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, 1998
                                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, 1998 AND DECEMBER 31, 1997
<CAPTION>
                                        UNAUDITED      AUDITED
                                         JUNE 30,    DECEMBER 31,
         ASSETS                            1998           1997
-------------------------------         ----------   ------------
<S>                                      <C>            <C>
INVESTMENT PROPERTIES, (net of
accumulated depreciation of
$1,753,653 and $1,674,213,
respectively)                            3,929,845      3,990,641

CASH AND CASH EQUIVALENTS                  192,767        256,608

RENT AND OTHER RECEIVABLES                  10,732          5,584

OTHER ASSETS                                 5,732          4,872

NOTES RECEIVABLE (net of allowance of
$60,664 and $60,031, respectively)               0              0

DEFERRED CHARGES                            32,808         18,781
                                        ----------     ----------
TOTAL ASSETS                             4,171,884      4,276,486
                                        ==========     ==========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------

ACCOUNTS PAYABLE AND ACCRUED EXPENSES      116,099        107,458

TENANT SECURITY DEPOSITS                    62,337         60,195

PREPAID RENT                                 3,596          4,567
                                        ----------     ----------
TOTAL LIABILITIES                          182,032        172,220

LIMITED PARTNERS' CAPITAL                3,937,509      4,053,737
GENERAL PARTNERS' CAPITAL                   52,343         50,529
                                        ----------     ----------
TOTAL PARTNERS' CAPITAL                  3,989,852      4,104,266
                                        ----------     ----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL  4,171,884      4,276,486
                                        ==========     ==========

<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, 1998 and 1997

                                  UNAUDITED
<CAPTION>
                     3 MONTHS   6 MONTHS   3 MONTHS  6 MONTHS
                       ended     ended      ended     ended
                     JUNE 30,   JUNE 30,   JUNE 30,  JUNE 30,
                       1998       1998       1997      1997
                     --------   --------   --------  --------
<S>                    <C>        <C>       <C>       <C> 
REVENUE:
 Rental income         197,007    392,928   190,043     377,465
 Restaurant sales      172,253    324,990   153,574     300,168

 Interest and other
   income                7,510     17,320     6,549      22,202
                      --------   --------  --------   ---------
                       376,770    735,238   350,166     699,835

EXPENSES:
 Operating and
  administrative       105,773    191,172    97,280     196,240
 Restaurant operating
  expenses             127,466    258,752   113,430     233,944
 Management fees        12,058     23,723    11,876      22,646
 Depreciation and
   amortization         40,095     80,190    39,990      79,979
                       --------   -------- --------    --------
                       285,392    553,837   262,576     532,809
                      --------   --------  --------    --------
NET INCOME              91,378    181,401    87,590     167,026
                      ========   ========  ========    ========




<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, 1998 and
                    for the year ended December 31, 1997

                                      UNAUDITED
<CAPTION>
                           General          Limited
                           Partners         Partners
                        (1% ownership)  (99% ownership)   Total
                        --------------  ---------------  --------
<S>                            <C>       <C>          <C>
BALANCE, January 1, 1997       47,279     4,323,648    4,370,927
                           ----------     ----------   ----------
NET INCOME (LOSS)               3,250       321,719      324,969

CASH DISTRIBUTIONS                  0      (591,630)    (591,630)
                           ----------    ----------   ----------

BALANCE, December 31, 1997     50,529     4,053,737    4,104,266
                           ----------    ----------   ----------

NET INCOME                      1,814       179,587      181,401

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

BALANCE, June 30, 1998         52,343     3,937,509    3,989,852
                           ==========    ==========   ==========


<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, 1998 and 1997

                                              UNAUDITED
<CAPTION>
                                    JUNE 30,          JUNE 30,
                                      1998              1997
                                    ---------         ---------
<S>                                <C>                 <C>
CASH FLOWS FROM
 OPERATING ACTIVITIES:

Net income (loss)                    181,401             167,026
Adjustments to reconcile net
 income to net cash provided
 by operating activities:
     Depreciation and
      amortization expense            80,190              79,979

Change in assets and liabilities:
     Accounts receivable              (5,148)             (3,364)

     Other assets                    (15,637)                373
     Accounts payable and
      accrued expenses                 8,641               2,723
     Tenants' security deposits        2,142               3,128
     Prepaid rent                       (971)             (4,422)
                                   ----------           ----------
Net Cash provided by
 operating activities:               250,618             245,443

CASH FLOWS FROM INVESTING
 ACTIVITIES:

  Additions to Investment
     Properties                      (18,644)                  0
                                  ----------           ----------
  Net Cash used in
  investing activities               (18,644)                  0
                                  ----------           ----------









                                   I-4
                                  
CASH FLOWS FROM FINANCING
 ACTIVITIES:

 Cash distributions paid            (295,815)           (295,815)
                                  ----------          ----------
Net cash provided by (used
in) financing activities            (295,815)           (295,815)
                                  ----------          ----------
Net increase (decrease)
 in cash                             (63,841)            (50,372)

Cash at beginning of period          256,608             383,182
                                  ----------          ----------
Cash at end of period                192,767             332,810
                                  ==========          ==========


<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, 1997.  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 $250,618 in 1998 and $245,443 in 1997,
primarily from earnings and depreciation (amortization).

As of June 30, 1998, the Partnership had cash of approximately
$190,000 representing undistributed cash flow, working capital
reserves, and tenant's security deposits.  Current liabilities
amounted to approximately $180,000.

The Partnership operates a Rocky Rococo restaurant in Milwaukee,
Wisconsin.  The restaurant contributed $54,210 to cash flow in
the first half of 1998 compared to $61,800 in the first
half of 1997.  The decline in cash flow is primarily due to
increased labor and related costs.





                             I-7

Results of Operations:

Gross rental revenues for the six months ended June 30 were
$392,929 in 1998 versus $377,465 in 1997.  Operating expenses,
excluding restaurant operations, from rental properties
for the six months ended June 30 were $191,172 in 1998 and
$196,240 in 1997.  The increase in gross rental revenues is
due to rent increases and improved occupancy at the mobile home
parks.

Net Income for the six months ended June 30 was $181,401 in 1998
and $167,026 in 1997.
 
The restaurant property on Howell Avenue in Milwaukee, Wisconsin
opened as a Rocky Rococo's in the fourth quarter of 1994.  Revenues
of $324,990 generated $40,566 of net income for the partnership
during the first six months of 1998 compared to revenues of
$300,168 and net income of $47,135 for the first six months of
1997.  The decrease in net income is due to increased labor costs
and promotion 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, 1998 and calendar year 1997:
<CAPTION>
                                   6 Months       Calendar
                                 ended June         Year
                                   30, 1998         1997
                                 -----------      --------
     <S>                              <C>            <C>
     1.   Forest Junction             98%            93%
     2.   Cloverleaf                  96%            91%
     3.   Shamrock                    94%            97%

</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

Potential Sale of Partnership Properties

The Partnership has received an offer from a prospective purchaser
for all or substantially all of the Partnership's properties.
Accordingly, the Partnership has entered into an asset purchase
agreement with the potential purchaser subject to Securities and
Exchange Commission review of the necessary proxy statement/consent
document, approval of the limited partners and the receipt of an
acceptable fairness opinion.











































                              I-9





                         SIGNATURES


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


             RAL YIELD + EQUITIES III LIMITED PARTNERSHIP
                             (Registrant)


Date:  August 4, 1998                  Robert A. Long
                                       --------------------------
                                       Robert A. Long
                                       General Partner