FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

For the year ended December 31, 1999
                   ---------------

                                       OR

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

For the transition period ______________________ to ______________________
Commission File Number                        T3-24235
                          ------------------------------------------------
                   SECURED INVESTMENT RESOURCES FUND, L.P. III
             (Exact name of registrant as specified in its charter)

                 Missouri                              48-6291172
--------------------------------------   ---------------------------------------
    (State or other jurisdiction of       (I.R.S. Employer Identification No.)
     incorporation or organization)

1100 Main, Suite 2100 Kansas City, Missouri                             64105
-------------------------------------------                            -------
  (Address of principal executive offices)                            (Zip Code)

(Registrant's telephone number, including area code)              (816) 421-4670
                                                                  --------------
Securities registered pursuant to Section 12(b) of the Act:

                                      None
                                      ----
Securities registered pursuant to Section 12(g) of the Act:

                     Limited Partnership Interests ("Units")
                     ---------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12 months  (or such  shorter  periods  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

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


                                        1

<PAGE>

                                     PART I

Item 1. Business

Secured Investment  Resources Fund, L.P. III (the "Partnership" or "Registrant")
is a Missouri  limited  partnership  formed  pursuant  to the  Missouri  Revised
Uniform  Limited  Partnership Act on April 20, 1988.  Nichols  Resources Ltd., a
Missouri corporation  ("Nichols") is the General Partner. The Partnership has no
predecessors or subsidiaries.

The  Partnership  was formed to engage in the business of acquiring,  improving,
developing,   operating  and  holding  for  investment   income  producing  real
properties   with  the   objectives  of  (i)   preserving   and  protecting  the
Partnership's capital; (ii) providing cash distributions from operations;  (iii)
providing   capital  growth  through   property   appreciation   of  Partnership
properties; and (iv) increasing equity in property ownership by the reduction of
mortgage  loans on  Partnership  properties.  The term of the  Partnership is 60
years from the date of the Partnership Agreement (December 6, 1988), or the date
on which all of the assets acquired by the Partnership are sold and converted to
cash.

On December 7, 1990, the  Partnership  closed its offering having received gross
proceeds  of  $4,842,500  from the sale of 9,685  units of  limited  partnership
interests.

The Partnership acquired two apartment communities in 1989. The General Partners
feel that  these  properties  met  the  Partnership's  investment  criteria  and
objectives.  Because of many factors, the Partnership did not raise the level of
capital anticipated. Accordingly, the General Partners were unable to obtain the
targeted  leveraged ratio and a  residential/commercial  property mix.

Due to  the  Partnership's  inability  to  restructure  the  debt  on one of the
Partnership's  properties,  the KC Club Apartments (after negotiations to obtain
more  favorable  terms  failed),  on  January 7, 1998 the  property  was lost to
foreclosure (as described in Note 6 to the accompanying  Consolidated  Financial
Statements).

On July 21, 1999, in connection  with its consent  solicitation  statement filed
with the Securities and Exchange  Commission  (the "SEC") on April 21, 1999 (the
"Consent Solicitation Statement"), Nichols Resources, Ltd., a general partner of
the Partnership ("Nichols"), obtained the written consent of limited partners of
the  Partnership  holding a  majority  of the issued  and  outstanding  units of
limited partnership issued by the Partnership ("Units") to (i) the assignment of
James R. Hoyt's and SIR  Partners  III,  L.P.'s  general  partner  interests  to
Nichols  and (ii) the  appointment  of Nichols  as  successor  Managing  General
Partner  of the  Partnership.  Pursuant  to the  consent  solicitation,  Nichols
received the consent of limited partners of the Partnership  holding 4,877 units
of the 9,685 issued and outstanding units of limited  partnership  issued by the
Partnership  ("Units").  As a result,  effective  as of July 21,  1999,  Nichols
acquired  Hoyt's  and SIR  Partners'  general  partnership  interest  and is the
Partnership's sole General Partner.

On January 1, 1999, the Partnership entered into a property management agreement
with  Maxus  Properties,  Inc.  ("Maxus"),  a  Missouri  corporation  that is an
affiliate of Nichols  Resources,  Ltd., the Partnership's  general partner.  The
sole  shareholder  of  Nichols  is MJS  Associates,  Inc.  ("MJS"),  a  Missouri
corporation.  David L.  Johnson is the  principal  shareholder  and an executive
officer and director of MJS.  David L. Johnson is also the majority  shareholder
and an executive officer and director of Maxus.

                                        2

<PAGE>

Item 1.      Business--Cont'd.

As of December 31, 1999, the Partnership has made cash  distributions to Limited
Partners of $364,000 for the period April 1, 1989 through  December 31, 1999. No
distributions have been made since July 1990. Future  distributions will only be
made from  excess  cash flow not  needed  for  capital  expenditures  or working
capital reserves.

As of December 31, 1999, the  Partnership  had no employees.  Employees of Maxus
provided property management services to the Partnership (as described in Note 5
to the accompanying Consolidated Financial Statements).

Competition

The real estate business is highly  competitive,  and the  Partnership  competes
with numerous entities engaged in real estate activities, some of which may have
greater  financial  resources than those of the Partnership.  The  Partnership's
management  believes that success against such competition is dependent upon the
geographic location of the property,  the performance of property managers,  the
amount of new construction in the area and the maintenance and appearance of the
property.  With respect to residential property,  competition is also based upon
the  design  and mix of the  units  and  the  ability  to  provide  a  community
atmosphere for the tenants. The Partnership's direct competitors, located within
five miles of the  Partnership's  only  property ( the  Greenhills  Bicycle Club
Apartments),  are Quail Run Apartments,  690 units built in 1985;  Falcon Point,
192 units built in 1988; The Ethans,  606 units built in 1988;  Camden  Passage,
598 units  built in  1989-1998;  The  Lakes,  400 units  built in 1987 and Kelly
Crossing,  624 units built in 1998.  The Greenhills  Bicycle Club  Apartments is
competitive  in terms of square  footage per unit and rents for unit types.  The
Partnership's management believes that general economic circumstances and trends
and new  properties in the vicinity of the  Partnership's  property will also be
competitive factors.

Inflation

The effects of inflation on the Partnership's  operations or investments are not
quantifiable.  Revenues from property operations fluctuate  proportionately with
increases and decreases in housing costs.  Fluctuations in the rate of inflation
also affect the sales values of properties  and,  correspondingly,  the ultimate
gains to be realized by the Partnership from property sales.


Item 2. Properties

The following  table sets forth the investment  portfolio of the  Partnership at
December 31, 1999:


                                  Properties at                     Occupancy(*)
     Property       Description   Initial Cost   Date Acquired       Percentage
     --------       -----------   ------------   -------------       ----------
                                                                    1999   1998
Greenhills Bicycle
Club Apartments
Kansas City, MO      312 units     $11,251,613    Oct. 27, 1989      90%    91%

                                        3

<PAGE>

Item 2.    Properties-Cont'd.

(*) Based upon vacancy amount (in dollars) as a percent of gross possible rents.
(Gross possible rents is calculated by multiplying  established market rents for
each unit type by the total  unit mix.  Established  market  rents are  budgeted
rents,  established by conducting  market surveys to determine the typical rents
charged for similar  properties  in the area and through  knowledge of the rates
the market will bear for similar unit types.)

The encumbrance  against the property is described in Note 3 to the accompanying
Consolidated Financial Statements.


Description of Real Estate:

The  Partnership's  sole  property,  the  Greenhills  Bicycle  Club  Apartments,
consists of 312 units of  multi-family  rental real estate.  On July 8, 1996 the
Partnership  refinanced  the matured first  mortgage on Greenhills  Bicycle Club
Apartments.  The terms of the  mortgage are  $8,100,000  at 9.0%  interest  with
monthly  principal  and interest  payments in the amount of $65,000  through the
loan maturity date of August 1, 2001. The outstanding  principal  balance of the
note at  December  31,  1999 is  $7,895,000.  The  balance to be due at maturity
assuming  no payment  has been made on  principal  in advance of its due date is
$7,766,000.  The note can be prepaid with  penalty.  A second  mortgage note was
paid in full at a discount in July, 1998 for $200,000, creating an extraordinary
gain on early extinguishment of debt of $197,000.

Competition:

The real estate business is highly competitive and the Partnership competes with
numerous  entities  engaged in real  estate  activities,  some of which may have
greater  financial  resources than those of the Partnership.  The  Partnership's
management  believes that success against such competition is dependent upon the
geographic location of the property,  the performance of property managers,  the
amount of new construction in the area and the maintenance and appearance of the
property.  With respect to residential property,  competition is also based upon
the  design  and mix of the  units  and  the  ability  to  provide  a  community
atmosphere for the tenants. The Partnership's direct competitors, located within
five miles of the Greenhills Bicycle Club Apartments,  are Quail Run Apartments,
690 units built in 1985; Falcon Point, 192 units built in 1988; The Ethans,  606
units built in 1988; Camden Passage, 598 units built in 1989-1998; The Lake, 400
units built in 1987 and Kelly  Crossing,  624 units  built in 1998.  The Bicycle
Club Apartments is competitive in terms of square footage per unit and rents for
unit  types.  The  Partnership's   management  believes  that  general  economic
circumstances and trends and new properties in the vicinity of the Partnership's
property will also be competitive factors. The partnership's management believes
that the property is adequately covered by insurance.



                                        4

<PAGE>

Item 2.  Properties-Cont'd.

Operating Data:

The occupancy  rate for the Greenhills  Bicycle Club  Apartments for each of the
last five years was:

1995: 93%    1996: 91%    1997: 91%   1998: 91%     1999: 90%

The average effective annual rental per unit for each of the last five years was

1995: $5,360    1996: $5,750  1997: $6,000    1998: $6,100   1999: $6,300


Depreciation:

Investment  property is depreciated on a straight-line  basis over the estimated
useful life of the property (30 years for buildings  and 5 years for  furniture,
fixtures and equipment). Improvements are capitalized and depreciated over their
estimated  useful  lives.   Maintenance  and  repair  expenses  are  charged  to
operations  as incurred.  Cost  (including  capital  improvements  subsequent to
acquisition)  of the Greenhills  Bicycle Club Apartments at December 31, 1999 is
$11,246,000.

Item 3. Legal Proceedings,

None.


Item 4. Submission of Matters to a Vote for Security Holders.

None






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                                        5

<PAGE>

                                    PART II

Item 5.  Market for  Registrant's  Common  Equity and  Related  Security  Holder
         Matters

(A)  There  is no  established  public  trading  market  for  the  Units  of the
     Partnership.

(B) There have been no distributions the last three years.

(C) As of December 31, 1999, the Partnership  had admitted 463 Limited  Partners
    who purchased 9,685 units.

Item 6. Selected Financial Data,

<TABLE>
<CAPTION>OPERATING DATA
(In Thousands)
<S>                                  <C>         <C>         <C>         <C>         <C>
                                     1999        1998        1997        1996        1995
                                 --------    --------    --------    --------    --------
Revenues                         $  1,982    $  1,945    $  2,739    $  2,768    $  2,697
Interest and earnings on
  investments                          11          13         196          90         128
Property operating
  expense                           1,414       1,400       2,027       2,110       2,072
Interest expense                      713         741       1,112       1,126         925
                                 --------    --------    --------    --------    --------

Partnership income (loss)
 before extraordinary item           (134)       (182)       (204)       (378)       (172)
                                 --------    --------    --------    --------    --------
  Extraordinary item:
    Gain on extinguishment
      of debt                        --           976        --          --          --
                                 --------    --------    --------    --------    --------
Partnership income (loss)        $   (134)   $    794    $   (204)   $   (378)   $   (172)
                                 ========    ========    ========    ========    ========

PER LIMITED PARTNERSHIP UNIT
Partnership income(loss)
 before extraordinary item (1)     (13.69)   $ (18.61)   $ (20.87)   $ (38.64)   $ (17.54)
                                 --------    --------    --------    --------    --------
Partnership income(loss) (1)       (13.69)    $ 81.18    $ (20.87)   $ (38.64)   $ (17.54)
                                 ========    ========    ========    ========    ========
Cash distribution                $   --      $   --      $   --      $   --      $   --
                                 ========    ========    ========    ========    ========

BALANCE SHEET DATA                   1999        1998        1997        1996        1995
                                 --------    --------    --------    --------    --------
(In Thousands)
Total Assets                     $  7,487    $  7,690    $ 11,617    $ 12,749    $ 13,223
Mortgage Debt                    $  7,895    $  7,963    $ 12,344    $ 12,931    $ 12,851

</TABLE>

     (1) Partnership loss per limited  partnership unit is computed
         by dividing  loss  allocated  to the  Limited  Partners by the
         weighted   average   number  of  limited   partnership   units
         outstanding (9,685 units for each period).

                                        6
<PAGE>

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

Results of Operations

1999 Comparisons

Revenues for the year ended  December  31, 1999  increased  $37,000  (1.9%) when
compared  to the same  period in 1998.  This  increase  is  primarily  due to an
increase in damage reimbursement income of $39,000.

Total operating and administrative expenses for the year ended December 31, 1999
increased $14,000 (1.0%) compared to 1998. The $14,000 increase is primarily due
to  increases  in property  operating  expenses of $74,000,  management  fees of
$3,000,  and depreciation  and  amortization of $14,000,  offset by decreases in
general and administrative  expense of $22,000 and professional fees of $55,000.
The $74,000  increase in  property  operating  expense was due to an increase in
general operating  expenses including an increase in  marketing and property tax
and  an  increase  in  periodic  repairs and maintenance,  partially  related to
increased turn cost.  The $14,000 increase in depreciation and amortization  was
due primarily  to  depreciation  of capital  items added to the property in  the
year ended December 31, 1999.

Interest expense for the year ended December 31, 1999 decreased by $28,000.  The
decrease is due to the Bicycle Club Apartments  paying down the mortgage balance
on the property through normal principal and interest payments.

1998 Comparisons

Revenues for the year ended  December 31, 1998 decreased  $794,000  (29.0%) when
compared to 1997.  The  majority  of the  decrease is due to the loss of revenue
caused by the  foreclosure  of the KC Club  Apartments.  Revenue for 1998 at the
Greenhills Bicycle Club Apartments increased $30,000 (1.6%) when compared to the
same period in 1997.  This increase is primarily  due to increased  rental rates
for new leases and upon lease  renewals.  These  higher  market  rates are being
achieved with fewer rent concessions.

Total operating and administrative expenses for the year ended December 31, 1998
decreased  $627,000  (30.9%)  compared to 1997. Of the total decrease,  $820,000
relates  to the  foreclosure  of the KC  Club  Apartments.  In  addition,  total
operating and administrative  expenses at the Greenhills Bicycle Club Apartments
increased by $193,000.  The $820,000  decrease related to the foreclosure of the
KC Club  Apartments  is  primarily  due to a decrease  in  expenses  as follows:
property operating expense $536,000, general and administrative expense $28,000,
professional  services  $30,000,  management  fee $41,000 and  depreciation  and
amortization   $168,000.   The  $193,000   increase  in  total   operating   and
administrative  expenses  relating to the Greenhills  Bicycle Club Apartments is
primarily due to an increase in expenses as follows:  property operating expense
$178,000, professional services $71,000, management fee $17,000 and depreciation
and amortization $15,000,  while general and administrative expense decreased by
$90,000.  The  $178,000  increase  in property  operating  expense was due to an
increase in general operating expenses including an increase in periodic repairs
and   maintenance,   marketing  and  property  tax.  The  $71,000   increase  in
professional  services  expenses  was  primarily  due to legal fees  incurred in
connection with the foreclosure of the KC Club Apartments and other  partnership
related  matters.  The General  Partners  were entitled to receive a Partnership
management fee equal to 5% of total operating cash flows (as defined) for

                                        7

<PAGE>

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

Results of Operations--Cont'd.

managing  the normal  operations  of the  Partnership.  The $17,000  increase in
management  fee  expense was due  primarily  to the  management  fees due to the
General  Partners for the year ended December 31, 1998.  There was no management
fee due to the General  Partners for the years ended December 31, 1997 and 1996.
The $15,000  increase in  depreciation  and  amortization  was due  primarily to
depreciation  of  capital  items  added to the  balance  sheet in the year ended
December 31, 1998.

Interest  expense  for the year  ended  December  31,  1998  decreased  $371,000
(33.4%).  $340,000  of the  decrease  is due to the  foreclosure  of the KC Club
Apartments.  The remainder of the decrease is due to the Bicycle Club Apartments
paying down the mortgage  balance on the property  through normal  principal and
interest payments.

Interest income for the year ended December 31, 1998 decreased  $182,000 (92.8%)
from 1997. The decrease in interest  income was caused  primarily by the absence
of interest  income from,  and the August 1997 gain realized on the sale of, the
Treasury certificate of accrual held by the Partnership as collateral for the KC
Club Apartments.

Liquidity and Sources of Capital

Cash on hand as of December 31, 1999 is $358,000,  an increase of $228,000  from
the year ended  December  31, 1998.  The increase in cash is due  primarily to a
decrease in net loss before  extraordinary  item of $48,000,  including non-cash
expenses (depreciation and amortization) of $451,000.

During 1999, cash was provided by operating activities in the amount of $311,000
compared to $244,000 for 1998.  The  increase is primarily  due to a decrease in
net loss (excluding extraordinary item) from 1998 ($182,000) to 1999 ($134,000).
Investing  activities used $15,000  primarily due to an increase in property and
equipment  purchases of $53,000  offset by a decrease in restricted  deposits of
$38,000. Financing activities (primarily principal payments, as described in the
Consolidated Statement of Cash Flows) used $68,000.

As a result of the  foreclosure of the KC Club Apartments in 1998, the liquidity
and financial condition of the Partnership has improved. The cash generated from
operations for the KC Club  Apartments was  insufficient to service the mortgage
on the property.

During  1998,  cash was  provided  by  operating  activities  in the  amount  of
$244,000.   Investing   activities  used  $112,000,   and  financing  activities
(primarily  principal  payments,  as described in the Consolidated  Statement of
Cash Flows) used $319,000.

Year 2000

Information Technology Systems

Subsequent to December 31, 1999, the Registrant has not experienced any material
information  technology  ("IT") or embedded  ("non-IT")  systems  disruptions or
failures  and  anticipates  no  material   systems   problems  at  Bicycle  Club
Apartments.

                                        8
<PAGE>


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


Year 2000 - Cont'd.

Material Third Parties' Systems Failures

Evaluation of material third parties' Year 2000 readiness status was essentially
complete as of December 31, 1999.  The  Registrant  continues to monitor for any
additional  information  pertaining to these parties' Year 2000  readiness.  The
Registrant has not experienced and does not anticipate any Year 2000 performance
issues related to its material third parties.

Inflation

The effects of inflation on the Partnership's  operations or investments are not
quantifiable.  Revenues from property operations fluctuate  proportionately with
increases and decreases in housing costs.  Fluctuations in the rate of inflation
also affect the sales values of properties  and,  correspondingly,  the ultimate
gains to be realized by the Partnership from property sales.

Future Changes in Accounting Principle

The  Financial  Accounting  Standards  Board  ("FASB")  has issued  Statement of
Financial  Accounting  Standards No. 133, Accounting for Derivative  Instruments
and Hedging Activities ("SFAS 133"). This statement, as amended by SFAS No. 137,
requires all  derivatives  to be recorded on the balance sheet at fair value and
establishes  standard  accounting  methodologies  for  hedging  activities.  The
standard will result in the  recognition of offsetting  changes in value or cash
flows of both the hedge and the hedged item in earnings or comprehensive  income
in the same period. The statement is effective for Secured Investment  Resources
Fund,  L.P.  III's  fiscal  year  ending  December  31,  2001.  Because  Secured
Investment  Resources Fund, L.P. III does not hold derivative  instruments,  the
adoption of this  statement  is not  expected  to have a material  impact on the
financial statements.


Item 7A. Qualitative and Quantitative Disclosure About Market Risk.

The Registrant has considered the provision of Financial  Reporting  Release No.
48 "Disclosure of Accounting Policies for Derivative  Financial  Instruments and
Derivative Commodity Instruments, and Disclosure of Quantitative and Qualitative
Information  about Market Risk  Inherent in  Derivative  Financial  Instruments,
Other Financial Instruments and Derivative Commodity Instruments". The Trust had
no holdings of  derivative  financial or commodity  instruments  at December 31,
1999.

The  Registrant  does not believe that it has any material  exposure to interest
rate risk. The debt on the Trust's property matures in the year 2001. Management
believes  that the Trust will be able to refinance  the debt on similar terms at
that time.


                                        9

<PAGE>

Item 8. Financial Statements and Supplementary Data

        See Item 14(a).

Item 9. Changes in and Disagreements  with Registrant's  Certifying  Accountants
        and Accounting and Financial Disclosure.

        None

                                    Part III

Item 10. Directors and Executive Officers of the Registrant.

The General  Partner of the Partnership is Nichols  Resources,  Ltd., a Missouri
corporation  formed on August  22,  1988 for the  purpose of acting as a general
partner of public real estate  programs and  otherwise  investing in and dealing
with limited  partnerships,  property management and the real estate syndication
business.  Nichols  Resources,  Ltd. was a  wholly-owned  subsidiary of the J.C.
Nichols Company until January, 1998. It is now a wholly-owned  subsidiary of MJS
Associates,  Inc., a Missouri corporation with executive offices located at 1100
Main Street, Ste 2100 Kansas City, Missouri 64105. MJS Associates, Inc. acquired
all of the  outstanding  stock of Nichols  Resources,  Ltd. in January 1998 from
J.C. Nichols  company.  Nichols  Resources,  Ltd. issued 15,000 shares of common
stock for $1,500,000 on August 22, 1988.

Currently,   Nichols'  sole  business  is  acting  as  general  partner  of  the
Registrant.  Besides  its  ownership  of stock of Nichols  and other real estate
companies,   MJS  oversees   construction  relating  to  the  rehabilitation  of
properties,  but has no employees. David L. Johnson is the principal shareholder
and an officer and director of MJS.

Nichols  has three  directors:  David L.  Johnson,  John W.  Alvey and Daniel W.
Pishny.  Christine A.  Robinson is Nichols'  President,  and Mr.  Pishny and Mr.
Alvey are Nichols' Vice President and Secretary/Treasurer, respectively.

Mr. Johnson, age 43, is a member of the Board of Trustees and Chairman of Nooney
Realty Trust, Inc., a publicly-traded real estate investment trust ("NRTI"). Mr.
Johnson also is Chairman,  Chief Executive Officer,  and majority shareholder of
Maxus Properties,  Inc. ("Maxus"),  a Missouri corporation located at 1100 Main,
Suite 2100, Kansas City, Missouri 64105, that specializes in commercial property
management for affiliated owners. Maxus


                                       10

<PAGE>



Item 10.  Directors and Executive  Officers of the  Registrant-Cont'd.

employs more than 250 people to manage 49 commercial properties,  including more
than 8,000  apartment  units and 700,000 square feet of retail and office space.
Mr.  Johnson is also a member of the Board of  Directors  and  Chairman of Maxus
Capital  Corp.  ("MCC")  the  managing  general  partner of Maxus Real  Property
Investors - Four, L.P., a publicly traded limited partnership.

Mr. Pishny,  age 37, is a member of the Board of Trustees and President of NRTI,
and is President and Chief Operating Officer of Maxus. Mr. Pishny is responsible
for the day-to-day operations of Maxus and its managed properties. Mr. Pishny is
also a member of the Board of Directors and President of MCC.

Mr. Alvey, age 41, is Vice President of NRTI, Executive Vice President and Chief
Financial Officer of Maxus. Mr. Alvey is also a member of the Board of Directors
of MCC.

Ms. Robinson, age 33, is Secretary of NRTI, Vice President of Administration and
Director of Investor Relations of Maxus.


Item 11. Management Compensation

During  1999,  The  Partnership  paid  $100,000  in fees to related  parties for
property  management  services.  The  Partnership  also paid  $17,000 to Nichols
Resources,  Ltd,  for  professional  services  as  described  in  Note  5 to the
accompanying Consolidated Financial Statements.

See  Item  14(a)(i)(vii),   Notes  to  Financial  Statements,   Note  5  to  the
accompanying  Consolidated Financial Statements for a discussion of transactions
between the Registrant and certain affiliates of the General Partner.


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                                       11

<PAGE>



Item 12. Security ownership of Certain Beneficial Owners and Management.

   (a) Security Ownership of Certain Beneficial Owners.

       The table below sets forth each person or entity that has reported to the
       Registrant  beneficial  ownership  of more  than  5% of the  Registrant's
       limited partner units as of January 31, 2000. The percentage of ownership
       is based on 9,685  limited  partner units  outstanding  as of February 1,
       2000.

                                        Amount and Nature of
       Name                             Beneficial Ownership         Percentage

       Bond Purchase, L.L.C.                  511                       5.3%
       1100 Main, Suite 2100
       Kansas City, Missouri 64105

   (b)  Security Ownership of Management.

       The table shown below sets forth the number of the  Registrant's  limited
       partner  units  beneficially  owned as of February  1, 2000,  directly or
       indirectly, by each general partner and executive officer and all general
       partners and executive officers as a group.

                                      Amount and Nature of
              Name                   Beneficial Ownership (1)     Percentage(2)
              ----                   -------------------------    -------------
Nichols Resources, Ltd..............          -0-                      -
David L. Johnson (3)................          511                     5.3%
Daniel W. Pishny  ..................          -0-                      -
John W. Alvey ......................          -0-                      -
Nichols Resources, Ltd..............          -0-                      -
Christine A. Robinson...............          -0-                      -
All general partners, directors
and officers........................          511                     5.3%
----------------

    (1)       A beneficial owner of a security  includes a person who,  directly
              or  indirectly,  has or shares  voting or  investment  power  with
              respect  to such  security.  Voting  power is the power to vote or
              direct the voting of the security and investment power is


                                       12

<PAGE>



Item 12. Security ownership of Certain Beneficial owners and Management-Cont'd.

              the power to dispose or direct the  disposition  of the  security.
              Each person  listed has stated that he,  either  alone or with his
              spouse,  has sole  voting  power and sole  investment  power  with
              respect  to the  units  shown as  beneficially  owned,  except  as
              otherwise indicated.

    (2)       The  percentages  represent  the total  number of limited  partner
              units in the  adjacent  column  divided  by 9,685,  the  number of
              issued and  outstanding  units of the  Registrant  on  February 1,
              2000.

    (3)       Represents  units  held by Bond  Purchase,  L.L.C.  of  which  Mr.
              Johnson is approximately an 86% owner.

  (c )   Change in Control.

On July 21, 1999, in connection  with its consent  solicitation  statement filed
with the Securities and Exchange  Commission  (the "SEC") on April 21, 1999 (the
"Consent Solicitation Statement"), Nichols Resources, Ltd., a general partner of
the Registrant ("Nichols"),  obtained the written consent of limited partners of
the Registrant holding a majority of the issued and outstanding units of limited
partnership issued by the Registrant ("Units") to (i) the assignment of James R.
Hoyt's and SIR Partners III,  L.P.'s  general  partner  interests to Nichols and
(ii) the  appointment of Nichols as successor  Managing  General  Partner of the
Registrant.  Pursuant to the consent solicitation,  Nichols received the consent
of limited  partners of the  Registrant  holding 4,877 units of the 9,685 issued
and outstanding units of limited partnership issued by the Registrant ("Units").
As a result,  effective as of July 21,  1999,  Nichols  acquired  Hoyt's and SIR
Partners'  general  partnership  interest and is the  Registrant's  sole General
Partner.

Nichols is a Missouri corporation, the owner of which is MJS Associates, Inc., a
Missouri  corporation  ("MJS").  Nichols has three directors:  David L. Johnson,
John W. Alvey and Daniel W. Pishny. Christine A. Robinson is Nichols' President,
and   Mr.   Pishny   and   Mr.   Alvey   are   Nichols'   Vice   President   and
Secretary/Treasurer, respectively. Nichols was formed on August 22, 1988 for the
purpose  of acting as a general  partner  of public  real  estate  programs  and
otherwise  investing  in  and  dealing  with  limited   partnerships,   property
management and real estate  syndications.  Currently,  Nichols' sole business is
acting a general partner of the Registrant.  Prior to January, 1998, Nichols was
a wholly-owned  subsidiary of the J.C.  Nichols Company.  In January,  1998, MJS
acquired all the issued and  outstanding  shares of common stock of Nichols from
the J.C.  Nichols  Company.  Besides its ownership of stock of Nichols and other
real estate companies,  MJS oversees construction relating to the rehabilitation
of  properties,  but  has no  employees.  David  L.  Johnson  is  the  principal
shareholder and an officer and director of MJS.

Item 13. Certain Relationships and Related Transactions.

See  Item  14(a)(1)(vii),   Notes  to  Financial  Statements,   Note  5  to  the
accompanying Consolidated Financial Statements.

                                       13

<PAGE>

                                     PART IV

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

(a)(1) The following Financial  Statements of Secured Investment Resources Fund,
       L.P. III, accompany this report:

SECURED INVESTMENT RESOURCES FUND, L.P. III


          (i) Independent Accountants' Report

         (ii) Independent Auditor's Report

        (iii) Consolidated  Balance Sheets - December 31, 1999
              and 1998

         (iv) Consolidated Statements of Income -
              Years Ended December 31, 1999,
              1998, and 1997

          (v) Consolidated Statements of Changes in Partners' Deficit
              Years Ended December 31,
              1999, 1998, and 1997

         (vi) Consolidated Statements of Cash Flows -
              Years Ended December 31, 1999,
              1998, and 1997

        (vii) Notes to Consolidated Financial Statements

(a)(2) The following Financial Statement Schedules are part of this report:

          (i) Report of Independent Accountants on Financial Statement Schedules

                                       14

<PAGE>

         (ii) Schedule II - Allowance For Doubtful Accounts Information

        (iii) Schedule III - Real Estate and Accumulated Depreciation


All schedules  other than those  indicated in the index have been omitted as the
required information is presented in the financial statements,  related notes or
is inapplicable.

(a)(3) The following  Exhibits are Incorporated by Reference and are an integral
       part of this Form 10-K.

Exhibit Number             Description

     (3)           (a)  Amended and Restated Agreement
                        of Limited Partnership. (iii)

                   (b)  Certificate of Limited
                        Partnership. (i)

     (4)           (a)  Form of Subscription Agreement. (iii)

                   (b)  Form of Certificate evidencing units. (i)

    (10)           (a) Property Management Agreement as Amended  (ii)

                   (b) Management Agreement between the Partnership and Maxus
                       Properties, Inc.

                   (c) Escrow Agreement between the Partnership and The Mission
                       Bank. (i)

                   (d) Real Estate Contract of Sale for the Brywood Hills
                       Apartments. (iv)

                   (e) Real Estate Contract of Sale for The Greenhills Bicycle
                       Club (formerly Candlewyck Apartments). (v)


                                       15

<PAGE>

                   (f)  Deed  of  Trust  and  Promissory  Notes  for  Greenhills
                        Bicycle Club (formerly Candlewyck Apartments). (vi)

                   (g)  Deed of Trust and  Promissory  Notes for  Brywood  Hills
                        Apartments. (vi)

    (16)           (a)  Letter regarding change in certifying accountant. (vi)

    (25)           (a)  Power of Attorney. (i)

    (27)           (a)  Secured Investment Resources Fund, L.P.  III   Financial
                        Data Schedule at December 31, 1999 and for the year then
                        ended.

    (28)           (b)  Guarantee of General Partners.  (i)


(i)    Previously  filed on September 13, 1988 as an Exhibit to the Registration
       Statement on Form S-11 (file no.  3324235) such Exhibit and  Registration
       Statement incorporated herein by reference.

(ii)   Previously  filed on  December 7, 1988 as an Exhibit to  Amendment  #1 to
       registration  Statement  of  Form  S-11  such  Exhibit  and  Registration
       Statement incorporated herein by reference.

(iii)  Previously  filed  on  December  7,  1988  as  part  of  Amendment  #1 to
       Registration Statement and incorporated herein by reference.

(iv)   Previously filed as an exhibit to a current report on Form 8-K dated June
       12, 1989 which exhibit and Form is incorporated herein by reference.

(v)    Previously  filed as an  exhibit  to a  current  report on Form 8-K dated
       October  30,  1989  which  exhibit  and Form is  incorporated  herein  by
       reference.

(vi)   Previously  filed as an  exhibit  to an annual  report on Form 10-K dated
       December  31,  1998  which  exhibit  and Form is  incorporated  herein by
       reference.

(vii)  Previously filed as an exhibit to a current report on Form 8-K (Amendment
       No.1)  dated  December  1, 1998 which  exhibit  and Form is  incorporated
       herein by reference.

(b)    Report of Form 8-K filed during the fourth quarter.

        None
                                       16

<PAGE>

(c)    See Exhibit Index contained herein.

(d)    See (a)(2) above.






              (the remainder of this page left blank intentionally)

                                       17

<PAGE>



                                   SIGNATURES

   Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                       Secured Investment Resources
                                       Fund, L.P., III, a Missouri limited
                                       partnership (Registrant)

Date: March 30, 2000               By: Nichols Resources, Ltd., its
                                       general partner

                                   By: /s/ Christine A. Robinson
                                           Christine A. Robinson
                                           President

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

/s/ David L. Johnson        Director of Nichols              March 30, 2000
David L. Johnson            Resources, Ltd., a
                            corporate general partner
                            of the Registrant

/s/ John W. Alvey           Director of Nichols              March 30, 2000
John W. Alvey               Resources, Ltd., a
                            corporate general partner
                            of the Registrant

/s/ Daniel W. Pisny         Director of Nichols              March 30, 2000
Daniel W. Pishny            Resources, Ltd., a
                            corporate general partner
                            of the Registrant



                                       18

<PAGE>

                   Secured Investment Resources Fund, L.P. III
                                 (A Partnership)

            Accountants' Report and Consolidated Financial Statements

                           December 31, 1999 and 1998


                                   [BKD LOGO]

                                      BKD
                             Baird, Kurtz & Dobson


<PAGE>

                   SECURED INVESTMENT RESOURCES FUND, L.P. III
                                 (A Partnership)

                           DECEMBER 31, 1999 AND 1998

                                    CONTENTS

                                                                           Page
INDEPENDENT ACCOUNTANTS' REPORT

     Baird, Kurtz and Dobson................................................F-3

     BDO Seidman, LLP.......................................................F-4

CONSOLIDATED FINANCIAL STATEMENTS
     Balance Sheets.........................................................F-5
     Statements of Operations...............................................F-6
     Statements of Changes in Partners' Deficit.............................F-7
     Statements of Cash Flows...............................................F-8
     Notes to Financial Statements..........................................F-9


                                      F-2
<PAGE>

                         Independent Accountants' Report


The Partners
Secured Investment Resources Fund, L.P. III
Kansas City, Missouri


   We have  audited  the  consolidated  balance  sheets  of  SECURED  INVESTMENT
RESOURCES  FUND,  L.P. III (A Partnership) as of December 31, 1999 and 1998, and
the related consolidated statements of operations,  changes in partners' deficit
and cash flows for the years then  ended.  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 SECURED INVESTMENT  RESOURCES
FUND, L.P. III (A Partnership) as of December 31, 1999 and 1998, and the results
of its operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.


                                                   /s/Baird, Kurtz and Dobson

Kansas City, Missouri
January 19, 2000

                                      F-3

<PAGE>

Report of Independent Certified Public Accountants


The Partners
Secured Investment Resources Fund, L.P. III
Mission, Missouri

         We have audited the consolidated statements of operations,  partnership
deficit  and cash  flows  for the year  ended  December  31,  1997,  of  Secured
Investment  Resources  Fund,  L.P.  III.  We have  also  audited  the  financial
statement  schedules  for the year ended  December  31,  1997.  These  financial
statements and schedules are the responsibility of the Partnership's management.
Our  responsibility  is to express an opinion on these financial  statements and
schedules 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 audit provides a reasonable basis for our opinion.

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material respects, the results of operations and their cash flows
of Secured  Investment  Resources  Fund,  L.P.  III for the year then ended,  in
conformity with generally accepted accounting principles.

         Also, in our opinion,  the schedules  present  fairly,  in all material
respects, the information set forth therein.


                                                     /s/ BDO Seidman, LLP

St. Louis, Missouri
February 6, 1998



                                      F-4
<PAGE>
                   SECURED INVESTMENT RESOURCES FUND, L.P. III
                                 (A Partnership)
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1999 AND 1998
                     (in thousands, except unit information)

                                     ASSETS
<TABLE>
<CAPTION>
<S>                                                    <C>        <C>
                                                       1999       1998
                                                     -------    -------
INVESTMENT PROPERTIES                                $ 6,885    $ 7,220
                                                     -------    -------
RESTRICTED DEPOSITS                                      117        155
                                                     -------    -------
CASH                                                     358        130
                                                     -------    -------
OTHER ASSETS
     Rent receivables                                     --          2
     Prepaid expenses and deposits                        27         20
     Debt issuance costs, less accumulated
        amortization of $316 in 1999 and
        $253 in 1998                                     100        163
                                                     -------    -------
                                                         127        185
                                                     -------    -------
                                                     $ 7,487    $ 7,690
                                                     =======    =======
</TABLE>
                       LIABILITIES AND PARTNERS' DEFICIT

                                                        1999       1998
                                                     -------    -------
Mortgage payable                                     $ 7,895    $ 7,963
Accounts payable and accrued expenses                     69         48
Accrued management fees - General Partner                 16         18
Accrued interest                                          59         60
Unearned revenue                                           4         25
Tenant security deposits                                  73         71
                                                     -------    -------
                                                       8,116      8,185
                                                     -------    -------
PARTNERS' DEFICIT
     General Partner (4 units authorized
         and outstanding)
              Capital contributions                        2          2
              Partnership deficit                        (45)       (44)
                                                     -------    -------
                                                         (43)       (42)
                                                     -------    -------
     Limited Partners (60,000 units authorized;
         9,685 units outstanding)
              Capital contributions                    3,915      3,915
              Partnership deficit                     (4,501)    (4,368)
                                                     -------    -------
                                                        (586)      (453)
                                                     -------    -------
                                                        (629)      (495)
                                                     -------    -------
                                                     $ 7,487    $ 7,690
                                                     =======    =======
                                      F-5
<PAGE>

                   SECURED INVESTMENT RESOURCES FUND, L.P. III
                                 (A Partnership)


                      CONSOLIDATED STATEMENTS OF OPERATIONS

                  YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

              (in thousands, except unit and per unit information)

<TABLE>
<CAPTION>
<S>                                               <C>        <C>        <C>
                                                  1999       1998       1997
                                               -------    -------    -------
REVENUES
     Rents                                     $ 1,865    $ 1,869    $ 2,692
     Other income                                  117         76         47
                                               -------    -------    -------
                                                 1,982      1,945      2,739
                                               -------    -------    -------
OPERATING AND ADMINISTRATIVE
     EXPENSES
         Property operating expenses               611        537        895
         General and administrative expenses       158        180        298
         Professional fees                          78        133         92
         Management fees                           116        113        137
         Depreciation and amortization             451        437        605
                                               -------    -------    -------
                                                 1,414      1,400      2,027
                                               -------    -------    -------
OPERATING INCOME                                   568        545        712
                                               -------    -------    -------
OTHER INCOME (EXPENSE)
     Interest expense                             (713)      (741)    (1,112)
     Interest income                                11         14        196
                                               -------    -------    -------
                                                  (702)      (727)      (916)
                                               -------    -------    -------
NET LOSS BEFORE EXTRAORDINARY ITEM                (134)      (182)      (204)

EXTRAORDINARY ITEM
     Gain on extinguishment of debt                 --        976         --

NET INCOME (LOSS)                              $  (134)   $   794    $  (204)
                                               =======    =======    =======
ALLOCATION OF INCOME (LOSS)
     General Partner                           $    (1)   $     8    $    (2)
     Limited Partners                             (133)       786       (202)
                                               -------    -------    -------
                                               $  (134)   $   794    $  (204)
                                               =======    =======    =======
PARTNERSHIP INCOME (LOSS) PER
     LIMITED PARTNERSHIP UNIT
     BEFORE EXTRAORDINARY ITEM                 $(13.69)   $(18.61)   $(20.87)
                                               =======    =======    =======
PARTNERSHIP INCOME (LOSS) PER
     LIMITED PARTNERSHIP UNIT                  $(13.69)   $ 81.18    $(20.87)
                                               =======    =======    =======
</TABLE>

                                      F-6
<PAGE>

             CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT

                  YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
                                 (in thousands)

                                         General        Limited
                                        Partners       Partners        Total
                                        --------       --------        -----

PARTNERS' DEFICIT, JANUARY 1, 1997      $    (48)      $  (1,037)   $  (1,085)

     Partnership loss                         (2)           (202)        (204)
                                        ---------      ----------   ----------

PARTNERS' DEFICIT, DECEMBER 31, 1997         (50)         (1,239)      (1,289)

     Partnership income                        8             786          794
                                        --------       ---------    ---------

PARTNERS' DEFICIT, DECEMBER 31, 1998         (42)           (453)        (495)

     Partnership loss                         (1)           (133)        (134)
                                        ---------      ----------   ----------

PARTNERS' DEFICIT, DECEMBER 31, 1999    $    (43)      $    (586)   $    (629)
                                        =========      ==========   ==========

                                      F-7

<PAGE>

                   SECURED INVESTMENT RESOURCES FUND, L.P. III
                                 (A Partnership)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                  YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
                                 (in thousands)


<TABLE>
<CAPTION>
<S>                                                                    <C>        <C>        <C>
                                                                       1999       1998       1997
                                                                      -----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income (loss)                                              $  (134)   $   794    $  (204)
     Items not requiring (providing) cash:
        Depreciation and amortization                                   451        437        605
        Extraordinary item                                               --       (976)        --
        Gain on sale of assets                                           --         --       (115)
     Changes in:
        Rent and other receivables                                        2         --         (2)
        Prepaid expenses and deposits                                    (7)        --         (1)
        Accounts payable and accrued expenses                            19         (1)        56
        Unearned revenue                                                (21)        13        (16)
        Accrued interest                                                 (1)       (11)      (386)
        Tenant security deposits                                          2        (12)         4
                                                                    -------    -------    -------
              Net cash provided by (used in) operating activities       311        244        (59)
                                                                    -------    -------    -------
CASH FLOWS FROM INVESTING ACTIVITIES
     Repayments from related parties                                     --        107         --
     Net change in restricted deposits                                   38        (72)       (59)
     Proceeds from sale of assets                                        --         --      1,083
     Income on investments                                               --         --        (71)
     Purchase of property and equipment                                 (53)      (147)       (66)
                                                                    -------    -------    -------
              Net cash provided by (used in) investing activities       (15)      (112)       887
                                                                    -------    -------    -------
CASH FLOWS FROM FINANCING ACTIVITIES
     Principal payments on long-term debt                               (68)      (262)      (587)
     Cash payments on foreclosure                                        --        (57)        --
     Note receivable from related parties                                --         --         (7)
                                                                    -------    -------    -------
              Net cash used in financing activities                     (68)      (319)      (594)
                                                                    -------    -------    -------
INCREASE (DECREASE) IN CASH                                             228       (187)       234

CASH, BEGINNING OF YEAR                                                 130        317         83
                                                                    -------    -------    -------
CASH, END OF YEAR                                                   $   358    $   130    $   317
                                                                    =======    =======    =======
</TABLE>

                                      F-8

<PAGE>
                   SECURED INVESTMENT RESOURCES FUND, L.P. III
                                 (A Partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1999, 1998 AND 1997
              (in thousands, except unit and per unit information)


NOTE 1:  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

   Secured  Investment  Resources  Fund,  L.P. III  (Partnership)  is a Missouri
limited  partnership  formed  pursuant to the Missouri  Revised  Uniform Limited
Partnership  Act on April 20, 1988.  The  Partnership  invested in two apartment
complexes in the Metropolitan  Kansas City,  Missouri area. It extends unsecured
credit,  subject  to  security  deposits,  to its  tenants.  Tenant  leases  are
generally  subject  to  annual  renewals.  The  General  Partner's  and  Limited
Partners'  interest in Partnership  earnings or loss initially amounts to 1% and
99%,  respectively.  At such  point in time cash  distributions  to the  Limited
Partners  equal their original  invested  capital plus interest at a rate of the
greater of 12% (14% for those investors who subscribed for units on or before 90
days after  December 7, 1988) or the  increase in the  Consumer  Price Index per
annum, cumulative  non-compounded on their adjusted invested capital, net income
or loss will be  allocated  15% to the  General  Partner  and 85% to the Limited
Partners.  Upon dissolution of the Partnership,  the General Partner must have a
capital account greater than or equal to 1.01% of the original invested capital.
If a  deficiency  exists,  the  General  Partner  will be  required  to fund the
necessary amounts. Effective January 7, 1998, one of the two apartment complexes
was foreclosed by the mortgage holder (see Note 6).

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  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

Partnership Loss Per Limited Partnership Unit

   Partnership  loss per limited  partnership  unit is computed by dividing  the
loss allocated to the Limited Partners by the weighted average number of limited
partnership  units sold.  The per unit  information  has been computed  based on
9,685 weighted average limited partnership units outstanding.

Principles of Consolidation

   The  Partnership is the sole Limited  Partner of a single asset  partnership,
Bicycle Club Joint Venture,  L.P. The consolidated  financial statements include
the  accounts  of the  Partnership  and Bicycle  Club Joint  Venture,  L.P.  All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.

                                      F-9

<PAGE>
                   SECURED INVESTMENT RESOURCES FUND, L.P. III
                                 (A Partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1999, 1998 AND 1997
              (in thousands, except unit and per unit information)

NOTE 1:  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (Continued)

Depreciation and Amortization

   Depreciation and amortization methods and lives are as follows:

                                   Estimated
                                  Useful Life         Method
                                  -----------         ------
Building and land improvements     30 years        Straight-line
Equipment                           5 years        Straight-line

   Debt issue costs are being  amortized over the lives of the related  mortgage
note using a method that approximates the interest method.  Amortization expense
was $63,  $63 and $76 for the years  ended  December  31,  1999,  1998 and 1997,
respectively.

Impairment

   The  Partnership  evaluates  long-lived  assets  to  be  held  and  used  for
impairment  when events or changes in  circumstances  indicate that the carrying
amount of such  assets  may not be  recoverable.  Impairment  is  recognized  if
expected  undiscounted  future cash flows are less than the  carrying  amount of
those assets.

Income Taxes

   Income taxes on the income of the  Partnership  are assumed by the individual
partners.  Therefore,  no  provision  for  income  taxes  is  reflected  in  the
accompanying consolidated financial statements.

Restricted Deposits

   Restricted  deposits  consist of cash accounts held for debt service payments
and repair and replacement costs.

Future Changes in Accounting Principle

   The Financial  Accounting  Standards  Board ("FASB") has issued  Statement of
Financial  Accounting  Standards No. 133, Accounting for Derivative  Instruments
and Hedging Activities ("SFAS 133"). This statement, as amended by SFAS No. 137,
requires all  derivatives  to be recorded on the balance sheet at fair value and
establishes  standard  accounting  methodologies  for  hedging  activities.  The
standard will result in the  recognition of offsetting  changes in value or cash
flows of both the hedge and the hedged item in earnings or comprehensive  income
in the same period. The statement is effective for Secured Investment  Resources
Fund,  L.P.  III's  fiscal  year  ending  December  31,  2001.  Because  Secured
Investment  Resources Fund, L.P. III does not hold derivative  instruments,  the
adoption of this  statement  is not  expected  to have a material  impact on the
financial statements.

                                      F-10
<PAGE>
                   SECURED INVESTMENT RESOURCES FUND, L.P. III
                                 (A Partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1999, 1998 AND 1997
              (in thousands, except unit and per unit information)

NOTE 1:  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
                (Continued)

Reclassifications

   Certain  amounts  in  the  1998  and  1997  financial  statements  have  been
reclassified to conform with the 1999 presentation.  These reclassifications had
no effect on the previously reported net income (loss) or partners' deficit.

NOTE 2:  INVESTMENT PROPERTIES

   Major  classifications  of  investment  properties,  stated  at cost,  are as
follows:

                                      1999       1998
                                     ------------------
Greenhills Bicycle Club Apartments   $11,246   $11,193
Office Equipment                          12        12
                                     -------   -------
                                      11,258    11,205
Less accumulated depreciation          4,373     3,985
                                     -------   -------

                                     $ 6,885   $ 7,220
                                     =======   =======

   Depreciation expense was $388, $374 and $542 for the years ended December 31,
1999, 1998 and 1997, respectively.

NOTE 3:  MORTGAGE PAYABLE
                                                   1999     1998
                                              ---------   ------
Real Estate Mortgage:
     Greenhills Bicycle Club Apartments (A)   $   7,895   $7,963
                                              =========   ======

   (A)  Mortgage payable,  bank, original balance of $8,100,  payable in monthly
        installments  of $65 including  principal and interest.  Due August 2001
        with interest at 9%; collateralized by investment property.

   The carrying value for the above mortgage payable approximates fair value.

   Aggregate  annual  maturities  of long-term  debt at December 31, 1999 are as
follows:

                  2000             $      75
                  2001                 7,820
                                   ---------
                                   $   7,895
                                   =========

                                      F-11
<PAGE>
                   SECURED INVESTMENT RESOURCES FUND, L.P. III
                                 (A Partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1999, 1998 AND 1997
              (in thousands, except unit and per unit information)


NOTE 4:  LAND LEASE

   The  Partnership  entered into a land lease agreement for the land underlying
the KC Club Apartments for a term of 20 years. The lease payments for years 1 to
15 were  calculated at 50% of that year's net  operating  income from the leased
premises in excess of an ascending  scale from $650 to $800.  During years 16 to
20, the annual lease payments were 10% of the land's then appraised  value.  For
the year ended  December 31, 1997,  the net operating  income did not exceed the
land lease requirements,  which resulted in no lease payments.  The property was
lost to foreclosure on January 7, 1998 and the lease was effectively terminated.

   The Partnership invested $500 (held as a Certificate of Accrual with a market
value of $1,037 as of December 31, 1996) which was pledged as  collateral  until
the  property's  net  operating  income  achieved  the level of 120% of the debt
service on the first  mortgages  for a  consecutive  24-month  period or May 31,
2004,  whichever was earlier.  The  Certificate of Accrual was sold on August 1,
1997 for $1,083. The proceeds were used to pay $553 of accrued interest and $530
of principal on the KC Club Apartments.

NOTE 5:  RELATED PARTY TRANSACTIONS

   Through  December 31, 1998,  SPECS,  Inc.,  a  corporation  in which a former
General  Partner had a 100%  interest,  received  property  management  fees for
providing  property  management  services.  SPECS,  Inc. also performed  various
professional  services for the  Partnership,  primarily  tax  accounting,  audit
preparation, SEC 10Q and 10K preparation, and investor services. Amounts paid by
the Partnership to SPECS, Inc. are as follows:

                                               1998           1997
                                             ---------------------
     Property management fee                 $   95          $ 137
     Professional services                       17             43
                                             ---------      ------
                                             $  112          $ 180
                                             =========      ======

   On January 1, 1999, the  Partnership  entered into a new property  management
agreement  with Maxus  Properties,  Inc.  (Maxus),  an  affiliate of the current
general partner,  Nichols  Resources,  Ltd ("Nichols").  The sole shareholder of
Nichols  is MJS  Associates,  Inc.  ("MJS"),  a Missouri  corporation.  David L.
Johnson is the principal  shareholder  and an executive  officer and director of
MJS. David L. Johnson is also the majority  shareholder and an executive officer
and director of Maxus. Under this agreement, Maxus provides management and other
services for the Partnership  similar to those services  described above.  Maxus
receives a management fee of 5% of the monthly gross receipts, as defined in the
agreement.  Management  fees totaled  $100 for the year ended December 31, 1999.

                                      F-12
<PAGE>
                   SECURED INVESTMENT RESOURCES FUND, L.P. III
                                 (A Partnership)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        DECEMBER 31, 1999, 1998 AND 1997
              (in thousands, except unit and per unit information)

NOTE 5:  RELATED PARTY TRANSACTIONS (Continued)

   The General Partner is also entitled to receive a Partnership  Management Fee
equal to 5% of total  operating  cash flows (as defined) for managing the normal
operations of the Partnership.  Partnership  management fees amounted to $16 and
$18 for the years ended December 31, 1999 and 1998,  respectively.  There was no
partnership management fee due for the year ended December 31, 1997.


NOTE 6:  EXTRAORDINARY ITEM

   During the year ended December 31, 1998, the  Partnership  realized a gain of
$976  as the  result  of the  foreclosure  by the  mortgage  holder  on KC  Club
Apartments and the related debt forgiveness (see Note 1), and the exercise of an
option to pay off the second  mortgage  related to the  Greenhills  Bicycle Club
Apartments.

   Under the  terms of the  foreclosure,  net  assets  with a net book  value of
$3,143 were  surrendered to the KC Club mortgage  holder and the Partnership was
relieved of the mortgage  obligation  amounting to $3,922.  The  resulting  gain
amounted to $779.

   Under the  exercise of the option,  the  Partnership  settled the  obligation
(remaining principal balance of $397) for $200, resulting in a $197 gain.


NOTE 7:  CASH DISTRIBUTIONS

   No distributions have been made to the general or limited partners since July
1990.  Future  distributions,  if any,  will be made from  excess  cash flow not
needed for capital improvement or working capital purposes.


NOTE 8:  ADDITIONAL CASH FLOWS INFORMATION

                                                     1999       1998        1997
                                                     ----       ----        ----
Non-Cash Investing and Financing Activities

     Net assets surrendered in exchange for debt
         forgiveness in foreclosure transaction        --    $  3,143         --

Additional Cash Payment Information

     Interest paid                                $   714         741   $  1,498

                                      F-13

<PAGE>
                        Report of Independent Accountants
                         on Financial Statement Schedule


The Partners
Secured Investment Resources Fund, L.P. III
Kansas City, Missouri

   In connection  with our audits of the  consolidated  financial  statements of
Secured  Investment  Resources  Fund,  L.P. III for the years ended December 31,
1999 and 1998, we have also audited the  information in the following  financial
statement  schedules  for the years  ended  December  31,  1999 and 1998.  These
financial  statement  schedules  are  the  responsibility  of the  Partnership's
management.  Our  responsibility  is to express  an  opinion on these  financial
statement  schedules  based on our  audits of the basic  consolidated  financial
statements.  The  schedules  are  presented  for purposes of complying  with the
Securities  and  Exchange  Commission's  rules  and  regulations  and  are not a
required part of the basic consolidated financial statements.

   In our opinion, the 1999 and 1998 consolidated  financial statement schedules
referred to above, when considered in relation to the basic financial statements
taken as a whole,  present  fairly,  in all material  respects,  the information
required to be included therein.

                                              /s/ Baird, Kurtz and Dobson

Kansas City, Missouri
January 19, 2000

<PAGE>

                  SECURED INVESTMENT RESOURCES FUND, L.P. III

                  SCHEDULE II - ALLOWANCE FOR DOUBTFUL ACCOUNTS

                                DECEMBER 31, 1999
                     (in thousands, except unit information)




                       Balance at                   Bad Debt Write    Balance at
                      Beginning of     Charged to   Offs Deducted        End
                         Period        Operations   From Allowance    of Period


For Years Ended
    December 31,


         1997          $   12          $   62         $     58         $    16

         1998              16              30               46              --

         1999              --              46               46              --



<PAGE>
                  Secured Investment Resource Fund , LP III

             Schedule III - Real Estate & Accumulated Depreciation

                               December 31, 1999
                     (in thousands, except unit information)
<TABLE>
<CAPTION>
                                                          Initial Cost to Partnership   (a)
                                                       --------------------------------------
<S>                                <C>                <C>         <C>               <C>
                                                                 Building &         Furniture
                                   Encumbrances        Land      Improvement        Equipment
                                   ------------        ----      -----------        ---------
Garden Apartments:

       KC Club Apartments              3,922             0           4,776             295
       Kansas City, MO

       Green Hills Bicycle Club        8,422           431           9,988             833
       Kansas City, MO

Other Equipment                            0             0               0               0
                                     -------       -------         -------          ------
       TOTAL                          12,344           431          14,764           1,128
                                     =======       =======         =======          ======
</TABLE>
<TABLE>
<CAPTION>
                                                     Gross Amount at Which
                                                  Carried at Close of Period
                                    ------------------------------------------------------
<S>                                 <C>      <C>             <C>        <C>        <C>            <C>           <C>
                                             Building &     Furniture              Accumulated      Date       Depreciation
                                    Land    Improvements    Equipment    Total    Depreciation    Acquired         Life
                                    ----    ------------    ---------    -----    ------------    --------         ----
Garden Apartments:

       KC Club Apartments             0            0             0           0           0        06/30/89      30 Yrs (1)
       Kansas City, MO                                                                                           5 Yrs (2)

       Green Hills Bicycle Club     407        9,655         1,184      11,246       4,361        10/27/89      30 Yrs (1)
       Kansas City, MO                                                                                           5 Yrs (2)

Other Equipment                       0           0             12         12           12                       5 Yrs (2)
                                    ---        -----         -----      ------       -----
       TOTAL                        407        9,655         1,196      11,258       4,373
                                    ===        =====         =====      ======       =====
</TABLE>

(1) Estimated  useful life of buildings

(2) Estimated  useful life of furniture and fixtures

NOTES:

(a) The initial cost to the Partnership  represents the original  purchase price
    of the properties,  including $206 and $146 of improvements incurred in 1988
    and 1987, respectively, which were contemplated at the time the property was
    acquired.

(b) Receipts  received  under  the  terms of  certain  guarantee  agreement  are
    recorded by the  Partnership  as a reduction of the basis of the property to
    which the guaranteed income relates.
<PAGE>
                   Secured Investment Resource Fund , LP III

         Schedule III - Real Estate & Accumulated Depreciation - Cont'd
                               December 31, 1997

(c) reconciliation of Real Estate Owned:

<TABLE>
<CAPTION>
<S>                              <C>           <C>      <C>             <C>
                                                        Buildings &     Furniture &
                                  Total        Land     Improvement      Equipment
                                  ------       ----     -----------     -----------
Balance at January 1, 1997        16,042        407         14,163        1,472
       Additions during year:
         Improvements                 66          0             21           45
                                  ------        ---         ------        -----
Balance at December 31, 1997      16,108        407         14,184        1,517
       Additions during year:
         Improvements                147          0             62           85
         Disposition              (5,050)         0         (4,641)        (409)
                                  ------        ---         ------        -----
Balance at December 31, 1998      11,205        407          9,605        1,193
       Additions during year:
         Improvements                 53          0             50            3
                                  ------        ---         ------        -----
Balance at December 31, 1999      11,258        407          9,655        1,196
                                  ======        ===         ======        =====
</TABLE>

(d) Reconciliation of Accumulated Depreciation:

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

Balance at  January 1, 1997        4,732          0          3,448        1,284
       Additions during year:
         Depreciation Expenses       542        ---            463           79
                                  ------       ----         ------       ------
Balance at December 31, 1997       5,274          0          3,911        1,363
       Additions during year:
         Depreciation Expenses       373        ---            328           45
         Disposition              (1,662)       ---         (1,315)        (347)
                                  ------       ----         ------       ------
Balance at December 31, 1998       3,985          0          2,924        1,061
       Additions during year:
         Depreciation Expenses       388          0            341           47
                                  ------       ----         ------       ------
Balance at December 31, 1999       4,373          0          3,265        1,108
                                  ======       ====         ======       ======
</TABLE>

(e)    The total gross amount of real estate at January 1, 1997 includes $567 of
       acquisition fees paid to affiliates.

<PAGE>