<PAGE>1

                                    FORM 10-K
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended     December 31, 1998
                              ------------------

Commission file number             1-11060
                              ------------------

              AMERICAN INSURED MORTGAGE INVESTORS
-----------------------------------------------------------------
       (Exact name of registrant as specified in charter)

             California                          13-3180848
-------------------------------------      ----------------------
  (State or other jurisdiction of           (I.R.S. Employer
  incorporation or organization)            Identification No.)

11200 Rockville Pike, Rockville, Maryland           20852
-----------------------------------------  ----------------------
(Address of principal executive offices)          (Zip Code)

                         (301) 816-2300
-----------------------------------------------------------------
       (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

                                        Name of each exchange on
         Title of each class                 which registered
-----------------------------------   ---------------------------
    Depositary Units of Limited             American Stock Exchange
       Partnership Interest

           Securities registered pursuant to Section 12(g) of the Act:

                               None
-----------------------------------------------------------------
                         (Title of class)

         Indicated  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 [ ]



<PAGE>2

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

         As of March 5, 1999, 10,000,125 depositary units of limited partnership
interest were  outstanding and the aggregate  market value of such units held by
non-affiliates of the Registrant on such date was $27,467,220.



<PAGE>3
                       AMERICAN INSURED MORTGAGE INVESTORS

                         1998 ANNUAL REPORT ON FORM 10-K

                                TABLE OF CONTENTS

                                     PART I
                                     ------
                                                                   Page
                                                                   ----
Item 1.    Business................................................  4
Item 2.    Properties..............................................  5
Item 3.    Legal Proceedings.......................................  5
Item 4.    Submission of Matters to a Vote of
             Security Holders......................................  6

                                     PART II
                                     -------
Item 5.    Market for Registrant's Securities and
             Related Security Holder Matters.......................  7
Item 6.    Selected Financial Data.................................  8
Item 7.    Management's Discussion and Analysis of
             Financial Condition and Results of
             Operations............................................  9
Item 7A.   Qualitative and Quantitative Disclosures
             About Market Risk..................................... 15
Item 8.    Financial Statements and Supplementary Data............. 15
Item 9.    Changes in and Disagreements with Accountants
             on Accounting and Financial Disclosure................ 15

                                    PART III
                                    --------
Item 10.   Directors and Executive Officers of the
             Registrant............................................ 15
Item 11.   Executive Compensation.................................. 18
Item 12.   Security Ownership of Certain Beneficial
             Owners and Management................................. 19
Item 13.   Certain Relationships and Related
             Transactions.......................................... 19

                                     PART IV
                                     -------
Item 14.   Exhibits, Financial Statement Schedules and
             Reports on Form 8-K................................... 20

Signatures ........................................................ 23


<PAGE>4
                                     PART I

ITEM 1.  BUSINESS

Development and Description of Business
---------------------------------------
         Information  concerning  the  business  of  American  Insured  Mortgage
Investors  (the  Partnership)  is  contained  in Part II,  Item 7,  Management's
Discussion and Analysis of Financial  Condition and Results of Operations and in
Notes 1, 4, 5 and 6 of the notes to the financial  statements of the Partnership
(filed in response to Item 8 hereof), which is incorporated herein by reference.
Also see Schedule  IV-Mortgage Loans on Real Estate for the table of the Insured
Mortgages (as defined below)  invested in by the  Partnership as of December 31,
1998, which is hereby incorporated by reference herein.

Employees
---------
         The Partnership has no employees.  The business of the Partnership is 
managed by CRIIMI, Inc. (the General Partner), while its portfolio of mortgages
is managed by AIM Acquisition Partners, L.P. (the Advisor) pursuant to an 
advisory agreement (the Advisory Agreement).  CRIIMI, Inc. is a wholly-owned 
subsidiary of CRIIMI MAE Inc. (CRIIMI MAE).

         The general partner of the Advisor is AIM Acquisition  Corporation (AIM
Acquisition)  and the  limited  partners  include,  but are not  limited to, AIM
Acquisition,  The  Goldman  Sachs  Group,  L.P.,  Broad,  Inc.  and CRIIMI  MAE.
Effective September 6, 1991 and through June 30, 1995, a sub-advisory  agreement
(the  Sub-advisory  Agreement)  existed  whereby  CRI/AIM  Management,  Inc., an
affiliate of CRI, Inc., managed the Partnership's  portfolio. In connection with
the  transaction  in which  CRIIMI MAE became a  self-administered  real  estate
investment  trust (REIT),  an affiliate of CRIIMI MAE acquired the  Sub-advisory
Agreement. As a consequence of this transaction, effective June 30, 1995, CRIIMI
MAE Services Limited  Partnership  manages the  Partnership's  portfolio.  These
transactions had no effect on the Partnership's financial statements.

Competition
-----------
         In disposing of mortgage  investments,  the  Partnership  competes with
private investors, mortgage banking companies, mortgage brokers, state and local
government agencies, lending institutions, trust funds, pension funds, and other
entities,  some with similar  objectives to those of the Partnership and some of
which are or may be  affiliates of the  Partnership,  its General  Partner,  the
Advisor  or  their  respective  affiliates.  Some of  these  entities  may  have
substantially  greater capital  resources and experience in disposing of Federal
Housing Administration (FHA) insured mortgages than the Partnership.

         CRIIMI  MAE and its  affiliates  also may  serve as  general  partners,
sponsors  or  managers  of real  estate  limited  partnerships,  REITS  or other
entities  in the  future.  The  Partnership  may  attempt to dispose of mortgage


<PAGE>5

investments  at or about the same time that CRIIMI MAE,  one or more of the "AIM
Funds" (defined as the Partnership, American Insured Mortgage Investors - Series
85, L.P. ("AIM 85"),  American Insured Mortgage Investors L.P. - Series 86 ("AIM
86") and  American  Insured  Mortgage  Investors  L.P. - Series 88 ("AIM  88")),
and/or  other  entities  sponsored  or managed by CRIIMI MAE are  attempting  to
dispose  of  mortgages.  As a result  of  market  conditions  that  could  limit
dispositions,  CRIIMI MAE Services Limited  Partnership and its affiliates could
be faced with  conflicts of interest in  determining  which  mortgages  would be
disposed  of. Both CRIIMI MAE Services  Limited  Partnership  and CRIIMI,  Inc.,
however,  are subject to their  fiduciary  duties in evaluating the  appropriate
action to be taken when faced with such conflicts.

Forward-Looking Statements
--------------------------
         In  accordance  with the Private  Securities  Litigation  Reform Act of
1995, the Partnership can obtain a "Safe Harbor" for forward-looking  statements
by  identifying  those  statements and by  accompanying  those  statements  with
cautionary  statements which identify factors that could cause actual results to
differ from those in the forward-looking statements.  Accordingly, the following
information contains or may contain forward-looking  statements: (1) information
included  or  incorporated  by  reference  in this  Annual  Report on Form 10-K,
including,  without  limitation,  statements  made  under  Item 7,  Management's
Discussion and Analysis of Financial  Condition and Results of  Operations,  (2)
information  included or  incorporated  by  reference  in future  filings by the
Partnership  with the  Securities  and Exchange  Commission  including,  without
limitation,  statements with respect to growth,  projected  revenues,  earnings,
returns and yields on its portfolio of mortgage  assets,  the impact of interest
rates, costs and business strategies and plans and (3) information  contained in
written  material,  releases and oral statements  issued by or on behalf of, the
Partnership,  including, without limitation,  statements with respect to growth,
projected  revenues,  earnings,  returns and yields on its portfolio of mortgage
assets, the impact of interest rates,  costs and business  strategies and plans.
The  Partnership's  actual results may differ materially from those contained in
the forward-looking  statements identified above. Factors which may cause such a
difference  to  occur  include,  but  are  not  limited  to (i)  regulatory  and
litigation  matters,  (ii)  interest  rates,  (iii) trends in the economy,  (iv)
prepayment of mortgages and (v) defaulted mortgages.

ITEM 2.  PROPERTIES

         Although the Partnership  does not own the underlying real estate,  the
mortgages  underlying the  Partnership's  mortgage  investments are non-recourse
first liens on the respective multifamily residential developments.

ITEM 3.  LEGAL PROCEEDINGS

         There are no material legal  proceedings to which the  Partnership is a
party.

<PAGE>6

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matters were submitted to the security holders to be voted on during
the fourth quarter of 1998.

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S SECURITIES AND RELATED SECURITY HOLDER MATTERS

Principal Market and Market Price for Units and Distributions
-------------------------------------------------------------
          The Units are traded on the  American  Stock  Exchange  (AMEX)  with a
trading symbol of "AIA". The high and low trade prices for the Units as reported
on AMEX and the distributions,  as applicable, for each quarterly period in 1998
and 1997 were as follows:

<TABLE>
<CAPTION>
                                                                                               Amount of
                                                               1998                          Distribution
    Quarter Ended                                      High              Low                    Per Unit
   ---------------------                             ---------         ---------             ---------------
   <S>                                               <C>               <C>                   <C>
   March 31                                          $   3 1/2         $   3 1/4                   $    0.07
   June 30                                               3 1/2             3 1/4                        0.07
   September 30                                          3 11/16           3 5/16                       1.06 (1)
   December 31                                           3 15/16           2 5/8                        0.09
                                                                                                   ---------
                                                                                                   $    1.29
                                                                                                   =========

                                                                                               Amount of
                                                               1997                          Distribution
     Quarter Ended                                     High              Low                   Per Unit
   ---------------------                             ---------         ---------             ---------------
   <S>                                               <C>               <C>                   <C>
   March 31                                          $  3 1/2             3 1/4                    $    0.07
   June 30                                              3 9/16            3 1/4                         0.07
   September 30                                         3 9/16            3 3/16                        0.07
   December 31                                          3 7/16            3 1/8                         0.08
                                                                                                   ---------
                                                                                                   $    0.29
                                                                                                   =========
   </TABLE>

   (1)    This amount includes approximately $0.99 per Unit representing net 
          proceeds from the prepayment of the mortgage on Water's Edge 
          Apartments.

         There are no material legal restrictions upon the Partnership's present
or future ability to make distributions in accordance with the provisions of the
Partnership Agreement.


<PAGE>7
ITEM 5.  MARKET FOR REGISTRANT'S SECURITIES AND RELATED SECURITY HOLDER 
           MATTERS - Continued

                                                  Approximate Number
                                                 of Unitholders as of
     Title of Class                                December 31, 1998
---------------------------                      ----------------------

Depositary Units of Limited
 Partnership Interest                                    8,000



<PAGE>8




                                     PART II


ITEM 6.  SELECTED FINANCIAL DATA
        (Dollars in thousands, except per Unit amounts)

<TABLE><CAPTION>
                                                                                 For the years ended December 31,
                                                             1998              1997            1996            1995         1994
                                                         ------------      ------------    ------------    ------------  -----------
<S>                                                      <C>               <C>             <C>             <C>           <C>
Income                                                   $      3,191      $     3,415     $     3,445     $     3,626   $    3,736

Net gains (losses) from
  mortgage modifications/dispositions                           1,290               --            (146)             --          196

Net earnings                                                    3,978            2,879           2,758           3,041        3,280

Composition of distributions
  per Limited Partnership
  Unit(1)(2):
    Net earnings - Basic                                 $       0.39      $      0.28     $      0.27     $      0.30   $     0.32
    Return of capital                                            0.90             0.01            0.03            0.02         0.81
                                                         ------------      -----------     -----------     -----------   ----------
       Total                                             $       1.29      $      0.29     $      0.30     $      0.32   $     1.13
                                                         ============      ===========     ===========     ===========   ==========

                                                                                             As of December 31,
                                                                                        --------------------------
                                                             1998              1997            1996           1995          1994
                                                        -------------      ------------    ------------    ------------  -----------
                                                        <C>                <C>             <C>             <C>           <C>
Total assets                                            $      28,735      $     38,551    $     38,385    $     39,415  $    38,161


Partners' equity                                               27,750            37,661          37,590          38,493       37,241


(1) Calculated  based upon the weighted  average  number of Limited  Partnership
    Units outstanding.
(2) Includes  distributions  due the  Unitholders for the  Partnership's  fiscal
    quarters  ended  December 31, 1998,  1997,  1996,  1995 and 1994 which were 
    paid subsequent  to each  year  end.  See  Notes 4 and 7 of the  Notes  to
    Financial Statements contained in Item 8. "Financial Statements and 
    Supplementary Data."

</TABLE>

         The  selected  statements  of  income  and  comprehensive  income  data
presented  above for the years ended  December 31,  1998,  1997 and 1996 and the
balance  sheet data as of December  31, 1998 and 1997,  are derived from and are
qualified by reference to the Partnership's financial statements which have been
included elsewhere in this Form 10-K. The statements of income and comprehensive
income data for the years ended December 31, 1995 and 1994 and the balance sheet
data as of December 31, 1996,  1995 and 1994 are derived from audited  financial
statements  not  included  in  this  Form  10-K.  This  data  should  be read in
conjunction with the financial statements and the notes thereto.


<PAGE>9


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS

General
-------
         American Insured Mortgage  Investors (the Partnership) was formed under
the Uniform Limited Partnership Act in the state of California on July 12, 1983.
During  the  period  from  March  1,  1984  (the  initial  closing  date  of the
Partnership's  public  offering)  through  December 31, 1984,  the  Partnership,
pursuant  to its  public  offering  of  10,000,000  depositary  units of limited
partnership interest (Units),  raised a total of $200,000,000 in gross proceeds.
In addition,  the initial limited partner  contributed  $2,500 to the capital of
the  Partnership  and  received  125 Units of limited  partnership  interest  in
exchange therefor.

         CRIIMI, Inc. (the General Partner) holds a partnership interest of 
2.9%.  CRIIMI, Inc. is a wholly owned subsidiary of CRIIMI MAE Inc. 
(CRIIMI MAE).  Prior to June 30, 1995, CRIIMI MAE was managed by an advisor 
whose general partner is CRI, Inc. (CRI).  However, effective June 30, 1995, 
CRIIMI MAE became a self-administered real estate investment trust (REIT) and, 
as a result, the advisor no longer advises CRIIMI MAE.

         AIM  Acquisition  Partners L.P. (the Advisor)  serves as the advisor to
the  Partnership.  The  general  partner  of  the  Advisor  is  AIM  Acquisition
Corporation  (AIM  Acquisition) and the limited  partners  include,  but are not
limited to, AIM  Acquisition,  The Goldman Sachs Group,  L.P.,  Broad,  Inc. and
CRIIMI  MAE.  Pursuant  to the terms of certain  amendments  to the  Partnership
agreement, the General Partner is required to receive the consent of the Advisor
prior to taking  certain  significant  actions which affect the  management  and
policies of the Partnership.

         Effective  September 6, 1991 and through June 30, 1995, a  sub-advisory
agreement (the Sub-advisory Agreement) existed whereby CRI/AIM Management, Inc.,
an affiliate of CRI, Inc.  managed the  Partnership's  portfolio.  In connection
with the  transaction  in which CRIIMI MAE became a  self-administered  REIT, an
affiliate of CRIIMI MAE acquired the Sub-advisory Agreement. As a consequence of
this  transaction,   effective  June  30,  1995,  CRIIMI  MAE  Services  Limited
Partnership  (CMSLP),  an  affiliate  of CRIIMI MAE,  manages the  Partnership's
portfolio.  These  transactions  had no  effect on the  Partnership's  financial
statements.

         On October 5, 1998, CRIIMI MAE, the parent of the General Partner,  and
the parent to AIM Investment L.P., and CRIIMI MAE Management, Inc., an affiliate
of CRIIMI MAE and  provider  of  personnel  and  administrative  services to the
Partnership,  filed a voluntary petition for reorganization  under Chapter 11 of
the U.S.  Bankruptcy  Code.  As a  debtor-in-possession,  CRIIMI MAE will not be
permitted  to provide  any  available  capital to the  General  Partner  without
approval from the bankruptcy  court.  This  restriction or potential loss of the
availability of a potential  capital resource could adversely affect the General
Partner  and  the  Partnership;   however,   CRIIMI  MAE  has  not  historically
represented  a  significant  source of capital  for the  General  Partner or the
Partnership.  Such bankruptcy filings could also result in the potential need to
replace   CRIIMI  MAE   Management,   Inc.  as  a  provider  of  personnel   and
administrative services to the Partnership.

<PAGE>10

                                    PART II

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS - Continued

Year 2000
---------
         The Year 2000  issue is a  computer  programming  issue that may affect
many electronic  processing  systems.  Until  relatively  recently,  in order to
minimize the length of data fields, most date-sensitive  programs eliminated the
first two digits of the year.  This issue could  affect  information  technology
("IT")  systems and date sensitive  embedded  technology  that controls  certain
systems (such as  telecommunications  systems,  security systems,  etc.) leaving
them unable to properly  recognize or  distinguish  dates in the  twentieth  and
twenty-first   centuries.   This   treatment   could   result   in   significant
miscalculations when processing critical date-sensitive  information relating to
dates after December 31, 1999.

         The General  Partner is currently in the process of assessing and 
testing Year 2000 compliance of its IT systems,  which include  software systems
to administer and manage mortgage assets and for internal accounting  purposes.
A majority of the IT systems used by the  Partnership is licensed from third 
parties.  These third parties have either provided upgrades to existing systems
or have indicated that their systems are Year 2000 compliant.  The General 
Partner has applied upgrades and has  completed a substantial  amount of  
compliance  testing as of March 30, 1999. There can be no assurance, however, 
that the Partnership's IT systems will be Year 2000 compliant by December 31, 
1999.

         The  Year  2000   issue  may  also   affect   the   General   Partner's
date-sensitive   embedded  technology,   which  controls  systems  such  as  the
telecommunications  systems, security systems, etc. The General Partner does not
believe that the cost to modify or replace such  technology to make it Year 2000
compliant  will be  material.  The  failure of any such  systems to be Year 2000
compliant could be material to the Partnership.

         The  potential  impact of the Year 2000 issue  depends  not only on the
corrective  measures the General Partner has undertaken and will undertake,  but
also on the ways in which the Year 2000 issue is addressed by third parties with
whom the  Partnership  directly  interfaces  or  whose  financial  condition  or
operations  are  important to the  Partnership.  The  Partnership  has initiated
communications  with third parties with which it directly interfaces to evaluate
the risk of their failure to be Year 2000  compliant and the extent to which the
Partnership  may be vulnerable to such failure.  There can be no assurance  that
the systems of these third  parties will be Year 2000  compliant by December 31,
1999. The failure of these third parties to be Year 2000 compliant  could have a
material adverse effect on the operations of the Partnership.

         The  Partnership  believes  that its greatest  risk with respect to the
Year 2000 issue relates to failures by third parties to be Year 2000  compliant.
In  addition  to  risks  posed by  third  parties  with  which  the  Partnership
interfaces  directly,  risks are created by third parties providing  services to
large  segments  of  society.  The  failure  of third  parties  to be Year  2000
compliant could,  among other things,  cause disruptions in the capital and real
estate  markets and borrower  defaults on real estate loans and  mortgage-backed
securities as well as the pools of mortgage loans  underlying  such  securities.
The  Partnership  believes  that its  greatest  exposure  to the Year 2000 issue
involves the loan servicing operations of an affiliate of the Partnership. CMSLP
currently  services  approximately 21% of the total mortgage  investments in the
AIM Funds.  CMSLP has applied a vendor upgrade and has  substantially  completed
compliance testing on the upgrade.

<PAGE>11

                                    PART II

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                           CONDITION AND RESULTS OF OPERATIONS - Continued

         Currently the Partnership estimates the cost of system upgrades related
to Year 2000 issues to be immaterial.

         Although the General Partner has substantially completed its compliance
testing and  remediation,  it is also in the process of  developing  contingency
plans for the risks of the  failure of the  Partnership  or third  parties to be
Year 2000 compliant.  The General Partner intends to complete  contingency plans
for the Year 2000 issue by May 31, 1999.  Due to the inability to predict all of
the potential  problems that may arise from the Year 2000 issue, there can be no
assurance that all contingencies will be adequately addressed by such plans.

Mortgage Investments
--------------------
         Prior to the  expiration of the  Partnership's  reinvestment  period in
November  1988,  the  Partnership  was engaged in the  business  of  originating
mortgage  loans  (Originated  Insured  Mortgages)  and acquiring  mortgage loans
(Acquired  Insured Mortgages and,  together with Originated  Insured  Mortgages,
referred to herein as Insured  Mortgages).  In accordance  with the terms of the
Partnership  Agreement,  the Partnership is no longer authorized to originate or
acquire Insured Mortgages and, consequently,  its primary objective is to manage
its  portfolio of mortgage  investments,  all of which are insured under Section
221(d)(4) or Section 231 of the National Housing Act. The Partnership  Agreement
states  that the  Partnership  will  terminate  on  December  31,  2008,  unless
previously terminated under the provisions of the Partnership Agreement.

         As of December 31,  1998,  the  Partnership  had invested in 13 Insured
Mortgages,  with an aggregate  amortized cost of approximately  $24.0 million, a
face value of  approximately  $28.6  million  and a fair value of  approximately
$28.7 million, as discussed below.

         The  Partnership's   investment  in  Insured   Mortgages   consists  of
FHA-insured  mortgage loans (FHA-Insured  Loans) and participation  certificates
evidencing  a  100%  undivided   beneficial   interest  in  government   insured
multifamily mortgages issued or sold pursuant to Federal Housing  Administration
(FHA)  programs  (FHA-Insured   Certificates).   The  mortgages  underlying  the
FHA-Insured  Certificates and FHA-Insured Loans are non-recourse  first liens on
multifamily residential developments.

<PAGE>12

                                    PART II

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS - Continued

Investment in FHA-Insured Loans
--------------------------------
         Listed below is the Partnership's  aggregate  investment in FHA-Insured
Loans as of December 31, 1998 and 1997:

<TABLE>
<CAPTION>
                                                                           December 31,
                                                                 1998                    1997
                                                            ---------------         ----------------
<S>                                                       <C>                     <C>
Number of
  Acquired Insured Mortgages (1)                                          3                        4
  Originated Insured Mortgages (2)                                        1                        2
Amortized Cost                                                 $ 12,891,015             $ 23,096,728
Face Value                                                       15,170,295               26,077,186
Fair Value                                                       15,238,597               26,840,133

(1)      In March  1998,  HUD issued  assignment  proceeds in the form of a 9.5%
         debenture for the mortgage on Portervillage I Apartments. This mortgage
         was owned  50% by AIM 84 and 50% by an  affiliate  of the  Partnership,
         American  Insured  Mortgage  Investors - Series 85, L.P.  (AIM 85). The
         debenture, with a face value of $2,296,098,  was issued to AIM 85, with
         interest payable semi-annually on January 1 and July 1. The Partnership
         recognized a gain of approximately $200,000 for the year ended December
         31,  1998  related to this  assignment.  The net  proceeds  and accrued
         interest are included in the Balance  Sheet as of December 31, 1998. In
         January  1999,  the  debenture  was   liquidated  at  par  value.   The
         Partnership received  approximately $1.2 million for their share of the
         debenture  proceeds,   including  interest  of  approximately  $55,000.
         Accordingly, a distribution of $0.12 per Unit related to the receipt of
         these proceeds was declared in March 1999 and is expected to be paid to
         Unitholders in May 1999.

(2)      On September  1, 1998,  the  mortgage on Water's  Edge  Apartments  was
         prepaid.  The Partnership  received net proceeds of approximately $10.2
         million,  and recognized a gain of  approximately  $1.1 million for the
         year ended December 31, 1998. A distribution  of $0.99 per Unit related
         to  this  prepayment  was  declared  in  September  1998  and  paid  to
         Unitholders in November 1998.

</TABLE>

         All of the  FHA-Insured  Loans were current with respect to the payment
of principal and interest as of March 26, 1999.

         In addition to base interest payments received from Originated  Insured
Mortgages,  the  Partnership  is  entitled  to  additional  interest  based on a
percentage of the net cash flow from the underlying  development  and of the net
proceeds  from the  refinancing,  sale or other  disposition  of the  underlying
development (referred to as Participations). During the years ended December 31,
1998,  1997 and 1996, the  Partnership  received  $52,526,  $61,988 and $12,158,
respectively,  from the  Participations.  These amounts are included in mortgage
investment  income on the  accompanying  statements of income and  comprehensive
income.


<PAGE>13

                                    PART II

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS - Continued


Investment in FHA-Insured Certificates
--------------------------------------
         Listed below is the Partnership's  aggregate  investment in FHA-Insured
Certificates as of December 31, 1998 and 1997:

<TABLE>
<CAPTION>
                                                                         December 31,
                                                                 1998                    1997
                                                            ---------------         ----------------
<S>                                                       <C>                     <C>
Number of mortgages                                                       9                        9
Amortized Cost                                                 $ 11,099,580             $ 11,216,144
Face Value                                                       13,440,088               13,648,992
Fair Value                                                       13,458,100               14,178,168

</TABLE>

         All of the  FHA-Insured  Certificates  were current with respect to the
payment of principal and interest as of March 26, 1999.

Results of Operations
---------------------

1998 versus 1997
----------------
         Net earnings increased for 1998 as compared to 1997 primarily due to an
increase in gains on mortgage dispositions.  In 1998, gains were realized on the
prepayment of the mortgage on Waters Edge  Apartments  and the assignment of the
mortgage on  Portervillage I Apartments,  as discussed  below. No mortgages were
disposed of or modified during 1997.

         The  increase in net  earnings  was  partially  offset by a decrease in
mortgage  investment  income,  caused by the reduction in the mortgage  base, as
discussed previously.

1997 versus 1996
----------------
         Net earnings  increased  for 1997 as compared to 1996  primarily due to
the loss incurred in 1996 on the mortgage  modification of Creekside Village. No
mortgages were disposed of or modified during 1997.

Liquidity and Capital Resources
-------------------------------
         The  Partnership's  operating  cash  receipts  derived from payments of
principal and interest on Insured Mortgages, plus cash receipts from interest on
short-term  investments,  are the Partnership's principal sources of cash flows,
and were sufficient for the years ended December 31, 1998, 1997 and 1996 to meet
operating  requirements.  The  Partnership  anticipates  its  cash  flows  to be
sufficient to meet operating requirements for 1999.

         The basis for paying  distributions to Unitholders is net proceeds from
mortgage  dispositions,  if any, and cash flow from  operations,  which includes
regular  interest  income and principal from Insured  Mortgages after paying all
expenses of the Partnership.  Although  Insured  Mortgages yield a fixed monthly
mortgage payment once purchased,  the cash distributions paid to the Unitholders
will vary during each period due to (1) the fluctuating yields in the short-term
money  market  where the  monthly  mortgage  payment  receipts  are  temporarily
invested prior to the payment of quarterly  distributions,  (2) the reduction in
the asset base resulting  from monthly  mortgage  payments  received or mortgage
dispositions, (3) variations in the cash flow attributable to the delinquency or
default of Insured  Mortgages  and (4)  changes in the  Partnership's  operating
expenses.

<PAGE>14

                                    PART II

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS - Continued

         Since the  Partnership  is  obligated  to  distribute  the  Proceeds of
Mortgage  Prepayments,  Sales and Insurance of Insured  Mortgages (as defined in
the Partnership  Agreement) to its  Unitholders,  the size of the  Partnership's
portfolio  will continue to decrease.  The magnitude of the decrease will depend
upon the size of the Insured  Mortgages which are prepaid,  sold or assigned for
insurance proceeds.

Cash Flow - 1998 versus 1997
----------------------------
         Net  cash  provided  by  operating  activities  decreased  for  1998 as
compared  to  1997  primarily  due to an  increase  in due  from  affiliate,  as
discussed  previously,  and a reduction  in net earnings  (excluding  gains from
mortgage dispositions) in 1998.

         Net  cash  provided  by  investing  activities  increased  for  1998 as
compared to 1997 due to proceeds  received from the prepayment and assignment of
two mortgages in 1998.

         Net cash used in financing activities increased for 1998 as compared to
1997 primarily due to larger distributions to Unitholders in 1998 related to the
prepayment of one mortgage.

Cash flow - 1997 versus 1996
----------------------------
         Net  cash  provided  by  operating  activities  decreased  for  1997 as
compared to 1996  primarily due to an increase in  receivables  and other assets
due to the delinquent mortgage on Portervillage I Apartments, which was assigned
to HUD in May 1997.

         Net cash provided by investing  activities  decreased slightly for 1997
as compared  to 1996  primarily  due to a  reduction  in the receipt of mortgage
principal from scheduled payments as a result of the normal  amortization of the
mortgage base.

         Net cash used in financing activities decreased for 1997 as compared to
1996  primarily  due to a decrease  in the  quarterly  distributions  in 1997 as
compared to 1996.

<PAGE>15

                                     PART II

ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

         The  Partnership's  principal  market  risk is  exposure  to changes in
interest rates in the US Treasury market,  which coupled with the related spread
to treasury  investors required for the Partnership's  Insured  Mortgages,  will
cause fluctuations in the market value of Partnership's assets.

         The table below provides  information about the  Partnership's  Insured
Mortgages all of which were entered into for purposes  other than  trading.  The
table  presents  anticipated  principal  and interest  cash flows based upon the
assumptions  used in  determining  the fair  value of these  securities  and the
related weighted average interest rates by expected maturity.

<TABLE>
<CAPTION>
                                                                                                             Fair
                                    1999      2000     2001      2002     2003     Thereafter      Total      Value
                                   ------    ------   ------    ------   ------   ------------     -------   -------
<S>                                <C>       <C>      <C>       <C>      <C>      <C>              <C>       <C>
Insured Mortgages
  (in millions)                     $3.9     $3.7     $3.6      $3.6      $3.5       $29.1          $47.4     $28.7

Average Interest Rate               7.48%    7.48%    7.48%     7.48%     7.48%       7.53%            --        --

</TABLE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The information  required by this item is contained on pages 24 through
42.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                           ACCOUNTING AND FINANCIAL DISCLOSURES
         None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

(a), (b), (c) and (e)

         The Partnership has no officers or directors. CRIIMI, Inc. (the General
Partner)  holds a general  Partnership  interest  of 2.9%.  The  affairs  of the
Partnership are generally managed by the General Partner,  which is wholly owned
by CRIIMI  MAE,  a  corporation  whose  shares  are listed on the New York Stock
Exchange.  Prior to June 30,  1995,  CRIIMI MAE was managed by an advisor  whose
general  partner was CRI,  Inc.  However,  effective  June 30, 1995,  CRIIMI MAE
became a self-administered REIT and, as a result, such advisor no longer advises
CRIIMI MAE.

         AIM  Acquisition  Partners L.P., (the Advisor) serves as the advisor to
the  Partnership.  AIM  Acquisition  Corporation  is the general  partner of the
Advisor  and  the  limited  partners  include,  but  are  not  limited  to,  AIM
Acquisition, The Goldman Sachs Group, L.P., Broad, Inc. and CRIIMI MAE. Pursuant
to the terms of certain  amendments to the  Partnership  Agreement,  the General
Partner is  required  to receive  the  consent  of the  Advisor  prior to taking
certain  significant  actions  which affect the  management  and policies of the
Partnership.   Effective  September  6,  1991  and  through  June  30,  1995,  a

<PAGE>16

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - Continued

sub-advisory  agreement (the  Sub-advisory  Agreement)  existed  whereby CRI/AIM
Management,  Inc., an affiliate of CRI, managed the Partnership's  portfolio. In
connection with the  transaction in which CRIIMI MAE became a  self-administered
REIT,  an  affiliate of CRIIMI MAE acquired  the  Sub-advisory  Agreement.  As a
consequence of this transaction, effective June 30, 1995, CMSLP, an affiliate of
CRIIMI MAE, manages the Partnership's portfolio.  These transactions had no 
effect on the Partnership's financial statements.

         The  General  Partner is also the general  partner of American  Insured
Mortgage  Investors  - Series  85,  L.P.  (AIM 85),  American  Insured  Mortgage
Investors L.P. - Series 86 (AIM 86) and American Insured Mortgage Investors L.P.
- Series 88 (AIM 88), limited partnerships with investment objectives similar to
those of the Partnership.


The following table sets forth information concerning the executive officers and
directors of the General Partner as of March 15, 1999:

<TABLE>
<CAPTION>

Name                                        Age                         Position
----                                       -----                       -----------
<S>                                        <C>                         <C>
William B. Dockser                          62                         Chairman of the Board

H. William Willoughby                       52                         President and Secretary

Frederick J. Burchill (a)                   50                         Executive Vice President

Cynthia O. Azzara                           39                         Senior Vice President, Chief Financial Officer and Treasurer

Brian L. Hanson                             37                         Senior Vice President

David B. Iannarone                          38                         Senior Vice President and General Counsel

Garrett G. Carlson, Sr.                     61                         Director

G. Richard Dunnells                         61                         Director

Robert Merrick                              54                         Director

Robert E. Woods                             51                         Director

</TABLE>

         William B. Dockser has served as Chairman of the Board of the General 
Partner since 1991.  Mr. Dockser has been Chairman of the Board of CRIIMI MAE 
since 1989 and Chairman of the Board of CRIIMI MAE Financial Corporation since
1995.  Mr. Dockser is also the founder of CRI, serving as its Chairman of the 
Board since 1974.

         H.  William  Willoughby  has served as President  and  Secretary of the
General  Partner since 1991.  Mr.  Willoughby  has been  President of CRIIMI MAE
since 1990 and a Director and  Secretary  of CRIIMI MAE since 1989.  He has also
served as a  director  of CRIIMI  MAE  Financial  Corporation  since  1995.  Mr.
Willoughby has been a director of CRI since 1974,  Secretary of CRI from 1974 to
1990 and President of CRI since 1990.

<PAGE>17

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - Continued

         (a) Mr.  Burchill was Executive Vice  President of the General  Partner
until his  resignation  from CRIIMI MAE and the  General  Partner on February 8,
1999.

         Cynthia O. Azzara has served as Chief Financial  Officer of the General
Partner since 1994. Ms. Azzara has served as Chief  Financial  Officer of CRIIMI
MAE since 1994. She has also served as Senior Vice President of CRIIMI MAE since
1995 and Treasurer of CRIIMI MAE since 1997,  Accounting and Finance Departments
of CRI from 1985 to June 1995.

         Brian L.  Hanson has served as Senior  Vice  President  of the  General
Partner  since March 1998.  Mr.  Hanson has served as Senior Vice  President  of
CRIIMI MAE since March 1998;  Group Vice President of CRIIMI MAE from March 1996
to March  1998;  Chief  Operating  Officer,  Director  of Asset  Operations  and
Portfolio Director of JCF Partners, Lanham, Maryland from 1991 to March 1996.

         David B.  Iannarone has served as Senior Vice  President of the General
Partner since March 1998.  Mr.  Iannarone has served as Senior Vice President of
CRIIMI  MAE since  March  1998;  General  Counsel of CRIIMI MAE since July 1996;
Counsel-Securities     and    Finance    for    Federal    Deposit     Insurance
Corporation/Resolution Trust Corporation from 1991 to July 1996.

         Garrett G. Carlson, Sr. has served as Director of the General Partner 
since 1989.  Mr. Carlson has served as Director of CRIIMI MAE since 1989; 
President of Can-American Realty Corp. and Canadian Financial Corp. since 1979 
and 1974, respectively; President of Garrett Real Estate Development since 1982;
President of the Satellite Broadcasting Corporation since 1996; Chairman of
the Board of SCA Realty Holdings Inc. from 1985 to 1995; Vice Chairman of 
Shelter Development Corporation Ltd. from 1983 to 1995 and member of the board 
of Bank Windsor from 1992 to 1994.

         G. Richard Dunnells has served as Director of the General Partner since
1991.  Mr.  Dunnells has served as Director of CRIIMI MAE since 1991;  Firm-wide
Hiring Partner,  Partner in the  Washington,  D.C. office and former Director of
the law firm of Holland & Knight since January 1994; Chairman of the Washington,
D.C. law firm of Dunnells & Duvall from 1989 to 1993; Senior Partner of such law
firm from 1973 to 1993;  Special  Assistant  to the  Under-Secretary  and Deputy
Assistant Secretary for Housing and Urban Renewal and Deputy Assistant Secretary
for Housing Management with the U.S. Department of Housing and Urban Development
from 1969 to 1973; President's Commission on Housing from 1981 to 1982.

<PAGE>18

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT - Continued

         Robert J. Merrick has served as Director of the General  Partner  since
1997. Mr.  Merrick has served as Director of CRIIMI MAE since 1997;  Director of
MCG Credit  Corporation since February 1998;  Executive Vice President from 1985
and Chief Credit Officer of Signet Banking Corporation through 1997, also served
as Chairman of the Credit Policy Committee and member of the Asset and Liability
Committee and Management Committee; Credit Officer-Virginia Banking Corporation,
an affiliate of Signet  Bank/Virginia,  from 1980 to 1984; Senior Vice President
of Bank of Virginia from 1976 to 1980.

         Robert E. Woods has served as  Director of the  General  Partner  since
1998.  Mr.  Woods has  served as  Director  of CRIIMI MAE since  1998;  Managing
Director and head of loan syndications for the Americas at Societe Generale, New
York since 1997;  Managing  Director,  head of Real Estate  Capital  Markets and
Mortgage-backed  Securities  division,  Citicorp  from  1991  to  1997,  Head of
Citicorp's  syndications,  private  placements,  money markets and  asset-backed
businesses from 1985 to 1990.

         (d)      There is no family relationship between any of the officers
                  and directors of the General Partner.

         (f)      Involvement in certain legal proceedings.

                  None.

         (g)      Promoters and control persons.

                  Not applicable.

         (h)      Section  16  (a)  Beneficial  Ownership  Reporting Compliance-
                  Based  solely on its  review of Forms 3 and 4 and  amendments
                  thereto   furnished   to   the   Partnership,    and   written
                  representations  from certain  reporting  persons that no Form
                  5's were required for those persons,  the Partnership believes
                  that all reporting  persons have filed on a timely basis Forms
                  3, 4, and 5 as required in the fiscal year ended  December 31,
                  1998.

ITEM 11. EXECUTIVE COMPENSATION

         The  Partnership  does not have any directors or officers.  None of the
directors  or officers  of the General  Partner  receive  compensation  from the
Partnership,  and the General  Partner does not receive  reimbursement  from the
Partnership for any portion of their  salaries.  Other  information  required by
Item 11 is hereby incorporated by reference herein to Note 4 of the notes to the
financial statements of the Partnership.

<PAGE>19

                                    PART III

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGEMENT

(a)      As of December 31, 1998, no person was known by the Partnership to be
         the beneficial owner of more than five percent (5%) of the outstanding
         Units of the Partnership.

(b)      As of December 31,  1998,  neither the  officers  and  directors,  as a
         group,  of the  General  Partner  nor any  individual  director  of the
         General Partner, are known to own more than 1% of the outstanding Units
         of the Partnership.

(c)      There are no arrangements  known to the  Partnership,  the operation of
         which may at any  subsequent  date result in a change in control of the
         Partnership.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         (a)      Transactions with management and others.

                  Note 4 of the notes to the Partnership's  financial statements
                  of this report contains a discussion of the amounts,  fees and
                  other  compensation  paid or accrued by the Partnership to the
                  directors  and executive  officers of the General  Partner and
                  their  affiliates,  and is hereby  incorporated  by  reference
                  herein.

         (b)      Certain business relationships.

                  Other  than as set  forth in Item 11 of this  report  which is
                  hereby  incorporated by reference herein,  the Partnership has
                  no business  relationship  with  entities of which the General
                  Partner of the Partnership  are officers,  directors or equity
                  owners.

         (c)      Indebtedness of management.

                  None.

         (d)      Transactions with promoters.

                  Not applicable.


<PAGE>20

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
           FORM 8-K

         (a)(1)   Financial Statements:

                                                                 Page
Description                                                     Number
-----------                                                 --------------

Balance Sheets as of December 31, 1998
  and 1997                                                         26

Statements of Income and Comprehensive Income
  for the years ended December 31, 1998, 1997 and 1996             27

Statements of Changes in Partners' Equity
  for the years ended December 31, 1998,
  1997 and 1996                                                    28

Statements of Cash Flows for the years
  ended December 31, 1998, 1997 and 1996                           29

Notes to Financial Statements                                      30

         (a)(2)   Financial Statement Schedules:

                           IV - Mortgage Loans on Real Estate      40

                           All other  schedules  have been omitted  because they
                           are inapplicable, not required, or the information is
                           included  in  the   Financial   Statements  or  Notes
                           thereto.

         (a)(3)   Exhibits:

         4.0               Amended and Restated Certificates of Limited 
                           Partnership are incorporated by reference to Exhibit
                           4(a) to the Registration Statement on Form S-11 
                           (No. 33-6747) dated June 25, 1986 (such Registration
                           Statement, as amended, is referred to herein as the 
                           "Registration Statement").

         4.1               Agreement of Limited Partnership, incorporated by 
                           reference to Exhibit 3 to the Registration Statement.

         4.2               Form of Depository Receipt, incorporated by reference
                           to Exhibit 4(b) to the Registration Statement.

         4.3               Amendment to the Amended and Restated Agreement of 
                           Limited Partnership of the Partnership dated February
                           12, 1990, incorporated by reference to Exhibit 4(c) 
                           to the Partnership's Annual Report on Form 10-K for 
                           the year ended December 31, 1989.

         4.4               Amendments to Partnership Agreement dated August 16,
                           1991, incorporated by reference to Exhibit 28(c) to
                           the Partnership's Annual Report on Form 10-K for the
                           year ended December 31, 1991.

<PAGE>21

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
           FORM 8-K - Continued

         10.0              Origination and Acquisition Services Agreement, dated
                           September 1, 1983, between the Partnership and IFI,
                           incorporated by reference to Exhibit 10(b) to the 
                           registration statement on Form S-11 (No. 2-85476) 
                           dated November 30, 1983 (such registration statement,
                           as amended, is referred to herein as the "Initial
                           Registration Statement").

         10.1              Management Services Agreement, dated November 30, 
                           1983, between the Partnership and IFI, incorporated 
                           by reference to Exhibit 10(c) to the Initial
                           Registration Statement.

         10.2              Disposition Services Agreement, dated November 30, 
                           1983, between the Partnership and IFI, incorporated
                           by Reference to Exhibit 10(d) to the Initial 
                           Registration Statement.

         10.3              Agreement,  dated November 30, 1983, among the former
                           managing  general   partner,   the  former  associate
                           general  partner  and  Integrated,   incorporated  by
                           reference   to   Exhibit   10(e)   to   the   Initial
                           Registration Statement.

         10.4              Reinvestment Plan, incorporated by reference to the 
                           Prospectus contained in the Registration Statement.

         10.5              Mortgage  Note dated  March 26, 1986  between  Mastic
                           Associates  and IFI,  incorporated  by  reference  to
                           Exhibit 10(l) to the  Partnership's  Annual Report on
                           Form 10-K for the year ended December 31, 1986.

         10.6              Mortgage dated March 26, 1986 between Mastic 
                           Associates and IFI, incorporated by reference to 
                           Exhibit 10(m) to the Partnership's Annual Report on 
                           Form 10-K for the year ended December 31, 1986.

         10.7              Mortgagor/Mortgagee Agreement dated March 26, 1986 
                           between Mastic Associates and IFI, incorporated by
                           reference to Exhibit 10(n) to the Partnership's 
                           Annual Report on Form 10-K for the year ended 
                           December 31, 1986.

         10.8              Lease Agreement dated as of December 10, 1984 between
                           NHP Land Associates, as Landlord and Mastic
                           Associates, as Tenant, incorporated by reference to 
                           Exhibit 10(o) to the Partnership's Annual Report on
                           Form 10-K for the year ended December 31, 1986.

         10.9              Purchase Agreement among AIM Acquisition, the former
                           managing general partner, the former corporate 
                           general partner, IFI and Integrated dated as of 
                           December 1, 1990, as amended January 9, 1991, 
                           incorporated by reference to Exhibit 28(a) to the 
                           Partnership's Annual Report on Form 10-K for the year
                           ended December 31, 1990.

<PAGE>22

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
           FORM 8-K - Continued

         10.10             Purchase   Agreement   among   CRIIMI,    Inc.,   AIM
                           Acquisition, the former managing general partner, the
                           former corporate general partner,  IFI and Integrated
                           dated as of  December  13,  1990 and  executed  as of
                           September  6,  1991,  incorporated  by  reference  to
                           Exhibit 28(b) to the  Partnership's  Annual Report on
                           Form 10-K for the year ended December 31, 1990.

         10.11             Sub-Management   Agreement   by   and   between   AIM
                           Acquisition and CRI/AIM Management,  Inc. dated as of
                           March 1, 1991,  incorporated  by reference to Exhibit
                           28(d) to the Partnership's Annual Report on Form 10-K
                           for the year ended December 31, 1992.

         27.      Financial Data Schedule (filed herewith).

         (b)      Reports on Form 8-K filed during the last quarter of the 
                  fiscal year:  None


                  All other items are not applicable.


<PAGE>23

                                   SIGNATURES

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

                             AMERICAN INSURED MORTGAGE
                             INVESTORS (Registrant)

                             By:  CRIIMI, Inc.
                                  General Partner


/s/ March 30, 1999                 /s/ William B. Dockser
---------------------------        -----------------------------
DATE                               William B. Dockser
                                   Chairman of the Board
                                     and Principal Executive Officer



/s/ March 30, 1999                 /s/ H. William Willoughby
---------------------------        ----------------------------
DATE                               H. William Willoughby
                                   President and Director



/s/ March 30, 1999                 /s/ Cynthia O. Azzara
---------------------------        ----------------------------
DATE                               Cynthia O. Azzara
                                   Principal Financial and
                                     Accounting Officer


/s/ March 30, 1999                 /s/ Garrett G. Carlson, Sr.
---------------------------        ----------------------------
DATE                               Garrett G. Carlson, Sr.
                                   Director


/s/ March 30, 1999                 /s/ G. Richard Dunnells
---------------------------        ----------------------------
DATE                               G. Richard Dunnells
                                   Director

/s/ March 30, 1999                 /s/ Robert J. Merrick
---------------------------        ----------------------------
DATE                               Robert J. Merrick
                                   Director


/s/ March 30, 1999                 /s/ Robert E. Woods
---------------------------        ----------------------------
DATE                               Robert E. Woods
                                   Director


<PAGE>24





























                       AMERICAN INSURED MORTGAGE INVESTORS

              Financial Statements as of December 31, 1998 and 1997

            and for the Years Ended December 31, 1998, 1997 and 1996




<PAGE>25


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
  American Insured Mortgage Investors:

         We have audited the  accompanying  balance  sheets of American  Insured
Mortgage  Investors (the  Partnership) as of December 31, 1998 and 1997, and the
related  statements  of income and  comprehensive  income,  changes in partners'
equity and cash flows for the years  ended  December  31,  1998,  1997 and 1996.
These  financial   statements  and  the  schedule  referred  to  below  are  the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements and schedule based on our audits.

         We conducted our audits in accordance with generally  accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material  respects,  the financial position of the Partnership as
of December 31, 1998 and 1997,  and the results of its  operations  and its cash
flows for the years ended December 31, 1998,  1997 and 1996, in conformity  with
generally accepted accounting principles.

         Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. Schedule IV-Mortgage Loans on Real Estate
as of December 31, 1998 and for the year then ended is presented for purposes of
complying with the Securities and Exchange  Commission's  rules and  regulations
and is not a required part of the basic financial statements. The information in
this  schedule  has been  subjected to the  auditing  procedures  applied in our
audits of the basic financial  statements and, in our opinion,  is fairly stated
in all material respects in relation to the basic financial  statements taken as
a whole.



Arthur Andersen LLP
Washington, DC
March 30, 1999


<PAGE>26


                                         AMERICAN INSURED MORTGAGE INVESTORS

                                                   BALANCE SHEETS


<TABLE><CAPTION>


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

Investment in FHA-Insured Loans,
  at amortized cost, net of unamortized
  discount:
    Originated insured mortgages                              $  4,994,145               $ 14,184,505
    Acquired insured mortgages                                   7,896,870                  8,912,223
                                                              ------------               ------------
                                                                12,891,015                 23,096,728

Investment in FHA-Insured Certificates,
  at fair value                                                 13,458,100                 14,178,168

Cash and cash equivalents                                          958,375                    878,867

Due from Affiliate                                               1,148,049                         --

Receivables and other assets                                       279,302                    397,201
                                                              ------------               ------------
     Total assets                                             $ 28,734,841               $ 38,550,964
                                                              ============               ============
LIABILITIES AND PARTNERS' EQUITY

Distributions payable                                         $    926,891               $    823,903

Accounts payable and accrued expenses                               58,060                     66,482
                                                              ------------               ------------
     Total liabilities                                             984,951                    890,385
                                                              ------------               ------------
Partners' equity:
  Limited partners' equity, 10,000,125
     Units authorized, issued and outstanding                   30,596,406                 39,633,683
  General partner's deficit                                     (5,205,036)                (4,935,128)
  Accumulated other
    comprehensive income                                         2,358,520                  2,962,024
                                                              ------------               ------------
     Total partners' equity                                     27,749,890                 37,660,579
                                                              ------------               ------------
     Total liabilities and partners'
       equity                                                 $ 28,734,841               $ 38,550,964
                                                              ============               ============


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

</TABLE>


<PAGE>27


                       AMERICAN INSURED MORTGAGE INVESTORS

                  STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

<TABLE><CAPTION>
                                                                          For the years ended December 31,
                                                                  1998              1997                1996
                                                               ------------      ------------       -------------
<S>                                                            <C>               <C>                <C>
Income:
  Mortgage investment income                                   $  2,987,164      $  3,376,465       $  3,413,739
  Interest and other income                                         204,152            38,282             31,263
                                                               ------------      ------------       ------------
                                                                  3,191,316         3,414,747          3,445,002
                                                               ------------      ------------       ------------
Expenses:
  Asset management fee to related parties                           319,794           343,092            343,092
  General and administrative                                        183,621           192,218            197,413
                                                               ------------      ------------       ------------
                                                                    503,415           535,310            540,505
                                                               ------------      ------------       ------------
Earnings before mortgage dispositions/modifications               2,687,901         2,879,437          2,904,497

Gains (losses) on mortgage dispositions/modifications             1,290,352                --           (146,464)
                                                               ------------      ------------       ------------
     Net earnings                                              $  3,978,253      $  2,879,437       $  2,758,033
                                                               ============      ============       ============

Other comprehensive income                                         (603,504)          177,991           (571,841)
                                                               ------------      ------------       ------------
Comprehensive income                                           $  3,374,749      $  3,057,428       $  2,186,192
                                                               ------------      ------------       ------------

Net earnings allocated to:
  Limited partners - 97.1%                                     $  3,862,884      $  2,795,933       $  2,678,050
  General partner -  2.9%                                           115,369            83,504             79,983
                                                               ------------      ------------       ------------
                                                               $  3,978,253      $  2,879,437       $  2,758,033
                                                               ============      ============       ============
Net earnings per limited
  partnership Unit - Basic                                     $       0.39      $       0.28       $       0.27
                                                               ============      ============       ============

                                              The accompanying notes are an
                                                   integral part of these
                                                   financial statements.
</TABLE>


<PAGE>28


                       AMERICAN INSURED MORTGAGE INVESTORS

                    STATEMENTS OF CHANGES IN PARTNERS' EQUITY

              For the years ended December 31, 1998, 1997 and 1996

<TABLE><CAPTION>
                                                                             Accumulated
                                                                                Other                  Total
                                       General          Limited              Comprehensive            Partners'
                                       Partner          Partners                Income                 Equity
                                    -------------      -----------           -------------           -----------
<S>                                 <C>                <C>                   <C>                     <C>
Balance, January 1, 1996               (4,922,401)      40,059,771               3,355,874            38,493,244

     Net earnings                          79,983        2,678,050                      --             2,758,033

      Adjustment to unrealized gains
       (losses) on investment in 
       insured mortgages                       --               --                (571,841)             (571,841)

  Distributions paid or accrued of  
    $0.30 per Unit, including return  
    of capital of $0.03 per Unit          (89,600)      (3,000,036)                     --            (3,089,636)
                                    -------------      -----------           -------------           -----------
Balance, December 31, 1996             (4,932,018)      39,737,785               2,784,033            37,589,800

    Net earnings                           83,504        2,795,933                      --             2,879,437

       Adjustment to unrealized gains 
        (losses) on investments in 
        insured mortgages                      --               --                 177,991               177,991

Distributions paid or accrued of 
  $0.29 per Unit, including return 
  of capital of $0.01 per Unit            (86,614)      (2,900,035)                     --            (2,986,649)
                                    -------------      -----------           -------------           -----------
Balance, December 31, 1997             (4,935,128)      39,633,683               2,962,024            37,660,579

Net earnings                              115,369        3,862,884                      --             3,978,253

    Adjustment to unrealized gains 
     (losses) on investments in 
     insured mortgages                         --               --                (603,504)             (603,504)

Distributions paid or accrued of 
  $1.29 per Unit, including return 
  of capital of $0.90 per Unit           (385,277)     (12,900,161)                     --           (13,285,438)
                                    -------------     ------------           -------------           -----------
Balance, December 31, 1998             (5,205,036)      30,596,406               2,358,520            27,749,890
                                    =============       ============           =============         ===========

Limited Partnership Units outstanding -
  basic, as of December 31, 1998, 1997,
  and 1996                                              10,000,125
                                                        ==========


                                               The accompanying notes are an
                                                   integral part of these
                                                   financial statements.
</TABLE>


<PAGE>29


                       AMERICAN INSURED MORTGAGE INVESTORS

                            STATEMENTS OF CASH FLOWS

<TABLE><CAPTION>
                                                                                       For the years ended December 31,
                                                                                  1998             1997                1996
                                                                              ------------     ------------        ------------
<S>                                                                           <C>              <C>                 <C>
Cash flows from operating activities:
  Net earnings                                                                $  3,978,253     $  2,879,437        $  2,758,033
  Adjustments to reconcile net earnings to net cash
    provided by operating activities:
    (Gains) losses on mortgage dispositions/modifications                       (1,290,352)              --             146,464
    Changes in assets and liabilities:
      Decrease (increase) in receivables and other assets                          117,899          (36,561)             16,683
      (Decrease) in accounts payable and
        accrued expenses                                                            (8,422)          (7,991)            (23,819)
                                                                              ------------     -------------       ------------
        Net cash provided by operating activities                                2,797,378         2,834,885          2,897,361
                                                                              ------------     -------------       ------------
Cash flows from investing activities:
  Proceeds from disposition of mortgages                                        10,195,241                --                 --
  Receipt of mortgage principal from scheduled payments                            269,339           271,593            277,580
                                                                              ------------     -------------       ------------
        Net cash provided by investing activities                               10,464,580           271,593            277,580
                                                                              ------------     -------------       ------------
Cash flows from financing activities:
  Distributions paid to partners                                               (13,182,450)       (2,883,662)        (3,192,623)
                                                                              ------------     -------------       ------------
Net increase (decrease) in cash and cash equivalents                                79,508           222,816            (17,682)

Cash and cash equivalents, beginning of year                                       878,867           656,051            673,733
                                                                              ------------      ------------       ------------
Cash and cash equivalents, end of year                                        $    958,375      $    878,867       $    656,051
                                                                              ============      ============       ============

Non-cash investing activity:
  50% share of  debenture  received  from HUD in  exchange  for the
  mortgage on Portervillage I Apartments (debenture is held by an
  affiliate, AIM 85)                                                          $  1,148,049                --                 --

</TABLE>








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


<PAGE>30


                       AMERICAN INSURED MORTGAGE INVESTORS

                          NOTES TO FINANCIAL STATEMENTS

1.       ORGANIZATION

         American Insured Mortgage  Investors (the Partnership) was formed under
the Uniform Limited Partnership Act in the state of California on July 12, 1983.

         CRIIMI, Inc. (the General Partner) holds a partnership interest of 
2.9%.  CRIIMI, Inc. is a wholly owned subsidiary of CRIIMI MAE Inc. 
(CRIIMI MAE).  Prior to June 30, 1995, CRIIMI MAE was managed by an advisor 
whose general partner is CRI, Inc. (CRI).  However, effective June 30, 1995, 
CRIIMI MAE became a self-administered real estate investment trust (REIT) and, 
as a result, the advisor no longer advises CRIIMI MAE.

         AIM  Acquisition  Partners L.P. (the Advisor)  serves as the advisor to
the  Partnership.  The  general  partner  of  the  Advisor  is  AIM  Acquisition
Corporation  (AIM  Acquisition) and the limited  partners  include,  but are not
limited to, AIM  Acquisition,  The Goldman Sachs Group,  L.P.,  Broad,  Inc. and
CRIIMI  MAE.  Pursuant  to the terms of certain  amendments  to the  Partnership
Agreement, the General Partner is required to receive the consent of the Advisor
prior to taking  certain  significant  actions which affect the  management  and
policies of the Partnership.

         Effective  September 6, 1991 and through June 30, 1995, a  sub-advisory
agreement (the Sub-advisory Agreement) existed whereby CRI/AIM Management, Inc.,
an affiliate of CRI, Inc.,  managed the Partnership's  portfolio.  In connection
with the  transaction  in which CRIIMI MAE became a  self-administered  REIT, an
affiliate of CRIIMI MAE acquired the Sub-advisory Agreement. As a consequence of
this  transaction,  effective June 30, 1995,  CMSLP, an affiliate of CRIIMI MAE,
manages the  Partnership's  portfolio.  These  transactions had no effect on the
Partnership's financial statements.

         Prior to the  expiration of the  Partnership's  reinvestment  period in
November  1988,  the  Partnership  was engaged in the  business  of  originating
mortgage  loans  (Originated  Insured  Mortgages)  and acquiring  mortgage loans
(Acquired  Insured Mortgages and,  together with Originated  Insured  Mortgages,
referred to herein as Insured  Mortgages).  In accordance  with the terms of the
Partnership  Agreement,  the Partnership is no longer authorized to originate or
acquire Insured Mortgages and, consequently,  its primary objective is to manage
its  portfolio of mortgage  investments,  all of which are insured under Section
221(d)(4) or Section 231 of the National Housing Act. The Partnership  Agreement
states  that the  Partnership  will  terminate  on  December  31,  2008,  unless
previously terminated under the provisions of the Partnership Agreement.

         On October 5, 1998, CRIIMI MAE, the parent of the General Partner,  and
the parent to AIM Investment L.P., and CRIIMI MAE Management, Inc., an affiliate
of CRIIMI MAE and  provider  of  personnel  and  administrative  services to the
Partnership,  filed a voluntary petition for reorganization  under Chapter 11 of
the U.S.  Bankruptcy  Code.  As a  debtor-in-possession,  CRIIMI MAE will not be
permitted  to provide  any  available  capital to the  General  Partner  without

<PAGE>31

                       AMERICAN INSURED MORTGAGE INVESTORS

                          NOTES TO FINANCIAL STATEMENTS

1.         ORGANIZATION - Continued

approval from the bankruptcy  court.  This  restriction or potential loss of the
availability of a potential  capital resource could adversely affect the General
Partner  and  the  Partnership;   however,   CRIIMI  MAE  has  not  historically
represented  a  significant  source of capital  for the  General  Partner or the
Partnership.  Such bankruptcy filings could also result in the potential need to
replace   CRIIMI  MAE   Management,   Inc.  as  a  provider  of  personnel   and
administrative services to the Partnership.

2.       SIGNIFICANT ACCOUNTING POLICIES

         Method of Accounting
         --------------------
                  The  Partnership's  financial  statements  are prepared on the
         accrual  basis of  accounting in  accordance  with  generally  accepted
         accounting  principles.  The  preparation  of financial  statements  in
         conformity  with  generally  accepted  accounting  principles  requires
         management to make estimates and  assumptions  that affect the reported
         amounts  of  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.

         Reclassifications
         -----------------
                  Certain  amounts  in the  financial  statements  for the years
         ended December 31, 1997 and 1996 have been  reclassified  to conform to
         the 1998 presentation.

         Investment in Insured Mortgages
         -------------------------------
                  The Partnership's investment in Insured Mortgages is comprised
         of FHA-insured  mortgage loans  (FHA-Insured  Loans) and  participation
         certificates   evidencing  a  100%  undivided  beneficial  interest  in
         government  insured  multifamily  mortgages  issued or sold pursuant to
         programs  of the  Federal  Housing  Administration  (FHA)  (FHA-Insured
         Certificates).  The mortgages  underlying the FHA-Insured  Certificates
         and  FHA-Insured  Loans are  non-recourse  first  liens on  multifamily
         residential developments.

                  Payment of principal and interest on FHA-Insured  Certificates
         and  FHA-Insured  Loans is insured by the United  States  Department of
         Housing and Urban Development (HUD) pursuant to Title 2 of the National
         Housing Act.

                  As of December 31, 1998, the weighted  average  remaining term
         of  the  Partnership's   investments  in  FHA-Insured  Certificates  is
         approximately 23 years.  However, the Partnership Agreement states that
         the Partnership  will terminate in  approximately 10 years, on December
         31, 2008,  unless  previously  terminated  under the  provisions of the
         Partnership  Agreement.  As the Partnership is anticipated to terminate

<PAGE>32

                      AMERICAN INSURED MORTGAGE INVESTORS

                         NOTES TO FINANCIAL STATEMENTS

2.       SIGNIFICANT ACCOUNTING POLICIES - Continued

         prior  to the  weighted  average  remaining  term  of  its  FHA-Insured
         Certificates,  the Partnership does not have the ability, at this time,
         to hold  these  investments  to  maturity.  Consequently,  the  General
         Partner believes that the Partnership's FHA-Insured Certificates should
         be  included  in  the  Available  for  Sale   category.   Although  the
         Partnership's  FHA-Insured Certificates are classified as Available for
         Sale for financial  statement  purposes,  the General  Partner does not
         intend to  voluntarily  sell these assets other than those which may be
         sold as a result of a default or those which are  eligible to be put to
         FHA  at  the  expiration  of 20  years  from  the  date  of  the  final
         endorsement.

                  In  connection  with this  classification,  as of December 31,
         1998 and 1997,  all  of  the   Partnership's   investments  in
         FHA-Insured  Certificates  are  recorded  at fair  value,  with the net
         unrealized gains on these investments  reported as comprehensive income
         and as a separate component of partners' equity.  Subsequent  increases
         or decreases in the fair value of FHA-Insured  Certificates  classified
         as  Available  for Sale will be  included  as a separate  component  of
         partners' equity. Realized gains and losses on FHA-Insured Certificates
         classified  as  Available  for Sale will  continue  to be  reported  in
         earnings.  The amortized  cost of the  investments  in this category is
         adjusted for amortization of discounts to maturity.  Such amortization
         is included in mortgage investment income.

                  As of December 31, 1998 and 1997,  Investment  in  FHA-Insured
         Loans are recorded at amortized cost.

                  Gains from dispositions of mortgage investments are recognized
         upon the receipt of cash or debentures.

                  Losses on dispositions of mortgage  investments are recognized
         when it becomes  probable  that a mortgage will be disposed of and that
         the  disposition  will  result  in a loss.  In the  case of  Originated
         Insured  Mortgages  fully  insured by HUD,  the  Partnership's  maximum
         exposure for purposes of determining the loan losses would generally be
         an assignment fee charged by HUD  representing  approximately 1% of the
         unpaid principal balance of the Originated Insured Mortgage at the date
         of  default,  plus the  unamortized  balance  of  acquisition  fees and
         closing costs paid in connection with the acquisition of the Originated
         Insured Mortgage and the loss of 30 days accrued interest.

                  Since Acquired Insured  Mortgages were purchased at a discount
         from the unpaid principal  balance of the mortgage,  the  Partnership's
         investment  in the Acquired  Insured  Mortgages is less than the amount
         that would be recovered from HUD in the event of a default.  Therefore,
         the Partnership would experience no loan losses on discounted  Acquired
         Insured Mortgages in the case of a default.

<PAGE>33

                      AMERICAN INSURED MORTGAGE INVESTORS

                         NOTES TO FINANCIAL STATEMENTS

2.       SIGNIFICANT ACCOUNTING POLICIES - Continued

         Cash and Cash Equivalents
         -------------------------
                  Cash and cash equivalents  consist of time and demand deposits
         with original maturities of three months or less.

         Income Taxes
         ------------
                  No provision has been made for Federal,  state or local income
         taxes  in the  accompanying  financial  statements  since  they are the
         personal responsibility of the Unitholders.

         New Accounting Standards
         ------------------------
                  During 1997, FASB issued SFAS No. 130 "Reporting Comprehensive
         Income"  (FAS 130).  FAS 130 states that all items that are required to
         be recognized under accounting standards as components of comprehensive
         income are to be  reported  in a  separate  statement  of income.  This
         includes net income as currently  reported by the Partnership  adjusted
         for unrealized gains and losses related to the Partnership's  mortgages
         accounted  for as  "available  for  sale."  FAS 130 was  adopted by the
         Partnership  on  January  1,  1998.  Unrealized  gains and  losses  are
         reported in the equity section of the "Balance  Sheet" as  "accumulated
         other comprehensive  income." The table below breaks out the adjustment
         to  unrealized  gains and losses  that relate to  mortgages  which were
         disposed of during the period with the resulting gain or loss reflected
         in   the    "Statements   of   Income   and    Comprehensive    Income"
         (reclassification  adjustments)  and the portion of the adjustment that
         relates  to those  investments  that were not  disposed  of during  the
         period.

<TABLE>
<CAPTION>

                                                                      1998             1997               1996
                                                                ---------------   -------------      -------------
<S>                                                             <C>               <C>                <C>
Reclassification adjustment for (gains) losses
  included in net income                                        $            --              --      $          --
Unrealized holding gains (losses) arising during
  the period                                                          (603,504)        177,991             (571,841)
                                                                --------------    ------------       --------------
Net adjustment to unrealized gains (losses) on mortgages        $     (603,504)   $    177,991       $     (571,841)
                                                                --------------    ------------       --------------
</TABLE>


3.       FAIR VALUE OF FINANCIAL INSTRUMENTS

         The  following  estimated  fair values of the  Partnership's  financial
instruments  are  presented in accordance  with  generally  accepted  accounting
principles which define fair value as the amount at which a financial instrument
could be exchanged in a current transaction between willing parties,  other than
in a forced or liquidation  sale. These estimated fair values,  however,  do not
represent the liquidation value or the market value of the Partnership.

<PAGE>34

                      AMERICAN INSURED MORTGAGE INVESTORS

                         NOTES TO FINANCIAL STATEMENTS

3.       FAIR VALUE OF FINANCIAL INSTRUMENTS - Continued

<TABLE><CAPTION>
                                          As of December 31, 1998            As of December 31, 1997
                                         Amortized       Fair             Amortized          Fair
                                         Cost            Value              Cost             Value
                                     ------------    ------------       ------------      ------------
<S>                                  <C>             <C>                <C>               <C>
Investment in FHA-Insured
  Certificates                       $ 11,099,580    $ 13,458,100       $ 11,216,144      $ 14,178,168
                                     ============    ============       ============      ============
Investment in FHA-Insured
  Loans:
  Originated Insured Mortgages       $  4,994,145    $  5,048,745       $ 14,184,505      $ 14,969,834
  Acquired Insured Mortgage             7,896,870      10,189,852          8,912,223        11,870,299
                                     ------------    ------------       ------------      ------------
                                     $ 12,891,015    $ 15,238,597       $ 23,096,728      $ 26,840,133
                                     ============    ============       ============      ============

Cash and cash equivalents            $    958,375    $    958,375       $    878,867      $    878,867

Accrued interest receivable          $    195,172    $    195,172       $    361,525      $    361,525

</TABLE>

         The following  methods and  assumptions  were used to estimate the fair
value of each class of financial instrument:

         Investment in FHA-Insured Certificates and
           FHA-Insured Loans
         ------------------------------------------------
                  The fair value of the FHA-Insured Certificates and FHA-Insured
         Loans is based on the quoted  market price from an  investment  banking
         institution  which trades these  instruments  as part of its day-to-day
         activities.

         Cash and cash equivalents and accrued interest receivable
         ---------------------------------------------------------
                  The carrying  amount  approximates  fair value  because of the
         short maturity of these instruments.

4.       TRANSACTIONS WITH RELATED PARTIES

         The  principal  officers  of the  General  Partner  for the years ended
December 31, 1998, 1997 and 1996 did not receive fees for serving as officers of
the General Partner, nor are any fees expected to be paid to the officers in the
future.

         The General Partner and certain  affiliated  entities have,  during the
years ended December 31, 1998, 1997 and 1996, earned or received compensation or
payments for services from the Partnership as follows:

<PAGE>35


<TABLE><CAPTION>

                                   COMPENSATION PAID OR ACCRUED TO RELATED PARTIES
                                   -----------------------------------------------

                                 Capacity in Which                For the year ended December 31,
Name of Recipient                   Served/Item                 1998            1997        1996
-----------------                -----------------            ---------       --------    ---------
<S>                        <C>                                <C>             <C>         <C>
CRIIMI, Inc.               General Partner/Distribution       $ 385,277       $ 86,614    $  89,600

AIM Acquisition            Advisor/Asset Management Fee         319,794        343,092      343,092
  Partners, L.P.(1)

CRIIMI MAE                 Affiliate of General Partner/         40,569         36,226       39,974
  Management, Inc.           Expense Reimbursement

American Insured Mortgage  Affiliate of Partnership/
  Investors Series 85-L.P.   Reimbursement of Debenture       1,148,049             --           --
                             Proceeds (See Footnote 5)

</TABLE>

  (1)    The Advisor,  pursuant to the Partnership Agreement,  effective October
         1, 1991, is entitled to an Asset Management Fee equal to 0.95% of Total
         Invested  Assets  (as  defined  in  the  Partnership  Agreement).   The
         sub-advisor to the Partnership  (the  Sub-advisor) is entitled to a fee
         equal to  0.28%  of Total  Invested  Assets  from the  Advisor's  Asset
         Management Fee. Of the amounts paid to the Advisor, CRIIMI MAE Services
         Limited Partnership (CMSLP) earned a fee equal to $94,245, $101,112 and
         $101,112  for the  years  ended  December  31,  1998,  1997  and  1996,
         respectively. The Limited Partner of CMSLP is a wholly-owned subsidiary
         of CRIIMI MAE Inc. which filed for  protection  under Chapter 11 of the
         U.S. Bankruptcy Code.

5.       INVESTMENT IN FHA-INSURED LOANS

         Listed below is the Partnership's aggregate investment in FHA-Insured 
Loans as of December 31, 1998 and 1997:

<TABLE><CAPTION>
                                                                           December 31,
                                                                 1998                     1997
                                                            ---------------         ----------------
<S>                                                         <C>                     <C>
Number of
  Acquired Insured Mortgages (1)                                          3                        4
  Originated Insured Mortgages (2)                                        1                        2
Amortized Cost                                                 $ 12,891,015             $ 23,096,728
Face Value                                                       15,170,295               26,077,186
Fair Value                                                       15,238,597               26,840,133

(1)      In March  1998,  HUD issued  assignment  proceeds in the form of a 9.5%
         debenture for the mortgage on Portervillage I Apartments. This mortgage
         was owned  50% by AIM 84 and 50% by an  affiliate  of the  Partnership,
         American  Insured  Mortgage  Investors - Series 85, L.P.  (AIM 85). The
         debenture, with a face value of $2,296,098,  was issued to AIM 85, with
         interest payable semi-annually on January 1 and July 1. The Partnership
         recognized a gain of approximately $200,000 for the year ended December
         31,  1998  related to this  assignment.  The net  proceeds  and accrued
         interest are included in the Balance  Sheet as of December 31, 1998. In
         January  1999,  the  debenture  was   liquidated  at  par  value.   The
         Partnership received  approximately $1.2 million for their share of the
         debenture  proceeds,   including  interest  of  approximately  $55,000.
         Accordingly, a distribution of $0.12 per Unit related to the receipt of
         these proceeds was declared in March 1999 and is expected to be paid to
         Unitholders in May 1999.

(2)      On  September  1, 1998,  the  mortgage  on Waters Edge  Apartments  was
         prepaid.  The Partnership  received net proceeds of approximately $10.2
         million,  and recognized a gain of  approximately  $1.1 million for the
         year ended December 31, 1998. A distribution  of $0.99 per Unit related
         to  this  prepayment  was  declared  in  September  1998  and  paid  to
         Unitholders in November 1998.
</TABLE>

<PAGE>36

                      AMERICAN INSURED MORTGAGE INVESTORS

                         NOTES TO FINANCIAL STATEMENTS

5.       INVESTMENT IN FHA-INSURED LOANS - Continued

         All of the  FHA-Insured  Loans were current with respect to the payment
of principal and interest as of March 26, 1999.

         In addition to base interest payments received from Originated  Insured
Mortgages,  the  Partnership  is  entitled  to  additional  interest  based on a
percentage of the net cash flow from the underlying  development  and of the net
proceeds  from the  refinancing,  sale or other  disposition  of the  underlying
development (referred to as Participations). During the years ended December 31,
1998,  1997 and 1996, the  Partnership  received  $52,526,  $61,988 and $12,158,
respectively,  from the  Participations.  These amounts are included in mortgage
investment  income on the  accompanying  statements of income and  comprehensive
income.

6.       INVESTMENT IN FHA-INSURED CERTIFICATES

         Listed below is the Partnership's  aggregate  investment in FHA-Insured
Certificates as of December 31, 1998 and 1997:

<TABLE>
<CAPTION>
                                                                           December 31,
                                                                  1998                    1997
                                                           ----------------         ----------------
<S>                                                        <C>                      <C>
Number of mortgages                                                       9                        9
Amortized Cost                                                 $ 11,099,580             $ 11,216,144
Face Value                                                       13,440,088               13,648,992
Fair Value                                                       13,458,100               14,178,168

</TABLE>

         All of the  FHA-Insured  Certificates  were current with respect to the
payment of principal and interest as of March 26, 1999.

7.       DISTRIBUTIONS TO UNITHOLDERS

         The  distributions  paid or accrued to  Unitholders on a per Unit basis
for the years ended December 31, 1998, 1997 and 1996 are as follows:

<TABLE>
<CAPTION>

Quarter Ended                                  1998             1997         1996
-------------                                --------         --------     --------
<S>                                          <C>              <C>          <C>
March 31                                     $   0.07         $   0.07     $   0.08
June 30                                          0.07             0.07         0.08
September 30                                     1.06(1)          0.07         0.07
December 31                                      0.09             0.08         0.07
                                             --------         --------     --------
                                             $   1.29         $   0.29     $   0.30
                                             ========         ========     ========

   (1)   This amount includes approximately $0.99 per Unit representing net 
         proceeds from the prepayment of the mortgage on Water's Edge 
         Apartments.
</TABLE>

         The basis for paying  distributions to Unitholders is net proceeds from
mortgage  dispositions,  if any, and cash flow from  operations,  which includes

<PAGE>37

                      AMERICAN INSURED MORTGAGE INVESTORS

                         NOTES TO FINANCIAL STATEMENTS

7.       DISTRIBUTIONS TO UNITHOLDERS - Continued
 
regular interest income and principal from Insured  Mortgages.  Although Insured
Mortgages  yield a fixed  monthly  mortgage  payment  once  purchased,  the cash
distributions  paid to the Unitholders will vary during each year due to (1) the
fluctuating  yields in the  short-term  money market where the monthly  mortgage
payment  receipts  are  temporarily  invested  prior to the payment of quarterly
distributions,  (2) the  reduction  in the asset  base  resulting  from  monthly
mortgage payments received or mortgage dispositions,  (3) variations in the cash
flow  attributable  to the  delinquency or default of Insured  Mortgages and (4)
changes in the Partnership's operating expenses.

8.       PARTNERS' EQUITY

         Depositary Units  representing  economic rights in limited  partnership
interests  (Units) were issued at a stated  value of $20. A total of  10,000,000
Units were issued for an aggregate  capital  contribution  of  $200,000,000.  In
addition,  the initial limited partner  contributed $2,500 to the capital of the
Partnership and received 125 Units in exchange therefor.



<PAGE>38

                       AMERICAN INSURED MORTGAGE INVESTORS

                          NOTES TO FINANCIAL STATEMENTS


9.       SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

         The following is a summary of unaudited quarterly results of operations
for the years ended December 31, 1998, 1997 and 1996:

         (In Thousands, Except Per Unit Data)

<TABLE><CAPTION>
                                                                                    1998
                                                                                Quarter ended
                                                    March 31             June 30            September 30           December 31
                                                  ------------          ----------       -----------------      ----------------
<S>                                               <C>                   <C>              <C>                    <C>
Income                                            $        887          $      837       $             803      $            664
Net earnings                                               951                 698                   1,763                   566
Gain on mortgage dispositions                              200                  --                   1,090                    --
Net earnings per Limited
  Partnership Unit - Basic                        $       0.09          $     0.07       $            0.17      $           0.06

</TABLE>

<TABLE><CAPTION>
                                                                                    1997
                                                                                Quarter ended
                                                    March 31             June 30            September 30           December 31
                                                  ------------          ----------       -----------------      ----------------
<S>                                               <C>                   <C>              <C>                    <C>
Income                                            $        901          $      840       $              836     $            838
Net earnings                                               758                 701                      708                  712
Net earnings per Limited
  Partnership Unit - Basic                        $       0.07          $     0.07       $             0.07     $           0.07


</TABLE>

<TABLE>
<CAPTION>
                                                                                    1996
                                                                                Quarter ended
                                                    March 31             June 30            September 30           December 31
                                                  ------------          ----------       -----------------      ----------------
<S>                                               <C>                   <C>              <C>                    <C>
Income                                            $        906          $      859       $             841      $            839
Net earnings                                               754                 572                     722                   710
Loss on mortgage modification                               --                (146)                     --                    --
Net earnings per Limited
  Partnership Unit - Basic                        $       0.07          $     0.06       $            0.07      $           0.07

</TABLE>



<PAGE>39

                       AMERICAN INSURED MORTGAGE INVESTORS
                   SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
                                DECEMBER 31, 1998
<TABLE><CAPTION>
                                                               Interest         Face              Net            Annual Payment
                                Maturity         Put            Rate on       Amount of       Carrying Value     (Principal and
Development Name/Location         Date          Date(1)        Mortgage(5)    Mortgage        (3)(7)(9)(10)      Interest) (5)(8)
-------------------------      ---------       --------        -----------   -----------     --------------      ----------------
<S>                            <C>             <C>             <C>           <C>             <C>                <C>
Acquired Insured Mortgages
--------------------------
Investment in FHA-Insured Loans
  (carried at amortized cost)(2)

Eastdale Apts.
 Montgomery, AL                    3/23           10/01          7.5%        $ 6,501,349      $   5,021,276      $       592,406
North River Place
  Chillecothe, OH                 10/21           12/01          7.5%          3,046,607          2,357,846              279,509
Town Park Apts.
  Rockingham, NC                  10/22           10/02          7.5%            628,194            517,748               56,755(4)
                                                                             -----------      -------------
  Total Investment in FHA-Insured Loans -
    Acquired Insured Mortgages                                                10,176,150          7,896,870
                                                                             -----------      -------------
Originated Insured Mortgages
----------------------------
Investment in FHA-Insured Loans
  (carried at amortized cost)(2)

Creekside Village
  Beaverton, OR                   11/25            1/01          7.75%         4,994,145          4,994,145              442,754
                                                                             -----------      -------------
  Total Investment in FHA-Insured Loans -
    Originated Insured Mortgages                                               4,994,145          4,994,145
                                                                             -----------      -------------

  Total Investment in FHA-Insured Loans                                       15,170,295         12,891,015
                                                                             -----------      -------------
See notes to Schedule IV - Mortgage Loans on Real Estate

</TABLE>


<PAGE>40

                       AMERICAN INSURED MORTGAGE INVESTORS
                   SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
                                DECEMBER 31, 1998
<TABLE><CAPTION>

                                                               Interest         Face              Net            Annual Payment
                                Maturity         Put            Rate on       Amount of       Carrying Value     (Principal and
Development Name/Location         Date          Date(1)        Mortgage(5)    Mortgage        (3)(7)(9)(10)      Interest) (5)(8)
-------------------------      ---------       --------        -----------   -----------     --------------      ----------------
<S>                            <C>             <C>             <C>           <C>             <C>                <C>
Acquired Insured Mortgages
--------------------------
Investment in FHA-Insured
  Certificates
  (carried at fair value)

Bay Pointe Apts.
  Lafayette, IN                   2/23             10/02          7.5%         2,038,674(4)      2,041,355                185,272(4)
Baypoint Shoreline Apts.
  Duluth, MN                      1/22             10/01          7.5%           962,790(4)        964,095                 87,967(4)
Berryhill Apts.
  Grass Valley, CA                1/21             11/02          7.5%         1,247,019(4)      1,248,872                115,899(4)
Brougham Estates II
  Kansas City, KS                11/22              3/02          7.5%         2,560,054(4)      2,563,272                230,860(4)
College Green Apts.
  Wilmington, NC                  3/23              2/02          7.5%         1,375,840(4)      1,377,519                123,455(4)
Fox Run Apts.
  Dothan, AL                     10/19             11/99          7.5%         1,219,703(4)      1,221,753                116,242(4)
Kaynorth Apts.
  Lansing, MI                     4/23              9/02          7.5%         1,866,941(4)      1,869,202                167,318(4)
Lakeside Apts.
  Bennettsville, SC               1/22              2/02          7.5%           386,387(4)        386,911                 35,303(4)
Westbrook Apts.
  Kokomo, IN                     11/22              9/02          7.5%         1,782,680(4)      1,785,121                163,177(4)
                                                                             -----------      ------------
  Total Investment in FHA-Insured Certificates                                13,440,088        13,458,100
                                                                             -----------      ------------
  TOTAL INVESTMENT IN INSURED MORTGAGES                                      $28,610,383      $ 26,349,115
                                                                             ===========      ============

See notes to Schedule IV - Mortgage Loans on Real Estate
</TABLE>


<PAGE>41


                       AMERICAN INSURED MORTGAGE INVESTORS

              NOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE

(1)      Under the Section 221 program of the National  Housing Act of 1937,  as
         amended,  a mortgagee has the right to assign a mortgage ("put") to FHA
         at the expiration of 20 years from the date of final endorsement if the
         mortgage  is not in default at such time.  Any  mortgagee  electing  to
         assign  an  FHA-insured  mortgage  to FHA  will  receive,  in  exchange
         therefor,  HUD  debentures  having a total face value equal to the then
         outstanding  principal balance of the FHA-insured mortgage plus accrued
         interest to the date of assignment. These HUD debentures will mature 10
         years from the date of assignment  and will bear interest at the "going
         Federal rate" at such date. This assignment  procedure is applicable to
         an insured  mortgage which had a firm or conditional FHA commitment for
         insurance on or before November 30, 1983. The  Partnership  anticipates
         that each eligible  insured  mortgage,  for which a prepayment  has not
         occurred  and which has not been sold,  will be  assigned to FHA at the
         expiration  of 20  years  from  the  date  of  final  endorsement.  The
         Partnership,  therefore,  does  not  anticipate  holding  any  eligible
         insured   mortgage  beyond  the  expiration  of  20  years  from  final
         endorsement of that insured mortgage.

(2)      Inclusive of closing costs and acquisition fees.

(3)      Prepayment of these insured mortgages would be based upon the unpaid 
         principal balance at the time of prepayment.

(4)      These amounts represent the Partnership's 50% interest in these insured
         mortgages.  The remaining 50% interest was acquired by American Insured
         Mortgage Investors - Series 85, L.P. (AIM 85).

(5)      In  addition,   the  servicer  of  the  insured  mortgages   (primarily
         unaffiliated  third  parties) is entitled to receive  compensation  for
         certain  services  rendered in an amount up to ten basis points (0.10%)
         of the unpaid principal balance of the insured mortgages.

(6)      Not used.

(7)      The mortgages  underlying the  Partnership's  investment in FHA-Insured
         Certificates  and  FHA-Insured  Loans are  non-recourse  first liens on
         multifamily residential developments.

(8)      Principal  and interest  are payable at level  amounts over the life of
         the Insured Mortgages.

<PAGE>42

(9)      A reconciliation of the carrying value of Insured Mortgages, for the 
         years ended December 31, 1998 and 1997, is as follows:

<TABLE>
<CAPTION>
                                                                1998                        1997
                                                            ------------                ------------
<S>                                                         <C>                         <C>
Beginning balance                                           $ 37,274,896                $ 37,368,498

  Gain on mortgage dispositions/modifications                  1,290,352                          --
  Proceeds from disposition of  mortgages                    (11,343,290) (1)                     --
  Principal receipts on Insured Mortgages                       (269,339)                   (271,593)
  Increase (decrease) in  unrealized gains on
    investment in Insured Mortgages                             (603,504)                    177,991
                                                            ------------                ------------
Ending balance                                              $ 26,349,115                $ 37,274,896
                                                            ============                ============

(1) This amount  represents  cash proceeds of  $10,195,241  (as reflected in the
"Statement of Cash Flows") and non-cash proceeds of $1,148,049.

</TABLE>

(10)     The tax basis of the Insured Mortgages was approximately $22.9 million
         and $33.7 million as of December 31, 1998 and 1997, respectively.