TO: MADISON


                              NOTICE OF WITHDRAWAL
                         OF PREVIOUSLY TENDERED UNITS OF
                    INVESTOR LIMITED PARTNERSHIP INTERESTS OF
                          KRUPP REALTY FUND, LTD. - III

     To be sent to:

          Madison Liquidity Investors 104, LLC
          4643 South Ulster Street
          Suite 800
          Denver, Colorado  80237
          Telecopy: (303) 858-0000      Telephone: (303) 858-0001

Ladies and Gentlemen:

     The following Units of Investor Limited Partnership Interests (the "Units")
of Krupp  Realty Fund,  Ltd. - III (the  "Partnership")  previously  tendered to
Madison Liquidity Investors 104, LLC and Madison/OHI  Liquidity  Investors,  LLC
(collectively,  "Madison"),  as a result of the  execution  of an  Agreement  of
Assignment and Transfer by the undersigned,  are hereby withdrawn.  A failure to
complete the Section  "Number of Units Tendered" shall be deemed to indicate the
intent  of the  undersigned  that all  Units  tendered  to  Madison  are  hereby
withdrawn.

NUMBER OF UNITS WITHDRAWN _______________ (if all Units, you may leave blank)



__________________________________      __________________________________
(Signature of Owner)                    (Signature of Joint Owner)

All registered holders of Units of Investor Limited  Partnership  Interests must
sign exactly as their  name(s)  appear(s) on the  Agreement  of  Assignment  and
Transfer sent to Madison and in the Partnership records.

Name and Capacity (if other than individuals):__________________________________

Title:__________________________________________________________________________

Address:________________________________________________________________________


________________________________________________________________________________
(City)                                       (State)                      (Zip)

Area Code and Telephone No.   (Day):____________________________________________

                              (Evening):________________________________________

================================================================================
                          Signature Guarantee Medallion

Name and Address of Eligible Institution:_______________________________________

________________________________________________________________________________

________________________________________________________________________________

Authorized Signature:_______________________

Name:_______________________________________

Title:______________________________________      Date:_________________________






                           INSTRUCTIONS FOR WITHDRAWAL
                                       OF
                          PREVIOUSLY TENDERED UNITS OF
                     INVESTOR LIMITED PARTNERSHIP INTERESTS
                                       OF
                          KRUPP REALTY FUND, LTD. - III


1.   DELIVERY OF NOTICE OF WITHDRAWAL.  If you are withdrawing Units of Investor
     Limited Partnership Interests (the "Units") previously tendered pursuant to
     the offer made on April 21, 1999 (the "Madison Offer") by Madison Liquidity
     Investors 104, LLC ("Madison 104") and Madison/OHI Liquidity Investors, LLC
     (collectively, "Madison") please complete, execute, and send the "Notice of
     Withdrawal of Previously  Tendered  Units" of Krupp Realty Fund, Ltd. - III
     ("Notice  of  Withdrawal")  to the  address  noted  below.  The  Notice  of
     Withdrawal is printed on PINK paper.

                    Madison Liquidity Investors 104, LLC
                    4643 South Ulster Street
                    Suite 800
                    Denver, Colorado  80237
                    Telecopy:   (303) 858-0000
                    Telephone:  (303) 858-0001

     Madison 104 must  receive the Notice of  Withdrawal  on or prior to May 24,
     1999, the date of expiration of the Madison Offer, unless extended. MADISON
     WILL NOT ACCEPT NOTICE OF  WITHDRAWALS  WHICH ARE FAXED.  YOU MUST SEND THE
     NOTICE OF WITHDRAWAL BY MAIL OR OVERNIGHT COURIER.  Copies of all Notice of
     Withdrawals  should be sent or  transmitted  to Krupp Funds  Group  Limited
     Partnership at One Beacon Street, Suite 1500, Boston,  Massachusetts 02108,
     Fax (617) 423-8919. You may include the copy of the Notice of Withdrawal in
     the package which contains the Agreement of Assignment and Transfer.

2.   INADEQUATE  SPACE.  If any space  provided in the Notice of  Withdrawal  is
     inadequate,  all such additional information should be listed on a separate
     schedule and attached as part of the Notice of Withdrawal.

3.   SIGNATURE ON NOTICE OF WITHDRAWAL.  The Notice of Withdrawal must be signed
     by the person(s) who signed the Assignment  and Transfer  Agreement sent to
     Madison and must contain a Medallion  Signature  Guarantee.  The signatures
     must correspond  exactly with the name(s) as they appear on the Partnership
     records. If any Units tendered pursuant to the Madison Offer are registered
     in the names of two or more joint  holders,  all such holders must sign the
     Notice of Withdrawal. If the Notice of Withdrawal is signed by any trustee,
     executor,   administrator,   guardian,   attorney-in-fact,   officer  of  a
     corporation,  or others acting in a fiduciary capacity, such persons should
     so indicate when signing and must submit proper evidence of their authority
     to act.





                                                           TO: Krupp Funds Group


                              NOTICE OF WITHDRAWAL
                         OF PREVIOUSLY TENDERED UNITS OF
                    INVESTOR LIMITED PARTNERSHIP INTERESTS OF
                          KRUPP REALTY FUND, LTD. - III

     To be sent to:

          Madison Liquidity Investors 104, LLC
          4643 South Ulster Street
          Suite 800
          Denver, Colorado  80237
          Telecopy: (303) 858-0000      Telephone: (303) 858-0001

Ladies and Gentlemen:

     The following Units of Investor Limited Partnership Interests (the "Units")
of Krupp  Realty Fund,  Ltd. - III (the  "Partnership")  previously  tendered to
Madison Liquidity Investors 104, LLC and Madison/OHI  Liquidity  Investors,  LLC
(collectively,  "Madison"),  as a result of the  execution  of an  Agreement  of
Assignment and Transfer by the undersigned,  are hereby withdrawn.  A failure to
complete the Section  "Number of Units Tendered" shall be deemed to indicate the
intent  of the  undersigned  that all  Units  tendered  to  Madison  are  hereby
withdrawn.

NUMBER OF UNITS WITHDRAWN _______________ (if all Units, you may leave blank)



__________________________________      __________________________________
(Signature of Owner)                    (Signature of Joint Owner)

All registered holders of Units of Investor Limited  Partnership  Interests must
sign exactly as their  name(s)  appear(s) on the  Agreement  of  Assignment  and
Transfer sent to Madison and in the Partnership records.

Name and Capacity (if other than individuals):__________________________________

Title:__________________________________________________________________________

Address:________________________________________________________________________


________________________________________________________________________________
(City)                                       (State)                      (Zip)

Area Code and Telephone No.   (Day):____________________________________________

                              (Evening):________________________________________

================================================================================
                          Signature Guarantee Medallion

Name and Address of Eligible Institution:_______________________________________

________________________________________________________________________________

________________________________________________________________________________

Authorized Signature:_______________________

Name:_______________________________________

Title:______________________________________      Date:_________________________






                           INSTRUCTIONS FOR WITHDRAWAL
                                       OF
                          PREVIOUSLY TENDERED UNITS OF
                     INVESTOR LIMITED PARTNERSHIP INTERESTS
                                       OF
                          KRUPP REALTY FUND, LTD. - III


1.   DELIVERY OF NOTICE OF WITHDRAWAL.  If you are withdrawing Units of Investor
     Limited Partnership Interests (the "Units") previously tendered pursuant to
     the offer made on April 21, 1999 (the "Madison Offer") by Madison Liquidity
     Investors 104, LLC ("Madison 104") and Madison/OHI Liquidity Investors, LLC
     (collectively, "Madison") please complete, execute, and send the "Notice of
     Withdrawal of Previously  Tendered  Units" of Krupp Realty Fund, Ltd. - III
     ("Notice  of  Withdrawal")  to the  address  noted  below.  The  Notice  of
     Withdrawal is printed on PINK paper.

                    Madison Liquidity Investors 104, LLC
                    4643 South Ulster Street
                    Suite 800
                    Denver, Colorado  80237
                    Telecopy:   (303) 858-0000
                    Telephone:  (303) 858-0001

     Madison 104 must  receive the Notice of  Withdrawal  on or prior to May 24,
     1999, the date of expiration of the Madison Offer, unless extended. MADISON
     WILL NOT ACCEPT NOTICE OF  WITHDRAWALS  WHICH ARE FAXED.  YOU MUST SEND THE
     NOTICE OF WITHDRAWAL BY MAIL OR OVERNIGHT COURIER.  Copies of all Notice of
     Withdrawals  should be sent or  transmitted  to Krupp Funds  Group  Limited
     Partnership at One Beacon Street, Suite 1500, Boston,  Massachusetts 02108,
     Fax (617) 423-8919. You may include the copy of the Notice of Withdrawal in
     the package which contains the Agreement of Assignment and Transfer.

2.   INADEQUATE  SPACE.  If any space  provided in the Notice of  Withdrawal  is
     inadequate,  all such additional information should be listed on a separate
     schedule and attached as part of the Notice of Withdrawal.

3.   SIGNATURE ON NOTICE OF WITHDRAWAL.  The Notice of Withdrawal must be signed
     by the person(s) who signed the Assignment  and Transfer  Agreement sent to
     Madison and must contain a Medallion  Signature  Guarantee.  The signatures
     must correspond  exactly with the name(s) as they appear on the Partnership
     records. If any Units tendered pursuant to the Madison Offer are registered
     in the names of two or more joint  holders,  all such holders must sign the
     Notice of Withdrawal. If the Notice of Withdrawal is signed by any trustee,
     executor,   administrator,   guardian,   attorney-in-fact,   officer  of  a
     corporation,  or others acting in a fiduciary capacity, such persons should
     so indicate when signing and must submit proper evidence of their authority
     to act.