EQUITY RESOURCE LEXINGTON FUND
                                 14 Story Street
                               Cambridge, MA 02138

                                  July 18, 2001

                        HIGHER OFFER TO PURCHASE UNITS IN
                               NTS PROPERTIES III
                                FOR $275 PER UNIT

Dear Limited Partner:

Enclosed with this letter is an offer to purchase limited partnership units in
NTS Properties III (the "Partnership") for $275 per unit [See "THE
OFFER--Introduction"]. This offer expires on August 16, 2001. If you are
interested in selling your units, please read the enclosed offer carefully.

BENEFITS OF A SALE
o    Equity Resource Lexington Fund (the "Lexington Fund" or "Purchaser") is
     currently offering to purchase your interest in the Partnership for $275
     per unit. The Lexington Fund's offer price is higher than the current price
     being offered by the Partnership and its affiliates. Limited partners who
     have already tendered their Units in response to the Partnership's offer
     may still sell their Units to the Purchaser at this higher price. By
     signing and submitting the enclosed Agreement of Sale, you give the
     Purchaser authority to withdraw your previously tendered units and to
     process the sale of those Units to the Lexington Fund.

o    The Lexington Fund's offer provides liquidity to limited partners and will
     give them an opportunity to liquidate this investment. The Partnership has
     been in existence for over 15 years and the Purchaser anticipates that it
     will continue to operate for the foreseeable future. By selling your
     limited partnership units, you give yourself the opportunity to place the
     proceeds from a sale into other, potentially better performing,
     investments. You may also simplify your tax returns by eliminating future
     K-1 reporting for these Partnerships.

o    Limited partnership units are illiquid investments. When you consider the
     illiquid secondary market (which is essentially nothing more than a
     "matching service" that attempts to bring buyers and sellers together), the
     cost of selling commissions, your annual cost of tax reporting, and the
     cost of a trustee if Units are held in an IRA or pension plan, the sale of
     your Units for cash may be a good choice for you.


RISKS OF A SALE
o    No independent party has been retained by Lexington Fund or any other
     person to evaluate or render any opinion to Limited Partners with respect
     to the fairness of the Offer Price, and no representation is made as to any
     fairness or other measures of value that may be relevant to Limited
     Partners. In making the Offer, Lexington Fund has not based its valuation
     of the properties owned by the Partnership on any third-party appraisal or
     valuation and it is uncertain whether the Offer Price reflects the value
     that would be realized upon the sale of



     Units by a Limited Partner to a third party. We urge Limited Partners to
     consult their own financial and tax advisors in connection with the Offer.

o    Lexington Fund is making the Offer with a view toward making a profit.
     Accordingly, there is a conflict between Lexington Fund's desire to acquire
     your Units at a low price and your desire to sell your Units at a high
     price. Lexington Fund's intent is to acquire the Units at a discount to the
     value Lexington Fund might ultimately realize from owning the Units.

o    Limited Partners who sell their Units will be giving up the opportunity to
     participate in any future potential benefits associated with ownership of
     Units, including the right to participate in any future distribution of
     cash or property. A sale of Units in the Offer will be a taxable sale. The
     tax consequences of the Offer to a particular Limited Partner may be
     different from those of other Limited Partners and we urge you to consult
     your own tax advisor in connection with the Offer.

THE PURCHASER
The Lexington Fund is in the business of acquiring fractional investment
interests for long-term retention and seeks to purchase Units in the Partnership
in advancement of that strategy. The Units acquired as a result of this offer
will be held as long-term investments and not with a view to a resale. The
Lexington Fund does not acquire General Partner positions and is not engaged in
property management.

Please read the enclosed offer carefully. It contains important information
concerning this offer, the Partnership and the Purchaser. If you wish to sell
your units, complete the enclosed Agreement of Sale according to the directions
on the back of the agreement, sign where indicated and return it in the
pre-addressed return envelope.

If you have any questions regarding this offer, please call Equity Resources
Group, Inc., the information agent for this offer, at (617) 876-4800, or e-mail
them at info@equityresources.com.

Sincerely,

Equity Resource Lexington Fund LP