SECURITIES AND EXCHANGE COMMISSION
                                   Washington, DC  20549

                                         FORM 10-K
(Mark One)

[X]           ANNUAL  REPORT  PURSUANT  TO SECTION 13 OR 15(d)
              OF THE  SECURITIES  EXCHANGE ACT OF 1934 [FEE REQUIRED] For fiscal
              year ended December 31, 1997

                                            OR

           [  ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE
              SECURITIES  EXCHANGE  ACT  OF  1934  [NO  FEE  REQUIRED]  For  the
              transition period from ________ to ________.

                                          0-17412
                                 (Commission File Number)

                                    Secured Income L.P.
           (Exact name of registrant as specified in its governing instruments)

                             Delaware                            06-1185846
(State or other jurisdiction of organization)
                                           (I.R.S. Employer Identification No.)

Wilder Richman Resources Corporation
599 W. Putnam Avenue
Greenwich, Connecticut                                     06830
(Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code:    (203) 869-0900

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

           None
(Title of each Class)

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

                      Units of Limited Partnership Interest
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports)  and  (2)  has  been  subject  to such  filing
requirements for the past 90 days. Yes X No

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

The aggregate sales price of the units of limited  partnership  interest held by
non-affiliates  of the Registrant is  $19,687,380.  There is currently no public
market for the units of limited  partnership  interest  and,  accordingly,  such
figure does not represent the market value for the units.

Documents incorporated by reference:

The Prospectus of the Registrant,  dated March 5, 1987 as supplemented and filed
pursuant  to  Rule  424(b)  and  (c)  under  the  Securities  Act  of  1933,  is
incorporated by reference into Parts I, II and III of this Annual Report on Form
10-K.





<PAGE>





                                       PART I


Item 1   Business


General Development of Business

Registrant  (also  referred to as the  "Partnership")  is a limited  partnership
which was formed under the Delaware  Revised Uniform Limited  Partnership Act on
October  10,  1986.  The  general  partners  of the  Partnership  (the  "General
Partners") are Wilder Richman  Resources  Corporation,  a Delaware  corporation,
Real Estate Equity  Partners L.P., a Delaware  limited  partnership  and WRC-87A
Corporation, a Delaware corporation.

The  Partnership  was  organized  to invest in luxury  multi-family  residential
housing  complexes  (the  "Complexes")  by  acquiring  approximately  99% of the
limited partnership interest (the "Operating  Partnership  Interest") in limited
partnerships that own and operate such Complexes (the "Operating Partnerships").
WRC-87A  Corporation is a special limited partner of each Operating  Partnership
and has certain rights in connection  therewith.  Pursuant to Rule 12b-23 of the
Securities and Exchange  Commission's General Rules and Regulations  promulgated
under the  Securities  Exchange  Act of 1934,  as amended,  the  description  of
Registrant's  business set forth under the heading  "Investment  Objectives  and
Policies" at pages 20 through 30 of the  prospectus,  dated March 5, 1987,  (the
"Prospectus") is incorporated herein by reference.

Pursuant to the  Partnership's  Prospectus,  as supplemented on October 2, 1987,
December 15, 1987 and March 29, 1988, the Partnership  offered up to $50 million
of units of limited partnership  interest in the Partnership (the "Units") at an
offering price of $20 per Unit. The Units were  registered  under the Securities
Act of 1933 pursuant to a Registration Statement on Form S-11 (Registration No.
33-9602).

Registrant  terminated  the offering of Units (the  "Offering")  on February 29,
1988  upon  raising  sufficient  capital  from  the  sale of  Units  to fund the
acquisition  of the two properties  specified for investment by Registrant.  The
Offering  raised  $19,687,380  from the sale of 984,369 Units.  After payment of
$1,378,117 of selling  commissions and $1,378,116 of  organization  and offering
expenses and  acquisition  fees, the net proceeds  available for investment were
$16,931,147. Of such net proceeds,  $16,734,273 was allocated to the acquisition
of  investments  in  the  Operating  Partnerships  (the  "Operating  Partnership
Interests") which included investments in guaranteed investment  contracts.  The
remaining net proceeds of $196,874 was designated as working  capital to be used
for operating expenses of the Partnership.

Financial Information about Industry Segments

Registrant is engaged  solely in the business of holding  Operating  Partnership
Interests.  A presentation  of information  regarding  industry  segments is not
applicable and would not be material to an  understanding  of the  Partnership's
business  taken as a whole.  See Item 8 herein  for a  summary  of  Registrant's
operations.

Competition

Information  regarding  competition,  general risks,  tax risks and  partnership
risks is set forth  under the heading  "Risk  Factors" at pages 37 through 48 of
the Prospectus, which is incorporated herein by reference.

Compliance with Environmental Protection Provisions

Registrant is not aware of any non-compliance by the Operating Partnerships with
respect to Federal,  State and Local  provisions  regulating  the  discharge  of
material into the  environment  or otherwise  relating to the  protection of the
environment, and is not aware of any condition that would have a material effect
on the capital expenditures or competitive position of Registrant.

Employees of Registrant

Registrant  employs no personnel  and incurs no payroll  costs.  An affiliate of
Wilder Richman Resources Corporation employs individuals who perform accounting,
secretarial,  transfer  and  other  services  on  behalf  of  Registrant  as are
necessary in the  ordinary  course of business.  Such  individuals  also perform
similar services for other affiliates of Wilder Richman Resources Corporation.

                                       2

<PAGE>



Tax Reform Act of 1986, Revenue Act of 1987, Technical and Miscellaneous Revenue
Act  of  1988,  Omnibus  Budget  Reconciliation  Act  of  1989,  Omnibus  Budget
Reconciliation   Act  of  1990,  Tax  Extension  Act  of  1991,  Omnibus  Budget
Reconciliation Act of 1993, Uruguay Round Agreements Act and Taxpayer Relief Act
of 1997 (collectively the "Tax Acts")

Registrant  is organized as a limited  partnership  and is a "pass  through" tax
entity which does not, itself, pay Federal income tax. However,  the partners of
Registrant  who are  subject to Federal  income tax may be  affected  by the Tax
Acts.  Registrant will consider the effect of certain aspects of the Tax Acts on
the partners when making decisions  regarding its  investments.  Registrant does
not anticipate  that the Tax Acts will currently have a material  adverse impact
on Registrant's business operations, capital resources and plans or liquidity.

Item 2   Properties

The following table sets forth information  regarding the Complexes owned by the
Operating Partnerships as of December 31, 1997.

                                                            Number of
         Property               Location                 Dwelling Units

         Fieldpointe Apartments Frederick, MD                  252
         The Westmont           New York, NY                   163

Fieldpointe  Apartments,  which is  owned by  Carrollton  X  Associates  Limited
Partnership (the "Carrollton Partnership"),  is comprised of 252 apartment units
totalling  approximately  235,000  square  feet with  approximately  500 parking
spaces.  On-site  amenities  include a clubhouse  building  with locker room and
on-site management office, a swimming pool and two tennis courts. The apartments
feature numerous amenities, including dishwashers, disposals and fireplaces.

The  Partnership  acquired its interest as a limited  partner in the  Carrollton
Partnership  by making a capital  contribution  of  $3,121,995.  Of this amount,
$1,373,039  was invested in guaranteed  investment  contracts and $1,748,956 was
contributed  upon the  Partnership's  acquisition  of the Operating  Partnership
Interest,  including the amount due upon the  achievement  of sustaining  rental
revenue.

The mortgage financing for the Carrollton Partnership was modified on August 30,
1993  from  the sale of  tax-exempt  bonds  pursuant  to the  terms  of  Section
103(b)(4)(a) of the Internal  Revenue Code. The modified  mortgage in the amount
of  $10,494,100,  bearing fixed 6.09%  interest (with an exception for the first
ten months through  August 1994) and with a term of 35 years,  is insured by the
United States Department of Housing and Urban Development  ("HUD") under Section
221(d)(4)  of the  National  Housing  Act,  as  amended.  Under the terms of the
financing, 80% of the units are permitted market rate rents and 20% of the units
are to be rented  to people  earning  no more  than the low or  moderate  income
levels within the meaning of Section  103(b)(4)(a) of the Internal Revenue Code.
The Fieldpointe  Apartments  occupancy rate was approximately 98% as of December
31, 1997.

The   Westmont,   which  is  owned  by  Columbia   Associates   (the   "Columbia
Partnership"),  contains 163  apartment  units,  9,415 square feet of commercial
space,  46 garage parking  spaces,  and a penthouse with an exercise  center and
health club which offers exercise  equipment,  steam room, sauna,  jacuzzi and a
large terrace.  The apartments  feature  numerous  luxury  amenities,  including
security systems, microwave ovens, dishwashers and hardwood floors.

The  Partnership  acquired  its  interest as a limited  partner in the  Columbia
Partnership by making a capital  contribution  of  $12,571,634.  Of this amount,
$6,651,323 was invested in guaranteed investment contracts (which had a value of
$5,610,679,  including  net  accrued  interest  of  $18,918,  at the time of the
acquisition as a result of principal  amortization from the dates of purchase of
such guaranteed  investment contracts to the closing of the Columbia Partnership
acquisition),  $5,921,104 was contributed upon the Partnership's  acquisition of
the Operating  Partnership  Interest in the Columbia  Partnership and $1,039,851
was contributed to the Columbia  Partnership  upon the achievement of sustaining
rental revenue.

The mortgage financing of the Columbia  Partnership was modified on May 27, 1993
pursuant  to  a  bond  refunding  by  the  New  York  City  Housing  Development
Corporation  ("HDC")  in the  amount  of  $27,600,000.  Under  the  terms of the
modified financing,  the Columbia Partnership agreed that 20% of the residential
units in The Westmont will be maintained for occupancy by low or moderate income
tenants until July 2004. The  Westmont's  occupancy rate as of December 31, 1997
was approximately 99% as to residential dwelling units and 100% as to commercial
space.
                                       3

<PAGE>

As of December 31, 1997,  the  residential  occupancy and market rental rates of
the Complexes, exclusive of low and moderate income units, were approximately as
follows:


                         Fieldpointe           The
                         Apartments         Westmont

     Occupancy Rate          98%               99%
     Monthly Rental Rates:
        Studio                            $1,576-$1,775
        One-Bedroom       $560-$600       $1,606-$2,530
        Two-Bedroom       $605-$690       $2,494-$3,350
        Three-Bedroom     $770-$800       $3,256-$4,100


The low and moderate income rental rates as of December 31, 1997 for Fieldpointe
Apartments fall within the ranges noted above. Such rates for The Westmont range
from $705 to $898.

Further information regarding the Complexes and Registrant's interest therein is
set forth under the heading Specified  Investments at pages 30 through 36 of the
Prospectus,  and in the supplements to the Prospectus  dated October 2, 1987 and
March 29, 1988.


Item 3   Legal Proceedings

         None


Item 4   Submission of Matters to a Vote of Security Holders

         None

                                       4



<PAGE>
<TABLE>
<CAPTION>


                                      PART II

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

Market

         There is no developed  public market for the purchase and sale of Units
and Registrant does not anticipate that such a market will develop.

Holders

         As of December 31, 1997, there were approximately  1,369 record holders
of Units (the "Limited  Partners")  holding an aggregate of 984,369 Units in the
Partnership.

Distributions

The Agreement of Limited Partnership of Registrant (the "Partnership Agreement")
provides  that all Cash  Available  for  Distribution  (as  defined  therein) be
distributed quarterly to the partners in specified  proportions.  As part of the
restructuring of the Columbia Partnership's  financing, the Columbia Partnership
is prohibited from distributing cash flow from operations (exclusive of proceeds
from the  guaranteed  investment  contracts).  See Item 7  herein,  Management's
Discussion and Analysis of Financial  Condition and Results of  Operations,  for
further discussion. There were no distributions to the Limited Partners declared
during the years ended December 31, 1997 and 1996.


Item 6   Selected Financial Data

The  following  table  summarizes   certain  selected   consolidated   financial
information  concerning  Registrant and should be read in  conjunction  with the
consolidated financial statements and the related notes thereto:


                              Year Ended December 31,

<S>                   <C>         <C>         <C>          <C>        <C>
                     1997        1996         1995        1994       1993
                   ---------   ----------   ---------   --------   ----------

Total revenue     $6,787,161   $6,434,698  $6,092,551  $5,880,772  $5,729,520

Net loss            (596,273)     (69,521)   (397,620)   (465,413) (1,219,746)

Net loss allocated
  per unit of limited
  partnership interest    -            -           -         (.39)      (1.23)

At year end:

  Total assets    38,149,194   39,322,376  40,458,675  41,709,487  43,416,439

  Mortgages
    payable       34,449,756   35,320,565  36,589,220  37,441,770  37,869,214

  Long-term debt       -           -             -          -           -

</TABLE>

                                       5
<PAGE>




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

Liquidity and Capital Resources

The Partnership's  primary sources of funds are rents generated by the Operating
Partnerships  and interest  derived  from  investments  and  deposits  which are
restricted  in  accordance  with the  terms of the  mortgages  of the  Operating
Partnerships.  As of January 15, 1995, the guaranteed investment contracts which
were  acquired  to provide  distributions  to the  Limited  Partners  were fully
amortized. One guaranteed investment contract, owned by the Columbia Partnership
became fully  amortized on January 15, 1998, the proceeds of which were utilized
for investor service charges of the Columbia Partnership through December 1997.
The Partnership's investments are highly illiquid.

The  Partnership  is not  expected  to have  access  to  additional  sources  of
financing.   Accordingly,  if  unforeseen  contingencies  arise  that  cause  an
Operating  Partnership to require capital in addition to that contributed by the
Partnership and any equity of the Operating General Partners,  potential sources
from which such capital needs will be able to be satisfied (other than reserves)
would be additional  equity  contributions of the Operating  General Partners or
other equity  reserves,  if any, which could adversely  affect the  distribution
from the Operating  Partnerships  to the  Partnership of operating cash flow and
sale or refinancing proceeds.  Prior to the modification of the mortgages of the
respective  Operating  Partnerships  during  1993,  the rents  generated  by the
Operating  Partnerships  were  generally  not  sufficient  to  fully  cover  the
operating expenses and debt service requirements of the Operating  Partnerships.
Although  the  Operating  Partnerships  were  successful  in  refinancing  their
respective  mortgages with significantly lower mandatory payment terms,  certain
restrictions were placed on the respective Operating  Partnerships in connection
with  distributions,   among  other  things.  Prior  to  the  refinancings,  the
respective   Operating  General  Partners  provided  funds  necessary  to  cover
operating deficits in the form of advances and fee deferrals; however, there can
be no assurance that the  respective  Operating  General  Partners would provide
funds to the extent they may be needed.

Investment in guaranteed  investment contract decreased by approximately $73,000
as a result of the  amortization  of principal from the quarterly  payments from
such  contract.  The payments of principal and interest from such contracts were
previously  utilized by the  Partnership to make  distributions  to the partners
(through  December 1994) and currently cover a portion of the investor  services
expenses incurred by the Partnership. Virtually all distributions to partners to
date have been generated from the investment in guaranteed investment contracts.
The General Partners do not anticipate  significant cash flow distributions from
the properties given the restrictions on cash flow distributions of the Columbia
Partnership resulting from the restructuring of its refinancing in 1993.

During 1997,  as a result of the cash flows  generated by the  operations of the
Complexes and the proceeds of the Columbia  Partnership's  guaranteed investment
contract,  cash  and  cash  equivalents  increased  by  approximately  $421,000.
Mortgages  payable  decreased  due to principal  amortization  of  approximately
$871,000, which amount includes $400,000 of accelerated payments on the Columbia
Partnership's  mortgages (see  discussion  below).  Due to general  partners and
affiliates  increased  primarily  as a result of accrued  interest  on  advances
provided  by the  Columbia  Operating  General  Partners  and  accrued  investor
services fees,  partially offset by the payment of management and reporting fees
of the Carrollton Partnership which were previously deferred. As of December 31,
1997, the  Partnership  owes  approximately  $686,000 to an affiliate of certain
General Partners for accrued investor services fees.

Property and equipment  decreased by approximately  $1,520,000  primarily due to
depreciation,  while  intangible  assets  decreased  by  approximately  $267,000
primarily due to amortization.  Property and equipment and intangible assets are
expected to decrease annually as the cost of these assets is allocated to future
periods over their remaining lives.

As of December 31, 1997, the balance in the Columbia  Partnership's  Pledged Cap
Account  (see  discussion  below)  is  approximately  $2,193,000.  Although  the
original  outside  date for the  Pledged  Cap  Account  to be  utilized  for its
intended purpose was October 31, 1996, the Columbia  Operating  General Partners
have been  conducting  ongoing  discussions  with the lender in order to address
other potential uses of such account,  including  utilizing such funds for costs
in connection with a potential refinancing of the mortgages with another lender.
Although  the  Columbia   Operating   General   Partners  have  been  conducting
discussions  with other  potential  credit  enhancers  and  continue  to explore
alternatives in order to obtain a lower effective  borrowing rate,  there can be
no assurance that the lender would approve any  alternative  utilization of such
account,  or that the Columbia  Operating General Partners will procure suitable
alternative financing.

                                       6
<PAGE>



Results of Operations

Year Ended December 31, 1997

During 1997, the Columbia Partnership and the Carrollton  Partnership  generated
income from operating  activitiesof  approximately  $3,121,000 and approximately
$949,000, respectively. Mortgage principal payments during 1997 for the Columbia
Partnership  and the  Carrollton  Partnership  were  approximately  $758,000 and
approximately $113,000,  respectively.  In the case of the Columbia Partnership,
the maximum amount  permitted to be deposited to the Operating  Deficit  Reserve
($500,000) was achieved during 1994; accordingly,  no additional deposits to the
Operating  Deficit  Reserve are required other than to maintain the account at a
balance of $500,000. No amounts were utilized from the Operating Deficit Reserve
during 1997.  Deposits to the Pledged Cap Account and the Bond Retirement Escrow
during   1997  were   approximately   $439,000   and   approximately   $252,000,
respectively. Pursuant to the terms of the Columbia Partnership's mortgages, the
lender is  entitled to a credit  enhancement  fee of 2.5% per annum based on the
outstanding loan balance commencing  February 1, 1997. During 1997, the Columbia
Partnership incurred $582,229 in connection with such fee. After considering the
respective mandatory mortgage principal payments,  required deposits to mortgage
escrows,  accelerated  principal payments on the Columbia Mortgages and payments
for the credit  enhancement  fee,  among other things,  the Complexes  generated
combined cash flow of  approximately  $344,000 during 1997. Any savings realized
on the  difference  between the initial note rate on the Columbia  Partnership's
mortgages of 4.66% and the actual low floater rate (approximately 3.56% weighted
average rate during  1997) are  deposited  into the Pledged Cap Account.  To the
extent  the  future  cash flow  generated  by the  Columbia  Partnership  is not
utilized to fund the Operating Deficit Reserve or Pledged Cap Account, such cash
flow,  under the Citibank loan terms,  will be deposited to the Bond  Retirement
Escrow to make additional mortgage principal payments.  Such additional payments
amounted to $400,000 during the year ended December 31, 1997. However, there can
be no assurance  that the level of cash flow  generated by the Complexes in 1997
will  continue  in future  years.

Although the Complexes  generated  cash flow during 1997,  results of operations
declined as compared to 1996  primarily as a result of (i) the  commencement  of
the  credit  enhancement  fee in  connection  with  the  Columbia  Partnership's
mortgages,  (ii) costs incurred by the Columbia  Partnership in connection  with
attempts to  refinance  its  mortgages  and (iii) an  increase  in the  weighted
average  interest  rate on the Columbia  Partnership's  mortgages  from 3.29% to
3.56%.  Operating and maintenance expenses increased for the year ended December
31, 1997 primarily due to scheduled  maintenance.  Interest revenue for the year
ended  December 31, 1997 is comparable  to the year ended  December 31, 1996 and
was generated  primarily from  Partnership  deposits and escrows  established in
connection with the Columbia Partnership's mortgages.

As  of  December  31,  1997,  the  occupancy  of   Fieldpointe   Apartments  was
approximately  98% and the occupancy of The Westmont was approximately 99% as to
residential  units and 100% as to commercial space. The future operating results
of the Complexes will be extremely  dependent on market conditions and therefore
may be subject to  significant  volatility.  The Complexes are generally in good
physical condition and are being managed by experienced management companies.

Year Ended December 31, 1996

During 1996, the Columbia Partnership and the Carrollton  Partnership  generated
income from operating  activities of approximately  $2,764,000 and approximately
$961,000,  respectively.  No amounts were utilized  from the  Operating  Deficit
Reserve during 1996. Deposits to the Pledged Cap Account and the Bond Retirement
Escrow  during 1996 were  approximately  $439,000  and  approximately  $712,000,
respectively.   Mortgage   principal  payments  during  1996  for  the  Columbia
Partnership and the Carrollton  Partnership  were  approximately  $1,162,000 and
approximately $106,000,  respectively, which amount for the Columbia Partnership
includes $800,000 of additional payments from the Bond Retirement Escrow.  After
considering  the respective  mandatory  mortgage  principal  payments,  required
deposits to mortgage escrows and accelerated  principal payments on the Columbia
Mortgages,  among other things,  the Complexes  generated  combined cash flow of
approximately $258,000 during 1996.

The  Partnership's  results  from  operations  improved  during  the year  ended
December  31,  1996 as  compared  to the year ended  December  31, 1995 due to a
decrease in the weighted  average  interest  rate on the Columbia  Partnership's
mortgages and an increase in rental revenue.  Operating and maintenance expenses
increased  for the year ended  December  31,  1996  primarily  due to  increased
maintenance  salaries.  Interest revenue for the year ended December 31, 1996 is
comparable to the year ended December 31, 1995 and was generated  primarily from
Partnership  deposits and escrows  established  in connection  with the Columbia
Partnership's mortgages.

                                       7
<PAGE>

As  of  December  31,  1996,  the  occupancy  of   Fieldpointe   Apartments  was
approximately  99% and the occupancy of The Westmont was approximately 99% as to
residential  units and 100% as to commercial  space.  The  commercial  space was
fully  occupied  throughout  1996,  resulting in an increase in commercial  rent
revenue of approximately $133,000 as compared to 1995.

Year Ended December 31, 1995

During 1995, the Columbia Partnership and the Carrollton  Partnership  generated
income from operating  activities of approximately  $2,696,000 and approximately
$928,000,  respectively.  No amounts were utilized  from the  Operating  Deficit
Reserve during 1995. Deposits to the Pledged Cap Account and the Bond Retirement
Escrow  during 1995 were  approximately  $322,000  and  approximately  $670,000,
respectively.   Mortgage   principal  payments  during  1995  for  the  Columbia
Partnership  and the  Carrollton  Partnership  were  approximately  $752,000 and
approximately $101,000,  respectively, which amount for the Columbia Partnership
includes $400,000 of additional payments from the Bond Retirement Escrow.  After
considering  the respective  mandatory  mortgage  principal  payments,  required
deposits to mortgage escrows and accelerated  principal payments on the Columbia
Mortgages,  among other things,  the Complexes  generated  combined cash flow of
approximately $166,000 during 1995.

As  of  December  31,  1995,  the  occupancy  of   Fieldpointe   Apartments  was
approximately  99% and the occupancy of The Westmont was approximately 98% as to
residential units and 100% as to commercial space. Although the commercial space
was fully occupied as of December 31, 1995,  approximately  22% of the space was
vacant during 1995 until November 1, 1995; the terms of the new lease (which has
a five  year term plus  renewal  options)  included  a rent  concession  through
February 28, 1996. The commercial vacancy loss (including concessions on the new
lease) for 1995 was approximately $126,000.

Inflation

Inflation  is not  expected to have a material  adverse  impact on  Registrant's
revenues during its period of ownership of the Operating Partnerships.  However,
because of the nature of the low floater  interest rate involved in the Columbia
Partnership's  mortgages,  the Columbia  Partnership's  ability to generate cash
flow (and therefore  fund reserves and retire debt) would be adversely  affected
by inflation.  Although the outside date for purchasing an interest rate cap was
October 1996,  the cap has not been purchased  (see  discussion  above under the
caption "Liquidity and Capital Resources").

Recent Accounting Statements Not Yet Adopted

In June 1997, the Financial  Accounting  Standards Board (FASB) issued Statement
of  Financial  Accounting  Standards  (SFAS) No. 130,  "Reporting  Comprehensive
Income"  effective for fiscal years  beginning after December 15, 1997. SFAS No.
130 establishes  standards for reporting and display of comprehensive income and
its components (revenue, expenses, gains and losses) in the financial statements
and requires  that all such items  required to be  recognized  as  components of
comprehensive income be reported and displayed with the same prominence as items
in other  financial  statements.  Reclassification  of financial  statements for
earlier periods provided for comparative  purposes is required.  SFAS No. 130 is
not  expected  to  have a  material  impact  on the  Partnership's  consolidated
financial statements.


Item 8      Financial Statements and Supplementary Data

Set  forth in the  financial  statements  listed  on page  F-2 is the  financial
information  required  in  response  to Item 8. Such  financial  statements  and
schedules appear on pages F-1 to F-16 and are incorporated herein by reference.


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

         None.

                                       8

<PAGE>




                                     PART III

Item 10  Directors and Executive Officers of the Registrant

The Partnership has no directors or executive officers.

The  General  Partners  are Wilder  Richman  Resources  Corporation,  a Delaware
corporation  (the "WRC General  Partner"),  Real Estate Equity  Partners L.P., a
Delaware  limited  partnership  and an affiliate of Lehman  Brothers  Inc.  (the
"Lehman General Partner") and WRC-87A  Corporation,  a Delaware corporation (the
"L/WRC General Partner").  The L/WRC General Partner is currently one-half owned
by Real Estate Equity Partners Inc., the corporate general partner of the Lehman
General  Partner,  and  one-half  owned by the  shareholders  of the WRC General
Partner.

                              The WRC General Partner


The directors and officers of the WRC General Partner are as follows:

      Name                  Age     Office

      Richard Paul Richman  50      President and Director

      Robert H. Wilder, Jr. 52      Executive Vice President, Secretary,
                                     Treasurer and Director.

Each of such  directors  and  officers  have served in such  capacity  since the
company's formation.

Richard Paul Richman is President and Director of the WRC General  Partner.  Mr.
Richman  graduated  from the Columbia  University Law School with a Juris Doctor
degree, the Columbia University Graduate School of Business  Administration with
a Master of  Business  Administration  degree  and  Syracuse  University  with a
Bachelor of Arts degree in Political Science.  Mr. Richman has over ten years of
extensive  experience in both the  development  and  management  of  residential
properties.  From 1973 until 1979,  Mr. Richman  practiced  corporate law in New
York City with the law firm of Greenbaum, Wolff & Ernst and then as a partner of
Shipley, Richman & Nierenberg. For over six years, Mr. Richman acted as a lawyer
in connection with the development,  syndication and tax issues relating to real
estate.  Since 1988, Mr. Richman has been the President and sole  stockholder of
The Richman  Group,  Inc. In recent years,  Mr. Richman has devoted full time to
the syndication and development of real estate. Mr. Richman was a vice president
and shareholder of Related Housing  Companies  Incorporated,  New York, New York
from  1978  until  mid-1979  with  responsibility  for  that  company's  project
acquisition  and  syndication  activities.  Mr. Richman has been a member of the
National  Advisory Board of the Housing and  Development  Reporter,  a bi-weekly
publication of the Bureau of National Affairs,  Inc., a frequent speaker on real
estate syndication, has been a member of the New York State Historic Credit Task
Force,  the National Leased Housing  Association,  the Coalition to Preserve the
Low-Income Tax Credit and the Minority Developer  Assistance  Corporation (which
was established by the New York State Battery Park Commission).

Robert H. Wilder,  Jr. is Executive  Vice  President,  Secretary,  Treasurer and
Director of the WRC General Partner. Mr. Wilder graduated from the University of
Michigan  with a Bachelor  of Arts  degree in  Economics  and from the  Columbia
University Graduate School of Business with a Master of Business  Administration
degree.   After  graduation  in  1968,  Mr.  Wilder  joined  James  D.  Landauer
Associates,   Inc.,  a  national  real  estate   consulting   firm,   where  his
responsibilities   included  feasibility  studies,  market  analyses,  land  use
studies,  portfolio valuations and appraisals of industrial,  office, commercial
and multi-family properties.  From 1973 until mid-1979, Mr. Wilder was executive
vice president and shareholder of Related Housing  Companies  Incorporated,  New
York, New York, and was responsible for mortgage financing and construction loan
placement and the  supervision  of the  development  of the company's  projects.
Since 1988,  Mr. Wilder has been the President  and sole  shareholder  of Wilder
Property  Companies Inc. Mr. Wilder is also a licensed real estate broker in New
York and Connecticut.

                                       9
<PAGE>





                             The Lehman General Partner

The directors and officers of Real Estate Equity Partners Inc. are set forth
below.

Certain  officers and  directors  of Real Estate  Equity  Partners  Inc. are now
serving (or in the past have served) as officers or directors of entities  which
act as general  partners of a number of real estate limited  partnerships  which
have sought protection under the provisions of the Federal  Bankruptcy Code. The
partnerships  which have filed  bankruptcy  petitions  own real estate which has
been adversely  affected by the economic  conditions in the markets in which the
real estate is located and, consequently, the partnerships sought the protection
of the  bankruptcy  laws to protect the  partnerships'  assets from loss through
foreclosure.

      Name                  Age     Office

      Doreen D. Odell       38      President & Chief Financial Officer

      Joan B. Berkowitz     38      Vice President


Doreen D. Odell is Senior Vice  President of Lehman  Brothers  Inc. and has
worked with the Diversified Asset Group since June 1988. Ms. Odell graduated Phi
Beta  Kappa and  received a B.A.  in  Economics  summa cum laude from  Wellesley
College  in 1981.  She  received  a M.S.  in Real  Estate  Development  from the
Massachusetts  Institute of Technology in 1986. Prior to joining Lehman Brothers
Inc.,  Ms. Odell was involved in real estate  development in both the public and
private  sectors.  As a  development  manager  with  N.Y.C.  Public  Development
Corporation,  she structured  joint ventures with private  developers.  She also
worked  with  a  private  development  company,   The  Harborside   Corporation,
evaluating real estate investments and development  projects.  From 1981 through
1984,  Ms. Odell was a  construction  loan officer with  Manufacturer's  Hanover
Trust Company.

     Joan B.  Berkowitz  is a Vice  President  of Lehman  Brothers  Inc.  and is
responsible for investment management of retail, commercial and residential real
estate within the Diversified  Asset Group. Ms. Berkowitz joined Lehman Brothers
Inc. in May 1986 as an accountant in the Realty  Investment  Group. From October
1984 to May 1986, she was an Assistant  Controller to the Patrician Group.  From
November  1983  to  October  1984,  she was  employed  by  Diversified  Holdings
Corporation.  From September 1981 to November 1983, she was employed by Deloitte
Haskins & Sells. Ms. Berkowitz,  a Certified Public Accountant,  received a B.S.
degree from Syracuse Univerity in 1981.

                             The L/WRC General Partner

The directors and officers of the L/WRC General Partner are as follows:

      Name                          Office

      Doreen D. Odell               President and Director

      Richard Paul Richman          Executive Vice President, Secretary,
                                      Treasurer and Director

Ms.  Odell's  biography  is included  above under the Lehman  General  Partner.
Mr.Richman's biography is included above under the WRC General Partner.

                                       10

<PAGE>




Item 11  Executive Compensation

The  Partnership  is not required to pay the officers,  directors or partners of
the General Partners any direct  compensation and no such  compensation was paid
during the fiscal year ended December 31, 1997.

Item 12  Security Ownership of Certain Beneficial Owners and Management

     a) No person or group is known by the Partnership to be the owner of record
of more than 5% of the outstanding units as of December 31, 1997.

     b) Security ownership by the General Partners is as follows:

                                                            Percentage of
                                              Amount and        Outstanding
                                              Nature of           General
                                              Beneficial         Partners'
Title of Class     Name of Beneficial Owner   Ownership          Interest *

   General           Real Estate Equity         $3.33              33.3%
   Partners'           Partners L.P.
   Interest in
   Secured Income L.P.Wilder Richman            $3.33              33.3%
                       Resources Corporation

                     WRC-87A Corporation        $3.34              33.4%

  *                  General  Partners as a class have a 1% interest in all
profits,losses and distributions of the Partnership.

     c) Registrant  knows of no  arrangements  which may, at a subsequent  date,
result in a change of  control  of  Registrant.  Article  VI of the  Partnership
Agreement  describes the  circumstances  under which changes in General Partners
can occur.

     d) There is no family  relationship  between any of the foregoing directors
and executive officers.

     e) Involvement in certain legal  proceedings  with respect to the foregoing
directors and executive officers: None.

Item 13  Certain Relationships and Related Transactions with Management

The General  Partners  and their  affiliates  are  entitled  to receive  certain
compensation,  fees and  reimbursements  of expenses.  The Partnership  incurred
investor services fees in the amount of $80,072,  of which $65,873 is payable to
an  affiliate  of the General  Partners  for the year ended  December  31, 1997.
Information   regarding  such  compensation  is  set  forth  under  the  heading
"Compensation  And Fees To General  Partners And Affiliates" at pages 13 through
19 of the Prospectus, which is incorporated herein by reference.

The  financial  interests  in  Registrant  of the General  Partners  and Special
Limited  Partner  are  set  forth  under  the  heading   "Profits,   Losses  and
Distributions"  at pages 64 through 67 of the Prospectus,  which is incorporated
herein by reference.

The taxable loss generated by Registrant during the year ended December 31, 1997
allocated to each of the General Partners was approximately $1,000.

Transactions with Affiliates of Management

     Wilder Richman Management Corp.  ("WRMC"),  an affiliate of certain General
Partners,  is the managing agent of Fieldpointe  Apartments.  In connection with
these services, WRMC earned management and reporting fees of $86,040 in 1997.

Indebtedness of Management

No officer or director of the General Partners or any affiliate of the foregoing
was indebted to Registrant at any time during the fiscal year ended December 31,
1997.

                                       11
<PAGE>




                                      PART IV


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

(a)  1     Financial  Statements - The list of Financial  Statements appears on
           page F-2.

     2     Schedules  -  All   schedules   are  omitted   because  the  required
           information is  inapplicable  or it is presented in the  consolidated
           financial statements or the notes thereto.

     3     Exhibits:

     3(A)  Form of Amended and  Restated  Agreement  of Limited  Partnership  of
           Secured  Income L.P.,  incorporated  by reference to Exhibit A to the
           Prospectus contained in the Partnership's  Registration  Statement on
           Form S-11 (No.
           33-9602) (the "Form S-11").

     3(B)  Certificate   of  Limited   Partnership   of  Secured   Income  L.P.,
           incorporated by reference to Exhibit 3(B) of Form S-11.

     10(A) Escrow   Agreement   between   Registrant  and  FirsTier  Bank  N.A.,
           incorporated by reference to Exhibit 10(A) of Form S-11.

     10(B) Carrollton Partnership Interest Acquisition  Agreement,  incorporated
           by reference to Exhibit 10(B) of Form S-11.

     10(C) Carrollton  Partnership  Agreement,  as amended,  and  guarantees  to
           certain   obligations  by  Carrollton   Developer   General  Partner,
           incorporated by reference to Exhibit 10(C) of Form S-11.

     10(D) Carrollton Property Management Agreement, as amended, incorporated by
           reference to Exhibit 10(D) of Form S-11.

     10(E) Fieldpointe Complex Financing Documents, incorporated by reference to
           Exhibit 10(B) of Form S-11.

     10(F) Form of Guaranteed Investment Contract Escrow Agreement, incorporated
           by reference to Exhibit 10(F) of Form S-11.

     10(G) Columbia Partnership Interest Acquisition Agreement,  incorporated by
           reference to Exhibit 10(G) of Form S-11.

     10(H) Columbia  Partnership  Agreement and guarantee of certain obligations
           of Columbia  Developer General Partner,  incorporated by reference to
           Exhibit 10(H) of Form S-11.

     10(I) Columbia Property Management Agreement,  incorporated by reference to
           Exhibit 10(I) of Form S-11.

     10(J) Columbia  Construction  and  Development  Agreement,  incorporated by
           reference to Exhibit 10(J) of Form S-11.

     10(K) Westmont Complex  Financing  Documents,  incorporated by reference to
           Exhibit 10(K) of Form S-11.

     10(L) Westmont Complex Financing Restructuring  Agreement,  incorporated by
           reference to Form 10-K for fiscal year ended December 31, 1992.

     10(M) Columbia   Partnership   Cost-Sharing  and  Indemnity   Agreement  in
           connection  with  the  mortgage  modification  dated  May  27,  1993,
           incorporated by reference to Form 10-K for fiscal year ended December
           31, 1993.

                                       12
<PAGE>




     10(N) Amendment of Partnership  Agreement of Columbia Partnership dated May
           27,  1993,  incorporated  by  reference  to Form 10-K for fiscal year
           ended December 31, 1993.

     10(O) Amendment of Guaranty Agreement of Columbia Partnership dated May 27,
           1993,  incorporated  by  reference to Form 10-K for fiscal year ended
           December 31, 1993.

     10(P) Columbia   Partnership   Financing  Agreement  dated  May  27,  1993,
           incorporated by reference to Form 10-K for fiscal year ended December
           31, 1993.

     10(Q) Carrollton  Partnership  Assignment and Modification of Deed of Trust
           dated  August 30,  1993,  incorporated  by reference to Form 10-K for
           fiscal year ended December 31, 1993.

     (25)  Power of Attorney, incorporated by reference to Exhibit 25 of Form
           S-11.

     (28)  Market   Analysis  dated   February  1,  1985  of  REDE   Associates,
           incorporated by reference to Exhibit 28 of Form S-11.


Other Exhibits

(b)        Reports on Form 8-K

No  reports on Form 8-K were filed  during the last  quarter of the fiscal  year
ended December 31, 1997.

                                       13
<PAGE>




                                    SIGNATURES



      Pursuant  to the  requirements  of Section  13 or 15(d) of the  Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on its
behalf by the  undersigned,  hereunto duly  authorized on the 31st day of March,
1998.


                     SECURED INCOME L.P.

                     By:  Wilder Richman Resources Corporation, General Partner

                          By:  /s/Richard Paul Richman
                               Richard Paul Richman - President

                     By:  Real Estate Equity Partners L.P., General Partner
                          Real Estate Equity Partners Inc.

                          By:  /s/Doreen D. Odell
                               Doreen D. Odell - President

                     By:  WRC-87A Corporation, General Partner

                          By:  /s/Doreen D. Odell
                               Doreen D. Odell - President

                                       14


<PAGE>



                     CONSOLIDATED FINANCIAL STATEMENTS AND
                         INDEPENDENT AUDITORS' REPORT

                     SECURED INCOME L.P. AND SUBSIDIARIES

                       DECEMBER 31, 1997, 1996 AND 1995


<PAGE>
<TABLE>
<CAPTION>


                        SECURED INCOME L.P. AND SUBSIDIARIES

                     INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



<S>                                                              <C>

Table of Contents                                               Page

Independent Auditors' Report                                     F-3


Consolidated Financial Statements


   Consolidated Balance Sheets                                   F-4


   Consolidated Statements Of Operations                         F-5


   Consolidated Statements Of Partners' Deficit                  F-6


   Consolidated Statements Of Cash Flows                         F-7


   Notes To Consolidated Financial Statements                    F-8

                                      F-2
</TABLE>






  <PAGE>






                               INDEPENDENT AUDITORS' REPORT



      To the Partners
      Secured Income L.P. and Subsidiaries

            We have audited the  consolidated  balance  sheets of Secured Income
      L.P. and  Subsidiaries  as of December 31, 1997 and 1996,  and the related
      consolidated  statements of operations,  partners'  deficit and cash flows
      for each of the three years ended  December 31, 1997.  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  generally  accepted
      auditing  standards.  Those standards require that we plan and perform the
      audit  to  obtain   reasonable   assurance  about  whether  the  financial
      statements  are  free  of  material   misstatement.   An  audit  includes
      examining,   on  a  test  basis,   evidence  supporting  the  amounts  and
      disclosures in the financial statements.  An audit also includes assessing
      the  accounting   principles  used  and  significant   estimates  made  by
      management,   as  well  as  evaluating  the  overall  financial  statement
      presentation.  We believe that our audits  provide a reasonable  basis for
      our opinion.

            In our opinion,  the consolidated  financial  statements referred to
      above present fairly, in all material respects,  the financial position of
      Secured Income L.P. and Subsidiaries as of December 31, 1997 and 1996, and
      the results of their  operations,  changes in their partners'  deficit and
      their cash flows for each of the three years ended  December 31, 1997, in
      conformity with generally accepted accounting principles.



                                          By:  /s/Reznick Fedder & Silverman

      Bethesda, Maryland
      March 18, 1998

                                     F - 3

<PAGE>
<TABLE>
<CAPTION>


                        SECURED INCOME L.P. AND SUBSIDIARIES

                              CONSOLIDATED BALANCE SHEETS
                             DECEMBER 31, 1997 AND 1996





                                       Notes           1997           1996
                                     ---------     -----------   ------------
<S>                                    <C>           <C>              <C>

ASSETS

Property and equipment, net
of accumulated depreciation            3,6      $ 29,708,923     $  31,228,583
Cash and cash equivalents              11          1,317,457           896,433
Tenant security deposits                             466,609           451,401
Restricted assets and funded
reserves                           5,6,9,11        4,280,585         4,322,124
Investment in guaranteed investment
contract                              2,11            19,499            92,585
Interest and accounts receivable       11             91,297            67,094
Prepaid expenses                                     437,833           135,734
Intangible assets, net of
 accumulated amortization              4           1,826,991
2,093,714
Other assets                                             -              34,708
                                              --------------    --------------

                                               $ 38,149,194     $  39,322,376

LIABILITIES AND PARTNERS'
  EQUITY (DEFICIT)

Liabilities

   Mortgages payable                   6      $  34,449,756     $  35,320,565
   Accounts payable and
    accrued expenses                                395,028           236,891
  Tenant security deposits payable                  460,182           451,401
  Due to general partners
    and affiliates                    7           4,109,214         3,970,278
  Deferred revenue                                  152,414           164,368
                                             ---------------    -------------

                                                 39,566,594        40,143,503

Commitments and contingencies        6,9

Partners' equity (deficit)            8

  Limited partners (984,369 units
    issued and outstanding)                             -                 -
  General partners                               (1,417,400)        (821,127)
                                              -------------    -------------

                                                 (1,417,400)        (821,127)

                                              $  38,149,194      $39,322,376
                                              =============    =============



</TABLE>








                  See notes to consolidated financial statements.
                                     F - 4
<PAGE>
<TABLE>
<CAPTION>
                        SECURED INCOME L.P. AND SUBSIDIARIES

                         CONSOLIDATED STATEMENTS OF OPERATIONS
                              YEARS ENDED DECEMBER 31,





                        Notes             1997          1996            1995
                     ------------   -------------  -----------       ---------

<S>                    <C>               <C>           <C>              <C>
REVENUE

Rental                                $ 6,584,435   $ 6,227,870   $  5,907,143
Interest                                  174,393       169,896        156,261
Other                                      28,333        36,932         29,147



TOTAL REVENUE                           6,787,161     6,434,698      6,092,551
                                      -----------  ------------  -------------

EXPENSES

Administration and
  management                 7            702,416       774,264        746,458
Operating and maintenance               1,232,640     1,060,253        852,146
Taxes and insurance                       971,805       891,180        916,304
Financial                   6,7         2,692,516     1,764,812      1,955,821
Depreciation and
  amortization              3,4         1,784,057     2,013,710      2,019,442
                                     ------------  ------------ --------------

TOTAL EXPENSES                          7,383,434     6,504,219      6,490,171
                                     ------------  ------------ --------------

NET LOSS                             $   (596,273)$     (69,521) $    (397,620)
                                     ============ =============  =============



NET LOSS ATTRIBUTABLE TO

  General partner            8       $   (596,273)$     (69,521) $    (397,620)
  Limited partners           8                -              -              -
                                     -------------     --------   ------------


                                     $   (596,273)$     (69,521) $    (397,620)
                                     ============ =============  =============

NET LOSS ALLOCATED PER UNIT
   OF LIMITED PARTNERSHIP
   INTEREST                  8       $         -   $        -    $        -
                                     =========== ==============  ==============


Weighted number of
  units outstanding                   $  984,369   $  984,369      $  984,369



</TABLE>







                   See notes to consolidated financial statements.
                                      F - 5


<PAGE>
<TABLE>
<CAPTION>


                        SECURED INCOME L.P. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF PARTNERS' DEFICIT
                    YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995




<S>                                          <C>            <C>            <C>
                                                          Limited      General
                                            Total         partners     partners


Partners' deficit, December 31, 1994    $(351,598       $    -      $ (351,598)

Net loss                                 (397,620)           -        (397,620)

Distributions                              (2,388)           -          (2,388)

Partners' deficit, December 31, 1995       (751,606)         -        (751,606)

Net loss                                    (69,521)         -         (69,521)
                                       ------------  ---------      ----------

Partners' deficit, December 31, 1996       (821,127)         -        (821,127)

Net loss                                   (596,273)         -        (596,273)
                                     -------------- ------------   -----------

Partners' deficit, December 31, 1997   $ (1,417,400    $     -    $ (1,417,400)
                                       ============   =========   ============





</TABLE>






                  See notes to consolidated financial statements.
                                      F- 6


<PAGE>
<TABLE>
<CAPTION>


                        SECURED INCOME L.P. AND SUBSIDIARIES

                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                              YEARS ENDED DECEMBER 31,

<S>                                            <C>        <C>          <C>
                                               1997      1996         1995
                                         ----------  ----------- ----------

 CASH FLOWS FROM OPERATING ACTIVITIES

Net loss
                                         $   (596,273)$     (69,521) $ (397,620)

Adjustments to reconcile net loss
 to net cash provided by operating
 activities
       Depreciation and amortization        1,784,057    2,013,710    2,019,442

     Decrease (increase) in
      restricted assets
      and funded reserves                      41,539     (834,186)    (491,585)

       Increase in tenant security
         deposits                             (15,208)     (26,931)     (12,408)

       Increase in interest and accounts
         receivable                           (24,203)      (9,235)      (5,817)

       Decrease (increase) in prepaid
         expenses                            (302,099)     289,779      (28,147)

       Decrease (increase) in
         intangible assets                     20,000      (20,000)     (45,785)
       Decrease (increase) in other
         assets                                34,708      (34,708)          -
       Increase (decrease) in accounts
         payable
         and accrued expenses                 158,137      (11,418)      24,743

       Increase in tenant security
         deposits payable                       8,781       29,455        9,884

       Increase in due to general
         partners and affiliates              138,936      195,794      193,782
       Decrease in deferred revenue           (11,954)     (11,954)     (11,954)
                                       --------------  -----------    ---------


Net cash provided by operating activities   1,236,421    1,510,785    1,254,535
                                         ------------    ---------    ---------


CASH FLOWS FROM INVESTING ACTIVITIES

Principal proceeds from guaranteed
   investment contracts                        73,086       65,809       270,741

Capital expenditures                          (17,674)    (187,733)    (339,980)
                                       --------------   ----------    ----------


Net cash provided by (used in)
  investing activities                         55,412     (121,924)     (69,239)
 CASH FLOWS FROM FINANCING ACTIVITIES

 Payments of principal on permanent
   financing                                 (870,809)  (1,268,655)    (852,550)

Distributions to partners                         -                -   (217,097)
                                            --------- ---------------  --------


Net cash used in financing activities        (870,809)  (1,268,655) (1,069,647)
                                        -------------   ----------   ----------


NET INCREASE IN CASH AND CASH
   EQUIVALENTS                                421,024      120,206      115,649


Cash and cash equivalents at beginning
  of year                                     896,433      776,227      660,578
                                              ---------------------------------


CASH AND CASH EQUIVALENTS AT END OF YEAR  $ 1,317,457 $    896,433  $   776,227
                                          =========== ============  ============


SUPPLEMENTAL INFORMATION

Financial expenses paid                   $ 2,259,546  $ 1,471,566   $ 1,626,811
                                          ===========  ===========   ===========

</TABLE>



                  See notes to consolidated financial statements.
                                     F - 7

<PAGE>



                        SECURED INCOME L.P. AND SUBSIDIARIES

                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          DECEMBER 31, 1997, 1996 AND 1995


Note 1 - Organization and Summary of Significant Accounting Policies

Secured  Income L.P. (the  "Partnership"),  was formed on October 10, 1986 under
the Revised  Uniform  Limited  Partnership  Act of the State of Delaware for the
purpose of acquiring real estate limited partnership interests.  The Partnership
filed a Form  S-11  registration  statement  with the  Securities  and  Exchange
Commission  effective  March 5, 1987  covering an  offering  of up to  2,500,000
limited  partnership  units at $20 per unit.  The admission of limited  partners
occurred on October 9, 1987 (at which time operations  commenced),  December 18,
1987 and April 12, 1988.

Carrollton X Associates Limited  Partnership  ("Carrollton") was organized under
the laws of the  District of  Columbia  on December  18, 1985 for the purpose of
constructing and operating a residential  rental  apartment  complex and related
facilities  under Section  221(d)4 of the National  Housing Act. The Partnership
acquired a 98.9% limited  partner  interest in  Carrollton in October 1987.  The
complex consists of 252 units located in Frederick,  Maryland and operates under
the name of Fieldpointe Apartments.

Columbia Associates ("Columbia") was formed as a limited partnership on February
6, 1985 to acquire an interest in real  property  located in New York,  New York
and to construct  and operate  thereon a 163 unit  apartment  complex which also
includes a parking garage and commercial space. The Partnership acquired a 98.9%
limited  partner  interest in Columbia in December  1988.  The complex  operates
under the name of The Westmont.

Columbia and Carrollton have  underlying  mortgages which qualify for tax-exempt
financing as a result of restricting at least 20% of their  apartment  units for
low to moderate income tenants as defined in applicable guidelines.

Principles of Consolidation

The  consolidated  financial  statements  include  the assets,  liabilities  and
results  of  operations  which  relate  to  the  business  of  the  Partnership,
Carrollton  and  Columbia.  All  significant   inter-partnership   balances  and
transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

Property, Equipment and Depreciation

Land,  buildings  and  improvements  are  carried  at the  lower  of cost or net
realizable value. Net realizable value represents the net cash flow necessary to
recover costs exclusive of debt service. Depreciation is provided for in amounts
sufficient to relate the cost of  depreciable  assets to  operations  over their
estimated service lives by use of the straight-line  method over a 25-year life.
Personal  property  is carried  at cost and is  depreciated  over its  estimated
service  life of 5-7 years  using the  straight-line  method.  Improvements  are
capitalized,  while  expenditures  for  maintenance  and  repairs are charged to
expense as incurred.  Upon disposal of  depreciable  property,  the  appropriate
property accounts are reduced by the related costs and accumulated  depreciation
and the resulting gains or losses are reflected in the  consolidated  statements
of operations.

Other Assets and Amortization

Mortgage costs are amortized  over the terms of the  respective  loans using the
effective interest method.  Acquisition fees are amortized over the useful lives
of the respective property and equipment using the straight-line method. Leasing
costs are amortized over the period of the applicable  leases which range from 5
to 12 years using the straight-line method.

                                      F - 8
<PAGE>





                        SECURED INCOME L.P. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                          DECEMBER 31, 1997, 1996 AND 1995

Note 1 - Organization and Summary of Significant Accounting Policies (continued)

Deferred Revenue

Deferred  revenue  consists of a fee received by Columbia for the extension of a
parking  garage  lease  which  expires  September  30,  2011.  Such fee is being
allocated to revenue over the lease term.

Leases

Tenant leases are treated as operating  leases.  Rental revenue is reported when
earned and expenses are charged to operations as incurred.

Interest Revenue

Interest earned on guaranteed  investment  contracts is recognized utilizing the
effective interest method.

Income Taxes

No provision or benefit for income  taxes has been  included in these  financial
statements since taxable income or loss passes through to, and is reportable by,
the partners individually.

Cash and Cash Equivalents

The  Partnership  considers  all  highly  liquid  investments  with an  original
maturity  of  three  months  or  less  at the  date  of  acquisition  to be cash
equivalents.

Net Loss per Unit of Limited Partnership Interest

Net loss per unit of limited  partnership  interest is calculated based upon the
weighted  average  number of units  outstanding,  984,369  for each of the years
1997, 1996 and 1995. Losses are allocated to limited partners until such time as
the limited partners' equity reaches zero.

Adoption of Accounting Standard

Effective  for the  year  ended  December  31,  1997,  the  Partnership  adopted
Statement  of Financial  Accounting  Standards  ("SFAS")  No. 128,  "Earning Per
Share" and SFAS No. 129,  "Disclosure of Information  about Capital  Structure."
SFAS No. 128  establishes  standards for computing and  presenting  earnings per
share. SFAS No. 129 requires the disclosure in summary form within the financial
statements of the  pertinent  rights and  privileges  of the various  securities
outstanding.  The adoption of SFAS Nos. 128 and 129 has not materially  impacted
the  Partnership's  reported  earnings,   financial  condition,  cash  flows  or
presentation of the financial statements.

Note 2 - Guaranteed Investment Contracts

In  order  to  provide  investor  limited  partners  with a 7%  guaranteed  cash
distribution  through December 31, 1993 and to pay investor  services fees for a
prescribed period, the Partnership  purchased  guaranteed  investment  contracts
upon each admission of limited partners. Proceeds from the guaranteed investment
contracts  have been  comprised of principal and interest such that the balances
of the guaranteed  investment  contracts are fully amortized upon the expiration
of their respective terms.

In connection with the Partnership's  investment in Carrollton,  the Partnership
purchased  guaranteed  investment  contracts  to provide  Carrollton's  pro rata
portion of the 7% cash distributions  through December 31, 1993. Such guaranteed
investment  contracts expired on January 15, 1994 and were then fully amortized.
In connection  with the  Partnership's  investment in Columbia,  the Partnership
purchased  guaranteed  investment contracts sufficient to provide Columbia's pro
rata  portion of the 7% cash  distributions  through  December  31, 1993 with an
additional  guaranteed  investment  contract  being  utilized  to provide a cash
distribution for the year ended December 31, 1994 and to pay Columbia's investor
services fee (see Note 7) through  December 31, 1997.  The remaining  guaranteed
investment contract provided for annual distributions of $80,072 for the payment
of Columbia's investor services fee and expired on January 15, 1998.

                                     F - 9
<PAGE>
<TABLE>
<CAPTION>

                        SECURED INCOME L.P. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                          DECEMBER 31, 1997, 1996 AND 1995


Note 3 - Property and Equipment

Property  and  equipment  as of  December  31, 1997 and 1996 are  summarized  as
follows:
 <S>                                              <C>                 <C>
                                                    1997             1996
                                             ------------------------------

      Land                                   $   6,057,940    $   6,057,940
      Buildings and improvements                36,573,381       36,555,707
      Furniture and equipment                    1,574,791        1,574,791
                                            --------------   --------------

                                                44,206,112       44,188,438
      Less accumulated depreciation             14,497,189       12,959,855
                                             -------------    -------------

                                              $ 29,708,923     $ 31,228,583
                                              ============     ============


Depreciation  for the  years  1997,  1996 and 1995 was  $1,537,334,  $1,527,885
and $1,541,752, respectively.


Note 4 - Intangible Assets

Intangible assets as of December 31, 1997 and 1996 are summarized as follows:

      <S>                                         <C>               <C>
                                                    1997             1996
                                            -----------------------------

      Acquisition fees                        $    787,495     $    787,495
      Mortgage costs                             4,761,572        4,781,572
      Leasing costs                                220,459          220,459
                                             -------------    -------------

                                                 5,769,526        5,789,526
      Less accumulated amortization              3,942,535        3,695,812
                                              ------------     ------------

                                               $ 1,826,991      $ 2,093,714
                                               ===========      ===========


Amortization  for  the  years  1997,  1996  and  1995  was  $246,723,  $485,825
and $477,690, respectively.


Note 5 - Restricted Assets and Funded Reserves

Restricted  assets and funded  reserves  (see Note 6) as of  December  31,  1997
and 1996 are summarized as follows:

        <S>                                        <C>               <C>
                                                     1997             1996
                                                -----------    --------------

       Escrows held by mortgage lenders       $    553,767     $    885,824
       Pledged cap account                       2,193,213        1,754,272
       Call premium collateral                   1,000,000        1,000,000
       Operating deficit reserve                   500,000          500,000
       Bond retirement escrow                       33,605          182,028
                                            --------------    -------------

                                               $ 4,280,585      $ 4,322,124
                                               ===========      ===========

</TABLE>
                                     F - 10
<PAGE>
                        SECURED INCOME L.P. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                          DECEMBER 31, 1997, 1996 AND 1995


Note 6 - Mortgages Payable

Carrollton

On December  18,  1985,  Carrollton  executed a note (the  "Original  Carrollton
Mortgage")  with Concord  Mortgage  Company,  an  affiliate  of certain  general
partners  of  Carrollton.  The  Original  Carrollton  Mortgage  in the amount of
$10,494,100 was financed through  tax-exempt revenue bonds issued by the City of
Frederick,  Maryland and was insured by the United States  Department of Housing
and Urban Development  ("HUD").  The Original Carrollton Mortgage was refinanced
during 1993 (see discussion below).  Under the terms of the Original  Carrollton
Mortgage,  principal and interest  payments  were payable in successive  monthly
installments of $85,009 through February 1, 2028, bearing interest at 9.5%.

On August 30, 1993, the Original Carrollton Mortgage was modified and refinanced
through a 1993 series  mortgage  revenue  bond issued by the City of  Frederick,
Maryland.  The note was modified by reducing  the interest  rate from 9.5% to 8%
for the period  August  31,  1993  through  June 30,  1994,  then 6.09% per year
through  maturity in February  2028.  The terms  include the monthly  payment of
principal  and interest of $74,734 from October 1, 1993 through July 1, 1994 and
$60,900 from August 1, 1994 through maturity.  The note is collateralized by the
underlying  value of the real  estate  plus other  amounts  on deposit  with the
lender.  The balance of the  mortgage  payable at December  31, 1997 and 1996 is
$10,079,919 and $10,193,088, respectively.

Pursuant to agreements,  Carrollton is required to make monthly escrow  deposits
for  taxes,  insurance  and  replacement  of project  assets,  and is subject to
restrictions as to operating policies,  rental charges,  operating  expenditures
and distributions to partners.

Columbia

The  original  financing  of Columbia  was provided by the New York City Housing
Development  Corporation  ("HDC") which issued  $32,497,691 of bonds in February
1985.  The funds  provided by the bond issue were loaned to Columbia in the form
of two mortgage loans (the "Original  Columbia  Mortgages").  In connection with
the  issuance  of such bonds,  Citibank,  N.A.  ("Citibank")  issued a letter of
credit in the  amount of  $33,018,629  to  guarantee  payment of  principal  and
interest on the bonds. The Original Columbia Mortgages were modified during 1993
(see  discussion  below).  Under the terms of the Original  Columbia  Mortgages,
interest was payable at the rate of 9.58% per annum. Principal and interest were
payable in monthly installments of $260,256 over a period of 23 years.

On May 27, 1993,  the Original  Columbia  Mortgages were modified (the "Modified
Columbia Mortgages").  Under the terms of the Modified Columbia Mortgages, based
on the issuance of new  tax-exempt  bonds (which bear a floating  interest rate,
adjusted  weekly),  the  initial  note rate was  4.66%,  with  required  monthly
principal amortization of $29,367. Pursuant to agreements,  any savings realized
on the difference between the 4.66% initial note rate and the actual low floater
rate (approximately  3.56% and 3.29% weighted average rate during 1997 and 1996,
respectively) will be deposited in an account to be used to purchase an interest
rate cap (the  "Pledged  Cap  Account")  by  October  1996,  which date has been
extended to April 30, 1998. The balance in the Pledged Cap Account is $2,193,213
and $1,754,272 as of December 31, 1997 and 1996,  respectively (see Note 5). The
balance of the mortgages payable as of December 31, 1997 and 1996 is $24,369,837
and  $25,127,477,  respectively.  The weighted  average low floater rate for the
period January 1, 1998 through February 28, 1998 was approximately 3.15%.

The Modified Columbia  Mortgages further provide that any cash flow generated by
Columbia above the note rate, servicing fees and principal  amortization will be
applied first to fund and maintain an interest-bearing operating deficit reserve
account (the  "Operating  Deficit  Reserve")  until it  accumulates to $500,000.
Thereafter,  such cash flow will be deposited into the Operating Deficit Reserve
to the  extent  necessary  to  maintain a balance  of  $500,000  and then into a
segregated  account  to be  used to  retire  the  underlying  bonds  (the  "Bond
Retirement  Escrow") at the earliest possible dates in minimum  denominations of
$100,000 in excess of the  scheduled  principal  amortization  of  approximately
$352,000 per annum.  Amounts  deposited in the  Operating  Deficit  Reserve will
generally be utilized to fund operating deficits,  pay for maintenance,  repairs
and  replacements  and to pay debt service and other  amounts due under the loan
documents.  As of  December  31,  1997 and 1996,  the  balance in the  Operating
Deficit  Reserve is $500,000 (see Note 5).  During the years ended  December 31,
1997 and 1996,  deposits of approximately  $252,000 and $712,000,  respectively,
were  made  to  the  Bond  Retirement   Escrow,   with  $400,000  and  $800,000,
respectively,  utilized to accelerate the retirement of the debt. As of December
31,  1997 and 1996,  the  balance in the Bond  Retirement  Escrow is $33,605 and
$182,028, respectively (see Note 5).

                                     F - 11
<PAGE>




                        SECURED INCOME L.P. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                          DECEMBER 31, 1997, 1996 AND 1995


Note 6 - Mortgages Payable (continued)

Columbia (continued)

Because the bonds issued in connection with the Original Columbia Mortgages were
redeemed  voluntarily,  Columbia was required to pay a prepayment premium in the
amount  of  $1,590,658  (the  "Call  Premium").  Columbia  paid for the costs of
issuance of the new bonds, including the Call Premium, from the premium realized
upon  liquidation of a debt service  reserve held by Citibank in connection with
the  Original  Columbia  Mortgages  and, to the extent  necessary,  amounts were
provided  by  the  Columbia  General  Partners  under  their  operating  deficit
guarantee to  Columbia.  As a result of  utilizing  such debt  service  reserve,
Citibank  required  the  partners of Columbia  (including  the  Partnership)  to
provide  Citibank  with letters of credit in the full amount of the Call Premium
(the "Call Premium  Letters of Credit").  In order to establish the Call Premium
Letters of Credit,  the Columbia  General Partners  provided  $900,000 (of which
$600,000 is in the form of letters of credit and  $300,000  was  advanced to the
Partnership)  and the  Partnership  provided  a letter  credit in the  amount of
$1,000,000 (inclusive of the $300,000 advance) (collectively,  the "Call Premium
Collateral").  The Call Premium  Letters of Credit will be available to Citibank
upon  sale or  refinancing  (or an  event of  default)  in the  event  available
proceeds  are not  sufficient  to pay in full all amounts due under the bonds or
accrued and unpaid Citibank letter of credit fees (see below). However, Citibank
will be entitled to draw first upon the Columbia General  Partners'  guaranty of
payment (in the amount of approximately $1,690,000) and thereafter upon the Call
Premium  Collateral  to pay any such unpaid letter of credit fee. As of December
31, 1997 and 1996,  $1,000,000 was invested in interest  bearing  deposits which
serves as collateral  for the  Partnership's  Call Premium Letter of Credit (see
Note 5). The  letters of credit in the amount of  $600,000  which were  provided
directly by the Columbia  General  Partners as described above are not reflected
in the accompanying consolidated balance sheets.

As part of the mortgage  modification,  Citibank  agreed to extend its letter of
credit from February 1997 to February 2003. Beginning February 1, 1997, Citibank
was entitled to a letter of credit fee for providing  credit support for the new
bonds in the amount of 2.5% per annum of the  outstanding  principal  balance of
the new bonds,  payable on a current or  deferred  basis at  Columbia's  option.
Except as described  above,  the obligation to pay the letter of credit fee will
be with full recourse as to the assets of Columbia,  but without recourse to any
of the partners,  including the Partnership.  If the letter of credit fee is not
fully paid from available proceeds from the sale or refinancing of Columbia, the
Columbia General  Partners'  guaranty of payment and the Call Premium Letters of
Credit,  any such unpaid  balance shall be deemed fully  discharged  and neither
Columbia  nor its  partners  shall  have any  further  obligation  with  respect
thereto.  For the year  ended  December  31,  1997,  Columbia  incurred a fee in
connection with the Citibank  letter of credit in the amount of $583,229,  which
fee is being paid currently on a monthly basis.

Pursuant to  agreements,  Columbia is subject to  restrictions  as to  operating
policies, rental charges, operating expenditures and distributions to partners.

Aggregate annual mandatory  maturities on the Carrollton and Columbia  Mortgages
as of December 31, 1997 are as follows:


                      1998             $       472,657
                      1999                     480,188
                      2000                     488,192
                      2001                     496,696
                      2002                     505,733
                   Thereafter               32,006,290

                                          $ 34,449,756


The carrying amount of the mortgages approximates fair value.

                                     F - 12

<PAGE>
<TABLE>
<CAPTION>

                        SECURED INCOME L.P. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                          DECEMBER 31, 1997, 1996 AND 1995

Note 7 - Related Party Transactions

Due to general partners and affiliates as of December 31, 1997 and 1996 consists
of cash advances and other payables as follows:

      <S>                                                 <C>             <C>
                                                           1997        1996
                                                    ------------ ------------

      Carrollton general partners and their affiliate  $   65,154   $   65,154

      Columbia general partners and their affiliates
        (including accrued interest of
        $1,126,066 and $948,432)                        3,156,746    2,979,112
      Wilder Richman Management Corp.                    201,600       306,171

      WRC-87A Corporation                                685,714       619,841
                                                   ------------- -------------


                                                     $ 4,109,214   $ 3,970,278
                                                     ===========   ===========

</TABLE>

The management  agent for  Fieldpointe  Apartments is Wilder Richman  Management
Corp. ("WRMC"),  an affiliate of one of the Carrollton general partners.  During
each of the three years ended  December 31, 1997,  WRMC was entitled to property
management fees equal to 4% of residential income collected.  In addition,  WRMC
was  entitled to a reporting  fee of $5 per unit per month for  bookkeeping  and
reporting  services.  The maximum  annual  management and reporting fees may not
exceed 5% of gross collections.  Such fees of $86,040,  $83,958 and $82,012 were
charged  to  operations  during  1997,  1996  and  1995,  respectively.  Accrued
management  and reporting  fees as of December 31, 1997 and 1996 are $35,600 and
$140,171, respectively.

The  management  agent for The  Westmont is an  affiliate of one of the Columbia
general partners and receives property management fees calculated at the greater
of 2% of rental income or $70,000 per year.  The charges to operations  amounted
to $89,332, $84,240 and $79,365 during 1997, 1996 and 1995, respectively.

WRC-87A  Corporation,  a general partner of the  Partnership,  is entitled to an
annual investor services fee which is incurred by Columbia and Carrollton in the
amounts of $80,072 and $18,365,  respectively,  and which is based on .5% of the
gross  proceeds from the offering of  Partnership  units  allocable to each such
investment.  The fee is payable  quarterly  from cash flow and shall be adjusted
annually by increases in the Consumer  Price Index.  To the extent that there is
insufficient  cash flow  available to pay the investor  services fee, the fee is
payable only from distributions from the guaranteed investment contracts,  which
in the  case of  Carrollton  expired  on  January  15,  1994.  The  consolidated
statements of operations include charges to operations for the investor services
fee of $80,072 in 1997 and 1996 and $98,437 in 1995.  These  amounts are paid or
payable to WRC-87A Corporation to the extent that such services are not provided
by an  independent  third party.  Amounts  payable to WRC-87A  Corporation as of
December 31, 1997 and 1996,  representing  the unpaid investor  services fee for
the year, were $65,873 and $65,971, respectively.

The sole  shareholder of an affiliate of one of the Carrollton  general partners
provided  debt  financing  for the  capitalization  of LaMere  Associates,  Inc.
("LaMere"). In connection with such debt financing, the shareholder received 20%
of the stock of LaMere.  LaMere was paid premiums in connection  with  property,
workers  compensation,  liability and umbrella  insurance  coverage  provided to
Carrollton.  In connection  with such insurance  coverage,  Carrollton  incurred
$45,864,  $47,303 and $49,104 in premiums for the years ended December 31, 1997,
1996 and 1995, respectively.

During 1997,  Columbia paid an affiliate a fee of $183,750 for services rendered
in connection  with an attempted  refinancing  proposal.  During 1995,  Columbia
entered into a contract  with an  affiliate  of one of its general  partners for
renovation  services in the amount of  $154,360,  all of which was  incurred and
paid as of December  31, 1995.  Additional  work was  contracted  in 1996 in the
amount of $20,779, all of which was incurred and paid as of December 31, 1996.

Pursuant to an operating  deficit  guarantee  agreement dated December 21, 1988,
the Columbia general partners  guaranteed to loan to Columbia any funds required
to satisfy its operating deficits, if any, up to $2,000,000.  As of December 31,
1997 and 1996, loans of $2,000,680 have been made to Columbia.  The loans,  with
the exception of $300,000,  bear interest at Chase  Manhattan  Bank's prime rate
plus 2%  (10.5%  at  December  31,  1997) in  accordance  with the  terms of the
Columbia  partnership  agreement.  The amount of interest  charged to operations
during 1997,  1996 and 1995 was $177,634,  $174,731 and $184,299,  respectively.
Accrued  interest as of December 31, 1997 and 1996 is  $1,126,066  and $948,432,
respectively.  Such loans are repayable from Columbia cash flow,  subject to the
terms of the Modified Columbia Mortgages.

                                     F - 13
<PAGE>



                        SECURED INCOME L.P. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                          DECEMBER 31, 1997, 1996 AND 1995


Note 7 - Related Party Transactions (continued)

Columbia is  obligated in the amount of $30,000 as of December 31, 1997 and 1996
to  certain  of  its  partners  for  development  advances.   The  advances  are
non-interest bearing, unsecured and due on demand.

Carrollton  owes WRMC $166,000 as of December 31, 1997 and 1996 for prior years'
operating  advances.  Carrollton  also owes its general  partners and affiliates
$65,154 as of December 31, 1997 and 1996 for various advances. All such advances
are unsecured, non-interest bearing and payable from Carrollton cash flow.

Management  believes it is not  practicable  to  estimate  the fair value of the
loans and advances from related  parties because loans and advances with similar
characteristics are not currently available to the Partnership.


Note 8 - Partners' Deficit

Partnership Allocation

Profits and losses of the  Partnership  are  allocated 1% and 99% to the general
partners  and  limited  partners,  respectively,  until such time as the limited
partners'  capital  reaches  zero,  after which all losses are  allocated to the
general partners.

Partnership Distributions

In accordance  with the respective  partnership  agreements,  to the extent that
Carrollton and Columbia  generate net operating cash flow in any year at a level
sufficient,  when distributed to the  Partnership,  to enable the Partnership to
satisfy the allocable  portion of the limited  partners' 8% preferred return for
such year without  utilizing  amounts  generated from the guaranteed  investment
contracts, the excess amounts generated from the guaranteed investment contracts
would be paid or  distributed  to the  general  partners  of  Carrollton  and/or
Columbia,  whichever  generate(s)  such level(s) of operating cash flow. No such
excess distributions were generated during the term of the guaranteed investment
contract periods (see Note 2). Due to restrictions concerning distributions from
operating  cash flow of Columbia (see Note 6), there were no cash  distributions
from Columbia in 1997 and 1996.


Note 9 - Commitments and Contingencies

Long-term Leases

The parking garage and commercial  space at Columbia are leased to tenants under
the terms of  noncancellable  operating leases expiring on various dates through
September 30, 2011.  Future minimum rental  payments as of December 31, 1997 are
as follows:

                             1998              $    775,986
                             1999                   658,067
                             2000                   552,501
                             2001                   394,294
                             2002                   408,007
                         Thereafter               2,899,171

                                                $ 5,688,096


Income recognized under the garage and commercial space for the years 1997, 1996
and 1995 was $758,473, $716,277 and $583,533, respectively.

                                     F - 14
<PAGE>
<TABLE>
<CAPTION>


                        SECURED INCOME L.P. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                          DECEMBER 31, 1997, 1996 AND 1995


Note 9 - Commitments and Contingencies (continued)

Lender Restrictions and Requirements

Carrollton  and  Columbia  are  subject  to  various  lender   requirements  and
restrictions,  including  (i) the  rental of not less  than 20% of the  dwelling
units to individuals or families who qualify as low or moderate  income tenants;
(ii) restrictions on the sale of the apartment complexes; and (iii) restrictions
on the amount of cash flow which may be distributed to the partners.

Concentration of Credit Risk

As of  December  31,  1997,  the  Partnership  has  $1,810,841  in cash and cash
equivalents  and  restricted  assets and funded  reserves which are deposited in
interest-bearing  accounts, of which $1,790,612 is deposited with an institution
which is not insured by the Federal Deposit Insurance Corporation.


Note 10 - Reconciliation of Taxable Income (Loss) and Bases of Assets

A  reconciliation  of the financial  statement net loss to the income tax income
(loss) of the  Partnership  for each of the years ended December 31, 1997,  1996
and 1995 is as follows:

<S>                                            <C>             <C>        <C>
                                              1997            1996       1995
                                           ---------    ------------  ---------

Financial statement net loss            $  (596,273)    $  (69,521) $ (397,620)


Costs depreciated over a life shorter
  for income tax purposes than
  financial reporting purposes             (267,751)      (241,484)   (308,690)


Excess depreciation for financial
  reporting purposes due to purchase
  accounting treatments                     438,491        405,607     432,087

Deferred revenue                            (11,954)       (14,627)     (8,066)


Amortization of start-up costs and
  construction period interest and taxes        224            256     (27,250)


Guaranteed investment contracts amortized
  over straight-line method for tax purposes     -             -       (10,804)


Accrual of related party expense items
  not deductible until paid for tax purposes
  under Internal Revenue Code Section 267     137,970      240,702     268,274
                                         ------------  ------------ ----------


Subtotal                                   (299,293)       320,933     (52,069)


Amounts allocated to other partners of
  Carrollton and Columbia                     4,321        (11,622)     (19,148)
                                    ---------------   ------------  -----------


Income (loss) as shown on tax return   $   (294,972)    $  309,311 $   (71,217)
                                       ============     ========== ===========

</TABLE>

                                     F - 15
<PAGE>
<TABLE>
<CAPTION>



                        SECURED INCOME L.P. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                          DECEMBER 31, 1997, 1996 AND 1995


Note 10 - Reconciliation of Taxable Income (Loss) and Bases of Assets
(continued)

A reconciliation of the financial  statement  carrying amount of total assets to
the tax basis as of December 31, 1997 and 1996 is as follows:

<S>                                                <C>                <C>
                                                    1997               1996
                                           ----------------      ------------

Financial statement carrying amount of assets $  38,149,194   $ 39,322,376
Difference which consists principally of the
       utilization of purchase accounting
       for financial statement purposes and
       the method of amortization of the
       guaranteed investment contracts          (14,394,766)   (14,743,782)

Tax bases of assets                           $  23,754,428   $ 24,578,594
                                              =============   ============

</TABLE>

Note 11 - Fair Value of Financial Instruments

The following disclosure of the estimated fair value of financial instruments is
made in accordance  with the  requirements of SFAS No. 107,  "Disclosures  about
Fair Value of Financial  Instruments."  The estimated fair value of amounts have
been determined using available market information,  assumptions,  estimates and
valuation methodologies.

Cash and Cash Equivalents and Restricted Assets and Funded Reserves

The carrying amount approximates fair value.

Guaranteed Investment Contract

The carrying amount approximates fair value.

Interest and Accounts Receivable

The carrying amount  approximates fair value due to the shore-term nature of the
receivables.

The  estimated  fair values of the  Partnership's  financial  instruments  as of
December 31, 1997 and 1996 are disclosed elsewhere in the financial statements.

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