BROWN-FLOURNOY EQUITY INCOME FUND
                              LIMITED PARTNERSHIP

                               1995 ANNUAL REPORT

                                 March 15, 1996

Dear Investor:

         We are pleased to report another year of improved operating results for
the  Brown-Flournoy  Equity Income Fund. In spite of increased  competition from
new construction in each of the markets in which the Fund operates, the Fund was
able to realize another year of increased rental income.

OPERATIONS

         Overall occupancy for the Fund's properties averaged 94% during 1995, a
slight decrease from 1994's average of 95%. While rental rates were increased at
all four  properties  during  1995,  added  competition  from  new  construction
tempered the  acceptance  of these  increases  by the market,  as evident by the
slightly lower occupancy  levels.  In spite of reduced overall occupancy levels,
the Fund achieved a $193,282 increase in rental income, as compared to the prior
year.  Each  property  achieved  some  level of  increase,  with the High  Ridge
property contributing the largest year-to-year improvement.

         During  1995,  the Fund  recognized  income  of  $299,228  representing
proceeds from the settlement of a lawsuit regarding polybutylene piping utilized
in the construction of one of the properties.

         Total  expenses  increased  $215,523 in 1995,  due  primarily to higher
maintenance  and repairs  costs.  During 1995,  the Fund  completed its program,
begun in 1994, of painting each of the properties.  The Park Place and Southland
Station   properties   were  painted  during  the  year  for  a  total  cost  of
approximately $110,000.  Additional maintenance and repairs programs during 1995
included pool resurfacing and landscaping enhancements.

         All four properties remain in excellent condition.

CASH DISTRIBUTIONS

         During 1995, the Fund made quarterly cash  distributions to Unitholders
totaling $20 per Unit and a special cash  distribution  during the first quarter
of $10 per unit,  representing  funds received during 1994 from the polybutylene
piping  settlement.  The quarterly  distributions  represented a 5.6% annualized
return on the  balance of your  equity  investments.  These  distributions  were
derived solely from  operations,  as cash flow provided by operating  activities
exceeded cash distributions made during the year.

                                       1
<PAGE>
                       BROWN-FLOURNOY EQUITY INCOME FUND
                              LIMITED PARTNERSHIP


OUTLOOK

         Construction of new apartment communities has increased in many markets
of the southeastern United States. This new competition has tempered rental rate
increases and slowed previous trends of rental income gains.  Each of the Fund's
four  properties   experienced  heightened  competition  during  1995  from  new
construction.  In some cases, 1996 will present  additional  challenges from new
construction.  Management  intends to meet these challenges in the upcoming year
through their ongoing marketing  programs and commitment to high tenant service.
The properties have been very well maintained since construction,  including the
painting of all four in 1994 and 1995, and are well prepared to compete in their
markets.

         During  1996,  the Fund will also have the  opportunity  to improve the
financing of the properties, as the prepayment restrictions on the current first
mortgages end in July and the mortgages  become payable at the end of September.
The current  interest  rate  environment  presents an excellent  opportunity  to
reduce monthly debt service and improve cash returns to investors.  We intend to
examine  refinancing  options,  while also  exploring the benefits from property
disposition opportunities.

Very truly yours,



John F. Flournoy                                    John M. Prugh, President
Development General Partner                 Brown Equity Income Properties, Inc.
                                                Administrative General Partner


                                       2
<PAGE>
                       BROWN-FLOURNOY EQUITY INCOME FUND
                              LIMITED PARTNERSHIP

         A summary of 1995 operations at the Fund's four properties is set forth
below:


The High  Ridge  property,  located  in  Athens,  Georgia,  achieved  an average
occupancy  during the year of 97%,  generally  consistent  with  1994.  However,
rental  income  increased  6% over the prior  year,  bolstered  by  rental  rate
increases  which  totaled $51 per unit on average by the end of the year.  These
results  were  achieved  in spite of the  addition to  competition  from a newly
constructed property nearby.






         In-migration  to the  Spartanburg,  South  Carolina  area  continued to
provide a substantial ource of new residents for multifamily communities in that
market,  including  the Fund's  Park Place  property.  These new  residents  are
typically  short-term  renters  with  plans to build or buy a new  home.  In the
interim, they are relatively price insensitive,  which has allowed management at
Park Place to increase  rental rates  throughout  the year by an average of $26.
The  short-term  nature  of  these  residents'  stay,   however,   causes  large
fluctuations in occupancy  levels.  While occupancy  averaged 93% for the entire
year,  it  ranged  from as low as 87% in  March  to as  high as 97% in  October.
Overall, the property achieved a 5% increase in rental income during the year.


                                       3
<PAGE>
                       BROWN-FLOURNOY EQUITY INCOME FUND
                              LIMITED PARTNERSHIP

         The Southland  Station  property,  located in Warner  Robins,  Georgia,
achieved an average  occupancy during 1995, of 92%, a substantial  decrease from
1994's average of 97%.  However,  ongoing  rental rate increases  throughout the
year  resulted  in an overall  increase  in rental  income of 3%, as compared to
1994.  Long-term  prospects for the property  appear very strong,  as the nearby
Warner Robins Air Force Base was again  excluded from the round of base closures
announced in 1995.  However,  this news had some negative  short-term  impact as
some tenants who had been delaying a home  purchase,  decided to move ahead with
their  plans  based on the  promising  long-term  outlook  for the  area.  These
moveouts contributed substantially to the drop in occupancy during the year.






         Occupancy  at  the  Hidden  Lake  property  veraged  96%  during  1995,
generally  consistent  with 1994.  Monthly rents were  increased $24 per unit on
average  during the year,  contributing  to a 3%  increase  in rental  income as
compared to 1994.

                                       4
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


The Partners
Brown-Flournoy Equity Income Fund Limited Partnership:

We have audited the accompanying balance sheets of Brown-Flournoy  Equity Income
Fund  Limited  Partnership  as of  December  31,  1995 and 1994 and the  related
statements of operations, partners' capital (deficit) and cash flows for each of
the years in the  three-year  period ended  December 31, 1995.  These  financial
statements are the responsibility of the Fund's  management.  Our responsibility
is to express an opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our 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 Brown-Flournoy  Equity Income
Fund Limited  Partnership  as of December 31, l995 and 1994,  and the results of
its operations and its cash flows for each of the years in the three-year period
ended  December 31, 1995,  in  conformity  with  generally  accepted  accounting
principles.


                                                     KPMG PEAT MARWICK LLP

Baltimore, Maryland
January 16, 1996

                                       5
<PAGE>
                       BROWN-FLOURNOY EQUITY INCOME FUND
                              LIMITED PARTNERSHIP

<TABLE>
<CAPTION>
                              Balance Sheets


                                                                    December 31,
                                                               1995            1994

 Assets

<S>                                                        <C>             <C>
   Investment in real estate (Note 3) ..................   $ 15,200,825    $ 15,867,064
   Cash and cash equivalents (Note 4) ..................      1,447,679       1,738,073
   Other assets
     Accounts receivable, including $23,533 due from
       affiliates as of December 31, 1994 ..............         22,624          46,958
     Prepaid expenses ..................................         65,417          66,482
     Loan fees, less accumulated amortization
       of $469,856 and $395,668, respectively ..........         49,459         123,647

   Total other assets ..................................        137,500         237,087

 Total assets ..........................................   $ 16,786,004    $ 17,842,224


 Liabilities and Partners' Capital (Deficit)

   Accounts payable and accrued expenses including
     $27,523 and $26,602 due to affiliates, respectively   $    453,493    $    447,430
   Tenant security deposits ............................        130,542         123,616
   Mortgage loans payable (Note 6) .....................     20,200,950      20,326,886

   Total liabilities ...................................     20,784,985      20,897,932


   Partners' Capital (Deficit) (Note 8)
     General Partners ..................................       (234,522)       (215,657)
     Limited Partners
       Class A - $1,000 stated value per unit;
         27,000 units outstanding ......................     (3,764,559)     (2,840,151)
       Class B .........................................            100             100

   Total partners' capital (deficit) ...................     (3,998,981)     (3,055,708)

 Total liabilities and partners' capital (deficit) .....   $ 16,786,004    $ 17,842,224

See accompanying notes to financial statements
</TABLE>

                                       6
<PAGE>
                       BROWN-FLOURNOY EQUITY INCOME FUND
                              LIMITED PARTNERSHIP

                            Statements of Operations

                        For the years ended December 31,

<TABLE>
<CAPTION>

                                                                       1995           1994           1993


Revenues
<S>                                                             <C>            <C>            <C>
  Rental income .............................................   $ 4,644,851    $ 4,451,569    $ 4,244,572
  Interest income ...........................................        67,677         49,805         57,850
  Gain on settlement of lawsuit (Note 10) ...................       299,228           --             --

                                                                  5,011,756      4,501,374      4,302,422


Expenses
  Compensation and related benefits .........................       465,396        423,923        449,505
  Property taxes ............................................       345,327        343,773        346,673
  Utilities .................................................       255,151        233,250        264,687
  Property management fee to related party (Note 5) .........       232,242        222,578        212,229
  Maintenance and repairs ...................................       505,152        404,083        256,291
  Advertising ...............................................        75,793         64,462         56,997
  Other .....................................................       106,308         80,845         88,287
  Administrative, including amounts to related party (Note 5)        85,768         92,422         75,611
  Interest expense (Note 6) .................................     1,945,006      1,953,754      1,954,227
  Depreciation of property and equipment (Notes 2 & 7) ......     1,038,167      1,019,697      1,021,009
  Amortization of loan fees (Note 2) ........................        74,188         74,188         74,188

                                                                  5,128,498      4,912,975      4,799,704

Net loss (Note 7) ...........................................   $  (116,742)   $  (411,601)   $  (497,282)


Net loss per unit of Class A Limited
  Partnership Interest (Note 8) .............................   $     (4.24)   $    (14.94)   $    (18.05)

</TABLE>


See accompanying notes to financial statements.

                                       7
<PAGE>
                       BROWN-FLOURNOY EQUITY INCOME FUND
                              LIMITED PARTNERSHIP

                   Statements of Partners' Capital (Deficit)

                        For the years ended December 31,

<TABLE>
<CAPTION>

                                                                                            Class A        Class B
                                                                            General         Limited        Limited
                                                                           Partners         Partners       Partners      Total


<S>                                                                      <C>            <C>            <C>           <C>
Balance at December 31, 1992 .........................................   $  (175,439)   $   (69,446)   $       100   $  (244,785)

Net loss .............................................................        (9,946)      (487,336)          --        (497,282)

Distributions to partners ............................................       (11,020)      (540,000)          --        (551,020)

Balance at December 31, 1993 .........................................      (196,405)    (1,096,782)           100    (1,293,087)

Net loss .............................................................        (8,232)      (403,369)          --        (411,601)

Distributions to partners

   Operations ........................................................       (11,020)      (540,000)          --        (551,020)

   Financing proceeds ................................................          --         (800,000)          --        (800,000)

Balance at December 31, 1994 .........................................      (215,657)    (2,840,151)           100    (3,055,708)

Net loss .............................................................        (2,334)      (114,408)          --        (116,742)

Distributions to partners ............................................       (16,531)      (810,000)          --        (826,531)

Balance at December 31, 1995 .........................................   $  (234,522)   $(3,764,559)   $       100   $(3,998,981)
</TABLE>


See accompanying notes to financial statements.



                                       8
<PAGE>
                       BROWN-FLOURNOY EQUITY INCOME FUND
                              LIMITED PARTNERSHIP

                            Statements of Cash Flows

                        For the years ended December 31,
<TABLE>
<CAPTION>

                                                              1995           1994           1993

Cash flows from operating activities
<S>                                                    <C>            <C>            <C>
   Net loss ........................................   $  (116,742)   $  (411,601)   $  (497,282)
   Adjustments to reconcile net loss to net
     cash provided by operating activities
       Depreciation of property and equipment ......     1,038,167      1,019,697      1,021,009
       Amortization of loan fees ...................        74,188         74,188         74,188
       Gain on settlement of lawsuit ...............      (299,228)          --             --
       Changes in assets and liabilities
         Decrease (increase) in accounts receivable         24,334        (18,285)       (14,834)
         Decrease (increase) in prepaid expenses ...         1,065        (18,372)         3,464
         Increase (decrease) in accounts payable
            and accrued expenses ...................         6,063        (23,668)        97,977
         Increase in tenant security deposits ......         6,926          1,815         15,185

Net cash provided by operating activities ..........       734,773        623,774        699,707

Cash flows from investing activities
   Additions to investment in real estate ..........       (88,700)       (54,100)       (32,957)
   Settlement proceeds .............................        16,000        283,228           --

Net cash (used in) provided by investing activities        (72,700)       229,128        (32,957)

Cash flows from financing activities
   Decrease in mortgage loans payable ..............      (125,936)       (29,647)          --
   Distributions to partners .......................      (826,531)    (1,351,020)      (551,020)

Net cash used in financing activities ..............      (952,467)    (1,380,667)      (551,020)


Net (decrease) increase in cash and cash equivalents      (290,394)      (527,765)       115,730

Cash and cash equivalents
   Beginning of period .............................     1,738,073      2,265,838      2,150,108

   End of period ...................................   $ 1,447,679    $ 1,738,073    $ 2,265,838
</TABLE>

See accompanying notes to financial statements.


                                       9
<PAGE>

                       BROWN-FLOURNOY EQUITY INCOME FUND
                              LIMITED PARTNERSHIP

                         Notes to Financial Statements

                                December 31, 1995

(1)    Organization

       Brown-Flournoy  Equity Income Fund Limited  Partnership (the "Fund") is a
       Delaware  limited  partnership  formed on June 25,  1986 to  develop  and
       operate  four  residential  apartment  communities  in Georgia  and South
       Carolina.  The capital raised from the admission of investors enabled the
       Fund  to  acquire  the   properties   and   improvements   and   complete
       construction. The properties are:

     o Southland Station, a 160 unit apartment community in Warner Robins, Ga.
     o Park Place, a 184-unit apartment community in Spartanburg,  S.C.
     o Hidden Lake - Phase Two, a 160-unit  apartment  community in
          Union City,  Ga.
     o High Ridge,  a160-unit apartment community in Athens, Ga.

       The General  Partners  are  Brown-Equity  Income  Properties,  Inc.,  the
       Administrative  General  Partner,  and John F. Flournoy,  the Development
       General  Partner.  The Class B Limited  Partners are John F. Flournoy and
       Realty  Associates  1986  Limited   Partnership,   an  affiliate  of  the
       Administrative  General Partner.  The Fund will terminate on December 31,
       2036,  unless sooner  terminated  under the provisions of the Partnership
       Agreement.

(2)    Summary of Significant Accounting Policies

       (a)  Method of Accounting

           The  accompanying  financial  statements  have been  prepared  on the
           accrual basis of accounting.  The Fund reports its operating  results
           for income tax purposes on the accrual basis. No provision for income
           taxes is made because any  liability  for income taxes is that of the
           individual partners and not that of the Fund.

       (b) Cash Equivalents

           The Partnership considers all highly liquid investments with original
           maturities of three months or less to be cash equivalents.

       (c) Depreciation

           Depreciation   of  property  and  equipment  is  computed  using  the
           straight-line  method  over  the  useful  lives of the  property  and
           equipment as follows:

              Buildings                              25 years
              Furniture, fixtures and equipment      10 years


                                       10
<PAGE>

                       BROWN-FLOURNOY EQUITY INCOME FUND
                              LIMITED PARTNERSHIP

                    Notes to Financial Statements (continued)

(2)    Summary of Significant Accounting Policies (continued)

       (d) Deferred Costs

           Costs  associated  with marketing of the Class A limited  partnership
           units  to the  public  were  offset  against  the  related  partners'
           capital.

           Loan fees incurred to obtain the mortgage loans have been capitalized
           and are being  amortized  on a basis that  approximates  the interest
           method over the 7-year loan terms.

       (e) Use of Estimates

           Management of the Fund has made a number of estimates and assumptions
           relating  to  the  reporting  of  assets,  liabilities,  revenue  and
           expenses to prepare these  financial  statements  in conformity  with
           generally accepted accounting principles. Actual results could differ
           from those estimates.

(3)    Investment in Real Estate

       Investment in real estate is stated at the lower of net realizable  value
       or cost, net of accumulated depreciation, and is summarized as follows at
       December 31:
<TABLE>
<CAPTION>

                                           1995          1994
                                                  -----------

<S>                                 <C>           <C>
Land ............................   $ 1,205,950   $ 1,205,950
Buildings .......................    20,417,743    20,134,515
Furniture, fixtures and equipment     2,202,272     2,113,572

                                     23,825,965    23,454,037
Less: Accumulated depreciation ..     8,625,140     7,586,973

                                    $15,200,825   $15,867,064
</TABLE>


(4)    Cash and Cash Equivalents

       Cash and cash equivalents consist of the following, stated at cost, which
approximates market value at December 31:
<TABLE>
<CAPTION>
                                                    1995         1994
                                                           ----------

<S>                                           <C>          <C>
Cash and money market .....................   $  428,716   $  772,440
Certificates of deposit with interest rates
    ranging from 4.25% to 5.90% in 1995
    and 3.05% to 4.25% in 1994 ............    1,018,963      965,633

                                              $1,447,679   $1,738,073

</TABLE>

                                       11
<PAGE>

                       BROWN-FLOURNOY EQUITY INCOME FUND
                              LIMITED PARTNERSHIP

                    Notes to Financial Statements (continued)


(5)    Related Party Transactions

       The Administrative General Partner received $41,644,  $41,314 and $37,767
       in  1995,  1994  and  1993,  respectively,  for  reimbursement  of  costs
       associated with  administering  the Fund,  including  clerical  services,
       investor  communication  services,  and reports and filings to regulatory
       authorities.

       Flournoy  Properties,  Inc.,  an  affiliate  of the  Development  General
       Partner,  is the managing agent for the properties and earned  management
       fees of  $232,242,  $222,578 and  $212,229  representing  5% of the gross
       monthly  operating  revenues from the  properties  during 1995,  1994 and
       1993, respectively.

(6)    Mortgage Loans Payable

       The Fund's general  partners  secured first  mortgage  loans  aggregating
       $20.8 million on August 30, 1989 which are secured by the land, apartment
       units and all other improvements to the four apartment properties.  These
       loans are for an original  term of 7 years with an interest rate of 9.6%.
       Interest only was payable monthly through  September 1994, and thereafter
       monthly  payments  were based on a 30-year  amortization  schedule with a
       balloon payment due at the end of the 7-year term. Under the terms of the
       mortgage  loans,  the aggregate  maturities are  $20,200,950 in 1996. The
       Fund  intends  to  repay  these  balances  with  proceeds  from  mortgage
       refinancing.  Interest of $1,945,936,  $1,953,991 and $1,791,375 was paid
       during the years ended December 31, 1995, 1994 and 1993, respectively.

(7)    Losses for Federal Income Tax Purposes

       The Fund's  losses for federal  income tax purposes in each of the last 3
       years  ended  December  31  differs  from the net  losses  for  financial
       reporting  purposes due to differences  in the Fund's  computation of tax
       depreciation  and in 1995,  different  treatment  of the  additional  net
       settlement  proceeds  (Note 10). For federal  income tax  purposes,  real
       property (other than land) and personal  property,  are being depreciated
       over 27 1/2 and 7 years,  respectively,  using the  Modified  Accelerated
       Cost Recovery  System,  and the additional net settlement  proceeds (Note
       10) are being  treated as a reduction  to the  adjusted  tax basis of the
       Southland Station property. The tax losses for 1995, 1994 and 1993 are as
       follows:
<TABLE>
<CAPTION>

                                                    1995         1994         1993

<S>                                            <C>          <C>          <C>
Losses for financial reporting purposes ....   $(116,742)   $(411,601)   $(497,282)
Financial reporting depreciation in
  excess of tax depreciation ...............     268,686      167,515       98,092

Additional net settlement proceeds (Note 10)    (299,228)        --           --

Losses for income tax purposes .............   $(147,284)   $(244,086)   $(399,190)
</TABLE>


                                       12
<PAGE>

                       BROWN-FLOURNOY EQUITY INCOME FUND
                              LIMITED PARTNERSHIP

                    Notes to Financial Statements (continued)


(8)    Partners' Capital (Deficit)

       The  Partnership  Agreement  provides,  among other  provisions,  for the
following:

       (a) The Fund will  consist of the General  Partners,  the Class A Limited
Partners and the Class B Limited Partners.

       (b) Distributions   to  the  Partners   relating  to  operations  of  the
           properties  will  be  based  on net  cash  flow,  as  defined  in the
           Partnership  Agreement.  Investors  will receive 98% of net cash flow
           and the General  Partners  will each receive 1%. Profit and loss from
           operations  will be allocated in the same  proportions.  Net loss per
           Class A Limited  Partnership  interest as disclosed on the Statements
           of Operations are based upon 27,000 units outstanding.

       (c) Net proceeds of sale or operational stage financing of the properties
will be distributed as follows:

               o To pay any deferred fees payable to the General Partners and
               affiliates.

                o To Class A Limited Partners until each Class A Limited Partner
                has  recovered  his original  capital  contribution  in full and
                received a  cumulative,  noncompounded  annual return of 7.5% of
                his capital  contribution to the extent that such return has not
                been provided from prior distributions of net cash flow.

                o Any remainder will be  distributed  80% to the Class A Limited
                Partners,  1% to each of the  General  Partners,  14% to John F.
                Flournoy in his  capacity  as Class B Limited  Partner and 4% to
                Realty Associates 1986 Limited Partnership.

     (d)  Restrictions   exist  regarding   transferability  or  disposition  of
partnership interests.

(9)    Distributions to Partners

       Distributions  of cash  to  partners  during  1995,  1994  and  1993  are
summarized as follows:
<TABLE>
<CAPTION>

                                         1995         1994         1993

To Class A Limited Partners from
<S>                                <C>          <C>          <C>
     Operations ................   $  540,000   $  540,000   $  540,000
     Settlement proceeds .......      270,000         --           --
     Financing proceeds ........         --        800,000         --

To General Partners from
     Operations ................       11,020       11,020       11,020
     Settlement proceeds .......        5,511         --           --

                                   $  826,531   $1,351,020   $  551,020
</TABLE>


                                       13
<PAGE>

                       BROWN-FLOURNOY EQUITY INCOME FUND
                              LIMITED PARTNERSHIP

                    Notes to Financial Statements (continued)


(9)    Distributions to Partners (continued)

       Each Class A Limited Partner received a distribution of $20 per unit from
       operations in 1995, 1994 and 1993, $10 per unit from settlement  proceeds
       in 1995 and  approximately  $29.63 per unit from  financing  proceeds  in
       1994.

(10)   Settlement Proceeds

       During  the  fourth  quarter of 1994,  the Fund  settled  an  outstanding
       lawsuit with the manufacturer of defective  polybutylene piping which was
       utilized at the Southland  Station  property.  The lawsuit sought damages
       resulting   from   numerous   plumbing   leaks  at  the  property   since
       construction.  The settlement included the cost to re-plumb the property,
       as well as additional net settlement proceeds to the Fund of $299,228.  A
       special  distribution of these proceeds was made in the second quarter of
       1995.

(11)   Fair Value of Financial Instruments

       Statement of Financial Accounting  Standards No. 107,  "Disclosures about
       Fair  Value of  Financial  Instruments"  requires  the  Fund to  disclose
       estimated  fair  values for certain on and off  balance  sheet  financial
       instruments.  Fair value estimates, methods and assumptions are set forth
       below for the Fund's financial instruments as of December 31, 1995.

       The carrying value for cash and cash equivalents, accounts receivable and
       accounts payable and accrued expenses  approximates fair value due to the
       short maturity of these instruments.

       The fair value of mortgages  payable was based on the discounted value of
       contractual   cash  flows.   The  mortgage   loans   payable  fair  value
       approximates  its carrying value due to the current  maturity date of the
       loans and the low rate of current borrowings on similar debt.


(12)   Subsequent Event (unaudited)

       In February 1996 the Fund made a cash distribution  totaling $137,755, of
       which 98% was allocated to Class A Limited  Partners.  This  distribution
       was  derived  from net cash  provided  by  operating  activities  for the
       quarter ended December 31, 1995. Each Class A Limited Partner  received a
       cash distribution of $5.00 per unit.

                                       14
<PAGE>

                       BROWN-FLOURNOY EQUITY INCOME FUND
                              LIMITED PARTNERSHIP

                      Supplementary Information (unaudited)

A comparison of the financial  forecast for Southland Station  ("Property I") as
provided in the prospectus with the actual results for Property I is required to
be included  in the annual  report by section  10.3 of the amended and  restated
agreement of limited  partnership.  This supplementary  information for the year
ended  December 31,  1995,  as set forth below,  is based on  completion  of the
minimum  offering and  acquisition  of Property I. Since the Fund  completed the
maximum offering and acquired all four  properties,  the results shown below for
Property I are not indicative of the Fund's overall  performance.  Additionally,
the Tax Reform Act of 1986 has required  that  interest  earnings be  segregated
from passive loss operations for tax reporting purposes, and therefore,  the net
tax earnings,  as shown below, is not indicative of an individual  Partner's tax
earnings from an investment in the Fund for 1995.
 <TABLE>
<CAPTION>

                                                                     Forecast                      Actual

Net cash flow
<S>                                                                             <C>           <C>
    Revenues ................................................................   $ 1,229,487   $ 1,141,002
    Expenses, exclusive of depreciation,
       amortization and funded expenses .....................................       896,769       931,489
                                                                                    332,718       209,513
    Other deductions
       Debt principal .......................................................        42,427        30,314

    Net cash flow ...........................................................   $   290,291   $   179,199

Distribution of net cash flow
    To Class A Limited Partners from
       Operations ...........................................................   $   284,485   $   175,615
       Working capital reserves .............................................          --            --
    To General Partners from
       Operations ...........................................................         5,806         3,584
       Working capital reserves .............................................          --            --

                                                                                $   290,291   $   179,199
    Per Class A Limited Partner
       (based on 645.5 investors) ...........................................   $       441   $       272

Net earnings (loss) and net tax earnings
    Revenues ................................................................   $ 1,229,487   $ 1,141,002
    Expenses, exclusive of depreciation,
       amortization and funded expenses .....................................       896,769       931,489

                                                                                    332,718       209,513

    Depreciation and amortization and funded expenses .......................       253,909       255,450

    Net earnings (loss) .....................................................        78,809       (45,937)
    Net decrease in depreciation and
       amortization expenses for income
       tax purposes .........................................................        20,071        72,555

    Net tax earnings ........................................................   $    98,880   $    26,618

    Per Class A Limited Partner
        (based on 645.5 investors) ..........................................   $       150   $        40
</TABLE>

                                       15
<PAGE>

                       BROWN-FLOURNOY EQUITY INCOME FUND
                              LIMITED PARTNERSHIP

                            Partnership Information


Directors and Executive Officers

John F. Flournoy
Development General Partner

Brown-Equity Income Properties, Inc.
Administrative General Partner

         John M. Prugh
         President and Director

         Peter E. Bancroft
         Vice President and Director

         Terry F. Hall
         Secretary

         Timothy M. Gisriel
         Treasurer



Additional Information

Please  submit  name and  address  changes to  Investor  Relations  at the above
address.

                                    Form 10-K
A copy of the Fund's Annual Report on Form
10-K for 1995 as filed with the Securities and Exchange  Commission is available
to partners without charge on request by writing to:

         Investor Relations
         Brown-Equity Income Properties, Inc.
         225 East Redwood Street
         Baltimore, Maryland 21202

                                    Auditors
KPMG Peat Marwick LLP
111 South Calvert Street
Baltimore, Maryland 21202

                                  Legal Counsel
Piper & Marbury
1100 Charles Center South
36 South Charles Street
Baltimore, Maryland 21201




For further  information  or questions  regarding your  investment,  please call
Denise Liekfet at (410) 727-4083.

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