UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                FORM 10-K/A No. 2

{X}  Annual Report  Pursuant to Section 13 of 15(d) of the  Securities  Exchange
     Act of 1934 (Fee Required)

                   For the fiscal year ended December 31, 1997
                                                        or

{    }  Transition  Report  Pursuant  to Section  13 or 15(d) of the  Securities
     Exchange Act of 1934 (No Fee Required)

        For the transition period from ............... to ...............

                         Commission file number 1-13962

                         INSIGNIA FINANCIAL GROUP, INC.
             (Exact name of registrant as specified in its charter)

         Delaware                                            13-3591193
(State or other jurisdiction of                           (I.R.S. Employer
incorporation or organization)                          Identification No. 1)

One Insignia Financial Plaza, P.O. Box 1089
       Greenville, South Carolina                               29602
 (Address of principal executive offices)                     (Zip Code)

        Registrant's telephone number, including area code (864) 239-1000

                                                                       

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

                                      None

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

                 Shares of Class A Common Stock, $.01 Par Value

                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 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  report),  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes X No .

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 any amendment to this
Form 10-K. 

As of February  27,  1998 there were  outstanding  30,446,171  shares of Class A
Common Stock.  Based on the closing price of $23.375 per share of Class A Common
Stock as of such date, the aggregate market value of Registrant's Shares held by
non-affiliates was approximately $508 million.


                       DOCUMENTS INCORPORATED BY REFERENCE



<PAGE>
<TABLE>


                                     Part II


Item 6. Selected Financial Data

     The selected  statement of operations  data set forth below with respect to
the years ended December 31, 1997,  1996,  1995,  1994 and 1993, and the balance
sheet data at December 31, 1997,  1996, 1995, 1994 and 1993 are derived from and
are  qualified by reference  to, the  Consolidated  Financial  Statements of the
Company  and  the  Notes  thereto  and  should  be  read  in  conjunction   with
Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations included as Item 7 in this Form 10-K/A No. 2.

     The tables set forth  below  provide a variety of  statistical  information
about Insignia.  Insignia believes that Net EBITDA, which is defined as earnings
before interest,  income taxes,  depreciation and amortization (excluding equity
earnings, apartment properties, and minority interests) ("EBITDA") combined with
funds from operations (as hereinafter  defined "FFO"), less interest expense and
earnings allocable to preferred  securities,  is a significant  indicator of the
strength of its results.  EBITDA is a measure of a company's ability to generate
cash to service its  obligations,  including  debt service  obligations,  and to
finance capital and other expenditures, including expenditures for acquisitions.
FFO is defined as income or loss from the real estate  operations,  which is net
income in accordance with generally  accepted  accounting  principles  excluding
gains or  losses  from  debt  restructuring,  sales of  property,  and  minority
interests,  plus  depreciation and provision for impairment.  Neither EBITDA nor
FFO represent cash flow as defined by generally accepted  accounting  principles
and do not  necessarily  represent  amounts of cash available to fund Insignia's
cash requirements.

                        SUMMARY HISTORICAL FINANCIAL DATA
                 INSIGNIA FINANCIAL GROUP, INC. AND SUBSIDIARIES
<CAPTION>
                                                 Year Ended December 31,

                                        1997     1996     1995    1994    1993
                                         (In thousands except per share data)
Statement of Operations Data(1):
<S>                                  <C>      <C>      <C>      <C>     <C>    
Revenues                             $400,843 $227,074 $123,032 $75,453 $52,577
Operating expenses                    325,886  172,046   94,727  54,757  37,720
Equity earnings                        10,027    3,590    2,461     113      --
Income before extraordinary item       10,233    9,266    6,258   7,261   4,925
Extraordinary loss                         --     (702)    (452)     --    (255)
Net income                             10,233    8,564    5,806   7,261   4,670
Income per common share before
   extraordinary item - diluted        $ 0.32   $ 0.28  $  0.22  $ 0.35  $ 0.34
Net income per common share - diluted  $ 0.32   $ 0.26  $  0.20  $ 0.35  $ 0.32
</TABLE>

<TABLE>
<CAPTION>
                                                      December 31,
                                                    (In thousands)

                                      1997     1996     1995     1994     1993
Balance Sheet Data(1):
<S>                                <C>      <C>      <C>      <C>      <C>     
Cash and cash equivalents          $ 88,847 $ 54,614 $ 49,846 $ 36,596 $ 34,005
Property management contracts       147,256  122,915   88,816   73,411   38,620
Investment in real estate limited   215,735  150,863   60,473   37,926       --
   partnerships and other securities
Total assets                        800,223  492,402  245,409  174,272   88,835
Notes payable                       170,404   49,840   32,996   63,198    1,139
Redeemable convertible preferred
   stock                                 --       --   15,000       --       --
Company-obligated mandatory 
   redeemable Convertible preferred 
   securities of a Subsidiary trust 144,065  144,169       --       --       --
Stockholders' equity                237,909  217,905  157,013   78,806   71,540
</TABLE>
<TABLE>

<CAPTION>
                                               Year Ended December 31,
                                      1997     1996     1995     1994     1993
                                                    (In thousands)
Cash Flow Data (1):
Cash provided by operating 
<S>                                <C>      <C>      <C>      <C>      <C>     
    activities                     $ 39,963 $ 15,894 $ 15,424 $ 13,655 $ 11,382
Cash used in investing activities  (160,179)(170,068) (56,710) (35,151) (14,932)
Cash provided by financing 
    activities                      154,449  158,942   54,536   24,087   26,222
</TABLE>

<TABLE>

<CAPTION>
                                               Year Ended December 31,
                                      1997     1996      1995     1994    1993
                                       (In thousands except properties managed)

Supplemental Data
<S>   <C>                          <C>      <C>      <C>      <C>      <C>     
EBITDA(2)                          $ 57,312 $ 49,008 $ 28,305 $ 20,696 $ 14,857
Combined EBITDA and FFO(3)           78,844   62,449   32,916   20,809   14,857
Net EBITDA(4)                        60,974   47,713   24,622   20,067   13,988

  Properties managed:
   Residential (units)              280,000  265,000  261,000  216,000  141,000
   Commercial properties 
     (thousands of sq. ft.)         160,000  110,000   64,000   43,000   25,000
</TABLE>


(1)  The Company and its  affiliates  have  acquired  control of, or  management
     rights to, 43  portfolios of  properties  since 1990,  the results of which
     affect the comparability of operations.

(2)  Earnings before interest  expense,  taxes,  depreciation  and  amortization
     (excluding equity earnings).

(3)  Funds  from  operations  is a  measure  of real  estate  operations,  which
     represents  net  income  or  loss in  accordance  with  generally  accepted
     accounting  principles  excluding gains or losses from debt  restructuring,
     sales of property,  and minority interests plus depreciation and provisions
     for  impairment.  (See table  below for  detailed  calculation  of combined
     EBITDA and FFO.)

(4)  EBITDA and FFO less  interest  expense and earnings  allocable to preferred
     securities.


<TABLE>

<CAPTION>
                                                Year Ended December 31,
                                                     (In thousands)
                                       1997    1996     1995      1994    1993
Calculation of Combined EBITDA
and FFO
<S>                                 <C>      <C>      <C>       <C>     <C>    
Fee based services revenue          $388,922 $215,623 $118,828  $72,576 $51,355
Interests                              4,571    3,104    2,780    1,457     652
Other                                    704    2,327    1,424    1,420     570
                                     394,197  221,054  123,032   75,453  52,577
Less:
   Fee based services expenses       315,653  164,830   85,707   49,090  32,469
   Administrative and other           10,233    7,216    8,020    5,667   3,751
   Release fee                         5,000       --       --       --      --
   Legal reserve                       5,202       --       --       --      --
   Termination of employment 
     agreements                           --       --    1,000       --   1,500
   Loss attributable to IPT              797       --       --       --      --
EBITDA - service company              57,312   49,008   28,305   20,696  14,857
FFO from real estate                 21,5320   13,441    4,611      113      --
Combined EBITDA and FFO             $ 78,844 $ 62,449 $ 32,916  $20,809 $14,857
</TABLE>

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations

Financial Condition

     Insignia's  prime  objective  is to  increase  income from  operations  and
stockholder  value  through  strategic  growth in the assets that  provide  such
returns.  The Company posted strong  results in pursuit of these  objectives for
the year ended  December 31, 1997 on sharply higher  revenues.  The Company uses
Net  EBITDA as a primary  indicator  of  financial  performance  and Net  EBITDA
increased 28% to $61.0 million in comparison to 1996.  These  financial  results
are impacted by various  one-time  charges  totaling $12.3 million in aggregate,
including  the  previously  announced $5 million  release fee paid to the United
States  Department  of Housing and Urban  Development  ("HUD")  during the third
quarter and $5.2 million in related legal costs and reserves for future costs in
the fourth  quarter.  Net EBITDA,  excluding  the one time  charges,  would have
increased 54% to $73.3  million in  comparison  to 1996.  EBITDA for the service
company  increased  17% to $57.3  million while total FFO increased 60% to $21.5
million in comparison to 1996, respectively. Assets grew 63% from $492.4 million
at December 31, 1996 to $800.2  million at December 31,  1997.  Growth  occurred
mainly in receivables, investments in real estate limited partnerships, property
management contracts,  and costs in excess of net assets of acquired businesses.
The growth in these areas is primarily due to the impact of acquisitions  closed
in 1997.

     During 1997,  the Company  completed ten business  acquisitions,  including
expansion  internationally through the purchase of 60% of the stock in CAGISA, a
leading management  company in Italy.  Other acquisitions  completed include the
following:  Rostenberg Doern Company, Inc., HMB Property Services,  Inc., Frain,
Camins & Swartchild,  Inc.  ("FC&S"),  The Related Companies of Florida,  Radius
Retail Advisors,  Forum Properties,  Inc., Realty One, Inc., 100% of the Class B
stock of First  Winthrop  Corporation  and a  general  partnership  interest  in
Winthrop Financial Associates ("Winthrop"), and Barnes, Morris, Pardoe & Foster.
The  businesses,   including  CAGISA,   were  acquired  for  aggregate  purchase
consideration of  approximately  $136.7 million with $101.6 million from cash on
hand ($95.8  million,  net of acquired  cash from  acquisition  entities of $5.8
million),  $4.2 million of the Company's Class A Common Stock,  notes payable of
$528,000 (net of $8.0 million in notes receivable), and $30.4 million in accrued
liabilities and deferred taxes.

     Cash and cash equivalents  increased 63% from $54.6 million at December 31,
1996 to $88.8 million at December 31, 1997. The primary sources of funds include
the  receipt  of  $62.4  million  by  Insignia   Properties  Trust  ("IPT"),   a
consolidated  subsidiary of the Company, from private placement offerings of its
securities, $38.1 million in collections from limited partnership distributions,
and $111 million from borrowings under the revolving credit facility.  The major
uses of funds  include  $95.8  million paid for the  acquisition  of  management
contracts and acquired  businesses  (discussed  above) and $93.1 million for the
purchase of real estate limited partnership interests. See the Statement of Cash
Flows and the  discussion in the Liquidity and Capital  Resources  section below
for more information.

     Receivables  increased  165% from $46.0  million at  December  31,  1996 to
$122.2  million  at  December  31,  1997.  This  increase  is  primarily  due to
substantially increased brokerage and leasing activity transactions primarily in
the commercial  segment,  coupled with substantial  increases in operations from
current year acquisitions. The increase in brokerage and leasing transactions is
attributable to the growth in revenues generated by acquisitions, primarily ESG,
Paragon and FC&S, over the past 18 months.  Such receivables are to be collected
at future dates as defined in the terms of the individual brokerage agreements.

     Property and  equipment  increased  57% from $12.1  million at December 31,
1996 to $19.0  million at December  31, 1997.  This change is  primarily  due to
expenditures  for  computer  equipment  and  software  in  connection  with  the
implementation  of  a  change  in  the  Company's   computer   platform.   Also,
contributing  to the  increase is  approximately  $2.4  million in property  and
equipment acquired through current year acquisition purchases.

     Investments  in real  estate  limited  partnerships  and  other  securities
increased  43% from  $150.9  million at December  31, 1996 to $215.7  million at
December 31, 1997. This increase resulted primarily from the investment of $93.1
million  in  additional  limited  partnership  interests  through  acquisitions,
secondary market purchases and real estate joint ventures,  net of distributions
received of $38.1 million. Also contributing to the increase was the recognition
of $10.0 million in equity earnings for 1997.

     Property management contracts increased 20% from $122.9 million at December
31, 1996 to $147.3  million at  December  31,  1997.  During  1997,  the Company
completed  the  acquisition  of 10  businesses  which in  aggregate  contributed
approximately  $54.6  million in additional  management  contract  bases.  These
acquisition  purchases are offset by $23.2 million in  amortization  expense and
the collection of  approximately  $6.8 million in disposition fees from the sale
of  real  estate  in  limited  partnerships  syndicated  by The  Balcor  Company
("Balcor").  In the second quarter of 1996,  Balcor  announced its intentions to
sell a large portion of the properties  covered by these  management  contracts.
The Company  entered into an agreement with Balcor whereby an advisory fee would
be paid to the Company for services rendered in the sales transactions. The fees
are paid in cash after close of the sale  transaction  and have been  applied to
the remaining unamortized contract basis associated with the Balcor properties.

     Costs in excess of net assets of acquired  businesses  increased  110% from
$75.6 million at December 31, 1996 to $158.5  million at December 31, 1997.  The
increase is primarily a result of the payment of purchase price of approximately
$87.4 million in excess of the net assets of acquired entities in 1997.

     Other assets increased 223% from $8.1 million at December 31, 1996 to $26.3
million at December 31, 1997. This increase is primarily due to acquisitions and
internal  growth  within the Company.  Contributing  to this  increase is 1) the
capitalization of certain costs, in the amount of approximately $5.0 million, in
connection  with  the  implementation  of a  change  in the  Company's  computer
platform,  2)  organization  costs in the  formation of IPT and proposed  merger
costs with AMIT aggregating  approximately  $4.5 million,  and 3) investments in
debt instruments totaling approximately $3.0 million.

     Accounts  payable  increased 701% from $1.7 million at December 31, 1996 to
$13.7   million  at  December  31,  1997.   Contributing   to  the  increase  is
approximately  $6.9 million in payables acquired through the purchases of CAGISA
and Realty One in combination  with  significant  increases in operations in the
commercial segment from current year acquisition activity.

     Commissions  payable at December 31, 1997  increased  174% or $32.5 million
over December 31, 1996. Consistent with the change in receivables, this increase
is  attributable  to  substantially  increased  brokerage  and leasing  activity
transactions from acquisitions over the past 18 months.

     Accrued  and  sundry  liabilities  increased  150% from  $40.7  million  at
December  31, 1996 to $102.0  million at December  31,  1997.  This  increase is
primarily  due to  the  addition  of  approximately  $30.4  million  in  accrued
acquisition  liabilities  and  deferred  tax  liabilities  coupled  with a $13.3
million  increase in accrued employee  compensation  and incentives  compared to
1996.

     Minority  interests  in  consolidated  subsidiaries  of  $61.5  million  at
December 31, 1997 represents the minority  equity in IPT from private  placement
offerings in combination with the minority equity in CAGISA.

     Notes  payable  increased  242% from $49.8  million at December 31, 1996 to
$170.4  million  at  December  31,  1997.   This  increase  is  attributable  to
acquisition  purchases  in 1997 which  resulted  in $111  million in  additional
borrowings on the revolving  credit facility  coupled with assumed notes payable
of approximately $20.9 million in the Realty One purchase.

     Stockholders'  equity increased 9% from $217.9 million at December 31, 1996
to $237.9  million at  December  31,  1997  primary  due to the  receipt of $7.5
million  from the  issuance of common  stock from the  exercise of options;  the
issuance of the Company's Class A Common Stock in the amount of $4.2 million for
the purchase of Realty One; and net income of $10.2 million for 1997.



<PAGE>

Results of Operations for the Years Ended December 31, 1997 and 1996

     Insignia  posted  strong  results in all major  components  of  operational
activity for 1997 due primarily to continued acquisition  activity.  The Company
uses Net EBITDA as a primary  indicator of its  financial  performance,  and Net
EBITDA  increased 28% from $47.7  million in 1996 to $61.0 million in 1997.  Net
EBITDA  per  common  share  increased  33% from  $1.45 in 1996 to $1.93 in 1997.
EBITDA for the service company increased 17% from $49.0 million to $57.3 million
and total FFO from real estate  operations of IPT and  co-investments  increased
from  $13.4  million to $21.5  million  for 1996 and 1997,  respectively.  These
financial  results are impacted by one-time  charges  totaling  $12.3 million in
aggregate, including $10.2 million in HUD related release fees, legal costs, and
reserves for future costs. Excluding the one time charges, Net EBITDA would have
reflected gains of 54% to $73.3 million and EBITDA for the service company would
have reflected gains of 42% to $69.6 million in comparison to 1996.

     Total  revenues  increased  77% or $173.8  million for the year from $227.1
million in 1996 to $400.8  million in 1997.  The growth in revenues is primarily
reflected in fee based services, which posted gains of 80% to $388.9 million, in
comparison to 1996. This growth rate is primarily  attributable to the fee based
services  revenue in the  commercial  group,  which posted  impressive  gains of
approximately  152% from $98.0 million in 1996 to $246.4  million in 1997.  This
increase is reflective of the  contributions of a full year of operations of ESG
and  Paragon,  which were  acquired  on June 30,  1996,  and the six  commercial
acquisitions  in 1997.  Fee based  services  revenue for the  residential  group
posted an increase of 22% from $111.2 million in 1996 to $135.6 million in 1997.
This growth is due primarily to the  contributions in fee based services revenue
of the four residential acquisitions in 1997, including CAGISA in Italy.

     Interest income  increased 47% from $3.1 million in 1996 to $4.6 million in
1997 due to higher  average  interest  bearing cash holdings in the current year
compared to 1996.

     Apartment property revenue, which represents the operations of a controlled
limited  partnership,  increased  10% to $6.6 million due primarily to increased
rental activity at the property in comparison to 1996.

     Fee based  services  expense  increased 92% from $164.8  million in 1996 to
$315.7 million in 1997.  Consistent with fee based services  revenue,  fee based
services  expense  increased  significantly  in the commercial group as a direct
result of the eight commercial  acquisitions over the past eighteen months.  Fee
based  services  expense  for the  commercial  group  increased  142% from $85.4
million in 1996 to $207.0 million in 1997.  Fee based  services  expense for the
residential  group,  which include a one-time  charge of $2.1 million for a note
receivable deemed uncollectible, reflected an increase of 35% from $71.6 million
in 1996 to $96.9 million in 1997.

     Administrative  expenses  increased  42% from $7.2 million in 1996 to $10.2
million in 1997.  This increase,  which is  significantly  lower that the growth
rate in revenues, is due in part to the increased operational expansion over the
course of 1997 and clearly  demonstrates  the Company's  ability to  efficiently
absorb   acquisitions   into   its   existing   administrative   and   corporate
infrastructure.

     Interest  expense  decreased 39% from $12.9 million in 1996 to $7.9 million
in 1997.  This decrease is directly  attributable  to lower average  outstanding
borrowings  on  the  revolving   credit  facility  in  1997  compared  to  1996.
Contributing to the lower outstanding borrowings in 1997 was the use of proceeds
from the  issuance  of the  trust  based  convertible  preferred  securities  in
November 1996 to pay down outstanding notes payable.

     Depreciation and  amortization  increased 38% from $23.0 million in 1996 to
$31.7  million  in 1997.  This  increase  is  consistent  with the growth of the
Company  over  the  past  twelve  months  attributable  to  acquisitions.  These
acquisitions  have  reflected   significant   purchases  of  amortizable  assets
resulting in a corresponding  increase in amortization expense. In addition, the
57% growth in  property  and  equipment  from  internal  growth and  acquisition
activity has resulted in a similar increase in depreciation expense in 1997.

     The $5 million  release fee represents a negotiated one time payment to HUD
to remove the Company from any  potential  liability in a civil lawsuit filed by
HUD against one of the third party unaffiliated  owners of affordable housing to
which the Company provides management  services.  The $5.2 million legal reserve
represents  the  one-time  charge for HUD related  legal costs and  reserves for
potential future incremental costs that the Company believes may result from its
management  of HUD  properties.  The Company does not  anticipate  further costs
beyond those incurred and accrued in 1997.

     Equity  earnings  increased 179% from $3.6 million in 1996 to $10.0 million
in 1997. This increase is  attributable  to: 1) equity earnings of $645,000 from
investments in  co-investment  partnerships  (no comparable  earnings from these
investments  existed in 1996); 2) significant  purchases of limited  partnership
interests in partnerships for which no investments existed in 1996; 3) increased
ownership  in IPT  controlled  partnerships  through  tender  offers  in the 4th
quarter of 1997; and 4) the continued  improvement  in the operating  results of
IPT controlled  partnerships as discussed in the Financial Conditions section on
FFO above.

     Minority  interests in consolidated  subsidiaries  increased 530% from $2.0
million in 1996 to $12.4 million in 1997.  This increase is primarily due to: 1)
$10  million  in  dividends  paid  on  the  trust  based  convertible  preferred
securities in 1997 compared to $1.6 million in 1996 (the  securities were issued
in  November  1996);  2) $1.2  million in minority  equity in the  current  year
earnings of IPT (the Company held an average 87% aggregate ownership interest in
IPT for 1997 compared to 100% in 1996); and 3) $1.3 million in charges resulting
from distributions made by a majority owned partnership subsidiary of IPT to the
holders of minority equity  interests (which resulted in negative equity for the
minority owners). Generally accepted accounting principles requires such charges
to be taken by the majority owner on the presumption that the negative equity of
the minority  owners on a historical book value basis cannot be recovered by the
majority owner.

     The provision  for income taxes  increased 20% from $5.7 million in 1996 to
$6.8 million in 1997. This increase is attributable to the rise in net income in
comparison  to 1996 coupled with an increase in the  effective tax rate from 38%
to 40%  because of changes  in assets and their tax bases as  determined  by the
structure of the purchase  agreements for  acquisitions  completed over the past
twelve months and higher tax rates where these acquisitions occurred.

     As a result of the  foregoing  factors,  net income  increased 19% to $10.2
million in 1997  compared to $8.6  million in 1996.  Diluted  earnings per share
increased to $.32 for 1997 compared to $.26 for 1996. If the Company had elected
to follow FASB Statement No. 123, "Accounting for Stock-Based Compensation," pro
forma net income would have been $6.8 million for 1997 compared to pro forma net
income for 1996 of $3.2 million;  and pro forma diluted earnings per share would
have been $.22 for 1997 compared to pro forma diluted earnings per share of $.10
for 1996.

Results of Operations for the Years Ended December 31, 1996 and 1995

     Acquisition activity and real estate investing were the primary reasons for
the Company's growth in results from operations, reflected by an increase of 90%
in combined  EBITDA and FFO,  from $32.9  million for 1995 to $62.4  million for
1996; and an increase of 94% in Net EBITDA, from $24.6 million for 1995 to $47.7
million for 1996.

     The  Company  uses Net  EBITDA  as a  primary  indicator  of its  financial
performance, which is combined EBITDA and FFO less interest expense and earnings
allocable  to  preferred  securities.  See the table in  Liquidity  and  Capital
Resources that breaks out all components of Net EBITDA. Net EBITDA per share was
$1.45 for 1996 compared to $1.09 for 1995.

     Revenues  increased 85% for the year from $123.0 million for 1995 to $227.1
million for 1996, with the primary growth being in fee based services  revenues.
The  acquisitions  completed  during the year  contributed  substantially to the
growth,  with those  acquisitions  being the NPI acquisition in January 1996 and
the ESG and Paragon acquisitions in June 1996.

     Other income increased  $903,000 from $1.4 million for 1995 to $2.3 million
for 1996.  The primary  reason for the  increase  was an increase of $300,000 in
amounts  received from an agency that serves as an insurance  broker for various
partnerships managed by the Company, and approximately $360,000 in a gain on the
sale of a  participation  note.  Various other items flowed through other income
such as miscellaneous fees and legal reimbursements.

     Fee based  services  expenses  increased 92% from $85.7 million for 1995 to
$164.8  million for 1996.  This  increase is primarily  caused by the  completed
acquisitions  mentioned  previously,  as well as expenses incurred in connection
with  unsuccessful  acquisitions of  approximately  $935,000.  Fee based service
expenses have increased at a higher  percentage than fee based service  revenues
as  a  result  of  lower  profit  margins   attributable  to  recent  commercial
acquisitions.  Also included in fee based services revenues and expenses are the
results  of  the  Company's  activities  in  the  consumer  services  area  with
operations contributing losses of $2.0 million for the year.

     Administrative  expenses  decreased  10% from $8.0 million for 1995 to $7.2
million for 1996.  This  decrease was achieved  through a reduction in occupancy
costs with some of the functions  decentralizing  to other locations  within the
Company;  and the revised  structure of the Company's  insurance program for its
operations.

     During 1995, a one-time charge for $1.0 million was incurred as a result of
terminating a contractual arrangement with a senior executive/director. Both the
Company  and the  employee  agreed to the  termination.  No such  expenses  were
incurred during the year ended December 31, 1996.

     Interest expense  increased 83% from $7.0 million for 1995 to $12.9 million
for 1996,  primarily as a result of the higher debt balances carried as a result
of 1996 acquisitions.

     With the  acquisition  of limited  partner  interests in excess of 50% in a
limited  partnership,  the  Company  now  consolidates  the results of the NPI 4
Partnership.  The categories  entitled apartment  property  revenues,  apartment
property expenses, apartment property interest and depreciation relate solely to
the operations of the property owned by the partnership.

     Depreciation and amortization  increased 71% from $13.5 million for 1995 to
$23.0  million for 1996.  This is a result of the  amortization  of the acquired
property  management  contracts,  goodwill,  and the  additions  to property and
equipment.

     Equity  earnings  increased  from $2.5 million for 1995 to $3.6 million for
1996,  primarily as a result of the increased  ownership of real estate  limited
partner interests. On a same store basis, revenues for the underlying properties
increased 4.5% over 1995, and expenses  (excluding major repairs and maintenance
mentioned  previously)  increased 1.7% over 1995. The Company also  accomplished
the  refinancing of $164 million in loans on 33 properties.  These  refinancings
decreased  interest costs at the partnership level, and increased cash available
for distribution.  Funds from operations increased from $4.6 million for 1995 to
$13.4 million for 1996.

     Minority interests also includes a $1.6 million distribution reflecting the
carrying  costs  on the  Preferred  Securities,  as this  is a form  of  outside
ownership.  The Trust issued $149.5 million in such Preferred  Securities in the
fourth quarter of 1996, with the Company owning 100% of the common securities of
the Trust.

     The provision for income taxes  increased 48% from $3.8 million for 1995 to
$5.7  million for 1996 in direct  proportion  to the  increase in income  before
income taxes and extraordinary item, resulting from the factors discussed above.

     The extraordinary  item relates to the early  extinguishment of debt on the
Company's  books for 1995, and on the limited  partnerships'  books of which the
Company owns equity interests for 1996.

     As a result of the  foregoing  factors,  net income  increased  48% to $8.6
million in 1996  compared to $5.8  million in 1995.  Diluted  earnings per share
increased to $.26 for 1996 compared to $.20 for 1995. If the Company had elected
to follow FASB Statement No. 123, "Accounting for Stock-Based Compensation," pro
forma net income would have been $3.2 million for 1996 compared to pro forma net
income for 1995 of $1.2 million;  and pro forma diluted earnings per share would
have been $.10 for 1996 compared to pro forma diluted earnings per share of $.05
for 1995.

Year 2000 Compliance 

     Insignia has  completed an  assessment on the impact of the year 2000 issue
and has  determined  that it will  have to  modify or  replace  portions  of its
software so that computer  systems will function  properly with respect to dates
in the year 2000 and  thereafter.  The project is  estimated  to be completed no
later than early 1999, which is prior to any anticipated impact on its operating
systems.  The Company believes that with current ongoing changes in its computer
platform,   expected  to  be  complete  later  in  1998,  coupled  with  current
modifications  to existing  software  and  software  conversions,  the year 2000
issues will not pose significant  operational problems for its computer systems.
The  Company  is  currently  assessing  the extent to which its  operations  are
vulnerable  should third party vendors and other  organizations,  with which the
Company conducts business, fail to remediate properly their computer systems. In
the event that such necessary modifications and conversions are not made, or are
not completed in a timely fashion,  the year 2000 issue could potentially have a
material impact on the operations of the Company.  The Company  anticipates that
Year 2000 compliance will cost  approximately $1.3 million of which $860,000 has
been spent to date.

Impact Of Inflation And Changing Prices

     The revenues of the property  management division are highly dependent upon
the aggregate  rents of the properties it manages,  which are affected by rental
rates and building  occupancy rates.  Rental rate increases are highly dependent
upon market  conditions  and the  competitive  environments  in the  properties'
locations.  Employee  compensation  is the  principal  cost  element of property
management.  Recent price and cost trends have not significantly affected profit
margins,  and are not  expected  to have  significant  negative  effects  in the
foreseeable future. Interest rate fluctuations generally do not adversely affect
a property's ability to perform due to the underlying debt carrying fixed rates.
Interest  rates do not  necessarily  move in the same  direction  or in the same
magnitude  as the  prices of goods and  services,  inasmuch  as such  prices are
affected by inflation.

     For the last several years,  rental and occupancy  rates across the country
have generally been stable.  However, in most areas of the Company's operations,
the absence for several years of any significant  new apartment  construction is
now resulting in upward  pressure on both occupancy and rental  levels.  Certain
aspects of the  Company's  operations  are  subject to  regulation  by the U. S.
Department  of  Housing  and  Urban  Development  ("HUD").  Rental  rates of HUD
properties are generally  based on the expenses of maintaining  the  properties,
rather than market  forces,  and are subject to regulatory  approval.  Occupancy
rates of HUD  properties,  as well as both occupancy and rental rates at non-HUD
properties,  generally respond to market forces along with other properties in a
region. The Company believes that increased  collected rents arising from either
higher  occupancy  or higher  rents  would have no  material  effect on overhead
costs.  There can be no assurance  that rent  collections  will increase or that
costs will not increase due to inflation or other causes.

     The programs  administered by HUD have been under continuing  review by the
United States  Congress.  Recent changes could result in reductions of rents, on
which management fees generally are based, in some HUD-subsidized  projects.  In
addition,  rent subsidies  which currently are tied to projects may be converted
to  "tenant-based"  assistance,  permitting  tenants in  subsidized  projects to
retain their  subsidies  while moving  elsewhere.  The occupancy level or rental
rates of such projects  could be affected and,  accordingly,  the management fee
paid to the property  manager  could be reduced.  It is possible that changes in
programs  administered  by HUD could result in lower rental  revenue and project
cash flow from which management and other fees are derived; however, the details
of the  implementation  of recent changes are not yet  sufficiently  specific to
determine  their actual  impact on such fees, if any.  Approximately  13% of the
residential units managed by the Company were housing projects  subsidized under
various government programs administered by HUD.

Other

     Certain  items  discussed  in this  report may  constitute  forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995  (the  "Reform  Act") and as such may  involve  known  and  unknown  risks,
uncertainties and other factors which may cause the actual results,  performance
or  achievements  of the  Company  to be  materially  different  from any future
results,   performance,   or   achievements   expressed   or   implied  by  such
forward-looking statements. Such forward-looking statements speak only as of the
date  of  this  report.  The  Company  expressly  disclaims  any  obligation  or
undertaking to release publicly any updates of revisions to any  forward-looking
statements contained herein to reflect any change in the Company's  expectations
with regard  thereto or any change in events,  conditions  or  circumstances  on
which any such statement is based.


<PAGE>
<TABLE>

Liquidity And Capital Resources

     The Company has several  sources  available  for  capital,  primarily  cash
generated from operations,  distributions  from IPT controlled and co-investment
partnerships,  and  available  credit  under the $275 million  Revolving  Credit
Facility.  At December 31, 1997, a total of $144 million was  outstanding  under
this facility.  As a result of its ability to generate cash, and such additional
sources,  cash  balances  grew from $54.6  million at December 31, 1996 to $88.8
million at December 31, 1997. The Company uses Net EBITDA as an indicator of its
working capital  generated from  operations.  Net EBITDA  increased 28% to $61.0
million in comparison to 1996. Net EBITDA,  excluding  $12.3 million in one-time
charges,  would have  increased 54% to $73.3 million in comparison to 1996.  The
following  chart  specifically  identifies the sources of Net EBITDA and how the
numbers are derived for each period.

<CAPTION>
                                                             Year Ended
                                                             December 31,
                                                       1997              1996

<S>                                                 <C>               <C>     
Fee based services revenue                          $388,922          $215,623
Interest                                               4,571             3,104
Other                                                    704             2,327
                                                     394,197           221,054
Less:
   Fee based services expenses                       315,653           164,830
   Administrative and other                           10,233             7,216
   Release fee                                         5,000                --
   Legal reserve                                       5,202                --
   Earnings attributable to IPT(1)                       797                --
EBITDA - service company                              57,312            49,008
FFO from real estate interests                        21,532            13,441
Combined EBITDA and FFO                               78,844            62,449
Interest expense                                      (7,867)          (12,918)
Preferred distributions                              (10,003)           (1,818)
Net EBITDA                                          $ 60,974          $ 47,713
</TABLE>

(1)  Earnings  of  $797,000  attributable  to the  operations  of IPT  (which is
     included in the consolidated income statement for the Company) are excluded
     from EBITDA for the service  company.  These  earnings  are included in FFO
     above.

     As  part  of  the  Company's  cash  management  program,   investments  are
periodically made in reverse repurchase agreements collateralized by obligations
of the government National Mortgage  Association ("GNMA") with maturities of one
to three weeks. The Company generally does not take possession of the securities
purchased under agreements to resell.

     At December 31, 1997,  the Company had cash and cash  equivalents  of $88.8
million as a result of positive cash flow from  operations,  distributions  from
partnerships, proceeds from private placement offerings of IPT, and the proceeds
from its debt sources. With the working capital generated through the operations
of the  Company  and the  remaining  availability  under  the  Revolving  Credit
Facility, management believes that the Company's cash and capital resources will
be  sufficient  to finance the  Company's  operations  for 1998.  The  Company's
funding needs are reassessed as acquisitions are identified and pursued.


<PAGE>

Subsequent Events

     Cohen Financial Transactions.  On January 7, 1998, the Company acquired the
rights to perform  property  management,  leasing and  construction  supervision
services for  approximately  4.1 million  square feet of commercial  real estate
from Cohen Financial.  The purchase price was  approximately $1 million,  all of
which was paid in cash.

     Goldie B. Wolfe & Company.  On January 20, 1998, the Company  acquired 100%
of the stock of Goldie B. Wolfe & Company,  a  commercial  real estate  services
firm. The purchase price was approximately  $5.3 million,  all of which was paid
in cash.

     MAE GP Merger.  Effective  as of March 7, 1998,  MAE GP  Corporation  ("MAE
GP"), which until then was a wholly-owned subsidiary of MAE, was merged with and
into IPT, with IPT surviving the merger (the "MAE GP Merger").  As consideration
for the MAE GP Merger,  IPT issued  332,300 shares of the common stock of IPT to
MAE valued for purposes of the MAE GP Merger at $10.53 per share.

     MAE GP owned or controlled  equity interests in entities which comprised or
controlled the general  partners of 29 public and 76 private real estate limited
partnerships (collectively, the "MAE Partnerships"),  nine of which are included
in the IPT  Partnerships.  The  MAE  Partnerships  own,  in the  aggregate,  169
properties  containing  approximately  32,000  residential  apartment  units and
approximately  2.3 million square feet of commercial  space.  In connection with
the MAE GP  Merger,  all of the shares of Class B common  stock of AMIT,  a real
estate  investment  trust that has entered  into a  definitive  agreement  to be
merged  with IPT,  which were until then owned by MAE GP,  were  transferred  by
dividend to MAE prior to the MAE GP Merger.

     In connection with the MAE GP Merger,  on February 17, 1998, IPLP purchased
certain assets described below from MAE for approximately  $596,000.  The assets
purchased by IPLP from MAE  consisted of (i) a 99% limited  partner  interest in
Insignia Jacques Miller, L.P. ("IJM"), which in turn owns non-controlling equity
interests in entities that comprise or control the general partners of 30 of the
MAE  Partnerships  and various notes receivable (the 1% general partner interest
in IJM was acquired by IPT from MAE GP in the MAE GP Merger),  and (ii) a 6.557%
limited partner  interest in Buccaneer Trace Limited  Partnership,  which owns a
208-unit residential apartment complex located in Savannah, Georgia.

     Also in connection with the MAE GP Merger,  on February 17, 1998,  Insignia
contributed  all  of  the  limited  partner   interests  it  owned  in  the  MAE
Partnerships  to IPLP in exchange for units of limited  partnership in IPLP ("OP
Units").  The value of the interests  contributed was approximately  $5,460,000,
for which  Insignia  received  518,528 OP Units  (based on a value of $10.53 per
unit).

     Richard Ellis Group Limited Acquisition.  In January 1998, the shareholders
of Richard Ellis Group Limited ("Richard Ellis") accepted the Company's offer to
acquire  100% of the stock of  Richard  Ellis.  Richard  Ellis is a real  estate
services and investment firm located in the United  Kingdom.  The transaction is
valued at approximately $81.5 million,  including approximately $14.7 million of
which  is  contingent  on  future  performance  measures.  The  transaction  was
completed on February 26, 1998. The Company funded the  acquisition by borrowing
$35 million from its revolving  credit  facility,  issuing 617,000 shares of its
Class A Common Stock,  and assuming  existing options to purchase 856,000 shares
of its Class A Common Stock.

     Merger and Stock Spin-off. On March 17, 1998, the Company and Insignia/ESG,
Inc.  ("Insignia/ESG") entered into an Agreement and Plan of Merger (the "Merger
Agreement")  with  Apartment  Investment  and  Management  Company,  a  Maryland
corporation   ("AIMCO"),   and  AIMCO  Properties,   L.P.,  a  Delaware  limited
partnership,  pursuant to which the Company will merge with and into AIMCO, with
AIMCO as the survivor (the  "Merger").  Consummation of the Merger is subject to
certain  conditions,  including  regulatory  approval  and the  approval  of the
stockholders of the Company (but not the approval of the stockholders of AIMCO).

     Prior to the AIMCO  Merger,  the Company will spin off to its  stockholders
the stock of an entity  that will  become a  separate  public  company  and will
include Insignia/ESG;  the international commercial real estate service company,
Insignia  Residential-New  York, a New York based  cooperative  and  condominium
management company;  the Company's  single-family home brokerage  operations and
other select holdings.  Pursuant to an Indemnification Agreement entered into in
connection  with  the  Merger  Agreement,  the  spun off  company  will  provide
indemnification for certain liabilities arising under the Merger Agreement.

     Assuming  the  stockholders  of AIMCO  approve  the  Merger,  shares of the
Company's  Class A Common Stock will be  converted  into the right to receive an
aggregate of  approximately  $303 million in Series E Preferred Stock, par value
$.01 per share of AIMCO (the "Series E Preferred"). In addition to receiving the
same  dividends as holders of AIMCO common stock,  holders of Series E Preferred
are entitled to receive a preferred  dividend of $50 million in the aggregate to
be paid on or before January 15, 1999 and when paid, the Series E Preferred will
automatically convert into AIMCO common stock on a one for one basis, subject to
certain antidilution adjustments. The actual number of Series E Preferred issued
in the Merger will be determined by a formula based on the average  market price
of AIMCO's common stock during a fixed period preceding the Merger, subject to a
fixed maximum AIMCO  exchange value of $38 per share.  If AIMCO's  average price
during that  period is less than $36.50 per share,  AIMCO may elect to pay up to
$15 million of the purchase price in cash,  provided that such payment would not
affect the tax free status of the Merger.

     In addition,  AIMCO will assume  approximately  $308 million in outstanding
indebtedness  of the Company and will assume  approximately  $150 million of the
6.5% Trust Convertible  Preferred  Securities issued by Insignia  Financing I, a
subsidiary of the Company.

     If the  stockholders  of AIMCO do not approve  the  Merger,  the Merger may
nonetheless be consummated.  However, instead of receiving approximately $303 in
Series E Preferred,  holders of the Company's Class A Common Stock would receive
approximately  $203  million in Series E Preferred  and $100 million in Series F
Preferred  Stock,  par value $.01 per share of AIMCO (the "Series F Preferred").
In either case,  holders of Series E Preferred  would be entitled to receive the
$50 million  preferred  dividend.  Holders of Series F Preferred are entitled to
receive the greater of (i) the same  dividends  as holders of AIMCO common stock
receive and (ii) preferred  distributions of 10% of the face value of the Series
F Preferred,  with the preferred return rate escalating 1% each year until a 15%
annual return is achieved.  Upon the approval by the  stockholders of AIMCO, the
Series F Preferred will convert into Series E Preferred on a one-to-one basis.

     Also, the Merger  Agreement  provides that  following the Merger,  AIMCO is
required to offer to purchase the outstanding  shares of beneficial  interest of
IPT, a Maryland real estate  investment trust, at a price of at least $13.25 per
IPT share.

     As a  condition  to  execution  with the Merger  Agreement,  certain of the
Company's  executive officers executed voting agreements and irrevocable proxies
in favor of AIMCO, pursuant to which each of the foregoing individuals agreed to
vote the  shares of the  Company's  Class A Common  Stock  owned of  record  and
beneficially by him,  including  shares acquired after the date of the execution
of  the  agreement  (but   excluding   shares   beneficially   owned  by  others
notwithstanding  that such shares may be owned of record by him) in favor of the
Merger and the Merger  Agreement  and  against  any  competing  transaction.  In
addition,  each of Metropolitan  Acquisition  Partners IV, L.P. and Metropolitan
Acquisition  Partners V, L.P.  (collectively,  the "MAPs") also executed  voting
agreements and  irrevocable  proxies,  pursuant to which each has agreed to vote
certain  shares of the  Company's  Class A Common  Stock to which the  Company's
Chairman,  Chief  Executive  Officer,  and  President  would  be  entitled  in a
distribution of shares of the Company's Class A Common Stock made by the MAPs in
favor  of the  Merger  and  the  Merger  Agreement  and  against  any  competing
transaction.




<PAGE>
<TABLE>

                                    Part III

Item 12. Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth certain information regarding the beneficial
ownership of the Common  Stock as of February 28, 1998 by: (i) each  stockholder
known by Insignia to beneficially own in excess of 5% of the outstanding  shares
of Common Stock, (ii) each director, (iii) the Chairman, Chief Executive Officer
and  President,  and each of the other four most  highly  compensated  executive
officers,  and (iv) all directors and executive  officers as a group.  Except as
otherwise  indicated in the footnotes to the table, the persons named below have
sole voting and investment power with respect to the shares  beneficially  owned
by such persons.


<CAPTION>
                                                            Beneficial Ownership
Name and Address                                   Shares                Percent
<S>                                              <C>                       <C> 
Metropolitan Acquisition Partners                2,237,258                 7.3%
IV, L.P. c/o Metro Shelter Directives, Inc.
One Insignia Financial Plaza
Greenville, South Carolina 29602

Andrew L. Farkas                                 5,760,499 (1)            18.4%
Insignia Financial Group, Inc.
One Insignia Financial Plaza
Greenville, South Carolina 29602

Apollo Real Estate Investment Fund, L.P.         3,944,686 (2)            12.4%
c/o Apollo Real Estate Fund, L.P.
2 Manhattanville Road
Purchase, New York  10577

Janus Capital Corporation(3)                     2,206,700                 7.2%
100 Filmore Street, Suite 300
Denver, Colorado  80206

The Capital Group Companies, Inc. (4)            3,274,230                10.6%
333 South Hope Street
Los Angeles, California  90071

Palisade Capital Management, L.L.C.              1,787,862 (5)             5.7%
1 Bridge Plaza, Suite 695
Fort Lee, New Jersey 07024


Robert J. Denison(6)(7)                           403,724                  1.3%

Robin L. Farkas(6)(8)                             166,777                    *

Merril M. Halpern(19)                              24,000                    *

Robert G. Koen(10)                                 24,000                    *

Michael Lipstein(6)(10)                           124,707                    *

Buck Mickel(6)(10)                                 77,668                    *

James A. Aston(11)                                304,983                  1.0%

Frank M. Garrison(12)                             217,139                    *

Edward S. Gordon(13)                              695,879                  2.3%

Stephen B. Siegel(14)                             171,680                    *

All directors and executive officers            9,181,138                 27.9%
as a group (23 individuals)(1)(15)(16)
</TABLE>

* Less than one percent.

(1)  Includes  shares owned by (i)  Metropolitan  Acquisition  Partners IV, L.P.
     ("MAP IV"), (ii) Metropolitan Acquisition Partners V, L.P. ("MAP V"), (iii)
     Metro Shelter Directives, Inc. and MV, Inc., the general partners of MAP IV
     and MAP V, respectively, (iv) certain stockholders who have granted proxies
     to MAP IV and MAP V, and (v) certain stockholders  (including  Charterhouse
     Equity  Partners,  L.P.  ("CEP")  and  affiliates  of  Apollo  Real  Estate
     Advisors,  L.P.) who are party to a  stockholders  agreement with Andrew L.
     Farkas.  Includes  748,000 shares subject to options and warrants which are
     or will  become  exercisable  within  60 days.  Includes  3,333  shares  of
     restricted  stock  which will vest  within 60 days,  the  remaining  93,333
     shares will vest ratably over the next 56 months.

(2)  Includes  securities  owned by various  affiliates  of Apollo  Real  Estate
     Investment Fund, L.P., including 1,392,916 shares subject to warrants which
     are or will become exercisable within 60 days.

(3)  Janus Capital Corporation is a registered investment advisor that furnishes
     investment  advice to  individual  and  institutional  clients  and certain
     mutual funds. The foregoing is based upon a Schedule 13G,  Amendment No. 7,
     filed  by  Janus  Capital  Corporation  with the  Securities  and  Exchange
     Commission on or about February 13, 1998.

(4)  The Capital Group Companies, Inc. ("Capital") is the parent holding company
     of a group  of  investment  management  companies.  Capital  does  not have
     investment  power  or  voting  power  over any of the  securities  reported
     herein.  Capital Guardian Trust Company, a bank as defined in Section 3(a)6
     of the  Securities  Exchange Act of 1934 and a wholly owned  subsidiary  of
     Capital,  is the  beneficial  owner of the  reported  shares as a result of
     serving as the investment manager of various  institutional  accounts.  The
     reported  shares  include   424,530  shares   resulting  from  the  assumed
     conversion  of  225,000  shares of the 6 1/2% Trust  Convertible  Preferred
     Securities issued by Insignia Financing I, a subsidiary of the Company. The
     foregoing is based upon a Schedule 13G filed by Capital with the Securities
     and Exchange Commission on or about February 10, 1998.

     Perkins Capital  Management,  Inc. is a registered  investment advisor that
     furnishes investment advice to individual and institutional  clients and to
     certain  mutual funds.  The reported  shares include  1,870,000  shares and
     210,000 warrants  (exercisable  within 60 days) owned by clients of Perkins
     Capital Management,  Inc. and 500,000 warrants (exercisable within 60 days)
     owned by Perkins  Opportunity  Fund. The foregoing is based upon a Schedule
     13G, Amendment No. 9, filed by Perkins Capital Management, Inc. on or about
     January 30, 1998.

(5)  Palisade Capital Management, L.L.C. is a registered investment advisor that
     furnishes investment advice to individual and institutional  clients and to
     certain mutual funds.  The reported shares include 683,965 shares resulting
     from  the  assumed  conversion  of  362,501  shares  of  the 6  1/2%  Trust
     Convertible   Preferred  Securities  issued  by  Insignia  Financing  I,  a
     subsidiary of the Company. The foregoing is based upon a Schedule 13G filed
     by Palisade Capital Management, L.L.C. on or about February 9, 1998.

(6)  Messrs.  Denison,  Lipstein,  Mickel and Robin L.  Farkas are each  limited
     partners in MAP IV.

(7)  Includes  133,600 shares held by First Security  Associates L.P., a limited
     partnership of which Mr. Denison is the sole general  partner,  and 246,100
     shares held by First  Security  Company II, L.P., a limited  partnership of
     which Mr.  Denison is the sole  general  partner.  Includes  10,000  shares
     subject  to options  and  warrants  which are  exercisable  or will  become
     exercisable  within  60 days,  but  excludes  43,600  shares  held by First
     Security  International  Fund,  Ltd., a Cayman Islands  company,  for which
     First  Security  Management,  Inc., a New York  corporation,  serves as the
     investment  advisor.  Mr.  Denison  is  the  President  of  First  Security
     Management, Inc.

(8)  Includes  24,000  shares  subject  to  options  which  are or  will  become
     exercisable   within  60  days,  and  88,129  shares  owned  by  a  general
     partnership for which Mr. Farkas shares voting power.

(9)  Includes  24,000  shares  subject  to  options  which  are or  will  become
     exercisable  within 60 days. Does not include  675,838 shares  beneficially
     owned by CEP and an associated entity.  Charterhouse  Group  International,
     Inc.  ("Charterhouse"),  of which Mr.  Halpern  is  Chairman  of the Board,
     indirectly  controls CEP and may be deemed to beneficially own such shares.
     Mr. Halpern disclaims beneficial ownership of any shares beneficially owned
     by Charterhouse.

(10) Includes  24,000  shares  subject  to  options  which  are or  will  become
     exercisable within 60 days.

(11) Includes  233,000  shares subject to options and warrants which are or will
     become exercisable within 60 days.  Includes 834 shares of restricted stock
     which will vest within 60 days and the remaining 23,333 shares vest ratably
     over the next 56 months.

12) Includes  176,500  shares subject to options and warrants which are or will
     become exercisable within 60 days.  Includes 834 shares of restricted stock
     which will vest within 60 days and the remaining 23,333 shares vest ratably
     over the next 56 months.

(13) Includes  100,000  shares  subject  to  options  which  are or will  become
     exercisable within 60 days.

(14) Includes  171,680  shares  subject  to  options  which  are or will  become
     exercisable within 60 days.

(15) Includes 2,353,900 shares subject to options and warrants which are or will
     become  exercisable  within 60 days.  Includes  5,835 shares of  restricted
     stock which will vest within 60 days and the remaining  163,332 shares will
     vest ratably over the next 56 months.

(16) No directors or executive officers  beneficially own any of the outstanding
     6 1/2% Trust Convertible  Preferred Securities issued by Insignia Financing
     I, a subsidiary of the Company.



<PAGE>





                              SIGNATURE

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


                              INSIGNIA FINANCIAL GROUP, INC.



                              By:  /s/Ronald Uretta
                              ---------------------
                                   Ronald uretta
                                   Chief Operating Officer