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


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

                                   FORM 10-Q
(Mark One)
[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

               For the quarterly period ended September 30, 1998

                                       or

[ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934


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


                         Commission file number 0-14187


                CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3
             (Exact name of registrant 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, P.O. Box 1089
        Greenville, South Carolina                                     29602
  (Address of principal executive offices)                           (Zip Code)

                                 (864) 239-1000
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes  X    No


                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

a)
                CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                                 BALANCE SHEETS
                        (in thousands, except unit data)


                                                 September 30,   December 31,
                                                      1998           1997
Assets                                             (Unaudited)       (Note)
  Cash and cash equivalents                         $  8,962       $  5,054
  Receivables and deposits                             1,185            960
  Investments                                              5            105
  Restricted escrows                                   1,651          2,141
  Other assets                                           859            974
  Investment properties:
     Land                                             12,371         12,371
     Building and related personal property           52,065         50,955
                                                      64,436         63,326
     Less accumulated depreciation                   (17,654)       (15,474)
                                                      46,782         47,852
                                                    $ 59,444       $ 57,086

Liabilities and Partners' Capital (Deficit)

Liabilities
   Accounts payable                                 $    205       $    172
   Tenant security deposit liabilities                   470            460
   Accrued property taxes                                511            264
   Other liabilities                                     427            440
   Mortgage notes payable                             30,525         30,525
                                                      32,138         31,861
Partners' Capital (Deficit)
   General partner's                                    (568)          (589)
   Limited partners' (383,033 units outstanding)      27,874         25,814
                                                      27,306         25,225
                                                    $ 59,444       $ 57,086

Note: The balance sheet at December 31, 1997 has been derived from the audited
     financial statements at that date but does not include all the information
     and footnotes required by generally accepted accounting principles for
     complete financial statements

                 See Accompanying Notes to Financial Statements


b)
                CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

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


                             For the Three Months   For the Nine Months
                              Ended September 30,   Ended September 30,
                                1998       1997       1998       1997
Revenues:
  Rental income               $ 3,617    $ 3,517    $10,773    $10,270
  Other income                    332        331        916      1,050
  Gain on casualty event           --         --         --         16
       Total revenues           3,949      3,848     11,689     11,336

Expenses:
  Operating                     1,599      1,740      4,592      4,898
  General and administrative      138        138        460        399
  Depreciation                    779        733      2,193      2,127
  Interest                        578        579      1,736      1,737
  Property taxes                  220        224        627        667
       Total expenses           3,314      3,414      9,608      9,828

Net income                    $   635    $   434    $ 2,081    $ 1,508

Net income allocated
  to general partner (1%)     $     6    $     4    $    21    $    15

Net income allocated
  to limited partners (99%)       629        430      2,060      1,493
                              $   635    $   434    $ 2,081    $ 1,508

Net income per limited
  partnership unit            $  1.64    $  1.12    $  5.38    $  3.90

Distributions per limited
  partnership unit            $    --    $    --    $    --    $ 18.27

                 See Accompanying Notes to Financial Statements

c)
                CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

              STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
                                  (Unaudited)
                        (in thousands, except unit data)


                                     Limited
                                   Partnership  General   Limited
                                      Units    Partner's Partners'   Total

Original capital contributions      383,033     $     1  $95,758   $95,759

Partners' (deficit) capital at
  December 31, 1996                 383,033     $  (443) $37,739   $37,296

Distributions to partners                --          (8)  (6,997)   (7,005)

Net income for the nine months
  ended September 30, 1997               --          15    1,493     1,508

Partners' (deficit) capital at
  September 30, 1997                383,033     $  (436) $32,235   $31,799

Partners' (deficit) capital at
  December 31, 1997                 383,033     $  (589) $25,814   $25,225

Net income for the nine months
  ended September 30, 1998               --          21    2,060     2,081

Partners' (deficit) capital at
  September 30, 1998                383,033     $  (568) $27,874   $27,306

                 See Accompanying Notes to Financial Statements


d)
                CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                            STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                 (in thousands)


                                                     Nine Months Ended
                                                       September 30,
                                                       1998      1997
Cash flows from operating activities:
  Net income                                         $ 2,081   $ 1,508
  Adjustments to reconcile net income to net
    cash provided by operating activities:
    Depreciation                                       2,193     2,127
    Amortization of lease commissions and
      loan costs                                         118       107
    Gain on casualty event                                --       (16)
    Loss on disposal of property                          58        41
    Change in accounts:
      Receivables and deposits                          (225)       58
      Other assets                                        (3)      (66)
      Accounts payable                                    33      (231)
      Tenant security deposit liabilities                 10        36
      Accrued property taxes                             247       294
      Other liabilities                                  (13)      (87)

         Net cash provided by operating activities     4,499     3,771

Cash flows from investing activities:
  Property improvements and replacements              (1,181)   (1,166)
  Net receipts from restricted escrows                   490        96
  Proceeds from sale of investment                       100        --
  Insurance proceeds from casualty event                  --        16
  Dividends received                                      --         4

         Net cash used in investing activities          (591)   (1,050)

Cash flows from financing activities:
  Loan costs paid                                         --        (2)
  Distribution to partners                                --    (7,005)

         Net cash used in financing activities            --    (7,007)

Net increase (decrease) in cash and cash equivalents   3,908    (4,286)

Cash and cash equivalents at beginning of period       5,054    15,813

Cash and cash equivalents at end of period           $ 8,962   $11,527

Supplemental disclosure of cash flow information:
  Cash paid for interest                             $ 1,647   $ 1,647

                 See Accompanying Notes to Financial Statements

e)
                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") have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
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") a wholly-owned
subsidiary of Insignia Properties Trust ("IPT") (see "Note E"), all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three and nine month
periods ended September 30, 1998, are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31, 1998.  For further
information, refer to the financial statements and footnotes thereto included in
the Partnership's annual report on Form 10-K for the fiscal year ended December
31, 1997.

Certain reclassifications have been made to the 1997 information to conform to
the 1998 presentation.

NOTE B - RELATED PARTY TRANSACTIONS

The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all partnership activities.
Affiliates of the General Partner provide property management and asset
management services to the Partnership.  The Limited Partnership Agreement
("Partnership Agreement") provides for payments to affiliates for property
management services based on a percentage of revenue.  The Partnership Agreement
also provides for reimbursement to the General Partner and its affiliates for
costs incurred in connection with the administration of Partnership activities.

The following payments were paid to affiliates of the General Partner during
each of the nine month periods ended September 30, 1998 and 1997:

                                                            1998    1997
                                                            (in thousands)

Property management fees (included in operating expenses)   $576    $548

Reimbursements for services of affiliates, including
 $34,000 and $20,000 of construction service reimbursements
 in the nine months ended September 30, 1998 and 1997,
 respectively (included in investment properties, general
 and administrative expenses, and operating expenses)        297     270

In addition, the Partnership paid approximately $41,000 and $29,000 during the
nine months ended September 30, 1998 and 1997, respectively, to an affiliate of
the General Partner for lease commissions at the Partnership's commercial
properties. These lease commissions are included in other assets and are
amortized over the terms of the respective leases.

For the period from January 1997 to August 1997, the Partnership insured its
properties under a master policy through an agency affiliated with the General
Partner with an insurer unaffiliated with the General Partner.  An affiliate of
the General Partner acquired, in the acquisition of a business, certain
financial obligations from an insurance agency, which was later acquired by the
agent who placed the master policy. The agent assumed the financial obligations
to the affiliate of the General Partner, which received payments on these
obligations from the agent.  The amount of the Partnership's insurance premiums
that accrued to the benefit of the affiliate of the General Partner by virtue of
the agent's obligations was not significant.

During the first quarter of 1998, an affiliate of the General Partner acquired
an additional 47,865.5 units in the Partnership as a result of a tender offer
commenced in December 1997.  During July 1998, an affiliate of the General
Partner (the "Purchaser") commenced a tender offer for limited partnership
interests in the Partnership.  The Purchaser offered to purchase up to 125,000
of the outstanding units of limited partnership interest in the Partnership at
$100 per Unit, net to the seller in cash.  The tender offer expiration date has
been extended to November 16, 1998.

NOTE C - COMMITMENT

The Partnership is required by the Partnership Agreement to maintain working
capital reserves for contingencies of not less than 5% of Net Invested Capital,
as defined in the Partnership Agreement.  Reserves, including cash and
investments available for sale totaling approximately $9 million were greater
than the reserve requirement of approximately $3.4 million at September 30,
1998.

NOTE D - DISTRIBUTIONS

The Partnership distributed cash generated from operations of approximately
$844,000 and approximately $6,161,000 from surplus funds for the nine months
ended September 30, 1997.

Subsequent to September 30, 1998, the Partnership distributed cash generated
from operations of approximately $1,980,000.

NOTE E - TRANSFER OF CONTROL; SUBSEQUENT EVENT

On October 1, 1998, Insignia Financial Group, Inc. completed its merger with and
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 of the Insignia Merger, AIMCO acquired control
of the General Partner. In addition, AIMCO also acquired approximately 51% of
the outstanding common shares of beneficial interest of Insignia Properties
Trust ("IPT"), the sole shareholder of the General Partner of the Partnership.
Also, effective October 1, 1998 IPT and AIMCO entered into an Agreement and plan
of Merger pursuant to which IPT is to be merged with and into AIMCO or a
subsidiary of AIMCO (the "IPT Merger").  The IPT Merger requires the approval of
the holders of a majority of the outstanding IPT Shares. AIMCO has agreed to
vote all of the IPT Shares owned by it in favor of the IPT Merger and has
granted an irrevocable limited proxy to unaffiliated representatives of IPT to
vote the IPT Shares acquired by AIMCO and its subsidiaries in favor of the IPT
Merger.  As a result of AIMCO's ownership and its agreement, the vote of no
other holder of IPT is required to approve the merger.  The General Partner does
not believe that this transaction will have a material effect on the affairs and
operations of the Partnership.



ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
       OF OPERATIONS

The Partnership's investment properties consist of eight apartment complexes and
two commercial properties.  The following table sets forth the average occupancy
of the properties for each of the nine month periods ended September 30, 1998
and 1997:


                                Average Occupancy
Property                           1998    1997

Cedar Rim                          96%     94%
  New Castle, Washington
City Heights                       96%     96%
  Seattle, Washington
Corporate Center                   99%     99%
  Tampa, Florida
Hidden Cove by the Lake            92%     92%
  Belleville, Michigan
Lamplighter Park                   96%     95%
  Bellevue, Washington
Park Capitol                       91%     97%
  Salt Lake City, Utah
Sandpiper I and II                 95%     96%
  St. Petersburg, Florida
South City Business Center         92%     90%
  Chula Vista, California
Tamarac Village I, II, III, IV     96%     94%
  Denver, Colorado
Williamsburg Manor                 96%     97%
  Cary, North Carolina


The decrease in occupancy at Park Capital is due to more limited access to the
property resulting from road construction as Salt Lake City prepares for the
upcoming 2000 Winter Olympics.

Results of Operations

The Partnership realized net income of approximately $635,000 and $2,081,000 for
the three and nine month periods ended September 30, 1998 compared to
approximately $434,000 and $1,508,000 for the corresponding periods in 1997.
The increase in net income is primarily attributed to an increase in rental
revenue and an overall decrease in operating expenses.

Rental revenue increased as a result of increased rental rates at most of the
Partnership's investment properties and increased occupancy at Cedar Rim,
Lamplighter Park, and South City Business Center.  Interest income decreased for
the nine month period ended September 30, 1998 compared to 1997 as a result of
lower average cash balances resulting from distributions paid to the partners in
1997.  Also partially offsetting the increase in rental revenue for the nine
month period was a casualty gain recorded in 1997 relating to a fire at Hidden
Cove by the Lake Apartments.  The fire damaged ten units in one building at the
complex.  The units affected were primarily smoke and water damaged, and the
restoration was completed in the second quarter of 1997.

Operating expenses decreased for the three and nine month periods ended
September 30, 1998 due to a reduction in major repairs and maintenance expenses.
For the nine months ended September 30, 1998, operating expenses included
approximately $147,000 of major repairs and maintenance comprised primarily of
exterior painting and landscaping.  For the nine month period ended September
30, 1997, major repairs and maintenance was approximately $457,000 and included
exterior painting, exterior building and parking lot repairs, landscaping and
pool repairs.  General and administrative expenses increased for the nine month
period ended September 30, 1998 due to increased printing and mailing costs
related to correspondence with the limited partners.

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 September 30, 1998, the Partnership held cash and cash equivalents of
approximately $8,962,000 compared to approximately $11,527,000 at September 30,
1997. The net increase in cash and cash equivalents for the nine months ended
September 30, 1998, was approximately $3,908,000, compared to a net decrease of
approximately $4,286,000 for the nine months ended September 30, 1997.  Net cash
provided by operating activities increased primarily due to an increase in net
income, as discussed above, and a decrease in cash used for accounts payable due
to the timing of payments.  These increases to cash were partially offset by an
increase in receivables and deposits due to the timing of payments.  Net cash
used in investing activities decreased primarily due to increased receipts from
restricted escrows.  In addition, a long term investment matured in May of 1998,
yielding proceeds of $100,000.  Net cash used in financing activities decreased
due to distributions paid to the partners during the nine months ended September
30, 1997.

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 various 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.  Such assets are
currently thought to be sufficient for any near-term needs of the Partnership.
The General Partner is currently assessing the need for capital improvements at
each of the Partnership's properties.  To the extent that additional capital
improvements are required, the Partnership's distributable cash flow, if any,
may be adversely affected, at least in the short term.  The notes payable of
$30,525,000 have maturity dates ranging from 2003 to 2005. The General Partner
will attempt to refinance such indebtedness or sell the properties prior to such
maturity date. If the properties cannot be refinanced or sold for a sufficient
amount, the Partnership will risk losing such properties through foreclosure.
The mortgage notes payable are nonrecourse and are secured by pledges of the
respective properties. All notes require prepayment penalties if repaid prior to
maturity and prohibit resale of the properties subject to existing indebtedness.
Distributions of $7,005,000 were made to the partners during the nine months
ended September 30, 1997.  Subsequent to September 30, 1998, the Partnership
distributed cash generated from operations of approximately $1,980,000.  Future
cash distributions will depend on the levels of net cash generated from
operations, property sales, refinancings, and the availability of cash reserves.
The Partnership's distribution policy will be reviewed on a quarterly basis.
There can be no assurance, however, that the Partnership will generate
sufficient funds from operations to permit further distributions to its partners
in 1998 or subsequent periods.

In the third quarter of 1998, the General Partner entered into a contract with
an unaffiliated party for the sale of City Heights.  The potential buyer is
currently conducting its due diligence review and has made a non-refundable good
faith deposit on the property.  The closing is anticipated to occur, if at all,
at the end of November 1998.

Transfer of Control; Subsequent Event

On October 1, 1998, Insignia Financial Group, Inc. completed its merger with and
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 of the Insignia Merger, AIMCO acquired control
of the General Partner. In addition, AIMCO also acquired approximately 51% of
the outstanding common shares of beneficial interest of Insignia Properties
Trust ("IPT"), the sole shareholder of the General Partner of the Partnership.
Also, effective October 1, 1998 IPT and AIMCO entered into an Agreement and plan
of Merger pursuant to which IPT is to be merged with and into AIMCO or a
subsidiary of AIMCO (the "IPT Merger").  The IPT Merger requires the approval of
the holders of a majority of the outstanding IPT Shares. AIMCO has agreed to
vote all of the IPT Shares owned by it in favor of the IPT Merger and has
granted an irrevocable limited proxy to unaffiliated representatives of IPT to
vote the IPT Shares acquired by AIMCO and its subsidiaries in favor of the IPT
Merger.  As a result of AIMCO's ownership and its agreement, the vote of no
other holder of IPT is required to approve the merger.  The General Partner does
not believe that this transaction will have a material effect on the affairs and
operations of the Partnership.

Year 2000

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 to define the applicable year.  The Partnership is
dependent upon the General Partner and its affiliates for management and
administrative services ("Managing Agent").  Any 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.

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 are not completed timely, the
Year 2000 Issue could have a material impact on the operations of the Managing
Agent and the Partnership.

Status of Progress in Becoming Year 2000 Compliant

The Managing Agent's plan to resolve the Year 2000 Issue involves the following
four phases: assessment, remediation, testing and implementation.  To date, the
Managing Agent has fully completed its assessment of all information systems
that could be significantly affected by the Year 2000, and has begun the
remediation, testing and implementation phase on both hardware and software
systems.  Assessments are continuing in regards to embedded systems in operating
equipment.  The Managing Agent anticipates having all phases complete by June 1,
1999.

In addition to the areas the Partnership is relying on the Managing Agent to
verify compliance with,  the Partnership has certain operating equipment,
primarily at the property sites,  which needed to be evaluated for Year 2000
compliance.  The focus of the General Partner was to the security systems,
elevators, heating-ventilation-air-conditioning systems, telephone systems and
switches, and sprinkler systems. The General Partner is currently engaged in the
identification of all non-compliant operational systems, and is in the process
of estimating the costs associated with any potential modifications or
replacements needed to such systems in order for them to be Year 2000 compliant.
It is not expected that such costs would have a material adverse effect upon
the operations of the Partnership.

Risk Associated with the Year 2000

The General Partner believes that the Managing Agent has an effective program in
place to resolve the Year 2000 issue in a timely manner and has appropriate
contingency plans in place for critical applications that could affect the
Partnership's operations.   To date, the General Partner is not aware of any
external agent with a Year 2000 issue that would materially impact the
Partnership's results of operations, liquidity or capital resources.  However,
the General Partner has no means of ensuring that external agents will be Year
2000 compliant.  The General Partner does not believe that the inability of
external agents to complete their Year 2000 resolution 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.

Other

Certain items discussed in this quarterly report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Reform Act") and as such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Partnership to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements.  Such forward-looking statements speak only as of the date
of this quarterly report.  The Partnership expressly disclaims any obligation or
undertaking to release publicly any updates of revisions to any forward-looking
statements contained herein to reflect any change in the Partnership's
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.             

                          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. in Superior Court of the State of California for
the County of San Mateo.  The Plaintiffs named as defendants, among others, the
Partnership, the General Partner and several of their affiliated partnerships
and corporate entities. The complaint purports to assert claims on behalf of a
class of limited partners and derivatively on behalf of a number of limited
partnerships (including the Partnership) which are named as nominal defendants,
challenging the acquisition by Insignia and entities which were, at the time,
affiliates of Insignia ("Insignia Affiliates") of interests in certain general
partner entities, past tender offers by Insignia Affiliates to acquire limited
partnership units, the management of partnerships by Insignia Affiliates, as
well as a recently announced agreement between Insignia and AIMCO.  The
complaint seeks monetary damages and equitable relief, including judicial
dissolution of the Partnership.  On June 25, 1998, the General Partner filed a
motion seeking dismissal of the action.  In lieu of responding to the motion,
the plaintiffs have filed an amended complaint.  The General Partner has filed
demurrers to the amended complaint, which are scheduled to be heard on January
8, 1999.  The General Partner believes the action to be without merit, and
intends to vigorously defend it.

In March 1998, a limited partner of the Partnership commenced an arbitration
proceeding against the General Partner claiming that the General Partner had
breached certain contractual and fiduciary duties allegedly owed to the
claimant.  The General Partner believes the claims to be without merit and
intends to vigorously defend the claims.

On July 30, 1998, certain entities claiming to own limited partnership interests
in certain limited partnerships whose general partners were, at the time,
affiliates of Insignia filed a complaint entitled Everest Properties LLC. v.
Insignia Financial Group, Inc. in the Superior Court of the State of California,
County of Los Angeles. The action involves 44 real estate limited partnerships
(including the Partnership) in which the plaintiffs allegedly own interests and
which Insignia Affiliates allegedly manage or control (the "Subject
Partnerships").  The complaint names as defendants Insignia, several Insignia
Affiliates alleged to be managing partners of the defendant limited
partnerships, the Partnership and the General Partner. Plaintiffs allege that
they have requested from, but have been denied by each of the Subject
Partnerships, lists of their respective limited partners for the purpose of
making tender offers to purchase up to 4.9% of the limited partner units of each
of the Subject Partnerships.  The complaint also alleges that certain of the
defendants made tender offers to purchase limited partner units in many of the
Subject Partnerships, with the alleged result that plaintiffs have been deprived
of the benefits they would have realized from ownership of the additional units.
The plaintiffs assert eleven causes of action, including breach of contract,
unfair business practices, and violations of the partnership statutes of the
states in which the Subject Partnerships are organized. Plaintiffs seek
compensatory, punitive and treble damages. The General Partner filed an answer
to the complaint on September 15, 1998.  The General Partner believes the claims
to be without merit and intends to defend the action vigorously.

The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature.  The General Partner of the Partnership believes all
such pending or outstanding litigation will be resolved without a material
adverse effect upon the business, financial condition or operations of the
partnership.


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 September 30, 1998.


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                               CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                               By:        CONCAP EQUITIES, INC.
                                          Its General Partner


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


                               By:        /s/Timothy R. Garrick
                                          Timothy R. Garrick
                                          Vice President - Accounting
                                          (Duly Authorized Officer)


                               Date:      November 13, 1998