FORM 10-QSB.--QUARTERLY 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

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


                For the quarterly period ended March 31, 1997

                                      or

[  ]  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.)

         630 Dundee Road, Suite 220
          Northbrook, Illinois                                  60062
(Address of principal executive offices)                      (Zip Code)


                   Issuer's telephone number (847) 714-9600



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

                        PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

a)                    INVESTORS FIRST-STAGED EQUITY L.P.

                          CONSOLIDATED BALANCE SHEET
                       (in thousands, except unit data)
                                 (Unaudited)

                                March 31, 1997


Assets
  Cash and cash equivalents:
     Unrestricted                                                  $  2,006
     Restricted-tenant security deposits                                447
  Accounts receivable, net of allowance
     for doubtful accounts of $47                                        52
  Note receivable                                                       109
  Escrows for taxes and insurance                                       239
  Restricted escrows                                                    910
  Other assets                                                          674
  Investment properties:
     Land                                         $  9,088
     Buildings and related improvements             42,099
                                                    51,187
  Less accumulated depreciation                    (24,690)          26,497
                                                                   $ 30,934

Liabilities and Partners' Deficit

Liabilities
  Accounts payable                                                 $     93
  Accrued interest                                                    2,421
  Tenant security deposits                                              436
  Accrued property taxes                                                 39
  Other liabilities                                                     376
  Advances from affiliates of the
General Partner                                                         479
  Mortgage notes payable                                             46,619


Partners' Deficit
  General partner                                 $   (377)
  Limited partners (16,267 units
     issued and outstanding)                       (19,152)         (19,529)
                                                                   $ 30,934

          See Accompanying Notes to Consolidated Financial Statements

b)                      INVESTORS FIRST-STAGED EQUITY L.P.

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

                                         

                                               Three Months Ended
                                                    March 31,
                                                1997           1996
Revenues:
 Rental income                                $ 1,840        $ 1,829
 Other income                                      73             60
    Total revenues                              1,913          1,889

Expenses:
 Operating                                        486            426
 General and administrative                        53             54
 Maintenance                                      176            171
 Depreciation                                     476            473
 Interest                                       1,076            869
 Property taxes                                   125            119
    Total expenses                              2,392          2,112
 Net loss                                     $  (479)       $  (223)

Net loss allocated to general partner (1%)    $    (5)       $    (2)
Net loss allocated to limited partners (99%)     (474)          (221)
                                              $  (479)       $  (223)

Net loss per limited partnership unit         $(29.14)       $(13.59)

             See Accompanying Notes to Consolidated Financial Statements


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
<S>                               <C>         <C>           <C>          <C>
Partners' deficit at
  December 31, 1996                16,267      $   (372)     $  (18,678)  $  (19,050)

Net loss for the three months
  ended March 31, 1997                 --            (5)           (474)        (479)

Partners' deficit at
  March 31, 1997                   16,267      $   (377)      $ (19,152)   $ (19,529)
<FN>
             See Accompanying Notes to Consolidated Financial Statements
</TABLE>

d)                      INVESTORS FIRST-STAGED EQUITY L.P.

                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                             Three Months Ended
                                                                  March 31,
                                                               1997       1996
<S>                                                         <C>        <C>
Cash flows from operating activities:
  Net loss                                                   $  (479)   $  (223)
  Adjustments to reconcile net loss to net cash 
    provided by operating activities:
    Depreciation                                                 476        473
    Amortization of loan costs and leasing commissions            40         11
    Change in accounts:
      Restricted cash                                             --        (68)
      Note receivable                                             11         10
      Accounts receivable                                         15        (41)
      Escrows for taxes and insurance                             (2)       317
      Other assets                                              (134)       (82)
      Accounts payable                                            15        (50)
      Accrued interest                                           487        497
      Tenant security deposit liabilities                        (10)        (5)
      Property taxes                                              39         23
      Other liabilities                                          162          5

      Net cash provided by operating activities                  620        867

Cash flows from investing activities:
  Property improvements and replacements                         (62)       (22)
  Receipts from restricted escrows                                 5         --
  Deposits to restricted escrows                                 (18)       (13)

      Net cash used in investing activities                      (75)       (35)

Cash flows from financing activities:
  Payments on mortgage notes payable                             (96)      (168)

      Net cash used in financing activities                      (96)      (168)

Net increase in cash and cash equivalents                        449        664

Cash and cash equivalents at beginning of period               1,557      2,807

Cash and cash equivalents at end of period                   $ 2,006    $ 3,471

Supplemental disclosure of cash flow information:
  Cash paid for interest                                     $   542    $   356
<FN>
             See Accompanying Notes to Consolidated Financial Statements
</TABLE>

e)                    INVESTORS FIRST-STAGED EQUITY L.P.

                  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") 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 VMS Realty Investment II ("General Partner"), all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three month period
ended March 31, 1997, are not necessarily indicative of the results that may be
expected for the fiscal year ending December 31, 1997.  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, 1996.

Certain reclassifications have been made to the 1996 information to conform to
the 1997 presentation.


NOTE B - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES

The Partnership has no employees and is dependent on the General Partner or its
affiliates for the management and administration of all partnership activities.
The General Partner or its affiliates may be reimbursed for direct expenses
relating to the Partnership's administration and other costs charged on behalf
of the Partnership.

Pursuant to an agreement dated July 14, 1994, a transaction is pending in which
the current General Partner would be replaced by MAERIL, Inc., an affiliate of
Insignia Financial Group, Inc. ("Insignia").  The substitution of MAERIL, Inc.
as the General Partner is expected, but there is no assurance that the
transaction will be consummated.

The Partnership has engaged affiliates of Insignia to provide day-to-day
management of the Partnership's properties.  These affiliates received
approximately $99,000 and $98,000 of such fees for the three months ended March
31, 1997 and 1996, respectively.  An affiliate of Insignia also provided
partnership administration and management services for the Partnership.
Reimbursements for direct expenses relating to these services totaled
approximately $38,000 for the three months ended March 31, 1997, and $36,000 for
the three months ended March 31, 1996.  At March 31, 1997, approximately
$120,000 of the 1996 and 1997 reimbursements remain unpaid and are included in
other liabilities.


NOTE C - SUBSEQUENT EVENTS

On April 10, 1997, the Partnership sold three buildings and two parcels of land
associated with Serramonte Plaza located in Daly City, California to an
unaffiliated party, Daly City Partners, LLC, a California limited liability
company.  The property was sold in an effort to maximize the Partnership's
return on its investment.  Total cash received for the three buildings and two
parcels of land was approximately $4,778,000 and was determined primarily by
reference to appraised values.


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

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 three months ended March 31, 1997 and 1996:

                                                      Average
                                                     Occupancy
                                                  1997       1996

Rivercrest Village Apartments                     95%         93%
     Sacramento, California
Richardson Highlands Apartments
     Marin City, California                       98%         97%
Serramonte Plaza
     Daly City, California                        79%         90%

The decrease in occupancy at Serramonte Plaza was primarily due to the vacancy
of one building accounting for approximately 8% of the property.  This building
was sold in April of 1997.

RESULTS OF OPERATIONS

The Partnership realized a net loss of  approximately $479,000 for the three
months ended March 31, 1997,  compared to a net loss of approximately $223,000
for the three months ended March 31, 1996. The increase in net loss is primarily
attributable to an increase in interest expense.  Interest expense increased as
a result of the accrual of the additional interest which is related to the June
1996 refinancing of the Serramonte Plaza first mortgage.  This additional
interest is being accrued over the term of the loan and at the maturity date of
the loan will equal approximately $1,680,000.  Also, net loss increased due to
increased operating expenses resulting from increased utility costs at
Rivercrest Apartments.

Subsequent to March 31, 1997, the Partnership sold three buildings and two
parcels of land associated with Serramonte Plaza located in Daly City,
California to an unaffiliated party, Daly City Partners, LLC, a California
limited liability company. The property was sold in an effort to maximize the
Partnership's return on its investment.  Total cash received for the three
buildings and two parcels of land was approximately $4,778,000 and was
determined primarily by reference to appraised values.

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

The Partnership held cash and cash equivalents of approximately $2,006,000 at
March 31, 1997,  compared to cash and cash equivalents of approximately
$3,471,000 at March 31, 1996.  Net cash provided by operating activities
decreased primarily due to the increased net loss as described above and a
decrease of approximately $315,000 in receipts from tax and insurance escrows.
The receipts from tax and insurance escrows at March 31, 1996, were related to
the Breuner building sale in late 1995. Partially offsetting the decreases in
cash flows provided by operating activities was the receipt of a $150,000
advance on the purchase price from the buyer of the three buildings and two
parcels of land at Serramonte Plaza to perform maintenance work on one of the
buildings prior to the consummation of the sale on April 10, 1997.
Approximately, $90,000 of this advance remains at March 31, 1997, and is
included in other liabilities.  The remaining advance was spent on readying the
property for sale in April of 1997.  Net cash used in investing activities
increased due to increased property improvements and replacements related to
tenant improvements at Serramonte Plaza used as incentives for prospective
tenants.   Net cash used in financing activities decreased due to decreased
mortgage principal payments on the Serramonte Plaza first mortgage.  As a result
of the refinancing of the Serramonte Plaza first mortgage in 1996, principal
payments became a function of cash flow of the property. Serramonte Plaza did
not generate the necessary cash flow throughout the three months ended March 31,
1997 to allow monthly principal payments.  When sufficient cash flows are not
achieved to provide for the monthly principal payment, interest only payments
are made.


                         PART II - OTHER INFORMATION



ITEM 1.  LEGAL PROCEEDINGS

There have been no new material developments or changes from "Part I, Item 3" of
the Partnership's report on the Form 10-KSB for the year ended December 31,
1996.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Partnership did not submit any matter to a vote of its holders of Limited
Partnership Interests during the three months ended March 31, 1997.



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 March 31, 1997.


                                  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,
                              General Partner

                         By:  JAS Realty Corporation



Date: May 15, 1997      By:   /s/ Joel A. Stone
                              Joel A. Stone
                              President



Date: May 15, 1997      By:   /s/ Thomas A. Gatti
                              Thomas A. Gatti, Senior Vice-President
                              and Principal Accounting Officer