
rapidly expanding community to the immediate southwest of Raleigh, North
Carolina. Cary is part of a region in central North Carolina known as the
Research Triangle area, which includes Raleigh, Durham, Chapel Hill and the
Research Triangle Park. The Martin Parcel is located near the residential single
family subdivisions known as Ridgepath, Wellington Park, MacGregor Downs,
Lochmere, Kildaire Farms, Wimbledon, and McDonald Woods. The map below shows the
locations of the Martin Parcel in Cary.

                                   [MAP]

                                       2
<PAGE>

The Martin Parcel contains approximately 25.1 acres of unimproved land, which is
divided into two tracts by the Cary Parkway. The tract lying to the west of the
Cary Parkway contains 15.76 acres of land, while the tract lying to the east of
the Cary Parkway contains 9.34 acres of land. The Martin Parcel is located
immediately to the north of the interchange.

Upon the sale of the Martin Parcel, the General Partner is entitled to a
broker-listing fee under some circumstances. See Item 11 "Executive
Compensation." In addition to the broker-listing fee, in the event the parcel is
sold by a broker unaffiliated with the General Partner, the Registrant may pay
the unaffiliated broker a 2.5% broker-referral fee.

Item 3.  Legal Proceedings.
         -----------------

No material legal proceedings are pending against the Registrant or its
properties.

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

No matters were submitted to a vote by the limited partners of the Registrant
during the fourth quarter of 2000.

                                    PART II

Item 5.  Market for the Registrant's Common Equity and Related Stockholder
         -----------------------------------------------------------------
         Matters.
         -------

         (a)   The Registrant has no common stock. There is no established
public trading market for the Units.

         (b)   The Registrant had 985 Limited Partners holding 5,900 Units as of
March 30, 2001. The number of Limited Partners was determined by the
Partnership's records maintained by the General Partner. An affiliate of the
General Partner owns 25 of these 5,900 units.

         (c)   Until the Limited Partners have received distributions of cash
from the Registrant of an aggregate amount equal to 100% of the Capital
Contributions of the Limited Partners, plus an additional return equivalent to
10% per annum simple interest on their "Unreturned Capital Contributions", the
Limited Partners will receive at least 99% of all distributions of cash, which
will be distributed and allocated among them in the ratio which the number of
Units owned by each of them bears to the total number of Units outstanding.
Thereafter, the Registrant's distributions will be allocated 90% to the Limited
Partners and 10% to the General Partner. "Unreturned Capital Contribution" means
the Capital Contribution of a Limited Partner less any distributions of cash
made by the Registrant to such Limited Partner.

                                       3
<PAGE>

Item 6.  Selected Financial Data.
         -----------------------

<TABLE>
<CAPTION>
                                   2000          1999           1998          1997        1996
                                   ----          ----           ----          ----        ----
<S>                              <C>            <C>          <C>            <C>         <C>
Summary of Operations:
  Gain on Sale of Land          $     -0-      $     -0-    $   291,596  $    541,269  $  1,382,081

  Other Income                     8,748         17,471         163,090        87,420        12,174

  Expenses                        56,466         57,129          76,565        57,557        58,040

  Net Income (Loss)              (47,718)       (39,658)        378,121       571,132     1,336,215

  Net Income (Loss)
  per limited partnership unit:
     From gain on sale of land        -0-            -0-          48.93         90.82        231.91
     From other operations         (8.08)         (6.58)          14.52          5.01         (7.78)
                                  ------         ------           -----          ----        ------
     Total per unit                (8.08)         (6.58)          63.45         95.83        224.13

  Distribution per unit               -0-            -0-         220.00            -0-       331.53

Selected Balances:
  Cash and Short-Term
  Investments                    273,220        347,989         413,165     1,002,868       205,524

  Land held for Investment     3,594,592      3,594,592       3,594,592     3,850,572     4,001,280

  Total Assets                 3,871,751      3,946,165       4,009,786     4,858,132     4,206,804

  Long term obligations               -0-            -0-             -0-           -0-           -0-

  General Partner's equity            -0-            -0-            865         5,711            -0-

  Limited Partners' equity     3,740,213      3,787,930       3,826,723    4 ,750,383     4,184,962
</TABLE>

Item 7.  Management's Discussion and Analysis of Financial Condition and
         ---------------------------------------------------------------
         Results of Operations.
         ---------------------

The Registrant's operations resulted in a net loss of $47,718 during 2000,
compared to a net loss of $39,658 during 1999 and a net income of $378,121 in
1998. The primary differences between 2000 in comparison to 1999 and 1998 were:

                                       4
<PAGE>

     2000 vs. 1999
     -------------

     .    A property tax refund of $6,113 in 1999 was received by the
          Registrant. There was no such refund received in 2000.

     .    Interest received by the Registrant from investment in a money market
          account totaled $6,798 in 2000 compared to $10,833 in 1999 due to
          higher balances in the account during 1999.

     2000 vs. 1998
     -------------

     .    There were no land sales in 2000 compared to a gain of $291,596 in
          1998 from the sale of the remaining 3.4 acres of the Registrant's
          Wellington Parcel.

     .    Interest of $66,167 and a late closing penalty of $77,605 in 1998 were
          received by the Registrant due to the deferral of the closing of the
          remaining 3.4 acres of the Wellington Parcel. There was no such
          interest received in 2000.

     .    Interest received by the Registrant from investment in a money market
          account totaled $6,798 in 2000 compared to $16,263 in 1998 due to
          higher balances in the account during 1998.

The Registrant has submitted a site plan for the development portion of the
Martin Parcel to the town of Cary. The town has failed to approve the site plan
because of traffic concerns. The General Partner and its representatives are
presently meeting with the North Carolina Department of Transportation
representatives and representatives of the town of Cary in an attempt to
alleviate the concerns of town officials. The General Partner believes that a
favorable outcome of these discussions will enhance the marketability of the
property. There can be no assurances that there will be a favorable outcome of
the discussions with the North Carolina Department of Transportation or the Town
of Cary.

Development of real property in the Research Triangle Area is highly
competitive. Factors which affect competition include price, financing terms,
economics, location, social and demographic conditions in the surrounding areas,
roads, sewers, utilities and other items of infrastructure, zoning and similar
governmental regulations which affect the cost of development and the uses of
the property. Many of these factors are beyond the control of the Registrant.
These competitive conditions may affect the Registrant's ability to locate
purchasers for, or develop the property at prices acceptable to the Registrant.
The Registrant believes, however, that the proximity of the property to the full
access highway interchange and overpass which connects the Cary Parkway and U.S.
Highway 1 and 64 (the "Interchange") enhances their marketability and minimizes
the effects of competition.

As of March 30, 2001, the Registrant has $274,720 in cash and short-term
investments, which is sufficient to meet its needs during the next year. The
Registrant expects to retain these.

The Registrant maintains its excess funds in money market account at Centura
Bank. The General Partner believes the account is an appropriate investment of
the Registrant's funds. Until the Martin Parcel is sold, placed into development
and/or refinanced, the Registrant anticipates deficits from operations and
administrative expenses.

                                       5
<PAGE>

Cautionary Statement Identifying Important Factors That Could Cause the
Registrant's Actual Results to Differ From Those Projected in Forward Looking
Statements.

In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, readers of this document, and any document
incorporated by reference herein, are advised that this document and documents
incorporated by reference into this document contain both statements of
historical facts and forward looking statements. Forward-looking statements are
subject to certain risks and uncertainties, which could cause actual results to
differ materially from those indicated by the forward looking statements.
Examples of forward looking statements include, but are not limited to (i)
projections of revenues, income or loss, earnings or loss per share, capital
expenditures, dividends, capital structure and other financial items, (ii)
statements of the plans and objectives of the Registrant or its management,
including the introduction of new products, or estimates or predictions of
actions by customers, suppliers, competitors or regulatory authorities, (iii)
statements of future economic performance, and (iv) statements of assumptions
underlying other statements and statements about the Registrant or its business.

This document and any documents incorporated by reference herein also identify
important factors which could cause actual results to differ materially from
those indicated by the forward looking statements. These risks and uncertainties
include uncertainties about whether real estate sales under contract will close,
the ability of the Registrant to sell its other real estate assets, the price of
real estate sales, environmental and similar liabilities, future operating
expenses and the adequacy of capital resources to meet future operating
expenses, which are described herein and/or in documents incorporated by
reference herein.

The cautionary statements made pursuant to the Private Securities Litigation
Reform Act of 1995 above and elsewhere by the Registrant should not be construed
as exhaustive or as any admission regarding the adequacy of disclosures made by
the Registrant prior to the effective date of such Act. Forward looking
statements are beyond the ability of the Registrant to control and in many cases
the Registrant cannot predict what factors would cause actual results to differ
materially from those indicated by the forward looking statements.

Item 7A.       Quantitative and Qualitative Disclosures About Market Risk.
               -----------------------------------------------------------

Not applicable.

Item 8.        Financial Statements and Supplementary Data.
               -------------------------------------------

Registrant's financial statements are included elsewhere herein. See "List of
Financial Statements."


Item 9.   Changes in and Disagreements with Accountant on Accounting and
          --------------------------------------------------------------
          Financial Disclosure.
          ---------------------

None.

                                       6
<PAGE>

                                   PART III

Item 10. Directors and Executive Officers of the Registrant.
         --------------------------------------------------

The Registrant has no directors or executive officers. The Registrant is
managed, and its investment decisions are made, by the general partners of the
General Partner. The General Partner is Walsmith Associates Two, a North
Carolina general partnership. Except as expressly provided in the Partnership
Agreement, the General Partner has the power to do any and all things necessary
or incident to the conduct of the Registrant's business. The general partners of
the General Partner are:

<TABLE>
<CAPTION>
                                                     -------------------------------------------------------------------------------
                                                                               Business Experience During
                                                                                 Past Five Years, Family
                                                                             Relationships and Directorships
NAME                             AGE                                               in Public Companies
----                             ---                 -------------------------------------------------------------------------------
<S>                              <C>                 <C>
Donald F. Walston                58                  President since 1982, and founder of Howard Perry & Walston Realty, Inc., a
                                                     residential real estate brokerage company located in the Research Triangle area
                                                     of North Carolina.

Alton L. Smith, III              51                  Mr. Smith is an officer and director of Trademark Properties, Inc. Mr. Smith is
                                                     the brother of C. Stephen Smith

C. Stephen Smith                 50                  Mr. Smith is an independent commercial real estate broker. Mr. Smith is the
                                                     brother of Alton L. Smith, III
</TABLE>

To the knowledge of the Registrant, no person is the beneficial owner of more
than 590 units, 10% of the outstanding Units.

Item 11. Executive Compensation.
         ----------------------

The Agreement of Limited Partnership of the Registrant (the "Partnership
Agreement") governs the amount of compensation payable to Walsmith Associates,
Two, the General Partner of the Registrant.

Each year any portion of the properties of the Registrant remain undeveloped,
the Registrant pays the General Partner an annual $3,000 management fee. This
fee was not paid to the General Partner by the Registrant during 2000.

If any portion of the Registrant's properties is developed by the Registrant,
the Registrant will pay the General Partner a 3% development fee based upon the
cost of improvements, net of land. No amounts were paid to the General Partner
as a development fee during the year ended December 31, 2000.

The Registrant may also pay personnel engaged by or on its behalf to coordinate
or supervise development, construction and operational activities, including
partners and employees of its General Partner. During the year ended December
31, 2000, the Registrant paid affiliates of the General Partner $1,314 for
writing checks and depositing funds. The Registrant has hired an outside
accounting firm for all other record keeping such as securities law filings and
maintenance of the partnership database.

                                       7
<PAGE>

The Partnership Agreement calls for the General Partner to be allocated a
minimum of 1% of the gain from the sale of property. The General Partner
receives cash to the extent it is allocated income. The General Partner has been
allocated no net income for 2000. (See Item 7. "Management's Discussion and
Analysis of Financial Condition and Results of Operations.")

Upon the sale of the Martin Parcel the General Partner will be paid a broker
listing fee of up to five (5%) percent of the sales price if the sale is to a
party unaffiliated with the General Partner. If the property is sold by a broker
unaffiliated with the General Partner, the Registrant may also pay the
unaffiliated broker a two and one-half (2 1/2%) percent broker-reallowance fee.
The Registrant paid no broker listing fees during the year ended December 31,
2000.

No other amounts were paid for services during the year ended December 31, 2000
to the General Partner or any of its partners or employees.

If the Registrant operates developed projects, the General Partner will receive
standard leasing commissions and standard property management fees. No amounts
were paid during the year ended December 31, 2000.

The General Partner receives cash to the extent it is allocated income. Pursuant
to the Partnership Agreement, the General Partner is allocated 1% of each
material item of Partnership income, gain, loss, deduction, or credit. Otherwise
all distributions are to the limited partners until such time as these
distributions equal their original capital contributions plus an additional
return of 10% per annum simple interest on their outstanding capital
contribution (original contributions as reduced by any prior distributions).
Thereafter, Partnership distributions will be allocated 10% to the General
Partner and 90% to the limited partners.

Information about comparative five-year return on investment in the Registrant
compared to market indexes has not been included herein because there is no
public market in Units of the Registrant. The limited partnership agreement of
the Registrant places substantial restrictions on transfer of Units of the
Registrant. Accordingly, the Registrant believes comparisons to indexes of
publicly traded securities would not be meaningful disclosure for investors.

Item 12.  Security Ownership of Certain Beneficial Owners and Management.
          --------------------------------------------------------------

          (a)  As of March 30, 2001, no person was known by the Registrant to
beneficially own more than 5% of the Units. The table set forth below indicates
the ownership of units by certain general partners of the General Partner as of
March 30, 2001:

<TABLE>
<CAPTION>
                                                                           Amount and
         Title                               Name & Address                  Nature              Percent of Class
         -----                               --------------                  ------              ----------------
<S>                                  <C>                                <C>                      <C>
Limited Partnership Unit             Alton L. Smith III                   25 units (1)                  *
                                     4000 Blue Ridge Road, Suite 100
                                     Raleigh, NC 27612
</TABLE>

* Indicates less than 1%.

(1)  Held in trust for Mr. Smith's children. Mr. Smith serves as trustee of the
     trust.

                                       8
<PAGE>

          (b)   As a limited partnership, the Registrant has no officers and
directors, although Alton L. Smith, III, a general partner of the General
Partner, serves the Registrant in the role of its principal financial "officer".
The General Partner has contributed $1,000 to the Registrant's capital account;
however, this contribution is not treated as the equivalent of a Unit of limited
partnership interest. The General Partner's contribution constitutes less than
1% of the total capital contributed to the Registrant. Messrs. Walston, Smith
and Smith are general partners of the General Partner. Alton L. Smith III
beneficially owns 25 units through a trust, for which he serves as trustee.
Neither Mr. Walston nor Mr. C. Stephen Smith beneficially owns any units of the
Registrant.

Item 13.  Certain Relationships and Related Transactions.
          ----------------------------------------------

See Item 11 "Executive Compensation."

                                    PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
          ----------------------------------------------------------------

          (a)  The following documents are filed as part of this report:

               (1)  List of Financial Statements:
                    See "List of Financial Statements."

               (2)  List of Financial Statement Schedules: All schedules are
                    omitted as they are not applicable or the required
                    information is shown in the financial statements or the
                    notes thereto.

               (3)  Exhibit Index.  All exhibits are incorporated by reference.

          (b)  No Current Report on Form 8-K was filed during the quarter ended
December 31, 2000.

          (c)  The following exhibits have been filed by the Registrant with the
Securities and Exchange Commission under the Securities Exchange Act of 1934
(File Number 0-15571) and are incorporated herein by reference:

                                       9
<PAGE>

              Exhibit No. 3.1      Amended Agreement of Limited Partnership of
                                   the Registrant (incorporated by reference to
                                   Exhibit 4.1 to the Registrant's Annual Report
                                   filed on Form 10-K for the year ended
                                   December 31, 1986).

              Exhibit No. 10.1     Purchase Agreement between Registrant and
                                   Walsmith Associates regarding the Martin
                                   Parcel (incorporated by reference to Exhibit
                                   10.1 to the Registrant's Annual Report filed
                                   on Form 10-K for the year ended December 31,
                                   1986).

              Exhibit No. 10.2     Offer to Purchase and Contract for the Sale
                                   and Purchase of Real Estate, dated as of
                                   January 24, 1986, between Wellington Park
                                   Associates and the Registrant (incorporated
                                   by reference to Exhibit 6A to the
                                   Registrant's Quarterly Report filed on Form
                                   10-Q for the period ended June 30, 1989).

              Exhibit No. 10.3     Agreement between the North Carolina
                                   Department of Transportation and Walsmith
                                   Associates (incorporated by reference to
                                   Exhibit 10.3 to the Registrant's Annual
                                   Report on Form 10-K for the year ended
                                   December 31, 1986).

              Exhibit No. 10.4     Assignment and Assumption Agreement between
                                   the Registrant and Walsmith Associates
                                   (incorporated by reference to Exhibit 10.4 to
                                   the Registrant's Annual Report on Form 10-K
                                   for the year ended December 31, 1986).

              Exhibit No. 10.5     Amendment to Offer to Purchase and Contract
                                   for the Sale and Purchase of Real Estate,
                                   dated as of February 1, 1990, between
                                   Wellington Park Associates and the Registrant
                                   (incorporated by reference to Exhibit 10.6 to
                                   the Registrant's Annual Report filed on Form
                                   10-K for the period ended December 31, 1989).

              Exhibit No. 10.6     Agreement for the Purchase and Sale of Real
                                   Estate, dated as of April 20, 1995, between
                                   Churchill & Banks, Ltd., ADA Corporation of
                                   North Carolina, and the

                                       10
<PAGE>

                                   Registrant (incorporated by reference to
                                   Exhibit C to the Registrant's Current Report
                                   filed on Form 8-K, dated April 20, 1995).

               Exhibit No. 10.7    First Amendment to the Agreement for the
                                   Purchase and Sale of Real Estate, dated as of
                                   August 9, 1995, between Churchill & Banks,
                                   Ltd., ADA Corporation of North Carolina, and
                                   the Registrant (incorporated by reference to
                                   Exhibit C to the Registrant's Current Report
                                   filed on Form 8-K, dated August 9, 1995).

               Exhibit No. 10.8    Second Amendment to the Agreement for the
                                   Purchase and Sale of Real Estate, dated as of
                                   April 19, 1996, between Churchill & Banks,
                                   Ltd., ADA Corporation of North Carolina, and
                                   the Registrant (incorporated by reference to
                                   Exhibit 28.5 to the Registrant's Quarterly
                                   Report filed on Form 10-Q for the period
                                   ended March 31, 1996).

               Exhibit No. 10.9    Third Amendment to the Agreement for the
                                   Purchase and Sale of Real Estate, dated as of
                                   September 10, 1996, between Churchill &
                                   Banks, Ltd., ADA Corporation of North
                                   Carolina, and the Registrant (incorporated by
                                   reference to Exhibit 10.1 to the Registrant's
                                   Current Report filed on Form 8-K, dated
                                   September 25, 1996).

               Exhibit No. 10.10   Fourth Amendment to the Agreement for the
                                   Purchase and Sale of Real Estate, dated as of
                                   September __, 1996, between Churchill &
                                   Banks, Ltd., ADA Corporation of North
                                   Carolina, and the Registrant (incorporated by
                                   reference to Exhibit 10.2 to the Registrant's
                                   Current Report filed on Form 8-K, dated
                                   September 25, 1996).

               Exhibit No. 10.11   Fifth Amendment to the Agreement for the
                                   Purchase and Sale of Real Estate, dated as of
                                   September 27, 1996, between Wellington Center
                                   Associates, LLC, ADA Corporation of North
                                   Carolina, and the Registrant (incorporated by
                                   reference to Exhibit 10.3 to the Registrant's
                                   Current Report filed on Form 8-K, dated
                                   September 25, 1996).

                                       11
<PAGE>

               Exhibit No. 10.12   Sixth Amendment to the Agreement for the
                                   Purchase and Sale of Real Estate, dated as of
                                   September 12, 1997, between Wellington Center
                                   Associates, LLC, ADA Corporation of North
                                   Carolina, and the Registrant (incorporated by
                                   reference to Exhibit 10.12 to the
                                   Registrant's Quarterly Report filed on Form
                                   10-Q for the period ended September 30,
                                   1997).

               Exhibit No. 10.13   Letter Agreement to amend the Agreement for
                                   the Purchase and Sale of Real Estate, dated
                                   December 12, 1997 between Churchill & Banks,
                                   Ltd., ADA Corporation of North Carolina, and
                                   the Registrant (incorporated by reference to
                                   Exhibit 10.13 to the Registrant's Quarterly
                                   Report filed on Form 10-Q for the period
                                   ended March 31, 1998).

               Exhibit No. 10.14   Eighth Amendment to the Agreement for the
                                   Purchase and Sale of Real Estate, dated March
                                   24, 1998 between Churchill & Banks, Ltd., ADA
                                   Corporation of North Carolina, and the
                                   Registrant (incorporated by reference to
                                   Exhibit 10.14 to the Registrant's Quarterly
                                   Report filed on Form 10-Q for the period
                                   ended March 31, 1998).

               Exhibit No. 27      Financial Data Schedule

     (d)  All financial statement schedules are omitted because they are not
applicable or the required information is shown in the financial statements
attached hereto or notes thereto.

                                       12
<PAGE>

                                  SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on March 21, 2001.

                                                  CAROLINA INVESTMENT PARTNERS

                                                  By: WALSMITH ASSOCIATES TWO,
                                                      General Partner

                                                  By:  /s/ Alton L. Smith, III
                                                  ----------------------------
                                                  Alton L. Smith, III
                                                  General Partner and
                                                  Principal Financial Officer


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

<TABLE>
<CAPTION>
Signature                                            Capacity                       Date
---------                                            ---------                      ----
<S>                                      <C>                                    <C>
/s/ Donald F. Walston                    General Partner of Walsmith            March 30, 2001
------------------------------------     Associates Two, general partner of
                                         the Registrant


/s/ Alton, L. Smith, III
------------------------------------     General Partner of Walsmith            March 30, 2001
                                         Associates Two, general partner of
                                         the Registrant
</TABLE>

Supplemental Information to be Furnished With Reports Filed Pursuant to Section
-------------------------------------------------------------------------------
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to
--------------------------------------------------------------------------------
Section 12 of the Act.
---------------------

No annual report or proxy statement has been or will be sent to the Limited
Partners of the Registrant.

                                       13
<PAGE>

                          ANNUAL REPORT ON FORM 10-K

                            ITEMS 8 AND 14 (a) (1)

                             FINANCIAL STATEMENTS

                         LIST OF FINANCIAL STATEMENTS

                         YEAR ENDED DECEMBER 31, 2000

               CAROLINA INVESTMENT PARTNERS, LIMITED PARTNERSHIP

                            RALEIGH, NORTH CAROLINA

                                       14
<PAGE>

     Form 10-K--Items, 8, 14 (a) (1) and (2) and (d)

     CAROLINA INVESTMENT PARTNERS, LIMITED PARTNERSHIP

     December 31, 2000

     LIST OF FINANCIAL STATEMENTS

     The following financial statements of Carolina Investment
     Partners, Limited Partnership are included in Item 8:

     Independent Auditors Report                                F-1

     Balance Sheets--December 31, 2000 and 1999                 F-2

     Statements of Operations--Years Ended
      December 31, 2000, 1999 and 1998                          F-3

     Statements of Changes in Partners' Equity--Years Ended
      December 31, 2000, 1999, and 1998                         F-4

     Statements of Cash Flows--Years Ended December 31, 2000,
      1999, and 1998                                            F-5

     Notes to Financial Statements                              F-6


Schedules to the financial statements for which provision is made in the
applicable accounting regulations of the Securities and Exchange Commission are
inapplicable or the required information is included in the financial statements
or the notes thereto.

                                       15
<PAGE>

                               INDEX TO EXHIBITS

               Exhibit No.                              Description
               -----------                              -----------

                 3.1                        Amended Agreement of Limited
                                            Partnership of the Registrant
                                            (incorporated by reference to
                                            Exhibit 4.1 to the Registrant's
                                            Annual Report filed on Form 10-K for
                                            the year ended December 31, 1986).

                10.1                        Purchase Agreement between
                                            Registrant and Walsmith Associates
                                            regarding the Martin Parcel
                                            (incorporated by reference to
                                            Exhibit 10.1to the Registrant's
                                            Annual Report filed on Form 10-K for
                                            the year ended December 31, 1986).

                10.2                        Offer to Purchase and Contract for
                                            the Sale and Purchase of Real
                                            Estate, dated as of January 24,
                                            1986, between Wellington Park
                                            Associates and the Registrant
                                            (incorporated by reference to
                                            Exhibit 6A to the Registrant's
                                            Quarterly Report filed on Form 10-Q
                                            for the period ended June 30, 1989).

                10.3                        Agreement between the North Carolina
                                            Department of Transportation and
                                            Walsmith Associates (incorporated by
                                            reference to Exhibit 10.3 to the
                                            Registrant's Annual Report on Form
                                            10-K for the year ended December 31,
                                            1986).

                10.4                        Assignment and Assumption Agreement
                                            between the Registrant and Walsmith
                                            Associates (incorporated by
                                            reference to Exhibit 10.4 to the
                                            Registrant's Annual Report on Form
                                            10-K for the year ended December 31,
                                            1986).

                10.5                        Amendment to Offer to Purchase and
                                            Contract for the Sale and Purchase
                                            of Real Estate, dated as

                                       16
<PAGE>

                                            of February 1, 1990, between
                                            Wellington Park Associates and the
                                            Registrant (incorporated by
                                            reference to Exhibit 10.6 to the
                                            Registrant's Annual Report filed on
                                            Form 10-K for the period ended
                                            December 31, 1989).

                10.6                        Agreement for the Purchase and Sale
                                            of Real Estate, dated as of April
                                            20, 1995, between Churchill & Banks,
                                            Ltd., ADA Corporation of North
                                            Carolina, and the Registrant
                                            (incorporated by reference to
                                            Exhibit C to the Registrant's
                                            Current Report filed on Form 8-K,
                                            dated April 20, 1995).

                10.7                        First Amendment to the Agreement for
                                            the Purchase and Sale of Real
                                            Estate, dated as of August 9, 1995,
                                            between Churchill & Banks, Ltd., ADA
                                            Corporation of North Carolina, and
                                            the Registrant (incorporated by
                                            reference to Exhibit C to the
                                            Registrant's Current Report filed on
                                            Form 8-K, dated August 9, 1995).

                10.8                        Second Amendment to the Agreement
                                            for the Purchase and Sale of Real
                                            Estate, dated as of April 19, 1997,
                                            between Churchill & Banks, Ltd., ADA
                                            Corporation of North Carolina, and
                                            the Registrant (incorporated by
                                            reference to Exhibit 28.5 to the
                                            Registrant's Quarterly Report filed
                                            on Form 10-Q for the period ended
                                            March 31, 1997).

                10.9                        Third Amendment to the Agreement for
                                            the Purchase and Sale of Real
                                            Estate, dated as of September 10,
                                            1997, between Churchill & Banks,
                                            Ltd., ADA Corporation of North
                                            Carolina, and the Registrant
                                            (incorporated by reference to
                                            Exhibit 10.1 to the Registrant's
                                            Current Report filed on Form 8-K,
                                            dated September 25, 1997).

                10.10                       Fourth Amendment to the

                                       17
<PAGE>

                                            Agreement for the Purchase and Sale
                                            of Real Estate, dated as of
                                            September __, 1997, between
                                            Churchill & Banks, Ltd., ADA
                                            Corporation of North Carolina, and
                                            the Registrant (incorporated by
                                            reference to Exhibit 10.2 to the
                                            Registrant's Current Report filed on
                                            Form 8-K, dated September 25, 1997).

                      10.11                 Fifth Amendment to the Agreement for
                                            the Purchase and Sale of Real
                                            Estate, dated as of September 27,
                                            1997, between Wellington Center
                                            Associates, LLC, ADA Corporation of
                                            North Carolina, and the Registrant
                                            (incorporated by reference to
                                            Exhibit 10.3 to the Registrant's
                                            Current Report filed on Form 8-K,
                                            dated September 25, 1997).

                      10.12                 Sixth Amendment to the Agreement for
                                            the Purchase and Sale of Real
                                            Estate, dated as of September 12,
                                            1997, between Wellington Center
                                            Associates, LLC, ADA Corporation of
                                            North Carolina, and the Registrant
                                            (incorporated by reference to
                                            Exhibit 10.12 to the Registrant's
                                            Quarterly Report filed on Form 10-Q
                                            for the period ended September 30,
                                            1997).

                      10.13                 Letter Agreement to amend the
                                            Agreement for the Purchase and Sale
                                            of Real Estate, dated December 12,
                                            1997 between Churchill & Banks,
                                            Ltd., ADA Corporation of North
                                            Carolina, and the Registrant
                                            (incorporated by reference to
                                            Exhibit 10.13 to the Registrant's
                                            Quarterly Report filed on Form 10-Q
                                            for the period ended March 31,
                                            1998).

                      10.14                 Eighth Amendment to the Agreement
                                            for the Purchase and Sale of Real
                                            Estate, dated March 24, 1998 between
                                            Churchill & Banks, Ltd., ADA
                                            Corporation of

                                       18
<PAGE>

                                            North Carolina, and the Registrant
                                            (incorporated by reference to
                                            Exhibit 10.14 to the Registrant's
                                            Quarterly Report filed on Form 10-Q
                                            for the period ended March 31,
                                            1998).

                                       19
<PAGE>

                      [LETTERHEAD OF LYNCH & HOWARD, P.A]


                         INDEPENDENT AUDITOR'S REPORT



     To the Partners
     Carolina Investment Partners Limited Partnership
     Raleigh, North Carolina


     We have audited the accompanying balance sheets of Carolina Investment
     Partners Limited Partnership as of December 31, 2000 and December 31, 1999,
     and the related statements of operations, changes in partners' equity and
     cash flows for each of the three years in the period ended December 31,
     2000. These financial statements are the responsibility of the
     Partnership's management. Our responsibility is to express an opinion on
     these financial statements based on our audits.

     We conducted our audits in accordance with U.S. 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 audits
     provide 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 Carolina Investment
     Partners Limited Partnership as of December 31, 2000 and December 31, 1999,
     and the results of its operations and its cash flows for each of the three
     years in the period ended December 31, 2000 in conformity with U.S.
     generally accepted accounting principles.

     /s/ Lynch & Howard, P.A.

     Raleigh, North Carolina
     January 30, 2001

                                                                             F-1
<PAGE>

                                                                       Exhibit A

                         CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            Raleigh, North Carolina
                                BALANCE SHEETS

<TABLE>
<CAPTION>
                                    ASSETS
                                                                                  December 31
                                                                   ------------------------------------------
                                                                        2000                      1999
                                                                   ----------------          ----------------
   <S>                                                             <C>                       <C>
   ASSETS:
         Cash                                                      $        47,457           $        74,024
         Short-term investments                                            225,763                   273,965
         Land held for investment  (Note 4)                              3,594,592                 3,594,592
         Accounts receivable - related party                                 3,939                     3,584
                                                                   ----------------          ----------------
                                                                   $     3,871,751           $     3,946,165
                                                                   ================          ================


                 LIABILITIES AND PARTNERS' EQUITY

   LIABILITIES:
         Accounts payable - trade                                  $        10,273           $        12,510
         Accounts payable - related party                                    6,158                     3,000
         Distributions not claimed by limited partners                     115,107                   142,725
                                                                   ----------------          ----------------
                     Total Liabilities                             $       131,538           $       158,235
                                                                   ----------------          ----------------


   PARTNERS' EQUITY:
         General Partner's equity                                  $             0           $             0
         Limited partners' equity; 5,900 units
           authorized, issued and outstanding                            3,740,213                 3,787,930
                                                                   ----------------          ----------------
                     Total Partners' Equity                        $     3,740,213           $     3,787,930
                                                                   ----------------          ----------------
                                                                   $     3,871,751           $     3,946,165
                                                                   ================          ================
</TABLE>

The Notes to Financial Statements are an integral part of this statement.

                                                                             F-2
<PAGE>

                                                                       Exhibit B

                         CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            Raleigh, North Carolina
                           STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                  Year Ended December 31
                                                                  ------------------------------------------------------------
                                                                      2000                   1999                   1998
                                                                  --------------         --------------         --------------
 <S>                                                              <C>                    <C>                    <C>
 REVENUES:
      Gain on sale of land - net of related party                 $           0          $           0          $     291,596
         commissions paid of $0, $0 and $26,778
         in 2000, 1999, and 1998, respectively  (Note 5)
      Interest and other income                                           8,748                 17,471                163,090
                                                                  --------------         --------------         --------------
           Total Revenues                                         $       8,748          $      17,471          $     454,686
                                                                  --------------         --------------         --------------

 OPERATING EXPENSES:
      General and administrative expenses                         $      52,151          $      51,314          $      64,110
      Related party expenses                                              4,314                  5,815                 12,455
                                                                  --------------         --------------         --------------
           Total Operating Expenses                               $      56,465          $      57,129          $      76,565
                                                                  --------------         --------------         --------------
 NET INCOME (LOSS)                                                $     (47,717)         $     (39,658)         $     378,121
                                                                  ==============         ==============         ==============

 ALLOCATION OF NET INCOME (LOSS) (Note 2):
      To General Partner:
         From gain on sale of land                                $           0          $           0          $       2,916
         From operations                                                      0                   (865)                   865
                                                                  --------------         --------------         --------------
           Total to General Partner                               $           0          $        (865)         $       3,781
                                                                  --------------         --------------         --------------

      To limited partners:
         From gain on sale of land                                $           0          $           0          $     288,680
         From operations                                                (47,717)               (38,793)                85,660
                                                                  --------------         --------------         --------------
           Total to Limited Partners                              $     (47,717)         $     (38,793)         $     374,340
                                                                  --------------         --------------         --------------
                                                                  $     (47,717)         $     (39,658)         $     378,121
                                                                  ==============         ==============         ==============


 NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT:
      (Based on 5,900 weighted average limited
      partnership units outstanding during each year)
         From gain on sale of land                                $        0.00          $        0.00          $       48.93
         From other operations                                            (8.08)                 (6.58)                 14.52
                                                                  --------------         --------------         --------------
                                                                  $       (8.08)         $       (6.58)         $       63.45
                                                                  ==============         ==============         ==============
</TABLE>

The Notes to Financial Statements are an integral part of this statement.

                                                                             F-3
<PAGE>

                                                                       Exhibit C

                         CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            Raleigh, North Carolina
                   STATEMENTS OF CHANGES IN PARTNERS' EQUITY

<TABLE>
<CAPTION>
                                                          Limited            General                Limited
                                                        Partnership         Partner's              Partners'
                                                           Units              Equity                Equity             Total
                                                       -------------       -------------       ----------------   --------------
      <S>                                              <C>                 <C>                 <C>                <C>
      Balance at January 1, 1998                               5,900       $       5,711       $      4,750,383   $    4,756,094

      Net income for 1998                                          -               3,781                374,340          378,121

      Distributions for 1998
            General Partner                                        -              (8,627)                     -           (8,627)
            Limited partners ($220.00 per unit)                    -                   -             (1,298,000)      (1,298,000)
                                                       -------------       -------------       ----------------   --------------

      Balance at December 31, 1998                             5,900       $         865       $      3,826,723   $    3,827,588

      Net loss for 1999                                            -                (865)               (38,793)         (39,658)
                                                       -------------       -------------       ----------------   --------------

      Balance at December 31, 1999                             5,900       $           0       $      3,787,930   $    3,787,930

      Net loss for 2000                                            -                   0                (47,717)         (47,717)
                                                       -------------       -------------       ----------------   --------------

      Balance at December 31, 2000                             5,900       $           0       $      3,740,213   $    3,740,213
                                                       =============       =============       ================   ==============
</TABLE>

The Notes to Financial Statements are an integral part of this statement.

                                                                             F-4
<PAGE>

                                                                       Exhibit D

                         CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            Raleigh, North Carolina
                           STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                              Year Ended December 31
                                                                            -------------------------------------------------------
                                                                                 2000                 1999                1998
                                                                            --------------       --------------       -------------
         <S>                                                                <C>                  <C>                  <C>
         OPERATING ACTIVITIES:
             Net income (loss)                                              $      (47,717)      $      (39,658)      $     378,121
             Adjustments to reconcile net income (loss) to
               net cash used in operating activities:
                  Changes in operating assets and liabilities:
                      Land held for investment                                           0                    0             255,980
                      Accounts receivable - related party                             (355)              (1,555)              2,663
                      Accounts payable - trade                                      (2,237)              (2,127)            (15,118)
                      Accounts payable - related party                               3,158                1,361                 302
                      Distributions not claimed by limited partners                (27,618)             (23,197)             94,976
                                                                            --------------       --------------       -------------

                      Net Cash Provided By (Used In)
                        Operating Activities                                $      (74,769)      $      (65,176)      $     716,924
                                                                            --------------       --------------       -------------


         FINANCING ACTIVITIES:
             Distribution to General Partner                                $            0       $            0       $      (8,627)
             Distribution to limited partners                                            0                    0          (1,298,000)
                                                                            --------------       --------------       -------------
                      Net Cash Provided By (Used In)
                        Financing Activities                                $            0       $            0       $  (1,306,627)
                                                                            --------------       --------------       -------------

         NET DECREASE IN CASH                                               $      (74,769)      $      (65,176)      $    (589,703)

         CASH AND CASH EQUIVALENTS -
           BEGINNING OF YEAR                                                       347,989              413,165           1,002,868
                                                                            --------------       --------------       -------------
         CASH AND CASH EQUIVALENTS -
           END OF YEAR                                                      $      273,220       $      347,989       $     413,165
                                                                            ==============       ==============       =============

         Supplemental Disclosure of Cash Flows Information:
             Cash and cash equivalents:
                  Cash                                                      $       47,457       $       74,024       $     110,033
                  Short-term investments                                           225,763              273,965             303,132
                                                                            --------------       --------------       -------------

                                                                            $      273,220       $      347,989       $     413,165
                                                                            ==============       ==============       =============
</TABLE>

The Notes to Financial Statements are an integral part of this statement.

                                                                             F-5
<PAGE>

                         CAROLINA INVESTMENT PARTNERS
                             LIMITED PARTRNERSHIP
                            Raleigh, North Carolina
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 2000


(1)  ORGANIZATION AND NATURE OF OPERATIONS

     Carolina Investment Partners Limited Partnership (the "Partnership") was
     organized in 1985 to invest in real property which it will sell or lease
     undeveloped or develop into office or commercial projects.  Walsmith
     Associates Two, a North Carolina General Partnership, is the general
     partner ("General Partner").  The Partnership has invested in two parcels
     of real estate located in Cary, North Carolina.


(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Statement of Cash Flows

     For the purposes of reporting cash flows, the Partnership considers cash
     equivalents to be cash on hand, cash in banks, and all highly liquid debt
     instruments with a maturity of less than three months.

     Land Held for Investment

     Land held for investment is stated at contract cost plus highway
     interchange construction costs and capitalized appraisal, survey, and
     closing costs and adjusted for impairments as required by Financial
     Accounting Standards Board Statement No. 121.  Management compares the cost
     of land held to sales of similar property to determine the potential for
     impairment.  There are no material differences between the book and federal
     tax cost basis of the property.

     Income Taxes

     No provision has been made for income taxes since income or loss is
     includable in the partners' returns as they report to tax authorities in
     their respective capacities as partners.

     Management's Use of Estimates

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions.  These affect the reported amounts of assets and liabilities
     and disclosure of contingent assets and liabilities at the date of the
     financial statements and the reported amounts of revenues and expenses
     during the reporting period.  Actual results could differ from those
     estimates.

                                                                             F-6
<PAGE>

                         CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            Raleigh, North Carolina
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 2000



(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

     Concentrations of Credit Risk

     The Partnership maintains cash deposits in banks in excess of the federally
     insured amounts.

     Allocation of Net Income or Net Loss

     Pursuant to the Partnership Agreement, the General Partner is allocated 1%
     of each material item of Partnership income, gain, loss, deduction or
     credit.  The limited partners receive 99% of each material item of
     Partnership income, gain, loss, deduction or credit until their original
     capital contributions plus interest have been distributed (see Cash
     Distribution Policy below).  Thereafter, the net income is allocated 10% to
     the General Partner and 90% to the limited partners.

     Net loss is allocated 10% to the General Partner and 90% to the limited
     partners.  The Partnership Agreement provides that no partner's capital
     account balance shall be less than zero.  For purposes of the allocation,
     net income or net loss is the amount recognized by the Partnership for
     federal income tax purposes, excluding gains or losses from the disposition
     of land.  For the years ended December 31, 2000, 1999 and 1998 there were
     no material differences between net income (loss) as reported for financial
     statement and federal income tax purposes.

     Cash Distribution Policy

     The General Partner receives cash to the extent it is allocated income.
     Otherwise, all distributions are to the limited partners until such time as
     these distributions equal 100% of their original capital contributions plus
     an additional return of 10% per annum simple interest on their outstanding
     capital contribution (original contributions as reduced by any prior
     distributions).  Thereafter, Partnership distributions will be allocated
     10% to the General Partner and 90% to the limited partners.

     Short-Term Investments

     Short-term investments consisted of certificates of deposit and money
     market funds.

                                                                             F-7
<PAGE>

                         CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            Raleigh, North Carolina
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 2000


(3)  RELATED PARTY TRANSACTIONS

     The Partnership Agreement allows the General Partner to receive a broker
     listing fee of 5% of the sales price for all properties sold by the
     Partnership to unaffiliated buyers.  An affiliate of the General Partner
     received a broker listing fee of $0, $0, and $11,947 in 2000, 1999 and
     1998, respectively, and the General Partner received a broker listing fee
     of $0, $0 and $14,831 in 2000, 1999 and 1998, respectively (See Note 5).

     The Partnership Agreement allows the Partnership to pay the General Partner
     a $3,000 annual management fee while the properties are in an undeveloped
     state.  In addition, affiliates of the General Partner performed
     Partnership accounting, SEC reporting, administrative services and
     engineering consulting totaling $1,314, $2,815 and $9,455 during 2000, 1999
     and 1998, respectively.  Amounts payable to related parties at December 31,
     2000 and 1999 were $6,158 and $3,000, respectively.


(4)  LAND HELD FOR INVESTMENT AND RELATED COMMITMENTS

     Martin Parcel

     In June 1986, the Partnership purchased for approximately $3,080,200 an
     undeveloped 26.7 acre parcel of land in Cary, North Carolina, known as the
     Martin Parcel, from an affiliate of the General Partner.

     Wellington Parcel

     In July 1986, the Partnership purchased for $1,223,175 an undeveloped 16.3
     acre parcel of land in Cary, North Carolina, known as the Wellington
     Parcel, from an affiliate of the General Partner.  The purchase contract
     provides that the Partnership will share evenly with the affiliate in any
     profits resulting from the sale of the Wellington Parcel.  The Partnership
     may, at its option, require the affiliate to repurchase the Wellington
     Parcel for $225,000 per acre (the "Put Option").  A 75% vote of the limited
     partners is required for this Put Option to be exercised.

                                                                             F-8
<PAGE>

                         CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            Raleigh, North Carolina
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 2000


(4)  LAND HELD FOR INVESTMENT AND RELATED COMMITMENTS - Continued

     Wellington Parcel - continued

     At a meeting of the limited partners held in March 1990, fewer than 75% of
     the partners voted to exercise the Put Option discussed above.  A new
     agreement was entered into called the Put Option Agreement Amendment.
     Under the terms of the Put Option Agreement Amendment, the Partnership will
     retain a greater percentage of the property appreciation upon sale of the
     Wellington Parcel to an unaffiliated third party than would be retained if
     the Put Option were exercised.  If the limited partners elect to exercise
     the Put Option at a later date, the Put Option Agreement Amendment will be
     void.

     Of the total 16.3 acres in the Wellington Parcel, 10.9 acres were sold
     prior to 1997.  A total of 2.0 acres were sold in 1997, and the remaining
     3.4 acres were sold during 1998.  (See Note 5).


(5)  GAIN ON SALE OF LAND

     Year 2000

     There was no land sale during 2000.

     Year 1999

     There was no land sale during 1999.

     Year 1998

     During 1998 the Partnership sold the remaining 3.4 acres of the Wellington
     Parcel to an unrelated party.  The total sales price for the property, a
     portion of which was owned by an affiliate of the General Partner, was
     $597,352.  This sales price was allocated among the Partnership and the
     affiliate based upon acreage sold by each, with $593,258 to the Partnership
     and $4,094 to the affiliate.

                                                                             F-9
<PAGE>

                         CAROLINA INVESTMENT PARTNERS
                              LIMITED PARTNERSHIP
                            Raleigh, North Carolina
                         NOTES TO FINANCIAL STATEMENTS
                               December 31, 2000


(5)  GAIN ON SALE OF LAND - Continued

     Year 1998 - continued

     The Partnership's proceeds were as follows:


<TABLE>
<CAPTION>
                                                            3/3/98           4/9/98          Total
                                                      ------------      -----------      ------------
<S>                                                   <C>               <C>              <C>
             Gross sales price                        $    227,655      $   365,603      $    593,258
             Commissions                                   (11,383)         (18,280)          (29,663)
             Commissions - related party                    (5,691)          (9,140)          (14,831)
             Deed stamps                                      (455)            (732)           (1,187)
                                                      ------------      -----------      ------------

             Net Sale Proceeds                        $    210,126      $   337,451      $    547,577
                                                      ============      ===========      ============
</TABLE>

     The Partnership agreement calls for the General Partner to be allocated a
     minimum of 1% of any gain from the sale of property.  To the extent the
     General Partner is allocated gain, it also receives a distribution.
     Accordingly, the General Partner's share of the gain was $2,916 (net sale
     proceeds of $547,577 less the Registrant's basis in the property sold of
     $255,980 equals a gain of $291,596; 1% of this amount is $2,916).

     On April 30, 1998 the Registrant distributed a total of $1,306,627, with
     $1,298,000 going to the limited partners ($220.00 per unit) and $8,627 to
     the General Partner.

                                                                            F-10