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

                        Quarterly or Transitional Report

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

                                  Form 10-QSB/A

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

                  For the quarterly period ended June 30, 1999


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

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

                         Commission file number 0-14470

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


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

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

                                 (864) 239-1000
                            Issuer's telephone number

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

<PAGE>

                         PART I - FINANCIAL INFORMATION

(This  document  amends the Form 10-QSB for the quarter ended June 30, 1999, due
to the reversal of the extraordinary gain on early extinguishment of debt.)

ITEM 1.     FINANCIAL STATEMENTS

a)
                       INVESTORS FIRST-STAGED EQUITY L.P.
                           CONSOLIDATED BALANCE SHEET
                        (in thousands, except unit data)
                                   (Unaudited)

                                  June 30, 1999

Assets
    Cash and cash equivalents                                       $  1,602
    Receivables and deposits                                             747
    Restricted escrows                                                   663
    Other assets                                                       1,501
    Investment properties:
      Land                                         $  8,402
      Buildings and related personal property        40,175
                                                     48,577

      Less accumulated depreciation                 (26,907)          21,670
                                                                    $ 26,183

Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                 $     70
   Accrued interest                                                      406
   Tenant security deposit liabilities                                   485
   Other liabilities                                                      90
   Advances from affiliates of General Partner                           326
   Mortgage notes payable                                             42,444

Partners' Deficit
    General partner                                $   (358)
    Limited partners (16,261.152 units
      issued and outstanding)                       (17,280)         (17,638)
                                                                    $ 26,183

             See Accompanying Notes to Consolidated Financial Statements

<PAGE>

b)
                       INVESTORS FIRST-STAGED EQUITY L.P.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        (in thousands, except unit data)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                Three Months Ended       Six Months Ended
                                                     June 30,                June 30,
                                                 1999        1998         1999        1998
Revenues:
<S>                                             <C>         <C>         <C>         <C>
  Rental income                                 $ 2,166     $ 2,013     $ 4,285     $ 3,991
  Other income                                       70          99         144         185
      Total revenues                              2,236       2,112       4,429       4,176

Expenses:
  Operating                                         669         667       1,305       1,332
  General and administrative                         34          70          91         139
  Depreciation                                      484         464         958         928
  Interest                                          818         838       1,631       1,666
  Property taxes                                    133         114         243         227
      Total expenses                              2,138       2,153       4,228       4,292

  Income (loss) before extraordinary item            98         (41)        201        (116)

Extraordinary item - gain on early
   extinguishment of debt                            --          --          --          10

         Net income (loss)                      $    98     $   (41)    $   201     $  (106)

Net income (loss) allocated to general
   partner (1%)                                 $     1     $    --     $     2     $    (1)
Net income (loss) allocated to limited
   partners (99%)                                    97         (41)        199        (105)

         Net income (loss)                      $    98     $   (41)    $   201     $  (106)

Net income (loss) per limited partnership unit:
 Income (loss) before extraordinary item        $  5.97     $ (2.52)    $ 12.24     $ (7.06)
 Extraordinary item                                  --          --          --         .61

         Net income (loss)                      $  5.97     $ (2.52)    $ 12.24     $ (6.45)
</TABLE>


             See Accompanying Notes to Consolidated Financial Statements

<PAGE>

c)
                          INVESTORS FIRST-STAGED EQUITY L.P.
                CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
                           (in thousands, except unit data)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                         Limited
                                       Partnership    General     Limited
                                          Units       Partner     Partners       Total
Partners' deficit at
<S>         <C> <C>                       <C>        <C>         <C>          <C>
   December 31, 1998                      16,261     $   (360)   $ (17,479)   $ (17,839)
Net income for the six months
   ended June 30, 1999                        --            2          199          201
Partners' deficit at
   June 30, 1999                          16,261     $   (358)   $ (17,280)   $ (17,638)
</TABLE>

             See Accompanying Notes to Consolidated Financial Statements

<PAGE>

d)
                       INVESTORS FIRST-STAGED EQUITY L.P.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                        Six Months Ended
                                                                            June 30,
                                                                         1999       1998

 Cash flows from operating activities:
<S>                                                                  <C>         <C>
    Net income (loss)                                                $    201    $   (106)
    Adjustments to reconcile net income (loss) to net cash
       provided by operating activities:
       Extraordinary gain on early extinguishment of debt                  --         (10)
       Depreciation                                                       958         928
       Amortization of loan costs and leasing commissions                  83          96
       Change in accounts:
         Receivables and deposits                                          (9)         13
         Other assets                                                     (32)        (69)
         Accounts payable                                                  (9)        (14)
         Accrued interest                                                  14         194
         Tenant security deposit liabilities                               17          30
         Other liabilities                                                (20)         (3)

            Net cash provided by operating activities                   1,203       1,059

 Cash flows from investing activities:
    Property improvements and replacements                               (111)       (356)
    Net (deposits to) withdrawals from restricted escrows                (139)        329
    Lease commissions paid                                                (34)         --

            Net cash used in investing activities                        (284)        (27)

 Cash flows from financing activities:
    Payment of loan costs                                                  --        (106)
    Payments on mortgage notes payable                                   (501)       (726)
    Advances to affiliates                                                 --           2

             Net cash used in financing activities                       (501)       (830)

 Net increase in cash and cash equivalents                                418         202

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

 Cash and cash equivalents at end of period                          $  1,602    $  2,842

 Supplemental disclosure of cash flow information:
    Cash paid for interest                                           $  1,557    $  1,394
</TABLE>


             See Accompanying Notes to Consolidated Financial Statements

<PAGE>

                       INVESTORS FIRST-STAGED EQUITY L.P.
e)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note A - Basis of Presentation

The  accompanying  unaudited  consolidated  financial  statements  of  Investors
First-Staged  Equity L.P. (the "Partnership" or "Registrant") have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information and with the  instructions to Form 10-QSB and Item 310(b)
of Regulation S-B.  Accordingly,  they do not include all of the information and
footnotes  required by generally  accepted  accounting  principles  for complete
financial  statements.  In the opinion of MAERIL,  Inc. (the "General Partner"),
all adjustments  (consisting of normal recurring accruals)  considered necessary
for a fair presentation have been included.  Operating results for the three and
six month periods  ended June 30, 1999,  are not  necessarily  indicative of the
results that may be expected for the fiscal year ending  December 31, 1999.  For
further  information,   refer  to  the  consolidated  financial  statements  and
footnotes thereto included in the Partnership's annual report on Form 10-KSB for
the fiscal year ended December 31, 1998.

Principles of Consolidation

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

Note B - Transfer of Control

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

Note C - Transactions with Affiliates and Related Parties

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

During the six months  ended June 30, 1999 and 1998,  affiliates  of the General
Partner  were  entitled  to  receive  5% of  gross  receipts  from  all  of  the
Registrant's  residential properties for providing property management services.
The Registrant paid to such affiliates  approximately  $113,000 and $126,000 for
the six months  ended June 30, 1999 and 1998,  respectively.  For the six months
ended June 30, 1999 and 1998, affiliates of the General Partner were entitled to
receive varying  percentages of gross receipts from the Registrant's  commercial
property for providing property management services. The Registrant paid to such
affiliates  $5,000 and $57,000 for the six months  ended June 30, 1999 and 1998,
respectively.  Effective  October 1, 1998 (the  effective  date of the  Insignia
Merger) a significant portion of these services for the commercial property were
provided by an unrelated party.

An affiliate  of the General  Partner  received  reimbursements  of  accountable
administrative  expenses amounting to approximately  $57,000 and $76,000 for the
six months ended June 30, 1999 and 1998, respectively.

<PAGE>

During the six months ended June 30, 1998 the Partnership paid affiliates of the
General Partner  approximately $40,000 for loan costs which were capitalized and
are included in other assets in the  accompanying  Consolidated  Balance  Sheet.
These loan costs related to the refinancing of the investment properties.

In prior years the  Partnership was advanced funds from a former General Partner
in order to meet its existing obligations. Interest accrues on these advances at
rates agreed to by the Partnership and the former General Partner.  The interest
rates at June 30, 1999 ranged from 4.70% to 9.50%.  The unpaid  balance on these
advances  at June 30,  1999 and the related  accrued  interest  is $326,000  and
$143,000, respectively.

On May 13, 1999,  AIMCO  Properties,  L.P., an affiliate of the General  Partner
commenced  a tender  offer to  purchase  up to  7,317.52  (45.00%  of the  total
outstanding units) units of limited partnership  interest in the Partnership for
a purchase price of $183 per unit. The offer expired on June 29, 1999.  Pursuant
to the offer, AIMCO Properties, L.P. acquired 2,366.93 units. As a result, AIMCO
and its affiliates  currently own 2,366.93 units of limited partnership interest
in the Partnership  representing  14.56% of the total  outstanding  units. It is
possible that AIMCO or its affiliate will make one or more additional  offers to
acquire additional limited partnership  interests in the Partnership for cash or
in exchange for units in the operating partnership of AIMCO.

Note D - Segment Reporting

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

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

Measurement of segment profit or loss:

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

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

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

Segment  information for the six months ended June 30, 1999 and 1998 is shown in
the tables below. The "Other" column includes Partnership administration related
items and income and expense not allocated to reportable segments.
<TABLE>
<CAPTION>

                  1999                   Residential  Commercial    Other    Totals

<S>                                      <C>          <C>         <C>       <C>
Rental income                            $  2,715     $  1,570    $   --    $ 4,285
Other income                                  118           14        12        144
Interest expense                            1,094          537        --      1,631
Depreciation                                  716          242        --        958
General and administrative expenses            --           --        91         91
Segment profit (loss)                          31          249       (79)       201
Total assets                               17,177        8,328       678     26,183
Capital expenditures                           93           18        --        111
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                  1998                   Residential  Commercial    Other    Totals

<S>                                      <C>          <C>         <C>       <C>
Rental income                            $  2,458     $  1,533    $   --    $ 3,991
Other income                                  118           10        57        185
Interest expense                            1,123          543        --      1,666
Depreciation                                  712          216        --        928
General and administrative expenses            --           --       139        139
Gain on extraordinary item                     10           --        --         10
Segment profit (loss)                        (296)         272       (82)      (106)
Total assets                               17,927        8,109     2,360     28,396
Capital expenditures                          128          228        --        356
</TABLE>

Note E - Legal Proceedings

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

<PAGE>

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

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

The Partnership's  investment  properties consist of two apartment complexes and
one commercial  property.  The following table sets forth the average  occupancy
for these properties for the six months ended June 30, 1999 and 1998:

                                                   1999         1998
Rivercrest Village Apartments
      Sacramento, California                        91%          89%
Richardson Highlands Apartments
      Marin City, California                        99%          99%
Serramonte Plaza
      Daly City, California                         97%          96%

Results of Operations

The Registrant's net income for the three and six months ended June 30, 1999 was
approximately $98,000 and $201,000,  respectively,  as compared to a net loss of
approximately  $41,000 and  $106,000 for the three and six months ended June 30,
1998.  The increase in net income was due to an increase in total revenues and a
decrease in total expenses.  The increase in total revenues was the result of an
increase in rental income,  which was primarily  attributable to the increase in
occupancy  and  average  rental  rates  at all of  the  Registrant's  investment
properties.  The increase in rental income was partially offset by a decrease in
other income. Other income decreased primarily due to an overall decrease in the
cash balance of the Partnership as a whole.

Total  expenses  decreased for the three and six months ended June 30, 1999 as a
result of decreases in both general and  administrative  and interest  expenses,
which was partially  offset by an increase in  depreciation  and property  taxes
expense.  Depreciation  expense increased as a result of the significant capital
improvements  put in service  during 1998.  Property tax expense  increased as a
result  of an  increase  in the tax  rate  for  Rivercrest  Village  Apartments.
Operating expense remained  relatively  constant for the three months ended June
30, 1999, but decreased for the six months ended June 30, 1999. The decrease for
the six months ended June 30, 1999 was  attributable  to a decrease in insurance
expense.  Insurance expense decreased due to the change in insurance carriers at
the Registrant's  investment  properties during the fourth quarter of 1998 which
resulted in lower insurance premiums.

Interest  expense  decreased due to principal  payments  made on the  properties
first and second mortgages.  General and  administrative  expense decreased as a
result  of a  decrease  in  professional  expenses  and  general  costs  of  the
Partnership.  Included in general and administrative expenses for the six months
ended  June  30,  1999 and 1998 are  management  reimbursements  to the  General
Partner allowed under the Partnership  Agreement.  In addition,  cost associated
with the  quarterly and annual  communications  with  investors  and  regulatory
agencies and the annual audit  required by the  Partnership  Agreement  are also
included.

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

Liquidity and Capital Resources

At June 30, 1999, the Registrant had cash and cash  equivalents of approximately
$1,602,000 as compared to  approximately  $2,842,000 at June 30, 1998.  Cash and
cash equivalents increased  approximately $418,000 for the six months ended June
30, 1999 from the Registrant's  fiscal year end,  primarily due to approximately
$1,203,000 of cash provided by operating activities,  which was partially offset
by approximately $501,000 of cash used in financing activities and approximately
$284,000 of cash used in investing activities. Cash used in financing activities
consisted of principal  payments on the mortgages  encumbering the  Registrant's
properties. Cash used in investing activities consisted of property improvements
and replacements, net deposits to the escrow accounts maintained by the mortgage
lender and the payment of lease commissions.  The Registrant invests its working
capital reserves in money market accounts.

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

Rivercrest Village Apartments

Based on a report received from an independent third party consultant  analyzing
necessary  exterior  improvements  and estimates made by the General  Partner on
interior improvements,  it is estimated that the property requires approximately
$365,000 of capital  improvements over the next few years.  Capital improvements
budgeted for, but not limited to, approximately $467,000 are planned for 1999 at
this property which include certain of the required  improvements and consist of
clubhouse renovations, carpet replacement and other interior improvements. As of
June 30, 1999 approximately  $25,000 of capital  improvements have been incurred
consisting primarily of appliance and floor covering replacements.

Richardson Highlands Apartments

Based on a report received from an independent third party consultant  analyzing
necessary  exterior  improvements  and estimates made by the General  Partner on
interior improvements,  it is estimated that the property requires approximately
$213,000 of capital  improvements over the next few years.  Capital improvements
budgeted for, but not limited to, approximately $213,000 are planned for 1999 at
this property which include certain of the required  improvements and consist of
balcony and stairway replacement and repairs,  carpet,  cabinet,  countertop and
roof replacements,  parking lot repairs and other building  improvements.  As of
June 30, 1999 approximately  $68,000 of capital  improvements have been incurred
consisting  primarily of interior  improvements,  appliance  and floor  covering
replacement, balconies and parking area improvements.

Serramonte Plaza

Based on a report received from an independent third party consultant  analyzing
necessary  exterior  improvements  and estimates made by the General  Partner on
interior improvements,  it is estimated that the property requires approximately
$1,000,000 of capital improvements over the next few years. Capital improvements
budgeted for, but not limited to, approximately $423,000 are planned for 1999 at
this property which include certain of the required  improvements and consist of
door and  entrance  way and parking lot repairs and tenant  improvements.  As of
June 30, 1999 approximately  $18,000 of capital  improvements have been incurred
consisting primarily of tenant improvements.

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

The  Registrant's  current assets are thought to be sufficient for any near-term
needs  (exclusive  of capital  improvements)  of the  Registrant.  The  mortgage
indebtedness  of  approximately  $42,444,000  matures  from  January  2000 until
January  2008,  with  balloon  payments  due at  maturity,  at  which  time  the
properties will either be refinanced and/or sold.  Agreements connected with the
second mortgages for Richardson  Highlands and Rivercrest  Village allow for the
lender to  receive  fifty  percent  of any  residual  proceeds  from the sale or
refinancing  of the  properties  after the payment of all mortgage notes payable
and other liabilities.

No cash  distributions  were paid during the six months  ended June 30, 1999 and
1998. The  Registrant's  distribution  policy is reviewed on a quarterly  basis.
Future cash  distributions  will depend on the levels of net cash generated from
operations, the availability of cash reserves, debt refinancing, and/or property
sales.  There can be no assurance,  however,  that the Registrant  will generate
sufficient funds from operations after required capital expenditures,  to permit
distributions to its partners in 1999.

Tender Offer

On May 13, 1999,  AIMCO  Properties,  L.P., an affiliate of the General  Partner
commenced  a tender  offer to  purchase  up to  7,317.52  (45.00%  of the  total
outstanding units) units of limited partnership  interest in the Partnership for
a purchase price of $183 per unit. The offer expired on June 29, 1999.  Pursuant
to the offer, AIMCO Properties, L.P. acquired 2,366.93 units. As a result, AIMCO
and its affiliates  currently own 2,366.93 units of limited partnership interest
in the Partnership  representing  14.56% of the total  outstanding  units. It is
possible that AIMCO or its affiliate will make one or more additional  offers to
acquire additional limited partnership  interests in the Partnership for cash or
in exchange for units in the operating partnership of AIMCO.

Year 2000 Compliance

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

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

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

<PAGE>

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

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

Computer Hardware:

During 1997 and 1998, the Managing Agent  identified all of the computer systems
at risk and formulated a plan to repair or replace each of the affected systems.
In August 1998, the main computer system used by the Managing Agent became fully
functional.  In addition to the main computer system,  PC-based network servers,
routers and desktop PCs were  analyzed for  compliance.  The Managing  Agent has
begun to replace each of the non-compliant  network  connections and desktop PCs
and, as of June 30, 1999, had completed approximately 90% of this effort.

The total cost to the Managing  Agent to replace the PC-based  network  servers,
routers and desktop PCs is expected to be  approximately  $1.5  million of which
$1.3 million has been incurred to date. The remaining  network  connections  and
desktop  PCs are  expected  to be  upgraded  to Year 2000  compliant  systems by
September 30, 1999. The completion of this process is scheduled to coincide with
the release of a compliant version of the Managing Agent's operating system.

Computer Software:

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

In April,  1999 the  Managing  Agent  embarked  on a data  center  consolidation
project that unifies its core  financial  systems under its Year 2000  compliant
system. The estimated completion date for this project is October, 1999.

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

The final software area is the office software and server operating systems. The
Managing Agent has upgraded all non-compliant office software systems on each PC
and has upgraded  90% of the server  operating  systems.  The  remaining  server
operating  systems  are  planned to be  upgraded  to be Year 2000  compliant  by
September,  1999.  The  completion of this process is scheduled to coincide with
the release of a compliant version of the Managing Agent's operating system.

Operating Equipment:

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

The  Managing  Agent has  chosen to focus its  attention  mainly  upon  security
systems, elevators, heating, ventilating and air conditioning systems, telephone
systems  and  switches,  and  sprinkler  systems.  While  this  area is the most
difficult to fully research  adequately,  management has not yet found any major
non-compliance  issues  that  put the  Managing  Agent  at risk  financially  or
operationally.

A  pre-assessment  of the properties by the Managing Agent has indicated no Year
2000 issues. A complete, formal assessment of all the properties by the Managing
Agent is in process and will be  completed in  September,  1999.  Any  operating
equipment that is found non-compliant will be repaired or replaced.

The total cost incurred for all  properties  managed by the Managing Agent as of
June 30, 1999 to replace or repair the  operating  equipment  was  approximately
$75,000.  The  Managing  Agent  estimates  the cost to  replace  or  repair  any
remaining operating equipment is approximately $125,000.

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

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

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

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

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

Costs to Address Year 2000

The total cost of the Year 2000  project to the  Managing  Agent is estimated at
$3.5  million  and is being  funded from  operating  cash  flows.  To date,  the
Managing Agent has incurred  approximately  $2.9 million ($0.7 million  expensed
and $2.2  million  capitalized  for new  systems and  equipment)  related to all
phases  of  the  Year  2000  project.  Of the  total  remaining  project  costs,
approximately  $0.5 million is  attributable to the purchase of new software and
operating  equipment,  which will be  capitalized.  The  remaining  $0.2 million
relates to repair of hardware and software and will be expensed as incurred. The
Partnership's portion of these costs are not material.

Risks Associated with the Year 2000

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

<PAGE>

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

Contingency Plans Associated with the Year 2000

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

<PAGE>

                           PART II - OTHER INFORMATION

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a)    Exhibits:

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

            b)    Reports on Form 8-K:

                  None filed during the quarter ended June 30, 1999.

<PAGE>

                                   SIGNATURES

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

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

                                       By:   VMS Realty Investment II,
                                             its General Partner

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

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

                                       Date: