United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

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

                     For the quarterly period ended September 30, 2002


[ ]   TRANSITION REPORT UNDER 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)

<PAGE>



                         PART I - FINANCIAL INFORMATION


ITEM 1.     FINANCIAL STATEMENTS



                      CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

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

                               September 30, 2002

<TABLE>
<CAPTION>

Assets
<S>                                                                       <C>
   Cash and cash equivalents                                              $ 1,372
   Receivables and deposits                                                   833
   Restricted escrows                                                         249
   Other assets                                                             1,349
   Investment properties:
      Land                                               $ 8,641
      Buildings and related personal property              49,579
                                                           58,220
      Less accumulated depreciation                       (24,877)         33,343
                                                                         $ 37,146
Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                        $ 262
   Tenant security deposit liabilities                                        288
   Accrued property taxes                                                     456
   Other liabilities                                                          982
   Mortgage notes payable                                                  46,732

Partners' Deficit
   General partner                                        $ (956)
   Limited partners (383,033 units outstanding)           (10,618)        (11,574)
                                                                         $ 37,146



                       See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

                 CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

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

<TABLE>
<CAPTION>

                                            For the Three Months      For the Nine Months
                                            Ended September 30,       Ended September 30,
                                             2002         2001         2002        2001
Revenues:                                              (Restated)               (Restated)
<S>                                         <C>          <C>         <C>          <C>
  Rental income                             $ 2,685      $ 3,182     $ 8,556      $ 9,635
  Other income                                  334          290       1,066          946
  Casualty gain                                  19           --         268           --
      Total revenues                          3,038        3,472       9,890       10,581

Expenses:
  Operating                                   1,096        1,191       3,428        3,590
  General and administrative                    150          157         450          522
  Depreciation                                  719          709       2,203        2,175
  Interest                                      886          889       2,662        1,964
  Property taxes                                212          177         594          576
  Loss on early extinguishment of debt           --           56          --          156
      Total expenses                          3,063        3,179       9,337        8,983

Net (loss) income                            $ (25)       $ 293       $ 553       $ 1,598

Net income allocated to general
  partner (1%)                               $ --          $ 3         $ 6         $ 16
Net (loss) income allocated to
  limited partners (99%)                        (25)         290         547        1,582

                                             $ (25)       $ 293       $ 553       $ 1,598

Net (loss) income per limited
  partnership unit                          $ (0.06)     $ 0.76       $ 1.43      $ 4.13

Distributions per limited
  partnership unit                          $ 0.67       $ 45.64      $ 1.65      $ 53.09

                       See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

                      CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                   STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
                                   (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 at
   December 31, 2001                  383,033       $ (956)     $(10,534)   $(11,490)

Distributions to partners                  --            (6)        (631)       (637)

Net income for the nine months
   ended September 30, 2002                --             6          547         553

Partners' deficit at
   September 30, 2002                 383,033       $ (956)     $(10,618)   $(11,574)

                       See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

                      CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES/3

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                   Nine Months Ended
                                                                     September 30,
                                                                     2002       2001
Cash flows from operating activities:
<S>                                                                <C>        <C>
  Net income                                                       $ 553      $ 1,598
  Adjustments to reconcile net income to net cash
   provided by operating activities:
      Casualty gain                                                  (268)         --
      Depreciation                                                  2,203       2,175
      Amortization of loan costs                                       88          85
      Loss on early extinguishment of debt                             --         156
      Casualty loss                                                    --           9
      Change in accounts:
        Receivables and deposits                                       39        (128)
        Other assets                                                  (77)       (103)
        Accounts payable                                              115         (88)
        Tenant security deposit liabilities                           (27)         (8)
        Accrued property taxes                                        245         287
        Other liabilities                                             569         (47)
         Net cash provided by operating activities                  3,440       3,936

Cash flows from investing activities:
  Property improvements and replacements                           (1,894)     (1,436)
  Net (deposits to) receipts from restricted escrows                  (41)         94
  Insurance proceeds received                                         633          13
         Net cash used in investing activities                     (1,302)     (1,329)

Cash flows from financing activities:
  Repayment of mortgage notes payable                                (639)    (17,100)
  Proceeds from mortgage notes payable                                 --      36,860
  Loan costs paid                                                      --      (1,137)
  Payments on mortgage note payable                                    --        (115)
  Distributions to partners                                          (637)    (20,542)
         Net cash used in financing activities                     (1,276)     (2,034)

Net increase in cash and cash equivalents                             862         573

Cash and cash equivalents at beginning of period                      510       2,010

Cash and cash equivalents at end of period                        $ 1,372     $ 2,583

Supplemental disclosure of cash flow information:
  Cash paid for interest                                          $ 2,580     $ 1,767

At  December  31,  2001,  approximately  $21,000 of  property  improvements  and
replacements  were  included in accounts  payable which are included in property
improvements and replacements during the nine months ended September 30, 2002.


                       See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

                 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"),  a publicly  traded real estate  investment  trust,  all  adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation have been included.  Operating results for the three and nine month
periods ended September 30, 2002, are not necessarily  indicative of the results
that may be expected for the fiscal year ending  December 31, 2002.  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, 2001.

Effective  April  1,  2002,  the  Partnership  adopted  Statement  of  Financial
Accounting  Standards ("SFAS") No. 145, "Rescission of FASB Statements No. 4, 44
and 64". SFAS No. 4 "Reporting  Gains and Losses from  Extinguishment  of Debt,"
required  that all gains and losses from  extinguishment  of debt be  aggregated
and, if material,  classified as an  extraordinary  item.  SFAS No. 145 rescinds
SFAS No. 4, and accordingly, gains and losses from extinguishment of debt should
only be  classified  as  extraordinary  if they are  unusual in nature and occur
infrequently. Neither of these criteria applies to the Partnership. As a result,
the accompanying statements of operations have been restated to reflect the loss
on early extinguishment of debt at Tamarac Village,  Lamplighter Park, Cedar Rim
and Hidden  Cove  Apartments  (see  "Note C") in  operations  rather  than as an
extraordinary item.

Note B - Transactions with Affiliated Parties

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.

During the nine months  ended  September  30, 2002 and 2001,  affiliates  of the
General  Partner were  entitled to receive 5% of gross  receipts from all of the
Partnership's  properties  as  compensation  for providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $506,000 and
$537,000 for  management  fees for the nine months ended  September 30, 2002 and
2001, respectively, which is included in operating expenses.

Affiliates  of  the  General  Partner  received   reimbursement  of  accountable
administrative expenses amounting to approximately $475,000 and $780,000 for the
nine months ended September 30, 2002 and 2001,  respectively,  which is included
in investment  properties and general and administrative  expenses.  Included in
these amounts are fees related to construction  management  services provided by
an affiliate  of the  Managing  General  Partner of  approximately  $129,000 and
$412,000 for the nine months ended  September  30, 2002 and 2001,  respectively.
The  construction  management  fees  are  calculated  based on a  percentage  of
additions to investment properties.

In addition to  reimbursement  for services of  affiliates,  an affiliate of the
General  Partner earned  $369,000 for services  related to the  refinancings  of
Lamplighter Park,  Tamarac Village,  Cedar Rim and Hidden Cove Apartments during
the nine months ended September 30, 2001.  These costs were  capitalized and are
included in other assets on the balance sheet.

Beginning in 2001, the  Partnership  began insuring its properties up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability. The Partnership insures its properties above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated  with the General  Partner.  During the nine months ended September
30,  2002 and 2001,  the  Partnership  was  charged by AIMCO and its  affiliates
approximately  $125,000 and $158,000,  respectively,  for insurance coverage and
fees associated with policy claims administration.

Note C - Refinancings of Mortgage Notes Payable

On June 27, 2001, the Partnership  refinanced the mortgage  encumbering  Tamarac
Village  Apartments.  The refinancing  replaced  indebtedness  of  approximately
$9,400,000 with a new mortgage of $21,000,000. The new mortgage carries a stated
interest  rate of  7.45%  as  compared  to the  7.33%  interest  rate on the old
mortgage.  Payments on the mortgage  loan are due monthly until the loan matures
on July 1, 2021 at which time the loan is  scheduled to be fully  amortized.  In
addition,  the  Partnership  was  required  to  establish  a  repair  escrow  of
approximately  $136,000 with the lender for certain capital replacements.  Total
capitalized  loan costs were  approximately  $604,000  for the nine months ended
September   30,  2001.   The   Partnership   recognized  a  loss  on  the  early
extinguishment  of  debt  of  approximately  $66,000  due  to the  write-off  of
unamortized loan costs.

On  June  29,  2001,  the  Partnership   refinanced  the  mortgage   encumbering
Lamplighter  Park   Apartments.   The  refinancing   replaced   indebtedness  of
approximately  $3,500,000  with a new mortgage of  $8,000,000.  The new mortgage
carries a stated  interest rate of 7.48% as compared to the 7.33%  interest rate
on the old  mortgage.  Payments on the mortgage  loan are due monthly  until the
loan  matures  on July 1, 2021 at which time the loan is  scheduled  to be fully
amortized.  In  addition,  the  Partnership  was  required to establish a repair
escrow of approximately $2,000 with the lender for certain capital replacements.
Total  capitalized  loan costs were  approximately  $247,000 for the nine months
ended  September  30,  2001.  The  Partnership  recognized  a loss on the  early
extinguishment  of  debt  of  approximately  $34,000  due  to the  write-off  of
unamortized loan costs.

On July 23, 2001, the Partnership  refinanced the mortgage encumbering Cedar Rim
Apartments.  The refinancing replaced  indebtedness of approximately  $2,000,000
with a new mortgage of $5,000,000.  The new mortgage  carries a stated  interest
rate of  7.49% as  compared  to the  7.33%  interest  rate on the old  mortgage.
Payments on the mortgage  loan are due monthly  until the loan matures on August
1,  2021 at which  time  the loan is  scheduled  to be  fully  amortized.  Total
capitalized  loan costs were  approximately  $166,000  for the nine months ended
September   30,  2001.   The   Partnership   recognized  a  loss  on  the  early
extinguishment  of  debt  of  approximately  $28,000  due  to the  write-off  of
unamortized loan costs.

On September  19, 2001,  the  Partnership  refinanced  the mortgage  encumbering
Hidden Cove Apartments.  The refinancing replaced  indebtedness of approximately
$2,200,000 with a new mortgage of $2,860,000.  The new mortgage carries a stated
interest  rate of  6.81%  as  compared  to the  7.33%  interest  rate on the old
mortgage.  Payments on the mortgage  loan are due monthly until the loan matures
on October 1, 2021 at which time the loan is scheduled to be fully amortized. In
addition,  the  Partnership  was  required  to  establish  a  repair  escrow  of
approximately  $152,000 with the lender for certain capital replacements.  Total
capitalized  loan costs were  approximately  $120,000  for the nine months ended
September   30,  2001.   The   Partnership   recognized  a  loss  on  the  early
extinguishment  of  debt  of  approximately  $28,000  due  to the  write-off  of
unamortized loan costs.

Note D - Casualty Events

In July 2001, a rain storm occurred at Tamarac Village  Apartments  which caused
water damage to the complex.  During the nine months  ended  September  30, 2002
insurance proceeds of approximately $31,000 were received and assets and related
accumulated  depreciation  with a net book value of  approximately  $24,000 were
written off.  This  resulted in a casualty  gain of  approximately  $7,000 being
recognized during the nine months ended September 30, 2002.

In October 2001, a fire occurred at  Lamplighter  Park  Apartments  which caused
damage to thirty  units of the complex.  During the nine months ended  September
30, 2002 insurance  proceeds of approximately  $535,000 were received and assets
and  related  accumulated  depreciation  with a net book value of  approximately
$289,000 were  written-off.  This  resulted in a casualty gain of  approximately
$246,000 being recognized during the nine months ended September 30, 2002.

In January 2002, a fire  occurred at Sandpiper I and II Apartments  which caused
damage to two units of the complex.  During the nine months ended  September 30,
2002 insurance  proceeds of  approximately  $42,000 were received and assets and
related accumulated  depreciation with a net book value of approximately $27,000
were written off.  This  resulted in a casualty  gain of  approximately  $15,000
being recognized during the nine months ended September 30, 2002.

Note E - 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. (the "Nuanes action") 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 series of
transactions  which  closed on October 1, 1998 and  February  26,  1999  whereby
Insignia and Insignia  Properties Trust,  respectively,  were merged into AIMCO.
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.  On May 14, 2001,  the Court heard the demurrer to the third
amended  complaint.  On July 10,  2001,  the Court  issued  an order  sustaining
defendants'  demurrer on certain grounds.  On July 20, 2001,  Plaintiffs filed a
motion for  reconsideration  of the Court's July 10, 2001 order granting in part
and denying in part defendants' demurrer. On September 7, 2001, Plaintiffs filed
a fourth amended class and derivative action  complaint.  On September 12, 2001,
the Court denied Plaintiffs' motion for reconsideration. On October 5, 2001, the
General Partner and affiliated defendants filed a demurrer to the fourth amended
complaint,  which was heard on December 11, 2001. On February 2, 2002, the Court
served its order granting in part the demurrer.  The Court has dismissed without
leave  to amend  certain  of the  plaintiffs'  claims.  On  February  11,  2002,
plaintiffs  filed a motion seeking to certify a putative class  comprised of all
non-affiliated  persons  who own or have owned  units in the  partnerships.  The
General Partner and affiliated  defendants oppose the motion. On April 29, 2002,
the Court held a hearing on plaintiffs' motion for class  certification and took
the matter under submission after further briefing, as ordered by the court, was
submitted by the parties.  On July 10, 2002, the Court entered an order vacating
the  current  trial  date of  January  13,  2003 (as well as the  pre-trial  and
discovery cut-off dates) and stayed the case in its entirety through November 7,
2002 so that the  parties  can have an  opportunity  to discuss  settlement.  On
October  30,  2002,  the court  entered  an order  extending  the stay in effect
through January 10, 2003.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the General Partner and affiliated defendants
moved to strike the first  amended  complaint in its entirety for  violating the
Court's  July 10, 2001 order  granting  in part and denying in part  defendants'
demurrer in the Nuanes action, or  alternatively,  to strike certain portions of
the  complaint  based on the statute of  limitations.  Other  defendants  in the
action demurred to the fourth amended complaint,  and,  alternatively,  moved to
strike the  complaint.  On December  11, 2001,  the court heard  argument on the
motions and took the matters under  submission.  On February 4, 2002,  the Court
served  notice of its order  granting  defendants'  motion to strike  the Heller
complaint  as a violation  of its July 10, 2001 order in the Nuanes  action.  On
March 27, 2002, the plaintiffs  filed a notice  appealing the order striking the
complaint. The parties are currently in the midst of briefing that appeal.

The  General  Partner  does not  anticipate  that any  costs,  whether  legal or
settlement  costs,   associated  with  these  cases  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.


<PAGE>




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

The Private  Securities  Litigation  Reform Act of 1995 provides a "safe harbor"
for forward-looking  statements in certain circumstances.  The matters discussed
in this report contain certain forward-looking  statements,  including,  without
limitation,  statements regarding future financial performance and the effect of
government regulations. The discussions of the Registrant's business and results
of operations,  including forward-looking statements pertaining to such matters,
do not take into account the effects of any changes to the Registrant's business
and  results of  operations.  Actual  results may differ  materially  from those
described in the forward-looking statements and will be affected by a variety of
risks and factors  including,  without  limitation:  national and local economic
conditions; the terms of governmental regulations that affect the Registrant and
interpretations of those regulations;  the competitive  environment in which the
Registrant  operates;  financing risks,  including the risk that cash flows from
operations  may be  insufficient  to meet  required  payments of  principal  and
interest;  real estate risks, including variations of real estate values and the
general  economic  climate in local markets and  competition for tenants in such
markets; and possible environmental liabilities. Readers should carefully review
the Registrant's financial statements and the notes thereto, as well as the risk
factors  described in the documents the Registrant  files from time to time with
the Securities and Exchange Commission.

The Partnership's investment properties at September 30, 2002 consisted of seven
apartment complexes. The following table sets forth the average occupancy of the
properties for each of the nine month periods ended September 30, 2002 and 2001:

                                                   Average Occupancy
      Property                                      2002       2001

      Cedar Rim                                     92%        90%
        New Castle, Washington
      Hidden Cove by the Lake                       96%        88%
        Belleville, Michigan
      Lamplighter Park                              68%        94%
        Bellevue, Washington
      Park Capital                                  91%        92%
        Salt Lake City, Utah
      Sandpiper I and II                            94%        96%
        St. Petersburg, Florida
      Tamarac Village I, II, III, IV                87%        94%
        Denver, Colorado
      Williamsburg Manor                            90%        95%
        Cary, North Carolina

The General  Partner  attributes  the  increase in  occupancy  at Hidden Cove to
capital  improvements at the property which improved its curb appeal and reduced
rental rates.  The decrease in occupancy at Lamplighter  Park is due to 30 units
damaged by a fire in October 2001 and the reconstruction  which has impacted the
rental of the  remaining  units.  The decrease in  occupancy at Tamarac  Village
Apartments  is due to the slow  economy in the local  market.  The  decrease  in
occupancy at Williamsburg  Manor  Apartments is due to more tenants buying homes
due to lower interest rates and increased competition in the local market.

Results of Operations

The  Partnership  realized  net income of  approximately  $553,000  for the nine
months  ended  September  30, 2002 as  compared  to net income of  approximately
$1,598,000 for the nine months ended  September 30, 2001. The  Partnership had a
net loss of approximately  $25,000 for the three months ended September 30, 2002
as compared to net income of  approximately  $293,000 for the three months ended
September  30, 2001.  The decrease in net income for the nine month period ended
September  30,  2002 is due to a decrease in total  revenues  and an increase in
total expenses.  The decrease in net income for the three months ended September
30, 2002 is due to a decrease in total revenues  partially  offset by a decrease
in total expenses.

Total revenues  decreased for the three and nine months ended September 30, 2002
due to a decrease in rental income partially offset by increases in other income
and casualty gain.  Rental income decreased for the three and nine month periods
ended  September  30, 2002 due to  decreased  occupancy at  Williamsburg  Manor,
Tamarac  Village,  Sandpiper  I  and  II,  Park  Capital  and  Lamplighter  Park
Apartments and an increase in bad debt expense at Tamarac Village,  Williamsburg
Manor,  Sandpiper I and II and Cedar Rim  Apartments and reduced rental rates at
all of the Partnership's properties.  Other income increased due to increases in
utility reimbursements at Tamarac Village,  Sandpiper I and II, Park Capital and
Cedar Rim Apartments and late charges at Tamarac Village,  Hidden Cove and Cedar
Rim Apartments  partially  offset by a decrease in interest  income due to lower
interest  rates and lower average cash balances  maintained in interest  bearing
accounts at all of the Partnership's properties.

Total  expenses  increased  for the nine  months  ended  September  30, 2002 due
primarily  to  increased  interest  expense  partially  offset by  decreases  in
operating  and  general  and  administrative  expenses  and the  loss  on  early
extinguishment  of debt.  Total  expenses  decreased  for the three months ended
September 30, 2002 due primarily to decreased  operating expense and the loss on
early  extinguishment  of debt.  Interest expense  increased for the nine months
ended  September 30, 2002 due to the  refinancings  during 2001 of the mortgages
encumbering  Tamarac  Village,  Hidden  Cove,  Lamplighter  Park,  and Cedar Rim
Apartments  which  increased  the  debt  balance  at each of  these  properties.
Operating  expenses  decreased  for the  three  and  nine  month  periods  ended
September  30, 2002  primarily  due to  decreased  maintenance  expenses  due to
reduced  supplies  purchased  primarily  at  Tamarac  Village  and  Hidden  Cove
Apartments.  The decrease in loss on early  extinguishment of debt for the three
and nine month periods ended September 30, 2002 relates to the 2001  refinancing
of the mortgages encumbering Tamarac Village, Hidden Cove, Lamplighter Park, and
Cedar Rim Apartments in 2001 as discussed in "Liquidity and Capital  Resources".
General  and  administrative  expenses  decreased  for  the  nine  months  ended
September  30, 2002  primarily  due to decreases in  accountable  administrative
expenses  and  professional  fees  associated  with  the  administration  of the
Partnership.  Included in general and administrative  expenses at both September
30, 2002 and 2001 are  reimbursements  to the Managing  General  Partner allowed
under  the  Partnership   Agreement   associated  with  its  management  of  the
Partnership.  Also included are costs  associated  with the quarterly and annual
communications  with  investors  and  regulatory  agencies  and the annual audit
required by the Partnership Agreement.

In July 2001, a rain storm occurred at Tamarac Village  Apartments  which caused
water damage to the complex.  During the nine months  ended  September  30, 2002
insurance proceeds of approximately $31,000 were received and assets and related
accumulated  depreciation  with a net book value of  approximately  $24,000 were
written off.  This  resulted in a casualty  gain of  approximately  $7,000 being
recognized during the nine months ended September 30, 2002.

In October 2001, a fire occurred at  Lamplighter  Park  Apartments  which caused
damage to thirty  units of the complex.  During the nine months ended  September
30, 2002 insurance  proceeds of approximately  $535,000 were received and assets
and  related  accumulated  depreciation  with a net book value of  approximately
$289,000 were  written-off.  This  resulted in a casualty gain of  approximately
$246,000 being recognized during the nine months ended September 30, 2002.

In January 2002, a fire  occurred at Sandpiper I and II Apartments  which caused
damage to two units of the complex.  During the nine months ended  September 30,
2002 insurance  proceeds of  approximately  $42,000 were received and assets and
related accumulated  depreciation with a net book value of approximately $27,000
were written off.  This  resulted in a casualty  gain of  approximately  $15,000
being recognized during the nine months ended September 30, 2002.

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  September  30,  2002,  the  Partnership  held cash and cash  equivalents  of
approximately  $1,372,000 compared to approximately  $2,583,000 at September 30,
2001.  The  increase  in cash and cash  equivalents  for the nine  months  ended
September 30, 2002,  from the  Partnership's  year ended  December 31, 2001, was
approximately $862,000. This increase is due to approximately $3,440,000 of cash
provided by operating  activities  which was partially  offset by  approximately
$1,302,000 of cash used in investing activities and approximately  $1,276,000 of
cash used in financing  activities.  Cash used in investing activities consisted
of property improvements and replacements and net deposits to restricted escrows
partially  offset  by  insurance  proceeds  received.  Cash  used  in  financing
activities  consisted  of  principal  payments  on  mortgage  notes  payable and
distributions  to the  partners.  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 Partnership and to comply with Federal,
state, and local legal and regulatory requirements. The General Partner monitors
developments in the area of legal and regulatory  compliance and is studying new
federal laws,  including the  Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act
of 2002  mandates  or suggests  additional  compliance  measures  with regard to
governance,  disclosure,  audit and other areas. In light of these changes,  the
Partnership  expects that it will incur higher  expenses  related to compliance,
including increased legal and audit fees. Capital  improvements planned for each
of the Partnership's properties are detailed below.

Cedar Rim

During the nine months ended  September  30,  2002,  the  Partnership  completed
approximately  $142,000 of budgeted and unbudgeted  capital  improvements at the
property, consisting primarily of balcony improvements,  structural improvements
and  floor  covering  replacements.  These  improvements  were  funded  from the
property's  operating  cash flow. For 2002,  the  Partnership  has evaluated the
capital  improvement  needs of the property for the year. The amount budgeted is
approximately  $48,000,  consisting  primarily of floor  covering  replacements.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition  of the  property as well as  anticipated  cash flow  generated by the
property.

Hidden Cove by the Lake

During the nine months ended  September  30,  2002,  the  Partnership  completed
approximately  $132,000 of capital  improvements,  consisting  primarily  of air
conditioning and floor covering  replacements,  major landscaping and structural
improvements.  These improvements were funded from the property's operating cash
flow. For 2002, the Partnership has evaluated the capital  improvement  needs of
the  property  for the year.  The amount  budgeted  is  approximately  $151,000,
consisting primarily of structural improvements and floor covering replacements.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition  of the  property as well as  anticipated  cash flow  generated by the
property.

Lamplighter Park

During the nine months ended  September  30,  2002,  the  Partnership  completed
approximately   $917,000  of  budgeted  and  unbudgeted  capital   improvements,
consisting  primarily of  construction in progress on units damaged in a fire in
October 2001, swimming pool upgrades,  and floor covering and roof replacements.
These improvements were funded from operating cash flow and insurance  proceeds.
For 2002, the  Partnership  has evaluated the capital  improvement  needs of the
property for the year. The amount budgeted is approximately $678,000, consisting
primarily  of parking  area and  swimming  pool  upgrades,  appliance  and floor
covering  replacements  and  reconstructing  the fire damaged units.  Additional
improvements may be considered and will depend on the physical  condition of the
property as well as anticipated cash flow generated by the property.

Park Capital

During the nine months ended  September  30,  2002,  the  Partnership  completed
approximately  $67,000 of capital  improvements,  consisting  primarily of major
landscaping and appliance and floor covering  replacements.  These  improvements
were funded from operating cash flow.  For 2002, the  Partnership  has evaluated
the capital  improvement needs of the property for the year. The amount budgeted
is  approximately  $73,000,  consisting  primarily  of  electrical  upgrades and
appliance  and  floor  covering  replacements.  Additional  improvements  may be
considered and will depend on the physical  condition of the property as well as
anticipated cash flow generated by the property.

Tamarac Village

During the nine months ended  September  30,  2002,  the  Partnership  completed
approximately   $341,000  of  capital  improvements,   consisting  primarily  of
electrical  upgrades,   parking  area,  building  and  structural  improvements,
appliance and floor covering  replacements and construction on water damage from
the rain storm in July 2001. These  improvements were funded from operating cash
flow. For 2002, the Partnership has evaluated the capital  improvement  needs of
the  property  for the year.  The amount  budgeted  is  approximately  $384,000,
consisting  primarily of parking area and  electrical  upgrades,  floor covering
replacements,  interior decoration, structural improvements, window covering and
air conditioning unit replacements, appliances and elevator upgrades. Additional
improvements may be considered and will depend on the physical  condition of the
property as well as anticipated cash flow generated by the property.

Williamsburg Manor

During the nine months ended  September  30,  2002,  the  Partnership  completed
approximately $121,000 of capital improvements, consisting primarily of plumbing
fixture upgrades,  floor covering  replacements,  and water  submetering.  These
expenditures were funded from operating cash flow and replacement reserves.  For
2002,  the  Partnership  has  evaluated  the  capital  improvement  needs of the
property for the year. The amount budgeted is approximately $121,000, consisting
primarily of air  conditioning  unit,  cabinet and floor covering  replacements,
structural  improvements and water submetering.  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 nine months ended  September  30,  2002,  the  Partnership  completed
approximately   $153,000  of  budgeted  and  unbudgeted   capital   improvements
consisting  primarily of  construction in progress on units damaged in a fire in
January 2002,  floor covering,  cabinet and appliance  replacements and building
improvements.  These  improvements  were  funded  from  operating  cash flow and
replacement  reserves.  For 2002,  the  Partnership  has  evaluated  the capital
improvement  needs  of the  property  for  the  year.  The  amount  budgeted  is
approximately  $118,000,  consisting primarily of plumbing fixture upgrades, air
conditioning  unit,  cabinet  and  floor  covering   replacements  and  signage.
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.

On June 27, 2001, the Partnership  refinanced the mortgage  encumbering  Tamarac
Village  Apartments.  The refinancing  replaced  indebtedness  of  approximately
$9,400,000 with a new mortgage of $21,000,000. The new mortgage carries a stated
interest  rate of  7.45%  as  compared  to the  7.33%  interest  rate on the old
mortgage.  Payments on the mortgage  loan are due monthly until the loan matures
on July 1, 2021 at which time the loan is  scheduled to be fully  amortized.  In
addition,  the  Partnership  was  required  to  establish  a  repair  escrow  of
approximately  $136,000 with the lender for certain capital replacements.  Total
capitalized  loan costs were  approximately  $604,000  for the nine months ended
September   30,  2001.   The   Partnership   recognized  a  loss  on  the  early
extinguishment  of  debt  of  approximately  $66,000  due  to the  write-off  of
unamortized loan costs.

On  June  29,  2001,  the  Partnership   refinanced  the  mortgage   encumbering
Lamplighter  Park   Apartments.   The  refinancing   replaced   indebtedness  of
approximately  $3,500,000  with a new mortgage of  $8,000,000.  The new mortgage
carries a stated  interest rate of 7.48% as compared to the 7.33%  interest rate
on the old  mortgage.  Payments on the mortgage  loan are due monthly  until the
loan  matures  on July 1, 2021 at which time the loan is  scheduled  to be fully
amortized.  In  addition,  the  Partnership  was  required to establish a repair
escrow of approximately $2,000 with the lender for certain capital replacements.
Total  capitalized  loan costs were  approximately  $247,000 for the nine months
ended  September  30,  2001.  The  Partnership  recognized  a loss on the  early
extinguishment  of  debt  of  approximately  $34,000  due  to the  write-off  of
unamortized loan costs.

On July 23, 2001, the Partnership  refinanced the mortgage encumbering Cedar Rim
Apartments.  The refinancing replaced  indebtedness of approximately  $2,000,000
with a new mortgage of $5,000,000.  The new mortgage  carries a stated  interest
rate of  7.49% as  compared  to the  7.33%  interest  rate on the old  mortgage.
Payments on the mortgage  loan are due monthly  until the loan matures on August
1,  2021 at which  time  the loan is  scheduled  to be  fully  amortized.  Total
capitalized  loan costs were  approximately  $166,000  for the nine months ended
September   30,  2001.   The   Partnership   recognized  a  loss  on  the  early
extinguishment  of  debt  of  approximately  $28,000  due  to the  write-off  of
unamortized loan costs.

On September  19, 2001,  the  Partnership  refinanced  the mortgage  encumbering
Hidden Cove Apartments.  The refinancing replaced  indebtedness of approximately
$2,200,000 with a new mortgage of $2,860,000.  The new mortgage carries a stated
interest  rate of  6.81%  as  compared  to the  7.33%  interest  rate on the old
mortgage.  Payments on the mortgage  loan are due monthly until the loan matures
on October 1, 2021 at which time the loan is scheduled to be fully amortized. In
addition,  the  Partnership  was  required  to  establish  a  repair  escrow  of
approximately  $152,000 with the lender for certain capital replacements.  Total
capitalized  loan costs were  approximately  $120,000  for the nine months ended
September   30,  2001.   The   Partnership   recognized  a  loss  on  the  early
extinguishment  of  debt  of  approximately  $28,000  due  to the  write-off  of
unamortized loan costs.

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  approximately  $46,732,000  has  maturity  dates  ranging from
December  2005 to October  2021.  The  mortgage  indebtedness  of  approximately
$35,907,000 that was refinanced  during 2001 requires monthly payments until the
loans  mature  between  July 2021 and  October  2021 at which time the loans are
scheduled to be fully amortized.  The Partnership's other mortgage  indebtedness
of $10,825,000 requires interest only payments, matures in December 2005 and has
balloon payments due at maturity.  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.

Pursuant to the Partnership Agreement,  the term of the Partnership is scheduled
to expire on December 31, 2015. Accordingly,  prior to such date the Partnership
will need to either  sell its  investment  properties  or extend the term of the
Partnership.

The Partnership  distributed the following  amounts during the nine months ended
September 30, 2002 and 2001 (in thousands, except per unit data):

<TABLE>
<CAPTION>

                       Nine Months      Per Limited       Nine Months      Per Limited
                          Ended         Partnership          Ended         Partnership
                   September 30, 2002       Unit      September 30, 2001       Unit

<S>                       <C>              <C>              <C>               <C>
Operations                $ 637            $ 1.65           $ 2,884           $ 7.45
Refinancing (1)              --                --            17,658            45.64
                          $ 637            $ 1.65           $20,542           $53.09

(1)   Distributions  from the refinancing of Tamarac  Village,  Lamplighter Park
      and Cedar Rim Apartments during 2001.
</TABLE>

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  cash  available  for
distribution 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 additional distributions to its partners
during the remainder of 2002 or subsequent periods.

Other

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership, AIMCO and its affiliates owned 203,150.50 limited partnership units
(the "Units") in the Partnership representing 53.04% of the outstanding units at
September  30,  2002. 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 acquire additional Units of limited partnership  interest in the
Partnership  in  exchange  for cash or a  combination  of cash and  units in the
operating  partnership  of AIMCO  either  through  private  purchases  or tender
offers. 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  voting on certain  amendments to the  Partnership  Agreement and
voting to remove the Managing General  Partner.  As a result of its ownership of
53.04% of the  outstanding  Units,  AIMCO is in a position  to control  all such
voting  decisions with respect to the Registrant.  Although the Managing General
Partner owes fiduciary duties to the limited  partners of the  Partnership,  the
Managing  General  Partner  also  owes  fiduciary  duties  to  AIMCO as its sole
stockholder. As a result, the duties of the Managing General Partner, as general
partner, to the Partnership and its limited partners may come into conflict with
the duties of the Managing General Partner to AIMCO, as its sole stockholder.

Critical Accounting Policies and Estimates

The financial  statements are prepared in accordance with accounting  principles
generally  accepted in the United States which require the  Partnership  to make
estimates and  assumptions.  The  Partnership  believes that of its  significant
accounting  policies,  the following may involve a higher degree of judgment and
complexity.

Impairment of Long-Lived Assets

Investment  properties  are  recorded at cost,  less  accumulated  depreciation,
unless  considered  impaired.  If  events  or  circumstances  indicate  that the
carrying  amount of a property may be  impaired,  the  Partnership  will make an
assessment of its  recoverability  by estimating  the  undiscounted  future cash
flows,  excluding  interest  charges,  of the property.  If the carrying  amount
exceeds the aggregate  future cash flows,  the  Partnership  would  recognize an
impairment  loss to the extent the carrying amount exceeds the fair value of the
property.

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's  investment  properties.  These  factors  include  changes  in the
national,  regional and local economic  climate;  local  conditions,  such as an
oversupply  of  multifamily   properties;   competition   from  other  available
multifamily  property  owners and changes in market  rental  rates.  Any adverse
changes in these factors could cause an impairment in the Partnership's assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
Rental income  attributable to leases is recognized monthly as it is earned. The
Partnership will offer rental concessions during  particularly slow months or in
response  to  heavy  competition  from  other  similar  complexes  in the  area.
Concessions are charged to income as incurred.

ITEM 3.     CONTROLS AND PROCEDURES

The principal  executive officer and principal  financial officer of the General
Partner, who are the equivalent of the Partnership's principal executive officer
and  principal  financial  officer,  respectively,  have,  within 90 days of the
filing  date  of this  quarterly  report,  evaluated  the  effectiveness  of the
Partnership's  disclosure  controls and  procedures  (as defined in Exchange Act
Rules  (13a-14(c)  and  (15d-14(c))  and have  determined  that such  disclosure
controls and procedures are adequate.  There have been no significant changes in
the Partnership's internal controls or in other factors that could significantly
affect the  Partnership's  internal  controls since the date of evaluation.  The
Partnership does not believe any significant deficiencies or material weaknesses
exist in the Partnership's internal controls. Accordingly, no corrective actions
have been taken.



<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. (the "Nuanes action") 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 series of
transactions  which  closed on October 1, 1998 and  February  26,  1999  whereby
Insignia and Insignia  Properties Trust,  respectively,  were merged into AIMCO.
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.  On May 14, 2001,  the Court heard the demurrer to the third
amended  complaint.  On July 10,  2001,  the Court  issued  an order  sustaining
defendants'  demurrer on certain grounds.  On July 20, 2001,  Plaintiffs filed a
motion for  reconsideration  of the Court's July 10, 2001 order granting in part
and denying in part defendants' demurrer. On September 7, 2001, Plaintiffs filed
a fourth amended class and derivative action  complaint.  On September 12, 2001,
the Court denied Plaintiffs' motion for reconsideration. On October 5, 2001, the
General Partner and affiliated defendants filed a demurrer to the fourth amended
complaint,  which was heard on December 11, 2001. On February 2, 2002, the Court
served its order granting in part the demurrer.  The Court has dismissed without
leave  to amend  certain  of the  plaintiffs'  claims.  On  February  11,  2002,
plaintiffs  filed a motion seeking to certify a putative class  comprised of all
non-affiliated  persons  who own or have owned  units in the  partnerships.  The
General Partner and affiliated  defendants oppose the motion. On April 29, 2002,
the Court held a hearing on plaintiffs' motion for class  certification and took
the matter under submission after further briefing, as ordered by the court, was
submitted by the parties.  On July 10, 2002, the Court entered an order vacating
the  current  trial  date of  January  13,  2003 (as well as the  pre-trial  and
discovery cut-off dates) and stayed the case in its entirety through November 7,
2002 so that the  parties  can have an  opportunity  to discuss  settlement.  On
October  30,  2002,  the court  entered  an order  extending  the stay in effect
through January 10, 2003.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the General Partner and affiliated defendants
moved to strike the first  amended  complaint in its entirety for  violating the
Court's  July 10, 2001 order  granting  in part and denying in part  defendants'
demurrer in the Nuanes action, or  alternatively,  to strike certain portions of
the  complaint  based on the statute of  limitations.  Other  defendants  in the
action demurred to the fourth amended complaint,  and,  alternatively,  moved to
strike the  complaint.  On December  11, 2001,  the court heard  argument on the
motions and took the matters under  submission.  On February 4, 2002,  the Court
served  notice of its order  granting  defendants'  motion to strike  the Heller
complaint  as a violation  of its July 10, 2001 order in the Nuanes  action.  On
March 27, 2002, the plaintiffs  filed a notice  appealing the order striking the
complaint. The parties are currently in the midst of briefing that appeal.

The  General  Partner  does not  anticipate  that any  costs,  whether  legal or
settlement  costs,   associated  with  these  cases  will  be  material  to  the
Partnership's overall operations.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

      a) Exhibits:

            Exhibit 3.1, Certificate of Limited Partnership,  as amended to date
            (Exhibit 3 to the  Registrant's  Annual  Report on Form 10-K for the
            year ended December 31, 2001, is incorporated herein by reference).

            Exhibit  3.2,  Agreement  of Limited  Partnership,  incorporated  by
            reference to Exhibit 3 to the Partnership's  Registration  Statement
            on  Amendment 1 on Form S-11 (Reg.  No.  2-97664)  filed on July 17,
            1985.

            Exhibit  99, Certification of Chief Executive Officer and Chief
            Financial Officer.

      b) Reports on Form 8-K filed during the quarter ended September 30, 2002:

            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/Thomas C. Novosel
                                          Thomas C. Novosel
                                          Senior Vice President
                                          and Chief Accounting Officer


                                    Date: November 14, 2002



<PAGE>



                                  CERTIFICATION


I, Patrick J. Foye, certify that:


1. I have reviewed this quarterly report on Form 10-QSB of Consolidated  Capital
Institutional Properties/3;


2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;


4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


      a)  Designed  such  disclosure  controls  and  procedures  to ensure  that
      material   information   relating  to  the   registrant,   including   its
      consolidated  subsidiaries,  is made  known to us by others  within  those
      entities, particularly during the period in which this quarterly report is
      being prepared;


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      quarterly report (the "Evaluation Date"); and


      c)  Presented  in  this  quarterly   report  our  conclusions   about  the
      effectiveness  of the  disclosure  controls  and  procedures  based on our
      evaluation as of the Evaluation Date;


5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):


      a) All  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and


      b) Any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:  November 13, 2002

                                    _______________________
                                    Patrick J. Foye
                                    Executive Vice President of ConCap Equities,
                                    Inc., equivalent of the chief executive
                                    officer  of  the Partnership


<PAGE>



                                  CERTIFICATION


I, Paul J. McAuliffe, certify that:


1. I have reviewed this quarterly report on Form 10-QSB of Consolidated  Capital
Institutional Properties/3;


2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;


3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;


4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


      a)  Designed  such  disclosure  controls  and  procedures  to ensure  that
      material   information   relating  to  the   registrant,   including   its
      consolidated  subsidiaries,  is made  known to us by others  within  those
      entities, particularly during the period in which this quarterly report is
      being prepared;


      b) Evaluated the effectiveness of the registrant's disclosure controls and
      procedures  as of a date  within 90 days prior to the filing  date of this
      quarterly report (the "Evaluation Date"); and


      c)  Presented  in  this  quarterly   report  our  conclusions   about  the
      effectiveness  of the  disclosure  controls  and  procedures  based on our
      evaluation as of the Evaluation Date;


5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):


      a) All  significant  deficiencies  in the design or  operation of internal
      controls which could adversely affect the registrant's  ability to record,
      process,  summarize and report  financial data and have identified for the
      registrant's auditors any material weaknesses in internal controls; and


      b) Any fraud,  whether or not material,  that involves management or other
      employees  who  have  a  significant  role  in the  registrant's  internal
      controls; and


6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date:  November 13, 2002

                                    _______________________
                                    Paul J. McAuliffe
                                    Executive Vice President and Chief Financial
                                    Officer of ConCap Equities, Inc., equivalent
                                    of the chief financial officer of the
                                    Partnership



<PAGE>


Exhibit 99


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002



In connection with the Quarterly  Report on Form 10-QSB of Consolidated  Capital
Institutional  Properties/3 (the "Partnership"),  for the quarterly period ended
September 30, 2002 as filed with the Securities  and Exchange  Commission on the
date hereof (the  "Report"),  Patrick J. Foye,  as the  equivalent  of the chief
executive officer of the Partnership,  and Paul J. McAuliffe,  as the equivalent
of the chief  financial  officer  of the  Partnership,  each  hereby  certifies,
pursuant to 18 U.S.C.  Section 1350,  as adopted  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

     (1)  The Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Partnership.


                               /s/ Patrick J. Foye
                              Name: Patrick J. Foye
                              Date: November 13, 2002


                              /s/ Paul J. McAuliffe
                             Name: Paul J. McAuliffe
                             Date: November 13, 2002


This  certification  accompanies  the  Report  pursuant  to  Section  906 of the
Sarbanes-Oxley  Act of 2002 and shall not,  except to the extent required by the
Sarbanes-Oxley  Act of 2002, be deemed filed by the  Partnership for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended.