FORM 10-Q

                 SECURITIES AND EXCHANGE COMMISSION
                       Washington, DC  20549

         Quarterly Report Under Section 13 or 15(d) of the
                  Securities Exchange Act of 1934

                  For Quarter Ended September 30, 1998
                  Commission File Number:  2-94509

                               LIF
  (Exact name of registrant as specified in its governing instruments)

         California                                   94-2969720
(State or other jurisdiction of                   (I.R.S. Employer
incorporation or organization)                  Identification Number)

               P. O. Box 130, Carbondale, Colorado 81623
                (Address of principal executive offices)

                         (970) 963-8007
         (Registrant's telephone number, including area code)

 Indicate by check mark whether the registrant (1) has filed all reports 
 required to be filed by Sections 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:  [  ]        

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<TABLE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

LIF
CONSOLIDATED BALANCE SHEETS, SEPTEMBER 30, 1998 AND DECEMBER 31, 1997 
(Unaudited) (Dollars in thousands)
<CAPTION>
                                           September 30,   December 31,
                                                1998           1997
<S>                                          <C>              <C>
ASSETS
INVESTMENTS IN REAL ESTATE:
Rental properties                            $ 10,349         $ 10,327
Accumulated depreciation                       (2,869)          (2,607)
Rental properties - net                         7,480            7,720

CASH AND CASH EQUIVALENTS (including
  Interest bearing deposits of $454
  in 1998 and $434 in 1997)                       460              570

OTHER ASSETS:
Accounts receivable                               147               49
Prepaid expenses and deposits                     112               19
Deferred organization costs and loan costs
  (net of accumulated amortization of $244 
   in 1998 and $212 in 1997)                       80               84
Notes receivable                                1,892            1,851
Total other assets                              2,231            2,003

TOTAL                                        $ 10,172          $10,293

LIABILITIES AND PARTNERS' EQUITY LIABILITIES:
Notes payable                                $  8,021          $ 7,679
Accounts payable                                    7               21
Liability for future improvement                  641              828
Deferred gain on sale of real estate               69               69
Other liabilities                                 241              217
Total liabilities                               8,979            8,814

PARTNERS' EQUITY 
    Limited Partners                            1,370            1,632
    General Partners                             (177)            (153)

TOTAL                                        $ 10,172          $10,293

Equity Units Authorized  - Limited Partners    12,820           12,820
                         - General Partners         0                0

Equity Units Outstanding - Limited Partners    12,820           12,820
                         - General Partners         0                0

The accompanying notes are an integral part of the consolidated
financial statements.

</TABLE>
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<TABLE>

LIF
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In thousands except per Unit amounts)
<CAPTION>

                                  Three Months Ended  Nine Months Ended
                                     September 30        September 30
                                     1998    1997       1998      1997
<S>                                  <C>     <C>       <C>       <C>
REVENUE:
Rental                               $ 404   $ 421     $1,244    $1,297
Interest                                 4      49         20        50
Total revenue                          408     470      1,265     1,347

EXPENSE:
Interest                               136     164        419       527
Operating                              158     169        485       507
Depreciation and amortization           96      90        287       260
General and administrative              39      34        144       150
Total expense                          429     457      1,335     1,444

Gain from property sale                  0     563          1       563

NET INCOME (LOSS) - Limited Partners $ (20)  $ 576        (69)      467
                  - General Partners     0       0          0         0

NET INCOME (LOSS) PER PARTNERSHIP UNIT
                  - Limited Partners    (2)     45         (5)       36
                  - General Partners     0       0          0         0

The accompanying notes are an integral part of the consolidated
financial statements.

</TABLE>
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<TABLE>

LIF
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY FOR THE NINE 
MONTHS ENDED SEPTEMBER 30, 1998 AND THE YEAR ENDED DECEMBER 31, 1997
(Unaudited)(Dollars in thousands)
<CAPTION>
                      ..LIMITED PARTNERS..
                           NUMBER OF              GENERAL     TOTAL
                          PARTNERSHIP             PARTNER     PARTNERS'
                            UNITS       AMOUNT    AMOUNT      DEFICIT
<S>                         <C>         <C>       <C>         <C>
BALANCE, JANUARY 1, 1997    12,820      $1,759    $ (153)     $1,606
Net Loss - 1997                           (127)        0        (127)

BALANCE, DECEMBER 31, 1997  12,820      $1,632    $ (153)     $1,479
Net loss                                   (69)        0         (69)
Distribution                              (192)      (24)       (216)

BALANCE, SEPTEMBER 30, 1998 12,820      $1,370    $ (177)     $1,193

The accompanying notes are an integral part of the consolidated
financial statements.

</TABLE>
<PAGE>
<TABLE>

LIF
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
NINE MONTHS ENDED SEPTEMBER 31, 1998 AND 1997 
(Unaudited) (Dollars in thousands)
<CAPTION>
                                                 1998             1997
<S>                                             <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                               $ (69)           $ (97)
Adjustments to reconcile net increase to net 
   cash provided by operating activities:
Depreciation and amortization                     287              238

Change in operating assets and liabilities:
Increase (decrease) in other liabilities           27              835
Increase (decrease) in accounts payable            (2)              (1)
Increase in accounts receivable                   (98)            (837)
(Increase) decrease in deferred expenses          (20)              21 
Increase in prepaid expenses                      (94)             (93)
Net provided by operating activities               31               66

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                              (82)            (470)
Sale of property                                   18              790
Net cash used in investing activities             (64)             320

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Financing                           244               48
Payment on notes payable                         (105)            (350)
Net (distribution) contribution                  (216)               0
Net cash provided by financing activities         (77)            (302)

Decrease in cash and cash equivalents            (110)              84
Cash and cash equivalents at beginning of period  570              387
Cash and cash equivalents at end of period      $ 460            $ 471

The accompanying notes are an integral part of the consolidated
financial statements.

</TABLE>
<PAGE>

LIF
FINANCIAL NOTES
(Dollars in thousands)

The accompanying unaudited financial statements should be read in
conjunction with the Partnership's 1997 Annual Report.  These 
statements have been prepared in accordance with the instructions 
to the Securities and Exchange Commission form 10-Q and do not 
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.  

In the opinion of the general partner, all adjustments (consisting of 
normal recurring accruals) considered necessary for a fair 
presentation have been included.  The results of operations for the 
nine months ended September 30, 1998 and 1997 are not necessarily 
indicative of the results that may be expected for the year ending 
December 31, 1998.

Organization - LIF (the "Partnership") is a limited partnership 
organized under the laws of the state of California for the purpose 
of investing in income properties and making short-term loan and 
capital contributions to operating entities formed to acquire or 
develop and operate one or more income producing real properties.  
The General Partner is Partners '85 (the "General Partner"), a 
California limited partnership, whose General Partner is Landsing 
Equities Corporation.  LIF was formed in June 1984, and shall 
continue until December 31, 2034, unless sooner terminated.

Investment In Real Estate Partnership - At September 30, 1998 and 
1997, the Partnership was invested in Landsing Private Fund 
("P-21"), a 99%-owned real estate partnership.  In 1997, Cattle 
Creek Development Partners (CCDP) was liquidated into the 
Partnership.  CCDP was originally formed in 1994.  For a portion of 
1996, the Partnership was invested in Prince Creek Partners ("PCP") 
and Thompson Creek Partners ("TCP").  In 1996, the properties owned 
by these partnerships were sold and the partnerships terminated.  
During 1996, the Partnership invested into 95% of a new entity - 
Alpine Center Partners ("ACP").  ACP acquired rental real estate 
in Colorado in 1996.  The Partnership interest in ACP was sold in
1998.  

Consolidation of Investment in Real Estate Partnerships - For 
financial reporting purposes, the Partnership consolidates the 
operations of it's investment in real estate partnerships with that 
of the Partnership.  All significant intercompany transactions, 
including notes payable/receivable and short-term loans/receivables, 
and balances have been eliminated.  

Rental Property - Rental property is stated at cost.  Depreciation is 
computed by the straight-line method over estimated useful lives 
ranging from five to forty years.  Major additions and betterments 
are capitalized at cost, while maintenance and repairs which do not 
improve or extend the life of the respective assets are expensed 
currently.  When assets are retired or otherwise disposed of, the 
costs and related accumulated depreciation are removed from the 
accounts, and any gain or loss on disposal is included in the 
results of operations.

Deferred Loan Costs - Loan fees are deferred and amortized over the 
life of the related note payable.  

Cash and Cash Equivalents - The Partnership considers all highly 
liquid investments with a maturity of three months or less at the 
time of purchase to be cash equivalents.

Short-Term Investments - The Partnership invests in short-term 
federally insured certificates of deposits which mature on a date 
in excess of three months from the date of purchase.  The cost of 
these investments approximate market value.

Income Taxes - No provision for federal or state income taxes has
been made in the consolidated financial statements because these 
taxes are the obligation of the partners.
 
Net Income (Loss) Per Partnership Unit - Net Income (Loss) per 
partnership unit is based on weighted average units outstanding of 
12,820 in 1998 and 1997, after giving effect to net income 
(loss) allocated to the General Partner. Cash distributions of $15 
per unit were paid to holders in 1998.  No cash distributions were 
paid in 1997.  
  
Concentrations of Credit Risk - The Partnership's financial 
instruments that are exposed to concentrations of credit risk 
consist primarily of its cash and cash equivalents.  The 
Partnership's cash and cash equivalents are maintained in various 
accounts in FDIC insured institutions. This investment policy limits 
the Partnership's exposure to concentrations of credit risk.

Use of Estimates - The preparation of financial statements in 
conformity with generally accepted accounting principles requires 
management to make estimates and assumptions that affect certain 
reported amounts and disclosures.  Accordingly, actual results 
could differ from those estimates.

Impairment of Long-Lived Assets - The Partnership adopted Statement 
of Financial Accounting Standards (SFAS) No. 121,  "Accounting for 
the Impairment of Long-lived Assets and for Long-lived Assets to be 
Disposed Of" during 1996.  SFAS No. 121 requires that long-lived 
assets and certain identifiable intangibles to be held and used 
or disposed of by an entity be reviewed for impairment whenever 
events or changes in circumstances indicate that the carrying amount 
of an asset may not be recoverable.  During 1998 and 1997, the 
Partnership determined that no impairment loss need be recognized 
for applicable assets of continuing operations.

Accounting Pronouncements - In June 1996, the Financial Accounting 
Standards Board issued Statement No. 125, "Accounting for Transfers 
and Servicing of Financial Assets and Extinguishment of Liabilities" 
(SFAS No.125).  This Statement is effective for transactions 
occurring after December 31, 1996.  However, transactions such as 
securities lending, repurchase agreements, dollar rolls, and similar 
secured financing arrangements are not subject to the provisions of 
SFAS No. 125 until January 1, 1998.  The standard provides that, 
following a transfer of financial assets, an entity is to recognize 
the financial and servicing assets it controls and the liabilities 
it has incurred, derecognize financial assets when control has been 
surrendered and derecognize liabilities when extinguished.  The 
adoption of SFAS No. 125 had no impact on the Partnership's 
consolidated financial statements.  The impact of the delayed 
provisions is also not expected to be material.

In June 1997, the FASB issued Statement No. 130, "Reporting 
Comprehensive Income" (SFAS No. 130) and Statement No. 131, 
"Disclosures about Segments of an Enterprise and Related 
Information" (SFAS No. 131).  Each of the new statements is 
effective for periods beginning after December 15, 1997, and 
requires that certain additional information be reported in the 
financial statements and related notes.  The Partnership will adopt 
these in 1998 but does not expect an impact on its 1998 consolidated 
financial statements.

Year 2000 - The Partnership is aware of the Year 2000 conversion 
issue.  It is Management's assertion that the current accounting 
system utilized by the Partnership has the capability to accommodate 
the Year 2000 issue.

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS

INTRODUCTION

The Partnership was organized to acquire real properties, including 
commercial, residential and agricultural properties, located primarily 
within the western portion of the United States, and to make 
short-term loans and capital contributions to other limited 
partnerships formed to acquire or develop and operate one or more 
income-producing real properties.  

The Partnership currently has a 99% investment in Landsing Private 
Fund-21 ("P-21") which owns one multi-family rental property.  The 
partnership also owns two retail rental properties, which were 
formerly owned by CCDP.  For financial reporting purposes the 
Partnership's investments are presented on a consolidated basis.  

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 1998, the Partnership's consolidated cash balance 
totaled $460,000.  Cash not required for current operations is placed
in federally insured financial instruments, certificates of deposit, 
and money market funds which can be liquidated as needed.  It is the 
Partnership's intention to maintain adequate cash reserves for its 
operations.  

Through the first three quarters of 1998, the Partnership experienced
a net decrease in cash and cash equivalents of $110,000. As of September
30, 1998, cash and cash equivalents totaled $460,000 versus $570,000 
at December 31, 1997.

The Short-Term Loan made to Cattle Creek Development Partners, a 
Colorado limited partnership ("CCDP"), was partially repaid in 
December 1996.  The remaining loan balance, including accrued and 
unpaid interest, as of December 31, 1996 was $550,000.  The loan 
was past due and was thus in default as of December 31, 1997. 
In 1997, per the terms of the loan agreement between LIF and CCDP, 
the properties securing the loan, Valley View Business Park and 
701 Cooper, became 100% owned by LIF.  These inter-company 
transactions were eliminated in consolidation.

The balance of the short-term loan, and the related interest income 
and expense, between LIF and CCDP was eliminated in the 
consolidation of the Partnership's financial statements.

On June 3, 1996, the Partnership made a Short-Term Loan in the 
principal amount of $550,000 to Alpine Center Partners, a Colorado 
limited partnership ("ACP").  ACP was organized to acquire one 
commercial property located in Carbondale, Colorado.  The 
Partnership also made a capital contribution to ACP in the amount 
of $10,000 and became a Co-General Partner of ACP.  

On September 30, 1997, the Partnership's investment in ACP sold 
40.20% of the Alpine Center Building to Gary K. Barr (GKB).  GKB is 
the president of the General Partner of LIF.  This sale resulted in 
cash to ACP of $370,000.  On September 30, 1997, ACP also sold 45.90% 
of the Alpine Center Building to Open World Investors (OWI), of which 
Gary K. Barr is a General Partner.  This sale generated cash to ACP 
of $420,000.  ACP deferred a gain on sale from these two transactions 
of $69,000.  ACP provided seller financing to GKB and OWI in the 
amounts of $864,300 and $986,850 respectively.  The partnership's 
investment in ACP owned 1.96% of the Alpine Center Building on 
December 31, 1997.  ACP reduced its short-term note payable to LIF 
by $358,000.  The balance of the note payable at December 31, 1997 
was $227,000.  ACP repaid the balance of this note to LIF in June 1998.  

On June 29, 1998, ACP sold its remaining 1.96% interest in the 
Alpine Center Building to Gary K. Barr for $59,000.  Cash received
in this transaction was $18,000 and ACP provided seller financing
in the amount of $41,000 to Mr. Barr.

For financial reporting purposes, results of operations for P21 
and ACP have been shown on a consolidated basis.  

RESULTS OF OPERATIONS

Rental revenues were $1,244,000 for the nine months ended September
30, 1998, a decrease of $53,000 compared to the same period in 1997.
The decline in rental revenues in 1998 versus 1997 was the result of 
a decrease in rent payments at 701 cooper, and the sale of the 
Alpine Center Building.

Operating expenses were $485,000 for the period ended September 30,
1998, a decrease of $22,000 compared to the same period in 1997.

Net operating income of properties (rental revenue less operating 
expenses) was $780,000 in 1998, a decrease of $60,000 from 1997.
Management believes net operating income is the best indication of 
the properties' performance.  

Interest expense decreased by $108,000 for the first three quarters 
of 1998, compared to the same period in 1997.  

Interest income and interest expense on loans by and between LIF and
its investments were eliminated in the consolidation of the Company's 
financial statements.  

Entity level general and administrative expenses, exclusive of that at 
the property level, decreased $6,000 in 1998 compared to 1997.  
Portfolio management fees remained unchanged.  

PROPERTY OPERATIONS

Residential Property - The remaining residential property, Whistler 
Point Apartments, continues to operate at a profit.  In 1997, the 
Partnership continued to make capital improvements to the property 
to allow it to compete effectively with new competition.  The 
Partnership is continuing this program in 1998 with an expected cost
of $150,000.  Specific capital expenditures are for new washers and 
dryers in all units, new microwaves, new carpet and vinyl flooring, 
carports, and exterior deck improvements.  Whistler Point Apartments 
are currently under contract for sale.  The sale is scheduled to
occur in early 1999.  There is no guarantee that such sale will take
place.  Proceeds from such sale will be distributed.  

Commercial Property - The 701 Cooper Building and the Valley View 
Business Center had stable occupancy during 1997.  However, at the 
end of the year, the sole tenant of 701 Cooper and CCDP agreed to 
cancel the remaining term of the lease for a payment of $61,000.  
Both properties, Valley View Business Center and 701 Cooper are 
currently listed for sale on the market. 

OCCUPANCY

Occupancy at all of the Partnership's properties remain high during
the first three quarters of 1998.  As of September 30, 1998, 
occupancy at Whistler Point Apartments was 96%.  This occupancy 
level is expected to be achieved through 1998.  Occupancy at 
properties formerly owned by CCDP averaged 70% as of September 
30, 1998.  It is expected that all Partnership properties will 
maintain stable to improved occupancy during 1998.

DISTRIBUTIONS

In March 1998, the Partnership paid a cash distribution of $15 per 
unit to unit holders of record on February 28, 1998.  

INFLATION

The effect of inflation on the Partnership's operations have been 
no greater than the effect on the economy as a whole.  Because of 
competitive conditions, market rate rents may increase or decrease 
disproportionately with inflation while property operating costs 
continue to follow inflationary trends.  Inflationary conditions 
are not expected to have a major impact on the Partnership during 
1998.

<PAGE>

PART II. OTHER INFORMATION

All items in Part II have been omitted since they are inapplicable or 
the answer is negative.



SIGNATURES

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

                                 L I F

Date: November 15, 1998          /s/ Gary K. Barr      
                                 Gary K. Barr, President & Director
                                 Landsing Equities Corporation 
                                 Managing Partner of the General Partner,
                                 Partners '85