FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT UNDER
                             SECTION 13 OR 15(d)

                                   Form 10-KSB
(Mark One)
[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934
      [No Fee Required]

                 For the fiscal year ended December 31, 2001

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934
      [No Fee Required]

             For the transition period from _________to _________

                         Commission file number 0-16684

                       MULTI-BENEFIT REALTY FUND '87-1
                (Name of small business issuer in its charter)

         California                                              94-3026785
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                          55 Beattie Place, PO Box 1089
                       Greenville, South Carolina 29602
                   (Address of principal executive offices)

                   Issuer's telephone number (864) 239-1000

        Securities registered under Section 12(b) of the Exchange Act:

                                      None

        Securities registered under Section 12(g) of the Exchange Act:

                          Units of Limited Partnership
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.
Yes X  No___

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of the  Partnership's  knowledge  in  definitive  proxy or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form [X]

State issuer's revenues for its most recent fiscal year.  $3,860,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests as of December 31, 2001. No market exists for the limited  partnership
interests of the Registrant,  and,  therefore,  no aggregate market value can be
determined.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None

<PAGE>

                                     PART I

Item 1.     Description of Business

Multi-Benefit   Realty  Fund  '87-1  (the  "Partnership"  or  "Registrant")  was
organized on September 8, 1986, as a limited  partnership  under the  California
Revised Limited  Partnership Act. ConCap  Equities,  Inc. ("CEI") is the general
partner of the Partnership (see additional information below). CEI (the "General
Partner")  is a  subsidiary  of  Apartment  Investment  and  Management  Company
("AIMCO"), a publicly traded real estate investment trust.

Commencing December 10, 1986, the Registrant offered, pursuant to a Registration
Statement  filed with the  Securities  and Exchange  Commission,  $60,000,000 of
Units of  Depositary  Receipts  (collectively,  the "Units,"  and  individually,
"Unit").  Two  classes of Units ("A"  Units and "B"  Units,  herein so  called),
entitled  to  different  rights  and  priorities  as to cash  distributions  and
Partnership  allocations,  were offered.  The Units  represent  economic  rights
attributable to the limited partnership interests in the Partnership and entitle
the holders ("Unit holders")  thereof to participate in certain  allocations and
distributions  of the  Partnership.  The  General  Partner  of  the  Partnership
intended  that the "A" Units and "B" Units be allocated  such that the "B" Units
would not exceed 25% nor be less than 20% of the total amount of the Units sold.
At the end of the current fiscal year, the "B" Units  represented  approximately
44% of the total  amount of the Units  sold.  The General  Partner is  currently
considering several alternative  procedures to conform the unit allocations more
closely to the intended  investment  objectives.  The General Partner intends to
continue such consideration,  but has not yet determined a feasible alternative.
The  corporate  limited  partner  of the  Partnership  was  Multi-Benefit  '87-1
Depositary  Corporation,  an affiliate  of the General  Partner.  The  corporate
limited  partner  served as  depositary  for the Units  pursuant to a Depositary
Agreement  entered  into  with the  Partnership.  The sale of  Units  closed  on
September 30, 1988,  with 172,436 Units sold at $100 each, or gross  proceeds of
approximately $17,244,000 to the Partnership.  The Partnership may repurchase or
retire any Units, at its absolute  discretion,  but is under no obligation to do
so. Since its initial offering, 1,000 Units have been retired. Since its initial
offering, the Partnership has not received, nor are limited partners required to
make, additional capital contributions.

Upon  the  Partnership's   formation  in  1986,  Consolidated  Capital  Equities
Corporation  ("CCEC"), a Colorado  corporation,  was the sole general partner of
the Partnership and the corporate limited partner, a wholly-owned  subsidiary of
CCEC, was the sole limited partner.  In 1988,  through a series of transactions,
Southmark Corporation  ("Southmark") acquired a controlling interest in CCEC. In
December  1988,  CCEC filed for  reorganization  under  Chapter 11 of the United
States  Bankruptcy  Code. In 1990, as part of CCEC's  reorganization  plan,  CEI
acquired  CCEC's general  partner  interest in the  Partnership  and in 15 other
affiliated public limited partnerships (the "Affiliated Partnerships"), acquired
the stock of the corporate  limited  partner,  and CEI replaced CCEC as managing
general  partner  in all  16  partnerships.  The  selection  of CEI as the  sole
managing  general  partner was approved by a majority of the Unit holders in the
Partnership and of the limited  partners in each of the Affiliated  Partnerships
pursuant to a solicitation of the Unit holders dated August 10, 1990. As part of
this  solicitation,   the  Unit  holders  also  approved  an  amendment  to  the
Partnership Agreement to limit changes of control of the Partnership.

All of CEI's outstanding  stock was owned by Insignia  Properties Trust ("IPT"),
which acquired the stock through two  transactions  in December 1994 and October
1995. Effective February 26, 1999, IPT was merged into AIMCO.

The  Registrant  is engaged in the business of operating and holding real estate
properties for  investment.  By the end of the  Partnership's  fiscal year 1988,
three apartment properties had been acquired. During the year ended December 31,
2000,  one of the  properties  was sold.  The  Registrant  continues  to own and
operate two of these  properties.  See "Item 2. Description of Properties".  The
Partnership  Agreement provides that the Partnership is to terminate on December
31, 2036, unless terminated prior to such date.

The Registrant has no employees. Property management and administrative services
are  provided  by the  General  Partner  and by agents  retained  by the General
Partner.  An affiliate of the General  Partner has been  providing such property
management services.

The  real  estate  business  in which  the  Partnership  is  engaged  is  highly
competitive.  There are other  residential  properties within the market area of
the Partnership's properties.  The number and quality of competitive properties,
including those which may be managed by an affiliate of the General Partner,  in
such  market  area  could have a  material  effect on the rental  market for the
apartments at the Partnership's properties and the rents that may be charged for
such apartments. While the General Partner and its affiliates own and/or control
a  significant  number of  apartment  units in the  United  States,  such  units
represent an  insignificant  percentage of total  apartment  units in the United
States and competition for the apartments is local.

Both  the  income  and  expenses  of  operating  the  properties  owned  by  the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand for similar  properties  resulting from various
market  conditions,  increases/decreases  in unemployment or population  shifts,
changes in the availability of permanent mortgage  financing,  changes in zoning
laws,  or changes in patterns or needs of users.  In  addition,  there are risks
inherent in owning and operating residential  properties because such properties
are  susceptible to the impact of economic and other  conditions  outside of the
control of the Partnership.

There have been, and it is possible there may be other, Federal, state and local
legislation  and  regulations   enacted   relating  to  the  protection  of  the
environment.  The Partnership is unable to predict the extent,  if any, to which
such new  legislation  or  regulations  might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.

The Partnership  monitors its properties for evidence of pollutants,  toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental  testing has been performed which resulted in no material  adverse
conditions or liabilities.  In no case has the Partnership  received notice that
it is a potentially  responsible party with respect to an environmental clean up
site.

A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operations" included in "Item 6" of this Form
10-KSB.

Item 2.     Description of Properties

The following table sets forth the Partnership's investments in properties:

                                 Date of
Property                         Purchase      Type of Ownership         Use

Hunt Club Apartments               05/87   Fee ownership subject to   Apartment
  Indianapolis, Indiana                    first mortgage (1)         200 units

Shadow Brook Apartments            05/87   Fee ownership subject to   Apartment
  West Valley City, Utah                   first mortgage             300 units

(1)   The  property is held by a limited  partnership  in which the  Partnership
      owns a 99% interest.

Schedule of Properties

Set forth below for each of the  Partnership's  properties is the gross carrying
value, accumulated depreciation,  depreciable life, method of depreciation,  and
Federal tax basis.
<TABLE>
<CAPTION>

                             Gross
                            Carrying   Accumulated                        Federal
Property                     Value    Depreciation    Rate    Method     Tax Basis
                                (in thousands)                         (in thousands)

<S>                         <C>          <C>          <C>                 <C>
Hunt Club Apartments        $ 7,867      $ 4,853      5-30     S/L        $ 3,923
Shadow Brook Apartments      11,264        5,702      5-30     S/L          5,739

  Total                     $19,131      $10,555                          $ 9,662
</TABLE>

See  "Note A" to the  consolidated  financial  statements  included  in "Item 7.
Financial  Statements"  for a  description  of  the  Partnership's  depreciation
policy.

Schedule of Property Indebtedness

The  following  table  sets  forth  certain  information  relating  to the loans
encumbering the Registrant's properties.
<TABLE>
<CAPTION>

                       Principal                                         Principal
                       Balance At      Stated                             Balance
                      December 31,    Interest    Period    Maturity       Due At
Property                  2001          Rate     Amortized    Date      Maturity (1)
                     (in thousands)                                    (in thousands)
Hunt Club
<S>                     <C>            <C>       <C>          <C>           <C>
  1st mortgage          $ 3,796        8.05%     20 years     09/20         $ --
Shadow Brook
  1st mortgage            8,725        7.10%     20 years     09/21           --

                        $12,521                                             $ --
</TABLE>

(1)   See "Item 7. Financial  Statements - Note B" for information  with respect
      to the  Partnership's  ability to prepay  these  loans and other  specific
      details about the loans.

On August 31, 2001, the Partnership  refinanced the mortgage  encumbering Shadow
Brook Apartments. The refinancing replaced indebtedness of $6,000,000 with a new
mortgage of $8,775,000. The new mortgage carries a stated interest rate of 7.10%
as  compared to the 7.33%  interest  rate on the old  mortgage.  Payments on the
mortgage  loan are due monthly  until the loan  matures on  September 1, 2021 at
which time the loan is scheduled to be fully amortized.  Total  capitalized loan
costs were  approximately  $281,000 during the year ended December 31, 2001. The
Partnership recognized an extraordinary loss on the early extinguishment of debt
of approximately $47,000 due to the write-off of unamortized loan costs.

Schedule of Rental Rate and Occupancy

Average annual rental rates and occupancy for 2001 and 2000 for each property:

                                   Average Annual               Average Annual
                                     Rental Rate                  Occupancy
                                     (per unit)
Property                         2001           2000          2001          2000

Hunt Club Apartments            $8,018         $7,861          92%          94%
Shadow Brook Apartments          7,257          7,186          97%          97%

As noted under "Item 1.  Description of Business",  the real estate  industry is
highly  competitive.  Both of the properties of the  Partnership  are subject to
competition from other residential  apartment complexes in the area. The General
Partner  believes  that both of the  properties  are  adequately  insured.  Each
property is an  apartment  complex  which  leases units for terms of one year or
less. No tenant leases 10% or more of the  available  rental space.  Both of the
properties are in good physical  condition,  subject to normal  depreciation and
deterioration as is typical for assets of this type and age.

Schedule of Real Estate Taxes and Rates

Real estate taxes and rates in 2001 for each property were:

                                                2001            2001
                                               Billing          Rate
                                           (in thousands)

       Hunt Club Apartments                     $152           10.15%
       Shadow Brook Apartments                   104            1.43%

Capital Improvements

Hunt Club

During the year ended December 31, 2001,  the  Partnership  spent  approximately
$245,000  on  capital   improvements   consisting   primarily   of  parking  lot
improvements,   water  heater  replacements  and  carpet   replacements.   These
improvements were funded from Partnership  reserves and operating cash flow. The
Partnership  is  currently  evaluating  the  capital  improvement  needs  of the
property for the upcoming year. The minimum amount to be budgeted is expected to
be $300 per unit or $60,000.  Additional improvements may be considered and will
depend on the physical  condition of the  property as well as  anticipated  cash
flow generated by the property.

Shadow Brook

During the year ended December 31, 2001,  the  Partnership  spent  approximately
$186,000 on capital  improvements  consisting  primarily  of major  landscaping,
washer and dryer replacements and carpet  replacements.  These improvements were
funded from  Partnership  reserves and operating cash flow.  The  Partnership is
currently  evaluating  the capital  improvement  needs of the  property  for the
upcoming year. The minimum amount to be budgeted is expected to be $300 per unit
or $90,000.  Additional  improvements  may be considered  and will depend on the
physical condition of the property as well as anticipated cash flow generated by
the property.

The  capital  improvements  planned  for  the  year  2002  at the  Partnership's
properties will be made only to the extent of cash available from operations and
Partnership  reserves. To the extent that such budgeted capital improvements are
completed,  the Registrant's  distributable  cash flow, if any, may be adversely
affected at least in the short term.

Item 3.     Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its General Partner and several of
their  affiliated  partnerships and corporate  entities.  The action purports to
assert  claims on behalf of a class of  limited  partners  and  derivatively  on
behalf of a number of limited partnerships (including the Partnership) which are
named as nominal defendants, challenging, among other things, the acquisition of
interests in certain General Partner entities by Insignia  Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia;  past
tender offers by the Insignia  affiliates to acquire limited  partnership units;
management of the  partnerships  by the Insignia  affiliates;  and the series of
transactions  which  closed on October 1, 1998 and  February  26,  1999  whereby
Insignia and Insignia  Properties Trust,  respectively,  were merged into AIMCO.
The plaintiffs seek monetary damages and equitable  relief,  including  judicial
dissolution of the  Partnership.  On June 25, 1998, the General  Partner filed a
motion seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs  filed an amended  complaint.  The General Partner filed demurrers to
the amended complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December  14,  1999,  the General  Partner  and its  affiliates  terminated  the
proposed settlement.  In February 2000, counsel for some of the named plaintiffs
filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated
the settlement.  On June 27, 2000, the Court entered an order disqualifying them
from the case and an appeal was taken  from the order on  October  5,  2000.  On
December 4, 2000, the Court  appointed the law firm of Lieff Cabraser  Heimann &
Bernstein  LLP as new  lead  counsel  for  plaintiffs  and the  putative  class.
Plaintiffs  filed a third  amended  complaint on January 19,  2001.  On March 2,
2001,  the  General  Partner  and its  affiliates  filed a demurrer to the third
amended  complaint.  On May 14, 2001,  the Court heard the demurrer to the third
amended  complaint.  On July 10,  2001,  the Court  issued  an order  sustaining
defendants'  demurrer on certain grounds.  On July 20, 2001,  Plaintiffs filed a
motion for  reconsideration  of the Court's July 10, 2001 order granting in part
and denying in part defendants' demurrer. On September 7, 2001, Plaintiffs filed
a fourth amended class and derivative action  complaint.  On September 12, 2001,
the Court denied Plaintiffs' motion for reconsideration. On October 5, 2001, the
General Partner and affiliated defendants filed a demurrer to the fourth amended
complaint,  which was heard on December 11, 2001. On February 2, 2002, the Court
served its order granting in part the demurrer.  The Court has dismissed without
leave  to amend  certain  of the  plaintiffs'  claims.  On  February  11,  2002,
plaintiffs  filed a motion seeking to certify a putative class  comprised of all
non-affiliated  persons  who own or have owned  units in the  partnerships.  The
General  Partner and affiliated  defendants  oppose the motion and a hearing has
been  scheduled  for April 29,  2002.  The Court has set the matter for trial in
January 2003.

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

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

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

Item 4.     Submission of Matters to a Vote of Partners

During the quarter ended  December 31, 2001, no matters were submitted to a vote
of the Unit holders through the solicitation of proxies or otherwise.

                                     PART II

Item 5.     Market for the Registrant's Units of Depository Receipts and
            Related Security Holder Matters

(A)   No  established  public  trading  market  has  developed  for the Units of
      Depository Receipts ("Units") and it is not anticipated that such a market
      will develop in the future.

(B)   Title of Class:                     Number of Record Unit holders:

      Units of Depositary Receipts
               A Units                    385 as of December 31, 2001
               B Units                    528 as of December 31, 2001

      The  Partnership  offered and sold 172,436 "A" and "B" Units.  At December
      31,  2001,  the  Partnership  had  96,284  "A" Units and  75,152 "B" Units
      outstanding.  Affiliates  of the  General  Partner  held  61,880 "A" Units
      (64.27%) and 38,617 "B" Units (51.39%) at December 31, 2001.

(C)   The  following  table  sets  forth  the  distributions   declared  by  the
      Partnership  for the years ended  December 31, 2000 and 2001 (see "Item 6.
      Management's  Discussion  and  Analysis  or Plan of  Operation"  for  more
      details).

                                               Distributions
                                                Per Limited       Per Limited
                                Aggregate     Partnership "A"    Partnership "B"

    01/01/00 - 12/31/00       $6,849,000 (1)        $54.33            $21.10
    01/01/01 - 12/31/01        3,397,000 (2)         28.76              8.24

(1)   Distribution consists of $1,512,000 of cash from operations and $5,337,000
      of cash from the sale proceeds of Carlin Manor Apartments.

(2)   Consists of $898,000 of cash from  operations  and $2,499,000 of cash from
      the refinancing proceeds of Shadow Brook.

Upon distribution of sale proceeds from the sale of Carlin Manor during the year
ended  December  31,  2000,  the "A" Unit  holders  did not  receive the correct
priority  return.  As a result,  at December  31, 2001 the "B" Unit holders have
been  overpaid  approximately  $1,422,000   (approximately  $18.92  per  limited
partnership "B" unit). Approximately $1,397,000 of this amount is due to the "A"
Unit  holders  (approximately  $14.51  per  limited  partnership  "A"  unit) and
approximately  $25,000 is due to the General Partner.  All future  distributions
payable to the "B" Unit holders  will be paid to the "A" Unit holders  until the
"A" Unit holders receive the correct priority return.

Future cash  distributions  will depend on the levels of net cash generated from
operations,   the  availability  of  cash  reserves,  and  the  timing  of  debt
maturities,   refinancings,   and/or  property  sales.  The  Partnership's  cash
available  for  distribution  is  reviewed on a monthly  basis.  There can be no
assurance,  however,  that the Partnership  will generate  sufficient funds from
operations  after required capital  expenditures to permit  distributions to its
partners in the year 2002 or subsequent  periods.  See "Item 2.  Description  of
Properties-Capital Improvements" for information relating to anticipated capital
expenditures at the properties.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 61,880 "A" and 38,617 "B" Units of
Depository Receipts ("Units") in the Partnership  representing 64.27% and 51.39%
of the  outstanding  "A" and "B" Units,  respectively  at December  31,  2001. A
number of these Units were  acquired  pursuant to tender offers made by AIMCO or
its  affiliates.  It is possible that AIMCO or its  affiliates  will make one or
more additional offers to acquire  additional limited  partnership  interests in
the Partnership  for cash or in exchange for units in the operating  partnership
of AIMCO.  Under the Partnership  Agreement,  Unit holders holding a majority of
the Units are entitled to take action with respect to a variety of matters which
would  include  voting on certain  amendments to the  Partnership  Agreement and
voting to remove the General Partner. As a result of its ownership of 64.27% and
51.39%  of the  outstanding  "A"  and "B"  Units,  respectively,  AIMCO  is in a
position to control all such voting  decisions  with respect to the  Registrant.
When voting on matters, AIMCO would in all likelihood vote the Units it acquired
in a manner  favorable  to the  interest of the General  Partner  because of its
affiliation with the General Partner.

Item 6.     Management's Discussion and Analysis or Plan of Operation

The  matters  discussed  in this Form  10-KSB  contain  certain  forward-looking
statements  and  involve  risks and  uncertainties  (including  changing  market
conditions,   competitive  and  regulatory   matters,   etc.)  detailed  in  the
disclosures  contained  in this  Form  10-KSB  and the  other  filings  with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussions of the  Registrant's  business and results of operations,  including
forward-looking  statements  pertaining  to such  matters,  does not  take  into
account the effects of any changes to the  Registrant's  business and results of
operations.  Accordingly,  actual  results  could differ  materially  from those
projected in the forward-looking  statements as a result of a number of factors,
including those identified herein.

This  item  should  be read  in  conjunction  with  the  consolidated  financial
statements and other items contained elsewhere in this report.

Results of Operations

The  Partnership  had net  income of  approximately  $77,000  for the year ended
December  31, 2001 as compared to  approximately  $4,865,000  for the year ended
December 31, 2000. The decrease in net income is primarily  attributable  to the
gain recorded on the sale of Carlin Manor Apartments during 2000.

On  June  12,  2000,  the  Partnership   sold  Carlin  Manor  Apartments  to  an
unaffiliated  third  party for  $8,100,000.  After  payment of closing  costs of
approximately  $95,000,  the net sales proceeds received by the Partnership were
approximately $8,005,000.  The Partnership used a portion of the proceeds to pay
off  the  mortgage   encumbering  the  property  of  $2,500,000.   Approximately
$5,337,000  of the proceeds  were  distributed  to the partners  during the year
ended  December  31,  2000.  The  remaining  proceeds  were  used  to  establish
additional cash reserves for the Partnership. The Partnership's gain on the sale
was  approximately  $4,910,000  and  there  was an  extraordinary  loss on early
extinguishment  of debt of  approximately  $105,000  consisting  of a prepayment
penalty and the write-off of unamortized loan costs.

Excluding the operations and sale of Carlin Manor  Apartments,  the  Partnership
had net income of  approximately  $52,000 for the year ended  December  31, 2001
compared to net income of approximately $102,000 for the year ended December 31,
2000.  The decrease in net income was largely due to the  extraordinary  loss on
early  extinguishment  of debt  relating  to the  refinancing  of  Shadow  Brook
Apartments  during 2001 (see  discussion in "Liquidity and Capital  Resources").
The Partnership had income before  extraordinary  item of approximately  $99,000
for the year ended December 31, 2001 compared to approximately  $105,000 for the
year ended December 31, 2000. The decrease in income before  extraordinary  item
for the year ended  December  31, 2001 is due to an  increase in total  expenses
partially  offset  by an  increase  in total  revenues.  The  increase  in total
revenues  is due to  increases  in other  income  partially  offset  by a slight
decrease in rental  income.  Other income  increased  primarily due to increased
utility reimbursements at both properties,  late charges at Hunt Club Apartments
and corporate unit rent at Shadow Brook Apartments,  which were partially offset
by decreases in telephone  commissions  at Shadow Brook  Apartments and interest
income due to lower average cash balances in interest bearing  accounts.  Rental
income  decreased   primarily  due  to  decreases  in  occupancy  at  Hunt  Club
Apartments,  increased  concessions at Shadow Brook Apartments and increased bad
debt expense at Hunt Club  Apartments.  These decreases were partially offset by
increases in the average rental rate at both properties.

Excluding the operations of and sale of Carlin Manor,  total expenses  increased
for the year ended  December 31, 2001 due to increased  operating,  depreciation
and interest expenses  partially offset by decreased general and  administrative
expenses.  Operating  expenses  increased  primarily due to increased  insurance
expense  at both of the  Partnership's  properties,  increased  utility  charges
primarily at Hunt Club  Apartments  and  increased  corporate  unit  expenses at
Shadow Brook  Apartments,  partially offset by reduced  maintenance  expenses at
both of the Partnership's  properties.  Depreciation expense increased primarily
due to property  improvements and replacements  completed during the past twelve
months.  Interest  expense  increased  due to the  refinancing  of the  mortgage
encumbering  Shadow Brook  Apartments in August 2001 and Hunt Club Apartments in
August 2000, which increased the average debt balance at the properties. General
and administrative  expenses decreased primarily due to decreases in Partnership
management  fees  on  distributions,  the  cost  of  services  included  in  the
management   reimbursements   to  the  General  Partner  as  allowed  under  the
Partnership   Agreement  and  professional  expenses  necessary  to  manage  the
Partnership.  Also included in general and administrative expenses for the years
ended  December 31, 2001 and 2000, are costs  associated  with the quarterly and
annual  communications  with  investors and  regulatory  agencies and the annual
audit required by the Partnership Agreement.

As part of the ongoing  business plan of the  Partnership,  the General  Partner
monitors the rental market  environment of each of its investment  properties to
assess the feasibility of increasing rents,  maintaining or increasing occupancy
levels and protecting  the  Partnership  from increases in expenses.  As part of
this plan,  the General  Partner  attempts to protect the  Partnership  from the
burden of  inflation-related  increases  in  expenses  by  increasing  rents and
maintaining a high overall  occupancy  level.  However,  due to changing  market
conditions,  which  can  result  in the use of  rental  concessions  and  rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.

Liquidity and Capital Resources

At  December  31,  2001,  the  Partnership  had  cash and  cash  equivalents  of
approximately  $342,000 as compared to  approximately  $892,000 at December  31,
2000. Cash and cash equivalents decreased  approximately  $550,000 from December
31, 2000, due to approximately  $1,037,000 of cash used in financing  activities
and  approximately  $387,000  of cash used in  investing  activities,  which was
partially  offset  by  approximately  $874,000  of cash  provided  by  operating
activities.  Cash  used  in  financing  activities  consisted  primarily  of the
repayment of the mortgage  encumbering Shadow Brook Apartments and distributions
to partners,  and to a lesser extent,  loan costs paid and payments of principal
made on the  Partnership's  mortgages  partially offset by the proceeds received
from  the  refinancing  of  Shadow  Brook  Apartments.  Cash  used in  investing
activities consisted of property improvements and replacements  partially offset
by net withdrawals  from restricted  escrows  maintained by the mortgage lender.
The  Partnership  invests its  working  capital  reserves  in  interest  bearing
accounts.

On August 31, 2001, the Partnership  refinanced the mortgage  encumbering Shadow
Brook Apartments. The refinancing replaced indebtedness of $6,000,000 with a new
mortgage of $8,775,000. The new mortgage carries a stated interest rate of 7.10%
as  compared to the 7.33%  interest  rate on the old  mortgage.  Payments on the
mortgage  loan are due monthly  until the loan  matures on  September 1, 2021 at
which time the loan is scheduled to be fully amortized.  Total  capitalized loan
costs were  approximately  $281,000 during the year ended December 31, 2001. The
Partnership recognized an extraordinary loss on the early extinguishment of debt
of approximately $47,000 due to the write-off of unamortized loan costs.

On August 31, 2000, the  Partnership  refinanced the mortgage  encumbering  Hunt
Club  Apartments.   The  refinancing  replaced   indebtedness  of  approximately
$3,582,000 with a new mortgage of $3,900,000.  The new mortgage carries a stated
interest  rate of  8.05%  as  compared  to the  8.30%  interest  rate on the old
mortgage.  Payments on the mortgage  loan are due monthly until the loan matures
on September 1, 2020. In addition,  the  Partnership was required to establish a
repair  escrow of  approximately  $239,000  with the lender for certain  capital
replacements.  Total  capitalized loan costs were  approximately  $157,000.  The
Partnership recognized an extraordinary loss on the early extinguishment of debt
of approximately $3,000 due to the write-off of unamortized loan costs.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the  properties  to  adequately  maintain the physical
assets and other  operating needs of the Partnership and to comply with Federal,
state, and local legal and regulatory requirements. The Partnership is currently
evaluating  the  capital  improvement  needs of both of its  properties  for the
upcoming year. The minimum amount to be budgeted for the Partnership is expected
to be $300 per unit or $150,000.  Additional  improvements may be considered and
will depend on the physical  condition of the  properties as well as replacement
reserves and anticipated cash flow generated by the properties.

The  additional  capital  expenditures  for the year  2002 at the  Partnership's
properties will be made only to the extent of cash available from operations and
Partnership  reserves. To the extent that such budgeted capital improvements are
completed,  the Partnership's  distributable cash flow, if any, may be adversely
affected at least in the short term.

Until  October  17,  2000,  the  Partnership  was  required  by the  Partnership
Agreement to maintain  working capital  reserves for  contingencies  of not less
than 5% of Net Invested Capital, as defined in the Partnership Agreement. In the
event  expenditures were made from this reserve,  operating  revenues were to be
allocated  to such reserve to the extent  necessary  to maintain  the  foregoing
level.  During the third  quarter,  the  Partnership  solicited  the vote of the
Limited  Partners to approve an  amendment  to the  Partnership  Agreement.  The
effect of the amendment was to change such provision to require the  Partnership
to maintain  reasonable reserves for normal working capital and contingencies in
an  amount  determined  from  time to time by the  General  Partner  in its sole
discretion.  The  Solicitation  Statement was mailed to the Limited  Partners on
September 16, 2000.  Upon the  expiration of the  solicitation  period (close of
business on October  16,  2000),  the  requisite  number of positive  votes were
received to effect this amendment.

The  Partnership's  assets  are  currently  thought  to be  sufficient  for  any
near-term needs  (exclusive of capital  improvements)  of the  Partnership.  The
mortgage  indebtedness of  approximately  $12,521,000 is amortized over 20 years
and matures on September  1, 2020 and  September 1, 2021 at which time the loans
are scheduled to be fully amortized.

During the year ended  December  31,  2001,  the  Registrant  declared  and paid
distributions of approximately $3,397,000  (approximately $2,769,000 to "A" Unit
holders or $28.76 per limited partnership "A" Unit and approximately $619,000 to
"B"  Unit  holders  or  $8.24  per  limited   partnership  "B"  Unit)  of  which
approximately $898,000  (approximately $270,000 to "A" Unit holders or $2.80 per
limited  partnership "A" Unit and approximately  $619,000 to "B" Unit holders or
$8.24 per limited  partnership "B" Unit) was from  operations and  approximately
$2,499,000  (approximately  $2,499,000 to "A" Unit holders or $25.96 per limited
partnership  "A"  Unit)  was  proceeds  from the  refinancing  of  Shadow  Brook
Apartments  in August  2001.  During  the year  ended  December  31,  2000,  the
Partnership paid a cash  distribution  from  operations,  which was declared and
accrued at December 31, 1999, of approximately $427,000  (approximately $423,000
to "A" Unit holders or $4.39 per limited partnership "A" Unit). In addition, the
Partnership  declared and paid  distributions  from operations of  approximately
$1,512,000  (approximately  $1,497,000 to "A" Unit holders or $15.55 per limited
partnership  "A" Unit) and of proceeds from the sale of Carlin Manor  Apartments
of  approximately  $5,337,000  (approximately  $3,734,000 to "A" Unit holders or
$38.78 per limited partnership "A" Unit and approximately $1,586,000 to "B" Unit
holders or $21.10 per limited  partnership  "B" Unit).  The  Partnership's  cash
available  for  distribution  is  reviewed  on  a  monthly  basis.  Future  cash
distributions  will depend on the levels of net cash generated from  operations,
the  availability  of  cash  reserves,   and  the  timing  of  debt  maturities,
refinancings,  and/or property sales. There can be no assurance,  however,  that
the Partnership  will generate  sufficient  funds from operations after required
capital expenditures to permit distributions to its partners in the year 2002 or
subsequent periods.

Upon distribution of sale proceeds from the sale of Carlin Manor during the year
ended  December  31,  2000,  the "A" Unit  holders  did not  receive the correct
priority  return.  As a result,  at December  31, 2001 the "B" Unit holders have
been  overpaid  approximately  $1,422,000   (approximately  $18.92  per  limited
partnership "B" unit). Approximately $1,397,000 of this amount is due to the "A"
Unit  holders  (approximately  $14.51  per  limited  partnership  "A"  unit) and
approximately  $25,000 is due to the General Partner.  All future  distributions
payable to the "B" Unit holders  will be paid to the "A" Unit holders  until the
"A" Unit holders receive the correct priority return.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 61,880 "A" and 38,617 "B" Units of
Depository Receipts ("Units") in the Partnership  representing 64.27% and 51.39%
of the  outstanding  "A" and "B" Units,  respectively  at December  31,  2001. A
number of these Units were  acquired  pursuant to tender offers made by AIMCO or
its  affiliates.  It is possible that AIMCO or its  affiliates  will make one or
more additional offers to acquire  additional limited  partnership  interests in
the Partnership  for cash or in exchange for units in the operating  partnership
of AIMCO.  Under the Partnership  Agreement,  Unit holders holding a majority of
the Units are entitled to take action with respect to a variety of matters which
would  include  voting on certain  amendments to the  Partnership  Agreement and
voting to remove the General Partner. As a result of its ownership of 64.27% and
51.39%  of the  outstanding  "A"  and "B"  Units,  respectively,  AIMCO  is in a
position to control all such voting  decisions  with respect to the  Registrant.
When voting on matters, AIMCO would in all likelihood vote the Units it acquired
in a manner  favorable  to the  interest of the General  Partner  because of its
affiliation with the General Partner.

Recent Accounting Pronouncements

In August 2001, the Financial  Accounting Standards Board issued SFAS No. 144,
"Accounting  for the  Impairment or Disposal of Long-Lived  Assets".  SFAS No.
144 provides  accounting  guidance for financial  accounting and reporting for
the impairment or disposal of long-lived assets.  SFAS No. 144 supersedes SFAS
No.  121,  "Accounting  for  the  Impairment  of  Long-Lived  Assets  and  for
Long-Lived  Assets to be Disposed  Of".  SFAS No. 144 is effective  for fiscal
years  beginning  after  December  15,  2001.  The  General  Partner  does not
anticipate  that its  adoption  will have a material  effect on the  financial
position or results of operations of the Partnership.

Item 7.     Financial Statements

MULTI-BENEFIT REALTY FUND '87-1

LIST OF CONSOLIDATED FINANCIAL STATEMENTS

      Report of Ernst & Young LLP, Independent Auditors

      Consolidated Balance Sheet - December 31, 2001

      Consolidated  Statements of  Operations - Years ended  December 31, 2001
      and 2000

      Consolidated  Statements of Changes in Partners' (Deficit) Capital - Years
      ended December 31, 2001 and 2000

      Consolidated  Statements  of Cash Flows - Years ended  December 31, 2001
      and 2000

      Notes to Consolidated Financial Statements


<PAGE>


              Report of Ernst & Young LLP, Independent Auditors



The Partners
Multi-Benefit Realty Fund '87-1


We have audited the  accompanying  consolidated  balance sheet of  Multi-Benefit
Realty  Fund  '87-1  as of  December  31,  2001,  and the  related  consolidated
statements of operations, changes in partners' (deficit) capital, and cash flows
for each of the two years in the period ended December 31, 2001. These financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 the  Partnership's  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 Multi-Benefit
Realty Fund '87-1 at December  31,  2001,  and the  consolidated  results of its
operations  and its cash  flows  for each of the two years in the  period  ended
December 31, 2001, in conformity with accounting  principles  generally accepted
in the United States.


                                                          /s/ERNST & YOUNG LLP


Greenville, South Carolina
February 15, 2002


<PAGE>

                       MULTI-BENEFIT REALTY FUND '87-1

                           CONSOLIDATED BALANCE SHEET
                       (in thousands, except unit data)

                                December 31, 2001

<TABLE>
<CAPTION>

Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $   342
   Receivables and deposits                                                      162
   Restricted escrows                                                            112
   Other assets                                                                  456
   Investment properties (Notes B and F):
      Land                                                    $ 1,447
      Buildings and related personal property                   17,684
                                                                19,131
      Less accumulated depreciation                            (10,555)        8,576
                                                                            $ 9,648

Liabilities and Partners' (Deficit) Capital
Liabilities
      Accounts payable                                                        $ 87
      Tenant security deposit liabilities                                         50
      Accrued property taxes                                                     153
      Other liabilities                                                          220
      Mortgage notes payable (Note B)                                         12,521

Partners' (Deficit) Capital
   General Partner                                             $ (125)
   Limited Partner "A" Unit holders -
      96,284 units issued and outstanding                       (7,393)
   Limited Partner "B" Unit holders -
      75,152 units issued and outstanding                        4,135        (3,383)
                                                                            $ 9,648

        See Accompanying Notes to Consolidated Financial Statements
</TABLE>

<PAGE>
                       MULTI-BENEFIT REALTY FUND '87-1

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

<TABLE>
<CAPTION>

                                                              Years Ended December 31,
                                                                 2001          2000
Revenues:
<S>                                                            <C>            <C>
  Rental income                                                $ 3,537        $ 4,167
  Other income                                                     323            366
  Gain on sale of investment property (Note H)                      --          4,910
      Total revenues                                             3,860          9,443

Expenses:
  Operating                                                      1,502          1,883
  General and administrative                                       295            444
  Depreciation                                                     840            978
  Interest                                                         847            879
  Property taxes                                                   252            286
      Total expenses                                             3,736          4,470

Income before extraordinary item                                   124          4,973
Extraordinary loss on early extinguishment of debt
  (Note B and H)                                                   (47)          (108)

Net income (Note C)                                              $ 77         $ 4,865

Net income allocated to general partner (1%)                     $ 1           $ 49
Net income allocated to limited partners (99%)                      76          4,816
                                                                 $ 77         $ 4,865
Per limited partnership "A" and "B" units:
  Income before extraordinary item                              $ 0.72        $ 28.71
  Extraordinary loss on early extinguishment of debt             (0.27)         (0.62)

Net income                                                      $ 0.45        $ 28.09

Distributions per limited partnership "A" units                $ 28.76        $ 54.33
Distributions per limited partnership "B" units                 $ 8.24        $ 21.10

        See Accompanying Notes to Consolidated Financial Statements

</TABLE>

<PAGE>

                       MULTI-BENEFIT REALTY FUND '87-1

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

<TABLE>
<CAPTION>

                                                                              Total
                                                                            Partners'
                                        General       Limited Partners      (Deficit)
                                        Partner    "A" Units    "B" Units    Capital

<S>                                       <C>       <C>          <C>        <C>
Original capital contributions            $ 1       $ 9,706      $ 7,538    $ 17,245

Limited partnership units at
  December 31, 2001 and
  December 31, 2000                         --       96,284       75,152     171,436

Partners' (deficit) capital at
  December 31, 1999                     $ (134)     $(2,141)     $ 4,196     $ 1,921

Distributions to partners                  (32)      (5,231)      (1,586)     (6,849)

Net income for the year ended
  December 31, 2000                         49        2,705        2,111       4,865

Partners' (deficit) capital at
  December 31, 2000                       (117)      (4,667)       4,721         (63)

Distributions to partners                   (9)      (2,769)        (619)     (3,397)

Net income for the year ended
  December 31, 2001                          1           43           33          77

Partners' (deficit) capital at
  December 31, 2001                     $ (125)     $(7,393)     $ 4,135    $ (3,383)

        See Accompanying Notes to Consolidated Financial Statements

</TABLE>

<PAGE>

                       MULTI-BENEFIT REALTY FUND '87-1

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (in thousands)

<TABLE>
<CAPTION>
                                                              Years Ended December 31,
                                                                  2001        2000
Cash flows from operating activities:
<S>                                                               <C>        <C>
  Net income                                                      $ 77       $ 4,865
  Adjustments to reconcile net income to net cash provided
   by operating activities:
     Depreciation                                                   840          978
     Amortization of loan costs                                      35           51
     Gain on sale of investment property                             --       (4,910)
     Extraordinary loss on early extinguishment of debt              47          108
     Change in accounts:
      Receivables and deposits                                      (77)         245
      Other assets                                                   (4)          12
      Accounts payable                                               20         (155)
      Tenant security deposit liabilities                            (8)         (29)
      Accrued property taxes                                          1         (184)
      Other liabilities                                             (57)        (145)
          Net cash provided by operating activities                 874          836

Cash flows from investing activities:
  Property improvements and replacements                           (556)        (439)
  Net withdrawals from (deposits to) restricted escrows             169          (38)
  Proceeds from sale of investment property                          --        8,005
          Net cash (used in) provided by investing
            activities                                             (387)       7,528

Cash flows from financing activities:
  Payments on mortgage notes payable                               (134)         (75)
  Repayment of mortgage notes payable                            (6,000)      (6,082)
  Proceeds from mortgage note payable                             8,775        3,900
  Prepayment penalty paid                                            --          (62)
  Loan costs paid                                                  (281)        (157)
  Distributions to partners                                      (3,397)      (7,276)
          Net cash used in financing activities                  (1,037)      (9,752)

Net decrease in cash and cash equivalents                          (550)      (1,388)
Cash and cash equivalents at beginning of year                      892        2,280
Cash and cash equivalents at end of year                         $ 342        $ 892

Supplemental disclosure of cash flow information:
  Cash paid for interest                                         $ 796        $ 851

Supplemental disclosure of non-cash activity:
  Property improvements and replacements included in
   accounts payable                                               $ --        $ 125

        See Accompanying Notes to Consolidated Financial Statements

</TABLE>

<PAGE>
                       MULTI-BENEFIT REALTY FUND '87-1

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2001


Note A - Organization and Significant Accounting Policies

Organization

Multi-Benefit   Realty  Fund  '87-1  (the  "Partnership"  or  "Registrant")  was
organized  as a limited  partnership  under the laws of the State of  California
pursuant to a Certificate and Agreement of Limited  Partnership  filed September
8, 1986.  The  Partnership  commenced  operations  on  February  27,  1987.  The
Partnership operates two apartment  properties,  one each located in Indiana and
Utah. ConCap Equities,  Inc. ("CEI" or the "General Partner") is a subsidiary of
Apartment  Investment and Management Company  ("AIMCO"),  a publicly traded real
estate  investment trust. The directors and officers of the General Partner also
serve as executive  officers of AIMCO. The Partnership  Agreement  provides that
the Partnership is to terminate on December 31, 2036, unless terminated prior to
such date.

Upon  the  Partnership's   formation  in  1986,  Consolidated  Capital  Equities
Corporation  ("CCEC"), a Colorado  corporation,  was the sole general partner of
the Partnership and the corporate limited partner, a wholly-owned  subsidiary of
CCEC, was the sole limited partner.  In 1988,  through a series of transactions,
Southmark Corporation  ("Southmark") acquired a controlling interest in CCEC. In
December  1988,  CCEC filed for  reorganization  under  Chapter 11 of the United
States  Bankruptcy  Code. In 1990, as part of CCEC's  reorganization  plan,  CEI
acquired  CCEC's general  partner  interest in the  Partnership  and in 15 other
affiliated public limited partnerships (the "Affiliated Partnerships"), acquired
the stock of the  corporate  limited  partner,  and CEI replaced CCEC as General
Partner in all 16 partnerships. The selection of CEI as the sole General Partner
was  approved by a majority of the Unit  holders in the  Partnership  and of the
limited  partners  in  each  of  the  Affiliated   Partnerships  pursuant  to  a
solicitation  of the  Unit  holders  dated  August  10,  1990.  As  part of this
solicitation,  the Unit  holders also  approved an amendment to the  Partnership
Agreement to limit changes of control of the Partnership.

Principles of Consolidation

The consolidated financial statements of the Partnership include its 99% limited
partnership  interest in Hunt Club Associates,  Ltd. The general partner of this
consolidated  partnership  is  the  General  Partner  of  the  Registrant.   The
Partnership  may  remove  the  general  partner  of Hunt Club  Associates,  Ltd;
therefore,  this  partnership is controlled and consolidated by the Partnership.
All significant interpartnership balances have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Partners' (Deficit) Capital

The  Partnership  has  issued  two  classes  of  Units  of  Depositary  Receipts
("Units"),  "A" Units and "B" Units.  The two  classes of units are  entitled to
different  rights  and  priorities  as to  cash  distributions  and  partnership
allocations.  The Units represent  economic  rights  attributable to the limited
partnership  interests in the Partnership and entitle the holders thereof ("Unit
holders") to participate in certain allocations of the Partnership.

The  Partnership  Agreement  ("Agreement")  provides for the  allocation  of net
income and net losses  from  operations  for both  financial  and tax  reporting
purposes as follows: net profits are first allocated in the reverse order of any
net losses  then are  allocated  99% to the holders of "A" Units until they have
been  allocated  income equal to their  priority  return,  and 1% to the General
Partner.  The priority return represents 9% per annum return on invested capital
for the  Partnership's  first fiscal year,  9.5% for the second year and 10% per
annum thereafter. Additional net profits are allocated 1% to the General Partner
and 99% to the Unit holders.  Net losses are allocated 1% to the General Partner
and  99%  to the  Unit  holders  until  their  capital  accounts  are  depleted.
Additional  net losses are  allocated  to the  General  Partner.  Net income per
limited  partnership  unit for both  2001  and 2000 was  computed  as 99% of net
income divided by 171,436 units outstanding.

Distributable  cash from  operations is allocated 1% to the General  Partner and
99% to the Unit holders with holders of "A" Units first receiving their priority
return,  then the balance is split equally  between holders of "A" Units and "B"
Units.  The General Partner  receives 1% of surplus funds and holders of "A" and
"B" Units will receive a return of their invested capital. Any remainder will be
allocated 10% to holders of "A" Units and 90% to holders of "B" Units.

Cash and Cash Equivalents

Includes  cash on hand and in  banks.  At  certain  times,  the  amount  of cash
deposited  at a bank may  exceed the limit on insured  deposits.  Cash  balances
include  approximately  $324,000 at December 31, 2001 that are  maintained by an
affiliated   management  company  on  behalf  of  affiliated  entities  in  cash
concentration accounts.

Tenant Security Deposits

The Partnership  requires security deposits from lessees for the duration of the
lease.  Deposits are refunded when the tenant  vacates,  provided the tenant has
not damaged its space and is current on rental payments.

Escrows for Taxes

Escrows for Hunt Club are held by the  mortgagor.  Escrows for Shadow  Brook are
held by the  Partnership.  All escrowed  funds are designated for the payment of
real  estate  taxes  and   insurance.   The  escrows  for  Hunt  Club   totaling
approximately  $36,000 and the escrows for Shadow Brook  totaling  approximately
$27,000 are included in receivables and deposits.

Restricted Escrows

At the time of the  refinancing  of the  mortgage at Hunt Club  Apartments,  the
mortgage lender required a "repair escrow" for certain capital replacements.  At
December 31, 2001, the balance was approximately $112,000.

Investment Properties

Investment properties consist of two apartment complexes and are stated at cost.
Acquisition  fees are  capitalized as a cost of real estate.  In accordance with
Statement of Financial  Accounting  Standards ("SFAS") No. 121,  "Accounting for
the  Impairment of Long-Lived  Assets and for  Long-Lived  Assets to be Disposed
Of," the  Partnership  records  impairment  losses on long-lived  assets used in
operations  when  events and  circumstances  indicate  that the assets  might be
impaired  and the  undiscounted  cash flows  estimated  to be generated by those
assets are less than the carrying  amounts of those assets.  No adjustments  for
impairment of value were recorded in the years ended December 31, 2001 and 2000.
See "Recent Accounting Pronouncements" below.

Depreciation

Depreciation is provided by the straight-line method over the estimated lives of
the investment properties and related personal property.  For Federal income tax
purposes, the accelerated cost recovery method is used for real property over 18
years for additions after May 8, 1985 and before January 1, 1987. As a result of
the Tax  Reform  Act of  1986,  for  additions  after  December  31,  1986,  the
alternative  depreciation  system is used for  depreciation of (1) real property
additions over 40 years, and (2) personal property additions over 5-20 years.

Loan Costs

Loan  costs  of  approximately   $442,000  less   accumulated   amortization  of
approximately  $19,000 are included in other assets and are being amortized on a
straight-line basis over the life of the respective loans.

Leases

The Partnership generally leases apartment units for twelve-month terms or less.
The Partnership  recognizes  income as earned on leases.  The General  Partner's
policy is to offer  rental  concessions  during  particularly  slow months or in
response  to  heavy  competition  from  other  similar  complexes  in the  area.
Concessions are charged against rental income as incurred.

Segment Reporting

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

Advertising

Advertising  costs of  approximately  $58,000  and  $87,000  for the years ended
December 31, 2001 and 2000, respectively, are charged to expense as incurred and
are included in operating expenses.

Fair Value of Financial Statements

SFAS No.  107,  "Disclosures  about Fair  Value of  Financial  Instruments",  as
amended by SFAS No. 119, "Disclosures about Derivative Financial Instruments and
Fair  Value  of  Financial  Instruments",  requires  disclosure  of  fair  value
information  about  financial  instruments,  whether  or not  recognized  in the
balance sheet, for which it is practicable to estimate fair value. Fair value is
defined in the SFAS as the amount at which the instruments could be exchanged in
a  current  transaction  between  willing  parties,  other  than in a forced  or
liquidation  sale.  The  Partnership  believes that the carrying  amounts of its
financial  instruments (except for long term debt) approximate their fair values
due to the short  term  maturity  of these  instruments.  The fair  value of the
Partnership's  long term debt, after  discounting the scheduled loan payments to
maturity  based on  borrowing  rates  currently  available  to the  Partnership,
approximates its carrying amount.

Recent Accounting Pronouncements

In August 2001, the Financial  Accounting Standards Board issued SFAS No. 144,
"Accounting  for the  Impairment or Disposal of Long-Lived  Assets".  SFAS No.
144 provides  accounting  guidance for financial  accounting and reporting for
the impairment or disposal of long-lived assets.  SFAS No. 144 supersedes SFAS
No.  121,  "Accounting  for  the  Impairment  of  Long-Lived  Assets  and  for
Long-Lived  Assets to be Disposed  Of".  SFAS No. 144 is effective  for fiscal
years  beginning  after  December  15,  2001.  The  General  Partner  does not
anticipate  that its  adoption  will have a material  effect on the  financial
position or results of operations of the Partnership.

Note B - Mortgage Notes Payable

The principal terms of mortgage notes payable are as follows:
<TABLE>
<CAPTION>

                        Principal      Monthly                           Principal
                       Balance At      Payment    Stated                  Balance
                      December 31,    Including  Interest   Maturity       Due At
Property                  2001        Interest     Rate       Date        Maturity
                           (in thousands)                              (in thousands)
Hunt Club
<S>                      <C>            <C>        <C>      <C>   <C>       <C>
  1st mortgage           $ 3,796        $ 33       8.05%    09/01/20        $ --
Shadow Brook
  1st mortgage             8,725           69      7.10%    09/01/21          --

                         $12,521        $ 102                               $ --
</TABLE>

The mortgage  notes  payable are  non-recourse  and are secured by pledge of the
respective  apartment  properties  and by pledge of revenues from the respective
apartment  properties.  Both of the notes require prepayment penalties if repaid
prior to maturity  and  prohibit  resale of the  properties  subject to existing
indebtedness.

On August 31, 2001, the Partnership  refinanced the mortgage  encumbering Shadow
Brook Apartments. The refinancing replaced indebtedness of $6,000,000 with a new
mortgage of $8,775,000. The new mortgage carries a stated interest rate of 7.10%
as  compared to the 7.33%  interest  rate on the old  mortgage.  Payments on the
mortgage  loan are due monthly  until the loan  matures on  September 1, 2021 at
which time the loan will be fully amortized.  Total  capitalized loan costs were
approximately  $281,000 during the year ended December 31, 2001. The Partnership
recognized  an  extraordinary  loss  on the  early  extinguishment  of  debt  of
approximately $47,000 due to the write-off of unamortized loan costs.

On August 31, 2000, the  Partnership  refinanced the mortgage  encumbering  Hunt
Club  Apartments.   The  refinancing  replaced   indebtedness  of  approximately
$3,582,000 with a new mortgage of $3,900,000.  The new mortgage carries a stated
interest  rate of  8.05%  as  compared  to the  8.30%  interest  rate on the old
mortgage.  Payments on the mortgage  loan are due monthly until the loan matures
on September 1, 2020. In addition,  the  Partnership was required to establish a
repair  escrow of  approximately  $239,000  with the lender for certain  capital
replacements.  Total  capitalized loan costs were  approximately  $157,000.  The
Partnership recognized an extraordinary loss on the early extinguishment of debt
of approximately $3,000 due to the write-off of unamortized loan costs.

Scheduled  principal  payments  of the  mortgage  notes  payable  subsequent  to
December 31, 2001 are as follows (in thousands):

                               2002             $   301
                               2003                 323
                               2004                 348
                               2005                 375
                               2006                 404
                            Thereafter           10,770
                                                $12,521

Note C - Income Taxes

The Partnership  received a ruling from the Internal  Revenue Service that it is
to be classified as a partnership for Federal income tax purposes.  Accordingly,
no provision for income taxes is made in the consolidated  financial  statements
of the Partnership. Taxable income or loss of the Partnership is reported in the
income tax returns of its partners.

The  following is a  reconciliation  of reported net income and Federal  taxable
income (in thousands, except per unit data):

                                              2001          2000
Net income as reported                        $ 77         $ 4,865
Add (deduct)
  Depreciation differences                        38           (19)
  Unearned income                                 70           (94)
  Gain on sale of investment property             96        (1,975)
  Other                                          (77)          (37)
Federal taxable income                        $ 204        $ 2,740
Federal taxable income per limited
  partnership unit                           $ 1.18        $ 15.83

The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and  liabilities  (in  thousands) as of December
31, 2001:

Net liabilities as reported                   $(3,383)
Land and buildings                                314
Accumulated depreciation                          772
Syndication fees                                1,975
Other                                             236

Net assets - tax basis                         $ (86)

Note D - Transactions with Affiliated Parties

The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership  activities.
The Partnership  Agreement  provides for (i) certain  payments to affiliates for
services and (ii)  reimbursement of certain  expenses  incurred by affiliates on
behalf of the Partnership.  The following  transactions with the General Partner
and/or its affiliates  were incurred during each of the years ended December 31,
2001 and 2000:

                                                   2001        2000
                                                    (in thousands)
Property management fees (included in
  operating expense)                              $ 198        $ 228
Reimbursement for services of affiliates
  (included in general and administrative
  expenses and investment properties)               357          191
Partnership management fees (included in
  general and administrative expense)                82          135
Refinancing fee (included in loan costs)             88           39

During the years ended  December  31, 2001 and 2000,  affiliates  of the General
Partner  were  entitled  to  receive  5% of  gross  receipts  from  both  of the
Partnership's  properties  as  compensation  for providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $198,000 and
$228,000 for the years ended December 31, 2001 and 2000, respectively.

Affiliates  of  the  General  Partner  received   reimbursement  of  accountable
administrative expenses amounting to approximately $357,000 and $191,000 for the
years ended December 31, 2001 and 2000, respectively.  Included in these amounts
are  construction  oversight fees paid to an affiliate of the General Partner of
approximately  $174,000  and $2,000 for the years  ended  December  31, 2001 and
2000,  respectively.  This fee is related to  construction  management  services
provided  by  AIMCO  and  its  affiliates.  The fee was  calculated  based  on a
percentage of current and certain prior year additions to investment  properties
and is being depreciated over 15 years.

The Partnership  Agreement  provides for a fee equal to 9% of distributable cash
from  operations  (as  defined in the  Partnership  Agreement)  received  by the
limited   partners  to  be  paid  to  the  General  Partner  for  executive  and
administrative  management services.  Fees of approximately $82,000 and $135,000
were earned during the years ended December 31, 2001 and 2000, respectively,  in
association with the distributions.

An affiliate of the General Partner received  approximately $88,000 for services
provided in conjunction with the refinancing of the mortgage  encumbering Shadow
Brook Apartments in August 2001 and approximately  $39,000 for services provided
in  conjunction  with the  refinancing  of the  mortgage  encumbering  Hunt Club
Apartments in August 2000 (see "Note B"). These costs were  capitalized  and are
included in other assets on the consolidated balance sheet.

Beginning in 2001, the  Partnership  began insuring its properties up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability. The Partnership insures its properties above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated with the General Partner.  During the year ended December 31, 2001,
the  Partnership  paid  AIMCO  and  its  affiliates  approximately  $32,000  for
insurance coverage and fees associated with policy claims administration.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 61,880 "A" and 38,617 "B" Units of
Depository Receipts ("Units") in the Partnership  representing 64.27% and 51.39%
of the  outstanding  "A" and "B" Units,  respectively  at December  31,  2001. A
number of these Units were  acquired  pursuant to tender offers made by AIMCO or
its  affiliates.  It is possible that AIMCO or its  affiliates  will make one or
more additional offers to acquire  additional limited  partnership  interests in
the Partnership  for cash or in exchange for units in the operating  partnership
of AIMCO.  Under the Partnership  Agreement,  Unit holders holding a majority of
the Units are entitled to take action with respect to a variety of matters which
would  include  voting on certain  amendments to the  Partnership  Agreement and
voting to remove the General Partner. As a result of its ownership of 64.27% and
51.39%  of the  outstanding  "A"  and "B"  Units,  respectively,  AIMCO  is in a
position to control all such voting  decisions  with respect to the  Registrant.
When voting on matters, AIMCO would in all likelihood vote the Units it acquired
in a manner  favorable  to the  interest of the General  Partner  because of its
affiliation with the General Partner.

Note E - Commitment

Until  October  17,  2000,  the  Partnership  was  required  by the  Partnership
Agreement to maintain  working capital  reserves for  contingencies  of not less
than 5% of Net Invested Capital, as defined in the Partnership Agreement. In the
event  expenditures were made from this reserve,  operating  revenues were to be
allocated  to such reserve to the extent  necessary  to maintain  the  foregoing
level.  During the third  quarter,  the  Partnership  solicited  the vote of the
Limited  Partners to approve an  amendment  to the  Partnership  Agreement.  The
effect of the amendment was to change such provision to require the  Partnership
to maintain  reasonable reserves for normal working capital and contingencies in
an  amount  determined  from  time to time by the  General  Partner  in its sole
discretion.  The  Solicitation  Statement  was  mailed to  Limited  Partners  on
September 16, 2000.  Upon the  expiration of the  solicitation  period (close of
business on October  16,  2000),  the  requisite  number of positive  votes were
received to effect this amendment.

Note F - Real Estate and Accumulated Depreciation
<TABLE>
<CAPTION>

                                                  Initial Cost
                                                 To Partnership
                                                 (in thousands)
                                                         Buildings       Net Cost
                                                        and Related     Capitalized
                                                         Personal      Subsequent to
Description                  Encumbrances      Land      Property       Acquisition
                            (in thousands)                            (in thousands)
<S>                            <C>            <C>         <C>             <C>
Hunt Club Apartments           $ 3,796        $ 485       $ 5,673         $ 1,709
Shadow Brook Apartments          8,725           962        8,262           2,040

          Totals               $12,521       $ 1,447      $13,935         $ 3,749
</TABLE>

<TABLE>
<CAPTION>

              Gross Amount At Which Carried
                  At December 31, 2001
                     (in thousands)
                       Buildings
                      And Related
                       Personal             Accumulated     Date of      Date    Depreciable
Description    Land    Property    Total    Depreciation  Construction Acquired  Life-Years
                                           (in thousands)
<S>            <C>      <C>       <C>         <C>             <C>        <C>        <C>
Hunt Club      $ 485    $ 7,382   $ 7,867     $ 4,853         1979       05/87      5-30
Shadow Brook     962     10,302    11,264       5,702         1985       05/87      5-30

Totals        $1,447    $17,684   $19,131     $10,555
</TABLE>

Reconciliation of "Real Estate and Accumulated Depreciation"

                                              Years Ended December 31,
                                                 2001          2000
                                                   (in thousands)
Real Estate
Balance at beginning of year                    $18,700       $25,487
  Property improvements                             431           564
  Sale of investment property                        --        (7,351)
Balance at end of year                          $19,131       $18,700

Accumulated Depreciation
Balance at beginning of year                    $ 9,715       $12,993
  Additions charged to expense                      840           978
  Sale of investment property                        --        (4,256)
Balance at end of year                          $10,555       $ 9,715

The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  2001 and 2000,  is  approximately  $19,445,000  and  $19,013,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December  31, 2001 and 2000,  is  approximately  $9,783,000  and  $8,980,000,
respectively.

Note G - Distributions

During the year ended  December  31,  2001,  the  Registrant  declared  and paid
distributions of approximately $3,397,000  (approximately $2,769,000 to "A" Unit
holders or $28.76 per limited partnership "A" Unit and approximately $619,000 to
"B"  Unit  holders  or  $8.24  per  limited   partnership  "B"  Unit)  of  which
approximately $898,000  (approximately $270,000 to "A" Unit holders or $2.80 per
limited  partnership "A" Unit and approximately  $619,000 to "B" Unit holders or
$8.24 per limited  partnership "B" Unit) was from  operations and  approximately
$2,499,000  (approximately  $2,499,000 to "A" Unit holders or $25.96 per limited
partnership  "A"  Unit)  was  proceeds  from the  refinancing  of  Shadow  Brook
Apartments  in August  2001.  During  the year  ended  December  31,  2000,  the
Partnership paid a cash  distribution  from  operations,  which was declared and
accrued at December 31, 1999, of approximately $427,000  (approximately $423,000
to "A" Unit holders or $4.39 per limited partnership "A" Unit). In addition, the
Partnership  declared and paid  distributions  from operations of  approximately
$1,512,000  (approximately  $1,497,000 to "A" Unit holders or $15.55 per limited
partnership  "A" Unit) and of proceeds from the sale of Carlin Manor  Apartments
of  approximately  $5,337,000  (approximately  $3,734,000 to "A" Unit holders or
$38.78 per limited partnership "A" Unit and approximately $1,586,000 to "B" Unit
holders or $21.10 per limited partnership "B" Unit).

Upon distribution of sale proceeds from the sale of Carlin Manor during the year
ended  December  31,  2000,  the "A" Unit  holders  did not  receive the correct
priority  return.  As a result,  at December  31, 2001 the "B" Unit holders have
been  overpaid  approximately  $1,422,000   (approximately  $18.92  per  limited
partnership "B" unit). Approximately $1,397,000 of this amount is due to the "A"
Unit  holders  (approximately  $14.51  per  limited  partnership  "A"  unit) and
approximately  $25,000 is due to the General Partner.  All future  distributions
payable to the "B" Unit holders  will be paid to the "A" Unit holders  until the
"A" Unit holders receive the correct priority return.

Note H - Sale of Investment Property

On  June  12,  2000,  the  Partnership   sold  Carlin  Manor  Apartments  to  an
unaffiliated  third  party for  $8,100,000.  After  payment of closing  costs of
approximately  $95,000,  the net sales proceeds received by the Partnership were
approximately $8,005,000.  The Partnership used a portion of the proceeds to pay
off  the  mortgage   encumbering  the  property  of  $2,500,000.   Approximately
$5,337,000  of the proceeds  were  distributed  to the partners  during the year
ended  December  31,  2000.  The  remaining  proceeds  were  used  to  establish
additional cash reserves for the Partnership. The Partnership's gain on the sale
was approximately  $4,910,000 and an extraordinary loss on early  extinguishment
of debt was  recorded  of  approximately  $105,000  consisting  of a  prepayment
penalty and the write-off of unamortized loan costs.

Note I - Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its General Partner and several of
their  affiliated  partnerships and corporate  entities.  The action purports to
assert  claims on behalf of a class of  limited  partners  and  derivatively  on
behalf of a number of limited partnerships (including the Partnership) which are
named as nominal defendants, challenging, among other things, the acquisition of
interests in certain General Partner entities by Insignia  Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia;  past
tender offers by the Insignia  affiliates to acquire limited  partnership units;
management of the  partnerships  by the Insignia  affiliates;  and the series of
transactions  which  closed on October 1, 1998 and  February  26,  1999  whereby
Insignia and Insignia  Properties Trust,  respectively,  were merged into AIMCO.
The plaintiffs seek monetary damages and equitable  relief,  including  judicial
dissolution of the  Partnership.  On June 25, 1998, the General  Partner filed a
motion seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs  filed an amended  complaint.  The General Partner filed demurrers to
the amended complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December  14,  1999,  the General  Partner  and its  affiliates  terminated  the
proposed settlement.  In February 2000, counsel for some of the named plaintiffs
filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated
the settlement.  On June 27, 2000, the Court entered an order disqualifying them
from the case and an appeal was taken  from the order on  October  5,  2000.  On
December 4, 2000, the Court  appointed the law firm of Lieff Cabraser  Heimann &
Bernstein  LLP as new  lead  counsel  for  plaintiffs  and the  putative  class.
Plaintiffs  filed a third  amended  complaint on January 19,  2001.  On March 2,
2001,  the  General  Partner  and its  affiliates  filed a demurrer to the third
amended  complaint.  On May 14, 2001,  the Court heard the demurrer to the third
amended  complaint.  On July 10,  2001,  the Court  issued  an order  sustaining
defendants'  demurrer on certain grounds.  On July 20, 2001,  Plaintiffs filed a
motion for  reconsideration  of the Court's July 10, 2001 order granting in part
and denying in part defendants' demurrer. On September 7, 2001, Plaintiffs filed
a fourth amended class and derivative action  complaint.  On September 12, 2001,
the Court denied Plaintiffs' motion for reconsideration. On October 5, 2001, the
General Partner and affiliated defendants filed a demurrer to the fourth amended
complaint,  which was heard on December 11, 2001. On February 2, 2002, the Court
served its order granting in part the demurrer.  The Court has dismissed without
leave  to amend  certain  of the  plaintiffs'  claims.  On  February  11,  2002,
plaintiffs  filed a motion seeking to certify a putative class  comprised of all
non-affiliated  persons  who own or have owned  units in the  partnerships.  The
General  Partner and affiliated  defendants  oppose the motion and a hearing has
been  scheduled  for April 29,  2002.  The Court has set the matter for trial in
January 2003.

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

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

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


Item 8.     Changes in and  Disagreements  with  Accountants on Accounting and
            Financial Disclosure

            None.


                                    PART III

Item 9.     Directors,  Executive  Officers,  Promoters  and Control  Persons;
            Compliance with Section 16(a) of the Exchange Act

The general partner of Multi-Benefit Realty Fund '87-1 (the "Partnership" or the
"Registrant") is ConCap  Equities,  Inc. ("CEI" or the "General  Partner").  The
names of the directors and executive officers of the General Partner, their ages
and the nature of all positions with CEI presently held by them are as follows:

Name                        Age    Position

Patrick J. Foye              44    Executive Vice President and Director
Martha L. Long               42    Senior Vice President and Controller

Patrick J. Foye has been  Executive Vice President and Director of the General
Partner  since  October  1,  1998.  Mr.  Foye has  served  as  Executive  Vice
President  of AIMCO  since May 1998.  Prior to joining  AIMCO,  Mr. Foye was a
partner in the law firm of Skadden,  Arps, Slate, Meagher & Flom LLP from 1989
to 1998 and was Managing Partner of the firm's  Brussels,  Budapest and Moscow
offices from 1992 through 1994.  Mr. Foye is also Deputy  Chairman of the Long
Island  Power  Authority  and  serves  as a  member  of  the  New  York  State
Privatization  Council.  He received a B.A.  from  Fordham  College and a J.D.
from Fordham University Law School.

Martha L. Long has been  Senior Vice  President  and  Controller  of the General
Partner since October 1998 as a result of the acquisition of Insignia  Financial
Group, Inc. As of February 2001, Ms. Long was also appointed head of the service
business for AIMCO.  From June 1994 until January 1997,  she was the  Controller
for Insignia, and was promoted to Senior Vice President - Finance and Controller
in January 1997,  retaining  that title until  October  1998.  From 1988 to June
1994,  Ms. Long was Senior Vice  President and  Controller for The First Savings
Bank, FSB in Greenville, South Carolina.

One or more of the above persons are also directors and/or officers of a general
partner (or general partner of a general partner) of limited  partnerships which
either have a class of  securities  registered  pursuant to Section 12(g) of the
Securities Exchange Act of 1934, or are subject to the reporting requirements of
Section  15(d) of such Act.  Further,  one or more of the above persons are also
directors and/or officers of Apartment Investment and Management Company and the
general  partner  of  AIMCO  Properties,  L.P.,  entities  that  have a class of
securities  registered  pursuant to Section 12(g) of the Securities Exchange Act
of 1934, or are subject to the reporting  requirements of Section 15 (d) of such
Act.

The  executive  officers  and  director  of  the  General  Partner  fulfill  the
obligations  of the Audit  Committee  and  oversee the  Partnership's  financial
reporting  process on behalf of the General Partner.  Management has the primary
responsibility for the financial  statements and the reporting process including
the systems of internal controls. In fulfilling its oversight  responsibilities,
the executive  officers and director of the General Partner reviewed the audited
financial  statements with management including a discussion of the quality, not
just the  acceptability,  of the accounting  principles,  the  reasonableness of
significant  judgments,   and  the  clarity  of  disclosures  in  the  financial
statements.

The  executive  officers and director of the General  Partner  reviewed with the
independent  auditors,  who are  responsible  for  expressing  an opinion on the
conformity of those audited  financial  statements  with  accounting  principles
generally accepted in the United States,  their judgments as to the quality, not
just the  acceptability,  of the  Partnership's  accounting  principles and such
other  matters as are required to be discussed  with the Audit  Committee or its
equivalent under auditing standards  generally accepted in the United States. In
addition,  the  Partnership  has  discussed  with the  independent  auditors the
auditors' independence from management and the Partnership including the matters
in the written  disclosures  required by the  Independence  Standards  Board and
considered  the   compatibility   of  non-audit   services  with  the  auditors'
independence.

The executive  officers and director of the General  Partner  discussed with the
Partnership's  independent auditors the overall scope and plans for their audit.
In  reliance on the reviews and  discussions  referred to above,  the  executive
officers and director of the General  Partner have approved the inclusion of the
audited financial  statements in the Form 10-KSB for the year ended December 31,
2001 for filing with the Securities and Exchange Commission.

The General Partner has reappointed Ernst & Young LLP as independent auditors to
audit the financial  statements of the  Partnership for the current fiscal year.
Fees for the last fiscal year were audit services of  approximately  $42,000 and
non-audit services (principally tax-related) of approximately $22,000.

Item 10.    Executive Compensation

Neither  the  director  nor the  officers of the General  Partner  received  any
remuneration from the Registrant.

Item 11.    Security Ownership of Certain Beneficial Owners and Management

(a)   Security Ownership of Certain Beneficial Owners

      Except as noted  below,  no  person  or entity  was known to CEI to own of
      record or beneficially  more than 5% of the Units of the Partnership as of
      December 31, 2001.

                                               Number of         Percent
                                                 Units           of Total

      AIMCO Properties, LP (1)              32,997 A units        34.27%
         (an affiliate of AIMCO)            20,177 B units        26.85%

      Insignia Properties, LP (2)            2,243 A units        2.33%
         (an affiliate of AIMCO)               210 B units        0.28%

      Madison River Properties, LLC (2)     21,457 A units        22.29%
         (an affiliate of AIMCO)            13,822 B units        18.39%

      Cooper River Properties, LLC (2)       5,183 A units        5.38%
         (an affiliate of AIMCO)             4,408 B units        5.87%

      (1)   Entity is indirectly  ultimately controlled by AIMCO. Its business
            address is 2000 South Colorado Blvd., Denver, Colorado 80222.

      (2)   Entity is indirectly ultimately owned by AIMCO. Its business address
            is 55 Beattie Place, Greenville, SC 29601.


(b)   Beneficial Owners of Management

      Neither CEI nor any of its  directors or officers or associates of CEI own
      any units of the Partnership of record or beneficially.

(c)   Changes in Control

      Beneficial Owners of CEI

      As of December 31, 2001,  the following  entity was known to CEI to be the
      beneficial owner of more than 5 percent of its common stock:

              Name and address         Number of CEI SHARES   Percent of Total

      Insignia Properties Trust (1)           100,000               100%

      (1)   Entity is indirectly ultimately owned by AIMCO. Its business address
            is 55 Beattie Place, Greenville, SC 29601.

Item 12.    Certain Relationships and Related Transactions

The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership  activities.
The Partnership  Agreement  provides for (i) certain  payments to affiliates for
services and (ii)  reimbursement of certain  expenses  incurred by affiliates on
behalf of the Partnership.  The following  transactions with the General Partner
and/or its affiliates  were incurred during each of the years ended December 31,
2001 and 2000:

                                                   2001        2000
                                                    (in thousands)
Property management fees                          $ 198        $ 228
Reimbursement for services of affiliates            357          191
Partnership management fees                          82          135
Refinancing fee                                      88           39

During the years ended  December  31, 2001 and 2000,  affiliates  of the General
Partner  were  entitled  to  receive  5% of  gross  receipts  from  both  of the
Partnership's  properties  as  compensation  for providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $198,000 and
$228,000 for the years ended December 31, 2001 and 2000, respectively.

Affiliates  of  the  General  Partner  received   reimbursement  of  accountable
administrative expenses amounting to approximately $357,000 and $191,000 for the
years ended December 31, 2001 and 2000, respectively.  Included in these amounts
are  construction  oversight fees paid to an affiliate of the General Partner of
approximately  $174,000  and $2,000 for the years  ended  December  31, 2001 and
2000,  respectively.  This fee is related to  construction  management  services
provided  by  AIMCO  and  its  affiliates.  The fee was  calculated  based  on a
percentage of current and certain prior year additions to investment  properties
and is being depreciated over 15 years.

The Partnership  Agreement  provides for a fee equal to 9% of distributable cash
from  operations  (as  defined in the  Partnership  Agreement)  received  by the
limited   partners  to  be  paid  to  the  General  Partner  for  executive  and
administrative  management services.  Fees of approximately $82,000 and $135,000
were earned during the years ended December 31, 2001 and 2000, respectively,  in
association with the distributions.

An affiliate of the General Partner received  approximately $88,000 for services
provided in conjunction with the refinancing of the mortgage  encumbering Shadow
Brook Apartments in August 2001 and approximately  $39,000 for services provided
in  conjunction  with the  refinancing  of the  mortgage  encumbering  Hunt Club
Apartments in August 2000 (see "Note B"). These costs were  capitalized  and are
included in other assets on the consolidated balance sheet.

Beginning in 2001, the  Partnership  began insuring its properties up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability. The Partnership insures its properties above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated with the General Partner.  During the year ended December 31, 2001,
the  Partnership  paid  AIMCO  and  its  affiliates  approximately  $32,000  for
insurance coverage and fees associated with policy claims administration.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 61,880 "A" and 38,617 "B" Units of
Depository Receipts ("Units") in the Partnership  representing 64.27% and 51.39%
of the  outstanding  "A" and "B" Units,  respectively  at December  31,  2001. A
number of these Units were  acquired  pursuant to tender offers made by AIMCO or
its  affiliates.  It is possible that AIMCO or its  affiliates  will make one or
more additional offers to acquire  additional limited  partnership  interests in
the Partnership  for cash or in exchange for units in the operating  partnership
of AIMCO.  Under the Partnership  Agreement,  Unit holders holding a majority of
the Units are entitled to take action with respect to a variety of matters which
would  include  voting on certain  amendments to the  Partnership  Agreement and
voting to remove the General Partner. As a result of its ownership of 64.27% and
51.39%  of the  outstanding  "A"  and "B"  Units,  respectively,  AIMCO  is in a
position to control all such voting  decisions  with respect to the  Registrant.
When voting on matters, AIMCO would in all likelihood vote the Units it acquired
in a manner  favorable  to the  interest of the General  Partner  because of its
affiliation with the General Partner.

Item 13.    Exhibits and Reports on Form 8-K

      (a)   Exhibits:

            None.

      (b)   Reports on Form 8-K filed during the fourth quarter of calendar year
            2001:

            None.


<PAGE>


                                   SIGNATURES



In accordance  with Section 13 or 15(d) of the Exchange Act, the  Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                    MULTI-BENEFIT REALTY FUND '87-1


                                    By:   CONCAP EQUITIES, INC.
                                          Its General Partner


                                    By:   /s/Patrick J. Foye
                                          Patrick J. Foye
                                          Executive Vice President


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


                                      Date:


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the Partnership and in the capacities and on the
dates indicated.


/s/Patrick J. Foye      Executive Vice President      Date:
Patrick J. Foye         and Director


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


<PAGE>


                                  EXHIBIT INDEX



Exhibit

 2.1              Agreement  and Plan of Merger,  dated as of October 1, 1998,
                  by and between AIMCO and IPT,  incorporated  by reference to
                  Registrant's  Current  Report on Form 8-K dated  October  1,
                  1998.

 3                Certificate of Limited Partnership, as amended to date.

 4                Depositary   Agreement   (Incorporated   by   reference   to
                  Registration  Statement  of  Registrant  (File No.  33-8908)
                  filed December 10, 1986, as amended by date).

10.1              Property  Management  Agreement  No. 310 dated  October  23,
                  1990, by and between the Partnership and CCEC  (Incorporated
                  by  reference to the  Quarterly  Report on Form 10-Q for the
                  quarter ended September 30, 1990).

10.2              Bill of Sale and  Assignment  dated October 23, 1990, by and
                  between CCEC and ConCap Services  Company  (Incorporated  by
                  reference  to the  Quarterly  Report  on Form  10-Q  for the
                  quarter ended September 30, 1990).

10.3              Assignment and Assumption Agreement dated October 23, 1990, by
                  and between  CCEC and ConCap  Management  Limited  Partnership
                  ("CCMLP")  (Incorporated  by reference to the Quarterly Report
                  on Form 10-Q for the quarter ended September 30, 1990).

10.4              Assignment  and  Agreement as to Certain  Property  Management
                  Services  dated  October 23,  1990,  by the between  CCMLP and
                  ConCap  Capital  Company  (Incorporated  by  reference  to the
                  Quarterly  Report on Form 10-Q for the quarter ended September
                  30, 1990).

10.5              Assignment and Assumption Agreement dated October 23, 1990, by
                  and  between  CCMLP  and Metro  ConCap,  Inc.  (300  Series of
                  Property Management  Contracts)  (Incorporated by reference to
                  the  Quarterly  Report  on Form  10-Q  for the  quarter  ended
                  September 30, 1990).

10.6              Construction  Management  Cost  Reimbursement  Agreement dated
                  January 1, 1991,  by and  between  the  Partnership  and Metro
                  ConCap,  Inc.  (Incorporated by reference to the Annual Report
                  on Form 10-K for the year ended December 31, 1991).

10.9              Construction  Management  Cost  Reimbursement  Agreement dated
                  January 1, 1991, by and between the Partnership and The Hayman
                  Company.  (Incorporated  by reference to the Annual  Report on
                  Form 10-K for the year ended December 31, 1991).

10.10             Investor  Services  Agreement  dated  October 23, 1990, by and
                  between the Partnership and CCEC (Incorporated by reference to
                  the  Quarterly  Report  on Form  10-Q  for the  quarter  ended
                  September 30, 1990).

10.11             Assignment  and  Assumption   Agreement  (Investor  Services
                  Agreement)  dated  October 23, 1990, by and between CCEC and
                  ConCap Services  Company  (Incorporated  by reference to the
                  Annual  Report on Form 10-K for the year ended  December 31,
                  1990).

10.12             Letter of Notice dated  December 20,  1991,  from  Partnership
                  Services, Inc. ("PSI") to the Partnership regarding the change
                  in  ownership  and  dissolution  of  ConCap  Services  Company
                  whereby   PSI  assumed  the   Investor   Services   Agreement.
                  (Incorporated  by reference to the Annual  Report on Form 10-K
                  for the year ended December 31, 1991).

10.13             Financial  Services  Agreement  dated October 23, 1990, by and
                  between the Partnership and CCEC (Incorporated by reference to
                  the  Quarterly  Report  on Form  10-Q  for the  quarter  ended
                  September 30, 1990).

10.14             Assignment  and  Assumption  Agreement  (Financial  Services
                  Agreement)  dated  October 23, 1990, by and between CCEC and
                  ConCap  Capital  Company  (Incorporated  by reference to the
                  Quarterly   Report  on  Form  10-Q  for  the  quarter  ended
                  September 30, 1990).

10.15             Letter of Notice  dated  December  20,  1991,  from PSI to the
                  Partnership  regarding the change in ownership and dissolution
                  of ConCap  Capital  Company  whereby PSI assumed the Financial
                  Services  Agreement.  (Incorporated by reference to the Annual
                  Report on Form 10-K for the year ended December 31, 1991).

10.16             Property  Management  Agreement  No. 518 dated June 1, 1993,
                  by and between the Partnership and Coventry Management, Inc.

10.17             Assignment  and  Assumption  Agreement  (Financial  Services
                  Agreement)  dated  October 23, 1990, by and between CCEC and
                  ConCap  Capital  Company  (Incorporated  by reference to the
                  Quarterly   Report  on  Form  10-Q  for  the  quarter  ended
                  September 30, 1990).

10.18             Letter dated December 8, 1994 reporting a change in control of
                  the  General  Partner  of  the  Registrant.  (Incorporated  by
                  reference to Form 8-K dated December 8, 1994).

10.19             Multifamily   Note   dated   November   1,   1996,   between
                  Multi-Benefit   Realty  Fund  '87-1,  a  California  limited
                  partnership,  and Lehman Brokers Holdings, Inc. d/b/a Lehman
                  Capital, A Division of Lehman Brothers Holdings, Inc.

10.20             Multifamily   Note   dated   November   1,   1996,   between
                  Multi-Benefit   Realty  Fund  '87-1,  a  California  limited
                  partnership,  and Lehman Brokers Holdings, Inc. d/b/a Lehman
                  Capital, A Division of Lehman Brothers Holdings, Inc.

10.21             Purchase and Sale  Contract  between  Registrant  and Carlin
                  Manor Investors,  Ltd., an Ohio Limited  Liability  Company,
                  dated  April 7,  2000.  (Incorporated  by  reference  to the
                  Current Report on Form 8-K dated June 13, 2000.)

10.22             Multifamily  Note dated August 31, 2000, by and between Hunt
                  Club  Associates,  Ltd., a Texas  limited  partnership,  and
                  ARCS  Commercial  Mortgage Co.,  L.P., a California  limited
                  partnership relating to Hunt Club Apartments.  (Incorporated
                  by reference to the Quarterly  Report on Form 10-QSB for the
                  quarter ended September 30, 2000.)

10.23             Multifamily  Note dated  August  31,  2001,  by and  between
                  Multi-Benefit   Realty  Fund  '87-1,  a  California  limited
                  partnership  and GMAC  Commercial  Mortgage  Corporation,  a
                  California    corporation,    relating   to   Shadow   Brook
                  Apartments.  (Incorporated  by  reference  to the  Quarterly
                  Report on Form 10-QSB for the quarter  ended  September  30,
                  2001.)

11                Statement  regarding  computation  of Net Income per Unit of
                  Depositary  Receipt  (Incorporated by reference to Note A of
                  Item 7. Financial Statements of this Form 10-KSB).

16                Letter,  dated  August  12,  1992,  from  Ernst & Young to the
                  Securities  and  Exchange   Commission   regarding  change  in
                  certifying accountant.  (Incorporated by reference to Form 8-K
                  dated August 6, 1992.)

16.1              Letter  dated  May  3,  1995,  from  Arthur  Anderson  to  the
                  Securities  and  Exchange   Commission   regarding  change  in
                  certifying accountant.  (Incorporated by reference to Form 8-K
                  dated May 3, 1995.)