SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
                                    ---------

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                    For the quarter ended September 30, 1998

                         Commission file number: 0-13693
                         -------------------------------


                       VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES
               (Exact name of registrant as specified in charter)


         Massachusetts                                            13-6850434
         --------------                                      -------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               Identification No.)


3111 Paces Mill Road, Suite A-200, Atlanta, GA                      30339
------------------------------------------------             -------------------
(Address of principal executive offices)                         (Zip Code)


Registrant's telephone number, including area code:            (770) 984-9500







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___



    Shares of Beneficial Interest outstanding at November 6, 1998: 1,100,507


<PAGE>


                       VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES

                         INDEX OF FINANCIAL INFORMATION

PART I   FINANCIAL INFORMATION                                              PAGE

Item 1   Financial Statements

         Consolidated Balance Sheets as of September 30, 1998 (unaudited)
         and December 31, 1997                                                 3

         Consolidated Statements of Operations (unaudited) for the
         three and nine months ended September 30, 1998 and 1997               4

         Consolidated Statements of Shareholders' Equity for the
         nine months ended September 30, 1998 (unaudited)                      5

         Consolidated Statements of Cash Flows (unaudited)
         for the nine months ended September 30, 1998 and 1997                 6

         Notes to Consolidated Financial Statements                            7

Item 2   Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                  17

PART II  OTHER INFORMATION/SIGNATURE

Item 1            Legal Proceedings                                           23

Item 6            Exhibits and Reports on Form 8-K                            23

                  Signature                                                   24
<PAGE>

                                     
<TABLE>
                                     PAGE 3

                      VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (unaudited)
<CAPTION>

                                                                                September 30,       December 31,
                                                                                    1998               1997
                                                                                -------------      -------------
<S>                                                                              <C>                   <C>
ASSETS
------

Real estate assets:
    Land                                                                         $ 2,884,500       $ 2,884,500
    Buildings and improvements                                                    15,376,032        15,267,009
    Furniture, fixtures & equipment                                                1,023,239         1,011,483
      Less:  accumulated depreciation                                             (1,505,911)       (1,036,311)
                                                                                -------------      ------------

         Net real estate assets                                                   17,777,860        18,126,681

Cash and cash equivalents                                                            195,885           282,851
Cash escrows                                                                         387,466           314,684
Receivables and other assets                                                         747,158            63,402
Deferred financing costs, less accumulated amortization of $69,532 and                             
    $54,459 at September 30, 1998 and December 31, 1997, respectively                146,790           169,968
Deferred leasing costs, less accumulated amortization of $26,573 and
    $39,087 at September 30, 1998 and December 31, 1997, respectively                 43,679            31,972
                                                                                -------------      ------------
Total assets                                                                    $ 19,298,838       $18,989,558
                                                                                =============      ============


LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------

Mortgage notes payable                                                          $ 13,677,292       $13,784,566
Line of credit                                                                     1,999,900         1,718,104
Accounts payable and accrued liabilities                                             612,256           708,876
                                                                                -------------      ------------
       Total liabilities                                                          16,289,448        16,211,546
                                                                                -------------      ------------
Minority interest in Operating Partnership                                           543,474           509,209
                                                                                -------------      ------------
Contingencies (Note 8)

Shareholders' equity:
    Shares of beneficial interest, without par value, unlimited shares
      authorized, 1,100,507 and 1,080,512 shares issued and outstanding
      at September 30, 1998 and December 31, 1997, respectively                   19,503,057        19,429,735

    Cumulative earnings                                                           37,341,388        37,217,597

    Cumulative distributions                                                     (54,378,529)      (54,378,529)
                                                                                -------------      ------------
       Total shareholders' equity                                                  2,465,916         2,268,803
                                                                                -------------      ------------
Total liabilities and shareholders' equity                                      $ 19,298,838       $18,989,558
                                                                                =============      ============
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>

                                     PAGE 4

                       VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)
<CAPTION>

                                                     For the three months ended      For the nine months ended
                                                          September 30                     September 30
                                                     --------------------------      ----------------------------
                                                      1998           1997               1998            1997
                                                     ----------  -------------      -------------   -------------
<S>                                                  <C>            <C>               <C>             <C>   
REVENUES
--------

     Rental revenues                                 $ 988,340      $ 613,118         $2,952,715      $1,765,491
     Other property revenues                            34,602         21,679            108,952          64,751
     Other income                                          316            939            501,945           1,903
                                                     ----------  -------------      -------------   -------------
                                                     1,023,258        635,736          3,563,612       1,832,145
                                                     ----------  -------------      -------------   -------------
EXPENSES
--------

     Property operating and maintenance                409,629        247,440          1,213,273         759,954
     Depreciation and amortization                     163,482        108,436            482,706         323,839
     Amortization of deferred financing costs            7,726          7,726             23,177          27,231
     Interest expense                                  337,114        200,280            998,829         600,196
     General and administrative                        155,898         90,479            694,223         250,540
                                                     ----------  -------------      -------------   -------------
                                                     1,073,849        654,361          3,412,208       1,961,760
                                                     ----------  -------------      -------------   -------------
     Income (loss) before minority interest            (50,591)       (18,625)           151,404        (129,615)
                                                     ----------  -------------      -------------   -------------
     Minority interest                                  (9,136)             -             27,613               -
                                                     ----------  -------------      -------------   -------------
     Net income (loss)                               $ (41,455)     $ (18,625)         $ 123,791      $ (129,615)
                                                     ==========  =============      =============   =============

NET INCOME (LOSS) PER SHARE - BASIC                    $ (0.04)       $ (0.02)            $ 0.11         $ (0.12)
                                                     ==========  =============      =============   =============

NET INCOME (LOSS) PER SHARE - DILUTED                  $ (0.04)       $ (0.02)            $ 0.11         $ (0.12)
                                                     ==========  =============      =============   =============

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC           1,100,508      1,080,513          1,087,348       1,080,516
                                                     ==========  =============      =============   =============

WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED         1,346,650      1,080,513          1,334,961       1,080,516
                                                     ==========  =============      =============   =============
 
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>


                                     PAGE 5

                       VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                  For the nine months ended September 30, 1998
                                   (unaudited)


<CAPTION>

                                                        Shares of                                                       Total
                                                       beneficial           Cumulative           Cumulative         shareholders'
                                                        interest             earnings          distributions           equity
                                                     ----------------    -----------------    -----------------    ----------------

<S>                                                     <C>                  <C>                  <C>                  <C>        
BALANCE AT DECEMBER 31, 1997                            $ 19,429,735         $ 37,217,597         $(54,378,529)        $ 2,268,803

Net income                                                         -              123,791                    -             123,791

Adjustment for minority interest of unitholders               (6,661)                   -                    -              (6,661)

Issuance of shares to officers and directors                  80,000                    -                    -              80,000

Retirement of shares                                             (17)                   -                    -                 (17)
                                                     ----------------    -----------------    -----------------    ----------------

BALANCE AT SEPTEMBER 30, 1998                           $ 19,503,057         $ 37,341,388         $(54,378,529)        $ 2,465,916
                                                     ================    =================    =================    ================
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>

<TABLE>
                                     PAGE 6

                      VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
<CAPTION>
                                                                             
                                                                                
                                                                                  For the nine months
                                                                                  ended September 30,
                                                                                -----------------------

                                                                                   1998          1997
                                                                                ----------     --------
<S>                                                                              <C>          <C>   
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)                                                                $ 123,791    $(129,615)

Adjustments to reconcile net income (loss) to net cash provided by
   operating activities:

        Depreciation and amortization                                             482,706       323,839
        Amortization of deferred financing costs                                   23,177        27,231
        Minority interest of unitholders in Operating Partnership                  27,613             -
        Non cash compensation expense                                              80,000             -
        Changes in assets and liabilities:
           Cash escrows                                                           (72,782)      (63,442)
           Receivables and other assets                                           (43,293)      (20,540)
           Capitalized leasing costs                                              (24,821)      (34,034)
           Accounts payable and accrued liabilities                               (96,620)       66,583
                                                                                -----------    --------
  
        Total adjustments                                                         375,980       299,637
                                                                                -----------    --------
 
Net cash provided by operating activities                                         499,771       170,022
                                                                                -----------    --------

CASH FLOWS FROM INVESTING ACTIVITIES:

The Thicket capital expenditures                                                  (36,473)      (82,250)
Peachtree capital expenditures                                                    (33,711)      (25,892)
Windrush capital expenditures                                                     (50,595)            -
Refundable deposits and acquisition costs                                        (640,463)            -
                                                                                -----------    --------

Net cash used in investing activities                                            (761,242)     (108,142)
                                                                                -----------    --------

CASH FLOWS FROM FINANCING ACTIVITIES:

Net proceeds from line of credit                                                  281,796             -
Principal repayments on mortgage notes payable                                   (107,274)      (38,564)
Purchase of retired shares                                                            (17)          (81)
                                                                                -----------    --------

Net cash provided by (used in) investing activities                               174,505       (38,645)
                                                                                -----------    --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                              (86,966)       23,235

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                  282,851       171,736
                                                                                -----------    --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                      $ 195,885      $194,971
                                                                                ===========    ========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>


                                     PAGE 7

                       VININGS INVESTMENT PROPERTIES TRUST
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)
                               September 30, 1998

NOTE 1 - FORMATION AND ORGANIZATION

         Vinings  Investment  Properties  Trust  ("Vinings"  or the "Trust") was
         organized on December 7, 1984 as a twenty year  finite-life real estate
         investment  trust  ("REIT")  whose  original  purpose  was to invest in
         participating,   shared   appreciation,   convertible  and  fixed  rate
         mortgages and joint venture financing secured by office, industrial and
         retail facilities located throughout the United States. The Declaration
         of Trust  provided,  among other  things,  that the Trustees  would use
         their best efforts to  terminate  the Trust  within  approximately  ten
         years.  The Trustees  proceeded with the orderly  liquidation of assets
         and the  distribution  of proceeds to the  shareholders.  The remaining
         assets of the Trust were  Peachtree  Business  Center,  a 75,000 square
         foot  business  park  located in  Atlanta,  Georgia  ("Peachtree")  and
         approximately $163,000 in cash.

         On  January  31,  1996,  Vinings  Investment   Properties,   Inc.  (the
         "Purchaser")  commenced a cash tender offer (the "Tender  Offer") for a
         minimum of a majority and a maximum of 85% of the outstanding shares of
         beneficial  interest,  without par value (the "Shares"),  of the Trust.
         The Tender Offer  expired in  accordance  with its terms at midnight on
         February 28, 1996, and the Purchaser  accepted  approximately  73.3% of
         the  outstanding  Shares.  In connection  with the  consummation of the
         Tender  Offer,  all of the Trustees and officers of the Trust  resigned
         and were replaced with  designees of the Purchaser  ("Management").  In
         addition,  the Trust was an  externally  advised REIT for which it paid
         advisory  fees  to an  unrelated  third  party  (the  "Advisor").  Upon
         consummation of the Tender Offer, the relationship with the Advisor was
         terminated and Vinings became self-administered.

         The purpose of the Tender Offer was for  Management to acquire  control
         of the Trust  and to  rebuild  Vinings  assets  by  expanding  into the
         multifamily real estate markets through the acquisition of garden style
         apartment  communities  which are  leased to  middle-income  residents.
         Management  believes  that these  investments  will provide  attractive
         sources of income to Vinings  which will not only  increase  net income
         and provide cash available for future distributions,  but will increase
         the value of Vinings' real estate portfolio as well.

         On June 11, 1996, Vinings Investment  Properties,  L.P. (the "Operating
         Partnership"),  a Delaware limited  partnership,  was organized.  As of
         September  30, 1998,  the Trust was the sole 1% general  partner and an
         80.94% limited partner in the Operating Partnership. (This structure is
         commonly referred to as an umbrella partnership REIT or "UPREIT").

         Vinings  currently  owns three real  estate  assets,  which are (1) The
         Thicket Apartments ("Thicket"), a 254-unit apartment complex located in
         Atlanta,  Georgia,  owned through Thicket Apartments,  L.P., a Delaware
         limited partnership of which the Operating Partnership is a 99% limited
         partner  and  Thicket  Holdings,   Inc.,  a  Delaware  corporation  and
         wholly-owned  subsidiary of the Trust, is the sole general partner; (2)
         Windrush  Apartments  ("Windrush"),   a  202-unit  apartment  community
         located in Atlanta, Georgia owned through Vinings Communities,  L.P., a
         Delaware  limited  partnership of which the Operating  Partnership is a
         99% limited partner and the Trust is the sole general partner;  and (3)
         Peachtree,  an approximately 75,000 square foot,  single-story business
         park located in Atlanta,  Georgia,  owned by the Operating Partnership.
         At September 30, 1998,  Thicket,  Windrush and Peachtree were 100%, 97%
         and 100% leased, respectively.
<PAGE>
                                     PAGE 8

         On July 1, 1996,  Vinings  effected a 1-for-8  reverse share split (the
         "Share  Split")  of  its  8,645,000  outstanding  Shares.  Shareholders
         tendered  their  Shares and  received  one Share for every eight Shares
         owned.  Vinings has purchased and continues to purchase any  fractional
         Shares  at a cost  of  $5.50  per  share.  As of  September  30,  1998,
         fractional  Shares totaling 118 had been  repurchased and retired.  All
         share  and  per  share  data  included  in the  accompanying  financial
         statements  and notes  thereto have been  restated to reflect the Share
         Split.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Basis of Presentation
         ---------------------

         The consolidated  financial statements have been prepared in accordance
         with generally  accepted  accounting  principles for interim  financial
         information  and with the  instructions  to Form 10-Q and Article 10 of
         Regulation S-X. Accordingly, they do not include all of the information
         and footnotes required by generally accepted accounting  principles for
         complete  financial  statements.  In the  opinion  of  management,  all
         adjustments necessary (consisting only of normal recurring adjustments)
         for a fair presentation  have been included.  Operating results for the
         nine  month  period  ended  September  30,  1998  are  not  necessarily
         indicative  of the  results  that may be  expected  for the year ending
         December 31, 1998.

         The accompanying  consolidated  financial statements of Vinings include
         the  consolidated  accounts  of the  Trust  and its  subsidiaries.  All
         significant intercompany balances and transactions have been eliminated
         in  consolidation.  The  minority  interest of the  unitholders  in the
         Operating  Partnership on the accompanying  balance sheet is calculated
         based on the  minority  interest  ownership  percentage  (18.06%  as of
         September  30, 1998)  multiplied  by the  Operating  Partnership's  net
         assets.  The minority interest of the unitholders in the income or loss
         of  the  Operating   Partnership  on  the  accompanying   statement  of
         operations is calculated based on the weighted average number of Shares
         and Units (as hereinafter  defined)  outstanding during the period. The
         term  "Vinings"  or "Trust"  hereinafter  refers to Vinings  Investment
         Properties  Trust  and  its   subsidiaries,   including  the  Operating
         Partnership.

         These financial  statements should be read in conjunction with Vinings'
         audited   consolidated   financial  statements  and  footnotes  thereto
         included  in  Vinings'  Annual  Report on Form 10-K for the year  ended
         December 31, 1997.

<PAGE>
                                     PAGE 9

         Income Taxes
         ------------
         Vinings  has elected to be taxed as a REIT under the  Internal  Revenue
         Code of 1986,  as  amended  (the  "Code").  As a result,  Vinings  will
         generally not be subject to federal income  taxation on that portion of
         its income that  qualifies  as REIT  taxable  income to the extent that
         Vinings  distributes  at  least  95%  of  its  taxable  income  to  its
         shareholders and satisfies certain other requirements.  Accordingly, no
         provision   for  federal   income  taxes  has  been   included  in  the
         accompanying consolidated financial statements.


         Cash and Cash Equivalents
         -------------------------
         Vinings  considers  all highly  liquid  investments  purchased  with an
         original maturity of three months or less to be cash equivalents.


         Cash Escrows
         ------------
         Cash  escrows  consist of real estate tax,  insurance  and  replacement
         reserve  escrows held by  mortgagees.  These escrows are funded monthly
         from property  operations and released solely for the purpose for which
         they were established.


         Use of Estimates
         ----------------
         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires  management  to make certain
         estimates and  assumptions  that affect the reported  amounts of assets
         and liabilities, the 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.


         Real Estate Assets
         ------------------
         Real estate assets are stated at depreciated  cost less  reductions for
         impairment,  if any. In identifying  potential  impairment,  management
         considers   such  factors  as  declines  in  a   property's   operating
         performance  or market  value,  a change in use, or adverse  changes in
         general market conditions. In determining whether an asset is impaired,
         management  estimates  the future cash flows  expected to be  generated
         from the asset's use and its eventual disposition.  If the sum of these
         estimated  future cash flows on an undiscounted  basis is less than the
         asset's  carrying cost, the asset is written down to its fair value. In
         management's  opinion,  there has been no  impairment  of Vinings' real
         estate assets as of September 30, 1998.

         Ordinary  repairs  and  maintenance  are  expensed as  incurred.  Major
         improvements  and  replacements  are capitalized  and depreciated  over
         their estimated useful lives when they extend the useful life, increase
         capacity or improve  efficiency of the related asset.  Depreciation  is
         computed  on a  straight-line  basis over the useful  lives of the real
         estate  assets  (buildings  and  improvements,  5-40 years;  furniture,
         fixtures and equipment,  3-5 years; and tenant improvements,  generally
         over the life of the related lease.)


<PAGE>
                                    PAGE 10

         Revenue Recognition
         -------------------
         All leases are  classified  as  operating  leases and rental  income is
         recognized   when  earned   which   materially   approximates   revenue
         recognition on a straight-line basis.


         Deferred Financing Costs and Amortization
         -----------------------------------------
         Deferred  financing  costs  include  fees and costs  incurred to obtain
         financing  and are  capitalized  and  amortized  over  the  term of the
         related debt.


         Net Income (Loss) Per Share
         ---------------------------
         Effective  beginning with the quarter and year ended December 31, 1997,
         Vinings  computes net income  (loss) per share under the  provisions of
         Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings
         per Share." As  prescribed by SFAS No. 128, all prior period net income
         (loss) per share data has been restated to conform with the  provisions
         of SFAS No. 128.  Under SFAS No. 128, basic net income (loss) per share
         is computed  based upon the weighted  average  number of common  shares
         outstanding  during the period.  Diluted net income (loss) per share is
         computed  to reflect  the  potential  dilution  of all  instruments  or
         securities  which are  convertible  into  common  shares of the  Trust.
         Previously  reported net income (loss) per share under prior accounting
         standards  was equal to basic and diluted  net income  (loss) per share
         under SFAS No. 128.

         The following is a reconciliation of net income (loss) available to the
         common  shareholders  and the weighted  average shares used in Vinings'
         basic and diluted net income (loss) per share computations:
<TABLE>

<CAPTION>
                                                   For the three months              For the nine months
                                                    Ended September 30,              Ended September 30,
                                             --------------------------------   ---------------------------------
                                                      1998            1997              1998             1997
                                             --------------------------------   ---------------------------------

<S>                                                <C>             <C>                <C>             <C>       
    Net income (loss) - basic                      $(41,455)       $(18,625)          $123,791        $(129,615)
    Minority interest                                (9,136)            -               27,613                -
                                             --------------------------------   -------------------------------- 
    Net income (loss) - diluted                    $(50,591)       $(18,625)          $151,404        $(129,615)
                                             ================================   ================================

    Weighted average shares - basic               1,100,508       1,080,513          1,087,348        1,080,516
    Dilutive Securities

        Weighted average Units in
        Operating Partnership                       242,546              -             242,546                -

        Share options                                 3,596              -               5,067                -
                                             --------------------------------   --------------------------------   
    Weighted average shares - diluted             1,346,650       1,080,513          1,334,961        1,080,516
                                             ================================   ================================
</TABLE>

         Units in the Operating Partnership held by the minority unitholders are
         redeemable for Shares of the Trust on a one-for-one basis, or for cash,
         at the option of the  Trust.  For the three and the nine  months  ended
         September 30, 1998 options to purchase  27,500 shares were excluded and
         for the three and the nine months ended  September  30, 1997 options to
         purchase  26,000 shares were excluded as the impact of such options was
         antidilutive.
<PAGE>
                                    PAGE 11

         Reclassification
         ----------------
         Certain 1997  financial  statement  amounts have been  reclassified  to
         conform with the current year presentation.


NOTE 3 - REAL ESTATE ASSETS

         Windrush Apartments 
         --------------------
         On December 19, 1997, Vinings acquired Windrush for a purchase price of
         $7,555,000 consisting of the assumption of an existing mortgage loan in
         the amount of  $6,464,898  and other  liabilities  and the  issuance of
         224,330  limited   partnership  units  in  the  Operating   Partnership
         ("Units").


         The Thicket Apartments
         ----------------------
         On June 28,  1996,  Vinings  acquired  Thicket for a purchase  price of
         $8,650,000.  The  acquisition  was  financed by a mortgage  loan on the
         property in the amount of $7,392,000 and borrowings  from Vinings' line
         of credit.


         Peachtree Business Center
         -------------------------
         Vinings  acquired  Peachtree  through a deed-in-lieu  of foreclosure on
         April 12, 1990.  Peachtree was recorded at $1,700,000,  its fair market
         value,  which  was less  than the book  value of the  Trust's  mortgage
         investment at the date of foreclosure.  Subsequent to the  acquisition,
         approximately $1,121,800 of improvements has been capitalized.


         Acquisition Transaction
         -----------------------
         On June 18, 1998 Vinings entered into 18 separate contracts to purchase
         14 multifamily communities totaling 2,184 units (the "Portfolio").  The
         aggregate  purchase price of the Portfolio is $104,434,605,  consisting
         of  cash  and  the  assumption  of  existing  debt  (the   "Acquisition
         Transaction"). Vinings has completed its due diligence review and is in
         the process of obtaining its equity  financing.  As of October 31, 1998
         Vinings had  terminated  the  contracts  to prevent  its earnest  money
         deposits  from  becoming  non-refundable.  However,  the  seller of the
         Portfolio has indicated its  willingness to reinstate the contracts and
         extend the dates for closing.  If Vinings obtains sufficient capital to
         finance the transaction,  the closing of the Portfolio could take place
         during the fourth quarter of 1998 or early 1999.  However,  Vinings has
         not yet  obtained an equity  commitment  and there can be no  assurance
         that the Acquisition Transaction will take place.


<PAGE>
                                    PAGE 12

NOTE 4 - NOTES PAYABLE

Mortgage Notes Payable
----------------------
         At  September  30,  1998,  Vinings  had the  following  mortgage  notes
         payable:

     1)  9.04%  mortgage  note  payable  in the  original  principal  amount  of
         $7,392,000,  which is  secured  by  Thicket  and which  matures on July
         1, 2003.  Principal and interest are payable in monthly installments of
          $59,691.

     2)  7.5% mortgage note payable which was assumed on December 19, 1997 with
         a principal balance of $6,464,898,  which is secured by Windrush and 
         which matures on July 1, 2024.  Principal and interest are payable in 
         monthly  installments of $47,457.

         At September 30, 1998, the total  outstanding  principal for both notes
         was $13,677,292.  Scheduled maturities of the mortgage notes payable as
         of September 30, 1998 are as follows:

                               1998              $    37,227
                               1999                  156,664
                               2000                  169,860
                               2001                  184,179
                               2002                  199,716
                               Thereafter         12,929,646
                                                 -----------
                               Total             $13,677,292
                                                 ===========


         Line of Credit
         --------------
         On June 28,  1998  Vinings  renewed its line of credit in the amount of
         $2,000,000  for six months.  The line of credit  bears  interest at the
         bank's base rate, which approximates  prime. At September 30, 1998, the
         interest  rate was  8.50%.  The  interest  rate  decreased  to 8.25% on
         October 1, 1998.  Interest is payable monthly with the entire principal
         balance due on December 28, 1998. Management  anticipates that the line
         of credit will  either be renewed or be repaid from new equity  sources
         prior to its expiration. The line of credit is secured by Peachtree. At
         September 30, 1998, the  outstanding  balance of the line of credit was
         $1,999,900.


NOTE 5 - RELATED PARTY TRANSACTIONS

         Vinings  entered into management  agreements  with Vinings  Properties,
         Inc. to provide property  management  services for Thicket and Windrush
         for a fee equal to a percentage  of gross  revenues plus a fee for data
         processing.  Vinings  Properties,  Inc.  is  an  affiliate  of  certain
         officers  and  Trustees of Vinings.  A total of $138,395 and $69,300 in
         management  fees and $20,520 and $11,430 in data  processing  fees were
         incurred by Vinings  during the nine month periods ended  September 30,
         1998 and 1997, respectively.
<PAGE>
                                    PAGE 13

         In addition,  as a commitment to the  rebuilding  of Vinings,  prior to
         1998 The  Vinings  Group,  Inc.,  the  parent  corporation  of  Vinings
         Properties, Inc. (collectively, "The Vinings Group"), provided numerous
         services at no cost to Vinings relating to administration, acquisition,
         and capital and asset advisory  services.  Certain direct costs paid on
         Vinings' behalf have been reimbursed to The Vinings Group and beginning
         January  1,  1998,  The  Vinings  Group  has  charged  Vinings  for the
         reimbursement of certain overhead charges.  However,  while Vinings has
         been in its initial growth stages, The Vinings Group has been committed
         to  providing  as many  services  as  possible  to promote  the Trust's
         growth.  A total of $33,750 was paid for each of the nine month periods
         ended September 30, 1998 and 1997, to The Vinings Group for shareholder
         services provided for the sole benefit of Vinings by one of The Vinings
         Group's employees. In addition, a total of $63,000 has been accrued for
         the nine month period ended September 30, 1998 to The Vinings Group for
         the  reimbursement of overhead  expenses,  which includes  salaries and
         benefits for employees  hired by The Vinings Group for the sole benefit
         of the Trust. The officers of the Trust have not received  compensation
         from Vinings for their  services  during 1998 except for the restricted
         stock, as hereinafter defined, awarded on July 1, 1998. (See Note 11 to
         Vinings' September 30, 1998 Consolidated Financial Statements.)


NOTE 6 - DISTRIBUTIONS

         There were no  distributions  declared or  distributed  for the periods
         ended September 30, 1998 and 1997. Since the consummation of the Tender
         Offer,  management  has not  declared  any  dividends.  In an effort to
         rebuild Vinings' assets,  all operating cash flow has been reserved for
         future  growth  and  expansion.  However,  as assets are  acquired  and
         operating cash flow increases,  Vinings intends to pay distributions to
         shareholders  in  amounts  at least  sufficient  to enable the Trust to
         qualify as a REIT.


NOTE 7 - LEASING ACTIVITY

         The following is a schedule of future minimum rents due under operating
         leases that have  initial or  remaining  noncancellable  lease terms in
         excess of one year as of September 30, 1998, at Peachtree:

                               1998                $127,362
                               1999                 517,110
                               2000                 387,463
                               2001                 292,422
                               2002                 120,557
                                                 ----------
                               Total             $1,444,914
                                                 ==========

         One tenant  generated 50% of Peachtree's  revenues for the period ended
         September  30,  1998.  The same tenant  accounts  for 72% of the future
         minimum lease payments.

<PAGE>
                                    PAGE 14

NOTE 8 - CONTINGENCIES

         Vinings is, from time to time,  subject to various claims that arise in
         the ordinary course of business. These matters are generally covered by
         insurance.  While the  resolution of these matters  cannot be predicted
         with  certainty,  management  believes  that the final  outcome of such
         matters  will not  have a  material  adverse  effect  on the  financial
         position or results of operations of Vinings.


NOTE 9 - SUPPLEMENTAL CASH FLOW INFORMATION

         Vinings  paid  interest of $998,829  and  $600,196  for the nine months
         ended September 30, 1998 and 1997, respectively.


NOTE 10 - DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

         Based on interest rates and other  pertinent  information  available to
         Vinings as of September 30, 1998, the Trust estimates that the carrying
         value of cash and cash  equivalents,  the mortgage notes  payable,  the
         line of credit,  and other  liabilities  approximate  their fair values
         when compared to instruments of similar type, terms and maturity.

         Disclosure  about  fair  value  of  financial  instruments  is based on
         pertinent information available to management as of September 30, 1998.
         Although   management   is  not  aware  of  any   factors   that  would
         significantly  affect its estimated  fair value  amounts,  such amounts
         have not been comprehensively  revalued for purposes of these financial
         statements since September 30, 1998.


NOTE 11 - 1997 STOCK OPTION AND INCENTIVE PLAN

         Vinings'  1997 Stock Option and  Incentive  Plan (the "Plan")  provides
         incentives  to  officers,  employees,  Trustees,  and other key persons
         including  the  grant  of share  options,  share  appreciation  rights,
         restricted and unrestricted share awards, performance share awards, and
         dividend equivalent rights.

         Under the Plan,  the maximum  number of shares that may be reserved and
         available for issuance is 10% of the total number of outstanding shares
         at any time  plus 10% of the  number of Units  outstanding  at any time
         that are subject to redemption  rights. At September 30, 1998 the total
         number of shares available for issuance under the Plan was 134,305.

         On July 1, 1997, Vinings granted a total of 26,000  non-qualified share
         options (the "1997 Options") to the officers,  Trustees and certain key
         persons. The 1997 Options are exercisable at a price of $5.00 (based on
         a closing  sales  price of a share of the Trust on the Nasdaq  SmallCap
         Market  on  June  30,  1997 of  $4.56)  and  became  fully  vested  and
         exercisable  in on July 9, 1998.  No options had been  exercised  as of
         September 30, 1998.
<PAGE>
                                    PAGE 15

         On June 9, 1998, Vinings granted a total of 81,250  non-qualified share
         options (the "1998 Options") to the officers,  Trustees and certain key
         persons. The 1998 Options are exercisable at a price of $4.00 (based on
         a closing  sales price of a share of the Trust on the  Over-the-Counter
         Bulletin Board on June 8, 1998 of $3.63) and become exercisable in full
         on June 9, 1999.

         On September 1, 1998,  Vinings granted 1,500  additional  non-qualified
         share options (the  "Additional  1998 Options") to certain key persons.
         The Additional  1998 Options are exercisable at a price of $4.75 (based
         on  a   closing   sales   price  of  a  share  of  the   Trust  on  the
         Over-the-Counter Bulletin Board on August 30, 1998 of $4.75) and become
         exercisable in full on September 1, 1999.

         On July 1, 1998 Vinings  awarded  20,000 shares of restricted  stock to
         the   officers  and  certain   trustees   (the   "Restricted   Stock"),
         representing  a total value of $80,000  (based on the Fair Market Value
         of a share of the Trust on the award date) which has been  reflected in
         compensation  expense in the second quarter and in shareholders' equity
         as  of  September  30,  1998.  The  Restricted  Stock  was  awarded  as
         compensation  for services to the Trust  provided by such  officers and
         trustees as well as by The Vinings Group.


NOTE 12 - UNUSUAL ITEM

         In August  1997,  Vinings,  through the  Operating  Partnership,  began
         contract  negotiations for the acquisition of a 2,365-unit portfolio of
         16  multifamily  properties.  The  sellers,  which  were 16  individual
         partnerships (the "Sellers"),  were to contribute the properties to the
         Operating  Partnership  in exchange for a  combination  of Units and/or
         cash  and  the  assumption  of  existing  mortgage   indebtedness  (the
         "Portfolio  Transaction").  The officers of Vinings  spent  substantial
         amounts of time and the Trust spent substantial amounts of money in its
         due  diligence  on  the   properties   and  in  contract   negotiations
         specifically  for this  portfolio.  Vinings  believes that it secured a
         binding  commitment  from the  Sellers for the  Portfolio  Transaction.
         Conditional  commitments for equity financing were obtained and Vinings
         was prepared to close on the  transaction in early 1998.  Within thirty
         days of closing,  the general  partner of the  Sellers  terminated  the
         contract for reasons  Vinings  believes to be pretextual,  in breach of
         the  contract  and not in the best  interests  of the  partners  of the
         selling partnerships or the shareholders of the Trust.

         On February 3, 1998,  Vinings  commenced an action against the Sellers,
         their  general  partners  and a  related  property  management  company
         seeking  specific  enforcement  of the  contract  and  damages  for the
         defendant's willful breach of contract,  lack of good faith negotiation
         and tortious interference in connection with the breach and termination
         of the  contract.  In a related  case,  the Sellers  filed an action on
         January 29, 1998 seeking a declaratory  judgement that the contract was
         not valid, binding and enforceable against them.

         On June 3,  1998,  a  settlement  was  agreed to  between  the  parties
         pursuant to a Settlement  Agreement  and Mutual  Release,  the terms of
         which are confidential. All pending claims have been dismissed. Amounts
         received under the Settlement Agreement and Mutual Release are included
         in other income in the accompanying statement of operations.

<PAGE>
                                    PAGE 16

NOTE 13 - SUBSEQUENT EVENT

         On August 11, 1998 Vinings  entered into  contracts for the purchase of
         two apartment  communities in Atlanta,  Georgia totaling 482 units (the
         "Atlanta Properties").  The combined purchase price totaled $19,500,000
         and  consisted of the  assumption  of the  existing  debt on one of the
         communities  and  the  remainder  in  cash.  After  completing  its due
         diligence   review,   Vinings   determined  that  it  was  not  in  the
         shareholders'  best interests to go forward with the  transaction.  The
         contracts  were  cancelled  on  September  21, 1998 and  earnest  money
         deposits totaling $50,000 were returned to Vinings in October 1998.


<PAGE>
                                    PAGE 17

                      VININGS INVESTMENT PROPERTIES TRUST
                              AND ITS SUBSIDIARIES

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW
--------

Vinings Investment  Properties Trust ("Vinings" or the "Trust") was organized on
December  7, 1984 as a twenty year  finite-life  real  estate  investment  trust
("REIT")  whose  original  purpose  was  to  invest  in  participating,   shared
appreciation,  convertible and fixed rate mortgages and joint venture  financing
secured by office,  industrial  and retail  facilities  located  throughout  the
United States. The Declaration of Trust provided,  among other things,  that the
Trustees   would  use  their  best  efforts  to   terminate   the  Trust  within
approximately ten years. The Trustees proceeded with the orderly  liquidation of
assets and the  distribution  of proceeds  to the  shareholders.  The  remaining
assets of the  Trust  were  Peachtree  Business  Center,  a 75,000  square  foot
business  park  located in  Atlanta,  Georgia  ("Peachtree")  and  approximately
$163,000 in cash.

On January 31, 1996,  Vinings  Investment  Properties,  Inc.  (the  "Purchaser")
commenced a cash tender offer (the  "Tender  Offer") for a minimum of a majority
and a maximum of 85% of the outstanding shares of beneficial  interest,  without
par value (the "Shares"),  of the Trust.  The Tender Offer expired in accordance
with its terms at midnight on February  28,  1996,  and the  Purchaser  accepted
approximately   73.3%  of  the  outstanding   Shares.  In  connection  with  the
consummation of the Tender Offer,  all of the Trustees and officers of the Trust
resigned and were replaced with  designees of the Purchaser  ("Management").  In
addition,  the Trust was an  externally  advised REIT for which it paid advisory
fees to an  unrelated  third party (the  "Advisor").  Upon  consummation  of the
Tender  Offer,  the  relationship  with the Advisor was  terminated  and Vinings
became self-administered.

The purpose of the Tender  Offer was for  Management  to acquire  control of the
Trust and to rebuild  Vinings  assets by  expanding  into the  multifamily  real
estate markets  through the  acquisition of garden style  apartment  communities
which are leased to  middle-income  residents.  Management  believes  that these
investments will provide  attractive sources of income to Vinings which will not
only increase net income and provide cash  available  for future  distributions,
but will increase the value of Vinings' real estate portfolio as well.

On  June  11,  1996,  Vinings  Investment   Properties,   L.P.  (the  "Operating
Partnership"),  a Delaware limited partnership,  was organized.  As of September
30, 1998,  Vinings was the sole 1% general partner and an 80.94% limited partner
in the  Operating  Partnership.  (This  structure is commonly  referred to as an
umbrella partnership REIT or "UPREIT").

On July 1, 1996,  Vinings  effected a 1-for-8  reverse  share  split (the "Share
Split") of its 8,645,000 outstanding Shares.  Shareholders tendered their Shares
and received one Share for every eight Shares  owned.  Vinings has purchased and
continues to purchase any fractional  Shares at a cost of $5.50 per share. As of
September 30, 1998,  fractional  Shares  totaling 118 had been  repurchased  and
retired.
<PAGE>
                                    PAGE 18

At September 30, 1998,  Vinings' real estate assets were The Thicket Apartments,
a 254-unit apartment community located in Atlanta, Georgia ("Thicket"), Windrush
Apartments,   a  202-unit  apartment  community  located  in  Atlanta,   Georgia
("Windrush") and Peachtree, which were 100%, 97% and 100% leased, respectively.

On June 18,  1998  Vinings  entered  into 18 separate  contracts  to purchase 14
multifamily  communities  totaling 2,184 units (the "Portfolio").  The aggregate
purchase  price of the  Portfolio is  $104,434,605,  consisting  of cash and the
assumption  of  existing  debt  (the  "Acquisition  Transaction").  Vinings  has
completed its due diligence review and is in the process of obtaining its equity
financing.  As of October  31, 1998  Vinings has  terminated  the  contracts  to
prevent its earnest money deposits from becoming  non-refundable.  However,  the
seller of the Portfolio has indicated its willingness to reinstate the contracts
and  extend the dates for  closing.  If Vinings  obtains  sufficient  capital to
finance the  transaction,  the closing of the Portfolio  could take place during
the fourth quarter of 1998 or early 1999. However,  Vinings has not yet obtained
an  equity  commitment  and  there  can be no  assurance  that  the  Acquisition
Transaction will take place.

On August 11,  1998  Vinings  entered  into  contracts  for the  purchase of two
apartment  communities  in Atlanta,  Georgia  totaling  482 units (the  "Atlanta
Properties").  The combined purchase price totaled  $19,500,000 and consisted of
the assumption of the existing debt on one of the  communities and the remainder
in cash. After completing its due diligence review,  Vinings  determined that it
was not in the shareholders'  best interests to go forward with the transaction.
The contracts  were  cancelled on September 21, 1998 and earnest money  deposits
totaling $50,000 were returned to Vinings in October 1998.

The following  discussion and analysis of the financial condition and results of
operations  should be read in  conjunction  with the  accompanying  consolidated
financial statements of Vinings and the notes thereto.


RESULTS OF OPERATIONS
---------------------

Rental and other property revenues increased $388,145, or 61%, from $634,797 for
the three months ended  September 30, 1997 to $1,022,942  for the same period in
1998,  and  $1,231,425,  or 67%,  from  $1,830,242  for the  nine  months  ended
September 30, 1997 to $3,061,667  for the same period in 1998.  This increase is
due primarily to the revenues generated in connection with Vinings' ownership of
Windrush  during 1998 which was not in Vinings'  portfolio  until  December  19,
1997. In addition to the increased  revenues  generated from Windrush,  revenues
from  Thicket  increased  $24,559 for the three  months and $93,668 for the nine
months ended September 30, 1998 due to occupancy and rental rate increases.

Other  income of  $501,945  for the nine  months  ended  September  30, 1998 was
generated  due  primarily  to  proceeds  received  from  the  settlement  of the
previously  disclosed  litigation in connection with the Portfolio  Transaction.
(See Part II, Item 1 - Legal  Proceedings and Note 12 to Vinings'  September 30,
1998 Consolidated Financial Statements.)
<PAGE>
                                    PAGE 19

Property operating and maintenance  expense increased by $162,189,  or 66%, from
$247,440 for the three months ended September 30, 1997, to $409,629 for the same
period in 1998,  and  $453,319,  or 60%, from $759,954 for the nine months ended
September 30, 1997 to $1,213,273  for the same period in 1998.  This increase is
due  primarily to expenses  generated in connection  with Vinings'  ownership of
Windrush  during 1998,  which was not in Vinings'  portfolio  until December 19,
1997.

Depreciation  and amortization  increased by $55,046,  or 51%, from $108,436 for
the three  months  ended  September  30, 1997 to $163,482 for the same period in
1998,  and $158,867,  or 49%, from $323,839 for the nine months ended  September
30, 1997 to $482,706 for the same period in 1998. This increase is due primarily
to  depreciation  generated in connection  with  Vinings'  ownership of Windrush
during  1998,  which was not in Vinings'  portfolio  until  December  19,  1997.
Depreciation  from Thicket and Peachtree  increased  slightly for both the three
and  the  nine  month  periods  ended  September  30,  1998  due to  capitalized
additions.  Amortization  of  capitalized  lease  commissions  at Peachtree also
increased slightly.

Interest expense increased $136,834,  or 68%, from $200,280 for the three months
ended  September 30, 1997 to $337,114 for the same period in 1998, and $398,633,
or 66%, from  $600,196 for the nine months ended  September 30, 1997 to $998,829
for the same period in 1998,  due primarily to the interest on the mortgage note
secured by Windrush.  Interest on Vinings' line of credit increased slightly due
to the increased balance of the line of credit.

General and  administrative  expense  increased $65,419 or 72%, from $90,479 for
the three  months  ended  September  30, 1997 to $155,898 for the same period in
1998,  and $443,683,  or 177% from $250,540 for the nine months ended  September
30, 1997 to $694,223 for the same period in 1998. Of this increase,  $22,889 and
$286,171,  for the three  months  and nine  months  ended  September  30,  1998,
respectively,  is legal and  accounting,  the majority of which is legal expense
incurred in connection with the litigation involving the Portfolio  Transaction.
(See Part II, Item 1 - Legal  Proceedings and Note 12 to Vinings'  September 30,
1998  Consolidated  Financial  Statements.)  $33,000 and $63,000,  for the three
months and nine months  ended  September  30, 1998,  respectively,  are overhead
reimbursements to The Vinings Group. (See Note 5 to Vinings'  September 30, 1998
Consolidated Financial Statements.) In addition, $80,000 of the increase for the
nine months ended  September 30, 1998 is  compensation  expense  relating to the
Restricted Stock awarded on July 1, 1998. (See Note 11 to Vinings' September 30,
1998 Consolidated Financial Statements.)


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

Net cash provided by operating activities increased $329,749,  from $170,022 for
the nine months ended  September  30, 1997 to $499,771 for the nine months ended
September  30, 1998.  This  increase is due  primarily to the proceeds  from the
Portfolio Transaction  settlement,  net of litigation costs. Property operations
from Windrush also contributed to this increase.

Cash flows used in investing  activities  increased $653,100,  from $108,142 for
the nine months ended  September  30, 1997 to $761,242 for the nine months ended
September  30,  1998.  This  increase  is due to funds  invested  in  refundable
deposits  and  costs  associated  with  potential  acquisitions.  Cash  totaling
$174,505  was  generated  from  financing  activities  for the nine months ended
September  30, 1998 as compared to cash used in  financing  activities  totaling
$38,645 for the same period in 1997.  This change was due to net proceeds  drawn
on the line of credit, which were used for refundable acquisition deposits.
<PAGE>
                                    PAGE 20

The cash held by Vinings at September 30, 1998, plus the cash flow from Vinings'
assets, is expected to provide sources of liquidity to allow Vinings to meet all
current operating obligations. This assumes that The Vinings Group will continue
to provide the same services to the Trust that it is currently providing.  It is
anticipated  that the line of credit,  which is due to expire in December  1998,
will either be renewed or will be repaid  through the  issuance of new equity in
connection  with  the  Acquisition  Transaction.   (For  additional  information
regarding  the  line  of  credit  see  Note 4 to  Vinings'  September  30,  1998
Consolidated  Financial  Statements).  In addition,  it is anticipated  that the
Acquisition  Transaction  will be funded through the assumption of existing debt
and cash provided by the issuance of new equity in a private  transaction.  (See
Note 3 to Vinings September 30, 1998 Consolidated Financial  Statements).  It is
also  anticipated  that new  sources  of equity  will be  raised to fund  future
acquisitions.  There can be no assurance,  however, that Vinings will be able to
raise the necessary equity to finance the Acquisition Transaction or such future
transactions.

Management  intends to continue ongoing  discussions with capital sources,  both
public and private,  as well as explore financing  alternatives,  so as to allow
the Trust to expand and grow its income producing investments.


RECENT ACCOUNTING PRONOUNCEMENTS
--------------------------------

In February 1997, the Financial  Accounting  Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share" ("SFAS 128"), which
supersedes the authoritative literature and related interpretations for earnings
per share under  Accounting  Principles  Board Opinion No. 15. Effective for the
quarter and year ended  December 31, 1997,  the Trust computes net income (loss)
per share under the  provisions  of SFAS No. 128. As prescribed by SFAS No. 128,
all prior period net income  (loss) per share data has been  restated to conform
with the provisions of SFAS No. 128. Under SFAS No. 128, basic net income (loss)
per share is computed  based upon the weighted  average  number of common shares
outstanding  during the period.  Diluted net income (loss) per share is computed
to reflect the potential  dilution of all  instruments  or securities  which are
convertible  into common  shares of the Trust.  Previously  reported  net income
(loss) per share under prior accounting standards was equal to basic and diluted
net income (loss) per share under SFAS No. 128.

YEAR 2000
---------

The statements in the following section include "Year 2000 readiness disclosure"
within the meaning of the Year 2000 Information and Readiness Disclosure Act.

The "Year 2000 issue" is the term used to describe the various  problems  caused
from  the  improper  processing  of  dates  and date  sensitive  information  by
computers and other  machinery and equipment.  The Year 2000 issue is the result
of many computer  programs  recognizing a date ending with "00" as the year 1900
rather than the year 2000,  causing potential system failures or miscalculations
<PAGE>
                                    PAGE 21

which could result in  disruptions  of normal  business  operations.  Vinings is
currently  assessing the potential impact Year 2000 will have on its operations.
A  compliance  program  is in the  process  of  being  designed,  which  will 1)
determine  Vinings state of readiness  for the Year 2000,  including the Trust's
information  technology  ("IT")  systems,  its non-IT  systems  and the state of
readiness of Vinings material suppliers and third party vendors; 2) assess where
potential risks may occur,  recognizing that date sensitive  systems may fail at
different  points in time  depending on their  function;  and 3) determine  what
steps  need to be  taken in order to  bring  remaining  software,  hardware  and
systems,  including  embedded  systems,  into  Year 2000  compliance  in time to
minimize any  significant  detrimental  effects on operations  (the  "Compliance
Program"). It is anticipated that the Compliance Program will be complete and in
place by the end of 1998. In addition,  Vinings is in the process of determining
a plan of  action in the event  that the Trust  will not be Year 2000  compliant
(the   "Contingency   Plan"),   which  should  be  complete  shortly  after  the
implementation of the Compliance Program.

Many of Vinings  computer  systems and related  software  are already  Year 2000
compliant.  These systems include the on-site resident  management  software and
associated  hardware as well as corporate  financial and accounting software and
related  hardware.  The costs  incurred  to date for new  on-site  hardware  and
software total  approximately  $6,200.  The financial and accounting systems are
shared with The Vinings Group. The costs incurred to upgrade these systems total
approximately  $70,000 and are in the form of monthly lease  payments of $1,178,
which expire in November 2002.  Currently these lease payments are not a cost of
the Trust.

Vinings has not yet determined whether many of its other operational systems are
Year 2000  compliant and therefore  cannot  determine at this time the potential
impact on the  Trust's  financial  condition  and results of  operations.  These
systems include administrative  systems as well as mechanical systems.  However,
Vinings  believes that once its  Compliance  Program has been  implemented,  all
material  systems within its control will be Year 2000 compliant well in advance
of January 1, 2000.

Vinings'  most  reasonably  likely  worst  case  scenario  relates  to Year 2000
non-compliance by third party vendors and service providers.  Vinings' relies on
a number of suppliers for utility services,  financial services,  materials etc.
Interruption  of  supplier  operations  due to Year  2000  issues  could  have a
material adverse effect on the Trust's future financial condition and results of
operations.  However, Vinings' Compliance Program will include steps to evaluate
the status of suppliers' efforts and will determine alternatives and contingency
plan requirements.

The information  provided above regarding Vinings' Year 2000 compliance includes
forward-looking  statements  based on  management's  best  estimates  of  future
events.  Such   forward-looking   statements  involve  risks  and  uncertainties
including the  availability  of  resources,  the ability to identify and correct
potential  Year 2000  sensitive  problems  that could  have a serious  impact on
operations and the ability of third party  suppliers to bring their systems into
Year 2000  compliance.  There can be no  assurance  that any of the  factors  or
statements regarding the Trust's Year 2000 preparedness will not change and that
any  change  will  not  affect  the  accuracy  of  the  Trust's  forward-looking
statements.
<PAGE>
                                    PAGE 22

OTHER MATTERS
-------------

Vinings  was  informed  on April 3, 1998 by NASDAQ that its shares no longer met
certain  maintenance  requirements for continued listing on the SmallCap Market.
Although  the  Trust  believed  that  all  requirements  were  met,  it made the
strategic decision not to submit a proposal for achieving compliance so that its
listing would be transferred  from the SmallCap  Market to the  Over-the-Counter
Bulletin  Board.  Vinings  made this  decision  because it feels that its growth
would have been severely  hindered by newly  implemented  SmallCap  requirements
pertaining to shareholder approval of new share issuances.  Therefore, effective
April 28,  1998,  Vinings'  shares are traded on the  Bulletin  Board  under the
symbol "VIPIS."

This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. Vinings' actual results could differ materially from those set forth in
the  forward-looking  statements.  Certain  factors  that  might  cause  such  a
difference  include  the  following:  the  failure  of the  Trust's  systems  or
software,  or the  systems  and  software  of a third  party on which  the Trust
relies,  to be Year  2000  compliant,  the  inability  of  Vinings  to  identify
multifamily  properties or property portfolios for acquisition which will have a
strategic fit with Vinings,  the inability of Vinings to close the  transactions
currently  anticipated,  including  the  Acquisition  Transaction  or such other
contracts  as Vinings may enter into in the future,  the less than  satisfactory
performance of any property which might be acquired by Vinings, the inability to
access  the  capital  markets  in  order to fund  Vinings'  present  growth  and
expansion strategy,  the cyclical nature of the real estate market generally and
locally  in  Georgia  and the  surrounding  southeastern  states,  the  national
economic  climate,  the local  economic  climate in Georgia and the  surrounding
southeastern  states,  and the local real estate  conditions and  competition in
Georgia and the surrounding southeastern states. There can be no assurance that,
as a result of the foregoing  factors,  Vinings'  growth and expansion  strategy
will be  successful  or that the business and  operations of Vinings will not be
adversely affected thereby.
<PAGE>
                                    PAGE 23

                      VININGS INVESTMENT PROPERTIES TRUST
                              AND ITS SUBSIDIARIES

                                     PART II
                                OTHER INFORMATION

Item 1.  Legal Proceedings
--------------------------

In August 1997,  Vinings,  through the  Operating  Partnership,  began  contract
negotiations  for the  acquisition  of a 2,365-unit  portfolio of 16 multifamily
properties.  The sellers, which were 16 individual partnerships (the "Sellers"),
were to contribute the properties to the Operating Partnership in exchange for a
combination  of  Units  and/or  cash and the  assumption  of  existing  mortgage
indebtedness  (the  "Portfolio  Transaction").  The  officers  of Vinings  spent
substantial  amounts of time and the Trust spent substantial amounts of money in
its due diligence on the  properties and in contract  negotiations  specifically
for this portfolio.  Vinings believes that it secured a binding  commitment from
the Sellers for the Portfolio  Transaction.  Conditional  commitments for equity
financing were obtained and Vinings was prepared to close on the  transaction in
early 1998.  Within thirty days of closing,  the general  partner of the Sellers
terminated the contract for reasons Vinings believes to be pretextual, in breach
of the  contract  and not in the best  interests  of the partners of the selling
partnerships or the shareholders of the Trust.

On February 3, 1998,  Vinings  commenced an action  against the  Sellers,  their
general  partners and a related  property  management  company seeking  specific
enforcement  of the contract and damages for the  defendant's  willful breach of
contract, lack of good faith negotiation and tortious interference in connection
with the breach and termination of the contract.  In a related case, the Sellers
filed an action on January 29, 1998  seeking a  declaratory  judgement  that the
contract was not valid, binding and enforceable against them.

On June 3, 1998,  a settlement  was agreed to between the parties  pursuant to a
Settlement  Agreement and Mutual Release,  the terms of which are  confidential.
All pending claims have been dismissed.


Item 6.  Exhibits and Reports on Form 8-K
-----------------------------------------

(a)      Exhibits

         27 - Financial Data Schedule

(b)      Reports on Form 8-K

         No  reports  on Form 8-K were  filed  during  the  three  months  ended
September 30, 1998.


<PAGE>
                                     PAGE 24

                                    SIGNATURE

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

                            Vinings Investment Properties Trust


                            By: /s/ Stephanie A. Reed
                                Stephanie A. Reed
                                Vice President and Treasurer

Dated:   November 16, 1998