Item 2.  Acquisition or Disposition of Assets

                             TIMBERGLEN APARTMENTS
                                 Dallas, Texas

         On February  13,  1998,  Apple  Residential  Income  Trust,  Inc.  (the
"Company")  purchased the Timberglen  Apartments located at 3773 Timberglen Road
in Dallas, Texas (The "Property"). The Property comprises 304 apartment units.

         The purchase  price for the Property  was  $12,000,000.  The seller was
Timberglen Apartments, Ltd., a Texas limited partnership which is not affiliated
with the Company,  Apple Residential  Advisors,  Inc. or their  Affiliates.  The
entire  purchase  price was paid using  proceeds from the sale of Company common
shares.  Title to the Property  was conveyed to the Company by limited  warranty
deed.

         LOCATION.  The Property is located in the north area of Dallas,  within
the greater Dallas/Fort Worth Consolidated  Metropolitan Statistical Area, or as
it is called locally,  "The  Metroplex."  The following  information is based in
part upon information provided by the Dallas Chamber of Commerce.

         The Dallas/Fort Worth Metroplex is in the  north-central  part of Texas
and is composed of nine  counties.  The 1996  population  of The  Metroplex  was
approximately 4,400,000.  Dallas is the second largest city in the state, behind
Houston.

         The economy of the Dallas/Fort  Worth area is complex and  diversified.
Key economic factors include a large  manufacturing  base (including as products
military hardware,  electronics,  automobiles,  industrial equipment,  oil-field
parts,   food   products   and   chemicals),    banking,   insurance   services,
communications,  oil and gas production and air transportation.  Major employers
in the area include Texas Instruments,  Southwestern Bell, General Motors,  J.C.
Penney, NationsBank and Vought Aircraft Company.

         The  Metroplex  is also an  established  transportation  center for the
nation.  The Dallas/Fort  Worth  International  Airport  occupies  approximately
17,800  acres of land  between  the two  cities.  It is the  largest  commercial
airport in the United  States in terms of land area,  and is the fourth  busiest
airport in the world, with 1,700 daily arrivals and departures.

         The area also has a well-established  system of interstate highways and
supporting  secondary routes. The Metroplex is located at the hub of Interstates
35,45,  20 and 30. Two outer loops,  Interstate 635 in Dallas and Interstate 820
in Fort Worth, surround the respective cities.

         The many  institutions of higher learning in the area include  Southern
Methodist University, the University of Texas at Dallas, the University of Texas
at Arlington, the University of North Texas, and Texas Christian University.



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         The  immediate  area   surrounding  the  Property   consists  of  other
multi-family,  commercial and retail  development.  The Property is located near
restaurants,  businesses,  schools, and churches, and is readily accessible from
Interstate 35, the North Dallas Tollway, Central Expressway and LBJ Freeway. The
Property is an approximately 15-minute drive from downtown Dallas.

         DESCRIPTION  OF THE PROPERTY.  The Property  consists of 304 garden and
townhouse style  apartment  units in 28 two-story and  three-story  buildings on
approximately 10.5 acres of land. The Property was constructed in 1984.

         The Property  offers five different unit types.  The unit mix and rents
being charged new tenants as of February, 1998 are as follows:

<TABLE>
<CAPTION>
                                                    Approximate
                                                     Interior
Quantity                 Type                     Square Footage    Monthly Rental

<S>  <C>                                                <C>             <C> 
     120     One bedroom/one bathroom                   512             $485
      80     One bedroom/one bathroom                   743              570
      32     One bedroom/one bathroom w/den             841              650
      48     Two bedrooms/two bathrooms                 983              710
      24     Two bedrooms/two bathrooms/studio TH     1,100              810

</TABLE>

         The apartments provide a total of approximately  221,000 square feet of
net rentable area.

         The  Company  believes  that  the  Property  has  generally  been  well
maintained  and is in good  condition.  The Company has  budgeted  approximately
$228,000 for additional capital improvements to the Property. These improvements
will include clubhouse renovations, landscaping and interior upgrades.

         Leases at the  Property  are  generally  for terms of one year or less.
Average  rental rates for the past five years have  generally  increased.  As an
example, a one-bedroom, one-bathroom apartment unit (743 square feet) rented for
$410 in 1993,  $420 in 1994,  $440 in 1995,  $485 in 1996 and $510 in 1997.  The
average  effective annual rental per square foot at the Property for 1993, 1994,
1995, 1996 and 1997 was $6.97, $7.14, $7.48, $8.25, and $8.67, respectively.

         The buildings are wood-frame  construction  with a combination of brick
veneer,  stucco  and  masonite  hardboard  siding on  reinforced  concrete  slab
foundations. Roofs are sloped fiberglass shingled on plywood.

         The  Property  has a  two-tiered  outdoor  swimming  pool,  two laundry
facilities and an access gate to the Property.  There is also a clubhouse  which
includes  a kitchen,  entertainment  area and a leasing  office.  There is ample
paved parking for the tenants.


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<PAGE>



         All apartment units have wall-to-wall carpeting in the living areas and
vinyl  floors  in the  kitchen  and  baths.  Each  apartment  unit  has a  cable
television  hook-up and an individually  controlled heating and air conditioning
unit. Each kitchen is equipped with a  refrigerator/freezer,  electric range and
oven,  dishwasher,  microwave and garbage  disposal.  Each apartment unit (other
than  the  smallest   one-bedroom   unit)  has  a  fireplace  and   washer/dryer
connections.  About  16  units  substitute  a dry bar for  the  fireplace.  Each
apartment unit (other than the largest  two-bedroom unit) has a large patio with
exterior storage. All of the upper level units have vaulted ceilings.  The owner
of the Property pays for cold water, gas usage for hot water,  sewer service and
trash removal.  Tenants pay for their own  electricity  service,  which includes
cooking, lighting, heating and air conditioning.

         There  are at least  10  apartment  properties  that  compete  with the
Property.  All  offer  similar  amenities  and  generally  have  rents  that are
comparable to those of the Property.  Based on a recent  telephone  survey,  the
Advisor estimates that occupancy in the nearby competing properties now averages
approximately 95%.

         According to information provided by the seller,  physical occupancy at
the Property  averaged  approximately 94% in 1993, 95% in 1994, 97% in 1995, 97%
in 1996,  and 97% in 1997.  As of  February  12,  1998,  the  Property  was 97 %
occupied.  The tenants are a mix of white-collar  workers,  blue-collar workers,
students and retired persons.

         The following  table sets forth the 1997 real estate tax information of
the Property:

                                 Assessed   
Jurisdiction                      Value           Rate          Tax
------------                     --------         ----          ---

City of Dallas                  $9,423,870     $0.65160      $61,405.94
County of Denton                 9,500,000      0.25590       24,310.50
Carollton-Farmers Branch ISD     9,423,870      1.49610      140,990.52
                                                             ----------
                                                            $226,706.96

         The basis of the depreciable  residential  real property portion of the
Property (currently estimated at about $9,600,176) will generally be depreciated
over 27.5 years on a  straight-line  basis.  The basis of the personal  property
portion will be depreciated  in accordance  with the modified  accelerated  cost
recovery  system of the Code.  Amounts to be spent by the Company on repairs and
improvements  will be treated for tax purposes as permitted by the Code based on
the nature of the expenditures.

         The  Advisor  and the  Company  believe  that the  Property is and will
continue to be adequately covered by property and liability insurance.

         MATERIAL  FACTORS  CONSIDERED IN ASSESSING  THE  PROPERTY.  The factors
considered  by the Advisor and the  Company to be  relevant  in  evaluating  the
Property for acquisition by the Company included the following:

 
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         1. The Dallas/Fort  Worth area generally and the specific area in which
the Property is located  were  perceived  as being  characterized  by a diverse,
stable and steadily  growing  economy.  Accordingly,  it was believed  that such
economy  and  its  anticipated  growth  and  development  would  support  stable
occupancy rates and reasonable increases in rents at the Property.

         2.  Based  upon an  engineering  report  and its own  inspections,  the
Advisor  believes that the Property has been well maintained and is generally in
good  condition,  although  the Advisor  believes  that the planned  repairs and
improvements will allow future increases in rents at the Property.

         3. The Company owns multiple properties in The Metroplex.  Accordingly,
the Company believes that it is  knowledgeable  concerning the rental market and
may also  benefit  from  certain  economics  in scale  in the  operation  of its
properties.

         The Company is not aware of any material  adverse  factors  relating to
the  Property  not set forth in this  report  that  would  cause  the  financial
information contained in this report not to be necessarily  indicative of future
operating results.

         ACQUISITION  AND  MANAGEMENT  SERVICES AND FEES.  In  consideration  of
services   rendered  to  the  Company  in  connection  with  the  selection  and
acquisition  of the  Property,  the Company will pay  Cornerstone  Realty Income
Trust, Inc., a property acquisition fee equal to 2% of the purchase price of the
Property,  or $240,000.  Cornerstone  Realty  Income  Trust,  Inc. will serve as
property  manager  for the  Property  and for its  services  will be paid by the
Company  a monthly  management  fee  equal to 5% of the  gross  revenues  of the
Property plus reimbursement of certain expenses.


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