FIRST AMENDMENT TO AGREEMENT OF SALE

     THIS FIRST AMENDMENT TO AGREEMENT OF SALE (this "Amendment") is entered
into as of the 25th day of October, 1996, by and between COLONY
APARTMENTS/CHAPEL HILL LIMITED PARTNERSHIP, a Maryland limited partnership
("Purchaser"), and COLONY LIMITED PARTNERSHIP, an Illinois limited partnership
("Seller").

                             W I T N E S S E T H:

     R-1.  Purchaser and Seller are parties to that certain Agreement of Sale
dated as of September 26, 1996 (the "Contract"), with respect to the purchase
and sale of that certain parcel of real property and the improvements situated
thereon known as Colony Apartments located at 1250 Ephesus Church Road, Chapel
Hill, North Carolina, as more particularly described in the Contract.

     R-2.  Purchaser and Seller now desire to amend the Contract as more
particularly set forth in this Amendment.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and/or other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser agree as
follows:

     1.  Incorporation of Recitals; Capitalized Terms.  The Recitals set forth
above are hereby incorporated herein to the same extent as if fully set forth
herein.  Any capitalized term not otherwise defined herein shall have the
meaning ascribed to it in the Contract.

     2.  Additional Earnest Money.  Section 2.2 of the Contract is hereby
amended to provided that the $50,000 Additional Earnest Money shall be payable
by Purchaser to Escrow Agent on or before October 30, 1006.

     3.  Closing Date.  Section 8.1 of the Contract is hereby amended to
provide that Closing shall be on the later to occur of (i) November 25, 1996 or
(ii) three (3) business days after receipt from the Federal Housing
Commissioner of written approval to the sale of the Property and the prepayment
of the existing financing encumbering the Property (the "Closing Date").

     4.  Ratification of Contract.  Except as modified by this Amendment, all
of the terms and provisions of the Contract are hereby ratified and confirmed
by Seller and Purchaser and shall remain in full force and effect.

     5.  Counterparts.  To facilitate execution, this Amendment may be executed
in as many counterparts as may be required; and it shall not be necessary that
the signature of each party, or that the signatures of all persons required to
bind any party, appear on each counterpart; but it shall be sufficient that the
signature of each party, or that the signatures of the persons required to bind
any party, appear on one or more or such counterparts.  All counterparts shall
collectively constitute a single agreement.
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     IN WITNESS WHEREOF, and intending to be legally bound, the undersigned
parties have duly executed this Amendment under seal on the dates indicate
below beneath their respective signatures.

WITNESS:                      SELLER:

---------------------------   COLONY LIMITED PARTNERSHIP,
                              an Illinois limited partnership

                              By:  Colony Partners, Inc., an Illinois 
                                   corporation, its general partner

                                   By:   /s/ James E. Mendelson
                                        ---------------------------------
                                   Name:  James E. Mendelson
                                        ---------------------------------
                                   Its:  Authorized Representative
                                        ---------------------------------


                              PURCHASER

                              COLONY APARTMENTS/CHAPEL HILL LIMITED 
                              PARTNERSHIP, a Maryland limited partnership

                              By:  Tarheel Investments, LLC, a Maryland
                                   limited liability company

                                   By:   /s/ Mike Brody
                                        --------------------------------
                                   Name:     Mike Brody
                                        --------------------------------
                                   Its:      Managing Member
                                        --------------------------------
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