SCHEDULE 14A

                                 (Rule 14a-101)

                     INFORMATION REQUIRED IN PROXY STATEMENT

                            SCHEDULE 14A INFORMATION
              Proxy Statement Pursuant to Section 14(a) Securities
                              Exchange Act of 1934

Filed by the Registrant |_|

Filed by a party other than the Registrant

         Check the appropriate box:

[ ]      Preliminary Proxy Statement

[ ]      Confidential, for Use of the Commission Only
           (as permitted by Rule 14a-6(e)(2))

[ ]      Definitive Proxy Statement

[X]      Definitive Additional Materials

[ ]      Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

                       REAL ESTATE ASSOCIATES LIMITED III

                (Name of Registrant as Specified in Its Charter)

                             BOND PURCHASE, L.L.C.

    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):

[X]      No fee required

[ ]      Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11


         (1) Title of each class of securities to which transaction applies:

         (2) Aggregate number of securities to which transactions applies:




         (3) Per unit price or other  underlying  value of transaction  computed
             pursuant to  Exchange  Act Rule 0-11 (Set forth the amount on which
             the filing fee is calculated and state how it was determined.)

         (4) Proposed maximum aggregate value of transaction:

         (5) Total Fee paid:

[ ]      Fee paid previously with preliminary materials

[ ]      Check box if any part of the fee is offset as provided by Exchange  Act
         Rule  0-11(a)(2)  and identify the filing for which the  offsetting fee
         was paid  previously.  Identify  the  previous  filing by  registration
         statement number, or the Form or Schedule and the date of its filing.

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                              Bond Purchase, L.L.C.
                                 104 Armour Road
                        North Kansas City, Missouri 64116


                             **IMPORTANT REMINDER**


                                                       May 22, 2001

Dear Fellow Limited Partner:

     We previously have mailed to you consent materials  relating to Real Estate
Associates Limited III (the  "Partnership")  that are scheduled to expire on May
31, 2001. Your vote for this important consent has yet not been received.

     Although  the votes we have  received to date have been  overwhelmingly  in
favor of removing NAPICO as the general  partner,  we still need your support to
reach the  majority of units  needed.  As an owner of a large number of units in
the Partnership, your vote is critical.

     We have  undertaken  this effort to remove  NAPICO at our own  expense.  We
believe  our vocal,  lead role in this  effort  has  resulted  in a  retaliatory
lawsuit meant to  discourage  us. We,  however,  remain  committed.  Through our
affiliate,  New G.P.,  L.L.C., we hope to become the new general partner so that
we may distribute the remaining  cash in the  Partnership,  lower the management
fees and liquidate the Partnership,  contingent on a review of the Partnership's
book and records.

     As a direct result of our involvement,  NAPICO has miraculously  discovered
that  they are now in a  position  to  distribute  approximately  $3,000,000  of
Partnership  funds they have held for over two years.  In an effort to  minimize
costs and to bring further positive change at the  Partnership,  we ask for your
support by signing,  dating and returning the enclosed BLUE consent form as soon
as possible.

     We thank you for your support.

                                                       Very Truly Yours,
                                                       Bond Purchase, L.L.C.


                                                       By: /s/ David L. Johnson
                                                               David L. Johnson,
                                                               Member

This letter is being delivered to the 100 largest  limited partner  unitholders,
who have not responded to our consent solicitation, on or about May 22, 2001.

                  --------------------------------------------
                 | YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY. |
                  --------------------------------------------

                               (Form of Consent)
                       Real Estate Associates Limited III
              a California Limited Partnership (the "Partnership")

                           CONSENT OF LIMITED PARTNER

          THIS CONSENT IS SOLICITED ON BEHALF OF BOND PURCHASE, L.L.C.

LIMITED PARTNERS WHO RETURN A SIGNED CONSENT BUT FAIL TO INDICATE THEIR APPROVAL
OR  DISAPPROVAL  AS TO ANY MATTER  WILL BE DEEMED TO HAVE VOTED TO APPROVE  SUCH
MATTER.  THIS  CONSENT  IS  VALID  FROM THE DATE OF ITS  EXECUTION  UNLESS  DULY
REVOKED.

The undersigned has received the Consent Solicitation  Statement dated March 13,
2001 as amended  April 30,  2001,  ("Consent  Solicitation  Statement")  by Bond
Purchase,  L.L.C.,  a Missouri  limited  liability  company ("Bond  Purchase."),
seeking the approval by written consent of the following proposals:

(1)  the  removal  of  the  current  general  partners,   National   Partnership
Investments  Corp.,  a  California  corporation  and Coast  Housing  Investments
Associates, a California limited partnership; and

(2) the  continuation of the Partnership and the election of New G.P. as the new
general  partner of the  Partnership  (which is  conditioned  on the approval of
proposal (1) above).

Each  of  the  undersigned,  by  signing  and  returning  this  Consent,  hereby
constitutes  and  appoints  Bond  Purchase,  acting  through  its  officers  and
employees as his or her  attorney-in-fact  for the purposes of executing any and
all  documents  and taking any and all actions  required  under the  Partnership
Agreement in connection with this Consent and the Consent Solicitation Statement
or in order to  implement  an approved  proposal;  and hereby  votes all limited
partnership  interests of the  Partnership  held of record by the undersigned as
follows for the proposals set forth above,  subject to the Consent  Solicitation
Statement.

            Proposal                            FOR       AGAINST       ABSTAIN

1. Removal of General Partners                  [ ]         [ ]           [ ]

2. Continuation of the Partnership  and         [ ]         [ ]           [ ]
   election of new general partner,  New G.P.

(Please sign exactly as your name appears on the  Partnership's  records.  Joint
owners should each sign. Attorneys-in-fact, executors, administrators, trustees,
guardians,  corporation  officers or others  acting in  representative  capacity
should indicate the capacity in which they sign and should give FULL title,  and
submit appropriate evidence of authority to execute the Consent)


                                            Dated: _______________________, 2001
                                                 (Important - please fill in)
[Limited Partner Name,
address and units held]
                              ___________________________________Signature/Title

                              ___________________________________Signature/Title

                              __________________________________Telephone Number