UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB

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

                For the quarterly period ended March 31, 2005


[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


             For the transition period from _________to _________

                         Commission file number 0-17646


                       UNITED INVESTORS INCOME PROPERTIES
        (Exact name of small business issuer as specified in its charter)



         Missouri                                           43-1483942
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                         Identification No.)

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

                                 (864) 239-1000
                           (Issuer's telephone number)

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

                         PART I - FINANCIAL INFORMATION


ITEM 1.     FINANCIAL STATEMENTS



                       UNITED INVESTORS INCOME PROPERTIES

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

                                 March 31, 2005

<TABLE>
<CAPTION>


Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $ 319
   Receivables and deposits                                                      57
   Other assets                                                                 117
   Investment properties:
       Land                                                  $ 1,522
       Buildings and related personal property                10,091
                                                              11,613
       Less accumulated depreciation                          (5,472)         6,141
                                                                            $ 6,634
Liabilities and Partners' (Deficiency) Capital
Liabilities
   Accounts payable                                                          $ 19
   Tenant security deposit liabilities                                           50
   Accrued property taxes                                                         8
   Other liabilities                                                             57
   Due to affiliates (Note B)                                                    21

Partners' (Deficiency) Capital
   General partner                                             $ (66)
   Limited partners (61,063 units issued and
      outstanding)                                             6,545          6,479
                                                                            $ 6,634


                See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>






                       UNITED INVESTORS INCOME PROPERTIES

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

<TABLE>
<CAPTION>

                                                               Three Months Ended
                                                                   March 31,
                                                                2005          2004
Revenues:
<S>                                                            <C>           <C>
   Rental income                                               $ 381         $ 373
   Other income                                                    48            42
       Total revenues                                             429           415

Expenses:
   Operating                                                      180           188
   General and administrative                                      31            33
   Depreciation                                                    99           105
   Property taxes                                                  38            38
       Total expenses                                             348           364

Net income                                                      $ 81          $ 51

Net income allocated to general partner (1%)                    $ 1           $ 1
Net income allocated to limited partners (99%)                     80            50

                                                                $ 81          $ 51

Net income per limited partnership unit                        $ 1.31        $ 0.82

Distributions per limited partnership unit                     $ 2.92         $ --

                See Accompanying Notes to Financial Statements
</TABLE>

<PAGE>




                       UNITED INVESTORS INCOME PROPERTIES

            STATEMENT OF CHANGES IN PARTNERS' (DEFICIENCY) CAPITAL
                                   (Unaudited)
                        (in thousands, except unit data)

<TABLE>
<CAPTION>


                                     Limited
                                   Partnership   General      Limited
                                      Units      Partner     Partners       Total

<S>                                   <C>          <C>        <C>          <C>
Original capital contributions        61,063       $ --       $15,266      $15,266

Partners' (deficiency) capital
   at December 31, 2004               61,063      $ (65)      $ 6,643      $ 6,578

Distributions to Partners                             (2)        (178)        (180)

Net income for the three months
   ended March 31, 2005                   --           1           80           81

Partners' (deficiency) capital
   at March 31, 2005                  61,063      $ (66)      $ 6,545      $ 6,479

                See Accompanying Notes to Financial Statements
</TABLE>



                       UNITED INVESTORS INCOME PROPERTIES

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


                                                                  Three Months Ended
                                                                       March 31,
                                                                   2005         2004
Cash flows from operating activities:
<S>                                                                <C>          <C>
  Net income                                                       $ 81         $ 51
  Adjustments to reconcile net income to net cash provided
   by operating activities:
     Depreciation                                                     99          105
     Bad debt expense                                                  9           13
     Change in accounts:
      Receivables and deposits                                       (26)         (13)
      Other assets                                                    11          (23)
      Accounts payable                                               (10)          (4)
      Tenant security deposit liabilities                             (2)           1
      Accrued property taxes                                           8           27
      Other liabilities                                                5           16
      Due to affiliates                                               16           12
        Net cash provided by operating activities                    191          185

Cash flows used in investing activities:
  Property improvements and replacements                             (38)         (11)

Cash flows from financing activities:
  Distributions to partners                                         (180)          --
  Loan costs incurred                                                (10)          --
        Net cash used in financing activities                       (190)          --

Net (decrease) increase in cash and cash equivalents                 (37)         174

Cash and cash equivalents at beginning of period                     356          509

Cash and cash equivalents at end of period                        $ 319        $ 683

                See Accompanying Notes to Financial Statements
</TABLE>



<PAGE>



                       UNITED INVESTORS INCOME PROPERTIES

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


Note A - Basis of Presentation

The  accompanying  unaudited  financial  statements of United  Investors  Income
Properties (the  "Partnership" or "Registrant") have been prepared in accordance
with generally accepted accounting  principles for interim financial information
and with the  instructions  to Form  10-QSB and Item 310(b) of  Regulation  S-B.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of United Investors Real Estate,  Inc. (the "General  Partner" or
"UIRE"),  a Delaware  corporation  and a subsidiary of Apartment  Investment and
Management  Company  ("AIMCO"),  a publicly traded real estate investment trust,
all adjustments  (consisting of normal recurring accruals)  considered necessary
for a fair  presentation  have been  included.  Operating  results for the three
month period ended March 31, 2005, are not necessarily indicative of the results
that may be expected for the fiscal year ending  December 31, 2005.  For further
information, refer to the financial statements and footnotes thereto included in
the  Partnership's  Annual  Report on Form  10-KSB  for the  fiscal  year  ended
December 31, 2004.

On May 1, 2003, Everest Properties,  Inc. a California  corporation  ("Everest")
acquired all of the capital stock of the General  Partner.  In  connection  with
this  transaction,  the  General  Partner  and the  Partnership  entered  into a
Services  Agreement  effective May 1, 2003 (the "Services  Agreement")  with NHP
Management Company ("NHP"), an affiliate of AIMCO, whereby NHP agreed to provide
portfolio and property  management  services for the Partnership.  The portfolio
management services included the services the General Partner of the Partnership
generally  performs  or  procures  in  connection  with  the  management  of the
Partnership,  subject  to  certain  limitations  provided  for in  the  Services
Agreement.  As compensation for providing the portfolio  management services and
the property management services,  the General Partner paid and assigned over to
NHP all of the income,  distributions,  fees,  commissions,  reimbursements  and
other payments  payable by the  Partnership to the General Partner or any of its
affiliates.  On February 27, 2004,  AIMCO/IPT,  Inc.  ("IPT"),  a subsidiary  of
AIMCO,  reacquired from Everest all of the capital stock of the General Partner.
As of February 27, 2004, the Services Agreement was terminated.  The Partnership
Agreement  provides  that the  Partnership  is to terminate on December 18, 2018
unless terminated prior to such date.

Reclassification:

Certain balances from 2004 have been reclassified to conform to the current year
presentation.

Note B - Transactions with Affiliated Parties

The  Partnership  has no  employees  and depends on the General  Partner and its
affiliates for the management and administration of all Partnership  activities.
The Partnership  Agreement  provides for payments to affiliates for services and
for  reimbursement of certain  expenses  incurred by affiliates on behalf of the
Partnership.  Pursuant to the Services Agreement discussed in "Note A", all such
payments for services provided for in the Partnership Agreement were paid to NHP
during the period from May 1, 2003 until  February  27,  2004 when the  services
agreement was terminated.

During the three months ended March 31, 2005 and 2004, affiliates of the General
Partner received 5% of gross receipts from all of the  Partnership's  properties
as compensation for providing property management services. The Partnership paid
to such  affiliates  approximately  $21,000 for each of the three  months  ended
March 31, 2005 and 2004, which is included in operating expenses.

An affiliate of the General  Partner charged the  Partnership  reimbursement  of
accountable  administrative  expenses  amounting  to  approximately  $20,000 and
$22,000 for the three months ended March 31, 2005 and 2004, respectively,  which
is included in general and administrative expenses.

For acting as real estate broker in  connection  with the 1999 sale of Peachtree
Corners Medical Building, the General Partner earned a real estate commission of
approximately  $21,000.  However,  this amount is not payable  until the limited
partners  receive an amount equal to their  adjusted  capital  investment  and a
cumulative  distribution  equal to an 8% annual return from the last  additional
closing date or, if greater,  a 6%  cumulative  annual return from their date of
admission to the  Partnership.  At March 31, 2005, the limited  partners had not
received  their  return.  Therefore,  the  commission  is  included  in  Due  to
affiliates on the accompanying balance sheet at March 31, 2005.

The  Partnership  insures its properties up to certain  limits through  coverage
provided by AIMCO,  which is generally  self-insured for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the General
Partner.  During the three  months  ended March 31, 2005,  the  Partnership  was
charged by AIMCO and its affiliates  approximately  $16,000 for hazard insurance
coverage  and fees  associated  with policy  claims  administration.  Additional
charges  will be incurred  by the  Partnership  during  2005 as other  insurance
policies renew later in the year. The  Partnership  was charged by AIMCO and its
affiliates approximately $24,000 for insurance coverage and fees associated with
policy claims administration during the year ended December 31, 2004.

Note C - Subsequent Event

Subsequent to March 31, 2005, the  Partnership  entered into a Purchase and Sale
Contract to sell Meadow Wood Apartments to an  unaffiliated  third party for the
purchase price of $5,075,000.  The anticipated  closing date for the transaction
is July 11, 2005. The carrying amount of the investment  property of Meadow Wood
Apartments was approximately $2,116,000 at March 31, 2005. The operating results
for Meadow Wood  Apartments  for the three  months ended March 31, 2005 and 2004
were  approximately  $38,000 and $48,000,  respectively,  including  revenues of
approximately $158,000 for both periods.

Note D - Contingencies

AIMCO Properties L.P. and NHP Management Company, both affiliates of the General
Partner,  are defendants in a lawsuit alleging that they willfully  violated the
Fair Labor Standards Act ("FLSA") by failing to pay maintenance workers overtime
for all hours  worked in excess of forty per week.  The  complaint  attempts  to
bring a collective  action under the FLSA and seeks to certify state  subclasses
in  California,  Maryland,  and the  District  of  Columbia.  Specifically,  the
plaintiffs  contend that AIMCO Properties L.P. and NHP Management Company failed
to  compensate  maintenance  workers  for time  that they  were  required  to be
"on-call."  Additionally,  the complaint  alleges AIMCO  Properties L.P. and NHP
Management  Company failed to comply with the FLSA in  compensating  maintenance
workers for time that they worked in responding to a call while  "on-call."  The
defendants have filed an answer to the amended complaint denying the substantive
allegations.  Oral  argument  relating to the  certification  of the  collective
action took place on May 12, 2005 and the parties await a ruling from the Court.
Although the outcome of any litigation is uncertain, AIMCO Properties, L.P. does
not believe that the ultimate outcome will have a material adverse effect on its
financial  condition or results of operations.  Similarly,  the General  Partner
does not believe that the ultimate  outcome will have a material  adverse effect
on the Partnership's financial condition or results of operations.

The  Partnership  is unaware  of any other  pending  or  outstanding  litigation
matters  involving  it or its  investment  properties  that are not of a routine
nature arising in the ordinary course of business.

Environmental

Various  Federal,  state and local laws subject  property owners or operators to
liability for management,  and the costs of removal or  remediation,  of certain
hazardous  substances  present on a property.  Such laws often impose  liability
without regard to whether the owner or operator knew of, or was responsible for,
the release or presence of the  hazardous  substances.  The  presence of, or the
failure to manage or remedy properly,  hazardous substances may adversely affect
occupancy at affected  apartment  communities and the ability to sell or finance
affected properties.  In addition to the costs associated with investigation and
remediation  actions brought by government  agencies,  the presence of hazardous
substances  on a  property  could  result in claims by  private  plaintiffs  for
personal injury,  disease,  disability or other  infirmities.  Various laws also
impose  liability for the cost of removal,  remediation or disposal of hazardous
substances  through a  licensed  disposal  or  treatment  facility.  Anyone  who
arranges for the disposal or treatment of hazardous  substances  is  potentially
liable  under such laws.  These laws often impose  liability  whether or not the
person arranging for the disposal ever owned or operated the disposal  facility.
In  connection  with  the  ownership  and  operation  of  its  properties,   the
Partnership could  potentially be liable for environmental  liabilities or costs
associated with its properties.

Mold

The Partnership is aware of lawsuits  against owners and managers of multifamily
properties asserting claims of personal injury and property damage caused by the
presence of mold, some of which have resulted in substantial  monetary judgments
or settlements. The Partnership has only limited insurance coverage for property
damage loss claims  arising from the  presence of mold and for  personal  injury
claims  related  to  mold  exposure.  Affiliates  of the  General  Partner  have
implemented a national  policy and  procedures to prevent or eliminate mold from
its  properties  and the  General  Partner  believes  that these  measures  will
eliminate,  or at least minimize, the effects that mold could have on residents.
To date,  the  Partnership  has not incurred any material  costs or  liabilities
relating to claims of mold exposure or to abate mold conditions. Because the law
regarding  mold is unsettled and subject to change the General  Partner can make
no assurance that liabilities resulting from the presence of or exposure to mold
will not have a material adverse effect on the Partnership's financial condition
or results of operations.

SEC Investigation

The  Central  Regional  Office of the  United  States  Securities  and  Exchange
Commission (the "SEC") is conducting a formal investigation  relating to certain
matters.  Although  the staff of the SEC is not limited in the areas that it may
investigate,   AIMCO  believes  the  areas  of  investigation   include  AIMCO's
miscalculated   monthly  net  rental  income  figures  in  third  quarter  2003,
forecasted  guidance,  accounts  payable,  rent  concessions,   vendor  rebates,
capitalization of payroll and certain other costs, and tax credit  transactions.
At the end of the first quarter of 2005, the SEC added certain tender offers for
limited partnership interests as an area of investigation.  AIMCO is cooperating
fully.  AIMCO is not able to predict  when the  investigation  will be resolved.
AIMCO does not believe  that the ultimate  outcome will have a material  adverse
effect  on its  consolidated  financial  condition  or  results  of  operations.
Similarly,  the General Partner does not believe that the ultimate  outcome will
have a material  adverse  effect on the  Partnership's  financial  condition  or
results of operations.

<PAGE>

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

The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including,  without limitation:  national and local
economic  conditions;  the terms of  governmental  regulations  that  affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates;  financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest;  real estate risks, including variations of real estate values and
the general  economic  climate in local markets and  competition  for tenants in
such markets;  litigation,  including  costs  associated  with  prosecuting  and
defending  claims  and  any  adverse   outcomes,   and  possible   environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.

The Partnership's  investment  properties consist of three apartment  complexes.
The following table sets forth the average  occupancy of the properties for each
of the three months ended March 31, 2005 and 2004:

                                                   Average Occupancy
      Property                                      2005       2004

      Bronson Place Apartments (1)                  84%        89%
         Mountlake Terrace, Washington
      Meadow Wood Apartments (2)                    79%        84%
         Medford, Oregon
      Defoors Crossing Apartments (3)               95%        85%
         Atlanta, Georgia

(1)   The  General  Partner  attributes  the  decrease in average  occupancy  at
      Bronson Place  Apartments to low mortgage  rates  allowing more tenants to
      buy homes and a change in the criteria used to accept new tenants.

(2)   The General Partner attributes the decrease in average occupancy at Meadow
      Wood  Apartments  to a change in the criteria  used to accept new tenants.
      The  change  was  implemented  in an effort to  attract  and retain a more
      stable tenant base.

(3)   The  General  Partner  attributes  the  increase in average  occupancy  at
      Defoors  Crossing  Apartments  to strong  resident  relations and customer
      service, as well as improved marketing to potential quality residents.

The  Partnership's  financial  results depend upon a number of factors including
the  ability to attract  and  maintain  tenants  at the  investment  properties,
interest  rates on mortgage  loans,  costs  incurred  to operate the  investment
properties,  general  economic  conditions  and weather.  As part of the ongoing
business plan of the Partnership, the General Partner monitors the rental market
environment of its investment properties to assess the feasibility of increasing
rents, maintaining or increasing occupancy levels and protecting the Partnership
from increases in expenses.  As part of this plan, the General Partner  attempts
to protect the  Partnership  from the burden of  inflation-related  increases in
expenses by increasing  rents and  maintaining a high overall  occupancy  level.
However,  the  General  Partner  may use  rental  concessions  and  rental  rate
reductions  to offset  softening  market  conditions,  accordingly,  there is no
guarantee that the General Partner will be able to sustain such a plan. Further,
a number of factors which are outside the control of the Partnership such as the
local  economic  climate and  weather can  adversely  or  positively  affect the
Partnership's financial results.

Results of Operations

The  Partnership  realized  net income of  approximately  $81,000  for the three
months ended March 31, 2005, compared to net income of approximately $51,000 for
the three months ended March 31, 2004.  The increase in net income for the three
months  ended  March 31,  2005 is due to an  increase  in total  revenues  and a
decrease in total expenses.

Total  revenues  increased  for the three  months ended March 31, 2005 due to an
increase in rental and other income.  Rental income increased due to an increase
in occupancy  at DeFoors  Crossing  Apartments,  and reduced bad debt expense at
Bronson Place  Apartments,  partially  offset by a decrease in occupancy at both
Meadow Wood Apartments and Bronson Place Apartments.  Other income increased due
to an increase in lease cancellation fees and cleaning and damage fees at Meadow
Wood Apartments.

Total  expenses  decreased  for the three  months  ended March 31, 2005 due to a
decrease in operating and  depreciation  expenses.  Property tax and general and
administrative  expenses  remained  relatively  constant  during the  comparable
periods.  Operating expense decreased primarily due to a decrease in maintenance
expense partially offset by an increase in property expense. Maintenance expense
decreased  due to a decrease in contract  repairs at Bronson  Place  Apartments.
Property  expense  increased due to an increase in payroll and related  employee
benefits at all of the Partnership's investment properties. Depreciation expense
decreased due to assets becoming fully depreciated over the past twelve months.

Included   in  general  and   administrative   expenses   are  the   accountable
reimbursements  charged by an affiliate of the General  Partner as allowed under
the Partnership Agreement.  Also included in general and administrative expenses
at both March 31,  2005 and 2004 are costs  associated  with the  quarterly  and
annual communications with investors and regulatory agencies.

Liquidity and Capital Resources

At  March  31,  2005,  the  Partnership   had  cash  and  cash   equivalents  of
approximately  $319,000  compared to  approximately  $683,000 at March 31, 2004.
Cash and cash equivalents  decreased by approximately $37,000 since December 31,
2004,  due to  approximately  $190,000 and $38,000 of cash used in financing and
investing activities,  respectively, which was partially offset by approximately
$191,000  of cash  provided  by  operating  activities.  Cash used in  financing
activities  consisted  of  distributions  paid to the  partners  and loan  costs
incurred  related to  anticipated  financings  to be obtained  on Bronson  Place
Apartments  and Meadow Wood  Apartments  during the second and third  quarter of
2005,  respectively.  Cash used in  investing  activities  consisted of property
improvements  and  replacements.  The  Partnership  invests its working  capital
reserves in interest bearing accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the various  properties  to  adequately  maintain  the
physical  assets and other operating needs of the Partnership and to comply with
Federal, state and local legal and regulatory requirements.  The General Partner
monitors  developments  in the  area of legal  and  regulatory  compliance.  For
example,  the  Sarbanes-Oxley  Act  of  2002  mandates  or  suggests  additional
compliance  measures  with  regard to  governance,  disclosure,  audit and other
areas.  In light of these changes,  the  Partnership  expects that it will incur
higher expenses related to compliance.  Capital improvements planned for each of
the Partnership's properties are detailed below.

Subsequent to March 31, 2005, the  Partnership  entered into a Purchase and Sale
Contract to sell Meadow Wood Apartments to an  unaffiliated  third party for the
purchase price of $5,075,000.  The anticipated  closing date for the transaction
is July 11, 2005. The carrying amount of the investment  property of Meadow Wood
Apartments was approximately $2,116,000 at March 31, 2005. The operating results
for Meadow Wood  Apartments  for the three  months ended March 31, 2005 and 2004
were  approximately  $38,000 and $48,000,  respectively,  including  revenues of
approximately $158,000 for both periods.

Bronson Place

During  the  three  months  ended  March 31,  2005,  the  Partnership  completed
approximately  $17,000  of capital  improvements  at  Bronson  Place  Apartments
consisting  primarily of floor covering and appliance  replacements  and cabinet
upgrades.   These  improvements  were  funded  from  operating  cash  flow.  The
Partnership  regularly  evaluates the capital improvement needs of the property.
While the Partnership has no material commitments for property  improvements and
replacements,  certain routine expenditures are anticipated during the remainder
of 2005. Such capital  expenditures will depend on the physical condition of the
property as well as the anticipated cash flow generated by the property.

Meadow Wood

During  the  three  months  ended  March 31,  2005,  the  Partnership  completed
approximately   $12,000  of  capital  improvements  at  Meadow  Wood  Apartments
consisting primarily of floor covering and appliance  replacements and an office
computer.   These  improvements  were  funded  from  operating  cash  flow.  The
Partnership  regularly  evaluates the capital improvement needs of the property.
While the Partnership has no material commitments for property  improvements and
replacements,  certain routine expenditures are anticipated during the remainder
of 2005. Such capital  expenditures will depend on the physical condition of the
property as well as the anticipated cash flow generated by the property.

DeFoors Crossing

During  the  three  months  ended  March 31,  2005,  the  Partnership  completed
approximately  $9,000 of capital  improvements  at DeFoors  Crossing  Apartments
consisting  primarily  of  floor  covering  and  appliance  replacements.  These
improvements  were funded from operating cash flow.  The  Partnership  regularly
evaluates the capital  improvement needs of the property.  While the Partnership
has no material commitments for property improvements and replacements,  certain
routine  expenditures are anticipated during the remainder of 2005. Such capital
expenditures  will depend on the  physical  condition of the property as well as
the anticipated cash flow generated by the property.

The additional  capital  expenditures will be incurred only if cash is available
from  operations  or from  Partnership  reserves.  To the  extent  that  capital
improvements are completed,  the Partnership's  distributable cash flow, if any,
may be adversely affected at least in the short term.

The Partnership  distributed the following amounts during the three months ended
March 31, 2005 and 2004 (in thousands, except per unit data):
<TABLE>
<CAPTION>

                   Three Months      Per Limited      Three Months       Per Limited
                      Ended          Partnership         Ended           Partnership
                  March 31, 2005        Unit         March 31, 2004         Unit

<S>                   <C>              <C>                <C>               <C>
Operations            $ 180            $ 2.92             $ --              $ --
</TABLE>

Future cash  distributions  will depend on the levels of net cash generated from
operations,  property sales and/or financings.  The Partnership's cash available
for distribution is reviewed on a monthly basis. There can be no assurance, that
the Partnership  will generate  sufficient  funds from operations  after capital
improvements to permit any additional  distributions  to its partners during the
remainder of 2005 or subsequent periods.

Other

On February 27, 2004, IPT, a subsidiary of AIMCO, reacquired from Everest all of
the capital stock of the General Partner.  In addition to its indirect ownership
of the sole general partner of the  Partnership,  AIMCO and its affiliates owned
24,490 limited  partnership units (the "Units") in the Partnership  representing
40.11% of the outstanding  units at March 31, 2005. A number of these Units were
acquired pursuant to tender offers made by AIMCO or its affiliates. AIMCO or its
affiliates may acquire additional Units of limited  partnership  interest in the
Partnership  in exchange  for cash or a  combination  of cash and units in AIMCO
Properties,  L.P., the operating  partnership of AIMCO,  either through  private
purchases or tender offers. Under the Partnership Agreement, unitholders holding
a majority of the Units are entitled to take action with respect to a variety of
matters that include voting on certain  amendments to the Partnership  Agreement
and voting to remove the General Partner. As a result of its ownership of 40.11%
of the  outstanding  Units at March 31, 2005,  AIMCO and its affiliates are in a
position to influence all such voting decisions with respect to the Partnership.
Although the General  Partner owes fiduciary  duties to the limited  partners of
the Partnership,  the General Partner also owes fiduciary duties to AIMCO as its
sole  stockholder.  As a result,  the duties of the General Partner,  as general
partner, to the Partnership and its limited partners may come into conflict with
the duties of the General Partner to AIMCO as its sole stockholder.

Critical Accounting Policies and Estimates

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

Impairment of Long-Lived Assets

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

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's investment properties.  These factors include, but are not limited
to,  changes  in the  national,  regional  and  local  economic  climate;  local
conditions,  such as an oversupply of multifamily  properties;  competition from
other available  multifamily property owners and changes in market rental rates.
Any adverse changes in these factors could cause impairment of the Partnership's
assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
The Partnership will offer rental concessions during particularly slow months or
in response  to heavy  competition  from other  similar  complexes  in the area.
Rental income attributable to leases, net of any concessions, is recognized on a
straight-line  basis over the term of the lease.  The Partnership  evaluates all
accounts  receivable  from  residents and  establishes  an allowance,  after the
application of security deposits,  for accounts greater than 30 days past due on
current tenants and all receivables due from former tenants.

ITEM 3.     CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures.  The Partnership's management,  with the
participation of the principal executive officer and principal financial officer
of the General Partner,  who are the equivalent of the  Partnership's  principal
executive officer and principal financial officer,  respectively,  has evaluated
the  effectiveness of the Partnership's  disclosure  controls and procedures (as
such term is defined  in Rules  13a-15(e)  and  15d-15(e)  under the  Securities
Exchange  Act of 1934,  as amended  (the  "Exchange  Act")) as of the end of the
period covered by this report. Based on such evaluation, the principal executive
officer and  principal  financial  officer of the General  Partner,  who are the
equivalent  of the  Partnership's  principal  executive  officer  and  principal
financial  officer,  respectively,  have  concluded  that, as of the end of such
period, the Partnership's disclosure controls and procedures are effective.

(b) Internal Control Over Financial  Reporting.  There have not been any changes
in the Partnership's  internal control over financial reporting (as such term is
defined in Rules  13a-15(f)  and  15d-15(f)  under the Exchange  Act) during the
fiscal quarter to which this report relates that have  materially  affected,  or
are reasonably likely to materially affect,  the Partnership's  internal control
over financial reporting.



<PAGE>


                           PART II - OTHER INFORMATION


ITEM 1.     LEGAL PROCEEDINGS

AIMCO Properties L.P. and NHP Management Company, both affiliates of the General
Partner,  are defendants in a lawsuit alleging that they willfully  violated the
Fair Labor Standards Act ("FLSA") by failing to pay maintenance workers overtime
for all hours  worked in excess of forty per week.  The  complaint  attempts  to
bring a collective  action under the FLSA and seeks to certify state  subclasses
in  California,  Maryland,  and the  District  of  Columbia.  Specifically,  the
plaintiffs  contend that AIMCO Properties L.P. and NHP Management Company failed
to  compensate  maintenance  workers  for time  that they  were  required  to be
"on-call."  Additionally,  the complaint  alleges AIMCO  Properties L.P. and NHP
Management  Company failed to comply with the FLSA in  compensating  maintenance
workers for time that they worked in responding to a call while  "on-call."  The
defendants have filed an answer to the amended complaint denying the substantive
allegations.  Oral  argument  relating to the  certification  of the  collective
action took place on May 12, 2005 and the parties await a ruling from the Court.
Although the outcome of any litigation is uncertain, AIMCO Properties, L.P. does
not believe that the ultimate outcome will have a material adverse effect on its
financial  condition or results of operations.  Similarly,  the General  Partner
does not believe that the ultimate  outcome will have a material  adverse effect
on the Partnership's financial condition or results of operations.

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On February 24, 2005, the Partnership sought the vote of the limited partners to
an amendment  (the  "Amendment")  of the Agreement of Limited  Partnership  (the
"Partnership  Agreement"),  to  eliminate  certain  limitations  on the terms of
financings that the General Partner may obtain on behalf of the Partnership.

On March 25, 2005, the consent  solicitation  expired pursuant to its terms. The
consent of the requisite number of limited  partners was received.  Accordingly,
the  Partnership  Agreement  has been  amended to  eliminate  the portion of the
Partnership  Agreement  which  limited  the terms of  financings  that  could be
obtained on behalf of the Partnership.

ITEM 5.     OTHER INFORMATION

Subsequent to March 31, 2005, on May 10, 2005,  the  Partnership  entered into a
Purchase and Sale Contract (the "Purchase  Agreement")  with a third party,  The
Meadow  Wood  Investors,   LLC,  an  Oregon  limited   liability   company  (the
"Purchaser")  to sell Meadow Wood  Apartments to the Purchaser for a sales price
of $5,075,000.

The  following  is a  summary  of the  terms  and  conditions  of  the  Purchase
Agreement,  which  summary is  qualified  in its  entirety by  reference  to the
Purchase Agreement,  a copy of which is filed as Exhibit 10.9 to this report and
incorporated herein by reference.

PURCHASE PRICE. The purchase price is $5,075,000,  subject to certain prorations
and adjustments at the closing. The Purchaser delivered a deposit of $100,000.

CLOSING. The closing is to occur thirty days after the satisfaction or waiver of
the closing  conditions.  The  Purchaser has the right to extend the closing one
time for up to thirty  days by  delivering  written  notice  and  delivering  an
additional  (non-refundable)  $50,000 payment. The expected closing date for the
transaction is July 11, 2005.

COSTS AND FEES.  The  Partnership  and  Purchaser  will each pay one-half of any
transfer,  sales,  use, gross  receipts or similar taxes.  The Purchaser will be
solely responsible for all of the recording costs, any premiums or fees required
to be paid  with  respect  to the  title  policy  and one half of the  customary
closing costs of the escrow agent. The Partnership will pay the base premium for
the title  policy  and one half of the  customary  closing  costs of the  escrow
agent.

REPRESENTATIONS  AND  WARRANTIES.  The  Partnership  and the Purchaser each made
limited representations and warranties to the other.

CONDITIONS  TO  CLOSING  AND  CLOSING  DELIVERIES.  The  closing  is  subject to
customary closing conditions and customary closing deliveries.

RISK OF LOSS. The risk of loss or damage to Meadow Wood  Apartments by reason of
any insured or uninsured  casualty  during the period  through and including the
closing date will be borne by the Partnership. The Partnership must maintain all
of its existing  insurance  coverage on Meadow Wood Apartments in full force and
effect until the closing date.

ASSIGNMENT.  With  the  exception  of an  assignment  to  an  affiliate  of  the
Purchaser,  the Purchase  Agreement is not  assignable by the Purchaser  without
first obtaining the prior written approval of the Partnership.

DEFAULTS AND REMEDIES.  If the Purchaser  defaults in its obligations to deliver
when required any required  deposits,  the purchase price or any other specified
deliveries,  then,  immediately  and without notice or cure, the Purchaser shall
forfeit such deposits to the  Partnership,  and neither party shall be obligated
to proceed with the purchase and sale of Meadow Wood Apartments. The Partnership
expressly waives the remedies of specific performance and additional damages for
any such defaults by the Purchaser.

If the  Partnership,  prior to the  closing,  defaults  in its  representations,
warranties,  covenants,  or obligations then the Purchaser has the option of (i)
terminating  the Purchase  Agreement,  having  returned any deposits made by the
Purchaser, and recovering, as its sole recoverable damages its documented direct
and  actual  out-of-pocket  expenses  and costs up to  $20,000  or (ii)  seeking
specific  performance  of the  Partnership's  obligation  to  deliver  the  deed
pursuant.

ITEM 6.     EXHIBITS

See Exhibit Index.


<PAGE>


                                   SIGNATURES



In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.



                                    UNITED INVESTORS INCOME PROPERTIES


                                    By:   United Investors Real Estate, Inc.
                                          Its General Partner

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

                                    By:   /s/Stephen B. Waters
                                          Stephen B. Waters
                                          Vice President

                                    Date: May 13, 2005



<PAGE>


                       UNITED INVESTORS INCOME PROPERTIES

                                INDEX TO EXHIBITS


Exhibit


       1          Form  of  Dealer  Manager   Agreement  between  the  General
                  Partner   and  the  Dealer   Manager,   including   Form  of
                  Soliciting  Broker  Agreement;  incorporated by reference to
                  Exhibit  1  to   Partnership's   Amendment  to  Registration
                  Statement  (File No.  33-20350)  previously  filed on May 2,
                  1988.

       1.1        Amendment  to  Dealer  Manager   Agreement;   incorporated  by
                  reference to Exhibit 1.1 to Post-Effective  Amendment No. 2 to
                  Partnership's Registration Statement previously filed on March
                  21, 1989.

       4.1        Form of Subscription  Agreement;  incorporated by reference as
                  part  of  the   Prospectus   of   Partnership   contained   in
                  Partnership's  Amendment to Registration  Statement previously
                  filed on May 2, 1988.

       4.2        Form of  Agreement  of  Limited  Partnership  of  Partnership;
                  incorporated  by  reference  as  part  of  the  Prospectus  of
                  Partnership   contained   in   Partnership's    Amendment   to
                  Registration Statement previously filed on May 2, 1988.

       4.3        Tenth  Amendment  to  Agreement  of  Limited   Partnership  of
                  Partnership;  incorporated  by  reference  to  Exhibit  4.3 to
                  Partnership's  Quarterly  Report on Form 10-Q previously filed
                  on May 15, 1989.

       4.4        Certificate of Limited Partnership (Exhibit 3 to Partnership's
                  Form 8-K filed on April 29, 1991,  is  incorporated  herein by
                  reference).

       4.5        Amendment to Agreement of Limited Partnership  effective March
                  28, 2005 filed with Partnership's Quarterly Report on Form 10Q
                  for the period ended March 31, 2005.

      10.2        Agreement of Purchase and Sale,  dated June 22, 1988,  between
                  United  Investors  Real  Estate,  Inc.,  as nominee for United
                  Investors  Income  Properties,  as purchaser,  and  Nilsen/Bay
                  Ridge  Development,  Inc.  and MBIV  Development,  as  seller,
                  relating  to  Bronson  Place   Apartments;   incorporated   by
                  reference to Exhibit 10.1 to Partnership's Quarterly Report on
                  Form 10-Q previously filed on August 11, 1988.

      10.3        Agreement  of  Purchase  and Sale,  dated  October  20,  1988,
                  between United Investors Real Estate, Inc., as purchaser,  and
                  Defoors  Crossing  Associates,  Ltd.,  as seller,  relating to
                  Defoors   Crossing   Apartments,   and   amendments   thereto;
                  incorporated  by reference  to Exhibit 10.3 to  Post-Effective
                  Amendment  No.1  to   Partnership's   Registration   Statement
                  previously filed on February 1, 1989.

      10.4        Agreement of Purchase and Sale,  dated June 29, 1989,  between
                  United  Investors  Real Estate,  Inc.,  as  purchaser  and CMW
                  Properties, as seller, relating to Meadow Wood Apartments, and
                  amendments thereto;  incorporated by reference to Exhibit 10.4
                  to  Partnership's  Current Report on Form 8-K previously filed
                  on October 17, 1989.

<PAGE>

      10.8        Stock Purchase  Agreement dated December 4, 1992,  showing the
                  purchase of 100% of the outstanding  stock of United Investors
                  Real  Estate,  Inc.  by MAE GP  Corporation;  incorporated  by
                  reference to Exhibit 10.8 to  Partnership's  Current Report on
                  Form 8-K previously filed on December 31, 1992.

      10.9        Purchase and Sale Contract  between  United  Investors  Income
                  Properties, a Missouri limited partnership, as Seller, and The
                  Meadow  Wood  Investors,  LLC,  an  Oregon  limited  liability
                  company, as Purchaser, effective May 10, 2005.

      31.1        Certification  of  equivalent  of  Chief  Executive  Officer
                  pursuant     to     Securities     Exchange     Act    Rules
                  13a-14(a)/15d-14(a),  as Adopted  Pursuant to Section 302 of
                  the Sarbanes-Oxley Act of 2002.

      31.2        Certification  of  equivalent  of  Chief  Financial  Officer
                  pursuant     to     Securities     Exchange     Act    Rules
                  13a-14(a)/15d-14(a),  as Adopted  Pursuant to Section 302 of
                  the Sarbanes-Oxley Act of 2002.

      32.1        Certification of the equivalent of the Chief Executive Officer
                  and Chief  Financial  Officer  Pursuant  to 18 U.S.C.  Section
                  1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002.



<PAGE>


Exhibit 4.5

                       UNITED INVESTORS INCOME PROPERTIES

                                  AMENDMENT TO
                        AGREEMENT OF LIMITED PARTNERSHIP


      This Amendment to the Agreement of Limited  Partnership  ("Amendment")  is
effective  as of the 28th day of  March  2005  (the  "Effective  Date"),  and is
entered  into by and among  United  Investors  Real  Estate,  Inc.,  a  Delaware
corporation  (the  "General  Partner")  and the limited  partners  (the "Limited
Partners") of United Investors Income Properties, a Missouri limited partnership
(the "Partnership").

      WHEREAS,  The General Partner,  on behalf of the Partnership,  submitted a
Consent Solicitation Statement, dated February 24, 2005, to the Limited Partners
seeking approval of this Amendment;

      WHEREAS,  A majority in interest of the Limited Partners have consented to
this Amendment.

      NOW,  THEREFORE,  the Partnership  Agreement is hereby amended as follows:
      Section 9(c)(xx) of the Partnership Agreement is deleted in its
entirety.

      Capitalized  terms used in this Amendment shall,  unless otherwise defined
herein, have the same meanings ascribed to them in the Partnership Agreement.

      This Amendment may be signed in any number of counterparts,  each of which
shall be an original for all  purposes,  but all of which taken  together  shall
constitute  only one agreement.  The  production of any executed  counterpart of
this  Amendment  shall be  sufficient  for all  purposes  without  producing  or
accounting for any other counterpart thereof.

      The Partners  shall  execute and deliver such further  instruments  and do
such  further  acts and things as may be  reasonably  required  to carry out the
intent and purposes of this Amendment.

      This  Amendment  shall  be  governed  by  and  construed  as to  validity,
enforcement, interpretations,  construction, effect and in all other respects by
the internal laws of the State of Missouri.

      If any  provision or  provisions  herein are  determined  to be invalid or
contrary to any existing or future law, such provisions shall be deemed void and
of no effect and such  invalidity  shall not impair the  operation  of or affect
those portions of this Amendment which are valid.

      Except  as set  forth  above,  all  of the  terms  and  provisions  of the
Partnership Agreement remain unmodified and in full force and effect.


<PAGE>




      IN  WITNESS  WHEREOF,  this  Amendment  has been duly  executed  as of the
Effective Date.


GENERAL PARTNER:                     UNITED INVESTORS REAL ESTATE, INC.
                                     a Delaware corporation

                                    By: /s/Martha L. Long
                                    Name: Martha L. Long
                                    Title: Senior Vice President


LIMITED PARTNERS:                    Each Limited Partner whose name appears on
                                     Exhibit A to the Partnership Agreement

                                     By:  United Investors Real Estate, Inc.
                                          Their Attorney-In-Fact

                                    By: /s/Martha L. Long
                                    Name: Martha L. Long
                                    Title: Senior Vice President





<PAGE>

                                                                  Exhibit 10.9



                           PURCHASE AND SALE CONTRACT

                                     BETWEEN



                       UNITED INVESTORS INCOME PROPERTIES,

                         a Missouri limited partnership





                                    AS SELLER





                                       AND





                         THE MEADOW WOOD INVESTORS, LLC,

                       an Oregon limited liability company



                                  AS PURCHASER

                             MEADOW WOOD APARTMENTS





<PAGE>




                                                                         Page(s)



                                TABLE OF CONTENTS


                                                                            Page


ARTICLE I         DEFINED TERMS.............................................1

ARTICLE II        PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT...............6
      2.1   Purchase and Sale.  ............................................6
      2.2   Purchase Price and Deposit......................................6
      2.3   Escrow Provisions Regarding Deposit.............................7

ARTICLE III       FEASIBILITY PERIOD........................................8
      3.1   Feasibility Period..............................................8
      3.2   Expiration of Feasibility Period................................9
      3.3   Conduct of Investigation........................................9
      3.4   Purchaser Indemnification.......................................9
      3.5   Property Materials.............................................10
      3.6   Property Contracts.............................................11

ARTICLE IV        TITLE....................................................12
      4.1   Title Documents................................................12
      4.2   Survey.........................................................12
      4.3   Objection and Response Process.................................12
      4.4   Permitted Exceptions...........................................13
      4.6   Purchaser Financing.  .........................................13

ARTICLE V         CLOSING..................................................14
      5.1   Closing Date...................................................14
            14
      5.2   Seller Closing Deliveries......................................14
      5.3   Purchaser Closing Deliveries...................................15
      5.4   Closing Prorations and Adjustments.............................16
      5.5   Post Closing Adjustments.......................................19

ARTICLE VI        REPRESENTATIONS AND WARRANTIES OF SELLER AND
                  PURCHASER................................................19
      6.1   Seller's Representations.......................................19
      6.2   AS-IS..........................................................20
      6.3   Survival of Seller's Representations...........................21
      6.4   Definition of Seller's Knowledge...............................21
      6.5   Representations And Warranties Of Purchaser....................22

ARTICLE VII       OPERATION OF THE PROPERTY................................23
      7.1   Leases and Property Contracts..................................23
      7.2   General Operation of Property..................................23
      7.3   Liens..........................................................23

ARTICLE VIII      CONDITIONS PRECEDENT TO CLOSING..........................24
      8.1   Purchaser's Conditions to Closing..............................24

ARTICLE IX        BROKERAGE................................................25
      9.1   Indemnity......................................................25
      9.2   Broker Commission.  ...........................................25
      9.3   Broker Signature Page..........................................25

ARTICLE X         DEFAULTS AND REMEDIES....................................25
      10.1  Purchaser Default..............................................25
      10.2  Seller Default.................................................26

ARTICLE XI        RISK OF LOSS OR CASUALTY.................................27
      11.1  Major Damage...................................................27
      11.2  Minor Damage...................................................27
      11.3  Repairs........................................................27

ARTICLE XII       EMINENT DOMAIN...........................................28
      12.1  Eminent Domain.................................................28

ARTICLE XIII      MISCELLANEOUS............................................28
      13.1  Binding Effect of Contract.....................................28
      13.2  Exhibits And Schedules.........................................28
      13.3  Assignability..................................................28
      13.4  Binding Effect.................................................28
      13.5  Captions.......................................................29
      13.6  Number And Gender Of Words.....................................29
      13.7  Notices........................................................29
      13.8  Governing Law And Venue........................................31
      13.9  Entire Agreement.  ............................................31
      13.10 Amendments.....................................................31
      13.11 Severability...................................................31
      13.12 Multiple Counterparts/Facsimile Signatures.....................31
      13.13 Construction.  ................................................31
      13.14 Confidentiality................................................32
      13.15 Time Of The Essence............................................32
      13.16 Waiver.........................................................32
      13.17 Attorneys Fees.................................................32
      13.18 Time Periods...................................................32
      13.19 1031 Exchange..................................................32
      13.20 No Personal Liability of Officers, Trustees or Directors
            of Seller's Partners.  ........................................33
      13.21 No Exclusive Negotiations......................................33
      13.22 ADA Disclosure.................................................33
      13.23 No Recording...................................................34
      13.24 Relationship of Parties........................................34
      13.25 Dispute Resolution.  ..........................................34
      13.26 AIMCO Marks....................................................34
      13.27 Non-Solicitation of Employees..................................35
      13.28 Survival.......................................................35
      13.29 Multiple Purchasers............................................35
      13.30 Statutory Land Use Disclaimer.  ...............................36


<PAGE>







                           PURCHASE AND SALE CONTRACT

      THIS PURCHASE AND SALE CONTRACT  (this  "Contract")  is entered into as of
the 10th day of May, 2005 (the "Effective Date") by and between UNITED INVESTORS
INCOME  PROPERTIES,  a Missouri limited  partnership,  having an address at 4582
South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237 ("Seller"),  and
THE MEADOW WOOD INVESTORS,  LLC, an Oregon limited liability  company,  having a
principal  address  at 1119  Kent  Street,  Suite  D,  Missoula,  Montana  59801
("Purchaser").

      NOW,  THEREFORE,  in  consideration  of mutual covenants set forth herein,
Seller and Purchaser hereby agree as follows:

                                    RECITALS

      A.....Seller  owns the real estate located in Jackson County,  Oregon,  as
more particularly described in Exhibit A attached hereto and made a part hereof,
and the improvements thereon, commonly known as the Meadow Wood Apartments.

      B.....Purchaser  desires to  purchase,  and Seller  desires to sell,  such
land,  improvements and certain associated property, on the terms and conditions
set forth below.
                                    ARTICLE I
                                  DEFINED TERMS

1.1  Unless  otherwise  defined  herein,   any  term  with  its  initial  letter
 capitalized  in this Contract  shall have the meaning set forth in this ARTICLE
 1.
1.1.1  "ADA"  shall  have  the  meaning  set  forth  in  Section  13.22.   1.1.2
Intentionally  left blank 1.1.3  "AIMCO"  shall mean  Apartment  Investment  and
Management  Company.  1.1.4  "AIMCO  Marks" means all words,  phrases,  slogans,
materials, software, proprietary systems, trade secrets, proprietary information
and lists, and other intellectual property owned or used by Seller, the Property
Manager, or AIMCO in the marketing,  operation or use of the Property (or in the
marketing,  operation  or use of any other  properties  managed by the  Property
Manager or owned by AIMCO or an affiliate of either Property Manager or AIMCO).
1.1.5 Intentionally left blank
1.1.6 Intentionally left blank
1.1.7 Intentionally left blank
1.1.8 "Broker" shall have the meaning set forth in Section 9.1. 1.1.9  "Business
Day" means any day other than a Saturday  or Sunday or Federal  holiday or legal
holiday in the States of Colorado, California, or Oregon. 1.1.10 "Closing" means
the consummation of the purchase and sale and related transactions  contemplated
by this Contract in accordance with the terms and conditions of this Contract.
1.1.11 "Closing Date" means the date on which date the Closing of the conveyance
of the Property is required to be held  pursuant to Section 5.1.  1.1.12  "Code"
shall have the meaning set forth in Section  2.3.6.  1.1.13  Intentionally  left
blank  1.1.14  "Consultants"  shall have the meaning  set forth in Section  3.1.
1.1.15 "Damage Notice" shall have the meaning set forth in Section 11.1.  1.1.16
"Deed" shall have the meaning set forth in Section 5.2.1.  1.1.17  Intentionally
left blank 1.1.18  "Deposit"  shall have the meaning set forth in Section 2.2.1.
1.1.19 "Escrow Agent" shall have the meaning set forth in Section 2.2.1.  1.1.20
"Excluded  Permits"  means  those  Permits  which,  under  applicable  law,  are
nontransferable and such other Permits, if any, as may be designated as Excluded
Permits on Schedule 1.1.20.
1.1.21      "Existing Survey" shall have the meaning set forth in Section 4.2.
1.1.22      "Feasibility   Period"   shall  have  the  meaning  set  forth  in
Section 3.1.
1.1.23      "FHA" shall have the meaning set forth in Section 13.22.
1.1.24      "Final  Response  Deadline"  shall have the  meaning  set forth in
Section 4.3.
1.1.25 "Fixtures and Tangible Personal Property" means all fixtures,  furniture,
furnishings,  fittings, equipment,  machinery,  apparatus,  appliances and other
articles  of  tangible   personal  property  located  on  the  Land  or  in  the
Improvements  as of the Effective Date and used or usable in connection with the
occupation  or  operation  of all or any part of the  Property,  but only to the
extent transferable. The term "Fixtures and Tangible Personal Property" does not
include  (a)  equipment  leased  by  Seller  and the  interest  of Seller in any
equipment  provided to the  Property for use, but not owned or leased by Seller,
or (b) property owned or leased by any Tenant or guest, employee or other person
furnishing  goods or services to the  Property,  or (c) property  and  equipment
owned by Seller, which in the ordinary course of business of the Property is not
used exclusively for the business,  operation or management of the Property,  or
(d) the property and equipment, if any, expressly identified in Schedule 1.1.25.
1.1.26      "General   Assignment"   shall  have  the  meaning  set  forth  in
Section 5.2.3.
1.1.27      "Good Funds" shall have the meaning set forth in Section 2.2.1.
1.1.28      "Improvements"  means all  buildings and  improvements  located on
the Land taken "as is."
1.1.29      Intentionally left blank
1.1.30 "Land" means all of those certain  tracts of land located in the State of
Oregon  described  on Exhibit A, and all rights,  privileges  and  appurtenances
pertaining thereto.
1.1.31  "Lease(s)" means the interest of Seller in and to all leases,  subleases
and other occupancy  contracts,  whether or not of record, which provide for the
use or occupancy of space or facilities on or relating to the Property and which
are in force as of the Closing Date for the applicable Property.
1.1.32  "Leases  Assignment"  shall have the meaning set forth in Section 5.2.4.
1.1.33   Intentionally  left  blank  1.1.34   Intentionally  left  blank  1.1.35
Intentionally left blank 1.1.36  Intentionally  left blank 1.1.37  Intentionally
left blank  1.1.38  Intentionally  left  blank  1.1.39  "Losses"  shall have the
meaning set forth in Section 3.4.1.  1.1.40  "Materials"  shall have the meaning
set forth in Section  3.5.  1.1.41  "Miscellaneous  Property  Assets"  means all
contract rights,  leases,  concessions,  warranties,  plans,  drawings and other
items of intangible  personal property relating to the ownership or operation of
the Property  and owned by Seller,  excluding,  however,  (a)  receivables,  (b)
Property Contracts, (c) Leases, (d) Permits, (e) cash or other funds, whether in
petty cash or house  "banks,"  or on deposit in bank  accounts or in transit for
deposit,  (f) refunds,  rebates or other claims,  or any interest  thereon,  for
periods or events  occurring  prior to the Closing Date, (g) utility and similar
deposits,  (h) insurance or other prepaid items, (i) Seller's  proprietary books
and records,  or (j) any right,  title or interest in or to the AIMCO Marks. The
term "Miscellaneous  Property Assets" also shall include all of Seller's rights,
if any, in and to the name "Meadow Wood  Apartments" as it relates solely to use
in  connection  with the Property  (and not with  respect to any other  property
owned or  managed  by  Seller,  Property  Manager,  AIMCO,  or their  respective
affiliates).
1.1.42      Intentionally left blank
1.1.43      "Objection   Deadline"   shall  have  the  meaning  set  forth  in
Section 4.3.
1.1.44      "Objection   Notice"   shall  have  the   meaning   set  forth  in
Section 4.3.
1.1.45      "Objections" shall have the meaning set forth in Section 4.3.
1.1.46      "Permits"   means  all  licenses   and  permits   granted  by  any
governmental  authority having  jurisdiction over the Property owned by Seller
and required in order to own and operate the Property.
1.1.47  "Permitted  Exceptions" shall have the meaning set forth in Section 4.4.
1.1.48  "Prohibited  Person" means any of the following:  (a) a person or entity
that is listed in the Annex to, or is otherwise  subject to the  provisions  of,
Executive Order No. 13224 on Terrorist Financing  (effective September 24, 2001)
(the  "Executive  Order");  (b) a person or entity  owned or  controlled  by, or
acting for or on behalf of any person or entity  that is listed in the Annex to,
or is otherwise  subject to the provisions of, the Executive Order; (c) a person
or entity that is named as a "specially designated national" or "blocked person"
on the most current list published by the U.S. Treasury  Department's  Office of
Foreign     Assets    Control     ("OFAC")    at    its    official     website,
http://www.treas.gov/offices/enforcement/ofac/;  (d) a person or entity  that is
otherwise the target of any economic sanctions program currently administered by
OFAC;  or (e) a person or entity  that is  affiliated  with any person or entity
identified in clause (a), (b), (c) and/or (d) above.
1.1.49  "Property" means (a) the Land and Improvements and all rights of Seller,
if any, in and to all of the easements,  rights,  privileges,  and appurtenances
belonging  or in any way  appertaining  to the  Land and  Improvements,  (b) the
right,  if any and only to the extent  transferable,  of Seller in the  Property
Contracts,  Leases,  Permits (other than Excluded Permits), and the Fixtures and
Tangible Personal Property,  and (c) the Miscellaneous  Property Assets owned by
Seller which are located on the Property and used in its operation.
1.1.50 "Property Contracts" means all contracts,  agreements,  equipment leases,
purchase  orders,  maintenance,   service,  or  utility  contracts  and  similar
contracts,  excluding  Leases,  which  relate  to  the  ownership,  maintenance,
construction or repair and/or operation of the Property,  but only to the extent
assignable by their terms or applicable  law  (including  any contracts that are
assignable with the consent of the applicable vendor), and not including (a) any
national  contracts  entered  into by Seller,  Property  Manager,  or AIMCO with
respect to the Property (i) which terminate  automatically  upon transfer of the
Property by Seller, or (ii) which Seller, in Seller's sole discretion, elects to
terminate with respect to the Property  effective as of the Closing Date, or (b)
any property management contract for the Property.
1.1.51 "Property  Contracts  Notice" shall have the meaning set forth in Section
3.6. 1.1.52 "Property Manager" shall have the meaning set forth in Section 6.4.
1.1.53      "Proration   Schedule"   shall  have  the  meaning  set  forth  in
Section 5.4.1.
1.1.54      "Purchase  Price" means the  consideration to be paid by Purchaser
to Seller for the purchase of the Property pursuant to Section 2.2.
1.1.55      "Records  Disposal  Notice"  shall have the  meaning  set forth in
Section 5.4.12.
1.1.56      "Records  Hold Period" shall have the meaning set forth in Section
5.4.12.
1.1.57      "Regional  Property  Manager"  shall have the meaning set forth in
Section  6.4.
1.1.58      Intentionally left blank
1.1.59      "Required  Assignment Consent" shall have the meaning set forth in
Section 3.6.
1.1.60      "Response   Deadline"   shall  have  the   meaning  set  forth  in
Section 4.3.
1.1.61      "Response Notice" shall have the meaning set forth in Section 4.3.
1.1.62      Intentionally left blank
1.1.63      "Seller's  Indemnified  Parties"  shall have the meaning set forth
in Section  3.4.1.
1.1.64      "Seller's  Property-Related  Files  and  Records"  shall  have the
meaning set forth in Section 5.4.12.
1.1.65      "Seller's  Representations"  shall have the  meaning  set forth in
Section 6.1.
1.1.66      Intentionally left blank
1.1.67      "Survey" shall have the meaning ascribed thereto in Section 4.2.
1.1.68      "Survival Period" shall have the meaning set forth in Section 6.3.
1.1.69      "Survival  Provisions" shall have the meaning set forth in Section
13.28.
1.1.70 "Tenant" means any person or entity entitled to occupy any portion of the
Property under a Lease.  1.1.71 "Tenant  Deposits" means all security  deposits,
prepaid rentals,  cleaning fees and other refundable deposits and fees collected
from  Tenants,  plus any  interest  accrued  thereon,  paid by Tenants to Seller
pursuant to the Leases.  Tenant  Deposits  shall not include any  non-refundable
deposits  or fees paid by Tenants to Seller,  either  pursuant  to the Leases or
otherwise.  1.1.72 "Tenant  Security Deposit Balance" shall have the meaning set
forth in Section 5.4.6.2.
1.1.73  "Terminated  Contracts" shall have the meaning set forth in Section 3.6.
1.1.74 Intentionally left blank 1.1.75 "Third-Party  Reports" means any reports,
studies  or  other  information  prepared  or  compiled  for  Purchaser  by  any
Consultant or other third-party in connection with Purchaser's  investigation of
the Property.  1.1.76 "Title Commitment" shall have the meaning ascribed thereto
in Section 4.1.
1.1.77      "Title  Documents"  shall have the  meaning  set forth in Section
4.1.
1.1.78      "Title Insurer" shall have the meaning set forth in Section 2.2.1.
1.1.79      "Title Policy" shall have the meaning set forth in Section  4.1.
1.1.80      "Uncollected  Rents"  shall have the  meaning set forth in Section
5.4.6.1.
1.1.81      Intentionally left blank
1.1.82      "Vendor  Terminations" shall have the meaning set forth in Section
5.2.5.
                                   ARTICLE II
                 PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT

2.1   Purchase  and Sale.  Seller  agrees to sell and convey the  Property  to
 Purchaser  and Purchaser  agrees to purchase the Property  from Seller,  all in
 accordance with the terms and conditions set forth in this Contract.
2.2 Purchase Price and Deposit.  The total purchase price ("Purchase Price") for
 the Property shall be an amount equal to Five Million Seventy-Five Thousand and
 no/100  Dollars  ($5,075,000.00),  which amount shall be paid by Purchaser,  as
 follows:
2.2.1 On the Effective  Date,  Purchaser  shall deliver to First  American Title
Insurance Company, c/o Carol L. Weir, Escrow Officer, 1 First American Way, Bldg
1, Santa Ana,  CA 92707,  800-854-3643  ("Escrow  Agent" or "Title  Insurer")  a
deposit  (the   "Deposit")   of  One  Hundred   Thousand   and  no/100   Dollars
($100,0000.00)  by wire transfer of immediately  available funds ("Good Funds").
The Deposit shall be held and disbursed in accordance with the escrow provisions
set forth in Section 2.3.
2.2.2 Intentionally left blank.
2.2.3 Intentionally left blank.
2.2.4 The balance of the Purchase  Price for the  Property  shall be paid to and
received by Escrow Agent by wire transfer of Good Funds no later than 11:00 a.m.
(in the time zone in which Escrow Agent is located) on the Closing Date.
2.3   Escrow Provisions Regarding Deposit.
2.3.1  Escrow  Agent shall hold the Deposit and make  delivery of the Deposit to
the party entitled thereto under the terms of this Contract.  Escrow Agent shall
invest the Deposit in such short-term,  high-grade securities,  interest-bearing
bank accounts,  money market funds or accounts,  bank certificates of deposit or
bank repurchase  contracts as Escrow Agent,  in its discretion,  deems suitable,
and all interest and income  thereon  shall become part of the Deposit and shall
be remitted to the party entitled to the Deposit pursuant to this Contract.
2.3.2 Escrow Agent shall hold the Deposit  until the earlier  occurrence  of (i)
the  Closing  Date,  at which  time the  Deposit  shall be applied  against  the
Purchase  Price,  or (ii) the date on which Escrow Agent shall be  authorized to
disburse  the  Deposit as set forth in  Section  2.3.3.  The tax  identification
numbers of the parties shall be furnished to Escrow Agent upon request. 2.3.3 If
the Deposit has not been released  earlier in accordance with Section 2.3.2, and
either  party  makes a written  demand  upon  Escrow  Agent for  payment  of the
Deposit,  Escrow  Agent  shall give  written  notice to the other  party of such
demand.  If Escrow  Agent does not  receive a written  objection  from the other
party to the proposed  payment  within 5 Business  Days after the giving of such
notice,  Escrow  Agent is hereby  authorized  to make such  payment  (subject to
Purchaser's obligation under Section 3.5.2 to return all Third-Party Reports and
information and Materials provided to Purchaser as a pre-condition to the return
of the  Deposit  to  Purchaser).  If Escrow  Agent  does  receive  such  written
objection within such 5-Business Day period, Escrow Agent shall continue to hold
such amount until otherwise directed by written instructions from the parties to
this Contract or a final  judgment or  arbitrator's  decision.  However,  Escrow
Agent  shall  have the right at any time to deposit  the  Deposit  and  interest
thereon,  if any, with a court of competent  jurisdiction  in the state in which
the Property is located.  Escrow Agent shall give written notice of such deposit
to Seller and Purchaser.  Upon such deposit,  Escrow Agent shall be relieved and
discharged of all further obligations and responsibilities hereunder.
2.3.4  The  parties  acknowledge  that  Escrow  Agent  is  acting  solely  as  a
stakeholder at their request and for their convenience,  that Escrow Agent shall
not be deemed to be the agent of either of the  parties  for any act or omission
on its part unless  taken or suffered in bad faith in willful  disregard of this
Contract  or  involving  gross  negligence.  Seller and  Purchaser  jointly  and
severally  shall  indemnify and hold Escrow Agent  harmless from and against all
costs, claims and expenses,  including  reasonable  attorney's fees, incurred in
connection with the performance of Escrow Agent's duties hereunder,  except with
respect to actions or omissions  taken or suffered by Escrow Agent in bad faith,
in willful  disregard of this Contract or involving gross negligence on the part
of the Escrow Agent. 2.3.5 The parties shall deliver to Escrow Agent an executed
copy of this Contract,  which shall  constitute the sole  instructions to Escrow
Agent.  Escrow Agent shall execute the signature  page for Escrow Agent attached
hereto with respect to the  provisions of this Section 2.3;  provided,  however,
that (a) Escrow  Agent's  signature  hereon shall not be a  prerequisite  to the
binding  nature of this  Contract on  Purchaser  and Seller,  and the same shall
become fully  effective  upon  execution by  Purchaser  and Seller,  and (b) the
signature of Escrow  Agent will not be necessary to amend any  provision of this
Contract other than this Section 2.3.
2.3.6 Escrow Agent, as the person responsible for closing the transaction within
the meaning of Section  6045(e)(2)(A)  of the Internal  Revenue Code of 1986, as
amended (the "Code"),  shall file all necessary information,  reports,  returns,
and statements regarding the transaction required by the Code including, but not
limited  to, the tax  reports  required  pursuant  to Section  6045 of the Code.
Further, Escrow Agent agrees to indemnify and hold Purchaser,  Seller, and their
respective  attorneys and brokers harmless from and against any Losses resulting
from Escrow Agent's failure to file the reports Escrow Agent is required to file
pursuant to this section. 2.3.7 The provisions of this Section 2.3 shall survive
the  termination  of this Contract,  and if not so  terminated,  the Closing and
delivery of the Deed to Purchaser.

                                  ARTICLE III
                               FEASIBILITY PERIOD

3.1  Feasibility  Period.  Subject to the terms of  Section  3.3 and 3.4 and the
 right of Tenants under the Leases, from the Effective Date to and including the
 date  which is 30 days after the  Effective  Date (the  "Feasibility  Period"),
 Purchaser, and its agents, contractors,  engineers,  surveyors,  attorneys, and
 employees (collectively,  "Consultants") shall have the right from time to time
 to enter onto the Property:
3.1.1 To conduct and make any and all customary  studies,  tests,  examinations,
inquiries, and inspections, or investigations (collectively,  the "Inspections")
of or concerning the Property  (including,  without limitation,  engineering and
feasibility  studies,  evaluation  of drainage and flood  plain,  soil tests for
bearing capacity and percolation and surveys,  including topographical surveys);
3.1.2 To confirm any and all matters which  Purchaser may  reasonably  desire to
confirm  with  respect to the  Property;  3.1.3 To  ascertain  and  confirm  the
suitability of the Property for  Purchaser's  intended use of the Property;  and
3.1.4 To  review  the  Materials  at  Purchaser's  sole  cost and  expense.  3.2
Expiration of Feasibility Period. If the results of any of the matters
 referred to in Section 3.1 appear unsatisfactory to Purchaser for any reason or
 if Purchaser  elects not to proceed with the  transaction  contemplated by this
 Contract for any other reason, or for no reason whatsoever, in Purchaser's sole
 and absolute discretion,  then Purchaser shall have the right to terminate this
 Contract by giving  written notice to that effect to Seller and Escrow Agent on
 or before 5:00 p.m.  (in the time zone in which the Escrow Agent is located) on
 the date of expiration of the Feasibility  Period. If Purchaser  exercises such
 right to terminate,  this Contract  shall  terminate and be of no further force
 and effect, subject to and except for the Survival Provisions, and Escrow Agent
 shall  forthwith  return  the  Deposit to  Purchaser  (subject  to  Purchaser's
 obligation   under  Section  3.5.2  to  return  all  Third-Party   Reports  and
 information  and  Materials  provided to  Purchaser as a  pre-condition  to the
 return of the  Deposit).  If  Purchaser  fails to provide  Seller with  written
 notice of  termination  prior to the  expiration of the  Feasibility  Period in
 strict  accordance  with the notice  provisions of this  Contract,  Purchaser's
 right to terminate under this Section 3.2 shall be permanently  waived and this
 Contract  shall  remain  in  full  force  and  effect,  the  Deposit  shall  be
 non-refundable,  and  Purchaser's  obligation to purchase the Property shall be
 non-contingent and unconditional except only for satisfaction of the conditions
 expressly stated in Section 8.1.
3.3 Conduct of  Investigation.  Purchaser  shall not  permit any  mechanic's  or
 materialmen's  liens or any other liens to attach to the  Property by reason of
 the  performance  of any work or the purchase of any  materials by Purchaser or
 any  other  party  in  connection  with  any  Inspections  conducted  by or for
 Purchaser.  Purchaser  shall give notice to Seller a  reasonable  time prior to
 entry  onto the  Property  and shall  permit  Seller  to have a  representative
 present during all Inspections conducted at the Property.  All information made
 available by Seller to Purchaser in  accordance  with this Contract or obtained
 by Purchaser in the course of its Inspections  shall be treated as confidential
 information  by  Purchaser,  and,  prior to the  purchase  of the  Property  by
 Purchaser, Purchaser shall use its best efforts to prevent its Consultants from
 divulging such  information to any unrelated third parties except as reasonably
 necessary  to third  parties  engaged by Purchaser  for the limited  purpose of
 analyzing and  investigating  such  information for the purpose of consummating
 the transaction  contemplated by this Contract.  The provisions of this Section
 3.3 shall survive the  termination of this  Contract,  and if not so terminated
 shall survive (except for the  confidentiality  provisions of this Section 3.3)
 the Closing and delivery of the Deed to Purchaser.
3.4   Purchaser Indemnification.
3.4.1 Purchaser shall  indemnify,  hold harmless and, if requested by Seller (in
Seller's  sole  discretion),  defend (with counsel  approved by Seller)  Seller,
together with Seller's affiliates,  parent and subsidiary entities,  successors,
assigns, partners, managers, members, employees,  officers, directors, trustees,
shareholders,  counsel,  representatives,  agents,  Property  Manager,  Regional
Property  Manager,   and  AIMCO  (collectively,   including  Seller,   "Seller's
Indemnified Parties"),  from and against any and all damages,  mechanics' liens,
liabilities,  losses,  demands,  actions,  causes of action,  claims,  costs and
expenses (including  reasonable  attorneys' fees, including the cost of in-house
counsel  and  appeals)  (collectively,  "Losses")  arising  from or  related  to
Purchaser's or its Consultant's entry onto the Property,  and any Inspections or
other  matters  performed by Purchaser  with respect to the Property  during the
Feasibility  Period or  otherwise,  except for any and all  damages,  mechanics'
liens,  liabilities,  losses, demands,  actions, causes of action, claims, costs
and  expenses  arising out of Seller's or Seller's  Indemnified  Parties'  gross
negligence or intentional  misconduct..  3.4.2 Notwithstanding  anything in this
Contract  to the  contrary,  Purchaser  shall not be  permitted  to perform  any
invasive tests on the Property  without  Seller's prior written  consent,  which
consent may be withheld in Seller's sole discretion.  Further, Seller shall have
the right, without limitation, to disapprove any and all entries, surveys, tests
(including, without limitation, a Phase II environmental study of the Property),
investigations  and other  matters that in Seller's  reasonable  judgment  could
result in any injury to the Property or breach of any contract, or expose Seller
to any Losses or violation of applicable law, or otherwise  adversely affect the
Property or  Seller's  interest  therein.  Purchaser  shall use best  efforts to
minimize   disruption  to  Tenants  in  connection   with   Purchaser's  or  its
Consultants'  activities  pursuant to this Section.  No consent by the Seller to
any such activity shall be deemed to constitute a waiver by Seller or assumption
of  liability  or risk  by  Seller.  Purchaser  hereby  agrees  to  restore,  at
Purchaser's sole cost and expense,  the Property to the same condition  existing
immediately prior to Purchaser's exercise of its rights pursuant to this Article
3. Purchaser  shall  maintain and cause its third party  consultants to maintain
(a)  casualty  insurance  and  comprehensive  public  liability  insurance  with
coverages of not less than  $1,000,000.00  for injury or death to any one person
and  $3,000,000.00 for injury or death to more than one person and $1,000,000.00
with respect to property damage, and (b) worker's compensation insurance for all
of their  respective  employees in accordance with the law of the state in which
the Property is located. Purchaser shall deliver proof of the insurance coverage
required  pursuant to this Section 3.4.2 to Seller (in the form of a certificate
of insurance)  prior to the earlier to occur of (i)  Purchaser's  or Purchaser's
Consultants' entry onto the Property, or (ii) the expiration of 5 days after the
Effective Date. The provisions of this Section 3.4 shall survive the termination
of this Contract, and if not so terminated, the Closing and delivery of the Deed
to Purchaser.
3.5   Property Materials.
3.5.1 Within 10 days after the Effective  Date, and to the extent the same exist
and are in Seller's possession or reasonable control (subject to Section 3.5.2),
Seller agrees to make the documents set forth on Schedule 3.5 (the  "Materials")
available at the  Property  for review and copying by  Purchaser at  Purchaser's
sole cost and expense.  In the  alternative,  at Seller's  option and within the
foregoing  10-day  period,  Seller may deliver  some or all of the  Materials to
Purchaser,  or make  the  same  available  to  Purchaser  on a  secure  web site
(Purchaser  agrees that any item to be delivered  by Seller under this  Contract
shall be deemed  delivered to the extent  available to Purchaser on such secured
web site).  To the extent that  Purchaser  determines  that any of the Materials
have not been made available or delivered to Purchaser  pursuant to this Section
3.5.1,   Purchaser  shall  notify  Seller  and  Seller  shall  use  commercially
reasonable efforts to deliver the same to Purchaser within 5 Business Days after
such  notification  is  received  by Seller;  provided,  however,  that under no
circumstances  will the  Feasibility  Period be extended  and  Purchaser's  sole
remedy will be to terminate this Contract pursuant to Section 3.2.
3.5.2 In providing  such  information  and  Materials to  Purchaser,  other than
Seller's Representations,  Seller makes no representation or warranty,  express,
written,  oral,  statutory,   or  implied,  and  all  such  representations  and
warranties are hereby  expressly  excluded and  disclaimed.  Any information and
Materials  provided by Seller to Purchaser  under the terms of this  Contract is
for  informational  purposes only and,  together with all  Third-Party  Reports,
shall be returned by Purchaser to Seller as a condition to return of the Deposit
to Purchaser (if Purchaser is otherwise entitled to such Deposit pursuant to the
terms of this Contract) if this Contract is terminated for any reason. Purchaser
shall not in any way be entitled to rely upon the  accuracy of such  information
and  Materials.  Purchaser  recognizes  and agrees that the  Materials and other
documents and information delivered or made available by Seller pursuant to this
Contract may not be complete or constitute  all of such  documents  which are in
Seller's  possession  or control,  but are those that are readily  available  to
Seller after  reasonable  inquiry to  ascertain  their  availability.  Purchaser
understands that,  although Seller will use commercially  reasonable  efforts to
locate and make  available  the  Materials  and other  documents  required to be
delivered or made available by Seller pursuant to this Contract,  Purchaser will
not rely on such  Materials or other  documents as being a complete and accurate
source of  information  with  respect to the  Property,  and will instead in all
instances rely  exclusively on its own Inspections and Consultants  with respect
to all  matters  which it deems  relevant to its  decision  to acquire,  own and
operate the Property.
3.5.3 The  provisions  of this  Section 3.5  shall  survive  the  Closing  and
delivery of the Deed to Purchaser.
3.6   Property  Contracts.  Within 10 days after the  Effective  Date,  Seller
 shall deliver to Purchaser a list,  prepared to Seller's  knowledge (as defined
 in Section 6.4), of the Property Contracts.  On or before the expiration of the
 Feasibility  Period,  Purchaser  may  deliver  written  notice to  Seller  (the
 "Property  Contracts Notice") specifying any Property Contracts which Purchaser
 desires to terminate at the Closing (the "Terminated Contracts"); provided that
 (a) the effective  date of such  termination  after Closing shall be subject to
 the express  terms of such  Terminated  Contracts  (and, to the extent that the
 effective date of  termination of any Terminated  Contract is after the Closing
 Date,  Purchaser  shall be deemed to have  assumed all of Seller's  obligations
 under  such  Terminated  Contract  as of the  Closing  Date),  (b) if any  such
 Property  Contract  cannot by its terms be  terminated,  it shall be assumed by
 Purchaser and not be a Terminated Contract, and (c) to the extent that any such
 Terminated  Contract requires payment of a penalty or premium for cancellation,
 Purchaser shall be solely  responsible for the payment of any such cancellation
 fees or penalties.  If Purchaser fails to deliver the Property Contracts Notice
 on or before  the  expiration  of the  Feasibility  Period,  there  shall be no
 Terminated  Contracts and Purchaser shall assume all Property  Contracts at the
 Closing.  To the extent that any  Property  Contract to be assumed by Purchaser
 (including any Property Contracts that, because of advance notice requirements,
 will  be  temporarily  assumed  by  Purchaser  pending  the  effective  date of
 termination  after the Closing Date) is assignable  but requires the applicable
 vendor to consent to the  assignment or assumption of the Property  Contract by
 Seller to Purchaser, then, prior to the Closing, Purchaser shall be responsible
 for  obtaining  from  each  applicable  vendor  a  consent  (each  a  "Required
 Assignment  Consent") to the  assignment of the Property  Contract by Seller to
 Purchaser  (and the  assumption  by  Purchaser  of all  obligations  under such
 Property Contract).  Purchaser shall indemnify, hold harmless and, if requested
 by Seller (in  Seller's  sole  discretion),  defend (with  counsel  approved by
 Seller)  Seller's  Indemnified  Parties  from and  against  any and all  Losses
 arising  from  or  related  to  Purchaser's  failure  to  obtain  any  Required
 Assignment Consent.

                                   ARTICLE IV
                                      TITLE

4.1 Title  Documents.  Within 10 calendar days after the Effective Date,  Seller
 shall cause to be delivered to Purchaser a standard form  commitment  for title
 insurance  ("Title  Commitment")  for the  Property  in an amount  equal to the
 Purchase  Price from Title Insurer for an owner's title  insurance  policy (the
 "Title  Policy") on the most recent  standard  American Land Title  Association
 form, together with copies of all instruments  identified as exceptions therein
 (together  with  the  Title  Commitment,  referred  to  herein  as  the  "Title
 Documents").  Seller shall be responsible only for payment of the basic premium
 for the Title Policy.  Purchaser shall be solely responsible for payment of all
 other costs relating to procurement of the Title Commitment,  the Title Policy,
 and any requested endorsements.
4.2  Survey.  Within 3 Business  Days after the  Effective  Date,  Seller  shall
 deliver to Purchaser or make  available at the Property any existing  survey of
 the Property (the "Existing Survey") which to Seller's knowledge is in Seller's
 possession or reasonable  control (subject to Section 3.5.2).  If such Existing
 Survey was prepared  within 6 months  prior to the  Effective  Date,  Purchaser
 shall  reimburse  Seller  for the cost of the  preparation  thereof.  Purchaser
 acknowledges  and agrees  that  delivery of the  Existing  Survey is subject to
 Section 3.5.2.  To the extent that  Purchaser  desires that a new survey of the
 Property be prepared (or that the Existing Survey be updated),  Purchaser shall
 request  the same in writing to Seller no later than 5 Business  Days after the
 Effective Date.  Seller also  independently may elect to order a new or updated
 survey of the Property  either before or after the Effective  Date (such new or
 updated survey (whether requested by Purchaser or ordered by Seller), (together
 with the Existing  Survey,  is referred to herein as the "Survey").  Any new or
 updated  survey may be ordered by Seller from the  surveyor  who  prepared  the
 Existing  Survey  (or from such  other  surveyor  as Seller  determines  in its
 reasonable discretion).  Purchaser shall be solely responsible for the cost and
 expense of the  preparation  of any new or updated  survey ordered by Seller or
 requested by Purchaser pursuant to the terms of this Section 4.2.
4.3 Objection and Response Process. On or before the date which is 15 days after
 the Effective Date (the  "Objection  Deadline"),  Purchaser  shall give written
 notice (the  "Objection  Notice") to the attorneys for Seller of any matter set
 forth in the Title  Documents  or the Survey to which  Purchaser  objects  (the
 "Objections").  If Purchaser  fails to tender an Objection  Notice on or before
 the  Objection  Deadline,  Purchaser  shall  be  deemed  to have  approved  and
 irrevocably waived any objections to any matters covered by the Title Documents
 and the Survey.  On or before 20 days after the Effective  Date (the  "Response
 Deadline"), Seller may, in Seller's sole discretion, give Purchaser notice (the
 "Response Notice") of those Objections which Seller is willing to cure, if any.
 Seller shall be entitled to reasonable adjournments of the Closing Date to cure
 the  Objections.  If Seller fails to deliver a Response  Notice by the Response
 Deadline,  Seller  shall be deemed  to have  elected  not to cure or  otherwise
 resolve  any  matter  set  forth  in the  Objection  Notice.  If  Purchaser  is
 dissatisfied with the Response Notice,  Purchaser may, as its exclusive remedy,
 elect by  written  notice  given to  Seller  on or  before  25 days  after  the
 Effective Date (the "Final Response  Deadline")  either (a) to accept the Title
 Documents and Survey with resolution, if any, of the Objections as set forth in
 the  Response  Notice  (or if no  Response  Notice  is  tendered,  without  any
 resolution  of the  Objections)  and without any  reduction or abatement of the
 Purchase Price,  or (b) to terminate this Contract,  in which event the Deposit
 shall be returned to Purchaser (subject to Purchaser's obligation under Section
 3.5.2 to return all Third-Party  Reports and information and Materials provided
 to Purchaser as a  pre-condition  to the return of the  Deposit).  If Purchaser
 fails to give notice to terminate this Contract on or before the Final Response
 Deadline,  Purchaser shall be deemed to have elected to approve and irrevocably
 waived any  objections  to any matters  covered by the Title  Documents  or the
 Survey,  subject only to resolution,  if any, of the Objections as set forth in
 the  Response  Notice  (or if no  Response  Notice  is  tendered,  without  any
 resolution of the Objections).
4.4 Permitted Exceptions.  The Deed delivered pursuant to this Contract shall be
 subject to the following, all of which shall be deemed "Permitted Exceptions":
4.4.1 All matters shown in the Title  Documents  and the Survey,  other than (a)
those  Objections,  if any,  which  Seller  has agreed to cure  pursuant  to the
Response  Notice  under  Section  4.3,  (b)  mechanics'  liens and taxes due and
payable with respect to the period preceding Closing, (c) the standard exception
regarding  the rights of parties in  possession  which shall be limited to those
parties in  possession  pursuant to the Leases,  and (d) the standard  exception
pertaining to taxes which shall be limited to taxes and  assessments  payable in
the year in which the Closing occurs and subsequent taxes and assessments; 4.4.2
All  Leases;  4.4.3  Intentionally  left  blank;  4.4.4  Applicable  zoning  and
governmental  regulations and ordinances;  4.4.5 Any defects in or objections to
title to the Property, or title exceptions or encumbrances,  arising by, through
or under  Purchaser;  and 4.4.6 The terms and conditions of this  Contract.  4.5
Intentionally  left blank.  4.6  Purchaser  Financing.  Purchaser  assumes  full
responsibility to obtain
 the funds required for settlement,  and there shall be no financing contingency
 hereunder.

                                   ARTICLE V
                                    CLOSING

5.1 Closing Date.  The Closing shall occur 30 days  following the  expiration of
 the  Feasibility  Period  (the  "Closing  Date")  through an escrow with Escrow
 Agent, whereby the Seller, Purchaser and their attorneys need not be physically
 present at the Closing and may deliver  documents by  overnight  air courier or
 other means.  Notwithstanding the foregoing to the contrary,  Seller shall have
 the option,  by  delivering  written  notice to Purchaser to extend the Closing
 Date to the last Business Day of the month in which the Closing Date  otherwise
 would occur pursuant to the preceding  sentence,  or to such other date (either
 in the same month or the next) as Seller  reasonably  determines  is desirable.
 Further,  the  Closing  Date may be extended  without  penalty at the option of
 Seller to a date not later than 30 days following the Closing Date specified in
 the first sentence of this paragraph  above (or, if applicable,  as extended by
 Seller  pursuant  to the second  sentence  of this  paragraph)  to satisfy  any
 condition to Closing,  or such later date as is mutually  acceptable  to Seller
 and Purchaser.

      Provided  that  Purchaser  is not in  default  under  the  terms  of  this
Contract,  Purchaser  shall be permitted a one-time thirty (30) day extension of
the Closing  Date  specified  in the first  sentence of this  Section 5.1 by (i)
delivering written notice to Seller no later than fifteen (15) days prior to the
scheduled  Closing  Date,  and (ii)  simultaneously  with such notice to Seller,
delivering  to Escrow  Agent the amount of Fifty  Thousand  and  no/100  Dollars
($50,000.00),  which amount when  received by Escrow Agent shall be added to the
Deposit  hereunder,  shall be  non-refundable  (except  as  otherwise  expressly
provided  herein with respect to the Deposit),  and shall be held,  credited and
disbursed in the same manner as provided hereunder with respect to the Deposit.
5.2   Seller  Closing  Deliveries.  No later than 1 Business  Day prior to the
 Closing Date,  Seller shall  deliver to Escrow  Agent,  each of the following
 items:
5.2.1  Special  Warranty  Deed (the "Deed") in the form attached as Exhibit B to
Purchaser, subject to the Permitted Exceptions. 5.2.2 A Bill of Sale in the form
attached  as Exhibit  C.  5.2.3 A General  Assignment  in the form  attached  as
Exhibit D (the "General Assignment").
5.2.4 An  Assignment  of Leases and  Security  Deposits in the form  attached as
Exhibit E (the "Leases Assignment").  5.2.5 A letter in the form attached hereto
as Exhibit F prepared by Purchaser  and  countersigned  by Seller to each of the
vendors under the Terminated Contracts informing them of the termination of such
Terminated  Contract  as of  the  Closing  Date  (subject  to any  delay  in the
effectiveness  of  such  termination  pursuant  to the  express  terms  of  each
applicable Terminated Contract) (the "Vendor Terminations").
5.2.6 A closing statement executed by Seller.
5.2.7 A title  affidavit or at Seller's option an indemnity,  as applicable,  in
the customary  form  reasonably  acceptable to Seller to enable Title Insurer to
delete the standard  exceptions to the title insurance  policy set forth in this
Contract (other than matters  constituting any Permitted  Exceptions and matters
which are to be completed or performed  post-Closing)  to be issued  pursuant to
the Title  Commitment;  provided that such  affidavit does not subject Seller to
any greater liability, or impose any additional  obligations,  other than as set
forth in this Contract.
5.2.8 A certification of Seller's non-foreign status pursuant to Section 1445 of
the  Internal  Revenue  Code  of  1986,  as  amended;   and  5.2.9  Resolutions,
certificates of good standing, and such other organizational  documents as Title
Insurer shall reasonably  require  evidencing  Seller's  authority to consummate
this transaction.
5.3  Purchaser  Closing  Deliveries.  No later than 1 Business  Day prior to the
 Closing  Date  (except  for the  balance of the  Purchase  Price which is to be
 delivered at the time specified in Section  2.2.4),  Purchaser shall deliver to
 the Escrow Agent (for  disbursement  to Seller upon the Closing) the  following
 items with respect to the Property being conveyed at such Closing:
5.3.1 The full Purchase  Price (with credit for the Deposit),  plus or minus the
adjustments or prorations required by this Contract. 5.3.2 A title affidavit (or
at Purchaser's  option an indemnity)  pertaining to Purchaser's  activity on the
Property  prior to Closing,  in the  customary  form  reasonably  acceptable  to
Purchaser,  to enable  Title  Insurer to delete the standard  exceptions  to the
title  insurance   policy  set  forth  in  this  Contract  (other  than  matters
constituting  any Permitted  Exceptions and matters which are to be completed or
performed post-Closing) to be issued pursuant to the Title Commitment;  provided
that such  affidavit  does not subject  Purchaser to any greater  liability,  or
impose any additional obligations, other than as set forth in this Contract.
5.3.3 Any  declaration or other  statement which may be required to be submitted
to the local assessor with respect to the terms of the sale of the Property.
5.3.4 A closing statement executed by Purchaser.
5.3.5 A countersigned counterpart of the General Assignment.
5.3.6 A countersigned counterpart of the Leases Assignment.
5.3.7 Notification  letters to all Tenants  prepared and executed by Purchaser
in the form attached hereto as Exhibit G.
5.3.8  The  Vendor  Terminations  (Purchaser  shall be  solely  responsible  for
identifying  each  of  the  Terminated  Contracts  (subject  to  the  terms  and
conditions  of Section  3.6) and  addressing  and  preparing  each of the Vendor
Terminations for execution by Purchaser and Seller).
5.3.9 Any cancellation  fees or penalties due to any vendor under any Terminated
Contract  as  a  result  of  the  termination   thereof.   5.3.10   Resolutions,
certificates of good standing, and such other organizational  documents as Title
Insurer shall reasonably require evidencing  Purchaser's authority to consummate
this transaction.
5.3.11      Intentionally left blank.
5.4   Closing Prorations and Adjustments.
5.4.1 General. All normal and customarily proratable items,  including,  without
limitation,  collected rents, operating expenses, personal property taxes, other
operating  expenses and fees,  shall be prorated as of the Closing Date,  Seller
being charged or credited,  as appropriate,  for all of same attributable to the
period up to the  Closing  Date (and  credited  for any  amounts  paid by Seller
attributable  to the  period  on or  after  the  Closing  Date,  if  assumed  by
Purchaser) and Purchaser being responsible for, and credited or charged,  as the
case may be, for all of same attributable to the period on and after the Closing
Date.  Seller shall prepare a proration  schedule (the "Proration  Schedule") of
the adjustments described in this Section 5.4 prior to Closing. Such adjustments
shall be paid by Purchaser to Seller (if the  prorations  result in a net credit
to Seller) or by Seller to Purchaser (if the  prorations  result in a net credit
to  Purchaser),  by  increasing  or reducing the cash to be paid by Purchaser at
Closing.  5.4.2 Operating  Expenses.  All of the operating,  maintenance,  taxes
(other  than real  estate  taxes,  such as  rental  taxes),  and other  expenses
incurred in operating the Property that Seller  customarily  pays, and any other
costs  incurred  in the  ordinary  course of  business  for the  management  and
operation of the Property,  shall be prorated on an accrual basis.  Seller shall
pay all such expenses  that accrue prior to Closing and Purchaser  shall pay all
such expenses that accrue from and after the Closing Date.
5.4.3  Utilities.  The final  readings and final  billings for utilities will be
made if possible as of the Closing Date, in which case Seller shall pay all such
bills as of the Closing Date and no proration  shall be made at the Closing with
respect to utility bills.  Otherwise,  a proration  shall be made based upon the
parties'  reasonable good faith estimate and a readjustment  made within 30 days
after the Closing,  if necessary.  Seller shall be entitled to the return of any
deposit(s)  posted by it with any utility company,  and Seller shall notify each
utility company serving the Property to terminate Seller's account, effective as
of noon on the Closing Date. 5.4.4 Real Estate Taxes. Any real estate ad valorem
or similar taxes for the Property,  or any installment of assessments payable in
installments which installment is payable in the calendar year of Closing, shall
be  prorated  to the date of  Closing,  based upon  actual  days  involved.  The
proration of real property taxes or installments  of assessments  shall be based
upon the  assessed  valuation  and tax rate  figures  (assuming  payment  at the
earliest time to allow for the maximum possible  discount) for the year in which
the Closing occurs to the extent the same are available;  provided,  that in the
event that actual figures (whether for the assessed value of the Property or for
the tax rate) for the year of Closing are not available at the Closing Date, the
proration shall be made using figures from the preceding year (assuming  payment
at the earliest time to allow for the maximum possible discount).  The proration
of real property taxes or  installments  of  assessments  shall be final and not
subject to  re-adjustment  after Closing.  5.4.5 Property  Contracts.  Purchaser
shall assume at Closing the obligations under the Property  Contracts assumed by
Purchaser; however, operating expenses shall be prorated under Section 5.4.2.
5.4.6 Leases.
5.4.6.1 All collected rent (whether fixed monthly rentals,  additional  rentals,
escalation rentals,  retroactive rentals,  operating cost pass-throughs or other
sums and charges payable by Tenants under the Leases),  income and expenses from
any portion of the Property  shall be prorated as of the Closing Date  (prorated
for any partial  month).  Purchaser  shall receive all collected rent and income
attributable to dates from and after the Closing Date.  Seller shall receive all
collected  rent and income  attributable  to dates  prior to the  Closing  Date.
Notwithstanding the foregoing, no prorations shall be made in relation to either
(a)  non-delinquent  rents which have not been collected as of the Closing Date,
or (b) delinquent rents existing,  if any, as of the Closing Date (the foregoing
(a) and (b) referred to herein as the  "Uncollected  Rents").  In adjusting  for
Uncollected  Rents,  no  adjustments  shall be made in Seller's  favor for rents
which have accrued and are unpaid as of the  Closing,  but  Purchaser  shall pay
Seller  such  accrued  Uncollected  Rents as and when  collected  by  Purchaser.
Purchaser  agrees to bill Tenants of the Property for all Uncollected  Rents and
to take  reasonable  actions to collect  Uncollected  Rents.  After the Closing,
Seller  shall  continue to have the right,  but not the  obligation,  in its own
name, to demand  payment of and to collect  Uncollected  Rents owed to Seller by
any Tenant, which right shall include, without limitation, the right to continue
or commence legal actions or proceedings  against any Tenant and the delivery of
the Leases  Assignment  shall not  constitute  a waiver by Seller of such right.
Purchaser  agrees to  cooperate  with Seller in  connection  with all efforts by
Seller to collect such Uncollected  Rents and to take all steps,  whether before
or after the Closing Date, as may be necessary to carry out the intention of the
foregoing,  including, without limitation, the delivery to Seller, within 7 days
after a written request, of any relevant books and records  (including,  without
limitation, rent statements, receipted bills and copies of tenant checks used in
payment of such rent), the execution of any and all consents or other documents,
and the  undertaking of any act reasonably  necessary for the collection of such
Uncollected Rents by Seller;  provided,  however, that Purchaser's obligation to
cooperate with Seller pursuant to this sentence shall not obligate  Purchaser to
terminate any Tenant lease with an existing  Tenant or evict any existing Tenant
from the Property.
5.4.6.2 At Closing,  Purchaser shall receive a credit against the Purchase Price
in an amount equal to the received  and  unapplied  balance of all cash (or cash
equivalent) Tenant Deposits,  including, but not limited to, security, damage or
other refundable deposits or required to be paid by any of the Tenants to secure
their respective obligations under the Leases,  together, in all cases, with any
interest  payable  to  the  Tenants  thereunder  as  may be  required  by  their
respective  Tenant Lease or state law (the "Tenant Security  Deposit  Balance").
Any cash (or cash  equivalents)  held by  Seller  which  constitute  the  Tenant
Security  Deposit  Balance  shall be  retained  by  Seller in  exchange  for the
foregoing  credit  against the Purchase  Price and shall not be  transferred  by
Seller pursuant to this Contract (or any of the documents delivered at Closing),
but  the  obligation  with  respect  to  the  Tenant  Security  Deposit  Balance
nonetheless  shall be assumed by Purchaser.  The Tenant Security Deposit Balance
shall not include any non-refundable deposits or fees paid by Tenants to Seller,
either pursuant to the Leases or otherwise.
5.4.6.3  With respect to  operating  expenses,  taxes,  utility  charges,  other
operating cost pass-throughs,  retroactive rental  escalations,  sums or charges
payable  by Tenants  under the Tenant  Leases,  to the  extent  that  Seller has
received as of the Closing payments  allocable to periods subsequent to Closing,
the same shall be properly  prorated  with an  adjustment in favor of Purchaser,
and Purchaser  shall reserve a credit  therefor at Closing.  With respect to any
payments  received by Purchaser  after the Closing  allocable to Seller prior to
Closing,  Purchaser shall promptly pay the same to Seller.  5.4.7  Intentionally
left blank.
5.4.8  Insurance.  No proration shall be made in relation to insurance  premiums
and insurance policies will not be assigned to Purchaser.  5.4.9 Employees.  All
of Seller's and Seller's manager's on-site employees shall have their employment
at the  Property  terminated  as of the  Closing  Date.  5.4.10  Closing  Costs.
Purchaser and Seller shall each pay one-half of any transfer,  sales, use, gross
receipts or similar taxes. Purchaser shall be solely responsible for the cost of
recording  any  instruments  required  to  discharge  any liens or  encumbrances
against the Property, any premiums or fees required to be paid by Purchaser with
respect  to the Title  Policy  pursuant  to Section  4.1,  and  one-half  of the
customary  closing costs of the Escrow Agent.  Seller shall pay the base premium
for the Title Policy to the extent  required by Section 4.1, and one-half of the
customary closing costs of the Escrow Agent.
5.4.11      Intentionally omitted.
5.4.12 Possession.  Possession of the Property,  subject to the Leases, Property
Contracts  which  are  not  identified  as  Terminated   Contracts   during  the
Feasibility  Period  (subject to the  limitations of Section 3.6), and Permitted
Exceptions,  shall be  delivered  to  Purchaser at the Closing upon release from
escrow of all items to be  delivered  by  Purchaser  pursuant  to  Section  5.3,
including,  without  limitation,  the Purchase Price.  To the extent  reasonably
available to Seller,  originals or copies of the Leases and Property  Contracts,
lease files,  warranties,  guaranties,  operating manuals, keys to the property,
and   Seller's   books  and  records   (other  than   proprietary   information)
(collectively,  "Seller's  Property-Related  Files and  Records")  regarding the
Property shall be made available to Purchaser at the Property after the Closing.
Purchaser agrees,  for a period of not less than 10 years after the Closing (the
"Records Hold  Period"),  to (a) provide and allow Seller  reasonable  access to
Seller's  Property-Related  Files and Records for  purposes  of  inspection  and
copying   thereof,   and  (b)   reasonably   maintain  and   preserve   Seller's
Property-Related  Files  and  Records.  If at any time  after the  Records  Hold
Period,  Purchaser  desires to dispose of  Seller's  Property-Related  Files and
Records,  Purchaser must first provide Seller prior written notice (the "Records
Disposal  Notice").  Seller shall have a period of 30 days after  receipt of the
Records  Disposal Notice to enter the Property (or such other location that such
records are then  stored) and remove or copy those of Seller's  Property-Related
Files and Records that Seller desires to retain. Purchaser agrees (i) to include
the covenants of this Section  5.4.12  pertaining  to Seller's  Property-Related
Files and Records in any  management  contract for the Property (and to bind the
manager thereunder to such covenants),  and (ii) to bind any future purchaser of
the  Property to the  covenants of this Section  5.4.12  pertaining  to Seller's
Property-Related  Files and Records.  Purchaser shall  indemnify,  hold harmless
and, if requested by Seller (in Seller's sole discretion),  defend (with counsel
approved by Seller)  Seller's  Indemnified  Parties from and against any and all
Losses  arising  from or  related  to  Purchaser's  failure  to comply  with the
provisions of this Section 5.4.12.
5.4.13      Survival.  The  provisions  of this Section 5.4 shall  survive the
Closing and delivery of the Deed to Purchaser.
5.5   Post  Closing  Adjustments.  In general,  and except as provided in this
 Contract or the Closing Documents,  Seller shall be entitled to all income, and
 shall pay all  expenses,  relating to the  operation  of the  Property  for the
 period prior to the Closing Date and Purchaser shall be entitled to all income,
 and shall pay all  expenses,  relating to the operation of the Property for the
 period  commencing  on and after the  Closing  Date.  Purchaser  or Seller  may
 request  that  Purchaser  and Seller  undertake  to  re-adjust  any item on the
 Proration  Schedule  (or any item omitted  therefrom)  in  accordance  with the
 provisions of Section 5.4 of this  Contract;  provided,  however,  that neither
 party shall have any obligation to re-adjust any items (a) after the expiration
 of 60 days after  Closing,  or (b) subject to such 60-day  period,  unless such
 items exceed $5,000.00 in magnitude (either  individually or in the aggregate).
 The  provisions  of this Section 5.5 shall  survive the Closing and delivery of
 the Deed to Purchaser.

                                   ARTICLE VI
            REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER

6.1 Seller's Representations. Except, in all cases, for any fact, information or
condition  disclosed  in the Title  Documents,  the  Permitted  Exceptions,  the
Property Contracts,  or the Materials,  or which is otherwise known by Purchaser
prior to the Closing,  Seller represents and warrants to Purchaser the following
(collectively,  the "Seller's  Representations") as of the Effective Date and as
of the Closing Date  (provided  that  Purchaser's  remedies if any such Seller's
Representations are untrue as of the Closing Date are limited to those set forth
in Section 8.1):  6.1.1 Seller is duly organized,  validly  existing and in good
standing  under the laws of the state of its  formation set forth in the initial
paragraph of this Contract; and, subject to Section 8.2.4, has or at the Closing
shall have the entity power and authority to sell and convey the Property and to
execute the  documents  to be  executed by Seller and prior to the Closing  will
have taken as applicable, all corporate,  partnership, limited liability company
or  equivalent  entity  actions  required for the execution and delivery of this
Contract,  and  the  consummation  of  the  transactions  contemplated  by  this
Contract.  The compliance with or fulfillment of the terms and conditions hereof
will not  conflict  with,  or result in a breach of, the  terms,  conditions  or
provisions of, or constitute a default under,  any contract to which Seller is a
party or by which Seller is otherwise bound,  which conflict,  breach or default
would have a material  adverse  affect on  Seller's  ability to  consummate  the
transaction contemplated by this Contract or on the Property. Subject to Section
8.2.4,  this  Contract is a valid,  binding and  enforceable  agreement  against
Seller in accordance with its terms;  6.1.2 Other than the Leases,  the Property
is not  subject  to any  written  lease  executed  by  Seller  or,  to  Seller's
knowledge,  any other possessory  interests of any person; 6.1.3 Seller is not a
"foreign person," as that term is used and defined in the Internal Revenue Code,
Section  1445,  as  amended;  6.1.4  Except  for any  actions by Seller to evict
Tenants  under  the  Leases,  or (b) any  matter  covered  by  Seller's  current
insurance policy(ies), to Seller's knowledge, there are no actions, proceedings,
litigation or governmental investigations or condemnation actions either pending
or threatened against the Property; 6.1.5 To Seller's knowledge,  Seller has not
received any written notice from a governmental  agency of any uncured  material
violations of any federal,  state,  county or municipal law,  ordinance,  order,
regulation  or  requirement  affecting  the  Property;  and  6.1.6  To  Seller's
knowledge, Seller has not received any written notice of any material default by
Seller under any of the Property  Contracts  that will not be  terminated on the
Closing Date. 6.2 AS-IS.  Except for Seller's  Representations,  the Property is
expressly  purchased  and sold "AS IS," "WHERE IS," and "WITH ALL  FAULTS."  The
Purchase  Price and the terms and  conditions set forth herein are the result of
arm's-length  bargaining  between  entities  familiar with  transactions of this
kind, and said price, terms and conditions reflect the fact that Purchaser shall
have the benefit of, and is not relying upon, any information provided by Seller
or Broker or statements, representations or warranties, express or implied, made
by  or  enforceable  directly  against  Seller  or  Broker,  including,  without
limitation,  any  relating  to  the  value  of the  Property,  the  physical  or
environmental  condition of the Property,  any state,  federal,  county or local
law,  ordinance,  order or permit;  or the  suitability,  compliance  or lack of
compliance of the Property with any regulation, or any other attribute or matter
of or relating to the Property  (other than any covenants of title  contained in
the Deed conveying the Property and Seller's Representations).  Purchaser agrees
that Seller shall not be  responsible  or liable to  Purchaser  for any defects,
errors or  omissions,  or on account of any  conditions  affecting the Property.
Purchaser,  its successors and assigns, and anyone claiming by, through or under
Purchaser,   hereby  fully  releases  Seller's  Indemnified  Parties  from,  and
irrevocably  waives  its right to  maintain,  any and all  claims  and causes of
action  that it or they  may now  have or  hereafter  acquire  against  Seller's
Indemnified  Parties with respect to any and all Losses  arising from or related
to any defects,  errors,  omissions or other conditions  affecting the Property.
Purchaser  represents  and  warrants  that,  as of the date hereof and as of the
Closing  Date, it has and shall have  reviewed and  conducted  such  independent
analyses,  studies  (including,  without limitation,  environmental  studies and
analyses concerning the presence of lead, asbestos,  PCBs and radon in and about
the Property),  reports,  investigations and inspections as it deems appropriate
in  connection  with the  Property.  If  Seller  provides  or has  provided  any
documents,  summaries,  opinions  or work  product  of  consultants,  surveyors,
architects,  engineers,  title companies,  governmental authorities or any other
person or entity with respect to the Property,  including,  without  limitation,
the offering prepared by Broker, Purchaser and Seller agree that Seller has done
so or shall do so only for the convenience of both parties,  Purchaser shall not
rely thereon and the reliance by Purchaser upon any such  documents,  summaries,
opinions or work  product  shall not create or give rise to any  liability of or
against Seller's Indemnified Parties.  Purchaser acknowledges and agrees that no
representation  has been made and no  responsibility  is assumed by Seller  with
respect to current and future applicable zoning or building code requirements or
the  compliance  of the  Property  with any other  laws,  rules,  ordinances  or
regulations,  the financial earning capacity or expense history of the Property,
the continuation of contracts,  continued  occupancy levels of the Property,  or
any part  thereof,  or the  continued  occupancy  by  tenants  of any Leases or,
without limiting any of the foregoing,  occupancy at Closing.  Prior to Closing,
Seller  shall  have the right,  but not the  obligation,  to enforce  its rights
against any and all Property occupants, guests or tenants. Purchaser agrees that
the departure or removal, prior to Closing, of any of such guests,  occupants or
tenants  shall not be the basis for, nor shall it give rise to, any claim on the
part of Purchaser,  nor shall it affect the  obligations of Purchaser under this
Contract in any manner  whatsoever;  and Purchaser  shall close title and accept
delivery of the Deed with or without such tenants in possession  and without any
allowance  or reduction in the  Purchase  Price under this  Contract.  Purchaser
hereby releases  Seller from any and all claims and liabilities  relating to the
foregoing matters.  The provisions of this Section 6.2 shall survive the Closing
and delivery of the Deed to Purchaser. 6.3 Survival of Seller's Representations.
Seller and Purchaser agree that Seller's  Representations  shall survive Closing
for a period of 6 months (the "Survival Period"). Seller shall have no liability
after the  Survival  Period with respect to Seller's  Representations  contained
herein except to the extent that  Purchaser has  requested  arbitration  against
Seller during the Survival Period for breach of any of Seller's Representations.
Under no circumstances shall Seller be liable to Purchaser for more than $50,000
in any  individual  instance or in the  aggregate  for all  breaches of Seller's
Representations, nor shall Purchaser be entitled to bring any claim for a breach
of Seller's Representations unless the claim for damage (either in the aggregate
or as to any individual  claim) by Purchaser  exceeds $5,000.  In the event that
Seller  breaches any  representation  contained in Section 6.1 and Purchaser had
knowledge of such breach prior to the Closing Date, Purchaser shall be deemed to
have waived any right of recovery,  and Seller  shall not have any  liability in
connection therewith.  6.4 Definition of Seller's Knowledge. Any representations
and  warranties  made "to the  knowledge of Seller" shall not be deemed to imply
any  duty  of  inquiry.  For  purposes  of  this  Contract,  the  term  Seller's
"knowledge"  shall mean and refer  only to actual  knowledge  of the  Designated
Representative  of the  Seller  and  shall  not be  construed  to  refer  to the
knowledge  of  any  other  partner,   officer,   director,  agent,  employee  or
representative  of the Seller, or any affiliate of the Seller, or to impose upon
such Designated  Representative any duty to investigate the matter to which such
actual  knowledge  or the  absence  thereof  pertains,  or to  impose  upon such
Designated Representative any individual personal liability. As used herein, the
term  Designated  Representative  shall  refer to  Kendra  Miller  the  Regional
Property  Manager,  who has been handling this Property for the past 1 1/2 years
(the "Regional Property Manager") and Joyce Painter,  the Property Manager,  who
has  been  handling  this  Property  for the  past 5 1/2  years  (the  "Property
Manager") 6.5  Representations  And Warranties Of Purchaser.  For the purpose of
inducing  Seller to enter  into this  Contract  and to  consummate  the sale and
purchase of the  Property  in  accordance  herewith,  Purchaser  represents  and
warrants to Seller the following as of the Effective  Date and as of the Closing
Date: 6.5.1 Purchaser is a corporation  duly organized,  validly existing and in
good standing under the laws of Montana. 6.5.2 Purchaser,  acting through any of
its or  their  duly  empowered  and  authorized  officers  or  members,  has all
necessary  entity  power  and  authority  to own and use its  properties  and to
transact the business in which it is engaged,  and has full power and  authority
to  enter  into  this  Contract,  to  execute  and  deliver  the  documents  and
instruments  required  of  Purchaser  herein,  and to  perform  its  obligations
hereunder; and no consent of any of Purchaser's partners, directors, officers or
members are required to so empower or authorize  Purchaser.  The compliance with
or  fulfillment  of the terms and  conditions  hereof will not conflict with, or
result in a breach of, the terms,  conditions or provisions  of, or constitute a
default under,  any contract to which Purchaser is a party or by which Purchaser
is otherwise  bound,  which  conflict,  breach or default  would have a material
adverse affect on Purchaser's ability to consummate the transaction contemplated
by this Contract.  This Contract is a valid,  binding and enforceable  agreement
against  Purchaser  in  accordance  with its terms.  6.5.3 No pending or, to the
knowledge  of  Purchaser,  threatened  litigation  exists  which  if  determined
adversely would restrain the  consummation of the  transactions  contemplated by
this  Contract  or  would  declare  illegal,   invalid  or  non-binding  any  of
Purchaser's  obligations  or  covenants  to Seller.  6.5.4  Other than  Seller's
Representations, Purchaser has not relied on any representation or warranty made
by  Seller  or any  representative  of Seller  (including,  without  limitation,
Broker) in connection  with this Contract and the  acquisition  of the Property.
6.5.5 The Broker and its  affiliates  do not, and will not at the Closing,  have
any  direct or  indirect  legal,  beneficial,  economic  or voting  interest  in
Purchaser  (or in an  assignee of  Purchaser,  which  pursuant to Section  13.3,
acquires the Property at the  Closing),  nor has  Purchaser or any  affiliate of
Purchaser  granted (as of the Effective  Date or the Closing Date) the Broker or
any of its  affiliates  any right or option to acquire  any  direct or  indirect
legal, beneficial,  economic or voting interest in Purchaser. 6.5.6 Purchaser is
not a Prohibited Person. 6.5.7 To Purchaser's knowledge,  none of its investors,
affiliates  or brokers or other  agents (if any),  acting or  benefiting  in any
capacity in  connection  with this  Contract is a Prohibited  Person.  6.5.8 The
funds or other assets  Purchaser will transfer to Seller under this Contract are
not the  property  of, or  beneficially  owned,  directly  or  indirectly,  by a
Prohibited  Person.  6.5.9 The funds or other assets  Purchaser will transfer to
Seller under this Contract are not the proceeds of specified  unlawful  activity
as defined by 18 U.S.C. ss.1956(c)(7).

      The  provisions of this Section 6.5 shall survive the Closing and delivery
of the Deed to Purchaser.

                                  ARTICLE VII
                            OPERATION OF THE PROPERTY

7.1 Leases and Property Contracts.  During the period of time from the Effective
 Date to the Closing Date, in the ordinary  course of business  Seller may enter
 into new  Property  Contracts,  new Leases,  renew  existing  Leases or modify,
 terminate or accept the surrender or  forfeiture  of any of the Leases,  modify
 any Property  Contracts,  or institute and prosecute any available remedies for
 default  under any Lease or  Property  Contract  without  first  obtaining  the
 written consent of Purchaser;  provided,  however,  Seller agrees that any such
 new Property  Contracts  or any new or renewed  Leases shall not have a term in
 excess  of 1 year (or  such  longer  period  of time for  which  such  Property
 Contracts or Leases are entered  into by Seller in the  ordinary  course of its
 operation of the  Property)  without the prior  written  consent of  Purchaser,
 which  consent  shall not be  unreasonably  withheld,  conditioned  or delayed.
 Notwithstanding  anything  to the  contrary  contained  herein , Seller  hereby
 agrees that any new Property  Contracts  entered into during the period of time
 from the Effective  Date to the Closing Date,  shall be terminable  upon thirty
 (30) days or less notice without penalty or cost.
7.2 General  Operation of  Property.  Except as  specifically  set forth in this
 Article 7, Seller shall operate the Property  after the  Effective  Date in the
 ordinary  course of business,  and except as  necessary  in the  Seller's  sole
 discretion  to address (a) any life or safety  issue at the Property or (b) any
 other  matter  which in Seller's  reasonable  discretion  materially  adversely
 affecting the use, operation or value of the Property, Seller will not make any
 material  alterations  to the  Property  or remove any  material  Fixtures  and
 Tangible Personal Property without the prior written consent of Purchaser which
 consent shall not be unreasonably withheld, denied or delayed.
7.3 Liens.  Other than utility  easements and temporary  construction  easements
 granted by Seller in the ordinary course of business,  Seller covenants that it
 will not  voluntarily  create or cause any lien or encumbrance to attach to the
 Property between the Effective Date and the Closing Date (other than Leases and
 Property  Contracts as provided in Section 7.1) unless Purchaser  approves such
 lien or  encumbrance,  which  approval  shall not be  unreasonably  withheld or
 delayed.  If Purchaser  approves any such subsequent  lien or encumbrance,  the
 same shall be deemed a Permitted Encumbrance for all purposes hereunder.

                                  ARTICLE VIII
                         CONDITIONS PRECEDENT TO CLOSING

8.1   Purchaser's  Conditions  to  Closing.  Purchaser's  obligation  to close
 under  this  Contract,   shall  be  subject  to  and  conditioned   upon  the
 fulfillment of each and all of the following conditions precedent:
8.1.1 All of the  documents  required to be  delivered by Seller to Purchaser at
the  Closing  pursuant  to the  terms  and  conditions  hereof  shall  have been
delivered;  8.1.2 Each of Seller's Representations shall be true in all material
respects  as of the  Closing  Date;  8.1.3  Seller  shall  have  complied  with,
fulfilled and performed in all material  respects each of the  covenants,  terms
and conditions to be complied with,  fulfilled or performed by Seller hereunder;
and 8.1.4 Neither Seller nor Seller's  general  partner shall be a debtor in any
bankruptcy  proceeding  nor shall have been in the last 6 months a debtor in any
bankruptcy proceeding.

      Notwithstanding anything to the contrary, there are no other conditions on
Purchaser's  obligation  to Close except as expressly  set forth in this Section
8.1. If any  condition set forth in Sections  8.1.1,  8.1.3 or 8.1.4 is not met,
Purchaser may (a) waive any of the foregoing  conditions  and proceed to Closing
on the Closing Date with no offset or deduction from the Purchase  Price, or (b)
if such failure  constitutes  a default by Seller,  exercise any of its remedies
pursuant to Section  10.2.  If the  condition  set forth in Section 8.1.2 is not
met,  Purchaser  may, as its sole and  exclusive  remedy,  (i) notify  Seller of
Purchaser's  election to  terminate  this  Contract  and receive a return of the
Deposit  from the Escrow  Agent,  or (ii) waive such  condition  and  proceed to
Closing on the Closing Date with no offset or deduction from the Purchase Price.
8.2 Seller's Conditions to Closing. Without limiting any of the rights of Seller
 elsewhere  provided for in this  Contract,  Seller's  obligation  to close with
 respect to conveyance of the Property  under this Contract  shall be subject to
 and  conditioned  upon  the  fulfillment  of  each  and  all of  the  following
 conditions precedent:
8.2.1 All of the  documents  and funds  required to be delivered by Purchaser to
Seller at the Closing  pursuant to the terms and  conditions  hereof  shall have
been delivered;  8.2.2 Each of the representations,  warranties and covenants of
Purchaser  contained  herein  shall be true in all  material  respects as of the
Closing Date; 8.2.3 Purchaser shall have complied with,  fulfilled and performed
in all material  respects  each of the  covenants,  terms and  conditions  to be
complied with, fulfilled or performed by Purchaser  hereunder;  and 8.2.4 Seller
shall have  received all  consents,  documentation  and  approvals  necessary to
consummate and  facilitate  the  transactions  contemplated  hereby,  including,
without  limitation,  a tax free  exchange  pursuant  to Section  13.19 (and the
amendment of Seller's (or Seller's  affiliates')  partnership or  organizational
documents  in  connection  therewith),  (a)  from  Seller's  partners,  members,
managers,  shareholders  or  directors  to the extent  required by Seller's  (or
Seller's  affiliates')  organizational  documents,  and (b) that are required by
law.

      If any of the foregoing  conditions  to Seller's  obligation to close with
respect to  conveyance of the Property  under this Contract are not met,  Seller
may (a) waive any of the  foregoing  conditions  and  proceed  to Closing on the
Closing Date, or (b) terminate this Contract, and, if such failure constitutes a
default by Purchaser, exercise any of its remedies under Section 10.1.

                                   ARTICLE IX
                                   BROKERAGE

9.1 Indemnity.  Seller  represents  and warrants to Purchaser  that it has dealt
 only with Pacific Real Estate  Investments  LLC  ("Broker") in connection  with
 this Contract.  Seller and Purchaser each  represents and warrants to the other
 that, other than Broker,  it has not dealt with or utilized the services of any
 other  real  estate  broker,  sales  person or finder in  connection  with this
 Contract, and each party agrees to indemnify,  hold harmless, and, if requested
 in the sole and absolute  discretion  of the  indemnitee,  defend (with counsel
 approved  by the  indemnitee)  the other  party  from and  against  all  Losses
 relating  to  brokerage   commissions   and  finder's   fees  arising  from  or
 attributable to the acts or omissions of the indemnifying party. The provisions
 of this Section 9.1 shall survive the termination of this Contract,  and if not
 so terminated, the Closing and delivery of the Deed to Purchaser.
9.2 Broker  Commission.  If the Closing  occurs,  Seller  agrees to pay Broker a
 commission  according to the terms of a separate contract.  Broker shall not be
 deemed a party or third party beneficiary of this Contract.
9.3 Broker  Signature  Page.  As a condition to Seller's  obligation  to pay the
 commission pursuant to Section 9.2, Broker shall execute the signature page for
 Broker  attached hereto solely for purposes of confirming the matters set forth
 therein;  provided,  however, that (a) Broker's signature hereon shall not be a
 prerequisite  to the binding  nature of this  Contract on Purchaser and Seller,
 and the same shall  become fully  effective  upon  execution  by Purchaser  and
 Seller,  and (b) the  signature  of Broker will not be  necessary  to amend any
 provision of this Contract.

                                   ARTICLE X
                              DEFAULTS AND REMEDIES

10.1 Purchaser Default.  If Purchaser  defaults in its obligations  hereunder to
 (a) deliver the Deposit (or any other deposit or payment  required of Purchaser
 hereunder),  (b) deliver to the Seller the deliveries  specified  under Section
 5.3 on the date required  thereunder,  or (c) deliver the Purchase Price at the
 time required by Section 2.2.4 and close on the purchase of the Property on the
 Closing Date,  then,  immediately  and without notice or cure,  Purchaser shall
 forfeit the Deposit,  and the Escrow Agent shall deliver the Deposit to Seller,
 and neither  party shall be  obligated to proceed with the purchase and sale of
 the  Property.  If,  Purchaser  defaults  in any of its other  representations,
 warranties or obligations  under this Contract,  and such default continues for
 more than 10 days after  written  notice  from  Seller,  then  Purchaser  shall
 forfeit the Deposit,  and the Escrow Agent shall deliver the Deposit to Seller,
 and neither  party shall be  obligated to proceed with the purchase and sale of
 the Property. The Deposit is liquidated damages and recourse to the Deposit is,
 except for Purchaser's  indemnity and  confidentiality  obligations  hereunder,
 Seller's  sole and  exclusive  remedy for  Purchaser's  failure to perform  its
 obligation to purchase the Property or breach of a representation  or warranty.
 Seller  expressly  waives the remedies of specific  performance  and additional
 damages for such default by Purchaser.  SELLER AND PURCHASER  ACKNOWLEDGE  THAT
 SELLER'S  DAMAGES  WOULD BE DIFFICULT TO  DETERMINE,  AND THAT THE DEPOSIT IS A
 REASONABLE  ESTIMATE OF SELLER'S DAMAGES  RESULTING FROM A DEFAULT BY PURCHASER
 IN ITS OBLIGATION TO PURCHASE THE PROPERTY.  SELLER AND PURCHASER FURTHER AGREE
 THAT THIS SECTION 10.1 IS INTENDED TO AND DOES  LIQUIDATE THE AMOUNT OF DAMAGES
 DUE SELLER, AND SHALL BE SELLER'S  EXCLUSIVE REMEDY AGAINST PURCHASER,  BOTH AT
 LAW AND IN EQUITY,  ARISING  FROM OR RELATED  TO A BREACH BY  PURCHASER  OF ITS
 OBLIGATION TO CONSUMMATE THE TRANSACTIONS  CONTEMPLATED BY THIS CONTRACT, OTHER
 THAN WITH RESPECT TO  PURCHASER'S  INDEMNITY  AND  CONFIDENTIALITY  OBLIGATIONS
 HEREUNDER.
10.2  Seller  Default.  If  Seller,  prior  to  the  Closing,  defaults  in  its
 representations,  warranties,  covenants,  or obligations  under this Contract,
 including  to sell the  Property as required by this  Contract and such default
 continues for more than 10 days after written notice from  Purchaser,  then, at
 Purchaser's  election and as Purchaser's sole and exclusive remedy,  either (A)
 this Contract shall terminate,  and all payments and things of value, including
 the  Deposit,  provided by Purchaser  hereunder  shall be returned to Purchaser
 (subject  to  Purchaser's   obligation   under  Section  3.5.2  to  return  all
 Third-Party  Reports and information  and Materials  provided to Purchaser as a
 pre-condition  to the return of the Deposit) and Purchaser may recover,  as its
 sole recoverable damages (but without limiting its right to receive a refund of
 the  Deposit),   its  direct  and  actual  out-of-pocket   expenses  and  costs
 (documented  by paid  invoices  to  third  parties)  in  connection  with  this
 transaction,  which  damages  shall not  exceed  $20,000 in  aggregate,  or (B)
 Purchaser may seek specific  performance of Seller's  obligation to deliver the
 Deed  pursuant to this Contract  (but not  damages).  Purchaser  agrees that it
 shall  promptly  deliver to Seller an assignment of all of  Purchaser's  right,
 title and interest in and to (together with possession of) all plans,  studies,
 surveys,  reports, and other materials paid for with the out-of-pocket expenses
 reimbursed by Seller pursuant to the foregoing  sentence.  SELLER AND PURCHASER
 FURTHER  AGREE THAT THIS  SECTION 10.2 IS INTENDED TO AND DOES LIMIT THE AMOUNT
 OF DAMAGES DUE PURCHASER AND THE REMEDIES AVAILABLE TO PURCHASER,  AND SHALL BE
 PURCHASER'S  EXCLUSIVE REMEDY AGAINST SELLER, BOTH AT LAW AND IN EQUITY ARISING
 FROM OR RELATED TO A BREACH BY SELLER OF ITS  REPRESENTATIONS,  WARRANTIES,  OR
 COVENANTS OR ITS OBLIGATION TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS
 CONTRACT.  UNDER NO CIRCUMSTANCES  MAY PURCHASER SEEK OR BE ENTITLED TO RECOVER
 ANY SPECIAL,  CONSEQUENTIAL,  PUNITIVE, SPECULATIVE OR INDIRECT DAMAGES, ALL OF
 WHICH PURCHASER  SPECIFICALLY  WAIVES, FROM SELLER FOR ANY BREACH BY SELLER, OF
 ITS  REPRESENTATIONS,  WARRANTIES  OR COVENANTS OR ITS  OBLIGATIONS  UNDER THIS
 CONTRACT.  PURCHASER  SPECIFICALLY  WAIVES THE RIGHT TO FILE ANY LIS PENDENS OR
 ANY LIEN AGAINST THE PROPERTY  UNLESS AND UNTIL IT HAS  IRREVOCABLY  ELECTED TO
 SEEK SPECIFIC PERFORMANCE OF THIS CONTRACT AND HAS FILED AN ACTION SEEKING SUCH
 REMEDY.

                                   ARTICLE XI
                            RISK OF LOSS OR CASUALTY

11.1 Major  Damage.  In the event that the  Property is damaged or  destroyed by
 fire or other  casualty  prior to Closing,  and the cost of repair is more than
 $250,000,  then  Seller  shall  have no  obligation  to repair  such  damage or
 destruction and shall notify Purchaser in writing of such damage or destruction
 (the "Damage Notice").  Within 10 days after Purchaser's  receipt of the Damage
 Notice,  Purchaser  may  elect at its  option to  terminate  this  Contract  by
 delivering  written notice to Seller. In the event Purchaser fails to terminate
 this Contract within the foregoing  10-day period,  this  transaction  shall be
 closed in  accordance  with the terms of this  Contract  for the full  Purchase
 Price  notwithstanding  any such  damage or  destruction  and  Purchaser  shall
 receive all insurance  proceeds  pertaining  thereto (plus a credit against the
 Purchase Price in the amount of any deductible  payable by Seller in connection
 therewith) at Closing.
11.2 Minor  Damage.  In the event that the  Property is damaged or  destroyed by
 fire or other casualty prior to the Closing, and the cost of repair is equal to
 or less than $250,000,  this transaction shall be closed in accordance with the
 terms of this Contract,  notwithstanding  the damage or destruction;  provided,
 however,  Seller  shall make such  repairs to the extent of any  recovery  from
 insurance carried on the Property if they can be reasonably effected before the
 Closing.  Subject to Section  11.3, if Seller is unable to effect such repairs,
 then Purchaser shall receive all insurance proceeds  pertaining thereto (plus a
 credit against the Purchase  Price in the amount of any  deductible  payable by
 Seller in  connection  therewith)  at Closing.  In the event that the insurance
 proceeds are  insufficient  to fund the estimated cost to complete such repairs
 (as determined by an independent  contractor selected by Seller),  Seller shall
 escrow at the Closing an amount equal to the  difference  between the amount of
 such estimate and the available  insurance  proceeds.  Such funds shall be held
 and  disbursed  pursuant to a mutually  acceptable  escrow  agreement  with the
 Escrow Agent to be executed at the Closing.
11.3  Repairs.  To the  extent  that  Seller  elects  to  commence  any  repair,
 replacement or restoration of the Property prior to Closing,  then Seller shall
 be entitled to receive and apply available insurance proceeds to any portion of
 such  repair,  replacement  or  restoration  completed  or  installed  prior to
 Closing,  with  Purchaser  being  responsible  for  completion  of such repair,
 replacement  or  restoration  after  Closing from the balance of any  available
 insurance  proceeds.  The  provisions  of this Section  11.3 shall  survive the
 Closing  and  delivery of the Deed to  Purchaser.  In the event that (a) Seller
 elects to commence repair,  replacement or restoration of the Property prior to
 Closing,  (b) such  repairs are not  completed  prior to  Closing,  and (c) the
 remaining  insurance proceeds are insufficient to fund the remaining  estimated
 cost to complete  such repairs (as  determined  either  pursuant to an existing
 construction  contract  or by an  independent  contractor  selected by Seller),
 Seller shall escrow at the Closing an amount  equal to the  difference  between
 the amount of such estimate and the  remaining  available  insurance  proceeds.
 Such funds shall be held and disbursed pursuant to a mutually acceptable escrow
 agreement with the Escrow Agent to be executed at the Closing.

                                  ARTICLE XII
                                 EMINENT DOMAIN

12.1 Eminent  Domain.  In the event that,  at the time of Closing,  any material
 part of the Property is (or  previously has been)  acquired,  or is about to be
 acquired,  by any  governmental  agency  by the  powers  of  eminent  domain or
 transfer in lieu thereof (or in the event that at such time there is any notice
 of any such acquisition or intent to acquire by any such governmental  agency),
 Purchaser  shall have the right,  at  Purchaser's  option,  to  terminate  this
 Contract by giving written notice within 10 days after Purchaser's receipt from
 Seller  of  notice  of the  occurrence  of  such  event,  and if  Purchaser  so
 terminates  this  Contract  shall  recover  the Deposit  hereunder  (subject to
 Purchaser's  obligation  under Section 3.5.2 to return all Third-Party  Reports
 and information and Materials  provided to Purchaser as a pre-condition  to the
 return of the Deposit).  If Purchaser  fails to terminate this Contract  within
 such 10-day period,  this  transaction  shall be closed in accordance  with the
 terms of this Contract for the full Purchase Price and Purchaser  shall receive
 the full benefit of any condemnation  award. It is expressly agreed between the
 parties hereto that this section shall in no way apply to customary dedications
 for public purposes which may be necessary for the development of the Property.

                                  ARTICLE XIII
                                  MISCELLANEOUS

13.1 Binding  Effect of Contract.  This Contract  shall not be binding on either
 party until executed by both Purchaser and Seller. As provided in Section 2.3.5
 and Section 9.3 above, neither the Escrow Agent's nor the Broker's execution of
 this Contract shall be a prerequisite to its effectiveness.
13.2 Exhibits And Schedules. All Exhibits and Schedules,  whether or not annexed
 hereto, are a part of this Contract for all purposes.
13.3  Assignability.  This Contract is not assignable by Purchaser without first
 obtaining the prior written  approval of the Seller,  except that Purchaser may
 assign this  Contract to one or more  entities so long as (a)  Purchaser  is an
 affiliate of the purchasing entity(ies), (b) Purchaser is not released from its
 liability  hereunder,  (c) Purchaser  provides  written notice to Seller of any
 proposed  assignment no later than 10 days prior to the Closing  Date,  and (d)
 Seller consents  thereto (which consent shall not be  unreasonably  withheld or
 delayed).  As used herein,  an affiliate is a person or entity  controlled  by,
 under common control with, or controlling another person or entity.
13.4 Binding  Effect.  Subject to Section 13.3,  this Contract  shall be binding
 upon and inure to the  benefit of Seller and  Purchaser,  and their  respective
 successors, heirs and permitted assigns.
13.5 Captions.  The captions,  headings,  and arrangements used in this Contract
 are for  convenience  only and do not in any way  affect,  limit,  amplify,  or
 modify the terms and provisions hereof.
13.6 Number And Gender Of Words.  Whenever  herein the singular  number is used,
 the same shall  include the plural where  appropriate,  and words of any gender
 shall include each other gender where appropriate.
13.7 Notices. All notices,  demands,  requests and other communications required
 or  permitted  hereunder  shall be in  writing,  and  shall  be (a)  personally
 delivered  with a  written  receipt  of  delivery;  (b)  sent  by a  nationally
 recognized  overnight  delivery service requiring a written  acknowledgement of
 receipt or providing a  certification  of delivery or attempted  delivery;  (c)
 sent by certified or registered mail, return receipt requested,  or (d) sent by
 confirmed  facsimile  transmission with an original copy thereof transmitted to
 the recipient by one of the means  described in subsections  (a) through (c) no
 later than 3 Business Days  thereafter.  All notices shall be deemed  effective
 when actually delivered as documented in a delivery receipt; provided, however,
 that if the notice was sent by overnight  courier or mail as  aforesaid  and is
 affirmatively refused or cannot be delivered during customary business hours by
 reason of the absence of a signatory to acknowledge  receipt, or by reason of a
 change of address  with  respect  to which the  addressor  did not have  either
 knowledge or written notice  delivered in accordance with this paragraph,  then
 the first attempted delivery shall be deemed to constitute delivery. Each party
 shall be  entitled  to change  its  address  for  notices  from time to time by
 delivering to the other party notice thereof in the manner herein  provided for
 the  delivery of notices.  All notices  shall be sent to the  addressee  at its
 address set forth following its name below:

            To Purchaser:

            The Meadow Wood Investors, LLC
            c/o Rocky Mountain Development Group, Inc.
            1119 Kent Street, Suite D
            Missoula, Montana  59801
            Attention:  Rick Wishcamper
            Telephone:  406-728-3040
            Facsimile:  775-383-9256

            and a copy to:

            Garlington, Lohn & Robinson, PLLP
            199 W. Pine
            Box 7909
            Missoula, Montana  59807
            Attention:  Alan F. McCormick, Esq.
            Telephone:  406-523-2518
            Facsimile:  406-523-2595

            To Seller:

            c/o AIMCO
            4582 South Ulster Street Parkway
            Suite 1100
            Denver, Colorado  80237
            Attention:  Patrick Slavin
            Telephone:  303-691-4340
            Facsimile:  303-300-3282

            And:

            c/o AIMCO
            4582 South Ulster Street Parkway
            Suite 1100
            Denver, Colorado  80237
            Attention:  Mr. Harry Alcock
            Telephone:  303-691-4344
            Facsimile:  303-300-3282

            with copy to:

            Chad Asarch, Esq.
            Vice President and Assistant General Counsel
            AIMCO
            4582 South Ulster Street Parkway
            Suite 1100
            Denver, Colorado  80237
            Telephone:  303-691-4303
            Facsimile:  303-300-3260

            and a copy to:

            Loeb & Loeb LLP
            10100 Santa Monica Boulevard, Suite 2200
            Los Angeles, California  90067-4164
            Attention:  Karen N. Higgins, Esq. and Loretta Thompson
            Telephone:  310-282-2345
            Facsimile:   310-919-3578

      Any notice required hereunder to be delivered to the Escrow Agent shall be
delivered in accordance with above provisions as follows:

            First American Title Insurance
            1 First American Way, Bldg 1
            Santa Ana, CA 92707
            Attention:  Carol L. Weir, Escrow Officer
            Telephone:  800-854-3643

Unless specifically required to be delivered to the Escrow Agent pursuant to the
terms of this  Contract,  no notice  hereunder  must be  delivered to the Escrow
Agent in order to be  effective so long as it is delivered to the other party in
accordance with the above provisions.  13.8 Governing Law And Venue. The laws of
the State of Oregon shall govern the validity,  construction,  enforcement,  and
interpretation  of this Contract,  unless otherwise  specified herein except for
the conflict of laws provisions  thereof.  Subject to Section 13.25, all claims,
disputes  and other  matters in  question  arising  out of or  relating  to this
Contract, or the breach thereof,  shall be decided by proceedings instituted and
litigated  in a court of  competent  jurisdiction  in the  state  in  which  the
Property is situated,  and the parties hereto expressly consent to the venue and
jurisdiction of such court.
13.9 Entire  Agreement.  This Contract  embodies the entire Contract between the
 parties  hereto  concerning  the subject matter hereof and supersedes all prior
 conversations,  proposals, negotiations,  understandings and Contracts, whether
 written or oral.
13.10  Amendments.  This  Contract  shall  not  be  amended,  altered,  changed,
 modified,  supplemented or rescinded in any manner except by a written contract
 executed by all of the parties;  provided,  however,  that,  (a) as provided in
 Section 2.3.5 above, the signature of the Escrow Agent shall not be required as
 to any amendment of this  Contract  other than an amendment of Section 2.3, and
 (b) as provided in Section 9.3 above,  the signature of the Broker shall not be
 required as to any amendment of this Contract.
13.11 Severability. In the event that any part of this Contract shall be held to
 be  invalid  or  unenforceable  by a  court  of  competent  jurisdiction,  such
 provision  shall be reformed,  and enforced to the maximum extent  permitted by
 law.  If such  provision  cannot be  reformed,  it shall be  severed  from this
 Contract  and the  remaining  portions  of this  Contract  shall be  valid  and
 enforceable.
13.12 Multiple Counterparts/Facsimile  Signatures. This Contract may be executed
 in a number  of  identical  counterparts.  This  Contract  may be  executed  by
 facsimile  signatures  which  shall be  binding  on the  parties  hereto,  with
 original signatures to be delivered as soon as reasonably practical thereafter.
13.13  Construction.  No provision of this Contract  shall be construed in favor
 of, or against,  any particular party by reason of any presumption with respect
 to the drafting of this Contract;  both parties,  being represented by counsel,
 having fully participated in the negotiation of this instrument.
13.14  Confidentiality.  Purchaser  shall not disclose the terms and  conditions
 contained in this Contract and shall keep the same confidential,  provided that
 Purchaser  may  disclose  the  terms and  conditions  of this  Contract  (a) as
 required by law, (b) to consummate the terms of this Contract, or any financing
 relating  thereto,  or (c) to  Purchaser's or Seller's  lenders,  attorneys and
 accountants.  Any  information  and  Materials  provided by Seller to Purchaser
 hereunder are  confidential  and Purchaser shall be prohibited from making such
 information  public to any other  person or entity  other  than its  agents and
 legal representatives,  without Seller's prior written authorization, which may
 be  granted  or  denied  in  Seller's  sole  discretion.   Notwithstanding  the
 provisions of Section 13.9,  Purchaser agrees that the covenants,  restrictions
 and agreements of Purchaser contained in any confidentiality agreement executed
 by Purchaser  prior to the  Effective  Date shall survive the execution of this
 Contract and shall not be superceded hereby.
13.15 Time Of The  Essence.  It is expressly  agreed by the parties  hereto that
 time is of the essence with respect to this Contract.
13.16 Waiver.  No delay or omission to exercise any right or power accruing upon
 any default,  omission,  or failure of performance  hereunder  shall impair any
 right or power or shall be construed to be a waiver thereof, but any such right
 and  power  may be  exercised  from  time to time and as often as may be deemed
 expedient.  No waiver,  amendment,  release,  or  modification of this Contract
 shall be established by conduct,  custom,  or course of dealing and all waivers
 must be in writing and signed by the waiving party.
13.17 Attorneys Fees. In the event either party hereto  commences  litigation or
 arbitration   against   the  other  to  enforce  its  rights   hereunder,   the
 substantially  prevailing party in such litigation shall be entitled to recover
 from the other party its reasonable  attorneys' fees and expenses incidental to
 such litigation and arbitration, including the cost of in-house counsel and any
 appeals, including the cost of in-house counsel, and whether incurred on appeal
 or in connection with any petition for review or bankruptcy proceeding.
13.18 Time  Periods.  Should the last day of a time  period fall on a weekend or
 legal holiday,  the next Business Day thereafter shall be considered the end of
 the time period.
13.19 1031  Exchange.  Seller  and  Purchaser  acknowledge  and  agree  that the
 purchase  and sale of the  Property  may be part of a tax-free  exchange  under
 Section  1031 of the Code for either  Purchaser  or Seller.  Each party  hereby
 agrees to take all reasonable steps on or before the Closing Date to facilitate
 such  exchange if  requested  by the other  party,  provided  that (a) no party
 making such accommodation shall be required to acquire any substitute property,
 (b) such exchange shall not affect the representations, warranties, liabilities
 and obligations of the parties to each other under this Contract,  (c) no party
 making such accommodation shall incur any additional cost, expense or liability
 in  connection  with such  exchange  (other  than  expenses  of  reviewing  and
 executing  documents  required in connection  with such  exchange),  and (d) no
 dates in this  Contract will be extended as a result  thereof.  Notwithstanding
 anything to the  contrary  contained in the  foregoing,  if Seller so elects to
 close the transfer of the Property as an exchange, then (i) Seller, at its sole
 option,  may delegate  its  obligations  to transfer  the  Property  under this
 Contract,  and may  assign  its  rights to  receive  the  Purchase  Price  from
 Purchaser,  to a deferred exchange  intermediary (an  "Intermediary")  or to an
 exchange  accommodation  titleholder,  as the case may be; (ii) such delegation
 and  assignment  shall  in no  way  reduce,  modify  or  otherwise  affect  the
 obligations  of Seller  pursuant to this  Contract;  (iii)  Seller shall remain
 fully liable for its obligations  under this Contract as if such delegation and
 assignment  shall  not  have  taken  place;   (iv)   Intermediary  or  exchange
 accommodation  titleholder,  as the case may be,  shall  have no  liability  to
 Purchaser;  and (v) the closing of the  transfer of the  Property to  Purchaser
 shall be undertaken by direct deed from Seller (or, if  applicable,  from other
 affiliates of Seller whom Seller will cause to execute such deeds) to Purchaser
 or to exchange accommodation  titleholder,  as the case may be. Notwithstanding
 anything to the contrary contained in the foregoing,  if Purchaser so elects to
 close the  acquisition of the Property as an exchange,  then (i) Purchaser,  at
 its sole option,  may delegate its  obligations  to acquire the Property  under
 this  Contract,  and may assign its rights to receive the Property from Seller,
 to an Intermediary or to an exchange accommodation titleholder, as the case may
 be; (ii) such  delegation  and  assignment  shall in no way  reduce,  modify or
 otherwise affect the obligations of Purchaser pursuant to this Contract;  (iii)
 Purchaser shall remain fully liable for its obligations  under this Contract as
 if such delegation and assignment shall not have taken place; (iv) Intermediary
 or  exchange  accommodation  titleholder,  as the  case may be,  shall  have no
 liability to Seller;  and (v) the closing of the acquisition of the Property by
 Purchaser or the exchange accommodation titleholder,  as the case may be, shall
 be  undertaken  by direct  deed from  Seller  (or,  if  applicable,  from other
 affiliates of Seller whom Seller will cause to execute such deeds) to Purchaser
 (or to exchange accommodation titleholder, as the case may be). Notwithstanding
 anything in this Section 13.19 to the contrary,  Seller shall have the right to
 extend the Closing Date (as extended  pursuant to the second or third sentences
 of Section 5.1) for up to 30 days in order to  facilitate  a tax free  exchange
 pursuant to this Section 13.19,  and to obtain all  documentation in connection
 therewith.
13.20 No Personal  Liability  of  Officers,  Trustees or  Directors  of Seller's
 Partners.  Purchaser  acknowledges that this Contract is entered into by Seller
 which is a Missouri  limited  partnership,  and  Purchaser  agrees that none of
 Seller's  Indemnified  Parties  shall have any  personal  liability  under this
 Contract  or  any  document   executed  in  connection  with  the  transactions
 contemplated by this Contract.
13.21 No Exclusive Negotiations. Seller shall have the right, at all times prior
 to the expiration of the Feasibility Period, to solicit backup offers and enter
 into  discussions,  negotiations,  or any other  communications  concerning  or
 related to the sale of the Property with any  third-party;  provided,  however,
 that such  communications  are subject to the terms of this Contract,  and that
 Seller shall not enter into any contract or binding Contract with a third-party
 for the  sale  of the  Property  unless  such  Contract  is  contingent  on the
 termination  of this  Contract  without the  Property  having been  conveyed to
 Purchaser.
13.22 ADA Disclosure. Purchaser acknowledges that the Property may be subject to
 the federal  Americans With  Disabilities  Act (the "ADA") and the federal Fair
 Housing Act (the "FHA").  The ADA requires,  among other matters,  that tenants
 and/or owners of "public  accommodations"  remove barriers in order to make the
 Property accessible to disabled persons and provide auxiliary aids and services
 for  hearing,  vision or speech  impaired  persons.  Seller  makes no warranty,
 representation  or guarantee of any type or kind with respect to the Property's
 compliance  with the ADA or the FHA (or any similar  state or local  law),  and
 Seller expressly disclaims any such representation.
13.23 No  Recording.  Purchaser  shall not cause or allow this  Contract  or any
 contract or other document related hereto, nor any memorandum or other evidence
 hereof, to be recorded or become a public record without Seller's prior written
 consent,  which  consent may be withheld at Seller's  sole  discretion.  If the
 Purchaser  records this Contract or any other  memorandum or evidence  thereof,
 Purchaser shall be in default of its obligations under this Contract. Purchaser
 hereby  appoints  the Seller as  Purchaser's  attorney-in-fact  to prepare  and
 record any documents  necessary to effect the  nullification and release of the
 Contract or other memorandum or evidence thereof from the public records.  This
 appointment shall be coupled with an interest and irrevocable.
13.24 Relationship of Parties.  Purchaser and Seller  acknowledge and agree that
 the relationship  established  between the parties pursuant to this Contract is
 only that of a seller and a purchaser of property. Neither Purchaser nor Seller
 is, nor shall either hold itself out to be, the agent, employee, joint venturer
 or partner of the other party.
13.25  Dispute  Resolution.  Any  controversy,  dispute,  or claim of any nature
 arising out of, in  connection  with,  or in  relation  to the  interpretation,
 performance,  enforcement or breach of this Contract (and any closing  document
 executed in connection herewith),  including any claim based on contract,  tort
 or  statute,  shall be  resolved  at the  written  request of any party to this
 Contract by binding  arbitration.  The  arbitration  shall be  administered  in
 accordance with the then current  Commercial  Arbitration Rules of the American
 Arbitration  Association.  Any  matter to be settled  by  arbitration  shall be
 submitted to the  American  Arbitration  Association  in the state in which the
 Property is located. The parties shall attempt to designate one arbitrator from
 the  American  Arbitration  Association.  If they are unable to do so within 30
 days after written demand therefor,  then the American Arbitration  Association
 shall designate an arbitrator.  The arbitration shall be final and binding, and
 enforceable in any court of competent jurisdiction.  The arbitrator shall award
 attorneys'  fees  (including  those  of  in-house  counsel)  and  costs  to the
 substantially  prevailing party and charge the cost of arbitration to the party
 which  is not the  substantially  prevailing  party.  Notwithstanding  anything
 herein to the  contrary,  this  Section  13.25 shall not prevent  Purchaser  or
 Seller from seeking and obtaining  equitable relief on a temporary or permanent
 basis,  including,   without  limitation,  a  temporary  restraining  order,  a
 preliminary or permanent  injunction or similar equitable relief,  from a court
 of competent jurisdiction located in the state in which the Property is located
 (to which all parties hereto consent to venue and  jurisdiction) by instituting
 a legal  action or other  court  proceeding  in order to protect or enforce the
 rights of such party  under this  Contract or to prevent  irreparable  harm and
 injury. The court's jurisdiction over any such equitable matter, however, shall
 be expressly limited only to the temporary, preliminary, or permanent equitable
 relief  sought;  all other claims  initiated  under this  Contract  between the
 parties  hereto shall be determined  through final and binding  arbitration  in
 accordance with this Section 13.25.
13.26 AIMCO Marks.  Purchaser agrees that Seller, the Property Manager or AIMCO,
 or their  respective  affiliates,  are the sole owners of all right,  title and
 interest  in and to the AIMCO  Marks (or have the right to use such AIMCO Marks
 pursuant to license  agreements with third parties) and that no right, title or
 interest in or to the AIMCO Marks is granted, transferred, assigned or conveyed
 as a result of this Contract.  Purchaser further agrees that Purchaser will not
 use the AIMCO Marks for any purpose.
13.27  Non-Solicitation  of Employees.  Purchaser  acknowledges and agrees that,
 without the express  written  consent of Seller,  neither  Purchaser nor any of
 Purchaser's  employees,  affiliates  or agents  shall  solicit  any of Seller's
 employees  or  any  employees  located  at the  Property  (or  any of  Seller's
 affiliates'  employees  located at any property owned by such  affiliates)  for
 potential employment.
13.28  Survival.  Except for (a) all of the provisions of this Article 13 (other
 than Section 13.19 and 13.21),  and (b) any  provision of this  Contract  which
 expressly states -that it shall so survive,  and (c) any payment  obligation of
 Purchaser  under this  Contract  (the  foregoing  (a),  (b) and (c) referred to
 herein as the "Survival Provisions"),  none of the terms and provisions of this
 Contract shall survive the  termination of this Contract,  and, if the Contract
 is not so terminated,  all of the terms and provisions of this Contract  (other
 than the Survival  Provisions)  shall be merged into the Closing  documents and
 shall not survive Closing.
13.29 Multiple Purchasers.  As used in this Contract, the term "Purchaser' means
 all entities acquiring any interest in the Property at the Closing,  including,
 without  limitation,  any  assignee(s)  of the original  Purchaser  pursuant to
 Section  13.3  of  this  Contract.  In  the  event  that  "Purchaser"  has  any
 obligations or makes any covenants,  representations  or warranties  under this
 Contract,  the same shall be made jointly and severally by all entities being a
 Purchaser  hereunder.  In the event that Seller receives notice from any entity
 being a Purchaser hereunder, the same shall be deemed to constitute notice from
 all entities being a Purchaser hereunder.  In the event that any entity being a
 Purchaser hereunder takes any action, breaches any obligation or otherwise acts
 pursuant  to the  terms of this  Contract,  the same  shall be deemed to be the
 action of the other entity(ies)  being a Purchaser  hereunder and the action of
 "Purchaser"  under this Contract.  In the event that Seller is required to give
 notice or take action with respect to Purchaser under this Contract,  notice to
 any entity  being a Purchaser  hereunder  or action with  respect to any entity
 being a Purchaser hereunder shall be a notice or action to all entities being a
 Purchaser  hereunder.  In the event that any entity being a Purchaser hereunder
 desires to bring an action or arbitration  against Seller,  such action must be
 joined by all entities being a Purchaser hereunder in order to be effective. In
 the event that there is any  agreement by Seller to pay any amount  pursuant to
 this Contract to Purchaser under any circumstance,  that amount shall be deemed
 maximum aggregate amount to be paid to all parties being a Purchaser  hereunder
 and not an amount that can be paid to each party  being a Purchaser  hereunder.
 In the event that Seller is  required to return the Deposit or other  amount to
 Purchaser,  Seller  shall  return  the  same to any  entity  being a  Purchaser
 hereunder and, upon such return,  shall have no further  liability to any other
 entity being a Purchaser  hereunder for such amount.  The foregoing  provisions
 also shall apply to any documents,  including,  without limitation, the General
 Assignment  and  Assumption  and the  Assignment  and  Assumption of Leases and
 Security   Deposits,   executed  in  connection  with  this  Contract  and  the
 transaction(s) contemplated hereby.
13.30 Statutory Land Use Disclaimer.  THE PROPERTY  DESCRIBED IN THIS INSTRUMENT
 MAY  NOT BE  WITHIN  A FIRE  PROTECTION  DISTRICT  PROTECTING  STRUCTURES.  THE
 PROPERTY IS SUBJECT TO LAND USE LAWS AND REGULATIONS, WHICH, IN FARM AND FOREST
 ZONES, MAY NOT AUTHORIZE  CONSTRUCTION OR SITING OF A RESIDENCE AND WHICH LIMIT
 LAWSUITS  AGAINST  FARMING OR FOREST  PRACTICES AS DEFINED IN ORS 30.930 IN ALL
 ZONES.  BEFORE SIGNING OR ACCEPTING THIS  INSTRUMENT,  THE PERSON ACQUIRING FEE
 TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING
 DEPARTMENT TO VERIFY  APPROVED USES AND THE  EXISTENCE OF FIRE  PROTECTION  FOR
 STRUCTURES."

                 [Remainder of Page Intentionally Left Blank]



<PAGE>



      NOW,  THEREFORE,  the parties hereto have executed this Contract as of the
date first set forth above.

                              Seller:

                              UNITED INVESTORS INCOME PROPERTIES,
                              a Missouri limited partnership

                              By:   United Investors Real Estate, Inc.,
                                    a Delaware corporation,
                                    its sole general partner
                                    By: /s/Patrick F. Slavin
                                    Name: Patrick F. Slavin
                                    Title: Senior Vice President

                              Purchaser:

                              THE MEADOW WOOD INVESTORS, LLC,
                              an Oregon limited liability company

                              By:    /s/Nathaniel M. Pulsifer
                              Name:  Nathaniel M. Pulsifer
                              Title: Manager


                              By:    /s/Richard Wisheamper
                              Name:  Richard Wisheamper
                              Title: President RMDC, Inc. as Manager

                              Purchaser's Tax Identification Number/Social
                                Security Number:

                              20-2761666



<PAGE>





                           ESCROW AGENT SIGNATURE PAGE

      The  undersigned  executes  the Contract to which this  signature  page is
attached  for the purpose of agreeing  to the  provisions  of Section 2.3 of the
Contract,  and hereby  establishes  May 9, 2005 as the date of opening of escrow
and designates NCS 87579 SAI as the escrow number assigned to this escrow.

                                    ESCROW AGENT:

                                    FIRST AMERICAN TITLE INSURANCE COMPANY


                                    By:    /s/Carol L. Weir
                                    Name:  Carol L. Weir
                                    Title: Senior Escrow Officer



<PAGE>



                              BROKER SIGNATURE PAGE

      The undersigned  Broker hereby executes this Broker  Signature Page solely
to  confirm  the  following:  (a)  Broker  represents  only  the  Seller  in the
transaction  described in the Contract to which this signature page is attached,
(b) Broker  acknowledges  that the only compensation due to Broker in connection
with the  Closing of the  transaction  described  in the  Contract to which this
signature  page is  attached  is as set forth in a  separate  agreement  between
Seller and Broker at the  Closing,  and (c) Broker  represents  and  warrants to
Seller  that  Broker  and its  affiliates  has  not and  will  not  receive  any
compensation (cash or otherwise) from or on behalf of Purchaser or any affiliate
thereof in  connection  with the  transaction,  and do not,  and will not at the
Closing,  have any direct or  indirect  legal,  beneficial,  economic  or voting
interest in Purchaser (or in an assignee of Purchaser, which pursuant to Section
13.3 of the  Contract,  acquires the Property at the Closing) nor has  Purchaser
granted (as of the Effective  Date or the Closing Date) the Broker or any of its
affiliates  any  right or option  to  acquire  any  direct  or  indirect  legal,
beneficial, economic or voting interest in Purchaser.

                              BROKER:

                              PACIFIC REAL ESTATE INVESTMENTS LLC,
                              an Oregon limited liability company


                              By:    /s/John A. Kennedy
                              Name:  John A. Kennedy
                              Title: President


Exhibit 31.1


                                  CERTIFICATION


I, Martha L. Long, certify that:


1.    I have reviewed this quarterly  report on Form 10-QSB of United  Investors
      Income Properties;

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

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

4.    The  small  business  issuer's  other  certifying  officer(s)  and  I  are
      responsible  for  establishing  and  maintaining  disclosure  controls and
      procedures (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
      the small business issuer and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            small business issuer, including its consolidated  subsidiaries,  is
            made  known to us by  others  within  those  entities,  particularly
            during the period in which this report is being prepared;

      (b)   Evaluated  the   effectiveness   of  the  small  business   issuer's
            disclosure  controls and procedures and presented in this report our
            conclusions about the  effectiveness of the disclosure  controls and
            procedures, as of the end of the period covered by this report based
            on such evaluation; and

      (c)   Disclosed in this report any change in the small  business  issuer's
            internal  control over financial  reporting that occurred during the
            small  business  issuer's  most  recent  fiscal  quarter  (the small
            business  issuer's  fourth  fiscal  quarter in the case of an annual
            report) that has  materially  affected,  or is reasonably  likely to
            materially affect, the small business issuer's internal control over
            financial reporting; and

5.    The  small  business  issuer's  other  certifying  officer(s)  and I  have
      disclosed,  based on our most recent  evaluation of internal  control over
      financial reporting, to the small business issuer's auditors and the audit
      committee of the small  business  issuer's  board of directors (or persons
      performing the equivalent functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely  affect the small business  issuer's
            ability  to  record,   process,   summarize  and  report   financial
            information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees who have a significant  role in the small  business
            issuer's internal control over financial reporting.

Date:  May 13, 2005

                                    /s/Martha L. Long
                                    Martha L. Long
                                    Senior Vice President of United  Investors
                                    Real  Estate,  Inc.,   equivalent  of  the
                                    chief executive officer of the Partnership


<PAGE>



Exhibit 31.2

                                  CERTIFICATION

I, Stephen B. Waters, certify that:


1.    I have reviewed this quarterly  report on Form 10-QSB of United  Investors
      Income Properties;

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

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

4.    The  small  business  issuer's  other  certifying  officer(s)  and  I  are
      responsible  for  establishing  and  maintaining  disclosure  controls and
      procedures (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
      the small business issuer and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            small business issuer, including its consolidated  subsidiaries,  is
            made  known to us by  others  within  those  entities,  particularly
            during the period in which this report is being prepared;

      (b)   Evaluated  the   effectiveness   of  the  small  business   issuer's
            disclosure  controls and procedures and presented in this report our
            conclusions about the  effectiveness of the disclosure  controls and
            procedures, as of the end of the period covered by this report based
            on such evaluation; and

      (c)   Disclosed in this report any change in the small  business  issuer's
            internal  control over financial  reporting that occurred during the
            small  business  issuer's  most  recent  fiscal  quarter  (the small
            business  issuer's  fourth  fiscal  quarter in the case of an annual
            report) that has  materially  affected,  or is reasonably  likely to
            materially affect, the small business issuer's internal control over
            financial reporting; and

5.    The  small  business  issuer's  other  certifying  officer(s)  and I  have
      disclosed,  based on our most recent  evaluation of internal  control over
      financial reporting, to the small business issuer's auditors and the audit
      committee of the small  business  issuer's  board of directors (or persons
      performing the equivalent functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely  affect the small business  issuer's
            ability  to  record,   process,   summarize  and  report   financial
            information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees who have a significant  role in the small  business
            issuer's internal control over financial reporting.

Date:  May 13, 2005

                                    /s/Stephen B. Waters
                                    Stephen B. Waters
                                    Vice  President of United  Investors  Real
                                    Estate,  Inc.,  equivalent  of  the  chief
                                    financial officer of the Partnership


<PAGE>


Exhibit 32.1


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



In  connection  with the  Quarterly  Report on Form  10-QSB of United  Investors
Income Properties (the "Partnership"),  for the quarterly period ended March 31,
2005 as filed with the  Securities  and Exchange  Commission  on the date hereof
(the "Report"), Martha L. Long, as the equivalent of the Chief Executive Officer
of the  Partnership,  and  Stephen B.  Waters,  as the  equivalent  of the Chief
Financial  Officer of the  Partnership,  each hereby  certifies,  pursuant to 18
U.S.C.  Section 1350, as adopted  pursuant to Section 906 of the  Sarbanes-Oxley
Act of 2002, that, to the best of his knowledge:

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

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


                                           /s/Martha L. Long
                                    Name:  Martha L. Long
                                    Date:  May 13, 2005


                                           /s/Stephen B. Waters
                                    Name:  Stephen B. Waters
                                    Date:  May 13, 2005


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

<PAGE>