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

                            FORM 10-Q

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

                       For the quarter ended
                           June 30, 1997
                                OR

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

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

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

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

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

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

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

     Yes     X                         No
          -------                           -------
                     RAL YIELD + EQUITIES III
                        LIMITED PARTNERSHIP
                            FORM 10-Q

                        TABLE OF CONTENTS

                                                            PAGES
PART I    FINANCIAL INFORMATION

          Item 1.   Financial Statements                    I-1

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

PART II   OTHER INFORMATION

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

Signatures


































<TABLE>
                    RAL YIELD + EQUITIES III
                       LIMITED PARTNERSHIP
    BALANCE SHEETS AT JUNE 30, 1997 AND DECEMBER 31, 1996
<CAPTION>
                                        UNAUDITED      AUDITED
                                         JUNE 30,    DECEMBER 31,
         ASSETS                            1997           1996
-------------------------------         ----------   ------------
<S>                                      <C>            <C> 
INVESTMENT PROPERTIES, (net of
accumulated depreciation of
$1,596,783 and $1,517,554,
respectively)                            4,035,534      4,114,763

CASH AND CASH EQUIVALENTS                  332,810        383,182

RENT AND OTHER RECEIVABLES                   5,184          1,820

OTHER ASSETS                                 2,954          3,327

NOTES RECEIVABLE (net of allowance of
$61,025 and $60,427, respectively)               0              0

DEFERRED CHARGES                             5,250          6,000
                                        ----------     ----------
TOTAL ASSETS                             4,381,732      4,509,092
                                        ==========     ==========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------

ACCOUNTS PAYABLE AND ACCRUED EXPENSES       77,434         74,711

TENANT SECURITY DEPOSITS                    59,623         56,495

PREPAID RENT                                 2,537          6,959
                                        ----------     ----------
TOTAL LIABILITIES                          139,594        138,165

LIMITED PARTNERS' CAPITAL                4,193,189      4,323,648
GENERAL PARTNERS' CAPITAL                   48,949         47,279
                                        ----------     ----------
TOTAL PARTNERS' CAPITAL                  4,242,138      4,370,927
                                        ----------     ----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL  4,381,732      4,509,092
                                        ==========     ==========

<FN>
     The accompanying notes are an integral part of these
     statements.
</FN>
</TABLE>
<TABLE>                               
                                  I-1 
                    RAL YIELD + EQUITIES III
                      LIMITED PARTNERSHIP

                    Statement of Operations
   For three months and six months ended June 30, 1997 and 1996

                                  UNAUDITED
<CAPTION>
                     3 MONTHS   6 MONTHS   3 MONTHS  6 MONTHS
                       ended     ended      ended     ended 
                     JUNE 30,   JUNE 30,   JUNE 30,  JUNE 30,
                       1997       1997       1996      1996
                     --------   --------   --------  --------
<S>                    <C>        <C>       <C>       <C>  
REVENUE:
 Rental income         190,043    377,465   243,148     490,679
 Restaurant sales      153,574    300,168   155,328     294,993
 Gain on sale                0          0   372,939     372,939
 Interest and other 
   income                6,549     22,202     9,764      29,439
                      --------   --------  --------   ---------
                       350,166    699,835   781,179   1,188,050

EXPENSES:
 Operating and 
  administrative        97,280    196,240   106,863     210,540
 Restaurant operating
  expenses             113,430    233,944   112,072     224,941
 Management fees        11,876     22,646    14,394      28,732
 Depreciation and
   amortization         39,990     79,979    55,168     110,298
                       --------   -------- --------    --------
                       262,576    532,809   288,497     574,511
                      --------   --------  --------    --------
NET INCOME              87,590    167,026   492,682     613,539
                      ========   ========  ========    ========




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







                                  I-2

 <TABLE>
                         RAL YIELD + EQUITIES III
                            LIMITED PARTNERSHIP

                Statements of Changes in Partners' Capital
                For the six months ended June 30, 1997 and
                    for the year ended December 31, 1996

                                      UNAUDITED
<CAPTION>
                           General          Limited
                           Partners         Partners
                        (1% ownership)  (99% ownership)   Total
                        --------------  ---------------  --------
<S>                            <C>       <C>          <C> 
BALANCE, January 1, 1996       39,419     5,815,162    5,854,581
                           ----------     ----------   ----------
NET INCOME (LOSS)               7,860       778,108      785,968

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

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

NET INCOME                      1,670       165,356      167,026

CASH DISTRIBUTIONS                  0      (295,815)    (295,815)
                           ----------     ----------   ----------

BALANCE, June 30, 1997         48,949     4,193,189    4,242,138
                           ==========    ==========   ==========


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











                                  I-3
                                   


<TABLE>
                       RAL YIELD + EQUITIES III
                          LIMITED PARTNERSHIP
                       Statements of Cash Flows
           For the six months ended June 30, 1997 and 1996

                                              UNAUDITED
<CAPTION>
                                    JUNE 30,          JUNE 30,
                                      1997              1996
                                    ---------         ---------
<S>                                <C>                 <C>
CASH FLOWS FROM
 OPERATING ACTIVITIES:

Net income (loss)                    167,026             613,539 
Adjustments to reconcile net
 income to net cash provided
 by operating activities:
     Depreciation and 
      amortization expense            79,979             110,298
Gain on sale of assets                     0            (372,939)
Change in assets and liabilities:
     Accounts receivable              (3,364)             (6,682)
     Notes receivable                      0               7,000 
     Other assets                        373               2,190 
     Accounts payable and
      accrued expenses                 2,723             (95,655)
     Tenants' security deposits        3,128             (15,060)
     Prepaid rent                     (4,422)                  0
                                   ----------           ----------
Net Cash provided by
 operating activities:               245,443             242,691

CASH FLOWS FROM INVESTING
 ACTIVITIES:

  Net proceeds from 
     sale of assets                        0           1,689,077
                                  ----------           ----------
  Net Cash used in
  investing activities                     0           1,689,077
                                  ----------           ----------









                                   I-4 
                                   
CASH FLOWS FROM FINANCING
 ACTIVITIES:

 Cash distributions paid            (295,815)           (347,810)
                                  ----------          ----------
Net cash provided by (used
in) financing activities            (295,815)           (347,810)
                                  ----------          ----------
Net increase (decrease)
 in cash                             (50,372)          1,583,958

Cash at beginning of period          383,182             502,133
                                  ----------          ----------
Cash at end of period                332,810           2,086,091
                                  ==========          ==========


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






























                                  I-5

                       RAL YIELD + EQUITIES III
                          LIMITED PARTNERSHIP

                    NOTES TO FINANCIAL STATEMENTS

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

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






























                                 I-6
       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS

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

Liquidity and Capital Resources:

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

Net cash flow provided by operating activities for the six
months ended June 30 was $245,443 in 1997 and $242,691 in 1996,
primarily from earnings and depreciation (amortization).

As of June 30, 1997, the Partnership had cash of approximately
$330,000 representing undistributed cash flow, working capital
reserves, and tenant's security deposits.  Current liabilities
amounted to approximately $140,000.

The Partnership operates a Rocky Rococo restaurant in Milwaukee,
Wisconsin.  The restaurant contributed $61,800 to cash flow in
the first half of 1997 compared to $64,900 in the first
half of 1996.  As sales continue to increase at this restaurant, it
should continue to be a large contributor to overall partnership
cash flow.




                             I-7

Results of Operations:

Gross rental revenues for the six months ended June 30 were
$377,465 in 1997 versus $490,679 in 1996.  Operating expenses,
excluding restaurant operations, from rental properties
for the six months ended June 30 were $196,240 in 1997 and
$210,540 in 1996.  The decrease in gross rental revenues and
operating expenses is primarily due to the sale of the warehouse
and mobile home park in 1996.

Net Income for the six months ended June 30 was $167,026 in 1997
and $613,539 in 1996.  The decrease in net income is primarily due
to the gain recognized on the sale of the warehouse in 1996.

The restaurant property on Howell Avenue in Milwaukee, Wisconsin
opened as a Rocky Rococo's in the fourth quarter of 1994.  Revenues
of $301,802 generated $47,135 of net income for the partnership
during the first six months of 1997 compared to revenues of
$295,797 and net income of $50,395 for the first six months of
1996.  The decrease in net income is due to increased labor costs.

<TABLE>
The following is a listing of the approximate average physical
occupancy rates for the Partnership's mobile home parks during
the six months ended June 30, 1997 and calendar year 1996:
<CAPTION>
                                   6 Months       Calendar
                                 ended June         Year
                                   30, 1997         1996
                                 -----------      --------
     <S>                              <C>            <C>
     1.   Forest Junction             93%            90%
     2.   Cloverleaf                  90%            88%
     3.   Shamrock                    99%            98%

</TABLE>

Inflation:

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

                              I-8




                         SIGNATURES


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


             RAL YIELD + EQUITIES III LIMITED PARTNERSHIP
                             (Registrant)


Date:  August 1, 1997                  Robert A. Long
                                       --------------------------
                                       Robert A. Long
                                       General Partner