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
                        September 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 September 30, 1997 and December 31, 1996
<CAPTION>
                                        UNAUDITED      AUDITED
                                      SEPTEMBER 30,  DECEMBER 31,
         ASSETS                            1997           1996
-------------------------------         ----------   ------------
<S>                                      <C>            <C>
INVESTMENT PROPERTIES, (net of
accumulated depreciation of
$1,636,586 and $1,517,554,
respectively)                            4,005,348      4,114,763

CASH AND CASH EQUIVALENTS                  285,440        383,182

RENT AND OTHER RECEIVABLES                   5,445          1,820

OTHER ASSETS                                 3,339          3,327

NOTES RECEIVABLE (net of allowance of
$61,064 and $60,427, respectively)               0              0

DEFERRED CHARGES (net of allowance of
$10,125 and $9,000, respectively)            4,875          6,000
                                        ----------     ----------

TOTAL ASSETS                             4,304,447      4,509,092
                                        ==========     ==========
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------

ACCOUNTS PAYABLE AND ACCRUED EXPENSES       69,932         74,711
TENANT SECURITY DEPOSITS                    61,648         56,495
PREPAID RENT                                 2,104          6,959
                                        ----------     ----------
TOTAL LIABILITIES                          133,684        138,165

LIMITED PARTNERS' CAPITAL                4,121,048      4,323,648
GENERAL PARTNERS' CAPITAL                   49,715         47,279
                                        ----------     ----------
TOTAL PARTNERS' CAPITAL                  4,170,763      4,370,927
                                        ----------     ----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL  4,304,447      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 nine months ended September 30, 1997 and 1996
  
                                  UNAUDITED
<CAPTION>
                     3 MONTHS   9 MONTHS   3 MONTHS  9 MONTHS   
                       ended     ended      ended     ended
                    SEPT. 30,  SEPT. 30,  SEPT. 30, SEPT. 30,
                       1997       1997       1996      1996
                     --------   --------   --------  --------
<S>                    <C>      <C>         <C>     <C> 
REVENUE:
 Rental income         192,082    569,547   184,530   675,209
 Restaurant sales      166,588    466,756   160,604   455,597
 Gain on sale                0          0    (4,188)  368,751
 Interest and other
   income               14,702     36,904    24,872    54,310
                      --------   --------  --------  --------
                       373,372  1,073,207   365,818 1,553,867

EXPENSES:
 Operating and
  administrative       101,718    297,958    90,270   300,809 
 Restaurant operating
  expenses             143,116    377,060   124,431   349,372
 Management fees        11,828     34,474    11,145    39,877
 Depreciation and
   amortization         40,178    120,157    39,770   150,068
                       --------   -------- --------  --------
                       296,840    829,649   265,616   840,126
                      --------   --------  --------  --------
NET INCOME              76,532    243,558   100,202   713,741
                      ========   ========  ========  ========




<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 nine months ended September 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                      2,436       241,122      243,558

CASH DISTRIBUTIONS                  0      (443,722)    (443,722)
                           ----------     ----------   ----------

BALANCE, September 30, 1997    49,715     4,121,048    4,170,763
                           ==========    ==========   ==========


<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 nine months ended September 30, 1997 and 1996

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

Net income (loss)                    243,558             713,741
Adjustments to reconcile net
 income to net cash provided
 by operating activities:
     Depreciation and
      amortization expense           120,157             150,068
Gain on sale of assets                     0            (368,751)
Change in assets and liabilities:
     Accounts receivable              (3,625)            (12,381)
     Notes receivable                      0              10,000
     Other assets                        (12)              2,149
     Accounts payable and
      accrued expenses                (4,779)            (95,687)
     Tenants' security deposits        5,153             (14,038)
     Prepaid Rent                     (4,855)                  0
                                   ----------           ----------
Net Cash provided by
 operating activities:               355,597             385,101

CASH FLOWS FROM INVESTING
 ACTIVITIES:

  Net proceeds from
     sale of assets                        0           1,684,888
  Acquisitions of and additions to
   investment properties              (9,617)                  0
                                   ----------         ----------
  Net Cash used in
  investing activities                (9,617)          1,684,888
                                  -----------          ----------






                                   I-4
                                  
CASH FLOWS FROM FINANCING
 ACTIVITIES:

 Cash distributions paid            (443,722)         (2,121,717)
                                  ----------          ----------
Net cash provided by (used
in) financing activities            (443,722)         (2,121,717)
                                  ----------          ----------
Net increase (decrease)
 in cash                             (97,742)            (51,728)

Cash at beginning of period          383,182             502,133
                                  ----------          ----------
Cash at end of period                285,440             450,405
                                  ==========          ==========


<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 nine
months ended September 30 was $355,597 in 1997 and $385,101 in
1996, primarily from earnings and depreciation (amortization).

The reduction in actual cash flow from 1996 to 1997 is primarily a
result of the loss of income from the two properties that were
sold in 1996.

The Partnership operates a Rocky Rococo restaurant in Milwaukee,
Wisconsin.  The restaurant contributed $83,174 to cash flow in
the period ending September 30, 1997 compared to $98,983 for the
first nine months of 1996.  The primary reasons for the decreased
cash flow are increased labor and maintenance costs.





                              I-7



As of September 30, 1997, the Partnership had cash of approximately
$285,000 representing undistributed cash flow, working capital
reserves, and tenant's security deposits.  Current liabilities
amounted to approximately $134,000.

Results of Operations:

Gross rental revenues for the nine months ended September 30 were
$569,547 in 1997 versus $675,209 in 1996.  Operating expenses,
excluding restaurant operations, from rental properties for the
nine months ended September 30 were $297,958 in 1997 and $300,809
in 1996.  The decrease in rental revenues is primarily due to the
sale of the warehouse and mobile home park in 1996.

Net Income for the nine months ended September 30 was $243,558 in
1997 and $713,741 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 $469,628 generated $61,145 of net income for the partnership
during the first nine months of 1997 compared to revenues of
$457,505 and net income of $77,167 for the first nine months of
1996.  The decrease in net income is due to increased labor and
maintenance costs.

                               
<TABLE>
The following is a listing of the approximate average physical
occupancy rates for the Partnership's mobile home parks during
the nine months ended September 30, 1997 and calendar year 1996:
<CAPTION>

                                   9 Months       Calendar
                                ended September     Year
                                   30, 1997         1996
                                 -----------      --------
     <S>                              <C>            <C>
     1.   Forest Junction             91%            90%
     2.   Cloverleaf                  94%            88%
     3.   Shamrock                    98%            98%

</TABLE>






                                
                                I-8




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-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:  November 12, 1997               Robert A. Long           
                                       --------------------------
                                       Robert A. Long
                                       General Partner