UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549



Form 10-QSB



(Mark One)

[X]

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended June 30, 2007





[ ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT





For the transition period from _________to _________



Commission file number 0-14187





CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

(Exact name of small business issuer as specified in its charter)







California

94-2940208

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)



Identification No.)



55 Beattie Place, PO Box 1089

Greenville, South Carolina  29602

(Address of principal executive offices)



(864) 239-1000

(Registrant'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 ___



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes __ No  X_



PART I  FINANCIAL INFORMATION





Item 1.

Financial Statements







CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3



BALANCE SHEET

(Unaudited)

(in thousands, except unit data)



June 30, 2007





|                                             |           |         
|-------------------------------------------- | --------- | --------
|Assets                                       |           |         
|Cash and cash equivalents                    |           | $    206
|Receivables and deposits                     |           | 687     
|Other assets                                 |           | 1,511   
|Investment properties:                       |           |         
|Land                                         | $  8,641  |         
|Buildings and related personal property      | 70,115    |         
|                                             | 78,756    |         
|Less accumulated depreciation                | (40,820)  | 37,936  
|                                             |           | $40,340 
|Liabilities and Partners' Deficit            |           |         
|Liabilities                                  |           |         
|Accounts payable                             |           | $  1,146
|Tenant security deposit liabilities          |           | 424     
|Accrued property taxes                       |           | 399     
|Other liabilities                            |           | 640     
|Due to affiliates                            |           | 7,755   
|Mortgage notes payable                       |           | 51,799  
|                                             |           |         
|Partners' Deficit                            |           |         
|General partner                              | $ (1,060) |         
|Limited partners (383,008 units outstanding) | (20,763)  | (21,823)
|                                             |           | $40,340 





See Accompanying Notes to Financial Statements



















CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3



STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per unit data)





|                                       |                |                |          |         
|-------------------------------------- | -------------- | -------------- | -------- | --------
|                                       | Three Months   | Six Months    
|                                       | Ended June 30, | Ended June 30,
|                                       | 2007           | 2006           | 2007     | 2006    
|Revenues:                              |                |                |          |         
|Rental income                          | $ 3,150        | $ 2,988        | $ 6,183  | $ 5,872 
|Other income                           | 460            | 441            | 826      | 839     
|Total revenues                         | 3,610          | 3,429          | 7,009    | 6,711   
|                                       |                |                |          |         
|Expenses:                              |                |                |          |         
|Operating                              | 1,942          | 1,996          | 3,875    | 3,620   
|General and administrative             | 154            | 115            | 302      | 245     
|Depreciation                           | 1,117          | 912            | 2,207    | 1,798   
|Interest                               | 935            | 858            | 1,869    | 1,722   
|Property taxes                         | 206            | 233            | 413      | 487     
|Total expenses                         | 4,354          | 4,114          | 8,666    | 7,872   
|                                       |                |                |          |         
|Casualty gain (Note C)                 | 19             | 151            | 19       | 151     
|                                       |                |                |          |         
|Net loss                               | $(725)         | $(534)         | $(1,638) | $(1,010)
|                                       |                |                |          |         
|Net loss allocated to general partner  |                |                |          |         
|(1%)                                   | $    (7)       | $    (5)       | $   (16) | $   (10)
|Net loss allocated to limited partners |                |                |          |         
|(99%)                                  | (718)          | (529)          | (1,622)  | (1,000) 
|                                       |                |                |          |         
|                                       | $(725)         | $(534)         | $(1,638) | $(1,010)
|                                       |                |                |          |         
|Net loss per limited partnership unit  | $(1.87)        | $(1.38)        | $(4.23)  | $(2.61) 





See Accompanying Notes to Financial Statements

















CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3



STATEMENT OF CHANGES IN PARTNERS' DEFICIT

(Unaudited)

(in thousands, except unit data)







|                               |             |          |           |          
|------------------------------ | ----------- | -------- | --------- | ---------
|                               | Limited     |          |           |          
|                               | Partnership | General  | Limited   |          
|                               | Units       | Partner  | Partners  | Total    
|                               |             |          |           |          
|Original capital contributions | 383,033     | $1       | $95,758   | $95,759  
|                               |             |          |           |          
|Partners' deficit at           |             |          |           |          
|December 31, 2006              | 383,008     | $(1,044) | $(19,141) | $(20,185)
|                               |             |          |           |          
|Net loss for the six months    |             |          |           |          
|ended June 30, 2007            | --          | (16)     | (1,622)   | (1,638)  
|                               |             |          |           |          
|Partners' deficit at           |             |          |           |          
|June 30, 2007                  | 383,008     | $(1,060) | $(20,763) | $(21,823)



See Accompanying Notes to Financial Statements













CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3



STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)





|                                                           |                  |         
|---------------------------------------------------------- | ---------------- | --------
|                                                           | Six Months Ended
|                                                           | June 30,        
|                                                           | 2007             | 2006    
|Cash flows from operating activities:                      |                  |         
|Net loss                                                   | $(1,638)         | $(1,010)
|Adjustments to reconcile net loss to net cash provided by  |                  |         
|operating activities:                                      |                  |         
|Depreciation                                               | 2,207            | 1,798   
|Casualty gain                                              | (19)             | (151)   
|Amortization of loan costs                                 | 53               | 54      
|Change in accounts:                                        |                  |         
|Receivables and deposits                                   | (98)             | 38      
|Other assets                                               | (328)            | (176)   
|Accounts payable                                           | 18               | 288     
|Tenant security deposit liabilities                        | 57               | 35      
|Accrued property taxes                                     | 168              | 188     
|Other liabilities                                          | 84               | 41      
|Due to affiliates                                          | 519              | --      
|Net cash provided by operating activities                  | 1,023            | 1,105   
|                                                           |                  |         
|Cash flows from investing activities:                      |                  |         
|Property improvements and replacements                     | (4,474)          | (2,584) 
|Insurance proceeds received                                | 25               | 212     
|Net cash used in investing activities                      | (4,449)          | (2,372) 
|                                                           |                  |         
|Cash flows from financing activities:                      |                  |         
|Payments on mortgage notes payable                         | (689)            | (641)   
|Advances from affiliates                                   | 3,821            | --      
|Net cash provided by (used in) financing activities        | 3,132            | (641)   
|                                                           |                  |         
|Net decrease in cash and cash equivalents                  | (294)            | (1,908) 
|                                                           |                  |         
|Cash and cash equivalents at beginning of period           | 500              | 3,146   
|                                                           |                  |         
|Cash and cash equivalents at end of period                 | $206             | $1,238  
|                                                           |                  |         
|Supplemental disclosure of cash flow information:          |                  |         
|Cash paid for interest, net of capitalized interest        | $1,516           | $1,669  
|                                                           |                  |         
|Supplemental disclosure of non-cash activity:              |                  |         
|Property improvements and replacements in accounts payable | $710             | $257    



Included in property improvements and replacements for the six months ended June 30, 2007 and 2006 are approximately $1,695,000 and $114,000 of improvements, respectively, which were included in accounts payable at December 31, 2006 and 2005, respectively.



See Accompanying Notes to Financial Statements













CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3



NOTES TO FINANCIAL STATEMENTS

(Unaudited)



Note A  Basis of Presentation



The accompanying unaudited financial statements of Consolidated Capital Institutional Properties/3 (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 ConCap Equities, Inc. (the "General Partner"), which is wholly owned by Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 2007, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2007. For further information, refer to the financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006.



Certain reclassifications have been made to the 2006 information to conform to the 2007 presentation.



Recent Accounting Pronouncements



In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements. SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. SFAS No. 157 applies whenever other standards require assets or liabilities to be measured at fair value and does not expand the use of fair value in any new circumstances. SFAS No. 157 establishes a hierarchy that prioritizes the information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, such as the reporting entitys own data. SFAS No. 157 requires fair value measurements to be disclosed by level within the fair value hierarchy. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Partnershipdoes not anticipate that the adoption of SFAS No. 157 will have a material effect on the Partnerships financial statements.



In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Partnership has not yet determined whether it will elect the fair value option for any of its financial instruments.



In June 2007, the American Institute of Certified Public Accountants (the AICPA) issued Statement of Position No. 07-1, Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies ("SOP 07-1").  SOP 07-1 provides guidance for determining whether the accounting principles of the AICPA Audit and Accounting Guide Investment Companies are required to be applied to an entity by clarifying the definition of an investment company and, whether investment











company accounting should be retained by a parent company upon consolidation of an investment company subsidiary, or by an investor in the application of the equity method of accounting to an investment company investee.  SOP 07-1 applies to reporting periods beginning on or after December 15, 2007, but earlier adoption is encouraged. The Partnership is currently evaluating the impact, if any, that adoption of SOP 07-1 may have on its financial statements in the period of adoption.



Note B  Transactions with Affiliated Parties



The Partnership has no employees and depends 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 reimbursement of certain expenses incurred by affiliates on behalf of the Partnership.



Affiliates of the General Partner receive 5% of gross receipts from all of the Partnership's properties as compensation for providing property management services. The Partnership paid to such affiliates approximately $339,000 and $325,000 for the six months ended June 30, 2007 and 2006, respectively, which is included in operating expense.



Affiliates of the General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $497,000 and $282,000 for the six months ended June 30, 2007 and 2006, respectively, which is included in general and administrative expenses and investment properties. The portion of these reimbursements included in investment properties for the six months ended June 30, 2007 and 2006 are redevelopment and construction management services provided by an affiliate of the General Partner of approximately $277,000 and $117,000, respectively. At June 30, 2007, approximately $433,000 of these reimbursements are payable to affiliates of the General Partner and are included in due to affiliates on the accompanying balance sheet.



During the six months ended June 30, 2007, the General Partner advanced the Partnership approximately $1,341,000 to cover expenses related to operations at Park Capitol, Hidden Cove by the Lake, Cedar Rim, Williamsburg Manor, Sienna Bay, Tamarac Village and Lamplighter Park Apartments and approximately $2,480,000 to cover redevelopment costs at Sienna Bay and Cedar Rim and property improvements at Williamsburg Manor and Lamplighter Park Apartments. Interest is charged at prime plus 2% (10.25% at June 30, 2007). Interest expense on outstanding advance balances was approximately $286,000 for the six months ended June 30, 2007.  No such advances were made during the six months ended June 30, 2006. Total advances and accrued interest of approximately $7,322,000 remain unpaid at June 30, 2007 and are included in due to affiliates on the accompanying balance sheet. Subsequent to June 30, 2007, an affiliate of the General Partner advanced the Partnership approximately $272,000 to cover expenses related to operations at Hidden Cove by the Lake, Cedar Rim, Williamsburg Manor, Sienna Bay, Tamarac Village and Lamplighter Park Apartments and approximately $1,429,000 to cover redevelopment costs at Cedar Rim and Sienna Bay Apartments.



The Partnership insures its properties up to certain limits through coverage provided by AIMCO which is generally self-insured for a portion of losses and liabilities related to workers compensation, property casualty, general liability and vehicle liability. The Partnership insures its properties above the AIMCO limits through insurance policies obtained by AIMCO from insurers unaffiliated with the General Partner. During the six months ended June 30, 2007, the Partnership was charged by AIMCO and its affiliates approximately $408,000 for hazard insurance coverage and fees associated with policy claims administration. Additional charges will be incurred by the Partnership during 2007 as other insurance policies renew later in the year.  The Partnership was charged by AIMCO and its affiliates approximately $294,000 for insurance coverage and fees associated with policy claims administration during the year ended December 31, 2006.



Note C  Casualty Events













During January 2007, one of the Partnerships investment properties, Tamarac Village Apartments, sustained water damage from a pipe break. The General Partner anticipates that the insurance proceeds to be received will be sufficient to cover estimated repairs and no casualty loss will result from this event.



During February 2007, one of the Partnerships investment properties, Hidden Cove by the Lake Apartments, sustained water damage from a pipe break. The General Partner anticipates that the insurance proceeds to be received will be sufficient to cover estimated repairs and no casualty loss will result from this event.



During December 2006, one of the Partnerships investment properties, Tamarac Village Apartments, incurred damage from a roof leak of approximately $35,000. During the three and six months ended June 30, 2007, the Partnership received approximately $25,000 in insurance proceeds and recognized a casualty gain of approximately $19,000 as a result of the write off of undepreciated damaged assets of approximately $6,000.



During December 2006, one of the Partnerships investment properties, Lamplighter Park Apartments, sustained storm damage. The General Partner anticipates that the insurance proceeds to be received will be sufficient to cover estimated repairs and no casualty loss will result from this event.



During February 2006, one of the Partnerships properties, Tamarac Village Apartments, incurred damage from a pipe break. During the three and six months ended June 30, 2006, the Partnership received insurance proceeds of approximately $73,000 and wrote off undepreciated assets of approximately $23,000 resulting in a casualty gain of approximately $50,000.



During September 2005, one of the Partnerships properties, Lamplighter Park Apartments, incurred damage from a roof leak. During the three and six months ended June 30, 2006, the Partnership received insurance proceeds of approximately $139,000 and wrote off undepreciated assets of approximately $38,000 resulting in a casualty gain of approximately $101,000. In addition, the Partnership received approximately $14,000 for lost rents associated with the casualty event.



Note D  Redevelopment



Two of the Partnerships investment properties, Sienna Bay and Cedar Rim Apartments, are currently under redevelopment.  Based on current redevelopment plans, the General Partner anticipates the Sienna Bay Apartments redevelopment to be completed in August 2007 at a total estimated cost of approximately $7,207,000 of which approximately $5,156,000 was completed during the years ended December 31, 2006 and 2005, and an additional $1,479,000 was completed during the six months ended June 30, 2007.  Included in these construction costs are capitalized interest costs of approximately $13,000 and $55,000, capitalized property taxes of approximately $11,000 and $13,000, and other construction period operating costs of approximately $3,000 and $4,000 for the six months ended June 30, 2007 and 2006, respectively. The Partnership currently expects to spend approximately $572,000 for property redevelopment during the remainder of 2007.  The project is being funded by the propertys operating cash flow and advances from an affiliate of the General Partner.



Based upon current redevelopment plans, the General Partner anticipates the Cedar Rim Apartments redevelopment to be completed in December 2007 at a total estimated cost of approximately $10,595,000, of which approximately $2,406,000 was completed during the year ended December 31, 2006 and an additional $1,092,000 was completed during the six months ended June 30, 2007. Included in these construction costs are capitalized interest costs of approximately $156,000, construction period property taxes of approximately $28,000, and other construction period operating costs of approximately $11,000 for the six months ended June 30, 2007.   The Partnership currently expects to spend approximately $7,097,000 for property redevelopment during the remainder of 2007.  The project is being funded by the propertys operating cash and advances from an affiliate of the General Partner.













Note E  Contingencies



In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its General Partner and several of their affiliated partnerships and corporate entities. The action purported to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) that are named as nominal defendants, challenging, among other things, the acquisition of interests in certain General Partner entities by Insignia Financial Group, Inc. ("Insignia") and entities that were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary damages and equitable relief, including judicial dissolution of the Partnership. In addition, during the third quarter of 2001, a complaint captioned Heller v. Insignia Financial Group (the "Heller action") was filed against the same defendants that are named in the Nuanes action. On or about August 6, 2001, plaintiffs filed a first amended complaint. The Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial dissolution. On January 28, 2002, the trial court granted defendants motion to strike the complaint.  Plaintiffs took an appeal from this order.



On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. On June 13, 2003, the court granted final approval of the settlement and entered judgment in both the Nuanes and

Heller actions. On August 12, 2003, an objector ("Objector") filed an appeal (the Appeal) seeking to vacate and/or reverse the order approving the settlement and entering judgment thereto. On May 4, 2004, the Objector filed a second appeal challenging the courts use of a referee and its order requiring Objector to pay those fees.



On March 21, 2005, the Court of Appeals issued opinions in both pending appeals.  With regard to the settlement and judgment entered thereto, the Court of Appeals vacated the trial courts order and remanded to the trial court for further findings on the basis that the state of the record is insufficient to permit meaningful appellate review.  The matter was transferred back to the trial court on June 21, 2005.  With regard to the second appeal, the Court of Appeals reversed the order requiring the Objector to pay referee fees. With respect to the related Heller appeal, on July 28, 2005, the Court of Appeals reversed the trial courts order striking the first amended complaint.



On August 18, 2005, Objector and his counsel filed a motion to disqualify the trial court based on a peremptory challenge and filed a motion to disqualify for cause on October 17, 2005, both of which were ultimately denied and/or struck by the trial court.  On or about October 13, 2005 Objector filed a motion to intervene and on or about October 19, 2005 filed both a motion to take discovery relating to the adequacy of plaintiffs as derivative representatives and a motion to dissolve the anti-suit injunction in connection with settlement.  On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion.  On February 3, 2006, the Court held a hearing on the various matters pending before it and ordered additional briefing from the parties and Objector. On June 30, 2006, the trial court entered an order confirming its approval of the class action settlement and entering judgment thereto after the Court of Appeals had remanded the matter for further findings.  The substantive terms of the settlement agreement remain unchanged.  The trial court also entered supplemental orders on July 1, 2006, denying Objectors Motion to File a Complaint in Intervention, Objectors Motion for Leave of Discovery and Objectors Motion to Dissolve the Anti-Suit Injunction.  Notice of Entry of Judgment was served on July 10, 2006. On August 31, 2006, the Objector filed a Notice of Appeal to the











Courts June 30, 2006 and July 1, 2006 orders. On December 14, 2006, Objector filed his Appellants Brief. The Partnership and its affiliates, as well as counsel for the Settlement Class, both filed Respondents Briefs on May 17, 2007.  Objector filed his response on August 3, 2007.  No hearing date has yet been scheduled.



The General Partner does not anticipate that any costs to the Partnership, whether legal or settlement costs, associated with these cases will be material to the Partnerships overall operations.



The Partnership is unaware of any other pending or outstanding litigation matters involving it or its investment properties that are not of a routine nature arising in the ordinary course of business.



Environmental



Various Federal, state and local laws subject property owners or operators to liability for management, and the costs of removal or remediation, of certain hazardous substances present on a property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of the hazardous substances. The presence of, or the failure to manage or remedy properly, hazardous substances may adversely affect occupancy at affected apartment communities and the ability to sell or finance affected properties. In addition to the costs associated with investigation and remediation actions brought by government agencies, and potential fines or penalties imposed by such agencies in connection therewith, the presence of hazardous substances on a property could result in claims by private plaintiffs for personal injury, disease, disability or other infirmities. Various laws also impose liability for the cost of removal, remediation or disposal of hazardous substances through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous substances is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of its properties, the Partnership could potentially be liable for environmental liabilities or costs associated with its properties.



Mold



The Partnership is aware of lawsuits against owners and managers of multifamily properties asserting claims of personal injury and property damage caused by the presence of mold, some of which have resulted in substantial monetary judgments or settlements.  The Partnership has only limited insurance coverage for property damage loss claims arising from the presence of mold and for personal injury claims related to mold exposure.  Affiliates of the General Partner have implemented policies, procedures, third-party audits and training and the General Partner believes that these measures will prevent or eliminate mold exposure and will minimize the effects that mold may have on residents.  To date, the Partnership has not incurred any material costs or liabilities relating to claims of mold exposure or to abate mold conditions.  Because the law regarding mold is unsettled and subject to change the General Partner can make no assurance that liabilities resulting from the presence of or exposure to mold will not have a material adverse effect on the Partnerships financial condition or results of operations.



Note F  Subsequent Event



Subsequent to June 30, 2007, the Partnership entered into a contract to sell Hidden Cove by the Lake Apartments to a third party for approximately $4,100,000. The anticipated closing date for the sale is August 16, 2007. For the six months ended June 30, 2007 the property had total revenues of approximately $530,000 and net loss of approximately $129,000. At June 30, 2007, the carrying amounts of the mortgage note payable and investment property for Hidden Cove by the Lake Apartments are approximately $2,395,000 and $1,510,000, respectively.















Item 2.

Management's Discussion and Analysis or Plan of Operation



The matters discussed in this report contain certain forward-looking statements, including, without limitation, statements regarding future financial performance and the effect of government regulations. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors including, without limitation: national and local economic conditions; the terms of governmental regulations that affect the Registrant and interpretations of those regulations; the competitive environment in which the Registrant operates; financing risks, including the risk that cash flows from operations may be insufficient to meet required payments of principal and interest; real estate risks, including variations of real estate values and the general economic climate in local markets and competition for tenants in such markets; litigation, including costs associated with prosecuting and defending claims and any adverse outcomes, and possible environmental liabilities. Readers should carefully review the Registrant's financial statements and the notes thereto, as well as the risk factors described in the documents the Registrant files from time to time with the Securities and Exchange Commission.



The Partnership's investment properties consist of seven apartment complexes. The following table sets forth the average occupancy of the properties for each of the six month periods ended June 30, 2007 and 2006:



|                                       |                   |     
|-------------------------------------- | ----------------- | ----
|                                       | Average Occupancy
|Property                               | 2007              | 2006
|                                       |                   |     
|Cedar Rim Apartments (1)               | 67%               | 97% 
|New Castle, Washington                 |                   |     
|Hidden Cove by the Lake Apartments (2) | 96%               | 89% 
|Belleville, Michigan                   |                   |     
|Lamplighter Park Apartments            | 99%               | 97% 
|Bellevue, Washington                   |                   |     
|Park Capitol Apartments                | 97%               | 98% 
|Salt Lake City, Utah                   |                   |     
|Sienna Bay Apartments (3)              | 81%               | 89% 
|St. Petersburg, Florida                |                   |     
|Tamarac Village Apartments             | 97%               | 96% 
|Denver, Colorado                       |                   |     
|Williamsburg Manor Apartments (4)      | 96%               | 82% 
|Cary, North Carolina                   |                   |     



(1)

The General Partner attributes the decrease in occupancy at Cedar Rim Apartments to redevelopment at the property.



(2)

The General Partner attributes the increase in occupancy at Hidden Cove by the Lake to increased marketing efforts and competitive pricing.



(3)

The General Partner attributes the decrease in occupancy at Sienna Bay Apartments to redevelopment at the property.



(4)

The General Partner attributes the increase in occupancy at Williamsburg Manor Apartments to increased marketing efforts and improved customer service.



The Partnerships financial results depend upon a number of factors including the ability to attract and maintain tenants at the investment properties, interest rates on mortgage loans, costs incurred to operate the investment properties, general economic conditions and weather. 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, the General Partner may use rental concessions and rental rate reductions to offset softening market conditions, accordingly, there is no guarantee that the General Partner will be able to sustain such a plan. Further, a number of factors that are outside the control of the Partnership such as the local economic climate and weather can adversely or positively affect the Partnerships financial results.



Results of Operations



The Partnership realized a net loss for the three and six months ended June 30, 2007 of approximately $725,000 and $1,638,000, respectively, compared to a net loss of approximately $534,000 and $1,010,000 for the three and six months ended June 30, 2006, respectively. The increase in net loss for both the three and six month periods ended June 30, 2007, is due to an increase in total expenses and a decrease in the recognition of casualty gains partially offset by an increase in total revenues.



Total revenues increased for both the three and six months ended June 30, 2007 due to increases in rental income. Other income remained relatively constant for the comparable periods. Rental income increased for the three months ended June 30, 2007 due to increases in occupancy at Williamsburg Manor, Tamarac Village, and Hidden Cove by the Lake, increases in average rental rates at Williamsburg Manor, Sienna Bay, Tamarac Village, Park Capital, Lamplighter Park, and Cedar Rim, partially offset by decreases in occupancy at Sienna Bay Apartments and Cedar Rim Apartments. Rental income increased for the six months ended June 30, 2007 due to increases in occupancy at Williamsburg Manor, Tamarac Village, Hidden Cove by the Lake, and Lamplighter Park Apartments, average rental rates at Sienna Bay, Tamarac Village, Park Capital and Lamplighter Park Apartments, partially offset by decreases in occupancy at Sienna Bay, Park Capital and Cedar Rim and a decrease in the average rental rate at Williamsburg Manor and Hidden Cove by the Lake Apartments.



During January 2007, one of the Partnerships investment properties, Tamarac Village Apartments, sustained water damage from a pipe break. The General Partner anticipates that the insurance proceeds to be received will be sufficient to cover estimated repairs and no casualty loss will result from this event.



During February 2007, one of the Partnerships investment properties, Hidden Cove by the Lake Apartments, sustained water damage from a pipe break. The General Partner anticipates that the insurance proceeds to be received will be sufficient to cover estimated repairs and no casualty loss will result from this event.



During December 2006, one of the Partnerships investment properties, Tamarac Village Apartments, incurred damage from a roof leak of approximately $35,000. During the three and six months ended June 30, 2007, the Partnership received approximately $25,000 in insurance proceeds and recognized a casualty gain of approximately $19,000 as a result of the write off of undepreciated damaged assets of approximately $6,000.



During December 2006, one of the Partnerships investment properties, Lamplighter Park Apartments, sustained storm damage. The General Partner anticipates that the insurance proceeds to be received will be sufficient to cover estimated repairs and no casualty loss will result from this event.



During February 2006, one of the Partnerships properties, Tamarac Village Apartments, incurred damage from a pipe break. During the three and six months ended June 30, 2006, the Partnership received insurance proceeds of approximately $73,000 and wrote off undepreciated assets of approximately $23,000 resulting in a casualty gain of approximately $50,000.















During September 2005, one of the Partnerships properties, Lamplighter Park Apartments, incurred damage from a roof leak. During the three and six months ended June 30, 2006, the Partnership received insurance proceeds of approximately $139,000 and wrote off undepreciated assets of approximately $38,000 resulting in a casualty gain of approximately $101,000. In addition, the Partnership received approximately $14,000 for lost rents associated with the casualty event.



Total expenses increased for the six months ended June 30, 2007 due to increases in operating, general and administrative, depreciation and interest expenses, partially offset by a decrease in property tax expense.  Operating expense increased for the six months ended June 30, 2007 due to increases in maintenance, insurance and property expenses partially offset by a decrease in administrative expenses. Maintenance expense increased due to increases in snow removal and plumbing repairs at Tamarac Village Apartments, and expense associated with minor casualties at Tamarac Village and Lamplighter Park Apartments, partially offset by a decrease in contract services at Sienna Bay and Hidden Cove by the Lake Apartments. Insurance expense increased primarily due to increases in general liability and umbrella insurance premiums at Williamsburg Manor, Sienna Bay, Tamarac Village, and Lamplighter Park Apartments and hazard insurance premiums at Tamarac Village and Sienna Bay Apartments. Property expense increased due to increases in salaries and related benefits and utility costs at both Sienna Bay and Cedar Rim Apartments. Administrative expense decreased due to a recording of a liability during the three months ended June 30, 2006 relating to the forfeiture of unclaimed property pursuant to applicable state and local laws. Depreciation expense increased due to property improvements and replacements placed into service at each of the Partnerships properties over the past twelve months. Interest expense increased as a result of an increase in interest on advances from affiliates of the General Partner and a decrease in capitalized interest at Sienna Bay Apartments related to the redevelopment project in place, partially offset by principal payments on the mortgages encumbering the Partnerships investment properties, except for Sienna Bay, which lowered the carrying balances of the mortgages, and an increase in capitalized interest at Cedar Rim Apartments related to the redevelopment project. Property tax expense decreased due to the recording of a tax refund due to a successful tax appeal at Tamarac Village Apartments. Total expenses increased for the three months ended June 30, 2007 due to increases in general and administrative, depreciation and interest expenses partially offset by decreases in property tax and operating expenses. The increase in depreciation and interest expense is as discussed above for the six month period. The decrease in property tax expense for the three month period is due to a reduction in the tax rate for Hidden Cove by the Lake Apartments. The decrease in operating expense is due to a decrease in administrative expense partially offset by an increase in maintenance and insurance expenses. These decreases and increases are as discussed above for the six month period.



General and administrative expenses increased for both the three and six months ended June 30, 2007 primarily due to an increase in the cost of services included in the management reimbursements paid to the General Partner as allowed under the Partnership Agreement. Also included in general and administrative expenses for the six months ended June 30, 2007 and 2006 are costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement.



Liquidity and Capital Resources



At June 30, 2007 the Partnership had cash and cash equivalents of approximately $206,000 compared to approximately $1,238,000 at June 30, 2006. Cash and cash equivalents decreased approximately $294,000 since December 31, 2006 due to approximately $4,449,000 of cash used in investing activities, partially offset by approximately $3,132,000 and $1,023,000 of cash provided by financing and operating activities, respectively. Cash used in investing activities consisted of property improvements and replacements partially offset by the receipt of insurance proceeds. Cash provided by financing activities consisted of advances from affiliates, partially offset by principal payments on the mortgages encumbering the













Partnerships properties. The Partnership invests its working capital reserves in interest bearing 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. The General Partner monitors developments in the area of legal and regulatory compliance. For example, the Sarbanes-Oxley Act of 2002 mandates or suggests additional compliance measures with regard to governance, disclosure, audit and other areas. In light of these changes, the Partnership expects that it will incur higher expenses related to compliance. Capital improvements planned for each of the Partnership's properties are detailed below.



Cedar Rim Apartments



During the six months ended June 30, 2007, the Partnership completed approximately $1,092,000 of capital improvements arising from the redevelopment of the property, which includes capitalization of construction period interest of approximately $156,000, construction period property taxes of approximately $28,000, and other construction period operating costs of approximately $11,000.  Approximately 62 units were in redevelopment and not in service at June 30, 2007.  These improvements were funded from advances from an affiliate of the General Partner and operating cash flow.   The property is currently undergoing a redevelopment project in order to become more competitive with other properties in the area in an effort to increase net operating income at the property.  Based upon current redevelopment plans, the General Partner anticipates the redevelopment to be completed in December 2007 at a total estimated cost of approximately $10,595,000. Approximately $2,406,000 was spent as a part of this project during the year ended December 31, 2006. The project is being funded by the propertys operating cash flow and advances from an affiliate of the General Partner.  The Partnership regularly evaluates the capital improvement needs of the property.  The Partnership currently expects to spend an additional $7,097,000 for property redevelopment during 2007.  In addition, certain routine capital expenditures are anticipated during 2007.  Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.



Hidden Cove by the Lake Apartments



During the six months ended June 30, 2007, the Partnership completed approximately $62,000 of capital improvements at the property consisting primarily of floor covering, roof, ceiling fan, and appliance replacements and air conditioning and heating upgrades. The improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2007. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.



Lamplighter Park Apartments



During the six months ended June 30, 2007, the Partnership completed approximately $182,000 of capital improvements at the property consisting primarily of repair of damages related to a roof leak, floor covering and appliance replacements, and structural improvements. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2007. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.















Park Capitol Apartments



During the six months ended June 30, 2007, the Partnership completed approximately $151,000 of capital improvements at the property consisting primarily of floor covering replacements, water heater upgrades, exterior painting and structural improvements. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2007. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.



Tamarac Village Apartments



During the six months ended June 30, 2007, the Partnership completed approximately $288,000 of capital improvements at the property consisting primarily of floor covering and appliance replacements, water heater upgrades, plumbing fixtures and roof repairs. These improvements were funded from operating cash flow. During 2006, the Partnership reevaluated the phased redevelopment project for kitchen and other interior upgrades and exterior painting and wood repairs that was in place at Tamarac Village Apartments in order to make the property more competitive in the local market.  Based on current plans, the General Partner anticipates the phased redevelopment to start again in 2007 and be completed in 2008, however, this timing is subject to change.   The previous estimated budget for the phased redevelopment project was approximately $4,350,000, of which approximately $276,000 was spent during 2005.  Approximately $3,000 was spent for the phased redevelopment project for the year ended December 31, 2006.  The revised budget, funding and timing for the phased redevelopment will be determined at a later date in 2007. The Partnership regularly evaluates the capital improvement needs of the property. Other than the redevelopment project the Partnership has no material commitments for property improvements and replacements, but certain routine capital expenditures are anticipated during 2007. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.



Williamsburg Manor Apartments



During the six months ended June 30, 2007, the Partnership completed approximately $76,000 of capital improvements at the property consisting primarily of floor covering replacements and water heater and air conditioning upgrades. These improvements were funded from operating cash flow and advances from an affiliate of the General Partner. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2007. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.



Sienna Bay Apartments



During the six months ended June 30, 2007, the Partnership completed approximately $1,479,000 of capital improvements arising from the redevelopment of the property, which includes capitalization of construction period interest of approximately $13,000, construction period property taxes of approximately $11,000 and other construction period operating costs of approximately $3,000. Additional capital improvements of approximately $159,000 consisted primarily of floor covering replacements. These improvements were funded from operating cash flow and advances from an affiliate of the General Partner. The property underwent a redevelopment project in order to become more competitive with other properties in the area in an effort to increase occupancy at the property. Based on current redevelopment plans, the General Partner anticipates the redevelopment to be completed in August 2007 at a total cost of approximately $7,207,000. Approximately $5,156,000 was spent as part of this project during the years ended December 31, 2006 and 2005. The project is













being funded by the propertys operating cash flow and advances from an affiliate of the General Partner. The Partnership regularly evaluates the capital improvement needs of the property. The Partnership currently expects to spend an additional $572,000 for property redevelopment during 2007. In addition, certain routine capital expenditures are anticipated during 2007. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.



Capital expenditures will be incurred only if cash is available from operations, Partnership reserves or advances from an affiliate of the General Partner. To the extent that capital improvements are completed, the Partnership's distributable cash flow, if any, may be adversely affected at least in the short term.



Except as discussed above, the Partnership's assets are thought to be generally sufficient for near-term needs (exclusive of capital improvements) of the Partnership. The mortgage indebtedness encumbering the Partnership's properties of approximately $51,799,000 has maturity dates ranging from September 2012 to October 2021. The mortgage indebtedness encumbering Tamarac Village, Hidden Cove by the Lake, Lamplighter Park and Cedar Rim Apartments of approximately $30,925,000 requires monthly payments until the loans mature between July 2021 and October 2021 at which time the loans are scheduled to be fully amortized. The mortgage indebtedness encumbering Williamsburg Manor, Sienna Bay and Park Capitol Apartments of approximately $20,874,000 requires monthly payments until the loans mature between September 2012 and September 2015 and have balloon payments totaling approximately $18,724,000 due at maturity. The General Partner will attempt to refinance such indebtedness and/or sell the properties prior to such maturity dates. If the investment properties cannot be refinanced or sold for a sufficient amount, the Partnership may risk losing such properties through foreclosure.



Subsequent to June 30, 2007, the Partnership entered into a contract to sell Hidden Cove by the Lake Apartments to a third party for approximately $4,100,000. The anticipated closing date for the sale is August 16, 2007. For the six months ended June 30, 2007 the property had total revenues of approximately $530,000 and net loss of approximately $129,000. At June 30, 2007, the carrying amounts of the mortgage note payable and investment property for Hidden Cove by the Lake Apartments are approximately $2,395,000 and $1,510,000, respectively.



The Partnership made no distributions during the six months ended June 30, 2007 and 2006. Future cash distributions will depend on the levels of cash generated from operations, and the timing of debt maturities, property sales and/or refinancings. The Partnership's cash available for distribution is reviewed on a monthly basis. Given the current redevelopment projects at Sienna Bay and Cedar Rim Apartments and the expected redevelopment project at Tamarac Village Apartments in 2007, it is not expected that the Partnership will generate sufficient funds from operations, after planned capital expenditures, to permit any distributions to its partners for the foreseeable future.



Other



In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 238,706 limited partnership units (the "Units") in the Partnership representing 62.32% of the outstanding Units at June 30, 2007. A number of these Units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will acquire additional Units in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the General Partner. As a result of its ownership of 62.32% of the outstanding Units, AIMCO and its affiliates are in a position to control all such voting decisions with respect to the Partnership. Although the General Partner owes fiduciary duties to the limited partners of the Partnership, the General Partner also owes fiduciary duties to AIMCO













as its sole stockholder. As a result, the duties of the General Partner, as general partner, to the Partnership and its limited partners may come into conflict with the duties of the General Partner to AIMCO as its sole stockholder.



Critical Accounting Policies and Estimates



The financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require the Partnership to make estimates and assumptions. The Partnership believes that of its significant accounting policies, the following may involve a higher degree of judgment and complexity.



Impairment of Long-Lived Assets



Investment properties are recorded at cost, less accumulated depreciation, unless the carrying amount of the asset is not recoverable.  If events or circumstances indicate that the carrying amount of a property may not be recoverable, the Partnership will make an assessment of its recoverability by comparing the carrying amount to the Partnerships estimate of the undiscounted future cash flows, excluding interest charges, of the property.   If the carrying amount exceeds the aggregate undiscounted future cash flows, the Partnership would recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property.



Real property investment is subject to varying degrees of risk.  Several factors may adversely affect the economic performance and value of the Partnerships investment properties.  These factors include, but are not limited to, general economic climate; competition from other apartment communities and other housing options; local conditions, such as loss of jobs or an increase in the supply of apartments that might adversely affect apartment occupancy or rental rates; changes in governmental regulations and the related cost of compliance; increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents; and changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multi-family housing.  Any adverse changes in these factors could cause impairment of the Partnerships assets.



Capitalized Costs Related to Redevelopment and Construction Projects



The Partnership capitalizes costs incurred in connection with capital expenditure activities, including redevelopment and construction projects. Costs including interest, property taxes and operating costs associated with redevelopment and construction projects are capitalized during periods in which redevelopment and construction projects are in progress in accordance with SFAS No. 34, Capitalization of Interest Costs and SFAS No. 67, Accounting for Costs and the Initial Rental Operations of Real Estate Properties. Included in these capitalized costs are payroll costs associated with time spent by site employees in connection with the planning, execution and control of all capital expenditure activities at the property level.



Revenue Recognition



The Partnership generally leases apartment units for twelve-month terms or less.  The Partnership will offer rental concessions during particularly slow months or in response to heavy competition from other similar complexes in the area.  Rental income attributable to leases, net of any concessions, is recognized on a straight-line basis over the term of the lease.  The Partnership evaluates all accounts receivable from residents and establishes an allowance, after the application of security deposits, for accounts greater than 30 days past due on current tenants and all receivables due from former tenants.



Item 3.

Controls and Procedures















(a)

Disclosure Controls and Procedures. The Partnerships management, with the participation of the principal executive officer and principal financial officer of the General Partner, who are the equivalent of the Partnerships principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnerships disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of the end of the period covered by this report. Based on such evaluation, the principal executive officer and principal financial officer of the General Partner, who are the equivalent of the Partnerships principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnerships disclosure controls and procedures are effective.



(b)

Internal Control Over Financial Reporting. There have not been any changes in the Partnerships internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Partnerships internal control over financial reporting.













PART II - OTHER INFORMATION



Item 1.

Legal Proceedings



In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its General Partner and several of their affiliated partnerships and corporate entities. The action purported to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) that are named as nominal defendants, challenging, among other things, the acquisition of interests in certain General Partner entities by Insignia Financial Group, Inc. ("Insignia") and entities that were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary damages and equitable relief, including judicial dissolution of the Partnership. In addition, during the third quarter of 2001, a complaint captioned Heller v. Insignia Financial Group (the "Heller action") was filed against the same defendants that are named in the Nuanes action. On or about August 6, 2001, plaintiffs filed a first amended complaint. The Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial dissolution. On January 28, 2002, the trial court granted defendants motion to strike the complaint.  Plaintiffs took an appeal from this order.



On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. On June 13, 2003, the court granted final approval of the settlement and entered judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector ("Objector") filed an appeal  (the Appeal) seeking to vacate and/or reverse the order approving the settlement and entering judgment thereto. On May 4, 2004, the Objector filed a second appeal challenging the courts use of a referee and its order requiring Objector to pay those fees.



On March 21, 2005, the Court of Appeals issued opinions in both pending appeals.  With regard to the settlement and judgment entered thereto, the Court of Appeals vacated the trial courts order and remanded to the trial court for further findings on the basis that the state of the record is insufficient to permit meaningful appellate review.  The matter was transferred back to the trial court on June 21, 2005.  With regard to the second appeal, the Court of Appeals reversed the order requiring the Objector to pay referee fees. With respect to the related Heller appeal, on July 28, 2005, the Court of Appeals reversed the trial courts order striking the first amended complaint.



On August 18, 2005, Objector and his counsel filed a motion to disqualify the trial court based on a peremptory challenge and filed a motion to disqualify for cause on October 17, 2005, both of which were ultimately denied and/or struck by the trial court.  On or about October 13, 2005 Objector filed a motion to intervene and on or about October 19, 2005 filed both a motion to take discovery relating to the adequacy of plaintiffs as derivative representatives and a motion to dissolve the anti-suit injunction in connection with settlement.  On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion.  On February 3, 2006, the Court held a hearing on the various matters pending before it and ordered additional briefing from the parties and Objector. On June 30, 2006, the trial court entered an order confirming its approval of the class action settlement and entering judgment thereto after the Court of Appeals had remanded the matter for further findings.  The substantive terms of the settlement agreement remain unchanged.  The trial court also entered supplemental orders on July 1, 2006, denying Objectors Motion to File a Complaint in Intervention, Objectors Motion for Leave of Discovery and Objectors













Motion to Dissolve the Anti-Suit Injunction.  Notice of Entry of Judgment was served on July 10, 2006. On August 31, 2006, the Objector filed a Notice of Appeal to the Courts June 30, 2006 and July 1, 2006 orders. On December 14, 2006, Objector filed his Appellants Brief. The Partnership and its affiliates, as well as counsel for the Settlement Class, both filed Respondents Briefs on May 17, 2007.  Objector filed his response on August 3, 2007.  No hearing date has yet been scheduled.



The General Partner does not anticipate that any costs to the Partnership, whether legal or settlement costs, associated with these cases will be material to the Partnerships overall operations.



Item 5.

Other Information



None.



Item 6.

Exhibits



See Exhibit Index Attached.













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.







|                      |                                                
|--------------------- | -----------------------------------------------
|                      | CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3
|                      |                                                
|                      | By:   CONCAP EQUITIES, INC.                    
|                      | General Partner                                
|                      |                                                
|Date: August 13, 2007 | By:   /s/Martha L. Long                        
|                      | Martha L. Long                                 
|                      | Senior Vice President                          
|                      |                                                
|Date: August 13, 2007 | By:   /s/Stephen B. Waters                     
|                      | Stephen B. Waters                              
|                      | Vice President                                 













CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3



EXHIBIT INDEX





Exhibit Number

Description of Exhibit





3.1

Certificate of Limited Partnership, as amended to date (Exhibit 3 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2002, is incorporated herein by reference).



3.2

Third Amendment to Second Amended and Restated Limited Partnership Agreement of the Consolidated Capital Institutional Properties/3 dated October 13, 2006. (Incorporated by reference to the Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2006).



10.48

Multifamily Note dated June 27, 2001, by and between Consolidated Capital Institutional Properties/3, a California limited partnership, and GMAC Commercial Mortgage Corporation, related to Tamarac Village Apartments. (Incorporated by reference to the Quarterly Report on Form 10-QSB for the quarterly period ended June 30, 2001.)



10.49

Multifamily Note dated June 29, 2001, by and between Consolidated Capital Institutional Properties/3, a California limited partnership, and GMAC Commercial Mortgage Corporation, related to Lamplighter Park Apartments. (Incorporated by reference to the Quarterly Report on Form 10-QSB for the quarterly period ended June 30, 2001.)



10.50

Multifamily Note dated July 23, 2001, by and between Consolidated Capital Institutional Properties/3, a California limited partnership, and GMAC Commercial Mortgage Corporation, related to Cedar Rim Apartments. (Incorporated by reference to the Quarterly Report on Form 10-QSB for the quarterly period ended June 30, 2001.)



10.51

Multifamily Note dated September 19, 2001, by and between Consolidated Capital Institutional Properties/3, a California limited partnership, and GMAC Commercial Mortgage Corporation, related to Hidden Cove Apartments. (Incorporated by reference to the Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2001.)



10.52

Deed of Trust, Assignment of Leases and Rents and Security Agreement dated August 31, 2005 between AIMCO Williamsburg Manor, LLC, a Delaware limited liability company and New York Life Insurance Company filed as Exhibit 10.52 to the Registrants Current Report on Form 8-K dated August 31, 2005 and filed on September 7, 2005, incorporated herein by reference.



10.53

Promissory Note dated August 31, 2005 between AIMCO Williamsburg Manor, LLC, a Delaware limited liability company and New York Life Insurance Company filed as Exhibit 10.53 to the Registrants Current Report on Form 8-K dated August 31, 2005 and filed on September 7, 2005, incorporated herein by reference.











CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3



EXHIBIT INDEX - CONTINUED



Exhibit Number

Description of Exhibit



10.54

Guaranty dated August 31, 2005 between AIMCO Properties, L.P., for the benefit of New York Life Insurance Company filed as Exhibit 10.54 to the Registrants Current Report on Form 8-K dated August 31, 2005 and filed on September 7, 2005, incorporated herein by reference.



10.55

Additional Mortgage Note dated August 31, 2005 between AIMCO Sandpiper, LLC, a Delaware limited liability company and New York Life Insurance Company filed as Exhibit 10.55 to the Registrants Current Report on Form 8-K dated August 31, 2005 and filed on September 7, 2005, incorporated herein by reference.



10.56

Modification, Reinstatement and Consolidation of Notes dated August 31, 2005 between AIMCO Sandpiper, LLC, a Delaware limited liability company and New York Life Insurance Company filed as Exhibit 10.56 to the Registrants Current Report on Form 8-K dated August 31, 2005 and filed on September 7, 2005, incorporated herein by reference.



10.57

Mortgage, Assignment of Leases and Rents and Security Agreement dated August 31, 2005 between AIMCO Sandpiper, LLC, a Delaware limited liability company and New York Life Insurance Company filed as Exhibit 10.57 to the Registrants Current Report on Form 8-K dated August 31, 2005 and filed on September 7, 2005, incorporated herein by reference.



10.58

Guaranty dated August 31, 2005 between AIMCO Properties, L.P. for the benefit of New York Life Insurance Company filed as Exhibit 10.58 to the Registrants Current Report on Form 8-K dated August 31, 2005 and filed on September 7, 2005, incorporated herein by reference.



10.59

Deed of Trust, Security Agreement and Fixture Filing dated August 30, 2005 between Consolidated Capital Institutional Properties/3, a California limited partnership and Transamerica Occidental Life Insurance Company, related to Park Capitol Apartments (incorporated by reference to the Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2005.)



10.60

Secured Promissory Note dated August 30, 2005 between Consolidated Capital Institutional Properties/3, a California limited partnership and Transamerica Occidental Life Insurance Company, related to Park Capitol Apartments (incorporated by reference to the Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2005).



28.1

Fee Owner's General Partnership Agreement (Incorporated by reference to Registration Statement of Partnership (File No. 2-97664) filed July 23, 1985).



28.2

Fee Owner's Certificate of Partnership (Incorporated by reference to Registration Statement of Partnership (File No. 2-97664) filed July 23, 1985).



31.1

Certification of equivalent of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.













CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3



EXHIBIT INDEX - CONTINUED



31.2

Certification of equivalent of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



32.1

Certification of equivalent of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.













Exhibit 31.1

CERTIFICATION

I, Martha L. Long, certify that:

1.

I have reviewed this quarterly report on Form 10-QSB of Consolidated Capital Institutional Properties/3;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;



4.

The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:



(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b)

Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



(c)

Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and



5.

The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):



(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and



(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

Date:  August 13, 2007

/s/Martha L. Long

Martha L. Long

Senior Vice President of ConCap Equities, Inc., equivalent of the chief executive officer of the Partnership











Exhibit 31.2

CERTIFICATION

I, Stephen B. Waters, certify that:

1.

I have reviewed this quarterly report on Form 10-QSB of Consolidated Capital Institutional Properties/3;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;



4.

The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:



(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b)

Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



(c)

Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and



5.

The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):



(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and



(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

Date:  August 13, 2007

/s/Stephen B. Waters

Stephen B. Waters

Vice President of ConCap Equities, Inc., equivalent of the chief financial officer of the Partnership











Exhibit 32.1





Certification of CEO and CFO

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002







In connection with the Quarterly Report on Form 10-QSB of Consolidated Capital Institutional Properties/3 (the "Partnership"), for the quarterly period ended June 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Martha L. Long, as the equivalent of the chief executive officer of the Partnership, and Stephen B. Waters, as the equivalent of the chief financial officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:



(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.





| |                        
| | -----------------------
| | /s/Martha L. Long      
| | Name: Martha L. Long   
| | Date: August 13, 2007  
| |                        
| | /s/Stephen B. Waters   
| | Name: Stephen B. Waters
| | Date: August 13, 2007  





This certification is furnished with this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.