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

                            FORM 10-Q

    X     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
 -------  SECURITIES EXCHANGE ACT OF 1934

                       For the quarter ended
                          March 31, 1997
                                OR

 -------  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
          SECURITIES EXCHANGE ACT OF 1934

                      Commission File Number
                              0-15677
                              -------

            RAL YIELD + EQUITIES III LIMITED PARTNERSHIP
            --------------------------------------------
      (Exact name of registrant as specified in its charter)

         Wisconsin                              39-1546907
-------------------------------           -----------------------
(State or other jurisdiction of            (I.R.S. Employer
 incorporation or organization)            Identification Number)

   20875 Crossroads Circle
        Suite 800
     Waukesha, Wisconsin                           53186        
-------------------------------           -----------------------
   (Address of principal                         (Zip Code)
     executive offices)

Registrant's telephone number, including area code (414) 798-0900
                                                   --------------
     Securities registered pursuant to Section 12(b) of the Act:
                             None
                             ----
     Securities registered pursuant to Section 12(g) of the Act:
                   LIMITED PARTNERSHIP INTERESTS
                         (Title of Class)

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
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
          -------                           -------

                     RAL YIELD + EQUITIES III
                        LIMITED PARTNERSHIP
                            FORM 10-Q

                        TABLE OF CONTENTS

                                                            PAGES
PART I    FINANCIAL INFORMATION

          Item 1.   Financial Statements                    I-1

          Item 2.   Management's Discussion and
                    Analysis of Financial Condition and
                    Results of Operations                   I-7

PART II   OTHER INFORMATION

          Item 6.  Exhibits and Reports on Form 8-K (None)

Signatures


































<TABLE>
                    RAL YIELD + EQUITIES III
                       LIMITED PARTNERSHIP
    BALANCE SHEETS AT MARCH 31, 1997 AND DECEMBER 31, 1996
<CAPTION>
                                        UNAUDITED       AUDITED
                                          MAR 31,     DECEMBER 31,
         ASSETS                            1997           1996
-------------------------------         ----------     ------------
<S>                                     <C>            <C>
INVESTMENT PROPERTIES, (net of
accumulated depreciation of
$1,557,168 and $1,517,554,
respectively)                           $4,075,148     $4,114,763

CASH AND CASH EQUIVALENTS                  349,675        383,182

RENT AND OTHER RECEIVABLES                  12,288          1,820

OTHER ASSETS                                 2,649          3,327

NOTES RECEIVABLE (net of allowance of
$60,985 and $60,427, respectively)               0              0

DEFERRED CHARGES                             5,625          6,000
                                        ----------     ----------

TOTAL ASSETS                            $4,445,385     $4,509,092
                                        ==========     ==========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------

ACCOUNTS PAYABLE AND ACCRUED EXPENSES      $80,569        $74,711

TENANT SECURITY DEPOSITS                    57,794         56,495

PREPAID RENT                                 4,567          6,959
                                        ----------     ----------
TOTAL LIABILITIES                         $142,930        138,165

LIMITED PARTNERS' CAPITAL                4,254,382      4,323,648
GENERAL PARTNERS' CAPITAL                   48,073         47,279
                                        ----------     ----------
TOTAL PARTNERS' CAPITAL                  4,302,455      4,370,927
                                        ----------     ----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $4,445,385     $4,509,092
                                        ==========     ==========
<FN>
     The accompanying notes are an integral part of these
     statements.
</FN>
</TABLE>
<TABLE>                              
                                  I-1   
                    RAL YIELD + EQUITIES III
                      LIMITED PARTNERSHIP

                    Statement of Operations
   For the three months ended March 31, 1997 and 1996
  
                             UNAUDITED
<CAPTION>
                     3 MONTHS        3 MONTHS
                       ended           ended
                      MAR 31,         MAR 31,
                        1997            1996
                      --------        --------
<S>                   <C>             <C>
REVENUE:
 Rental income        $187,422        $247,532
 Restaurant sales      146,594         139,665
 Interest and other
   income               15,653          19,673
                      --------        --------   
                      $349,669        $406,870

EXPENSES:
 Operating and
  administrative       $86,531         $92,696
 Restaurant Operating
  expenses             115,286         106,454
 Management fees        10,770          14,338
 Real estate and other
  taxes                 17,098          17,875
 Bad Debts                 559            (480)
 Depreciation and
   amortization         39,989          55,130
                      --------        --------   
                      $270,233        $286,013
                      --------        --------   
NET INCOME (LOSS)      $79,436        $120,857
                      ========        ========   

<FN>
   The accompanying notes are an integral part of these statements.
</FN>
</TABLE>









                                  I-2

 <TABLE>
                         RAL YIELD + EQUITIES III
                            LIMITED PARTNERSHIP

                Statements of Changes in Partners' Capital
             For the three months ended March 31, 1997 and
                    for the year ended December 31, 1996

                                      UNAUDITED
<CAPTION>
                             General          Limited
                             Partners         Partners
                          (1% ownership)  (99% ownership)   Total

                          --------------  ---------------  --------
<S>                           <C>        <C>         <C>
BALANCE, January 1, 1996      $39,419   $5,815,162    $5,854,581
                           ----------    ----------   ----------
NET INCOME (LOSS)               7,860      778,108      $785,968 

CASH DISTRIBUTIONS                  0   (2,269,622)  ($2,269,622)
                           ----------   ----------    ----------

BALANCE, December 31, 1996    $47,279   $4,323,648    $4,370,927
                           ----------   ----------    ----------

NET INCOME                        794       78,642        79,436

CASH DISTRIBUTIONS                        (147,908)     (147,908)
                           ----------    ----------   ----------

BALANCE, March 31, 1997       $48,073   $4,254,382    $4,302,455
                           ==========    ==========   ==========

<FN>
     The accompanying notes are an integral part of these
statements.
</FN>
</TABLE>













                                  I-3 
                                  
<TABLE>
                       RAL YIELD + EQUITIES III
                          LIMITED PARTNERSHIP
                       Statements of Cash Flows
         For the three months ended March 31, 1997 and 1996

                                              UNAUDITED
<CAPTION>
                                       MAR 31,           MAR 31,
                                        1997              1996   
                                      ---------         ---------
<S>                                  <C>                 <C>
CASH FLOWS FROM
 OPERATING ACTIVITIES:

Net income (loss)                      $79,436            $120,857
Adjustments to reconcile net
 income to net cash provided
 by operating activities:
     Depreciation and
     amortization expense               39,989              55,130
Change in assets and liabilities:
     Accounts receivable               (10,468)             (3,707)
     Notes receivable                        0               4,000
     Other assets                          678               2,134
     Accounts payable and
      accrued expenses                   5,858             (15,075)
     Tenants' security deposits          1,299               2,313
     Prepaid Rent                       (2,391)             (1,769)
                                    ----------           ----------
Net Cash provided by
 operating activities:                $114,401            $163,883

CASH FLOWS FROM INVESTING
 ACTIVITIES:

  Acquisitions of and additions to
   investment properties                    $0                  $0
                                    ----------           ----------
 Net Cash used in
  investing activities                      $0                  $0
                                    ----------          ----------










                                   I-4
                                  
CASH FLOWS FROM FINANCING
 ACTIVITIES:

 Cash distributions paid             ($147,908)          ($173,906)
                                    ----------          ----------
Net cash provided by (used
in) financing activities             ($147,908)          ($173,906)
                                    ----------          ----------
Net increase (decrease)
 in cash                               (33,507)            (10,023)

Cash at beginning of period            383,182             502,133
                                    ----------           ----------
Cash at end of period                 $349,675            $492,110
                                    ==========          ==========


<FN>
     The accompanying notes are an integral part of these
statements.
</FN>
</TABLE>





























                                  
                                  I-5

                       RAL YIELD + EQUITIES III
                          LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS

Pursuant to Rule 10-01(a)(5) of Regulation S-X (17 CFR Part 210)
RAL Yield + Equities III Limited Partnership is omitting its
footnote disclosure.  The Registrant has presumed that users of the
interim financial information have read or have access to the
audited financial statements for the preceding fiscal year.  Copies
of the audited statements will be furnished upon request.  The
disclosure is being omitted since it substantially duplicates the
disclosure contained in the most recent annual report to security
holders, Form 10-K for the fiscal year ended December 31, 1996.  No
events have occurred (other than those discussed in the
Management's Discussion and Analysis of Financial Condition and
Results of Operations) subsequent to the end of the most recent
fiscal year which would have a material impact on RAL Yield +
Equities III Limited Partnership.

In the opinion of management, the unaudited financial statements
presented herein reflect all adjustments necessary to a fair
statement of the results for the interim periods presented.





























                                 I-6

       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS

RAL YIELD + EQUITIES III LIMITED PARTNERSHIP (the "Partnership") is
a Wisconsin Limited Partnership formed on April 29, 1985, under the
Wisconsin Revised Uniform Limited Partnership Act.  The Partnership
was organized to acquire new and existing income-producing propert-
ies.  Currently held properties consist primarily of restaurants
(including land and building) leased on a "triple net"lease basis
(i.e. for the tenant to pay for maintenance, repairs, real estate
taxes and insurance) to chain restaurants, including Hardee's,
Pizza Hut, and Wendy's.  The Partnership also owns and operates
three mobile home communities located in Wisconsin and Minnesota.
The Partnership's offering of limited partnership interests to the
public pursuant to the Securities Act of 1933 raised $13,725,000,
in which the above-described properties, in addition to the
properties which have been sold as mentioned below, were purchased
for cash.  During 1993 four of the commercial properties and one of
the mobile home communities were sold.  In 1994 an additional
commercial property was sold.  During the second quarter of 1996
one mobile home park and a warehouse building were sold.

Liquidity and Capital Resources:
Properties acquired by the Partnership are generally intended to be
held from seven to ten years.  During the Properties' holding
periods, the investment strategy is to maintain (on the "triple net
lease" restaurant properties) and improve (on the mobile home
parks) occupancy rates through the application of professional
property management (including selective capital improvements).
The Partnership also accumulates working capital reserves for
normal repairs, replacements, working capital, and contingencies.

Net cash flow provided by operating activities for the three months
ended March 31 was $114,401 in 1997 and $163,883 in 1996,
primarily from earnings and depreciation (amortization).    

The 30.2% reduction in actual cash flow from 1996 to 1997 is
primarily a result of the loss of income from the two properties
that were sold.  Cash flow from the warehouse that was sold has
resulted in a reduction of $50,000 along with about $3,000 from the
sale of the mobile home park.

As of March 31, 1997, the Partnership had cash of approximately
$350,000 representing undistributed cash flow, working capital
reserves, and tenant's security deposits.  Current liabilities
amounted to approximately $143,000.

The Partnership operates a Rocky Rococo restaurant in Milwaukee,
Wisconsin.  The restaurant contributed $25,587 to cash flow in the
first quarter of 1997 compared to $26,794 in the first quarter of
1996.  As sales continue to increase at this restaurant, it should
continue to be a large contributor to overall partnership cash
flow.
                                I-7    




Results of Operations:

Gross rental revenues for the three months ended March 31 were
$187,422 in 1997 versus $247,532 in 1996.  Operating expenses,
excluding restaurant operations, from rental properties
for the three months ended March 31 were $86,531 in 1997 and
$92,696 in 1996.  The decrease in gross rental revenues and
operating expenses is primarily due to the sale of the warehouse
and mobile home park in 1996.

Net Income for the three months ended March 31 was $79,436 in 1997
and $120,857 in 1996.

The restaurant property on Howell Avenue in Milwaukee, Wisconsin
opened as a Rocky Rococo's in the fourth quarter of 1994.  Revenues
of $148,211 generated $18,762 of net income for the partnership
during the first quarter of 1997 compared to revenues of $140,431
and net income of $19,522 for the first quarter of 1996.

<TABLE>
The following is a listing of the approximate average physical
occupancy rates for the Partnership's mobile home parks during the
three months ended March 31, 1997 and calendar year 1996:
<CAPTION>
                                   3 Months       Calendar
                                 ended Mar.         Year
                                   31, 1997         1996 
                                 -----------      --------
     <S>                              <C>            <C>
     1.   Forest Junction             92%             90%
     2.   Cloverleaf                  88%             88%
     3.   Shamrock                   100%             98%

</TABLE>














                                 I-8


Inflation:

Due to the comparatively low level of inflation since the
Partnership commenced operations, the effect of inflation on the
Partnership has not been material to date.  Should the rate of
inflation increase substantially over the life of the Partnership,
it is likely to influence ongoing operations, in particular, the
operating expenses of the Partnership.  Most of the commercial
leases contain clauses permitting pass-through of certain increased
operating costs.  Residential leases are typically of one year or
less in duration; this allows the Partnership to react quickly
(through rental increases) to changes in the level of inflation.
These factors should serve to reduce, to a certain degree, any
impact of rising costs on the Partnership.





































                                 I-9


                         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 thereunto duly authorized.


             RAL YIELD + EQUITIES III LIMITED PARTNERSHIP
                             (Registrant)


Date:  April 12, 1997                   Robert A. Long           
                                       --------------------------
                                        Robert A. Long
                                        General Partner