UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
                                    FORM 10-K

(Mark One)

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

                   For the fiscal year ended December 31, 1997

                                       OR

[ ]      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 0-28380

                       CNL AMERICAN PROPERTIES FUND, INC.
             (Exact name of registrant as specified in its charter)

                  Maryland                               59-3239115
       (State or other jurisdiction of      (I.R.S. Employer Identification No.)
       incorporation or organization)

                              400 East South Street
                             Orlando, Florida 32801
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (407) 422-1574

               Securities registered pursuant to Section 12(b) of the Act:

                 Title of each class:     Name of exchange on which registered:
                         None                        Not Applicable

           Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, $0.01 par value per share
                                (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 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

         Indicate by check mark if disclosure of delinquent  filers  pursuant to
Item 405 of Regulation S-K is not contained  herein,  and will not be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ ]

         Aggregate market value of the voting stock held by nonaffiliates of the
registrant:  The  registrant  registered two offerings of shares of common stock
(the "Shares") on Form S-11 under the Securities Act of 1933, as amended.  Since
no established market for such Shares exists,  there is no market value for such
Shares. Each Share was originally sold at $10 per Share.

         The number of shares of common  stock  outstanding  as of February  18,
1998, was 39,326,342.


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                      DOCUMENTS INCORPORATED BY REFERENCE:

         Registrant  incorporates  by  reference  portions  of the CNL  American
Properties Fund, Inc.  Definitive Proxy Statement for the 1998 Annual Meeting of
Stockholders  (Items  10,  11, 12 and 13 of Part III) to be filed no later  than
April 30, 1998.


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                                     PART I


Item 1.  Business

         CNL American  Properties Fund, Inc. (the "Registrant" or the "Company")
is a  Maryland  corporation,  which  was  organized  on May 2,  1994,  and which
operates for federal  income tax purposes as a real estate  investment  trust (a
"REIT").  Beginning in April 1995, the Company offered for sale up to 16,500,000
shares of common stock (the "Shares")  ($165,000,000)  (the "Initial  Offering")
pursuant to a  registration  statement on Form S-11 under the  Securities Act of
1933, as amended.  Of the  16,500,000  Shares,  1,500,000 were available only to
stockholders   who  elected  to  participate   in  the  Company's   distribution
reinvestment  plan.  Upon  completion of the Initial  Offering,  the Company had
received  subscription proceeds of $150,591,765  (15,059,177 Shares),  including
$591,765 (59,177 Shares) issued pursuant to the Company's reinvestment plan.

         Immediately  following  the  termination  of the  Initial  Offering  on
February 6, 1997, the Company  commenced an offering of up to 27,500,000  Shares
($275,000,000)  (the "1997  Offering").  Of the 27,500,000 Shares offered in the
1997  Offering,  2,500,000  are  available  only to  stockholders  who  elect to
participate  in the Company's  reinvestment  plan. As of December 31, 1997,  the
Company had received  subscription proceeds totalling  $361,729,707  (36,172,971
Shares)  from the  Initial  Offering  and 1997  Offering,  including  $2,464,413
(246,441 Shares) issued pursuant to the reinvestment plan.

          On October 10, 1997, the Company filed a  registration  statement with
the Securities and Exchange  Commission in connection  with the proposed sale by
the Company of up to 34,500,000  Shares  ($345,000,000)  (the "1998  Offering"),
which is  expected to  commence  immediately  following  the  completion  of the
Company's 1997 Offering. Of the 34,500,000 shares of common stock to be offered,
2,000,000 will be available only to stockholders  purchasing  shares through the
Company's  distribution  reinvestment  plan.  The  price per share and the other
terms of the 1998 Offering,  including the percentage of gross proceeds  payable
to the managing  dealer for selling  commissions and expenses in connection with
the offering, payable to CNL Fund Advisors, Inc. (the "Advisor") for acquisition
fees and  acquisition  expenses  and  reimbursable  to the Advisor for  offering
expenses,  will be the same as those for the Company's Initial Offering and 1997
Offering.  Management  believes that the increase in the amount of assets of the
Company   that  will  result  from  the  1998   Offering   will   increase   the
diversification  of the  Company's  assets and the  likelihood  of  listing  the
Company's  shares  of  common  stock  on  a  national   securities  exchange  or
over-the-counter market ("Listing"), although there is no assurance that Listing
will occur.  If the shares are not listed on a national  securities  exchange or
over-the-counter  market  by  December  31,  2005,  as to which  there can be no
assurance,  the  Company  will  commence  orderly  sale  of its  assets  and the
distribution of the proceeds. Listing does not assure liquidity.

         The Company was formed primarily to acquire restaurant  properties (the
"Properties")  located across the United States,  directly or indirectly through
joint  venture  or  co-tenancy  arrangements,   to  be  leased  on  a  long-term
(generally,  15 to 20 years,  plus renewal  options for an  additional  10 to 20
years),  "triple-net" basis, which means that the tenant will be responsible for
repairs,  maintenance,  property taxes, utilities,  and insurance. As of January
22, 1998,  the Company owned a portfolio of 246  Properties  located  across the
United  States which are leased to  operators  of certain  national and regional
fast-food,  family-style  and casual dining  restaurant  chains (the "Restaurant
Chains"). The Company is expected to have a total portfolio of approximately 670
to 730  Properties,  if the maximum  number of Shares of the Company is sold in
the 1997 Offering and the 1998  Offering.  The Company  structures the leases of
its  Properties  to provide for  payment of base annual rent with (i)  automatic
increases in base rent and/or (ii)  percentage rent based on gross sales above a
certain level.  The Company also offers financing for the purchase of buildings,
generally  by  tenants  that lease the  underlying  land from the  Company  (the
"Mortgage  Loans").  Mortgage Loans are expected to constitute from 5% to 10% of
the Company's  total  investments if the maximum number of Shares is sold in the
1997  Offering  and the 1998  Offering.  Management  believes  that the economic
effects of the Mortgage Loans for the purchase of buildings are similar to those
of its leases  (generally  with full repayment in 15 to 20 years).  In addition,
the Company offers furniture, fixtures and equipment (the "Equipment") financing
to  operators  of  Restaurant  Chains  pursuant to which the  Company  provides,
through direct  financing  leases and loans,  the Equipment  (collectively,  the
"Secured Equipment Leases"). The Company has

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represented that at the end of each quarter, the value of the Equipment together
with  any  personal  property  owned  by the  Company,  in the  aggregate,  will
represent  less than 25% of the  Company's  total assets.  In 1996,  the Company
obtained a  $15,000,000  line of credit and  subsequently  amended  such line of
credit to  $35,000,000,  which is or will be used by the Company to fund Secured
Equipment Leases, to purchase Properties and to provide Mortgage Loans.

         As of December 31,  1997,  net proceeds to the Company from its Initial
Offering,  1997  Offering  and capital  contributions  from the  Advisor,  after
deduction of organizational and offering expenses,  totalled  $323,867,890.  The
Company  acquired its first  Property on June 30,  1995,  and as of December 31,
1997,  approximately  $272,140,000  of such  amount had been used to invest,  or
committed for investment,  in 244 Properties  (including ten of which were under
construction  as of December 31, 1997),  which  includes  mortgage  financing of
$17,047,000,  acquisition fees to the Advisor totalling  $16,277,837 and certain
acquisition  expenses.  In addition,  as of December  31, 1997,  the Company had
entered into 27 Secured  Equipment  Leases and entered into two promissory notes
totalling $13,225,000 with a borrower for equipment financing.  The Company will
use the  remaining  net  offering  proceeds,  together  with  proceeds  from the
issuance  of Shares  subsequent  to December  31,  1997,  to acquire  additional
Properties,   to  pay  construction  costs  relating  to  the  Properties  under
construction at December 31, 1997, to provide Mortgage Loans, to pay acquisition
fees and  certain  acquisition  expenses  and to pay  expenses  relating  to the
issuance of the Shares.  As of January 22,  1998,  the Company had  acquired two
additional  Properties  (both of which were under  construction),  as  described
below in Item 2.  Properties.  The  number  of  Properties  to be  acquired  and
Mortgage  Loans to be entered  into will depend upon the amount of net  offering
proceeds  available to the Company.  The Company  presently  is  negotiating  to
acquire additional Properties,  but as of January 22, 1998, had not acquired any
such Properties.

          The  Company's  primary  investment  objectives  are (i) to  preserve,
protect, and enhance the Company's assets; (ii) making quarterly  distributions;
(iii)  obtaining  fixed  income  through  the  receipt of base rent,  as well as
increase the Company's income (and distributions) and provide protection against
inflation  through  automatic  increases in base rent and receipt of  percentage
rent,  and to obtain fixed income  through the receipt of payments from Mortgage
Loans and Secured  Equipment  Leases;  (iv)  continuing to qualify as a REIT for
federal income tax purposes;  and (v) providing stockholders of the Company with
liquidity of their  investment  within two to seven years after  commencement of
the 1998 Offering,  either in whole or in part, through (a) Listing,  or (b) the
commencement  of orderly sales of the Company's  assets and  distribution of the
proceeds  thereof  (outside the ordinary  course of business and consistent with
its objective of qualifying as a REIT).

         For the next two to seven  years,  the Company  intends,  to the extent
consistent with the Company's  objective of qualifying as a REIT, to reinvest in
additional  Properties or Mortgage  Loans any proceeds of the sale of a Property
or a Mortgage Loan that are not required to be  distributed to  stockholders  in
order to preserve the  Company's  REIT status for federal  income tax  purposes.
Similarly,  and to the extent  consistent with REIT  qualification,  the Company
plans to use the  proceeds  of the  sale of a  Secured  Equipment  Lease to fund
additional  Secured Equipment Leases, or to reduce its outstanding  indebtedness
on the line of credit. Within two to seven years, the Company intends to provide
stockholders of the Company with liquidity of their investment,  either in whole
or in part,  through  Listing of the Shares of the Company  (although  liquidity
cannot be assured thereby).  If Listing occurs,  the Company intends to reinvest
in additional  Properties,  Mortgage Loans and Secured  Equipment Leases any net
sales  proceeds  not  required to be  distributed  to  stockholders  in order to
preserve the  Company's  status as a REIT. If Listing does not occur by December
31, 2005, the Company will undertake the orderly  liquidation of the Company and
the sale of the Company's  assets and will  distribute any net sales proceeds to
stockholders.  In  addition,  the Company  will not sell any assets if such sale
would not be consistent with the Company's objective of qualifying as a REIT.

         In  deciding  the  precise  timing  and terms of  Property  sales,  the
Advisor,  subject  to the  approval  of the Board of  Directors,  will  consider
factors  such  as  national  and  local  market  conditions,  potential  capital
appreciation,  cash flows, and federal income tax  considerations.  The terms of
certain  leases,  however,  may  require  the  Company to sell a Property  at an
earlier time if the tenant  exercises its option to purchase a Property  after a
specified  portion  of the lease  term has  elapsed.  The  Company  will have no
obligation  to sell all or any  portion of a Property  at any  particular  time,
except as may be required  under  property  or joint  venture  purchase  options
granted to certain  tenants.  In  connection  with  sales of  Properties  by the
Company,  purchase money obligations may be taken by the Company as part payment
of the sales price.  The terms of payment will be affected by custom in the area
in which

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the  Property is located and  prevailing  economic  conditions.  When a purchase
money  obligation  is accepted in lieu of cash upon the sale of a Property,  the
Company will continue to have a mortgage on the Property and the proceeds of the
sale will be realized over a period of years rather than at closing of the sale.

         The Company does not anticipate  selling the Secured  Equipment  Leases
prior to  expiration  of the lease  term,  except in the event that the  Company
undertakes orderly liquidation of its assets. In addition,  the Company does not
anticipate  selling any Mortgage Loans prior to the expiration of the loan term,
except in the event (i) the Company owns the Property (land only) underlying the
building  improvements  which  secure  the  Mortgage  Loan  and the  sale of the
Property occurs, or (ii) the Company undertakes an orderly sale of its assets.

Leases

         As of December 31, 1997, the Company had acquired,  either  directly or
through a joint  venture  arrangement,  244  Properties,  which are  subject  to
long-term,  triple-net  leases.  Although  there are  variations in the specific
terms of the leases,  the following is a summarized  description  of the general
structure of the Company's  leases.  The leases of the  Properties  owned by the
Company and the joint venture in which the Company is a  co-venturer,  generally
provide for initial  terms  ranging from 15 to 20 years and expire  between 2006
and 2017. The leases are on a triple- net basis, with the lessee responsible for
all repairs and maintenance, property taxes, insurance and utilities. The leases
of the Properties  provide for minimum base annual rental  payments  (payable in
monthly  installments)  ranging  from  approximately  $61,900  to  $467,500.  In
addition, certain leases provide for percentage rent based on sales in excess of
a specified  amount.  In  addition,  the  majority of the leases  provide  that,
commencing in specified lease years (generally the sixth lease year), the annual
base rent required under the terms of the lease will increase.

         Generally,  the  leases  of the  Properties  provide  for  two to  five
five-year or ten-year  renewal  options subject to the same terms and conditions
as the initial lease. Certain lessees also have been granted options to purchase
the Property at the Property's then fair market value after a specified  portion
of the lease term has elapsed. The option purchase price may equal the Company's
original cost to purchase the Property  (including  acquisition  costs),  plus a
specified percentage from the date of the lease or a specified percentage of the
Company's  purchase  price,  if that amount is greater than the Property's  fair
market value at the time the purchase option is exercised.

         The leases also generally provide that, in the event the Company wishes
to sell the  Property  subject to that lease,  the Company  first must offer the
lessee the right to purchase the Property on the same terms and conditions,  and
for the same price,  as any offer which the Company has received for the sale of
the Property.

         In connection  with the acquisition of 15 of the 20 Properties that are
building only, the Company has also entered into tri-party  agreements  with the
tenants and the owners of the land.  The tri-party  agreements  provide that the
tenant is responsible  for all  obligations  under the ground lease and provides
certain  rights to the Company to help protect its interest in the  buildings in
the event of a default by the tenant  under the terms of the  ground  lease.  In
connection with the purchase of one of the Properties that is building only, the
Company has entered into an  assignment  of an interest in the ground lease with
the landlord of the land.  The  assignment  provides  that the ground  lessee is
responsible  for all  obligations  under the ground lease and  provides  certain
rights  to the  Company  relating  to the  maintenance  of its  interest  in the
building  in the event of a default by the lessee  under the terms of the ground
lease.

         In connection with the acquisition of 44 Properties  consisting of land
only,  the  Company  acquired  the land and is  leasing  these 44 parcels to the
lessee pursuant to four master lease agreements (the "Master Lease Agreements").
The ground lessee has  subleased  the 44 Properties to three of its  affiliates,
which are the  operators  of the  restaurants.  The general  terms of the Master
Lease  Agreements  are  similar  to those  described  above in the  first  three
paragraphs.  Upon termination of the Master Lease Agreements, the sublessees and
lessee will surrender possession of the Properties to the Company, together with
any  improvements on such Properties.  The lessee owns the buildings  located on
the 44 Properties. In connection with the acquisition of the 44 Properties,  the
Company  provided  mortgage  financing of $17,047,000 to the lessee  pursuant to
four Mortgage Loans evidenced by four mortgage notes which are collateralized by
the building improvements on these 44 Properties plus two additional properties.
The Mortgage  Notes bear interest  ranging from 10.5% to 10.75% per annum,  with
all four having principal and interest due in equal monthly installments over 20
years. At the time entered into, the Mortgage Notes equaled  approximately 76 to
88 percent of the appraised value of the related buildings.  Management believes
that,

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due to the fact that the Company  owns the  underlying  land  relating to the 44
Properties and due to other  underwriting  criteria,  the Company has sufficient
collateral for the Master Mortgage Notes.

         During the period January 1, 1998 through January 22, 1998, the Company
acquired two additional  Properties (both of which are under construction).  The
leases for the two  Properties  are  substantially  the same as those  described
above.

Major Tenants

         During  1997,  three  of  the  Company's  lessees  and  borrowers,   or
affiliated groups of lessees and borrowers,  (i) Castle Hill Holdings V, L.L.C.,
Castle  Hill  Holdings  VI,  L.L.C.   and  Castle  Hill  Holdings  VII,   L.L.C.
(hereinafter  referred to as "Castle  Hill"),  (ii)  Foodmaker,  Inc.  and (iii)
Houlihan's  Restaurants,  Inc.,  each  contributed  more than ten percent of the
Company's  total rental,  earned  income,  and interest  income  relating to its
Properties,  Mortgage  Loans and Secured  Equipment  Leases.  Castle Hill is the
lessee under leases  relating to the land portion of 44  restaurants  and is the
borrower  on  Mortgage  Loans  relating  to the  buildings  on such  Properties.
Foodmaker,  Inc.  is the lessee  under  leases  relating to 29  restaurants  and
Houlihan's   Restaurants  Inc.  is  the  lessee  under  leases  relating  to  20
restaurants.  In addition,  four  Restaurant  Chains,  Pizza Hut,  Golden Corral
Family  Steakhouse,  Jack in the Box and Boston Market,  each accounted for more
than ten percent of the Company's  total  rental,  earned  income,  and interest
income  relating to  Properties,  Mortgage  Loans and Secured  Equipment  Leases
during 1997. Because the Company has not completed its investment in Properties,
Mortgage  Loans and  Secured  Equipment  Leases as yet,  it is not  possible  to
determine  which lessees,  borrowers or Restaurant  Chains will  contribute more
than ten percent of the Company's  rental,  earned income,  and interest  income
during 1998 and subsequent  years. In the event that certain lessees,  borrowers
or Restaurant  Chains  contribute more than ten percent of the Company's rental,
earned income, and interest income in future years, any failure of such lessees,
borrowers or Restaurant  Chains could materially affect the Company's income. As
of December  31, 1997,  no single  lessee or  borrower,  or group of  affiliated
lessees or borrowers  lease  Properties or are the borrower under Mortgage Loans
with an  aggregate  carrying  value,  excluding  acquisition  fees  and  certain
acquisition expenses, in excess of 20 percent of the anticipated total assets of
the Company upon completion of the 1997 Offering.

Joint Venture Arrangement

         In August 1995, the Company  entered into a joint venture  arrangement,
CNL/Corral South Joint Venture, with an unaffiliated entity to purchase and hold
one  Property.  The joint venture  arrangement  provides for the Company and its
joint  venture  partner to share in all costs and benefits  associated  with the
joint venture in accordance with their  respective  percentage  interests in the
joint  venture.  The Company and its joint venture  partner are also jointly and
severally liable for all debts,  obligations and other  liabilities of the joint
venture.

         CNL/Corral  South Joint  Venture  has an initial  term of 15 years and,
after the  expiration of the initial term,  continues in existence  from year to
year unless  terminated at the option of either of the joint  venturers or by an
event of dissolution.  Events of dissolution include the bankruptcy,  insolvency
or  termination of any joint  venturer,  sale of the property owned by the joint
venture and mutual  agreement  of the Company and its joint  venture  partner to
dissolve the joint venture.

         The Company has management  control of CNL/Corral  South Joint Venture.
The joint venture agreement  restricts each venturer's ability to sell, transfer
or assign its joint venture  interest  without first offering it for sale to its
joint  venture  partner,  either upon such terms and  conditions as to which the
venturers  may agree or, in the event the venturers  cannot  agree,  on the same
terms and  conditions  as any offer from a third  party to  purchase  such joint
venture interest.

         As of December 31, 1997,  the Company  owned an 85.47%  interest in the
joint venture.  Net cash flow from operations of CNL/Corral  South Joint Venture
are  distributed to the Company and its joint venture partner in accordance with
each partners' respective interest. Any liquidation proceeds, after paying joint
venture debts and liabilities and funding  reserves for contingent  liabilities,
will be  distributed  first to the Company until it has received a return of its
capital  contribution,  plus a 20 percent  return on its capital  contributions,
then to the other joint  venture  partner to the extent of its positive  capital
account balance plus 20 percent thereof;  and thereafter,  in proportion to each
joint venture partner's percentage interest in the joint venture.

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Certain Management Services

         The Advisor provides management  services relating to the Company,  the
Properties,  the Mortgage Loans and the Secured Equipment Lease program pursuant
to an advisory agreement (the "Advisory  Agreement") between it and the Company.
Under this  agreement,  the Advisor is responsible  for assisting the Company in
negotiating  leases,  Mortgage Loans,  Secured  Equipment Leases and the line of
credit,  collecting rental,  Mortgage Loan and Secured Equipment Lease payments,
inspecting the Properties and the tenants' books and records,  and responding to
tenant  inquiries  and notices.  The Advisor also  provides  information  to the
Company about the status of the leases, the Properties,  the Mortgage Loans, the
Secured Equipment Leases and the line of credit. In exchange for these services,
the  Advisor  is  entitled  to  receive  certain  fees  from  the  Company.  For
supervision of the Properties and Mortgage Loans, the Advisor receives a monthly
asset and mortgage  management fee, of one-twelfth of .60% of the Company's real
estate asset value and the outstanding  principal  balance of the Mortgage Loans
as of the end of the proceeding month. The management fee, which will not exceed
fees which are competitive for similar services in the same geographic area, may
or may not be taken,  in whole or in part as to any year, in the sole discretion
of the Advisor.  For negotiating  equipment  financing and loans and supervising
the  Secured  Equipment  Lease  program,  the  Advisor is  entitled to receive a
one-time  secured  equipment  lease servicing fee of two percent of the purchase
price of the  equipment  that is the  subject  of a lease or loan (the  "Secured
Equipment Lease Servicing Fee").

         The Advisory  Agreement  continues until April 18, 1998, and thereafter
may be extended  annually  upon  mutual  consent of the Advisor and the Board of
Directors of the Company unless terminated at an earlier date upon 60 days prior
notice by each party.

Borrowing

          In March 1996, the Company  entered into a $15,000,000  line of credit
and security agreement with a bank, the proceeds of which were to be used by the
Company to fund Secured Equipment  Leases.  The line of credit provided that the
Company would be able to receive  advances of up to  $15,000,000  until March 4,
1998.  Generally,  all advances under the line of credit bore interest at either
(i) a rate per annum equal to 215 basis points above the Reserve  Adjusted LIBOR
Rate (as  defined in the line of  credit) or (ii) a rate per annum  equal to the
bank's prime rate,  whichever  the Company  selected at the time  advances  were
made.  As a condition of  obtaining  the line of credit,  the Company  agreed to
grant to the bank a first security interest in the Secured Equipment Leases.

          In August 1997, the Company's  $15,000,000  line of credit was amended
and  restated  to  enable  the  Company  to  receive  advances  on  a  revolving
$35,000,000  uncollateralized  line of credit  (the "Line of Credit") to provide
equipment  financing,  to purchase and develop  Properties  and to fund Mortgage
Loans.  The advances  bear  interest at a rate of LIBOR plus 1.65% or the bank's
prime rate,  whichever the Company  selects at the time of  borrowing.  Interest
only is  repayable  monthly  until July 31,  1999,  at which time all  remaining
interest  and  principal  shall be due.  The  Line of  Credit  provides  for two
one-year renewal options.

         During the year ended December 31, 1997, the Company obtained  advances
totalling  $19,721,804 under the Line of Credit, the proceeds of which were used
to fund 27 Secured  Equipment  Leases  (including  two partially  funded Secured
Equipment Leases as of December 31, 1997), to provide equipment financing in the
form of two  promissory  notes  and to pay loan  costs on the  original  line of
credit.  The Company  expects to obtain  additional  advances  under the Line of
Credit to fund the remaining amounts due for two of the Secured Equipment Leases
and any Secured Equipment Leases entered into in the future. The Company intends
to limit the amount of Secured  Equipment  Leases it enters into to 10% of gross
proceeds of its offerings.

         During 1996,  the Company  entered into interest  rate swap  agreements
with a commercial  bank to reduce the impact of changes in interest rates on its
floating rate long-term debt. These agreements  effectively change the Company's
interest rate exposure on notional amounts totalling approximately $2,110,000 of
the  outstanding  floating  rate notes to fixed rates ranging from 8.75% to nine
percent per annum.  The notional  amounts of the interest  rate swap  agreements
amortize over the period of the  agreements  which  approximate  the term of the
related notes. As of December 31, 1997, the notional  balance was  approximately
$1,750,000. The Company is exposed to credit loss in the event of nonperformance
by the other party to the interest rate swap  agreements;  however,  the Company
does not anticipate nonperformance by the counterparty.


                                        5

<PAGE>



         The Company expects to use uninvested net offering  proceeds,  plus any
net offering proceeds from the sale of additional shares, to purchase additional
Properties,  to  fund  construction  costs  relating  to  the  Properties  under
construction  and to make Mortgage Loans. The Company does not intend to use net
offering proceeds to fund Secured Equipment Leases;  however,  from time to time
the Company may use  uninvested  net offering  proceeds to repay a portion of or
all of the balance  outstanding  under the Line of Credit pending the investment
of such offering proceeds in Properties or Mortgage Loans in order to reduce the
Company's  interest cost during such period. No Properties will be encumbered in
connection with the Line of Credit.

Competition

         The fast-food,  family-style,  and casual dining restaurant business is
characterized by intense  competition.  The operators of the restaurants located
on the  Company's  Properties  compete  with  independently  owned  restaurants,
restaurants which are part of local or regional chains, and restaurants in other
well-known national chains, including those offering different types of food and
service.

         Many successful fast-food,  family-style, and casual dining restaurants
are located in "eating  islands," which are areas to which people tend to return
frequently and within which they can diversify  their eating habits,  because in
many cases local  competition  may enhance the  restaurant's  success instead of
detracting  from it.  Fast-food,  family-style,  and casual  dining  restaurants
frequently  experience better operating results when there are other restaurants
in the same area.

         The Company will be in competition with other persons and entities both
to locate  suitable  Properties  to  acquire  and to locate  purchasers  for its
Properties.  The Company also will compete with other financing  sources such as
banks,  mortgage lenders, and sale/leaseback  companies for suitable Properties,
tenants, and Equipment tenants.

Employees

         Reference is made to Item 10.  Directors and Executive  Officers of the
Registrant for a listing of the Company's Executive Officers. The Company has no
other employees.


Item 2.  Properties

         As of December 31, 1997, the Company owned,  either directly or through
a joint venture arrangement, 244 Properties,  located in 35 states. Reference is
made to the Schedule of Real Estate and Accumulated Depreciation filed with this
report for a listing of the Properties  and their  respective  costs,  including
acquisition fees and certain acquisition expenses.

         During the period January 1, 1998 through January 22, 1998, the Company
acquired two additional Properties (both of which were under construction),  for
cash at a total cost of approximately  $1,067,000,  excluding development costs,
acquisition  fees and  certain  acquisition  expenses.  The  leases of these two
Properties  are  substantially  the  same  as the  leases  described  in Item 1.
Business - Leases.

         The Company presently is negotiating to acquire additional  properties,
but as of January 22, 1998, had not acquired any such properties.

Description of Properties

         Land. The Company's Property lot sizes range from approximately  11,300
to 190,100  square  feet  depending  upon  building  size and local  demographic
factors.  Sites  purchased by the Company are in locations  zoned for commercial
use which have been reviewed for traffic patterns and volume.





                                        6

<PAGE>



         Buildings.  The buildings generally are rectangular and are constructed
from various combinations of stucco, steel, wood, brick and tile. Building sizes
range  from  approximately  2,000  to  12,700  square  feet.  All  buildings  on
Properties  owned by the Company are  freestanding  and are  surrounded by paved
parking areas.  Buildings are suitable for conversion to various uses,  although
modifications may be required prior to use for other than restaurant operations.

         Generally,  a  lessee  is  required,  under  the  terms  of  its  lease
agreement,  to make such capital  expenditures as may be reasonably necessary to
refurbish  buildings,  premises,  signs and  equipment  so as to comply with the
lessee's  obligations,  if applicable,  under the franchise agreement to reflect
the current commercial image of its Restaurant Chain. These capital expenditures
are required to be paid by the lessee during the term of the lease.

         As of December 31, 1997,  the Company owned 20 Properties  that consist
of only building.  The Company does not own the  underlying  land. In connection
with the acquisition of these  Properties,  the Company entered into a tri-party
agreement with the tenant and the owner of the land or assignment of interest in
the ground lease with the landlord, as described in Item 1. Business - Leases.

         Leases with Major  Tenants.  The terms of the leases with the Company's
major  tenants as of December 31, 1997 (see Item 1.  Business - Major  Tenants),
are substantially the same as those described in Item 1. Business Leases.

         Castle Hill leases 44 Pizza Hut  restaurants  under four Master Leases.
The initial  term of each Master  Lease is 20 years  (expiring  between 2016 and
2017) and the  aggregate  minimum  base annual rent is  $857,580.  In  addition,
Castle Hill is the borrower on Mortgage  Loans relating to the buildings on such
Properties.

          Foodmaker,  Inc.  leases 29 Jack in the Box  restaurants.  The initial
term of each  lease  is 18  years  (expiring  between  2011  and  2015)  and the
aggregate minimum base annual rent is approximately $3,218,000.

          Houlihan's  Restaurants,  Inc.  leases 20  Houlihan's,  Charley's  and
Darryl's  restaurants.  The initial term of each lease is 20 years  (expiring in
2017) and the aggregate minimum base annual rent is approximately $2,936,000.


         Management   considers  the  Properties  to  be   well-maintained   and
sufficient for the Company's operations.


Item 3.  Legal Proceedings

         Neither the Company,  nor its Advisor or any affiliates of the Advisor,
nor any of their  respective  properties,  is a party to,  or  subject  to,  any
material pending legal proceedings.


Item 4.  Submission of Matters to a Vote of Security Holders

         None.

                                        7

<PAGE>



                                     PART II


Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

          As of January 22, 1998,  there were 17,753  stockholders  of record of
common stock.  There is no public trading market for the Shares, and even though
the  Company  intends to list the Shares on a national  securities  exchange  or
over-the-counter  market within two to seven years of  commencement  of the 1998
Offering,  there is no assurance  that listing will occur and if listing  occurs
there is no assurance  that a public market for the Shares will  develop.  After
the  termination  of the  offering  and prior to such time,  if any,  as Listing
occurs,  any stockholder (other than the Advisor) may present all or any portion
equal to at least 25% of such stockholder's Shares to the Company for redemption
at any time.  At such time,  the Company may, at its option,  subject to certain
conditions,  redeem such Shares  presented for redemption for cash to the extent
it has sufficient net proceeds ("Reinvestment Proceeds") from the sale of Shares
under the Company's  distribution  reinvestment  plan.  Stockholders who wish to
have their distributions used to acquire additional Shares (to the extent Shares
are available for  purchase),  may do so pursuant to the Company's  distribution
reinvestment  plan.  There  is no  assurance  that  there  will be  Reinvestment
Proceeds available for redemption and,  accordingly,  a stockholder's Shares may
not be redeemed.  Any Shares  acquired  pursuant to a redemption will be retired
and no longer  available for issuance by the Company.  The Board of Directors of
the Company,  in their  discretion,  may amend or suspend the redemption plan at
any time  they  determine  that  such  amendment  or  suspension  is in the best
interest of the Company.  The price to be paid for any Share  transferred  other
than pursuant to the redemption  plan is subject to negotiation by the purchaser
and the selling  stockholder.  For the year ended  December 31, 1997,  no Shares
were transferred, or retired pursuant to the redemption plan.

         As of December 31, 1997, the offering price per share was $10.

         The  Company  expects  to  distribute  at least 95% of its real  estate
investment trust taxable income to the  stockholders  pursuant to the provisions
of the  Articles of  Incorporation.  For the years ended  December  31, 1997 and
1996, the Company  declared cash  distributions  of $16,854,297  and $5,436,072,
respectively,  to  stockholders.  For federal  income tax  purposes,  93.33% and
90.25% of distributions paid in 1997 and 1996, respectively,  were considered to
be ordinary  income and 6.67% and 9.75%,  respectively,  were considered to be a
return of capital.  No amounts  distributed to stockholders  for the years ended
December  31,  1997 and 1996,  are  required  to be or have been  treated by the
Company as a return of capital for  purposes of  calculating  the  stockholders'
return  on  their  invested   capital.   The  following   table  presents  total
distributions and distributions per share:

<TABLE>
<CAPTION>

                                              First        Second         Third       Fourth         Year
<S> <C>
         1997 Quarter

         Total distributions declared      $2,693,357    $3,589,113    $4,597,499   $5,974,328   $16,854,297
         Distributions per share               0.1792        0.1865        0.1885       0.1906        0.7448


         1996 Quarter

         Total distributions declared      $  768,808    $1,099,679    $1,536,145   $2,031,440   $ 5,436,072
         Distributions per share               0.1749        0.1749        0.1781       0.1781        0.7060
</TABLE>

         In January 1998, the Company  declared  distributions  to  stockholders
totalling $2,299,701, ($0.06354 per Share) payable in March 1998.

         The Company intends to continue to declare distributions of cash to the
stockholders  on a monthly  basis  during the  offering  period,  and  quarterly
thereafter.

                                        8

<PAGE>




Item 6.  Selected Financial Data
<TABLE>
<CAPTION>

                                                               1997          1996         1995           1994 (1)
                                                         -------------- ------------- -------------   -----------
<S> <C>
Year Ended December 31:
    Revenues                                              $  19,457,933  $  6,206,684  $    659,131    $     -
    Net earnings                                             15,564,456     4,745,962       368,779          -
    Cash distributions declared                              16,854,297     5,436,072       638,618          -
    Funds from operations (2)                                17,348,723     5,257,040       469,097          -
    Earnings per Share                                             0.66          0.59          0.19          -
    Cash distributions declared per Share                          0.74          0.71          0.31          -
    Weighted average number of Shares
          outstanding (3)                                    23,423,868     8,071,670     1,898,350          -

At December 31:
    Total assets                                           $339,077,762  $134,825,048   $33,603,084    $  929,585
    Total stockholders' equity                              321,638,101   122,867,427    31,980,648       200,000
</TABLE>

(1)       Selected  financial  data for 1994  represents  the period May 2, 1994
          (date of inception) through December 31, 1994.

(2)      Funds from operations ("FFO"),  based on the revised definition adopted
         by the Board of  Governors  of  NAREIT  and as used  herein,  means net
         earnings  determined in accordance with generally  accepted  accounting
         principles ("GAAP"),  excluding gains or losses from debt restructuring
         and sales of  property,  plus  depreciation  and  amortization  of real
         estate assets,  and after adjustments for  unconsolidated  partnerships
         and joint  ventures.  (Net earnings  determined in accordance with GAAP
         include the noncash effect of straight-lining rent increases throughout
         the lease term and/or  rental  payments  during the  construction  of a
         property   prior  to  the  date  it  is   placed   in   service.   This
         straight-lining is a GAAP convention requiring real estate companies to
         report rental  revenue based on the average rent per year over the life
         of the lease.  During the years ended December 31, 1997, 1996 and 1995,
         net earnings included $1,941,054,  $517,067 and $39,142,  respectively,
         of these amounts.) FFO was developed by NAREIT as a relative measure of
         performance  and liquidity of an equity REIT in order to recognize that
         income-producing  real estate  historically  has not depreciated on the
         basis determined under GAAP.  However,  FFO (i) does not represent cash
         generated from operating activities  determined in accordance with GAAP
         (which, unlike FFO, generally reflects all cash effects of transactions
         and other events that enter into the  determination  of net  earnings),
         (ii) is not necessarily  indicative of cash flow available to fund cash
         needs and (iii)  should  not be  considered  as an  alternative  to net
         earnings  determined  in  accordance  with GAAP as an indication of the
         Company's  operating  performance,  or  to  cash  flow  from  operating
         activities  determined in  accordance  with GAAP as a measure of either
         liquidity or the Company's ability to make distributions.  Accordingly,
         the Company believes that in order to facilitate a clear  understanding
         of the consolidated  historical  operating results of the Company,  FFO
         should be considered in conjunction with the Company's net earnings and
         cash  flows as  reported  in the  accompanying  consolidated  financial
         statements and notes thereto.

(3)       The weighted  average  number of Shares  outstanding is based upon the
          period the Company was operational.



                                        9

<PAGE>



Item 7.       Management's  Discussion  and Analysis of Financial  Condition and
              Results of Operations

         CNL American  Properties Fund, Inc. is a Maryland  corporation that was
organized on May 2, 1994, to acquire  restaurant  Properties  located across the
United  States,  directly or  indirectly  through  joint  venture or  co-tenancy
arrangements,  to be leased on a long-term,  "triple-net"  basis to operators of
certain  national  and  regional  fast-food,   family-style  and  casual  dining
Restaurant  Chains.  In addition,  the Company  provides  Mortgage Loans for the
purchase of buildings,  generally by tenants that lease the underlying land from
the Company. In addition,  the Company offers furniture,  fixtures and equipment
financing through Secured Equipment Leases to operators of Restaurant Chains.

Liquidity and Capital Resources

         The Company was formed in May 1994, at which time the Company  received
initial capital contributions of $200,000 for 20,000 shares of common stock from
the Advisors.  In April 1995,  the Company  commenced a public  offering for the
sale of up to 16,500,000 Shares ($165,000,000) of common stock, the net proceeds
of which were used to invest in Properties and Mortgage Loans. Of the 16,500,000
Shares of common stock offered,  1,500,000 Shares  ($15,000,000)  were available
only to  stockholders  who elected to participate in the Company's  distribution
reinvestment  plan. Upon completion of its Initial Offering on February 6, 1997,
the Company had  received  subscription  proceeds  of  $150,591,765  (15,059,177
shares),  including  $591,765  (59,177  shares) issued pursuant to the Company's
reinvestment plan.

         Following the completion of its Initial Offering,  on February 6, 1997,
the Company  commenced the 1997  Offering of up to  27,500,000  Shares of common
stock.  Of the 27,500,000  Shares of common stock being  offered,  2,500,000 are
available  only to  stockholders  who  elect  to  participate  in the  Company's
reinvestment   plan.  As  of  December  31,  1997,   the  Company  had  received
subscription  proceeds  of  $361,729,707  (36,172,971  shares)  from the Initial
Offering  and  1997  Offering,  including  $2,464,413  (246,441  shares)  issued
pursuant to the reinvestment plan.

         As of December 31,  1997,  net proceeds to the Company from its Initial
Offering,  1997  Offering  and capital  contributions  from the  Advisor,  after
deduction  of  organizational  and  offering  expenses,  totalled  $323,867,890.
Approximately  $272,140,000 of such amount had been used to invest, or committed
for  investment,  in  244  Properties  (including  ten  Properties  on  which  a
restaurant  was being  constructed  as of December  31,  1997),  which  includes
mortgage  financing of $17,047,000,  acquisition  fees to the Advisor  totalling
$16,277,837  and  certain  acquisition  expenses as of December  31,  1997.  The
Company  acquired 18 of the 244 Properties  from  affiliates for purchase prices
totalling   approximately   $14,681,000.   The   affiliates  had  purchased  and
temporarily   held  title  to  these  Properties  in  order  to  facilitate  the
acquisition  of the  Properties by the Company.  Each Property  acquired from an
affiliate  was purchased at a cost no greater than the lesser of the cost of the
Property to the affiliate (including carrying costs) or the Property's appraised
value.

         In connection  with the ten Properties  under  construction at December
31,  1997,  the Company has entered  into various  development  agreements  with
tenants which provide terms and specifications for the construction of buildings
the tenants have agreed to lease.  The  agreements  provide a maximum  amount of
development  costs  (including the purchase price of the land and closing costs)
to be paid by the Company.  The aggregate maximum  development costs the Company
has  agreed  to  pay  are  approximately  $14,495,000,  of  which  approximately
$10,202,000  had been incurred as of December 31, 1997. The buildings  currently
under  construction  are expected to be  operational by June 1998. In connection
with the  purchase of each  Property,  the  Company,  as lessor,  entered into a
long-term lease agreement.

         On October 10, 1997,  the Company filed a  registration  statement with
the Securities and Exchange  Commission in connection  with the proposed sale by
the Company of up to  34,500,000  Shares of common  stock in its 1998  Offering,
which is  expected to  commence  immediately  following  the  completion  of the
Company's 1997 Offering. Of the 34,500,000 Shares of common stock to be offered,
2,000,000 will be available only to stockholders  purchasing  shares through the
reinvestment plan. The price per share and the other terms of the 1998 Offering,
including the  percentage of gross proceeds  payable to the managing  dealer for
selling commissions and expenses in connection with the offering, payable to the
Advisor for acquisition  fees and acquisition  expenses and  reimbursable to the
Advisor  for  offering  expenses,  will be the same as those  for the  Company's
Initial Offering and 1997 Offering.

                                       10

<PAGE>



Management  believes  that the  increase  in the amount of assets of the Company
that will result from the 1998 Offering will increase the diversification of the
Company's  assets and the  likelihood of listing the Company's  Shares of common
stock on a national securities exchange or over-the-counter  market ("Listing"),
although  there is no assurance  that Listing will occur.  If the Shares are not
listed on a national securities exchange or over-the-counter  market by December
31,  2005,  as to which there can be no  assurance,  the Company  will  commence
orderly sale of its assets and the  distribution  of the proceeds.  Listing does
not assure liquidity.

         As of January 22, 1998, the Company had received  subscription proceeds
of $374,047,498 (37,404,750 Shares) from its Initial Offering and 1997 Offering,
including   $2,464,413   (246,441  Shares)  issued  pursuant  to  the  Company's
reinvestment  plan.  As of January  22,  1998,  the  Company  had  invested,  or
committed for investment, a total of approximately $275,403,000 of such proceeds
in 246 Properties,  in providing  mortgage financing for Mortgage Loans relating
to 44 Properties  consisting  of land only and the  buildings on two  additional
Properties  through  Mortgage  Loans and to pay  acquisition  fees and  expenses
totalling  $16,832,137  to the Advisor,  leaving  approximately  $59,242,000  in
aggregate  net offering  proceeds  available for  investment  in Properties  and
Mortgage Loans.

         The Company expects to use uninvested net offering  proceeds,  plus any
net offering  proceeds from the sale of  additional  Shares in the 1997 Offering
and the 1998 Offering, to purchase additional  Properties,  to fund construction
costs relating to the Properties under  construction and to make Mortgage Loans.
The  Company  does not  intend  to use net  offering  proceeds  to fund  Secured
Equipment Leases;  however, from time to time the Company may use uninvested net
offering proceeds to repay a portion of or all of the balance  outstanding under
the  Line of  Credit  pending  the  investment  of  such  offering  proceeds  in
Properties  or Mortgage  Loans in order to reduce the  Company's  interest  cost
during such period.  The Company  expects to fund the Secured  Equipment  Leases
with proceeds  from the Line of Credit.  The number of Properties to be acquired
and  Mortgage  Loans to be  entered  into  will  depend  upon the  amount of net
offering proceeds available to the Company,  although the Company is expected to
have a total  portfolio of 670 to 730 Properties if the maximum number of shares
is sold in the 1997 Offering and 1998  Offering.  The Company  intends to limit
equipment financing to ten percent of the aggregate gross offering proceeds from
its offerings.

         The Company currently is negotiating to acquire additional  Properties,
but as of January 22, 1998, had not acquired any such Properties.

         During  1996,  the Company  entered  into three  Mortgage  Loans in the
aggregate  principal  sum of  $12,847,000,  collateralized  by  mortgages on the
buildings relating to 35 Pizza Hut Properties.  The Mortgage Loans bear interest
at a rate of 10.75% per annum and are being collected in 240 equal  installments
totalling  $130,426.  In February 1997,  the Company  entered into an additional
Mortgage Loan in the principal sum of $4,200,000, collateralized by mortgages on
the  buildings  on nine  Pizza  Hut  Properties  and two  additional  Pizza  Hut
buildings.  The Mortgage Loan bears interest at a rate of 10.5% per annum and is
being  collected  in  240  monthly  installments  of  $41,943.   Mortgage  notes
receivable  at  December  31,  1997 and  1996 of  $17,622,010  and  $13,389,607,
respectively, include accrued interest of $118,887 and $35,285, respectively.

         During 1997,  the Company sold five of its Properties and the Equipment
relating to two Secured  Equipment  Leases to tenants.  The Company received net
proceeds of approximately $7,252,000,  which were equal to the carrying value of
the Properties and the Equipment at the time of the sales. As a result,  no gain
or loss was recognized for financial  reporting  purposes.  The Company used the
net  sales  proceeds  relating  to the sale of the  Equipment  to repay  amounts
previously  advanced  under  its line of  credit.  The  Company  reinvested  the
proceeds from the sale of Properties in additional Properties.

         In October 1997, the Company  entered into two promissory  notes with a
borrower for equipment financing, totalling $13,225,000 which are collateralized
by restaurant  equipment.  The  promissory  notes bear interest at a rate of ten
percent  per  annum  and  will be  collected  in 84 equal  monthly  installments
totalling  $219,550  beginning  January 1, 1998.  As of December 31,  1997,  the
Company had advanced  $12,521,400 to the borrower and had a remaining balance to
fund of $703,600.  Notes receivable at December 31, 1997, of $13,548,044 include
accrued interest of $323,044.  In January 1998, at the borrower's  request,  the
Company  applied the  majority of the $703,600  balance  remaining to be funded,
towards the January  payments of principal  and interest,  the interest  accrued
since October 1997.

                                       11

<PAGE>




         In March 1996,  the Company  entered into a line of credit and security
agreement  with a bank,  the proceeds of which were to be used by the Company to
fund Secured  Equipment  Leases.  The line of credit  provided  that the Company
would be able to receive  advances  of up to  $15,000,000  until  March 4, 1998.
Generally,  all advances  under the line of credit bore interest at either (i) a
rate per annum equal to 215 basis points above the Reserve  Adjusted  LIBOR Rate
(as  defined in the line of credit) or (ii) a rate per annum equal to the bank's
prime rate,  whichever the Company selected at the time advances were made. As a
condition of obtaining  the line of credit,  the Company  agreed to grant to the
bank a first security interest in the Secured Equipment Leases.

         In August 1997,  the Company's  $15,000,000  line of credit was amended
and  restated  to  enable  the  Company  to  receive  advances  on  a  revolving
$35,000,000  uncollateralized Line of Credit to provide equipment financing,  to
purchase and develop  Properties and to fund Mortgage  Loans.  The advances bear
interest at a rate of LIBOR plus 1.65% or the bank's prime rate,  whichever  the
Company  selects at the time of borrowing.  Interest  only is repayable  monthly
until July 31, 1999, at which time all remaining interest and principal shall be
due. The Line of Credit provides for two one-year renewal options.

         During 1996,  the Company  entered into interest  rate swap  agreements
with a commercial  bank to reduce the impact of changes in interest rates on its
floating rate long-term debt. These agreements  effectively change the Company's
interest rate exposure on notional amounts totalling approximately $2,110,000 of
the  outstanding  floating  rate notes to fixed rates ranging from 8.75% to nine
percent per annum.  The notional  amounts of the interest  rate swap  agreements
amortize over the period of the  agreements  which  approximate  the term of the
related notes. As of December 31, 1997, the notional  balance was  approximately
$1,750,000. The Company is exposed to credit loss in the event of nonperformance
by the other party to the interest rate swap  agreements;  however,  the Company
does not anticipate nonperformance by the counterparty.

         Advances  used to fund  Secured  Equipment  Leases will be repaid using
payments received from Secured Equipment Leases and will be refinanced in regard
to any Secured  Equipment  Lease not fully  repaid at the end of the term of the
Line of Credit. The Company,  from time to time, may use uninvested net offering
proceeds to repay a portion of or all of the balance  outstanding under the Line
of Credit  pending the  investment  of such  offering  proceeds in Properties or
Mortgage  Loans in order to reduce  the  Company's  interest  cost  during  such
period.  Advances used to purchase and develop  Properties  and to fund Mortgage
Loans will be repaid  using  additional  offering  proceeds or  refinanced  on a
long-term basis.

         The Company will not encumber Properties in connection with the Line of
Credit.  Management  believes that during the offering period the Line of Credit
will allow the Company to make investments in Properties and Mortgage Loans that
the  Company  otherwise  would be forced to delay  until it raised a  sufficient
amount of  proceeds  from the sale of shares  to allow the  Company  to make the
investments.  By eliminating this delay the Company will also eliminate the risk
that  these  investments  will no  longer  be  available,  or the  terms  of the
investments  will be less  favorable,  when the  Company  has raised  sufficient
offering  proceeds.  Alternatively,  affiliates  of the Advisor  could make such
investments,  pending receipt by the Company of sufficient offering proceeds, in
order  to  preserve  the  investment  opportunities  for the  Company.  However,
Properties  acquired by the  Company in this manner  would be subject to closing
costs both on the  original  purchase  by the  affiliate  and on the  subsequent
purchase by the Company,  which would increase the amount of expenses associated
with the  acquisition of Properties  and reduce the amount of offering  proceeds
available for investment in  income-producing  assets.  Management believes that
the use of the Line of Credit by the  Company  will enable the Company to reduce
or  eliminate  the  instances  in which  the  Company  will be  required  to pay
duplicate closing costs.

         During the years ended December 31, 1997 and 1996, the Company obtained
advances totalling $19,721,804 and $3,666,896,  respectively,  under the Line of
Credit,  the proceeds of which were used to fund Secured Equipment Leases and to
pay loan costs.  During the year ended  December  31,  1997,  the  Company  used
proceeds  relating to the sale of the equipment during 1997, as described above,
and uninvested net offering  proceeds,  to repay $20,784,577 of amounts advanced
under the Line of Credit.  During the year ended  December 31, 1996, the Company
used amounts  collected under the terms of the Secured Equipment Leases to repay
$145,080 of amounts  advanced under the Line of Credit.  The Company  expects to
obtain  additional  advances  under the Line of Credit to fund future  equipment
financing  requirements  and to  purchase  Properties  and to invest in Mortgage
Loans.


                                       12

<PAGE>



         Properties  are and will be leased on a  long-term,  triple-net  basis,
meaning that tenants are generally  required to pay all repairs and maintenance,
property  taxes,  insurance and utilities.  Rental payments under the leases are
expected to exceed the  Company's  operating  expenses.  For these  reasons,  no
short-term  or  long-term   liquidity  problems  currently  are  anticipated  by
management.

         Until Properties are acquired,  or Mortgage Loans are entered into, net
offering  proceeds  are held in  short-term,  highly  liquid  investments  which
management  believes to have  appropriate  safety of principal.  This investment
strategy  provides high  liquidity in order to  facilitate  the Company's use of
these  funds to  acquire  Properties  at such time as  Properties  suitable  for
acquisition  are located or to fund Mortgage  Loans.  At December 31, 1997,  the
Company had  $49,595,001  invested in such short-term  investments  (including a
certificate  of deposit in the amount of  $2,000,000) as compared to $42,450,088
at  December  31,  1996.  The  increase  in the amount  invested  in  short-term
investments  reflects  subscription  proceeds  derived  from the sale of  shares
during  the year  ended  December  31,  1997,  net of the  repayment  of amounts
advanced under the Line of Credit, as described above.  These funds will be used
primarily to purchase and develop or renovate Properties (directly or indirectly
through joint venture arrangements), to make Mortgage Loans, to pay offering and
acquisition  costs, to pay distributions to stockholders,  to temporarily reduce
amounts outstanding under the Company's Line of Credit pending the investment of
net offering proceeds, to meet Company expenses and, in management's discretion,
to create cash reserves.

         During the years ended December 31, 1997, 1996 and 1995,  affiliates of
the  Company  incurred  on  behalf  of  the  Company  $2,351,244,  $804,617  and
$2,084,145,  respectively,  for certain organizational and offering expenses. In
addition, during the years ended December 31, 1997, 1996 and 1995, affiliates of
the Company incurred on behalf of the Company  $514,908,  $206,103 and $131,629,
respectively,  for certain  acquisition  expenses  and  $368,516,  $243,402  and
$54,234,  respectively, for certain operating expenses. As of December 31, 1997,
the Company owed the Advisor and its  affiliates  $1,524,294  for such  amounts,
unpaid fees and accounting and administrative  expenses.  The Advisor has agreed
to pay or reimburse to the Company all  organizational  and offering expenses in
excess of three  percent of gross  offering  proceeds  from each of the  Initial
Offering, 1997 Offering and 1998 Offering.

         During the years ended  December 31, 1997,  1996 and 1995,  the Company
generated cash from  operations  (which  includes cash received from tenants and
interest and other income  received,  less cash paid for operating  expenses) of
$17,076,214,  $5,482,540  and  $498,459,  respectively.  Based  on  current  and
anticipated future cash from operations,  the Company declared  distributions to
the  stockholders of $16,854,297,  $5,436,072 and $638,618 during 1997, 1996 and
1995,  respectively.   In  addition,  in  January  1998,  the  Company  declared
distributions to its stockholders  totalling $2,299,701,  payable in March 1998.
For the years ended December 31, 1997, 1996 and 1995, 93.33%, 90.25% and 59.82%,
respectively,  of the distributions  received by stockholders were considered to
be ordinary income and 6.67%, 9.75% and 40.18%, respectively,  were considered a
return  of  capital  for  federal  income  tax  purposes.  However,  no  amounts
distributed or to be distributed to the stockholders as of January 22, 1998, are
required  to be or have been  treated by the  Company as a return of capital for
purposes of calculating the stockholders' return on their invested capital.

         Management  believes  that the  Properties  are  adequately  covered by
insurance.  In  addition,  the Advisor has  obtained  contingent  liability  and
property  coverage for the Company.  This insurance policy is intended to reduce
the Company's  exposure in the unlikely event a tenant's insurance policy lapses
or is  insufficient  to cover a claim  relating to the  Property.  The Company's
investment  strategy of  acquiring  Properties  for cash and leasing  them under
triple-net  leases  to  operators  who meet  specified  financial  standards  is
expected to minimize the Company's operating expenses.

         Due  to the  fact  that  the  Properties  are  leased  on a  long-term,
triple-net basis,  management does not believe that working capital reserves are
necessary  at this  time.  Management  has the  right to cause  the  Company  to
maintain  reserves if, in their  discretion,  they  determine  such reserves are
required to meet the Company's working capital needs.

         Management  expects that the cash  generated  from  operations  will be
adequate to pay operating expenses.





                                       13

<PAGE>



Results of Operations

         No  significant  operations  commenced  until the Company  received the
minimum offering proceeds of $1,500,000 on June 1, 1995.

         As of  December  31,  1997,  the  Company  and its  consolidated  joint
venture,  CNL/Corral  South  Joint  Venture,  had  purchased  and  entered  into
long-term,  triple-net leases for 244 Properties. The leases provide for minimum
annual  base rental  payments  (payable in monthly  installments)  ranging  from
approximately  $61,900 to $467,500.  In  addition,  certain  leases  provide for
percentage rent based on sales in excess of a specified amount.  The majority of
the leases also provide that,  commencing in generally the sixth lease year, the
annual  base rent  required  under the terms of the  leases  will  increase.  In
connection therewith,  during the years ended December 31, 1997, 1996, and 1995,
the  Company   earned  a  total  of   $15,490,615,   $4,357,298   and  $539,776,
respectively,  in rental income from  operating  leases,  earned income from the
direct financing leases and contingent  rental income from 244 Properties and 27
Secured  Equipment Leases in 1997, from 85 Properties and six Secured  Equipment
Leases in 1996 and from 16 Properties in 1995, respectively. Because the Company
did not commence  significant  operations until it received the minimum offering
proceeds  on  June 1,  1995,  and  intends  to make  additional  investments  in
Properties,  Mortgage Loans and Secured Equipment Leases, revenues for the years
ended  December 31, 1997,  1996 and 1995,  represent  only a portion of revenues
which the Company is expected to earn during  future  years in which the Company
has  completed   additional   investments  and  the  Company's   Properties  are
operational (and other investments in place) for the full period.

         During the years ended  December 31, 1997 and 1996,  the Company earned
$1,687,456 and $1,069,349, respectively, in mortgage interest income relating to
the Mortgage Loans collateralized by Pizza Hut Properties, as described above in
"Liquidity and Capital  Resources".  The increase during the year ended December
31, 1997, is  attributable  to investing in an  additional  Mortgage Loan during
1997.

         During  1997,  three  of  the  Company's  lessees  and  borrowers,   or
affiliated  groups of lessees and borrowers,  Castle Hill,  Foodmaker,  Inc. and
Houlihan's  Restaurants  Inc.,  each  contributed  more than ten  percent of the
Company's  total  rental,  earned  income and  interest  income  relating to its
Properties,  Mortgage  Loans and Secured  Equipment  Leases.  Castle Hill is the
lessee under leases  relating to the land portion of 44  restaurants  and is the
borrower on Mortgage Loans relating to the buildings on such Properties, as well
as two  additional  properties.  Foodmaker,  Inc.  is the  lessee  under  leases
relating to 29 restaurants and Houlihan's Restaurants,  Inc. is the lessee under
leases relating to 20 restaurants.  In addition,  four Restaurant Chains,  Pizza
Hut, Golden Corral Family  Steakhouse,  Jack in the Box and Boston Market,  each
accounted for more than ten percent of the Company's total rental, earned income
and interest income relating to Properties, Mortgage Loans and Secured Equipment
Leases  during 1997.  Because the Company has not  completed  its  investment in
Properties,  Mortgage  Loans and  Secured  Equipment  Leases  as yet,  it is not
possible  to  determine  which  lessees,  borrowers  or  Restaurant  Chains will
contribute  more than ten percent of the  Company's  rental,  earned  income and
interest  income  during 1998 and  subsequent  years.  In the event that certain
lessees,  borrowers or Restaurant Chains contribute more than ten percent of the
Company's rental, earned income and interest income in future years, any failure
of such lessees,  borrowers or  Restaurant  Chains could  materially  affect the
Company's income.

         During the years ended  December 31, 1997,  1996 and 1995,  the Company
earned  $2,254,375,  $773,404 and  $118,859,  respectively,  in interest  income
earned on the  promissory  notes with a borrower  for  equipment  financing,  as
described above in "Liquidity and Capital  Resources",  and from  investments in
money market accounts or other short-term,  highly liquid  investments and other
income.  Interest  income  is  expected  to  increase  as  the  Company  invests
subscription  proceeds received in the future relating to both the 1997 Offering
and the 1998  Offering  in  highly  liquid  investments  pending  investment  in
Properties and Mortgage Loans. However, as net offering proceeds are invested in
Properties and used to make Mortgage Loans,  interest income from investments in
money market accounts or other short-term, highly liquid investments is expected
to decrease.

         Operating expenses,  including  depreciation and amortization  expense,
were $3,862,024,  $1,430,795 and $290,276 for the years ended December 31, 1997,
1996 and 1995,  respectively.  Total operating expenses increased during each of
the years  ended  December  31,  1997 and 1996,  as  compared to the prior year,
primarily as a result of the Company  having  invested in additional  Properties
and Mortgage Loans during each year.  General and  administrative  expenses as a
percentage  of total  revenues is  expected to decrease as the Company  acquires
additional

                                       14

<PAGE>



Properties,  invests  in  additional  Mortgage  Loans and the  Properties  under
construction become operational. However, asset and mortgage management fees and
depreciation  and  amortization  expense are expected to increase as the Company
invests in additional Properties and Mortgage Loans.

          The Company has made an election  under Section 856(c) of the Internal
Revenue Code of 1986, as amended (the  "Code"),  to be taxed as a REIT under the
Code  beginning  with its taxable year ended  December 31, 1995. As a REIT,  for
federal  income  tax  purposes,  the  Company  generally  will not be subject to
federal  income tax on income that it distributes  to its  stockholders.  If the
Company  fails to qualify as a REIT in any taxable  year,  it will be subject to
federal income tax on its taxable income at regular corporate rates and will not
be permitted to qualify for treatment as a REIT for federal  income tax purposes
for four years  following the year during which  qualification  is lost. Such an
event could  materially  affect the Company's net income.  However,  the Company
believes  that it is  organized  and operates in such a manner as to qualify for
treatment as a REIT for the years ended  December 31,  1997,  1996 and 1995.  In
addition, the Company intends to continue to operate the Company so as to remain
qualified as a REIT for federal income tax purposes.

         All of the  Company's  leases as of December 31, 1997,  are  triple-net
leases and contain provisions that management believes will mitigate the adverse
effect of inflation.  Such provisions  include clauses  requiring the payment of
percentage rent based on certain restaurant sales above a specified level and/or
automatic  increases  in base rent at  specified  times  during  the term of the
lease.  Management  expects that  increases in  restaurant  sales volumes due to
inflation  and real sales growth  should  result in an increase in rental income
over  time.  Continued  inflation  also may cause  capital  appreciation  of the
Company's Properties.  Inflation and changing prices,  however, also may have an
adverse  impact  on the  sales  of the  restaurants  and  on  potential  capital
appreciation of the Properties.

         In February  1997,  the  Financial  Accounting  Standards  Board issued
Statement of Financial  Accounting  Standards No. 128, "Earnings Per Share". The
statement,  which is effective for fiscal years ending after  December 15, 1997,
provides for a revised  computation of earnings per share.  The Company  adopted
this standard during the year ended December 31, 1997. Adoption of this standard
had no  material  effect on the  Company's  financial  position  or  results  of
operations.

         In February  1997,  the  Financial  Accounting  Standards  Board issued
Statement of Financial  Accounting Standards No. 129, "Disclosure of Information
about Capital  Structure".  The  statement,  which is effective for fiscal years
ending after December 15, 1997, provides for disclosure of the Company's capital
structure. At this time, the Company's Board of Directors has not determined the
relative  rights,  preferences,  and  privileges  of each  class  or  series  of
preferred stock  authorized.  Since the Company has not issued preferred shares,
the disclosures to this standard are not applicable.

         In June 1997, the Financial Accounting Standards Board issued Statement
No. 130 "Reporting Comprehensive Income". The statement,  which is effective for
fiscal years  beginning  after December 15, 1997,  requires the reporting of net
earnings  and all other  changes  to equity  during  the  period,  except  those
resulting from investments by owners and  distributions to owners, in a separate
statement that begins with net earnings. Currently, the Company's only component
of comprehensive  income is its net earnings.  The Company does not believe that
adoption of this standard will have a material effect on the Company's financial
position or results of operations.


         The  Advisor  of  the  Company  is in  the  process  of  assessing  and
addressing  the impact of the year 2000 on its computer  package  software.  The
hardware  and  built-in  software  are  believed  to  be  year  2000  compliant.
Accordingly, the Company does not expect this matter to materially impact how it
conducts business nor its future results of operations or financial position.

         This information contains forward-looking statements within the meaning
of Section 27A of the  Securities  Act of 1933 and Section 21E of the Securities
Exchange  Act of 1934.  Although  the  Company  believes  that the  expectations
reflected  in  such   forward-looking   statements  are  based  upon  reasonable
assumptions, the Company's actual results could differ materially from those set
forth in the forward-looking statements. Certain factors that might cause such a
difference  include  the  following:  changes  in general  economic  conditions,
changes in real estate conditions,  continued  availability of proceeds from the
Company's 1997 Offering and the availability of proceeds

                                       15

<PAGE>



from the Company's 1998 Offering,  the ability of the Company to locate suitable
tenants for its Properties and borrowers for its Mortgage Loans, and the ability
of such tenants and borrowers to make payments  under their  respective  leases,
Secured Equipment Leases or Mortgage Loans.


Item 8.   Financial Statements and Supplementary Data

                                       16

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY


                                    CONTENTS






                                                             Page

Report of Independent Accountants                            18

Financial Statements:

  Consolidated Balance Sheets                                19

  Consolidated Statements of Earnings                        20

  Consolidated Statements of Stockholders' Equity            21

  Consolidated Statements of Cash Flows                      22

  Notes to Consolidated Financial Statements                 24

                                       17

<PAGE>








                        Report of Independent Accountants



To the Board of Directors
CNL American Properties Fund, Inc.


We  have  audited  the  consolidated  financial  statements  and  the  financial
statement   schedules  of  CNL  American   Properties  Fund,  Inc.  (a  Maryland
corporation)  and its subsidiary  listed in Item 14(a) of this Form 10-K.  These
financial statements and financial statement schedules are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements and financial statement schedules based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  consolidated  financial  position of CNL American
Properties  Fund,  Inc. and its subsidiary as of December 31, 1997 and 1996, and
the  consolidated  results of their  operations and their cash flows for each of
the three years in the period  ended  December  31,  1997,  in  conformity  with
generally  accepted  accounting  principles.  In addition,  in our opinion,  the
financial  statement schedules referred to above, when considered in relation to
the basic financial statements taken as a whole, present fairly, in all material
respects, the information required to be included herein.



/s/Coopers & Lybrand L.L.P.


Orlando, Florida
January 22, 1998

                                       18

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS


                                                          December 31,
               ASSETS                               1997               1996
                                                ------------       ------------

Land and buildings on operating leases,
  less accumulated depreciation                 $205,338,186       $ 60,243,146
Net investment in direct financing leases         47,613,595         15,204,972
Cash and cash equivalents                         47,586,777         42,450,088
Certificates of deposit                            2,008,224                 -
Receivables, less allowance for doubtful
  accounts of $99,964 and $2,857                     635,796            142,389
Notes receivable                                  13,548,044                 -
Mortgage notes receivable                         17,622,010         13,389,607
Accrued rental income                              1,772,261            422,076
Intangibles and other assets                       2,952,869          2,972,770
                                                ------------       ------------

                                                $339,077,762       $134,825,048
                                                ============       ============

  LIABILITIES AND STOCKHOLDERS' EQUITY

Line of credit                                  $  2,459,043       $  3,521,816
Accrued construction costs payable                10,978,211          6,587,573
Accounts payable and other accrued expenses        1,060,497             79,817
Due to related parties                             1,524,294            997,084
Rents paid in advance                                517,428            118,900
Deferred rental income                               557,576            335,849
Other payables                                        56,878             28,281
                                                ------------       ------------
      Total liabilities                           17,153,927         11,669,320
                                                ------------       ------------

Minority interest                                    285,734            288,301
                                                ------------       ------------

Commitments (Note 13)

Stockholders' equity:
  Preferred stock, without par value.
    Authorized and unissued 3,000,000
    shares                                                -                  -
  Excess shares, $0.01 par value per share.
    Authorized and unissued 78,000,000
    and 23,000,000 shares, respectively                   -                  -
  Common stock, $0.01 par value per share.
    Authorized 75,000,000 and 20,000,000
    shares, respectively, issued and
    outstanding 36,192,971 and 13,944,715,
    respectively                                     361,930            139,447
  Capital in excess of par value                 323,525,961        123,687,929
  Accumulated distributions in excess of
    net earnings                                  (2,249,790)          (959,949)
                                                ------------       ------------
      Total stockholders' equity                 321,638,101        122,867,427
                                                ------------       ------------

                                                $339,077,762       $134,825,048
                                                ============       ============





          See accompanying notes to consolidated financial statements.

                                       19

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

                       CONSOLIDATED STATEMENTS OF EARNINGS




<TABLE>
<CAPTION>

                                                                             Year Ended December 31,
                                                               1997                 1996                 1995
                                                            -----------          -----------          -----------
<S> <C>
Revenues:
  Rental income from operating
    leases                                                  $12,457,200          $ 3,731,806          $   510,841
  Earned income from direct
    financing leases                                          3,033,415              625,492               28,935
  Interest income from
    mortgage notes receivable                                 1,687,456            1,069,349                   -
  Other interest income                                       2,254,375              773,404              118,859
  Other income                                                   25,487                6,633                  496
                                                            -----------          -----------          -----------
                                                             19,457,933            6,206,684              659,131
                                                            -----------          -----------          -----------

Expenses:
  General operating and
    administrative                                              944,763              542,564              134,759
  Professional services                                          65,962               58,976                8,119
  Asset and mortgage manage-
    ment fees to related party                                  804,879              251,200               23,078
  State taxes                                                   251,358               56,184               20,189
  Depreciation and amorti-
    zation                                                    1,795,062              521,871              104,131
                                                            -----------          -----------          -----------
                                                              3,862,024            1,430,795              290,276
                                                            -----------          -----------          -----------

Earnings Before Minority
  Interest in Income of
  Consolidated Joint Venture                                 15,595,909            4,775,889              368,855

Minority Interest in Income of
  Consolidated Joint Venture                                    (31,453)             (29,927)                 (76)
                                                            -----------          -----------          -----------

Net Earnings                                                $15,564,456          $ 4,745,962          $   368,779
                                                            ===========          ===========          ===========

Earnings Per Share of Common
  Stock (Basic and Diluted)                                 $      0.66          $      0.59          $      0.19
                                                            ===========          ===========          ===========

Weighted Average Number of
  Shares of Common Stock
  Outstanding                                                23,423,868            8,071,670            1,898,350
                                                            ===========          ===========          ===========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       20

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                  Years Ended December 31, 1997, 1996 and 1995
<TABLE>
<CAPTION>


                                                                                                   Accumulated
                                                     Common stock             Capital in           distributions
                                                 Number          Par           excess of           in excess of
                                               of shares        value          par value           net earnings          Total
<S> <C>
Balance at December 31,
  1994                                             20,000      $    200       $    199,800        $        -          $    200,000

Subscriptions received
  for common stock
  through public offering
  and distribution
  reinvestment plan                             3,845,416        38,454         38,415,704                 -            38,454,158

Stock issuance costs                                   -             -          (6,403,671)                -            (6,403,671)

Net earnings                                           -             -                  -             368,779              368,779

Distributions declared
  ($0.31 per share)                                    -             -                  -            (638,618)            (638,618)
                                               ----------      --------       ------------        -----------         ------------

Balance at December 31,
  1995                                          3,865,416        38,654         32,211,833           (269,839)          31,980,648

Subscriptions received
  for common stock
  through public offering
  and distribution
  reinvestment plan                            10,079,299       100,793        100,692,198                 -           100,792,991

Stock issuance costs                                   -             -          (9,216,102)                -            (9,216,102)

Net earnings                                           -             -                  -           4,745,962            4,745,962

Distributions declared
  ($0.71 per share)                                    -             -                  -          (5,436,072)          (5,436,072)
                                               ----------      --------       ------------        -----------         ------------

Balance at December 31,
  1996                                         13,944,715       139,447        123,687,929           (959,949)         122,867,427

Subscriptions received
  for common stock
  through public offering
  and distribution
  reinvestment plan                            22,248,256       222,483        222,260,077                 -           222,482,560

Stock issuance costs                                   -             -         (22,422,045)                -           (22,422,045)

Net earnings                                           -             -                  -          15,564,456           15,564,456

Distributions declared
  ($0.74 per share)                                    -             -                  -         (16,854,297)         (16,854,297)
                                               ----------      --------       ------------        -----------         ------------

Balance at December 31,
  1997                                         36,192,971      $361,930       $323,525,961        $(2,249,790)        $321,638,101
                                               ==========      ========       ============        ===========         ============

</TABLE>


          See accompanying notes to consolidated financial statements.

                                       21

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                       Year Ended December 31,
                                                        1997                 1996                 1995
                                                    ------------         ------------         --------
<S> <C>
Increase (Decrease) in Cash and Cash
  Equivalents:

    Cash Flows From Operating Activities:
      Cash received from tenants                    $ 15,440,803         $  4,543,506         $    492,488
      Cash paid for expenses                          (1,903,876)            (928,001)            (113,384)
      Interest received                                3,539,287            1,867,035              119,355
                                                    ------------         ------------         ------------
          Net cash provided by operating
            activities                                17,076,214            5,482,540              498,459
                                                    ------------         ------------         ------------

    Cash Flows From Investing Activities:
      Additions to land and buildings on
        operating leases                            (143,542,667)         (36,104,148)         (18,835,969)
      Increase in net investment in direct
        financing leases                             (39,155,974)         (13,372,621)          (1,364,960)
      Proceeds from sale of buildings and
        equipment under direct financing
        leases                                         7,251,510                   -                    -
      Investment in certificates of deposit           (2,000,000)                  -                    -
      Investment in notes receivable                 (12,521,401)                  -                    -
      Investment in mortgage notes
        receivable                                    (4,401,982)         (13,547,264)                  -
      Collections on mortgage notes
        receivable                                       250,732              133,850                   -
      Increase in intangibles and other
        assets                                                -            (1,103,896)            (628,142)
                                                    ------------         ------------         ------------
          Net cash used in investing
            activities                              (194,119,782)         (63,994,079)         (20,829,071)
                                                    ------------         ------------         ------------

    Cash Flows From Financing Activities:
      Reimbursement of acquisition,
        organization, deferred offering and
        stock issuance costs paid by related
        parties on behalf of the Company              (2,857,352)            (939,798)          (2,500,056)
      Proceeds from borrowing on line of
        credit                                        19,721,804            3,666,896                   -
      Payment on line of credit                      (20,784,577)            (145,080)                  -
      Contribution from minority interest
        of consolidated joint venture                           -              97,419              200,000
      Subscriptions received from
        stockholders                                 222,482,560          100,792,991           38,454,158
      Distributions to minority interest                 (34,020)             (39,121)                  -
      Distributions to stockholders                  (16,854,297)          (5,439,404)            (635,286)
      Payment of stock issuance costs                (19,542,862)          (8,486,188)          (3,680,704)
      Other                                               49,001              (54,533)                  -
                                                    ------------         ------------         -----------
          Net cash provided by financing
            activities                               182,180,257           89,453,182           31,838,112
                                                    ------------         ------------         ------------

Net Increase in Cash and Cash Equivalents              5,136,689           30,941,643           11,507,500

Cash and Cash Equivalents at Beginning of
  Year                                                42,450,088           11,508,445                  945
                                                    ------------         ------------         ------------

Cash and Cash Equivalents at End of Year            $ 47,586,777         $ 42,450,088         $ 11,508,445
                                                    ============         ============         ============
</TABLE>



          See accompanying notes to consolidated financial statements.

                                       22

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED


<TABLE>
<CAPTION>

                                                                       Year Ended December 31,
                                                         1997                 1996                 1995
                                                     ------------         ------------         --------
<S> <C>
Reconciliation of Net Earnings to Net Cash
  Provided by Operating Activities:

    Net earnings                                     $ 15,564,456         $  4,745,962         $    368,779
                                                     ------------         ------------         ------------
    Adjustments to reconcile net earnings
      to net cash provided by operating
      activities:
        Depreciation                                    1,784,268              511,078              100,318
        Amortization                                       10,794               69,886                3,813
        Increase in receivables                          (905,339)            (160,984)             (44,749)
        Decrease in net investment in direct
          financing leases                              1,130,095              259,740                1,078
        Increase in accrued rental income              (1,350,185)            (382,934)             (39,142)
        Increase in intangibles and other
          assets                                           (6,869)              (4,293)              (8,090)
        Increase (decrease) in accounts
          payable and other accrued expenses              153,223               (2,896)              38,461
        Increase (decrease) in due to related
          parties, excluding reimbursement of
          acquisition, organization, deferred
          offering and stock issuance costs
          paid on behalf of the Company                    15,466              (30,929)              42,868
        Increase in rents paid in advance                 398,528               93,549               25,351
        Increase in deferred rental income                221,727              335,849                   -
        Increase in other payables                         28,597               18,585                9,696
        Increase in minority interest                      31,453               29,927                   76
                                                     ------------         ------------         ------------
            Total adjustments                           1,511,758              736,578              129,680
                                                     ------------         ------------         ------------

Net Cash Provided by Operating Activities            $ 17,076,214         $  5,482,540         $    498,459
                                                     ============         ============         ============

Supplemental Schedule of Non-Cash Investing
  and Financing Activities:

    Related parties paid certain  acquisition,
      organization,  deferred offering and
      stock issuance costs on behalf of the
      Company as follows:
        Acquisition costs                            $    514,908         $    206,103         $    131,629
        Organization costs                                     -                    -                20,000
        Deferred offering costs                                -               466,405                   -
        Stock issuance costs                            2,351,244              338,212            2,084,145
                                                     ------------         ------------         ------------

                                                     $  2,866,152         $  1,010,720         $  2,235,774
                                                     ============         ============         ============
</TABLE>



          See accompanying notes to consolidated financial statements.

                                       23

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                  Years Ended December 31, 1997, 1996 and 1995


1.       Significant Accounting Policies:

         Organization  and Nature of Business - CNL  American  Properties  Fund,
         Inc.  (the  "Company")  was  organized  in  Maryland  on May  2,  1994,
         primarily for the purpose of acquiring,  directly or indirectly through
         joint venture or co-tenancy  arrangements,  restaurant  properties (the
         "Properties")  to  be  leased  on  a  long-term,  triple-net  basis  to
         operators of certain national and regional fast-food,  family-style and
         casual dining restaurant  chains.  The Company also provides  financing
         (the  "Mortgage  Loans") for the  purchase of  buildings,  generally by
         tenants that lease the underlying  land from the Company.  In addition,
         the Company offers furniture,  fixtures and equipment financing through
         leases or loans ("Secured Equipment Leases") to operators of restaurant
         chains.

         The Company was a development stage enterprise from May 2, 1994 through
         June 1, 1995. Since operations had not begun,  activities  through June
         1, 1995, were devoted to organization of the Company.

         Principles  of  Consolidation  - The  Company  accounts  for its 85.47%
         interest in  CNL/Corral  South Joint  Venture  using the  consolidation
         method.   Minority  interest  represents  the  minority  joint  venture
         partner's   proportionate   share  of  the  equity  in  the   Company's
         consolidated joint venture. All significant  intercompany  accounts and
         transactions have been eliminated.

         Real Estate and Lease  Accounting - The Company records the acquisition
         of land,  buildings and equipment at cost,  including  acquisition  and
         closing costs. In addition, interest costs incurred during construction
         are  capitalized  in accordance  with  accounting  standards.  Land and
         buildings are leased to unrelated third parties on a triple-net  basis,
         whereby the tenant is generally  responsible for all operating expenses
         relating  to  the  Property,   including  property  taxes,   insurance,
         maintenance  and repairs.  In addition,  the Company  offers  equipment
         financing  through leases or loans.  The Property  leases are accounted
         for using either the direct  financing  or the  operating  method.  The
         Secured  Equipment  Leases are accounted for using the direct financing
         method.  Such methods are described below:

                                       24

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995


1.       Significant Accounting Policies - Continued:

                  Direct  financing  method - The leases accounted for using the
                  direct  financing  method are recorded at their net investment
                  (which at the inception of the lease generally  represents the
                  cost of the asset) (Note 5).  Unearned  income is deferred and
                  amortized  to income  over the lease  terms so as to produce a
                  constant   periodic  rate  of  return  on  the  Company's  net
                  investment in the leases.

                  Operating  method - Land and  building  leases  accounted  for
                  using the  operating  method are recorded at cost,  revenue is
                  recognized as rentals are earned and  depreciation  is charged
                  to operations as incurred.  Buildings are  depreciated  on the
                  straight-line  method over their estimated  useful lives of 30
                  years. When scheduled rentals  (including rental payments,  if
                  any,  required  during the  construction  of a Property)  vary
                  during the lease term, income is recognized on a straight-line
                  basis so as to produce a constant periodic rent over the lease
                  term commencing on the date the Property is placed in service.

                  Accrued  rental  income  represents  the  aggregate  amount of
                  income  recognized  on a  straight-line  basis  in  excess  of
                  scheduled  rental  payments  to date.  In  contrast,  deferred
                  rental income  represents  the  aggregate  amount of scheduled
                  rental payments to date (including  rental payments due during
                  construction  and  prior  to  the  Property  being  placed  in
                  service)  in excess of income  recognized  on a  straight-line
                  basis over the lease term  commencing on the date the Property
                  is placed in service.

         When the  Properties  or  equipment  are  sold,  the  related  cost and
         accumulated  depreciation  for operating  leases and the net investment
         for direct financing leases, plus any accrued rental income or deferred
         rental  income,  will be  removed  from the  accounts  and any gains or
         losses from sales will be reflected in income.  Management  reviews its
         Properties for

                                       25

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995


1.       Significant Accounting Policies - Continued:

         impairment  whenever events or changes in  circumstances  indicate that
         the  carrying  amount  of the  assets  may not be  recoverable  through
         operations.  Management  determines  whether an impairment in value has
         occurred by comparing the  estimated  future  undiscounted  cash flows,
         including the residual value of the Property, with the carrying cost of
         the individual Property. If an impairment is indicated,  the assets are
         adjusted to their fair value.

         Mortgage  Loans - The Company  accounts for loan  origination  fees and
         costs  incurred in connection  with Mortgage  Loans in accordance  with
         Statement of Financial  Accounting  Standards No. 91,  "Accounting  for
         Nonrefundable  Fees and Costs  Associated with Originating or Acquiring
         Loans and Initial Direct Costs of Leases".  This statement requires the
         deferral of loan origination fees and the capitalization of direct loan
         costs. The costs capitalized,  net of the fees deferred,  are amortized
         to  interest  income  as an  adjustment  of yield  over the life of the
         loans. The unpaid principal and accrued interest on the Mortgage Loans,
         plus the  unamortized  balance of such fees and costs are  included  in
         mortgage notes receivable (see Note 7).

         Cash and Cash  Equivalents  - The Company  considers  all highly liquid
         investments  with a maturity of three months or less when  purchased to
         be cash  equivalents.  Cash  and cash  equivalents  consist  of  demand
         deposits at  commercial  banks,  money  market funds (some of which are
         backed by  government  securities)  and  certificates  of deposit (with
         maturities of three months or less when  purchased).  Cash  equivalents
         are stated at cost plus accrued  interest,  which  approximates  market
         value.

         Cash accounts maintained on behalf of the Company in demand deposits at
         commercial  banks,  money market funds and  certificates of deposit may
         exceed  federally  insured  levels;   however,   the  Company  has  not
         experienced any losses in such accounts.  The Company limits investment
         of  temporary  cash  investments  to financial  institutions  with high
         credit standing;  therefore,  management  believes it is not exposed to
         any significant credit risk on cash and cash equivalents.



                                       26

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995


1.       Significant Accounting Policies - Continued:

         Organization  Costs - Organization  costs are amortized over five years
         using the  straight-line  method and are  included in  intangibles  and
         other  assets.  For  the  years  ended  December  31,  1997  and  1996,
         accumulated  amortization  of $10,318  and  $6,318,  respectively,  was
         recorded.

         Loan Costs - Loan  costs  incurred  in  connection  with the  Company's
         $35,000,000  line  of  credit  have  been  capitalized  and  are  being
         amortized  over the term of the loan  commitment  using  the  effective
         interest method.  Income or expense  associated with interest rate swap
         agreements  related to the line of credit is  recognized on the accrual
         basis as earned or incurred through an adjustment to interest  expense.
         Loan costs are included in intangibles and other assets. As of December
         31,  1997 and 1996,  the  Company  had  aggregate  gross  loan costs of
         $100,634 and $54,533,  respectively.  For the years ended  December 31,
         1997  and  1996,  accumulated  amortization  of  $61,783  and  $22,034,
         respectively, was recorded.

         Income  Taxes - The  Company has made an election to be taxed as a real
         estate  investment trust ("REIT") under Sections 856 through 860 of the
         Internal Revenue Code of 1986, as amended, and related regulations. The
         Company generally will not be subject to federal corporate income taxes
         on amounts  distributed  to  stockholders,  providing it distributes at
         least 95 percent of its REIT  taxable  income and meets  certain  other
         requirements  for qualifying as a REIT.  Accordingly,  no provision for
         federal  income  taxes has been made in the  accompanying  consolidated
         financial statements.  Notwithstanding the Company's  qualification for
         taxation as a REIT,  the  Company is subject to certain  state taxes on
         its income and property.

         Earnings Per Share - Basic earnings per share are calculated based upon
         net earnings (income available to common  stockholders)  divided by the
         weighted  average number of shares of common stock  outstanding  during
         the reporting period.  The Company does not have any dilutive potential
         common shares.

         Use of  Estimates  -  Management  of the  Company  has made a number of
         estimates  and  assumptions  relating  to the  reporting  of assets and
         liabilities and the disclosure of contingent  assets and liabilities to
         prepare  these  financial   statements  in  conformity  with  generally
         accepted accounting principles.  Actual results could differ from those
         estimates.

                                       27

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995

1.       Significant Accounting Policies - Continued:

         Reclassification   -  Certain  items  in  the  prior  years'  financial
         statements   have  been   reclassified   to   conform   with  the  1997
         presentation.  These  reclassifications  had no effect on stockholders'
         equity or net earnings.

         New Accounting  Standards - In February 1997, the Financial  Accounting
         Standards Board issued Statement of Financial  Accounting Standards No.
         128, "Earnings Per Share". The statement, which is effective for fiscal
         years  ending  after   December  15,  1997,   provides  for  a  revised
         computation of earnings per share (see Earnings Per Share). Adoption of
         this  standard  had  no  material  effect  on the  Company's  financial
         position or results of operations.

         In February  1997,  the  Financial  Accounting  Standards  Board issued
         Statement of Financial  Accounting  Standards No. 129,  "Disclosure  of
         Information about Capital Structure". The statement, which is effective
         for  fiscal  years  ending  after  December  15,  1997,   provides  for
         disclosure  of the  Company's  capital  structure.  At this  time,  the
         Company's  Board of Directors has not determined  the relative  rights,
         preferences,  and privileges of each class or series of preferred stock
         authorized.  Since the Company  has not issued  preferred  shares,  the
         disclosures to this standard are not applicable.

         In June 1997, the Financial Accounting Standards Board issued Statement
         of Financial  Accounting  Standards  No. 130  "Reporting  Comprehensive
         Income".  The statement,  which is effective for fiscal years beginning
         after December 15, 1997, requires the reporting of net earnings and all
         other changes to equity during the period,  except those resulting from
         investments  by owners  and  distributions  to  owners,  in a  separate
         statement that begins with net earnings.  Currently, the Company's only
         component of comprehensive income is its net earnings. The Company does
         not believe that adoption of this standard will have a material  effect
         on the Company's financial position or results of operations.

2.       Public Offering:

         The Company has a currently  effective  registration  statement on Form
         S-11  with  the  Securities  and  Exchange  Commission  for the sale of
         27,500,000 shares ($275,000,000) of common stock (the "1997 Offering").
         Of the 27,500,000 shares of common

                                       28

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995


2.       Public Offering - Continued:

         stock, the Company has registered,  2,500,000 shares  ($25,000,000) are
         available  only  to  stockholders  who  elect  to  participate  in  the
         Company's  reinvestment  plan.  The Company has adopted a  reinvestment
         plan pursuant to which  stockholders  may elect to have the full amount
         of their cash  distributions  from the Company reinvested in additional
         shares of common stock of the Company.  Prior to the 1997 Offering, the
         Company  received  proceeds  from its initial  offering  (the  "Initial
         Offering"),  of $150,591,765  (15,059,177  shares),  including $591,765
         (59,177 shares) issued pursuant to the Company's  reinvestment plan. As
         of December 31, 1997, the Company had received  aggregate  subscription
         proceeds from its Initial  Offering and 1997  Offering of  $361,729,709
         (36,172,971  shares),  including  $2,464,413  (246,441  shares)  issued
         through the reinvestment plan.

         On October 10, 1997,  the Company filed a  registration  statement with
         the Securities and Exchange  Commission in connection with the proposed
         sale by the  Company of up to  34,500,000  shares of common  stock (the
         "1998  Offering")  in an  offering  expected  to  commence  immediately
         following  the  completion  of  the  Company's  1997  Offering.  Of the
         34,500,000  shares of common  stock to be  offered,  2,000,000  will be
         available   only  to   stockholders   purchasing   shares  through  the
         reinvestment  plan. The price per share and the other terms of the 1998
         Offering,  including the  percentage of gross  proceeds  payable to the
         managing dealer for selling commissions and expenses in connection with
         the  offering,   payable  to  the  advisor  for  acquisition  fees  and
         acquisition  expenses  and  reimbursable  to the advisor  for  offering
         expenses,  will be the same as those for the Company's  1997  Offering.
         Net  proceeds  from the 1998  Offering  will be invested in  additional
         Properties and Mortgage Loans.

3.       Leases:

         The Company  leases its land,  buildings  and equipment to operators of
         national  and  regional  fast-food,   family-style  and  casual  dining
         restaurants.  The  leases are  accounted  for under the  provisions  of
         Statement of Financial  Accounting  Standards No. 13,  "Accounting  for
         Leases". For Property leases classified as direct financing leases, the
         building  portions of the majority of the leases are  accounted  for as
         direct financing leases while the land portions of these leases are

                                       29

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995


3.       Leases - Continued:

         accounted for as operating  leases.  Substantially  all Property leases
         have initial terms of 15 to 20 years  (expiring  between 2006 and 2017)
         and provide for  minimum  rentals.  In  addition,  the  majority of the
         Property  leases provide for contingent  rentals and/or  scheduled rent
         increases  over the  terms of the  leases.  Each  tenant  also pays all
         property  taxes and  assessments,  fully  maintains  the  interior  and
         exterior of the  building  and carries  insurance  coverage  for public
         liability,  property  damage,  fire and  extended  coverage.  The lease
         options for the Property  leases  generally  allow tenants to renew the
         leases for two to four successive five-year periods subject to the same
         terms and conditions as the initial  lease.  Most leases also allow the
         tenant  to  purchase  the  Property  at the  greater  of the  Company's
         purchase  price plus a specified  percentage of such purchase  price or
         fair market value after a specified portion of the lease has elapsed.

         The Secured  Equipment Leases recorded as direct financing leases as of
         December 31, 1997 provide for minimum  rentals payable monthly and have
         lease terms  ranging  from four to seven years.  The Secured  Equipment
         Leases  generally  include  an option  for the  lessee to  acquire  the
         equipment at the end of the lease term for a nominal fee.

4.       Land and Buildings on Operating Leases:

         Land and  buildings on operating  leases  consisted of the following at
         December 31:
                                               1997                   1996
                                           ------------           ------------

                  Land                     $106,616,360           $ 33,850,436
                  Buildings                  95,518,149             24,152,610
                                           ------------           ------------
                                            202,134,509             58,003,046
                  Less accumulated
                    depreciation             (2,395,665)              (611,396)
                                           ------------           ------------
                                            199,738,844             57,391,650
                  Construction in
                    progress                  5,599,342              2,851,496
                                           ------------           ------------

                                           $205,338,186           $ 60,243,146
                                           ============           ============



                                       30

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995


4.       Land and Buildings on Operating Leases - Continued:

         Some leases provide for scheduled  rent increases  throughout the lease
         term and/or rental payments during the construction of a Property prior
         to the date it is placed in service.  Such amounts are  recognized on a
         straight-line basis over the terms of the leases commencing on the date
         the  Property is placed in service.  For the years ended  December  31,
         1997, 1996 and 1995, the Company  recognized  $1,941,054,  $517,067 and
         $39,142, respectively, of such rental income.

         During 1997,  the Company sold five of its Properties and the equipment
         relating  to two  Secured  Equipment  Leases to  tenants.  The  Company
         received net proceeds of approximately $7,252,000,  which were equal to
         the carrying  value of the  Properties  and the net  investment  in the
         direct  financing leases for the equipment at the time of the sales. As
         a  result,  no gain or loss  was  recognized  for  financial  reporting
         purposes.  The Company used the net sales proceeds relating to the sale
         of the equipment to repay amounts previously advanced under its line of
         credit (see Note 8). The Company  reinvested the proceeds from the sale
         of Properties in additional Properties.

         The  following  is a schedule of future  minimum  lease  payments to be
         received on the noncancellable operating leases at December 31, 1997:

                  1998                       $ 18,891,310
                  1999                         18,931,518
                  2000                         18,960,643
                  2001                         19,187,537
                  2002                         19,982,822
                  Thereafter                  265,518,312
                                             ------------

                                             $361,472,142

         Since  lease  renewal  periods  are  exercisable  at the  option of the
         tenant, the above table only presents future minimum lease payments due
         during  the  initial  lease  terms.  In  addition,  this table does not
         include any amounts for future contingent rentals which may be received
         on the leases based on a percentage of the tenant's gross sales.  These
         amounts also do not include minimum lease payments that will become due
         when Properties under development are completed (see Note 13).



                                       31

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995


5.       Net Investment in Direct Financing Leases:

         The  following  lists  the  components  of  net  investment  in  direct
         financing leases at December 31:

                                                    1997             1996
                                                ------------     ------------

                  Minimum lease payments
                    receivable                  $ 98,121,853     $ 30,162,465
                  Estimated residual values        6,889,570        1,346,332
                  Secured equipment lease
                    interest receivable               67,614           18,286
                  Less unearned income           (57,465,442)     (16,322,111)
                                                ------------     ------------

                  Net investment in direct
                    financing leases            $ 47,613,595     $ 15,204,972
                                                ============     ============

         The  following  is a schedule of future  minimum  lease  payments to be
         received on direct financing leases at December 31, 1997:

                  1998                             6,820,081
                  1999                             6,820,081
                  2000                             6,872,134
                  2001                             6,644,067
                  2002                             6,546,936
                  Thereafter                      64,418,554
                                                 -----------

                                                 $98,121,853

         The above table does not include  future  minimum  lease  payments  for
         renewal  periods or for contingent  rental payments that may become due
         in future periods (see Note 4).

6.       Notes Receivable:

         In October 1997, the Company  entered into two promissory  notes with a
         borrower  for  equipment  financing,  totalling  $13,225,000  which are
         collateralized  by  restaurant  equipment.  The  promissory  notes bear
         interest at a rate of ten percent per annum and will be collected in 84
         equal monthly  installments  totalling  $219,550  beginning  January 1,
         1998. At December 31, 1997, the Company had advanced $12,521,400 to the
         borrower and had a remaining  balance to fund of $703,600  (included in
         accounts  payable and other  accrued  expenses at December  31,  1997).
         Notes  receivable  at December 31, 1997,  include  accrued  interest of
         $323,044.



                                       32

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995


6.       Notes Receivable - Continued:

         Management  believes that the estimated fair value of notes  receivable
         at December 31, 1997  approximated  the  outstanding  principal  amount
         based on estimated  current  rates at which similar loans would be made
         to borrowers with similar credit and for similar maturities.

7.       Mortgage Notes Receivable:

         During 1996, in connection  with the  acquisition  of land for 35 Pizza
         Hut  restaurants,  the Company  accepted three  promissory notes in the
         aggregate principal sum of $12,847,000,  collateralized by mortgages on
         the buildings on the 35 Pizza Hut Properties. The promissory notes bear
         interest at a rate of 10.75% per annum and are being  collected  in 240
         equal monthly installments totalling $130,426.

         During 1997, in connection  with the acquisition of land for nine Pizza
         Hut  restaurants,  the  Company  accepted  a  promissory  note  in  the
         principal  sum  of  $4,200,000,  collateralized  by a  mortgage  on the
         buildings on the nine Pizza Hut Properties and two additional Pizza Hut
         buildings.  The  promissory  note bears interest at a rate of 10.5% per
         annum and is being  collected  in 240  equal  monthly  installments  of
         $41,943.

         Mortgage notes receivable consisted of the following at December 31:

                                                      1997              1996
                                                   -----------      -----------

                  Outstanding principal            $16,662,418      $12,713,151
                  Accrued interest income              118,887           35,285
                  Deferred financing income            (85,448)         (46,268)
                  Unamortized loan costs               926,153          687,439
                                                   -----------      -----------

                                                   $17,622,010      $13,389,607
                                                   ===========      ===========

         Management  believes  that the estimated  fair value of mortgage  notes
         receivable at December 31, 1997 and 1996  approximated  the outstanding
         principal  amount based on  estimated  current  rates at which  similar
         loans would be made to borrowers  with  similar  credit and for similar
         maturities.



                                       33

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995

8.       Line of Credit:

         In March 1996,  the Company  entered into a line of credit and security
         agreement  with a bank,  the  proceeds  of which were to be used by the
         Company to offer Secured Equipment Leases.  The line of credit provided
         that the Company would be able to receive advances of up to $15,000,000
         until March 4, 1998.  Generally,  all advances under the line of credit
         bore  interest at either (i) a rate per annum equal to 215 basis points
         above  the  Reserve  Adjusted  LIBOR  Rate (as  defined  in the line of
         credit)  or (ii) a rate per  annum  equal  to the  bank's  prime  rate,
         whichever  the Company  selected at the time  advances  were made. As a
         condition of obtaining the line of credit,  the Company agreed to grant
         to the bank a first security interest in the Secured Equipment Leases.

         In August 1997,  the Company's  $15,000,000  line of credit was amended
         and  restated to enable the Company to receive  advances on a revolving
         $35,000,000  uncollateralized  line of credit (the "Line of Credit") to
         provide equipment financing,  to purchase and develop Properties and to
         fund Mortgage Loans. The advances bear interest at a rate of LIBOR plus
         1.65% or the bank's prime rate,  whichever  the Company  selects at the
         time of borrowing.  Interest  only is repayable  monthly until July 31,
         1999, at which time all remaining  interest and principal shall be due.
         The Line of Credit provides for two one-year renewal options.

         During the years ended December 31, 1997 and 1996, the Company obtained
         advances totalling $19,721,804 and $3,666,896,  respectively, under the
         Line of Credit and made principal  payments  totalling  $20,784,577 and
         $145,080,  respectively.  As of December 31, 1997 and 1996,  $2,459,043
         and $3,521,816,  respectively, of principal was outstanding relating to
         the Line of Credit, plus $14,430 and $13,164,  respectively, of accrued
         interest.  As of  December  31,  1997,  the  interest  rate on  amounts
         outstanding  under the Line of Credit was 7.373% (LIBOR plus 1.65%). As
         of December 31, 1996,  the interest rate on amounts  outstanding  under
         the Line of Credit  ranged from 7.71% to 7.82% (215 basis  points above
         the  Reserve  Adjusted  LIBOR  Rate).  The Company  believes,  based on
         current terms,  that the carrying value of its note payable at December
         31, 1997 and 1996  approximated  fair  value.  The terms of the Line of
         Credit include financial covenants which provide for the maintenance of
         certain  financial  ratios.  The  Company was in  compliance  with such
         covenants as of December 31, 1997.



                                       34

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995


8.       Line of Credit - Continued:

         During 1996,  the Company  entered into interest  rate swap  agreements
         with a  commercial  bank to reduce the  impact of  changes in  interest
         rates on its floating rate long-term  debt. The agreements  effectively
         change  the  Company's  interest  rate  exposure  on  notional  amounts
         totalling  approximately  $2,110,000 of the  outstanding  floating rate
         notes to fixed rates ranging from 8.75% to nine percent per annum.  The
         notional amounts of the interest rate swap agreements amortize over the
         period of the  agreements  which  approximate  the term of the  related
         notes. As of December 31, 1997, the notional balance was  approximately
         $1,750,000.  The  Company  is  exposed  to credit  loss in the event of
         nonperformance by the other party to the interest rate swap agreements;
         however,  the  Company  does  not  anticipate   nonperformance  by  the
         counterparty. Management does not believe the impact of any payments of
         a termination penalty, in the event the Company determines to terminate
         the swap agreements prior to the end of their respective  terms,  would
         be  material  to  the  Company's   financial  position  or  results  of
         operations.

         Interest costs (including  amortization of loan costs) incurred for the
         years ended  December 31, 1997 and 1996,  were  $544,788 and  $127,012,
         respectively,  all of  which  were  capitalized  as part of the cost of
         buildings  under  construction.  For the years ended December 31, 1997,
         and  1996,   the  Company  paid   interest  of  $502,680  and  $91,757,
         respectively.  No interest was paid during the year ended  December 31,
         1995.

9.       Stock Issuance Costs:

         The Company has incurred certain expenses in connection with the public
         offerings of its shares,  including commissions,  marketing support and
         due  diligence   expense   reimbursement   fees,  filing  fees,  legal,
         accounting, printing and escrow fees, which have been deducted from the
         gross  proceeds  of  the  offerings.   CNL  Fund  Advisors,  Inc.  (the
         "Advisor") has agreed to pay all  organizational  and offering expenses
         (excluding  commissions and marketing support and due diligence expense
         reimbursement  fees) which exceed three  percent of the gross  offering
         proceeds received from the sale of shares of the Company.

         During the years ended  December 31, 1997,  1996 and 1995,  the Company
         incurred  $22,422,045,  $9,216,102  and  $6,423,671,  respectively,  in
         organizational and offering costs, including

                                       35

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995

9.       Stock Issuance Costs - Continued:

         $17,798,605,  $8,063,439 and $3,076,333,  respectively,  in commissions
         and marketing support and due diligence expense reimbursement fees (see
         Note 11). Of these  amounts,  as of December 31,  1997,  1996 and 1995,
         $38,041,818,   $15,619,773  and  $6,403,671,  respectively,  have  been
         treated  as stock  issuance  costs  and  $20,000  has been  treated  as
         organization  costs.  The stock  issuance  costs  have been  charged to
         stockholders' equity subject to the three percent cap described above.

10.      Distributions:

         For the years ended December 31, 1997,  1996 and 1995,  93.33%,  90.25%
         and 59.82%, respectively, of the distributions received by stockholders
         were  considered  to be  ordinary  income and 6.67%,  9.75% and 40.18%,
         respectively,  were  considered a return of capital for federal  income
         tax purposes.  No amounts  distributed  to  stockholders  for the years
         ended December 31, 1997,  1996 and 1995 are required to be or have been
         treated  by  the  Company  as a  return  of  capital  for  purposes  of
         calculating the stockholders' return on their invested capital.

11.      Related Party Transactions:

         Certain  directors  and officers of the Company hold similar  positions
         with the Advisor and the managing dealer of the Company's  common stock
         offerings, CNL Securities Corp.

         CNL  Securities  Corp.  is  entitled  to  receive  selling  commissions
         amounting  to 7.5% of the total  amount  raised from the sale of shares
         for services in connection  with the offering of shares,  a substantial
         portion  of  which  has  been or will be paid as  commissions  to other
         broker  dealers.  During the years ended  December 31,  1997,  1996 and
         1995, the Company  incurred  $16,686,192,  $7,559,474  and  $2,884,062,
         respectively,   of  such  fees,  of  which  approximately  $15,563,500,
         $7,059,000 and  $2,682,000,  respectively,  were or will be paid by CNL
         Securities Corp. as commissions to other broker-dealers.

         In addition,  CNL  Securities  Corp. is entitled to receive a marketing
         support and due diligence  expense  reimbursement  fee equal to 0.5% of
         the total amount raised from the sale of shares, a portion of which may
         be reallowed to other  broker-dealers.  During the years ended December
         31, 1997, 1996 and 1995, the Company incurred $1,112,413,  $503,965 and
         $192,271,  respectively,  of such  fees,  the  majority  of which  were
         reallowed  to other  broker-dealers  and from  which  all bona fide due
         diligence expenses were paid.

                                       36

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995

11.      Related Party Transactions - Continued:

         CNL Securities Corp. will also receive,  in connection with each common
         stock offering,  a soliciting  dealer servicing fee payable annually by
         the Company  beginning on December 31 of the year following the year in
         which  the  offering   terminates   in  the  amount  of  0.20%  of  the
         stockholders'  investment in the Company.  CNL Securities Corp. in turn
         may reallow all or a portion of such fee to  soliciting  dealers  whose
         clients  purchased shares in such offering held shares on such date. As
         of December 31, 1997, no such fees had been incurred.

         The  Advisor is entitled to receive  acquisition  fees for  services in
         identifying the Properties and structuring the terms of the acquisition
         and leases of the Properties and  structuring the terms of the Mortgage
         Loans equal to 4.5% of the total amount raised from the sale of shares.
         During the years ended  December 31, 1997,  1996 and 1995,  the Company
         incurred $10,011,715, $4,535,685 and $1,730,437,  respectively, of such
         fees. Such fees are included in land and buildings on operating leases,
         net investment in direct  financing  leases,  mortgage notes receivable
         and other assets.

         In connection with the acquisition of Properties that are being or have
         been constructed or renovated by affiliates, subject to approval by the
         Company's    Board   of    Directors,    the    Company    may    incur
         development/construction  management fees, payable to affiliates of the
         Company. Such fees are included in the purchase price of the Properties
         and are  therefore  included in the basis on which the Company  charges
         rent on the  Properties.  During the years ended  December 31, 1997 and
         1996, the Company incurred $369,570 and $159,350, respectively, of such
         amounts  relating to six and three  Properties,  respectively.  No such
         amounts were incurred for the year ended December 31, 1995.

         For negotiating  Secured  Equipment  Leases and supervising the Secured
         Equipment Lease program,  the Advisor is entitled to receive a one-time
         secured  equipment  lease  servicing fee of two percent of the purchase
         price of the  equipment  that is the  subject  of a  Secured  Equipment
         Lease.  During the years ended  December 31, 1997 and 1996, the Company
         incurred $366,865 and $70,070, respectively, in Secured Equipment Lease
         servicing  fees.  No such  amounts  were  incurred  for the year  ended
         December 31, 1995.



                                       37

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995

11.      Related Party Transactions - Continued:

         The Company and the Advisor  have  entered  into an advisory  agreement
         pursuant to which the Advisor will receive a monthly asset and mortgage
         management  fee of  one-twelfth  of 0.60% of the Company's  real estate
         asset value and the outstanding principal balance of the Mortgage Loans
         as of the end of the proceeding  month.  The management fee, which will
         not exceed fees which are competitive for similar  services in the same
         geographic area, may or may not be taken, in whole or in part as to any
         year, in the sole discretion of the Advisor.  All or any portion of the
         management  fee not  taken as to any  fiscal  year  shall  be  deferred
         without  interest  and may be taken in such  other  fiscal  year as the
         Advisor shall determine. During the years ended December 31, 1997, 1996
         and  1995,  the  Company  incurred   $881,668,   $278,902  and  $27,950
         respectively,  of such fees, $76,789, $27,702 and $4,872, respectively,
         of which  has been  capitalized  as part of the cost of  buildings  for
         Properties that have been or are being constructed.

         Prior to such time, if any, as shares of the Company's common stock are
         listed on a national securities  exchange or  over-the-counter  market,
         the Advisor is entitled to receive a deferred, subordinated real estate
         disposition  fee, payable upon the sale of one or more Properties based
         on the lesser of one-half of a  competitive  real estate  commission or
         three percent of the sales price if the Advisor  provides a substantial
         amount of services in connection with the sale.  However,  if the sales
         proceeds are reinvested in a replacement  property, no such real estate
         disposition  fees will be incurred until such  replacement  property is
         sold and the net  sales  proceeds  are  distributed.  The  real  estate
         disposition  fee  is  payable  only  after  the  stockholders   receive
         distributions  equal to the sum of an  annual,  aggregate,  cumulative,
         noncompounded   eight  percent   return  on  their   invested   capital
         ("Stockholders' 8% Return") plus their aggregate  invested capital.  No
         deferred,  subordinated real estate disposition fees have been incurred
         to date.

         A subordinated  share of net sales proceeds will be paid to the Advisor
         upon the sale of Company  assets in an amount  equal to ten  percent of
         net sales  proceeds.  However,  if net sales proceeds are reinvested in
         replacement properties or replacement Secured Equipment Leases, no such
         share of net sales  proceeds  will be paid to the  Advisor  until  such
         replacement  property or Secured  Equipment  Lease is sold. This amount
         will be paid only after the stockholders receive distributions equal to
         the sum of the stockholders' aggregate


                                       38

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995


11.      Related Party Transactions - Continued:

         invested capital and the  Stockholders'  8% Return.  As of December 31,
         1997, no such payments have been made to the Advisor.

         The Advisor and its affiliates  provide  accounting and  administrative
         services  to the Company on a  day-to-day  basis as well as services in
         connection  with the offering of shares.  For the years ended  December
         31, 1997,  1996 and 1995,  expenses  incurred for these  services  were
         classified as follows:

<TABLE>
<CAPTION>

                                                                   1997              1996             1995
                                                                ----------        ----------       ----------
<S> <C>
                  Stock issuance costs                          $1,676,226        $  769,225       $  714,674
                  General operating and
                    administrative expenses                        556,240           334,603           68,016
                                                                ----------        ----------       ----------

                                                                $2,232,466        $1,103,828       $  782,690
                                                                ==========        ==========       ==========
</TABLE>

         During the years ended  December 31, 1997,  1996 and 1995,  the Company
         acquired   five,   four  and   nine   Properties,   respectively,   for
         approximately $5,450,000, $2,610,000 and $6,621,000, respectively, from
         affiliates of the Company. The affiliates had purchased and temporarily
         held title to these  Properties in order to facilitate the  acquisition
         of the Properties by the Company.  Each Property was acquired at a cost
         no  greater  than  the  lesser  of  the  cost  of the  Property  to the
         affiliate, including carrying costs, or the Property's appraised value.



                                       39

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995


11.      Related Party Transactions - Continued:

         The due to related parties consisted of the following at December 31:

                                                      1997          1996
                                                   ----------    ----------

                  Due to the Advisor:
                    Expenditures incurred on
                      behalf of the Company
                      and accounting and
                      administrative services      $  126,205    $  199,068
                    Acquisition fees                  386,972       383,210
                                                   ----------    ----------
                                                      513,177       582,278
                                                   ----------    ----------

                  Due to CNL Securities Corp.:
                    Commissions                       940,520       372,227
                    Marketing support and
                      due diligence expense
                      reimbursement fees               63,097        42,579
                                                   ----------    ----------
                                                    1,003,617       414,806
                                                   ----------    ----------

                  Due to other affiliates               7,500            -
                                                   ----------    ---------

                                                   $1,524,294    $  997,084
                                                   ==========    ==========

12.      Concentration of Credit Risk:

         The following schedule presents rental, earned and interest income from
         individual  lessees or borrowers,  or  affiliated  groups of lessees or
         borrowers,  each  representing  more than ten percent of the  Company's
         total rental,  earned income and interest  income from its  Properties,
         Mortgage  Loans and  Secured  Equipment  Leases for at least one of the
         years ended December 31:
<TABLE>
<CAPTION>

                                                                   1997              1996             1995
                                                                ----------        ----------       ----------
<S> <C>
                  Castle Hill  Holdings  V,
                    L.L.C.,  Castle Hill
                    Holdings  VI, L.L.C.
                    and Castle Hill
                    Holdings VII, L.L.C.                        $2,636,004        $1,699,986       $       -
                  Foodmaker, Inc.                                1,980,338           346,179           66,813
                  Houlihan's Restaurants,
                    Inc.                                         1,847,574                -                -
                  DenAmerica Corp.                               1,120,534           420,810           66,595
                  Golden Corral Corporation                      1,064,801           577,003          212,406
                  Northstar Restaurants,
                    Inc.                                           328,914           329,117           73,219
                  Roasters Corp.                                    47,264           187,609           82,136
</TABLE>

                                       40

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995


12.      Concentration of Credit Risk - Continued:

         In addition,  the following schedule presents total rental, earned, and
         interest income from individual  restaurant  chains,  each representing
         more than ten percent of the Company's total rental,  earned income and
         interest  income  from  its  Properties,  Mortgage  Loans  and  Secured
         Equipment  Leases  and  financing  for at least one of the years  ended
         December 31:
<TABLE>
<CAPTION>

                                                                   1997              1996             1995
                                                                ----------        ----------       ----------
<S> <C>
                  Pizza Hut                                     $2,636,004        $1,699,986       $       -
                  Golden Corral Family
                    Steakhouse Restaurants                       2,531,941         1,459,349          212,406
                  Boston Market                                  2,338,949           547,590           73,219
                  Jack in the Box                                1,980,338           346,179           66,813
                  Denny's                                          931,752           420,810           66,595
                  Kenny Rogers' Roasters                            47,264           187,609           82,136
</TABLE>

         Although the Company's Properties are geographically diverse throughout
         the United  States and the Company's  lessees and  borrowers  operate a
         variety of restaurant concepts,  failure of any one of these restaurant
         chains or any one of these lessees or borrowers that  contributes  more
         than ten percent of the  Company's  rental,  earned income and interest
         income  could  significantly  impact the results of  operations  of the
         Company.  However,  management believes that the risk of such a default
         is reduced due to the essential or important nature of these Properties
         for the on-going operations of the lessees and borrowers.

13.      Commitments:

         The  Company has  entered  into  various  development  agreements  with
         tenants which provide terms and  specifications for the construction of
         buildings the tenants have agreed to lease.  The  agreements  provide a
         maximum  amount of development  costs  (including the purchase price of
         the land and closing  costs) to be paid by the Company.  The  aggregate
         maximum   development   costs  the   Company  has  agreed  to  pay  are
         approximately  $14,495,000,  of which approximately $10,202,000 in land
         and  other  costs  had been  incurred  as of  December  31,  1997.  The
         buildings  currently under  construction are expected to be operational
         by June 1998. In  connection  with the purchase of each  Property,  the
         Company,  as lessor,  entered  into a long-term  lease  agreement.  The
         general terms of the lease  agreements  are  substantially  the same as
         those described in Note 3.


                                       41

<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                 AND SUBSIDIARY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 1997, 1996 and 1995


14.      Subsequent Events:

         During the period January 1, 1998 through January 22, 1998, the Company
         received  subscription  proceeds  for an  additional  1,231,779  shares
         ($12,317,791) of common stock.

         On January 1, 1998, the Company declared distributions of $2,299,701 or
         $.06354  per share of common  stock,  payable  on March  23,  1998,  to
         stockholders of record on January 1, 1998.

         During the period January 1, 1998 through January 22, 1998, the Company
         acquired  two  Properties   (both  on  which   restaurants   are  being
         constructed) for cash at a total cost of approximately $1,067,000.  The
         buildings  under  construction  are expected to be  operational by July
         1998. In connection with the purchase of each Property,  the Company as
         lessor, has entered into a long-term, triple-net lease agreement.

                                       42

<PAGE>



Item 9.   Changes in and  Disagreements  with  Accountants  on Accounting and
          Financial Disclosure

          None.


                                    PART III


Item 10.  Directors and Executive Officers of the Registrant

         The  information  required by this Item is incorporated by reference to
the Company's Definitive Proxy Statement to be filed with the Commission for its
annual stockholders' meeting to be held on May 4, 1998.

Item 11.  Executive Compensation

         The  information  required by this Item is incorporated by reference to
the Company's Definitive Proxy Statement to be filed with the Commission for its
annual stockholders' meeting to be held on May 4, 1998.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

         The  information  required by this Item is incorporated by reference to
the Company's Definitive Proxy Statement to be filed with the Commission for its
annual stockholders' meeting to be held on May 4, 1998.

Item 13.  Certain Relationships and Related Transactions

         The  information  required by this Item is incorporated by reference to
the Company's Definitive Proxy Statement to be filed with the Commission for its
annual stockholders' meeting to be held on May 4, 1998.


                                                      PART IV


Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)      The following documents are filed as part of this report.

         1.  Consolidated Financial Statements

                  Report of Independent Accountants

                  Consolidated Balance Sheets at December 31, 1997 and 1996

                  Consolidated  Statements  of  Earnings  for  the  years  ended
                    December 31, 1997, 1996 and 1995.

                  Consolidated  Statements of Stockholders' Equity for the years
                    ended December 31, 1997, 1996 and 1995.

                  Consolidated  Statements  of Cash  Flows for the  years  ended
                    December 31, 1997, 1996 and 1995.

                  Notes to Consolidated Financial Statements




                                       43

<PAGE>



         2.  Financial Statement Schedules

                  Schedule  III - Real Estate and  Accumulated  Depreciation  at
                  December 31, 1997

                  Notes  to  Schedule   III  -  Real   Estate  and   Accumulated
                  Depreciation at December 31, 1997

                  Schedule IV - Mortgage  Loans on Real  Estate at December  31,
                  1997

                  All other Schedules are omitted as the required information is
                  inapplicable  or is presented in the  financial  statements or
                  notes thereto.

         3.  Exhibits

                  3.1      CNL  American   Properties  Fund,  Inc.  Amended  and
                           Restated  Articles  of  Incorporation   (Included  as
                           Exhibit 3.4 to Registration Statement No. 33-78790 on
                           Form S-11 and incorporated herein by reference.)

                  3.2      CNL  American   Properties  Fund,  Inc.  Amended  and
                           Restated   Bylaws   (Included   as  Exhibit   3.2  to
                           Registration Statement No. 333-37657 on Form S-11 and
                           incorporated herein by reference.)

                  3.3      CNL  American   Properties  Fund,  Inc.  Articles  of
                           Amendment  to  Amended  and   Restated   Articles  of
                           Incorporation    (Included    as   Exhibit   3.3   to
                           Registration  Statement  No.  333- 15411 on Form S-11
                           and incorporated herein by reference.)

                  4.1      CNL  American   Properties  Fund,  Inc.  Amended  and
                           Restated  Articles  of  Incorporation   (Included  as
                           Exhibit 3.4 to Registration Statement No. 33-78790 on
                           Form S-11 and incorporated herein by reference.)

                  4.2      CNL  American   Properties  Fund,  Inc.  Amended  and
                           Restated   Bylaws   (Included   as  Exhibit   3.2  to
                           Registration Statement No. 333-37657 on Form S-11 and
                           incorporated herein by reference.)

                  4.3      CNL  American   Properties  Fund,  Inc.  Articles  of
                           Amendment  to  Amended  and   Restated   Articles  of
                           Incorporation    (Included    as   Exhibit   3.3   to
                           Registration  Statement  No.  333- 15411 on Form S-11
                           and incorporated herein by reference.)

                  4.4      Amended Reinvestment Plan (Included as Exhibit 4.4 to
                           Registration    Statement    No.   333-   37657   and
                           incorporated herein by reference.)

                  4.5      Form of Stock Certificate (Included as Exhibit 4.5 to
                           Registration  Statement No. 33-78790 on Form S-11 and
                           incorporated herein by reference.)

                  10.1     Advisory  Agreement,  dated  as of  April  18,  1997,
                           between CNL American  Properties  Fund,  Inc. and CNL
                           Fund  Advisors,  Inc.  (Included as Exhibit  10.10 to
                           Registration Statement No. 333-15411 on Form S-11 and
                           incorporated herein by reference.)

                  10.2     Amended Reinvestment Plan (Included as Exhibit 4.4 to
                           Registration    Statement    No.   333-   37657   and
                           incorporated herein by reference.)

                  10.3     Form of  Indemnification  Agreement dated as of April
                           18, 1995, between CNL American  Properties Fund, Inc.
                           and each of James M. Seneff,  Jr.,  Robert A. Bourne,
                           G. Richard  Hostetter,  J. Joseph  Kruse,  Richard C.
                           Huseman, John T. Walker, Jeanne A. Wall, Lynn E. Rose
                           and Edgar J.  McDougall  and dated as of January  27,
                           1997 between CNL American  Properties  Fund, Inc. and
                           Steven D.  Shackelford  (Included  as Exhibit 10.9 to
                           Registration Statement No. 333-15411 and incorporated
                           herein by reference.)

                                       44

<PAGE>




                  27       Financial Data Schedule (Filed herewith.)

         (b)      The Registrant  filed a report on Form 8-K on October 21, 1997
                  reporting the acquisition of Properties.

                                       45

<PAGE>



                                   SIGNATURES

          Pursuant to the  requirements of Section 13 or 15(d) 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,  on the 25th day of
February, 1998.

                                    CNL AMERICAN PROPERTIES FUND, INC.

                                    By:      ROBERT A. BOURNE
                                             President

                                             /s/ Robert A. Bourne
                                             --------------------------
                                             ROBERT A. BOURNE


<PAGE>



         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>

      Signature                                   Title                              Date
<S> <C>

/s/ James M. Seneff, Jr.                Chairman of the Board and Chief           February 25, 1998
----------------------------            Executive Officer (Principal Executive
James M. Seneff, Jr.                    Officer)



/s/ Robert A. Bourne                    Director and President                    February 25, 1998
---------------------------
Robert A. Bourne



/s/ Steven D. Shackelford               Chief Financial Officer (Principal        February 25, 1998
---------------------------             Financial and Accounting Officer) 
Steven D. Shackelford



/s/ G. Richard Hostetter                Independent Director                      February 25, 1998
---------------------------
G. Richard Hostetter



/s/ J. Joseph Kruse                     Independent Director                      February 25, 1998
---------------------------
J. Joseph Kruse



/s/ Richard C. Huseman                  Independent Director                      February 25, 1998
---------------------------
Richard C. Huseman
</TABLE>
<PAGE>
                CNL AMERICAN PROPERTIES FUND, INC. AND SUBSIDIARY

             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 1997


<TABLE>
<CAPTION>

                                                                                                   Costs Capitalized
                                                                                                      Subsequent
                                                                   Initial Cost                     To Acquisition
                                                                            Buildings
                                           Encum-                              and             Improve-      Carrying
                                          brances           Land           Improvements         ments         Costs
<S> <C>
Properties the Company
  has Invested in Under
  Operating Leases:

    Applebee's Restaurants:
      Montclair, California                    -         $   874,094        $        -       $        -      $     -
      Salinas, California                      -             786,475                 -                -            -

    Arby's Restaurants:
      Avon, Indiana                            -             338,486            497,282               -            -
      Greensboro, North Carolina               -             363,478            404,650               -            -
      Greenville, North Carolina               -             277,986            490,143               -            -
      Jonesville, North Carolina               -             228,364            539,764               -            -
      Kendallville, Indiana                    -             276,567            505,359               -            -
      Kernersville, North Carolina             -             273,325            413,077               -            -
      Kinston, North Carolina                  -             268,545            485,160               -            -
      Lexington, North Carolina                -             320,924            463,347               -            -

    Barb Wires Steakhouse and Saloon
      Restaurants:
        Cookeville, Tennessee                  -             511,084                 -                -            -
        Lawrence, Kansas                       -             493,489                 -                -            -
        Murfreesboro, Tennessee                -             514,900                 -                -            -
        Nashville, Tennessee                   -             420,176                 -                -            -

    Bennigan's Restaurant:
      Arvada, Colorado                         -             714,194          1,302,733               -            -

    Black-eyed Pea Restaurants:
      Hillsboro, Texas                         -             403,885                 -                -            -
      Mesa, Arizona                            -             784,939                 -                -            -

    Boston Market Restaurants:
      Arvada, Colorado                         -             569,452                 -           641,644           -
      Atlanta, Georgia                         -             775,523                 -           456,458           -
      Baltimore, Maryland                      -             585,818                 -           866,641           -
      Cedar Park, Texas                        -             569,769                 -           296,976           -
      Chanhassen, Minnesota                    -             376,929            639,875               -            -
      Collinsville, Illinois                   -             507,544                 -           328,353           -
      Corvallis, Oregon                        -             365,784                 -           605,763           -
      Dubuque, Iowa                            -             353,608            663,969               -            -
      Edgewater, Colorado                      -             320,463            627,371               -            -
      Ellisville, Missouri                     -             397,036                 -           639,422           -
      Florissant, Missouri                     -             705,522                 -           626,845           -
      Franklin, Tennessee (k)                  -             566,562            442,992               -            -
      Gambrills, Maryland                      -             667,992                 -           661,776           -
      Golden Valley, Minnesota                 -             665,422                 -           481,311           -
      Grand Island, Nebraska                   -             234,685            644,615               -            -
      Hoover, Alabama                          -             493,536            619,786               -            -
      Indianapolis, Indiana                    -             885,234                 -           867,523           -
      Jessup, Maryland                         -             630,950                 -           720,642           -
      Lansing, Michigan                        -             515,827                 -           572,706           -


</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                                                                                                         Life
                                                                                                                       on Which
                  Gross Amount at Which Carried                                                                      Depreciation
                       at Close of Period (b)                                                                         in Latest
                            Buildings                                                  Date                             Income
                               and                                Accumulated         of Con-          Date          Statement is
          Land             Improvements           Total           Depreciation       struction       Acquired          Computed
       -----------         ------------        -----------        ------------       ---------       --------        ----------

<S> <C>




       $   874,094                     (g)     $   874,094                (h)           1997           08/96              (h)
           786,475                     (g)         786,475                (h)           1997           09/96              (h)


           338,486              497,282            835,768        $ 21,345              1996           09/96              (e)
           363,478              404,650            768,128           5,515              1990           08/97              (e)
           277,986              490,143            768,129           6,681              1995           08/97              (e)
           228,364              539,764            768,128           7,357              1995           08/97              (e)
           276,567              505,359            781,926          24,922              1995           07/96              (e)
           273,325              413,077            686,402           5,630              1994           08/97              (e)
           268,545              485,160            753,705           6,613              1995           08/97              (e)
           320,924              463,347            784,271           7,162              1992           07/97              (e)



           511,084                  (g)            511,084                (h)           1994           08/97              (h)
           493,489                  (g)            493,489                (h)           1994           08/97              (h)
           514,900                  (g)            514,900                (h)           1995           08/97              (h)
           420,176                  (g)            420,176                (h)           1978           08/97              (h)


           714,194            1,302,733          2,016,927          32,539              1997           04/97              (e)


           403,885                     (g)         403,885                (h)           1996           06/96              (h)
           784,939                     (g)         784,939                (h)           1994           09/97              (h)


           569,452              641,644          1,211,096          10,566              1997           04/97              (e)
           775,523              456,458          1,231,981          11,776              1997           12/96              (e)
           585,818              866,641          1,452,459          11,625              1997           05/97              (e)
           569,769              296,976            866,745           4,238              1997           04/97              (e)
           376,929              639,875          1,016,804          45,872              1995           11/95              (e)
           507,544              328,353            835,897           5,135              1997           04/97              (e)
           365,784              605,763            971,547          26,005              1996           07/96              (e)
           353,608              663,969          1,017,577          49,661              1995           10/95              (e)
           320,463              627,371            947,834           7,692              1997           08/97              (e)
           397,036              639,422          1,036,458          29,321              1996           06/96              (e)
           705,522              626,845          1,332,367          22,067              1996           09/96              (e)
           566,562              442,992          1,009,554          35,004              1995           08/95              (e)
           667,992              661,776          1,329,768           7,691              1997           05/97              (e)
           665,422              481,311          1,146,733          21,132              1996           06/96              (e)
           234,685              644,615            879,300          49,053              1995           09/95              (e)
           493,536              619,786          1,113,322           6,637              1997           09/97              (e)
           885,234              867,523          1,752,757           9,527              1997           04/97              (e)
           630,950              720,642          1,351,592          12,270              1997           05/97              (e)
           515,827              572,706          1,088,533           4,759              1997           05/97              (e)
</TABLE>

                                        2

<PAGE>



                CNL AMERICAN PROPERTIES FUND, INC. AND SUBSIDIARY

       SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

                                December 31, 1997


<TABLE>
<CAPTION>

                                                                                                  Costs Capitalized
                                                                                                      Subsequent
                                                                Initial Cost                        To Acquisition
                                                                            Buildings
                                           Encum-                              and             Improve-      Carrying
                                          brances           Land           Improvements         ments         Costs
<S> <C>
      La Quinta, California                    -             688,147                 -           351,810           -
      Liberty, Missouri                        -             469,049                 -           334,826           -
      Merced, California                       -             573,163                 -           402,636           -
      Newport News, Virginia                   -             473,596            586,377               -            -
      Riverdale, Maryland                      -             525,389                 -           574,019           -
      Rockwall, Texas                          -             528,118                 -           340,297           -
      San Antonio, Texas                       -             481,952                 -           315,486           -
      Saint Joseph, Missouri                   -             378,786                 -           388,489           -
      Stafford, Texas                          -             448,185            681,598               -            -
      Taylorsville, Utah                       -             901,777                 -           475,260           -
      Upland, California                       -             788,248                 -           209,449           -
      Vacaville, California                    -             751,576                 -           757,026           -
      Waldorf, Maryland                        -             651,867                 -           775,634           -

    Burger King Restaurants:
      Burbank, Illinois                        -             543,095                 -           620,617           -
      Chattanooga, Tennessee                   -             680,192                 -           575,426           -
      Chattanooga, Tennessee                   -             769,842                 -           411,012           -
      Chicago, Illinois                        -             917,717                 -           784,590           -
      Highland, Indiana                        -             672,815                 -           621,133           -
      Indian Head Park, Illinois               -             618,715                 -           134,394           -
      Kent, Ohio                               -             233,468            689,696               -            -
      Oak Lawn, Illinois                       -           1,211,346                 -           829,339           -
      Ooltewah, Tennessee                      -             546,261                 -           714,114           -

    Charley's Restaurants:
      King of Prussia, Pennsylvania            -             965,223            549,565               -            -
      McLean, Virginia                         -             944,585            689,363               -            -

    Chevy's Fresh Mex Restaurants:
      Arapahoe, Colorado                       -             986,426          1,680,312               -            -
      Beaverton, Oregon                        -             938,162          1,681,670               -            -
      Greenbelt, Maryland                      -             945,234          1,475,339               -            -
      Lake Oswego, Oregon                      -             963,047          1,505,671               -            -

    Darryl's Restaurants:
      Evansville, Indiana                      -             563,479                 -                -            -
      Hampton, Virginia                        -             698,367            570,468               -            -
      Huntsville, Alabama                      -             777,842            663,941               -            -
      Knoxville, Tennessee                     -             589,574                 -                -            -
      Louisville, Kentucky                     -             647,375                 -                -            -
      Mobile, Alabama                          -             495,195                 -                -            -
      Montgomery, Alabama                      -             346,380                 -                -            -
      Nashville, Tennessee                     -             513,218                 -                -            -
      Orlando, Florida                         -           1,485,631            772,853               -            -
      Pensacola, Florida                       -             389,394                 -                -            -
      Raleigh, North Carolina                  -             840,525            505,176               -            -
      Raleigh, North Carolina                  -           1,131,164            719,865               -            -
      Richmond, Virginia                       -             618,125                 -                -            -
      Richmond, Virginia                       -             311,196                 -                -            -
      Winston-Salem, North Carolina            -             436,867                 -                -            -
</TABLE>


                                        3

<PAGE>
<TABLE>
<CAPTION>

                                                                                                                         Life
                                                                                                                       on Which
                    Gross Amount at Which Carried                                                                    Depreciation
                       at Close of Period (b)                                                                          in Latest
                            Buildings                                                  Date                             Income
                               and                                Accumulated         of Con-          Date          Statement is
          Land             Improvements           Total           Depreciation       struction       Acquired          Computed
       -----------         ------------        -----------        ------------       ---------       --------        ----------
<S> <C>
           688,147              351,810          1,039,957          12,379              1996           09/96              (e)
           469,049              334,826            803,875           4,136              1997           04/97              (e)
           573,163              402,636            975,799          16,620              1996           09/96              (e)
           473,596              586,377          1,059,973           9,010              1997           07/97              (e)
           525,389              574,019          1,099,408           4,508              1997           05/97              (e)
           528,118              340,297            868,415          13,394              1996           07/96              (e)
           481,952              315,486            797,438           2,802              1997           04/97              (e)
           378,786              388,489            767,275          13,482              1996           12/96              (e)
           448,185              681,598          1,129,783          11,344              1997           07/97              (e)
           901,777              475,260          1,377,037           8,908              1997           04/97              (e)
           788,248              209,449            997,697           9,637              1996           07/96              (e)
           751,576              757,026          1,508,602          11,839              1997           05/97              (e)
           651,867              775,634          1,427,501          12,130              1997           05/97              (e)


           543,095              620,617          1,163,712          28,962              1996           03/96              (e)
           680,192              575,426          1,255,618          13,403              1997           12/96              (e)
           769,842              411,012          1,180,854           8,111              1997           02/97              (e)
           917,717              784,590          1,702,307          21,908              1996           10/96              (e)
           672,815              621,133          1,293,948          29,476              1996           04/96              (e)
           618,715              134,394            753,109                (c)             (d)          04/96              (c)
           233,468              689,696            923,164          20,833              1970           02/97              (e)
         1,211,346              829,339          2,040,685          35,597              1996           03/96              (e)
           546,261              714,114          1,260,375          11,104              1997           04/97              (e)


           965,223              549,565          1,514,788          10,163              1977           06/97              (e)
           944,585              689,363          1,633,948          12,748              1971           06/97              (e)


           986,426            1,680,312          2,666,738             153              1994           12/97              (e)
           938,162            1,681,670          2,619,832             154              1995           12/97              (e)
           945,234            1,475,339          2,420,573             135              1994           12/97              (e)
           963,047            1,505,671          2,468,718             138              1995           12/97              (e)


           563,479                     (g)         563,479                (h)           1983           06/97              (h)
           698,367              570,468          1,268,835          10,550              1983           06/97              (e)
           777,842              663,941          1,441,783          12,278              1981           06/97              (e)
           589,574                   (g)           589,574              (h)             1983           06/97            (h)
           647,375                   (g)           647,375              (h)             1983           06/97            (h)
           495,195                   (g)           495,195              (h)             1983           06/97            (h)
           346,380                   (g)           346,380              (h)             1984           06/97            (h)
           513,218                   (g)           513,218              (h)             1981           06/97            (h)
         1,485,631              772,853          2,258,484          14,292              1983           06/97            (e)
           389,394                   (g)           389,394              (h)             1983           06/97            (h)
           840,525              505,176          1,345,701           9,342              1980           06/97            (e)
         1,131,164              719,865          1,851,029          13,313              1972           06/97            (e)
           618,125                   (g)           618,125              (h)             1982           06/97            (h)
           311,196                   (g)           311,196              (h)             1982           06/97            (h)
           436,867                   (g)           436,867              (h)             1978           06/97            (h)
</TABLE>


                                        4

<PAGE>



                CNL AMERICAN PROPERTIES FUND, INC. AND SUBSIDIARY

       SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

                                December 31, 1997


<TABLE>
<CAPTION>

                                                                                                     Costs Capitalized
                                                                                                         Subsequent
                                                                    Initial Cost                       To Acquisition
                                                                                Buildings
                                               Encum-                              and             Improve-      Carrying
                                              brances           Land           Improvements         ments         Costs

<S> <C>
    Denny's Restaurants:
      McKinney, Texas                              -             439,961                 -                -            -
      Pasadena, Texas                              -             466,555            506,094               -            -
      Shawnee, Oklahoma                            -             528,090            625,653               -            -
      Tampa, Florida                               -             397,302                 -                -            -

    Einstein Brothers' Bagels
      Restaurants:
        Dearborn, Michigan                         -             464,102                 -           236,674           -
        Springfield, Virginia                      -             628,804                 -            36,311           -

    Golden Corral Family
      Steakhouse Restaurants:
        Carlsbad, New Mexico                       -             384,221                 -           643,854           -
        Cleburne, Texas                            -             359,455                 -           653,853           -
        Columbia, Tennessee                        -             442,218                 -                -            -
        Columbus, Ohio                             -           1,031,098                 -         1,092,939           -
        Corpus Christi, Texas                      -             576,319                 -           967,482           -
        Corsicana, Texas                           -             349,227            699,756               -            -
        Council Bluffs, Iowa                       -             482,178                 -            11,844           -
        Dover, Delaware                            -           1,043,108                 -           977,508           -
        Duncan, Oklahoma                           -             161,573                 -           955,184           -
        Enid, Oklahoma                             -             364,860                 -           790,942           -
        Fort Walton Beach, Florida                 -             591,440                 -         1,034,541           -
        Fort Worth, Texas                          -             640,320            898,171               -            -
        Hopkinsville, Kentucky                     -             455,534                 -                -            -
        Jacksonville, Florida                      -             616,450                 -         1,010,728           -
        Jacksonville, Florida                      -             541,510                 -         1,132,450           -
        Liberty, Missouri                          -             409,209                 -           930,147           -
        Lufkin, Texas                              -             463,303                 -           994,467           -
        Moberly, Missouri                          -             581,989                 -           664,344           -
        Mobile, Alabama                            -             429,268                 -         1,032,335           -
        Muskogee, Oklahoma                         -             393,435                 -            15,109           -
        Olathe, Kansas                             -             547,126                 -           916,145           -
        Palatka, Florida                           -             322,919                 -           950,722           -
        Port Richey, Florida                       -             626,999                 -         1,130,692           -
        Tampa, Florida                             -             825,065                 -         1,222,843           -
        Universal City, Texas                      -             357,429                 -           650,249           -
        Winchester, Kentucky                       -             303,823                 -           923,607           -


    Ground Round Restaurants:
      Allentown, Pennsylvania                      -             405,631            884,954               -            -
      Cincinnati, Ohio                             -             282,099            534,632               -            -
      Crystal, Minnesota                           -             370,667            431,642               -            -
      Dubuque, Iowa                                -             693,733            810,458               -            -
      Ewing, New Jersey                            -             371,254            685,847               -            -
      Gloucester, New Jersey                       -             422,489            528,849               -            -
      Janesville, Wisconsin                        -             451,235            548,178               -            -
      Kalamazoo, Michigan                          -             287,331            712,081               -            -
</TABLE>

                                        5

<PAGE>

<TABLE>
<CAPTION>

                                                                                                                        Life
                                                                                                                      on Which
                   Gross Amount at Which Carried                                                                    Depreciation
                       at Close of Period (b)                                                                        in Latest
                            Buildings                                                  Date                             Income
                               and                                Accumulated         of Con-          Date          Statement is
          Land             Improvements           Total           Depreciation       struction       Acquired          Computed
       -----------         ------------        -----------        ------------       ---------       --------        ----------
<S> <C>


           439,961                   (g)           439,961              (h)             1996           06/96            (h)
           466,555              506,094            972,649          39,131              1981           09/95            (e)
           528,090              625,653          1,153,743          48,370              1987           09/95            (e)
           397,302                   (g)           397,302              (h)             1997           02/97            (h)



           464,102              236,674            700,776           3,723              1997           04/97            (e)
           628,804               36,311            665,115             588              1997           05/97            (e)



           384,221              643,854          1,028,075          50,415              1995           08/95            (e)
           359,455              653,853          1,013,308          48,395              1995           08/95            (e)
           442,218                   (g)           442,218              (h)             1996           12/96            (h)
         1,031,098            1,092,939          2,124,037          77,421              1995           11/95            (e)
           576,319              967,482          1,543,801           8,681              1997           05/97            (e)
           349,227              699,756          1,048,983          55,883              1995           08/95            (e)
           482,178               11,844            494,022              (c)               (d)          12/97            (c)
         1,043,108              977,508          2,020,616          75,038              1995           08/95            (e)
           161,573              955,184          1,116,757           2,704              1997           08/97            (e)
           364,860              790,942          1,155,802           2,745              1997           06/97            (e)
           591,440            1,034,541          1,625,981              (c)               (d)          08/97            (c)
           640,320              898,171          1,538,491          70,972              1995           08/95            (e)
           455,534                   (g)           455,534              (h)             1996           02/97            (h)
           616,450            1,010,728          1,627,178           9,069              1997           05/97            (e)
           541,510            1,132,450          1,673,960          12,333              1997           06/97            (e)
           409,209              930,147          1,339,356           5,946              1997           06/97            (e)
           463,303              994,467          1,457,770          34,603              1997           11/96            (e)
           581,989              664,344          1,246,333          14,349              1997           12/96            (e)
           429,268            1,032,335          1,461,603             189              1997           09/97            (e)
           393,435               15,109            408,544              (c)               (d)          12/97            (c)
           547,126              916,145          1,463,271              (c)               (d)          10/97            (c)
           322,919              950,722          1,273,641             434              1997           09/97            (e)
           626,999            1,130,692          1,757,691          48,325              1996           05/96            (e)
           825,065            1,222,843          2,047,908          77,496              1995           08/95            (e)
           357,429              650,249          1,007,678          51,253              1995           08/95            (e)
           303,823              923,607          1,227,430          17,586              1997           02/97            (e)



           405,631              884,954          1,290,585           5,900              1983           10/97            (e)
           282,099              534,632            816,731           3,564              1981           10/97            (e)
           370,667              431,642            802,309           2,878              1981           10/97            (e)
           693,733              810,458          1,504,191           5,403              1982           10/97            (e)
           371,254              685,847          1,057,101           2,756              1979           11/97            (e)
           422,489              528,849            951,338           3,526              1981           10/97            (e)
           451,235              548,178            999,413           3,655              1982           10/97            (e)
           287,331              712,081            999,412           4,747              1980           10/97            (e)
</TABLE>

                                        6

<PAGE>



                CNL AMERICAN PROPERTIES FUND, INC. AND SUBSIDIARY

       SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

                                December 31, 1997


<TABLE>
<CAPTION>

                                                                                                      Costs Capitalized
                                                                                                          Subsequent
                                                                   Initial Cost                        To Acquisition
                                                                                Buildings
                                               Encum-                              and             Improve-      Carrying
                                              brances           Land           Improvements         ments         Costs
<S> <C>
      Nanuet, New Jersey                           -             375,116            605,067               -            -
      Parma, Ohio                                  -             388,699            793,475               -            -
      Reading, Pennsylvania                        -             728,574            793,410               -            -
      Waterloo, Iowa                               -             436,471            659,089               -            -
      Wauwatosa, Wisconsin                         -             627,680            804,399               -            -

    Houlihan's Restaurants:
      Bethel Park, Pennsylvania                    -             846,183            595,600               -            -
      Langhorne, Pennsylvania                      -             817,039            648,765               -            -
      Plymouth Meeting, Pennsylvania               -           1,181,460            908,880               -            -

    International House of Pancakes
      Restaurants:
        Elk Grove, California                      -             584,766                 -                -            -
        Fairfax, Virginia                          -           1,096,763            705,345               -            -
        Houston, Texas                             -             645,365            856,532               -            -
        Lake Jackson, Texas                        -             460,167            802,640               -            -
        Leesburg, Virginia                         -             665,015            580,798               -            -
        Loveland, Colorado                         -             488,259                 -                -            -
        Stockbridge, Georgia                       -             765,743            707,406               -            -
        Victoria, Texas                            -             319,237                 -                -            -

    Jack in the Box Restaurants:
      Bacliff, Texas                               -             419,488                 -           697,861           -
      Channelview, Texas                           -             361,238                 -           711,595           -
      Corinth, Texas                               -             396,864                 -           620,042           -
      Dallas, Texas                                -             369,886                 -           513,533           -
      Enumclaw, Washington                         -             124,468                 -           773,506           -
      Florissant, Missouri                         -             388,820                 -           773,834           -
      Folsom, California                           -             635,343            703,067               -            -
      Fresno, California                           -             286,850                 -           606,547           -
      Garland, Texas                               -             382,042                 -           613,690           -
      Hollister, California                        -             537,223                 -           592,536           -
      Houston, Texas                               -             545,485                 -           527,020           -
      Houston, Texas                               -             403,002                 -           610,815           -
      Houston, Texas                               -             375,776                 -           643,445           -
      Houston, Texas                               -             370,342                 -           548,107           -
      Houston, Texas                               -             420,521                 -           543,338           -
      Humble, Texas                                -             437,667                 -           591,877           -
      Humble, Texas                                -             390,509                 -           596,872           -
      Kent, Washington                             -             737,038                 -           604,806           -
      Kingsburg, California                        -             415,880                 -           649,681           -
      Las Vegas, Nevada                            -             730,674                 -           600,180           -
      Los Angeles, California                      -             603,354            602,630               -            -
      Los Angeles, California                      -             911,754                 -           581,552           -
      Los Angeles, California                      -             740,616            678,189               -            -
      Moscow, Idaho                                -             217,851                 -           751,664           -
      Murrieta, California                         -             387,455                 -           625,933           -
      Oxnard, California                           -             681,663                 -           642,924           -
      Palmdale, California                         -             631,275                 -           567,912           -
      West Sacramento, California                  -             523,089                 -           617,131           -
      Woodland, California                         -             358,130                 -           668,383           -
</TABLE>

                                        7

<PAGE>

<TABLE>
<CAPTION>

                                                                                                                        Life
                                                                                                                      on Which
                   Gross Amount at Which Carried                                                                    Depreciation
                        at Close of Period (b)                                                                        in Latest
                            Buildings                                                  Date                             Income
                               and                                Accumulated         of Con-          Date          Statement is
          Land             Improvements           Total           Depreciation       struction       Acquired          Computed
       -----------         ------------        -----------        ------------       ---------       --------        ------------
<S> <C>
           375,116              605,067            980,183               1,658            1982          12/97                  (e)
           388,699              793,475          1,182,174               5,290            1977          10/97                  (e)
           728,574              793,410          1,521,984               5,289            1982          10/97                  (e)
           436,471              659,089          1,095,560               4,394            1982          10/97                  (e)
           627,680              804,399          1,432,079               5,363            1977          10/97                  (e)


           846,183              595,600          1,441,783              11,015            1972          06/97                  (e)
           817,039              648,765          1,465,804              11,998            1976          06/97                  (e)
         1,181,460              908,880          2,090,340              16,808            1974          06/97                  (e)



           584,766                   (g)           584,766                  (h)           1997          08/97                  (h)
         1,096,763              705,345          1,802,108              12,593            1995          06/97                  (e)
           645,365              856,532          1,501,897              14,256            1996          07/97                  (e)
           460,167              802,640          1,262,807               9,767            1997          08/97                  (e)
           665,015              580,798          1,245,813              11,855            1994          05/97                  (e)
           488,259                   (g)           488,259                  (h)           1997          08/97                  (h)
           765,743              707,406          1,473,149              11,774            1997          07/97                  (e)
           319,237                   (g)           319,237                  (h)           1997          08/97                  (h)


           419,488              697,861          1,117,349               9,576            1997          04/97                  (e)
           361,238              711,595          1,072,833               6,580            1997          07/97                  (e)
           396,864              620,042          1,016,906               6,016            1997          06/97                  (e)
           369,886              513,533            883,419              15,527            1997          12/96                  (e)
           124,468              773,506            897,974              10,826            1997          04/97                  (e)
           388,820              773,834          1,162,654                  (c)             (d)         10/97                  (c)
           635,343              703,067          1,338,410               4,880            1997          10/97                  (e)
           286,850              606,547            893,397               6,772            1997          05/97                  (e)
           382,042              613,690            995,732               5,338            1997          07/97                  (e)
           537,223              592,536          1,129,759              14,421            1997          01/97                  (e)
           545,485              527,020          1,072,505              32,199            1996          11/95                  (e)
           403,002              610,815          1,013,817              26,930            1996          07/96                  (e)
           375,776              643,445          1,019,221              27,207            1996          07/96                  (e)
           370,342              548,107            918,449              13,540            1997          02/97                  (e)
           420,521              543,338            963,859               9,949            1997          03/97                  (e)
           437,667              591,877          1,029,544              26,729            1996          06/96                  (e)
           390,509              596,872            987,381              18,025            1997          02/97                  (e)
           737,038              604,806          1,341,844              14,388            1997          01/97                  (e)
           415,880              649,681          1,065,561              15,693            1997          01/97                  (e)
           730,674              600,180          1,330,854              16,285            1997          01/97                  (e)
           603,354              602,630          1,205,984              50,272            1986          06/95                  (e)
           911,754              581,552          1,493,306              12,720            1997          01/97                  (e)
           740,616              678,189          1,418,805                 124            1997          12/97                  (e)
           217,851              751,664            969,515              19,157            1992          01/97                  (e)
           387,455              625,933          1,013,388              14,948            1997          01/97                  (e)
           681,663              642,924          1,324,587              10,642            1997          04/97                  (e)
           631,275              567,912          1,199,187              11,695            1997          02/97                  (e)
           523,089              617,131          1,140,220               5,312            1997          07/97                  (e)
           358,130              668,383          1,026,513               5,127            1997          07/97                  (e)
</TABLE>

                                        8

<PAGE>



                CNL AMERICAN PROPERTIES FUND, INC. AND SUBSIDIARY

       SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

                                December 31, 1997


<TABLE>
<CAPTION>

                                                                                                    Costs Capitalized
                                                                                                      Subsequent
                                                                 Initial Cost                       To Acquisition
                                                                              Buildings
                                             Encum-                              and             Improve-      Carrying
                                            brances           Land           Improvements         ments         Costs
<S> <C>
    Kenny Rogers' Roasters
      Restaurant:
        Grand Rapids, Michigan                   -             282,806            599,309               -            -

    Kentucky Fried Chicken
      Restaurant:
        Putnam, Connecticut                      -             301,723                 -                -            -

    Mr. Fables's Restaurant:
      Grand Rapids, Michigan                     -             320,594            559,433               -            -

    On The Border Restaurant:
      San Antonio, TX                            -                  -                  -         1,305,075           -

    Pizza Hut Restaurants:
      Adrian, Michigan                           -             242,239                 -                -            -
      Beaver, West Virginia                      -             212,053                 -                -            -
      Beckley, West Virginia                     -             209,432                 -                -            -
      Bedford, Ohio                              -             174,721                 -                -            -
      Belle, West Virginia                       -              46,737                 -                -            -
      Bluefield, West Virginia                   -             120,449                 -                -            -
      Bolivar, Ohio                              -             190,009                 -                -            -
      Bowling Green, Ohio                        -             200,442                 -                -            -
      Bowling Green, Ohio                        -             135,831                 -                -            -
      Carrollton, Ohio                           -             187,082                 -                -            -
      Cleveland, Ohio                            -             116,849                 -                -            -
      Cleveland, Ohio                            -             126,494                 -                -            -
      Cleveland, Ohio                            -             226,163                 -                -            -
      Cross Lanes, West Virginia                 -             215,881                 -                -            -
      Defiance, Ohio                             -             242,239                 -                -            -
      Dover, Ohio                                -             245,145                 -                -            -
      East Cleveland, Ohio                       -             194,012                 -                -            -
      Euclid, Ohio                               -             202,050                 -                -            -
      Fairview Park, Ohio                        -             142,570                 -                -            -
      Huntington, West Virginia                  -             212,093                 -                -            -
      Hurricane, West Virginia                   -             180,803                 -                -            -
      Lambertville, Michigan                     -              99,166                 -                -            -
      Marietta, Ohio                             -             169,454                 -                -            -
      Mayfield Heights, Ohio                     -             202,552                 -                -            -
      Middleburg Heights, Ohio                   -             216,518                 -                -            -
      Millersburg, Ohio                          -             213,090                 -                -            -
      Milton, West Virginia                      -              99,815                 -                -            -
      Monroe, Michigan                           -             152,215                 -                -            -
      New Philadelphia, Ohio                     -             149,206                 -                -            -
      New Philadelphia, Ohio                     -             223,981                 -                -            -
      North Olmsted, Ohio                        -             259,922                 -                -            -
      Norwalk, Ohio                              -             261,529                 -                -            -
      Ronceverte, West Virginia                  -              99,733                 -                -            -
      Sandusky, Ohio                             -             259,922                 -                -            -
      Seven Hills, Ohio                          -             239,023                 -                -            -
      Steubenville, Ohio                         -             228,199                 -                -            -
      Strongsville, Ohio                         -             186,476                 -                -            -
</TABLE>

                                        9

<PAGE>


<TABLE>
<CAPTION>

                                                                                                                         Life
                                                                                                                       on Which
                   Gross Amount at Which Carried                                                                     Depreciation
                       at Close of Period (b)                                                                          in Latest
                            Buildings                                                  Date                             Income
                               and                                Accumulated         of Con-          Date          Statement is
          Land             Improvements           Total           Depreciation       struction       Acquired          Computed
       -----------         ------------        -----------        ------------       ---------       --------        ----------
<S> <C>


           282,806              599,309            882,115          48,123              1995           08/95            (e)



           301,723                   (g)           301,723              (h)             1997           07/97            (h)


           320,594              559,433            880,027          33,362              1967           03/96            (e)


                -             1,305,075          1,305,075              (c)               (d)          10/97            (c)


           242,239                   -             242,239              (f)             1989           01/96            (f)
           212,053                   -             212,053              (f)             1986           05/96            (f)
           209,432                   -             209,432              (f)             1978           05/96            (f)
           174,721                   -             174,721              (f)             1975           01/96            (f)
            46,737                   -              46,737              (f)             1980           05/96            (f)
           120,449                   -             120,449              (f)             1986           05/96            (f)
           190,009                   -             190,009              (f)             1996           03/97            (f)
           200,442                   -             200,442              (f)             1985           01/96            (f)
           135,831                   -             135,831              (f)             1992           12/96            (f)
           187,082                   -             187,082              (f)             1990           03/97            (f)
           116,849                   -             116,849              (f)             1978           01/96            (f)
           126,494                   -             126,494              (f)             1986           01/96            (f)
           226,163                   -             226,163              (f)             1987           01/96            (f)
           215,881                   -             215,881              (f)             1990           05/96            (f)
           242,239                   -             242,239              (f)             1977           01/96            (f)
           245,145                   -             245,145              (f)             1975           05/97            (f)
           194,012                   -             194,012              (f)             1986           01/96            (f)
           202,050                   -             202,050              (f)             1983           01/96            (f)
           142,570                   -             142,570              (f)             1996           01/96            (f)
           212,093                   -             212,093              (f)             1978           05/96            (f)
           180,803                   -             180,803              (f)             1978           05/96            (f)
            99,166                   -              99,166              (f)             1994           01/96            (f)
           169,454                   -             169,454              (f)             1986           05/96            (f)
           202,552                   -             202,552              (f)             1980           04/96            (f)
           216,518                   -             216,518              (f)             1975           01/96            (f)
           213,090                   -             213,090              (f)             1989           03/97            (f)
            99,815                   -              99,815              (f)             1986           05/96            (f)
           152,215                   -             152,215              (f)             1994           01/96            (f)
           149,206                   -             149,206              (f)             1975           03/97            (f)
           223,981                   -             223,981              (f)             1983           03/97            (f)
           259,922                   -             259,922              (f)             1976           01/96            (f)
           261,529                   -             261,529              (f)             1993           01/96            (f)
            99,733                   -              99,733              (f)             1991           05/96            (f)
           259,922                   -             259,922              (f)             1978           01/96            (f)
           239,023                   -             239,023              (f)             1983           01/96            (f)
           228,199                   -             228,199              (f)             1983           03/97            (f)
           186,476                   -             186,476              (f)             1976           04/96            (f)
</TABLE>

                                       10

<PAGE>



                CNL AMERICAN PROPERTIES FUND, INC. AND SUBSIDIARY

       SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

                                December 31, 1997


<TABLE>
<CAPTION>

                                                                                                                 Costs Capitalized
                                                                                                       Subsequent
                                                                 Initial Cost                        To Acquisition
                                                                               Buildings
                                              Encum-                              and             Improve-      Carrying
                                             brances           Land           Improvements         ments         Costs
<S> <C>
      Toledo, Ohio                                -             128,604                 -                -            -
      Toledo, Ohio                                -             194,097                 -                -            -
      Toledo, Ohio                                -             208,480                 -                -            -
      Toledo, Ohio                                -             176,170                 -                -            -
      Toledo, Ohio                                -             197,227                 -                -            -
      Uhrichsville, Ohio                          -             279,779                 -                -            -
      Wellsburg, West Virginia                    -             167,170                 -                -            -

    Ruby Tuesday's Restaurant:
      London, Kentucky                            -             354,415                 -                -            -

    Ruth's Chris Steak House
      Restaurant:
        Tampa, Florida                            -           1,076,442          1,062,751               -            -

    Ryan's Family Steak House
      Restaurant:
        Spring Hill, Florida                      -             591,371                 -         1,175,273           -

    Shoney's Restaurants:
      Indian Harbor Beach, Florida                -             309,101                 -           420,249           -
      Las Vegas, Nevada                           -             656,316                 -           970,452           -
      Guadalupe, Arizona                          -             623,725                 -                -            -

    TGI Friday's Restaurant:
      Mesa, Arizona                               -             903,876                 -           284,913           -

    Wendy's Old Fashioned
      Hamburgers Restaurants:
        Camarillo, California                     -             640,061                 -           687,385           -
        Knoxville, Tennessee                      -             358,027                 -           444,622           -
        Westlake Village, California              -             763,232                 -           153,034           -
                                                           ------------        -----------      -----------     -------

                                                           $106,616,360        $43,045,117      $58,072,374     $     -
                                                           ============        ===========      ===========     =======
</TABLE>


                                       11

<PAGE>


<TABLE>
<CAPTION>

                                                                                                                         Life
                                                                                                                       on Which
                    Gross Amount at Which Carried                                                                    Depreciation
                       at Close of Period (b)                                                                          in Latest
                            Buildings                                                  Date                             Income
                               and                                Accumulated         of Con-          Date          Statement is
          Land             Improvements           Total           Depreciation       struction       Acquired          Computed
       -----------         ------------        -----------        ------------       ---------       --------        ----------
<S> <C>
           128,604                   -             128,604                  (f)           1988          04/96                  (f)
           194,097                   -             194,097                  (f)           1993          12/96                  (f)
           208,480                   -             208,480                  (f)           1975          01/96                  (f)
           176,170                   -             176,170                  (f)           1985          01/96                  (f)
           197,227                   -             197,227                  (f)           1978          01/96                  (f)
           279,779                   -             279,779                  (f)           1983          03/97                  (f)
           167,170                   -             167,170                  (f)           1980          03/97                  (f)


           354,415                   (g)           354,415                  (h)           1997          08/97                  (h)



         1,076,442            1,062,751          2,139,193              20,236            1996          06/97                  (e)



           591,371            1,175,273          1,766,644              38,505            1996          09/96                  (e)


           309,101              420,249            729,350              11,312            1997          01/97                  (e)
           656,316              970,452          1,626,768                  (c)             (d)         08/97                  (c)
           623,725                   (g)           623,725                  (h)           1997          04/97                  (h)


           903,876              284,913          1,188,789                  (c)             (d)         09/97                  (c)



           640,061              687,385          1,327,446              33,167            1996          06/96                  (e)
           358,027              444,622            802,649              19,300            1996          05/96                  (e)
           763,232              153,034            916,266                  (c)             (d)         11/97                  (c)
      ------------         ------------       ------------          ----------

      $106,616,360         $101,117,491       $207,733,851          $2,395,665
      ============         ============       ============          ==========
</TABLE>




                                       12

<PAGE>



                CNL AMERICAN PROPERTIES FUND, INC. AND SUBSIDIARY

       SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

                                December 31, 1997


<TABLE>
<CAPTION>

                                                                                                                 Costs Capitalized
                                                                                                     Subsequent
                                                                 Initial Cost                      To Acquisition
                                                                            Buildings
                                           Encum-                              and             Improve-      Carrying
                                          brances           Land           Improvements         ments         Costs
<S> <C>
Properties the Company
  has Invested in Under
  Direct Financing Leases:

    Applebee's Restaurants:
      Montclair, California                    -         $        -         $        -       $   890,100     $     -
      Salinas, California                      -                  -                  -           794,058           -

    Barb Wires Steakhouse and
      Saloon Restaurants:
        Cookeville, Tennessee                  -                  -           1,029,717               -            -
        Hendersonville, Tennessee              -                  -             782,282               -            -
        Lawrence, Kansas                       -                  -           1,022,607               -            -
        Murfreesboro, Tennessee                -                  -             976,699               -            -
        Nashville, Tennessee                   -                  -             949,367               -            -

    Black-Eyed Pea Restaurants:
      Albuquerque, New Mexico                  -                  -             705,746               -            -
      Albuquerque, New Mexico                  -                  -             704,757               -            -
      Bedford, Texas                           -                  -             655,028               -            -
      Dallas, Texas                            -                  -             655,011               -            -
      Dallas, Texas                            -                  -             698,827               -            -
      Forestville, Maryland                    -                  -             681,034               -            -
      Fort Worth, Texas                        -                  -             655,014               -            -
      Hillsboro, Texas                         -                  -                  -           849,816           -
      Houston, Texas                           -                  -             685,977               -            -
      Mesa, Arizona                            -                  -             906,740               -            -
      Oklahoma City, Oklahoma                  -                  -             651,523               -            -
      Phoenix, Arizona                         -                  -             677,681               -            -
      Phoenix, Arizona                         -                  -             677,805               -            -
      Phoenix, Arizona                         -                  -             682,141               -            -
      Scottsdale, Arizona                      -                  -                  -           823,188           -
      Tucson, Arizona                          -                  -             678,333               -            -
      Waco, Texas                              -                  -             699,815               -            -
      Wichita, Kansas                          -                  -             698,827               -            -

    Darryl's Restaurants:
      Evansville, Indiana                      -                  -             974,401               -            -
      Knoxville, Tennessee                     -                  -             709,047               -            -
      Louisville, Kentucky                     -                  -             915,201               -            -
      Mobile, Alabama                          -                  -           1,009,042               -            -
      Montgomery, Alabama                      -                  -             952,382               -            -
      Nashville, Tennessee                     -                  -             736,400               -            -
      Pensacola, Florida                       -                  -             725,709               -            -
      Richmond, Virginia                       -                  -             775,617               -            -
      Richmond, Virginia                       -                  -             650,175               -            -
      Winston-Salem, North Carolina            -                  -             812,752               -            -

    Denny's Restaurants:
      McKinney, Texas                          -                  -                  -           655,052           -
      Tampa, Florida                           -                  -                  -           715,957           -
</TABLE>


                                       13

<PAGE>


<TABLE>
<CAPTION>

                                                                                                                         Life
                                                                                                                       on Which
                    Gross Amount at Which Carried                                                                    Depreciation
                        at Close of Period (b)                                                                         in Latest
                            Buildings                                                  Date                             Income
                               and                                Accumulated         of Con-          Date          Statement is
          Land             Improvements           Total           Depreciation       struction       Acquired          Computed
       -----------         ------------        -----------        ------------       ---------       --------        ----------
<S> <C>





                  (g)                  (g)                (g)           (h)             1997           08/96            (h)
                (g)                  (g)                (g)             (h)             1997           09/96            (h)



                  (g)                  (g)                (g)             (h)           1994           08/97              (h)
                  (j)                  (g)                (g)             (h)           1974           08/97              (h)
                  (g)                  (g)                (g)             (h)           1994           08/97              (h)
                  (g)                  (g)                (g)             (h)           1995           08/97              (h)
                (g)                  (g)                (g)             (h)             1978           08/97            (h)


                  (j)                  (g)                (g)             (h)           1993           10/97              (h)
                  (j)                  (g)                (g)             (h)           1993           10/97              (h)
                  (j)                  (g)                (g)             (h)           1993           03/97              (h)
                  (j)                  (g)                (g)             (h)           1996           03/97              (h)
                  (j)                  (g)                (g)             (h)           1991           10/97              (h)
                  (j)                  (g)                (g)             (h)           1989           10/97              (h)
                  (j)                  (g)                (g)             (h)           1991           03/97              (h)
                (g)                  (g)                (g)             (h)             1996           06/96            (h)
                (j)                  (g)                (g)             (h)             1990           10/97            (h)
                (g)                  (g)                (g)             (h)             1994           09/97            (h)
                (j)                  (g)                (g)             (h)             1992           03/97            (h)
                (j)                  (g)                (g)             (h)             1991           09/97            (h)
                (j)                  (g)                (g)             (h)             1993           09/97            (h)
                (j)                  (g)                (g)             (h)             1994           09/97            (h)
                (j)                  (g)                (g)             (h)             1997           04/97            (h)
                (j)                  (g)                (g)             (h)             1995           09/97            (h)
                (j)                  (g)                (g)             (h)             1991           10/97            (h)
                (j)                  (g)                (g)             (h)             1992           10/97            (h)


                (g)                  (g)                (g)             (h)             1983           06/97            (h)
                (g)                  (g)                (g)             (h)             1983           06/97            (h)
                (g)                  (g)                (g)             (h)             1983           06/97            (h)
                (g)                  (g)                (g)             (h)             1983           06/97            (h)
                (g)                  (g)                (g)             (h)             1984           06/97            (h)
                (g)                  (g)                (g)             (h)             1981           06/97            (h)
                (g)                  (g)                (g)             (h)             1983           06/97            (h)
                (g)                  (g)                (g)             (h)             1982           06/97            (h)
                (g)                  (g)                (g)             (h)             1982           06/97            (h)
                (g)                  (g)                (g)             (h)             1978           06/97            (h)


                (g)                  (g)                (g)             (h)             1996           06/96            (h)
                (g)                  (g)                (g)             (h)             1997           02/97            (h)

</TABLE>

                                       14

<PAGE>



                CNL AMERICAN PROPERTIES FUND, INC. AND SUBSIDIARY

       SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - CONTINUED

                                December 31, 1997


<TABLE>
<CAPTION>

                                                                                                   Costs Capitalized
                                                                                                      Subsequent
                                                                 Initial Cost                      To Acquisition
                                                                             Buildings
                                            Encum-                              and             Improve-      Carrying
                                           brances           Land           Improvements         ments         Costs
<S> <C>
    Golden Corral Family
      Steakhouse Restaurants:
        Brooklyn, Ohio                          -                  -           1,044,311               -            -
        Columbia, Tennessee                     -                  -                  -           939,712           -
        Eastlake, Ohio                          -             256,332          1,473,307               -            -
        Hopkinsville, Kentucky                  -                  -                  -           869,221           -

    International House of
      Pancakes Restaurants:
        Elk Grove, California                   -                  -           1,039,584               -            -
        Loveland, Colorado                      -                  -             963,597               -            -
        Victoria, Texas                         -                  -             814,015               -            -

    Kentucky Fried Chicken
      Restaurant:
        Putnam, Connecticut                     -                  -             530,846               -            -

    Popeye's Chicken Restaurant:
      Starke, Florida                           -             208,910                 -           427,067           -

    Ruby Tuesday's Restaurant:
      London, Kentucky                          -                  -                  -           845,249           -

    Shoney's Restaurant:
      Guadalupe, Arizona                        -                  -                  -           919,322           -

    Wendy's Old Fashioned
      Hamburgers Restaurants:
        San Diego, California                   -                  -                  -           590,058           -
        Sevierville, Tennessee                  -                  -                  -           531,726           -
                                                          -----------        -----------      -----------     -------

                                                          $   465,242       $ 30,001,317      $ 9,850,526     $     -
                                                          ===========       ============      ===========     =======
</TABLE>

                                       15

<PAGE>



<TABLE>
<CAPTION>

                                                                                                                         Life
                                                                                                                       on Which
                    Gross Amount at Which Carried                                                                    Depreciation
                       at Close of Period (b)                                                                         in Latest
                            Buildings                                                  Date                             Income
                               and                                Accumulated         of Con-          Date          Statement is
          Land             Improvements           Total           Depreciation       struction       Acquired          Computed
       -----------         ------------        -----------        ------------       ---------       --------        ----------
<S> <C>


                (j)                  (g)                (g)             (h)             1995           08/96            (h)
                (g)                  (g)                (g)             (h)             1996           12/96            (h)
                (g)                  (g)                (g)             (i)             1996           12/96            (i)
                (g)                  (g)                (g)             (h)             1996           02/97            (h)



                (g)                  (g)                (g)             (h)             1997           08/97            (h)
                (g)                  (g)                (g)             (h)             1997           08/97            (h)
                (g)                  (g)                (g)             (h)             1997           08/97            (h)



                (g)                  (g)                (g)             (h)             1997           07/97            (h)


                (g)                  (g)                (g)             (i)             1997           05/97            (i)


                (g)                  (g)                (g)             (h)             1997           08/97            (h)


                (g)                  (g)                (g)             (h)             1997           04/97            (h)



                (j)                  (g)                (g)             (h)             1996           10/96            (h)
                (j)                  (g)                (g)             (h)             1996           06/96            (h)
</TABLE>


                                       16

<PAGE>



                CNL AMERICAN PROPERTIES FUND, INC. AND SUBSIDIARY

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 1997



(a)      Transactions in real estate and accumulated  depreciation  during 1997,
         1996 and 1995 are summarized as follows:
<TABLE>
<CAPTION>

                                                                                    Accumulated
                                                                    Cost (b)       Depreciation
<S> <C>
                    Properties the Company
                      has Invested in Under
                      Operating Leases:

                        Balance, December 31, 1994             $         -         $         -
                        Acquisitions (l)                         19,824,044                  -
                        Depreciation expense (e)                         -              100,318
                                                               ------------        ------------

                        Balance, December 31, 1995               19,824,044             100,318
                        Acquisitions (l)                         41,030,498                  -
                        Depreciation expense (e)                         -              511,078
                                                               ------------        ------------

                        Balance, December 31, 1996               60,854,542             611,396
                        Acquisitions (1)                        146,879,309                  -
                        Depreciation expense (e)                         -            1,784,269
                                                               ------------        ------------

                        Balance, December 31, 1997             $207,733,851        $  2,395,665
                                                               ============        ============
</TABLE>

(b)        As of December 31, 1997,  1996 and 1995,  the  aggregate  cost of the
           Properties owned by the Company and its subsidiary for federal income
           tax  purposes  was   $248,050,936,   $73,144,286   and   $21,199,004,
           respectively.  All of the leases are treated as operating  leases for
           federal income tax purposes.

(c)        Property  was  not  placed  in  service  as  of  December  31,  1997;
           therefore, no depreciation was taken.

(d)        Scheduled for completion in 1998.

(e)        Depreciation expense is computed for buildings and improvements based
           upon estimated lives of 30 years.

(f)        The  building  portion  of this  Property  is  owned  by the  tenant;
           therefore, depreciation is not applicable.

(g)        For financial  reporting  purposes,  certain  components of the lease
           relating  to land  and/or  building  have been  recorded  as a direct
           financing lease.  Accordingly,  costs relating to these components of
           this lease are not shown.

(h)        For financial reporting purposes,  the portion of this lease relating
           to the building has been recorded as direct financing lease. The cost
           of the  building  has  been  included  in net  investment  in  direct
           financing leases; therefore, depreciation is not applicable.

(i)        For financial reporting purposes, the lease for the land and building
           has been recorded as direct financing lease. The cost of the land and
           building  has been  included in net  investment  in direct  financing
           leases; therefore, depreciation is not applicable.

                                       17

<PAGE>



                CNL AMERICAN PROPERTIES FUND, INC. AND SUBSIDIARY

               NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
                            DEPRECIATION - CONTINUED

                                December 31, 1997


(j)        The Company owns the building  only relating to this  Property.  This
           Property  is  subject  to a ground  lease  between  the tenant and an
           unaffiliated  third  party.  In  connection  therewith,  the  Company
           entered  into  either a tri-party  agreement  with the tenant and the
           owner of the land or an  assignment  of interest in the ground  lease
           with the landlord of the land. The tri-party  agreement or assignment
           of  interest  each  provide  that the tenant is  responsible  for all
           obligations  under the ground lease and provide certain rights to the
           Company to help  protect its interest in the building in the event of
           a default by the tenant under the terms of the ground lease.

(k)        The restaurant on the property in Franklin,  Tennessee, was converted
           from  a  Kenny  Rogers'  Roasters   restaurant  to  a  Boston  Market
           restaurant in 1996.

(l)        During the years ended December 31, 1997,  1996 and 1995, the Company
           (i) incurred acquisition fees totalling  $10,011,715,  $4,535,685 and
           $1,730,437,  respectively,  paid to the Advisor,  (ii) purchased land
           and buildings from affiliates of the Company for an aggregate cost of
           approximately  $5,450,000,  $2,610,000 and $6,621,000,  respectively,
           and  (iii)  paid   development/construc-   tion  management  fees  to
           affiliates of the Company totalling  $369,570 and $159,350 during the
           years   ended   December   31,  1997  and  1996,   respectively.   No
           development/construction  management  fees  were  paid to  affiliates
           during the year ended December 31, 1995. Such amounts are included in
           land and  buildings on operating  leases,  net  investment  in direct
           financing  leases and other  assets at December  31,  1997,  1996 and
           1995.

                                       18

<PAGE>



                CNL AMERICAN PROPERTIES FUND, INC. AND SUBSIDIARY

                   SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE

                                December 31, 1997

<TABLE>
<CAPTION>

                                                                                                                        Principal
                                                                                                                         Amount
                                                                                                                        of Loans
                                                                                                                       Subject to
                                                         Final       Periodic              Face        Carrying        Delinquent
                                         Interest      Maturity      Payment    Prior    Amount of     Amount of        Principal
         Description                       Rate          Date         Terms     Liens    Mortgages     Mortgages       or Interest
------------------------------           --------   -------------    --------   -----   -----------   -----------      -----------
<S> <C>
Castle Hill Holdings V, L.L.C.
First Mortgages                           10.75%    January, 2016       (1)     $  -    $ 8,475,000   $ 8,700,023      $        -
  Pizza Hut Restaurants:
    Adrian, MI
    Bedford, OH
    Bowling Green, OH
    Cleveland, OH
    Cleveland, OH
    Cleveland, OH
    Defiance, OH
    East Cleveland, OH
    Euclid, OH
    Fairview Park, OH
    Lambertville, MI
    Mayfield Heights, OH
    Middleburg Heights, OH
    Monroe, MI
    North Olmstead, OH
    Norwalk, OH
    Sandusky, OH
    Seven Hills, OH
    Strongsville, OH
    Toledo, OH
    Toledo, OH
    Toledo, OH
    Toledo, OH

Castle Hill Holdings VI, L.L.C.
First Mortgages                           10.75%       June, 2016          (1)     -     3,888,000     4,030,612               -
  Pizza Hut Restaurants:
    Beaver, WV
    Beckley, WV
    Belle, WV
    Bluefield, WV
    Cross Lanes, WV
    Huntington, WV
    Hurricane, WV
    Marietta, OH
    Milton, WV
    Ronceverte, WV

Castle Hill Holdings VII, L.L.C.
First Mortgages                           10.75%    January, 2017          (1)     -       484,000      503,900                -
  Pizza Hut Restaurants:
    Bowling Green, OH
    Toledo, OH

Castle Hill Holdings VII (Phase II),
  L.L.C.
First Mortgages                           10.50%      April, 2017          (2)     -     4,200,000    4,387,475                -
  Pizza Hut Restaurants:
    Bolivar, OH
    Carrollton, OH
    Dover, OH
    Millersburg, OH
    New Philadelphia, OH
    New Philadelphia, OH
    Steubenville, OH
    Uhrichsville, OH
    Weirton, WV
    Wellsburg, WV
    Wintersville, OH

    Total                                                                       $  -  $17,047,000   $17,622,010 (4)      $     -
                                                                                ===== ===========   ===========          =========
</TABLE>



                                       19

<PAGE>


                CNL AMERICAN PROPERTIES FUND, INC. AND SUBSIDIARY

              SCHEDULE IV - NOTES TO MORTGAGE LOANS ON REAL ESTATE

                                December 31, 1997






(1)     Equal  monthly  payments of principal  and interest at an annual rate of
        10.75%.

(2)     Equal  monthly  payments of principal  and interest at an annual rate of
        10.50%.

(3)     The tax carrying value of the notes is $17,622,010.

(4)     The changes in the carrying amounts are summarized as follows:
<TABLE>
<CAPTION>


                                                  1997            1996            1995
                                              ------------     -----------     ---------
<S> <C>
         Balance at beginning of period        $13,389,607     $        -      $        -

         New mortgage loans                      4,200,000      12,847,000              -

         Accrued interest                           83,601          35,286              -

         Collection of principal                  (250,732)       (133,850)             -

         Deferred financing income                 (39,180)        (46,268)             -

         Unamortized loan costs                    238,714         687,439              -
                                               -----------     -----------     ----------

         Balance at end of period              $17,622,010     $13,389,607     $        -
                                               ===========     ===========     ==========
</TABLE>


                                       20



<PAGE>



                                    EXHIBITS


<PAGE>


                                  EXHIBIT INDEX


   Exhibit Number

        3.1       CNL  American  Properties  Fund,  Inc.  Amended  and  Restated
                  Articles  of   Incorporation   (Included  as  Exhibit  3.4  to
                  Registration   Statement   No.   33-78790  on  Form  S-11  and
                  incorporated herein by reference.)

        3.2       CNL American Properties Fund, Inc. Amended and Restated Bylaws
                  (Included  as  Exhibit  3.2  to  Registration   Statement  No.
                  333-37657 on Form S-11 and incorporated herein by reference.)

        3.3       CNL American  Properties  Fund, Inc.  Articles of Amendment to
                  Amended and Restated  Articles of  Incorporation  (Included as
                  Exhibit 3.3 to  Registration  Statement No.  333-15411 on Form
                  S-11 and incorporated herein by reference.)

        4.1       CNL  American  Properties  Fund,  Inc.  Amended  and  Restated
                  Articles  of   Incorporation   (Included  as  Exhibit  3.4  to
                  Registration   Statement   No.   33-78790  on  Form  S-11  and
                  incorporated herein by reference.)

        4.2       CNL American Properties Fund, Inc. Amended and Restated Bylaws
                  (Included  as  Exhibit  3.2  to  Registration   Statement  No.
                  333-37657 on Form S-11 and incorporated herein by reference.)

        4.3       CNL American  Properties  Fund, Inc.  Articles of Amendment to
                  Amended and Restated  Articles of  Incorporation  (Included as
                  Exhibit 3.3 to  Registration  Statement No.  333-15411 on Form
                  S-11 and incorporated herein by reference.)

        4.4       Amended   Reinvestment   Plan  (Included  as  Exhibit  4.4  to
                  Registration  Statement No. 333-37657 and incorporated  herein
                  by reference.)

        4.5       Form  of  Stock  Certificate   (Included  as  Exhibit  4.5  to
                  Registration   Statement   No.   33-78790  on  Form  S-11  and
                  incorporated herein by reference.)

        10.1      Advisory  Agreement,  dated as of April 18, 1997,  between CNL
                  American  Properties  Fund,  Inc. and CNL Fund Advisors,  Inc.
                  (Included  as  Exhibit  10.10 to  Registration  Statement  No.
                  333-15411 on Form S-11 and incorporated herein by reference.)

        10.2      Amended   Reinvestment   Plan  (Included  as  Exhibit  4.4  to
                  Registration  Statement No. 333-37657 and incorporated  herein
                  by reference.)

        10.3      Form of Indemnification  Agreement dated as of April 18, 1995,
                  between CNL American  Properties  Fund, Inc. and each of James
                  M. Seneff,  Jr., Robert A. Bourne,  G. Richard  Hostetter,  J.
                  Joseph Kruse,  Richard C. Huseman,  John T. Walker,  Jeanne A.
                  Wall,  Lynn E.  Rose and  Edgar J.  McDougall  and dated as of
                  January 27, 1997 between CNL American  Properties  Fund,  Inc.
                  and  Steven  D.  Shackelford  (Included  as  Exhibit  10.9  to
                  Registration  Statement No. 333-15411 and incorporated  herein
                  by reference.)

        27        Financial Data Schedule (Filed herewith.)


                                        i