SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, DC  20549

                               FORM 10-KSB
(Mark One)

[ X ]       ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                   THE SECURITIES EXCHANGE ACT OF 1934
               For the fiscal year ended December 31, 1997               

                                   OR

[    ]     TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
                     SECURITIES EXCHANGE ACT OF 1934
  For the Transition period from                  to                  

                        Commission file: #0-14453                        


       NATIONAL REAL ESTATE LIMITED PARTNERSHIP INCOME PROPERTIES
             (Name of small business issuer in its charter)



     Wisconsin                                    39-1503893             
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

1155 Quail Court, Pewaukee, Wisconsin                       53072-3703   
(Address of principal executive offices)                         (Zip Code)

Issuer's telephone number                                   (414) 691-3122

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

                                  None

Securities registered under Section 12(g) of the Exchange Act:

                      Limited Partnership Interests                      
                            (Title of Class)

     Check whether the issuer (1) filed all reports required to be filed by
Sections 13 or 15(d) of the Exchange Act during the past 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          

     Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form and no disclosure will 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-KSB or any 
amendment to this Form 10-KSB. [x]

     Issuer's total gross rental revenues for its most recent fiscal year
ended December 31, 1997, were $ 942,453. State the aggregate market value of the
securities held by non-affiliates of the Registrant as of February 28, 1998:
indeterminate value as there is no market.*
*For purposes of this disclosure only.

     The number of Limited Partnership interests outstanding as of February
28, 1998: 9,004.15

                   DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the annual report to Partners for the year ended December 31,
1997 are incorporated by reference into Parts I, II, III.

     Definitive Prospectus dated January 31, 1985, as amended to date, is
incorporated by reference into Part III.
                            TABLE OF CONTENTS


Item No.                                                         Page No.

                                 PART I

    1.    Business . . . . . . . . . . . . . . . . . . . . . . . . . .  3

    2.    Properties . . . . . . . . . . . . . . . . . . . . . . . . . .3

    3.    Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . .3

    4.    Submission of Matters to a Vote of Security Holders. . . . . .3


                                 PART II

    5.    Market for Partnership's Securities and Related
          Security Holder Matters. . . . . . . . . . . . . . . . . . . .4

    6.    Management's Discussion and Analysis of Financial
          Condition and Results of Operations. . . . . . . . . . . . . .5

    7.    Financial Statements and Supplementary Data. . . . . . . . . .5

    8.    Disagreements on Accounting and Financial Disclosure . . . . .5

                                PART III

    9.    Directors and Executive Officers of the Partnership. . . . . .6

   10.    Executive Compensation . . . . . . . . . . . . . . . . . . . .9

   11.    Security Ownership of Certain Beneficial Owners and
          Management . . . . . . . . . . . . . . . . . . . . . . . . . 10

   12.    Certain Relationships and Related Transactions . . . . . . . 11


   13.    Exhibits, Financial Statements, Schedules, and Reports
          on Form 8-K. . . . . . . . . . . . . . . . . . . . . . . . . 11




                                 PART I


ITEM 1.   BUSINESS

 "Business" on pages 1 and 2 of the Partnership's annual report to Partners
for the year ended
December 31, 1997 is incorporated herein by reference.


ITEM 2.   PROPERTIES

 "Properties" on pages 2 through 4 of the Partnership's annual report to
Partners for the year
ended December 31, 1997 is incorporated herein by reference.


ITEM 3.   LEGAL PROCEEDINGS

 "Legal Proceedings" on page 4 of the Partnership's annual report to Partners
for the year ended December 31, 1997 is incorporated herein by reference.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS FOR THE QUARTER
ENDED
          DECEMBER  31, 1997

 No matters have been submitted to a vote of security holders during the
fourth quarter ended
December 31, 1997.

 By virtue of its organization as a limited partnership, the Limited
Partnership Interests do not
possess traditional voting rights. However, as provided in Article 15 of the
Limited Partnership
Agreement, Limited Partners have voting rights for, among other things, the
removal of the General
Partners, the approval of the sale of substantially all of the assets under
certain circumstances, and the
initiation of the dissolution of the Partnership.





                                 PART II


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

 a) Market Information

 The Partnership's only authorized equity securities are Limited Partnership
Interests ("Interests").
As of December 18, 1986, the Partnership concluded its offering of Interests
and 9,034.01 Interests had
been sold to the public at a price of $1,000 per Interest. Management is not
aware of a public trading
market having been developed for the Interests. The Partnership does provide a
repurchase pool whereby
the limited partners may tender their limited partnership interests back to
the Partnership at a specified
price. Tenders are accepted semi-annually if they meet the criteria
established by the General Partners. As
of December 31, 1997, 29.86 Interests have been repurchased and are held 
in Treasury.

 b) Security Holders

          NUMBER OF RECORD HOLDERS         NUMBER OF INTERESTS
  TITLE OF CLASS    (AS OF FEBRUARY 28, 1998)     (AS OF FEBRUARY 28, 1998)

 Limited Partner-
  ship Interests        1,127          9,004.15

 c) Dividends or Similar Distributions

 Cash distributions to Limited Partners depend upon attaining and thereafter
maintaining operating
income and expenses of the Partnership at levels permitting distributions.
Distributions of cash, if any,
will be made from: (i) Cash Available for Distribution; (ii) cash from
property sales; and (iii) cash from
Partnership reserve accounts.

 "Cash Available for Distribution" is defined in the Partnership Agreement to
include Cash Flow
from the Partnership less amounts set aside for Reserves plus, through 1987,
the amount of any General
Partner Loan for such period. "Cash Flow" is defined as the Partnership's cash
funds provided from
operations and Reserves, including lease payments on net leases from builders
and sellers, without
deductions for depreciation, but after deducting cash funds used to pay all
Operating Expenses, deferred
fees, other expenses, debt payments, capital improvements and replacements.
Mr. Vishnevsky, as
Individual General Partner was required to loan funds to the Partnership
quarterly to the extent necessary
to make Cash Available for Distribution to Limited Partners equal to 8% in
1985, 8.25% in 1986, and
2.0% in 1987, up to a maximum loan of 3% of the gross proceeds of the
offering. Through December 31,
1997, the Individual General Partner loaned $271,020 to the Partnership under
this commitment, which is
the maximum amount under the commitment. This commitment expired December 31,
1987. The
Individual General Partner shall be repaid with interest equal to 12% or the
prime rate plus two
percentage points, whichever is lower, solely from sale proceeds. The
Partnership continued cash
distributions in 1997 with an aggregate of $180,084 and $5,568 to its Limited
Partners and General
Partners, respectively. Distributions for 1997 were at a rate that equaled
2.0% on the Limited Partners'
capital investment. The General Partners anticipate that the Partnership will
continue to make cash
distributions to its Limited Partners in 1998, though the level of such cash
distributions will be dependent
upon the results of property operations and there can be no assurance as to
the amount, if any, that may
be distributed.

 Cash available for distribution, as defined in the Agreement, will be
distributed 97% to the
Limited Partners and 3% to the General Partners. After the repayment of any
General Partner loans, sales
proceeds will be distributed as follows: (1) 97% to the Limited Partners and
3% to the General Partners
until the Limited Partners have received (A) 100% of their initial capital
investment and (B) cumulative,
non-compounded distributions of sales proceeds, in excess of the amount
required in (A), and cash
available for distribution equal to 6% per annum on their initial capital
investment, with the 3% to the
General Partners subordinated to payment of the amounts in (A) and (B) to the
Limited Partners; (2) to
an affiliate of the General Partners, an amount equal to its subordinated real
estate commission (up to 3%
of the aggregate selling price of all properties); (3) 88% to the Limited
Partners and 12% to the General
Partners, with such payments to the General Partners subordinated to a total
return to the Limited
Partners of (A) 100% of their initial capital investment plus (B) a cumulative
preference of 10% per
annum on their initial capital investment.

 If the General Partners should at any time determine that the Reserves of the
Partnership are in
excess of the amount reasonably necessary under the circumstances, such
Reserves may be reduced and
the amount of such reduction may, in the sole discretion of the General
Partners, be used for payment of
expenses, distributions to the Limited Partners, or investment in
additional properties.


ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF
          OPERATIONS

 "Management's Discussion and Analysis of Financial Condition and Results of
Operations" on
pages 4 through 7 of the Partnership's annual report to Partners for the year
ended December 31, 1997, is
incorporated herein by reference.


ITEM 7.   FINANCIAL STATEMENTS 

 The financial statements included on pages 8 through 20 of the Partnership's
annual report to
Partners for the year ended December 31, 1997, are incorporated herein by
reference. 


ITEM 8.   DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 There were no disagreements with Ernst and Young LLP on any matter of
accounting principles
or practices, financial statement disclosure, or auditing scope or procedure.

 
                                PART III


ITEM 9.   DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP

 (a-b) Identification of Directors and Executive Officers

 The Partnership has no directors or officers. The General Partners of the
Partnership are John
Vishnevsky; National Development and Investment, Inc. ("NDII"), a Wisconsin
corporation of which Mr.
Vishnevsky is the majority stockholder; and EC Corp., a Wisconsin corporation
of which Stephen P.
Kotecki is the majority stockholder. The address of Mr. Vishnevsky and NDII is
1155 Quail Court,
Pewaukee, Wisconsin 53072-3703, telephone (414) 691-3122. The address of EC
Corp. is 1155 Quail
Court, Pewaukee, Wisconsin 53072-3703, telephone (414) 691-3122.

 The General Partners manage and control the affairs of the Partnership and
have responsibility and
ultimate authority in all matters affecting its business. The names of the
directors and executive officers of
NDII and EC Corp. are as follows:

                              Term 
        Name                           Office                    Held 
Office (since)

 NDII:
     John Vishnevsky President, Director               09/30/74
     Stephen P. Kotecki  Vice President, Secretary, Treasurer          04/12/91
           and Director


 EC Corp.:
     Stephen P. Kotecki  President, Treasurer, Director          10/30/92
      Thomas Rielly  Vice President, Secretary, Director          12/17/92

 Officers of the corporations are elected by their respective Boards of
Directors annually. There is
no arrangement or understanding between or among any of said directors or
officers and any other person
pursuant to which such individual was selected as a director or officer.

 (c) Identification of Certain Significant Persons

 The General Partners, in conjunction with their affiliates, believe that they
have sufficient
personnel to fully discharge their responsibilities to the Partnership. The
Partnership employs various
individuals to oversee the Partnership's affairs and report to the General
Partners, but, the Partnership
relies directly on the General Partners for the management and control of the
Partnership's affairs. See
Item 10, Subsection (e), for a description of the business experience of
officers, directors, and personnel
of the General Partners and affiliates.

 There are four other organizations which are or were affiliated with the
Individual or Corporate
General Partners whose services are utilized by the Partnership: National
Realty Management, Inc.
("NRMI"), which provides property and partnership management, real estate
acquisition and real estate
brokerage through delegation of duties agreements with NDII; Victor
Construction, Inc., which has and
may in the future serve as general contractor and perform other services in
connection with renovation
and remodeling work of the Partnership's properties; National Selected
Securities Corp. (formerly NDII
Securities Corp.), which acted as the Managing Dealer for the offering of
Interests in the Partnership; and
The John Vishnevsky Company ("JVCO"), which has provided consulting services
in the areas of real
estate investments, joint ventures, financing, systems, accounting, and
internal controls.

                    RELATIONSHIP OF GENERAL PARTNERS
                          AND THEIR AFFILIATES


 The following diagram shows the relationship of the Partnership to various
prior or current
affiliates:


                    
<TABLE>
<S>  <C> <C> <C> <C><C>     <C> <C> <C><C><C><C><C>  <C><C>      <C>
                 NATIONAL REAL ESTATE LIMITEDPARTNERSHIP INCOME PROPERTIES
                                                                 

                                                                 
                                                                 

      (1)                                                        

EC CORPCorporateGeneral PartnerJOHNVISHNEVSKYIndividualGeneral Partner
100%NATIONALDEVELOPMENT ANDINVESTMENT, INC.Corporate General Partner
                                                                 
                                                                 
                                                                 

                                                                 
                                                                 

         100%                   100%        (2)                   (3)

JOHN VISHNEVSKYCOMPANYFinancial and RealEstate Consulting andServicesNATIONAL
SELECTEDSECURITIES CORP.NRMIVICTOR
                   Security Sales                      CONSTRUCTIONINC.
                                         Partnership andPropertyManagement
                                         Acquisition &BrokerageBuilding 
                                         Contractor
                                                                 
                                                                 
                                                                 
                                                                 
                                                                 
</TABLE>



(1)  The ownership of EC Corp. is held by Mr. Stephen P. Kotecki (100%).

(2)  Until February 6, 1998, the ownership of NRMI was held by Mr. Edward
Carow (51%), Ms.
     Stasia Vishnevsky (25%), and Mr. Jeffrey Wussow (24%). Since February 6,
1998, the company
     is under the 100% ownership of John Vishnevsky. It is anticipated that
the services of NRMI will
     continue to be available to the Partnership under the terms and
conditions described in the
     Prospectus.

(3)  The ownership of Victor Construction, Inc. is held by Mr. Edward J.
Bushman (53%),
     Ms. Niomi  Bushman (18%), Mr. Clayton Bushman (18%), Mr. Mark Clements
(9%), and
     Mr. Mark Breuchel (2%). It is anticipated that the services of Victor
will continue to be available
     to the Partnership under the terms and conditions described in
the Prospectus.

 (d) Family Relationships

 Ms. Stasia Vishnevsky, former part owner and Secretary of NRMI, is the
daughter of
John Vishnevsky and is married to Jeffrey Wussow, former part owner and Vice
President of NRMI.

 (e) Business Experience

 The experience of the officers and directors of the Corporate General
Partners includes the
following:

 John Vishnevsky, President and Director of NDII, and as of February 6, 1998,
100% owner of
National Realty Management, Inc. (age 74) is a graduate of Marquette
University. For over 39 years he
has been involved in real estate related activities such as land development,
residential, apartment, and
commercial construction, property management, and the structuring of
limited partnerships. Mr. Vishnevsky has directed companies that have
developed or constructed projects with a current
market value of over $100 million. He, corporate entities he controls, or
both, act as general partner for
all NDII limited partnerships. These partnerships have sold in excess of $160
million of limited
partnership interests. Mr. Vishnevsky is licensed as an insurance broker, a
real estate broker, and a
securities principal. He has lectured frequently and taught courses in real
estate at the University of
Wisconsin-Milwaukee. He has appeared as a guest on television and radio
programs related to real estate
investments. Mr. Vishnevsky is author of the following books: The Art of
Financial Independence, The
Phantom Yield of Real Estate Investment, The Great Real Estate Disaster... The
Greatest Real Estate
Opportunity, Getting to Know You, Releasing Your Creativity, Principles and
Don't Feed the
Crocodiles.

 Stephen P. Kotecki, Vice President and Director of NDII, and President,
Treasurer, and Director
of EC Corp. (age 47) is a General Securities Registered Representative,
multi-line licensed insurance
agent and entrepreneur. He is the sole stockholder of EC Corp. Mr. Kotecki
holds a Bachelor of Science
Degree with a major in Political Science from the University of
Wisconsin-Whitewater, and a Master of
Science Degree in Urban Affairs from the University of Wisconsin-Milwaukee.
Mr. Kotecki  directed
research for the American Federation of State, County and Municipal Employees'
District Council in
Milwaukee County for over four years. Mr. Kotecki further has experience as a
Regional Criminal Justice
Planner and as a Housing Evaluation Specialist. As a college instructor Mr.
Kotecki lectured courses in
Business and Industrial Relations, Marketing and Investments for over three
years.

 Thomas P. Rielly, Vice President, Secretary and Director of EC Corp., (age
50) is a licensed
general securities principal and a financial and operations principal. Mr.
Rielly has been an active
participant in the financial services industry for 24 years. His diverse
financial services experience includes
professional assignments in the areas of venture capital, business planning
and venture formation,
investment banking, asset management and securities placement. Mr. Rielly has
been associated with
National Development and Investment, Inc., related companies, and Mr.
Vishnevsky for over 11 years.

 Other personnel of the General Partners, affiliates, or other entities who
were significantly
involved in the Partnership's affairs include the following:

 David A. Hoeller, National Director of Operations of NRMI as of February 6,
1998, (age 41).
Previously, Mr. Hoeller was Chief Financial Officer of a diversified financial
services corporation which
specialized in commercial and consumer installment lending and servicing, and
mortgage banking. Mr.
Hoeller was also manager of its independent automobile installment servicing
division which serviced in
excess of 15,000 loans with debtors located across the country. Mr. Hoeller
has a total of over 18 years
of financial and operational experience in the financial services industry.
Mr. Hoeller was also with
Security Bank SSB, a $3 billion financial institution. His business and
management experience and
responsibilities have included the areas of operations, financial management,
financial reporting, treasury,
taxes, and cost analysis. His banking experience has included lead development
of prospectus materials,
including establishment of a bank holding company structure and conversion of
a mutual bank to stock
ownership. He has also been involved in real estate sales, partnership
syndication, ownership, and
management through various banking subsidiaries. He was also associated with
the accounting firm of
Ernst & Young. He is active in local civic organizations, including as Trustee
of the Boys and Girls Club.
Mr. Hoeller is a certified public accountant and holds undergraduate degrees
in accounting and finance
and an MBA degree from the University of Wisconsin
 Edward Carow, President of NRMI until February 6, 1998. Mr. Carow (age 38)
has over 19 years
experience and an extensive background in property management, acquisitions,
partnership management,
loan workouts, refinancing, and property sales. Mr. Carow is a licensed real
estate broker and holds the
CPM (Certified Property Manager) designation. Mr. Carow attended the
University of Wisconsin for
business, the Waukesha County Technical College for real estate and he
continues to attend trade
conferences and lectures. He has taught courses in property management and
real estate investments for
Milwaukee Area Technical College. He is a member of the Executive Council of
the Institute of Real
Estate Management and was the 1992 President. Some of his other commitments
include the
International Affairs Committee of the Institute of Real Estate Management,
the Publishing Committee of
the Institute of Real Estate Management and the Advisory Board at the Waukesha
County Technical
College.

 Stasia Vishnevsky, who, until February 6, 1998, served as Secretary and Media
Director of
NRMI, (age 32) supervised marketing, public relations, and advertising for
NRMI-managed properties.
She also produced corporate training and operations manuals, newsletters, and
training seminars. She
attended Elmhurst College for English, and Marquette University for Broadcast 
Communications. Joan Jenstead, Director of Property Operations, (age 63) has
been involved in the management of
over ten thousand apartment units in addition to commercial and condominium
management nationwide.
She is a Certified Property Manager and a licensed Wisconsin real estate
broker. Ms. Jenstead attended
the University of North Dakota, majoring in Business. In 1984, she was
responsible for the recognition of
NRMI as an Accredited Management Organization (AMO) by the National Institute
of Real Estate
Management, (IREM). In 1988, she served as President of  the local chapter of
the  Institute of Real
Estate Management. She is also a member of the national faculty of IREM, a
faculty member of the
Milwaukee Area Technical College, and a past President of the Board of
Directors for the state of
Wisconsin Technical College Trustee Association. In 1990, Ms. Jenstead was
recognized for her
accomplishments in higher education in "Profiles in Success" published by the
National Center for Higher
Education. In 1994 she was elected to a three year term as a director on the 
National Board of the
Association of Community College Trustees.

 John Vishnevsky is or was the Individual General Partner of National Real
Estate Limited
Partnership-II (NRELP-II), National Real Estate Limited Partnership-III
(NRELP-III), National Real
Estate Limited Partnership-IV (NRELP-IV), National Real Estate Limited
Partnership-V (NRELP-V),
National Real Estate Limited Partnership-VI (NRELP-VI), National Real Estate
Limited Partnership
Income Properties-II (NRELP-IP-II) and the Partnership, among others. NDII is
or was the corporate
general partner of NRELP-IV, NRELP-V, NRELP-VI, NRELP-IP-II, and the
Partnership, among others.
EC Corp. is or was the corporate general partner of NRELP-VI, NRELP-IP-II and
the Partnership,
among others. The Boards of Directors of the Partnership's Corporate General
Partners, NDII and EC
Corp., may be deemed to be interlocking.

ITEM 10.  EXECUTIVE COMPENSATION

 As stated above, the Partnership has no officers or directors. The officers
and directors of the
Corporate General Partners receive no current or proposed direct remuneration
in such capacities,
pursuant to any standard arrangement or otherwise, from either the Corporate
General Partners or from
the Partnership, with the exception of those directors which are not employees
of NDII, EC Corp. and
affiliates, to whom an annual director's fee of $50 per director is paid by 
NDII.
Pursuant to the terms of the Limited Partnership Agreement, net profits and
losses from
operations and Cash Available for Distribution are allocated 97% to the
Limited Partners and 3% to the
General Partners. For such 3% interest, the General Partners contributed
$6,000 to the Partnership. For
the fiscal period ended December 31, 1997, this interest resulted in net
taxable income to the Individual
General Partner in the amount of approximately $2,043. Cash distributions of
$5,568 were made to the
Individual General Partner.

 Cash available for distribution, as defined in the Agreement, will be
distributed 97% to the
Limited Partners and 3% to the General Partners. After the repayment of any
General Partner loans, sales
proceeds will be distributed as follows: (1) 97% to the Limited Partners and
3% to the General Partners
until the Limited Partners have received (A) 100% of their initial capital
investment and (B) cumulative,
non-compounded distributions of sales proceeds, in excess of the amount
required in (A), and cash
available for distribution equal to 6% per annum on their initial capital
investment, with the 3% to the
General Partners subordinated to payment of the amounts in (A) and (B) to the
Limited Partners; (2) to
an affiliate of the General Partners, an amount equal to its subordinated real
estate commission (up to 3%
of the aggregate selling price of all properties); (3) 88% to the Limited
Partners and 12% to the General
Partners, with such payments to the General Partners subordinated to a total
return to the Limited
Partners of (A) 100% of their initial capital investment plus (B) a cumulative
preference of 10% per
annum on their initial capital investment.

 The Partnership is engaged in various transactions involving affiliates of
the General Partners, as
described in the Prospectus. Notes 2 and 7 of the Partnership's financial
statements of  the annual report
to Partners for the year ended December 31, 1997 is incorporated herein by
 reference.

 The contracts between the Partnership and affiliates provide that the
compensation, price, or fee
must be comparable and competitive with the compensation, price, or fee of any
other person whose
services could reasonably be made available to the Partnership. The General
Partners believe
compensation to affiliates for services to the Partnership was on terms no
less favorable to the
Partnership than would have been available through arm's-length negotiations
for similar services from
unrelated parties.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 (a) Persons or groups known by the Partnership to own beneficially more than
5% of the
outstanding Interests of the Partnership are indicated below:


             Name of         Amount and Nature of  Percent of
  Title of Class            Beneficial Owner          Beneficial Ownership    
Class                                                                          
Limited Partnership  Thea J. Peterson        500 Interests  
Interests                 Sole and Joint            5.55%
                     Investment  Power  


(b) By virtue of its organization as a limited partnership, the Partnership
has no officers or directors. The
General Partners are responsible for management of the Partnership, subject to
certain limited democracy
rights of the Limited Partners described in the Limited Partnership Agreement.
Persons or entities
performing functions similar to those of officers and directors of the
Partnership, beneficially own, in the
aggregate, the following Interests of the Partnership as of February 28, 1998.


           Name of     Amount and Nature of   Percent of
  Title of Class         Beneficial Owner          Beneficial Ownership     
Class                                                                          

Limited Partnership      John Vishnevsky      29.56 Interests     0.33%
Interests                                Sole Investment Power

Limited Partnership      Stephen P. Kotecki   4 Interests        0.04%
Interests                                    Sole Investment Power


 (c) There is no arrangement known to the Partnership which may, at a
subsequent date, result in a
change in control of the Partnership.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 Neither the General Partners nor their affiliates were indebted to the
Partnership during the year
ended December 31, 1997.

 There were no transactions with management other than the Partnership's
transactions with the
General Partners and affiliates, as described in this report at Items 9, 10
and 12.

13.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K


(A)  1.   Financial Statements.

     a)   Financial Statements and Report of Independent Auditors
(incorporated by
          reference from pages 8 through 19 of the Partnership's annual report
to Partners
          for the year ended December 31, 1997).

         (i)   Report of Independent Auditors

        (ii)   Balance Sheet, December 31, 1997

       (iii)   Statements of Income, Years Ended December 31, 1997, and 1996

       (iv)    Statements of Partners' Capital, Years Ended 
               December 31, 1997, and 1996

        (v)    Statements of Cash Flows, Years Ended December 31, 1997, and 1996

       (vi)    Notes to Financial Statements

 2.  Exhibits

     See attached exhibit list which is incorporated by reference.


(B)  Reports on Form 8-K for the Quarter ended December 31, 1997

     There were no reports on Form 8-K filed during the fourth quarter ending
December 31, 1997.


(C)  Exhibits
 3(a)     Limited Partnership Agreement, incorporated by reference from
Prospectus previously
          filed with Registration Statement 2-95072 on Form S-11 effective
January 31, 1985.
 3(b)     Certificate of Limited Partnership incorporated by reference from
Exhibit 3B Registration
          Statement 2-95072 on Form S-11 filed December 20, 1984.
 4   Subscription Agreement Evidencing Ownership of a Partnership Interest,
incorporated by
     reference from Prospectus previously filed with Registration Statement
2-95072 on Form
     S-11 effective January 31, 1985.
 10(a)    Consulting Fee Agreement between the Partnership and NDII dated
January 31, 1985,
          incorporated by reference from 1985 10-K filed March 28, 1986.
 10(b)    Property Management Agreements between Partnership and NRMI and
between NRMI
          and Equity Management Corporation Lock-It Lockers Tucson,
incorporated by reference
          from 1985 10-K filed March 28, 1986.
 10(c)    Acquisition Agreement between the Partnership and NDII dated January
31, 1985,
          incorporated by reference from 1985 10-K filed March 28, 1986.
 10(d)    Organization Expense Agreement between the Partnership and NDII
dated January 31,
          1985, incorporated by reference from 1985 10-K filed March 28, 1986.
 10(e)    Contracts for Acquisition of Assets
          (1)  With respect to Lock-It Lockers Mini-Warehouse, Tucson,
Arizona: Incorporated
          by reference from Exhibit 2-1 to periodic report on Form 8-K dated
May 7, 1985; July 9,
          1985; August 9, 1985; and September 13, 1985.
          (2)  With respect to Lock-It Lockers Mini-Warehouse, Phoenix,
Arizona: Incorporated
          by reference from Exhibit 2-1 to periodic report on Form 8-K dated
January 1, 1986;
          February 1, 1986; and April 2, 1986.
          (3)  With respect to Cave Creek Mini-Warehouses, Phoenix, Arizona:
Incorporated by reference Exhibit 2-1 to periodic report on Form 8-K dated
 April 30, 1987.
          (4)  With respect to Northridge Commons Shopping Center, Milwaukee,
 Wisconsin: Incorporated by reference Exhibit 2-1 to periodic report on Form 8-K
dated May 28,
          1987.
 10(f)    Escrow Agreement dated January 31, 1985, incorporated by reference
from Exhibit 10 to
          Amendment No. 1 to Registration Statement 2-95072 effective January
31, 1985.
 10(g)    Property Management Agreement between Partnership and NRMI and
between NRMI
          and Equity Management Corporation, Lock It Lockers, Phoenix,
Arizona: Incorporated
          by reference from 1986 10-K filed March 28, 1987.
 10(h)    Management Consulting Delegation of Duties Agreement between General
Partners and
          NRMI dated May 28, 1991. Incorporated by reference from the 1991
10-K filed March
          27, 1992.
 10(i)    Co-General Partner Agreement incorporated by reference from Exhibit
5-1 to periodic
          reports on 8-K dated July 26, 1991.
 10(j)    Property Management Agreement between Partnership and NRMI, dated
July 1, 1991.
          Incorporated by reference from the 1991 10-K filed March 27, 1992.
 11  Not applicable, see Item 6 of this report.
 12  Not applicable
 *13 National Real Estate Limited Partnership Income Properties 1997 annual
report to
     Partners is included as an exhibit hereto for those portions of such
annual report
     specifically incorporated by reference elsewhere herein. Such annual
report is deemed not
     to be filed as part of this Report.
 18  Not applicable
 19  Not applicable
 22  Not applicable
 23  Not applicable 
 *24 Consent of Independent Auditors filed with this report.
 25  Not applicable

     (D)  Financial Statement Schedules There are no schedules to be included
 herein.

*    Filed with this Report.

                                                               Exhibit 24


                     CONSENT OF INDEPENDENT AUDITORS



We consent to the incorporation by reference in this Annual Report (Form
10-KSB) of National Real
Estate Limited Partnership Income Properties of our report dated January 20,
1998, included in the 1997
Annual Report to Partners of National Real Estate Limited Partnership Income
Properties.





                                                    /S/ ERNST & YOUNG LLP

Milwaukee, Wisconsin
March 30, 1998



                               SIGNATURES

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

NATIONAL REAL ESTATE LIMITED PARTNERSHIP INCOME PROPERTIES
                              (Registrant)

Dated: March 30, 1998              By:        /S/ John Vishnevsky              
                John Vishnevsky
                President and Chief Operating and
                Executive Officer
                National Development and Investment, Inc.
                Corporate General Partner

Dated: March 30, 1998              By:        /S/ John Vishnevsky              
                John Vishnevsky
                Chief Financial and Accounting Officer
                National Development and Investment, Inc.
                Corporate General Partner


Pursuant to the requirements of the Securities Exchange Act of 1934, this
report is signed below by the
following persons on behalf of the Registrant and in the capacities* and on
the dates indicated:


  /S/ John Vishnevsky              President and Director     March 30, 1998  
 John Vishnevsky         National Development and  (dated)
               Investment, Inc.


  /S/ Stephen P. Kotecki           Vice President, Secretary,      March 30,
1998  
 Stephen P. Kotecki      Treasurer and Director    (dated)
               National Development and
               Investment, Inc.


  /S/ Stephen P. Kotecki           President, Treasurer and   March 30, 1998  
 Stephen P. Kotecki      Director                 (dated)
               EC Corp.


  /S/ Thomas Rielly                Vice President, Secretary   March 30, 1998 
  
 Thomas Rielly      and Director         (dated)
               EC Corp    




* The indicated positions are held in the Corporate General Partners of the
Registrant.

                                    

J:\WPDOCS\REPORTS\10K-NIP.SJG
                               SIGNATURES

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

NATIONAL REAL ESTATE LIMITED PARTNERSHIP INCOME PROPERTIES
                              (Registrant)

Dated:    3/30/98         By:            
                    John Vishnevsky
                    President and Chief Operating and
                     Executive Officer
                     National Development and Investment, Inc.
                    Corporate General Partner

Dated:    3/30/98         By:            
                    John Vishnevsky
                    Chief Financial and Accounting Officer
                    National Development and Investment, Inc.
                    Corporate General Partner


Pursuant to the requirements of the Securities Exchange Act of 1934, this
report is signed below by the
following persons on behalf of the Registrant and in the capacities* and on
the dates indicated:


           President and Director   3/30/98               
 John Vishnevsky     National Development and     (dated)
           Investment, Inc.


           Vice President, Secretary,    3/30/98            
 Stephen P. Kotecki  Treasurer and Director   (dated)
           National Development and
           Investment, Inc.


           President, Treasurer and     3/30/98             
 Stephen P. Kotecki  Director                (dated)
           EC Corp.


           Vice President, Secretary     3/30/98             
 Thomas Rielly  and Director        (dated)
           EC Corp   






* The indicated positions are held in the Corporate General Partners of the
Registrant.


       NATIONAL REAL ESTATE LIMITED PARTNERSHIP INCOME PROPERTIES


BUSINESS

 The Registrant, National Real Estate Limited Partnership Income Properties
(the "Partnership"),
is a limited partnership organized under the Wisconsin Revised Uniform Limited
Partnership Act pursuant
to a Certificate and an Agreement of Limited Partnership, each dated December
18, 1984. As of
December 31, 1997, the Partnership consisted of an Individual and two
Corporate General Partners and
1,125 Limited Partners owning 9,004.15 limited partnership interests (the
"Interests") acquired at a
public offering price of $1,000 per Interest ($9,024,556 net of affiliate
discounts). The Interests were sold
commencing January 31, 1985, pursuant to a Registration Statement on Form S-11
under the Securities
Act of 1933 (Registration #2-95072) as amended. The offering of interests was
concluded on
December 18, 1986. The Individual General Partner is John Vishnevsky and the
Corporate General
Partners are National Development and Investment, Inc. ("NDII"), a Wisconsin
corporation and EC
Corp., a Wisconsin corporation. All management decisions are the
responsibility of the General Partners.

 The Partnership's primary objective was to acquire existing commercial space,
such as office
buildings, shopping centers, and mini-warehouses, though it was also permitted
to acquire existing
residential properties from non-affiliated sellers. Although the Partnership
intended to acquire existing
properties, it was permitted to acquire properties which were recently
completed. The Partnership's
principal investment objectives are to invest in real estate properties which
will:

 1)  preserve and protect the Limited Partners' capital investment;

 2)  provide quarterly distributions of cash from operations, commencing
December 31, 1985;
     and

 3)  provide capital appreciation through increases in the value of the
Partnership's real estate
     assets.

 The Partnership will continue in existence until December 31, 2004, unless
terminated earlier by
disposition of all of its assets or certain other events. The Partnership will
commence to liquidate its
properties as soon as feasiblely possible, depending upon, among other
factors, whether the Partnership's
objectives are met, potential capital appreciation, cash flow, and federal
income tax consequences to its
limited partners.

 The Partnership owns and operates four investment properties. During the
fiscal year ended
December 31, 1985, the Partnership acquired Lock-It Lockers Mini-Warehouse, a
self storage mini-
warehouse rental complex located in Tucson, Arizona ("Tucson Lock-It
Lockers"). Tucson Lock-It
Lockers was acquired in four separate Parcels as follows: Parcel I (21,670 net
rentable square feet)
effective May 1, 1985; Parcel II (15,575 net rentable square feet) effective
July 1, 1985; Parcel III (6,845
net rentable square feet) effective August 1, 1985; and Parcel IV (5,795 net
rentable square feet) effective
September 1, 1985. In 1986, the Partnership continued its investment in
properties by acquiring an
additional Lock-It Lockers Mini-Warehouse located in Phoenix, Arizona
("Phoenix Lock-It Lockers"), in
three separate parcels, as follows: Parcel I (18,600 net rentable square feet)
effective January 1, 1986;
Parcel II (17,625 net rentable square feet) effective February 1, 1986; and
Parcel III (22,541 net rentable
square feet including 8,000 net rentable square feet for recreational vehicle
storage) effective April 1,
1986. The Partnership completed its investment in properties during the fiscal
year ended
December 31, 1987, when it purchased the two following investment properties,
a parcel of land
containing one building plus part of a second building out of a total of five
buildings of Cave Creek Mini
Warehouses in Phoenix, Arizona and Northridge Commons Shopping Center, a
community shopping
center located in Milwaukee, Wisconsin. These properties are described more
fully in this report at
Properties. Cave Creek was managed by Enterprise Growth Group ("EGG") from the
time the property
was purchased through October, 1991. As of November 1, 1991, National Realty
Management, Inc.
("NRMI") took over management of the property. All other Partnership
properties were managed by
NRMI since their purchase.

 The real estate investment business is highly competitive. The Partnership's
properties are in
competition for tenants with numerous other alternative sources for storage or
shopping center space.

 The Partnership is not dependent upon any single tenant for its operating
success except at
Northridge Commons where one tenant occupied 42.3% of the total rentable
square footage. The
Partnership does not foresee any events or market trends which would have a
materially adverse affect
upon the Partnership's revenues, except for increased competition for tenants,
which is discussed in the
section entitled Results of Operations of this report.

 During 1997, the Partnership employed three full-time and six part-time
on-site personnel in the
following capacities: three managers, four rental agents and two
cleaning/maintenance persons. In
addition, due to the centralized nature of the Partnership's accounting and
management systems, another
16 employees provided various accounting and management services to this and
other partnerships.
These persons worked an average of approximately each 2.18 hours per week for
this Partnership.
Detailed time records of all personnel are maintained which form the basis for
charges to the Partnership.
All on-site and partnership employees are supervised by NRMI under its
Management Consulting
Delegation of Duties and Property Management Agreements with the Partnership.

 The Partnership is engaged solely in the business of investing in and
managing real estate. Its
business is believed by management to fall entirely within a single industry
segment. The business of the
Partnership is not seasonal, although the Partnership's properties may
experience cyclical fluctuations in
occupancy levels in the rental markets where they are located.

 The General Partners are general partners for other limited partnerships that
have invested in real
estate which may be competitive with the Partnership. 

 There may be conflicts of interest between the Partnership and the General
Partners at such time
as the Partnership attempts to sell its properties or may compete for tenants
with the Partnership's
investments. If properties are being sold, the General Partners will attempt
to give equal exposure to
competing properties and will sell solely on the basis of purchaser
preference. The General Partners will
establish asking price based upon market conditions. The General Partners will
follow a policy of renting
first on the basis of the tenants' preference and then on the basis of
greatest vacancy. In the hiring of
resident building mangers, the General Partners will follow a policy of
filling the oldest vacancy first.  

 The Partnership, by virtue of its ownership in real estate, is subject to
federal and state laws and
regulations covering various environmental issues. The General Partners are
not aware of any potential
liability related to environmental issues or conditions that would be material
to the Partnership.

 The Partnership has developed a plan to modify its information technology to
recognize the year
2000 and has begun converting critical data processing systems. The
Partnership currently expects the
project to be substantially complete by early 1999 and the cost to be
immaterial. The Partnership does not
expect this project to have a material adverse effect on the operations of 
the Partnership.
 
PROPERTIES

 The properties in which the Partnership has invested are owned in fee simple,
described more fully
at Notes to Financial Statements (Note 3). The principal factors which the
General Partners believe affect
rental rates and occupancy levels include location, ease of access, amenities,
and the quality of property
management.

 TUCSON LOCK-IT LOCKERS

 Tucson Lock-It Lockers is located on 2.057 fully improved acres at 6560 East
Tanque Verde
Road, Tucson, Arizona. Tucson Lock-It Lockers consists of seven single-story
buildings which were
constructed in 1976. Tucson Lock-It Lockers has an aggregate of 49,885 net
rentable square feet (57,710
gross) with a unit mix that varies. Management has the ability to subdivide
some of the larger units in
accordance with market demand. Features of Tucson Lock-It Lockers include fire
walls and exterior
passage doors constructed of solid-core steel hinged in steel frames. Security
at Tucson Lock-It Lockers
is provided by a resident manager and a fenced perimeter with single-gate
access. In addition to the seven
warehouse buildings, there is an on-site office/apartment, and limited
customer parking spaces are
available.

 PHOENIX LOCK-IT LOCKERS

 Phoenix Lock-It Lockers is located on 3.1 fully improved acres at 10250 North
19th Avenue,
Phoenix, Arizona. The complex consists of three single-story buildings
containing a total of 593 units and
30 outside RV spaces which were constructed in 1976. Phoenix Lock-It Lockers
has an aggregate of
62,016 net rentable square feet (66,200 gross) with a unit mix that varies.
Management has the ability to
subdivide some of the larger units according to market demand. Features of the
complex include fire
walls and exterior passage doors constructed of solid-core steel hinged in
steel frames. Security in the
complex is provided by electronic surveillance cameras with a motion detector
that provides the resident
manager with the ability to monitor the property during the day and night.
There is also a fenced
perimeter with a single-gate access to the property which provides additional
security. In addition to the
three warehouse buildings, there is an on-site office/apartment, and customer
parking spaces are
available.

 CAVE CREEK MINI-WAREHOUSE

 Cave Creek Mini-Warehouse is located at 1201 East Cinnabar Avenue, Phoenix,
Arizona, on
approximately 1.7 acres (the "Complex"). The 747 unit complex consists of
three individual one story
and two individual two story buildings. The Partnership's acquisition consists
of one one-story building
and part of one two-story building of the Project, of which construction was
completed in 1985. The
Partnership has an interest in the remaining portions of the Project for
access and use of the business
office facilities. National Real Estate Limited Partnerships Income Properties
II, another limited
partnership of which the General Partners are general partners, owns the other
portion. Security in the
Project is provided by a resident manager and a fenced perimeter with
single-gate access.

 The Project has an aggregate of approximately 46,028 net rentable square
feet. The Partnership's
property contains approximately 8,236 net rentable square feet, or
approximately 18% of the total net
rentable square feet of the Project. Units can be subdivided, if appropriate,
in light of current demand;
therefore, the total unit count may fluctuate. At the time of purchase, the
Partnership's property was
divided into 91 units.

 NORTHRIDGE COMMONS

 Northridge Commons is a community shopping center located at 8310-8360 West
Brown Deer
Road, Milwaukee, Wisconsin, on an outparcel at a major entrance to Northridge
Mall, a 1,100,000
square foot regional mall, making Northridge Commons part of a shopping
cluster. Constructed in 1981,
Northridge Commons is a masonry building consisting of 7 retail service
outlets. Most of the building is
100 feet deep, creating store dimensions of 20'x100' and 25'x100'. Northridge
Commons has an aggregate
of approximately 20,780 net rentable square feet. All current tenant leases
are "triple net" agreements.
Asking rents are $8.00 per square foot triple net leases, which is in line
with the competition.

 The Tucson, Phoenix, and Milwaukee real estate rental markets are highly
competitive. For a
further discussion of occupancy rates, see Management's Discussion and
Analysis of Financial Condition
and Results of Operations contained in this report. Additional mini-warehouse
projects and shopping
malls may be built within the Tucson, Phoenix, and Milwaukee areas, which may
compete directly with
the Partnership's properties.

 The General Partners feel that the Partnership is adequately covered by
insurance on the
properties. 

LEGAL PROCEEDINGS

 The Partnership is not a party to any material pending legal proceedings.

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

 Information contained in this Annual Report on Form 10-KSB contains -looking
statements' within the meaning of the Private Securities Litigation Reform Act
of 1995, which can be
identified by the use of forward-looking terminology such as -looking
statements, including certain risks and uncertainties, that could cause actual
results to differ materially
from those contemplated in such forward-looking statements. Such factors,
which could adversely
affect the Partnership's ability to obtain these results, include, among other
things, (i) the volume of
transactions and prices for real estate in the real estate markets generally,
(ii) a general or regional
economic downturn which could create a recession in the real estate markets,
(iii) the Partnership's
debt level and its ability to make interest and principal payments, (iv) an
increase in expenses related
to new initiatives, investments in people and technology, and service
improvements, (v) the success of
the new initiatives and investments and (vi) other factors described elsewhere
in this Annual Report.

 LIQUIDITY AND CAPITAL RESOURCES

 The Partnership commenced an offering to the public on January 31, 1985, of
up to 15,000 Interests
at $1,000 per Interest pursuant to a Registration Statement on Form S-11 under
the Securities Act of
1933. A total of 3,767.26 Interests were sold in 1985 ($3,760,356). From
January 1, 1986, to
December 18, 1986, at which time the offering was concluded, an additional
5,266.75 Interests were sold
($5,264,200). After deducting offering costs, the Partnership had $8,026,434
with which to purchase the
investment properties, described in this report at Properties, to pay costs
related to purchasing such
properties and to meet capital requirements for operations.

 The Partnership does not have any permanent, long-term financing nor any
other financing on its
investment properties and does not intend to incur any during the
Partnership's life. The Partnership plans
capital expenditures for roof replacement and repairs for Tucson
Lock-it-Lockers in 1998. Painting is
planned at Cave Creek. Asphalt work is scheduled to be done at Tucson Lock-It
Lockers. These
expenditures will cost approximately $26,000 and will be funded from the cash
flow of operations. The
Partnership does not have any other present or planned material commitments
for ordinary maintenance.

 The General Partners committed to make loans to the Partnership to the extent
necessary for the
Partnership to make cash distributions to the Limited Partners equal to 8% in
1985, 8.25% in 1986, and
8.5% in 1987. However, the maximum the General Partner was required to loan
was equal to 3% of the
gross offering proceeds. Through December 31, 1997, the Individual General
Partner loaned $271,020 to
the Partnership under this commitment, which is the maximum amount under the
commitment. The
General Partners' loan shall be repaid with interest equal to 12% or the prime
rate plus two percentage
points, whichever is lower, solely from sale proceeds of the investment
properties. As of December 31,
1997, $594,982 of interest had accrued on the General Partners' loan. During
1997, the Partnership
continued distributions with a total of $180,084 to its Limited Partners and
$5,568 to the General
Partners. The distributions for 1997 equaled 2% of the Limited Partners
investment. The pay rates prior
to 1988 were supplemented by the General Partner Loans, as described above,
and the operating results
of the properties have not advanced as originally projected. The Partnership's
ability to maintain and or
increase distributions or to pay the loan during 1998 is dependent upon the
results of property operations
or sales of properties and therefore no assurance as to the distribution
amount, if any, or the loan
payment can be made.

 Cash generated by the Partnership's investment properties and the sale of
such properties are
expected to provide funds for the Partnership liquidity needs and any cash
distributions to the Limited
Partners. At the current time the general partner is evaluating the possible
sale of Northridge Commons.
No other activity related to the sale of properties has occurred.

 RESULTS OF OPERATIONS

 The Partnership operated four investment properties during 1997. The
Partnership began operations
in 1985 and made additional property purchases in 1986 and 1987.

 1997 Rental rates at Tucson Lock-It Lockers remained the same as 1996 and
ranged from $25 to
$155, depending on the size of the unit. Average occupancy at Tucson Lock-It
Lockers was 97% during
1997, compared to 96% in 1996. Marketing efforts are directed primarily toward
Yellow Pages
advertising which is the main source of traffic. Signs on Tanque Verde have
been upgraded in order to
lead prospective clients around the corner to the main entrance. There is a
marketing program in place
with neighboring businesses where we share coupon advertising at several
locations. Management
participates in the Tanque Verde Business Association and continues to
participate in their marketing and
advertising programs. Competition studies done by management and those done by
The Arizona Mini
Storage Association show a Tucson area occupancy of around 93.9%. The
marketplace for 1996 and
1997 was slow to absorb the vacancies created by rent increases implemented in
the fall of 1996. Since
the marketplace is improving, rental rates may be raised in the early part of
1998.

 Rental rates are based on unit size at Phoenix Lock-It Lockers and ranged
from $31 to $235 in
1997, and $11 to $235 in 1996. Average annual occupancy at the property was
97% for both 1997 and
1996. Management uses the Yellow Pages for advertising as well as using client
referral coupons,
offering discounts to existing clients for bringing us new clients. Our
manager has been attending the
Sunnyslope Business Association meetings in an attempt to capture more
business rentals and to keep up
with the business networking in the area. Rate increases will need to remain
conservative. Our
management competition study and information gathered from the Arizona Mini
Storage Association
indicate the surrounding area is 87% to 89% occupied. The market continues to
soften in the Phoenix
area because of overbuilding of self-storage facilities in the immediate area
of the property. The business
suites are 100% occupied, with all suites on at least a one year lease.  

 At Cave Creek Lock-It Lockers asking rents remained the same as 1996 and as
of December 31,
1997 ranged from $15 to $135, based on unit size. Average annual occupancy was
95% and 94% in 1997
and 1996 respectively. Marketing efforts are directed primarily through the
use of Yellow Pages
advertising, which is the main source of traffic. Management uses resident
referral coupons for all current
tenants, offering a discount if they send us new clients. The managers are
marketing the lockers to
neighboring businesses and apartment communities, using neighborhood business
coupon flyers. Their
marketing efforts and excellent customer service will continue to help
occupancy remain strong.

 The marketplace for Cave Creek Lock-It-Lockers continues to soften. No
increase in rental rates is
anticipated since the project is maintaining a healthy occupancy level. Our
management competition study
and information received from the Arizona Mini Storage Association indicates a
high vacancy rate will
continue throughout the surrounding area and immediate neighborhood. We will
be affected in early 1998
by lower interest rates that are allowing our tenants to purchase homes with
their own storage space, and
by continued over-building of storage facilities.  

 Occupancy for 1997 remained stable at 95%. Our neighborhood competition study
and vacancy
rates reports by the Arizona Mini Storage Association show neighboring
facilities running at 85-89%
occupied. We are doing considerably better than the overall marketplace. There
are three new self-
storage facilities within a 5-mile radius. All are in different stages of
operation, from under construction
to near completion to newly opened. This will substantially affect occupancy
levels. Management is
anticipating substantial rental incentives and marketing cost increases. The
management team is doing an
excellent job retaining tenants and leasing our facility in a very tough
marketplace. We continue to have a
higher occupancy than the neighboring properties. 

 Northridge Commons experienced average annual occupancy of 76% during 1997,
compared to
92% in 1996. Occupancy for December 1997 was 91.6%. This compares to the
December rate of 67% in
1996. Northridge Commons had remained relatively fully occupied until the
fourth quarter of 1996 when
Talbot's, the anchor tenant, lease ended. Due to the vacancy in the area in
1996 and the loss of Talbot's,
the General Partners determined that an impairment to the property has
occurred. Accordingly, a
provision for impairment loss of approximately $785,000 has been charged to
operations in 1996. For
further discussion see Note 4 of the Partnership's Audited financial
statements for the year ended
December 31, 1997. Georgia Carpet Company opened their new store on November 1
and their first rent
payment of a five year lease began on December 1. They have been paying triple
net charges since August
when they began renovations. 

 Competition studies show that rental rates in the Northridge area are
marketed at $6 to $12 per
square foot with $8 appearing to be a median. There is still significant
vacancy in the area but there have
been some positive developments in the past two month. There are some large
square footage stores, or
"big box" stores, going into the area that carry a large selection of items
for their merchandising focus,
and the Milwaukee Journal Sentinel had an article in the October 3, 1997,
edition giving notice to some
of the positive changes occurring. Some strip malls in the area have had and
average occupancy of 74%
to 72%, while newer malls are 90% to 98% occupied.

 At the end of the third quarter the only vacant space is the 2,500 square
feet formerly occupied by
Egghead. 750 square feet of that space is being occupied by the Oreck Vacuum
shop which was moved
from its former space by the GCO lease. Oreck is on a month to month lease.
Disc Go Round has given
notice that it will be vacating the 2,000 square feet it occupies at the end
of its lease term on March 31,
1998.

 1997 Operating Revenues were $130,740 for Northridge Commons, $393,679 for
Tucson Lock-It
Lockers, $363,181 for Phoenix Lock-It Lockers, and $54,231 for Cave Creek
Lock-It Lockers. 1996
operating revenues were $223,787 for Northridge Commons, $371,405 for Tucson
Lock-It Lockers,
$349,431 for Phoenix Lock-It Lockers, and $50,261 for Cave Creek Lock-It
Lockers. Revenues for
Tucson Lock-It-Lockers increased 6% in 1997 compared to 1996 because of higher
rental rates and
improved occupancy. 1997 net operating income of Phoenix Lock-It-Lockers was
3.9% higher in
comparison to 1996 due to a 6.3% increase in gross potential rent as new lease
documents were signed
with the increase put in place late 1996. 1997 net operating income of Cave
Creek Lock-It-Lockers
increased 7.9% over 1996 as gross potential increased 3.3% due to new leases
signed with increases put
in place late 1996, and delinquency decreased. Northridge Commons' revenues
decreased in 1997
compared to 1996 due to decreased occupancy mostly due to the anchor tenant 
leaving.

 Maintenance costs dropped 37% compared to 1996 due to the 1996 lintel and
garage door project
at Lock-It Lockers Tucson. In 1997, Phoenix Lock-It Lockers' operating
expenses rose 1.7% compared
to 1996. 1997 Cave rek Lock-It Lockers' operating expenses increased 11.4 %
compared to 1996 due to
increased personnel expenses. Northridge Commons' expenses declined 14% due to
a decrease in
personnel expense.  

 Reference is made to Notes 2 and 7 of the Partnership's financial statements
for a discussion of
various fees charged to the Partnership and the amounts charged to the
Partnership by affiliates in 1997.

 INFLATION

 The General Partners believe the Partnership's ability to increase rental
rates would offset any
adverse effects from inflation on the Partnership's cost of operations.
Inflation may also tend to cause
capital appreciation of the Partnership's properties over a period of time as
rental rates and replacement
costs of properties continue to increase. However, the effects of inflation in
real estate may be influenced
by general or local economic conditions. Future results are subject to
uncertainty and the ability of the
Partnership to achieve certain results is largely beyond the control of the
General Partners and their
affiliates.








                     Report of Independent Auditors

The Partners
National Real Estate Limited Partnership Income Properties

We have audited the accompanying balance sheet of National Real Estate Limited
Partnership Income
Properties (the Partnership) as of December 31, 1997, and the related
statements of operations, partners'
capital (deficit) and cash flows for each of the two years in the period ended
December 31, 1997. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express
an opinion on these financial statements based on our audits.

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

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


                         /S/ ERNST & YOUNG LLP



January 20, 1998

       National Real Estate Limited Partnership Income Properties

                              Balance Sheet

                            DECEMBER 31, 1997


ASSETS
Cash and cash equivalents                $  790,168
Escrow deposits and other assets             14,271
Investment properties, at cost:
 Land                                     1,047,695
 Buildings and improvements               5,649,885
  6,697,580
 Accumulated depreciation                 2,343,748
  4,353,832
  $5,158,271

LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
 Tenant security deposits                $    5,530
 Deferred rent                               29,501
 Accrued interest payable to Individual General Partner  594,982
 Accrued expenses and other liabilities      80,144
 Note payable to Individual General Partner    271,020
  981,177
Partners' capital:
 General Partners (deficit)               (114,820)
 Limited Partners (authorized 10000 interests;
 issued 9034.01 interests)               4,313,585
 Less cost of Limited Partner interests held in Treasury
 (29.86 interests)                         (21,671)
    4,291,914
    4,177,094
   $5,158,271





See accompanying notes.



       National Real Estate Limited Partnership Income Properties

                        Statements of Operations

                      YEAR ENDED DECEMBER 31
                     1997               1996
Operating revenues:
 Rentals                                          $850,711       $ 865,822
 Other                                      91,742          128,971
  942,453                                          994,793
Operating expenses:
 Operating                                 229,253        219,870
 Administrative                            188,495        173,818
 Maintenance                                52,941         84,239
 Depreciation                              215,789        205,267
 Interest                                           85,539         75,873
 Property taxes                            123,845        122,246
 Advertising                                18,314            19,956
  914,176                                           901,269
Income from operation                       28,277         93,524

Interest income                             32,517         35,053
Provision for impairment loss on investment
 property (Note 4)                                         (785,000)
Net income (loss)                          $60,794        $(656,423)

Net income (loss) attributable to General
 Partners (3%)                            $  1,824        $ (19,693)
Net income (loss) attributable to Limited
 Partners (97%)                             58,970          (636,730)
  $60,794                                         $(656,423)

Net income per Limited Partnership Interest$    6.55      $   (70.72)







See accompanying notes.


       National Real Estate Limited Partnership Income Properties

                Statements of Partners' Capital (Deficit)



                         Cost of Limited
           General   Limited  Partners' Interests 
           Partners  Partners Held in Treasury    Total  

Balance at January 1, 1996$  (85,815)$5,251,513$(21,671) $5,144,027
 Distributions to Partners(5,568) (180,084)          -    (185,652)
 Net income for the year     (19,693)(636,730)       0    (656,423)
Balances at December 31, 1996(111,076)4,434,699(21,671)   4,301,952
 Distributions to Partners(5,568) (180,084)          -    (185,652)
 Net income for the year     1,824   58,970          -       60,794
Balances at December 31, 1997$(114,820)$4,313,585$(21,671)$4,177,094



















See accompanying notes



       National Real Estate Limited Partnership Income Properties

                        Statements of Cash Flows

                        YEAR ENDED DECEMBER 31
                         1997      1996
OPERATING ACTIVITIES:
Net income (loss) for the year             $60,794        $(656,423)
Adjustments to reconcile net income to net
 cash provided by operating activities:
  Provision for impairment loss on
   investment property                                    785,000
  Depreciation                             215,789        205,267
  Changes in operating assets and liabilities:
   Escrow deposits and other assets          1,321        (5,560)
   Tenant security deposits                     76              -
   Deferred rent                             2,877        (5,719)
   Accrued expenses and other liabilities   77,821           77,389
Net cash provided by operating activities  358,678        399,954

INVESTING ACTIVITY
Additions to investment properties       (152,352)        (44,123)

FINANCING ACTIVITY
Distributions to Partners                (185,652)         (185,652)

Increase in cash and cash equivalents       20,674        170,179
Cash and cash equivalents at beginning of year769,494        599,315
Cash and cash equivalents at end of year  $790,168         $ 769,494










See accompanying notes.


       National Real Estate Limited Partnership Income Properties
                                    
                      Notes to Financial Statements
                                    
                            December 31, 1997
                                    
                                    
                                    

1. ORGANIZATION AND BASIS OF ACCOUNTING

ORGANIZATION

National Real Estate Limited Partnership Income Properties (the Partnership)
was organized as a limited
partnership under the laws of the State of Wisconsin pursuant to a Certificate
and an Agreement of Limited
Partnership (the Agreement) dated December 18, 1984, for the purpose of
investing primarily in commercial
real property and began operations in May 1985. The Partnership is to be
dissolved on or before
December 31, 2004.

The Partnership consists of three General Partners, National Development and
Investment, Inc., John
Vishnevsky, and EC Corp., and 1,125 Limited Partners at December 31, 1997. Mr.
Vishnevsky is the
president and majority stockholder of National Development and Investment,
Inc. EC Corp. was admitted
to the Partnership effective July 26, 1991, as approved by the Limited
Partners. 

BASIS OF ACCOUNTING

The Partnership records are maintained on the basis of accounting utilized for
federal income tax reporting
purposes. The accompanying financial statements have been prepared from such
records adjusted to the
generally accepted accounting principles (GAAP) basis of accounting, including
adjustments for differences
in depreciation methods. Certain accrual and tax basis amounts are summarized
as follows:

<TABLE>
<S>                 <C>      <C>    <C>       <C>
                    1997            1996      

                      GAAP     Tax     GAAP     Tax
                      Basis   Basis   Basis    Basis

(In Thousands)                                

Total assets           $5,158 $5,775    $5,202 $5,897

                                              

Partner's capital:                            

General Partners (deficit)    (115)  (107)     (111)  (103)

Limited Partners        4,292  5,484     4,413  5,598

Net income (loss):                            

General Partners            2      2      (19)      4

Limited Partners           59     66     (637)    140
</TABLE>

       National Real Estate Limited Partnership Income Properties 
               Notes to Financial Statements (continued) 


2. SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires
management to make estimates and assumptions that affect the amounts reported
in the financial statements
and accompanying notes. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

The Partnership considers all short-term investments which have original
maturities of one year or less when
purchased to be cash equivalents.

INVESTMENT PROPERTY

Investment property is stated at cost. Depreciation is computed by the
straight-line method using estimated
useful lives of 10 to 30 years for the buildings and improvements and 5 to 10
years for related equipment.
Leasehold improvements are depreciated over the life of the related lease.

The Partnership evaluates the investment property periodically for indication
of impairment, including
recurring operating losses and other significant adverse changes in the
business climate that affect the
recovery of the recorded asset value. If investment property is considered
impaired, a loss is provided to
reduce the net carrying value of the asset to its estimated fair value.
Management is not aware of any
indicator that would result in any significant impairment loss.

FEES TO AFFILIATES

Property management fees are payable currently to the General Partners or
affiliates of the General Partners. 
Fees for property management and rental services are being charged to expense
over the period property
management services are being performed.

ALLOCATIONS AND DISTRIBUTIONS

Pursuant to the Agreement, net income and loss from operations (exclusive of
those from the sale or
disposition of Partnership properties) are to be allocated 97% to the Limited
Partners and 3% to the General
Partners. Any gains from the sale or disposition of Partnership properties are
to be allocated first to the
General Partners and Limited Partners with deficit net capital accounts; then
to the Limited Partners in an
amount equal to their initial capital investment plus any amount remaining to
be paid and paid under their
cumulative preference; then to the General Partners in an amount equal to the
proceeds of such sale
distributed to them; and all remaining amounts are to be allocated to the
Limited Partners provided that at
least 3% of the gain from sale or disposition would be allocated to the
General Partners. Losses from the sale
or other disposition of Partnership properties are to be allocated 97% to the
Limited Partners and 3% to the
General Partners.

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Cash available for distribution, as defined in the Agreement, will be
distributed 97% to the Limited Partners
and 3% to the General Partners. After the repayment of any General Partner
loans, sales proceeds will be
distributed as follows: (1) 97% to the Limited Partners and 3% to the General
Partners until the Limited
Partners have received (A) 100% of their initial capital investment and (B)
cumulative, noncompounded
distributions of sales proceeds, in excess of the amount required in (A), and
cash available for distribution
equal to 6% per annum on their initial capital investment, with the 3% to the
General Partners subordinated
to payment of the amounts in (A) and (B) to the Limited Partners; (2) to an
affiliate of the General Partners,
an amount equal to its subordinated real estate commission (up to 3% of the
aggregate selling price of all
properties); (3) 88% to the Limited Partners and 12% to the General Partners,
with such payments to the
General Partners subordinated to a total return to the Limited Partners of (A)
100% of their initial capital
investment plus (B) a cumulative preference of 10% per annum of their initial
capital investment. 

NET INCOME PER LIMITED PARTNERSHIP INTEREST

Net income per Limited Partnership interest is based on 97% of net income as
allocated to the Limited
Partners divided by the weighted average number of interests outstanding
during the year.


3. INVESTMENT PROPERTIES

Investment properties consist of the following at December 31, 1997:
<TABLE>
<S>                        <C>                 <C><C>
                                               Costs CapitalizedSubsequent to
                                               Acquisition of
                           Initial Cost to Partnership
</TABLE>
<TABLE>
<S>                        <C>      <C>        <C>
                                    Buildings andImprovementsBuildings and
        Description          Land               Improvements
</TABLE>
<TABLE>
<S>                        <C>                               <C><C>
                             (In Thousands)                  
</TABLE>
<TABLE>
<S>                        <C>      <C>        <C>
Lock-It-Lockers Mini-WarehousesTucson, Arizona 
                                $253     $1,748          $137

Lock-It-Lockers Mini-WarehousesPhoenix, Arizona
                                 222      1,999            90

Northridge Commons                             
Shopping Center                  699      1,747           190
Milwaukee, Wisconsin                           

Cave Creek - Phase I Mini-WarehousesPhoenix, Arizona
                                  94        301             1

                              $1,268     $5,795          $418
</TABLE>

<TABLE>
<S>                        <C>                     <C><C>
                           Gross Amount at Which Carried

                             Buildings and         Accumulated
</TABLE>
<TABLE>
<S>                        <C>     <C>        <C>   <C>
        Description          Land  ImprovementsTotalDepreciation
</TABLE>
<TABLE>
<S>                        <C>
                           (In Thousands)
</TABLE>
<TABLE>
<S>                        <C>     <C>        <C>   <C>
Lock-It-Lockers Mini-WarehousesTucson, Arizona      
                               $253     $1,885$2,138     $765

Lock-It-Lockers Mini-WarehousesPhoenix, Arizona        
                                222      2,089 2,311      828

Northridge Commons                                  
Shopping Center                 479      1,372 1,851      642
Milwaukee, Wisconsin                                

Cave Creek-Phase I Mini-WarehousesPhoenix, Arizona  
                                 94        304   398      109

                             $1,048     $5,650$6,698   $2,344
</TABLE>

3. INVESTMENT PROPERTIES (CONTINUED)

<TABLE>
<S>                              <C>             <C>
Description                      Date of ConstructionDate Acquired

Lock-It-Lockers Mini-Warehouses                  
Tucson, Arizona                  1976            May 1985   
                                                      

Lock-It-Lockers Mini-Warehouses                  
Phoenix, Arizona                 1976            January 1986

Northridge Commons Shopping                      
Center                           1981            May 1987
Milwaukee, Wisconsin                             

Cave Creek - Phase I Mini-WarehousesPhoenix, Arizona
                                 1985            April 1987
</TABLE>

There were no encumbrances on the investment properties at December 31, 1997.
The accumulated
depreciation reported for federal income tax purposes is $3,510,336 at
December 31, 1997.

A reconciliation of the cost and accumulated depreciation of the investment
properties for financial reporting
purposes follows:
<TABLE>
<S>                                 <C>                     <C><C>
                                    YEAR ENDED DECEMBER 31  
</TABLE>
<TABLE>
<S>                                 <C>     <C>
                                      1997    1996
</TABLE>
<TABLE>
<S>                                 <C>             <C>     <C>
                                        (In Thousands)      
</TABLE>
<TABLE>
<S>                                 <C>     <C>
Cost:                                       

Balance at beginning of year        $6,545  $7,286

Additions to investment properties  153     44

Provision for impairment of assets  --      (785)

Balance at end of year              $6,698  $6,545

                                            

Accumulated depreciation:                   

Balance at beginning of year        $2,128  $1,923

Provision for the year              216     205

Balance at end of year              $2,344  $2,128
</TABLE>


4. IMPAIRMENT OF ASSETS

In accordance with FASB Statement No. 121, "Accounting for the Impairment of
Long-Lived Assets and
for Long-Lived Assets to be Disposed Of," the Partnership records impairment
losses on long-lived assets
used in operations when events and circumstances indicate that the assets
might be impaired and the
undiscounted cash flows estimated to be generated by those assets are less
than the carrying amounts of those
assets. During 1996, the Partnership determined that an impairment to the
asset value of a retail shopping
center known as Northridge Commons had occurred, resulting from the loss of a
significant anchor tenant
and deteriorating market conditions caused by an economically depressed area
where the property is located.
Based on these factors, the Partnership wrote down assets with a carrying
value of approximately $1,880,000
by $785,000 to their estimated fair value. Fair value was based on estimated
future cash flows to be generated
from the property, discounted at a market rate of interest.

5. INCOME TAXES

The Partnership pays no income taxes. Partnership losses or income and taxes
attributable thereto will be the
responsibility of the various Partners.

Differences between the net income as reported herein and the net income
(loss) reported for federal income
tax purposes arise primarily from timing differences related to depreciation
and other GAAP basis
adjustments. The following is a reconciliation of the reported net income
(loss) and the net income reported
for federal income tax purposes:

<TABLE>
<S>                                 <C>                      <C><C>
                                    YEAR ENDED DECEMBER 31   
</TABLE>
<TABLE>
<S>                                <C>      <C>
                                     1997     1996

Net income (loss) as reported in            
the financial                        $60,794$(656,423)
statements                                  

Add (deduct):                               

Depreciation                        (78,217)(60,218)

GAAP basis adjustments                85,539  75,873

Provision for impairment of assets        --785,000

Net income reported for federal      $68,116$ 144,232
income tax                                  
purposes                                    
</TABLE>


6. LEASES

The Partnership is the lessor of a shopping center under operating leases
expiring in various years to 2002.
Certain of the shopping center leases provide for contingent rentals based on
specified percentages of gross
sales of the tenants. Contingent rentals from operating leases amounted to $
-0- in 1997, $17,093 in 1996.

At December 31, 1997, future minimum lease payments receivable under
noncancellable operating leases with
remaining terms of one year or more are as follows:

<TABLE>
<S>                           <C>
1998                             111,500

1999                             101,100

2000                              84,800

2001                              72,500

2002                              66,500
</TABLE>

7. TRANSACTIONS WITH AFFILIATED PARTIES

The General Partners are general partners for other limited partnerships which
have invested in real estate.
The Partnership reimburses affiliates of the General Partner for the actual
cost of goods and materials used
by or for the Partnership in the course of performing the general functions of
the Partnership. These general
functions include certain management, accounting and other expenses. The
Partnership has executed
contracts providing for the following fees payable to such entities:

NATIONAL REALTY MANAGEMENT, INC. (NRMI)

NRMI charged the Partnership for property management fees ($53,705-1997 and
$53,770-1996.) Monthly
fees represent 6% of gross receipts from the Lock-It-Lockers Mini-Warehouses
in Tucson and Phoenix and
Cave Creek Mini-Warehouse, and 3% of gross receipts from Northridge Commons
Shopping Center.

The Partnership also paid $56,923, $52,534 in 1997, 1996, respectively, for
the reimbursement of accounting
and administrative expenses incurred by NRMI on behalf of the Partnership.

7. TRANSACTIONS WITH AFFILIATED PARTIES (CONTINUED)

NATIONAL DEVELOPMENT AND INVESTMENT, INC.

The Partnership paid National Development and Investment, Inc. (NDII) for the
reimbursement of expenses
totaling $93,363, and $86,993 in 1997 and 1996, respectively, for
administrative expenses incurred on behalf
of the Partnership.

INDIVIDUAL GENERAL PARTNER

The note payable to Individual General Partner is payable from proceeds from
sale or other disposition of
investment properties, with interest payable monthly at a bank's prime rate
plus 2% (10.5% at December 31,
1997) or 12%, whichever is lower. The Partnership incurred interest
($85,539-1997 and $75,873-1996) in
connection with this note and no interest was paid in any year with respect to
the note payable to Individual
General Partner. 

8. FAIR VALUES OF FINANCIAL INSTRUMENTS

CASH, CASH EQUIVALENTS AND DEBT

The carrying amount reported in the balance sheet for cash, and cash
equivalents and debt approximates its
fair value due to the short term nature of each.


       NATIONAL REAL ESTATE LIMITED PARTNERSHIP INCOME PROPERTIES





   John Vishnevsky  Chief Operating and Executive Officer
   John Vishnevsky  Chief Financial and Accounting Officer



General Partners:


  John Vishnevsky

  National Development and Investment, Inc.

   John Vishnevsky      President and Director
   Stephen P. Kotecki       Vice President, Secretary, Treasurer
                 and Director



  EC Corp.

   Stephen P. Kotecki       President, Treasurer and Director
   Thomas Rielly           Vice President, Secretary and Director


Of the above officers and directors of the Corporate General Partner, Mr.
Thomas Rielly is the only person
not an employee of National Development and Investment, Inc., its affiliates,
or EC Corp.


The Partnership Form 10-KSB for 1997 which is filed with the Securities and
Exchange Commission, will
be furnished at no charge to partners upon written request directed to:
National Development and
Investment, Inc., Attn: Partnership Management, 1155 Quail Court, Pewaukee,
Wisconsin 53072-3703.