EXHIBIT 99.5



                      FIRST RESORT SOFTWARE, INC.

                      FINANCIAL STATEMENTS
                      AS OF DECEMBER 31, 1997 AND MAY 26, 1998
                      TOGETHER WITH REPORT OF INDEPENDENT
                          PUBLIC ACCOUNTANTS


<PAGE>





                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To First Resort Software, Inc.:

We have audited the accompanying  balance sheets of First Resort Software,  Inc.
(a Colorado  corporation)  as of December  31,  1997 and May 26,  1998,  and the
related statements of operations, changes in stockholders' equity and cash flows
for the year ended December 31, 1997 and the period from January 1, 1998 through
May 26, 1998. These financial statements are the responsibility of the Company'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 audits 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 First Resort Software, Inc., as
of December 31, 1997 and May 26, 1998, and the results of its operations and its
cash flows for the year ended  December  31, 1997 and the period from January 1,
1998 through May 26, 1998,  in conformity  with  generally  accepted  accounting
principles.








ARTHUR ANDERSEN LLP





Houston, Texas
July 17, 1998


<PAGE>



                           FIRST RESORT SOFTWARE, INC.

                                 BALANCE SHEETS
                        (In thousands, except share data)

<TABLE>
<CAPTION>
<S>                                                               <C>                       <C>

                                                                            December 31,         May 26,
                                                                                1997              1998  
                                                                           ------------       ----------
                                     ASSETS

CURRENT ASSETS:
    Cash and cash equivalents                                                   $ 126            $ 108
    Accounts receivable                                                           274              381
    Notes receivable                                                              152              235
    Prepaid expenses and other current assets                                      45               25
                                                                                -----           ------
              Total current assets                                                597              749

PROPERTY AND EQUIPMENT, net                                                       275              270

OTHER ASSETS                                                                       -                 8
                                                                                -----           ------
              Total assets                                                      $ 872           $1,027
                                                                                 ====            =====

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
    Deferred revenue                                                            $ 506            $ 579
    Accounts payable and accrued liabilities                                      130              170
                                                                                -----           ------
              Total current liabilities                                           636              749

LONG-TERM OBLIGATIONS                                                             125              125

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
    Common stock, $1 par; 50,000 shares authorized; 3,000 shares outstanding        3                3
    Additional paid in capital                                                     13               13
    Retained earnings                                                              95              137
                                                                                -----           ------
              Total stockholders' equity                                          111              153
                                                                                -----           ------
              Total liabilities and stockholders' equity                        $ 872           $1,027
                                                                                 ====            =====
</TABLE>


   The accompanying notes are an integral part of these financial statements.


<PAGE>


                           FIRST RESORT SOFTWARE, INC.

                            STATEMENTS OF OPERATIONS
                                 (In thousands)
<TABLE>
<CAPTION>
                                                                                                           Period from  
                                                                                   Year Ended               January 1   
                                                                                  December 31,           Through May 26,
                                                                                      1997                    1998      
                                                                                --------------           ---------------
<S>                                                                                <C>                  <C>    
REVENUES:
    Software sales                                                                 $1,318               $   626
    Service contracts                                                               1,390                   685
    Other                                                                             156                    90
                                                                                  -------               -------
              Total revenues                                                        2,864                 1,401

OPERATING EXPENSES                                                                  1,704                   679

GENERAL AND ADMINISTRATIVE EXPENSES                                                   417                   322
                                                                                  -------               -------
    Income from operations                                                            743                   400

OTHER INCOME:

    Interest income                                                                    25                    12
                                                                                  -------               -------
NET INCOME                                                                        $   768               $   412
                                                                                  =======               =======
</TABLE>



   The accompanying notes are an integral part of these financial statements.


<PAGE>


                           FIRST RESORT SOFTWARE, INC.

                  STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                        (In thousands, except share data)

<TABLE>
<CAPTION>
<S>                                          <C>                 <C>        <C>               <C>            <C>


                                                   Common Stock            Additional       Retained            
                                               ---------------------         Paid in        Earnings            
                                               Shares         Amount         Capital        (Deficit)      Total
                                               ------         ------         -------        ---------      -----
BALANCE, December 31, 1996                      3,000           $3            $13            $(106)       $ (90)
    Net income                                                                                 768          768
    Distributions                                                                             (567)        (567)
                                               -----            --            ---             -----        -----
BALANCE, December 31, 1997                     3,000             3             13               95          111
    Net income                                                                                 412          412
    Distributions                                                                             (370)        (370)
                                               -----            --            ---             -----        -----
BALANCE, May 26, 1998                          3,000            $3            $13             $ 137       $ 153
                                               =====            ==             ==             =====         ====
</TABLE>



   The accompanying notes are an integral part of these financial statements.


<PAGE>



                           FIRST RESORT SOFTWARE, INC.

                            STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                                Year Ended             January 1  
                                                                               December 31,         Through May 26,
                                                                                   1997                   1998     
                                                                               ------------        ---------------

<S>                                                                                <C>                   <C>  
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                                     $ 768                 $ 412
    Adjustments to reconcile net income to net cash
       provided by operating activities--
          Depreciation                                                                45                    66
    Changes in operating assets and liabilities--
       Accounts receivable                                                           (44)                 (107)
       Notes receivable                                                              (25)                  (83)
       Prepaid expenses and other assets                                              29                    12
       Deferred revenue                                                               49                    73
       Accounts payable and accrued liabilities                                      (17)                   25
                                                                                  ------                ------
              Net cash provided by operating activities                              805                   398
                                                                                  ------                ------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of property and equipment                                              (183)                  (61)
                                                                                  ------                ------
              Net cash used in investing activities                                 (183)                  (61)
                                                                                  ------                ------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Payments on line of credit                                                       (39)                -
    Distributions to stockholders                                                   (567)                 (355)
                                                                                  ------                ------
              Net cash used in financing activities                                 (606)                 (355)
                                                                                  ------                ------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                             16                   (18)

CASH AND CASH EQUIVALENTS, beginning of period                                       110                   126
                                                                                  ------                ------
CASH AND CASH EQUIVALENTS, end of period                                           $ 126                 $ 108
                                                                                    ====                  ====


SUPPLEMENTAL SCHEDULE OF NON-CASH
    OPERATING AND FINANCING ACTIVITIES:
       Accrued distribution to stockholders                                     $   -                   $   15
                                                                                 =======                 =====
</TABLE>



   The accompanying notes are an integral part of these financial statements.


<PAGE>



                           FIRST RESORT SOFTWARE, INC.

                          NOTES TO FINANCIAL STATEMENTS

1.     BUSINESS AND ORGANIZATION:

First Resort  Software,  Inc.  (the  "Company") is a Colorado  corporation.  The
Company was founded and began operations in 1985. The Company develops,  markets
and distributes property management computer software  applications and provides
its licensees with implementation  services and ongoing support. The Company has
a client base of over 650 companies located in the United States, Canada and the
Caribbean.

On May 26, 1998, ResortQuest International, Inc. ("ResortQuest") consummated its
initial public offering and acquired all of the outstanding stock of the Company
in exchange for cash and shares of ResortQuest common stock (the "Combination").
In connection with the Combination the stockholders  have agreed to increases in
salary and  benefits  which  would have  increased  general  and  administrative
expenses by  approximately  $42,000 and $6,000 for the year ended  December  31,
1997 and for the period from January 1, 1998 through May 26, 1998, respectively.
In addition,  certain stockholders retained  non-operating assets and assumed or
retired  certain  liabilities  that were excluded from the  Combination  and the
purchase  price  for the  Company  was  adjusted  for  certain  working  capital
adjustments of approximately $15,000.

2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

       Revenue Recognition

The  Company   records   revenue  from  software  sales  when  the  software  is
successfully installed on the client's system.

The Company's revenue recognition policies conform to accounting  principles for
software  revenue  recognition  issued by the  American  Institute  of Certified
Public Accountants  ("AICPA").  For customer  arrangements that include multiple
elements (i.e., additional software products,  postcontract customer support, or
services)  the  contract  price is generally  allocated to the various  elements
based on Company--specific objective evidence of fair values. Revenue related to
software maintenance  agreements,  which are generally one year in duration,  is
generally  billed  in  advance  and  recognized  ratably  over  the  term of the
maintenance  contract.  Customer  deposits received and amounts invoiced but not
yet recognized as revenue are reflected as deferred  revenue in the accompanying
balance  sheet.  These  amounts  are  included  in  revenue  when  the  relevant
recognition criteria are met.


<PAGE>



Revenues  related to service  elements are generally  recognized as the services
are provided.  Should the Company enter into  arrangements  with  customers that
require significant  production,  modification or customization of software, the
entire arrangement will be accounted for using progress to completion accounting
methods prescribed by the AICPA.

       Operating Expenses

Operating  expenses  include  salaries,  benefits,  communications,   marketing,
postage and shipping, and other costs associated with developing,  servicing and
marketing software.

       Cash and Cash Equivalents

For the purposes of the balance sheets and statements of cash flows, the Company
considers all investments with original maturities of three months or less to be
cash equivalents.

       Property and Equipment

Property and equipment are stated at cost,  and  depreciation  is computed using
the  straight--line  method  over the  estimated  useful  lives  of the  assets.
Expenditures  for repairs and  maintenance are charged to expense when incurred.
Expenditures for major renewals and  betterments,  which extend the useful lives
of existing  equipment,  are  capitalized  and  depreciated.  Upon retirement or
disposition  of  property  and  equipment,  the  cost  and  related  accumulated
depreciation  are removed from the accounts  and any  resulting  gain or loss is
recognized in the statement of operations.

       Research and Development

Research  and  development  costs,  except as discussed  below,  are expensed as
incurred.  These costs consist primarily of salaries relating to the development
of new products and technologies.

Generally accepted accounting  principles provide that costs incurred to produce
software for external sale or lease should be  capitalized.  Costs  eligible for
capitalization are those incurred after the product's technological  feasibility
has been  established and before the product is ready for general  release.  The
establishment  of  technological  feasibility and the ongoing  assessment of the
recoverability of capitalized costs requires considerable judgment by management
with  respect  to certain  external  factors,  including,  but not  limited  to,
anticipated  future  product  revenues,  estimated  economic life and changes in
software and hardware  technology.  The Company incurred costs which satisfy the
above criteria of approximately $149,000 and $61,000 for the year ended December
31, 1997 and for the period  January 1, 1998 through May 26, 1998, and therefore
these software development costs have been capitalized by the Company.

       Income Taxes

The Company has elected S Corporation  status as defined by the Internal Revenue
Code,  whereby  the  Company is not  subject to  taxation.  Under S  Corporation
status, the stockholders report their share of the Company's taxable earnings or
losses in their personal tax returns.


                                      -2-
<PAGE>


       Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting   principles  requires  the  use  of  estimates  and  assumptions  by
management in determining  the reported  amounts of assets and  liabilities  and
disclosures  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.

3.     PROPERTY AND EQUIPMENT:

Property and equipment consisted of the following (in thousands):

<TABLE>
<CAPTION>
                                                         Estimated Useful         December 31,       May 26,
                                                          Lives in Years              1997             1998
                                                        ------------------      ---------------     ---------         
<S>                                                            <C>                <C>               <C>  
       Furniture, fixtures and equipment                          5                  $ 255             $ 255
       Leasehold improvements                                     5                      9                 9
       Computer software                                          5                    149               210
                                                                                    ------            ------
                                                                                       413               474
       Less - Accumulated depreciation                                                (138)             (204)
                                                                                    ------            ------
       Property and equipment, net                                                   $ 275             $ 270
                                                                                      ====              ====
</TABLE>



4.     LINE OF CREDIT:

The Company has a loan  agreement with a bank providing a line of credit ("LOC")
credit facility of $150,000, which is subject to renewal and review on an annual
basis.  The LOC bears  interest at prime plus 1.75% and matured  March 25, 1998.
The LOC has  subsequently  been renewed with interest at prime plus 1%, maturing
in March 1999. At December 31, 1997 and May 26, 1998,  there was no  outstanding
balance on this LOC.

The owners of the Company have guaranteed the obligations and liabilities of the
Company in connection with the LOC pursuant to a continuing guaranty dated March
25, 1994.

5.     COMMITMENTS AND CONTINGENCIES:

       Litigation

The Company is involved  in certain  legal  actions  arising  from the  ordinary
course of business.  Management  does not believe that the outcome of such legal
actions will have a material adverse effect on the Company's  financial position
or results of operations.


                                      -3-
<PAGE>



       Insurance

The Company carries a broad range of insurance coverage,  workers'  compensation
and a business liability,  business personal property,  loss of business income,
employee  dishonesty and medical  payment  policy.  The Company has not incurred
significant  claims or losses on any of its insurance policies during the period
presented in the accompanying financial statements.

       Benefit Plans

The Company's 401(k)  retirement plan is available to  substantially  all of the
Company's  employees.  The  Company's  contribution  to the plan is based upon a
percentage of employee  contributions,  as defined by the plan. The cost of this
plan were approximately  $18,000 and $9,000 for the year ended December 31, 1997
and for the period January 1, 1998 through May 26, 1998.