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



                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

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

                   For the quarterly period ended March 31, 2001


[ ] 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 small business issuer 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, PO Box 1089
                        Greenville, South Carolina 29602
                      (Address of principal executive offices)

                                 (864) 239-1000
                         (Registrant'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

ITEM 1.     FINANCIAL STATEMENTS

a)

                  CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

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

                                 March 31, 2001

<TABLE>
<CAPTION>

Assets
<S>                                                                       <C>
   Cash and cash equivalents                                              $ 1,203
   Receivables and deposits                                                   545
   Restricted escrows                                                         209
   Other assets                                                               649
   Investment properties:
      Land                                               $ 8,641
      Buildings and related personal property              46,882
                                                           55,523
      Less accumulated depreciation                       (20,809)         34,714

                                                                         $ 37,320
Liabilities and Partners' (Deficit) Capital
Liabilities
   Accounts payable                                                        $   93
   Tenant security deposit liabilities                                        349
   Accrued property taxes                                                     260
   Other liabilities                                                          594
   Mortgage notes payable                                                  27,925

Partners' (Deficit) Capital
   General partner                                        $ (759)
   Limited partners (383,033 units outstanding)             8,858           8,099
                                                                         $ 37,320



                   See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

b)

                  CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

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

<TABLE>
<CAPTION>

                                                          Three Months Ended
                                                              March 31,
                                                         2001            2000
Revenues:
<S>                                                     <C>            <C>
  Rental income                                         $ 3,251        $ 3,141
  Other income                                              338            209
      Total revenues                                      3,589          3,350

Expenses:
  Operating                                               1,184          1,225
  General and administrative                                159            153
  Depreciation                                              730            716
  Interest                                                  528            523
  Property taxes                                            201            179
      Total expenses                                      2,802          2,796

Net income                                               $ 787          $ 554

Net income allocated to general partner (1%)                  8              6
Net income allocated to limited partners (99%)              779            548
                                                         $ 787          $ 554

Net income per limited partnership unit                 $ 2.03          $ 1.43

Distributions per limited partnership unit              $ 5.01          $ 3.87

                   See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>


c)

                  CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

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


<TABLE>
<CAPTION>

                                     Limited
                                    Partnership     General     Limited
                                       Units        Partner     Partners      Total

<S>                                   <C>             <C>       <C>          <C>
Original capital contributions        383,033         $ 1       $95,758      $95,759

Partners' (deficit) capital
   at December 31, 2000               383,033       $ (748)     $ 9,998      $ 9,250

Distributions to partners                  --           (19)     (1,919)      (1,938)

Net income for the three months
   ended March 31, 2001                    --             8         779          787

Partners' (deficit) capital at
   March 31, 2001                     383,033       $ (759)     $ 8,858      $ 8,099

                   See Accompanying Notes to Financial Statements
</TABLE>


<PAGE>

d)

                  CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                   (in thousands)

<TABLE>
<CAPTION>

                                                                 Three Months Ended
                                                                       March 31,
                                                                  2001        2000
Cash flows from operating activities:
<S>                                                              <C>          <C>
  Net income                                                     $ 787        $ 554
  Adjustments to reconcile net income to net cash
   provided by operating activities:
      Depreciation                                                  730          716
      Amortization of loan costs                                     26           22
      Change in accounts:
        Receivables and deposits                                     87          202
        Other assets                                               (172)         (62)
        Accounts payable                                           (213)         (90)
        Tenant security deposit liabilities                           4           12
        Accrued property taxes                                      108           69
        Other liabilities                                          (150)         (40)

           Net cash provided by operating activities              1,207        1,383

Cash flows from investing activities:
  Property improvements and replacements                           (313)        (385)
  Net receipts from restricted escrows                              237          243

           Net cash used in investing activities                    (76)        (142)

Cash flows from financing activities:
  Distributions to partners                                      (1,938)      (1,497)

Net decrease in cash and cash equivalents                          (807)        (256)

Cash and cash equivalents at beginning of period                  2,010        5,451

Cash and cash equivalents at end of period                      $ 1,203      $ 5,195

Supplemental disclosure of cash flow information:
  Cash paid for interest                                         $ 501        $ 501


                   See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

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"  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 ConCap  Equities,  Inc.  (the "General
Partner"),  which is wholly owned by Apartment Investment and Management Company
("AIMCO"),  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, 2001, are not  necessarily  indicative of the
results that may be expected for the fiscal year ending  December 31, 2001.  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, 2000.

Segment Reporting

Statement of Financial  Accounting Standards ("SFAS") No. 131, "Disclosure about
Segments of an Enterprise and Related Information" established standards for the
way that public business enterprises report information about operating segments
in annual  financial  statements  and  requires  that those  enterprises  report
selected  information about operating segments in interim financial reports.  It
also establishes  standards for related disclosures about products and services,
geographic  areas,  and  major  customers.  As  defined  in SFAS  No.  131,  the
Partnership has only one reportable  segment.  The General Partner believes that
segment-based disclosures will not result in a more meaningful presentation than
the financial statements as currently presented.

Reclassifications

Certain  reclassifications  have been made to the 2000 information to conform to
the 2001 presentation.

Note B - Related Party Transactions

The  Partnership has no employees and is dependent on the General Partner and/or
its  affiliates  for  the  management  and  administration  of  all  Partnership
activities. 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 amounts were paid or accrued to the General Partner and affiliates
during each of the three month periods ended March 31, 2001 and 2000:

                                                                  2001      2000
                                                                  (in thousands)

 Property management fees (included in operating expenses)        $177      $166
 Reimbursements for services of affiliates (included in
  investment properties, general and administrative
  expenses, and operating expenses)                                137        81

During the three months ended March 31, 2001 and 2000, affiliates of the General
Partner  were  entitled  to  receive  5% of  gross  receipts  from  all  of  the
Partnership's  residential  properties as  compensation  for providing  property
management  services.  The  Partnership  paid to such  affiliates  approximately
$177,000 and $166,000 for  management  fees for the three months ended March 31,
2001 and 2000, respectively.

An  affiliate  of the General  Partner  received  reimbursement  of  accountable
administrative  expenses amounting to approximately $137,000 and $81,000 for the
three month periods ended March 31, 2001 and 2000, respectively.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,   AIMCO  and  its  affiliates   currently  own  195,659.9   limited
partnership  units in the  Partnership  representing  51.08% of the  outstanding
units.  A number of these units were acquired  pursuant to tender offers made by
AIMCO or its  affiliates.  It is possible that AIMCO or its affiliates 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.  Under the Partnership  Agreement,  unitholders  holding a
majority of the Units are  entitled to take action with  respect to a variety of
matters, which would include without limitation, voting on certain amendments to
the Partnership  Agreement and voting to remove the General Partner. As a result
of its ownership of 51.08% of the outstanding  units,  AIMCO is in a position to
influence all voting  decisions with respect to the  Registrant.  When voting on
matters,  AIMCO would in all  likelihood  vote the Units it acquired in a manner
favorable to the interest of the General  Partner  because of their  affiliation
with the General Partner.

Note C - Distributions

The  Partnership  paid  distributions  of  cash  generated  from  operations  of
approximately  $1,938,000  (approximately  $1,919,000 to the limited partners or
$5.01 per limited  partnership  unit)  during the three  months  ended March 31,
2001. The Partnership  paid  distributions  of cash generated from operations of
approximately  $1,497,000  (approximately  $1,482,000 to the limited partners or
$3.87 per limited  partnership  unit) for the three months ended March 31, 2000.
Subsequent  to  March  31,  2001,   the  General   Partner   declared  and  paid
distributions from operations of approximately $947,000  (approximately $938,000
to the limited partners or $2.45 per limited partnership unit).

Note D - 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 the Superior Court of the State of California
for the County of San Mateo. The plaintiffs  named as defendants,  among others,
the   Partnership,   its  General  Partner  and  several  of  their   affiliated
partnerships  and corporate  entities.  The action  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,  among other things,  the  acquisition of interests in
certain general partner entities by Insignia Financial Group, Inc.  ("Insignia")
and entities which were, at one time, affiliates of Insignia; past tender offers
by the Insignia affiliates to acquire limited  partnership units;  management of
the  partnerships  by the  Insignia  affiliates;  and the Insignia  Merger.  The
plaintiffs  seek  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  filed an amended  complaint.  The General Partner filed demurrers to
the amended complaint which were heard February 1999.

Note D - Legal Proceedings (continued)

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December  14,  1999,  the General  Partner  and its  affiliates  terminated  the
proposed settlement.  In February 2000, counsel for some of the named plaintiffs
filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated
the settlement.  On June 27, 2000, the Court entered an order disqualifying them
from the case and an appeal was taken  from the order on  October  5,  2000.  On
December 4, 2000, the Court  appointed the law firm of Lieff Cabraser  Heimann &
Bernstein  LLP as new  lead  counsel  for  plaintiffs  and the  putative  class.
Plaintiffs  filed a third  amended  complaint on January 19,  2001.  On March 2,
2001,  the  General  Partner  and its  affiliates  filed a demurrer to the third
amended  complaint.  The demurrer is scheduled to be heard on May 14, 2001.  The
Court has also  scheduled  a hearing  on a motion  for class  certification  for
August 27, 2001.  Plaintiffs must file their motion for class  certification  no
later than June 15, 2001.  The General  Partner does not  anticipate  that costs
associated  with  this  case  will  be  material  to the  Partnership's  overall
operations.

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

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

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
discussion 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 at March 31, 2001  consisted of seven
apartment complexes. The following table sets forth the average occupancy of the
properties for each of the three month periods ended March 31, 2001 and 2000:

                                                   Average Occupancy
      Property                                      2001       2000

      Cedar Rim                                     87%        93%
        New Castle, Washington
      Hidden Cove by the Lake                       90%        95%
        Belleville, Michigan
      Lamplighter Park                              92%        97%
        Bellevue, Washington
      Park Capital                                  89%        94%
        Salt Lake City, Utah
      Sandpiper I and II                            96%        98%
        St. Petersburg, Florida
      Tamarac Village I, II, III, IV                96%        97%
        Denver, Colorado
      Williamsburg Manor                            96%        96%
        Cary, North Carolina

The  General  Partner  attributes  the  decrease  in  occupancy  at Cedar Rim to
increased competition in the area of the property.  The decrease in occupancy at
Hidden Cove by the Lake is due to more  difficult  move-in  requirements  at the
property.  The decrease in occupancy at  Lamplighter  Park is due to layoffs and
increased competition in the area of the property.  The decrease in occupancy at
Park Capital is due to  decreased  traffic due to the  permanent  closing of the
main street access from downtown Salt Lake City to the apartments.

Results of Operations

The  Partnership had net income of  approximately  $787,000 for the three months
ended March 31, 2001,  compared to  approximately  $554,000 for the three months
ended March 31, 2000.  The increase in net income is due to an increase in total
revenues  partially  offset by an increase  in total  expenses.  Total  revenues
increased  due to  increases  in both  rental and other  income.  Rental  income
increased  due to increased  average  rental  rates at all of the  Partnership's
properties  which more than offset the  decreases in occupancy at Hidden Cove by
the Lake, Park Capital,  Lamplighter Park,  Sandpiper I and II, Tamarac Village,
and Cedar Rim. Other income increased due to increased utilities  reimbursements
primarily at  Sandpiper I and II,  Tamarac  Village,  and  Lamplighter  Park and
increased corporate housing revenue at Tamarac Village and Lamplighter Park.

Total expenses increased due primarily to increased depreciation,  property tax,
and  general  and  administrative  expenses  which  were  partially  offset by a
decrease in operating  expenses.  Depreciation  expense increased due to capital
improvements  completed  during  the past  twelve  months  which  are now  being
depreciated.  Property  tax expense  increased  primarily  due to  increases  in
assessed  values at  Williamsburg  Manor,  Tamarac  Village,  and Park  Capital.
General and administrative  expenses increased due to an increase in the cost of
services  included in the management  reimbursements  to the General  Partner as
allowed  under  the  Partnership  Agreement  and  increased   professional  fees
associated with the administration of the Partnership. Also, included in general
and  administrative  expenses at March 31, 2001 and 2000,  are costs  associated
with the  quarterly and annual  communications  with  investors  and  regulatory
agencies and the annual audit required by the Partnership  Agreement.  Operating
expenses decreased due to decreased salary expenses primarily at Tamarac Village
and decreased maintenance expenses at most of the Partnership's properties.

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  March  31,  2001,  the  Partnership   held  cash  and  cash  equivalents  of
approximately $1,203,000 compared to approximately $5,195,000 at March 31, 2000.
The decrease in cash and cash  equivalents  for the three months ended March 31,
2001,  from the  Partnership's  year ended December 31, 2000, was  approximately
$807,000.  This  decrease  is due to  approximately  $1,938,000  of cash used in
financing  activities  and  approximately  $76,000  of cash  used  in  investing
activities  which was  partially  offset  by  approximately  $1,207,000  of cash
provided by operating activities. Cash used in financing activities consisted of
distributions to the partners.  Cash used in investing  activities  consisted of
property  improvements  and  replacements  which  was  partially  offset  by net
receipts from restricted  escrows.  The Partnership  invests its working capital
reserves in interest bearing 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 Registrant 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.

Cedar Rim

During  the  three  months  ended  March 31,  2001,  the  Partnership  completed
approximately  $13,000  of  capital  improvements  at the  property,  consisting
primarily of water heater replacements,  appliances, office computers and carpet
and vinyl  replacements.  These  improvements  were  funded  primarily  from the
property's  replacement  reserves.  The  Partnership  has  evaluated the capital
improvement  needs  of the  property  for  the  year.  The  amount  budgeted  is
approximately  $35,000,  consisting  primarily of carpet and vinyl replacements,
interior upgrades, and swimming pool improvements.  Additional  improvements may
be considered and will depend on the physical  condition of the property as well
as replacement reserves and anticipated cash flow generated by the property.

Hidden Cove by the Lake

During  the  three  months  ended  March 31,  2001,  the  Partnership  completed
approximately   $29,000  of  capital   improvements,   consisting  primarily  of
countertop   replacements,   carpet  and  vinyl   replacements   and  structural
improvements.  These improvements were funded from the property's operating cash
flow.  The  Partnership  has  evaluated  the  capital  improvement  needs of the
property for the year. The amount budgeted is approximately $175,000, consisting
primarily of gas submetering,  door repairs, swimming pool improvements,  ground
lighting, and carpet replacement.  Additional improvements may be considered and
will depend on the physical  condition  of the  property as well as  replacement
reserves and anticipated cash flow generated by the property.

Lamplighter Park

During  the  three  months  ended  March 31,  2001,  the  Partnership  completed
approximately  $24,000 of capital  improvements,  consisting  primarily of water
heater  replacements,   window  treatments,  carpet  replacements,  and  grounds
lighting.   These  improvements  were  funded  from  replacement  reserves.  The
Partnership has evaluated the capital  improvement needs of the property for the
year. The amount  budgeted is  approximately  $58,000,  consisting  primarily of
plumbing upgrades,  carpet and vinyl replacements,  lighting  improvements,  and
heating improvements.  Additional improvements may be considered and will depend
on the physical  condition of the property as well as  replacement  reserves and
anticipated cash flow generated by the property.

Park Capital

During  the  three  months  ended  March 31,  2001,  the  Partnership  completed
approximately $54,000 of capital improvements,  consisting primarily of signage,
office equipment,  office  computers,  structural  improvements,  and carpet and
vinyl replacements. These improvements were funded from operating cash flow. The
Partnership has evaluated the capital  improvement needs of the property for the
year. The amount  budgeted is  approximately  $69,000,  consisting  primarily of
carpet and vinyl  replacements,  major landscaping,  appliances,  and structural
improvements.  Additional  improvements may be considered and will depend on the
physical  condition  of  the  property  as  well  as  replacement  reserves  and
anticipated cash flow generated by the property.

Tamarac Village

During  the  three  months  ended  March 31,  2001,  the  Partnership  completed
approximately $135,000 of capital improvements, consisting primarily of lighting
upgrades, appliances,  structural improvements,  cabinet replacements,  interior
decoration, carpet and vinyl replacements,  and garage and carport improvements.
These  improvements  were funded from  replacement  reserves and operating  cash
flow.  The  Partnership  has  evaluated  the  capital  improvement  needs of the
property for the year. The amount budgeted is approximately $408,000, consisting
primarily  of carpet  replacements,  remodeling  and  upgrading  the  clubhouse,
installing  a double  set of doors at the ATM  machine,  and roof  replacements.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition of the property as well as replacement  reserves and anticipated  cash
flow generated by the property.

Williamsburg Manor

During  the  three  months  ended  March 31,  2001,  the  Partnership  completed
approximately  $25,000 of capital  improvements,  consisting  primarily of water
heater  replacements,  plumbing  fixtures,  carpet and vinyl  replacements,  and
structural  improvements.  These  expenditures  were funded from  operating cash
flow.  The  Partnership  has  evaluated  the  capital  improvement  needs of the
property for the year. The amount budgeted is approximately $50,000,  consisting
primarily of air conditioning unit replacement,  window  treatments,  and carpet
and vinyl  replacements.  Additional  improvements  may be  considered  and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flow generated by the property.

Sandpiper I and II

During  the  three  months  ended  March 31,  2001,  the  Partnership  completed
approximately  $33,000 of capital improvements  consisting primarily of plumbing
fixtures,   cabinet  replacements,   carpet  replacements,   appliances,   major
landscaping,  and structural  improvements.  These improvements were funded from
replacement  reserves and operating cash flow. The Partnership has evaluated the
capital  improvement  needs of the property for the year. The amount budgeted is
approximately  $183,000,  consisting  primarily  of exterior  painting,  cabinet
replacements,  carpet and vinyl replacements, and fitness equipment.  Additional
improvements may be considered and will depend on the physical  condition of the
property as well as replacement  reserves and anticipated cash flow generated by
the property.

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

The Partnership's  current assets are thought to be sufficient for any near-term
needs  (exclusive  of capital  improvements)  of the  Registrant.  The  mortgage
indebtedness  of  $27,925,000  has maturity  dates ranging from November 2003 to
December 2005. The General  Partner will attempt to refinance such  indebtedness
and/or sell the  properties  prior to such  maturity  dates.  If the  properties
cannot be refinanced or sold for a sufficient  amount,  the  Registrant may risk
losing such properties through foreclosure.

The  Partnership  paid  distributions  of  cash  generated  from  operations  of
approximately  $1,938,000  (approximately  $1,919,000 to the limited partners or
$5.01 per limited  partnership  unit)  during the three  months  ended March 31,
2001. The Partnership  paid  distributions  of cash generated from operations of
approximately  $1,497,000  (approximately  $1,482,000 to the limited partners or
$3.87 per limited  partnership  unit) for the three months ended March 31, 2000.
Subsequent  to  March  31,  2001,   the  General   Partner   declared  and  paid
distributions from operations of approximately $947,000  (approximately $938,000
to the  limited  partners or $2.45 per limited  partnership  unit).  Future cash
distributions  will  depend on the  levels of cash  generated  from  operations,
timing  of  debt  maturities,  refinancings,  and/or  property  sales,  and  the
availability of cash reserves. The Partnership's distribution policy is reviewed
on a monthly basis.  There can be no assurance,  however,  that the  Partnership
will  generate   sufficient   funds  from  operations   after  required  capital
expenditures  to  permit  further  distributions  to  its  partners  during  the
remainder of 2001 or subsequent periods.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,   AIMCO  and  its  affiliates   currently  own  195,659.9   limited
partnership  units in the  Partnership  representing  51.08% of the  outstanding
units.  A number of these units were acquired  pursuant to tender offers made by
AIMCO or its  affiliates.  It is possible that AIMCO or its affiliates 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.  Under the Partnership  Agreement,  unitholders  holding a
majority of the Units are  entitled to take action with  respect to a variety of
matters, which would include without limitation, voting on certain amendments to
the Partnership  Agreement and voting to remove the General Partner. As a result
of its ownership of 51.08% of the outstanding  units,  AIMCO is in a position to
influence all voting  decisions with respect to the  Registrant.  When voting on
matters,  AIMCO would in all  likelihood  vote the Units it acquired in a manner
favorable to the interest of the General  Partner  because of their  affiliation
with the General Partner.



<PAGE>



                           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 the Superior Court of the State of California
for the County of San Mateo. The plaintiffs  named as defendants,  among others,
the   Partnership,   its  General  Partner  and  several  of  their   affiliated
partnerships  and corporate  entities.  The action  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,  among other things,  the  acquisition of interests in
certain general partner entities by Insignia Financial Group, Inc.  ("Insignia")
and entities which were, at one time, affiliates of Insignia; past tender offers
by the Insignia affiliates to acquire limited  partnership units;  management of
the  partnerships  by the  Insignia  affiliates;  and the Insignia  Merger.  The
plaintiffs  seek  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  filed an amended  complaint.  The General Partner filed demurrers to
the amended complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December  14,  1999,  the General  Partner  and its  affiliates  terminated  the
proposed settlement.  In February 2000, counsel for some of the named plaintiffs
filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated
the settlement.  On June 27, 2000, the Court entered an order disqualifying them
from the case and an appeal was taken  from the order on  October  5,  2000.  On
December 4, 2000, the Court  appointed the law firm of Lieff Cabraser  Heimann &
Bernstein  LLP as new  lead  counsel  for  plaintiffs  and the  putative  class.
Plaintiffs  filed a third  amended  complaint on January 19,  2001.  On March 2,
2001,  the  General  Partner  and its  affiliates  filed a demurrer to the third
amended  complaint.  The demurrer is scheduled to be heard on May 14, 2001.  The
Court has also  scheduled  a hearing  on a motion  for class  certification  for
August 27, 2001.  Plaintiffs must file their motion for class  certification  no
later than June 15, 2001.  The General  Partner does not  anticipate  that costs
associated  with  this  case  will  be  material  to the  Partnership's  overall
operations.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a) Exhibits:

               None.

            b) Reports  on Form 8-K filed  during the  quarter  ended  March 31,
               2001:

               None.




<PAGE>



                                   SIGNATURES



Pursuant to the requirements of the Exchange Act, 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 J. Foye
                                          Patrick J. Foye
                                          Executive Vice President


                                    By:   /s/Martha L. Long
                                          Martha L. Long
                                          Senior Vice President
                                          and Controller


                                    Date: