FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
                        QUARTERLY OR TRANSITIONAL REPORT


                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549


                                  FORM 10-QSB
(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934


                 For the quarterly period ended March 31, 1999


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

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

                         Commission file number 0-14470


                       INVESTORS FIRST-STAGED EQUITY L.P.
       (Exact name of small business issuer as specified in its charter)


         Delaware                                            36-3310965
(State or other jurisdiction of                             (IRS Employer
incorporation or organization)                           Identification No.)

                         55 Beattie Place, PO Box 1089
                        Greenville, South Carolina 29602
                    (Address of principal executive offices)


                                 (864) 239-1000
                           Issuer's telephone number


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.  Yes  X  No
                         
                         PART I - FINANCIAL INFORMATION


ITEM 1.   FINANCIAL STATEMENTS

a)
                       INVESTORS FIRST-STAGED EQUITY L.P.

                           CONSOLIDATED BALANCE SHEET
                        (in thousands, except unit data)
                                  (Unaudited)

                                 March 31, 1999


Assets

  Cash and cash equivalents                                     $  1,368

  Receivables and deposits                                           861

  Restricted escrows                                                 592

  Other assets                                                     1,533

  Investment properties:

     Land                                        $  8,402

     Buildings and related improvements            40,102

                                                   48,504

     Less accumulated depreciation                (26,423)        22,081

                                                                $ 26,435

Liabilities and Partners' Deficit

Liabilities

  Accounts payable                                              $     37

  Accrued interest                                                   400

  Tenant security deposit liabilities                                464

  Accrued property taxes                                              86

  Other liabilities                                                  130

  Advances from affiliates of General Partner                        327

  Mortgage notes payable                                          41,853


Partners' Deficit

  General partner                                $   (350)

  Limited partners (16,261.152 units

     issued and outstanding)                      (16,512)       (16,862)

                                                                $ 26,435


          See Accompanying Notes to Consolidated Financial Statements

b)
                       INVESTORS FIRST-STAGED EQUITY L.P.

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                        (in thousands, except unit data)
                                  (Unaudited)


                                                   Three Months Ended

                                                        March 31,

                                                    1999        1998

Revenues:

 Rental income                                   $ 2,119      $ 1,978

 Other income                                         74           86

    Total revenues                                 2,193        2,064


Expenses:

 Operating                                           636          665

 General and administrative                           57           69

 Depreciation                                        474          464

 Interest                                            813          828

 Property taxes                                      110          113

    Total expenses                                 2,090        2,139

Income (loss) before extraordinary item              103          (75)

Extraordinary item - gain on early

  extinguishment of debt                             874           10


Net income (loss)                                $   977      $   (65)


Net income (loss) allocated to general

  partner (1%)                                   $    10      $    (1)

Net income (loss) allocated to limited

  partners (99%)                                     967          (64)


                                                 $   977      $   (65)

Per limited partnership unit:

Income (loss) before extraordinary item          $  6.27      $ (4.54)

Extraordinary item                                 53.19          .61

Net income (loss) per limited partnership unit   $ 59.46      $ (3.93)


          See Accompanying Notes to Consolidated Financial Statements

c)
                       INVESTORS FIRST-STAGED EQUITY L.P.

             CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
                        (in thousands, except unit data)
                                  (Unaudited)



                                    Limited

                                  Partnership   General     Limited

                                     Units      Partner    Partners     Total

  Partners' deficit at

  December 31, 1998                 16,261     $   (360) $ (17,479)  $ (17,839)


Net income for the three months
   ended March 31, 1999                 --           10        967         977

Partners' deficit at

    March 31, 1999                  16,261     $   (350) $ (16,512)  $ (16,862)


          See Accompanying Notes to Consolidated Financial Statements

d)
                       INVESTORS FIRST-STAGED EQUITY L.P.

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                  (Unaudited)


                                                             Three Months Ended

                                                                  March 31,

                                                                1999     1998

Cash flows from operating activities:

    Net income (loss)                                        $   977   $   (65)

    Adjustments to reconcile net income (loss) to net cash

      provided by operating activities:

      Depreciation                                               474       464

      Amortization of loan costs and leasing commissions          45        47

      Extraordinary gain on early extinguishment of debt        (874)      (10)

      Change in accounts:

        Receivables and deposits                                (123)      (52)

        Other assets                                             (60)        6

        Accounts payable                                         (42)       (4)

        Accrued interest                                           8       186

        Tenant security deposit liabilities                       (4)       19

        Accrued property taxes                                    86       113

        Other liabilities                                         20       (20)


         Net cash provided by operating activities               507       684


Cash flows from investing activities:

    Property improvements and replacements                       (38)     (190)

    Net (deposits to) withdrawals from restricted escrows        (68)      375


         Net cash (used in) provided by investing activities    (106)      185


Cash flows from financing activities:

    Payment of loan costs                                         --      (106)

    Payments on mortgage notes payable                          (218)     (635)

 Advances to affiliates                                            1         1


         Net cash used in financing activities                  (217)     (740)


Net increase in cash and cash equivalents                        184       129

Cash and cash equivalents at beginning of period               1,184     2,640


Cash and cash equivalents at end of period                   $ 1,368   $ 2,769


Supplemental disclosure of cash flow information:

    Cash paid for interest                                   $   768   $   602


          See Accompanying Notes to Consolidated Financial Statements


e)
                       INVESTORS FIRST-STAGED EQUITY L.P.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of Investors First-
Staged Equity L.P. (the "Partnership" or "Registrant") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B.  Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.  In the opinion of MAERIL, Inc. (the "General Partner"),
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the three
month period ended March 31, 1999, are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31, 1999.  For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Partnership's annual report on Form 10-KSB for the
fiscal year ended December 31, 1998.

Principles of Consolidation:  The Partnership's consolidated financial
statements include the accounts of its 99.99% limited partnership interests in
Serramonte, LP, VMS Apartments Portfolio II and VMS Apartments Portfolio III.
The General Partner of the consolidated partnership is MAERIL, Inc. MAERIL,
Inc., may be removed by the Registrant; therefore, the consolidated partnership
is controlled and consolidated by the Registrant.  All significant
interpartnership balances have been eliminated.



NOTE B - TRANSFER OF CONTROL

Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment Investment and Management Company, ("AIMCO") a publicly
traded real estate investment trust, with AIMCO being the surviving corporation
(the "Insignia Merger"). As a result, AIMCO acquired 100% ownership interest in
the General Partner. The General Partner does not believe that this transaction
will have a material effect on the affairs and operations of the Partnership.

NOTE C - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES

The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all partnership activities.
The Partnership Agreement provides for certain payments to affiliates for
services and as reimbursement of certain expenses incurred by affiliates on
behalf of the Partnership.

During the three months ended March 31, 1999 and 1998, affiliates of the General
Partner were entitled to receive 5% of gross receipts from all of the
Registrant's residential properties for providing property management services.
The Registrant paid to such affiliates approximately $56,000 and $63,000 for the
three months ended March 31, 1999 and 1998, respectively.  For the three months
ended March 31, 1998, affiliates of the General Partner were entitled to receive
varying percentages of gross receipts from the Registrant's commercial property
for providing property management services.  The Registrant paid to such
affiliates $53,000 for the three months ended March 31, 1998. Effective October
1, 1998 (the effective date of the Insignia Merger) these services for the
commercial property were provided by an unrelated party.



An affiliate of the General Partner received reimbursements of accountable
administrative expenses amounting to approximately $39,000 and $37,000 for the
three months ended March 31, 1999 and 1998, respectively.

During the three months ended March 31, 1998 the Partnership paid affiliates of
the General Partner approximately $40,000 for loan costs which were capitalized
and are included in other assets in the accompanying Consolidated Balance Sheet.
These loan costs related to the refinancing of the investment properties.

In prior years the Partnership was advanced funds from a former General Partner
in order to meet its existing obligations.  Interest accrues on these advances
at rates agreed to by the Partnership and the former General Partner.  The
interest rates at March 31, 1999 ranged from 4.70% to 9.50%.  The unpaid balance
on these advances at March 31, 1999 and the related accrued interest is $327,000
and $138,000, respectively.

NOTE D - EARLY EXTINGUISHMENT OF DEBT

At March 31, 1999, the total estimated future cash payments, on the
Partnership's properties second mortgages, are less than the recorded balance.
Therefore, in compliance with Financial Accounting Standards 15, the Partnership
reduced the carrying balance to the estimated future cash payments of $1,895,000
on the second mortgage encumbering Rivercrest Village Apartments.  In January
1999, the Partnership made the final payment on the second mortgage encumbering
the Richardson Highlands property.  As a result of the payment, the Partnership
recognized an extraordinary gain of $874,000.

NOTE E - SEGMENT REPORTING


Description of the types of products and services from which the reportable
segment derives its revenues:

The Partnership has two reportable segments: residential properties and
commercial properties.  The Partnership's residential property segment consists
of two apartment complexes located in California.  The Partnership rents
apartment units to tenants for terms that are typically twelve months or less.
The commercial property segment consists of office space located in Serramonte,
California. This property leases space to management, restaurant, and dental
enterprises at terms ranging from month to month to ten years.

Measurement of segment profit or loss:

The Partnership evaluates performance based on net income.  The accounting
policies of the reportable segments are the same as those described in the
summary of significant accounting policies in the Partnership's annual report on
Form 10-KSB for the year ended December 31, 1998.

Factors management used to identify the enterprise's reportable segment:

The Partnership's reportable segments are investment properties that offer
different products and services.  The reportable segments are each managed
separately because they provide distinct services with different types of
products and customers.

Segment information for the three months ended March 31, 1999 and 1998 is shown
in the tables below (in thousands). The "Other" column includes Partnership
administration related items and income and expense not allocated to reportable
segments.


                1999                Residential Commercial   Other   Totals

Rental income                       $  1,352    $    767   $   --   $ 2,119
Other income                              63           5        6        74
Interest expense                         544         269       --       813
Depreciation                             360         114       --       474
General and administrative expenses       --          --       57        57
Gain on extraordinary items              874          --       --       874
Segment profit (loss)                    917         111      (51)      977
Total assets                          17,476       8,296      663    26,435
Capital expenditures                      33           5       --        38

                1998                Residential Commercial   Other   Totals

Rental income                       $  1,237    $    741   $   --   $  1,978
Other income                              49           6       31         86
Interest expense                         556         272       --        828
Depreciation                             356         108       --        464
General and administrative expenses       --          --       69         69
Gain on extraordinary items               10          --       --         10
Segment profit (loss)                   (131)        104      (38)       (65)
Total assets                          18,231       7,989    2,394     28,614
Capital expenditures                      44         146       --        190

NOTE F - LEGAL PROCEEDINGS

The Partnership is unaware of any pending or outstanding litigation that is not
of a routine nature arising in the ordinary course of business.



ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Registrant from time to time.
The discussion of the Registrant's business and results of operations, including
forward-looking statements pertaining to such matters, does not take into
account the effects of any changes to the Registrant's business and results of
operation.  Accordingly, actual results could differ materially from those
projected in the forward-looking statements as a result of a number of factors,
including those identified herein.

The Partnership's investment properties consist of two apartment complexes and
one commercial property.  The following table sets forth the average occupancy
for these properties for the three months ended March 31, 1999 and 1998:


                                                  1999        1998

Rivercrest Village Apartments

     Sacramento, California                       90%         90%

Richardson Highlands Apartments

    Marin City, California                        99%          99%

Serramonte Plaza

     Daly City, California                        97%         95%


Results of Operations

The Registrant's net income for the three months ended March 31, 1999 was
approximately $977,000 as compared to a net loss of approximately $65,000 for
the three months ended March 31, 1998.  The increase in net income was primarily
attributed to the extraordinary gain on early extinguishment of debt at
Richardson Highlands Apartments.  During the three months ended March 31, 1999,
the Partnership made the final mortgage payment on the second mortgage
encumbering the Richardson Highlands Apartments resulting in the extraordinary
gain on early extinguishment of debt.

The Registrant's income before extraordinary items for the three months ended
March 31, 1999 was approximately $103,000 as compared to a loss of approximately
$75,000 for the three months ended March 31, 1998.  The increase in net income
before extraordinary item was due to an increase in total revenues and a
decrease in total expenses.  The increase in total revenues was due to an
increase in rental income, which was primarily attributable to the increase in
average rental rates at all of the Registrant's investment properties.  The
increase in rental income was partially offset by a decrease in other income.
The decrease in other income was primarily attributable to a decrease in the
Registrant's balances in interest bearing accounts.

Total expenses decreased primarily due to a reduction in operating expense and
to a lesser extent, a decrease in interest expense and general and
administrative expense. Operating expense decreased due to a reduction in
insurance.  Insurance expense decreased due to the change in insurance carriers
at the Registrant's investment properties during the fourth quarter of 1998
which resulted in lower insurance premiums.

The decrease in general and administrative expense is primarily attributable to
a decrease in professional expenses and general costs of the Partnership.
Interest expense decreased due to the repayment of Richardson Highlands' second
mortgage, which encumbered the property.  Depreciation expense increased
slightly for the three months ended March 31, 1999 as compared to the comparable
period.  Property tax expense remained relatively constant for the comparable
periods.  Included in general and administrative expenses at both March 31, 1999
and 1998 are management reimbursements to the General Partner allowed under the
Partnership Agreement.  In addition, costs associated with the quarterly and
annual communications with investors and regulatory agencies and the annual
audit required by the Partnership Agreement are also included.

As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses.  As part of
this plan, the General Partner attempts to protect the Partnership from the
burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level.  However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.

Liquidity and Capital Resources

At March 31, 1999, the Registrant had cash and cash equivalents of approximately
$1,368,000 as compared to approximately $2,769,000 at March 31, 1998.  Cash and
cash equivalents increased approximately $184,000 for the three months ended
March 31, 1999 from the Registrant's fiscal year end, primarily due to
approximately $507,000 of cash provided by operating activities, which was
partially offset by approximately $217,000 of cash used in financing activities
and approximately $106,000 of cash used in investing activities.  Cash used in
financing activities consisted primarily of principal payments on the mortgage
encumbering the Registrant's properties.  Cash used in investing activities
consisted of property improvements and replacements and net deposits to the
escrow accounts maintained by the mortgage lender.  The Registrant invests its
working capital reserves in money market accounts.

The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Partnership and to comply with Federal,
state and local legal and regulatory requirements.  Capital improvements planned
for each of the Registrant's properties are detailed below.

Rivercrest Village Apartments

Based on a report received from an independent third party consultant analyzing
necessary exterior improvements and estimates made by the General Partner on
interior improvements, it is estimated that the property requires approximately
$365,000 of capital improvements over the near term.  Capital improvements
budgeted for, but not limited to, approximately $467,000 are planned for 1999
consisting of clubhouse renovations, carpet replacement and other interior
improvements.  As of March 31, 1999 approximately $12,000 has been incurred
consisting primarily of appliance and floor covering replacements.

Richardson Highlands Apartments

Based on a report received from an independent third party consultant analyzing
necessary exterior improvements and estimates made by the General Partner on
interior improvements, it is estimated that the property requires approximately
$213,000 of capital improvements over the near term. Capital improvements
budgeted for, but not limited to, approximately $213,000 are planned for 1999
consisting of balcony and stairway replacement and repairs, carpet, cabinet,
countertop and roof replacements, parking lot repairs and other building
improvements.  As of March 31, 1999 approximately $21,000 has been incurred
consisting primarily of interior improvements and floor covering replacement.

Serramonte Plaza

Based on a report received from an independent third party consultant analyzing
necessary exterior improvements and estimates made by the General Partner on
interior improvements, it is estimated that the property requires approximately
$1,000,000 of capital improvements over the near term.  Capital improvements
budgeted for, but not limited to, approximately $423,000 are planned for 1999
consisting of door and entrance way and parking lot repairs and tenant
improvements.  As of March 31, 1999 approximately $5,000 has been incurred
consisting primarily of tenant improvements.

The additional capital improvements will be incurred only if cash is available
from operations or Partnership reserves.  To the extent that such budgeted
capital improvements are completed, the Registrant's distributable cash flow, if
any, may be adversely affected at least in the short term.


The Registrant's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Registrant.  The mortgage
indebtedness of approximately $41,853,000 matures from January 2000 until
January 2008, with balloon payments due at maturity, at which time the
properties will either be refinanced and/or sold.  Rivercrest Village has a
balloon second mortgage, which includes a "shadow debt" portion, payable only in
the event that the mortgage goes to maturity, January 15, 2000.  The "shadow
debt" portion for Rivercrest is approximately $1,307,000.  On March 31, 1999,
the total remaining balance on the second mortgage for Rivercrest Village is
approximately $1,895,000.  The Partnership made the final payment on the second
mortgage encumbering the Richardson Highlands Apartments during January 1999.

No cash distributions were paid during the three months ended March 31, 1999 and
1998.  The Registrant's distribution policy is reviewed on a quarterly basis.
Future cash distributions will depend on the levels of net cash generated from
operations, the availability of cash reserves, debt refinancing, and/or property
sales.  There can be no assurance, however, that the Registrant will generate
sufficient funds from operations after required capital expenditures, to permit
distributions to its partners in 1999.

Potential Tender Offer

On October 1, 1998,  Insignia Financial Group, Inc. merged into AIMCO, a real
estate investment trust, whose Class A Common Shares are listed on the New York
Stock Exchange. As a result of such merger, AIMCO and AIMCO Properties, L.P., a
Delaware limited partnership and the operating partnership of AIMCO ("AIMCO OP")
acquired indirect control of the General Partner.  AIMCO and its affiliates
currently do not own any of the limited partnership interests in the
Partnership. AIMCO is presently considering whether it will engage in an
exchange offer for limited partnership interests in the Partnership. There is a
substantial likelihood that, within a short period of time, AIMCO OP will offer
to acquire limited partnership interests in the Partnership for cash or
preferred units or common units of limited partnerships interests in AIMCO OP.
While such an exchange offer is possible, no definite plans exist as to when or
whether to commence such an exchange offer, or as to the terms of any such
exchange offer, and it is possible that none will occur.

A registration statement relating to these securities has been filed with the
Securities and Exchange Commission but has not yet become effective. These
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This Form 10-QSB shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such state.

Year 2000 Compliance

General Description of the Year 2000 Issue and the Nature and Effects of the
Year 2000 on Information Technology (IT) and Non-IT Systems

The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year.  The Partnership
is dependent upon the General Partner and its affiliates for management and
administrative services ("Managing Agent").  Any of the computer programs or
hardware that have date-sensitive software or embedded chips may recognize a
date using "00" as the year 1900 rather than the year 2000.  This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.

Over the past two years, the Managing Agent has determined that it will be
required to modify or replace significant portions of its software and certain
hardware so that those systems will properly utilize dates beyond December 31,
1999.  The Managing Agent presently believes that with modifications or
replacements of existing software and certain hardware, the Year 2000 issue can
be mitigated.  However, if such modifications and replacements are not made, or
not completed in time, the Year 2000 issue could have a material impact on the
operations of the Partnership.

The Managing Agent's plan to resolve Year 2000 issues involves four phases:
assessment, remediation, testing, and implementation.  To date, the Managing
Agent has fully completed its assessment of all the information systems that
could be significantly affected by the Year 2000, and has begun the remediation,
testing and implementation phases on both hardware and software systems.
Assessments are continuing in regards to embedded systems.  The status of each
is detailed below.

Status of Progress in Becoming Year 2000 Compliant, Including Timetable for
Completion of Each Remaining Phase

Computer Hardware:

During 1997 and 1998, the Managing Agent identified all of the computer systems
at risk and formulated a plan to repair or replace each of the affected systems.
In August 1998, the mainframe system used by the Managing Agent became fully
functional. In addition to the mainframe, PC-based network servers, routers and
desktop PCs were analyzed for compliance.  The Managing Agent has begun to
replace each of the non-compliant network connections and desktop PCs and, as of
March 31, 1999, had completed approximately 75% of this effort.

The total cost to the Managing Agent to replace the PC-based network servers,
routers and desktop PCs is expected to be approximately $1.5 million of which
$1.3 million has been incurred to date.  The remaining network connections and
desktop PCs are expected to be upgraded to Year 2000 compliant systems by July
31, 1999.

Computer Software:

The Managing Agent utilizes a combination of off-the-shelf, commercially
available software programs as well as custom-written programs that are designed
to fit specific needs.  Both of these types of programs were studied, and
implementation plans written and executed with the intent of repairing or
replacing any non-compliant software programs.

During 1998, the Managing Agent began converting the existing property
management and rent collection systems to its management properties Year 2000
compliant systems. The estimated additional costs to convert such systems at all
properties, is $200,000, and the implementation and the testing process is
expected to be completed by July 31, 1999.

The final software area is the office software and server operating systems.
The Managing Agent has upgraded all non-compliant office software systems on
each PC and has upgraded 80% of the server operating systems.  The remaining
server operating systems are planned to be upgraded to be Year 2000 compliant by
July 31, 1999.

Operating Equipment:


The Managing Agent has operating equipment, primarily at the property sites,
which needed to be evaluated for Year 2000 compliance.  In September 1997, the
Managing Agent began taking a census and inventory of embedded systems
(including those devices that use time to control systems and machines at
specific properties, for example elevators, heating, ventilating, and air
conditioning systems, security and alarm systems, etc.).

The Managing Agent has chosen to focus its attention mainly upon security
systems, elevators, heating, ventilating and air conditioning systems, telephone
systems and switches, and sprinkler systems.  While this area is the most
difficult to fully research adequately, management has not yet found any major
non-compliance issues that put the Managing Agent at risk financially or
operationally.  The Managing Agent intends to have a third-party conduct an
audit of these systems and report their findings by July 31, 1999.

Any of the above operating equipment that has been found to be non-compliant to
date has been replaced or repaired.  To date, these have consisted only of
security systems and phone systems.  As of March 31, 1999 the Managing Agent has
evaluated approximately 86% of the operating equipment for the Year 2000
compliance.

The total cost incurred for all properties managed by the Managing Agent as of
March 31, 1999 to replace or repair the operating equipment was approximately
$400,000. The Managing Agent estimates the cost to replace or repair any
remaining operating equipment is approximately $325,000, which is expected to be
completed by August 30, 1999.

The Managing Agent continues to have "awareness campaigns" throughout the
organization designed to raise awareness and report any possible compliance
issues regarding operating equipment within its enterprise.


Nature and Level of Importance of Third Parties and Their Exposure to the Year
2000

The Managing Agent continues to conduct surveys of its banking and other vendor
relationships to assess risks regarding their Year 2000 readiness.  The Managing
Agent has banking relationships with three major financial institutions, all of
which have indicated their compliance efforts will be complete before May 1999.
The Managing Agent has updated data transmission standards with two of the three
financial institutions.  The Managing Agent's contingency plan in this regard is
to move accounts from any institution that cannot be certified Year 2000
compliant by June 1, 1999.

The Partnership does not rely heavily on any single vendor for goods and
services, and does not have significant suppliers and subcontractors who share
information systems (external agent).  To date the Partnership is not aware of
any external agent with a Year 2000 compliance issue that would materially
impact the Partnership's results of operations, liquidity, or capital resources.
However, the Partnership has no means of ensuring that external agents will be
Year 2000 compliant.

The Managing Agent does not believe that the inability of external agents to
complete their Year 2000 remediation process in a timely manner will have a
material impact on the financial position or results of operations of the
Partnership.  However, the effect of non-compliance by external agents is not
readily determinable.

Costs to Address Year 2000

The total cost of the Year 2000 project to the Managing Agent is estimated at
$3.5 million and is being funded from operating cash flows.  To date, the
Managing Agent has incurred approximately $2.8 million ($0.6 million expensed
and $2.2 million capitalized for new systems and equipment) related to all
phases of the Year 2000 project.  Of the total remaining project costs,
approximately $0.5 million is attributable to the purchase of new software and
operating equipment, which will be capitalized.  The remaining $0.2 million
relates to repair of hardware and software and will be expensed as incurred.
The Partnership's portion of these costs are not material.

Risks Associated with the Year 2000

The Managing Agent believes it has an effective program in place to resolve the
Year 2000 issue in a timely manner.  As noted above, the Managing Agent has not
yet completed all necessary phases of the Year 2000 program.  In the event that
the Managing Agent does not complete any additional phases, certain worst case
scenarios could occur.  The worst case scenarios could include elevators,
security and heating, ventilating and air conditioning systems that read
incorrect dates and operate with incorrect schedules (e.g., elevators will
operate on Monday as if it were Sunday). Although such a change would be
annoying to residents, it is not business critical.

In addition, disruptions in the economy generally resulting from Year 2000
issues could also adversely affect the Partnership.  The Partnership could be
subject to litigation for, among other things, computer system failures,
equipment shutdowns or failure to properly date business records.  The amount of
potential liability and lost revenue cannot be reasonably estimated at this
time.

Contingency Plans Associated with the Year 2000


The Managing Agent has contingency plans for certain critical applications and
is working on such plans for others.  These contingency plans involve, among
other actions, manual workarounds and selecting new relationships for such
activities as banking relationships and elevator operating systems.

                          PART II - OTHER INFORMATION



ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          a)   Exhibits:

               Exhibit 27, Financial Data Schedule, is filed as an exhibit to
               this report.

          b)   Reports on Form 8-K:

               None filed during the quarter ended March 31, 1999.


                                   SIGNATURES


In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.




                               INVESTORS FIRST-STAGED EQUITY L.P.
                               (Registrant)

                               By:      VMS Realty Investment II,
                                        its General Partner

                               By:      /s/Patrick J. Foye
                                        Patrick J. Foye
                                        Executive Vice President

                               By:      /s/Carla R. Stoner
                                        Carla R. Stoner
                                        Senior Vice President Finance and
                                        Administration

                               Date:    May 17, 1999