AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 17, 1998

REGISTRATION NO. 333-53815
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- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

INSIGNIA PROPERTIES TRUST
(Exact name of registrant as specified in its charter)

MARYLAND 6798 57-1045190
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organizatio Classification Code Number) Identification No.)

ONE INSIGNIA FINANCIAL PLAZA
P.O. BOX 19059
GREENVILLE, SOUTH CAROLINA 29602
(864) 239-1300
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

JAMES A. ASTON
PRESIDENT
INSIGNIA PROPERTIES TRUST
ONE INSIGNIA FINANCIAL PLAZA
P.O. BOX 19059
GREENVILLE, SOUTH CAROLINA 29602
(864) 239-1300
(Name, address including zip code, and telephone number,
including area code, of agent for service)
with copies to:

ROBERT G. KOEN PAULA J. PETERS
AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P. MICHAEL V. BALES
590 MADISON AVENUE GREENBERG GLUSKER FIELDS CLAMAN
20TH FLOOR & MACHTINGER LLP
NEW YORK, NEW YORK 10022 1900 AVENUE OF THE STARS, SUITE 2100
LOS ANGELES, CALIFORNIA 90067

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after this Registration Statement becomes
effective and the merger of Angeles Mortgage Investment Trust with and into
Insignia Properties Trust (the "Merger") has become effective.

If any securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]

CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) FEE(3)
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Common Shares of Beneficial
Interest, par value $.01 per share......... 4,056,664 $ 16.63 $67,717,376 $13,491
- - --------------------------------------------------------------------------------------------------------------------------

(1) Consists of up to 4,056,664 common shares of beneficial interest, par
value $.01 per share, of the Registrant issuable upon the conversion,
pursuant to the Merger, of (i) 2,617,000 Class A shares of beneficial
interest, par value $1.00 per share, of Angeles Mortgage Investment Trust
("AMIT Class A Shares") and (ii) 1,675,113 Class B shares of beneficial
interest, par value $.01 per share of Angeles Mortgage Investment Trust
("AMIT Class B Shares").

(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f)(1), Rule 457(c) and Rule 457(f)(2), based on the
sum of (i) the product of $19.00 (the average of the high and low prices
of the AMIT Class A Shares on June 16, 1998 on the American Stock
Exchange) times 2,617,000 (the number of AMIT Class A Shares outstanding
on June 12, 1998) and (ii) the product of $10.74 (the book value of the
AMIT Class B Shares on March 31, 1998) times 1,675,113 (the number of
AMIT Class B Shares outstanding on March 31, 1998). A registration fee of
$13,491 was paid on May 28, 1997 with the initial filing of the
registration statement.

(3) Pursuant to Section 14(g)(1)(B) of the Securities Exchange Act of 1934,
as amended, the fee of $6,485 paid on November 14, 1997 upon the filing
by Angeles Mortgage Investment Trust of preliminary proxy material
relating to the Merger has been credited against the registration fee
payable in connection with this filing.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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ANGELES MORTGAGE INVESTMENT TRUST
340 NORTH WESTLAKE BOULEVARD
SUITE 230
WESTLAKE VILLAGE, CALIFORNIA 91362

JUNE , 1998

Dear Shareholder:

You are cordially invited to attend a special meeting of shareholders (the
"Special Meeting") of Angeles Mortgage Investment Trust ("AMIT") on July 9,
1998. The Special Meeting will begin at 9:00 a.m., local time, at the Beverly
Hilton Hotel, 9876 Wilshire Boulevard, Beverly Hills, California.

At the Special Meeting, you will be asked to approve certain matters
related to the proposed acquisition of AMIT by Insignia Properties Trust
("IPT"), pursuant to an Agreement and Plan of Merger dated as of July 18, 1997
(the "Merger Agreement") among AMIT, IPT, Insignia Financial Group, Inc.
("Insignia") and MAE GP Corporation ("MAE GP"). The Merger Agreement provides
for the merger of AMIT with and into IPT, with IPT being the surviving entity
(the "Merger").

In connection with the Merger, you are being asked to consider and vote on
the following proposals:

(i) to approve and adopt the Merger Agreement and the transactions
contemplated thereby, including the Merger (the "Merger Proposal"),
and

(ii) subject to the approval of the Merger Proposal, to approve the
amendment of AMIT's Declaration of Trust (the "Trust Amendment") to
permit AMIT to merge and consolidate with other entities subject to
the required vote of AMIT's Board of Trustees and shareholders (the
"Trust Amendment Proposal," and together with the Merger Proposal,
the "Proposals").

Holders of record of AMIT's Class A common shares of beneficial interest,
par value $1.00 per share ("AMIT Class A Shares"), and Class B common shares of
beneficial interest, par value $.01 per share ("AMIT Class B Shares," and
together with the AMIT Class A Shares, "AMIT Shares"), at the close of business
on May 13, 1998, the record date for the Special Meeting, are entitled to
notice of, and to vote at, the Special Meeting and any adjournment or
postponement thereof. The affirmative vote of a majority of the AMIT Class A
Shares and AMIT Class B Shares, voting together as a single class, is required
to approve and adopt each of the Proposals, although the Trust Amendment
Proposal is conditioned upon the approval of the Merger Proposal, and will not
be submitted to the AMIT shareholders if the Merger Proposal fails.

For your information, all of the outstanding AMIT Class B Shares are
beneficially owned by Metropolitan Asset Enhancement, L.P. ("MAE"), which is an
affiliate of Insignia, and pursuant to an irrevocable voting proxy held by
AMIT, all (100%) of the AMIT Class B Shares will be voted as a unit on each of
the Proposals in the same manner as the majority of the AMIT Class A Shares
represented at the Special Meeting are voted on each of the Proposals.

Pursuant to the Merger Agreement, each outstanding AMIT Class A Share will
be converted into 1.530 common shares of beneficial interest of IPT, par value
$.01 per share ("IPT Common Shares"), and each outstanding AMIT Class B Share
will be converted into 0.0312 IPT Common Shares. No cash will be paid to AMIT
shareholders, other than cash paid in lieu of fractional IPT Common Shares. The
number of IPT Common Shares into which each AMIT Class A Share and AMIT Class B
Share will be converted will decrease if and to the extent that AMIT declares
any distributions prior to the consummation of the Merger. Conversely, the
number of IPT Common Shares into which each AMIT Class A Share and AMIT Class B
Share will be converted will be increased if and to the extent that IPT
declares any distributions after the date hereof with a record date prior to
the consummation of the Merger. However, neither AMIT nor IPT intends or
expects to declare any such additional distributions prior to consummation of
the Merger. Nevertheless, there can be no assurance that such a distribution
will not be declared. Consequently, AMIT shareholders may not know the exact
number of IPT Common Shares into which his, her or its AMIT Shares will be
converted at the time of the Special Meeting.

Subsequent to the execution of the Merger Agreement, on March 17, 1998,
Insignia, the majority shareholder of IPT, entered into a merger agreement (as
subsequently amended and restated as of
May 26, 1998, the "Insignia/AIMCO Merger Agreement") with Apartment Investment
and Management Company, a publicly held Maryland corporation ("AIMCO"),
providing for, among other things, the merger of Insignia with and into AIMCO
(the "Insignia/AIMCO Merger"), which if consummated will result in AIMCO
becoming the majority shareholder of IPT. Pursuant to the Insignia/AIMCO Merger
Agreement, AIMCO has agreed to propose to acquire IPT by merger and to use its
reasonable best efforts to consummate this merger with IPT within three months
after the consummation of the Insignia/AIMCO Merger (but not earlier than
August 15, 1998) at a purchase price of not less than $13.25 per IPT Common
Share. AIMCO currently intends to effect such merger by causing IPT to merge
into a subsidiary of AIMCO (the "IPT/AIMCO Merger"). If the IPT/AIMCO Merger
(or any equivalent transaction involving the acquisition of IPT by AIMCO) is
consummated, the AMIT shareholders then holding IPT Common Shares will be
cashed out and have no further interest in the newly merged IPT. Based on the
current exchange ratio for the Merger, if the IPT/AIMCO Merger is consummated,
an AMIT Class A shareholder would receive a cash amount for its IPT Common
Shares received in the Merger equivalent to $20.27 per AMIT Class A Share.
There can be no assurance that the IPT/AIMCO Merger will be consummated.

Information regarding each of the matters to be voted upon at the Special
Meeting is contained in the attached Combined Proxy Statement and Prospectus
(the "Proxy Statement/Prospectus"). We urge you to read the Proxy
Statement/Prospectus carefully. A copy of the Merger Agreement is attached to
the Proxy Statement/Prospectus as Annex A, and a copy of the Trust Amendment is
attached as Annex B. The Proxy Statement/Prospectus is being mailed to all AMIT
shareholders on or about June , 1998.

THE AMIT BOARD OF TRUSTEES HAS DETERMINED THAT THE MERGER AGREEMENT AND
THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF AMIT AND ITS SHAREHOLDERS
REGARDLESS OF WHETHER OR NOT THE IPT/AIMCO MERGER IS CONSUMMATED. THE AMIT
BOARD OF TRUSTEES HAS APPROVED EACH OF THE PROPOSALS AND RECOMMENDS THAT YOU
VOTE FOR APPROVAL OF EACH OF THE PROPOSALS.

The firm of Christopher Weil & Company, Inc. has issued its opinion to
AMIT, a copy of which is attached to the Proxy Statement/Prospectus as Annex C,
that the exchange ratios established in the Merger Agreement pursuant to which
the AMIT Shares will be converted into IPT Common Shares upon consummation of
the Merger are fair, from a financial point of view, to the shareholders of
AMIT. Such opinion was delivered prior to announcement of the proposed
Insignia/AIMCO Merger. Such firm has not rendered an opinion as to the fairness
of the consideration to be received in the IPT/AIMCO Merger or as to the
fairness of the consideration to be received in the Merger in light of the
contemplated IPT/AIMCO Merger.

Whether or not you plan to attend the Special Meeting in person, we urge
you to complete, date and sign the enclosed proxy card and return it as
promptly as possible in the accompanying envelope. This is especially important
because a majority of the AMIT Class A Shares voting on each of the Proposals
will determine whether each Proposal passes or fails. If you are a shareholder
of record and do attend the Special Meeting and wish to vote your shares in
person, even after returning your proxy, you still may do so.

We look forward to seeing you in Beverly Hills on July 9, 1998.

Sincerely yours,

RONALD J. CONSIGLIO
President and Chief Executive Officer

PLEASE READ, SIGN, DATE AND RETURN YOUR PROXY.

ANGELES MORTGAGE INVESTMENT TRUST
340 NORTH WESTLAKE BOULEVARD
SUITE 230
WESTLAKE VILLAGE, CALIFORNIA 91362
-------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 9, 1998
-------------------------------
To the Shareholders of
Angeles Mortgage Investment Trust:

Notice is hereby given that a special meeting of shareholders (the
"Special Meeting") of Angeles Mortgage Investment Trust, a California
unincorporated business trust ("AMIT"), will be held on July 9, 1998. The
Special Meeting will begin at 9:00 a.m., local time, and will be held at the
Beverly Hilton Hotel, 9876 Wilshire Boulevard, Beverly Hills, California, to
consider and act upon the following matters in connection with the proposed
acquisition of AMIT by Insignia Properties Trust ("IPT") pursuant to an
Agreement and Plan of Merger dated as of July 18, 1997 (the "Merger Agreement")
among AMIT, IPT, Insignia Financial Group, Inc. ("Insignia") and MAE GP
Corporation ("MAE GP"), which provides for the merger of AMIT with and into
IPT, with IPT being the surviving entity (the "Merger"):

1. To approve and adopt the Merger Agreement and the transactions
contemplated thereby, including the Merger (the "Merger Proposal");

2. Subject to the approval of the Merger Proposal, to approve the amendment
of AMIT's Declaration of Trust (the "Trust Amendment") to permit AMIT to
merge and consolidate with other entities subject to the required vote of
AMIT's Board of Trustees and shareholders (the "Trust Amendment
Proposal," and together with the Merger Proposal, the "Proposals"); and

3. To transact such other business as may properly come before the Special
Meeting.

The close of business on May 13, 1998, has been fixed as the record date
for the determination of shareholders entitled to notice of, and to vote at,
the Special Meeting and any adjournment or postponement thereof. A list of AMIT
shareholders entitled to vote at the Special Meeting will be available for
examination upon request prior to the Special Meeting.

YOUR VOTE IS IMPORTANT NO MATTER HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE SPECIAL MEETING, PLEASE DATE AND
SIGN THE ENCLOSED FORM OF PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE
TO CHASEMELLON SHAREHOLDER SERVICES, L.L.C. PLEASE DO NOT SEND ANY OF YOUR
SHARE CERTIFICATES AT THIS TIME.

When proxies are returned properly executed, the shares represented
thereby will be voted in accordance with the indicated instructions. However,
if no instructions have been specified on the returned proxy, the shares
represented thereby will be voted FOR approval of each of the Proposals. Any
shareholder giving a proxy has the right to revoke it at any time before it is
voted by filing, with the Secretary of AMIT, either an instrument revoking the
proxy or a duly executed proxy bearing a later date. Proxies also may be
revoked by attending the Special Meeting and voting in person.

By Order of the Board of Trustees,

ANGELES MORTGAGE INVESTMENT TRUST

ANNA MERGUERIAN
Secretary

June , 1998

SUBJECT TO COMPLETION, DATED JUNE , 1998

ANGELES MORTGAGE INVESTMENT TRUST

PROXY STATEMENT
--------------------------
INSIGNIA PROPERTIES TRUST
PROSPECTUS
--------------------------
This Combined Proxy Statement and Prospectus (this "Proxy
Statement/Prospectus") is being furnished to holders of Class A common shares
of beneficial interest, par value $1.00 per share ("AMIT Class A Shares"), and
Class B common shares of beneficial interest, par value $.01 per share ("AMIT
Class B Shares," and together with the AMIT Class A Shares, "AMIT Shares"), of
Angeles Mortgage Investment Trust, a California unincorporated business trust
("AMIT"), in connection with the solicitation of proxies by the Board of
Trustees of AMIT (the "AMIT Board") for use at a special meeting of
shareholders of AMIT (the "Special Meeting") to be held on July 9, 1998, at the
Beverly Hilton Hotel, 9876 Wilshire Boulevard, Beverly Hills, California,
commencing at 9:00 a.m., local time, and at any adjournment or postponement
thereof.

The Special Meeting has been called to consider and vote on proposals to
(1) approve and adopt the Agreement and Plan of Merger dated as of July 18,
1997 (the "Merger Agreement") among AMIT, Insignia Properties Trust, a Maryland
real estate investment trust ("IPT"), Insignia Financial Group, Inc.
("Insignia") and MAE GP Corporation ("MAE GP") and the transactions
contemplated thereby, including the merger (the "Merger") of AMIT with and into
IPT, with IPT being the surviving entity (the "Merger Proposal"), and (2)
subject to the approval of the Merger Proposal, to approve the amendment of
AMIT's Declaration of Trust (the "Trust Amendment") to permit AMIT to merge and
consolidate with other entities subject to the required vote of the AMIT Board
and AMIT's shareholders (the "Trust Amendment Proposal," and together with the
Merger Proposal, the "Proposals"). A copy of the Merger Agreement is attached
hereto as Annex A, and a copy of the Trust Amendment is attached hereto as
Annex B.

Neither AMIT nor IPT intends or expects to declare any additonal
distributions after the date hereof with a record date prior to consummation of
the Merger. If, however, either AMIT or IPT declares any distributions after
the date of this Proxy Statement/Prospectus with a record date prior to the
consummation of the Merger, the ratios at which the AMIT Shares will be
converted into IPT Common Shares in the Merger will be adjusted and, therefore,
AMIT shareholders may not know the exact number of IPT Common Shares into which
their AMIT Shares will be converted in the Merger at the time of the Special
Meeting.

Subsequent to the execution of the Merger Agreement, on March 17, 1998,
Insignia, the majority shareholder of IPT, entered into a merger agreement (as
subsequently amended and restated as of May 26, 1998, the "Insignia/AIMCO
Merger Agreement") with Apartment Investment and Management Company, a publicly
held Maryland corporation ("AIMCO"), providing for, among other things, the
merger of Insignia with and into AIMCO (the "Insignia/AIMCO Merger"), which if
consummated will result in AIMCO becoming the majority shareholder of IPT.
Pursuant to the Insignia/AIMCO Merger Agreement, AIMCO has agreed to propose to
acquire IPT by merger and to use its reasonable best efforts to consummate this
merger with IPT within three months after the consummation of the
Insignia/AIMCO Merger (but not earlier than August 15, 1998) at a purchase
price of not less than $13.25 per IPT Common Share. AIMCO currently intends to
effect such merger by causing IPT to merge into a subsidiary of AIMCO (the
"IPT/AIMCO Merger"). If the IPT/AIMCO Merger (or any equivalent transaction
involving the acquisition of IPT by AIMCO) is consummated, the AMIT
shareholders then holding IPT Common Shares will be cashed out and have no
further interest in the newly merged IPT. Based on the current exchange ratio
for the Merger, upon consummation of the IPT/AIMCO Merger, an AMIT Class A
shareholder would receive a cash amount for its IPT Common Shares received in
the Merger which would be equivalent to $20.27 per AMIT Class A Share. There
can be no assurance that the IPT/AIMCO Merger will be consummated.

The IPT Board of Trustees has adopted a policy to pay regular quarterly
distributions in an amount equal to $.15 per IPT Common Share which will be
increased to $.16 per IPT Common Share beginning with the first quarterly
distribution for which the record date is after the consummation of the Merger.
These amounts are expected in the aggregate to exceed 95% of IPT's REIT taxable
income. If distributions exceed available cash, IPT will be required to sell
assets or borrow funds to make distributions or revise its dividend policy.

There will be no opinion of counsel regarding whether or not the Merger
should be treated as a tax-free reorganization in the event that the Merger is
consummated but the IPT/AIMCO Merger is not consummated and AMIT shareholders
will have no assurances as to the federal income tax treatment of the Merger in
such case.

This Proxy Statement/Prospectus also constitutes a prospectus of IPT with
respect to the IPT Common Shares to be issued in the Merger in exchange for the
outstanding AMIT Shares. An aggregate of approximately 4,057,000 IPT Common
Shares are expected to be issued to the holders of AMIT Shares (including
affiliates of IPT) upon consummation of the Merger.

The IPT Common Shares to be issued in connection with the Merger have been
approved for listing on the American Stock Exchange (the "ASE"), subject to
official notice of issuance, under the symbol "FFO."

This Proxy Statement/Prospectus and accompanying form of proxy relating to
the AMIT Class A Shares are first being mailed to shareholders of AMIT on or
about June , 1998.

FOR A DISCUSSION OF CERTAIN CONSIDERATIONS REGARDING THE BUSINESS AND
OPERATIONS OF IPT AND AMIT THAT SHOULD BE EVALUATED BEFORE VOTING ON THE
PROPOSALS DESCRIBED HEREIN AT THE SPECIAL MEETING, SEE "RISK FACTORS" BEGINNING
ON PAGE 17.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATOR HAS APPROVED THE MERGER DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS
OR THE ISSUANCE OF IPT COMMON SHARES IN CONNECTION WITH THE MERGER, NOR HAVE
THEY DETERMINED WHETHER THIS PROXY STATEMENT/PROSPECTUS IS ACCURATE OR
ADEQUATE. FURTHERMORE, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT PASSED
UPON THE FAIRNESS OR MERITS OF THE MERGER. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

The date of this Proxy Statement/Prospectus is June , 1998.

TABLE OF CONTENTS

PAGE PAGE
----- -----

SUMMARY ............................................ 1 Underlying IPT Assets Create Investment
The Parties ..................................... 1 with Greater Risk .......................... 18
IPT and IPLP .................................... 1 Fixed Exchange Ratio Despite
AMIT ............................................ 2 Fluctuations in Market Prices .............. 19
Insignia ........................................ 2 Exchange Ratio Subject to Adjustment
The Special Meeting ............................. 3 for Distributions .......................... 19
The Merger and Related Matters .................. 3 Disproportionality with Respect to
The Merger Agreement ............................ 3 Conversion Ratio of OP Units ............... 19
Conversion of AMIT Shares ....................... 3 Lack of Independent Valuations of Assets 20
Insignia/AIMCO Transaction ...................... 4 Leverage; No Limitation on Debt .............. 20
Ownership of IPT Following the Merger ........... 5 Conflicts of Interest ........................ 21
Listing of IPT Common Shares .................... 5 Control by Insignia .......................... 22
Management of IPT Following the Merger .......... 5 Lack of Shareholder Control Over IPT's
IPT Distribution Policy Following the Policies ................................... 22
Merger ....................................... 6 Limitations on Ownership Interests and
Recommendation of the AMIT Board ................ 6 Change of Control in Declaration of
Opinion of AMIT's Financial Advisor ............. 6 Trust ...................................... 23
Interests of Certain Persons in the Merger ...... 6 Possible Adverse Consequences of
Conditions to the Merger ........................ 7 Ownership Limit ............................ 23
Effective Time of the Merger .................... 7 Dependence on Property Performance;
Trust Amendment ................................. 7 Risks Related to Investments in Real
Accounting Treatment ............................ 8 Estate Limited Partnerships ................ 24
Federal Income Tax Consequences ................. 8 Adverse Effects of REIT Minimum
Material Conflicts of Interest .................. 8 Distribution Requirements; Effects of
Summary Risk Factors ............................ 8 Distribution Policy ........................ 24
No Appraisal Rights ............................. 10 Adverse Consequences of the Failure to
Forward-Looking Statements ...................... 10 Qualify as a REIT .......................... 25
Insignia Properties Trust Post-Merger Potential Adverse Effects of Future
Organizational Chart ......................... 11 Offerings .................................. 25
IPT Summary Historical Financial Data ........... 12 Possible Adverse Effect on Share Price
AMIT Summary Historical Consolidated Arising from Shares Available for
Financial Data ............................... 14 Future Sale ................................ 26
IPT Summary Pro Forma Financial Data ............ 15 Negative Impact on REIT Status if IPLP
Comparative Per Share information ............... 16 or a Controlled Partnership Fails to Be
RISK FACTORS ....................................... 17 Classified as a Partnership for Federal
Risk Factors Relating to the Income Tax Purposes ........................ 26
Insignia/AIMCO Transaction ................... 17 No Established Public Trading Market for
No Assurance of Consummation ................. 17 Interests in the IPT Partnerships .......... 26
Loss of Opportunity to Participate in Competition in Real Estate Market ............ 27
Future of IPT .............................. 17 Dependence on Andrew L. Farkas and
Change of Control of IPT ..................... 17 Other Senior Managers ...................... 27
AIMCO Control of Shareholder Vote on Concentration of Properties in
IPT/AIMCO Merger ........................... 17 Multifamily Residential Housing ............ 27
No Direct Rights to Require AIMCO to Environmental Liability ...................... 27
Effect IPT/AIMCO Merger .................... 17 Limited Operating History .................... 28
Absence of Fairness Opinion .................. 18 Absence of Prior Market for IPT
Risk Factors Relating to the Merger and Common Shares .............................. 28
Post-Merger Operations ....................... 18 Adverse Effect of Increase in Interest
Uncertain Tax Treatment of Merger ............ 18 Rates on the Trading Price of IPT
Integration of the Business of AMIT and Common Shares .............................. 28
IPT ........................................ 18 Uncertainty Surrounding Consolidation of
Financial Statements ....................... 28
Dilution ..................................... 28
Applicability of the Investment Company
Act ........................................ 29
Litigation Arising from Tender Offers ........ 29

iii

PAGE PAGE
----- -----

SPECIAL FACTORS ..................................... 32 BUSINESS OF IPT ..................................... 59
Background of the Merger ...................... 32 General ....................................... 59
AMIT's Reasons for the Merger ................. 34 The IPT Partnerships .......................... 60
IPT's Reasons for the Merger .................. 37 Business Objectives ........................... 61
Recommendation of the AMIT Board .............. 38 Acquisition Strategies ........................ 62
Opinion of AMIT's Financial Advisor ........... 38 Operating Strategies .......................... 62
Interests of Certain Persons in the Investment Policies ........................... 63
Merger ...................................... 42 Financing Policies ............................ 64
Purpose and Structure of IPT/AIMCO Conflict of Interest Policies ................. 64
Merger ...................................... 42 Policies with Respect to Other Activities ..... 64
Fairness of IPT/AIMCO Merger .................. 43 Properties .................................... 65
Opinion of Financial Advisor to Insignia Taxes/Depreciation ............................ 67
Relating to IPT/AIMCO Merger ................ 43 Mortgages ..................................... 69
Certain Effects of the IPT/AIMCO Legal Proceedings ............................. 70
Merger ...................................... 44 IPT FORMATION TRANSACTIONS AND
Certain Other Information Concerning CERTAIN RECENT DEVELOPMENTS ......................... 72
the IPT/AIMCO Merger ........................ 45 Predecessors of IPT and IPLP .................. 72
Appraisal Rights .............................. 45 The NPI Transaction ........................... 72
THE SPECIAL MEETING ................................. 30 Formation of IPT and IPLP ..................... 73
Time and Place; Purposes ...................... 30 Certain Recent Developments ................... 74
Voting; Votes Required for Approval ........... 30 THE PARTNERSHIP AGREEMENT OF
AMIT Proxies .................................. 30 IPLP ................................................ 79
Solicitation .................................. 31 Management .................................... 79
THE MERGER .......................................... 46 Transferability of Interests .................. 79
General ....................................... 46 Capital Contributions ......................... 79
Accounting Treatment .......................... 46 Redemption Rights ............................. 80
Federal Income Tax Consequences of the Operations .................................... 80
Merger ...................................... 46 Distributions and Allocations ................. 81
Exchange of Share Certificates ................ 48 Property Management and Contract Loss
No Fractional Shares .......................... 48 Fee ......................................... 81
Listing of IPT Common Shares .................. 49 Put Rights .................................... 82
No Appraisal Rights ........................... 49 Partnership Administration Services ........... 82
Federal Securities Laws Consequences .......... 49 Transfers of Controlling Interests in IPT
INSIGNIA/AIMCO TRANSACTION .......................... 50 Entities .................................... 83
Insignia/AIMCO Merger ......................... 50 Term .......................................... 83
IPT/AIMCO Merger .............................. 50 Tax Matters Partner ........................... 83
THE MERGER AGREEMENT ................................ 51 ACQUISITION AND DISPOSITION
Effective Time and Closing of the Merger 51 SERVICES AGREEMENT .................................. 84
Manner and Basis of Converting Shares ......... 51 Acquisition and Disposition Services .......... 84
Representations and Warranties ................ 53 Agreements Regarding Certain Real
Pre-Closing Covenants ......................... 53 Estate Opportunities ........................ 84
Conditions to the Merger ...................... 55 IPT LINE OF CREDIT .................................. 85
Termination or Amendment of Merger BUSINESS OF AMIT .................................... 87
Agreement ................................... 56 General ....................................... 87
TRUST AMENDMENT ..................................... 57 Management; Employees ......................... 88
CERTAIN OTHER AGREEMENTS ............................ 57 Properties .................................... 88
Asset Agreement ............................... 57 Investment Policy ............................. 89
Tax Agreement ................................. 58 Legal Proceedings ............................. 90
Stock Option Agreement and Class B Market for AMIT's Common Equity and
Voting Proxy ................................ 58 Related Shareholder Matters ................. 90
Expense Reimbursement Agreement ............... 58

PAGE PAGE
----- -----

IPT SELECTED CONSOLIDATED AND Distributions and Liquidation Rights ........ 128
COMBINED FINANCIAL DATA ........................... 92 Registration Rights ......................... 128
MANAGEMENT'S DISCUSSION AND Share Ownership Limitations;
ANALYSIS OF FINANCIAL CONDITION Restrictions on Transfer of IPT
AND RESULTS OF OPERATIONS OF IPT Common Shares ............................. 129
AND THE IPT PARTNERSHIPS .......................... 94 Exchange of OP Units into IPT Common
Insignia Properties Trust ................... 94 Shares .................................... 131
IPT Partnerships ............................ 97 COMPARISON OF SHAREHOLDER
AMIT SELECTED CONSOLIDATED RIGHTS ............................................ 131
FINANCIAL DATA .................................... 102 Business Combinations ....................... 131
MANAGEMENT'S DISCUSSION AND Control Share Acquisitions .................. 132
ANALYSIS OF FINANCIAL CONDITION Shareholders' Meetings ...................... 133
AND RESULTS OF OPERATIONS OF Limited Liability and Indemnification of
AMIT .............................................. 103 Trustees, Officers, Employees and
UNAUDITED PRO FORMA FINANCIAL Other Agents .............................. 133
INFORMATION ....................................... 110 Classification of the Board of Trustees ..... 134
Unaudited Pro Forma Condensed Voting Rights ............................... 134
Consolidated Balance Sheet March 31, Annual Report ............................... 135
1998 ...................................... 111 Amendment to the Declaration of Trust ....... 135
Notes to Unaudited Pro Forma Rights Plan ................................. 136
Condensed Consolidated Balance Sheet 112 Inspection of Books and Records ............. 136
Unaudited Pro Forma Condensed Asset Requirements .......................... 136
Consolidated Statement of Income for SHARES AVAILABLE FOR FUTURE
the Three Months Ended March 31, SALE .............................................. 137
1998 ...................................... 113 FEDERAL INCOME TAX
Unaudited Pro Forma Condensed CONSIDERATIONS .................................... 139
Consolidated Statement of Income for Taxation of IPT ............................. 139
the Year Ended December 31, 1997 .......... 114 Taxation of U.S. Shareholders ............... 144
Notes to Unaudited Pro Forma Taxation of Non-U.S. Shareholders ........... 146
Condensed Consolidated Statements of Tax Aspects of IPT's Investment in IPLP
Income .................................... 115 and the IPT Partnerships .................. 146
MANAGEMENT OF IPT ................................. 116 Other Tax Considerations .................... 148
Board of Trustees ........................... 116 EXPERTS ........................................... 149
Committees of the IPT Board ................. 117 LEGAL MATTERS ..................................... 149
Compensation of Trustees .................... 118 GLOSSARY .......................................... G-1
Executive Officers .......................... 118 INDEX TO FINANCIAL STATEMENTS ..................... F-1
Executive Compensation ...................... 119 Annex A -- Merger Agreement ....................... A-1
Employment Agreements ....................... 119 Annex B -- Trust Amendment ........................ B-1
1997 Share Incentive Plan ................... 120 Annex C -- Fairness Opinion of Christopher
PRINCIPAL SECURITY HOLDERS OF Weil & Company, Inc ............................... C-1
IPT ............................................... 123 Annex D -- Information Regarding the
PRINCIPAL SECURITY HOLDERS OF Directors and Executive Officers of Insignia ...... D-1
AMIT .............................................. 124
CAPITALIZATION .................................... 125
DISTRIBUTIONS ..................................... 126
DESCRIPTION OF SHARES OF
BENEFICIAL INTEREST OF IPT ........................ 127
General ..................................... 127
Common Shares ............................... 127
Preferred Shares ............................ 128
Classification or Reclassification of IPT
Common Shares or Preferred Shares ......... 128

SUMMARY

The following is only a summary of certain information contained elsewhere
in this Proxy Statement/Prospectus and does not purport to be complete.
Reference is made to, and this Summary is qualified in its entirety by, the
more detailed information contained elsewhere in this Proxy
Statement/Prospectus, including the financial statements included herein and
the attached Annexes. As used in this Proxy Statement/ Prospectus, the terms
"IPT" and "AMIT" refer to Insignia Properties Trust and Angeles Mortgage
Investment Trust, respectively, and, except where the context otherwise
requires, their respective predecessors and subsidiaries including, in the case
of IPT, Insignia Properties, L.P., the operating partnership of IPT. Unless the
context indicates otherwise, all references herein to "Insignia" shall mean
Insignia Financial Group, Inc. and its consolidated subsidiaries (other than
IPT). Except where otherwise indicated, all ownership percentages regarding IPT
contained in this Proxy Statement/Prospectus attribute to Insignia the IPT
Common Shares owned by the executive officers, trustees and directors of IPT
and Insignia. Shareholders of AMIT are urged to read this Proxy
Statement/Prospectus and the Annexes attached hereto in their entirety.
Capitalized terms which are frequently used in this Proxy Statement/Prospectus
are defined in the Glossary commencing on page G-1 hereof.

THE PARTIES

IPT AND IPLP

IPT is a Maryland real estate investment trust formed by Insignia in May
1996 primarily for the purpose of acquiring and owning interests in multifamily
residential properties, principally through ownership of limited and general
partner interests in real estate limited partnerships. IPT has been organized
and intends to operate in a manner that will qualify it to be taxed as a real
estate investment trust ("REIT") under the Internal Revenue Code of 1986, as
amended (the "Code"). Substantially all of IPT's assets are held through its
operating partnership, Insignia Properties, L.P., a Delaware limited
partnership ("IPLP").

As of the date of this Proxy Statement/Prospectus, IPT holds equity
interests in and effectively controls 127 real estate limited partnerships
(excluding ten partnerships which are in the process of dissolving) (the
"Controlled Partnerships") and owns one whole real estate asset (a 168-unit
residential apartment complex located in Pensacola, Florida). IPT is currently
structured such that IPT (or a subsidiary thereof) owns a controlling equity
interest in each entity that comprises or controls the managing general partner
of each Controlled Partnership and will own any additional such controlling
equity interests acquired by IPT in the future, and IPLP (and its subsidiaries)
own the limited partner interests in the Controlled Partnerships and IPT's only
existing whole real estate asset and will own any additional limited partner
interests in real estate limited partnerships and whole assets acquired by IPT
in the future. The Controlled Partnerships in which IPT directly and indirectly
owns a material interest are referred to herein as the "IPT Partnerships." The
IPT Partnerships are listed on page 61 hereof. As of the date of this Proxy
Statement/Prospectus, the Controlled Partnerships own, in the aggregate, 349
properties containing approximately 73,000 residential apartment units and
approximately 5.9 million square feet of commercial space, and the IPT
Partnerships own, in the aggregate, 200 properties containing approximately
49,000 residential apartment units and approximately 3.0 million square feet of
commercial space. See "IPT Formation Transactions" and "Business of IPT."

As of the date of this Proxy Statement/Prospectus, there are 19,427,760
common shares of beneficial interest, par value $.01 per share, of IPT ("IPT
Common Shares") issued and outstanding, 13,216,048 (or approximately 68%) of
which are owned by Insignia and its affiliates, and IPLP has two partners --
IPT, which is the sole general partner and owns 19,427,760 (or approximately
66%) of IPLP's outstanding units of common partnership interest ("OP Units");
and Insignia, which is the sole limited partner and owns 9,934,475 (or
approximately 34%) of the outstanding OP Units. The affairs of IPLP and the
relations among its partners are governed by the Fourth Amended and Restated
Agreement of Limited Partnership of IPLP (the "Partnership Agreement"). Under
the Partnership Agreement, Insignia is

designated as the special limited partner (the "Special Limited Partner") of
IPLP and, as such, possesses special rights with respect to certain matters
concerning IPLP. Limited partners of IPLP have the right, under certain
circumstances, to require IPLP to redeem their OP Units for cash, subject,
however, to certain first rights of IPT to acquire such OP Units in exchange
for IPT Common Shares. See "The Partnership Agreement of IPLP."

Under the Partnership Agreement, IPT is required to retain Insignia to
provide (i) property management services with respect to virtually all
properties currently or hereafter controlled (directly or indirectly) by IPT,
and (ii) partnership administration services to certain of the partnerships
controlled by IPT. IPT, IPLP and Insignia have also entered into an Acquisition
and Disposition Services Agreement (the "Acquisition and Disposition Services
Agreement"), pursuant to which IPT has engaged Insignia to provide certain real
estate and real estate securities acquisition and disposition services to IPT
and IPLP. See "The Partnership Agreement of IPLP" and "Acquisition and
Disposition Services Agreement."

IPT's principal executive offices are located at One Insignia Financial
Plaza, Greenville, South Carolina 29602, and its telephone number at that
address is (864) 239-1300.

AMIT

AMIT is a California unincorporated business trust which was organized as
a REIT for federal income tax purposes. The AMIT Class A Shares are listed on
the American Stock Exchange under the symbol "ANM." AMIT makes various types of
intermediate-term real estate loans. AMIT's lending is concentrated principally
in secured, and to a lesser extent unsecured, real estate loans. As of March
31, 1998, AMIT had 23 loans outstanding, with an aggregate principal balance of
approximately $30 million (net of loan loss reserves) and owned real property
with a book value of approximately $8.7 million. As of such date, AMIT had 15
loans outstanding to partnerships currently controlled by IPT, with an
aggregate principal balance of approximately $17.8 million (net of loan loss
reserves). See "Risk Factors -- Conflicts of Interests; Loans."

All of the outstanding AMIT Class B Shares are owned by Metropolitan Asset
Enhancement, L.P. ("MAE"), which is an affiliate of IPT and Insignia. The AMIT
Class B Shares are subject to an irrevocable voting proxy (the "Class B Voting
Proxy") which has been granted to AMIT pursuant to which AMIT, as proxy for
MAE, is required to vote all (100%) of the AMIT Class B Shares as a unit in
accordance with the majority of AMIT Class A Shares voting on any matter
involving AMIT and Insignia, including each of the Proposals. AMIT also holds
an option to purchase all of the AMIT Class B Shares owned by MAE in the year
2005 for approximately $94,000. See "Certain Other Agreements -- Stock Option
Agreement and Class B Voting Proxy." Liquidity Assistance L.L.C. ("LAC"), which
is a wholly-owned subsidiary of Insignia, owns 96,800 (or approximately 3.7%)
of the outstanding AMIT Class A Shares.

AMIT's principal executive offices are located at 340 North Westlake
Boulevard, Suite 230, Westlake Village, California 91362, and its telephone
number at that address is (805) 449-1335.

INSIGNIA

Insignia is a leading fully-integrated real estate services company. Based
on information published by the National Multi-Family Housing Council, Insignia
is the largest manager of multifamily residential properties in the United
States, and according to information provided by Commercial Property News,
Insignia is among the largest managers of commercial properties. Insignia's
real estate services include property management, providing all of the
day-to-day services necessary to operate a property, whether residential or
commercial; asset management, including long-term financial planning,
monitoring and implementing capital improvement plans, and development and
execution of refinancings and dispositions; real estate leasing and brokerage;
maintenance and construction services; marketing and advertising; investor
reporting and accounting; and investment banking, including assistance in
workouts and restructurings, mergers and acquisitions, and debt and equity
securitizations. Insignia provides property

and/or asset management services for approximately 2,400 properties, which
include approximately 280,000 residential units (including cooperative and
condominium units) and approximately 160 million square feet of commercial
space located in over 500 cities in 48 states and overseas. Insignia currently
provides partnership administration services to approximately 900 limited
partnerships having approximately 330,000 limited partners. Insignia's common
stock is listed on the New York Stock Exchange under the symbol "IFS."

As of the date of this Proxy Statement/Prospectus, Insignia and its
affiliates own approximately 68% of the outstanding IPT Common Shares, and
Insignia is the sole limited partner of IPLP and owns approximately 34% of the
outstanding OP Units.

THE SPECIAL MEETING

The Special Meeting will be held on July 9, 1998, at the Beverly Hilton
Hotel, 9876 Wilshire Boulevard, Beverly Hills, California, at 9:00 a.m., local
time. At the Special Meeting, holders of AMIT Shares will be asked to approve
and adopt the Merger Proposal and the Trust Amendment Proposal. The Trust
Amendment Proposal is conditioned upon the approval of the Merger Proposal, and
will not be submitted to the shareholders of AMIT if the Merger Proposal fails.

The AMIT Board has established May 13, 1998 as the record date (the "AMIT
Record Date") for the determination of AMIT shareholders entitled to notice of,
and to vote at, the Special Meeting and any adjournment or postponement
thereof. The approval of each of the Proposals requires the affirmative vote of
the holders of the majority of the outstanding AMIT Class A Shares and AMIT
Class B Shares, voting together as a single class. On the AMIT Record Date,
there were 2,617,000 AMIT Class A Shares outstanding and 1,675,113 AMIT Class B
Shares outstanding.

All of the issued and outstanding AMIT Class B Shares are owned by MAE.
Pursuant to the terms of the Class B Voting Proxy, AMIT, as MAE's proxy, is
required to vote all (100%) of the AMIT Class B Shares as a unit in accordance
with the vote of a majority of the holders of the AMIT Class A Shares
represented at the Special Meeting on each of the Proposals. See "Certain Other
Agreements -- Stock Option Agreement and Class B Voting Proxy." LAC owns 96,800
(or approximately 3.7%) of the outstanding AMIT Class A Shares. The AMIT Class
A Shares owned by LAC are not subject to the Class B Voting Proxy and may be
voted by LAC without restriction. LAC has indicated that it intends to vote its
AMIT Class A Shares in favor of each of the Proposals. The AMIT Class A Shares
owned by LAC and the AMIT Class B Shares owned by MAE collectively represent
approximately 43% of the voting power of AMIT.

THE MERGER AND RELATED MATTERS

THE MERGER AGREEMENT

CONVERSION OF AMIT SHARES

Pursuant to the Merger Agreement, each outstanding AMIT Class A Share will
be converted into 1.530 IPT Common Shares (the "Class A Exchange Ratio") and
each outstanding AMIT Class B Share will be converted into 0.0312 IPT Common
Shares (the "Class B Exchange Ratio," and collectively with the Class A
Exchange Ratio, the "Exchange Ratio"). The Exchange Ratio is determined by
adjusting the base exchange values set in the Merger Agreement of $16.25 per
AMIT Class A Share and $10.00 per IPT Common Share to account for distributions
declared or paid by AMIT since December 31, 1996 and by IPT since January 31,
1997. IPT's initial exchange value of $10.00 has been adjusted to $10.62 to
account

for the distributions of $1.99 per AMIT Class A Share paid by AMIT since
December 31, 1996 and of $.60 per IPT Common Share declared or paid by IPT
since January 31, 1997, resulting in the Class A Exchange Ratio of 1.530
($16.25 divided by $10.62). The adjusted Class A Exchange Ratio, assuming a
constant $10.00 IPT Common Share exchange value, effectively values each AMIT
Class A Share at $15.30 for purposes of the Merger. Because AMIT Class B Shares
are convertible into AMIT Class A Shares at a rate of 49 to 1 under AMIT's
Declaration of Trust, the Class B Exchange Ratio simply equals the Class A
Exchange Ratio divided by 49 (or 0.0312). The Exchange Ratio is subject to
further adjustment should either AMIT or IPT declare any distributions after
the date of this Proxy Statement/Prospectus with a record date prior to the
consummation of the Merger, although neither party intends or expects to
declare any such additional distributions. No fractional IPT Common Shares will
be issued. In lieu of any fractional shares, an AMIT shareholder otherwise
entitled to a fractional IPT Common Share will receive cash from IPT in an
amount determined by multiplying such fractional share amount by the IPT Share
Value (which will be $10.62, assuming no distributions are declared by AMIT or
IPT between the date hereof and the Merger). For additional information on the
conversion of the AMIT Shares, including adjustments to the Exchange Ratio, see
"The Merger Agreement -- Manner and Basis of Converting Shares."

INSIGNIA/AIMCO TRANSACTION

On March 17, 1998, Insignia entered into a definitive merger agreement (as
subsequently amended and restated as of May 26, 1998, the "Insignia/AIMCO
Merger Agreement") with Apartment Investment and Management Company, a Maryland
corporation and publicly traded REIT ("AIMCO"), pursuant to which Insignia is
to be merged with and into AIMCO (the "Insignia/AIMCO Merger"), with AIMCO
being the surviving entity. If the Insignia/AIMCO Merger is consummated, AIMCO
will succeed to all of Insignia's business relating to the ownership and
management of multifamily residential properties, including Insignia's
ownership of IPT Common Shares and OP Units and thus AIMCO will become the
majority shareholder of, and control, IPT.

As part of the Insignia/AIMCO Merger Agreement, AIMCO has agreed to
propose to acquire IPT by merger within three months of the effective time of
the Insignia/AIMCO Merger and use its reasonable best efforts to effect such
merger (but not earlier than August 15, 1998) at a purchase price of not less
than $13.25 per IPT Common Share in cash. AIMCO currently intends to effect
such acquisition by causing IPT to be merged with and into a subsidiary of
AIMCO (the "IPT/AIMCO Merger").

Based on the current Class A Exchange Ratio of 1.530, upon consummation of
the Merger and the IPT/AIMCO Merger, an AMIT Class A shareholder would receive
a cash amount for its IPT Common Shares received in the Merger which would be
equivalent to $20.27 per AMIT Class A Share. However, there can be no assurance
that either the Insignia/AIMCO Merger or the IPT/AIMCO Merger will be
consummated.

The affirmative vote of the holders of a majority of the outstanding IPT
Common Shares will be required for approval of the IPT/AIMCO Merger. Following
the Merger and the Insignia/AIMCO Merger, AIMCO will own a majority of the
outstanding IPT Common Shares. Consequently, AIMCO will have sufficient votes
to approve the IPT/AIMCO Merger without the vote of any other IPT shareholder.

It is presently contemplated that a Proxy Statement or an Information
Statement with respect to the IPT/AIMCO Merger will be distributed to the IPT
shareholders prior to consummation of the IPT/AIMCO Merger. IPT shareholders
(including the former AMIT shareholders) will be entitled to dissenters' rights
of appraisal in connection with the IPT/AIMCO Merger if it is consummated as
currently contemplated and described herein.

Insignia/ESG Holdings, Inc. ("Insignia/ESG"), a wholly-owned subsidiary of
Insignia which will be "spun-off" to the current stockholders of Insignia, is a
party to the Insignia/AIMCO Merger Agreement and the agreement provides that
Insignia/ESG may enforce AIMCO's obligation to propose to acquire IPT by
merger. Insignia/ESG has covenanted to AMIT and IPT that it will use its
reasonable best efforts

to compel AIMCO to effect the IPT/AIMCO Merger in the event that AIMCO breaches
its obligation to effect such merger pursuant to the terms of the
Insignia/AIMCO Merger Agreement. However, there can be no assurance that
Insignia/ESG would be successful in an attempt to specifically enforce AIMCO's
obligation to effect the IPT/AIMCO Merger pursuant to the terms of the
Insignia/AIMCO Merger Agreement.

AIMCO is a Maryland corporation formed on January 10, 1994 and is a
self-administered and self-managed REIT engaged in the ownership, acquisition,
development, expansion and management of multifamily apartment properties.
According to AIMCO's annual report for the year ended December 31, 1997,
through its controlling interests in AIMCO Properties, L.P., a Delaware limited
partnership, other limited partnerships and subsidiary corporations, AIMCO
currently owns or controls 40,039 units in 147 apartment properties, holds an
equity interest in 83,431 units in 515 apartment properties and manages 69,587
units in 374 apartment properties for third party owners and affiliates.

For additional information concerning the Insignia/AIMCO Merger and
IPT/AIMCO Merger, see "Insignia/AIMCO Transaction."

OWNERSHIP OF IPT FOLLOWING THE MERGER

After giving effect to the conversion of the AMIT Shares in the Merger,
the AMIT shareholders (other than MAE and LAC) will own approximately 16% of
the outstanding IPT Common Shares; Insignia and its affiliates (including LAC,
but excluding MAE and the executive officers, trustees and directors of IPT and
Insignia) will own approximately 51% of the outstanding IPT Common Shares; MAE
will own approximately 3% of the outstanding IPT Common Shares; the executive
officers, trustees and directors of IPT and Insignia will collectively own
approximately 2% of the outstanding IPT Common Shares; and the remaining 26% of
the outstanding IPT Common Shares will be owned by the current IPT shareholders
who are unaffiliated with IPT. The chart on Page 11 depicts the post-Merger
organizational structure and beneficial ownership of IPT and IPLP. If the
Insignia/AIMCO Merger is consummated, AIMCO will succeed to Insignia's
ownership of approximately 51% of the outstanding IPT Common Shares, and upon
the consummation of the IPT/AIMCO Merger AIMCO will own 100% of the outstanding
IPT Common Shares, although there can be no assurance that either transaction
will be consummated. See "The Merger -- General."

LISTING OF IPT COMMON SHARES

The currently outstanding IPT Common Shares have been approved for listing
on the ASE, subject to consummation of the Merger under the symbol "FFO." The
IPT Common Shares to be received by the shareholders of AMIT in the Merger have
also been approved for listing on the ASE, subject to official notice of
issuance, and upon consummation of the Merger such shares (other than IPT
Common Shares received by certain affiliates of IPT and AMIT) will be freely
tradable. See "The Merger -- Listing of IPT Common Shares."

MANAGEMENT OF IPT FOLLOWING THE MERGER

Upon consummation of the Merger, all of the current trustees and executive
officers of IPT will remain as such. In addition, the following persons will be
appointed at that time as additional trustees of IPT: Ronald Uretta, who is
Treasurer of IPT and Senior Vice President and Chief Operating Officer of
Insignia; Ronald J. Consiglio, who is a trustee and the President and Chief
Executive Officer of AMIT; Bryan L. Herrmann, who is a trustee of AMIT; and
Warren Eckstein, who is a Managing Director -- Investment Banking of Paine
Webber Incorporated. In addition, upon the consummation of the Merger, IPT will
enter into employment agreements with each of Ronald J. Consiglio and Anna
Merguerian, who is the Chief Financial Officer of AMIT, pursuant to which they
will become Managing Director and Vice President of IPT, respectively. See
"Special Factors -- Interests of Certain Persons in the Merger" and "Management
of IPT -- Employment Agreements."

IPT DISTRIBUTION POLICY FOLLOWING THE MERGER

The Board of Trustees of IPT (the "IPT Board") has adopted a policy to pay
regular quarterly distributions in the amount of $.15 per IPT Common Share
which will be increased to $.16 per IPT Common Share beginning with the first
quarterly distribution for which the record date is after the consummation of
the Merger, although IPT is not obligated to pay such distributions and cannot
assure that such distributions will be paid. IPT is currently paying regular
quarterly distributions of $.15 per IPT Common Share in accordance with this
policy. Such distributions are intended to match, on an adjusted share basis,
the aggregate of the $1.00 per AMIT Class A Share distributions that AMIT was
paying annually at the time the Merger Agreement was being negotiated.
Distributions by IPT to the extent of its current and accumulated earnings and
profits for federal income tax purposes generally will be taxable to
shareholders as ordinary dividend income. Distributions in excess of current
and accumulated earnings and profits will be treated as a non-taxable reduction
of a shareholder's basis in its IPT Common Shares to the extent thereof and
thereafter as taxable gain. Distributions that are treated as a reduction of a
shareholder's basis in its IPT Common Shares will have the effect of deferring
taxation until the sale of the shareholder's shares. If distributions exceed
available cash, IPT would be required to sell assets or borrow funds to make
distributions or revise its dividend policy. IPT paid distributions of $.15 per
IPT Common Share on November 17, 1997, to shareholders of record on October 31,
1997, on January 15, 1998 to shareholders of record on December 23, 1997, and
on April 15, 1998 to shareholders of record on March 23, 1998. In addition, on
June 3, 1998, IPT declared a distribution of $.15 per IPT Common Share to
shareholders of record on June 23, 1998, which distribution is expected to be
paid by July 15, 1998. See "Distributions."

RECOMMENDATION OF THE AMIT BOARD

The AMIT Board recommends approval of the Merger Proposal with IPT whether
or not the IPT/AIMCO Merger is consummated. The AMIT Board recommends approval
of the Merger Proposal even if the IPT/AIMCO Merger does not occur because the
AMIT Board believes, based in part upon the fairness opinion issued by
Christopher Weil & Co., that the Exchange Ratio is fair to AMIT shareholders
from a financial point of view. The AMIT Boards recommends approval of the
Merger Proposal even if the Merger is followed by the IPT/AIMCO Merger because
the minimum price at which AIMCO has covenanted to Insignia to pay to acquire
the remaining IPT Common Shares equates, based on the current Class A Exchange
Ratio of 1.530, to approximately $20.27 per AMIT Class A Share. This price is
in excess of the current book value of the AMIT Class A shares and is higher
than the price at which the AMIT Class A Shares have ever traded in the public
market. See "Special Factors -- AMIT's Reasons for the Merger" and "Special
Factors -- Recommendation of the AMIT Board." However, there can be no
assurance that the IPT/AIMCO Merger will be consummated.

OPINION OF AMIT'S FINANCIAL ADVISOR

Christopher Weil & Company, Inc. ("Weil") delivered an oral opinion to the
AMIT Board on July 18, 1997 (the date the Merger Agreement was signed), that,
as of such date, the Exchange Ratio was fair to the shareholders of AMIT from a
financial point of view. Weil later confirmed its opinion in written form (the
"Weil Opinion"), which was delivered to the AMIT Board on November 13, 1997.
Weil delivered its opinion prior to announcement of the proposed Insignia/AIMCO
Merger. Weil has not rendered an opinion as to the fairness of the
consideration to be received in the IPT/AIMCO Merger or as to the fairness of
the consideration to be received in the Merger in light of the contemplated
IPT/AIMCO Merger. A copy of the complete text of the Weil Opinion, setting
forth the procedures, the matters considered and the assumptions made in
connection with rendering this opinion, is attached to this Proxy
Statement/Prospectus as Annex C. AMIT shareholders are encouraged to read the
Weil Opinion carefully. See "Special Factors -- Opinion of AMIT's Financial
Advisor."

INTERESTS OF CERTAIN PERSONS IN THE MERGER

In considering the recommendation of the AMIT Board with respect to the
Proposals, the shareholders of AMIT should be aware that certain members of
AMIT's management and certain members of the AMIT Board have interests in the
Merger separate from the interests of the AMIT shareholders generally. These
separate interests are summarized below:

IPT Board Representation. Upon consummation of the Merger, IPT will take
such action as is required under its Declaration of Trust and Bylaws to cause
Ronald J. Consiglio and Bryan L. Herrmann to be appointed as trustees of IPT.
Mr. Consiglio is currently a trustee, President and Chief Executive Officer of
AMIT, and Mr. Herrmann is currently an independent trustee of AMIT. Each of
Messrs. Consiglio and Herrmann will be entitled to compensation for attendance
at meetings of the IPT Board and committees thereof. See "Special Factors --
Interests of Certain Persons in the Merger" and "Management of IPT --
Compensation of Trustees."

Employment Agreements. Upon consummation of the Merger, Ronald J.
Consiglio and Anna Merguerian will enter into employment agreements with IPT.
Mr. Consiglio, who is currently the President, Chief Executive Officer and a
trustee of AMIT, will enter into a three year employment agreement to serve as
a Managing Director of IPT, pursuant to which he will receive a base salary of
at least $276,000 per annum, with an annual bonus of not less than $90,000. Ms.
Merguerian, who is currently the Chief Financial Officer, Secretary and Vice
President of AMIT, will enter into a three year employment agreement to serve
as a Vice President of IPT, pursuant to which she will receive a base salary of
at least $100,000 per annum, with an annual bonus of not less than $45,000. See
"Management of IPT -- Employment Agreements."

AMIT Trustee Compensation. On January 29, 1998, the executive committee of
the AMIT Board voted in favor of a proposal to compensate AMIT trustees who are
not continuing as trustees of IPT after the Merger, in an amount equal to
$2,500 per year for each year of service on the AMIT Board, but not to exceed
aggregate payments of $30,000 to all qualifying trustees. Assuming the closing
of the Merger prior to June 30, 1998, the aggregate of such compensation to all
departing trustees will be $27,500. No trustee who is eligible to receive such
compensation voted in connection with the proposal. See "Special Factors --
Interests of Certain Persons in the Merger."

CONDITIONS TO THE MERGER

Consummation of the Merger is subject to a number of conditions,
including: the requisite approval of each of the Proposals by the shareholders
of AMIT; the effectiveness under the Securities Act of a registration statement
relating to the IPT Common Shares to be issued in the Merger; and no material
adverse event occurring with respect to IPT or AMIT. The receipt of an opinion
of counsel to the effect that the Merger should be treated as a reorganization
under Section 368(a) of the Code (which would in general be tax-free to AMIT
shareholders) was a condition to the Merger, however, due to the proposed
IPT/AIMCO Merger, no opinion of counsel that the Merger should be treated as a
reorganization under Section 368(a) of the Code will be given. This condition
has been waived by the parties subject to the approval of the Proposals by the
AMIT shareholders. See "The Merger -- Conditions to the Merger" and "The
Merger--Federal Income Tax Consequences of the Merger."

EFFECTIVE TIME OF THE MERGER

The Merger will become effective immediately upon the acceptance for
record of the articles of merger by and between AMIT and IPT (the "Articles of
Merger") by the Maryland Department of Assessments and Taxation or at such time
thereafter as is provided in the Articles of Merger (the "Effective Time").
Assuming all conditions to the Merger contained in the Merger Agreement are
satisfied or waived, it is anticipated that the Effective Time of the Merger
will occur as promptly following the Special Meeting as practicable. See "The
Merger Agreement -- Effective Time and Closing of the Merger."

TRUST AMENDMENT

AMIT shareholders will be asked to consider and vote on the Trust
Amendment Proposal, which, if approved, will allow AMIT to merge or consolidate
with other entities with the approval of a majority of the AMIT Board and the
affirmative vote of the holders of the majority of the AMIT Class A Shares and

AMIT Class B Shares, voting together as a single class. AMIT's Declaration of
Trust currently lacks such authority. The approval of the Trust Amendment
Proposal, therefore, is necessary for the Merger to be consummated. The Trust
Amendment Proposal is conditioned upon the approval of the Merger Proposal and
will not be submitted to the AMIT shareholders if the Merger Proposal fails.
See "Trust Amendment."

ACCOUNTING TREATMENT

IPT will account for the Merger as a purchase for accounting and financial
reporting purposes. See "The Merger -- Accounting Treatment."

FEDERAL INCOME TAX CONSEQUENCES

Akin, Gump, Strauss, Hauer & Feld, L.L.P. ("Akin Gump"), counsel to IPT,
has rendered an opinion with respect to the federal income tax treatment of the
Merger that if both the Merger and the IPT/AIMCO Merger are consummated, the
IPT Common Shares received by the AMIT shareholders in exchange for AMIT Shares
in the Merger will be treated as a taxable event and each AMIT shareholder will
recognize gain (or loss) to the extent that the fair market value of the IPT
Common Shares received is greater than (or less than) such shareholder's tax
basis in its AMIT Share. If the Merger is consummated but the IPT/AIMCO Merger
is not consummated the federal income tax treatment of the Merger is unclear
and Akin Gump is unable to opine whether or not the Merger will be treated for
federal income tax purposes as a reorganization within the meaning of Section
368(a) of the Code. If the Merger is not treated as a reorganization under the
Code, Akin Gump has opined that the Merger will have the federal income tax
consequences described above. If the Merger is treated as a reorganization,
Akin Gump has opined that no gain or loss will be recognized by holders of AMIT
Shares upon the receipt of IPT Common Shares in the Merger, except with respect
to any cash received by an AMIT shareholder in lieu of a fractional IPT Common
Share. For a discussion of these and other federal income tax considerations in
connection with the Merger, see "The Merger -- Federal Income Tax Consequences
of the Merger."

MATERIAL CONFLICTS OF INTEREST

Shareholders of AMIT should refer to the "Risk Factors -- Conflicts of
Interest" section for a discussion of the conflicts that should be considered
in connection with an evaluation of the Proposals to be considered at the
Special Meeting, including the following:

Management. In exercising its voting rights as the controlling shareholder
of IPT, Insignia and its affiliates may consider their interests, which may be
different from those of the other shareholders of IPT and therefore present a
conflict of interest for IPT. Additionally, upon consummation of the Merger, a
majority of the trustees of IPT will consist of persons who are also the
executive officers of Insignia.

Property Management and Partnership Administration. Pursuant to the terms
of the Partnership Agreement, IPT and IPLP are required to engage Insignia and
its affiliates to provide property management services to virtually all of the
properties directly or indirectly controlled by IPT and to provide partnership
administration services to certain of the partnerships controlled by IPT.

SUMMARY RISK FACTORS

Shareholders of AMIT should carefully consider and refer to the
information under "Risk Factors" for a discussion of certain factors that
should be considered in connection with an evaluation of the Proposals to be
voted on at the Special Meeting, including the following:

Risk Factors Relating to Insignia/AIMCO Merger and IPT/AIMCO Merger

o There can be no assurance that either the Insignia/AIMCO Merger or the
IPT/AIMCO Merger will be consummated.

o If the Insignia/AIMCO Merger is consummated, AIMCO will become the
controlling shareholder of IPT. AIMCO has less experience than Insignia
with respect to the IPT property portfolio.

o If the IPT/AIMCO Merger is consummated, AMIT shareholders will receive
cash for their IPT Common Shares and will no longer have the opportunity
to share in the future earnings and growth of IPT.

o Because AIMCO will own a majority of the outstanding shares of IPT
following the Insignia/ AIMCO Merger, it will have the ability to
approve the IPT/AIMCO Merger without the consent of the minority
shareholders of IPT (including the former AMIT shareholders).

o AMIT shareholders do not have any direct rights to require AIMCO to
complete the IPT/AIMCO Merger. AMIT shareholders are not third party
beneficiaries of AIMCO's covenant to propose to acquire the minority
interest in IPT following consummation of the Insignia/AIMCO Merger.
Insignia/ESG has, however, covenanted to AMIT and IPT that it will use
its reasonable best efforts to compel AIMCO to effect the IPT/AIMCO
Merger in the event that AIMCO breaches its obligations to do so.

o AMIT's Board of Directors has not received an opinion from a financial
advisor as to the fairness to AMIT shareholders from a financial point
of view of the IPT/AIMCO Merger.

Risk Factors Relating to the Merger and Post-Merger Operations

o The federal income tax consequences of the Merger are not certain. Akin
Gump has rendered an opinion that if the Merger is consummated and the
IPT/AIMCO Merger is consummated after the Merger as contemplated by the
Insignia/AIMCO Merger Agreement (i.e., in a cash-out merger), the
receipt of IPT Common Shares in the Merger will be treated as a taxable
event for AMIT shareholders. If the Merger is consummated and the
IPT/AIMCO Merger is not consummated, the federal income tax treatment of
the Merger is unclear and Akin Gump is unable to opine whether or not
the Merger will be treated as a reorganization within the meaning of
Section 368(a) of the Code.

o Following the Merger, Insignia will control IPT, having appointed the
majority of the IPT Board and controlling approximately 57% of the
outstanding IPT Common Shares (and approximately 66% on a fully-diluted
basis, assuming all OP Units are either redeemed for cash or acquired by
IPT in exchange for IPT Common Shares).

o IPT is dependent on the property management services provided by
Insignia and its affiliates and the loss of such property management
services could adversely affect IPT.

o Certain provisions in IPT's Declaration of Trust and Bylaws, including
restrictions on ownership of IPT Common Shares, may have the effect of
inhibiting a change in control of IPT even where such a change of
control could be beneficial to IPT's shareholders.

o IPT's property portfolio is heavily concentrated in multifamily
residential housing, making IPT particularly susceptible to downturns in
this sector of the real estate market.

o The multifamily residential real estate market in which IPT competes is
highly competitive and subject to a variety of risks, including the
implementation of local rent control or stabilization ordinances, the
oversupply of or reduction in demand for apartments, interest rate
levels and the availability of financing, all of which could have an
adverse effect on the operations of IPT.

o If IPT were to fail to qualify as a REIT, or if IPLP or any IPT
Partnership were deemed to be a corporation instead of a partnership for
tax purposes, IPT would become liable for federal and state taxes on its
income and the amount of cash available for distribution to shareholders
of IPT could be reduced substantially.

NO APPRAISAL RIGHTS

Neither the shareholders of AMIT nor the shareholders of IPT are entitled
to dissenters' rights of appraisal under their respective Declarations of
Trust, Bylaws or applicable state law as a result of the Merger. If the Merger
is consummated and the IPT Common Shares are listed on the ASE on the record
date for determining the IPT shareholders certified to vote on the IPT/AIMCO
Merger, IPT shareholders (including the former AMIT shareholders) will not be
entitled to dissenters' rights of appraisal in connection with the IPT/AIMCO
Merger, if consummated as currently contemplated and described herein. See
"Special Factors -- No Appraisal Rights."

FORWARD-LOOKING STATEMENTS

CERTAIN STATEMENTS CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS ARE NOT
BASED ON HISTORICAL FACTS, BUT ARE FORWARD-LOOKING STATEMENTS THAT ARE BASED
UPON NUMEROUS ASSUMPTIONS ABOUT FUTURE CONDITIONS THAT MAY ULTIMATELY PROVE TO
BE INACCURATE. ACTUAL EVENTS AND RESULTS MAY MATERIALLY DIFFER FROM ANTICIPATED
RESULTS DESCRIBED IN SUCH STATEMENTS. IPT'S ABILITY TO ACHIEVE SUCH RESULTS IS
SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES. SUCH RISKS AND UNCERTAINTIES
INCLUDE, BUT ARE NOT LIMITED TO, CONTINUED AVAILABILITY OF CAPITAL AND
FINANCING. CAPITAL EXPENDITURES, THE AMOUNT OF OTHER FINANCING AND OTHER
FACTORS AFFECTING IPT'S BUSINESS THAT MAY BE BEYOND IPT'S CONTROL, INCLUDING,
BUT NOT LIMITED TO, THE MATTERS DESCRIBED IN "RISK FACTORS." "MANAGEMENT'S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF IPT
AND THE IPT PARTNERSHIPS," "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS OF AMIT," "THE MERGER," "BUSINESS OF IPT"
AND "UNAUDITED PRO FORMA FINANCIAL INFORMATION," AS WELL AS WITHIN THE PROXY
STATEMENT/PROSPECTUS GENERALLY. WHEN USED IN THIS PROXY STATEMENT/PROSPECTUS
THE WORDS "BELIEVES," "ANTICIPATES," "EXPECTS" AND SIMILAR EXPRESSIONS ARE
INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS.

FORWARD LOOKING STATEMENTS ARE NOT GUARANTEES OF PERFORMANCE. THEY INVOLVE
RISKS, UNCERTAINTIES AND ASSUMPTIONS. THE FUTURE RESULTS AND SHAREHOLDER VALUES
OF IPT, AMIT AND THE COMBINED ENTITY MAY DIFFER MATERIALLY FROM THOSE EXPRESSED
IN FORWARD LOOKING STATEMENTS. MANY OF THE FACTORS THAT WILL DETERMINE THESE
RESULTS AND VALUES ARE BEYOND IPT'S AND AMIT'S ABILITY TO CONTROL AND PREDICT.
SHAREHOLDERS ARE CAUTIONED NOT TO PUT UNDUE RELIANCE ON ANY FORWARD LOOKING
STATEMENTS.

INSIGNIA PROPERTIES TRUST
POST-MERGER ORGANIZATIONAL CHART

The chart below depicts the organizational structure and beneficial
ownership of IPT and IPLP after giving effect to the Merger.

[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE
PURPOSE OF EDGAR FILING.]

Executive Officers,
Trustees and
Directors of
INSIGNIA (1) MAE AMIT SHAREHOLDERS (2) IPT and Insignia OTHERS (3)
51% 3% 16% 2% 26%
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| ------------------------------------------------------------------
| INSIGNIA PROPERTIES TRUST
| ("IPT")
| ------------------------------------------------------------------
| | |
| | |
| | |
| Limited | General o Equity Interests in Entities
| Partner | Partner Comprising or Controlling
| (30%) | (70%) the Managing General
| | Partners of the Contolled
- - --- INSIGNIA PROPERTIES, L.P. Partnerships
("IPLP")
| o Certain AMIT Assets
|
|
|
o Limited Partner
Interests in the
Controlled Partnerships

o Whole Real Estate Assets

(1) Includes IPT Common Shares held by affiliates of Insignia including
LAC but excluding MAE and the executive officers, trustees and directors
of IPT and Insignia.

(2) Excludes MAE and LAC.

(3) Includes persons who purchased IPT Common Shares in the Private Offerings
(other than the executive officers, trustees and directors of IPT and
Insignia).

IPT SUMMARY HISTORICAL FINANCIAL DATA

The following is a summary of certain selected financial data of IPT and
its subsidiaries and predecessors. The summary financial data have been derived
from IPT's consolidated financial statements and the combined financial
statements of its predecessor and, in the opinion of the management of IPT,
include all adjustments (consisting of only normal recurring adjustments)
necessary for a fair presentation of the financial position and results of
operations for the periods presented. The information set forth below is not
necessarily indicative of the results of future operations and should be read
in conjunction with IPT's Financial Statements and the related Notes thereto
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations of IPT and the IPT Partnerships" included elsewhere in this Proxy
Statement/Prospectus.

THREE MONTHS ENDED MARCH
31, YEAR ENDED DECEMBER 31,
--------------------------- -----------------------------------------
1998 1997 1997 1996 1995 1994
------------- ------------- ------------- --------- --------- -------
(IN THOUSANDS, EXCEPT SHARE DATA) (IN THOUSANDS, EXCEPT SHARE DATA)

STATEMENT OF OPERATIONS DATA
Revenues ............................... $ 5,757 $ 4,128 $ 16,826 $9,705 $2,459 $113
Income before extraordinary item $ 2,054 $ 660 $ 6,074 $3,557 $2,215 $113
Net income ............................. $ 2,080 $ 660 $ 6,004 $2,425 $2,215 $113
Income before extraordinary item
per share (diluted) .................. .11 .06 .41 n/a n/a n/a
Net income per share (diluted) ......... .11 .06 .40 n/a n/a n/a
Cash distributions to IPT
Common shareholders per
share ................................ .15 -- .30 .20 n/a n/a
Weighted average IPT Common
Shares outstanding ................... 18,835,911 11,179,036 14,694,327 n/a n/a n/a

THREE MONTHS ENDED MARCH
31, YEAR ENDED DECEMBER 31,
-------------------------- --------------------------------------------------
1998 1997 1997 1996 1995 1994
------------- ------------ ------------ ------------ ----------- ------------
(IN THOUSANDS, EXCEPT SHARE DATA) (IN THOUSANDS, EXCEPT SHARE DATA)

BALANCE SHEET DATA
Cash .............................. $23,338 $ 5,111 $37,432 $ 4,928 $ 528 $ --
Investments in real estate
limited partnerships ............ 177,681 110,632 159,469 118,741 54,037 38,346
Total assets ...................... 234,091 139,905 226,068 147,757 54,565 38,346
Long-term debt .................... 21,957 20,380 19,300 19,730 -- --
Minority interest in IPLP ......... 56,984 46,998 54,447 50,429 -- --
Minority interest in other
consolidated subsidiaries ....... -- -- -- -- 2,682 --
Shareholders' equity .............. $149,314 $71,034 $146,212 $70,639 $51,874 $38,346
OTHER DATA
Cash provided by (used in)
operating activities ............ $ 97 $ 815 $ 2,338 $ 1,420 $ (100) $ --
Cash provided by (used in)
investing activities ............ (12,253) 9,886 (16,481) (70,834) (13,237) (38,233)
Cash provided by (used in)
financing activities ............ (1,938) (10,518) 46,647 73,814 13,865 38,233
Funds from Operations(a) .......... $ 7,439 $ 5,144 $20,939 $12,563 $ 4,611 $ 113
Number of IPT Partnerships(b) 43 26 29 26 13 4
Number of properties(b) ........... 201 136 150 136 86 32
Apartment units(b) ................ 49,373 36,077 38,369 36,077 19,337 7,433
Commercial square feet(b) ......... 2,983,995 819,000 1,667,874 819,000 767,172 453,977

- - ----------
(a) In accordance with the resolution adopted by the Board of Governors
of NAREIT, funds from operations represents net income (loss)
(computed in accordance with generally accepted accounting
principles), excluding gains (or losses) from debt restructuring or
sales of property, plus depreciation of real property, and after
adjustments for unconsolidated partnerships and joint ventures.
Funds from operations should not be considered as an alternative to
net income or other measurements under generally accepted accounting
principles as an indicator of operation performance or to cash flows
from operating, investing or financing activities as a measure of
liquidity. Funds from operations does not reflect working capital
changes, cash expenditures for capital improvements or principal
payments on indebtedness. IPT believes that funds from Operations is
helpful to investors as a measure of the performance of an equity
REIT, because along with cash flows from operating activities,
financing activities and investing activities, it provides investors
with an understanding of the ability of IPT to incur and service
debt and make capital distributions. Funds from operations computed
by IPT may not be comparable to other similarly titled measures of
other REITs. Funds from Operations is calculated as follows:

THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
--------------------- -----------------------------------------------
1998 1997 1997 1996 1995 1994
--------- --------- ----------- ----------- --------- -------
(IN THOUSANDS) (IN THOUSANDS)

Income before gain on sale of
property, minority interest
and extraordinary items ............. $3,587 $2,487 $ 9,470 $ 3,913 $2,346 $113
Depreciation and amortization ......... 4,002 2,871 12,288 9,388 2,265 --
Minority interest in NPI 4 funds
from operations ..................... (150) (214) (819) (738) -- --
------ ------ ------- ------- ------ ----
Funds from Operations ................. $7,439 $5,144 $20,939 $12,563 $4,611 $113
====== ====== ======= ======= ====== ====

(b) Only includes the IPT Partnerships.

AMIT SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA

The following is a summary of certain selected consolidated financial data
of AMIT. The summary financial data have been derived from AMIT's consolidated
financial statements and, in the opinion of the management of AMIT, include all
adjustments (consisting of only normal recurring adjustments) necessary for a
fair presentation of the financial position and results of operations for the
periods presented. The information set forth below is not necessarily
indicative of the results of future operations and should be read in
conjunction with AMIT's Consolidated Financial Statements and the related Notes
related thereto and "Management's Discussion and Analysis of Financial
Condition and Results of Operations of AMIT" included elsewhere in this Proxy
Statement/Prospectus.

(UNAUDITED)
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
----------------------------- ---------------------------------------
1998 1997 1997 1996 1995
-------------- -------------- ------------- ------------ ------------
(IN THOUSANDS, EXCEPT SHARE DATA) (IN THOUSANDS, EXCEPT SHARE DATA)

STATEMENT OF OPERATIONS DATA
Revenue ................................. $ 1,060 $ 1,235 $ 7,199 $ 10,050 $ 19,502
Costs and expenses ...................... 76 353 1,650 964 2,213
Extraordinary item ...................... -- -- -- -- 1,844
Net income .............................. 984 882 5,549 9,086 19,133
Per AMIT Class A Share:
Income before extraordinary item 0.37 0.33 2.10 3.33 5.77
Extraordinary item .................... -- -- -- -- 0.61
Net income ............................ 0.37 0.33 2.10 3.33 6.38
Cash distributions to AMIT
Class A shareholders .................. $ 0.32 $ 0.22 $ 2,695 $ 1,407 --
Cash distributions per AMIT
Class A Share ......................... $ 837 $ 576 $ 1.03 $ 0.52 --
AMIT Class A Shares outstanding ......... 2,617,000 2,617,000 2,617,000 2,617,000 2,826,700
Weighted average AMIT
Class A Shares outstanding ............ 2,617,000 2,617,000 2,617,000 2,704,375 2,968,532
BALANCE SHEET DATA
Total assets ............................ $ 51,151 $ 43,494 $ 46,530 $ 43,375 $ 37,332
Notes and advances payable .............. 4,525 -- -- -- --
Shareholders' equity .................... 46,089 43,394 45,942 43,088 37,139

IPT SUMMARY PRO FORMA FINANCIAL DATA

The following is a summary of certain pro forma financial data of IPT
giving effect to (i) the Merger, (ii) the exercise of the Shelter IV Option (as
defined herein) and (iii) certain other transactions described under "Unaudited
Pro Forma Financial Data" included elsewhere herein, as if effected at March
31, 1998, in the case of the pro forma balance sheet data, and at January 1,
1997, in the case of the pro forma statements of income data. The following
summary pro forma financial data have been derived from, and should be read in
conjunction with, the historical financial statements and notes thereto of IPT
and AMIT included elsewhere herein, and are not necessary indicative of the
financial position or operating results that would have occurred had the
foregoing transactions actually taken place on March 31, 1998 or January 1,
1997.

PRO FORMA PRO FORMA
THREE MONTHS ENDED YEAR ENDED
MARCH 31, 1998 DECEMBER 31, 1997
-------------------- -------------------
(IN THOUSANDS, (IN THOUSANDS,
EXCEPT SHARE DATA) EXCEPT SHARE DATA)

STATEMENT OF OPERATIONS DATA
Revenues ............................................... $ 6,817 $ 26,584
Net income before extraordinary item ................... $ 3,038 $ 13,481
Net income before extraordinary item per IPT Common
Share ................................................ $ .13 $ 0.58
Weighted average IPT Common Shares outstanding ......... 23,111,424 23,084,024

PRO FORMA
THREE MONTHS ENDED
MARCH 31, 1998
-------------------
(IN THOUSANDS)

BALANCE SHEET DATA
Cash .................................................... $ 34,198
Investments in real estate limited partnerships ......... $177,681
Total Assets ............................................ $281,276
Long-term debt .......................................... $ 26,482
Minority interest in IPLP ............................... $ 56,984
Shareholders' equity .................................... $190,237

PRO FORMA PRO FORMA
THREE MONTHS ENDED YEAR ENDED
MARCH 31, 1998 DECEMBER 31, 1997
----------------------- ----------------------
(IN THOUSANDS, EXCEPT (IN THOUSANDS, EXCEPT
PROPERTY INFORMATION) PROPERTY INFORMATION)

OTHER DATA
Cash provided by operating activities ................... $ 578 $ 5,262
Cash used in investing activities ....................... $(4,984) $(22,552)
Cash provided by (used in) financing activities ......... $(2,775) $ 43,952
Funds from Operations (b) ............................... $ 8,423 $ 31,321
Number of IPT Partnerships(a) ........................... 43 29
Number of properties(a) ................................. 201 150
Apartment units(a) ...................................... 49,373 38,369
Commerical square feet(a) ............................... 2,983,995 1,667,874

- - ----------
(a) Only includes the IPT Partnerships.

(b) In accordance with the resolution adopted by the Board of Governors
of NAREIT, funds from operations represents net income (loss)
(computed in accordance with generally accepted accounting
principles), excluding gains (or losses) from debt restructuring or
sales of property, plus depreciation of real property, and after
adjustments for unconsolidated partnerships and joint ventures.
Funds from operations should not be considered as an alternative to
net income or other measurements under generally accepted accounting
principles as an indicator of operating performance or to cash flows
from operating, investing or financing activities as a measure of
liquidity. Funds from operations does not reflect working capital
changes, cash expenditures for capital improvements or principal

payments on indebtedness. IPT believes that funds from operations is
helpful to investors as a measure of the performance of an equity REIT,
because along with cash flows from operating activities, financing
activities and investing activities, it provides investors with an
understanding of the ability of IPT to incur and service debt and make
capital distributions. Funds from operations computed by IPT may not be
comparable to other similarly titled measures of other REITs. Funds from
operations is calculated as follows:

PRO FORMA PRO FORMA
THREE MONTHS ENDED YEAR ENDED
MARCH 31, 1998 DECEMBER 31, 1997
-------------------- ------------------
(IN THOUSANDS) (IN THOUSANDS)

Income before minority interest and
extraordinary items ................. $4,571 $17,338
Depreciation and amortization ......... 4,002 14,802
Minority interest in NPI 4 funds from
operations .......................... (150) (819)
------ -------
Funds from Operations ................. $8,423 $31,321
====== =======

COMPARATIVE PER SHARE INFORMATION

The following table sets forth the historical per share data and pro forma
per share data giving effect to the Merger using the purchase method of
accounting and the equivalent pro forma combined per share amounts for each of
IPT and AMIT. The pro forma combined data are not necessarily indicative of
actual financial position or future operating results that would have occurred
or will occur upon consummation of the Merger. The information shown below
should be read in conjunction with (i) the Consolidated and Combined Financial
Statements and Notes thereto of IPT and (ii) the Pro Forma Financial
Statements, including the Notes thereto, which are contained elsewhere in this
Proxy Statement/Prospectus.

PER SHARE PER SHARE
PER SHARE CASH DIVIDENDS BOOK VALUE
INCOME (LOSS) DECLARED (END OF PERIOD)
--------------- ---------------- ----------------

IPT -- Historical
Year ended December 31, 1996 .............. n/a $ .20 $ 6.33
Year ended December 31, 1997 .............. $ .40 $ .30 $ 7.87
Three months ended March 31, 1998 ......... $ .11 $ .15 $ 7.69
AMIT -- Historical(1)
Year ended December 31, 1996 .............. $ 3.33 $ .52 $ 16.46
Year ended December 31, 1997 .............. $ 2.10 $ 1.03 $ 17.38
Three months ended March 31, 1998 ......... $ .37 $ .32 $ 17.44
IPT and AMIT -- Pro Forma Combined
Year ended December 31, 1997 .............. $ .58 $ .35 $ 8.12
Three months ended March 31, 1998 ......... $ .13 $ .32 $ 8.10
AMIT -- Pro Forma Equivalent(2)
Year ended December 31, 1997 .............. $ .89 $ .54 $ 12.65
Three months ended March 31, 1998 ......... $ .20 $ .49 $ 12.39

- - ----------
(1) Amounts related to the AMIT Class A Shares. The AMIT Class B Shares are
entitled to a 1% interest in the profits, losses and credits of AMIT and
are theoretically convertible into AMIT Class A Shares at the rate of 49
to 1. Pursuant to the Stock Option Agreement (as defined herein) between
AMIT and MAE (as successor to MAE GP), no dividends were paid on the AMIT
Class B Shares for the years ended December 31, 1996 and 1997,
respectively.

(2) Determined by multiplying the Class A Exchange Ratio (1.530) by the IPT
and AMIT pro forma per share amounts.

RISK FACTORS

In addition to the other information in this Proxy Statement/Prospectus,
the following factors should be considered carefully in evaluating the
Proposals to be voted upon at the Special Meeting and the acquisition of the
securities offered hereby.

RISK FACTORS RELATING TO THE INSIGNIA/AIMCO TRANSACTION

NO ASSURANCE OF CONSUMMATION

Subsequent to the AMIT Board's decision to approve the Merger, the
Insignia/AIMCO Merger Agreement was entered into pursuant to which (if approved
and consummated) Insignia will merge with and into AIMCO, AIMCO will succeed to
all of Insignia's business relating to the ownership and management of
multifamily residential properties, including Insignia's ownership of IPT
Common Shares and OP Units and AIMCO thereby will become the majority
shareholder of, and control, IPT. If the Insignia/AIMCO Merger is consummated,
then pursuant to the terms of the Insignia/AIMCO Merger Agreement, AIMCO has
agreed to propose to acquire the remainder of the outstanding IPT Common Shares
(including IPT Common Shares held by former AMIT shareholders) for cash at a
purchase price of not less than $13.25 per IPT Common Share. AIMCO currently
intends to effect such acquisition by causing IPT to merge into a subsidiary of
AIMCO. If the IPT/AIMCO Merger is consummated, the AMIT shareholders will
receive cash in exchange for their IPT Common Shares in a taxable transaction
and will no longer have any ownership interest in IPT. However, there can be no
assurance that the IPT/AIMCO Merger will be consummated.

LOSS OF OPPORTUNITY TO PARTICIPATE IN FUTURE OF IPT

If the IPT/AIMCO Merger is consummated, the former AMIT shareholders will
receive cash for their IPT Common Shares obtained in the Merger and will no
longer have the opportunity to share in the future earnings and growth of IPT.

CHANGE OF CONTROL OF IPT

If AIMCO fails to perform its obligations to propose to acquire the
minority interest in IPT for cash after the consummation of the Insignia/AIMCO
Merger, the AMIT shareholders would then hold a minority interest in IPT, with
AIMCO, rather than Insignia, being the controlling shareholder of IPT and
providing property management services to the properties controlled by IPT.
AIMCO does not possess the same experience with the Controlled Partnerships and
the properties owned by the Controlled Partnerships as Insignia and its
affiliates, and there can be no assurance that IPT and the Controlled
Partnerships will continue to have the same level of performance following the
Insignia/AIMCO Merger. See "-- Conflicts of Interest; Property Management."
Also, there is no assurance that AIMCO would continue the current distribution
policy of IPT. See "Distributions."

AIMCO CONTROL OF SHAREHOLDER VOTE ON IPT/AIMCO MERGER

Upon consummation of the Insignia/AIMCO Merger, AIMCO will own a majority
of the outstanding IPT Common Shares and will have the ability to effect the
IPT/AIMCO Merger without the consent of the minority shareholders of IPT
(including former AMIT shareholders).

NO DIRECT RIGHTS TO REQUIRE AIMCO TO EFFECT IPT/AIMCO MERGER

AMIT shareholders are not third party beneficiaries of AIMCO's covenant in
the Insignia/AIMCO Merger Agreement to propose to acquire the minority interest
in IPT following the consummation of the Insignia/AIMCO Merger, and in the
event that AIMCO breaches its obligation to propose to acquire IPT by merger,
the AMIT shareholders would have no direct cause of action against AIMCO.
However, Insignia/ESG has covenanted to AMIT and IPT that it will use its
reasonable best efforts to compel AIMCO to effect the IPT/AIMCO Merger in the
event that AIMCO breaches its obligation to do so pursuant to the
Insignia/AIMCO Merger Agreement, although, there can be no assurance that

Insignia/ESG will be able to specifically enforce AIMCO's obligation to effect
the IPT/AIMCO Merger, and Insignia/ESG may not be able to prosecute a damage
claim against AIMCO for any damages incurred by AMIT shareholders as a result
of AIMCO's breach of such obligation.

ABSENCE OF FAIRNESS OPINION

The Board of Directors of AMIT has not obtained an opinion from a
financial advisor as to the fairness, from a financial point of view, of the
cash consideration to be received by IPT shareholders (including former AMIT
shareholders) in the IPT/AIMCO Merger or the fairness of the consideration to
be received by AMIT shareholders in the Merger in light of the contemplated
IPT/AIMCO Merger.

RISK FACTORS RELATING TO THE MERGER AND POST-MERGER OPERATIONS

UNCERTAIN TAX TREATMENT OF MERGER

Akin Gump has rendered an opinion that if the Merger is consummated and
the IPT/AIMCO Merger is consummated after the consummation of the Merger on the
terms contemplated by the Insignia/AIMCO Merger Agreement (i.e., a cash-out
merger), (i) AMIT would be treated as if it had sold all of its assets to IPT
in a taxable transaction and would recognize taxable gain or loss equal to the
difference between AMIT's adjusted tax basis in its assets and the fair market
value of the IPT Common Shares delivered in the Merger plus the total amount of
cash received by the AMIT shareholders (including cash received in lieu of
fractional shares) and, if AMIT is not qualified as a REIT for any reason, IPT
would become liable for the tax resulting from any such gains; and (ii) the
AMIT shareholders would be treated as if all of their AMIT Shares were redeemed
in a fully taxable liquidation of AMIT, and each AMIT shareholder would
recognize taxable gain or loss in an amount equal to the difference between
such holder's adjusted tax basis in such AMIT Shares and the fair market value
of the IPT Common Shares plus the amount of cash received in exchange therefor.
As described more fully under "The Merger -- Federal Income Tax Consequences --
Tax Treatment of Amounts Received Under the Tax Agreement," under certain
circumstances the AMIT shareholders would be entitled to indemnification for
the taxes arising from such failed reorganization. However, AMIT shareholders
will not be entitled to such indemnification if the Merger fails to qualify as
a reorganization under the Code as a consequence of the IPT/AIMCO Merger or the
Insignia/AIMCO Merger Agreement.

However, if the Merger is consummated but the IPT/AIMCO Merger is not
consummated, the federal income tax treatment of the Merger is unclear and Akin
Gump is unable to opine whether or not the Merger will be treated as a
reorganization under the Code for federal income tax purposes. In such event,
the contemplated IPT/AIMCO Merger makes it sufficiently unclear as to whether
the AMIT shareholders will have retained a substantial proprietary stake and
material interest in the affairs of IPT in order to meet the "continuity of
proprietary interest" requirement with respect to a reorganization under
Section 368(a) of the Code. Additionally, no ruling from the Internal Revenue
Service regarding the federal income tax consequences of the Merger will be
obtained. For a discussion of these and other federal income tax considerations
in connection with the Merger, see "The Merger -- Federal Income Tax
Consequences of the Merger."

INTEGRATION OF THE BUSINESS OF AMIT AND IPT

Following the Merger, the primary focus and growth of IPT will continue to
center on its existing business as an equity REIT in the apartment sector. It
is not IPT's current intention to make additional investments in the
origination of new loans or the acquisition of outstanding loans to add to or
replace AMIT's existing portfolio. Instead, IPT will retain AMIT's existing
management in its current location to manage the existing loan portfolio,
together with any refinancings of such loans, until their maturity or earlier
disposition. There can be no assurance that the operations, management and
personnel of the two companies will be compatible or that IPT will not
experience the loss of key personnel. See "Business of IPT -- Business
Objectives."

UNDERLYING IPT ASSETS CREATE INVESTMENT WITH GREATER RISK

AMIT is a mortgage REIT that was formed primarily to make loans secured by
direct or indirect interests in real property. Accordingly, the value of such
assets, as well as the value of AMIT's securities,

though not immune from, are generally less sensitive than equity REITs such as
IPT, to factors affecting the value and economic performance of the underlying
real property. To the extent that AMIT's assets consist of loans secured by
mortgages, the income used by AMIT to pay distributions on its securities
derives largely from the interest payments and fees received by AMIT pursuant
to those mortgage loans. The income of IPT, on the other hand, is largely
dependent upon the distributions it receives from the partnerships in which it
invests. Such distributions, in turn, vary both positively and negatively with
the economic performance of the income producing properties held by those
partnerships. Further, the risk (as to principal) of an investment in a
mortgage is generally limited to the principal amount of the loan, and the
extent of this risk is typically mitigated by the value of the underlying
collateral, together with such other credit support devices (for example, third
party guaranties) as may be negotiated in connection with the loan. Mortgages,
however, unlike equity investments in real property, do not provide significant
potential for appreciation in asset value. In the case of equity investments in
real property, on the other hand, there is both less inherent security against
loss of asset value as well as greater potential for appreciation in asset
value because the value of such equity interests varies more directly with the
value and income producing potential of the underlying real property. As a
result of these and other factors, an investment in IPT intrinsically involves
significantly greater potential for both the loss of, and return on, investment
than does a comparable investment in AMIT.

FIXED EXCHANGE RATIO DESPITE FLUCTUATIONS IN MARKET PRICES

The Exchange Ratio was determined in July 1997 based on arm's-length
negotiations between IPT and Insignia, on the one hand, and AMIT on the other
hand. The value or price of the IPT Common Shares and/or the AMIT Shares at the
Effective Time, as well as the values or prices at the date of this Proxy
Statement/Prospectus and at the date of the Special Meeting, may vary as a
result of changes in the business, operations or prospects of IPT or AMIT,
market assessments of the likelihood that the Merger will be consummated and
the timing thereof, general market and economic conditions and other factors.
Because the Exchange Ratio is fixed in the Merger Agreement (subject only to
adjustment for any distributions paid by IPT or AMIT prior to the Effective
Time), it will not be adjusted to reflect any increase or decrease in the
market value or price of the IPT Common Shares or the AMIT Shares or any change
in the operations (other than distributions declared by either AMIT or IPT) or
prospects of IPT or AMIT and consequently, the value of the consideration to be
received by the AMIT shareholders in the Merger may be more or less depending
upon changes in the market price of the AMIT Class A Shares prior to the
consummation of the Merger. See "Merger -- Manner and Basis of Converting
Shares."

EXCHANGE RATIO SUBJECT TO ADJUSTMENT FOR DISTRIBUTIONS

Although neither AMIT nor IPT intends or expects to declare any additional
distributions prior to consummation of the Merger, the Exchange Ratio is
subject to further adjustment should either AMIT or IPT declare any
distributions after the date of the Proxy Statement/Prospectus with a record
date prior to the consummation of the Merger. Consequently, an AMIT shareholder
may not know the exact Exchange Ratio upon voting on the Proposals at the
Special Meeting.

DISPROPORTIONALITY WITH RESPECT TO CONVERSION RATIO OF OP UNITS

As an umbrella partnership real estate investment trust (UPREIT), IPT
holds substantially all of its assets through IPLP, its operating partnership.
Such an ownership structure is designed and intended to result in an
equivalence in value between OP Units and IPT Common Shares. Under certain
circumstances, holders of OP Units have the right to require IPLP to redeem
their OP Units for cash in an amount equal to the market value of an equivalent
number of IPT Common Shares (subject to the first right of IPT to acquire such
OP Units for an equivalent number of IPT Common Shares). In order to avoid
triggering certain adverse federal income tax consequences, following the
Merger IPT intends to continue to hold directly at least 50% of the pre-Merger
AMIT assets (including any assets transferred to Insignia pursuant to the Asset
Agreement (as defined herein, see "Certain Other Agreements -- Asset
Agreement")) until such time, if any, as IPT receives a ruling from the IRS or
an opinion of counsel that such assets may be contributed to IPLP. The
particular assets to be retained by IPT will not be determined

until after the consummation of the transactions contemplated by the Asset
Agreement and will not be known by the AMIT shareholders at the time of the
Special Meeting. IPT may retain whole loans or various participation interests
in certain of AMIT's loans. Because IPT will hold assets other than through
IPLP, the value of an IPT Common Share vis-a-vis an OP Unit will vary depending
on the value of the retained AMIT assets. Thus, upon a redemption of OP Units
for cash (or an acquisition of OP Units by IPT in exchange for IPT Common
Shares), a shareholder of IPT would be diluted if and to the extent that the
value of an IPT Common Share exceeds the value of an OP Unit at the time of
such redemption or acquisition. Management intends to mitigate the effects of
this potential valuation imbalance, however, by having IPT directly pay certain
expenses which otherwise would be paid by IPLP.

LACK OF INDEPENDENT VALUATIONS OF ASSETS

In most instances the valuation of the assets contributed to IPT and IPLP
with respect to the formation of IPT and in certain transactions among IPT,
IPLP and Insignia and its affiliates since the formation transactions was not
determined on the basis of independent appraisals of such assets, and the
valuation of IPT and the allocation of its equity interests among the
participants in the formation transactions were not determined on an arm's
length basis. In addition, AMIT did not obtain independent appraisals of the
value of the underlying real property or the partnership interests owned by IPT
and IPLP in determining whether to approve the Merger. Accordingly, no
assurance can be given that the valuations of those assets, which were used in
establishing the Exchange Ratio, were accurate or as to whether the IPT Common
Shares will trade at or above the IPT Share Value.

LEVERAGE; NO LIMITATION ON DEBT

IPT intends to use the net proceeds from future offerings and borrowings
primarily to acquire interests in multifamily residential properties, as well
as real estate in other sectors incidental to the purchase of multifamily
property portfolios, including direct ownership interests in such properties,
loans secured by real estate, limited and general partner interests in real
estate limited partnerships, REITs and REIT-eligible income producing assets,
and for general operating purposes. IPLP has obtained a line of credit in the
amount of $50 million, which is guaranteed by IPT (the "IPT Line of Credit").
In connection with the IPT Line of Credit, IPT and IPLP have pledged all of the
general partner interests, limited partner interests and direct property
interests they own or acquire as collateral. See "IPT Line of Credit." As of
the date hereof, IPT has no outstanding indebtedness under the IPT Line of
Credit and no other outstanding indebtedness. Additionally, the IPT Line of
Credit places certain restrictions on the operations of IPT. See "IPT Line of
Credit." IPT is subject to the risks associated with debt financing, including
the risk that IPT's cash flow will be insufficient to meet required payments of
principal and interest, which could result in the lenders foreclosing on the
assets pledged as security for the IPT Line of Credit and result in a loss of
income and equity value from such interests to IPT. Additionally, certain of
the properties owned by the Controlled Partnerships are encumbered by debt.
There exists a risk that the Controlled Partnerships will not be able to
refinance existing indebtedness on their properties or that the terms of such
refinancings will not be as favorable as the terms of existing indebtedness and
that necessary capital expenditures will not be financed on favorable terms. If
a property of a Controlled Partnership is mortgaged to secure payment of
indebtedness and the applicable Controlled Partnership is unable to meet
mortgage payments, the property could be transferred (by foreclosure or
otherwise) to the mortgagee with a consequent loss of any prospective income
and equity value from such property to IPT. For federal income tax purposes,
such a foreclosure would trigger any built-in gain (or loss) with respect to
the property foreclosed upon, measured by the difference in the principal
amount of the debt and the tax basis of the foreclosed property. Thus, IPT
could recognize gain upon a foreclosure without receiving cash to pay the tax
thereon.

In addition, the organizational documents of IPT do not contain any
limitation on the amount of indebtedness IPT may incur. If IPT becomes highly
leveraged, the resulting debt service could adversely affect IPT's financial
condition and results of operations and the amount of cash available for
distributions to shareholders (including distributions that are required in
order to maintain IPT's qualification as a REIT) and could increase the risk of
default on IPT's indebtedness.

CONFLICTS OF INTEREST

Several conflicts of interest exist on the part of IPT, IPLP, Insignia and
their respective trustees, directors and management. The following describes
the material conflicts of interest, including the relationships through which
they arise.

Management. In exercising its voting rights as the controlling shareholder
of IPT, Insignia and its affiliates may consider their liquidity, strategic,
tax and other interests, which may be different from those of IPT or other
shareholders of IPT. In addition, all of the current trustees and five of the
eight current executive officers of IPT (including Andrew L. Farkas, who serves
as trustee, Chairman and Chief Executive officer of IPT, and is Chairman, Chief
Executive officer and President of Insignia), are officers of Insignia, and, as
such, will not devote all of their time and effort to the affairs of IPT. In
addition, four of such persons (Andrew L. Farkas, James A. Aston, Frank M.
Garrison and Ronald Uretta) have a significantly greater direct economic
interest in Insignia than in IPT. As a result, the interest of such individuals
in IPT and Insignia may conflict. In their capacity as shareholders of IPT,
such individuals may vote their IPT Common Shares to cause IPT to take certain
actions that are in the best interests of Insignia but not necessarily in the
best interests of IPT or the other shareholders of IPT.

Use of Personnel. IPT believes that it cannot at present economically
justify maintaining an internal staff to provide real estate and real estate
securities acquisition and disposition services. As a result, pursuant to the
Acquisition and Disposition Services Agreement, IPT intends to utilize
Insignia's personnel to perform the vast majority of such services until the
expiration of the Acquisition and Disposition Services Agreement on December
31, 2000. To the extent that such personnel are also performing services for
Insignia, it may detract from their ability to devote the time and attention
necessary to perform similar services for IPT.

Property Management. Pursuant to the terms of the Partnership Agreement,
IPT is required to engage Insignia and its affiliates to provide property
management services to virtually all of the properties now or hereafter
controlled by IPT. As of the date of this Proxy Statement/Prospectus, Insignia
provides property management services to all but 19 of the properties
controlled by IPT. Pursuant to the terms of the Partnership Agreement, the
removal of Insignia as the property manager with respect to any properties
controlled by IPT, and the termination of any property management agreement
relating to such properties, requires the consent of Insignia, as the Special
Limited Partner of IPLP. In addition, Insignia and its property management
affiliates provide management services to a substantial number of other parties
affiliated with Insignia and to unaffiliated third parties. IPT and the
Controlled Partnerships are heavily dependent upon the property management and
partnership administration services provided by Insignia and its affiliates.
The loss of such services could materially and adversely affect the ability of
IPT and the Controlled Partnerships to conduct their business in an efficient
and profitable manner.

Conflicts may arise between IPT and Insignia when considering the sale of
a particular property controlled by IPT which may result in a loss of property
management revenue to Insignia. IPT is precluded from obtaining property
management services for the properties controlled by IPT from a provider other
than Insignia and from performing property management services itself. In
addition, the Partnership Agreement provides that if the total amount of
property management fees paid to Insignia in respect to all properties
controlled by IPT during any rolling twelve-month period ending at the end of a
calendar quarter is less than 90% of the total annualized amount of property
management fees paid to Insignia for the year preceding IPT's acquisition of
control of certain properties, then IPLP is required to pay Insignia a fee
equal to the greater of (i) the decrease in the market value of Insignia and
its affiliates arising or expected to arise by virtue of such decrease in
property management fees and (ii) the increase in the market value of IPT
arising or expecting to arise as a result thereof. Additionally, if IPT or IPLP
is in material breach of its obligations under the Partnership Agreement
(including without limitation the failure to pay the foregoing fee when due),
Insignia, MAE, and each of their affiliates will have certain put rights with
respect to the IPT Common Shares and OP Units then owned by each of them. See
"The Partnership Agreement of IPLP -- Property Management and Contract Loss
Fee" and "The Partnership Agreement of IPLP -- Put Rights."

Investments in Real Estate. Under the Acquisition and Disposition
Services Agreement, until December 31, 2000, Insignia is required to inform IPT
of certain multifamily residential real estate investments reserved for IPT
before Insignia may invest in any such opportunity; however, Insignia is
required to give such notice only if Insignia plans to invest in the
opportunity for its own account and the investment opportunity is of a type
that Insignia would have invested in prior to the formation of IPT. Thus,
Insignia may inform unaffiliated third parties, and not IPT, of real estate
investments that may be suitable to IPT provided that Insignia does not itself
invest in such opportunity. Subject to these restrictions, neither Insignia nor
any of its directors, officers, employees or affiliates are restricted from
investing in interests in real estate or from engaging in any other activities
which may involve competition with IPT or which may give rise to conflicts of
interest between Insignia and IPT (although employment agreements of certain
executive officers of Insignia and IPT do contain non-competition provisions).
Additionally, IPT is required to inform Insignia of certain real estate
investments and may not invest in such investments without the prior written
consent of Insignia. See "Acquisition and Disposition Services Agreement --
Agreement Regarding Certain Real Estate Opportunities."

Loans. Many of the loans in AMIT's mortgage portfolio consists of loans
made to entities now controlled by IPT. Should any issues regarding such loans
arise, such issues may not be resolved in an arm's length manner due to the
overlapping management after the Merger. For a list of the loans in AMIT's
portfolio to partnerships now controlled by IPT, see "Schedule IV -- Mortgage
Loans on Real Estate as of December 31, 1997" on page F-77 of this Proxy
Statement/Prospectus.

Distributions. Subject to the current policy adopted by the IPT Board to
pay regular quarterly distributions in the amount of $.15 per IPT Common Share
(which will be increased to $.16 per IPT Common Share beginning with the first
quarterly distribution for which the record date is after the Effective Time),
the IPT Board has the power and authority to declare and pay distributions at
any time, and in such amounts as they deem advisable. Subject to their
fiduciary duties to the shareholders of IPT, trustees of IPT who are also
directors and/or executive officers of Insignia may take into account the
capital needs of Insignia when determining the amount and timing of the
distributions made by IPT to its shareholders and IPLP to its partners, in each
case including Insignia.

Tax Benefits. Because certain IPT Partnerships own properties the fair
market value of which exceeds the adjusted tax basis, the gain recognized for
federal income tax purposes from the sale of such properties will largely be
allocated to Insignia. Consequently, the decision of IPT to cause the IPT
Partnerships to dispose of such properties may conflict with Insignia's
interests in not realizing such gain.

CONTROL BY INSIGNIA

Upon consummation of the Merger, Insignia and its affiliates will continue
to own approximately 57% of the IPT Common Shares (approximately 66% on a
fully-diluted basis assuming all OP Units are redeemed for cash or acquired by
IPT in exchange for IPT Common Shares). Insignia will have the ability to
control the direction and management of IPT and IPT may not be able to engage
in certain extraordinary transactions without the consent of Insignia. Although
all shareholders of IPT will be entitled to vote in future elections of
trustees, Insignia designated all three of the initial members of IPT Board and
after the Effective Time a majority of the IPT Board will consist of
individuals who also serve as officers of Insignia (including one member who is
also a director of Insignia), and Insignia may be able to control the future
election of trustees. The IPT Board appoints IPT's executive officers and has
the authority to decide most management and policy issues without the consent
of the shareholders of IPT.

Additionally, as the Special Limited Partner of IPLP, Insignia possesses
certain special consent rights which prohibit IPLP from taking certain actions
or engaging in certain transactions without the consent of Insignia, as the
Special Limited Partner. See "Partnership Agreement of IPLP -- Management."

LACK OF SHAREHOLDER CONTROL OVER IPT'S POLICIES

The investment and financing policies of IPT and its policies with respect
to certain other activities, including its growth, capitalization,
distributions, REIT status and investment and operations, will be determined by
the IPT Board. Although the IPT Board has no present intention to do so, these
policies

may be amended or revised at any time and from time to time at the discretion
of the IPT Board without a vote of the shareholders of IPT. A change in these
policies could adversely affect IPT's financial condition, results of
operations or the market price for IPT Common Shares.

LIMITATIONS ON OWNERSHIP INTERESTS AND CHANGE OF CONTROL IN DECLARATION OF
TRUST

Certain provisions in IPT's Declaration of Trust and Bylaws may have the
effect of discouraging a third party from making an acquisition proposal for
IPT and may thereby delay, defer or prevent a change in control of IPT and, as
a result, could prevent the shareholders of IPT from receiving a premium for
their IPT Common Shares over then-prevailing market prices.

IPT's Declaration of Trust permits the IPT Board to issue up to
100,000,000 preferred shares of beneficial interest ("Preferred Shares") and to
establish the preferences and rights (including the right to vote, participate
in earnings, and to convert into IPT Common Shares) of any such Preferred
Shares issued. Although the IPT Board has no intention to do so at the present
time, it could authorize the issuance of Preferred Shares with terms and
conditions which could have the effect of discouraging a takeover or other
transaction in which holders of IPT Common Shares might receive a premium for
their IPT Common Shares over the then-prevailing market price of such IPT
Common Shares. See "Description of Shares of Beneficial Interest of IPT --
Preferred Shares."

IPT's Declaration of Trust authorizes the IPT Board to (i) amend IPT's
Declaration of Trust without shareholder approval, to increase or decrease the
aggregate number of shares of beneficial interest or the number of shares of
beneficial interest of any class (including IPT Common Shares) that IPT has the
authority to issue; (ii) cause IPT to issue additional authorized but unissued
IPT Common Shares or Preferred Shares; and (iii) classify or reclassify any
unissued IPT Common Shares and Preferred Shares and to set the preferences,
rights and other terms of such classified or unclassified shares. See
"Description of Shares of Beneficial Interest of IPT -- Classification or
Reclassification of IPT Common Shares or Preferred Shares." Although the IPT
Board has no intention to do so at the present time, it could establish a class
or series of shares of beneficial interest that could, depending on the terms
of such series, delay, defer or prevent a transaction or change in control of
IPT that might involve a premium for the IPT Common Shares or otherwise be in
the best interests of the shareholders of IPT. IPT's Declaration of Trust and
Bylaws also contain other provisions that may have the effect of delaying,
deferring or preventing a transaction or change in control of IPT that might
involve a premium for the IPT Common Shares or otherwise be in the best
interest of the shareholders of IPT. See "Description of Shares of Beneficial
Interest of IPT."

Additionally, the IPT Board is divided into three classes. The initial
terms of the first, second and third classes will expire in 1998, 1999 and
2000, respectively. Beginning in 1998, trustees of each class will be chosen
for three-year terms upon the expiration of their current terms and each year
one class of trustees will be elected by the shareholders of IPT. The staggered
terms of trustees may reduce the possibility of a tender offer or an attempt to
change control of IPT, even though a tender offer or change in control may be
in the best interest of the shareholders of IPT. See "Comparison of Shareholder
Rights -- Classification of the Board of Trustees."

POSSIBLE ADVERSE CONSEQUENCES OF OWNERSHIP LIMIT

In order to maintain its qualification as a REIT, not more than 50% in
value of the outstanding IPT Common Shares may be owned, directly or
indirectly, by five or fewer "individuals" (as defined in the Code to include
certain entities such as private pension funds). Accordingly, IPT's Declaration
of Trust prohibits the actual or constructive ownership by an individual of
more than 9.8% of the outstanding IPT Common Shares, subject to certain
exceptions. See "Description of Shares of Beneficial Interest of IPT -- Share
Ownership Limitations; Restrictions on Transfer of IPT Common Shares." As a
result, a holder of IPT Common Shares may be prohibited from increasing its
holdings of IPT Common Shares or selling its IPT Common Shares to an existing
shareholder of IPT. The IPT Board may, in its sole discretion, waive these
restrictions if evidence satisfactory to the IPT Board and IPT's tax counsel is
presented showing that ownership in excess of this limit will not jeopardize
IPT's tax status as a REIT. As a condition of such

waiver, the IPT Board may require a ruling from the Internal Revenue Service or
an opinion of counsel satisfactory to it and/or undertakings or representations
from the applicant with respect to the preservation of IPT's status as a REIT
under the Code. Limiting the ownership of more than 9.8% of the outstanding IPT
Common Shares may (i) discourage a change in control of IPT; (ii) deter tender
offers for IPT Common Shares, which offers may be attractive to IPT's
shareholders; or (iii) limit the opportunity for shareholders to receive a
premium for their IPT Common Shares that might otherwise exist if an investor
attempted to assemble a block of IPT Common Shares in excess of 9.8% of the
outstanding IPT Common Shares or to effect a change of control of IPT.

DEPENDENCE ON PROPERTY PERFORMANCE; RISKS RELATED TO INVESTMENTS IN
REAL ESTATE LIMITED PARTNERSHIPS

IPT's financial success will depend, in large part, upon the performance
of the properties owned by the real estate limited partnerships (including the
IPT Partnerships) in which it invests and properties owned by IPT directly. The
performance of such properties in turn will depend, in part, upon the ability
of Insignia and its affiliates, as the manager of such properties, to attract
and retain tenants; competition from other available properties; Insignia's
ability as property manager to control capital expenditures and operating
expenses (many of which are subject to various contingencies); energy shortages
and the costs attributable thereto; the age of the properties owned by the real
estate limited partnerships in which it invests; changes in tax law and other
governmental regulations; local rent control or stabilization ordinances which
are or may be put into effect; various uninsurable risks; financial conditions
prevailing generally and in the areas in which such properties are located,
including oversupply of apartments or commercial space or a reduction in demand
for apartments or commercial space in such areas; the nature, type, supply and
extent of competitive properties in the areas where such properties are
located; and the real estate market generally. Additionally, revenue from
properties and real estate values are also affected by such factors as interest
rate levels and the availability of financing. Any or all of these factors may
affect IPT's income. For example, older properties or properties in markets
with an oversupply of multifamily residential properties must be rented at
lower rates in order to maintain occupancy levels. In addition, capital
expenditures and operating expenses on properties may increase more than
anticipated.

In the future, IPT may participate with other entities in the ownership of
properties and/or limited partner interests in real estate limited partnerships
through partnerships and joint ventures. Partnership and joint venture
investments may, under certain circumstances, involve risks not otherwise
present, including the possibility that such partners or co-venturers might
become bankrupt, that such partners or co-venturers might at any time have
economic or business interests or goals inconsistent with those of IPT and that
such partners or co-venturers may be in a position to take action contrary to
IPT's instructions, requests, policies or objectives, including IPT's policy
with respect to maintaining its qualification as a REIT. However, IPT will seek
to maintain sufficient control of such partnerships or joint ventures, as the
case may be, to permit IPT's business objectives to be achieved. Although IPT
invests primarily in limited partnerships, certain subsidiaries of IPT which
comprise the general partners of certain of such limited partnerships may be
liable for certain recourse obligations of such limited partnerships in its
capacity as general partner. There is no limitation under IPT's organization
documents as to the amount of available funds that may be invested in
partnerships or joint ventures.

ADVERSE EFFECTS OF REIT MINIMUM DISTRIBUTION REQUIREMENTS; EFFECTS OF
DISTRIBUTION POLICY

To maintain its status as a REIT, IPT generally will be required each year
to distribute to its shareholders at least 95% of its REIT taxable income
(excluding net capital gain and after taking into account certain adjustments).
In addition, IPT will be subject to a 4% nondeductible excise tax on the
amount, if any, by which certain distributions paid by it with respect to any
calendar year are less than the sum of 85% of its ordinary net income and 95%
of its capital gain net income for such calendar year plus any amount of such
income not distributed in prior years. See "Certain Federal Income Tax
Considerations -- Annual Distribution Requirements." Under certain
circumstances, IPT may be required to accrue from time to time certain income
items for tax purposes prior to their receipt in cash (e.g., rent earned but
not yet received). Differences in timing between the accrual of certain income
items for tax purposes and the receipt thereof or the failure by any of the IPT
Partnerships to timely distribute to IPT

the proceeds that such IPT Partnerships receive from their properties could
cause IPT to have taxable income without sufficient cash to meet the annual 95%
distribution requirements and to avoid the nondeductible excise tax. In such
cases, IPT may be compelled to borrow funds on a short-term basis or liquidate
investments on terms that are disadvantageous to IPT in order to meet the 95%
distribution requirement and to avoid the nondeductible excise tax. The
requirement to distribute a substantial portion of IPT's REIT taxable income
could cause IPT to distribute amounts that otherwise would be spent on future
acquisitions or repayments of debt, which could require IPT to borrow funds or
to sell assets to fund the cost of such items.

The IPT Board has adopted a policy to pay regular quarterly distributions
in an amount equal to $.15 per IPT Common Share which will be increased to $.16
per IPT Common Share beginning with the first quarterly distribution for which
the record date is after the Effective Time. IPT is currently paying regular
quarterly distributions of $.15 per IPT Common Share in accordance with this
policy. IPT believes these distributions in the aggregate will exceed the 95%
distribution requirement exclusive of gains from the sales of property to avoid
the nondeductible excise tax described above. If distributions exceed available
cash, IPT would be required to sell assets or borrow funds to make
distributions or revise its dividend policy. Distributions by IPT to the extent
of its current and accumulated earnings and profits for federal income tax
purposes generally will be taxable to shareholders as ordinary dividend income
or capital gains distributions, as the case may be, and distributions in excess
of current and accumulated earnings and profits will generally be treated as a
non-taxable reduction of a shareholder's basis in its IPT Common Shares to the
extent thereof and thereafter as taxable gain. Distributions that are treated
as a reduction of a shareholder's basis in its IPT Common Shares will have the
effect of deferring taxation until the sale of the shareholder's shares.

IPT anticipates that it will be able to make the distributions described
above, although no assurances can be given in this regard. IPT also anticipates
that it will retain any REIT taxable income in excess of the aggregate amount
of the dividends described above for future acquisitions and general working
capital purposes, subject to IPT meeting the 95% distribution requirement
described above. Pursuant to newly enacted tax legislation, a REIT may elect to
retain capital gains otherwise required to be distributed and instead may pay a
tax on such retained amounts. Each REIT shareholder would report its pro rata
share of such retained amounts as if such amounts had been distributed directly
to such shareholder and will receive, as a credit against the tax thereon (or
as a refund if such credit otherwise exceeds the shareholder's overall tax
liability for the tax year), its proportionate share of the taxes paid by the
REIT on the retained capital gains as if such shareholder had paid the tax
directly. Such a strategy is a strong possibility for IPT and, if implemented,
each shareholder's adjusted tax basis in its IPT Common Shares will be
increased by an amount equal to the difference between the amount of such
capital gain included in such shareholder's taxable income and the tax credit
deemed paid by such shareholder. In effect, this method of taxation, with
respect to capital gains, will produce the same result as if the shareholder
had received the full capital gain distribution included such amount in its
taxable income, paid the tax thereon and subsequently recontributed the
distribution (in excess of the tax paid) to the REIT for no additional shares.

ADVERSE CONSEQUENCES OF THE FAILURE TO QUALIFY AS A REIT

IPT intends to operate in a manner that will enable it to continue to
qualify as a REIT under the Code. To qualify as a REIT, IPT must satisfy
certain tests related to the nature of its assets and income, and it must also
distribute substantially all of its income (as specifically defined for these
purposes) to its shareholders. If IPT fails to qualify as a REIT in any taxable
year and certain relief provisions of the Code do not apply, IPT would be
subject to federal income tax as a regular domestic corporation, and its
shareholders would be subject to tax in the same manner as shareholders of such
a corporation. As a result, IPT could be subject to income tax liability,
thereby significantly reducing or eliminating the amount of cash available for
distribution to its shareholders. Although management of IPT believes that IPT
has been organized and will continue to operate in a manner enabling it to
remain qualified as a REIT, no assurance to such effect can be given. See
"Federal Income Tax Considerations -- Taxation of IPT -- Failure to Qualify."
Additionally, no assurance can be given that future legislation, regulations,
administrative interpretations or court decisions will not significantly change
the tax laws with respect to

IPT's qualification as a REIT or the federal income tax consequences of such
qualification, which changes may reduce or eliminate the advantages of
qualifying as a REIT.

POTENTIAL ADVERSE EFFECTS OF FUTURE OFFERINGS

IPT may in the future increase its capital resources by making additional
offerings of equity or debt securities, including classes of common shares,
Preferred Shares, and senior or subordinated debt instruments. All debt
securities and classes of Preferred Shares will be senior to the IPT Common
Shares in a liquidation of IPT. The effect of additional equity offerings may
be the dilution of the equity of the shareholders of IPT or the reduction of
the price of IPT Common Shares, or both. IPT is unable to estimate the amount,
timing or nature of additional offerings as they will depend on market
conditions and other factors. There can be no assurance that IPT will be able
to satisfy its capital requirements through such offerings on favorable terms
or at all.

POSSIBLE ADVERSE EFFECT ON SHARE PRICE ARISING FROM SHARES AVAILABLE FOR FUTURE
SALE

Upon consummation of the Merger, 23,484,425 IPT Common Shares will be
outstanding, including the approximately 4,056,664 IPT Common Shares to be
issued in the Merger. The IPT Common Shares to be issued to the AMIT
shareholders in the Merger (other than IPT Common Shares received by affiliates
of AMIT and IPT) will be freely tradable without restriction under the
Securities Act. There are 13,216,048 IPT Common Shares currently held by
Insignia and its affiliates, which are restricted securities within the meaning
of Rule 144 promulgated under the Securities Act ("Rule 144") and may not be
sold in the absence of registration under the Securities Act or unless an
exemption from registration is available, including exemptions contained in
Rule 144. Additionally, 6,150,000 IPT Common Shares are held by persons who
purchased such shares in the Private offerings (other than the executive
officers, trustees and directors of IPT and Insignia). Approximately 17,772,913
IPT Common Shares will be eligible for sale under Rule 144 within 90 days after
the consummation of the Merger. See "Shares Available for Future Sale."
Insignia and its affiliates and the purchasers of IPT Common Shares in the
Private Offerings possess certain demand and piggyback registration rights
regarding their IPT Common Shares. See "Description of Shares of Beneficial
Interest of IPT -- Registration Rights."

No prediction can be made as to the effect, if any, that future sales of
IPT Common Shares, the availability of IPT Common Shares for future sale, or
future issuances of IPT Common Shares will have on the market price of the IPT
Common Shares from time to time. Sales of substantial numbers of IPT Common
Shares, or the perception that such sales could occur, could adversely affect
the prevailing market price for the IPT Common Shares. If such sales reduce the
market price of the IPT Common Shares, IPT's ability to raise additional
capital in the equity markets could be adversely affected. The existence of the
registration rights referred to above also may adversely affect the terms upon
which IPT can obtain additional equity in the future.

NEGATIVE IMPACT ON REIT STATUS IF IPLP OR A CONTROLLED PARTNERSHIP FAILS TO BE
CLASSIFIED AS A PARTNERSHIP FOR FEDERAL INCOME TAX PURPOSES

Although IPT has not requested, and does not expect to request, a ruling
from the Internal Revenue Service that IPLP and each of the Controlled
Partnerships will be classified as partnerships for federal income tax
purposes, IPT has received an opinion of its counsel stating that IPLP and each
Controlled Partnership will be classified as a partnership, and not a
corporation or an association taxable as a corporation, for federal income tax
purposes. If the Internal Revenue Service were to challenge successfully the
tax status of IPLP or any such Controlled Partnership as a partnership for
federal income tax purposes, IPLP or a Controlled Partnership would be taxable
as a corporation. In such event, IPT likely would cease to qualify as a REIT
for a variety of reasons. Furthermore, the imposition of a corporate income tax
on IPLP or a Controlled Partnership would reduce substantially the amount of
cash available for distribution to IPT and its shareholders.

NO ESTABLISHED PUBLIC TRADING MARKET FOR INTERESTS IN THE IPT PARTNERSHIPS

There is no established public trading market for units of limited partner
interest in the IPT Partnerships, and there may not be established public
trading markets for units in other real estate limited

partnerships in which IPT may invest, and there can be no assurance that such
markets will develop. Consequently, IPT may be able to realize gains on its
investments in a limited partnership or liquidate such investment only upon the
liquidation of such limited partnership or sales or refinancing of the
properties held by such limited partnership.

COMPETITION IN REAL ESTATE MARKET

Competition is intense in the markets for acquisition of control of real
estate assets and entities owning real estate assets. No single organization
controls more than a small percentage of the total residential or commercial
properties in the United States. Most competitors are regional or local
organizations that control a relatively small number of properties. IPT
believes that competition for acquisition or control of such entities is based
principally on the ability to offer reasonable value to the seller of control,
which often requires restructuring the debt and equity of the controlled entity
so that the properties can provide positive cash flow to investors. There can
be no assurance that IPT will be able to compete effectively in this market.
Additionally, subject to the terms of the Acquisition and Disposition Services
Agreement, Insignia may invest in certain real estate opportunities which may
be suitable for IPT. See "Acquisition and Disposition Services Agreement --
Agreement Regarding Certain Real Estate Opportunities."

Insignia's ability to provide effective property and asset management
services with respect to the properties that IPT controls will depend, in part,
on Insignia's ability to maintain its experienced management team and to
attract additional managers as Insignia's property management business expands.
Insignia believes that there is currently a shortage of qualified property
management personnel.

DEPENDENCE ON ANDREW L. FARKAS AND OTHER SENIOR MANAGERS

The successful implementation of IPT's strategy will depend upon the
continued services of Mr. Farkas, who is a trustee, Chairman and Chief
Executive officer of IPT and Chairman, Chief Executive officer and President of
Insignia, and who may be deemed to be in control of each of IPT and Insignia.
Mr. Farkas will not devote his full time to the affairs of either IPT or
Insignia. The other current members of the IPT Board (Messrs. Aston and
Garrison) also serve as executive officers of Insignia and will not devote
their full business time to the affairs of IPT. If Mr. Farkas becomes
incapacitated or resigns his positions with IPT and/or Insignia, the loss of
his services could have a material adverse effect on the operations of IPT. The
remainder of IPT's senior management consists principally of former and current
members of Insignia's senior management team. Consequently, the successful
implementation of IPT's business plan will also depend, in part, upon
Insignia's ability to attract and maintain other key management personnel. None
of the current executive officers or employees of IPT have employment
agreements with IPT.

CONCENTRATION OF PROPERTIES IN MULTIFAMILY RESIDENTIAL HOUSING

The properties owned and controlled by the IPT Partnerships are
concentrated predominantly in the multifamily residential housing sector
(although IPT does control approximately 5.9 million square feet of commercial
space). Approximately 88% of the properties owned by the IPT Partnerships are
multifamily residential properties. Such concentration may expose IPT to the
risk of downturns in this sector (which, among other things, may be caused by
greater unemployment causing an increase in the vacancy rate or by a decrease
in interest rates causing a surge in the purchase of housing) to a greater
extent than if its portfolio also included other property types.

ENVIRONMENTAL LIABILITY

Under various federal, state and local environmental laws, statutes,
ordinances, rules and regulations, an owner or operator of real property may be
liable for the costs of removal or remediation of certain hazardous or toxic
substances at, on, under or in such property, as well as certain other
potential costs relating to hazardous or toxic substances (including government
fines and penalties and damages for injuries to persons and adjacent property).
Such laws often impose liability whether or not the owner or

operator knew of, or was responsible for, the presence or disposal of such
hazardous or toxic substances. Such liability may be imposed on the owner in
connection with the activities of an operator of, or tenant at, the property.
Persons who arrange for the transportation, disposal or treatment of hazardous
or toxic substances may also be liable for the costs of removal or remediation
of such substances at the disposal or treatment facility, whether or not such
facility is or ever was owned or operated by such person.

Environmental laws such as the Comprehensive Environmental Response
Compensation and Liability Act (CERCLA), the toxic Substances Control Act
(TSCA), the Clean Air Act (CAA) and their state equivalents govern such areas
as indoor air pollution, radon gas, lead-based paint, polychlorinated biphenyls
(PCBs) and fluorescent lights, and may impose obligations on the owner or
operator of residential or commercial real property. Certain environmental laws
and common law principles could be used to impose liability for release of and
exposure to hazardous substances, including asbestos-containing materials
(ACMs) into the air, and third parties may seek recovery from owners or
operators of real properties for personal injury or property damage associated
with exposure to released hazardous substances. Certain environmental laws and
regulations impose an obligation on the owner or operator of real property to
report the discovery of historical contamination and may require the owner or
operator to remediate that contamination and/or restrict the use of such
property through deed restrictions.

LIMITED OPERATING HISTORY

IPT has been recently organized and has a limited operating history and,
accordingly, has not yet developed an extensive financial history. There can be
no assurance that IPT's financial results to date will be indicative of future
results.

ABSENCE OF PRIOR MARKET FOR IPT COMMON SHARES

There is currently no market for the IPT Common Shares, and there can be
no assurance that an active trading market will develop or be sustained
following the Merger. The IPT Common Shares have been approved for listing on
the ASE, subject to consummation of the Merger, under the symbol "FFO." The IPT
Common Shares to be received by the shareholders of AMIT in the Merger have
also been approved for listing on the ASE, subject to official notice of
issuance. Factors such as government regulatory action, tax laws, interest
rates and market conditions in general could have a significant impact on the
future market price of the IPT Common Shares. In addition, the trading volume
of the IPT Common Shares may be limited, which could also have a significant
effect on their future market price.

ADVERSE EFFECT OF INCREASE IN INTEREST RATES ON THE TRADING PRICE OF IPT COMMON
SHARES

One of the factors that may influence the trading price of the IPT Common
Shares in public trading markets will be the annual yield resulting from
distributions on the IPT Common Shares as compared to yields on certain
financial instruments. Thus, an increase in market interest rates will result
in higher yields on certain financial instruments, which could adversely affect
the market price of the IPT Common Shares. Additionally, increases in market
interest rates will result in higher costs to IPT in financing future
acquisitions, which may adversely affect IPT's ability to achieve earnings
growth.

UNCERTAINTY SURROUNDING CONSOLIDATION OF FINANCIAL STATEMENTS

In the view of the Commission and the Financial Accounting Standards Board
("FASB") there exists a great deal of uncertainty under generally accepted
accounting principles as to the reporting method to be employed in
consolidating the financial statements of a partnership with those of another
company in the case where the company owns a general partner interest in such
partnership. If the Commission and the FASB adopt a policy regarding the
reporting method to be employed in such instances that is contrary to the
method currently used by IPT, the required presentation of IPT's financial
statements could differ materially from the presentation of the financial
statements set forth herein.

DILUTION

In connection with the Merger, shareholders of AMIT (other than MAE and
LAC) will be issued approximately 3,856,000 IPT Common Shares and will hold, in
the aggregate, approximately 16% of the

outstanding IPT Common Shares as of the Effective Time. Additionally, holders
of IPT Common Shares will experience dilution of their voting power in IPT upon
an exchange by holders of OP Units for IPT Common Shares and upon the vesting
and exercise of options and restricted share awards under IPT's 1997 Share
Incentive Plan (the "1997 Share Incentive Plan"). See "Description of Shares of
Beneficial Interest of IPT -- Exchange of OP Units into IPT Common Shares" and
"Management -- 1997 IPT Share Incentive Plan."

APPLICABILITY OF THE INVESTMENT COMPANY ACT

IPT believes that it will not be, and intends to conduct its operations so
as not to become, regulated as an investment company under the Investment
Company Act of 1940, as amended (the "Investment Company Act"). Accordingly,
IPT does not expect to be subject to the restrictive provisions of the
Investment Company Act. In particular, IPT intends to rely upon provisions of
the Investment Company Act (and Commission interpretations thereof) which
generally exempt from the Investment Company Act's registration requirements
entities that are primarily engaged in the business of purchasing or otherwise
acquiring interests in real estate. If IPT does not conduct its operations so
as to maintain the availability of an exemption from registration as an
investment company, IPT could, among other things, be required to either (i)
change the manner in which it conducts its business to avoid being required to
register as an investment company or (ii) register as an investment company,
either of which could have a material adverse effect on IPT and the market
price of the IPT Common Shares. Registration as an investment company would
result in, among other things, a significantly reduced ability to utilize
leverage in IPT's business and significantly increased operating expenses.

LITIGATION ARISING FROM TENDER OFFERS

As part of its business plan, IPT may seek to acquire additional units of
limited partner interest in the Controlled Partnerships or other real estate
limited partnerships through tender offers. Such tender offers have resulted
and may in the future result in litigation concerning the terms of and
circumstances surrounding the offer. In certain circumstances such litigation
may be brought by plaintiffs on behalf of the tendering security holders for
the purpose of seeking a settlement with the entity making the offer, even
though IPT generally does not believe such suits to be meritorious. Although
IPT anticipates that such litigation will not have a material adverse effect on
IPT, no assurance can be given as to the outcome of any such litigation. See
"Business of IPT -- Legal Proceedings."

SPECIAL FACTORS

BACKGROUND OF THE MERGER

LAC (which is a wholly-owned subsidiary of Insignia) began purchasing AMIT
Class A Shares in the open market in June 1995. On October 16, 1996, Andrew L.
Farkas, Chairman, President and Chief Executive Officer of Insignia met with
Ronald J. Consiglio, a trustee, President and Chief Executive Officer of AMIT,
and Bryan Herrmann, a trustee of AMIT, to discuss a possible business
combination transaction between IPT and AMIT. At a special meeting of the AMIT
Board held on November 12, 1996, Mr. Consiglio advised the AMIT Board that
meetings had been held with representatives of Insignia regarding a merger of
AMIT and IPT. Mr. Consiglio advised the AMIT Board that discussions and due
diligence could take several months due to the numerous properties controlled
by IPT.

Insignia continued to accumulate AMIT Class A Shares until November 1996,
when Insignia and its affiliates filed a Statement on Schedule 13D with the
Commission disclosing its ownership of approximately 6% of the outstanding AMIT
Class A Shares (assuming the conversion of the AMIT Class B Shares then held by
MAE GP into AMIT Class A Shares). The Schedule 13D disclosed that Insignia had
engaged in discussions with the management of AMIT concerning a potential
business combination transaction involving AMIT and certain IPT Partnerships
and that Insignia was considering other transactions involving Insignia
acquiring control of AMIT.

On December 2, 1996 the executive committee of the AMIT Board met and Mr.
Consiglio reported to the other members of the committee concerning the ongoing
discussions with Insignia and identified certain factors which would affect any
decision of the AMIT Board regarding any merger transaction, including the
valuation of the properties controlled by IPT and the change in the character
of AMIT from a mortgage REIT to an equity REIT. The full AMIT Board held a
meeting on December 10, 1996, at which Mr. Consiglio reviewed the actions taken
by the executive committee as it related to the proposal from Insignia
regarding a merger of AMIT and IPT. Mr. Consiglio advised the AMIT Board that
Insignia had filed a Schedule 13D with the Commission which raised the
possibility of a hostile takeover of AMIT. The AMIT Board discussed potential
defenses to a hostile takeover attempt by Insignia. They also analyzed the
conflict of interest issue resulting from a number of AMIT's loans being to
partnerships controlled by MAE and for which Insignia served as the property
manager.

The executive committee of the AMIT Board met again on January 20, 1997
and reviewed an internally prepared valuation of the AMIT Class A Shares using
net asset value, discounting of projected cash distributions to shareholders
and projected market pricing. These valuation methods produced per share
valuations of $18.04, $17.58, and $16.89 to $19.33, respectively. Mr. Consiglio
advised the executive committee that a valuation consultant had been retained
by management to review these valuations, and reported that the valuation
consultant had concluded that net asset value was a reasonable method for
valuing AMIT and that $18.00 per AMIT Class A Share fell within the range of
reasonable values for the proposed transaction. The executive committee agreed
to consider the proposed merger with IPT.

The full AMIT Board met again on March 13, 1997. At that meeting Mr.
Consiglio informed the AMIT Board that AMIT was continuing discussions with
Insignia regarding a possible merger of AMIT and IPT. The AMIT Board discussed
two concerns regarding the possible merger: (i) the possible tax gain that the
combined entity might incur due to the fact that the limited partner interests
in many of the Controlled Partnerships held by IPLP were acquired at a discount
from the values assigned to them for merger purposes, and (ii) the pro forma
value of AMIT Class A Shares after the merger. The AMIT Board reviewed a "tax
issues summary" prepared by Insignia, and Mr. Consiglio advised the AMIT Board
that the built-in gain issue was currently being analyzed by the AMIT's
accountants and counsel.

Insignia and AMIT began negotiating the terms of a letter of intent in
mid-March 1997. The negotiations of the letter of intent were primarily handled
by James A. Aston and Frank M. Garrison for Insignia and IPT, and by Ronald J.
Consiglio and Bryan Herrmann for AMIT. The letter of intent, executed by
Insignia and AMIT on April 3, 1997, described in non-binding terms the parties'
preliminary understanding regarding the financial terms and the structure of
the proposed transaction. The letter of intent contemplated that the
combination of IPT and AMIT would be structured as a tax-free subsidiary

merger in which a newly-formed subsidiary of AMIT would merge into IPT, with
IPT surviving the merger as a subsidiary of AMIT. The terms of the initial
merger structure would have resulted in the shareholders of IPT owning a
substantial majority of the AMIT Class A Shares immediately following the
merger.

After the signing of the letter of intent, IPT and AMIT began negotiating
the terms of a definitive merger agreement. Concurrently with these
negotiations, the parties commenced their respective due diligence reviews. In
particular:

o AMIT conducted an extensive due diligence review of IPT, including its
holdings and business plan. To assist AMIT in assessing and evaluating
the proposed transaction, AMIT retained two independent firms: Weil was
retained to provide a fairness opinion in connection with the Exchange
Ratio, and a consultant was retained to test through the use of an
economic model the property valuations forming the basis for the IPT
Share Value. The parties spent a significant amount of time in April, May
and June 1997 responding to inquiries from the retained experts.

o The parties analyzed the investment portfolios of both IPT and AMIT and
the impact that combining these portfolios would have on the post-merger
entity's status as a REIT under the Code. During this analysis, the
parties discussed potential tax considerations which, if adversely
determined, may have caused the post-merger entity to fail to qualify as
a REIT.

In light of both parties' unwillingness to enter into any transaction in
which the post-merger entity's status as a REIT may have been questioned, IPT
and AMIT began discussing alternative structures for the proposed transaction.
As a result of these discussions, IPT and AMIT changed the structure of the
proposed transaction to one in which AMIT would merge directly into IPT, with
IPT being the surviving entity.

The AMIT Board met on June 10, 1997 and Mr. Consiglio reported to the AMIT
Board on the events occurring since the letter of intent was signed on April 3,
1997, discussed the due diligence process being conducted by AMIT and reported
on the timetable proposed by Insignia for reaching a definitive agreement. Mr.
Consiglio advised the AMIT Board that he would be meeting with Insignia to
continue negotiation of a definitive agreement after meeting with Weil and the
consultant retained by AMIT who was performing valuations of the properties
controlled by IPT based on a discounted cash flow analysis. The AMIT Board
discussed the benefits of the merger with IPT to allow the shareholders to get
a better market value more quickly than might be accomplished without the
merger, and also discussed various negative considerations. Mr. Consiglio
advised the AMIT Board that Weil believed that the newly merged entity would
sell at the lower quartile factor of funds from operations due to the age of
the properties controlled by IPT, the fact that IPT was not (at that time) a
self advised REIT, (and that the termination of the advisory agreement with
Insignia would result in IPT owing a substantial termination fee to Insignia),
and the complexity of the transaction structure. The AMIT Board also discussed
the fact that IPT intended to pay the minimum distributions required to ensure
qualification of a REIT, which Mr. Consiglio estimated to be $.32 and $.68 per
IPT Common Share for 1997 and 1998, respectively, which would be less than the
annual dividends then being paid to the AMIT's shareholders, which were
approximately $1.00 per AMIT Class A Share. With respect to the built in gain
issue discussed at the previous meeting of the AMIT Board, Mr. Consiglio
informed the AMIT Board that Weil had advised him of its belief that the market
does not discount the market price of REIT equity securities for deferred
taxes.

The parties continued to negotiate the terms of a definitive merger
agreement through July 1997. The individuals for Insignia, IPT and MAE GP
involved in the negotiations of the Merger Agreement were Messrs. Farkas,
Aston, Garrison, Carroll D. Vinson, William H. Jarrard, Jr. and Jeffrey P.
Cohen. AMIT was represented in the negotiations by Messrs. Consiglio and
Herrmann. The parties agreed to use the same base values of the AMIT Class A
Shares and the IPT Common Shares that were included in the letter of intent.
The AMIT Board held a special meeting on July 18, 1997 where the trustees
discussed the resolution of certain open issues related to the definitive
merger agreement. Mr. Consiglio advised the AMIT Board that certain tax issues
relating to the Merger had been resolved. Specifically, Insignia had agreed to
purchase up to $13 million of AMIT's assets if required to qualify AMIT as a
"diversified

investment company" for tax purposes. Also, Insignia had agreed to indemnify
AMIT's shareholders for actual damages under certain circumstances if the
merger failed to qualify as a tax-free organization under certain
circumstances. Mr. Consiglio also advised the AMIT Board that Weil had not
formalized its fairness opinion, although it had orally advised Mr. Consiglio
of its conclusion that the Exchange Ratio was fair to AMIT's shareholders and
that the definitive agreement would require the issuance of a fairness opinion
as a condition precedent to the merger (Weil later formalized its opinion and
delivered the Weil Opinion to the AMIT Board in written form on November 13,
1997). The AMIT Board inquired as to the timeline and outside date to complete
the Merger, which they were advised was June 30, 1998. The AMIT Board discussed
the impact that the long time frame would have on the ability to run the
day-to-day business of AMIT and were advised by Mr. Consiglio that he did not
think that this was a problem. The AMIT Board was advised that although the
definitive agreement precluded AMIT from engaging in extraordinary
transactions, it did not affect the ability of AMIT to conduct its business in
the ordinary course. After a thorough discussion of the definitive agreement,
including all of the positive and negative considerations, the AMIT Board
approved the Merger Agreement and authorized Mr. Consiglio to execute the
Merger Agreement on behalf of AMIT. The IPT Board approved the Merger Agreement
and the Merger by unanimous written consent on July 17, 1997, and IPT,
Insignia, AMIT and MAE GP executed the Merger Agreement on July 18, 1997 (the
"Signing Date"). See "Special Factors -- IPT's Reasons for the Merger." See
"Special Factors -- AMIT's Reasons for the Merger," "Special Factors --
Recommendation of the AMIT Board."

Because each member of the IPT Board was actively involved in the
negotiations regarding the Merger Agreement, the IPT Board did not formally
hold any special meetings concerning the Merger.

On March 17, 1998, Insignia and AIMCO announced the Insignia/AIMCO Merger
Agreement. The AMIT Board met on March 26, 1998 and reassessed its position
with respect to the Merger. The AMIT Board determined that it could not
recommend to AMIT shareholders approval of the Merger without AMIT receiving a
covenant from Insignia/ESG that Insignia/ESG would enforce AIMCO's obligation
to propose to acquire IPT by merger pursuant to the terms of the Insignia/AIMCO
Merger Agreement, but it could make such recommendation if Mr. Consiglio could
obtain such a covenant. Subsequent negotiations among IPT, AMIT and
Insignia/ESG resulted in Insignia/ESG covenanting to AMIT and IPT that it will
use its reasonable best efforts to compel AIMCO to effect the IPT/AIMCO Merger
in the event that AIMCO breaches its obligation to effect such merger pursuant
to the terms of the Insignia/AIMCO Merger Agreement.

Determination of the Exchange Ratio

Included in the letter of intent regarding the Merger was an agreement as
to the base values of the AMIT Class A Shares ($16.25) and the IPT Common
Shares ($10.00), which ultimately became the base exchange values used to
determine the Exchange Ratio in the Merger Agreement. Those per share values
were the result of arm's length negotiations between the parties. The base
exchange value of the AMIT Class A Shares fell within a range of values
estimated by AMIT's management utilizing a discounted cash flow analysis, and
the base exchange value of the IPT Common Shares approximated IPT management's
estimate of the per share net asset value of IPT's assets and equaled the price
at which IPT Common Shares were sold to non-affiliated investors and IPT and
Insignia insiders in the Private Offerings. Because the AMIT Class B Shares are
convertible into AMIT Class A Shares at a rate of 49 to 1, the parties agreed
to set the Class B Exchange Ratio as the Class A Exchange Ratio divided by 49.

AMIT'S REASONS FOR THE MERGER

Prior to the announcement of the Insignia/AIMCO Merger Agreement, the AMIT
Board had identified several positive considerations in deciding to enter into
the Merger Agreement, including the following:

o Consideration: The AMIT Board believed that the Merger would be fair to
the AMIT shareholders. Further, the values used for the AMIT Shares in
determining the Exchange Ratio were higher than the market price at which
AMIT Class A Shares had been trading prior to the

public announcement of the signing of the Merger Agreement. Finally, the
value used for the AMIT Class A Shares in determining the Exchange Ratio
fell within a range of values estimated by AMIT's management utilizing a
discounted cash flow analysis.

o Upside Potential: The AMIT Board believed that the conversion of AMIT's
business from that of a mortgage REIT to principally that of an equity
REIT enhanced the upside potential that the AMIT shareholders would have
for achieving long-term appreciation in the value of their shares.

o Distribution Payments: The AMIT Board received assurances from IPT's
management that IPT would adopt a policy to pay regular quarterly
distributions after the Effective Time in an amount per IPT Common Share
equivalent to at least $1.00 per AMIT Class A Share, which, based on the
Class A Exchange Ratio, equates to $.16 per IPT Common Share. See
"Distributions."

o Fairness Opinion: The Weil Opinion that the Exchange Ratio was fair to
the AMIT Shareholders was an essential element in the decision of the
AMIT Board to proceed with the Merger. The calling of the Special Meeting
(and the consummation of the Merger) was specifically conditioned upon
AMIT's receipt of a satisfactory fairness opinion. The Weil Opinion
significantly influenced the AMIT Board's conclusions as to the
valuations of the assets involved and the upside potential for the
post-Merger entity.

In evaluating whether to enter into the Merger Agreement, the AMIT Board
also considered certain negative factors, including the following:

o Transition from a Mortgage REIT to an Equity REIT: The AMIT Board
considered the effect of the Merger on the investment objectives of
shareholders resulting from a change in the character of the investment
from a more conservative mortgage REIT investment to a riskier equity
REIT investment. This concern was mitigated to some extent by the
perceived ability of AMIT's shareholders to liquidate their investment in
the public market if the transition did not fit within their investment
objectives.

o Conflicts of Interest: The AMIT Board considered a number of potential
conflicts of interest related to Insignia's control of IPT, including
potential conflicts of interest arising as a result of the property
management company controlling the property owner, the difficulty in
terminating the Insignia management contracts without potentially
incurring substantial termination fees, various financial transactions
involving IPT and Insignia, the terms of which have not and will not be
established on an arms-length basis, and the possibility that property
disposition decisions could be influenced by the loss of management fees
by Insignia, as well as tax effects on Insignia due to the recognition of
accumulated gain in the Insignia contributed properties.

o Distribution Policy: The AMIT Board considered the different distribution
policies of the two companies. AMIT's distribution policy has been to
make significant distributions to its shareholders, while IPT's
distribution policy had been one of making the minimum required
distribution to shareholders and reinvesting excess positive cash flow.
AMIT has increased its quarterly distribution each quarter for the past
two years, while IPT has paid less in distributions than AMIT. This
concern was ameliorated to some extent by IPT's agreement to make
distributions after the Effective Time at an annual rate of $.64 per IPT
Common Share (which, on an equivalent basis, although less than the $1.28
per share currently being paid by AMIT, is approximately equal to the
$1.00 per AMIT Class A Share distributions that were being paid by AMIT
at the time the Merger Agreement was being negotiated).

o Market Acceptance: The AMIT Board also considered certain factors which
might have a negative effect on the market's acceptance of the merged
entity and the future market price of IPT Common Shares, including IPT's
complex structure, with Insignia's 30% (post-Merger) ownership of IPLP;
IPT's indirect ownership of property through various limited
partnerships; external, nonexclusive property management; the age of the
properties owned by the Controlled Partnerships; high capital expenditure
budgets due to deferred maintenance; and possible litigation resulting
from IPT tender offers for limited partner interests in limited
partnerships of which it controls the general partner.

o Valuation Issues: The AMIT Board considered the valuation of the IPT
assets, which for purposes of the Merger were valued between 30% and 50%
higher than the acquisition cost of those assets. Although the AMIT Board
did not obtain current independent appraisals of the real property owned
by the Controlled Partnerships, it relied heavily on a consultant's
discounted cash flow analysis and the fairness opinion issued by Weil to
resolve its concerns about valuation issues.

o Previous Litigation: AMIT had previously been involved in litigation with
certain affiliates of Insignia arising out of activities involving AMIT's
prior advisor.

The AMIT Board first determined that AMIT would no longer remain
independent at the July 18 meeting of the AMIT Board when it approved the
Merger Agreement based on the assurances of Weil that it would be able to issue
a fairness opinion. The AMIT Board considered alternative transactions that
would have allowed AMIT to remain independent. However, the AMIT Board decided
to proceed with the Merger based on three principal factors which led them to
determine that it was in the best interests of the shareholders to engage in
the Merger. First, the AMIT Board's decision was significantly influenced by
the voting power then held by MAE GP, through its ownership of the AMIT Class B
Shares, and by Insignia and certain shareholders of Insignia, through their
ownership of AMIT Class A Shares. The AMIT Board believed that the time,
expense and uncertainty of a nonconsensual takeover attempt by Insignia would
substantially erode shareholder value, and also believed that it would be
difficult, if not impossible, to attract an alternative merger partner or
investor because of MAE GP's ownership of the AMIT Class B Shares. Second,
based on an extensive quantitative analysis of financial information provided
by IPT concerning the Controlled Partnerships using the discounted cash flow
method as well various analyses prepared by Weil, the AMIT Board concluded that
the AMIT shareholders were receiving fair consideration for their AMIT Class A
Shares in the Merger. Finally, based on financial analyses prepared by Weil and
other publicly available market data, AMIT concluded that the upside potential
for an equity REIT was greater than that for a mortgage REIT and that there
should be an increase in the value of the shares held by the AMIT shareholders
more quickly than could be achieved by AMIT if it continued as a mortgage REIT.

The AMIT Board believes that the execution of the Insignia/AIMCO Merger
Agreement and the implementation of that agreement has caused several aspects
of the Merger to be materially altered:

o The consummation of the IPT/AIMCO Merger will render the Merger taxable
to the AMIT shareholders. Depending on when the IPT/AIMCO Merger is
consummated, it is possible that an AMIT shareholder could have income in
the year in which the Merger is consummated but not receive the proceeds
from the IPT/AIMCO Merger until the following year.

o The public trading price of the IPT Common Shares after the Merger may be
negatively impacted by the agreed upon minimum IPT Common Share price of
$13.25 specified in the Insignia/ AIMCO Merger Agreement.

o The consummation of the IPT/AIMCO Merger will eliminate the upside growth
potential of AMIT's transition from a mortgage REIT to an equity REIT.

o AMIT will no longer receive an opinion of counsel that the Merger should
be treated as a reorganization under the Code.

The AMIT Board has conducted no due diligence with regard to AIMCO because
AIMCO's obligation to propose to acquire the remaining IPT Common Shares by
merger requires AIMCO to pay cash for the remaining IPT Common Shares. Although
the AMIT Board is concerned that neither AMIT nor the IPT shareholders will
have enforcement rights against AIMCO in the event that AIMCO breaches its
obligation propose to acquire IPT by merger, this concern is somewhat mitigated
by the fact that Insignia/ESG has covenanted to AMIT and IPT that it will use
its reasonable best efforts to compel AIMCO to consummate the IPT/AIMCO Merger
pursuant to the Insignia/AIMCO Merger Agreement in the event that AIMCO
breaches its obligations to do so. However, there can be no assurance that
Insignia/ESG would be successful in such an action.

AMIT has no assurance that, if the Insignia/AIMCO Merger is consummated
but the IPT/AIMCO Merger does not occur, AIMCO, as the majority shareholder of
IPT, will continue IPT's current distribution policy or that AIMCO will manage
the IPT assets as effectively as current IPT management.

The AMIT Board, however, notes that the minimum price which AIMCO has
covenanted to Insignia to pay to acquire the remaining IPT Common Shares, which
based on the current Class A Exchange Ratio of 1.530 approximates $20.27 per
AMIT Class A Share, is in excess of the current book value of the AMIT Class A
Shares and is greater than the price at which the AMIT Class A Shares have ever
traded in the public market. Therefore, assuming that AIMCO completes the
IPT/AIMCO Merger as agreed, the AMIT Board believes that completing the Merger
is a better alternative for AMIT shareholders than remaining independent. In
coming to this conclusion the AMIT Board considered that AMIT will no longer
receive an opinion of counsel that the Merger should be treated as a
reorganization under the Code and that the Merger may be taxable to AMIT and
its shareholders. However, the AMIT Board does not believe that the current
circumstances of the Merger (i.e., a taxable merger followed by the IPT/AIMCO
Merger) is more beneficial to AMIT shareholders than the tax-free merger with
growth potential envisioned by the AMIT Board when they originally approved the
Merger Agreement.

The AMIT Board did not find it practicable to, and did not, quantify or
otherwise attempt to assign relative weights to the various factors it
considered in reaching its conclusions to approve the Merger, but rather
balanced the totality of the factors. On balance, the AMIT Board believed that
the potential benefits to the AMIT shareholders of the Merger outweighed the
negative considerations. IPT'S REASONS FOR THE MERGER

The members of the IPT Board were actively involved in the negotiations
concerning the Merger Agreement and the Merger, along with IPT's management and
legal advisors. On July 17, 1997, the IPT Board determined that the Merger is
fair to, and in the best interests of, IPT and its shareholders, approved the
Merger Agreement and the Merger, and authorized IPT to enter into the Merger
Agreement and consummate the transactions contemplated thereby, including the
Merger.

In making its determination with respect to the Merger, the IPT Board
considered a number of positive factors in its deliberations concerning the
Merger, including the following:

o Better Access to the Capital Markets; Liquidity: The IPT Board believed
that the Merger will provide IPT with better access to the capital
markets because, following the Merger, the IPT Common Shares will be
listed and publicly traded on the ASE and IPT will become a reporting
company under the Exchange Act. The IPT Board believed that this would
make it easier for IPT to raise capital to acquire additional interests
in properties which would benefit the IPT shareholders and as a result of
being a publicly traded company would provide IPT shareholders with
increased liquidity in their investment in IPT.

o Exchange Ratio: The IPT Board believed that the Exchange Ratio was fair
to IPT because the Exchange Ratio was based on the per share net asset
value of IPT's assets at the time that IPT was formed and an amount per
AMIT Class A Share which did not exceed its book value.

The IPT Board also considered the following negative considerations in
evaluating the Merger:

o Integration of Portfolios: The IPT Board considered that the loan
portfolio of AMIT, when combined with IPT's holdings in the Merger, may
not be complementary.

o Uncertain Tax Treatment of the Merger: The IPT Board considered that the
Merger may be treated as a taxable exchange of the AMIT assets for IPT
Common Shares. If AMIT was not deemed to be a qualified REIT as of the
Effective Time for any reason, IPT would become liable for any tax
resulting from such a gain, if any.

In the view of the IPT Board, the potentially negative factors were not
sufficient to outweigh the positive factors considered by the IPT Board in its
deliberations relating to the Merger. The IPT Board did not quantify or
otherwise attempt to assign relative weights to the various factors considered
in making its decision nor did it rely on the Weil Opinion in evaluating the
Merger.

Following announcement of the Insignia/AIMCO Merger, the IPT Board
reassessed its position with respect to the Merger and determined to proceed
with the Merger as IPT is contractually bound to do so.

RECOMMENDATION OF THE AMIT BOARD

Based on the considerations outlined above, the AMIT Board has determined
that the Merger is fair to and in the best interests of AMIT and its
shareholders regardless of whether or not the IPT/AIMCO Merger occurs, and
recommends that AMIT shareholders vote to approve the Merger Proposal. The
Merger was approved by each member of the AMIT Board, including the members who
are not employees of AMIT. In deciding to recommend the Merger Proposal to the
AMIT shareholders, the AMIT Board did not quantify or otherwise attempt to
assign relative weights to the various factors considered in making its
decision, and individual trustees may have given different weights to different
considerations.

OPINION OF AMIT'S FINANCIAL ADVISOR

General

Weil is an NASD/SEC registered securities broker-dealer and Registered
Investment Advisor founded in 1970. Its activities include both portfolio
management and investment banking. Weil manages over 400 individual securities
portfolios. Included among the assets in these accounts are over $20 million in
real estate securities.

Recent investment banking assignments have included: the sale of a major
real estate portfolio for the affiliate of a New York Stock Exchange-listed
REIT; underwriter of private placements and co-underwriter of public offerings
of REIT securities; sale of a major property portfolio for an institutional
investor; and advisor to a major REIT in the acquisition of a smaller public
REIT. Additionally, Weil has served as information and solicitation agent for
tender offers resulting in the purchase of more than $70 million of real estate
limited partnership units and more than $100 million in property acquisitions.

Weil was retained to act as AMIT's financial advisor in connection with
the Merger and related matters based on Weil's qualifications, expertise,
reputation and experience with respect to transactions similar to those
contemplated by the Merger Agreement. On November 13, 1997, Weil delivered its
written opinion to the AMIT Board that, as of the date of such opinion, and
based on the procedures followed, assumptions made, matters considered and
limitations on the review undertaken, as set forth in the opinion, the Exchange
Ratios were fair to the shareholders of AMIT from a financial point of view.

THE WEIL OPINION WAS DELIVERED PRIOR TO THE ANNOUNCEMENT OF THE
INSIGNIA/AIMCO MERGER AGREEMENT. WEIL HAS NOT RENDERED, AND HAS NOT BEEN ASKED
TO RENDER, AN OPINION AS TO THE FAIRNESS OF THE CONSIDERATION TO BE RECEIVED IN
THE IPT/AIMCO MERGER OR AS TO THE FAIRNESS OF THE CONSIDERATION TO BE RECEIVED
IN THE MERGER IN LIGHT OF THE CONTEMPLATED IPT/AIMCO MERGER.

A COPY OF THE WEIL OPINION IS ATTACHED TO THIS PROXY STATEMENT/PROSPECTUS
AS ANNEX C. AMIT SHAREHOLDERS ARE URGED TO READ THE WEIL OPINION IN ITS
ENTIRETY FOR INFORMATION WITH RESPECT TO THE PROCEDURES FOLLOWED, ASSUMPTIONS
MADE, MATTERS CONSIDERED AND LIMITS OF THE REVIEW UNDERTAKEN BY WEIL IN
RENDERING ITS OPINION. REFERENCES TO THE WEIL OPINION AND THE SUMMARY OF THE
WEIL OPINION HEREIN ARE QUALIFIED BY REFERENCE TO THE FULL TEXT OF THE WEIL
OPINION, WHICH IS INCORPORATED HEREIN BY REFERENCE. THE WEIL OPINION IS
DIRECTED ONLY TO THE FAIRNESS, FROM A FINANCIAL POINT OF VIEW, TO THE
SHAREHOLDERS OF AMIT OF THE EXCHANGE RATIO AND DOES NOT ADDRESS AMIT'S
UNDERLYING BUSINESS DECISION TO EFFECT THE MERGER, NOR DOES IT CONSTITUTE A
RECOMMENDATION TO ANY AMIT SHAREHOLDER AS TO HOW SUCH SHAREHOLDER SHOULD VOTE
WITH RESPECT TO THE MERGER PROPOSAL OR THE TRUST AMENDMENT PROPOSAL.

In connection with rendering its opinion, Weil reviewed and analyzed,
among other things, the following:

o The Merger Agreement.

o AMIT's public filings for the year ending December 31, 1996 and the
quarters ending March 31, 1997 and June 30, 1997.

o IPT's unaudited consolidated financial statements and related information
for the period ending December 31, 1996 and the quarters ending March 31,
1997 and June 30, 1997.

o Public filings for the IPT Partnerships for the year ending December 31,
1996 and for the quarters ending March 31, 1997 and June 30, 1997.

o Operating and financial data relating to the business operations of AMIT
and the IPT Partnerships.

o Historical trading data for the common shares of AMIT and companies
deemed by Weil to be reasonably comparable to AMIT and the proposed
merged entity in light of their current operations and prospects.

o Publicly available financial and operating data for companies deemed by
Weil to be reasonably comparable to the proposed merged entity.

o Property inspection reports prepared by independent parties on behalf of
AMIT for a sample of the properties held by the IPT Partnerships.

o Real property valuations prepared by Insignia's internal staff relative
to the real properties owned by the IPT Partnerships; where available,
independent appraisal reports commissioned by Insignia for the IPT
Partnerships with regard to the real properties owned by the IPT
Partnerships; and discounted cash flow valuation analyses of the real
properties owned by the IPT Partnerships prepared on AMIT's behalf
utilizing data provided by Insignia and/or IPT which was inserted by an
AMIT consultant into a computer model. AMIT did not obtain independent
appraisals of the value of the real properties or the partnership
interests owned by IPT and IPLP and no such independent appraisals or
valuations were performed by Weil.

o Analysis reflecting that a portion of the IPT formation values exceed
IPT's allocable income tax basis in assets by approximately $42 million,
resulting from unrealized appreciation and depreciation taken.

o Financial information and analyses prepared by the managements of AMIT
and IPT, respectively, reflecting their separate current and estimated
future cash flows for their operations as presently constituted and the
future prospects for both AMIT's and IPT's businesses.

Weil also held discussions with members of senior management of AMIT and
IPT to review and discuss the information reviewed by Weil and, among other
matters, AMIT's and IPT's respective businesses, operations, assets, financial
condition and future prospects. Weil also considered other information such as
financial studies, analyses, investigations and financial, economic and market
criteria which it deemed relevant.

In the course of its review, Weil assumed and relied upon the accuracy and
completeness of all the financial and other information provided to it or
discussed with it or publicly available and neither attempted independently to
verify nor assumed responsibility for verifying any such information. Weil also
assumed that the financial forecasts provided to it were reasonably prepared on
bases reflecting the best currently available estimates and judgments of AMIT's
and IPT's respective management's as to the financial performance of AMIT and
IPT for the period covered. Weil expresses no opinion with respect to such
forecasts or the assumptions upon which they are based.

In addition, Weil has not reviewed any of the books and records of AMIT or
IPT or assumed any responsibility for conducting a physical inspection of the
properties or facilities of AMIT or IPT or for making or obtaining an
independent valuation or appraisal of the assets or liabilities of AMIT or IPT,
and Weil has not been furnished any such valuation or appraisal. The Weil
Opinion assumes that the Merger will be consummated in accordance with the
terms of the Merger Agreement and that the Merger will be accounted for as a
purchase under generally accepted accounting principles. The Weil Opinion is
necessarily based on economic and market conditions and other circumstances as
they existed and could be evaluated by Weil as of the date thereof.

Set forth below is a summary of certain of the financial analyses used and
assumptions made by Weil in connection with providing its opinion to the AMIT
Board.

IPT Valuation Analysis

Weil compared IPT with the average of a group of 28 REITs predominantly in
the apartment industry (the "Apartment Group"). This group of 28 REITs contains
few examples of REITs with (i) external property managers, (ii) assets
consisting primarily of partnership interests (other than REITs employing
"umbrella" partnership structures like IPT), and (iii) assets having
significant book/tax differences (again other than REITs employing "umbrella"
partnership structures like IPT). Due in part to these structural differences,
Weil believed that IPT should be compared to REITs in the lowest quartile in
terms of market valuation. The four companies in the lowest quartile chosen as
the prime comparables were Apartment Investment and Management Company,
Berkshire Realty, Inc., Merry Land & Investment, Inc. and United Dominion
Realty Trust (the "Four Prime Comparables").

The Four Prime Comparables have structural characteristics often
considered superior to those previously mentioned for IPT. IPT's assets consist
primarily of partnership interests and its major investments are comprised of
both general partner interests as well as a substantial percentage of limited
partner interests in the IPT Partnerships. IPT's cash flows are currently
derived primarily from distributions from the IPT Partnerships. IPT has been
successful in tendering for units of limited partner interest at substantial
discounts to the fair market value of the underlying properties and IPT's
business plan includes additional purchases of both general partner interests
and limited partner interests in real estate limited partnerships. The cash or
cash return on such investments has been, in recent years, superior to those of
direct property purchases and may continue to be in the future. Upon attaining
in excess of 50% of the limited partner interests in a limited partnership IPT
will consolidate the financial results of that limited partnership which may
simplify analysis. Weil believed that the higher returns from future
investments in partnerships and potential for further consolidations of these
partnerships partially offset the external property management, lack of direct
property ownership and the book/tax differences discussed above.

In comparing IPT to the Apartment Group and the Four Prime Comparables,
Weil performed four principal analyses which it believes are primary indicators
of value for REITs : (i) a ratio of common stock market price to funds from
operations ("FFO Multiple") analysis; (ii) a ratio of common stock market price
to net asset value ("NAV Multiple") analysis; (iii) a ratio of annual
distributions to common stock market price ("Dividend Yield") analysis; and
(iv) a ratio of annual distributions to funds from operations ("FFO Payout
Ratio") analysis. The results of these analyses are summarized below.

Based on publicly available industry data, including 1998 consensus
analyst estimates as reported by First Call, Weil estimated that:

(i) the average FFO Multiple for the Apartment Group as a whole was
approximately 11.8 times, and the FFO Multiples of the Four Prime
Comparables ranged from a low of 9.7 times to a high of 12.1 times;

(ii) the average NAV Multiple for the Apartment Group as a whole was
approximately 1.31 times, and the NAV Multiples of the Four Prime
Comparables ranged from a low of 1.02 times to 1.59 times for the Four
Prime Comparables;

(iii) the average Dividend Yield for the Apartment Group as a whole was
approximately 5.9%, and the Dividend Yields of the Four Prime Comparables
ranged from a low of 4.9% to 7.9% for the Four Prime Comparables; and

(iv) the average FFO Payout Ratio for the Apartment Group as a whole was
approximately 77%, and the FFO Payout Ratios of the Four Prime Comparables
ranged from a low of 59% to 83% for the Four Prime Comparables.

Based on information and estimates provided by IPT management and property
valuation estimates for the properties owned by the IPT Partnerships supplied
by a valuation consultant retained by AMIT, and assuming a per IPT Common Share
value of $10.45 (which was the exchange value of an IPT Common Share at the
time the Weil Opinion was initially orally rendered to the AMIT Board), Weil
estimated that:

(i) IPT had an implied FFO Multiple of 7.0 times to 8.4 times, based on
an assumed range of 1998 funds from operations estimates of approximately
$1.25 per IPT Common Share to $1.50 per IPT Common Share;

(ii) IPT had an implied NAV Multiple of 0.95 times to 1.05 times, based
on an assumed range of estimates of $9.90 per IPT Common Share to $11.00
per IPT Common Share of the aggregate net asset value of the properties and
assets owned by the IPT Partnerships;

(iii) IPT had an implied Dividend Yield of 5.7% based on the initial
distribution policy of $.60 per IPT Common Share adopted by the IPT Board;
and

(iv) IPT had an implied FFO Payout Ratio of 40% to 48%, based on an
assumed range of 1998 funds from operations estimates and based on the
initial distribution policy of $.60 per IPT Common Share adopted by the IPT
Board.

Weil observed that the value ascribed to the IPT Common Shares for
purposes of the Merger was at or below the range of both the Apartment Group
and the Four Prime Comparables in each of these four primary valuation
indicator categories. Thus, Weil concluded that the value ascribed to the IPT
Common Shares for purposes of calculating the Exchange Ratio was reasonable.

AMIT Valuation Analysis

Weil also observed that the REIT universe contains relatively few examples
of micro-capitalization (below $50 million) commercial mortgage REITs. Because
Weil believed that AMIT may be hampered in the future by (i) its small asset
base and its relatively high general and administrative expenses in relation to
its assets, and (ii) limited opportunities to profitably expand its equity
capital base given the relatively high dividend yield required of it (and most
micro-cap commercial mortgage REITs) compared to mid-term real estate lending
rates in the current climate, Weil valued AMIT based on a liquidation analysis
as opposed to a going concern basis. On a liquidation value basis, Weil
estimated that the value of the AMIT Class A Shares ranged between $16.00 to
$17.00 per share (after provision for transaction costs and assuming one year
to dispose of assets, but excluding severance expense, if any). Weil observed
that the $16.25 exchange value ascribed to the AMIT Class A Shares for purposes
of the Merger was within this range and, therefore, reasonable.

Conclusion

Based on the above, Weil concluded that the Exchange Ratio was fair to the
shareholders of AMIT from a financial point of view.

Miscellaneous

The foregoing summary does not purport to be a complete description of the
analyses performed by Weil or of its presentation to the AMIT Board. The
preparation of financial analyses and fairness opinions are complex processes
and are not necessarily susceptible to partial analysis or summary description.
Weil believes that its analyses (and the summary set forth above) must be
considered as a whole, and that selecting portions of such analyses and of the
factors considered by Weil, without considering all of such analyses and
factors, could create an incomplete view of the Weil Opinion. Weil made no
attempt to assign specific weights to particular analyses. No company or
transaction used in the above analyses as a comparison is identical to AMIT and
IPT or the transactions contemplated by the Merger Agreement. Any estimates
contained in Weil's analyses are not necessarily indicative of actual value,
which may be significantly more or less favorable than as set forth therein.
Estimates of values of companies do not purport to be appraisals or necessarily
to reflect the prices at which companies may actually be worth.

Weil, as part of its general securities business, is continually engaged
in the valuation of businesses and their securities in connection with mergers
and acquisitions, negotiated underwritings, competitive biddings, secondary
distributions of listed and unlisted securities, private placements and
valuations for estate, corporate and other purposes. The Exchange Ratio was
determined by arm's-length negotiations between AMIT and IPT and their
respective representatives. Weil has not previously rendered

investment banking or other advisory services to AMIT, but may render such
services in the future, for which it may receive customary compensation from
AMIT and its affiliates. Weil agreed, during the pendency of its engagement by
AMIT, not to engage in trading activities for its own account nor to effect
discretionary or solicited brokerage transactions in the purchase or sale of
AMIT securities. Weil has not engaged in such trading activities or brokerage
transactions during the course of its engagement by AMIT with regard to the
securities of AMIT, IPT or Insignia.

Pursuant to an engagement letter with Weil, Weil has been paid a fee of
$50,000 for the rendering of its fairness opinion to the AMIT Board. AMIT also
paid Weil an hourly fee for services rendered by Weil to AMIT in an advisory
capacity extraneous to the customary services involved in rendering the
fairness opinion and reimbursed Weil for its out-of-pocket expenses incurred in
connection with its engagement. AMIT has agreed to indemnify Weil and certain
related persons against certain liabilities and expenses relating to and
arising out of the engagement, including certain liabilities under the federal
securities laws. Pursuant to a separate agreement between AMIT and IPT, IPT
paid directly to Weil all fees and costs incurred by AMIT with regard to AMIT's
engagement of Weil.

INTERESTS OF CERTAIN PERSONS IN THE MERGER

In considering the recommendation of the AMIT Board with respect to the
Proposals, the shareholders of AMIT should be aware that certain members of
AMIT's management and certain members of the AMIT Board have certain interests
in the Merger separate from the interests of the AMIT shareholders generally.
These separate interests are summarized below.

IPT Board Representation. Pursuant to the terms of the Merger Agreement,
immediately subsequent to the Effective Time IPT is required to take such
action as is required under its Declaration of Trust and Bylaws to cause Ronald
J. Consiglio and Bryan L. Herrmann to be appointed as trustees of IPT. Mr.
Consiglio is currently a trustee, President and Chief Executive Officer of AMIT
and Mr. Herrmann is currently an independent trustee of AMIT. Each of Messrs.
Consiglio and Herrmann will be entitled to compensation for their attendance at
meetings of the IPT Board and committees thereof. See "Management --
Compensation of Trustees."

Employment Agreements. Pursuant to the terms of the Merger Agreement, upon
consummation of the Merger Ronald J. Consiglio and Anna Merguerian will enter
into employment agreements with IPT. Mr. Consiglio, who is currently the
President, Chief Executive Officer and a trustee of AMIT, will enter into a
three year employment agreement to serve as a Managing Director of IPT,
pursuant to which he will receive a base salary of at least $276,000 per annum,
and an annual bonus of not less than $90,000. Ms. Merguerian, who is currently
the Chief Financial Officer, Secretary and Vice President of AMIT, will enter
into a three year employment agreement to serve as a Vice President of IPT,
pursuant to which she will receive a base salary of at least $100,000 per
annum, and an annual bonus of not less than $45,000. See "Management of IPT --
Employment Agreements."

The trustees who voted to approve the compensation proposal believe that
the compensation is fair and equitable based upon AMIT's performance, both in
terms of capital growth and shareholder distributions, during the past several
years, the substantial and extraordinary time and effort devoted by the
departing trustees relative to the Merger with regard to the review and
negotiation of definitive agreements and proxy materials and the continued
successful operations of AMIT through lengthy and complex negotiations.

PURPOSE AND STRUCTURE OF IPT/AIMCO MERGER

In connection with the Insignia/AIMCO Merger Agreement, Insignia
negotiated a covenant from AIMCO to use its reasonable best efforts to propose
to acquire the minority interest in IPT (by merger)

for at least $13.25 per IPT Common Share, which is the same value Insignia
assigned to the IPT Common Shares owned by Insignia and its wholly-owned
subsidiaries for purposes of valuing the Insignia/AIMCO Merger. Insignia and
AIMCO considered structuring the IPT/AIMCO Merger in a manner so that the
minority shareholders would have received shares of common stock of AIMCO in
exchange for their IPT Common Shares; however, AIMCO preferred to acquire the
minority interest in IPT for cash rather than additional common stock.

AMIT and IPT originally determined the structure of the Merger as a
tax-free exchange whereby AMIT would merge into IPT with the AMIT shareholders
acquiring newly issued IPT Common Shares in exchange for their AMIT Shares. The
Merger was not entered into in anticipation of the Insignia/ AIMCO Merger or
the IPT/AIMCO Merger. The structure of the IPT/AIMCO Merger was intended to
provide the minority shareholders of IPT the same economic value as Insignia is
to receive for its IPT Common Shares in the Insignia/AIMCO Merger and to ensure
that most of the minority shareholders of IPT receive long term capital gains
treatment on the cash received in the IPT/AIMCO Merger.

At the time the Merger Agreement was entered into it was not the intent of
either IPT or AMIT to structure a transaction in which IPT would be merged with
another entity after the consummation of the Merger and the former AMIT
shareholders would not longer own an equity interest in IPT. The structure of
the collective transactions contemplated by the Merger Agreement and the
Insignia/AIMCO Merger Agreement is the combined result of two independently
negotiated transactions.

FAIRNESS OF IPT/AIMCO MERGER

Based on the information currently known about the terms of the
contemplated IPT/AIMCO Merger (see "Insignia/AIMCO Transaction -- IPT/AIMCO
Merger"), IPT determined that the Merger and the IPT/AIMCO Merger are fair to
the shareholders of AMIT. IPT's conclusion is based on the following factors:

(i) the fact that the consideration of $13.25 per IPT Common Share to be
received by the minority shareholders of IPT (including former AMIT
shareholders) is the same value Insignia assigned to the IPT Common Shares
owned by Insignia and its wholly-owned subsidiaries for purposes of valuing
the Insignia/AIMCO Merger;

(ii) the fact that Board of Directors of Insignia received the opinion of
Lehman Brothers, Inc. ("Lehman Brothers") and that the IPT Board is
permitted to rely on such opinion, that the allocation of the
consideration to be paid by AIMCO between the merger consideration to be
received by the holders of Insignia common stock and the consideration to be
offered to the holders of IPT Common Shares in the contemplated IPT/AIMCO
Merger are reasonable based on, and subject to, the assumptions and
qualifications set forth in such opinion;

(iii) the fact that Insignia and its legal and financial advisors
determined the amount of consideration to be paid to the holders of IPT
Common Shares in the contemplated IPT/AIMCO Merger on an arm's-length basis
with AIMCO and its legal and financial advisors;

(iv) the fact that the consideration to be received by the former AMIT
shareholders then holding IPT Common Shares in the contemplated IPT/AIMCO
Merger, which based on the current Class A Exchange Ratio approximates
$20.27 per AMIT Class A Share, exceeds the current book value of the AMIT
Class A Shares and is greater than the price at which the AMIT Class A
Shares have ever traded in the public market; and

(v) the fact that AMIT received the Weil Opinion that the Exchange Ratio
was fair to the AMIT shareholders from a financial point of view and that
the AMIT Board has determined to recommend the Merger regardless of whether
or not the IPT/AIMCO Merger is consummated.

In making its determination, IPT did not quantify or otherwise attempt to
assign relative weights to the various factors considered in making its
determination.

OPINION OF FINANCIAL ADVISOR TO INSIGNIA RELATING TO IPT/AIMCO MERGER

Lehman Brothers acted as financial adviser to the board of directors of
Insignia (the "Insignia Board") in connection with the Insignia/AIMCO Merger.

As part of its role as financial adviser to Insignia, on March 13, 1998,
Lehman Brothers delivered its oral opinion (subsequently confirmed in writing
in an opinion dated March 17, 1998) (the "Lehman Brothers Opinion") to the
Insignia Board to the effect that, as of those dates, and based on the
assumptions made, procedures followed and matters considered, as set forth in
the Lehman Brothers Opinion, the allocations of the consideration to be paid by
AIMCO between the merger consideration to be received by the holders of
Insignia's common stock and the aggregate consideration to be offered to the
holders of IPT Common Shares are reasonable. The IPT Board is permitted to rely
upon the Lehman Brothers Opinion.

A copy of the Lehman Brothers Opinion is available for inspection and
copying at the principal executive offices of Insignia at One Insignia
Financial Plaza, Greenville, South Carolina, during regular business hours by
AMIT shareholders or their representative who has been so designated in
writing. AMIT shareholders may read the Lehman Brothers Opinion in its entirety
for a discussion of the assumptions made, matters considered and limitations on
the review undertaken by Lehman Brothers in rendering its opinion. The summary
of the Lehman Brothers Opinion set forth in this Proxy Statement/ Prospectus
is qualified in its entirety by reference to the full text of the opinion.

No limitations were imposed by Insignia on the scope of Lehman Brothers'
investigation or the procedures to be followed by Lehman Brothers in rendering
its opinion, except that Insignia did not authorize Lehman Brothers to solicit,
and Lehman Brothers did not solicit, proposals from third parties with respect
to the purchase of all or a part of Insignia's business. Lehman Brothers was
not requested to and did not make any recommendation to the Insignia Board as
to the form or amount of the consideration to be offered to the holders of IPT
Common Shares, which was determined through arm's-length negotiations between
the parties. In arriving at its opinion, Lehman Brothers did not ascribe a
specific range of value to IPT, but rather made its determination as to the
fairness, from a financial point of view, of the reasonableness of the
allocations of the consideration to be paid by AIMCO with respect to the
Insignia/AIMCO Merger between the merger consideration to be received by the
holders of Insignia's common stock required to be offered to the holders of IPT
Common Shares by AIMCO, on the basis of the financial and comparative analysis
described below. The Lehman Brothers Opinion is for the use and benefit of the
Insignia Board and was rendered to the Insignia Board in connection with its
consideration of the Insignia/AIMCO Merger. However, the IPT Board is expressly
permitted to rely upon the Lehman Opinion. The Lehman Brothers Opinion is not
intended to be and does not constitute a recommendation to any stockholder of
Insignia or shareholder of AMIT as to whether to vote in favor of the
Insignia/AIMCO Merger or the Merger respectively, or any matter related
thereto.

In arriving at its opinion, Lehman Brothers reviewed and analyzed: (1) the
Insignia/AIMCO Merger Agreement and the specific terms of the transactions
contemplated thereby, (2) publicly available information concerning Insignia
and AIMCO that it believed to be relevant to its analysis, (3) financial and
operating information with respect to the business, operations and prospects of
Insignia, Insignia/ ESG and AIMCO furnished to it by Insignia and AIMCO,
respectively, (4) a trading history of Insignia's common stock from January 1,
1996 to March 11, 1998 and a comparison of that trading history with those of
other companies that it deemed relevant, (5) a trading history of AIMCO's
common stock from January 1, 1996 to March 11, 1998 and a comparison of that
trading history with those of other companies that it deemed relevant, (6) a
comparison of the historical financial results and present financial condition
of Insignia with those of other companies that it deemed relevant, (7) a
comparison of the historical financial results and present financial condition
of AIMCO with those of other companies that it deemed relevant, (8) a
comparison of the historical financial results and present financial condition
of Insignia/ ESG with those of other companies that it deemed relevant, (9) a
comparison of historical financial results and present financial condition of
IPT with those of other companies that it deemed relevant, (10) a comparison of
the financial terms of the Insignia/AIMCO Merger with the financial terms of
certain other recent transactions that it deemed relevant, (11) the potential
pro forma impact of the Insignia/AIMCO Merger on AIMCO (including the cost
savings, operating synergies and strategic benefits expected by the managements
of Insignia and AIMCO to result from the Insignia/AIMCO Merger), and (12)
liquidation values of Insignia's and IPT's properties furnished to it by
Insignia. In addition, Lehman Brothers had discussions with the managements of
Insignia and AIMCO concerning their respective businesses, operations, assets,
financial conditions and prospects and have undertaken such other studies,
analyses and investigations as it deemed appropriate.

In arriving at its opinion, Lehman Brothers assumed and relied upon the
accuracy and completeness of the financial and other information used by it
without assuming any responsibility for independent verification of the
information and has further relied upon the assurances of managements of
Insignia and AIMCO that they are not aware of any facts or circumstances that
would make the information inaccurate or misleading. With respect to the
financial projections of Insignia, Insignia ESG, IPT, AIMCO and the combined
company upon consummation of the Insignia/AIMCO Merger and the spin-off of
Insignia/ESG to the stockholders of Insignia, upon advice of Insignia and
AIMCO, respectively, Lehman Brothers assumed that the projections have been
reasonably prepared on a basis reflecting the best currently available
estimates and judgments of the managements of Insignia and AIMCO, as the case
may be, as to the future financial performance of Insignia/ESG, IPT, AIMCO and
the combined company and that Insignia, IPT and AIMCO would perform, and
Insignia/ESG and the combined company will perform, substantially in accordance
with such projections. In arriving at its opinion, Lehman Brothers has not
conducted a physical inspection of the properties and facilities of Insignia,
IPT or AIMCO and has not made or obtained any evaluations or appraisals of the
assets or liabilities of Insignia, IPT or AIMCO. In addition, Insignia did not
authorize Lehman Brothers to solicit, and Lehman Brothers did not solicit, any
indications of interest from any third party with respect to a purchase of all
or a part of Insignia's businesses. Upon advice of Insignia, who was advised by
its tax counsel, Lehman Brothers has assumed that the Insignia/AIMCO Merger
will qualify as a reorganization within the meaning of Section 368(a) of the
Code, and therefore as a tax-free transaction to the holders of Insignia's
common stock, and the spin-off of Insignia/ESG to the stockholders of Insignia
will qualify as a tax-free transaction to the holders of Insignia's common
stock. The Lehman Brothers Opinion necessarily is based upon market, economic
and other conditions as they exist on, and can be evaluated as of, the date of
such opinion. Lehman Brothers assumed for the purposes of its opinion that the
consideration to be received by the holders of IPT Common Shares in the
IPT/AIMCO Merger will be equal to $13.25 per IPT Common Share.

In connection with the preparation and delivery of its opinion to the
Insignia Board, Lehman Brothers performed a variety of financial and
comparative analyses, as described below. The preparation of a fairness opinion
involves various determinations as to the most appropriate and relevant methods
of financial and comparative analysis and the application of those methods to
the particular circumstances and, therefore, such an opinion is not readily
susceptible to summary description. Furthermore, in arriving at its opinion,
Lehman Brothers did not attribute any particular weight to any analysis or
factor considered by it, but rather made qualitative judgments as to the
significance and relevance of each analysis and factor. Accordingly, Lehman
Brothers believes that its analyses must be considered as a whole and that
considering any portion of its analyses and factors, without considering all
analyses and factors, could create a misleading or incomplete view of the
process underlying its opinion. In its analyses, Lehman Brothers made numerous
assumptions with respect to industry performance, general business and economic
conditions and other matters, many of which are beyond the control of Insignia
and AIMCO. Any estimates contained in these analyses are not necessarily
indicative of actual values or predictive of future results or values, which
may be significantly more or less favorable than as set forth therein. In
addition, analyses relating to the value of businesses do not purport to be
appraisals or to reflect the prices at which businesses actually may be sold.

Valuation of IPT

COMPARABLE PUBLIC COMPANY ANALYSIS. Lehman Brothers compared certain
publicly available financial and operating data and projected financial
performance (reflecting research analysts' estimates) of selected publicly
traded REITs with similar financial and operating data and projected financial
performance of IPT (as estimated by the management of Insignia). The selected
REITs reviewed in this analysis (collectively, the "IPT Comparable Group") were
AIMCO, BRE Properties, Equity Residential Properties, Camden Property Trust,
Merry Land & Investment, and United Dominion Realty. Lehman Brothers analyzed,
among other things, the ratios of equity market value per share to FFO per
share, as well as operating and financial performance data and the capital
structures of the IPT Comparable Group. Lehman Brothers then compared the
results of its analyses for the IPT Comparable Group to the corresponding
results for IPT. Lehman Brothers calculations resulted in a range of equity
market value per share to 1998 FFO per share of 9.5x to 12.6x, with a mean of
10.8x, as compared to IPT at 12.0x (assuming an allocated IPT consideration of
$13.25 per share).

Because of the inherent differences between the businesses, operations and
prospects of IPT and the businesses, operations and prospects of the companies
included in the IPT Comparable Group, Lehman Brothers believed that it was
inappropriate to, and therefore did not, rely solely on the quantitative
results of the analysis, and accordingly also made qualitative judgments
concerning differences between the financial and operating characteristics of
IPT and the companies in the IPT Comparable Group that would affect the public
trading values of IPT and such comparable companies.

COMPARABLE TRANSACTION ANALYSIS. Lehman Brothers reviewed certain
information regarding nine selected pending or completed business combinations
involving REITs owning primarily apartment properties since 1994. Lehman
Brothers reviewed the prices paid in these transactions in terms of the equity
value per share as a multiple of projected FFO per share (reflecting research
analysts' estimates) and compared the multiples to the multiples of the
financial results for IPT implied by the IPT consideration. The nine completed
business combinations reviewed in this analysis (collectively, the "IPT
Transaction Comparables") were: the acquisition of Evans Withycombe by Equity
Residential, the acquisition of Wellsford Residential by Equity Residential;
the acquisition of Columbus Realty by Post Properties; the acquisition of
Paragon Group by Camden Property Trust; the acquisition of South West Property
Trust by United Dominion Realty; the acquisition of REIT of California by BRE
Properties; the acquisition of Holly Residential by Wellsford Residential; the
acquisition of Oasis Residential by Camden Property Trust; and the pending
acquisition of Ambassador by AIMCO. Lehman Brothers calculated the implied
value of IPT by selecting ranges of multiples of 1998 FFO, derived from Lehman
Brothers' analysis of multiples of equity value per share to FFO per share for
the IPT Transaction Comparables, and applying this multiple range to the
projected FFO of IPT (as projected by management of Insignia). Lehman Brothers
calculations resulted in a range of equity market value per share to 1998 FFO
per share of 9.6x to 14.0x, with a means of 11.7x, as compared to IPT at 12.0x
(assuming an allocated IPT consideration of $13.25 per share).

Because the market conditions, rationale and circumstances surrounding
each of the transactions analyzed were specific to each transaction and because
of the inherent differences between the businesses, operations and prospects of
IPT and the acquired businesses analyzed, Lehman Brothers believed that it was
inappropriate to, and therefore did not, rely solely on the quantitative
results of the analysis, and accordingly, also made qualitative judgments
concerning differences between the characteristics of these transactions and
the Insignia/AIMCO Merger that would affect the acquisition values of IPT and
such acquired companies.

NET ASSET VALUE ANALYSIS. Lehman Brothers calculated the net asset value
of IPTs proportionate interest in the real estate assets owned by IPT, adjusted
for total debt outstanding, to arrive at an equity value per IPT Common Share.
The analysis of IPT utilized projections provided by management of Insignia.
Lehman Brothers calculated values of Insignia's assets based on a range of
capitalization rates of 9.45% to 10.45% applied to projected 1998 net operating
income for IPT's real estate assets, plus an adjustment for the estimated value
of non-income producing property. This analysis indicated an imputed equity
value (defined as aggregate value minus debt) of IPT of $11.21 to $12.88 per
fully-diluted IPT Common Share.

General

Lehman Brothers is an internationally recognized investment banking firm
and, as part of its investment banking activities, is regularly engaged in the
evaluation of businesses and their securities in connection with mergers and
acquisitions, negotiated underwritings, competitive bids, secondary
distributions of listed and unlisted securities, private placements and
valuations for corporate and other purposes. The Insignia Board selected Lehman
Brothers because of its expertise, reputation and familiarity with Insignia in
particular and the real estate industry in general, and because its investment
banking professionals have substantial experience in transactions similar to
the Insignia/AIMCO Merger.

As compensation for its services in connection with the Insignia/AIMCO
Merger and the transactions related thereto, Insignia will pay Lehman Brothers
a fee of approximately $4.6 million, of which $1,000,000 has already been
received by Lehman Brothers and approximately $3.6 million will be payable upon
the closing of the Insignia/AIMCO Merger. Insignia has also agreed to reimburse
Lehman Brothers

for up to $25,000 of its reasonable expenses (including, without limitation,
professional and legal fees and disbursements) incurred in connection with its
engagement, and to indemnify Lehman Brothers and certain related persons
against certain liabilities in connection with its engagement, including
certain liabilities under the federal securities laws.

Lehman Brothers is currently a lender under Insignia's credit facility and
under the IPT Line of Credit. In addition, Lehman Brothers and certain officers
thereof own an aggregate of 510,000 IPT Common Shares. Lehman Brothers has also
performed various investment banking services for Insignia and AIMCO in the
past, for which it has received customary fees. In the ordinary course of its
business, Lehman Brothers actively trades in the debt and equity securities of
Insignia and AIMCO for its own account and for the accounts of its customers
and, accordingly, may at any time hold a long or short position in these
securities.

CERTAIN EFFECTS OF THE IPT/AIMCO MERGER

If the IPT/AIMCO Merger is consummated on the terms described in this
Proxy Statement/
Prospectus, each IPT Common Share will be converted into the right to receive
$13.25 in cash. The IPT shareholders, other than AIMCO, will cease to have a
direct ownership interest in IPT or rights as shareholders of IPT and will
cease to participate in IPT's future earnings and growth, if any, as
shareholders of IPT.

Upon consummation of the IPT/AIMCO Merger, AIMCO will indirectly own 100%
of the outstanding equity securities of IPT. As a result of the IPT/AIMCO
Merger, IPT will be privately held and there will be no public market for the
IPT Common Shares. Upon consummation of the IPT/AIMCO Merger, the IPT Common
Shares will cease to be quoted on the ASE, the registration of the IPT Common
Shares under the Exchange Act will be terminated and such stock will no longer
constitute "margin securities" under the rules of the Board of Governors of the
Federal Reserve System. Moreover, IPT will be relieved of the obligation to
comply with the proxy rules of Regulation 14A under Section 14 of the Exchange
Act and the obligation to file periodic reports with the Commission under the
Exchange Act. In addition, IPT's officers, trustees and 10% shareholders will
be relieved of the reporting requirements and restrictions on "short-swing"
trading contained in Section 16 of the Exchange Act with respect to the IPT
Common Shares.

AIMCO has not informed IPT as to any changes it may make in the
organizational structure, capitalization, management or distribution policy of
the surviving corporation of the IPT/AIMCO Merger. However, because the
surviving corporation will be a wholly-owned subsidiary of AIMCO, it is
probable that changes will be made in one or all of the organizational
structure, capitalization, management, board of trustees, and distribution
policy of such surviving corporation.

CERTAIN OTHER INFORMATION CONCERNING THE IPT/AIMCO MERGER

The total amount of funds to be used to pay the consideration in the
contemplated IPT/AIMCO Merger is estimated to be approximately $152 million
(assuming the consummation of the Merger and a purchase price of $13.25 per IPT
Common Share). AIMCO has not informed IPT as to the sources from which AIMCO
intends to obtain such funds, nor can the expenses of the IPT/AIMCO Merger be
reasonably estimated at this time.

IPT does not know whether any current executive officer, trustee or
affiliate of IPT will vote for or against the contemplated IPT/AIMCO Merger if
and when a proposal relating to such Merger is submitted to the shareholders of
IPT.

APPRAISAL RIGHTS

Neither the shareholders of AMIT nor the shareholders of IPT are entitled
to dissenters' rights of appraisal under their respective Declarations of
Trust, Bylaws or applicable state law as a result of the Merger. If the Merger
is consummated and the IPT Common Shares are listed on the ASE on the record
date for determining the IPT shareholders entitled to vote on the IPT/AIMCO
Merger, IPT shareholders (including the former AMIT shareholders) will not be
entitled to dissenters' rights of appraisal in connection with the IPT/AIMCO
Merger, if consummated as currently contemplated and described herein.

THE SPECIAL MEETING

This Proxy Statement/Prospectus is being furnished in connection with the
solicitation of proxies from the holders of AMIT Class A Shares by the AMIT
Board for use at the Special Meeting.

TIME AND PLACE; PURPOSES

The Special Meeting will be held on July 9, 1998, commencing at 9:00 a.m.,
local time, at the Beverly Hilton Hotel, 9876 Wilshire Boulevard, Beverly
Hills, California. At the Special Meeting, holders of AMIT Shares will consider
and vote to approve and adopt the Merger Proposal and the Trust Amendment
Proposal. No other business will be presented at the Special Meeting other than
those matters incidental to the conduct of the Special Meeting.

VOTING; VOTES REQUIRED FOR APPROVAL

The AMIT Board has fixed the close of business on May 13, 1998 as the AMIT
Record Date for the determination of AMIT shareholders entitled to notice of,
and to vote at, the Special Meeting and at any adjournment or postponement
thereof. Only holders of record of AMIT Shares on the AMIT Record Date are
entitled to vote at the Special Meeting. On the AMIT Record Date, there were
2,617,000 AMIT Class A Shares outstanding held by 1,186 shareholders of record
and 1,675,113 AMIT Class B Shares outstanding, all of which are held of record
by MAE.

The presence, either in person or by proxy, of the holders of a majority
of the outstanding AMIT Class A Shares and AMIT Class B Shares entitled to vote
at the Special Meeting is necessary to constitute a quorum at the Special
Meeting. The affirmative vote of the holders of a majority of the AMIT Class A
Shares and AMIT Class B Shares, voting together as a single class, is required
to approve and adopt each of the Proposals. The Trust Amendment Proposal is
conditioned upon the approval of the Merger Proposal, and will not be submitted
to the AMIT shareholders if the Merger Proposal fails. Pursuant to the terms of
the Class B Voting Proxy, AMIT, as the proxy for MAE, is required to vote all
(100%) of the AMIT Class B Shares as a unit on each of the Proposals in
accordance with the vote of a majority of the AMIT Class A Shares represented
at the Special Meeting. The AMIT Class B Shares owned by MAE represent
approximately 39% of the total voting power of AMIT.

Under the rules of the American Stock Exchange, brokers who hold AMIT
Class A Shares in "street name" for customers will not have authority to vote
such AMIT Class A Shares on whether or not to approve either of the Proposals
(so-called "broker non-votes"). Abstentions will be counted as votes cast on
any matter presented for a vote at the Special Meeting and will have the same
effect as negative votes. Because each of the Proposals requires the approval
of a specified affirmative vote of the holders of the AMIT Class A Shares and
AMIT Class B Shares outstanding on the AMIT Record Date, abstentions and
"broker non-votes" will have the same effect as votes against such proposals.

No vote of the IPT shareholders is required to approve the Merger
Agreement or the Merger.

AMIT PROXIES

If a shareholder attends the Special Meeting, such shareholder may vote by
ballot. However, many of AMIT's shareholders may be unable to attend the
Special Meeting. Therefore, the AMIT Board is soliciting proxies so that each
holder of AMIT Class A Shares on the AMIT Record Date has the opportunity to
vote on the proposals to be considered at the Special Meeting. When a proxy is
returned properly signed and dated, the AMIT Class A Shares represented thereby
will be voted according to the instructions on the proxy. If an AMIT
shareholder does not return a signed proxy, such shareholder's shares will not
be voted. Shareholders are urged to mark the boxes on the proxy to indicate how
their shares are to be voted. If an AMIT shareholder returns a signed proxy,
but does not indicate how such shareholder's shares are to be voted, the shares
represented by the proxy will be voted FOR approval of each of the Proposals.
The proxy also confers discretionary authority on the individuals appointed by
the AMIT Board and named on the proxy to vote the shares represented thereby on
any other matter that may properly arise at the Special Meeting. At the present
time, it is not anticipated that any other matters

will be brought before the Special Meeting for consideration and vote by the
AMIT shareholders, including without limitation any motion to adjourn the
Special Meeting. In the event of any motion to adjourn the Special Meeting in
order to allow AMIT to solicit additional votes in favor of the Merger
Proposal, proxies voting AGAINST the Merger Proposal will be voted against such
motion to adjourn the Special Meeting, and in the event of any motion to
adjourn the Special Meeting in order to allow AMIT to solicit additional votes
in favor of the Trust Amendment Proposal, proxies voting AGAINST the Trust
Amendment Proposal will be voted against such motion to adjourn the Special
Meeting. If, however, any other matters not now known are properly brought
before the Special Meeting, the AMIT proxy holders will vote upon the same
according to their discretion and best judgment.

Pursuant to the terms of the Class B Voting Proxy, AMIT, as proxy for MAE,
is required to vote all (100%) of the AMIT Class B Shares as a unit in
accordance with the vote of a majority of the AMIT Class A Shares represented
at the Special Meeting on each of the Proposals. See "Certain Other Agreements
- - -- Stock Option Agreement and Class B Voting Proxy."

Any AMIT shareholder who executes and returns a proxy may revoke such
proxy at any time before it is voted by (i) notifying the Secretary of AMIT, in
writing, at 340 North Westlake Boulevard, Suite 230, Westlake Village,
California 91362; (ii) granting a subsequent proxy; or (iii) appearing in
person and voting at the Special Meeting. Attendance at the Special Meeting
will not by itself constitute revocation of a proxy.

SOLICITATION

AMIT has retained Chase Mellon Shareholder Services, L.L.C. to solicit
proxies on behalf of AMIT for an aggregate fee of $4,500, plus reimbursement of
out-of-pocket expenses. AMIT will bear its own expenses in connection with the
solicitation of proxies from its shareholders, including the cost of preparing
and mailing this Proxy Statement/Prospectus. Arrangements will also be made
with custodians, nominees and fiduciaries for forwarding of proxy solicitation
materials to beneficial owners of AMIT Class A Shares held of record by such
custodians, nominees and fiduciaries, and AMIT will reimburse such custodians,
nominees and fiduciaries for reasonable expenses incurred in connection
therewith.

THE MERGER

GENERAL

Upon consummation of the Merger, AMIT will be merged with and into IPT,
with IPT being the surviving entity. The Merger will be consummated as soon as
practicable after the satisfaction or waiver of all conditions contained in the
Merger Agreement, including the approval of each of the Proposals by the
shareholders of AMIT. After the Effective Time, AMIT shareholders (excluding
MAE and LAC) will receive approximately 3,856,000 IPT Common Shares
(representing approximately 16% of the total IPT Common Shares that will be
outstanding upon consummation of the Merger) in exchange for their AMIT Class A
Shares.

Upon consummation of the Merger, Insignia and its affiliates will own
approximately 13,416,000 IPT Common Shares, representing approximately 57% of
the total outstanding IPT Common Shares (approximately 66% on fully diluted
basis assuming all OP Units are redeemed for cash or acquired by IPT in
exchange for IPT Common Shares). Thus, Insignia and its affiliates will
continue to have the ability to control the management and direction of IPT
after the Merger. However, upon the consummation of the Insignia/AIMCO Merger,
AIMCO will succeed to Insignia's interest in IPT, and will have the ability to
control IPT.

Under the terms of the Insignia/AIMCO Merger Agreement, AIMCO has agreed
to propose to acquire IPT by merger for cash after the consummation of the
Insignia/AIMCO Merger, which AIMCO currently intends to do by causing IPT to
merge into a subsidiary of AIMCO. Based on the Class A Exchange Ratio of 1.530,
upon consummation of the Merger and the IPT/AIMCO Merger, an AMIT Class A
shareholder would receive a cash amount for its IPT Common Shares received in
the Merger which would be equivalent to $20.27 per AMIT Class A Share. There
can be no assurance that either the Insignia/AIMCO Merger or the IPT/AIMCO
Merger will be consummated.

If the Insignia/AIMCO Merger is consummated, AIMCO will own a majority of
the outstanding IPT Common Shares and will have sufficient votes to approve the
IPT/AIMCO Merger without the vote of the other shareholders of IPT (including
the former AMIT shareholders). It is presently contemplated that a Proxy
Statement (if proxies are solicited) or an Information Statement (if proxies
are not solicited) with respect to the IPT/AIMCO Merger will be distributed to
IPT shareholders prior to consummation of the IPT/AIMCO Merger. IPT
shareholders will be entitled to dissenters' rights of appraisal in connection
with the IPT/AIMCO Merger if it is consummated as currently contemplated and
described herein. See "Insignia/AIMCO Transaction."

ACCOUNTING TREATMENT

IPT will account for the Merger as a purchase for accounting and financial
reporting purposes in accordance with generally accepted accounting principles.
The Merger results for financial reporting purposes in the effective purchase
of all of the AMIT Shares. Accordingly, 100% of the assets and liabilities of
AMIT will be adjusted to fair value and the results of operations of AMIT will
be included in the results of operations of IPT for periods subsequent to the
Effective Time.

FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

The following discussion is a summary of the material United States
federal income tax consequences of the Merger to the AMIT shareholders and is
not intended to be a complete discussion of all potential tax effects that
might be relevant to the Merger. Such discussion deals only with a citizen or
resident of the United States or a domestic corporation. This summary assumes
that the AMIT Shares have been held as capital assets. It may not be applicable
to certain classes of taxpayers, including, without limitation, insurance
companies, tax-exempt organizations, financial institutions, securities
dealers, broker-dealers, foreign persons and persons who hold AMIT Shares as
part of a conversion transaction. Moreover, the state, local, foreign and
estate tax consequences to AMIT shareholders of the Merger are not discussed.

This summary is based on the current provisions of the Code, laws,
regulations, rulings, practice and judicial decisions in effect at the date of
this Proxy Statement/Prospectus. However, legislative, judicial or

administrative changes or interpretations may be forthcoming that could alter
or modify the statements and conclusions set forth herein. Any such changes or
interpretations may or may not be retroactive and could affect the tax
consequences described herein to shareholders.

EACH SHAREHOLDER IS URGED TO CONSULT WITH ITS OWN TAX ADVISOR AS TO THE
PARTICULAR TAX CONSEQUENCES TO IT OF THE TRANSACTIONS DESCRIBED HEREIN,
INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS
AND OF CHANGES IN APPLICABLE TAX LAWS.

Tax Treatment of the Merger

Akin Gump, counsel to IPT, has opined that if the Merger is consummated
and the IPT/AIMCO Merger is consummated on the terms contemplated by the
Insignia/AIMCO Merger Agreement (i.e., in a cash-out merger) the following
federal income tax consequences will result:

(i) AMIT would be treated as if it sold all of its assets to IPT in a
taxable transaction. AMIT would recognize taxable gain or loss equal to the
difference between: (a) AMIT's adjusted tax basis in its assets and (b) the
fair market value of the IPT Common Shares delivered in the Merger, the
total amount of cash received by the AMIT shareholders (including cash
received in lieu of a fractional IPT Common Share and the liabilities of
AMIT at the time of the Merger). If AMIT was not deemed to be a qualified
REIT as of the Effective Time for any reason, IPT would become liable for
any tax resulting from any such gain;

(ii) the AMIT shareholders would be treated as if all of their AMIT
Shares canceled in the Merger were redeemed in a fully taxable liquidation
of AMIT. Each AMIT shareholder would recognize taxable gain or loss in an
amount equal to the difference between: (a) such holder's adjusted tax
basis in such AMIT Shares and (b) the fair market value of the IPT Common
Shares and the total amount of cash received in exchange therefor
(including cash received in lieu of a fractional IPT Common Share);

(iii) the gain or loss recognized by each AMIT shareholder would be
capital gain or loss if the AMIT Shares surrendered in the Merger are held
as capital assets as of the Effective Time;

(iv) the tax basis of the IPT Common Shares received by the AMIT
shareholders at the Effective Time would equal the fair market value of
such IPT Common Shares at the Effective Time; and

(v) the holding period of the IPT Common Shares received by the AMIT
shareholders would commence on the day after the Effective Time.

In the event that the IPT/AIMCO Merger does not occur, it is unclear
whether or not the Merger would qualify as a tax-free reorganization under
Section 368(a) of the Code. The Internal Revenue Service and the courts have
held that the continuity of interest requirement for a tax-free reorganization
is not met if the shareholders of the acquired corporation are obligated to
dispose of all of the stock of the acquiring corporation that they receive in a
merger pursuant to a binding agreement in place at the time of the merger.
However, the authorities are unclear as to whether the continuity of interest
requirement would be met if the shareholders of the acquired corporation were
obligated to dispose of the stock of the acquiring corporation at the time of
the merger but if in fact they did not dispose of the acquiring company stock
received in the merger as originally contemplated at the time of the merger. It
is arguable that in such event the continuity of interest requirement would be
met if the shareholders of the acquiring corporation in the aggregate held at
least 40 to 50% of the stock of the acquiring corporation that they received in
the merger for a sufficient period of time to establish that they maintained a
substantial proprietary interest in the acquiring corporation. Because the law
is unclear on this issue, particularly on the question of the length of the
holding period that would be necessary to establish that the shareholders of
the acquired corporation maintained a substantial proprietary interest in the
acquiring corporation, Akin Gump is unable to opine as to whether the Merger
would qualify as a taxfree reorganization if the IPT/AIMCO Merger does not
occur. In addition, no ruling from the Internal Revenue Service regarding the
federal income tax consequences of the Merger will be obtained.

If the Merger is not treated as a reorganization under the Code, Akin Gump
has opined that a Merger will have the same federal income tax consequences
described above. If the Merger is treated as a reorganization under Section
368(a) of the Code, Akin Gump has opined that the following federal income tax
consequences will result:

(i) no gain or loss will be recognized by IPT or AMIT in connection with
the Merger;

(ii) no gain or loss will be recognized by a holder of AMIT Shares upon
the exchange of such holder's AMIT Shares solely for IPT Common Shares in
the Merger except where such holder receives cash proceeds in lieu of
fractional IPT Common Shares greater than the tax basis allocable to such
holder's fractional interests;

(iii) the aggregate tax basis of the IPT Common Shares received by an
AMIT shareholder in the Merger (including any fractional share deemed
received) in exchange for AMIT Shares will be the same as the aggregate tax
basis of the shares of AMIT Shares surrendered in exchange therefor,
decreased by the amount of loss (if any) recognized by such shareholder in
the Merger and by the amount of cash received by such shareholder, and
increased by the amount of gain (if any) recognized by such shareholder in
the Merger;

(iv) the holding period of the IPT Common Shares received by an AMIT
shareholder in exchange for AMIT Shares in the Merger will include the
holding period of the AMIT Shares surrendered in exchange therefor,
provided that such AMIT Shares are held as capital assets at the Effective
Time; and

(v) a shareholder of AMIT who receives cash in lieu of a fractional IPT
Common Share will recognize gain or loss equal to the difference, if any,
between such shareholder's tax basis in the fractional share (as described
in paragraph (iii) above) and the amount of cash received. Such gain or
loss will be a capital gain or loss if the AMIT Shares are held by such
shareholder as capital assets at the Effective Time, unless the receipt of
such cash by such shareholder has the effect of a distribution of a
dividend, in which case such gain will be taxed as ordinary income to the
extent of the earnings and profits of IPT.

Tax Treatment of Amounts Received Under the Tax Agreement

Pursuant to a Tax Indemnification Agreement, dated as of July 18, 1997
(the "Tax Agreement"), made by IPT in favor of the record holders of AMIT Class
A Shares as of the Effective Time, IPT has agreed to indemnify such
shareholders for any damages incurred by such shareholder directly attributable
to such shareholder recognizing taxable gain arising from the Merger by reason
of either (a) the failure of the Merger to satisfy the "continuity of business"
requirement due to any action taken by IPT after the Effective Time, or (b) the
fact AMIT failed to qualify as "diversified" within the meaning of Section
368(a)(2)(F)(ii) of the Code. AMIT shareholders will not be entitled to any
indemnification under the Tax Agreement for a failure of the Merger to qualify
as a reorganization under the Code as a result of the IPT/AIMCO Merger or the
Insignia/AIMCO Merger Agreement. IPT believes that any amounts received by a
shareholder pursuant to the Tax Agreement would be treated as taxable income in
the year of receipt, the character of which may be capital. See "Certain Other
Agreements -- Tax Agreement." EACH SHAREHOLDER OF AMIT IS URGED TO CONSULT WITH
ITS OWN TAX ADVISOR REGARDING THE CHARACTER AND INCLUSION OF ANY AMOUNTS
RECEIVED PURSUANT TO THE TAX AGREEMENT.

EXCHANGE OF SHARE CERTIFICATES

As soon as reasonably practicable after the Effective Time, IPT will cause
First Union National Bank (the "Exchange Agent") to mail to each record holder
of AMIT Shares a letter of transmittal to be used to effect the exchange of
share certificates, along with instructions for using such letter of
transmittal to effect such exchange.

NO FRACTIONAL SHARES

No fractional IPT Common Shares will be issued. In lieu of any such
fractional shares, a shareholder otherwise entitled to a fractional IPT Common
Share will receive cash in an amount determined by

multiplying such fractional IPT Common Share amount by the IPT Share Value
(which will be $10.43 assuming no distributions are declared by AMIT or IPT
subsequent to the date hereof).

LISTING OF IPT COMMON SHARES

The currently outstanding IPT Common Shares have been approved for listing
on the ASE, subject to consummation of the Merger, under the symbol "FFO." The
IPT Common Shares to be received by the AMIT shareholders in the Merger have
also been approved for listing on the ASE, subject to official notice of
issuance, and upon consummation of the Merger such shares (other than IPT
Common Shares received by certain affiliates of IPT and AMIT) will be freely
tradable.

NO APPRAISAL RIGHTS

Neither holders of AMIT Shares nor holders of IPT Common Shares are
entitled to any dissenters' rights of appraisal with respect to the Merger
under AMIT's or IPT's respective Declaration of Trust or under applicable law
as a result of the Merger. If the Merger is consummated and the IPT Common
Shares are listed on the ASE on the record date for determining the IPT
shareholders entitled to vote on the IPT/AIMCO Merger, IPT shareholders
(including the former AMIT shareholders) will not be entitled to dissenters'
rights of appraisal in connection with the IPT/AIMCO Merger, if consummated as
currently contemplated and described herein.

FEDERAL SECURITIES LAWS CONSEQUENCES

All IPT Common Shares received or held by AMIT shareholders in connection
with the Merger will be freely transferable under the federal securities laws,
except that IPT Common Shares received or held by persons who are deemed to be
"affiliates" (as such term is defined under the Securities Act) of AMIT or IPT
prior to the Merger may be resold by them only in transactions permitted by the
resale provisions of Rule 145 promulgated under the Securities Act (or Rule 144
in the case of such persons who become affiliates of IPT) or as otherwise
permitted under the Securities Act. Persons who may be deemed to be affiliates
of IPT or AMIT generally include individuals or entities that control, are
controlled by, or are under common control with such party and may include
certain officers and trustees of such party as well as principal shareholders
of such party.

INSIGNIA/AIMCO TRANSACTION

INSIGNIA/AIMCO MERGER

On March 17, 1998, Insignia and AIMCO entered into the Insignia/AIMCO
Merger Agreement which provides for, among other things, the Insignia/AIMCO
Merger. As a result of the Insignia/AIMCO Merger, AIMCO will succeed to all of
Insignia's business regarding the ownership and management of multifamily
residential properties, including Insignia's ownership of IPT Common Shares and
OP Units and thus AIMCO will become the majority shareholder of, and control,
IPT. The consummation of the Insignia/AIMCO Merger is subject to a number of
conditions, including the approval of the stockholders of Insignia, and no
assurance can be given that the Insignia/AIMCO Merger will be consummated.

IPT/AIMCO MERGER

General. Pursuant to the terms of the Insignia/AIMCO Merger Agreement,
AIMCO has agreed to propose to acquire IPT by merger within three months of the
effective time of the Insignia/AIMCO Merger (but not earlier than August 15,
1998) at a purchase price of not less than $13.25 per IPT Common Share payable
in cash. AIMCO currently intends to effect such acquisition by causing IPT to
merge into a subsidiary of AIMCO. Based on the current Class A Exchange Ratio
of 1.530, upon consummation of the Merger and the IPT/AIMCO Merger, an AMIT
Class A shareholder will receive a cash amount for his, her or its IPT Common
Shares which would be equivalent to $20.27 per AMIT Class A Share. However,
there can be no assurance that either the Insignia/AIMCO Merger or the
IPT/AIMCO Merger will be consummated.

Conditions. Consummation of the IPT/AIMCO Merger will be subject to a
number of conditions, including consummation of the Insignia/AIMCO Merger,
negotiation of a definitive merger agreement, approval of the merger by the
board of trustees or directors of IPT and of the AIMCO subsidiary into which
IPT will merge, and approval of the merger agreement by IPT shareholders. There
can be no assurance that the IPT/AIMCO Merger will be consummated.

Shareholder Vote. The affirmative vote of holders of a majority of the
outstanding IPT Common Shares will be required to approve the IPT/AIMCO Merger.
Following consummation of the Merger and the Insignia/AIMCO Merger, AIMCO will
own a majority of the outstanding IPT Common Shares and will have the ability
to approve the IPT/AIMCO Merger without the consent of any other shareholder of
IPT (including former AMIT shareholders).

Insignia/ESG Agreement. AMIT shareholders are not third party
beneficiaries to AIMCO's obligation to propose to acquire IPT by merger
pursuant to the Insignia/AIMCO Merger Agreement. However, Insignia/ESG which
will be "spun-off" to the current stockholders of Insignia, is a party to the
Insignia/AIMCO Merger Agreement and the agreement provides that Insignia/ESG
may enforce AIMCO's obligation to propose to acquire IPT by merger.
Insignia/ESG has covenanted to AMIT and IPT that it will use its reasonable
best efforts to compel AIMCO to effect the IPT/AIMCO merger in the event that
AIMCO breaches its obligation to effect such merger pursuant to the terms of
the Insignia/AIMCO Merger Agreement. However, there can be no assurance that
Insignia/ESG would be successful in an attempt to enforce AIMCO's obligation to
effect the IPT/AIMCO Merger pursuant to the terms of the Insignia/AIMCO Merger
Agreement.

Appraisal Rights. AMIT shareholders are not entitled to dissenters'
appraisal rights in connection with the Merger, and assuming that the Merger is
consummated and the IPT Common Shares are listed on the ASE, IPT shareholders
(including the former AMIT shareholders) will not be entitled to dissenters'
appraisal rights in connection with the IPT/AIMCO Merger if it is consummated
as currently contemplated and described herein.

Proxy or Information Statement. It is currently contemplated that a Proxy
Statement (if proxies are solicited) or an Information Statement (if proxies
are not solicited) describing in detail the IPT/AIMCO Merger, will be
distributed to IPT shareholders prior to consummation of the IPT/AIMCO Merger.

THE MERGER AGREEMENT

The following is a brief summary of the material provisions of the Merger
Agreement, the full text of which is attached hereto as Annex A and
incorporated herein by reference. The following discussion is qualified in its
entirety by reference to the Merger Agreement.

EFFECTIVE TIME AND CLOSING OF THE MERGER

The Merger Agreement provides for, among other things, the merger of AMIT
with and into IPT, with IPT being the surviving entity. The Merger will become
effective upon the acceptance for record of the Articles of Merger by the State
Department of Assessments and Taxation of the State of Maryland or at such
later time as may be provided in the Articles of Merger. The closing of the
Merger will take place as soon as practicable following the satisfaction or
waiver in writing of all of the conditions precedent to the Merger, or such
later date as may be agreed upon by the parties (the "Closing Date"). As a
result of the transaction, IPT will succeed to the operations and assets of
AMIT, the separate existence of AMIT will cease and the former shareholders of
AMIT will become shareholders of IPT.

MANNER AND BASIS OF CONVERTING SHARES

Exchange Ratio; No Fractional Shares

The Class A Exchange Ratio is 1.530, and the Class B Exchange Ratio is
0.0312. Upon consummation of the Merger, each outstanding AMIT Class A Share
(other than AMIT Class A Shares held in treasury, which will be canceled) will
be converted into 1.530 IPT Common Shares, and each outstanding AMIT Class B
Share will be converted into 0.0312 IPT Common Shares.

The Exchange Ratio was determined as follows:

o Under the Merger Agreement, the AMIT Class A Shares were assigned a
base exchange value of $16.25 per share and the IPT Common Shares were
assigned a base exchange value of $10.00 per share. Those base exchange
values were the result of arm's length negotiations between the parties.
The parties were able to agree on those values based, in part, on the
fact that the base exchange value of $16.25 per AMIT Class A Share fell
within a range of values estimated by AMIT's management utilizing a
discounted cash flow analysis, and the base exchange value of $10.00 per
IPT Common Share approximated IPT management's estimate of the per share
net asset value of IPT's assets as of the same date and equaled the price
at which IPT Common Shares were sold to non-affiliated investors and IPT
and Insignia insiders in the Private Offerings.

o Pursuant to the terms of the Merger Agreement, the base IPT Common Share
exchange value (and thus the Exchange Ratio) automatically adjusts to
account for all distributions declared by AMIT subsequent to December 31,
1996 and by IPT subsequent to January 31, 1997, as follows:

(i) each such distribution declared by AMIT with respect to the AMIT
Class A Shares results in an increase in the base IPT Common Share
exchange value equal to the per share amount of such AMIT distribution
multiplied by 0.6154 (0.61544 is equal to the base IPT Common Share
exchange value of $10.00 divided by the base AMIT Class A Share exchange
value of $16.25); and

(ii) each such distribution declared by IPT with respect to the IPT
Common Shares results in a decrease in the base IPT Common Share
exchange value equal to the per share amount of such IPT distribution.

o Since those dates, AMIT has declared aggregate per AMIT Class A Share
distributions of $1.99, resulting in a corresponding increase in the base
IPT Common Share exchange value of $1.22, and IPT has declared aggregate
per IPT Common Share distributions of $.60, resulting in a corresponding
decrease in the base IPT Common Share exchange value of $.60, with the
net result being an adjusted IPT Common Share exchange value of $10.62.

o The Class A Exchange Ratio of 1.530 thus results from dividing the AMIT
Class A Share exchange value of $16.25 by the adjusted IPT Common Share
exchange value of $10.62. The adjusted Class A Exchange Ratio, assuming a
constant $10.00 IPT Common Share exchange value, effectively values each
AMIT Class A Share at $15.30 for purposes of the Merger. Because the AMIT
Class B Shares are convertible into AMIT Class A Shares at a rate of 49
to 1, the Class B Exchange Ratio of 0.0312 simply results from dividing
the Class A Exchange Ratio of 1.530 by 49.

Although neither AMIT nor IPT intends or expects to declare any additional
distributions after the date hereof with a record date prior to consummation of
the Merger, the adjusted IPT Common Share exchange value, and thus the Exchange
Ratio, is subject to further adjustment should either AMIT or IPT declare any
such distributions (in the same manner described in the second bullet point
above). Consequently, AMIT shareholders may not know the final adjusted Class A
Exchange Ratio at the time of the Special Meeting.

As of March 31, 1998, the book value per AMIT Class A Share was $17.44.
The closing price of the AMIT Class A Shares on the American Stock Exchange on
that date was $18.75. The closing price of the AMIT Class A Shares on the day
the letter of intent regarding the Merger was announced was $13.25, and the
closing price of the AMIT Class A Shares on the day the signing of the Merger
Agreement was announced was $15.125. The highest reported sales price of the
AMIT Class A Shares on the American Stock Exchange during the two years
preceding the public announcement of the Merger was $14.50, and the lowest
reported sales price during such period was $5.375.

No fractional IPT Common Shares will be issued in connection with the
Merger. In lieu of the issuance of such fractional IPT Common Shares, an AMIT
shareholder otherwise entitled to a fractional IPT Common Share will receive an
amount in cash equal to the product of such fractional IPT Common Share
multiplied by the IPT Common Share exchange value (which will be $10.62
assuming neither AMIT or IPT declares any distributions between the date of
this Proxy Statement/Prospectus and the Merger).

Exchange of AMIT Class A Shares

Promptly following the Effective Time, IPT will cause the Exchange Agent
to mail to each record holder of AMIT Shares immediately prior to the Effective
Time a letter of transmittal and other information advising such holder of the
consummation of the Merger. The transmittal forms and related information are
also intended for use by shareholders in exchanging certificates evidencing
AMIT Shares for certificates evidencing IPT Common Shares. After receipt of
such transmittal forms, each holder of certificates formerly evidencing AMIT
Shares should surrender such certificates to the Exchange Agent, and each such
holder will receive, in exchange therefor, a certificate or certificates
evidencing the number of whole IPT Common Shares to which such holder is
entitled, together with any cash which may be payable in lieu of a fractional
IPT Common Share. After the Effective Time, there will be no further
registration of transfers of AMIT Shares on the share transfer books of AMIT.
SHARE CERTIFICATES SHOULD NOT BE SURRENDERED FOR EXCHANGE BY AMIT SHAREHOLDERS
PRIOR TO THE EFFECTIVE TIME AND THE RECEIPT OF A LETTER OF TRANSMITTAL.

Rights After the Effective Time

Until such time as a holder of AMIT Shares surrenders an outstanding share
certificate to the Exchange Agent, together with the letter of transmittal, the
AMIT Shares evidenced thereby will be

deemed from and after the Effective Time to evidence solely the right to
receive a certificate representing the number of newly issued IPT Common Shares
to be issued in exchange therefor and any cash to be received in lieu of a
fractional IPT Common Share. The Exchange Agent shall not be entitled to vote
or exercise any rights of ownership with respect to the IPT Common Shares held
by it from time to time under the Merger Agreement, except that it shall
receive and hold all dividends or other distributions paid or distributed with
respect to such shares for the account of the persons entitled thereto. Upon
surrender of the certificates previously representing AMIT Shares, the holder
thereof will receive one or more certificates representing the number of IPT
Common Shares which such holder is entitled to receive, together with the
appropriate amount of cash paid in lieu of a fractional IPT Common Share. In
addition to certificates for IPT Common Shares and cash in lieu of a fractional
IPT Common Share, AMIT shareholders will also be entitled to receive the amount
of any dividends or other distributions payable to holders of record of IPT
Common Shares on or after the Effective Time with respect to their shares,
without interest thereon.

REPRESENTATIONS AND WARRANTIES

Representations and Warranties of AMIT

The Merger Agreement contains various representations and warranties of
AMIT including, among others, (i) the due organization, valid existence and
good standing of AMIT and its subsidiaries, (ii) the power and authority of
AMIT and its subsidiaries to operate their properties and conduct their
business, (iii) the capitalization of AMIT and its subsidiaries, (iv) AMIT's
authority to execute and deliver the Merger Agreement, (v) no conflicts under
AMIT's organizational documents, no required consents or approvals and no
violations of any instruments or laws, (vi) the filing with the Commission of
all required documents, (vii) the preparation of AMIT's financial statements in
accordance with generally accepted accounting principles, (viii) the absence of
certain changes or events with respect to AMIT, (ix) the absence of undisclosed
liabilities of AMIT, (x) no liability to any broker, and (xi) the
non-applicability of state takeover statutes.

Representations and Warranties of IPT and Insignia

The Merger Agreement contains various representations and warranties of
IPT and Insignia including, among others, (i) the due organization, valid
existence and good standing of IPT, IPLP, the subsidiaries of IPT and the
Controlled Partnerships (collectively, the "IPT Group"), (ii) the power and
authority of the members of the IPT Group to operate their properties and
conduct their business, (iii) the capitalization of each member of the IPT
Group, (iv) IPT's authority to execute and deliver the Merger Agreement, (v) no
conflicts under organizational documents of any member of the IPT Group, no
required consents or approvals and no violations of any instruments or laws,
(vi) the filing with the Commission of all required documents, (vii) the
preparation of IPT's financial statements in accordance with generally accepted
accounting principles, (viii) the absence of certain changes or events with
respect to the IPT Group, (ix) the absence of any material undisclosed
liabilities of the IPT Group, (x) the qualification of IPT as a REIT, (xi) no
liability to any broker, and (xii) the non-applicability of any state takeover
laws.

PRE-CLOSING COVENANTS

The Merger Agreement contains various pre-closing covenants including,
among others:

No Solicitation of Competing Transactions

During the period from the Signing Date until the consummation of the
Merger or the termination of the Merger Agreement, AMIT and its affiliates are
prohibited from, directly or indirectly, through any representative or
otherwise, soliciting or entertaining offers from, negotiating with or in any
manner encouraging, discussing, accepting, or considering any proposal of any
other person relating to the acquisition of any AMIT Shares, or the assets or
business of AMIT, in whole or in part, whether directly or indirectly, through
purchase, merger, consolidation, or otherwise (other than transactions in the

ordinary course of business). The Merger Agreement does provide, however, that
AMIT and its trustees and officers are permitted to entertain offers from,
negotiate with, or discuss, accept or consider any proposal of any person to
the extent their fiduciary duties may require. In any event, AMIT is required
to notify IPT immediately regarding any contact between AMIT or its
representatives and any other person regarding any of the foregoing.

Standstill

During the period from the Signing Date until the earlier of the
termination of the Merger Agreement or the consummation of the Merger, Insignia
and its affiliates are prohibited from, directly or indirectly, through
representatives or otherwise, (i) acquiring any additional AMIT Class A Shares
or (ii) initiating any communication with any AMIT shareholder. However,
neither Insignia nor its affiliates are restricted in any manner whatsoever
from initiating communication with any of its or their shareholders on matters
unrelated to AMIT or the Merger, regardless of whether or not its or their
shareholders are also AMIT shareholders.

Conduct of Business of AMIT Prior to the Effective Time

AMIT and its subsidiaries are prohibited from engaging in any practice,
taking any action, or entering into any transaction outside of the ordinary
course of business. Specifically, AMIT may not (i) authorize or effect any
change in its Declaration of Trust or Bylaws other than the Trust Amendment,
(ii) grant any options, warrants or other rights to purchase or obtain any AMIT
Shares or issue, sell or otherwise dispose of any of its shares, (iii) redeem,
repurchase or otherwise acquire any of its shares, (iv) issue any note, bond or
other debt security or create, incur, assume, or guarantee any indebtedness for
borrowed money or capitalized lease obligation other than in the ordinary
course of business, (v) impose or permit to exist certain liens upon any of its
assets, (vi) make any capital investment in, make any loan to, or acquire
assets or securities of any other person other than in the ordinary course of
business; provided, however that AMIT may not acquire any interest in an asset
which would otherwise fail (a) to be a "real estate asset" as defined in
Section 856(c)(6)(b) of the Code or (b) to generate income as described in
Section 856(c)(3) of the Code, (vii) make any change in employment terms of any
of its trustees, officers and employees other than in the ordinary course of
business, or (viii) commit to any of the foregoing.

Conduct of Business by IPT Prior to the Effective Time

Each member of the IPT Group is prohibited from engaging in any practice,
taking any action, or entering into any transaction outside the ordinary course
of business. Specifically, IPT may not (i) authorize or effect any change in
its Declaration of Trust or Bylaws, other than an amendment in connection with
the Merger or the private offering of IPT Common Shares to certain investors,
(ii) grant any options, warrants or other rights to purchase or obtain any of
its shares of beneficial interests or issue, sell, or otherwise dispose of any
of its shares of beneficial interests, other than (a) issuances or sales of IPT
Common Shares pursuant to the Private Offerings, (b) grants of options or other
rights to purchase or obtain IPT Common Shares pursuant to the 1997 Share
Incentive Plan, (c) issuances or sales of IPT Common Shares or OP Units
pursuant to a transaction entered into in the ordinary course of business, and
(d) issuances or sales of IPT Common Shares pursuant to the Partnership
Agreement (in each case, subject to a minimum sales or strike price of $10.00,
subject to certain adjustments), (iii) redeem, repurchase or otherwise acquire
any of its shares of beneficial interest, (iv) issue any note, bond, or other
debt security or create, incur, assume, or guarantee any indebtedness for
borrowed money or capitalized lease obligation other than Permitted Debt (as
defined in the Merger Agreement), (v) impose or permit to exist certain liens
upon any of its assets, (vi) make any capital investment in, make any loan to,
or acquire assets or the securities of any other person other than in the
ordinary course of business, (vii) make any change in employment terms for any
of its trustees, officers, and employees other than in the ordinary course of
business, or (viii) commit to any of the foregoing.

Payment of a Dividend Equal to Earnings and Profits

If necessary in order for IPT to continue to qualify as a REIT under the
Code after the consummation of the Merger, AMIT is required to declare and pay
a dividend prior to the Effective Time

in an amount equal to AMIT's accumulated earnings and profits at the Effective
Time, if any. In connection with this dividend, AMIT is required to provide to
IPT, not later than 20 days prior to the declaration of such dividend, all
documents necessary to support (to the satisfaction of IPT and IPT's counsel)
the calculation of the amount to be distributed in such dividend.

AMIT's Reporting Obligations

AMIT is obligated to provide to IPT, within ten days after the last day of
each month prior to the Closing and within two days prior to the Closing Date,
a written statement setting forth all the material terms of each loan
transaction entered into or amended since the later of January 1, 1997 or the
date of any previous statement. However, AMIT is not required to provide a
statement with respect to (i) a restructuring or refinancing of a loan
outstanding before January 1, 1997 so long as such loan was and remains secured
by a direct interest in real property or (ii) any loan (including any
restructuring or refinancing of a loan) made to any member of the IPT Group,
Insignia or any controlled affiliate of Insignia.

IPT's Reporting Obligations

IPT is obligated to provide to AMIT, within ten days after the last day of
each month prior to the Closing and within two days prior to the Closing Date,
a written statement which sets forth all of the changes to the capitalization
and ownership of the IPT Group and IPLP's ownership interest in the Controlled
Partnerships since the later of the Signing Date or the date of a previous
written statement. In addition to the written statement required by the
immediately preceding sentence, IPT is obligated to provide promptly to AMIT a
description of the material terms of any transaction which would affect such
items and in which the aggregate purchase price exceeds $500,000.

Indemnification

Under the terms of the Merger Agreement, IPT has agreed to indemnify,
defend and hold harmless each person who was, as of the Signing Date, or who
becomes prior to the Effective Time, an officer, trustee or director of AMIT or
any subsidiary of AMIT against all losses, claims, damages, costs, expenses
(including reasonable attorneys' fees and expenses), liabilities, judgments or
amounts that are paid or agreed to be paid (with the approval of IPT which
shall not be unreasonably withheld) in settlement of, or otherwise in
connection with, any threatened or actual claim, action, suit, proceeding or
investigation, whether asserted or claimed at or after the Signing Date, based
on, arising out of or pertaining to the Merger Agreement or the Merger and
which would not otherwise be an indemnifiable claim under the AMIT Declaration
of Trust, in each case to the fullest extent a corporation is permitted under
Maryland law to indemnify its own directors or officers, as the case may be,
and IPT has agreed to pay expenses in advance of the final disposition of any
such proceeding to each indemnified party to the full extent permitted by law
subject to certain limitations.

CONDITIONS TO THE MERGER

Conditions to AMIT's Obligations

The obligation of AMIT to consummate the Merger is subject to the
satisfaction or waiver in writing by AMIT of certain conditions including,
among others, (i) the receipt by AMIT of the requisite approval from its
shareholders of the Merger Proposal and the Trust Amendment Proposal, (ii) the
truth and accuracy (in all material respects) of the representations and
warranties made by IPT and Insignia in the Merger Agreement as though made on
or as of the Closing Date and the receipt by AMIT of a certificate from an
executive officer of each of IPT and Insignia to such effect, (iii) the
performance (in all material respects) by IPT of all the covenants required by
the Merger Agreement to be performed prior to or at the Closing and the receipt
by AMIT of a certificate signed by an executive officer of IPT to such effect,
(iv) the effectiveness of a registration statement on Form S-4 under the
Securities Act, (v) the receipt by AMIT of a fairness opinion from Weil, (vi)
the filing with the State Department of Assessments and Taxation of the State
of Maryland of the Articles of Merger, (vii) the non-existence of any judgment,

order, decree, stipulation, injunction or charge which prevents the
consummation of any of the transactions contemplated by the Merger Agreement,
(viii) the receipt by AMIT of an opinion of Miles & Stockbridge ("M&S"),
special Maryland counsel, as to the enforceability and validity of the Merger
Agreement under Maryland law, (ix) the receipt by AMIT of an opinion of Akin
Gump as to various matters relating to IPT and the Merger Agreement, and (x)
the receipt by IPT of an opinion of Akin Gump regarding IPT's organization and
operation as a REIT commencing with the taxable year ending December 31, 1996,
and regarding IPLP's status as a partnership for federal income tax purposes.
The Merger had also been conditioned upon the receipt by AMIT of an opinion of
Akin Gump that the Merger would qualify as a tax free reorganization under the
Code; however, due to the uncertainty of the federal income tax treatment of
the Merger as a result of the proposed IPT/AIMCO Merger, no opinion of counsel
will be given regarding the federal income tax consequences of the Merger. The
receipt of this opinion has been waived by AMIT subject to the approval of the
Proposals by the AMIT shareholders.

Conditions to IPT's Obligations

The obligation of IPT to consummate the Merger is subject to the
satisfaction or waiver in writing by IPT of certain conditions including, among
others, (i) the truth and accuracy (in all material respects) of the
representations and warranties made by AMIT in the Merger Agreement as though
made on or as of the Closing Date and the receipt by IPT of a certificate from
an executive officer of AMIT to such effect, (ii) the performance (in all
material respects) by AMIT of all the covenants required by the Merger
Agreement to be performed prior to or at the Closing and the receipt by IPT of
a certificate signed by an executive officer of AMIT to such effect, (iii) the
effectiveness of a registration statement on Form S-4 under the Securities Act,
(iv) the filing with the State Department of Assessments and Taxation of the
State of Maryland of the Articles of Merger, (v) the non-existence of any
judgment, order, decree, stipulation, injunction or charge which prevents the
consummation of any of the transactions contemplated by the Merger Agreement,
(vi) the receipt by IPT of an opinion of M&S as to the enforceability and
validity of the Merger Agreement under Maryland law, (vii) the receipt by IPT
of an opinion of Greenberg Glusker Fields Claman and Machtinger LLP ("GGFC&M"),
counsel to AMIT, as to various matters relating to AMIT and the Merger
Agreement, and (viii) the receipt by IPT of an opinion of Akin Gump regarding
IPT's organization and operation as a REIT commencing with the taxable year
ending December 31, 1996, and regarding IPLP's status as a partnership for
federal income tax purposes. IPT's obligations to consummate the Merger had
also been conditioned upon the receipt by AMIT of an opinion of Akin Gump that
the Merger would qualify as a tax free reorganization under the Code; however,
due to the uncertainty of the federal income tax treatment of the Merger as a
result of the proposed IPT/AIMCO Merger, the receipt by AMIT of this opinion
has been waived by IPT as a condition to the Merger.

TERMINATION OR AMENDMENT OF MERGER AGREEMENT

The Merger Agreement may be terminated at any time prior to the Effective
Time: (i) by mutual written consent of the AMIT Board and IPT Board; (ii) by
either AMIT or IPT, if the matters to be voted upon by such party shall not
have received the requisite approval from such party's shareholders at a
meeting (or any adjournment thereof) called for such purpose; (iii) by either
AMIT or IPT, if the Merger shall not have been consummated on or before
December 31, 1997, provided, however, that, so long as an active registration
statement on Form S-4 is on file with the Commission, the foregoing date shall
be extended automatically to the earlier of June 30, 1998 or 90 days after such
registration statement is declared effective, provided further that the party
seeking to terminate the Merger Agreement is not otherwise in material breach
of its obligations under the Merger Agreement; (iv) by IPT, if AMIT shall have
failed to comply in any material respect with any of its respective covenants
or agreements contained in the Merger Agreement; provided that, if such failure
is curable, notice of such failure shall have been given by IPT to AMIT and
AMIT shall not have cured such failure within 30 days of notice thereof; (v) by
AMIT, if IPT shall have failed to comply in any material respect with any of
its covenants or agreements contained in the Merger Agreement; provided that,
if such failure is curable, notice of such failure shall have been given by
AMIT to IPT and IPT shall not have cured such failure within 30 days of notice
thereof; or (vi) by AMIT, if IPT's funds from operations per weighted average
IPT Common

Share outstanding, for the period commencing on January 1, 1997 and ending on
the ex-dividend date of the last dividend paid by AMIT prior to the Effective
Time during the same period is less than the equivalent of the aggregate per
AMIT Class A Share dividend amount paid by AMIT.

TRUST AMENDMENT

The following is a brief summary of the material provisions of the Trust
Amendment, the full text of which is attached hereto as Annex B and
incorporated herein by reference. The following discussion is qualified in its
entirety by reference to the Trust Amendment.

AMIT's Declaration of Trust does not expressly permit AMIT to merge or
consolidate with other entities. Under California law, an amendment to AMIT's
Declaration of Trust permitting a merger or consolidation is required to
consummate the Merger. The Trust Amendment accomplishes this by making the
following significant amendments to AMIT's Declaration of Trust.

The Trust Amendment provides that AMIT may (i) sell, lease, exchange or
otherwise dispose of all or substantially all of its assets, (ii) incorporate
or merge with another entity (including real estate investment trusts and
limited partnerships), regardless of whether AMIT is the surviving entity,
(iii) consolidate with one or more entities into a new entity, and (iv)
reorganize as a new entity, in each case subject to obtaining the affirmative
approval of a majority of the members of the AMIT Board and the affirmative
approval of the holders of a majority of the outstanding AMIT Class A Shares
and AMIT Class B Shares (voting together as a single class). Such transactions
will be permitted regardless of whether the other entity or entities are
organized under the laws of the State of California and whether AMIT is the
surviving entity.

At a meeting held on November 13, 1997, the AMIT Board voted to approve
the Trust Amendment, conditioned upon the approval of the Merger Proposal by
the AMIT shareholders, and to submit the Trust Amendment Proposal to the AMIT
shareholders, also conditioned upon the approval of the Merger Proposal by the
AMIT shareholders.

THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE OUTSTANDING AMIT
CLASS A SHARES AND AMIT CLASS B SHARES, VOTING TOGETHER AS A SINGLE CLASS, IS
REQUIRED TO APPROVE THE TRUST AMENDMENT PROPOSAL, WHICH IS CONDITIONED UPON THE
APPROVAL OF THE MERGER PROPOSAL. THE TRUST AMENDMENT PROPOSAL WILL NOT BE
SUBMITTED TO THE AMIT SHAREHOLDERS IF THE MERGER PROPOSAL FAILS. THE AMIT BOARD
HAS APPROVED THE TRUST AMENDMENT AND RECOMMENDS THAT AMIT SHAREHOLDERS VOTE FOR
APPROVAL OF THE TRUST AMENDMENT PROPOSAL.

CERTAIN OTHER AGREEMENTS

Simultaneously with the execution of the Merger Agreement, Insignia and
AMIT entered into an Agreement Regarding Certain Assets (the "Asset Agreement")
and IPT executed the Tax Agreement, each of which is described below.

ASSET AGREEMENT

The Asset Agreement, among other things, (i) obligates AMIT to sell, and
Insignia to purchase, an amount of assets (not to exceed $13,000,000)
sufficient to qualify AMIT as a "diversified investment company" within the
meaning of Section 368(a)(2)(F)(ii) of the Code, and (ii) grants Insignia an
option to purchase from AMIT any additional assets (in excess of the
$13,000,000 obligation) which AMIT would need to dispose of in order to qualify
as a diversified investment company. Insignia must select the assets it will
purchase pursuant to the Asset Agreement no later than 15 days prior to the
Closing. The closing of the transactions contemplated in the Asset Agreement
will occur on the business day immediately prior to the Closing Date.

Insignia is not obligated to purchase any of AMIT's assets pursuant to the
Asset Agreement if (i) the aggregate purchase price of assets which must be
sold in order to qualify AMIT as a diversified investment

company exceeds $13,000,000 or (ii) the purchase of such assets would violate,
in the opinion of Insignia and its counsel, the "continuity of business
enterprise" requirement contained in Treasury Regulation Section 1.368-1(d)(3).
If Insignia fails to perform its obligations under the Asset Agreement, the
Merger will not be consummated, and Insignia and its affiliates will be
precluded from (i) owning or acquiring more than 9.8% (in the aggregate) of the
issued and outstanding AMIT Class A Shares, (ii) voting any AMIT Shares in any
election of AMIT trustees except in accordance with the vote of a majority of
the AMIT Class A Shares held by shareholders other than Insignia or its
affiliates, and (iii) soliciting proxies from, or presenting any proposals to,
AMIT's shareholders with respect to any matter which a majority of the AMIT
Board has not approved in advance. If the aggregate purchase price of the AMIT
assets to be sold in order to qualify AMIT as a diversified investment company
exceeds $13,000,000 and Insignia elects not to exercise its option to purchase
such assets, the Merger will not be consummated.

TAX AGREEMENT

The Tax Agreement obligates IPT to indemnify the AMIT shareholders of
record at the Effective Time from and against all actual, direct and provable
damages and losses arising from and directly relating to the recognition of
taxable gain with respect to the Merger for federal and state income tax
purposes, but only if recognition is due to a final and non-appealable
determination binding upon a shareholder of AMIT that the Merger is treated as
a taxable event with respect to the shareholders as a result of (i) the failure
of the Merger to satisfy the "continuity of business" requirement due to any
action taken by IPT after the Effective Time, or (ii) the fact that AMIT failed
to qualify as a "diversified investment company" within the meaning of Section
368(a)(2)(F)(ii) of the Code; provided, however, that IPT will not have any
indemnification obligation under clause (ii) above if any representation made
by AMIT related to AMIT's status under Section 368(a)(2)(F)(ii) of the Code is
inaccurate or determined to be inaccurate in a final and non-appealable
determination. AMIT shareholders will not be entitled to indemnification under
the terms of the Tax Agreement if the Merger fails to qualify as a
reorganization under the Code as a result of the IPT/AIMCO Merger or the
Insignia/AIMCO Merger Agreement.

Under the terms of the Tax Agreement, the indemnifiable damages (i) shall
not exceed the amount of gain to the shareholders of AMIT resulting from the
Merger multiplied by the maximum combined effective federal and state income
tax rate applicable to long or short-term capital gain, as the case may be,
plus any penalties assessed against any shareholder relating to the reporting
position that the Merger was not a taxable event; and (ii) shall take into
account any tax benefit (including the time value of money) to the shareholder
that has resulted or will result from the increased basis arising from the
recognition of gain on the Merger.

STOCK OPTION AGREEMENT AND CLASS B VOTING PROXY

MAE is the owner of all of the issued and outstanding AMIT Class B Shares,
which represent a 1% interest in the profits, losses, credits and distributions
of AMIT and currently represents approximately 39% of AMIT's total voting
shares. The AMIT Class B Shares are subject to a stock option agreement (the
"Stock Option Agreement") granting AMIT the option to purchase all of the AMIT
Class B Shares owned by MAE in April 2005 for approximately $94,000. The Stock
Option Agreement grants to AMIT the Class B Voting Proxy, pursuant to which
AMIT, as the proxy for MAE, is required to vote all (100%) of the AMIT Class B
Shares as a unit in accordance with the vote of the majority of the AMIT Class
A Shares represented at the meeting on any matter involving AMIT and Insignia,
including each of the Proposals. All of the AMIT Class B Shares will be
canceled in the Merger and, as a result, the Stock Option Agreement and Class B
Voting Proxy will terminate upon the consummation of the Merger.

EXPENSE REIMBURSEMENT AGREEMENT

In connection with the letter of intent regarding the Merger entered into
April 3, 1997 by AMIT and Insignia, AMIT and Insignia entered into an Agreement
Regarding Expenses dated April 3, 1997 (the "Expense Reimbursement Agreement"),
pursuant to which IPT has agreed to pay the following expenses incurred by AMIT
in connection with the Merger and the related transactions: (i) the legal fees
and actual expenses directly related to services of GGFC&M, counsel to AMIT;
(ii) the professional fees and actual

expenses, subject to certain limitations, directly related to services rendered
by a valuation consultant engaged by AMIT to assist in its due diligence review
of the properties owned by the Controlled Partnerships; and (iii) the
professional fees and actual expenses payable to BDO Seidman, LLP (AMIT's
accounting firm) and Weil (who rendered the fairness opinion to the AMIT
Board).

BUSINESS OF IPT

GENERAL

IPT is a Maryland real estate investment trust formed by Insignia in May
1996 primarily for the purpose of acquiring and owning interests in multifamily
residential properties, principally through ownership of limited and general
partner interests in real estate limited partnerships. IPT has been organized
and intends to operate in a manner that will qualify it to be taxed as a REIT
under the Code. Substantially all of IPT's assets are held through its
operating partnership, IPLP.

As of the date of this Proxy Statement/Prospectus, IPT holds equity
interests in and effectively controls the 127 Controlled Partnerships and owns
one whole real estate asset (a 168-unit residential apartment complex located
in Pensacola, Florida). IPT is currently structured such that IPT (or a
subsidiary thereof) owns a controlling equity interest in each entity that
comprises or controls the managing general partner of each Controlled
Partnership and will own any additional such controlling equity interests
acquired by IPT in the future, and IPLP (and its subsidiaries) own the limited
partner interests in the Controlled Partnerships and IPT's only existing whole
real estate asset and will own any additional limited partner interests in real
estate limited partnerships and whole assets acquired by IPT in the future. The
Controlled Partnerships in which IPT directly and indirectly owns a material
interest are referred to herein as the "IPT Partnerships." The IPT Partnerships
are listed on page 61 hereof. As of the date of this Proxy
Statement/Prospectus, the Controlled Partnerships own, in the aggregate, 349
properties containing approximately 73,000 residential apartment units and
approximately 5.9 million square feet of commercial space, and the IPT
Partnerships own, in the aggregate, 200 properties containing approximately
49,000 residential apartment units and approximately 3.0 million square feet of
commercial space. See "IPT Formation Transactions."

As of the date of this Proxy Statement/Prospectus, there are 19,427,760
IPT Common Shares issued and outstanding, 13,216,048 (or approximately 68%) of
which are owned by Insignia and its affiliates, and IPLP has two partners --
IPT, which is the sole general partner and owns 19,427,760 (or approximately
66%) of IPLP's outstanding OP Units; and Insignia, which is the sole limited
partner and owns 9,934,475 (or approximately 34%) of the outstanding OP Units.
The affairs of IPLP and the relations among its partners are governed by the
Partnership Agreement. Under the Partnership Agreement, Insignia is designated
as the Special Limited Partner of IPLP and, as such, possesses special rights
with respect to certain matters concerning IPLP. Limited partners of IPLP have
the right, under certain circumstances, to require IPLP to redeem their OP
Units for cash, subject, however, to certain first rights of IPT to acquire
such OP Units for IPT Common Shares. See "The Partnership Agreement of IPLP."

Under the Partnership Agreement, IPT is required to cause Insignia to be
retained to provide (i) property management services with respect to virtually
all properties currently or hereafter controlled (directly or indirectly) by
IPT and (ii) partnership administration services to certain of the partnerships
controlled by IPT. IPT, IPLP and Insignia have also entered into the
Acquisition and Disposition Services Agreement, pursuant to which IPT has
engaged Insignia to provide certain real estate and real estate securities
acquisition and disposition services to IPT and IPLP. See "The Partnership
Agreement of IPLP" and "Acquisition and Disposition Services Agreement."

THE IPT PARTNERSHIPS

The table below sets forth the following information with respect to each
of the IPT Partnerships: (i) its name; (ii) IPT's aggregate (direct and
indirect) stated ownership interest therein (taking into account both limited
and general partner interests); (iii) the number of properties owned; (iv) the
number of residential apartment units contained in the properties; and (v) the
number of square feet of commercial space contained in the properties.

IPT'S STATED
OWNERSHIP NUMBER OF RESIDENTIAL COMMERCIAL
INTEREST PROPERTIES UNITS SQUARE FEET
------------- ------------ ------------- ------------

Consolidated Capital Growth Fund(b)(c) ..................... 44.48% 4 1,647 --
Consolidated Capital Institutional Properties(c) ........... 40.50% 15 3,572 302,981
Consolidated Capital Institutional Properties/2(c) ......... 21.16% 11 856 875,541
Consolidated Capital Institutional Properties/3(c) ......... 24.50% 10 1,661 273,357
Consolidated Capital Properties III(a)(b) .................. 24.30% 4 468 72,559
Consolidated Capital Properties IV(a)(b) ................... 27.03% 17 4,258 --
Consolidated Capital Properties V(a)(b) .................... 23.73% 3 454 85,727
Consolidated Capital Properties VI(a)(b) ................... 22.23% 1 261 --
Johnstown/Consolidated Income Partners(b) .................. 20.79% 3 158 143,436
Multi-Benefit Realty Fund 87-1(b) .......................... 22.68% 3 778 --
Shelter Properties I Limited Partnership(a) ................ 39.40% 4 806 --
Shelter Properties II Limited Partnership(a) ............... 33.42% 3 853 --
Shelter Properties III Limited Partnership(a) .............. 34.03% 4 831 --
Shelter Properties IV Limited Partnership(a) ............... 32.30% 3 1,620 --
Shelter Properties V Limited Partnership(a) ................ 38.52% 7 1,944 --
Shelter Properties VI Limited Partnership(a) ............... 27.72% 6 1,456 --
Shelter Properties VII Limited Partnership(a) .............. 14.80% 2 566 --
National Property Investors III(b)(c) ...................... 45.22% 3 1,092 --
National Property Investors 4(b)(c) ........................ 61.91% 1 722 --
National Property Investors 5(b)(c) ........................ 46.63% 4 1,033 --
National Property Investors 6(b)(c) ........................ 44.40% 6 2,131 --
National Property Investors 7(b)(c) ........................ 42.55% 5 1,122 --
National Property Investors 8(b)(c) ........................ 38.46% 2 672 --
Century Properties Fund XIV(a)(b) .......................... 45.85% 3 850 --
Century Properties Fund XV(a)(b) ........................... 44.41% 2 962 --
Century Properties Fund XVI(a)(b) .......................... 36.87% 2 472 --
Century Properties Fund XVII(a)(b) ......................... 38.34% 5 1,993 --
Century Properties Fund XVIII(a)(b) ........................ 35.69% 2 724 --
Century Properties Fund XIX(a)(b) .......................... 32.98% 8 2,278 --
Century Properties Growth Fund XXII(a)(b) .................. 26.92% 9 2,895 --
Fox Strategic Housing Income Partners ...................... 15.43% 2 344 --
Davidson Growth Plus, L.P. ................................. 11.42% 3 688 --
Davidson Diversified Real Estate II, L.P. .................. 4.66% 5 1,342 160,000
Davidson Income Real Estate, L.P. .......................... 4.51% 4 580 --
HCW Pension Real Estate Fund ............................... 2.45% 2 269 104,312
Angeles Income Properties, Ltd. II ......................... 4.32% 5 780 169,168
Angeles Income Properties, Ltd. IV ......................... 7.79% 2 -- 345,287
Angeles Income Properties, Ltd. 6 .......................... 4.86% 7 1,211 278,154
Angeles Opportunity Properties, Ltd. ....................... 4.23% 2 352 --
Angeles Partners IX ........................................ 5.64% 5 1,441 --
Angeles Partners XII ....................................... 4.41% 10 2,855 173,473
Woodhaven Associates, L.P. ................................. 35.36% 1 208 --

- - ----------
(a) Indicates that (i) the stated interest of the general partner with
respect to distributions of net sales and refinancings proceeds are
subordinated to priority returns of and on limited partner
investments, or (ii) the general partner is required to restore
distributions received on account of their stated interests in the
event the limited partners fail to receive distributions in an
aggregate amount equal to their aggregate original investment. IPT
believes, based on current real estate values, that these limited
partner priorities would not be achieved and thus IPT has valued the
stated general partner interest in such partnership at zero.

(b) Indicates that the general partner has an additional interest in the
partnership (e.g., "incentive fees") which effectively entitles it
to participate in the results of operations in fixed percentages
beyond the stated interest of the general partner. With respect to
each National Property Investors partnership, there is a maximum
annual amount the general partner may receive in respect of such
additional fixed-percentage interest.

(c) Indicates that the interest of the general partner in distributions
of net proceeds from property sales and refinancings is generally
greater than its stated interest in the partnership, assuming the
limited partners have recovered their investments and stated returns
thereon. In addition, certain partnerships allocate a portion of the
sales proceeds to the general partner as a non-subordinated
disposition fee. Based on the terms of the applicable partnership
agreements and estimated current property values, IPT believes that
the general partner would be allocated a greater portion of net
sales or refinancing proceeds than their stated interest would
indicate.

BUSINESS OBJECTIVES

IPT's primary business objective is to acquire interests in multifamily
residential properties located in the United States, including through (i)
direct ownership of such properties; (ii) indirect ownership of properties
through investments in limited partnerships, joint ventures or other entities
owning such properties; and (iii) indebtedness secured by such properties. IPT
seeks to engage in transactions that will enhance the value of such interests
and that IPT's management believes ultimately will provide superior returns to
the shareholders of IPT and the limited partners of IPLP. Accordingly, IPT will
seek to acquire multifamily residential property interests at prices that it
considers favorable in light of its assessment of the value of the underlying
properties in which it will invest. Once such interests are acquired, IPT will
take such action as it deems appropriate to enhance the potential return on its
investment in such interests. In connection with these objectives, IPT intends
to utilize the significant experience of Insignia in managing and, during the
term of the Acquisition and Disposition Services Agreement, in acquiring the
multifamily residential properties or interests in multifamily residential
properties described above.

IPT believes that there continues to be attractive opportunities to
acquire interests in multifamily residential properties. IPT anticipates that
it will seek to acquire additional interests in certain IPT Partnerships to the
extent such interests become available at prices that IPT considers favorable
in light of its assessment of the value of the underlying properties. IPT also
intends to pursue opportunities to acquire multifamily real estate assets or
interests in such real estate assets from other sources, either through the
acquisition of general and limited partner interests in partnerships that hold
such assets, direct or indirect investments in fee interests, or investments in
debt secured by such real estate assets.

IPT will seek to enhance the value of its real estate portfolio in a
variety of ways, which could include: (i) arranging for the underlying
properties in which it holds an interest to be managed by Insignia and/or its
property management affiliates with a view to achieving material increases in
funds from operations and distributable cash flow, and (ii) realizing economies
of scale through mergers or consolidations of partnerships (and other entities)
in which IPT has invested, or combinations of such partnerships (and other
entities) with other issuers.

In addition to its interests in multifamily residential property, IPT, as
a result of the Merger, will acquire AMIT's assets which primarily consist of
loans secured by mortgages and other real estate related interests. IPT intends
to manage the loan portfolio of AMIT substantially in accordance with the past
practices of AMIT and will retain Ronald J. Consiglio and Anna Merguerian, the
current executive officers of AMIT, to work for IPT primarily on the loan
portfolio. Although IPT has no present intentions to originate any new loans,
it may do so in the future depending upon the capital resources of IPT and the
relative anticipated returns on such investments.

Also, although it has no current plans to do so, IPT may seek to develop
real estate and engage in transactions with respect to such development that
are consistent with IPT's investment policies and that IPT believes will
enhance the value of such properties.

ACQUISITION STRATEGIES

IPT's primary strategies with respect to its acquisition of interests in
multifamily residential properties will be to:

o acquire additional general partner interests in other limited
partnerships (and controlling interests in other types of entities) that
own as a material portion of their holdings multifamily residential
properties;

o purchase other direct and indirect interests in multifamily residential
properties, including direct and indirect fee interests;

o invest in debt secured by mortgages and other real estate-related
interests. In this regard IPT intends to manage the current portfolio of
AMIT mortgages after the consummation of the Merger in accordance with
the past practices of AMIT. Although IPT has no current plans to invest
in other debt secured by mortgages or real estate-related interests
following the Merger, it may do so depending on the capital resources of
IPT and the relative anticipated returns on such investments; and

o possibly acquire additional limited partner interests in the Controlled
Partnerships, including the IPT Partnerships.

In making decisions whether to acquire interests in particular real
properties, IPT will consider the real estate and capital market conditions
existing from time to time. In addition, IPT expects to consider such factors
as: (i) the recent sales prices (if any) of such interests in relation to IPT's
estimate of the value of the underlying real estate assets; (ii) the geographic
area, type of property and demographic profile of the underlying properties;
(iii) the location, construction quality, condition and design of such
properties; (iv) the current and anticipated cash flow of such properties and
its adequacy to meet operational needs; (v) the potential for capital
appreciation, if any; (vi) the growth, tax and regulatory environments of the
communities in which such properties are located; and (vii) the impact of such
investment on IPT's ability to maintain its REIT status. Finally, with respect
to potential investments in interests of any limited partnership, in deciding
whether to acquire such limited partner interests, IPT expects to consider
whether it has acquired, or can reasonably expect in the future to acquire,
ownership or control of the general partner of such limited partnership.

Additionally, under the terms of the Acquisition and Disposition Services
Agreement, IPT is required to inform Insignia of certain opportunities to
invest in commercial properties and may not invest in such properties without
the prior consent of Insignia. See "Acquisition and Disposition Services
Agreement -- Agreement Regarding Certain Real Estate Opportunities."

OPERATING STRATEGIES

Once interests in multifamily residential properties have been acquired
(including those in the Controlled Partnerships previously acquired), IPT has
broad powers to take such actions as the IPT Board deems necessary to enhance
returns on its investments in such interests.

As required by the Partnership Agreement, IPT intends to retain Insignia
to manage all of the real properties controlled by IPT. Historically, upon the
acquisition of limited partner interests in a real estate limited partnership
in which Insignia or MAE controlled the general partner, Insignia has continued
its strategy of working to increase the value of, and cash flow generated by,
such partnership's assets. IPT believes that Insignia's property management
capabilities contribute significantly to the potential benefit of owning
interests in real estate limited partnerships. IPT believes that Insignia has
been able to manage such partnerships at a net cost to the partnerships that is
lower than that charged by predecessor managers, and has traditionally achieved
improvements in property operations compared to the predecessor managers.

IPT expects that the general partners of each of the Controlled
Partnerships, and of any other real estate limited partnerships in which IPT
may acquire interests, will seek and review opportunities to engage in
transactions which may enhance returns to the partnership's limited partners.
In that regard,

IPT expects that the general partners will carefully consider any suggestions
or proposals that IPT may make. IPT believes that possible future transactions
which may be proposed to the general partner of a limited partnership include
(i) payment of distributions, (ii) refinancing, reducing or increasing existing
indebtedness of the limited partnership, (iii) sales of assets, individually or
as part of a complete liquidation of the limited partnership and (iv) mergers
or other consolidation transactions involving the limited partnership. Any such
merger or consolidation transaction could involve other limited partnerships in
which IPT, Insignia or their respective affiliates serve as general partner, or
a combination of the partnership with one or more existing, publicly traded
entities (including, possibly, affiliates of IPT or Insignia). In any such
merger or consolidation, limited partners might receive cash, IPT Common
Shares, OP Units or other securities or consideration. There can be no
assurance, however, as to when or whether any of the transactions referred to
above might occur. A merger or other consolidation transaction and certain
kinds of other extraordinary transactions would require a vote of the limited
partners in the subject limited partnership, and by holding a substantial
number of units of limited partner interests in the partnership, IPT, as
general partner of IPLP, will be able to influence (and in some instances may
be able to control) the outcome of such a vote.

INVESTMENT POLICIES

IPT expects to invest primarily in multifamily residential real estate
located in the United States. Such investments will be made not only through
the acquisition of general and limited partner interests in limited
partnerships, but also through acquisitions of direct and indirect fee
interests. Although it has no current plans to do so, IPT may also invest in
debt secured by mortgages and other real estate-related interests. IPT has no
present intention to invest in commercial real estate except to the extent the
Controlled Partnerships currently own commercial property and any commercial
properties that may be acquired incidentally to the acquisition of multifamily
residential portfolios. In addition, although it has no current intention to do
so, IPT has the authority to invest in real estate interests outside of the
United States.

Subject to the percentage ownership limitations and gross income and asset
tests which must be satisfied to qualify as a REIT (See "Federal Income Tax
Considerations--Taxation of IPT"), IPT may in the future acquire all or
substantially all of the securities or assets of other REITs, management
companies or similar entities where such investments would be consistent with
IPT's investment policies.

Subject to the REIT qualification requirements, there is no limitation on
the percentage of IPT's total assets that may be invested in any one
investment. The IPT Board may establish such limitations as it deems
appropriate from time to time without a vote of the shareholders. No limits
have been set on the number of limited partnerships in which IPT will seek to
invest, or on the concentration of investment in any one limited partnership or
in any geographic area.

IPT may invest its cash in certain short-term investment grade
instruments. Such investments may be in interest-bearing bank accounts,
certificates of deposit, money-market securities, United States government
securities, mortgage-backed securities guaranteed by the Government National
Mortgage Association, mortgages insured by the Federal Housing Administration
or guaranteed by the Veterans Administration, mortgage loans, mortgage loan
participations and certain other similar investments. IPT's ability to make
certain of these investments may be limited by tax considerations.

IPT may, but does not presently intend to, make investments other than as
previously described. IPT has the authority to offer IPT Common Shares or other
senior securities in exchange for property and to repurchase or otherwise
reacquire IPT Common Shares or any other securities, and may engage in such
activities in the future. In addition, IPT may cause IPLP to offer OP Units in
exchange for property. IPT has not made any loans to other entities or persons,
including trustees and officers of IPT, although it may do so in the future,
including investments in debt instruments as described above. In addition, IPT
may make loans secured by real estate, including without limitation loans to
the Controlled Partnerships. At all times, IPT intends to make investments in
such a manner as to be consistent with the requirements of the Code to qualify
as a REIT unless, in light of changed circumstances, the IPT Board determines
that it is no longer in the best interests of IPT and its shareholders to
qualify as a REIT.

FINANCING POLICIES

In the second and third quarters of 1997, IPT raised approximately $62
million in the Private Offerings. Additionally, IPLP has obtained the IPT Line
of Credit, in the principal amount of $50 million. See "IPT Line of Credit."

In the future, IPT may raise capital through public offerings or private
placements of its equity and debt securities. IPT may determine to finance
acquisitions through the issuance of its own securities or through the issuance
of OP Units to the selling entities, if such transactions otherwise satisfy
IPT's investment criteria. IPT also has the authority to repurchase or
otherwise reacquire IPT Common Shares or any other securities and may determine
to do so in the future.

IPT may incur indebtedness when, in the opinion of the IPT Board, it is
advisable to do so. IPT may, from time to time, negotiate additional lines of
credit or arrange for other short-term borrowings from banks or elsewhere. IPT
may also arrange for long-term borrowings from banks or other institutional
investors, or through a public offering of debt securities. Such borrowings may
be for general corporate purposes, to improve or expand existing investments,
to make additional investments or to fund any shortfall of cash necessary to
meet its REIT cash distribution requirements that could arise if its taxable
income exceeds its cash available for distribution. IPT's Declaration of Trust
and other corporate governance documents impose no limit on the amount of
indebtedness that IPT may incur.

Although IPT has no present intention to issue senior equity securities,
its Declaration of Trust authorizes the IPT Board to issue up to 100,000,000
Preferred Shares in series having such preferences, voting powers and other
rights as the IPT Board may determine, and IPT may in the future issue senior
securities to fund property acquisitions or in connection with a merger or
other business acquisition or for any other corporate purposes.

CONFLICT OF INTEREST POLICIES

IPT has adopted certain policies designed to minimize potential conflicts
of interest. The IPT Board is subject to certain provisions of Maryland law
described below, which are designed to eliminate or minimize certain potential
conflicts of interest. However, there can be no assurance that these policies
always will be successful in eliminating the influence of such conflicts, and
if they are not successful, decisions could be made that might fail to reflect
fully the interests of all shareholders of IPT.

IPT's Declaration of Trust authorizes IPT to enter into transactions,
agreements or other arrangements with any person or business entity even though
one or more trustees or officers of IPT may be a party to such agreement or an
officer, director, shareholder, partner, member, trustee or affiliate of such
other party, and no such agreement or transaction is void or voidable solely by
reason of the existence of any such relationship, if either (i) the existence
of such relationship is disclosed or known by (A) the IPT Board and the
agreement or transaction is approved by a majority of the disinterested members
of the IPT Board, or (B) the shareholders of IPT, and the agreement or
transaction is approved by a majority of the shareholders entitled to vote
other than the interested trustee or other party, or (ii) the agreement or
transaction is fair to IPT.

Additionally, under IPT's Declaration of Trust, each trustee of IPT is
required to discharge his duties in good faith, with the care an ordinarily
prudent person in a like position would exercise under similar circumstances
and in a manner he reasonably believes to be in the best interest of IPT.

POLICIES WITH RESPECT TO OTHER ACTIVITIES

IPT has authority to offer its shares of beneficial interest or other
equity or debt securities in exchange for property and to repurchase or
otherwise reacquire its shares of beneficial interest or any other securities
and may engage in such activities in the future. Similarly, IPT may cause IPLP
to offer OP Units in exchange for cash or other property. IPT also may make
loans to IPLP. As described under "Shares Available for Future Sale" and "The
Partnership Agreement of IPLP--Redemption Rights," IPT may (but is not
obligated to) issue IPT Common Shares to holders of OP Units upon exercise of
their redemption rights, subject to certain restrictions and limitations. IPT
has not made loans to any entities

or persons, including its officers and trustees. IPT has not engaged in
underwriting or agency distribution of the securities of other issuers and does
not intend to do so. IPT makes and intends to continue to make investments in
such a way that it will not be treated as an investment company under the
Investment Company Act.

IPT intends to make investments in a manner consistent with the
requirements of the Code for IPT to qualify as a REIT unless, because of
changing circumstances or changes in the Code (or in treasury regulations
promulgated thereunder), the IPT Board determines that it is no longer in the
best interests of IPT to qualify as a REIT.

IPT's policies with respect to such activities may be reviewed and
modified from time to time by the IPT Board without the vote of the
shareholders of IPT.

PROPERTIES

The following is a summary of certain information with respect to the
properties owned by the IPT Partnerships.

PROPERTIES

The following table sets forth the number of properties, the primary use
and units, the average annual rental rate and average occupancy for each IPT
Partnership as of December 31, 1997.

AVERAGE
NUMBER OF RENTAL ANNUAL AVERAGE
NAME OF PARTNERSHIP PROPERTIES PRIMARY USE/UNITS RATES/PER UNIT 1997 OCCUPANCY
- - --------------------------------------------- ------------ -------------------------------- --------------------- ----------

Consolidated Capital Growth Fund ............ 4 Apartment/1,647 units $7,124/unit 92.3%
Consolidated Capital Institutional .......... 15(b) 12.5 Apartment/3,556 units $7,466/unit 91.7%
Properties(a) .............................. 2.5 Commercial/320,764 sq. ft. $13.87/sq. ft. 80.3%
Consolidated Capital Institutional .......... 11 4 Apartment/856 units $7,736/unit 93.2%
Properties/2(c) ............................ 7 Commercial/882,985 sq. ft. $14.58 sq. ft. 92.8%
Consolidated Capital Institutional .......... 10 8 Apartment/1,661 units $7,851/unit 94.9%
Properties/3 ............................... 2 Commercial/277,000 sq. ft. $6.26 sq. ft. 92.9%
Consolidated Capital Properties III ......... 4 3 Apartment/468 units $10.81/sq. ft. 94.0%
1 Commercial/79,000 sq. ft. $6,160/unit 93.6%
Consolidated Capital Properties IV .......... 17(d) Apartment/4,259 units $6,816/unit 94.0%
Consolidated Capital Properties V ........... 3 2 Apartment/454 units $7,211/unit 94.6%
1 Commercial/85,727 sq. ft. $14.74/sq. ft. 95.0%
Consolidated Capital Properties VI .......... 1 Apartment/261 units $6,517/unit 88.0%
Shelter Properties I Limited Partnership..... 4 Apartment/806 units $6,357/unit 94.3%
Shelter Properties II Limited Partnership.... 3 Apartment/853 units $6,650/unit 94.6%
Shelter Properties III Limited Partnership... 4 Apartment/830 units $6,754/unit 92.6%
Shelter Properties IV Limited Partnership.... 3 Apartment/1,620 units $7,014/unit 94.6%
Shelter Properties V Limited Partnership..... 7 Apartment/1,944 units $7,083/unit 93.1%
Shelter Properties VI Limited Partnership.... 6 Apartment/1,457 units $7,093/unit 93.9%
Shelter Properties VII Limited Partnership... 2 Apartment/566 units $6,922/unit 91.7%
National Property Investors III ............. 3 Apartment/1,092 units(e) $7,852/unit 96.2%
National Property Investors 4 ............... 1 Apartment/722 units $9,136/unit 95.2%
National Property Investors 5 ............... 3.24(f) Apartment/1,033 units $5,485/unit 91.7%
National Property Investors 6 ............... 6.76(g) Apartment/2,129 units $6,316/unit 90.8%
National Property Investors 7 ............... 5 Apartment/1,122 units $6,746/unit 93.1%
National Property Investors 8 ............... 2 Apartment/672 units $7,123/unit 91.9%

AVERAGE
NUMBER OF RENTAL ANNUAL AVERAGE
NAME OF PARTNERSHIP PROPERTIES PRIMARY USE/UNITS RATES/PER UNIT 1997 OCCUPANCY
- - ----------------------------------------- ------------ ------------------------------ --------------------- ----------

Century Properties Fund XIV ............. 3 3 Apartment/850 units $6,970/unit 93.3%
Century Properties Fund XV .............. 2 2 Apartment/962 units $7,898/unit 94.5%
Century Properties Fund XVI ............. 2 Apartment/472 units $6,232/unit 95.2%
Century Properties Fund XVII ............ 5 Apartment/1,993 units $6,548/unit 95.2%
Century Properties Fund XVIII ........... 2 Apartment/724 units $6,349/unit 94.7%
Century Properties Fund XIX ............. 8 Apartment/2,278 units $7,297/unit 91.9%
Century Properties Growth Fund XXII...... 9 Apartment/2,895 units $7,438/unit 93.2%
Johnstown/Consolidated Income Partners... 3 (h) 1 Apartment/158 units $5,858/unit 97.0%
2 Commercial/144,094 sq. ft. $9.38/sq. ft. 81.0%
Davidson Growth Plus, L.P. .............. 3 Apartment/688 units(i) $7,794/unit 93.1%
Multi-Benefit Realty Fund '87-1 ......... 3 Apartment/778 units $6,571/unit 92.7%
Fox Strategic Housing Income Partners.... 2 Apartment/344 units $9,154/unit 93.0%
DavidsonDiversified RealEstate II, L.L.P. 5 4 Apartments/1,341 units $6,025/unit 90.2%
1 Commercial/129,000 sq. ft. $8.93/sq. ft. 71.0%
Angeles Income Properties, Ltd. II ...... 4 (j) 3 Apartments/780 units $8,162/unit 96.6%
1 Commercial/169,168 sq. ft. $4.46/sq. ft. 91.0%
Angeles Income Properties Ltd. IV ....... 2 2 Commercial/347,000 sq. ft. $9.48/sq. ft. 90.5%
Angeles Income Properties Ltd. 6 ........ 7 5 Residential/1,209 units $4,872/unit 91.9%
2 Commercial/251,000 sq. ft. $6.19/sq. ft. 84.4%
Angeles Opportunity Properties, Ltd...... 2 2 Apartments/352 units $6,563/unit 97.7%
Angeles Partners IX ..................... 5 5 Apartments/1,441 units $5,482/unit 91.7%
7
Angeles Partners XII .................... 10 (k) 9 Apartments/2,855 units $7,383 unit 89.2%
1 Commercial/103,473 sq. ft. $11.40/sq. ft. 53.0%
Davidson Income Real Estate, Ltd. ....... 4 4 Apartments/900 units(i) $8,500/unit 92.4%
HCW Pension Real Estate Fund L.P. ....... 2 1 Apartment/269 units $7,751/unit 84.0%
1 Commercial/102,000 sq. ft. $13.80/sq. ft. 74.0%
Woodhaven Associates, L.P. .............. 1 Apartment/208 units $6,082/unit 94.4%

- - ----------
(a) Includes properties owned by Consolidated Capital Equity Properties,
L.P. ("CCEP") in which Consolidated capital Institutional Properties
has a beneficial ownership interest as a result of its ownership of
a significant amount of CCEP's debt securities.

(b) One property includes both commercial and residential space.

(c) Includes properties owned by Consolidated Capital Equity
Properties/Two, L.P. ("CCEP2") in which Consolidated Capital
Institutional Properties/2 has a beneficial ownership interest as a
result of its ownership of a significant amount of CCEP2's debt
securities.

(d) The partnership originally acquired 48 properties. Of which 11 were
sold, ten were conveyed to lenders in lieu of foreclosure, and nine
were foreclosed upon by the lenders in the fiscal years prior to
1996. In February of 1996, the partnership lost an additional
property through foreclosure. As of December 31, 1997, the
partnership owned 17 apartment complexes and held one note
receivable on a sold property.

(e) In January 1997, the partnership acquired co-tenant's 10% interest
in 304 of the 1,092 units for $50,000.

(f) The partnership is a tenant in common with National Property
Investors 6 on a property consisting of 576 units; 138 units
represents the partnership's pro rata share.

(g) The partnership is a tenant in common with National Property
Investors 5 on a property consisting of 576 units; 438 units
represent the partnership's pro-rata share; the partnership owns
75.972% subject to a first mortgage.

(h) The partnership originally acquired four properties and funded five
loans. At December 31, 1997, the partnership owned three properties.

(i) One apartment property (320 units) is held through a joint venture
82.5% owned by Davidson Growth Plus, L.P. and 17.5% owned by
Davidson Income Real Estate, Ltd.

(j) Does not include a 14.4% interest in a golf course held by the
partnership.

(k) Does not include a 44.5% interest in a golf course held by the
partnership.

TAXES/DEPRECIATION

The following table sets forth the aggregate gross carrying value, the
aggregate accumulated depreciation, the range and method of depreciation, and
the aggregate federal tax basis of the properties owned by the IPT Partnerships
as of December 31, 1997 (all in thousands) and the aggregate 1997 taxes and tax
rate paid by the IPT Partnerships.

AGGREGATE AGGREGATE
GROSS AGGREGATE FEDERAL AGGREGATE 1997
CARRYING ACCUMULATED RANGE OF TAX 1997 TAX
PARTNERSHIP VALUE DEPRECIATION DEPRECIATION METHOD BASIS TAXES RATE
- - ----------------------------------------- ----------- -------------- -------------- -------- ---------- ----------- ----------

Consolidated Capital Growth Fund ........ $ 42,258 $22,630 5-19 yrs. S/L $23,838 $ 587 1.20%
5-22 yrs.
Consolidated Capital Institutional
Properties ............................. 143,150 80,760 3-18 yrs. S/L 67,337 1,663 2.67%
5-25 yrs.
Consolidated Capital Institutional
Properties/2 ........................... 99,369 59,501 1-20 yrs. S/L 51,694 1,196 2.37%
3-20 yrs.
Consolidated Capital Institutional
Properties/3 ........................... 63,326 15,474 3-20 yrs. S/L 56,544 860 1.37%
5-25 yrs.
Consolidated Capital Properties III ..... 14,209 9,624 3-15 yrs. S/L 8,259 215 1.72%
5-19 yrs.
Consolidated Capital Properties IV ...... 130,653 98,490 5-15 yrs. S/L 36,698 1,900 1.81%
5-40 yrs.
Consolidated Capital Properties V ....... 20,993 14,057 5-19 yrs. S/L 9,074 460 5.08%
ConsolidatedCapitalProperties IV ........ 9,866 3,641 5-30 yrs. S/L 5,558 113 4.42%
Shelter Properties I Limited
Partnership ............................ 19,927 13,590 5-30 yrs. S/L 7,574 238 2.27%
5-37 yrs.
Shelter Properties II Limited
Partnership ............................ 24,806 15,996 5-35 yrs. S/L 5,263 400 2.49%
5-38 yrs.
Shelter Properties III Limited
Partnership ............................ 25,880 14,229 5-36 yrs. S/L 3,842 346 8.56%
5-32 yrs.
Shelter Properties IV Limited
Partnership ............................ 59,996 32,269 5-30 yrs. S/L 7,981 777 1.86%
5-36 yrs.
Shelter Properties V Limited
Partnership ............................ 75,253 40,464 5-27 yrs. S/L 13,006 806 2.02%
5-34 yrs.
Shelter Properties VI Limited
Partnership ............................ 52,209 24,751 5-27 yrs. S/L 16,536 912 2.37%
5-35 yrs.
Shelter Properties VII Limited
Partnership ............................ 21,447 9,906 5-29 yrs. S/L 9,974 181 4.24%
5-39 yrs.
National Property Investors III ......... 35,484 23,509 5-27.5 yrs. S/L 11,916 684 4.02%
National Property Investors 4 ........... 26,047 17,946 5-27.5 yrs. S/L 3,809 467 4.32%
National Property Investors 5 ........... 29,093 20,711 5-27.5 yrs. S/L 4,161 233 2.13%
National Property Investors 6 ........... 64,370 41,579 5-27.5 yrs. S/L 15,384 454 3.35%
National Property Investors 7 ........... 45,426 24,079 5-27.5 yrs. S/L 12,938 380 1.64%
National Property Investors 8 ........... 30,036 15,084 5-27 yrs. S/L 12,921 451 4.07%
5-29 yrs.
Century Properties Fund XIV ............. 26,659 14,074 5-30 yrs. S/L 7,524 306 2.06%
Century Properties Fund XV .............. 39,884 18,559 5-30 yrs. S/L 19,480 735 2.70%

AGGREGATE AGGREGATE
GROSS AGGREGATE FEDERAL AGGREGATE 1997
CARRYING ACCUMULATED RANGE OF TAX 1997 TAX
PARTNERSHIP VALUE DEPRECIATION DEPRECIATION METHOD BASIS TAXES RATE
- - ---------------------------------------- ---------- -------------- -------------- -------- ----------- ----------- ----------

Century Properties XVI ................. 14,947 7,303 5-30 yrs. S/L 2,452 246 2.76%
Century Properties XVII ................ 66,141 30,323 5-30 yrs. S/L 14,022 761 3.45%
Century Properties XVIII ............... 26,859 9,777 5-30 yrs. S/L 8,581 473 2.09%
Century Properties XIX ................. 95,841 40,016 5-30 yrs. S/L 26,644 1,136 1.95%
Century Properties Growth Fund
XXII .................................. 130,980 52,090 5-30 yrs. S/L 48,019 1,647 2.20%
Johnstown/Consolidated Income
Partners .............................. 13,092 6,193 5-19 yrs. S/L 7,629 162 2.17%
5-28 yrs.
Davidson Growth Plus, L.P. ............. 23,756 9,160 5-25 yrs. S/L 21,165 448 2.69%
Multi-Benefit Realty Fund '87-1 ........ 23,943 10,913 5-30 yrs. S/L 16,121 343 3.51%
Fox Strategic Housing Income ........... 21,364 6,416 5-30 yrs. S/L 14,633 271 4.29%
Davidson Diversified Real Estate
II, L.P. .............................. 44,544 21,263 5-25 yrs. S/L 17,260 741 3.36%
Angeles Income Partners, Ltd. II ....... 35,800 24,462 5-20 yrs. S/L 8,026 560 2.40%
Angeles Income Properties, Ltd. IV ..... 23,368 12,569 5-20 yrs. S/L 14,515 190 1.39%
Angeles Income Properties, Ltd. 6 ...... 36,223 8,650 5-40 yrs. S/L 35,166 821 3.69%
Angeles Opportunity Partners, Ltd. ..... 8,294 1,914 5-40 yrs. S/L 7,134 224 2.84%
Angeles Partners IX .................... 36,860 22,719 5-19 yrs. S/L 16,797 409 3.56%
5-25 yrs.
Angeles Partners XII ................... 100,619 60,629 5-40 yrs. S/L 38,099 2,156 3.10%
Davidson Income Real Estate, L.P. ...... 24,287 10,149 5-25 yrs. S/L 17,796 424 2.63%
HCW Pension Real Estate Fund ........... 15,391 4,892 5-25 yrs. S/L 11,832 397 9.61%
5-40 yrs.
Woodhaven Associates, L.P. ............. 5,288 3,162 5-30 yrs. S/L 552 81 1.36%

MORTGAGES

The following table sets forth the aggregate principal balance outstanding
on the mortgages of each IPT Partnership, the range of interest on and
maturities of such mortgages and the aggregate balance due at maturity as of
December 31, 1997.

AGGREGATE PRINCIPAL AGGREGATE BALANCE
PARTNERSHIP OUTSTANDING RANGE OF INTEREST MATURITIES DUE AT MATURITY
- - ------------------------------------ --------------------- ---------------------- ----------------- ------------------

Consolidated Capital Growth Fund ... $30,690 6.95-7.33% 11/03; 12/05 $30,690
Consolidated Capital Institutional . 27,581 6.95 % 12/05 24,200
Properties
Consolidated Capital Institutional . 32,905 7.33-9.88% 06/00; 11/03 31,528
Properties/2
Consolidated Capital Institutional . 30,525 6.95-7.33% 11/93; 12/05 30,525
Properties/3
Consolidated Capital Properties III 4,200 7.33 % 11/03 4,200
Consolidated Capital Properties IV . 71,191 6.95-10.50% 12/98; 12/05 69,071
Consolidated Capital Properties V .. 11,145 7.33-9.125% 10/03; 06/04 10,018
Consolidated Capital Properties VI . 4,407 9.50 % 05/01 4,512
Shelter Properties I Limited
Partnership ....................... 11,470 7.33-7.60% 11/02; 11/03 10,888
Shelter Properties II Limited
Partnership ....................... 8,549 7.60 % 11/02 7,370
Shelter Properties III Limited
Partnership ....................... 8,276 7.60-7.83% 11/02; 10/03 7,228
Shelter Properties IV Limited
Partnership ....................... 24,067 7.60 % 11/02 20,669
Shelter Properties V Limited
Partnership ....................... 31,513 7.33-10.375% 02/99; 12/16 23,787
Shelter Properties VI Limited
Partnership ....................... 26,790 7.60 % 11/02 23,008
Shelter Properties VII Limited
Partnership ....................... 11,116 7.50-7.83% 03/01; 10/03 10,287
National Property Investors III .... 24,414 7.13-9.87% 07/01; 01/08(a) 23,602
National Property Investors 4 ...... 19,300 7.33 % 11/01/03 19,300
National Property Investors 5 ...... 11,704 8.50%-9.00% 02/01; 07/03 10,658
National Property Investors 6 ...... 26,135 7.33 % 11/03 26,135
National Property Investors 7 ...... 20,284 7.33%-8.56% 02/01; 11/03 20,157
National Property Investors 8 ...... 10,924 7.33%-9.85% 02/02; 11/03 10,611
Century Properties Fund XIV ........ 16,067 9.88 % 07/01 15,551
Century Properties Fund XV ......... 19,023 7.33-9.6 % 07/01; 11/03 18,529
Century Properties Fund XVI ........ 7,422 7.88 % 01/06 6,618
Century Properties Fund XVII ....... 37,334 7.875-8.630%(b) 07/99; 07/05 39,574
Century Properties Fund XVIII ...... 18,550 7.36%-8.25% 01/99; 10/04 17,605
Century Properties Fund XIX ........ 60,900 7.33-8.33% 01/03; 01/06 56,462
Century Properties Growth Fund
XXII .............................. 72,603 7.33-7.93%(c) 12/99; 02/06 66,036
Johnstown/Consolidated Income
Partners .......................... 2,325 7.33 % 11/03 2,325
Davidson Growth Plus, L.P. ......... 12,270 7.60-7.83% 11/02; 10/03 10,750
Multi-Benefit Realty Fund 87-1 ..... 12,285 7.33-8.30% 10/00; 11/03 12,075
Fox Strategic Housing Income
Partners .......................... 7,836 10.9 % 08/98 8713
Davidson Diversified Real Estate II,
L.P. .............................. 26,807 (d) 1/00 12/09 22,185
Angeles Income Properties, Ltd. II . 18,197 733-7.83% 11/03 16,812

AGGREGATE PRINCIPAL AGGREGATE BALANCE
PARTNERSHIP OUTSTANDING RANGE OF INTEREST MATURITIES DUE AT MATURITY
- - ------------------------------------------- -------------------- ------------------- -------------- -------------------

Angeles Income Properties, Ltd. IV ........ 15.221 9.75% 10/06 12,955
Angeles Income Properties, Ltd. 6 ......... 23,374 7.33-10.07% 9/99; 7/19 17,826
Angeles Opportunity Properties, Ltd........ 5,432 7.33-7.83% 10/03; 11/03 5,293
Angeles Partners IX ....................... 19,768 7.33-10.13% 8/02; 11/03 18,258
Angeles Partners XII ...................... 72,105 7.83-10.5% 01/02; 05/05 63,822
Davidson Diversified Real Estate, L.P...... 12,011 7.33-7.83 11/02; 10/03 11,278
HCW Pension Real Estate Fund .............. -- -- -- --
Woodhaven Associates, L.P. ................ 3,787 10.5 % 4/1/24 --

- - ----------
(a) One property (304 units) has a mortgage that matured on September 1,
1996, and an extension was obtained through December 31, 1997. The
partnership continues to pay debt service to the lender while
alternate financing is arranged.

(b) One property has zero coupon note; discounted at an effective
interest rate of 10.247%.

(c) One property with a principal balance of $2,840,000 bears interest
at LIBOR plus 3.75%; the other properties range in interest from
7.33% to 7.93%.

(d) Adjusted rate based on 75% of interest rate on new-issue long-term
A-rate utility bonds as determined on first day of each calendar
year. The rate at December 31, 1997 was 5.385%. Rates on the other
properties ranged from 7.50% to 10.125%.

LEGAL PROCEEDINGS

In connection with the tender offers commenced on August 28, 1997 (the
"Initial Tender Offers"), IPT, IPLP, Insignia and IPLP Acquisition were named
as defendants in several lawsuits regarding the terms of and circumstances
surrounding these tender offers. IPT and its affiliates believe that the
allegations contained in each of the complaints are without merit and intend to
vigorously contest each action.

1. On September 8, 1997, persons claiming to own units of limited partner
interest in the partnerships (the "Initial Tender Offer Partnerships") with
respect to which IPLP Acquisition commenced the Initial Tender Offers filed a
Complaint (the "San Mateo Complaint") with respect to a purported class action
and derivative suit in the Superior Court for the State of California for the
County of San Mateo seeking, among other things, an order requiring corrections
to the disclosures in the tender offer documents and enjoining the Initial
Tender Offers, an order requiring the defendants to disclose their fiduciary
duties to the limited partners of the Initial Tender Offer Partnerships by
seeking other transactions that would maximize value for the limited partners
of the Initial Tender Offer Partnerships and compensatory damages.

The San Mateo Complaint applies to each of the Initial Tender Offers. The
San Mateo Complaint names as defendants IPLP Acquisition, Insignia, IPLP, IPT,
the corporate general partner of each Initial Tender Offer Partnership, which
in each case is wholly-owned by IPT, and one individual who is an officer and
director of Insignia. The San Mateo Complaint contains allegations that, among
other things, the defendants have intentionally mismanaged the Initial Tender
Offer Partnerships and acted contrary to the limited partners' best interests,
through use of non-public material information gained as a result of the
relationship between IPLP Acquisition and the Initial Tender Offer Partnerships
and thus continue the revenue derived by Insignia from the Initial Tender Offer
Partnerships, while at the same time reducing the demand for the Initial Tender
Offer Partnerships' units in the limited resale market for the units by
artificially depressing the trading prices for the units in order to create a
favorable environment for the Initial Tender Offers. In the San Mateo
Complaint, the plaintiffs also allege that, as a result of the Initial Tender
Offers, IPLP Acquisition will acquire effective voting control over the Initial
Tender Offer Partnerships at highly inadequate prices, and that the offers to
purchase and related tender offer documents contain numerous false and
misleading statements and omissions of material facts. The alleged
misstatements and omissions concern, among things, the advantages to limited
partners of tendering units pursuant to the Initial Tender Offers; the
description of the estimated liquidation value in the offers to

purchase and the estimated expenses that were taken into account in computing
that value; the true financial condition of the Initial Tender Offer
Partnerships and the ability to sell or refinance any of the Initial Tender
Offer Partnerships' properties; the factors affecting the likelihood that
properties owned by the Initial Tender Offer Partnerships will be sold or
liquidated in the near future; the liquidity and value of the units; the
limited secondary market for units; and the true nature of the market for the
underlying assets.

On September 24, 1997, the plaintiffs in this action made an ex parte
application to the court seeking a temporary restraining order prohibiting IPLP
Acquisition from purchasing units tendered pursuant to the Initial Tender
Offers. The court denied the application on the same afternoon. In January
1998, the plaintiffs agreed to discontinue this action, and on March 3, 1998
formal discontinuance documents were filed with the court.

2. On September 8, 1997, persons claiming to own units in the Initial
Tender Offer Partnerships filed a Complaint (the "Delaware Complaint") with
respect to a purported class action and derivative suit in the Court of
Chancery in the State of Delaware in and for New Castle County seeking, among
other things, compensatory damages, a declaration that the defendants have
breached their fiduciary duties to the limited partners of the Initial Tender
Offer Partnerships, an order directing the defendants to carry out their
fiduciary duties and an order enjoining the Initial Tender Offers.

The Delaware Complaint applies to each of the Initial Tender Offers. The
Delaware Complaint names as defendants IPLP Acquisition, Insignia and IPLP. The
Delaware Complaint contains allegations that, among other things, the
defendants have intentionally mismanaged the Initial Tender Offer Partnerships
and acted contrary to the limited partners' best interests, by manipulating the
limited partners into selling their units pursuant to the Initial Tender Offers
for substantially lower prices than the units are worth. In the Delaware
Complaint, the plaintiffs also allege that, as a result of the Initial Tender
Offers and in light of the acknowledged conflict of interest between IPLP
Acquisition and the corporate general partners of the Initial Tender Offer
Partnerships, Insignia breached its duty to provide an independent analysis of
the fair market value of the units in the offers to purchase and the related
tender offer materials (including the Schedule 14D-9 filed with the Commission
on August 28, 1997 by the corporate general partner of each Initial Tender
Offer Partnership). The Delaware Complaint contains further allegations that,
among other things, the defendants failed to appoint a disinterested committee
to review the Initial Tender Offers, and therefore, did not adequately consider
other alternatives available to the limited partners (such as a liquidation or
auction of the Initial Tender Offer Partnerships or their assets), resulting in
an offer that may not be in the best interests of the Initial Tender Offer
Partnerships and the limited partners thereof.

In January 1998, the plaintiffs agreed to discontinue this action, and on
February 27, 1998 this action was dismissed.

3. On September 10, 1997, persons claiming to own units of limited partner
interest in the Initial Tender Offer Partnerships filed a complaint with
respect to a purported class action and derivative suit in the Superior Court
for the State of California for the County of Alameda (the "Heller Complaint")
seeking, among other things, an order enjoining the Initial Tender Offers, an
order requiring the defendants to discharge their fiduciary duties to the
limited partners of the Initial Tender Offer Partnerships by, among other
things, engaging independent persons to act in the best interest of the limited
partners and by seeking other transactions that would maximize value for the
limited partners, an order requiring the defendants to explore other
alternatives to the Initial Tender Offers and compensatory damages.

The Heller Complaint applies to each of the Initial Tender Offers. The
Heller Complaint names as defendants IPLP Acquisition, Insignia, IPLP, IPT and
the corporate general partner of each Initial Tender Offer Partnership. The
Heller Complaint contains allegations that, among other things, the defendants
have intentionally mismanaged the Initial Tender Offer Partnerships and acted
contrary to the limited partners' best interests, through use of non-public
material information gained as a result of the relationship between IPLP
Acquisition and the corporate general partners of the Initial Tender Offer
Partnerships, and failed to adequately consider other alternatives available to
the Initial Tender Offer

Partnerships, such as a sale or liquidation of the Initial Tender Offer
Partnerships' properties, or to hire an independent person to advise the
corporate general partners as to such alternatives. In the Heller Complaint,
the plaintiffs also allege that, as a result of the Initial Tender Offers, IPLP
Acquisition will acquire effective voting control over the Initial Tender Offer
Partnerships at highly inadequate prices, and that the offers to purchase and
related tender offer documents contain numerous false and misleading statements
and omissions of material facts. The alleged misstatements and omissions
concern, among other things, the advantages to limited partners of tendering
units pursuant to the offers; the true financial condition of the Initial
Tender Offer Partnerships and their ability sell or refinance any of the
Initial Tender Offer Partnerships' properties; the factors affecting the
likelihood that properties owned by the Initial Tender Offer Partnerships will
be sold or liquidated in the near future; the liquidity and value of the units
of limited partner interest in the Initial Tender Offer Partnerships; the
limited secondary market for units of limited partner interest in the Initial
Tender Offer Partnerships; the true nature of the market for the underlying
assets; and the true intentions of IPT and its affiliates with respect to the
units of limited partner interest in the Initial Tender Offer Partnerships.

In January, 1998 the plaintiffs agreed to discontinue this action, and on
February 11, 1998 this action was formally dismissed with prejudice.

4. On March 24, 1998, an action entitled Rosalie Nuanes, et al. v.
Insignia Financial Group, Inc., et al. was filed in the Superior Court of the
State of California for the County of San Mateo, in which the plaintiffs named
as defendants, among others, IPT, IPLP and Insignia. The complaint purports to
assert claims on behalf of the limited partners of 55 of the Controlled
Partnerships and derivatively on behalf of the Controlled Partnerships named in
the complaint, which are also named as nominal defendants. The complaint
challenges (i) the acquisition of interests in the general partners of the
named Controlled Partnerships by Insignia and its affiliates, (ii) various past
tender offers commenced by affiliates of Insignia and IPT to acquire units of
limited partner interest in the Controlled Partnerships named in the complaint,
(iii) the management of the named Controlled Partnerships by Insignia and its
affiliates and (iv) the proposed Insignia/AIMCO Merger.

The complaint seeks monetary damages and equitable relief, including the
dissolution of the Controlled Partnerships named in the complaint. IPT and
Insignia believe that the allegations contained in the complaint are without
merit and intend to vigorously contest this action.

IPT FORMATION TRANSACTIONS AND CERTAIN RECENT DEVELOPMENTS

PREDECESSORS OF IPT AND IPLP

In January 1996, Insignia organized Insignia Properties Corporation
("IPC"), a Delaware corporation, and Insignia NPI, L.L.C., a Delaware limited
liability company ("Insignia-NPI"), for the purpose of entering into the NPI
Transaction (as defined below). IPC was a wholly-owned subsidiary of Insignia,
and Insignia-NPI was owned 99% by IPC and 1% by another wholly-owned subsidiary
of Insignia. IPT is the successor by merger to IPC, and IPLP is the successor
by merger to Insignia-NPI.

THE NPI TRANSACTION

In January 1996, IPC and Insignia-NPI (and certain other affiliates of
Insignia) entered into a series of related transactions (collectively, the "NPI
Transaction") with National Properties Investors, Inc. ("NPI") and certain of
its affiliates, pursuant to which:

(1) IFGP Corporation, a wholly-owned subsidiary of Insignia ("IFGP"),
acquired (i) all of the outstanding stock of NPI, which in turn owned
controlling equity interests in various entities that controlled the sole or
managing general partners of the following IPT Partnerships: National Property
Investors II, National Property Investors III, National Property Investors 4,
National Property Investors 5, National Property Investors 6, National Property
Investors 7, National Property Investors 8, Century Properties Fund XIV,
Century Properties Fund XV, Century Properties Fund XVI, Century Properties
Fund XVII, Century Properties Fund XVIII, Century Properties Fund XIX, Century
Properties Fund XX, Century Properties Growth Fund XXII, Century Pension Income
Fund XXIII, Century Pension

Income Fund XXIV and Fox Strategic Housing Income Partners (collectively, the
"NPI Partnerships"); and (ii) general partner interests in 83 private real
estate limited partnerships and ten other public real estate partnerships which
are in the process of dissolving.

(2) Insignia-NPI acquired limited partner interests in certain of the NPI
Partnerships.

(3) Other affiliates of Insignia acquired all of the outstanding equity
interests in NPI-AP Management, L.P., a property management company which
provides property management services to most of the NPI Partnerships as well
as other public and private real estate partnerships.

(4) Insignia, IPC and Insignia-NPI entered into an agreement (the "NPI
Indemnification Agreement") with the sellers of certain of the entities
acquired by Insignia and its affiliates in the NPI Transaction, pursuant to
which (i) such sellers agreed to indemnify Insignia, IPC, Insignia-NPI and
their affiliates for certain losses they suffer which occurred during or are
attributable to the period prior to the NPI Transaction, and (ii) Insignia, IPC
and Insignia-NPI agreed to reimburse those sellers for certain losses they
suffer which occurred or are attributable to the period after the NPI
Transaction.

(5) Insignia and Insignia-NPI entered into an agreement (the "Fox
Indemnification Agreement") with the limited partners (the "Fox Principals") of
an entity which is the non-managing general partner of an entity that controls
the managing general partners of certain of the NPI Partnerships. Pursuant to
the Fox Indemnification Agreement, Insignia and Insignia-NPI agreed to
indemnify the Fox Principals for 25% of some (but not all) amounts that the Fox
Principals may be required to contribute (directly or indirectly) to the
capital of such NPI Partnerships in the future as a result of capital account
deficit restoration obligations of the general partners of such NPI
Partnerships which arose or relate to a time prior to the NPI Transaction.

(6) Insignia-NPI entered into an agreement (the "Fox Reimbursement
Agreement") with the Fox Principals pursuant to which Insignia-NPI agreed to
reimburse the Fox Principals for any amounts received by Insignia-NPI in
respect of the limited partner interests in certain of the NPI Partnerships,
which amounts result from future capital contributions made by or on behalf of
the Fox Principals to those NPI Partnerships.

(7) Insignia assumed certain commitments (the "NPI Loan Commitments")
established prior to the NPI Transaction, pursuant to which Insignia agreed to
lend, under certain conditions, up to $500,000 to certain of the NPI
Partnerships (not to exceed $2,600,000 in the aggregate) and $150,000 to
certain other NPI Partnerships (not to exceed $6,000,000 in the aggregate) at
interest rates not to exceed the prime rate plus 2%.

(8) In June 1996, IPC acquired all of the outstanding capital stock of Fox
Capital Management Corporation, which is a co-general partner of the entities
that control the general partner of the NPI Partnerships.

To finance its portion of the NPI Transaction, Insignia-NPI borrowed
$72,837,798 from Insignia (the "NPI Loan"). Insignia subsequently assigned all
of its rights under the NPI Loan to its wholly-owned financing subsidiary,
Insignia Capital Corporation ("ICC").

FORMATION OF IPT AND IPLP

Insignia organized IPT and IPLP in May 1996, and in December 1996 the
following formation transactions were effected:

(1) IPC was merged with IPT, with IPT being the surviving entity. As a
result of that merger, IPT succeeded by operation of law to all of the assets
and liabilities of IPC (including IPC's rights and obligations under the NPI
Indemnification Agreement).

(2) Insignia-NPI was merged with IPLP, with IPLP being the surviving
entity. As a result of that merger, IPLP succeeded by operation of law to all
of the assets and liabilities of Insignia-NPI (including the limited partner
interests in the NPI Partnerships acquired in the NPI Transaction, the NPI Loan
and Insignia-NPI's rights and obligations under the NPI Indemnification
Agreement, the Fox Indemnification Agreement and the Fox Reimbursement
Agreement).

(3) IPT assumed IPLP's obligations under the NPI Loan, in exchange for
which IPLP issued 7,283,780 OP Units to IPT. IPT in turn issued 7,283,780 IPT
Common Shares to ICC in full satisfaction of the NPI Loan.

(4) IPT assumed Insignia's obligations under the NPI Indemnification
Agreement and under the NPI Loan Commitments. As of the date of this Proxy
Statement/Prospectus, (i) there are no amounts outstanding related to the NPI
Loan Commitments, and (ii) no indemnification claims have been made under the
Indemnification Agreement (and IPT does not believe that any circumstances are
likely to arise which would result in such a claim).

(5) IPT issued 3,271,547 IPT Common Shares to Insignia in respect of
Insignia's 100% ownership interest in IPT at the time.

(6) Insignia caused NPI to assign to IPT all of NPI's equity interests in
the entities that controlled the sole or managing general partners of the NPI
Partnerships, valued (in the aggregate) at $1,002,870, in exchange for which
IPT issued 100,287 IPT Common Shares to NPI.

(7) Insignia caused IFGP to assign to IPT all of IFGP's equity interests
in the entities that comprised the general partners of the Shelter Properties
Partnerships (see "Glossary"), valued (in the aggregate) at $455,100, in
exchange for which IPT issued 45,510 IPT Common Shares to IFGP.

(8) MAE assigned to IPT all of the equity interests in the entities that
comprised the general partners of the Consolidated Capital Partnerships (see
"Glossary") and Davidson Growth Plus, L.P., valued (in the aggregate) at
$4,668,070, in exchange for which IPT issued 466,807 IPT Common Shares to MAE.

(9) Insignia and certain of its affiliates contributed to IPLP limited
partner interests in certain of the Controlled Partnerships and equity
interests in entities that owned limited partner interests in certain of the
Controlled Partnerships, valued (in the aggregate) at $83,994,990, in exchange
for which IPLP issued 8,399,499 OP Units to Insignia.

(10) Insignia purchased 6,405 IPT Common Shares for $64,050 in cash. At
the direction of Insignia, those IPT Common Shares were issued to and in the
name of certain employees and affiliates of Insignia as bonus compensation.
These shares were purchased and issued, in part, in order to satisfy the 100
shareholders requirement of the federal REIT tax rules.

(11) Six executive officers and directors purchased an aggregate of 4,700
IPT Common Shares for $47,000 in cash. At the direction of those executive
officers and directors, certain of those shares were issued to and in the name
of members of their respective immediate families. These shares were purchased
and issued, in part, in order to satisfy the 100 shareholders requirement of
the federal REIT tax rules.

(12) IPLP entered into an option agreement (the "Shelter IV Option
Agreement") with certain affiliates of Insignia pursuant to which those
affiliates of Insignia granted IPLP an option (the "Shelter IV Option") to
acquire on or before December 31, 1997, 11,259 units of limited partner
interest in Shelter Properties IV Limited Partnership in exchange for the
issuance of 714,815 OP Units to Insignia.

(13) IPT, IPLP and Insignia entered into an advisory agreement (the
"Advisory Agreement") pursuant to which Insignia agreed to provide a broad
range of services to IPT, including executive advisory, investment advisory,
acquisition, administrative, financial and accounting services, for, among
other things, the payment of an annual advisory fee.

CERTAIN RECENT DEVELOPMENTS

Insignia/AIMCO Transaction

On March 17, 1998, Insignia and AIMCO entered into the Insignia/AIMCO
Merger Agreement. Pursuant to the terms of the Insignia/AIMCO Merger Agreement
(i) Insignia will be merged with and into AIMCO, (ii) AIMCO will succeed to all
of Insignia's business regarding the ownership and management of multifamily
residential properties, including Insignia's ownership of IPT Common Shares and
OP Units and AIMCO will become the majority shareholder of, and control, IPT,
and (iii) AIMCO

has agreed to propose to acquire IPT by merger within three months of the
effective time of the Insignia/AIMCO Merger (but not earlier than August 15,
1998) at a purchase price of not less than $13.25 per IPT Common Share payable
in cash. AIMCO currently intends to effect such acquisition by causing IPT to
be merged into a subsidiary of AIMCO. However, no assurance can be given that
either the Insignia/AIMCO Merger or the IPT/AIMCO Merger will be consummated.
See "Insignia/AIMCO Transaction."

Termination of Advisory Structure

From its formation in December 1996 until February 17, 1998, IPT operated
as an externally advised REIT and Insignia served as the advisor to IPT
pursuant to the Advisory Agreement. The Advisory Agreement was terminated in
its entirety on February 17, 1998 (retroactive to January 1, 1998), without
penalty to IPT, IPLP or Insignia, and certain provisions until then contained
in the Advisory Agreement regarding the property management of the properties
now or hereafter controlled by IPT and the provision of partnership
administration services to the Controlled Partnerships and certain other
business entities controlled by IPT in the future were incorporated into the
Partnership Agreement effective as of the same date. See "The Partnership
Agreement of IPLP--Property Management and Contract Loss Fee" and "The
Partnership Agreement of IPLP--Partnership Administration." Also effective upon
the termination of the Advisory Agreement, IPT, IPLP and Insignia entered into
the Acquisition and Disposition Services Agreement, which also incorporates
some of the provisions regarding real estate and real estate securities
acquisition and disposition services previously contained in the Advisory
Agreement. See "Acquisition and Disposition Services Agreement." Upon the
termination of the Advisory Agreement, the twelve employees of Insignia who
prior to that time had worked almost exclusively on matters concerning IPT
became employees of IPT. Also effective on that date, certain key employees of
Insignia received an aggregate of 510,000 restricted IPT Common Shares, which
will vest ratably over a five-year period. See "Management -- Executive
Compensation."

MAE GP Merger

Effective as of February 25, 1998, MAE GP, which until then was a
wholly-owned subsidiary of MAE, was merged with and into IPT, with IPT
surviving the merger (the "MAE GP Merger"). As consideration for the MAE GP
Merger, IPT issued 344,609 IPT Common Shares to MAE valued for purposes of the
MAE GP Merger at $10.53 per share. MAE GP owned or controlled equity interests
in entities which comprised or controlled the general partners of 29 public and
61 private real estate limited partnerships (collectively, the "MAE
Partnerships"), nine of which are included in the IPT Partnerships. The MAE
Partnerships own, in the aggregate, 167 properties containing approximately
31,000 residential apartment units and approximately 2.2 million square feet of
commercial space. In connection with the MAE GP Merger, all of the AMIT Class B
Shares, which were until then owned by MAE GP, were transferred by dividend to
MAE prior to the MAE GP Merger.

Transfers of Assets to IPLP

In connection with the MAE GP Merger, on February 17, 1998, IPLP purchased
certain assets from MAE for approximately $596,000 in cash. The assets
purchased from MAE consisted of (i) a 99% limited partner interest in Insignia
Jacques Miller, L.P. ("IJM"), which in turn owns non-controlling equity
interests in entities that comprise or control the general partners of 30 of
the MAE Partnerships and various notes receivable (the 1% general partner
interest in IJM was acquired by IPT from MAE GP in the MAE GP Merger), and (ii)
a 6.557% limited partner interest in Buccaneer Trace Limited Partnership, which
owns a 208-unit residential apartment complex located in Savannah, Georgia.

Also in connection with the MAE GP Merger, on February 17, 1998, Insignia
contributed all of the limited partner interests it owned in the MAE
Partnerships to IPLP in exchange for OP Units. The value of the interests
contributed was approximately $5,460,000, for which Insignia received 518,528
OP Units (based on a value of $10.53 per unit).

Winthrop Option

On October 27, 1997, Insignia consummated a transaction with Winthrop
Financial Associates ("WFA") and certain affiliates of WFA whereby Insignia
acquired, among other things, limited partner interests in, or the right to
acquire units of limited partner interests (the "Winthrop Units") in, two
public and 11 private real estate limited partnerships (the "Winthrop
Partnerships"), which own, in the aggregate, 29 properties containing
approximately 12,100 residential apartment units, and the right to receive
certain asset management, investor services and partnership management fees
from ten of the Partnerships which totaled $987,602 in 1996 (the base upon
which the purchase price paid by Insignia was calculated) (the "Winthrop Fees,"
and together with the Winthrop Units, the "Winthrop Interests").

The Winthrop Partnerships are controlled by WFA. In connection with the
foregoing transaction, IPT I LLC, a Delaware limited liability company which is
owned 90.1% by Insignia and 9.9% by IPT, acquired an associate general partner
interest in WFA, as a result of which IPT I LLC has the power to effectively
control all property management decisions relating to the properties owned by
six of the Winthrop Partnerships. Insignia also acquired all of the
newly-issued Class B stock of First Winthrop Corporation ("FWC"), which
immediately prior thereto was a wholly-owned subsidiary of WFA, as a result of
which Insignia has the right to appoint the two Class B directors of FWC, who
in turn have the power to effectively control all property management decisions
relating to the properties owned by the other seven Winthrop Partnerships. In
addition, IPT I LLC and Insignia caused the respective general partners of the
Winthrop Partnerships to subcontract with IPGP Corporation, a wholly-owned
subsidiary of Insignia ("IFGP"), to perform the asset management and other
services in respect of which the Winthrop Fees are payable on behalf of such
general partners, in exchange for which IFGP was assigned the rights to receive
the Winthrop Fees.

On February 17, 1998, Insignia granted IPLP an option (the "Winthrop
Option") to acquire all but not less than all of the Winthrop Interests at any
time on or before December 31, 1998. The Winthrop Option is exercisable by IPLP
for an aggregate cash amount of approximately $46 million, plus varying amounts
of interest on approximately $40 million of such amount at a rate equal to
Insignia's cost of funds (based on the interest rate in effect from time to
time under Insignia's revolving credit facility) and a ratable portion of the
transaction costs incurred by Insignia in connection with the acquisition. Upon
exercise of the Winthrop Option, the Operating Agreement of IPT LLC I will be
amended to make IPT the sole managing member of IPT I LLC, with the sole
authority to manage the business and affairs of IPT I LLC, and Insignia will
cause the persons designated by IPLP from time to time to be appointed as the
Class B directors of FWC.

Property Acquisition

On January 28, 1998, IPT acquired a 168-unit apartment complex located in
Pensacola, Florida known as the Raintree Apartments, which is the only whole
asset currently owned by IPT. The aggregate purchase price paid for the
Raintree Apartments was approximately $3.7 million, approximately $2,660,000 of
which was debt financed on a non-recourse basis.

Tender Offers

On August 28, 1997, IPLP Acquisition I LLC, a Delaware limited liability
company and a wholly-owned subsidiary of IPLP ("IPLP Acquisition"), commenced
tender offers to purchase units of limited partner interest in the following
IPT Partnerships: Consolidated Capital Properties IV, Century Properties Fund
XVII, Century Properties Fund XIX, Century Properties Growth Fund XXII, Fox
Strategic Housing Income Partners and National Property Investors 4. These
tender offers expired on October 6, 1997, and IPLP Acquisition accepted for
purchase all units validly tendered and not withdrawn pursuant to the Tender
Offers. Pursuant to these tender offers, IPLP Acquisition acquired 29,617.5 (or
approximately 8.64%) of the limited partner units in Consolidated Capital
Properties IV, 3,369.5 (or approximately 4.49%) of the limited partner units in
Century Properties Fund XVII, 4,892 (or approximately 5.48%) of the limited
partner units in Century Properties Fund XIX, 5,459 (or approximately 6.59%) of
the limited partner units in Century Properties Fund XXII, 3,919 (or
approximately

15.01%) of the limited partner units in Fox Strategic Housing Income Partners
and 4,452 (or approximately 7.42%) of the limited partner units in National
Property Investors 4, for total cost (excluding expenses) of approximately $9
million.

On October 30, 1997, Reedy River Properties, L.L.C., a Delaware limited
liability company and a wholly-owned subsidiary of IPLP ("Reedy River"),
commenced tender offers to purchase units of limited partner interest in
Consolidated Capital Institutional Properties and Consolidated Capital
Institutional Properties/2. These tender offers expired on December 15, 1997
and Reedy River accepted for purchase all units validly tendered and not
withdrawn. Pursuant to these tender offers, Reedy River acquired 28,900.5 (or
approximately 14.52%) of the limited partner units in Consolidated Capital
Institutional Properties and 169,105.3 (or approximately 18.60%) of the limited
partner units in Consolidated Capital Institutional Properties/2, for total
cost (excluding expenses) of approximately $18 million.

On various dates in December 1997, Madison River Properties, L.L.C., a
Delaware limited liability company and a wholly-owned subsidiary of IPLP
("Madison River"), commenced tender offers to purchase units of limited partner
interests in Multi-Benefit Realty Fund 87-1, Century Properties Fund XIV,
Century Properties Fund XV, Century Properties Fund XVIII, Consolidated Capital
Growth Fund, Consolidated Capital Institutional Properties/3, Consolidated
Capital Properties V, Johnstown/ Consolidated Income Partners and Shelter
Properties VII Limited Partnership. These tender offers expired on various
dates in January and February of 1998 and Madison River accepted for purchase
all units validly tendered and not withdrawn. Pursuant to these tender offers,
Madison River acquired 21,457 units (or approximately 22.29%) of the Class A
limited partner units in Multi-Benefit Realty Fund 87-1, 13,822 units (or
approximately 18.39%) of the Class B limited partner units in Multi-Benefit
Realty Fund 87-1, 2,925.57 units (or approximately 4.52%) of the limited
partner units in Century Properties Fund XIV, 4,222 units (or approximately
4.69%) of the limited partner units in Century Properties Fund XV, 5,259.5
units (or approximately 7.01%) of the limited partner units in Century
Properties Fund XVIII, 2,690 units (or approximately 5.47%) of the limited
partner units in Consolidated Capital Growth Fund, 46,775.4 units (or
approximately 12.21%) of the limited partner units in Consolidated Capital
Institutional Properties/3, 43,795.8 units (or approximately 24.39%) of the
limited partner units in Consolidated Capital Properties V, 14,061.5 units (or
approximately 10.92%) of the limited partner units in Johnstown/ Consolidated
Income Partners, and 2,180 units (or approximately 12.57%) of the limited
partner units in Shelter Properties VII Limited Partnership, for total costs
(excluding expenses) of approximately $10 million.

On April 13, 1998, Broad River Properties, L.L.C., a Delaware limited
liability company and a wholly-owned subsidiary of IPLP ("Broad River"),
commenced a tender offer to purchase up to 18,300 units of limited partner
interest in Angeles Partners IX for a purchase price of $325 per unit in cash,
and on April 14, 1998, Broad River commenced a tender offer to purchase 18,500
units of limited partner interest in Angeles Partners XII for a purchase price
of $500 per unit. Each of these tenders offers is scheduled to expire on May
11, 1998.

Shelter IV Option

In June 1997 the Shelter IV Option Agreement was amended to make the 4,263
units of limited partner interest in Shelter Properties IV Limited Partnership
acquired by Insignia in the High River transaction described above also subject
to the Shelter IV Option. In December 1997, the Shelter IV Option Agreement was
amended again to make 488 units of limited partner interest acquired by
Insignia in various transactions between June and December 1997 subject to the
Shelter IV Option. IPLP exercised the Shelter IV Option effective as of
midnight on December 31, 1997. As a result of that exercise, IPLP acquired a
total of 16,010 units of limited partner interest in Shelter Properties IV
Limited Partnership in exchange for a total of 1,016,448 OP Units issued to
Insignia.

Private Offerings

Commencing in May 1997 and ending in August 1997, IPT offered and sold an
aggregate of 5,231,000 IPT Common Shares, at a purchase price of $10.00 per
share, to 44 investors (12 of whom are executive

officers of IPT and/or Insignia) pursuant to a private offering, and in an
unrelated transaction in October 1997 IPT sold 1,000,000 IPT Common Shares,
also at a purchase price of $10.00 per share, to a single private investor
(collectively, the "Private Offerings"). The Private Offerings were each made
in reliance upon exemptions from the registration requirements of the
Securities Act. IPT contributed the gross proceeds of the Private Offerings to
IPLP in exchange for 6,231,000 OP Units (all of the expenses of the Private
Offerings were borne by IPLP). The net proceeds of the Private Offerings of
approximately $62 million have been and will be used by IPLP for general
purposes, principally acquisitions of direct and indirect interests in
multifamily residential real estate.

High River Transactions

In June 1997, Insignia entered into an agreement with High River Limited
Partnership ("High River") pursuant to which Insignia acquired an aggregate of
23,581 units of limited partner interest in the Shelter Properties Partnerships
for an aggregate purchase price $15,500,000. As a result of those purchases,
various buy/sell agreements between Insignia and High River relating to the
transferred interests and the general partner interests in those partnerships
were terminated. Insignia then assigned all of those units (other than 4,263
units in Shelter Properties IV Limited Partnership) to IPT, in exchange for
which IPT issued 1,109,259 IPT Common Shares to Insignia. IPT in turn assigned
those units to IPLP, in exchange for which IPLP issued 1,109,259 OP Units to
IPT.

Also in June 1997, Insignia entered into a separate agreement with High
River pursuant to which Insignia (i) directly acquired 25 units of limited
partner interest in Davidson Growth Plus, L.P. from an affiliate of High River
and (ii) indirectly acquired 1,244 units of limited partner interest in
Davidson Growth Plus, L.P. through the acquisition from High River of a 50%
equity interest in DGP Acquisition, L.L.C. (a limited liability company formed
by Insignia and High River in 1995 for the purpose of acquiring units of
limited partner interests in Davidson Growth Plus, L.P. pursuant to a tender
offer), for an aggregate purchase price of $525,287. As a result of those
purchases, various buy/sell agreements between Insignia and High River relating
to the transferred interests and the managing general partner interest in
Davidson Growth Plus, L.P. were terminated. Insignia then assigned all of those
units and the 50% interest in DGP Acquisition, L.L.C. to IPT, in exchange for
which IPT issued 53,192 IPT Common Shares to Insignia. IPT in turn assigned
those units and the 50% interest to IPLP, in exchange for which IPLP issued
53,192 OP Units to IPT.

THE PARTNERSHIP AGREEMENT OF IPLP

The following summary of the Partnership Agreement, and the descriptions
of certain provisions thereof set forth elsewhere herein, are qualified in
their entirety by reference to the Partnership Agreement, a copy of which has
been filed as an exhibit to the Registration Statement of which this Proxy
Statement/Prospectus forms a part.

MANAGEMENT

IPLP was formed as a Delaware limited partnership in May 1996. IPT is the
sole general partner of IPLP, and Insignia is currently the sole limited
partner of IPLP. In addition, Insignia is designated in the Partnership
Agreement as the Special Limited Partner and, as such, possesses certain rights
described below not shared by others who may become limited partners of IPLP.

IPT, as the sole general partner of IPLP (in such capacity, together with
any substitute general partner that may be appointed in accordance with the
terms of the Partnership Agreement, the "General Partner"), has full and
exclusive responsibility and discretion in the management and control of IPLP.
The limited partners in their capacity as such generally will have no authority
to transact business for, or participate in the management activities or
decisions of, IPLP. The General Partner may, with the consent of the Special
Limited Partner but without the consent of any other limited partner, amend or
modify the Partnership Agreement in any respect, provided, however, that any
amendment which would (i) impose on any limited partner any obligation to make
additional capital contributions or (ii) materially adversely affect the
economic rights of such limited partner requires the consent of such limited
partner.

The General Partner is not permitted to take certain actions without the
prior written consent of the Special Limited Partner. Specifically, without the
prior written consent of the Special Limited Partner, the General Partner may
not (i) enter into or amend, modify or terminate any conflict avoidance
arrangement contemplated by the Partnership Agreement, (ii) sell all or
substantially all of IPLP's assets or cause IPLP to merge or consolidate with
or into any other entity, or (iii) issue any additional OP Units or other
interests in IPLP if as a result of such issuance the relative economic
interest of the Special Limited Partner in IPLP would be materially diluted.

TRANSFERABILITY OF INTERESTS

The General Partner generally may not voluntarily withdraw from IPLP or
transfer or assign its interest in IPLP. Limited partners may transfer their OP
Units, in whole or in part, except in the following circumstances: (i) in the
opinion of legal counsel for IPLP, such proposed transfer would require
registration of OP Units under the Securities Act or would otherwise violate
any federal or state securities law; (ii) in the opinion of legal counsel, such
proposed transfer would (a) adversely affect IPLP's status as a qualified REIT
subsidiary within the meaning of the Code or (b) adversely affect IPT's ability
to qualify as a REIT or subject IPT to additional taxes; (iii) such proposed
transfer would be effected through an "established securities market" or
"secondary market" within the meaning of the Code; or (iv) such proposed
transfer would be made to a lender whose loan would constitute a nonrecourse
liability, in which instance the proposed transfer would require the consent of
the General Partner.

CAPITAL CONTRIBUTIONS

The Partnership Agreement provides that if IPLP requires additional funds
at any time, or from time to time, in excess of funds available to IPLP from
borrowing or capital contributions, IPT may borrow such funds from a financial
institution or other lender and lend such funds to IPLP on the same terms and
conditions as are applicable to IPT's borrowing of such funds. Under the
Partnership Agreement, IPT generally is obligated to contribute the net
proceeds received in connection with any offering of IPT Common Shares or
Preferred Shares as additional capital to IPLP. Moreover, IPT is authorized, as
the General Partner, to cause IPLP to issue OP Units for less than fair market
value if IPT has concluded in good faith that such issuance is in the best
interests of IPT and IPLP.

If IPT contributes additional capital to IPLP (which can only happen upon
the issuance of shares of beneficial interest of IPT and the subsequent
contribution or deemed contribution by IPT to IPLP of the

net proceeds of such issuance), then IPT will receive additional OP Units, and
its percentage interests in IPLP will be increased on a proportionate basis
based upon the amount of such additional capital contributions and the value of
IPLP at the time of such contributions. Conversely, the percentage interests of
the limited partners will be decreased on a proportionate basis in the event of
additional capital contributions by IPT.

REDEMPTION RIGHTS

Under the Partnership Agreement, the limited partners of IPLP have
redemption rights ("Redemption Rights") which enable them to cause IPLP to
redeem each OP Unit for cash equal to the value of an IPT Common Share
(subject, however, to a first right of IPT to purchase each OP Unit offered for
redemption for one IPT Common Share, subject to adjustment upon the occurrence
of share splits, mergers, consolidations or similar pro rata share transactions
which would have the effect of diluting the ownership interests of the limited
partners or the shareholders of IPT). If the limited partner electing to redeem
its OP Units is Insignia or MAE, the election as to whether IPT will exercise
its first right to acquire such OP Units for IPT Common Shares will be made by
a committee of the IPT Board consisting solely of members who are not officers,
directors or employees of Insignia. The Redemption Rights may not be exercised,
however, if and to the extent that (i) the acquisition of OP Units by IPT in
exchange for IPT Common Shares (regardless of whether IPT would in fact
exercise its rights to acquire such OP Units for IPT Common Shares) would (a)
result in any person owning, directly or indirectly, IPT Common Shares in
excess of the limitations set forth in the "excess share" provisions contained
in IPT's Declaration of Trust, (b) result in IPT Common Shares being owned by
fewer than 100 persons (determined without reference to any rules of
attribution), (c) result in IPT being "closely held" within the meaning of
section 856(h) of the Code (for this purpose taking into account the applicable
attribution rules imposed by the Code), (d) cause IPT to own, directly or
constructively, 10% or more of the ownership interests in a tenant in a real
property directly or indirectly owned by IPT within the meaning of section
856(d)(2)(b) of the Code, or (e) cause the issuance of IPT Common Shares to
such redeeming limited partner to be "integrated" with any other distribution
of IPT Common Shares for purposes of complying with the Securities Act; or (ii)
on the date of redemption, IPT does not have a class of securities registered
under the Exchange Act and does not qualify for an exemption from registration
with respect to the IPT Common Shares to be issued.

Only OP Units outstanding for at least one-year may be redeemed. Not more
than two redemptions by any limited partner may occur during each calendar
quarter, and no limited partner may exercise Redemption Rights for less than
1,000 OP Units or, if such limited partner holds less than 1,000 OP Units, for
less than all of the OP Units held by such limited partner. Prior to the
expiration of the one year holding period, IPT, as General Partner, may permit
a lender to whom OP Units have been pledged with IPT's consent to exercise the
Redemption Right (but only for cash) in the event of a foreclosure. In the
future, it may become necessary to place additional restrictions on the
exercise of Redemption Rights in order to assure that IPLP does not become a
"publicly traded partnership" under the Code and thereby taxable as a
corporation for federal income tax purposes. See "Certain Federal Income Tax
Considerations -- Tax Aspects of IPT's Investment in IPLP and the IPT
Partnerships." As of the date of this Proxy Statement/Prospectus, the aggregate
number of OP Units outstanding held by Insignia (the sole limited partner of
IPLP) is 9,934,475, of which 8,399,499 are currently eligible for redemption
upon exercise of the Redemption Rights.

OPERATIONS

The Partnership Agreement requires that IPLP be operated in a manner that
will enable IPT to qualify as a REIT (unless the IPT Board determines that it
is no longer in the best interests of IPT to conduct business as a REIT), to
avoid any federal income or excise tax liability imposed under the Code and to
ensure that IPLP will not be classified as a "publicly traded partnership" for
purposes of Section 7704 of the Code.

In addition to the administrative and operating costs and expenses
incurred by IPLP, IPLP will reimburse IPT (as General Partner) for all
administrative costs and expenses it incurs, and such expenses

will be treated as expenses of IPLP. Such expenses generally include (i) all
expenses relating to the formation and continuity of existence of IPT and
subsidiaries thereof, (ii) all expenses relating to any offering or
registration of securities by IPT, (iii) all expenses incurred in connection
with the issuance, repurchase or redemption of securities by IPT or IPLP, (iv)
all expenses associated with the preparation and filing of any periodic reports
by IPT under federal, state or local laws or regulations, (v) all expenses
associated with compliance by IPT with laws, rules and regulations promulgated
by any regulatory body, (vi) all expenses associated with any 401(k) plan,
incentive plan, bonus plan or other plan providing for compensation for
trustees, officers or directors, and (vii) all other operating or
administrative costs of IPT (as General Partner) incurred in the ordinary
course of its business on behalf of IPLP.

DISTRIBUTIONS AND ALLOCATIONS

The Partnership Agreement generally provides that IPLP will distribute
cash from operations (including net sale and refinancing proceeds, but
excluding net proceeds from the sale of IPLP's property in connection with the
liquidation of IPLP) at such time and in such amounts as determined by the
General Partner in its sole discretion (but in any event no less frequently
than annually) to the partners in accordance with their respective percentage
interests in IPLP. However, the General Partner is required to use its
reasonable efforts to cause IPLP to distribute amounts sufficient to enable IPT
to meet the REIT distribution requirements. See "Distributions." Upon
liquidation of IPLP, after payment of, or adequate provision for, its debts and
obligations, including any loans from partners, any remaining assets of IPLP
will be distributed to all partners with positive capital accounts in
accordance with their respective capital account balances. If the General
Partner has a negative balance in its capital account following a liquidation
of IPLP, it will be obligated to contribute cash to IPLP equal to the negative
balance in its capital account.

Profit and loss of IPLP for each fiscal year will generally be allocated
among the partners in accordance with their respective percentage interests in
IPLP. Taxable income and loss will be allocated in the same manner, subject to
compliance with the provisions of sections 704(b) and 704(c) of the Code and
Treasury Regulations promulgated thereunder. The General Partner has the right
to alter the method of allocation in any way that is not adverse to the
interests of the limited partners.

PROPERTY MANAGEMENT AND CONTRACT LOSS FEE

The Partnership Agreement requires IPT and IPLP to cause Insignia to be
retained as property manager for all properties now and hereafter controlled by
IPT pursuant to separate property management agreements. The property
management services to be provided by Insignia include (i) performing all
accounting functions incidental to the properties, such as rent processing and
collection, accounts payable (e.g., mortgages, taxes and insurance), payroll
and financial reporting, (ii) acting as a rental agent for the properties, and
(iii) overseeing the routine maintenance responsibilities relating to the
properties. The property management agreements generally provide for the
payment of fees to Insignia based on a percentage of the rent collections from
the managed properties. The percentage charged varies inversely with the rental
rates and the size of the property, although the actual percentage is based on
a variety of factors, including prevailing market rates and, in the case of the
Controlled Partnerships, the terms of the underlying partnership agreements,
and is not determined or fixed by any formula. In general, though, Insignia is
compensated: (i) on the same terms that existed prior to the formation of IPT,
with respect to properties controlled by IPT at the time of its formation; (ii)
on the same terms that existed immediately prior to acquisition of control,
with respect to properties of which IPT acquired control subsequent to its
formation and which were managed by Insignia immediately prior to such
acquisition; and (iii) on terms comparable to those employed by other major,
full service real estate management companies in light of the nature and
geographic location of the properties, with respect to properties of which IPT
acquired control subsequent to its formation but which were not managed by
Insignia immediately prior to such acquisition.

The Partnership Agreement also provides that if, after taking into account
certain equitable adjustments specified in the Partnership Agreement, (x) the
total amount of property management fees paid to Insignia in respect of all
properties controlled by IPT during any rolling twelve-month period

ending at the end of a calendar quarter is less than (y) 90% of the total
annualized amount of property management fees paid to Insignia for the year
preceding IPT's acquisition of control of the Designated Properties (as
hereinafter defined) (a "Triggering Event"), then IPLP is required to pay
Insignia a fee (the "Contract Loss Fee") equal to the greater of (i) the
decrease in the market value of Insignia resulting or reasonably expected to
result by virtue of the Triggering Event and (ii) the increase in market value
of IPT resulting or reasonably expected to result from such Triggering Event;
provided, however, that a Contract Loss Fee shall not duplicate the payment of
any previous Contract Loss Fee resulting from a prior Triggering Event. The
calculation of a Contract Loss Fee shall be made, at the expense of IPLP,
within 30 days following the end of the calendar quarter in which a Triggering
Event occurs by one of the 15 largest investment banks in the United States
(determined based on the aggregate dollar amount of equity offerings by each
investment bank during the past year), and IPLP is required to pay Insignia the
Contract Loss Fee in cash no later than 45 days following the end of the
calendar quarter in which the Triggering Event occurs. For this purpose, a
"Designated Property" is any multifamily residential property (i) with respect
to which Insignia was providing property management services immediately prior
to the acquisition of control thereof by IPT, (ii) the controlling interest in
which was acquired by IPT from Insignia, MAE or an affiliate of either of them
or (iii) with respect to which Insignia paid some form of consideration to any
entity or person (other than another affiliate of Insignia) for the purpose of
acquiring, or otherwise in respect of, the property management rights relating
thereto.

IPT's obligation to cause Insignia to be retained as property manager for
all the properties controlled by IPT terminates, on a property by property
basis, upon the earliest to occur of (i) the termination of the Partnership
Agreement, (ii) the termination by Insignia of the applicable property
management agreement, (iii) the termination of the applicable property
management agreement by the applicable property-owning entity for cause (but
not for any other reason, notwithstanding that such termination may have been
expressly permitted by the terms of such property management agreement), or
(iv) such time as IPT no longer controls such property.

PUT RIGHTS

Upon the occurrence of or during the continuation of any material breach
by IPT or IPLP of its obligations under the Partnership Agreement (including
without limitation the failure to pay any Contract Loss Fee due), Insignia, MAE
and their affiliates (other than IPT and IPLP) (the "Put Holders") have the
right to (i) demand an appraisal of (a) all OP Units (and any other interests
in IPLP) held by the Put Holders (collectively, the "Put Right Units") and (b)
the IPT Common Shares (and any other securities of IPT) held by the Put
Holders, and (ii) to require (a) IPT to purchase all or any portion of such IPT
Common Shares (and other IPT securities) and (b) IPLP to purchase all or any
portion of such Put Right Units. The appraisals of the IPT Common Shares (and
other IPT securities) and the Put Right Units will be performed by one of the
15 largest national investment banks in the United States (as measured by the
aggregate dollar amount of equity offerings underwritten during the preceding
year and selected in accordance with the procedures set forth in the
Partnership Agreement) based on the greatest of (i) their value based on an
independent going concern/continuing operations analyses, (ii) sale of the
entire entity analyses and (iii) liquidation analyses, in each case determined
as of the date of the written demand for appraisal and redemption. IPLP is
required to bear the cost of the investment bank's services.

PARTNERSHIP ADMINISTRATION SERVICES

Insignia currently provides partnership administration services to each
Controlled Partnership which was such at the time IPT was formed (the
"Formation Partnerships"). Such services, for which Insignia is typically paid
on a reimbursement basis only, generally include accounting functions, investor
relations and the preparation and filing of required reports under the Exchange
Act. Under the terms of the Partnership Agreement, IPT (i) is obligated to
cause each Formation Partnership to continue to engage Insignia to provide
partnership administration services on substantially the same terms, including
compensation and reimbursement, as were in effect on January 1, 1997, and (ii)
may, but is not obligated to, cause Insignia to be retained to provide such
services to any business entity which subsequently becomes controlled by IPT,
provided that once Insignia has been engaged to provide such services, IPT

is obligated to cause such entity to continue to engage Insignia (such
additional entities, together with the Formation Partnerships, the
"Administration Entities").

In the event that IPT breaches its obligation to cause an Administration
Entity to continue to engage Insignia to provide partnership administration
services (including as a result of the dissolution or ceasing to exist of such
Administration Entity in connection with or as a result of a merger or other
business combination transaction or the sale of all or substantially all of its
assets in a single transaction or series of related transactions), then IPLP is
required to pay Insignia the aggregate allocated costs of Insignia relating to
such Administration Entity, including the costs of fixed assets, long-term
obligations, insurance, utilities, employees (including severance and other
termination payments) and other items related to the provision of
administrative services to such Administration Entity.

IPT's obligation to cause each Administration Entity to engage Insignia to
provide partnership administration services shall terminate, on an entity by
entity basis, upon the earliest to occur of (i) the termination of the
Partnership Agreement, (ii) the termination by Insignia of the provision of
such services to such Administration Entity, (iii) the termination of the
engagement of Insignia by such Administration Entity for cause (but not for any
other reason), or (iv) such time as such Administration Entity is dissolved and
its affairs wound up in connection with an orderly liquidation thereof.

TRANSFERS OF CONTROLLING INTERESTS IN IPT ENTITIES

IPT has agreed not to assign, or to permit or cause any IPT Entity (see
"Glossary") to assign, any controlling interest in any IPT Entity except in
accordance with the terms of the Partnership Agreement, which provides that IPT
is required to deliver a written notice ("Sale Notice") to Insignia at least 60
days prior to any transfer of any controlling interest in an IPT Entity. The
Sale Notice must set forth in reasonable detail the identity of the prospective
transferee(s) and the terms and conditions of any proposed transfer. Within 30
days after receipt of the Sale Notice by Insignia, Insignia may, upon written
notice to IPT, elect to purchase not less than all of the controlling interests
in the IPT Entity described in the Sale Notice upon the same terms and
conditions set forth in such notice. If IPT elects not to purchase the
controlling interest in the IPT Entity described in the Sale Notice, the
interest may be transferred by IPT at a price and on terms no more favorable to
the transferee than those set forth in the Sale Notice. Upon the sale of any
controlling interest in an IPT Entity other than to Insignia (and assuming that
Insignia is not retained as the property manager for the properties controlled
by such IPT Entity), any amount of the sale price which exceeds the fair market
value of the assets attributable to such controlling interest (i.e., any
management control premium) is required to be paid to Insignia. A decision by
Insignia not to exercise its right to purchase the interests in an IPT Entity
described in a Sale Notice does not affect any obligation of IPLP to pay to
Insignia any applicable Contract Loss Fee.

TERM

IPLP will continue in existence until December 31, 2097, unless sooner
dissolved upon the first to occur of (i) an election to dissolve the
Partnership by the General Partner with the consent of the Special Limited
Partner, (ii) the passage of 90 days after the sale or other disposition of all
or substantially all of the assets of IPLP, (iii) the redemption of all OP
Units held by limited partners of IPLP or (iv) the entry of a decree of
judicial dissolution of IPLP pursuant to the provisions of the Delaware Revised
Limited Partnership Act.

TAX MATTERS PARTNER

Pursuant to the Partnership Agreement, the General Partner is the tax
matters partner of IPLP and, as such, has the authority to handle tax audits
and to make tax elections under the Code on behalf of IPLP.

ACQUISITION AND DISPOSITION SERVICES AGREEMENT

The following summary of the Acquisition and Disposition Services
Agreement, and the descriptions of certain provisions thereof set forth
elsewhere herein, are qualified in their entirety by reference to the
Acquisition and Disposition Services Agreement, a copy of which has been filed
as an exhibit to the Registration Statement of which this Proxy
Statement/Prospectus forms a part.

ACQUISITION AND DISPOSITION SERVICES

In connection with the termination of the Advisory Agreement, IPT, IPLP
and Insignia entered into the Acquisition and Disposition Services Agreement,
which provides that IPT has the right, but not the obligation, to engage
Insignia to provide services, on a transaction by transaction basis, in
connection with acquisitions and disposition of whole real estate and real
estate-related assets ("Real Estate Transactions") and acquisitions of equity
or debt securities of, or other ownership interests in, entities which own real
estate or real estate-related assets ("Securities Transactions") through
December 31, 2000. Such services would include (i) consulting advice and
financial analysis; (ii) due diligence review and analysis of documentation and
operations; (iii) negotiation, drafting and review of transaction documents;
(iv) brokerage and other disposition services; and (v) other services
reasonably related or incidental to the foregoing.

As compensation for such services, IPLP will pay to Insignia the following
fees: (i) for each Securities Transaction, an amount equal to 1.5% of the
aggregate net asset value of the securities or other ownership interests
acquired; and (ii) for each Real Estate Transaction involving an acquisition
(but not a disposition), an amount equal to 0.75% of the aggregate purchase
price (or IPT's pro rata portion thereof in the case of an acquisition with one
or more partners) of the real estate or real estate-related assets acquired by
IPT (including any debt incurred or assumed in connection therewith). IPLP is
also obligated to reimburse Insignia for (i) all out-of-pocket third-party
costs and expenses incurred in connection with its provision of such services
and (ii) for all employee costs (including commissions) incurred by Insignia in
connection with Real Estate Transactions involving dispositions of real
properties, not to exceed 1.0% of the gross sales price.

AGREEMENTS REGARDING CERTAIN REAL ESTATE OPPORTUNITIES

The Acquisition and Disposition Services Agreement contains certain
provisions which provide that Insignia may not acquire or enter into a
definitive agreement to acquire an IPT Opportunity (as defined below) unless
Insignia has provided notice of such IPT Opportunity to IPT and IPT has elected
not to invest in such IPT Opportunity, although Insignia is permitted to enter
into a definitive agreement which provides Insignia the contractual right to
acquire an IPT Opportunity if such agreement expressly provides that the right
to acquire such IPT Opportunity may be assigned by Insignia to IPT. However,
Insignia is required to notify IPT of an IPT Opportunity only if Insignia plans
to invest in the IPT Opportunity for its own account. Thus, Insignia is not
obligated to notify IPT of all IPT Opportunities of which it becomes aware. An
"IPT Opportunity" means an opportunity to invest in or acquire (i) any
investment in multifamily residential property or properties located in the
United States, (ii) indebtedness secured by multifamily residential property or
properties located in the United States, and (iii) equity or debt securities
of, or other ownership interests in, a business entity which primarily owns or
invests in multifamily residential properties in the United States, but
specifically excluding opportunities to invest in or acquire multifamily
residential property in the United States, or an equity or other ownership
interest in a business entity which invests primarily in multifamily
residential housing in the United States but is not controlled by IPT, if
Insignia owned any equity, debt or other ownership interest in such multifamily
residential property or business entity on January 1, 1998 or acquired an
equity, debt or ownership interest in such multifamily residential property or
business entity in accordance with the Acquisition and Disposition Services
Agreement.

The Acquisition and Disposition Services Agreement reciprocally prohibits
IPT from acquiring an Insignia Opportunity (as defined below) without the prior
written consent of Insignia. An "Insignia Opportunity" means any opportunity to
invest in or acquire equity or debt securities of or other

ownership interests in a business entity that (i) invests primarily in real
property other than multifamily residential property in the United States, (ii)
invests primarily in multifamily residential property in the United States if
(x) such business entity is controlled by Insignia or MAE or (y) Insignia or
its affiliates serve as property manager of the properties owned by such
business entity, or (iii) performs property management services (regardless of
the type of property with respect to which such services are performed), but
specifically excluding opportunities to invest in or acquire equity or debt
securities of, or other ownership interests in, a business entity that invests
primarily in multifamily residential property located in the United States if
IPT owned an equity, debt or other ownership interest in such business entity
as of January 1, 1998 or acquired an equity, debt or other ownership interest
in such business entity pursuant to the Acquisition and Disposition Services
Agreement.

Insignia's obligations under the Acquisition and Disposition Services
Agreement with respect to IPT Opportunities will terminate upon the earliest to
occur of (i) the termination of the Acquisition and Disposition Services
Agreement or a material breach thereof by IPT, (ii) the incurrence by IPLP of
an obligation to pay a Contract Loss Fee pursuant to the Partnership Agreement,
or (iii) the failure of IPT to cause Insignia to be retained to provide
property management services to the properties controlled by IPT as required by
the Partnership Agreement. The obligations of IPT with respect to Insignia
Opportunities will terminate only upon the termination of the Acquisition and
Disposition Services Agreement.

IPT LINE OF CREDIT

The following summary of the IPT Line of Credit and the descriptions of
certain provisions thereof set forth elsewhere herein are qualified in their
entirety by reference to the Line of Credit Agreement (as defined below), a
copy of which has been filed as an exhibit to the Registration Statement of
which this Proxy Statement/Prospectus form a part.

IPLP has entered into a Credit Agreement, (the "Credit Agreement"), with
Lehman Commercial Paper, Inc., as syndication agent, First Union National Bank,
as administrative agent (in such capacity, the "Administrative Agent") and the
lenders from time to time parties thereto (the "Lenders"). Pursuant to the
Credit Agreement, the Lenders have made available to IPLP a revolving credit
facility of up to $50.0 million at any one time outstanding. Loans under the
IPT Line of Credit (the "Loans") may be utilized to finance certain permitted
investments and refinance certain investments made prior to the date of the
Credit Agreement. The IPT Line of Credit matures in a single installment on
December 30, 2000.

Loans may be borrowed by IPLP under the IPT Line of Credit at a rate based
upon the adjusted LIBOR Rate (as defined in the Credit Agreement) (the "LIBOR
Loans") or the Base Rate (as defined in the Credit Agreement) (the "Base Rate
Loans"). As of the date hereof, IPT has no outstanding indebtedness under the
IPT Line of Credit.

IPT is obligated to pay a commitment fee at a rate of 0.25% per annum on
the undrawn portion of the IPT Line of Credit. Such commitment fee is payable
quarterly in arrears and calculated based on the actual number of days elapsed
over a 365-day year.

The Loans are subject to mandatory prepayment only to the extent that the
aggregate outstanding principal amount of the Loans on any day exceeds the
amount of the IPT Line of Credit then in effect. Voluntary prepayments of the
Loans and voluntary reductions of the IPT Line of Credit are permitted in whole
or in part at the option of IPLP, in minimum principal amounts, without premium
or penalty, subject to reimbursement of certain of the Lenders costs under
certain conditions.

IPLP's obligations under the IPT Line of Credit have been guaranteed by
IPT and such guaranty is secured by a first priority pledge of and security
interest in the capital stock or other equity interests held by IPT in each of
the subsidiaries of IPT which directly or indirectly, owns or controls the
general partner interest in any Real Estate Entity (as defined below) in which
IPLP, directly or indirectly owns a limited partner interest. In addition, the
IPT Line of Credit is secured by a first priority pledge of and security
interest in all limited partnership interests from time to time owned by IPLP
and the equity interests from time to time held by IPLP in any subsidiary of
IPLP which itself owns limited partnership interests. The Credit Agreement
defines a "Real Estate Entity" as any limited partnership, limited liability
company,

corporation or other entity which has as its principal business the ownership
of real property or debt secured by real property. Thus, all of the Controlled
Partnerships constitute Real Estate Entities for purposes of the Credit
Agreement.

The IPT Line of Credit contains customary covenants and restrictions on
IPLP's ability to, among other things, incur debt or contingent obligations,
grant liens, sell assets, make distributions or make investments. In addition,
the Credit Agreement contains certain financial covenants which require that
(a) the ratio of adjusted portfolio equity of IPLP to funded debt not be less
than 5.00 to 1.00 at the end of any fiscal quarter, (b) the ratio of Adjusted
DCFO (as defined below) for the period of four fiscal quarters then ended to
the sum of interest expense and certain dividend accruals not be less than 1.10
to 1.00 at the end of any fiscal quarter and (c) the ratio of Adjusted DCFO for
the period of four fiscal quarters then ended to interest expense for such
period not be less than 6.00 to 1.00. For purposes of the Credit Agreement, the
term "DCFO" means, for any period, the aggregate net operating income for such
period of each Real Estate Entity in which IPLP owns an equity interest less
with respect to each Real Estate Entity for such period the sum of (i) cash
interest expense, (ii) all principal payments (other than in connection with
refinancings) on the debt of such Real Estate Entity, (iii) an amount equal to
the greater of (x) the capital expenditures (exclusive of capital expenditures
to restore newly acquired properties to their original condition in accordance
with a budget provided by IPLP within 90 days after acquisition) less funded
capital expenditures or (y) an amount equal to $500 for each apartment unit and
$0.20 per square foot for each commercial property owned by such Real Estate
Entity; and the term "Adjusted DCFO" means, as of any date, an amount equal to
the aggregate of IPLP's pro rata portion of the DCFO of each Real Estate Entity
in which IPLP owns an equity interest (after giving effect to any acquisition
by IPLP of an equity interest in such Real Estate Entity during the quarterly
period ending on the determination date) plus all fee and other income received
by IPLP during such period (excluding extraordinary items) less all
unreimbursed fees and expenses paid by IPLP or IPT during such period.

Events of default under the IPT Line of Credit include (i) nonpayment of
principal with no period of grace and nonpayment of interest, fees or other
amounts due under the IPT Line of Credit within five days after the same become
due; (ii) material breach of any representation or warranty; (iii) failure to
observe any term, covenant or agreement contained in the IPT Line of Credit
beyond (in certain cases) an applicable period of grace; (iv) the failure by
IPLP to pay amounts due on account of the termination of any interest hedge
agreement within ten days of the date when due; (v) default by IPLP in the
payment when due, or in the performance or observance, of any material
obligation involving monetary liability in excess of $5,000,000 to the extent
that such liability is not being contested by IPLP in good faith with adequate
reserves having been established on its books in accordance with generally
accepted accounting principles; (vi) certain events of bankruptcy or insolvency
with respect to IPLP or material subsidiaries; (vii) the occurrence of certain
events under the Employee Retirement Income Security Act of 1974, as amended;
(viii) the failure of any material provision of the Credit Agreement or any
agreement delivered pursuant thereto to continue to be a valid and binding
obligation of IPLP or IPLP; (ix) the failure of the relevant security documents
to continue to be a valid first priority lien on any material portion of the
collateral security pledged pursuant thereto; and (x) judgments against IPLP of
$5,000,000 million or greater that remain unsatisfied, unvacated or unstayed
pending appeal for a period of 30 days after entry.

BUSINESS OF AMIT

GENERAL

AMIT is an unincorporated California business trust which was organized to
qualify as a REIT for federal income tax purposes. AMIT was originally
organized as a publicly held limited partnership that began offering limited
partnership units on August 18, 1986 and commenced operations on July 9, 1987.
In January 1989, the holders of a majority of the limited partnership units
elected to transfer all of the partnership's assets to AMIT. Presently AMIT's
capital structure consists of 2,617,000 outstanding AMIT Class A Shares and
1,675,113 outstanding AMIT Class B Shares. The AMIT Class A Shares are
registered under the Exchange Act and listed on the American Stock Exchange
under the symbol "ANM". Each AMIT Class A Share and each AMIT Class B Share is
entitled to one vote with respect to all matters put before AMIT's
shareholders.

AMIT has one wholly-owned subsidiary. In order for IPT to maintain its
qualification as a REIT under the Code after the Effective Time, AMIT's
subsidiary will be dissolved prior to the consummation of the Merger.

Angeles Funding Corporation ("AFC"), a wholly owned subsidiary of Angeles
Corporation ("Angeles") served as advisor to AMIT until February 1993. Through
AFC, AMIT had invested in various types of intermediate-term real estate loans
(the "AMIT Loans"). Prior to December 1996, the majority of the AMIT Loans were
made to partnerships that were once controlled by Angeles and are now
controlled by IPT. These partnerships include private and public real estate
limited partnerships which were formed to acquire, own and operate
income-producing real properties. As of December 31, 1997, there were 23 AMIT
Loans outstanding, with an aggregate portfolio balance of approximately $37
million, net of loan loss reserves, and AMIT owned as a result of foreclosures
or receipt of deeds in lieu of foreclosure on certain assets securing certain
AMIT Loans approximately $4.5 million of real property. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations of
AMIT."

Beginning in February 1993, AMIT faced significant liquidity problems
caused by (i) the failure of a significant number of the obligors of the AMIT
Loans (including certain partnerships now controlled by IPT) to fully service
outstanding debt obligations under their respective AMIT Loans, and (ii)
Angeles' inability to fully service its debt obligations under its promissory
note payable to AMIT or perform its other obligations to AMIT under its third
party loan guarantees and shareholder distribution guarantees. As of February
1993, approximately 75% of the AMIT Loans were in payment default. In February
1993, Angeles informed AMIT that it was unable to perform its obligations under
its guarantees because of liquidity problems caused by its inability to
complete sales or refinancings of real estate assets, its inability to fully
realize asset values in a continuing sluggish and depressed real estate market
and the failure of the obligors of the AMIT Loans to service fully, if at all,
their debt obligations to Angeles. On May 3, 1993, Angeles filed for protection
under Chapter 11 of the federal bankruptcy code. Angeles' failure to perform
under its guarantees, together with the defaults on AMIT Loans, resulted in
AMIT's suspension of cash distributions to the holders of AMIT Class A Shares
starting in February 1993 and resuming in February 1996. AMIT filed various
claims against Angeles and eventually reached agreement with Angeles and the
Committee of Creditors Holding Unsecured Claims of Angeles to settle all claims
between AMIT and Angeles. The settlement agreement was approved by the
Bankruptcy Court in March 1995. Under the agreement, AMIT received over $15
million in cash, notes, and AMIT Class A Shares.

Since February 1993 (when AMIT terminated its advisory agreement with
AFC), AMIT has restructured the majority of its loan portfolio and has paid in
full its then outstanding bank loan of $20 million. However, certain AMIT
Loans, which in the aggregate have a carrying value (net of loan loss reserves)
of approximately $1.3 million (constituting approximately 3% of AMIT's net
investments), are currently in default with respect to debt service
obligations. AMIT's lending is primarily concentrated in secured and, to a
lesser extent, unsecured real estate loans. The realizable value of real estate
collateralizing notes receivable or acquired in loan foreclosure proceedings
can only be determined based upon a sales negotiation with independent third
parties in an arm's length transaction. In addition, considering that, in most
cases, it is the proceeds of sale and/or refinancing which will enable AMIT to
receive funds, the actual proceeds may be significantly impacted by the
condition of the real estate

industry at the time the principal amounts become due or properties are sold.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations of AMIT."

AMIT will terminate December 31, 2003, unless extended to no later than
December 31, 2015 by vote of the shareholders of AMIT, or by the AMIT Board to
no later than December 31, 2020 without a vote of the shareholders of AMIT if
the AMIT Board believes that termination at such time would result in material
under-realization of the value of AMIT's assets. Upon liquidation of AMIT,
disposition proceeds will be distributed to the shareholders.

An entity will qualify for taxation as a REIT if it satisfies certain
income and assets tests. Among these tests is a requirement that a certain
percentage of assets constitute "real estate assets" and a certain percentage
of income be derived from such assets. AMIT's loan assets are collateralized in
a variety of ways, and some loans have not been collateralized. AMIT has not
requested or obtained an IRS determination that any of its assets qualify as a
"real estate asset", and has not obtained an opinion of counsel that it
currently qualifies as a REIT. If AMIT were to fail to qualify as a REIT in any
taxable year, AMIT would not be allowed a deduction for dividend distributions
in computing taxable income and would be subject to federal income tax on its
taxable income at regular corporate rates. AMIT believes that it has operated
in a manner designed to qualify as a REIT. However, if the Internal Revenue
Service were successfully to challenge the qualification of AMIT's REIT assets,
AMIT would be subject to federal income tax only after the utilization of
AMIT's net operating losses.

MANAGEMENT; EMPLOYEES

The general policies and supervision of AMIT are overseen by the AMIT
Board, which consists of four trustees.

AMIT has three employees. Upon the 1993 termination of AFC's advisory and
administrative services, AMIT engaged personnel to advise and administer its
operations. The shareholders of AMIT have no right to participate in the
management or conduct of AMIT's business and affairs.

PROPERTIES

The following is a list of properties owned by AMIT and held for sale as
of March 31, 1998.

DATE OF TYPE OF
PROPERTY OWNERSHIP OWNERSHIP USE CARRYING VALUE
- - ----------------------------------- ------------------- --------------- --------------------- ---------------

University Center Phase I & II..... 11/16/95 Fee ownership Warehouse Office $1,100,000
51,200 Sq. Ft.
University Center Phase IV ........ 12/02/95 Fee ownership Retail Shopping 1,671,000
56,000 Sq. Ft.
Silver Ridge Apartments ........... 1/30/98 Fee ownership 186 unit apartment 4,369,000
complex
Colony Cove ....................... 4/15/96 & 10/3/97 Fee ownership Raw land, 240 acres 1,750,000
----------
$8,730,000
==========

In August 1993, AMIT acquired, through a mortgage loan foreclosure, a
vacant parcel of land located in Houston, Texas and in January 1994, AMIT
acquired, through a mortgage loan foreclosure, a 220 unit apartment complex
located in Decatur, Georgia. The apartment complex was sold in 1994 for $3.4
million. The vacant parcel of land was sold, free and clear of any liens, in
1995 for $1.5 million.

In 1995 AMIT obtained title to three properties through deeds-in-lieu of
foreclosure. Two of these properties are industrial warehouses and are located
in Cleveland, Ohio. One is known as 4851 Van Epps, on which AMIT held a first
trust deed mortgage in the amount of $1,500,000 and the second is known as 4705
Van Epps, on which AMIT obtained a judgment lien through recourse provisions in
a defaulted loan. In October 1995, AMIT sold the 4851 Van Epps property for
$1,370,000 and in March 1996 AMIT sold

4705 Van Epps for $752,000. The third property, University Center Phase I & II,
was obtained through a deed-in-lieu of foreclosure, through recourse provisions
in a defaulted loan. The property consists of warehouse office space located in
Fridley, Minnesota. In December 1995, AMIT foreclosed on its first trust deed
mortgage in the original amount of $1,800,000, held on a retail shopping center
known as University Center Phase IV, located in Fridley, Minnesota.

In April 1996, AMIT foreclosed on a first trust deed mortgage in the
original amount of $1,572,000, held on 200 acres of raw land, know as Colony
Cove, located in Ellenton, Florida, and in October 1997 foreclosed on an
additional 40 acres adjacent to the 200 acres based on recourse provisions
provided in the mortgage. Currently, approximately 224 acres of Colony Cove
land is under contract for sale, which is anticipated to close in the latter
part of 1998, although there can be no assurance that such sale will be
consummated. In January 1998, through the recourse provisions in the mortgage,
AMIT was successful in garnishing all cash held by the Colony Cove borrower and
received cash of approximately $160,000, which reduced the carrying basis of
the property. In June 1996, AMIT along with a joint venture partner, foreclosed
on a first trust deed mortgage in the original amount of $1,050,000
(representing AMIT's 57% joint venture interest in the loan), held on 155 acres
of raw land and an 8,500 square foot strip shopping center known as a Rolling
Greens, located in Ocala, Florida. In June 1997, Rolling Greens was sold for
$1,175,000, of which $665,000 represents AMIT's portion of the joint venture
proceeds. In August 1996, AMIT foreclosed on a second trust deed mortgage in
the original amount of $1,720,000 held on a 443 pad mobile home park community,
known as Springdale Lake Estates Mobile Home Park ("Springdale"), located in
Belton, Missouri. Upon foreclosure, AMIT assumed the first note and trust deed
mortgage held by a third party bank in the amount of $2.8 million. In October
1996, AMIT sold Springdale for $4 million.

In December 1997, AMIT purchased a second mortgage loan for $380,000 on a
186-unit apartment complex, Silver Ridge Apartments, located in Maplewood,
Minnesota. In addition, during 1997, AMIT obtained judgment liens against a
186-unit apartment complex, Silver Ridge Apartments, located in Maplewood,
Minnesota, based upon recourse provisions on two other AMIT loans. As a result
of the judgment liens, AMIT foreclosed on the Silver Ridge Apartments in
October 1997, subject to a twelve-month redemption period. On January 30, 1998,
AMIT received title to Silver Ridge Apartments through deed-in-lieu of
foreclosure as a result of provisions in the second mortgage held by AMIT. In
connection with taking title to Silver Ridge Apartments, AMIT assumed a first
trust deed mortgage from a third party in the amount of $4,525,000. This first
mortgage provides for a variable interest rate not to exceed 12%, interest only
monthly, with a current rate of 3 1/2% per annum. The loan matures in July
2023.

INVESTMENT POLICY

AMIT's Declaration of Trust authorizes the AMIT Board to invest in a wide
variety of investments. Investments may be made in various combinations and may
involve participations with other persons, including affiliates. Such
investments may incorporate a variety of real property equity and financing
techniques, including partnerships, joint ventures, purchase and leasebacks,
and mortgages. AMIT may also invest in real property and interests therein.
Notwithstanding this broad authorization, it has always been the principal
investment objective and policy of AMIT to invest primarily in loans secured by
real property. There are no limitations on the geographical area or areas or
the types of loans or of real property securing such loans in which AMIT may
invest. Originally, AMIT invested primarily in second mortgages however, in
recent years, there have been more first mortgage investments. The real
properties securing the AMIT Loans have included raw land, office buildings,
apartment buildings, shopping centers, hotels, industrial and commercial
properties and mobile home parks.

To the extent that AMIT has assets not invested in real property and
interests therein, it may, subject to the prohibitions discussed below, invest
them in obligations of the United States government, any state, territory or
possession, or any agency or political subdivision of any of the above;
evidences of deposits in, or obligations of, banking institutions, state and
federal savings and loan associations, and savings institutions; and other
securities, liquid short term investments and property.

In making investments, AMIT is subject to certain restrictions contained
in its Declaration of Trust. It may not invest more than 10% of the Trust
Proceeds (as defined below) directly in the equity ownership of real estate.
"Trust Proceeds" is the sum of $56,600,000 (the total contributions made to
AMIT's

predecessor), AMIT borrowings and the proceeds from AMIT equity and debt
offerings. Since AMIT has never made any equity or debt offerings and it had no
borrowings as of December 31, 1997, the Trust Proceeds amounted to $56,600,000
as of December 31, 1997. AMIT may not acquire or fund any AMIT Loan which
provides for an initial term of more than 15 years unless such longer term is
approved by a majority of the AMIT Board. AMIT loans have typically had a
scheduled maturity of three to seven years. AMIT may not invest in or make a
loan to any one borrower if the principal amount of such loans would exceed, in
the aggregate, 40% of the Trust Proceeds at the time the loan is made. For
purposes of this limitation, each affiliate of Insignia is treated individually
and loans to such affiliates are not aggregated. AMIT may not invest in or make
a loan secured by any one property or asset if the principal amount of such
loan would exceed, in the aggregate, an amount equal to 20% of the Trust
Proceeds. AMIT may not invest in or make loans secured by one property or asset
if the aggregate amount of all loans secured by such property or asset which
are equal or senior to the loans, plus the principal amount of the loans, would
exceed an amount equal to 85% of the estimated value of such property or asset,
unless a majority of the AMIT Board determines that the terms of such loans are
reasonable to AMIT.

Notwithstanding the foregoing limitations or any other provision of AMIT's
Declaration of Trust, when an obligor to AMIT is in default under the terms of
any obligation (including an AMIT Loan), the AMIT Board has the power to pursue
any remedies permitted by law which, in its sole judgment, are in the interest
of AMIT, and the AMIT Board has the power to receive and hold any investment
and to enter into any commitment or obligation on behalf of AMIT in connection
with or in pursuit of such remedies which, in the sole judgment of the AMIT
Board, is necessary or desirable for the purpose of acquiring property and
disposing of property acquired in the pursuit of such remedies. From time to
time, AMIT acquires properties through the exercise of such remedies. All
foreclosed properties are held for sale.

AMIT's Declaration of Trust provides that the AMIT Board shall not invest
in commodities, foreign currencies or bullion except in connection with
investments in other property, engage in any material trading activities with
respect to any of the assets of AMIT, issue redeemable securities or engage in
the underwriting or public distribution of securities issued by others.

Subject to the specific limitations set forth above and subject to such
restrictions as may be necessary to qualify AMIT as a REIT under the Code, the
AMIT Board, without the vote or consent of shareholders, may alter the
investment policy of AMIT in light of changes in economic circumstances and
other relevant factors, and the method of implementing AMIT's investment
policies may change, in the discretion of the AMIT Board, as economic and other
conditions change.

LEGAL PROCEEDINGS

An action was filed against AMIT, Katten Muchin Zavis and David M. Bass in
Superior Court of the State of California by Jules P. Kirsch on December 26,
1996 alleging that the named defendants had maliciously prosecuted Mr. Kirsch
in certain earlier litigation commenced by AMIT in 1995, which alleged the
purchase by Jules P. Kirsch and several other individuals and corporations of
AMIT Class A Shares through the use of "inside information" and for violations
of Sections 13(d) and 14(a) of the Exchange Act and the rules and regulations
promulgated thereunder.

In June 1996, AMIT settled the prior claims with all defendants, except
for Jules P. Kirsch and voluntarily dismissed the claims against Jules P.
Kirsch. The now pending action commenced by Jules P. Kirsch seeks unspecified
amounts for compensatory and punitive damages. AMIT believes this lawsuit will
be resolved with no material effect on AMIT.

On January 5, 1998, summary judgment was entered in favor of AMIT and
against Mr. Kirsch on all claims in the malicious prosecution action. On
January 30, 1998 Mr. Kirsch filed an appeal of the summary judgment ruling.

MARKET FOR AMIT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

AMIT has 1,186 record holders of AMIT Class A Shares as of May 13, 1998.
The AMIT Class A Shares are currently traded on the American Stock Exchange
under the symbol "ANM." All of the AMIT Class B Shares are held by MAE.

Pursuant to the Stock Option Agreement, AMIT holds an option to purchase
all of the AMIT Class B Shares held by MAE. There is no established public
trading market for the AMIT Class B Shares.

The following table sets forth, for the periods indicated, the high and
low sales prices of the AMIT Class A Shares, as reported on the American Stock
Exchange:

HIGH LOW
--------- ---------

1998, Quarter ended:
June 30 (through
June ) .............. $ $
March 31 .............. $19 3/8 $17 7/8
1997, Quarter ended:
December 31 .......... $19 3/4 $16 1/8
September 30 ......... $17 3/4 $14 7/8
June 30 .............. $15 3/4 $13 1/4
March 31 ............. $14 1/2 $12 5/8
1996, Quarter ended:
December 31 .......... $13 3/4 $8 7/16
September 30 ......... $8 5/8 $7 7/8
June 30 .............. $8 5/8 $7 5/8
March 31 ............. $9 5/8 $5 5/8

On June , 1998, the last sale price of the AMIT Class A Shares as
reported by the ASE was $ . In 1997, AMIT paid quarterly distributions
equaling in the aggregate $1.03 per AMIT Class A Common Share. Additionally, in
1998 AMIT has paid distributions of $.32 per AMIT Class A Share on February 11,
1998 to shareholders of record on January 13, 1998 and on May 12, 1998 to
shareholders of record on April 14, 1998 and AMIT has declared an additional
distribution of $.32 per AMIT Class A Share to be paid on July 9, 1998 to
shareholders of record on July 1, 1998. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations of AMIT."

IPT SELECTED CONSOLIDATED AND COMBINED FINANCIAL DATA

The following is a summary of certain selected financial data of IPT and
its subsidiaries and predecessors. The selected financial data have been
derived from IPT's consolidated financial statements and the combined financial
statements of its predecessor and, in the opinion of management of IPT, include
all adjustments (consisting of only normal recurring adjustments) necessary for
a fair presentation of the financial position and results of operations for the
periods presented. The information set forth below is not necessarily
indicative of the results of future operations and should be read in
conjunction with IPT's Financial Statements and the related Notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of IPT and the Investment Partnerships" included elsewhere in this
Proxy Statement/Prospectus.

THREE MONTHS ENDED MARCH 31, YEAR ENDED DECEMBER 31,
------------------------------- -----------------------------------------------------
1998 1997 1997 1996 1995 1994
--------------- --------------- -------------- ------------ ------------ ------------
(IN THOUSANDS, EXCEPT SHARE DATA) (IN THOUSANDS, EXCEPT SHARE DATA)

STATEMENT OF OPERATIONS DATA
Revenues ................................ $ 5,757 $ 4,128 $ 16,826 $ 9,705 $ 2,459 $ 113
Income before extraordinary
item ................................... $ 2,054 $ 660 $ 6,074 $ 3,557 $ 2,215 $ 113
Net income .............................. $ 2,080 $ 660 $ 6,004 $ 2,425 $ 2,215 $ 113
Income before extraordinary
item per share (diluted) ............... .11 .06 .41 n/a n/a n/a
Net income per share (diluted) .......... .11 .06 .40 n/a n/a n/a
Cash distributions to IPT
Common shareholders
per share .................... ......... .15 -- .30 .20 n/a n/a
Weighted average IPT
Common Shares
outstanding ............................ 18,835,911 11,179,036 14,694,327 n/a n/a n/a
BALANCE SHEET DATA
Cash .................................... $ 23,338 $ 5,111 $ 37,432 $ 4,928 $ 528 $ --
Investments in real estate
limited partnerships ................... 177,681 110,632 159,469 118,741 54,037 38,346
Total assets ............................ 234,091 139,905 226,068 147,757 54,565 38,346
Long-term debt .......................... 21,957 20,380 19,300 19,730 -- --
Minority interest in IPLP ............... 56,984 46,998 54,447 50,429 -- --
Minority interest in other
consolidated subsidiaries .............. -- -- -- -- 2,682 --
Shareholders' equity .................... $ 149,314 $ 71,034 $ 146,212 $ 70,639 $ 51,874 $ 38,346
OTHER DATA
Cash provided by
(used in) operating activities ......... $ 97 $ 815 $ 2,338 $ 1,420 $ (100) $ --
Cash provided by (used in)
provided by investing
activities ............................. (12,253) 9,886 (16,481) (70,834) (13,237) (38,233)
Cash provided by (used in)
financing activities ................... (1,938) (10,518) 46,647 73,814 13,865 38,233
Funds from Operations(a) ................ $ 7,439 $ 5,144 $ 20,939 $ 12,563 $ 4,611 $ 113
Number of IPT Partnerships(b) ........... 43 26 29 26 13 4
Number of properties(b) ................. 201 136 150 136 86 32
Apartment units(b) ...................... 49,373 36,077 38,369 36,077 19,337 7,433
Commercial square feet(b) ............... 2,983,995 819,000 1,667,874 819,000 767,172 453,977

THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
--------------------- -----------------------------------------------
1998 1997 1997 1996 1995 1994
--------- --------- ----------- ----------- --------- -------
(IN THOUSANDS, EXCEPT SHARE DATA) (IN THOUSANDS, EXCEPT SHARE DATA)

Income before gain on
sale of property, minority
interest and extraordinary
items ................................ $3,587 $2,487 $ 9,470 $ 3,913 $2,346 $113
Depreciation and amortization ......... 4,002 2,871 12,288 9,388 2,265 --
Minority interest in NPI 4 funds
from operations ...................... (150) (214) (819) (738) -- --
------ ------ ------- ------- ------ ----
Funds from Operations ................. $7,439 $5,144 $20,939 $12,563 $4,611 $113
====== ====== ======= ======= ====== ====

(b) Only includes the IPT Partnerships.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF IPT AND THE IPT PARTNERSHIPS

This Proxy Statement/Prospectus contains forward-looking statements that
involve risks and uncertainties. IPT's actual results could differ materially
from the results discussed in the forward-looking statements.

INSIGNIA PROPERTIES TRUST

The following is based on (i) the historical results of IPT for the three
months ended March 31, 1998 and the year ended December 31, 1997, and (ii) the
historical results of IPT's predecessor entities for the years ended December
31, 1996 and 1995. IPT's predecessor entities began operations in 1994 with the
acquisition of partnership interests in December 1994. IPT's most significant
assets are its investments in real estate limited partnerships, which are
principally comprised of general and limited partner interests in the IPT
Partnerships. See Note 3 to the Combined Financial Statements of IPT for a
summary of investments made for each year. This information should be read in
conjunction with the accompanying combined financial statements and the related
notes thereto.

FINANCIAL CONDITION

At March 31, 1998, IPT held assets of $234.1 million, an increase of 4%
from December 31, 1997. IPT's assets increased from the prior year end 53% to
$226.1 million at December 31, 1997 and 171% to $147.8 million at December 31,
1996 for the years then ended, respectively. The asset growth was principally
in cash and cash equivalents, investments in real estate limited partnerships,
apartment properties and other assets, principally due to the NPI Transaction,
the Private Offerings and the acquisition of units of limited partner interests
in certain of the IPT Partnerships in both the transactions with High River and
various tender offers.

Cash and cash equivalents decreased 37.7% to $23.3 million at March 31,
1998 compared to December 31, 1997 primarily as a result of the acquisition of
units of limited partner interests in certain of the IPT Partnerships during
the period. Cash and cash equivalents increased from the prior year end 660% to
$37.4 million at December 31, 1997 and 833% to $4.9 million at December 31,
1996 for the years then ended, respectively. The primary sources of the cash
increases were the Private Offerings, for the year ended December 31, 1997, and
the consolidation of NPI 4 (as a result of the NPI Transaction) for the year
ended December 31, 1996.

Investments in real estate limited partnerships (consisting primarily of
investments in the IPT Partnerships) increased 11.4% to $177.7 million at March
31, 1998 compared to December 31, 1997. Investments in real estate limited
partnerships increased from the prior year end 34% to $159.5 million at
December 31, 1997 and 120% to $118.7 million at December 31, 1996 for the years
then ended, respectively. The increases for the three months ended March 31,
1998 and year ended December 31, 1997 resulted primarily from the acquisitions
of units of limited partner interests in the Shelter Properties Partnerships
(see "Glossary") and acquisitions of units of limited partner interests in
other IPT Partnerships in various tender offers. The increase for the year
ended December 31, 1996, was primarily due to the acquistion of units of
limited partner interests in the NPI Partnerships.

The apartment properties balances of $26 million, $22.4 million and $22.1
million at March 31, 1998, December 31, 1997 and December 31, 1996,
respectively, are due to the consolidation of NPI 4 for the years ended
December 31, 1997 and 1996, and the consolidation of NPI 4 and Raintree
Pensacola, L.P. for the three months ended March 31, 1998. The other assets
balances of $6.8 million and $1.9 million at December 31, 1997 and 1996,
respectively, are due to the consolidation of NPI 4 and the capitalization of
organizational costs incurred in connection with the formation of IPT.

LIQUIDITY AND CAPITAL RESOURCES

The initial capitalization of IPT and IPLP was primarily funded by
Insignia. Insignia also initially provided IPLP a line of credit of $2.5
million for additional investments. The outstanding balance on that line of
credit was paid and the line of credit canceled during July 1997.

During the year ended December 31, 1997, IPT raised additional capital of
$52.3 million in one of the Private Offerings and an additional $10.0 million
through a private sale of IPT Common Shares to a single investor. At March 31,
1998, IPT had cash of approximately $23.3 million. Subsequent to March 31,
1998, IPLP obtained the IPT Line of Credit, in the aggregate amount of $50.0
million. The IPT Line of Credit is secured by a pledge and security interest in
all of the limited partner interests owned by IPLP in the Controlled
Partnerships and any other partnerships in which IPT owns or controls the
general partner and IPLP owns a limited partner interest. Additionally, IPT has
guaranteed IPLP's obligations under the IPT Line of Credit commitment. As of
the date hereof, IPT has no outstanding indebtedness under the IPT Line of
Credit.

Two apartment properties and two non-recourse mortgage notes, which are
consolidated in IPT's financial statements, constitute the principal assets and
liabilities of NPI 4 (in which a wholly-owned subsidiary of IPT is the sole
general partner and IPLP owns a majority of the limited partner interests) and
Raintree Pensacola, L.P. (in which a wholly-owned subsidiary of IPT is the sole
general partner and IPLP is the sole limited partner). In addition, $2.1
million of consolidated cash was held by NPI 4 and Raintree Pensacola, L.P.
combined at March 31, 1998.

Cash distributions of approximately $2.8 million ($.15 per share) were
paid during the first quarter of 1998. Additionally, cash distributions paid to
common shareholders of approximately $8.7 million and approximately $2.2
million were paid in 1997 and 1996 respectively. IPT declared a distribution of
approximately $2.9 million to common shareholders of record on March 23, 1998,
and paid such distribution in April 1998. Cash distributions paid to Insignia
by IPLP of approximately $5.4 million, approximately $6.8 million and
approximately $10.2 million were paid in 1997, 1996 and 1995 respectively. A
cash distribution of approximately $1.4 million was paid to Insignia by IPLP
during the first quarter of 1998. The 1996 distribution was paid from the
proceeds of a distribution from IPLP, which simultaneously paid a distribution
of approximately $4.1 million to Insignia (as the sole limited partner of
IPLP). Future distributions will depend on the levels of net cash generated
from operations, capital expenditure requirements, property sales, refinancings
by the Controlled Partnerships and distributions thereof to IPT. However, the
IPT Board has adopted a policy to pay regular quarterly distributions in an
amount equal to $.15 per IPT Common Share which will be increased to $.16 per
IPT Common Share beginning with the first quarterly distribution for which the
record date is after the Effective Time. IPT is currently paying regular
quarterly distributions of $.15 per IPT Common Share in accordance with this
policy. See "Distributions."

RESULTS OF OPERATIONS

Because IPT's primary assets consist of general and limited partner
interests in the IPT Partnerships, a substantial majority of IPT's funds from
operations results from the pass through of IPT's share of funds from
operations generated by the IPT Partnerships (including IPT's share of the
funds from operations generated by NPI 4 and Raintree Pensacola, L.P., which
are consolidated in IPT's combined financial statements). See Note 6 to IPT's
Combined Financial Statements.

Acquisitions of partnership interests began in December 1994 and have
since then continued. Substantial operating results began in 1995, which
produced net income of $2.2 million and $4.6 million of funds from operations.
Net income of $2.4 million in 1996 was up slightly from the $2.2 million in
1995, primarily due to increased equity earnings resulting from acquisitions of
interests in partnerships during 1996. Net income for the year ended December
31, 1997 was approximately $6.0 million, which was an increase of 148% from net
income for the year ended December 31, 1996. Net income for the three months
ended March 31, 1998 was approximately $2.1 million compared to approximately
$0.7 million for the same period in 1997, an increase of 110%. These increases
were primarily due to increased equity earnings resulting from improved
operations of the IPT Partnerships and from the acquisition of units of limited
partner interest in various IPT Partnerships. Insignia's minority interest
resulted from Insignia and its affiliates transferring to IPLP their limited
partner interests in the IPT Partnerships in exchange for OP Units in 1996 and
1997. Income before minority interest and extraordinary items increased from
approximately $3.9 million for the year ended December 31, 1996 to
approximately $10.5 million for the year ended December 31, 1997, and increased
44.2% to $3.6 million for the three months ended

March 31, 1998, compared to the same period in 1997. This increase was
primarily attributable to an increase in equity earnings due to improved
operations of the IPT Partnerships, to the acquisition of units of limited
partner interests in various IPT Partnerships, and to an increase in other
income resulting from increased distributions received from the Controlled
Partnerships in which IPT has a nominal investment.

For the three months ended March 31, 1998, funds from operations increased
44.6% to $7.4 million compared to $5.1 million for the three months ended March
31, 1997. Funds from operations increased 67% to $20.9 million for the year
ended December 31, 1997 compared to $12.6 million for the year ended December
31, 1996. Funds from operations increased 172% to $12.6 million for the year
ended December 31, 1996 from $4.6 million for the year ended December 31, 1995.
These increases were primarily the result of additional partnership interest
acquisitions, and to a lesser extent from an increase in funds from operations
from the IPT Partnerships. Funds from operations is defined as income or loss
from real estate operations, which is net income in accordance with generally
accepted accounting principles excluding gains or losses for debt
restructurings, sales of property and minority interests, plus depreciation and
provision for impairment. See "IPT Selected Combined Financial Data" for a
reconciliation of net income to funds from operations.

YEAR 2000 COMPLIANCE

IPT is dependent upon Insignia for management and administrative services.
Insignia has completed an assessment and has determined that it will have to
modify or replace portions of its software so that its computer systems will
function properly with respect to dates in the year 2000 and thereafter. The
project is estimated to be completed not later than December 31, 1998, which is
prior to any anticipated impact on its operating systems. Insignia believes
that with modifications to existing software and conversions to new software,
the year 2000 issue will not pose significant operational problems for its
computer systems. IPT does not expect the conversion to have a material impact
on its financial position or results of operations. However, if such
modifications and conversions are not made, or are not completed in a timely
fashion, the year 2000 issue could have a material impact on the operations of
IPT.

FUNDS FROM OPERATIONS (FFO)

The Company believes that FFO is a significant indicator of the strength
of its results. FFO represents net income (loss) (computed in accordance with
generally accepted accounting principles), excluding gains (or losses) from
debt restructuring or sales of property, plus depreciation of real property,
and after adjustments for unconsolidated partnerships and joint ventures. FFO
should not be considered as an alternative to net income or other measurements
under generally accepted accounting principles as an indicator of operation
performance or to cash flows from operating, investing or financing activities
as a measure of liquidity. FFO does not reflect working capital changes, cash
expenditures for capital improvements or principal payments on indebtedness.

INFLATION

Substantially all of the leases at the properties of the IPT Partnerships
are for a term of one year or less, which may enable IPT to seek increased rent
upon renewal of existing leases and upon the commencement of new leases. The
short-term nature of the leases generally serves to reduce the risk to IPT of
the adverse effects of inflation.

SOP 98-5

In 1998, the Accounting Standards Executive Committee issued Statement of
Position 98-5, Reporting on the Costs of Start-Up Activities ("SOP 98-5"),
which is effective for financial statements for fiscal years beginning after
December 15, 1998. SOP 98-5 requires costs of start-up activities and
organization costs to be expensed as incurred. Initial application should be
reported as the cumulative effect of a change in accounting principle and
expensed in the first quarter in the year of adoption. At March 31, 1998, the
Company had approximately $1.8 million capitalized as organizational costs that
would be affected by the requirements of SOP 98-5.

EITF 97-11

The Company has not capitalized any internal costs in connection with
identifying and acquiring operating properties. Therefore, EITF 97-11 will have
no effect on the Company's financial statements.

IPT PARTNERSHIPS

The following discussion pertains to the combined financial condition and
results of operations of those partnerships that constituted IPT Partnerships
during the applicable periods (i.e., those Controlled Partnerships in which IPT
had a material interest). While this discussion is directed to the IPT
Partnerships in the aggregate, it is important to note that each IPT
Partnership is limited to its own resources and must accordingly manage its
capital resources.

FINANCIAL CONDITION

Each of the IPT Partnerships is governed by its specific partnership
agreement, and pursuant to each of those partnership agreements the general
partner of the applicable partnership has substantial authority over the
operations and financial position of the particular partnership. Further, the
partnership agreements generally render the issuance of additional equity
interests impractical and in many instances limit the amount and nature of
permitted mortgages or other indebtedness. Finally, certain changes of control
of the general partners of the IPT Partnerships that occurred during the last
three years have resulted in different philosophies with respect to operations,
rent changes and debt structure.

IPT believes that each IPT Partnership has sufficient capital to meet its
operating and capital needs. At December 31, 1997, the IPT Partnerships held
approximately $106.0 million in cash and other liquid investments, which
included approximately $10.0 million held for distribution to partners,
including IPT and affiliates, in the first quarter 1998. At March 31, 1998, the
IPT Partnerships held approximately $127.7 million in cash and other liquid
investments.

A majority of the mortgage loan financings of the IPT Partnerships was
obtained with the assistance of Insignia over the last five years. Each
mortgage loan is single asset, non-recourse, non-cross-collaterlized, fixed
rate debt. The aggregate outstanding balance of all such financings at March
31, 1998 and December 31, 1997 was approximately $913.1 million and $680.2
million, respectively.

The mortgage loan financings completed by the IPT Partnerships can be
substantially grouped into three principal categories:

o A series of whole loan financings specific to properties controlled by
Insignia completed in November 1992 with Lehman Capital. Each of the
property loans bears interest at an annual rate of 7.6%, provides for
monthly debt service based on a twenty-three year amortization and
matures with a balloon payment due in November 2002. These loans
comprised approximately 10% and 12% of the combined IPT Partnerships'
outstanding debt at March 31, 1998 and December 31, 1997, respectively.

o A series of whole loan financings with Lehman Capital and Freddie Mac in
December 1995 pursuant to which each loan bears interest at an annual
rate of 6.95%. Payments are substantially interest only and the loans
mature in December 2005. These loans comprised approximately 12% and 16%
of the combined IPT Partnerships' outstanding debt at March 31, 1998 and
December 31, 1997, respectively.

o A series of whole loan financings with Lehman Capital and Freddie Mac in
September 1996 pursuant to which each loan bears interest at an annual
rate of 7.33%. Payments are interest only and the loans mature in
September 2003. These loans comprised approximately 23% and 24% of the
combined IPT Partnerships' outstanding debt at March 31, 1998 and
December 31, 1997, respectively.

The IPT Partnerships require sufficient operating cash flows and capital
resources to maintain their properties and service their debt. Excess cash
flows are generally available for distribution to partners. Capital
expenditures have been substantial with respect to the assets owned by the IPT
Partnerships.

Upon gaining control of the general partners, Insignia has undertaken to
implement property improvement programs intended to result in improving both
the physical condition and the appearance of the properties. This has been the
case particularly with respect to the properties owned by the Consolidated
Capital Partnerships, which Insignia commenced managing in 1995, and with
respect to the properties owned by the National Properties Partnerships and
Century Properties Partnerships, which Insignia commenced managing in 1996.
Aggregate capital expenditures of the IPT Partnerships were approximately $44.0
million in 1996, and approximately $32.6 million in 1997. IPT believes that the
IPT Partnerships will expend approximately $34.2 million on capital
expenditures in 1998. As of March 31, 1998, the IPT Partnerships has expended
approximately $11.1 million on capital expenditures.

Certain properties owned by IPT Partnerships are encumbered by mortgages
in amounts that constitute substantially all of the value of the properties.
Furthermore, one IPT Partnership, Century Properties Fund XVI, does not
currently generate cash flow after payment of debt services and required
capital expenditures. However, IPT does not believe that any of these
investments will be lost. Additionally, if these properties were lost, the
combined loss of these investments would not have a material adverse effect on
the combined IPT Partnerships or IPT.

RESULTS OF OPERATIONS

Each IPT Partnership is essentially a closed end investment vehicle.
Accordingly, the primary factors affecting operating results are changes in
rental income, changes in property operating expenses, changes in debt
financing and dispositions of asset investments during the period.

Three Months Ended March 31, 1998 Compared to Three Months ended March 31,
1997

The following table summarizes certain operating statement data included
in the Combined Financial Statements of IPT. The same data is also presented
for only those properties that were included in operating results for the full
year in each period. Amounts are shown before gains (losses) on disposition of
real property and/or extraordinary items.

AS REPORTED BY EXCLUDING ASSETS
THE IPT PARTNERSHIPS SOLD DURING 1998 AND 1997
---------------------------------------- ------------------------------------------
THREE MONTHS ENDED MARCH 31, THREE MONTHS ENDED MARCH 31,
---------------------------------------- ------------------------------------------
1998 1997 CHANGE 1998 1997 CHANGE
------------ ------------ ---------- ------------ ------------ ------------
(IN THOUSANDS) (IN THOUSANDS)

Property Revenues ................ $ 91,257 $ 60,241 51.5% $ 62,668 $ 59,463 5.4%
Property Operating Expenses ...... (44,450) (30,365) 46.4% (30,079) (29,891) 0.6%
Interest Income .................. 2,108 1,837 14.8% 1,483 1,836 (19.2)%
Interest Expense ................. (19,324) (13,189) 46.5% (12,836) (12,998) ( 1.2)%
Administrative Expense ........... (3,890) (1,954) 99.1% (2,562) (1,954) 31.1%
--------- --------- --------- ---------
Funds From Operations ............ 25,701 16,570 55.1% 18,674 16,456 13.5%
Depreciation ..................... (18,249) (12,221) 49.3% (11,992) (12,060) ( 0.6)%
--------- --------- --------- ---------
Income (Loss) from operations..... $ 7,452 $ 4,349 71.3% $ 6,682 $ 4,396 52.0%
========= ========= ========= =========

Property revenues for the three months ended March 31, 1998 increased
51.5% from the three months ended March 31, 1997. The property revenue growth
was primarily due to increased ownership in a greater number of properties
during the period as a result of tender offers extended during 1997 and 1998,
and the transfer of limited partnership interests in various limited
partnerships from Insignia in connection with the MAE GP Merger. This growth
was partially offset by the effects of three properties sold during the second
half of 1997. Property revenues from properties owned throughout the two
periods increased 5.4%. The property revenue growth is a function of the
favorable market for rental rate increases and the improved conditions and
appearance of the subject properties. Property operating expenses increased
46.4% for the three months ended March 31, 1998 primarily as a result of the
1997 and

100

1998 tender offers and limited partnership units acquired in connection with
the MAE GP Merger, offset by 1997 property sales. For properties owned
throughout both periods, property operating expenses increased .6% for the
three months ended March 31, 1998 compared to the three months ended March 31,
1997.

Interest expense of the IPT Partnerships increased 46.5% for the three
months ended March 31, 1998 primarily as a result of owning an interest in a
greater number of properties for the period as discussed above. Conversely,
with respect to properties owned throughout both periods, interest expense
decreased slightly by 1.2%. Administrative expenses increased 31.1% for the
three months ended March 31, 1998 as compared to the same period in 1997 after
adjusting for properties owned throughout both periods. The increase in
administrative expenses primarily resulted from increases in audit, legal and
other professional fees combined with fees and cost reimbursments to the
general partners. Depreciation expense increased 49.3% for the three months
ended March 31, 1998 compared to the three months ended March 31, 1997 due to
owning an interest in a greater number of properties during the period as a
result of the 1997 and 1998 tender offers and the acquisition of limited
partnership interests in connection with the MAE GP Merger. This increase was
slighly offset by 1997 property sales. For properties owned throughout both
periods, depreciation expense decreased .6%.

As a result of the foregoing factors, funds from operations improved by
55.1% and the income from operations increased 71.3%. With respect to
properties owned throughout both periods, funds from operations increased 13.5%
and income from operations increased 52%.

Fiscal Year 1997 Compared to Fiscal Year 1996

AS REPORTED BY EXCLUDING ASSETS
THE IPT PARTNERSHIPS SOLD DURING 1997 AND 1996
------------------------------------------ --------------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------------------------ --------------------------------------------
1997 1996 CHANGE 1997 1996 CHANGE
------------- ------------- ---------- ------------- ------------- ------------
(IN THOUSANDS) (IN THOUSANDS)

Property Revenues ................ $ 283,668 $ 247,999 14.4% $ 248,105 $ 244,109 1.6 %
Property Operating Expenses ...... (152,502) (139,538) 9.3% (133,017) (137,009) ( 2.9)%
Interest Income .................. 5,353 5,347 0.1% 5,044 5,344 ( 5.6)%
Interest Expense ................. (57,794) (53,340) 8.4% (51,470) (52,328) ( 1.6)%
Administrative Expense ........... (11,541) (10,405) 10.9% (9,230) (10,405) (11.3)%
---------- ---------- ---------- ----------
Funds From Operations ............ 67,184 50,063 34.2% 59,432 49,711 19.6 %
Depreciation ..................... (57,416) (50,719) 13.2% (49,529) (49,814) ( 0.6)%
---------- ---------- ---------- ----------
Income (Loss) from operations..... $ 9,768 $ (656) $ 9,903 $ (103)
========== ========== ========== ==========

Property revenues for the year ended December 31, 1997 increased 14.4%
from the year ended December 31, 1996. The property revenue growth was
primarily due to increased ownership in a greater number of properties during
the period as a result of tender offers extended during 1997. This growth was
partially offset by the effects of one property foreclosed upon during 1996 and
three properties sold during the last half of 1997. Property revenues from
properties owned throughout the two periods increased slightly by 1.6%. The
property revenue growth is a function of the favorable market for rental rate
increases and the improved conditions and appearance of the subject properties.
Property operating expenses increased 9.3% for the year ended December 31, 1997
as a result of the 1997 tender offers, offset by 1997 property sales and the
1996 property foreclosure. For properties owned throughout both periods,
property operating expenses decreased 2.9% for the year ended December 31, 1997
compared to the year ended December 31, 1996.

Interest expense of the IPT Partnerships increased 8.4% for the year ended
December 31, 1997 primarily as a result of owning an interest in a greater
number of properties for the period as discussed

101

above. Conversely, with respect to properties owned throughout both periods,
interest expense decreased 1.6%. The decrease resulted primarily due to the
aggregate mortgage balances decreasing as a result of the refinancings that
occurred in the second half of 1996 and a reduction in the interest rates for
the related mortgages. Administrative expenses decreased 11.3% for the year
ended December 31, 1997 as compared to the same period in 1996 after adjusting
for properties owned throughout both periods. The decrease in administrative
expenses primarily resulted from Insignia's economies of scale being applied to
all of the IPT Partnerships by the second half of 1996. Depreciation expense
increased 13.2% for the year ended December 31, 1997 compared to the year ended
December 31, 1996 due to owning an interest in more properties during the
period as a result of the 1997 tender offers, slightly offset by property
sales.

As a result of the foregoing factors, funds from operations improved by
34.2% and the income from operations increased by $10.0 million for the year
ended December 31, 1997 as compared to the same period in 1996. With respect to
properties owned throughout both periods, funds from operations increased 19.6%
and income from operations increased $10 million.

Fiscal Year 1996 Compared to Fiscal Year 1995

The following table summarizes certain operating statement data included
in the Combined Financial Statements of IPT. The same data is also present for
only those properties that were included in operating results for the full year
in each period. Amounts are shown before gains (losses) on disposition of real
property and/or extraordinary items.

AS REPORTED BY EXCLUDING ASSETS
THE IPT PARTNERSHIPS SOLD DURING 1996 AND 1995
---------------------------------------- ----------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
---------------------------------------- ----------------------------------------
1996 1995 CHANGE 1996 1995 CHANGE
------------- ------------- ------------ ------------- ------------- ------------
(IN THOUSANDS) (IN THOUSANDS)

Property Revenues ................... $ 247,999 $ 239,335 3.6 % $ 247,701 $ 234,499 5.6 %
Property Operating Expenses ......... (139,538) (132,986) 4.9 % (139,306) (129,752) 7.4 %
Interest Income ..................... 5,347 4,776 12.0 % 5,347 4,744 12.7 %
Interest Expense .................... (53,340) (56,477) ( 5.6)% (53,243) (55,090) ( 3.4)%
Administrative Expense .............. (10,405) (12,662) (17.8)% (10,405) (12,662) (17.8)%
---------- ---------- ---------- ----------
Funds From Operations ............... 50,063 41,986 19.2 % 50,094 41,739 20.0 %
Depreciation ........................ (50,719) (50,844) ( 0.3)% (50,576) (49,723) 1.7 %
Provisions for Loss ................. -- (8,255) n/a -- (8,055) n/a
---------- ---------- ---------- ----------
Loss from operations ................ $ (656) $ (17,113) (96.2)% $ (482) $ (16,039) (97.0)%
========== ========== ========== ==========

Property revenues for the year ended December 31, 1996 increased by 3.6%
from the year ended December 31, 1995. This increase was a result of a 5.6%
growth in property revenues from the properties owned throughout the two
periods, offset by the effects of three properties sold during 1996 and four
properties sold during 1995. Average occupancy was approximately 94% in each
period. The property revenue growth was a function of the favorable market for
rental rate increases and the improved condition and appearance of the subject
properties.

Property operating expenses increased by 4.9% due to a 7.4% increase for
the properties owned throughout the two periods reduced by the effect of the
property dispositions during 1995 and 1996. Approximately $4.0 million (or
3.0%) of the increased expenses was directly attributable to the general
improvement program for the properties and related to periodic major
maintenance expenses, such as exterior painting and general landscaping
changes. The remaining 4.4% increase in same property operating expenses is
primarily attributable to increased costs of operations.

Interest expense of the IPT Partnerships declined by 5.6%, with a decline
of 3.4% attributable solely to properties owned at the end of 1996. This
decline resulted primarily from the December 1995 refinancing which reduced the
related interest rates to 6.95%, and to a lesser extent from the September 1996
refinancing which reduced related interest rates to 7.33%. These rates
permitted a reduction in total interest expense notwithstanding that the
aggregate mortgage balances increased by approximately

102

$50.0 million in those refinancing transactions. The increase in administrative
expenses from 1995 to 1994 was reversed and administrative expenses decreased
further as a result of Insignia's economies of scale being applied to all of
the IPT Partnerships by the second half of 1996.

Depreciation of the IPT Partnerships declined modestly because the effect
of property sales was greater than the increase caused by capital expenditures,
and the writedown of assets in 1995 resulting from Insignia's analysis of
property carrying values was not present in 1996.

As a result of the foregoing factors, funds from operations improved by
19.0% and the net loss declined from $17.1 million to approximately $0.7
million. With respect to properties owned throughout both periods, funds from
operations improved 20.0% and loss from operations improved $15.6 million.

103

AMIT SELECTED CONSOLIDATED FINANCIAL DATA

The following is a summary of certain selected consolidated financial data
of AMIT. The selected consolidated financial data have been derived from AMIT's
consolidated financial statements and, in the opinion of management of AMIT,
include all adjustments (consisting of only normal recurring adjustments)
necessary for a fair presentation of the financial position and results of
operations for the periods presented. The information set forth below is not
necessarily indicative of the results of future operations and should be read
in conjunction with AMIT's Consolidated Financial Statements and the related
Notes thereto and "Management's Discussion and Analysis of Financial Condition
and Results of Operations of AMIT" included elsewhere in this Proxy
Statement/Prospectus.

(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
--------------------------------
1998 1997
---------------- ---------------
(IN THOUSANDS, EXCEPT SHARE
DATA)

STATEMENT OF OPERATIONS DATA
Revenue ............................ $ 1,060 $ 1,235
Costs and expenses ................. 76 353
Extraordinary item ................. -- --
Net income ......................... 984 882
Per AMIT Class A Share:(a)
Income before extraordinary
item ............................. 0.37 0.33
Extraordinary item ................ -- --
Net income ........................ 0.37 0.33
Cash distributions to AMIT
Class A shareholders .............. 837 576
Cash distributions per AMIT
Class A Share ..................... 0.32 0.22
AMIT Class A Shares
outstanding at end of period ....... 2,617,000 2,617,000
Weighted average AMIT
Class A Shares outstanding ......... 2,617,000 2,617,000
BALANCE SHEET DATA
Total assets ....................... $ 51,151 $ 43,494
Notes and advances payable ......... 4,525 --
Shareholders' equity ............... 46,089 43,394

YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------
1997 1996 1995 1994 1993
---------------- ------------- ------------- ------------- -------------
(IN THOUSANDS, EXCEPT SHARE DATA)

STATEMENT OF OPERATIONS DATA
Revenue ............................ $ 7,199 $ 10,050 $ 19,502 $ 2,769 $ 4,307
Costs and expenses ................. 1,650 964 2,213 2,396 3,017
Extraordinary item ................. -- -- 1,844 -- --
Net income ......................... 5,549 9,086 19,133 373 1,290
Per AMIT Class A Share:(a)
Income before extraordinary
item ............................. 2.10 3.33 5.77 0.11 0.38
Extraordinary item ................ -- -- -- 0.61 --
Net income ........................ 2.10 3.33 6.38 0.11 0.38
Cash distributions to AMIT
Class A shareholders .............. 2,695 1,407 -- -- 573
Cash distributions per AMIT
Class A Share ..................... 1.03 0.52 -- -- 0.17
AMIT Class A Shares
outstanding at end of period ....... 2,617,000 2,617,000 2,826,700 3,394,026 3,394,026
Weighted average AMIT
Class A Shares outstanding ......... 2,617,000 2,704,375 2,968,532 3,394,026 3,394,026
BALANCE SHEET DATA
Total assets ....................... $ 46,530 $ 43,375 $ 37,332 $ 35,535 $ 29,327
Notes and advances payable ......... -- -- -- 11,085 17,965
Shareholders' equity ............... 45,942 43,088 37,139 22,510 22,137

- - ----------
(a) The net income per AMIT Class A Share was based on the weighted
average AMIT Class A Shares outstanding during each of the five
years in the period ended December 31, 1997, and for the three month
periods ended March 31, 1998 and 1997, after deduction of the AMIT
Class B Shares' 1% interest.

104

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF AMIT

The following discussion should be read in conjunction with "AMIT Selected
Consolidated Financial Data" and the AMIT Financial Statements and Notes
thereto appearing elsewhere in this Proxy Statement/Prospectus.

RESULTS OF OPERATIONS

Three Months Ended March 31, 1998 Compared to Three Months Ended March 31,
1997

During the three months ended March 31, 1998 total revenue and interest
income decreased by approximately 14% and 17%, respectively, when compared to
the three months ended March 31, 1997. Such decrease is primarily due to the
restructuring of the LaSalle loan during the first quarter ending March 31,
1997 which resulted in the AMIT capitalizing into principal accrued interest
and late fees of $423,000. Recurring revenue and interest income has increased
by approximately 31% for the three months ended March 31, 1998 when compared to
the same period ended March 31, 1997, due primarily to newly funded loans
during 1997 in the amount of $13,867,000. Funds for such new loans in 1997 came
from the repayment of non-performing loans and loans paying at a lower rate of
interest and from the sale of property obtained through foreclosure.

The significant decrease in general and administrative expenses for the
quarter ended March 31, 1998 when compared to the previous quarter for the same
period, is due primarily to reversing expense accruals in the first quarter of
1998 that were provided in 1997 for state income taxes and legal fees in the
amounts of $180,000 and $50,000, respectively. Such reversals resulted in a
reduction of actual general and administrative expense for the quarter ended
March 31, 1998 by $230,000. The general and administrative expense, prior to
such adjustments, for the three months ended March 31, 1998 was $286,000,
resulting in a decrease of such expense when compared to the same period ended
March 31, 1997 by 15%. Such decrease is primarily due to reduced legal expenses
incurred by AMIT.

Fiscal Year 1997 Compared to Fiscal Year 1996

Total interest income for the year ended December 31, 1997 decreased by
20% when compared to the same period ending in 1996. Such decrease is primarily
due to the restructuring and/or repayment of interest income not previously
recorded in the amount of $3.7 million during 1996 verses a total of such
similar interest income of $1.5 million during 1997. During 1997 AMIT
restructured three Hospitality Inn second mortgage loans, which occurred in
April 1997 and the LaSalle loan which was effective in February 1997. In
addition in 1997, AMIT received full repayment of the Carriage Hills note
payable in November 1997 and in December 1997 the reinstatement of the Brittany
Point loan as a current loan. Upon modifying the Hospitality Inns and LaSalle
loans, AMIT capitalized into principal accrued interest and late fees of
approximately $440,000 relating to the three Hospitality Inn second mortgage
loans, during the quarter ended June 30, 1997, and $409,000 for the LaSalle
loan during the first quarter ended March 31, 1997. During the quarter ended
December 31, 1997, in conjunction with the repayment of the Carriage Hills
note, AMIT received and realized interest income in the amount of $238,000,
which represented past due interest. Beginning in July 1997 AMIT began
receiving monthly interest payments at the stated interest rate on the Brittany
Point loan and as a result recognized $337,000 of past due interest as income.
Recurring interest income has increased 32% in 1997 when compared to 1996, in
the approximate amounts of $3,603,000 and $2,719,000, respectively, due to
previously modified loans which are now paying debt service either at the
stated interest rate or on a cash flow basis and newly funded loans during the
six months ended June 30, 1997 in the amount of $9,850,000. Funds for such new
loans came from the repayment of non-performing loans and loans paying at a
lower rate of interest and from the sale of a property obtained through
foreclosure.

AMIT recognized additional income for the year ended December 31, 1997
relating to recovery of bad debt. During the three months ended June 30, 1997,
AMIT received a partial principal repayment of $340,500 on a loan for which an
allowance for estimated loss has been previously provided and during the
quarter ended December 31, 1997 as discussed above, AMIT received full
repayment of principal on the Carriage Hills loan in the amount of $1,404,000
for which an allowance for estimated loss had been

105

previously provided. In addition, AMIT recognized a gain from the sale of its
joint venture interest in the Rolling Greens property in the amount of $80,000,
which occurred in June 1997.

The 253% increase in legal fee expenses for the year ended December 31,
1997 when compared to the previous same period, is due to the settlement in
June 1996 of the state and federal claims AMIT brought against others relating
to the use of non-public information by a group of investors. In conjunction
with this settlement, AMIT offset $764,000 in settlement proceeds against legal
expenses in June 1996. In addition during the year ended December 31, 1997 AMIT
incurred legal expenses defending itself against a malicious prosecution case
brought against AMIT by one of the defendants in the state and federal insider
trading claims described above. In October 1997 the malicious prosecution case
was dismissed in favor of AMIT on summary judgment.

General and administrative expenses increased by 12% in 1997 when compared
to 1996. This increase is primarily due to AMIT no longer sharing its office
administrative expenses, effective November 1, 1996, with another trust,
Angeles Participating Mortgage Trust.

Fiscal Year 1996 Compared to Fiscal Year 1995

For the year ended December 31, 1996, total revenue decreased
significantly as compared to total revenue for the same period in 1995. The
decrease is due to the Angeles bankruptcy settlement of $12,844,000 which was
effective March 31, 1995. Simultaneous with the Angeles settlement, AMIT
settled its claims with the various partnerships associated with Insignia,
which resulted in extraordinary income of $1,844,000 resulting from AMIT being
able to negotiate the settlement of these claims at a discount. Total revenue
for the year ended December 31, 1996 represents a significant decrease from the
same period ended 1995 due to the two 1995 settlement transactions referred to
above.

Interest income for the year ended December 31, 1996 increased by
approximately 73% when compared to the year ended December 31, 1995. This
increase in 1996 is primarily due to the restructuring of AMIT's Arrowhead
loan, for which AMIT recognized approximately $2.8 million of interest income
and the pay off of the Fox Run and Harbour Landing loans for which AMIT
recognized approximately $900,000 of interest income not previous recorded due
to the doubtful nature of their collectability. Rental income grew during 1996
as the two University Center properties achieved greater occupancy in 1996 over
that of 1995.

In conjunction with the modification of the Arrowhead loan, AMIT held a
$1.2 million preferred partnership distribution interest which it received in
the Angeles bankruptcy settlement. At that time AMIT valued this interest at
zero as it had an indeterminable value when it was acquired. Upon modifying the
Arrowhead loan this preferred interest was rolled into the principal of the
restructured loan, and as a result AMIT recognized additional interest income
of $1.2 million. In addition, $2 million was recorded as recovery of bad debt
upon the full repayment of the $6.7 million Fox Run loan in December 1996.

Interest expense to the bank from which AMIT has obtained a line of credit
decreased as AMIT had no borrowings on the bank line of credit for the year
ending December 31, 1996, and only borrowed $430,000 for a three-day period in
June 1996. AMIT had an average month-end borrowing on the bank line of credit
of $2,075,000 in 1995.

During 1996 AMIT paid $9,000 for 1995 Minnesota state taxes due to the
fact that AMIT owns properties in that state and $10,000 and $120,000 in
alternative minimum tax for the 1995 and 1996 tax year, respectively, as AMIT
utilized its net operating losses to offset its 1995 and 1996 taxable income.
Prior to October 1996, AMIT shared its office administrative expenses along
with a portion of the salaries of its employees with another trust, Angeles
Participating Mortgage Trust ("APART"). Effective October 1996, AMIT employees
no longer provide any services to APART nor does APART operate in the same
offices as AMIT. As a result, beginning in October 1996, AMIT no longer
receives reimbursement of employee salary or general office expenses.

Legal expenses for the year ended December 31, 1996 decreased
significantly when compared to the same period in 1995 as AMIT reached an
agreement to settle pending litigation in state and federal courts with all but
one defendant, relating to AMIT's complaint for damages arising from the use of
non-public

106

information to acquire AMIT Class A Shares and alleged violations of federal
securities laws. AMIT, in settlement, received cash of $689,000 and a $75,000
four year, 8% collateralized promissory note, with semi-annual interest
payments. This $764,000 portion of the settlement was recognized by AMIT as
income by offsetting legal expenses incurred by AMIT relating to the lawsuit.
In addition, AMIT acquired 209,700 AMIT Class A Shares for $1,730,000, or $8.25
per AMIT Class A Share and obtained a standstill agreement and a voting proxy,
controlled by the AMIT Board, on approximately 200,000 additional AMIT Class A
Shares until such shares are sold in the open market.

Fiscal Year 1995 Compared to Fiscal Year 1994

For the year ended December 31, 1995 total revenue increased significantly
as compared to total revenue for the same period in 1994. This increase is
primarily due to the Angeles bankruptcy settlement which was effective March
31, 1995. AMIT recognized a recovery of bad debt of $12,844,000 as a result of
the settlement, for which AMIT received proceeds of cash in excess of $8
million on April 14, 1995. Simultaneous with the Angeles settlement, AMIT
settled its claims with the various partnerships then associated with Insignia,
which resulted in an extraordinary gain of $1,844,000 resulting from AMIT being
able to negotiate the settlement of these claims at a discount. During the year
ended December 31, 1995, AMIT recorded an additional $3,110,000 in recovery of
other bad debts, which were associated with partial principal repayments on
loans which had allowances for estimated losses recorded in addition to
recording two properties AMIT received through deeds-in-lieu of foreclosure at
market value. Included in the $3,110,000 of debt recovery, AMIT reversed
$1,800,000 of allowance for estimated loss relating to the Fox Run loans, based
upon improved property performance, the commencement of modified debt service
in the fourth quarter of 1995 and an anticipated refinancing of the mortgages
on the property.

In addition, revenues increased in 1995 from 1994 as a result of a
$435,000 gain recognized from the $1,370,000 sale of the 4851 Van Epps
property. AMIT obtained title to this property through a deed-in-lieu of
foreclosure in September 1995, from its first trust deed mortgage on this
property.

Interest income for the twelve months ended December 31, 1995 increased
approximately 12% or $318,000 when compared to the same period ended in 1994.
The increase is primarily related to two AMIT Loans: (1) recognition of
interest due to restructuring of past due interest into principal, the note is
currently performing; and (2) recognition of interest as a result of debt
satisfaction through a deed-in-lieu of foreclosure.

Property rental income and ownership expenses increased for the year ended
1995 when compared to 1994 as AMIT owned up to five properties during 1995
compared to two properties owned in 1994.

In December 1995, AMIT sold the parcel of land it owned in Houston, Texas
for $1,500,000 and recognized a $3,000 loss from such sale.

Interest expense on AMIT's line of credit decreased as AMIT's average
month-end borrowings were $2,075,000 and $6,093,000 in 1995 and 1994,
respectively. Such decrease is offset by an increase in the weighted average
interest rate of 10.1% and 9.0% for the years ended December 31, 1995 and 1994,
respectively.

Other interest expense decreased for the twelve months ended December 31,
1995 when compared to the same period in 1994. Such interest expense is
associated with cash advances which had a balance of $7,585,000 as of December
31, 1994 and were paid effective March 31, 1995.

The increase in general and administrative expenses for the twelve months
ended December 31, 1995 when compared to the same period in 1994, is primarily
due to increased proxy solicitation costs of approximately $150,000 incurred as
a result of a proxy contest in 1995. The increased legal fees were associated
with state claims brought by AMIT against a group of investors. AMIT claimed
the investors acquired AMIT Class A Shares based on insider information and
brought a federal claim against Morton Kirsch and Wherco, Inc. and others, for
deficiencies in information required to be filed and false and misleading
information filed by the defendants in public documents regarding AMIT. AMIT
sought recovery of legal expenses in connection with certain of these claims.

107

LIQUIDITY AND CAPITAL RESOURCES

In January 1998, AMIT funded a new loan in the amount of $1,000,000
secured by a first deed of trust on a 125,000 square foot warehouse facility
located in Memphis, Tennessee. This new loan requires monthly interest only
payments at an annual rate of 8% and matures in January 2008. In March 1998
AMIT purchased at par two first mortgage loans from an unaffiliated third party
for $3,865,000. These two mortgages are on three industrial warehouse
properties located in Cleveland, Ohio. AMIT began the foreclosure process on
these three properties in 1996 and expects to take title during the third
quarter of 1998. The foreclosure process on these three properties results from
AMIT obtaining judgement liens relating to recourse provisions on a defaulted
second mortgage loan held by AMIT. The debt service on the first mortgage loans
have been and continue to be current through the foreclosure process. These two
mortgage loans pay monthly interst only at an annual rate of 7.15% and mature
September 1, 1998.

As of April 30, 1998 AMIT has an outstanding commitment to fund a first
mortgage loan in the amount of $5,500,000 and to purchase a first mortgage loan
for approximately $4,250,000.

During the quarter ended March 31, 1998, AMIT had its largest mortgage
note receiveable prepay in full the outstanding principal balance of
$9,004,000. This loan, referred to as Lake Arrowhead, paid monthly interest
payments at the stated note rate of 10.20%. While AMIT has been able to commit
to fund new loans with such proceeds, it is unlikely it will be able to obtain
the same yield as the Lake Arrowhead loan due to the recent downward trend of
interest rates.

Until December 1996, AMIT invested in loans which were made principally to
partnerships that were affiliated with Angeles, the parent company to AMIT's
prior advisor, AFC, but the majority of which are now controlled by IPT.

In May 1998, AMIT's line of credit, in the amount of $5 million, which is
secured by all of AMIT's assets, was renewed through October 1998, with the
ability to renew for an additional six months to April 1999 at AMIT's option.
The line of credit allows AMIT to draw on such line to facilitate the
foreclosure process on AMIT Loans. The line of credit requires monthly interest
only payments based upon prime plus 1/2% and a $12,500 commitment fee paid
quarterly. During the year ended December 31, 1997 and the three months ended
March 31, 1998, AMIT did not draw on the line of credit.

AMIT's liquidity is dependent upon its borrowers having sufficient cash to
pay interest and principal payments as they become due. In February 1993, a
significant number of the obligors of the AMIT Loans, including certain
partnerships now controlled by IPT, failed to service their debt obligations
under AMIT Loans. AMIT has since completed the process of restructuring the
AMIT Loans. Certain of the restructured loan terms include a reduction in the
interest rate, an extension of the loan term, payment of at least net cash flow
from the operation of the relevant property on a current basis and a modest
increase in the principal balance of the loan as consideration for the
modification.

Loans having a carrying value (net of loan loss reserves) of approximately
$1.3 million (or 3% of AMIT's net investments) are currently in default with
respect to debt service obligations. AMIT's lending is primarily concentrated
in secured and, to a lesser extent, unsecured real estate loans. The realizable
value of real estate collateralizing notes receivable or owned from Loan
foreclosures, can only be determined based upon a sales negotiation between
independent third parties in an arm's length transaction. In addition,
considering that, in most cases, it is the proceeds of sale and/or refinancing
which will enable AMIT to receive such funds, the actual proceeds may be
significantly impacted by the condition of the real estate industry at the time
the principal amounts become due or properties sold.

During 1996 AMIT modified five loans referred to as Brittany Point, Fox
Crest, Carriage Hills, Vista Hills and Angeles Partners XIV-Waterford. In
connection with the modifications, AMIT extended the maturity dates on all of
the loans except for Angeles Partners XIV-Waterford, to December 31, 2000,
March 1, 2003, September 1, 2000 and September 1, 2002, respectively, and
capitalized approximately $320,000, $1,765,000, $204,000, $230,000 and
$134,000, respectively, of past due interest into principal. The modified notes
require payments only out of cash flows provided by the properties. AMIT did
not recognize any interest income in connection with these loan modifications.

108

AMIT received full and partial paydowns as follows:

NUMBER OF PAYDOWN IN
YEAR LOANS MILLIONS
- - ------------------- ----------- -----------

1995 ......... 6 $ 9.0
1996 ......... 10 $ 10.3
1997 ......... 11 $ 7.6

During the last quarter of 1996, AMIT modified and received a significant
repayment on two of AMIT's largest loans. In October 1996, the Arrowhead Joint
Venture $6 million loan (which was previously secured only by a partnership
interest), along with a related $1.2 million unsecured preferred partnership
distribution interest ("Preferred Interest"), was restructured to a $9 million
first trust deed mortgage, with a current effective interest rate of 10.02%
reducing to a 9.8% rate upon repayment of $1.5 million which is expected to
occur in late 1998. The restructuring has resulted in AMIT significantly
strengthening the collateral on this loan along with increasing the annual debt
service on this loan by approximately $400,000. The $1.2 million Preferred
Interest was acquired in the settlement with Angeles and was initially valued
at zero as it had an indeterminable value when it was acquired. In addition,
AMIT capitalized approximately $1.7 million in deferred interest that was not
previously recognized in income, as full recovery of such interest was, until
the modification, considered doubtful.

In December 1996, AMIT received approximately $7 million from its three
Fox Run mortgages as a result of the borrower refinancing the property. The $7
million of cash proceeds represented the full repayment of approximately $6.7
million of principal on these three loans with the remainder representing a
portion of the accrued interest associated with the loans. In addition to this
repayment, AMIT took back a new third mortgage on the Fox Run property in the
amount of $875,000. The $875,000 is comprised of approximately $425,000 of the
remaining accrued interest from the three Fox Run loans and approximately
$450,000 of accrued interest and principal on the Angeles Partners XI-Harbour
Landing promissory note. AMIT recognized $2 million of bad debt recovery on
this transaction, and approximately $900,000 of interest income from accrued
interest not previously recognized, as full recovery of such interest was
indeterminable until the repayment.

In December 1996, AMIT, acquired, at par, three first mortgage loans from
an unaffiliated third party for approximately $2.9 million. These mortgages are
on three properties known as Hospitality Inns (three separate properties and
locations) on which AMIT also holds three second mortgages. All of these six
mortgages matured in October 1996, and AMIT entered into negotiations with the
borrowers which culminated in the restructure of the indebtedness in mid-1997.
The six loans were restructured into three loans secured by first priority
mortgages on the hotel properties owned by the various borrowers as well as
cross-collateralization of one of the loans by a second priority mortgage on
the hotel property owned by one of the other two borrowers. The borrowers
continued making debt service payments to AMIT throughout the negotiation
process.

In February 1997, AMIT made its first new loan since January 1993, in the
amount of $5,000,000, secured by first deeds of trust on three manufactured
home parks located in Texas. This new loan requires interest only payments at
8.9% and matures in December 2003. In April 1997, AMIT made a second new loan
in the amount of $2,950,000 secured by a first deed of trust on a 628,000
square foot industrial warehouse located in Martinsville, Virginia. This loan
requires interest only payments at 11% and matures in April 1998. In June, 1997
AMIT made a new first mortgage loan in the amount of $1,900,000 secured by four
manufactured home parks located in Wyoming. The new loan requires interest only
payments of 9.07% and matures in December 2003. In December 1997 AMIT made
three first mortgage loans in the amounts and terms as follows: $1,300,500 on a
144,000 square foot office/warehouse facility located in Houston, Texas with an
8% interest rate, interest only payable monthly; $531,250 on a 56,080 square
foot industrial/warehouse located in Aiken, South Carolina with an 8% interest
rate, principal and interest payable monthly, with principal amortized over 20
years; and $2,185,000 on a 335,000 square foot industrial facility located in
Jackson, Tennessee, initially monthly interest only payable at a rate of 10
1/2%, with the interest rate reduced to 230 basis points over ten-year
Treasuries upon the debt coverage ratios increasing to a stipulated level. All
three of these December 1997 first mortgage loans mature in December 2007.

109

In December 1997 AMIT purchased a second mortgage loan with a face amount
of $375,000 for $384,000. This second mortgage loan is on a 186-unit apartment
complex, Silver Ridge Apartments, located in Maplewood, Minnesota. The Silver
Ridge second mortgage has an interest rate of 10% and default rate of 12% and
matured December 31, 1997. In addition, during 1997 AMIT obtained judgment
liens against the Silver Ridge Apartments property based upon recourse
provisions on other AMIT loans. Through one of these judgment liens AMIT
foreclosed on the property in October 1997 subject to a twelve-month redemption
period. On January 30, 1998, AMIT received title to Silver Ridge Apartments
through deed-in-lieu of foreclosure as a result of provisions in the second
mortgage held by AMIT. In connection with taking title to Silver Ridge
Apartments, AMIT assumed a first trust deed mortgage from a third party in the
amount of $4,525,000. This first mortgage provides for a variable interest rate
not to exceed 12%, interest only paid monthly, with a current interest rate of
3 1/2%. The loan matures in July 2023.

During 1995 AMIT foreclosed on University Center Phase IV and took title
to three properties through deeds-in-lieu of foreclosure. These properties
include 4851 Van Epps for which AMIT had commenced foreclosure action in 1994.
In October 1995, AMIT sold this property for $1,370,000, receiving net cash
proceeds of $580,000 and a first trust deed on the property for $700,000. In
addition, AMIT obtained title, through deeds-in-lieu of foreclosure as a result
of recourse provisions in a defaulted loan, on 4705 Van Epps, an industrial
warehouse located in Cleveland, Ohio and on University Center I and II, office
industrial property located in Fridley, Minnesota. In addition, AMIT sold a
parcel of land located in Houston, Texas for $1,500,000, resulting in net cash
proceeds of approximately $1,400,000. During 1996, AMIT sold the 4705 Van Epps
property in March 1996 for a sale price of $752,000 and received net cash
proceeds of approximately $677,000. In addition, AMIT foreclosed on three
properties during 1996, which included; Colony Cove a 200-acre parcel of raw
land; Rolling Greens, in which AMIT has a 57% joint venture interest in a
155-acre parcel of raw land and an 8,500 square foot strip shopping center and
Springdale a 443 pad mobile home park. In October 1996, AMIT sold Springdale
for a $4 million sale price and received net cash proceeds of approximately
$1.1 million. In addition, during 1996, AMIT began the foreclosure process on
five properties, which include a first mortgage referred to as LaSalle
Warehouse (which was subsequently restructured and paid in full during the
quarter ended December 31, 1997), a second mortgage referred to as Southgate
Apartments and three industrial properties located in Cleveland, Ohio. AMIT's
interest in the Cleveland, Ohio properties, were obtained from judgment liens
relating to recourse provisions on a defaulted second mortgage loan held by
AMIT. AMIT anticipates that the foreclosure process will be completed during
1998.

The settlement between AMIT and Angeles represented over $15 million in
various assets including $6 million in cash and a collateralized note. The
collateralized note due December 31, 1998, carries interest at prime plus one
percent with a maximum interest rate of 8.5%. The note was paid in full in
December 1997.

AMIT's management on a quarterly basis reviews the carrying value of the
AMIT Loans and properties held for sale. Generally accepted accounting
principles require that the carrying values of a note receivable or property
held for sale cannot exceed the lower of its cost or its estimated net
realizable value. The estimate of net realizable value is based on management's
review and evaluation of the collateral properties as well as recourse
provisions included in certain notes receivable. The allowance for loan loss as
of March 31, 1998 was approximately $8.8 million. However, the provision for
loss is an estimate which is inherently uncertain and depends on the outcome of
future events. AMIT's estimates are based on an analysis of the loan portfolio,
composition of the loan portfolio, the value of collateral and current economic
conditions.

AMIT believes that its current cash flow from operations is sufficient to
provide for payment of its operating costs and provide for distributions to
shareholders.

During the year ended December 31, 1997, four AMIT loans prepaid the total
outstanding principal balance of $6,800,000 and another loan, referred to by
AMIT as Northprior, made a substantial repayment in the amount of $340,000. The
four loans which made full repayments are referred to by AMIT as Angeles
Partners X ($614,000), Angeles Corporation ($3,450,000), Carriage Hills
($1,404,000) and LaSalle ($1,334,000).

110

In October 1997 AMIT foreclosed on an additional 40 acres of raw land
adjacent to the 200-acre parcel of land foreclosed on in April 1996, referred
to as Colony Cove, in Ellenton, Florida. AMIT held a first trust deed in the
amount of $1,572,000 on the 200 acres and had recourse, through provisions on
the mortgage note, allowing for the foreclosure on the adjacent 40 acres. In
conjunction with the foreclosures, AMIT incurred approximately $178,000 in
expenses, which was capitalized into the cost of the property. AMIT did not
recognize any income or loss from such foreclosures. During 1997 AMIT entered
into a contract to sell approximately 224 acres of this property zoned
residential, for $8,500 per acre. The contract requires the sale to close in
the latter part of 1998, although there can be no assurances that this
transaction will occur. Subsequent to 1997, in January 1998 AMIT received cash
of approximately $160,000 through garnishment of all of the borrowers bank
accounts, this amount reduced the carrying value of the Colony Cove property.

In June 1997 the Rolling Greens property was sold for $1,175,000 of which
$665,000 represented AMIT's portion of the 57% joint venture proceeds of the
sale and cash held by the joint venture partnership.

In December 1997 AMIT wrote off a promissory note, with a principal
outstanding balance of $1,530,000 referred to by AMIT as Vista Hills. Based
upon AMIT's evaluation of the property operations and discussions with the
borrower regarding the likelihood of foreclosure by the first lien holder in
1998, AMIT believed there would be no recovery in the future. The borrower had
indicated to AMIT that the property would most likely be foreclosed upon by the
first lien holder during 1998. AMIT had previously fully provided for loan loss
reserves for this loan and did not realize any loss or gain from the sale.

111

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated financial
statements have been prepared from, and should be read in conjunction with, the
historical financial statements and related notes thereto of IPT and AMIT
included elsewhere herein, and are not necessarily indicative of the financial
position or operating results that would have occurred had the transactions
described below been in effect on the dates indicated.

The Unaudited Pro Forma Condensed Consolidated Balance Sheet as of March
31, 1998 gives effect to the Merger as if effected at March 31, 1998.

The Unaudited Pro Forma Condensed Consolidated Statement of Income for the
three months ended March 31, 1998 and the year ended December 31, 1997 gives
effect to the Merger as if effected at January 1, 1997. The Unaudited Pro Forma
Condensed Consolidated Statements of Income for the year ended December 31,
1997 also gives effect to (i) the completion of the tender offers commenced on
August 28, 1997 by a wholly-owned subsidiary of IPLP for limited partner
interests, (ii) the completion of the tender offers commenced on October 30,
1997 by a wholly-owned subsidiary of IPLP for limited partner interests, (iii)
the exercise of the Shelter IV Option and (iv) the acquisitions of additional
limited partner interests in certain IPT Partnership from High River, as if
effected at January 1, 1997.

112

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1998
(IN THOUSANDS)

PRO FORMA PRO FORMA
IPT AMIT ADJUSTMENTS BALANCE SHEET
------------ ----------------- ------------- --------------

ASSETS
Cash ........................................ $ 23,338 $ 10,860 $ 34,198
Accounts receivable ......................... 1 615 616
Mortgage notes receivable ................... 31,921 $ (8,826) 23,095
Promissory notes receivable
(primarily due from affiliates) ........... 6,789 6,789
Allowance for estimated losses on
mortgage notes and promissory
notes receivable .......................... (8,826) a) 8,826
Investments in real estate limited
partnerships .............................. 177,681 177,681
Apartment property and other real
estate .................................... 26,003 8,730 (2,766) 31,967
Other assets ................................ 7,068 1,062 (1,200) 6,930
-------- --------- -------- --------
Total assets ................................. $234,091 $ 51,151 $ (3,966) $281,276
======== ========= ======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Liabilities: ................................
Accounts payable -- due to
Insignia ................................. $ 160 $ 160
Distributions payable to Insignia ......... 1,490 1,490
Distributions payable ..................... 2,914 2,914
Accrued expenses .......................... 1,272 $ 537 a) $ 1,200 3,009
Non-recourse mortgage notes ............... 21,957 4,525 26,482
-------- --------- -------- --------
Total liabilities ............................ 27,793 5,062 1,200 34,055
Minority interests in IPLP ................... 56,984 56,984
Shareholders' equity:
Preferred shares, issued and
outstanding, none
Common shares, issued and
outstanding IPT 19,427,760, AMIT
2,617,000 (Class A) and 1,675,113
(Class B) and IPT pro forma
23,484,425 ................................ 194 2,631 (2,590) 235
Additional paid-in capital .................. 154,984 50,199 (9,317) 195,866
Unearned compensation ....................... (5,462) (5,462)
Distributions in excess of accumulated
earnings .................................. (402) (6,741) a) 6,741 (402)
-------- --------- -------- --------
Total shareholders' equity .................. 149,314 46,089 (5,166) 190,237
-------- --------- -------- --------
Total liabilities and shareholders'
equity .................................... $234,091 $ 51,151 $ (3,966) $281,276
======== ========= ======== ========

See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Balance
Sheet.

113

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

PRO FORMA ADJUSTMENTS

a) Represents adjustment to record initial estimated fair value allocation of
purchase price, the elimination of AMIT's shareholders' equity under the
purchase method of accounting and the issuance of approximately 4,056,664
IPT Common Shares in connection with the Merger, and estimated costs of
$2,400,000 related to the Merger. Purchase price and related costs (in
thousands, except share data):

Issuance of 4,056,664 IPT Common Shares at $10.00
per share .............................................. $ 40,567
Estimated Registration Costs .................... (200)
--------
Net Proceeds of Issuance ........................ 40,367
Professional Fees and other liabilities ......... 2,400
--------
Purchase Price of Class A Common Shares ......... 42,767
Less: Costs paid through March 31, 1998 ......... (1,200)
--------
$ 41,567
========

Under purchase accounting, AMIT's assets and liabilities are required to
be adjusted to their estimated fair values:

NET ASSETS
INCREASE/DECREASE
------------------

Amounts reported by AMIT .......................... $ 46,089
Class B Shares Held by an Affiliate ............... (556)
Purchase price adjustment:
Apartment property and other real estate ......... (2,766)
--------
$ 42,767
========

114

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(IN THOUSANDS, EXCEPT SHARE DATA)

PRO FORMA
INCOME
IPT AMIT STATEMENT
-------------- -------- --------------

REVENUES
Rental income ................................................... $ 1,771 $ 87 $ 1,858
Equity earnings -- limited partnership interests ................ 3,361 3,361
Interest income ................................................. 973 973
Other ........................................................... 625 625
----------- ----- -----------
5,757 1,060 6,817
EXPENSES
Property operating expenses ..................................... 890 890
Administrative .................................................. 352 56 408
Apartment property interest ..................................... 406 406
Apartment property depreciation ................................. 271 271
Amortization .................................................... 251 20 271
----------- ----- -----------
2,170 76 2,246
----------- ----- -----------
Income before minority interest and sale of properties .......... 3,587 984 4,571
Minority interest in IPLP and consolidated subsidiaries ......... 1,533 1,533
----------- -----------
Income before extraordinary item ................................ $ 2,054 $ 984 $ 3,038
=========== ===== ===========
Income before extraordinary item per common share ............... $ 0.11 $ 0.13
=========== ===========
Weighted average number of shares outstanding and
common share equivalents ...................................... 18,835,911 23,111,424
=========== ===========

See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Statements
of Income

115

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT SHARE DATA)

PRO FORMA
PRO FORMA INCOME
IPT AMIT ADJUSTMENTS STATEMENT
-------------- ------------ ------------- --------------

REVENUES
Rental income ........................... $ 6,646 $ 266 $ 6,912
Equity earnings--limited partnership
interests ............................. 8,062 a) $2,370 10,701
b) 269
Interest income ......................... 5,109 5,109
Recovery of bad debts ................... 1,744 1,744
Other ................................... 2,118 2,118
----------- ------ ------ -----------
16,826 7,119 2,639 26,584
EXPENSES
Property operating expenses ............. 3,258 56 3,314
Administrative .......................... 1,314 1,351 2,665
Apartment property interest ............. 1,486 1,486
Apartment property depreciation ......... 966 966
Amortization ............................ 285 63 240 588
Income taxes ............................ 180 180
Other interest .......................... 47 47
----------- ------ ------ -----------
7,356 1,650 240 9,246
----------- ------ ------ -----------
Income before minority interest and
sale of properties .................... 9,470 5,469 2,399 17,338
Minority interests in IPLP and
consolidated subsidiaries ............. 4,440 d) 382 4,822
----------- ------ ------ -----------
Income before gain on sale of
properties ............................ 5,030 5,469 2,017 12,516
Gain on sale of properties (net of
minority interest) .................... 1,044 80 1,124
----------- ------ ------ -----------
Incomebefore extraordinary item ......... $ 6,074 $5,549 $2,017 $ 13,481
=========== ====== ====== ===========
Income before extraordinary item per
common share .......................... $ 0.40 $ 0.58
=========== ===========
Weighted average number of shares
outstanding and common share
equivalents ........................... 14,694,327 23,084,024
=========== ===========

See accompanying Notes to Unaudited Pro Forma Condensed Consolidated
Statements of Income

116

NOTES TO UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED STATEMENTS OF INCOME

The Unaudited Pro Forma Condensed Consolidated Statement of Income for the
three months ended March 31, 1998 gives effect to the Merger. The Unaudited Pro
Forma Condensed Consolidated Statement of Income for the year ended December
31, 1997 gives effect to (i) the Merger, (ii) the completion of the tender
offers commenced on August 28, 1997 by a wholly-owned subsidiary of IPLP for
limited partner interests, (iii) the completion of the tender offers commenced
on October 30, 1997 by a wholly-owned subsidiary of IPLP for limited partner
interests, (iv) the exercise of the Shelter IV Option, (v) the acquisitions of
additional limited partner interests in certain IPT Partnerships from High
River, as if effected at January 1, 1997.

PRO FORMA ADJUSTMENTS

a) Represents additional equity earnings from acquisition of investments in
partnerships in 1997 as if such investments were acquired at the beginning
of the period.

b) Represents additional equity earnings from Shelter Properties IV Limited
Partnership as a result of the exercise of the Shelter IV Option.

c) Represents adjustment for amortization of estimated formation costs of
$2,200,000 which are being amortized over a five year period.

d) Represents adjusted minority interest to reflect the aforementioned events.
Minority interest in IPLP is reflected at 29.7% and minority interest in
NPI 4 is reflected at 37.4%.

117

MANAGEMENT OF IPT

BOARD OF TRUSTEES

After the consummation of the Merger, the IPT Board will consist of seven
members, four of whom also serve as officers of Insignia (including one who is
also a director of Insignia). The IPT Board has the power to expand the size of
the IPT Board and to appoint additional trustees to fill newly created seats
and vacancies. The trustees are classified, with respect to the terms for which
they severally hold offices, into three classes of staggered three-year terms.
Any trustee may resign by written notice to the remaining trustees, and may be
removed only for fraud or willful malfeasance by the affirmative votes of not
less than two-thirds of the IPT Common Shares then outstanding and entitled to
vote in the election of trustees. Any vacancies on the IPT Board, whether
resulting from resignation, removal or death, or an increase in the number of
trustees, may be filled by a majority of the trustees of the same class as the
vacant trustee then in office, or by the sole remaining trustee of that class
or if there are no remaining trustees of that class, by the vote of a majority
of the remaining trustees, in each case even if less than a quorum. The
trustees are and will be indemnified against certain liabilities under Maryland
law, the Declaration of Trust and Bylaws of IPT and the Partnership Agreement
of IPLP. See "Comparison of Shareholder Rights -- Limited Liability and
Indemnification of Trustees, Officers, Employees and other Agents."

The following table identifies the existing trustees of IPT and the
additional trustees who will be appointed upon consummation of the Merger,
together with their respective ages and positions with IPT.

Existing Trustees

NAME AGE POSITIONS
- - --------------------------------- ---------- --------------------------------------------

Andrew L. Farkas ............. 37 Trustee, Chairman of the Board of Trustees,
Chief Executive Officer
James A. Aston ............... 45 Trustee, President
Frank M. Garrison ............ 42 Trustee, Executive Managing Director

Trustees to be Appointed Upon Consummation of the Merger

NAME AGE POSITIONS
- - ---------------------------------- -- --------------------------------------------
Ronald J. Consiglio .......... 54 Trustee, Managing Director
Warren M. Eckstein ........... 37 Trustee
Bryan L. Herrmann ............ 62 Trustee
Ronald Uretta ................ 42 Trustee, Treasurer

Andrew L. Farkas has served as a trustee of IPT since December 1996, and
has served as its Chairman and the Chief Executive Officer of IPT since January
1997. Mr. Farkas has been a Director and Chairman, President and Chief
Executive Officer of Insignia since its inception in January 1991. Mr. Farkas
has also been President of Metropolitan Asset Group, Ltd., a real estate
investment banking firm, since 1983. Mr. Farkas' term as a trustee of IPT will
expire at the annual meeting of the shareholders of IPT held in the year 2000.
Mr. Farkas is primarily engaged in the management and affairs of Insignia and
is involved in IPT affairs only to the extent of strategic planning and capital
formation.

James A. Aston has served as a trustee and President of IPT since its
inception in May 1996. Mr. Aston's principal employment has been with Insignia
for more than the past five years, and he currently serves as Chief Financial
Officer of Insignia (since August 1996) and with the office of the Chairman
(since July 1994). Mr. Aston's term as a trustee of IPT will expire at the
annual meeting of the shareholders of IPT held in the year 1999. Mr. Aston will
divide his time between the affairs of Insignia and the affairs of IPT as
necessary.

118

Frank M. Garrison has served as a trustee of IPT since December 1996 and
is an Executive Managing Director of IPT. He has also served in various other
officer capacities with IPT since December 1996.

Mr. Garrison's principal employment has been with Insignia for more than the
past five years, and he currently serves as Executive Managing Director of
Insignia and President of Insignia Financial Services, a division of Insignia
(in each case since July 1994). Mr. Garrison's term as a trustee of IPT will
expire at the annual meeting of the shareholders of IPT held in the year 1998.

Ronald J. Consiglio will be appointed as a trustee of IPT upon
consummation of the Merger. Mr. Consiglio has been a trustee of AMIT since
April 1988 and has served as the Chairman, Chief Executive Officer and
President of AMIT since May 1993. In addition, he was the Chairman of AMIT's
Audit Committee in 1993 and became the Chairman of the Independent Committee
upon its formation in February 1993. Upon formation of AMIT's Executive
Committee in May 1995, Mr. Consiglio served as its Chairman. From January 1993
through June 1993, he served as Executive Vice President and Chief
Administrative Officer of Reynolds Kendrick Sexton, Inc., a Los Angeles based
securities brokerage firm. Mr. Consiglio also serves as a trustee of APART, an
American Stock Exchange company. Upon consummation of the Merger, Mr. Consiglio
will also serve as a Managing Director of IPT. Mr. Consiglio's term as a
trustee of IPT will expire at the annual meeting of the shareholders of IPT
held in the year 2000.

Warren M. Eckstein will be appointed as a trustee of IPT upon consummation
of the Merger. Mr. Eckstein has been Managing Director -- Investment Banking of
Paine Webber Incorporated since October 1996. Prior to October 1996, Mr.
Eckstein served as Senior Vice President, Investment Banking, of Dillon, Reed &
Co., Inc. Mr. Eckstein's term as a trustee of IPT will expire at the annual
meeting of the shareholders of IPT held in the year 1999.

Bryan L. Herrmann will be appointed as a trustee of IPT upon consummation
of the Merger. Mr. Herrmann has been a trustee of AMIT since December 1994 and
is a member of the Compensation and Executive Committees and serves as the
Chairman of the Compensation Committee. Mr. Herrmann is an investment banker by
background and currently is Chairman and Chief Executive Officer of Base Camp 9
Corp., a position he has held since 1990. Mr. Herrmann is also a member of the
board of directors of Wynn's International, Inc., a ASE company. Mr. Herrmann's
term as a trustee of IPT will expire at the annual meeting of the shareholders
of IPT held in the year 2001.

Ronald Uretta will be appointed as a trustee of IPT upon consummation of
the Merger. Mr. Uretta has served in various officer capacities with IPT since
December 1996 and currently serves as its Treasurer. Mr. Uretta's principal
employment has been with Insignia for more than the past five years, and he
currently serves as Chief Operating Officer (since August 1996) and Treasurer
(since January 1992) of Insignia. Mr. Uretta's term as a trustee of IPT will
expire at the annual meeting of the shareholders of IPT held in the year 2000.
Mr. Uretta is primarily engaged in the affairs of Insignia.

COMMITTEES OF THE IPT BOARD

The IPT Board has two committees -- an Audit Committee and a Compensation
Committee.

Audit Committee. Mr. Aston is currently the sole member of the Audit
Committee. Upon consummation of the Merger, the Audit Committee will be
comprised of two independent trustees (Messrs. Eckstein and Herrmann) and one
inside trustee (Mr. Aston). The Audit Committee makes recommendations
concerning the engagement of independent public accountants, reviews with the
independent public accountants the plans and results of audit engagement,
approves professional services provided by the independent public accountants,
reviews the independence of the independent public accountants, considers the
range of audit and non-audit fees and reviews the adequacy of IPT's internal
accounting controls.

Compensation Committee. Mr. Farkas is currently the sole member of the
Compensation Committee. Upon consummation of the Merger, the Compensation
Committee will be comprised of two independent trustees (Messrs. Eckstein and
Herrmann) and one inside trustee (Mr. Farkas). The Compensation Committee
determines the compensation for IPT's executive officers and administers IPT's
1997 Share Incentive Plan.

119

COMPENSATION OF TRUSTEES

Each trustee of IPT who is not also an officer of Insignia will receive a
board retainer of $12,000 per year, and each trustee of IPT who is not also an
officer of IPT or Insignia will receive additional compensation in the amount
of $2,000 for each regular meeting of the IPT Board he attends in person and
$500 for each regular meeting attended via telephone. In addition, each trustee
who is a member of the Audit Committee or the Compensation Committee (and who
is not an officer of IPT or Insignia) will receive $1,000 for each committee
meeting attended, whether in person or by telephone. Each trustee may, in lieu
of receiving the above described compensation, direct that such compensation be
paid to a charitable organization of his choice. Mr. Eckstein has indicated
that it is his intent to do so. All trustees of IPT are eligible to receive
grants of options to purchase IPT Common Shares and restricted IPT Common
Shares under the terms of IPT's 1997 Share Incentive Plan. See "-- 1997 Share
Incentive Plan" below.

EXECUTIVE OFFICERS

The following table identifies the individuals who will serve as the
executive officers of IPT upon consummation of the Merger and their respective
ages and offices they will hold with IPT. Each person will serve until his
successor is appointed by the IPT Board.

Officers Who Will Not Serve as Full-Time Employees of IPT

NAME AGE OFFICE
- - ----------------------------------- ----- ---------------------------------

Andrew L. Farkas ........... 37 Chief Executive Officer
James A. Aston ............. 45 President
Jeffrey P. Cohen ........... 30 Senior Vice President; Secretary
Frank M. Garrison .......... 42 Executive Managing Director
Ronald Uretta .............. 42 Treasurer

Officers Who Will Serve as Full-Time Employees of IPT

NAME AGE OFFICE
- - ----------------------------------------- ----- ------------------------------------

Carroll D. Vinson ................ 56 Chief Operating Officer
Ronald J. Consiglio .............. 54 Managing Director
William H. Jarrard, Jr. .......... 51 Senior Vice President -- Operations
William D. Falls ................. 33 Controller

Jeffrey P. Cohen has served in various capacities with IPT since June 1997
and currently serves as a Senior Vice President and the Secretary of IPT. Since
April 1997, Mr. Cohen's principal occupation has been to serve as a Senior Vice
President -- Investment Banking of Insignia. Prior to April 1997, Mr. Cohen's
principal occupation was as an attorney with the law firm of Rogers & Wells,
New York, New York. Mr. Cohen is primarily engaged in the affairs of Insignia.

Carroll D. Vinson has served as Chief Operating Officer of IPT since May
1997. Since August 1994, Mr. Vinson's principal occupation has been to serve as
president of the various corporate general partners of partnerships now
controlled by IPT. During 1993 until August 1994, Mr. Vinson was affiliated
with Crisp, Hughes & Co. (a regional CPA firm) and engaged in various other
investment and consulting activities. Briefly, in early 1993, Mr. Vinson served
as President and Chief Executive Officer of Angeles Corporation, a real estate
investment firm. From 1991 to 1993, Mr. Vinson was employed by Insignia in
various capacities. Mr. Vinson will devote substantially all of his time to the
affairs of IPT and the IPT Partnerships.

120

William H. Jarrard, Jr. has served in various capacities with IPT since
December 1996 and currently serves as Senior Vice President -- Operations. Mr.
Jarrard's principal employment has been with Insignia for more than the past
five years in various executive officer positions. Mr. Jarrard will devote
substantially all of his time to the affairs of IPT and the IPT Partnerships.

William D. Falls has served as the Controller of IPT since August 1997.
Since April 1995, Mr. Falls' principal occupation has been to serve as an
accountant with Insignia. Prior to April 1995, Mr. Falls' principal occupation
was as a senior auditor with the accounting firm of Ernst & Young LLP. Mr.
Falls will devote substantially all of his time to the affairs of IPT.

EXECUTIVE COMPENSATION

Full Time Executive Officers

Because IPT was an externally advised and managed REIT and had no
employees until the termination of the Advisory Agreement in February 1998
(with retroactive effect to January 1, 1998), IPT paid no cash compensation to
its executive officers prior to that time. Upon the termination of the Advisory
Agreement, the twelve employees of Insignia who worked almost exclusively on
IPT matters, three of whom are executive officers of IPT, became employees of
IPT and will receive cash salaries from IPT for fiscal year 1998. In addition,
in February 1998 these three executive officers were granted an aggregate of
22,000 restricted IPT Common Shares, which shares will vest ratably over five
years commencing on September 31, 1998 and will be issued only upon vesting.
The 22,000 restricted IPT Common Shares were allocated 10,000 to Mr. Vinson,
10,000 to Mr. Jarrard and 2,000 to Mr. Falls. See "-- 1997 Share Incentive
Plan" below.

Non-Full Time Executive Officers

The non-full time executive officers of IPT do not receive any direct cash
compensation for their services from IPT. Rather, in connection with the
termination of the Advisory Agreement those individuals were awarded an
aggregate of 457,500 restricted IPT Common Shares in February 1998, which
shares will vest ratably over five years commencing in February 1999 (or, in
certain cases, upon a change of control of IPT) and were issued at the
beginning of the restriction period. The 457,500 restricted IPT Common Shares
were allocated 150,000 to Mr. Farkas, 100,000 each to Messrs. Aston, Garrison
and Uretta, and 7,500 to Mr. Cohen. See "-- 1997 Share Incentive Plan" below.

EMPLOYMENT AGREEMENTS

Upon consummation of the Merger, IPT will enter into a three-year
employment agreement with Ronald J. Consiglio, which will provide (i) for base
annual compensation in the amount of $276,000 and an annual bonus of not less
than $90,000, (ii) for severance payments in the event of death, disability,
termination by IPT without cause, or voluntary resignation by Mr. Consiglio
occurring within twelve months of his initial employment, (iii) that Mr.
Consiglio must devote his full business time to the affairs of IPT, provided
however, that Mr. Consiglio's work days and work hours will be substantially
similar to the work days and work hours that Mr. Consiglio devoted to AMIT, and
(iv) that, subject to certain exceptions, during the term of his employment Mr.
Consiglio is prohibited from engaging, directly or indirectly, in any activity
that competes with IPT. The agreement will also provide that for a period of
one year following the cessation of Mr. Consiglio's employment with IPT (two
years in the event that Mr. Consiglio voluntarily terminates such employment),
Mr. Consiglio may not purchase, acquire or participate in the acquisition of
(i) any assets, securities or debt of IPT or any of its affiliates or
subsidiaries, (ii) limited partner or general partner interests in any
partnership affiliated with IPT or any of its affiliates or subsidiaries or
owning multifamily housing or commercial properties managed by IPT or any of
its affiliates or subsidiaries, (iii) interests in entities owning or
controlling, directly or indirectly, limited or general partner interests in
such partnerships or otherwise acting, directly or indirectly, as general
partner of such partnerships. The agreement will be automatically renewed for
successive one-year periods unless otherwise terminated.

121

Mr. Consiglio has the option at any time during the first twelve months of
his employment to terminate his employment by delivering written notice to IPT.
Provided that Mr. Consiglio is not at any time following such termination in
breach of the terms of his employment agreement, Mr. Consiglio shall be
entitled to (i) immediately be paid an amount equal to the aggregate of twice
(a) his base salary then in effect, and (b) a bonus payment described above,
and (ii) the continuance of health coverage or payment of an equivalent premium
amount for substantially similar health coverage, at IPT's expense, for Mr.
Consiglio and his spouse and dependents for two years following the cessation
of Mr. Consiglio's employment with IPT. If IPT terminates the employment
agreement without cause, Mr. Consiglio shall be entitled to (i) an amount equal
to the aggregate of (a) his base salary plus (b) the bonus paid to him in the
prior calendar year, multiplied by the number of years remaining in the
employment term, and (ii) the continuance of health coverage for himself, his
spouse and dependents for the remainder of the employment term.

1997 SHARE INCENTIVE PLAN

General

IPT adopted the 1997 Share Incentive Plan in August 1997 for the purpose
of attracting and retaining executive officers, trustees and employees. In
general, all employees (including officers) and trustees of, and consultants
to, IPT are eligible to participate in the 1997 Share Incentive Plan, including
employees of Insignia. Upon consummation of the Merger, the 1997 Share
Incentive Plan will be administered by the Compensation Committee of the IPT
Board (the 1997 Share Incentive Plan is currently administered by the full IPT
Board).

The 1997 Share Incentive Plan authorizes the granting of awards with
respect to up to 1,200,000 IPT Common Shares. The 1997 Share Incentive Plan
provides for the grant of awards of (i) options to purchase IPT Common Shares
intended to qualify as incentive stock options under section 422 of the Code
("Incentive Share Options"), (ii) options to purchase IPT Common Shares not
intended to qualify as incentive stock options under Section 422 of the code
("Nonqualified Share Options"), and (iii) "restricted" IPT Common Shares which
vest over time or on the attainment of specified performance goals or other
criteria as prescribed by the Compensation Committee. Awards are documented by
written agreements between the holder of the award and IPT.

Options

The Compensation Committee will determine the option exercise schedule
(which may not commence prior to six months from the option grant date) and any
vesting requirements in connection with any grant of options under the 1997
Share Incentive Plan. Options may be exercised by paying the purchase price in
cash or surrendering IPT Common Shares already owned by the option holder. An
option may not be exercised for a fractional IPT Common Share and an option
holder will have not rights as a shareholder with respect to the IPT Common
Shares subject to his option unless and until the option is exercised.

The Compensation Committee has the discretion to determine the exercise
price of options granted under the 1997 Share Incentive Plan; however, the
exercise price per share of an Incentive Share Option may not be less than 100%
of the fair market value of an IPT Common Share on the date of grant. In
addition, an Incentive Share Option granted to a holder of more than 10% of the
total combined voting power of all of the shares of beneficial interest of IPT
or any subsidiary must have an exercise price of at least 110% of the fair
market value of an IPT Common Share on the date of grant and by its terms must
not be exercisable after the expiration of five years from the date it is
granted.

At or prior to the exercise of vested Nonqualified Share Options, the
Compensation Committee will have the discretion to permit the option holder, in
lieu of purchasing the entire number of IPT Common Shares subject to purchase
under such options, to relinquish all or part of the unexercised portion of the
option for cash in the amount of the difference between the aggregate value of
the IPT Common Shares subject to the option and the aggregate exercise price of
the option. The option holder may elect to have this amount paid in IPT Common
Shares instead of cash.

122

If a holder of an option award dies or becomes totally disabled, all
outstanding options covered thereby will become immediately exercisable in full
and will thereafter be exercisable for one year after the date of death or
total disability (but not later than the scheduled expiration of such options).
If a holder of an option award ceases to be an employee or consultant (other
than because of death or total disability) prior to complete exercise thereof,
then the options covered thereby will be exercisable only to the extent
provided in the applicable option agreement. However, if a holder of an option
award ceases to be an employee or consultant as a result of a termination for
"cause," then all options covered thereby will immediately terminate.

Restricted Shares

Restricted shares granted by the Compensation Committee are awards of IPT
Common Shares which vest in the holder only after termination of a restriction
period. The Compensation Committee may determine the price, if any, to be paid
by the holder for the restricted shares and has discretion to determine whether
IPT Common Shares covered by such awards will be issued at the beginning or end
of a restriction period and whether dividend equivalents will be paid during
the restriction period. The vesting of restricted shares may be dependent upon
the passage of time and/or the fulfillment of employment or other conditions,
including performance goals. Restricted Shares issued at the end of a
restriction period will not constitute issued or outstanding shares for any
purpose unless and until vested. Restricted shares which are issued at the
beginning of a restriction period, however, will constitute issued and
outstanding IPT Common Shares for all purposes. Accordingly, the holder of
restricted shares issued at the beginning of a restriction period will have the
right to vote such IPT Common Shares and to receive and retain all regular cash
distributions or any other similar distributions from IPT. However, such a
holder will not be entitled to delivery of any share certificate or
certificates evidencing the shares until the restriction period expires and the
shares vest. Other than regular cash dividends and any other distributions that
the Compensation Committee may in its discretion designate, IPT will retain
custody of all distributions made or declared with respect to any restricted
shares until vesting thereof, and any such retained distributions will not bear
interest or be segregated in a separate account.

In connection with any award of restricted IPT Common Shares, a provision
may be made for the payment of a cash amount to the holder at any time after
the restricted shares become vested. Any such cash award will be payable in
accordance with any additional restrictions, terms and conditions as prescribed
by the Compensation Committee in the applicable restricted share agreement.

In the event of the death of a holder of restricted shares, the
restriction period applicable to the award will be deemed to have expired and
all such restricted shares will become vested. If a holder of restricted shares
ceases to be an employee or consultant (other than because of death or total
disability) prior to the vesting thereof, then such restricted shares will vest
only to the extent provided in the applicable restricted share agreement.
However, if a holder of unvested restricted shares ceases to be an employee or
consultant as a result of a termination for "cause," then the holder's rights
to all such restricted shares (and any cash awards) will be forfeited
immediately.

The 510,000 restricted IPT Common Shares granted in connection with the
termination of the Advisory Agreement were issued at the beginning of the
restriction period and, therefore, the holders are entitled to receive and
retain all regular cash distributions paid by IPT in respect thereof. In
addition, the vesting of such restricted IPT Common Shares is, in certain
cases, automatically accelerated upon a change in control of IPT. The 22,000
restricted IPT Common Shares issued to Messrs. Vinson, Jarrard and Falls were
not issued at the beginning of the restriction period, and the vesting of those
shares does not accelerate automatically upon a change of control of IPT.

Miscellaneous

In general, neither options nor restricted shares may be sold, assigned,
pledged or transferred prior to exercise, in the case of options, or vesting,
in the case of restricted shares. However, subject to the prior consent of the
Compensation Committee, Nonqualified Share Options may be transferred by the
holder to one or more "permitted transferees" if there is no consideration for
the transfer and certain other

123

requirements are met. For this purpose, a "permitted transferee" means any
member of the holder's "immediate family," a trust established for the
exclusive benefit of such immediate family members or a partnership in which
immediate family members are the only partners; and "immediate family" means
spouses, children, step-children and grandchildren including relationships
arising from adoption.

The Compensation Committee may, at any time before termination of an
option or lapsing of restrictions on restricted shares, accelerate the time or
times at which options may be exercised or restricted shares may vest. However,
unless otherwise provided in an applicable option or restricted share
agreement, a change of control of IPT will not cause options to become fully
exercisable or cause restricted shares to become fully vested.

The Compensation Committee may make or provide for such adjustments in the
number of IPT Common Shares available for awards under the 1997 Share Incentive
Plan or in the number of shares for which outstanding awards have been granted
as it determines is appropriate in order to prevent dilution or enlargement of
the rights of holders or to otherwise recognize the effects of any share split,
share dividend, combination or reclassification of shares, recapitalization or
reorganization, spin-off, liquidation or similar transaction. In addition, the
exercise price or purchase price applicable to awards may be similarly adjusted
in such events.

124

PRINCIPAL SECURITY HOLDERS OF IPT

The following table sets forth certain information regarding the
beneficial ownership of IPT Common Shares by (i) each person who is known to be
a beneficial owner of more than 5% of the outstanding IPT Common Shares, (ii)
each trustee of IPT, and (iii) the trustees and executive officers of IPT as a
group, in each case as of June , 1998 and immediately after consummation of
the Merger. Unless otherwise indicated in the footnotes, all of such IPT Common
Shares are owned directly, and the indicated person has sole voting and
investment power with respect thereto.

As of June , 1998, there were 19,427,760 IPT Common Shares outstanding
and 9,934,475 OP Units outstanding not held by IPT.

PRIOR TO THE MERGER AFTER THE MERGER
------------------------------------ -----------------------------------
NUMBER OF SHARES % OF CLASS NUMBER OF SHARES % OF CLASS
NAME OF OWNER OR IDENTITY OF GROUP BENEFICIALLY OWNED OUTSTANDING BENEFICIALLY OWNED OUTSTANDING
- - ---------------------------------------- -------------------- ------------- -------------------- ------------

Insignia(1)(2) ......................... 22,395,087 76.2% 22,586,502 67.6%
MAE .................................... 755,436 3.9% 807,746 3.4%
Andrew L. Farkas(3) .................... 175,400 0.9% 175,400 0.7%
High River Limited Partnership ......... 1,000,000 5.1% 1,000,000 4.2%
767 Fifth Avenue
New York, New York 10153
Blackacre -- IPT LLC ................... 1,000,000 5.1% 1,000,000 4.3%
450 Park Avenue, 28th Floor
New York, New York 10022
Spruce Investors, LLC .................. 1,000,000 5.1% 1,000,000 4.3%
c/o Arlen Capital Advisors
1650 Hotel Circle North, Suite 200
San Diego, California 92108
James A. Aston(4)(5) ................... 108,000 0.6% 108,000 0.5%
Frank M. Garrison(4)(5) ................ 105,400 0.6% 105,400 0.5%
Ronald Uretta(4)(5) .................... 105,300 0.6% 105,300 0.5%
Warren Eckstein ........................ -- -- -- --
Ronald J. Consiglio(6) ................. -- -- 22,567 0.1%
Bryan L. Herrmann(6) ................... -- -- 6,961 *
All trustees and executive officers as
a group (11 individuals) .............. 506,702 2.6% 550,000 2.3%

- - ----------
* Less than 0.1%

(1) Assumes that all OP Units held by Insignia are either redeemed for cash
or acquired by IPT in exchange for IPT Common Shares. Also assumes that
all restricted IPT Common Shares held by such persons are vested.

(2) Includes (i) IPT Common Shares held through subsidiaries of Insignia, and
(ii) IPT Common Shares owned by the current executive officers, trustees
and directors of IPT and Insignia.

(3) Includes 150,000 restricted IPT Common Shares owned by such person, none
of which are vested yet.

(4) Includes certain IPT Common Shares owned by such individual's immediate
family.

(5) Includes 100,000 restricted IPT Common Shares owned by such person, none
of which are vested yet.

(6) Represents IPT Common Shares to be issued in the Merger in exchange for
the AMIT Class A Shares owned by such individuals.

125

PRINCIPAL SECURITY HOLDERS OF AMIT

The following table sets forth certain information regarding the
beneficial ownership of AMIT Class A Shares and AMIT Class B Shares for (i)
each person known to be a beneficial owner of more than 5% of AMIT Class A
Shares; (ii) each trustee of AMIT; and (iii) the trustees and executive
officers of AMIT as a group. There are no other trustees or officers of AMIT
who beneficially own either AMIT Class A Shares or AMIT Class B Shares. Unless
otherwise indicated in the footnotes, all of such interests are owned directly,
and the indicated person has sole voting and investment power.

NUMBER OF SHARES % OF CLASS
NAME OF OWNER OR IDENTITY OF GROUP TITLE OF CLASS BENEFICIALLY OWNED OUTSTANDING
- - ---------------------------------------- ---------------- -------------------- ------------

Gotham Partners, L.P. and
Gotham Partners II, L.P. .............. Class A 249,700 9.5%
East 42nd Street, 18th Floor
New York, New York 10017
Wayne M. Cooperman and
Ricky C. Sandler (1) .................. Class A 225,300 8.6%
Ronald J. Consiglio .................... Class A 14,750 0.6%
Bryan L. Herrmann ...................... Class A 4,550 0.2%
J. D'Arcy Chisholm ..................... Class A 1,728 *
MAE (2) ................................ Class B 1,675,113 100%
All trustees and executive officers as a
group (3 individuals) ................. Class A 21,028 0.8%
Class B -- 0.0%

- - ----------
* Less than 0.1%

(1) The AMIT Class A Shares are held through Fusion Partners, L.P. and Fusion
Offshore Fund Limited, a British Virgin Islands corporation. The
individuals are the general partners of Fusion Partners, L.P. and the
principals of the investment manager of Fusion Offshore Fund Limited.

(2) The AMIT Class B Shares held by MAE are subject to the Class B Voting
Proxy and the Stock Option Agreement.

126

CAPITALIZATION

The following table sets forth the capitalization of IPT as of March 31,
1998 and as adjusted to give effect to the consummation of the Merger.

AT MARCH 31, 1998
---------------------------
HISTORICAL PRO FORMA
------------ ------------
(IN THOUSANDS)

Debt:
Non-recourse mortgage notes(1) .................................... $ 21,957 $ 26,482
Minority interest in IPLP .......................................... 56,984 56,984
Preferred Shares, par value $.01 per share -- authorized 100,000,000
shares, none issued and outstanding ............................... -- --
Common Shares, par value $.01 per share -- authorized 400,000,000
shares, issued and outstanding 19,427,760 (historical) 23,484,425
(pro forma) ....................................................... 194 235
Unearned compensation .............................................. (5,462) (5,462)
Additional paid-in capital ......................................... 154,984 195,866
Distributions in excess of accumulated earnings .................... (402) (402)
-------- --------
Total shareholders' equity ......................................... 149,314 190,237
-------- --------
Total capitalization ............................................... $228,255 $273,703
======== ========

- - ----------
(1) See Notes to Consolidated and Combined Financial Statements of IPT
contained elsewhere in this Proxy Statement/Prospectus for information
relating to the indebtedness.

127

DISTRIBUTIONS

IPT intends to make periodic distributions to its shareholders to the
extent necessary to satisfy the annual distribution requirements of a REIT
under the Code. In general, such requirements provide that at least 95% of
IPT's REIT taxable income must be distributed annually. Under certain
circumstances, it may be necessary for IPT to borrow or liquidate investments
to satisfy its distribution requirements as a REIT.

In August 1997, the IPT Board adopted a policy to pay regular quarterly
distributions in an amount equal to $.15 per IPT Common Share which will be
increased to $.16 per IPT Common Share beginning with the first quarterly
distribution for which the record date is after the Effective Time, although
IPT is not obligated to do so and there can be no assurance that IPT will pay
such distributions. IPT is currently paying regular quarterly distributions of
$.15 per IPT Common Share in accordance with this policy. This distribution
policy was intended to approximately equal, on an adjusted share basis, the
$1.00 per AMIT Class A Share distributions being paid by AMIT during the
negotiations of the Merger Agreement. IPT believes that these distributions
will exceed the 95% distribution requirement exclusive of gains from the sales
of property. Pursuant to its current distribution policy, IPT paid
distributions of $.15 per IPT Common Share on November 17, 1997 to shareholders
of record on October 31, 1997, on January 15, 1998 to shareholders of record on
December 23, 1997 and on April 15, 1998 to shareholders of record on March 23,
1998. In addition, on June 3, 1998 IPT declared a distribution of $.15 per IPT
Common Share to shareholders of record on June 23, 1998 which distribution is
expected to be paid on July 15, 1998. In December 1996 and January 1997, IPT
and IPLP made distributions to its shareholders and partners, respectively, of
which approximately $10 million was to Insignia and its affiliates.

Distributions by IPT to the extent of its current and accumulated earnings
and profits (excluding distributions that are designated by IPT as capital gain
dividends) generally will be taxable to shareholders as ordinary dividend
income for federal income tax purposes. In general, distributions in excess of
current and accumulated earnings and profits will be treated as a nontaxable
reduction of a shareholder's basis in its IPT Common Shares to the extent
thereof, and thereafter as taxable gain. Distributions that are treated as a
reduction of a shareholder's basis in its IPT Common Shares will have the
effect of deferring taxation until the sale of a shareholder's IPT Common
Shares.

IPT may designate distributions as capital gain dividends to the extent
that such dividends do not exceed IPT's net capital gain for the applicable
fiscal years, and such capital gain distributions will be taxable to
shareholders as capital gain income. Alternatively, pursuant to newly enacted
tax legislation, IPT can elect to retain capital gains otherwise required to be
distributed and instead may pay a tax on such retained amounts. Each
shareholder will report such retained amounts as if such amounts had been
distributed directly to such shareholder and will receive, as an offset of the
tax thereon, a credit for its proportionate share of the taxes paid by IPT on
the retained capital gains as if such shareholder had paid the tax directly.

Under newly enacted tax legislation, the capital gains rates with respect
to individual shareholders has changed. Generally, for capital gains recognized
after July 28, 1997, the maximum tax rate on those gains will be 20% (10% for
individuals in the 15% tax bracket) if the taxpayer holds the asset for more
than 18 months and 28% for those assets held for more than 12 months and not
more than 18 months. However, the new tax legislation provides that Treasury
regulations may be issued to apply the new capital gain tax rates to
pass-through entities (including a REIT). Thus, how these regulations may
effect holders of IPT shares is uncertain. See "Certain Federal Income Tax
Considerations -- Taxation of U.S. Shareholders -- Taxation of Taxable Domestic
Shareholders."

128

DESCRIPTION OF SHARES OF BENEFICIAL INTEREST OF IPT

The following summary of the terms of the shares of beneficial interest of
IPT does not purport to be complete and is subject to and qualified in its
entirety by reference to IPT's Declaration of Trust and Bylaws, copies of which
have been filed as exhibits to the Registration Statement of which this Proxy
Statement/Prospectus forms a part.

GENERAL

IPT's Declaration of Trust provides that IPT may issue up to 400,000,000
IPT Common Shares and 100,000,000 preferred shares of beneficial interest, $.01
par value per share ("Preferred Shares"). Upon completion of the Merger,
approximately 23,484,425 IPT Common Shares will be issued and outstanding and
no Preferred Shares will be issued and outstanding. As permitted by Maryland
law, IPT's Declaration of Trust contains a provision permitting the IPT Board,
without any action by the shareholders of IPT, to amend IPT's Declaration of
Trust to increase or decrease the aggregate number of shares of beneficial
interest or the number of shares of any class of shares of beneficial interest
that IPT has authority to issue. IPT believes that the power of the IPT Board
to issue additional shares of beneficial interest will provide IPT with
increased flexibility in structuring possible future financings and
acquisitions and in meeting other needs that might arise. The additional shares
of beneficial interest, including possibly IPT Common Shares, will be available
for issuance without further action by IPT's shareholders, unless action by the
shareholders is required by applicable law or the rules of any stock exchange
or automated quotation system on which IPT's securities may be listed or
traded. Although the IPT Board currently has no intention of doing so, it could
authorize IPT to issue a class or series that could, depending on the terms of
such class or series, delay, defer or prevent a transaction or a change in
control of IPT that might involve a premium for the IPT Common Shares and might
otherwise be in the best interests of the shareholders of IPT.

COMMON SHARES

Subject to the preferential rights of any other shares or series of
beneficial interest and to the provisions of IPT Declaration of Trust regarding
the restriction of the transfer of shares of beneficial interest, holders of
IPT Common Shares are entitled to receive dividends on shares if, as and when
authorized and declared by the IPT Board out of assets legally available
therefor and to share ratably in the assets of IPT legally available for
distribution to its shareholders in the event of its liquidation, dissolution
or winding-up after payment of, or adequate provision for, all known debts and
liabilities of IPT.

Each outstanding IPT Common Share entitles the holder to one vote on all
matters submitted to a vote of shareholders, including the election of
trustees, and, except as provided with respect to any other class or series of
shares of beneficial interest, the holders of such IPT Common Shares possess
the exclusive voting power. There is no cumulative voting in the election of
trustees, which means that the holders of a majority of the outstanding IPT
Common Shares can elect all of the trustees then standing for election and the
holders of the remaining shares will not be able to elect any trustees.

Holders of IPT Common Shares have no preference, conversion, sinking fund,
redemption or appraisal rights and have no preemptive rights to subscribe for
any securities of IPT. Subject to the provisions of IPT's Declaration of Trust
regarding the restriction on transfer of shares of beneficial interest, IPT
Common Shares have equal dividend, distribution, liquidation and other rights.

Under Maryland law, a Maryland real estate investment trust generally
cannot amend its declaration of trust or merge unless approved by the
affirmative vote of shareholders holding at least two-thirds of the shares
entitled to vote on the matter unless a lesser percentage (but not less than a
majority of all the votes entitled to be cast on the matter) is set forth in
the real estate investment trust's declaration of trust. IPT's Declaration of
Trust, other than provisions therein relating to (i) trustees, (ii) changes in
capital structure, (iii) related party transactions, (iv) duration of IPT, (v)
restrictions on transfers, (vi) limitations on trustee liability, (vii)
exemptions to the excess share provisions, and (viii) certain exemptions from
the provisions of Maryland law, may be amended only by the affirmative vote of
the holders of not less than a majority

129

of the IPT Common Shares then outstanding and entitled to vote thereon. The
provisions described in clauses (i)-(viii) in the preceding sentence may be
amended only by the affirmative vote of the holders not less than two-thirds of
the IPT Common Shares then outstanding. Under Maryland law, a declaration of
trust may permit the trustees by a two-thirds vote to amend the declaration of
trust from time to time to qualify as a real estate investment trust under the
Code or Maryland law without the approval of the shareholders. IPT's
Declaration of Trust permits such action by the IPT Board. In addition, as
permitted by Maryland law, IPT's Declaration of Trust contains a provision
permitting the IPT Board, without any action by the shareholders of IPT, to
amend IPT's Declaration of Trust to increase or decrease the aggregate number
of shares of beneficial interest or the number of shares of any class of shares
of beneficial interest that IPT has authority to issue.

PREFERRED SHARES

IPT's Declaration of Trust authorizes the IPT Board to classify any
unissued Preferred Shares and to reclassify any previously classified but
unissued Preferred Shares of any series from time to time in one or more
series, as authorized by the IPT Board. Prior to issuance of shares of each
series, the IPT Board is required by Maryland law and IPT's Declaration of
Trust to set for each such series, subject to the provisions of IPT's
Declaration of Trust regarding the restriction on transfer of shares of
beneficial interest, the terms, preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends or other distributions,
qualifications and terms or conditions of redemption for each such series.
Thus, the IPT Board could authorize the issuance of Preferred Shares with terms
and conditions which could have the effect of delaying, deferring or preventing
a transaction or a change in control of IPT that might involve a premium for
holders of IPT Common Shares or otherwise might be in their best interests. As
of the date hereof, no Preferred Shares are outstanding and IPT has no present
plans to issue any Preferred Shares.

CLASSIFICATION OR RECLASSIFICATION OF IPT COMMON SHARES OR PREFERRED SHARES

IPT's Declaration of Trust authorizes the IPT Board to classify or
reclassify any unissued IPT Common Shares or Preferred Shares into one or more
classes or series of shares of beneficial interest by setting or changing the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or distributions, qualifications or terms or
conditions of redemption of such new class or series of shares of beneficial
interest.

DISTRIBUTIONS AND LIQUIDATION RIGHTS

Subject to any preferential rights of any outstanding series of Preferred
Shares, the holders of IPT Common Shares are entitled to such distributions as
may be declared from time to time by the IPT Board from funds available
therefor, and upon liquidation are entitled to receive pro rata all of the
assets of IPT available for distribution to such holders. See "Distributions."

REGISTRATION RIGHTS

Pursuant to certain agreements entered into in connection with the
formation of IPT and the Private Offering, if IPT has not registered the IPT
Common Shares under the Exchange Act and listed such IPT Common Shares on a
national securities exchange or the NASDAQ within five years of the date the
IPT Common Shares were purchased in the Private Offering, then Insignia and its
affiliates and each purchaser of IPT Common Shares in the Private Offering
holding not less than 50,000 IPT Common Shares have the right to demand
registration of all, but not less than all, of the IPT Common Shares held by
each such holder (collectively, the "Registration Rights Holders" and each a
"Registration Rights Holder"). Upon such demand, IPT is required to use
reasonable efforts to effect the registration under the Securities Act of such
IPT Common Shares. IPT may in its good faith judgment defer any such
registration if it is not in the best interests of IPT and its shareholders for
a period of not more than 120 days; provided, however, that during such time
IPT may not file a registration statement for securities to be issued and sold
for its own account or that of any other shareholder.

130

Under the same agreements, if IPT at any time proposes to register any IPT
Common Shares in an offering of IPT Common Shares for cash, whether or not for
sale for its own account, it will give written notice of its intention to do so
to the Registration Rights Holders. Upon the written request of any
Registration Rights Holder (which request shall specify the IPT Common Shares
intended to be disposed of by such holder and the intended method of
disposition thereof), IPT will use reasonable efforts to effect the
registration under the Securities Act of all IPT Common Shares which IPT has
been so requested to register by the requesting Registration Rights Holder, to
the extent required to permit the disposition of the IPT Common Shares so to be
registered, provided that if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, IPT shall
determine for any reason not to register or to delay registration of such
securities, IPT may, at its election, not register or delay the registration
after giving written notice of such determination to each of the requesting
Registration Rights Holders.

If a registration described in the preceding paragraph involves an
underwritten offering of securities and the managing underwriter of such
underwritten offering informs IPT and any Registration Rights Holders
requesting such registration by letter of its belief that the number of
securities requested to be included in such registration exceeds the number
which can be sold in (or during the time of) such offering, then IPT shall be
entitled to reduce the aggregate number of securities to be included in such
registration, with participation in the offering being allocated first, for the
account of IPT, and second, pro rata among all Registration Rights Holders of
IPT Common Shares requesting registration pursuant to the preceding paragraph.

Notwithstanding any of the foregoing, IPT shall not be required to
register any IPT Common Shares if, in the opinion of its counsel, the
Registration Rights Holders requesting registration are permitted to sell such
IPT Common Shares to the public without registration under the Securities Act.

Additionally, IPT has granted certain registration rights to Insignia in
the event that Insignia requests a redemption of all or a portion of its OP
Units and IPT elects to redeem such OP Units in exchange for IPT Common Shares.
IPT has agreed that, upon written request by Insignia, IPT will file with the
Commission a shelf registration statement pursuant to Rule 415 under the
Securities Act covering all of the IPT Common Shares that may be issued upon a
redemption of all of the OP Units held by Insignia and arrange for the listing
of such IPT Common Shares on the ASE.

SHARE OWNERSHIP LIMITATIONS; RESTRICTIONS ON TRANSFER OF IPT COMMON SHARES

For IPT to qualify as a REIT under the Code, it must meet certain
requirements concerning the ownership of its outstanding shares of beneficial
interest. Specifically, not more than 50% in value of IPT's outstanding shares
of beneficial interest may be owned, directly or indirectly, by five or fewer
individuals (as defined in the Code to include certain entities) during the
last half of a taxable year, and IPT must be beneficially owned by 100 or more
persons during at least 335 days of a taxable year of 12 months or during a
proportionate part of a shorter taxable year. See "Certain Federal Income Tax
Considerations -- Taxation Requirements -- Organizational Requirements."

Because the IPT Board believes it is essential for IPT to continue to
qualify as a REIT, IPT's Declaration of Trust, subject to certain exceptions
described below, provides that no person may own, or be deemed to own by virtue
of the attribution provisions of the Code, more than the lesser of (i) 9.8% of
the number of outstanding shares of beneficial interest of IPT (except for
Insignia and its affiliates, including Andrew L. Farkas) and (ii) 9.8% of the
value of the outstanding IPT Common Shares and Preferred Shares (the "Ownership
Limitation"). Any transfer of IPT Common Shares or Preferred Shares that would
(i) result in any person (other than Insignia and its affiliates) owning,
directly or indirectly, IPT Common Shares or Preferred Shares in excess of the
Ownership Limitation, (ii) result in the IPT Common Shares and Preferred Shares
being owned by fewer than 100 persons (determined without reference to any
rules of attribution) or (iii) result in IPT being "closely held" within the
meaning of Section 856(h) of the Code, shall be null and void, and the intended
transferee will acquire no rights in such IPT Common Shares or Preferred
Shares.

131

Subject to certain exceptions described below, if any purported transfer
of IPT Common Shares or Preferred Shares would (i) result in any person owning,
directly or indirectly, IPT Common Shares or Preferred Shares in excess of the
Ownership Limitation, (ii) result in the IPT Common Shares and Preferred Shares
being owned by fewer than 100 persons (determined without reference to any
rules of attribution), or (iii) result in the Company being "closely held"
within the meaning of Section 856(h) of the Code, the IPT Common Shares or
Preferred Shares, as the case may be, will be designated as "Excess Shares" and
transferred automatically to a trust (the "Special Trust"). The trustee of the
Special Trust (the "Special Trustee") will be designated by IPT but will not be
affiliated with IPT or any prohibited transferee or purported owner (the
"Purported Owner") of the Excess Shares. The beneficiary of the Special Trust
(the "Beneficiary") will be one or more charitable organizations that are named
by the Special Trustee.

Excess Shares will remain issued and outstanding shares and will be
entitled to the same rights and privileges as all other shares of the same
class or series. The Special Trust will receive all dividends and distributions
on the Excess Shares and will hold such dividends and distributions in trust
for the benefit of the Beneficiary. The Special Trustee will vote all Excess
Shares.

The Purported Owner with respect to Excess Shares will be required to
repay to the Special Trust the amount of any dividends or distributions
received by the Purported Owner that are attributable to any Excess Shares. The
Purported Owner generally will receive from the Special Trustee the lesser of
(i) the price per share such Purported Owner paid for the IPT Common Shares or
Preferred Shares that were designated as Excess Shares (or, in the case of a
gift or devise, the Market Price (as defined below) per share on the date of
such transfer) and (ii) the price per share received by the Special Trustee
from the sale of such Excess Shares. Any amounts received by the Special
Trustee in excess of the amounts to be paid to the Purported Owner will be
distributed to the Beneficiary.

The Excess Shares will be deemed to have been offered for sale to IPT, or
its designee, at a price per share equal to (i) in the case of Excess Shares
resulting from a purported transfer, the lesser of (a) the price per share in
the transaction that created such Excess Shares (or, in the case of a gift or
devise, the Market Price per share on the date of such transfer) or (b) the
Market Price per share on the date that IPT, or its designee, accepts such
offer; and (ii) in the case of Excess Shares created by an event other than a
purported transfer (including, without limitation, a change in IPT's capital
structure), the lesser of (a) the Market Price of such Shares that were
converted into such Excess Shares on the date of such conversion and (b) the
Market Price of such shares on the date IPT or its designee accepts such offer.
IPT will have the right to accept such offer for a period of 90 days after the
later of (i) the date of the purported transfer or other event which resulted
in such Excess Shares and (ii) the date the IPT Board determines in good faith
that a transfer or other event resulting in such Excess Shares occurred.

"Market Price" means, with respect to IPT Common Shares or Preferred
Shares, the last reported sales price reported on the ASE of such class of
shares on the trading day immediately preceding the relevant date, or if not
then traded on the ASE, the last reported sales price on the trading day
immediately preceding the relevant date as reported on any exchange or
quotation system on which the IPT Common Shares or Preferred Shares may be
traded, or if not then traded over any exchange or quotation system, then the
market price of the IPT Common Shares or Preferred Shares on the relevant date
as determined in good faith by the IPT Board.

Any person who acquired or attempts to acquire IPT Common Shares or
Preferred Shares in violation of the foregoing restrictions, or any person who
is a transferee such that Excess Shares result, will be required to give
immediate written notice or, in the event of a proposed or attempted
acquisition, give at least 15 days prior written notice, to IPT of such event
and shall provide to IPT such other information as IPT may request in order to
determine the effect, if any, of such acquisition or attempted acquisition on
IPT's status as a REIT.

IPT's Declaration of Trust requires all persons who own, directly or
indirectly, more than 5% (or such lower percentages as provided in the tax
regulations promulgated under the Code) of the number or value of the
outstanding IPT Common Shares and Preferred Shares, within 30 days after
January 1 of each year (or within such shorter period as may reasonably be
required by IPT) to provide written notice to IPT

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stating the name and address of such direct or indirect owner, the number of
IPT Common Shares and Preferred Shares owned directly or indirectly, and a
description of how such shares are held. In addition, each direct or indirect
shareholder will provide to IPT such additional information as IPT may request
in order to determine the effect, if any, of such ownership on IPT's status as
a REIT.

In addition, the IPT Board, upon receipt of a ruling from the Service or
an opinion of counsel and upon such evidence satisfactory to the IPT Board, may
exempt a person from the Ownership Limitation under certain circumstances. The
Ownership Limitation could have the effect of delaying, deferring or preventing
a transaction or a change in control of IPT that might involve a premium for
the IPT Common Shares or otherwise be in the best interest of the shareholders
of IPT.

All certificates representing IPT Common Shares or Preferred Shares will
bear a legend referring to the restrictions described above.

EXCHANGE OF OP UNITS INTO IPT COMMON SHARES

Any holder of OP Units may, at any time after one year from the issuance
of such OP Units, request redemption of his OP Units as described under "The
Partnership Agreement of IPLP -- Redemption Rights" herein. IPT may elect to
satisfy such rights by issuing IPT Common Shares in exchange for OP Units at
the rate of one IPT Common Share for each OP Unit. With each exchange of OP
Units for IPT Common Shares, IPT's ownership interest in IPLP will increase and
the voting percentage in IPT of each shareholder of IPT will be diluted.
Additionally, IPT has granted certain registration rights to Insignia in the
event that Insignia requests the redemption of any OP Units held by it and IPT
elects to exchange IPT Common Shares for such OP Units. See "-- Registration
Rights" above.

COMPARISON OF SHAREHOLDER RIGHTS

If the Merger is consummated, all shareholders of AMIT immediately prior
to the effective time will become shareholders of IPT. The following is a
comparison of the principal rights of shareholders of AMIT under its charter
documents and California law and the rights of shareholders of IPT under its
charter documents and Maryland law. Although there are substantive differences
between California and Maryland law and between the AMIT and IPT charter
documents, AMIT does not believe that such changes will result in any material
detriment to its shareholders. These comparisons are summaries and do not
purport to be complete and are qualified in their entirety by reference to the
applicable laws and the charter documents.

It should be noted that the provisions of California statutory law
governing REITs do not provide a comprehensive set of rules for governance in
the same way that the statutes governing corporations and partnerships do.
Maryland, on the other hand, has a comprehensive statute that covers a number
of areas that are not addressed by California statutory law.

BUSINESS COMBINATIONS

Under Maryland law, certain "business combinations" (including a merger,
consolidation, share exchange, or, in certain circumstances, an asset transfer
or issuance or reclassification of equity securities) between a Maryland real
estate investment trust and any person who beneficially owns 10% or more of the
voting power of the trust's shares or an affiliate of the trust which, at any
time within the two-year period prior to the date in question, was the
beneficial owner of 10% or more of the voting power of the trust's shares (an
"Interested Shareholder") or an affiliate of an Interested Shareholder are
prohibited for five years after the most recent date on which the Interested
Shareholder became an Interested Shareholder and thereafter must be (i)
recommended by the board of trustees of such trust and (ii) approved by the
affirmative vote of at least (a) 80% of the votes entitled to be cast by
holders of outstanding voting shares of the trust and (b) two-thirds of the
votes entitled to be cast by holders of outstanding voting shares other than
shares held by the Interested Shareholder with whom the business combination is
to be effected, unless, among other things, the trust's common shareholders
receive a minimum price (as defined in the statute) for their shares and the
consideration is received in cash or in the same form as previously paid by the
Interested Shareholder for his shares. These provisions of

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Maryland law do not apply, however, to business combinations that are approved
or exempted by the board of trustees of the trust prior to the time that the
Interested Shareholder becomes an Interested Shareholder. IPT's Declaration of
Trust contains provisions exempting Insignia, any successor to Insignia, any
affiliate of Insignia or successor thereto, Andrew L. Farkas and any affiliate
of Andrew L. Farkas from the provisions of the business combination statute. In
addition, in connection with the proposed Insignia/AIMCO Merger and the
IPT/AIMCO Merger contemplated thereby, the IPT Board adopted a revocable
resolution exempting AIMCO from the provisions of the business combination
statute.

California statutory law has no statute similar to the Maryland law
governing business combinations. The California REIT statute permits mergers
and consolidations of REITs that are governed by California law only if (i) the
other party or parties to the transaction are REITs that have qualified their
shares for sale in California or are limited partnerships and (ii) authority
for the merger or consolidation and the procedures for accomplishing the
transaction are set forth in the declaration of trust. Accordingly, AMIT has
proposed the Trust Amendment and the approval of the Merger Proposal, which
includes the Trust Amendment, by the shareholders of AMIT is a condition to the
Merger.

CONTROL SHARE ACQUISITIONS

Maryland law provides that "Control Shares" of a Maryland real estate
investment trust acquired in a "Control Share Acquisition" have no voting
rights except to the extent approved by a vote of two-thirds of the votes
entitled to be cast on the matter, excluding shares of beneficial interest
owned by the acquiror or by officers or trustees who are employees of the
trust. "Control Shares" are voting shares of beneficial interest which, if
aggregated with all other such shares of beneficial interest previously
acquired by the acquiror or in respect of which the acquiror is able to
exercise or direct the exercise of voting power in electing trustees, fall
within one of the following ranges of voting power: (i) one-fifth or more but
less than one-third, (ii) one-third or more but less than a majority, or (iii)
a majority of all voting power. Control Shares do not include capital stock
that the acquiring person is then entitled to vote as a result of having
previously obtained shareholder approval. A "Control Share Acquisition" means
the acquisition of Control Shares, subject to certain exceptions.

A person who has made or proposes to make a Control Share Acquisition,
upon satisfaction of certain conditions (including an undertaking to pay
expenses), may compel the board of trustees of the trust to call a special
meeting of shareholders to be held within 50 days of demand to consider voting
rights for the shares. If no request for a meeting is made, the trust may
itself present the question at any shareholders meeting.

If voting rights are not approved at the meeting or if the acquiring
person does not deliver an acquiring person statement as required by the
statute, then, subject to certain conditions and limitations, the trust may
redeem any or all of the Control Shares (except those for which voting rights
have previously been approved) for fair value determined, without regard to the
absence of voting rights for the Control Shares, as of the date of the last
Control Share acquisition by the acquiror or of any meeting of shareholders at
which the voting rights of such shares are considered and not approved. If
voting rights for Control Shares are approved at a shareholders' meeting and
the acquiror becomes entitled to vote a majority of the shares of beneficial
interest entitled to vote, all other shareholders may exercise appraisal
rights. The fair value of the shares of beneficial interest as determined for
purposes of such appraisal rights may not be less than the highest price per
share paid by the acquiror in the Control Share Acquisition.

The Control Share Acquisition statute does not apply to shares acquired in
a merger, consolidation or share exchange if the trust is a party to the
transaction, or to acquisitions approved or exempted by the Declaration of
Trust or Bylaws of the trust. IPT's Declaration of Trust contains provisions
exempting Insignia, any successor to Insignia, any affiliate of Insignia or
successor thereto, Andrew L. Farkas and any affiliate of Andrew L. Farkas from
the provisions of the Control Share Acquisition statute. In addition, in
connection with the proposed Insignia/AIMCO Merger and the IPT/AIMCO Merger
contemplated thereby, the IPT Board intends, but is not obligated, to amend the
bylaws of IPT to exempt AIMCO from the provisions of the Control Share
Acquisition statute.

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California statutory REIT law contains no provisions similar to the
Maryland "Control Share acquisition" provisions.

SHAREHOLDERS' MEETINGS

The IPT Declaration of Trust provides for an annual meeting of
shareholders to be held upon reasonable notice and within a reasonable period
(not less than 30 days) following delivery of IPT's annual report, but in any
event such meeting must be held within six months after the end of each full
fiscal year of IPT. Special meetings of shareholders may be called by a
majority of the IPT Board or by the Chairman of the Board or President of IPT
and may be called upon the written request of shareholders holding in the
aggregate not less that 25% of the outstanding IPT Common Shares entitled to
vote. Written notice stating the place, date and hour of the shareholders'
meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than 10 nor more than
60 days before the day of the meeting to each holder of record.

The AMIT Declaration of Trust likewise requires that an annual meeting of
shareholders be held in the first six months of the year. The Trustees'
Regulations of AMIT specify that the annual meeting will be held on the last
Friday of April. No annual meeting will be held in 1997 because of the pendency
of the transaction with IPT. Special meetings of the shareholders may be called
by the chairman of the board of trustees, or at least two of the other
trustees, and shall be called upon the written request of shareholders holding
not less than 20% of the outstanding AMIT Class A Shares or 20% of the
outstanding AMIT Class B Shares. The management of AMIT believes that no single
shareholder of AMIT other than MAE has a right to compel a special meeting of
the shareholders.

LIMITED LIABILITY AND INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES AND
OTHER AGENTS

IPT's Declaration of Trust limit the liability of IPT's trustees and
officers to IPT and its shareholders for money damages to the fullest extent
permitted under Maryland law and provide that a trustee or officer may be
indemnified against judgments, penalties, fines, settlements, and reasonable
expenses actually incurred in a proceeding unless the following can be
established: (i) the act, or omission of the trustee or officer was material to
the cause of action adjudicated in the proceeding, and was committed in bad
faith or was the result of active and deliberate dishonesty; (ii) the trustee
or officer actually received an improper personal benefit in money, property or
services; or (iii) with respect to any criminal proceeding, the trustee or
officer had reasonable cause to believe his act or omission was unlawful. Such
indemnification or any agreement to hold harmless is recoverable only out of
the assets of IPT and not from the shareholders.

This provision does not reduce the exposure of trustees and officers to
liability under federal or state securities laws, nor does it limit the
shareholders' ability to obtain injunctive relief or other equitable remedies
for a violation of a trustee's or an officer's duties to IPT or its
shareholders, although such equitable remedies may not be an effective remedy
in certain circumstances.

In addition, IPT may, at the discretion of the IPT Board, indemnify
employees or agents of IPT. Pursuant to IPT's Declaration of Trust, IPT is
required to advance to any person who is eligible for indemnification
reasonable expenses incurred by such person who is a party to a proceeding
prior to the final disposition of the proceeding upon receipt by IPT of a
notice in writing from such person stating (i) that in such person's good faith
belief the standard of conduct necessary for indemnification has been met and
(ii) that such person will repay the amount advanced if it is ultimately
determined that such standard of conduct has not been met.

Indemnification of the trustees and officers of IPT will not be allowed
for certain liabilities arising from or out of a violation of state or federal
securities laws. Indemnification will be allowed for settlements and related
expenses of lawsuits alleging securities laws violations and for expenses
incurred in successfully defending such lawsuits, provided that a court either
(i) approves the settlement and finds that indemnification of the settlement
and related costs should be made, or (ii) there has been a dismissal with
prejudice or a successful adjudication on the merits of each count involving
alleged securities law violations as to the particular indemnitee and a court
approves such indemnification.

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AMIT's Declaration of Trust provides for indemnification of trustees,
officers, employees and agents of AMIT against any claim or liability by or to
any third person, in respect of any act or any failure to act so long as such
act or failure to act was performed in a manner determined in good faith to be
within the scope of the trustees' authority and to be in the best interests of
AMIT, and so long as he or she was not guilty of negligence, misconduct or a
breach of fiduciary obligations in such act or failure to act. Indemnification
includes payment of reasonable attorneys' fees or other expenses, but there is
no express provision for advancement of expenses. The AMIT Declaration of Trust
also provides that no trustee or officer of AMIT shall be liable to AMIT except
in cases of his or her own willful violation of the provisions of the AMIT
Declaration of Trust or of the Trustees' Regulations which violation is
materially against the interests of the shareholders of AMIT and results in
material harm to such interests, or gross negligence in the performance of his
or her duties. The AMIT Declaration of Trust is similar to the IPT Declaration
of Trust in its provisions with respect to indemnification for liabilities
arising from violation of federal and state securities laws.

CLASSIFICATION OF THE BOARD OF TRUSTEES

IPT's Declaration of Trust provides that the number of trustees of IPT
shall be determined from time to time by resolution of the IPT Board. IPT's
Bylaws provide that the number of trustees of IPT may be established by the IPT
Board but may not be fewer than three nor more than eight. Upon consummation of
the Merger, there will be seven trustees. The trustees may increase or decrease
the number of trustees by a vote of at least two-thirds of the members of the
IPT Board, provided that the number of trustees shall never be less than the
number required by Maryland law and that the tenure of office of a trustee
shall not be affected by any decrease in the number of trustees. Any vacancy
will be filled, including a vacancy created by an increase in the number of
trustees, at any regular meeting or at any special meeting called for that
purpose, by a majority of the remaining trustees.

Pursuant to IPT's Declaration of Trust, the IPT Board is divided into
three classes of trustees. The initial terms of the first, second and third
class will expire in 1998, 1999 and 2000, respectively. Beginning in 1997,
trustees of each class are chosen for three-year terms upon the expiration of
their current terms and each year one class of trustees will be elected by the
shareholders. IPT believes that classification of the IPT Board will help to
assure the continuity and stability of IPT's business strategies and policies
as determined by the IPT Board. Holders of IPT Common Shares have no right to
cumulative voting in the election of trustees. Consequently, at each annual
meeting of shareholders, the holders of a majority of the IPT Common shares are
able to elect all of the successors of the class of trustees whose terms expire
at that meeting.

The classified board provision could have the effect of making the
replacement of incumbent trustees more time consuming and difficult. At least
two annual meetings of shareholders, instead of one, will generally be required
to effect a change in a majority of the IPT Board. The staggered terms of
trustees may reduce the possibility of a tender offer or an attempt to change
control of IPT or other transaction that might involve a premium for holders of
IPT Common Shares, even though a tender offer, change of control or other
transaction might be in the best interests of the shareholders.

AMIT's Trustees Regulations provide that the number of trustees of AMIT
may be established by the AMIT Board but may not be fewer than three or more
than fifteen. As of the date hereof, the AMIT Board consists of four trustees.
The trustees may increase or decrease the number of trustees by unanimous
written consent, provided that the number of trustees shall not be less than
three or more than fifteen. Any vacancy will be filled, including a vacancy
created by an increase in the number of trustees, by a majority of the
remaining trustees.

Each trustee of AMIT is elected annually, and serves until the election of
his or her successor. Holders of AMIT Shares are entitled to cumulate their
votes on the election of trustees. See Voting Rights, below.

VOTING RIGHTS

Holders of IPT Common Shares are entitled to one vote per share on all
matters on which shareholders are entitled to vote. The shareholders of IPT are
only entitled to vote on (i) the election of

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trustees, (ii) certain amendments of IPT's Declaration of Trust, (iii) the
voluntary dissolution or termination of IPT, and (iv) in certain circumstances,
the merger or consolidation of IPT or the sale of all or substantially all of
IPT's property. Shareholders of IPT have no cumulative voting rights. The IPT
Board is classified into three classes of staggered three-year terms. IPT
trustees may be removed only for fraud or willful malfeasance by the
affirmative vote of not less than two-thirds of the IPT Common Shares.

Holders of AMIT Shares are also entitled to one vote on all matters on
which shareholders are entitled to vote. The holders of AMIT Class A Shares and
AMIT Class B Shares vote together as a single class, except as required by law
and except with respect to any amendment to AMIT's Declaration of Trust that
would diminish or eliminate the voting rights of either class, in which case
the vote of two-thirds of the class of shares affected is required.

AMIT shareholders are entitled to cumulate their votes in the election of
trustees. Accordingly, each shareholder may cast a number of votes equal to the
number of AMIT Shares held of record multiplied by the number of trustees to be
elected or removed by the shareholders, and may cast all of such votes for a
single trustee, or may distribute such votes among the number of trustees to be
voted on, or for any two or more of them as such shareholder may see fit.

AMIT trustees may be removed by majority vote or written consent of the
shareholders for willful violations of the AMIT Declaration of Trust or the
Trustees' Regulations, which violations are materially against the interests of
the shareholders, or for gross negligence in the performance of their duties.

ANNUAL REPORT

The Declaration of Trust requires IPT to deliver to shareholders an annual
report concerning its operations for the preceding fiscal year containing
financial statements prepared in accordance with generally accepted accounting
principles which are audited and reported on by independent accountants. Annual
reports must be mailed or delivered to each shareholder at or before the annual
meeting.

The AMIT Declaration of Trust requires that an annual report be sent to
shareholders not later than 120 days after the close of each year.

AMENDMENT TO THE DECLARATION OF TRUST

The IPT Board, by a two-thirds vote, may amend the provisions of IPT's
Declaration of Trust, without the consent of shareholders, from time to time to
preserve IPT's ability to qualify as a REIT if they determine in good faith it
is advisable and to increase or decrease the aggregate number of authorized IPT
Common Shares or the number of authorized shares of any class, provided that
any such amendment may not decrease the aggregate number of authorized IPT
Common Shares or the number of authorized shares of any class of common shares
below the number of then outstanding IPT Common Shares or shares of such class,
respectively. Except as described in the preceding sentence, IPT's Declaration
of Trust, other than provisions therein relating to (i) trustees, (ii) changes
in capital structure (other than amendments by the IPT Board), (iii) related
party transactions, (iv) duration of IPT, (v) certain restrictions on ownership
of shares of IPT, (vi) limitations on trustee liability, (vii) exemptions to
the excess share provisions and (viii) certain exemptions from the provisions
of Maryland law, may be amended only by the affirmative vote of the holders of
not less than a majority of the voting shares then outstanding and entitled to
vote thereon. The provisions described in clauses (i)-(viii) in the preceding
sentence may be amended only by the affirmative vote of the holders of not less
than two-thirds of the voting shares then outstanding.

The AMIT Board, by a majority vote, may amend AMIT's Declaration of Trust
without the vote or consent of the shareholders of AMIT if they deem it
necessary to conform AMIT's Declaration of Trust to the REIT requirements of
the Code or to other federal or state laws and regulations, or to delete any
inconsistency, clarify or supplement any unclear or ambiguous provision, and/or
correct any mistake or ambiguity. No amendment may be made which would change
the rights with respect to any outstanding shares of AMIT by diminishing or
eliminating any voting rights, except with the vote or consent of the holders
of two-thirds of the outstanding class of the shares affected and entitled to
vote thereon. All other

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amendments to be voted on, consented to or ratified by the shareholders may be
passed, consented to or ratified by a majority vote of the holders of the AMIT
Class A Shares and AMIT Class B Shares, voting together as a single class, with
each share held of record entitled to cast one vote in person or by proxy.

RIGHTS PLAN

In November 1996, the AMIT Board adopted a Shareholders Rights Plan (the
"AMIT Rights Plan") and declared a dividend of one "Right" on each outstanding
AMIT Class A Share to shareholders of record on November 18, 1996. The Rights
are exercisable if a person or group acquires 20% or more of the AMIT Class A
Shares or announces or commences a tender offer for 20% or more of the such
shares. When a person or group acquires such 20% interest, each exercisable
Right will entitle its holder (other than such person or group) to purchase, at
the Right's then-current exercise price, a number of AMIT Class A Shares having
a market value of twice such price. In addition, if AMIT is acquired in a
merger or other business combination transaction after a person has acquired
20% or more of AMIT's outstanding AMIT Class A Shares, each right will entitle
its holder to purchase, at the Right's then-current exercise price, a number of
the acquiring company's common shares having a market value of twice such
price. Prior to the acquisition by a person or group with beneficial ownership
of 20% or more of the AMIT Class A Shares, the Rights are redeemable for one
cent per Right at the option of the AMIT Board. The AMIT Board is also
authorized, under certain circumstances, to reduce the 20% threshold referred
to above to not less than 10%. The Rights will expire on December 31, 2003
unless otherwise extended by the AMIT Board. The Rights will not be exercisable
in connection with the Merger due to the fact that IPT will not acquire 20% of
the AMIT Class A Shares prior to the consummation of the Merger.

IPT does not have a rights agreement or other agreement or provisions
similar to the AMIT Rights Plan.

INSPECTION OF BOOKS AND RECORDS

Any shareholder of IPT may inspect and copy the bylaws, minutes of
proceedings of shareholders and annual statements of affairs of IPT. In
addition, one or more shareholders of record who own at least 5% of the
outstanding shares of any class of beneficial interest of IPT for at least six
months is entitled to inspect and copy the books of account and share ledger of
IPT and to require IPT to prepare and deliver a verified list of the name and
address of, and the number of shares owned by, each shareholder.

Shareholders of AMIT are entitled to inspect and copy the record of
shareholders' names, addresses and shareholdings, the accounting books and
records and minutes of proceedings of the shareholders and the AMIT Board and
committees of the AMIT Board upon written demand at any reasonable time during
usual business hours, for a purpose reasonably related to the shareholder's
interest as a shareholder. In addition, a shareholder or shareholders holding
at least 5% in the aggregate of the outstanding voting shares of AMIT have an
absolute right to either inspect and copy the record of shareholders' names,
addresses and shareholdings or to obtain from the transfer agent, upon written
demand and upon the tender of its usual charges for such a list, a list of the
shareholders' names, addresses and shareholdings as of the most recent record
date for which it has been compiled or as of a date specified by the
shareholder subsequent to the date of the demand.

ASSET REQUIREMENTS

To maintain qualification as a Maryland real estate investment trust,
Maryland law requires at least 75% of the value of IPT's assets to be held,
directly or indirectly, in real estate assets, mortgages or mortgage-related
securities, government securities, cash and cash equivalent items, including
high-grade short term securities and receivables. Maryland law also prohibits
IPT from using or applying land for farming, agricultural, horticultural or
similar purposes.

California law imposes no similar asset requirements.

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SHARES AVAILABLE FOR FUTURE SALE

General

Upon consummation of the Merger, IPT will have 23,484,425 IPT Common
Shares issued and outstanding, of which 510,000 shares were issued under the
1997 Share Incentive Plan and an additional 690,000 shares are eligible for
issuance thereunder.

The IPT Common Shares issued to the shareholders of AMIT in the Merger
will be freely tradable by persons other than "affiliates" of AMIT and IPT,
without restriction under the Securities Act, subject to the limitations on
ownership set forth in IPT's Declaration of Trust. Pursuant to the Partnership
Agreement, the limited partners of IPLP have the right under certain
circumstances to require IPLP to redeem their OP Units for cash, subject,
however, to certain first rights of IPT to acquire such OP Units in exchange
for IPT Common Shares.

All 19,427,760 IPT Common Shares issued prior to the Merger are, and any
IPT Common Shares issued to holders of OP Units upon the exercise of redemption
rights will be, "restricted" securities under the meaning of Rule 144 and may
not be sold in the absence of registration under the Securities Act unless an
exemption from registration is available, including exemptions contained in
Rule 144. As described below, IPT has granted certain holders registration
rights with respect to such IPT Common Shares.

Of the 13,416,475 IPT Common Shares that will be held by Insignia and its
affiliates upon consummation of the Merger, 13,084,932 shares will be eligible
for sale in the public market 90 days after the consummation of the Merger,
subject to compliance with the volume limitations of Rule 144. Of the 6,211,712
IPT Common Shares that are currently held by IPT shareholders unaffiliated with
IPT, 5,199,403 shares may become eligible for resale in the public market 90
days after the consummation of the Merger, subject to compliance with the
volume limitations under Rule 144.

In general, under Rule 144, if one year has elapsed since the later of the
date of acquisition of restricted shares of IPT from IPT or any "affiliate" of
IPT, as that term is defined under the Securities Act, the acquirer or
subsequent holder thereof is entitled to sell, within any three-month period, a
number of shares that does not exceed the greater of (i) 1% of the then
outstanding IPT Common Shares, or (ii) the average weekly trading volume of the
IPT Common Shares during the four calendar weeks preceding the date on which
notice of the sale is filed with the Commission. Sales under Rule 144 are also
subject to certain manner of sale provisions, notice requirements and the
availability of current public information about IPT. In addition, if two years
have elapsed since the later of the date of acquisition of the restricted
shares of IPT from IPT or from any affiliate of IPT, and the acquirer or any
subsequent holder thereof is not deemed to have been an affiliate of the
Company at any time during the three months preceding a sale, such person would
be entitled to sell such shares in the public market under Rule 144(k) without
regard to the volume limitations, manner of sale provisions, public information
requirements or notice requirements.

IPT has an aggregate of 1,200,000 IPT Common Shares eligible for issuance
under the 1997 Share Incentive Plan. IPT intends to file a registration
statement on Form S-8 with respect to the IPT Common Shares issuable under the
Plan. IPT Common Shares issued after the effective date of any such
registration statement on Form S-8 upon the exercise of options granted under
the 1997 Share Incentive Plan will be available for sale in the public market
without restriction to the extent that they are held by persons who are not
affiliates of IPT and, to the extent that they are held by affiliates, pursuant
to Rule 144, without observance of the holding period requirement.

Prior to the Merger, there has been no public market for the IPT Common
Shares. The IPT Common Shares to be issued in the Merger have been approved for
listing on the ASE, subject to official notice of issuance, under the symbol
"FFO." No prediction can be made as to the effect, if any, that future sales of
IPT Common Shares, or the availability of IPT Common Shares for future sale,
will have on the market price of IPT Common Shares prevailing from time to
time. Sales of substantial amounts of IPT Common Shares, or the perception that
such sales or exercise could occur, could adversely affect prevailing market
prices of IPT Common Shares.

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If the IPT/AIMCO Merger is consummated, IPT Common Shares will cease to be
traded or have a public market and the AMIT shareholders will cease to have an
interest in IPT.

Registration Rights

In connection with the formation of IPT and the Private Offerings, IPT has
granted Insignia and its affiliates and each purchaser of IPT Common Shares in
the Private Offerings certain "demand" and "piggyback" registration rights with
respect to their respective IPT Common Shares. The registration rights grant
each rights holder the right to demand registration of all of its IPT Common
Shares if IPT has not registered any IPT Common Shares under the Exchange Act
and listed the IPT Common Shares on a national securities exchange or quoted on
the NASDAQ prior to five years after the date of acquisition of such IPT Common
Shares as long as the purchaser holds not less than 50,000 IPT Common Shares at
the time of the demand. The purchasers will also have the right to include
their IPT Common Shares in any registration of IPT Common Shares conducted by
IPT, subject to certain limitations.

Additionally, IPT has granted Insignia certain registration rights in the
event that Insignia requests a redemption of any of their OP Units and IPT
elects to exercise its right of first refusal and acquire such OP Units by
issuing IPT Common Shares in exchange for such OP Units. See "Description of
Shares of Beneficial Interest of IPT -- Registration Rights."

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FEDERAL INCOME TAX CONSIDERATIONS

The following discussion summarizes the material U.S. federal income tax
considerations that may be relevant to a prospective holder of IPT Common
Shares. Akin Gump believes that the overview presented herein summarizes fairly
the U.S. federal income tax consequences that are likely to be material to a
holder of IPT Common Shares. The following discussion is not exhaustive,
however, and does not discuss in detail all of the state, local and foreign tax
considerations that may be applicable to an investment in the IPT Common
Shares, nor does it discuss all of the aspects of U.S. federal income taxation
that may be relevant to a prospective shareholder in light of his or her
particular circumstances or to certain types of shareholders that are subject
to special treatment under the U.S. federal income tax laws (including
insurance companies, tax-exempt entities, financial institutions,
broker-dealers, foreign corporations and persons who are not citizens or
residents of the United States).

The statements in this discussion and the opinions of Akin Gump are based
on current provisions of the Code, existing, temporary and currently proposed
Treasury regulations promulgated under the Code ("Treasury Regulations"), the
legislative history of the Code, existing administrative rulings and practices
of the Internal Revenue Service (the "IRS"), and judicial decisions. No
assurance can be given that future legislative, judicial or administrative
actions or decisions, which may be retroactive in effect, will not affect the
accuracy of any statements in this Proxy Statement/Prospectus with respect to
the transactions entered into or contemplated prior to the effective date of
such changes.

EACH SHAREHOLDER IS URGED TO CONSULT ITS OWN TAX ADVISOR REGARDING THE
SPECIFIC TAX CONSEQUENCES TO IT OF THE PURCHASE, OWNERSHIP AND SALE OF COMMON
SHARES OF BENEFICIAL INTEREST IN AN ENTITY ELECTING TO BE TAXED AS A REIT,
INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SUCH
PURCHASE, OWNERSHIP AND SALE AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.

TAXATION OF IPT

IPT's Election To Be Taxed As a REIT

IPT, which is considered to be a corporation for U.S. federal income tax
purposes, has elected to be taxed as a REIT under Sections 856 through 860 of
the Code, commencing with its first taxable year ending December 31, 1996. IPT
has been organized, and has represented that it has and will continue to
operate in such a manner so as to qualify for taxation as a REIT under the
Code. No assurance, however, can be given that IPT will operate in a manner, so
as to qualify or remain qualified as a REIT in the future.

In addition, IPT's qualification as a REIT depends upon the treatment of
the corporate subsidiaries of IPT that are or control the general partners of
the IPT Partnerships (the "Corporate GPs") as "qualified REIT subsidiaries." A
qualified REIT subsidiary is a corporation all of the stock of which has been
owned by the REIT at all times during such corporation's existence. IPT has
received a private letter ruling from the IRS to the effect that the Corporate
GPs owned by IPT at December 31, 1996 will be treated as a qualified REIT
subsidiaries from the date their stock was transferred to IPT. The additional
Corporate GPs acquired by IPT as a result of the MAE GP Merger in February 1998
will be treated as qualified REIT subsidiaries under Section 856(i) of the
Code.

The sections of the Code relating to the qualification and operation as a
REIT, and the U.S. federal income tax treatment of a REIT and its shareholders,
are highly technical and complex. The following discussion provides an overview
of the material aspects of those sections. This summary is qualified in its
entirety by the applicable Code provisions, the rules and regulations
promulgated thereunder, and administrative and judicial interpretations
thereof.

In the opinion of Akin Gump, and, assuming that the election and actions
described in this discussion of "-- Taxation of IPT" and represented to Akin
Gump, are or will be observed and completed in a timely fashion, IPT is
organized in conformity with the requirements for qualification as a REIT, and
its method of operation will enable it to meet the requirements for
qualification and taxation as a REIT under the Code; and immediately after the
Merger IPT will continue to qualify as a REIT. Investors should be aware that
opinions of counsel are not binding on the IRS or the courts and that this
opinion is based on various assumptions and is conditioned upon certain
representations made by IPT and IPLP as to factual matters

141

relating to the organization and the expected and actual manner of operation
of, and conduct of business by, IPT, IPLP, the IPT Partnerships and the
Corporate GPs, and the nature of the properties owned and to be acquired by
these entities. Moreover, such qualification and taxation as a REIT will depend
upon IPT's ability to meet (on a continuing basis), through actual annual
operating results, distribution levels and stock ownership, the various
qualification tests imposed under the Code, as discussed below. Akin Gump will
not review compliance with these tests on a continuing basis. Accordingly, no
assurance can be given that the actual results of IPT's operation and ownership
for any particular taxable year will satisfy such requirements. For a
discussion of the tax consequences of failure to qualify as a REIT, see "--
Taxation of IPT -- Failure to Qualify" below.

General

In any year in which IPT qualifies as a REIT, it generally will not be
subject to U.S. federal income tax on that portion of its net income that it
distributes currently to shareholders. This treatment substantially eliminates
the "double taxation" of income at the corporate and shareholder levels that
generally results from investment in a corporation.

Notwithstanding its qualification as a REIT, IPT will be subject to U.S.
federal income tax as follows. First, IPT will be taxed at regular corporate
rates on any undistributed REIT taxable income, including undistributed net
capital gains. Second, under certain circumstances, IPT may be subject to the
"alternative minimum tax" on items of tax preference. Third, if IPT has (i) net
income from the sale or other disposition of "foreclosure property" (generally,
property acquired by reason of a default on indebtedness or a lease) that is
held primarily for sale to customers in the ordinary course of business or (ii)
other nonqualifying income from foreclosure property, it will be subject to tax
at the highest corporate rate on such income. Fourth, if IPT has net income
from "prohibited transactions" (which are, in general, certain sales or other
dispositions of property held primarily for sale to customers in the ordinary
course of business other than foreclosure property), such income will be
subject to a 100% tax. Fifth, if IPT should fail to satisfy the 75% gross
income test or the 95% gross income test (as discussed below), and has
nonetheless maintained its qualification as a REIT because certain other
requirements have been met, it will be subject to a 100% tax on the net income
attributable to the greater of the amount by which IPT fails the 75% gross
income test or the 95% gross income test. Sixth, if IPT fails to distribute
during each calendar year an amount equal to at least the sum of (i) 85% of its
REIT ordinary income for such year, (ii) 95% of its REIT capital gain net
income for such year and (iii) any undistributed taxable income from prior
periods, IPT will be subject to a 4% excise tax on the excess of the amount of
such required distribution over the amount actually distributed.

Finally, pursuant to Notice 88-19, 1988-1 C.B. 486, a C corporation (i.e.,
a corporation generally subject to full corporate-level tax) that elects to be
taxed as a REIT must immediately recognize any gain that would have been
realized had the C corporation sold all of its assets for their respective fair
market values and immediately liquidated at the end of its last taxable year
before the taxable year in which it qualifies to be taxed as a REIT, unless
such C corporation elects to be taxed under rules similar to the rules of
Section 1374 of the Code. As a result, IPT will recognize, and be subject to
tax at the highest corporate tax rate applicable to, any "built-in" gain on the
disposition of any asset that is (i) held by IPT at the time its REIT election
is first effective and (ii) disposed of within the ten-year period beginning on
the effective date of the REIT election. This same treatment applies to any
"built-in" gain asset (i) acquired by IPT from a C corporation in a transaction
in which the basis of the asset to IPT is determined by reference to the basis
of the asset (or any other property) to the C corporation and (ii) disposed of
within such ten-year period. IPT will make the election pursuant to Notice
88-19 which will apply to the assets owned by the Corporate GPs on the earlier
of (i) December 30, 1996 or (ii) the date they were acquired by IPT and, if
AMIT does not qualify as a REIT, any assets acquired from AMIT pursuant to the
Merger as of the date of the Merger.

Requirements for Qualification

To qualify as a REIT, IPT must elect to be so treated and must meet the
requirements, discussed below, relating to organization, sources of income,
nature of assets and distributions of income to shareholders.

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Organizational Requirements

The Code defines a REIT as a corporation, trust or association: (i) that
is managed by one or more trustees or directors; (ii) the beneficial ownership
of which is evidenced by transferable shares or by transferable certificates of
beneficial interest; (iii) that would be taxable as a domestic corporation but
for Sections 856 through 860 of the Code; (iv) that is neither a financial
institution nor an insurance company subject to certain provisions of the Code;
(v) the beneficial ownership of which is held by 100 or more persons; (vi) not
more than 50% in value of the outstanding stock of which is owned, directly or
indirectly through the application of certain attribution rules, by five or
fewer individuals (defined in the Code to include certain entities as
individuals without regard to such attribution rules) at any time during the
last half of each taxable year; and (vii) that meets certain other tests
regarding the nature of income and assets, described below. In addition, IPT
must (a) affirmatively elect to be taxed as a REIT, (b) satisfy certain filing
and administrative requirements and (c) use the calendar year as its taxable
year. The Code provides that each of conditions (i) to (iv) must be met during
the entire taxable year and that condition (v) must be met during at least 335
days of a taxable year of 12 months, or during a proportionate part of a
taxable year that is less than 12 months.

IPT's Declaration of Trust provides for restrictions regarding the
transfer of IPT Common Shares in order to ensure that IPT will satisfy the
share ownership requirements described in conditions (v) and (vi).

In applying the gross income and asset tests described below, the Treasury
Regulations provide that a REIT that is a partner in a partnership will be
deemed to own a share (based on its relative capital interest) of the assets of
the partnership and will be deemed to be entitled to the gross income of the
partnership attributable to such share. In addition, the character of the
assets and gross income of the partnership shall retain the same character in
the hands of the REIT for purposes of Section 856 of the Code, including these
tests. Thus, IPT's share of the assets, liabilities and items of income of IPLP
and the IPT Partnerships will be treated as assets, liabilities and items of
income of IPT for the purposes of applying the requirements described herein.

Additionally, a qualified REIT subsidiary is not treated as a separate
entity for U.S. federal income tax purposes, and all of such subsidiary's
assets, liabilities and items of income, deduction, loss and credit are treated
as if they are those of the REIT. Assuming that the Corporate GPs will be
treated as qualified REIT subsidiaries, the assets, liabilities and items of
income of the Corporate GPs will be treated as assets, liabilities and items of
income of IPT for the purposes of applying the requirements described below.

Gross Income Tests

In order for IPT to maintain its qualification as a REIT, there are three
requirements relating to IPT's gross income that must be satisfied annually.
First, at least 75% of IPT's gross income (excluding gross income from
prohibited transactions) for each taxable year must consist of defined types of
income derived directly or indirectly from investments relating to real
property or mortgages on real property (including "rents from real property"
and, in certain circumstances, interest) or temporary investment income.
Second, at least 95% of IPT's gross income (excluding gross income from
prohibited transactions) for each taxable year must be derived from such real
property investments and from dividends, interest and gains from the sale or
disposition of stock or securities or from any combination of the foregoing.
Third, short-term gain from the sale or other disposition of stock or
securities, gain from prohibited transactions and gain on the sale or other
disposition of real property held for less than four years (apart from
involuntary conversions and sales of "foreclosure property") must not represent
more than 30% of IPT's gross income (including gross income from prohibited
transactions) for each taxable year. However, recently enacted tax legislation
repeals the 30% restriction for all tax years after 1997.

Rents received by IPT will qualify as "rents from real property" in
satisfying the gross income tests for a REIT described above only if several
conditions are met. First, the amount of rent must not be based in whole or in
part on the income or profits of any person. An amount received or accrued
generally will not be excluded from the term "rents from real property" solely
by reason of being based on a fixed percentage or percentages of receipts or
sales. Second, the Code provides that rents received from a tenant will not
qualify as "rents from real property" in satisfying the gross income tests if
the REIT, or

143

an owner of 10% or more of the REIT, directly or through the application of
certain attribution rules, owns 10% or more of such tenant. Third, if rent
attributable to personal property leased in connection with a lease of real
property is greater than 15% of the total rent received under the lease, then
the entire portion of rent attributable to such personal property will not
qualify as "rents from real property." Finally, for rents received to qualify
as "rents from real property," the REIT generally must not operate or manage
the property or furnish or render services to tenants of such property, other
than through an "independent contractor" who is adequately compensated and from
whom the REIT derives no revenue. The independent contractor requirement,
however, does not apply to the extent that the services provided by the REIT
are "usually or customarily rendered" in connection with the rental of space
for occupancy only (e.g., furnishing water, heat, light and air conditioning
and cleaning windows, public entrances and lobbies) and are not otherwise
considered to be "rendered to the occupant" (e.g., renting parking spaces on a
reserved basis to tenants). However, pursuant to recently enacted tax
legislation, for tax years beginning after 1997, income derived from the
impermissible services previously mentioned will constitute "rents from real
property" to the extent such income does not exceed 1% of all amounts received
or accrued during the tax year by the REIT from such property. The law
concerning types of services that may be rendered by a REIT is constantly
evolving and the consequences of rendering impermissible services are somewhat
uncertain.

IPT has represented that and Akin Gump has relied on such representation
that the real properties owned by the IPT Partnerships give rise to "rents from
real property" for purposes of the 75% and 95% gross income tests, and that the
aggregate amount of its nonqualifying income in any taxable year derived
directly or through IPLP or the IPT Partnerships will not cause IPT to fail to
meet the 75% and 95% gross income tests and IPT complied with the 30% gross
income test for 1997. In addition, IPT has represented that and Akin Gump has
relied on such representation that the 75% and 95% gross income tests will be
met immediately after the Effective Time, with the inclusion of the AMIT
assets.

Insignia (which will not satisfy the independent contractor standard) will
provide certain services with respect to the real properties owned, or acquired
in the future, by IPLP and the IPT Partnerships. IPT has represented that and
Akin Gump has relied on such representation that all services provided by
Insignia to IPLP and the IPT Partnerships are and will be of the type usually
or customarily rendered in connection with the rental of space for occupancy
only and are not and will not be considered rendered to the occupant under the
Treasury Regulations, and therefore that the provision of such services will
not cause the rents received with respect to such real properties to fail to
qualify as "rents from real property" for purposes of the 75% and 95% gross
income tests.

Any gross income derived from a prohibited transaction (as defined above)
is taken into account in applying the 30% income test necessary to qualify as a
REIT (and the net income from that transaction is subject to a 100% tax). IPT
has represented that and Akin Gump has relied on such representation that no
asset owned by IPLP, the IPT Partnerships or IPT is or will be considered to be
"held for sale to customers in the ordinary course of a trade or business" of
IPLP, the relevant IPT Partnership or IPT. Whether property is treated as "held
primarily for sale to customers in the ordinary course of a trade or business"
depends, however, upon the facts and circumstances existing at a given time,
including those relating to a particular property. Nevertheless, IPT and IPLP
will attempt to comply with the terms of safe-harbor provisions in the Code
prescribing when asset sales will not be characterized as prohibited
transactions. Complete assurance cannot be given, however, that IPT will be
able to comply with these safe-harbor provisions or will never own property
that may be characterized as "held primarily for sale to customers in the
ordinary course of business."

Even if IPT fails to satisfy one or both of the 75% or 95% gross income
tests for any taxable year, it may nevertheless qualify as a REIT for such year
if it is entitled to relief under certain provisions of the Code. These relief
provisions generally will be available if IPT (i) can establish that its
failure to meet such tests is due to reasonable cause and not due to willful
neglect, (ii) attaches a schedule of the sources of its income to its return
and (iii) can establish that any incorrect information on the schedule is not
due to fraud with an intent to evade tax. It is not possible, however, to
guarantee that IPT will always be entitled to the benefit of these relief
provisions. As discussed above in "-- Taxation of IPT," even if these relief
provisions did apply, a 100% tax would be imposed with respect to IPT's net
income attributable to the

144

excess of 75% or 95% of IPT's gross income over IPT's qualifying income in the
relevant category, whichever is greater. For the 1996 and 1997 tax years, there
is no comparable relief provision which could mitigate the consequences of a
failure to satisfy the 30% gross income limitation. As previously stated above,
the recently enacted tax legislation repealed this 30% gross income limitation.

Asset Tests

IPT, at the close of each quarter of its taxable year, must also satisfy
two tests relating to the nature of its assets. First, at least 75% of the
value of IPT's total assets must be represented by cash or cash items
(including certain receivables), government securities, "real estate assets"
or, in cases where IPT raises new capital through the offering of stock or
long-term (at least five-year) debt, temporary investments in stock or debt
instruments during the one-year period following IPT's receipt of the proceeds
of such offerings. The term "real estate assets" includes interests in real
property, interests in mortgages on real property (to the extent the mortgage
balance does not exceed the value of the associated real property as of the
date of the loan commitment by the REIT or if the loan is purchased, the date
purchase commitment becomes binding on the REIT), and shares of other REITs.
For purposes of the 75% asset requirement, the term "interest in real property"
includes an interest in land and improvements thereon, such as buildings or
other inherently permanent structures (including items that are structural
components of such buildings or structures), a leasehold in real property, and
an option to acquire real property (or a leasehold in real property). Second,
of the investments not included in the 75% asset class, the value of any one
issuer's securities owned by IPT may not exceed 5% of the value of IPT's total
assets and IPT may not own more than 10% of any one issuer's outstanding voting
securities (excluding its ownership interest in IPLP, the IPT Partnerships, the
Corporate GPs only (assuming they are qualified REIT subsidiaries), or any
other corporate subsidiary with respect to which it is treated as holding 100%
of the stock at all times during such subsidiary's existence and, after 1997,
those subsidiaries as to which IPT holds 100% of the stock regardless of
whether IPT has held the stock for the entire existence of the Corporate
Subsidiary).

For purposes of the asset requirements, as noted above, IPT will be deemed
to own its proportionate share of the assets of IPLP and each IPT Partnership,
rather than its partnership interests in IPLP and each IPT Partnership. IPT has
represented and Akin Gump has relied on such representation that, as of the
date of its formation, (i) at least 75% of the value of its total assets was
represented by real estate assets, cash and cash items (including receivables),
and government securities and (ii) other than the Corporate GPs, it does not
own any securities of any issuer that is treated as a corporation for federal
income tax purposes that either (a) represent in excess of 10 percent of the
outstanding voting securities of such issuer or (b) have an aggregate fair
market value in excess of 5 percent of the fair market value of the total
assets of IPT. In addition, IPT has represented that and Akin Gump has relied
on such representation that it will satisfy these tests in the future, and has
represented that it will take all measures within its control to ensure that
these asset requirements are met.

If IPT fails to satisfy the asset requirements at the end of a calendar
quarter, such failure would not cause it to lose its REIT status if (i) it
satisfied all of the asset tests at the close of the preceding calendar quarter
and (ii) the discrepancy between the value of IPT's assets and the asset
requirements either did not exist immediately after the acquisition of any
particular asset or is not wholly or partly caused by such an acquisition
(i.e., the discrepancy arises from changes in the market values of IPT assets).
If the condition described in clause (ii) of the preceding sentence is not
satisfied, IPT may still avoid disqualification by eliminating any discrepancy
within 30 days after the close of the calendar quarter in which it arises.

Annual Distribution Requirement

IPT, in order to qualify as a REIT, is required to distribute dividends
(other than capital gain dividends) to its shareholders in an amount at least
equal to (i) the sum of (a) 95% of IPT's REIT taxable income (computed without
regard to the dividends paid deduction and IPT's net capital gain), and (b) 95%
of the net income (after tax), if any, from foreclosure property, minus (ii)
the sum of certain items of noncash income. Such distributions must be paid in
the taxable year to which they relate, or in the

145

following taxable year if declared before IPT timely files its tax return for
such year and if paid on or before the first regular dividend payment after
such declaration ("post-closing dividends"). To the extent that IPT does not
distribute all of its net capital gain or distributes at least 95% (but less
than 100%) of its REIT taxable income, as adjusted, it will be subject to tax
on the undistributed amount at regular corporate tax rates. Furthermore, if IPT
should fail to distribute during each calendar year at least the sum of (i) 85%
of its REIT ordinary income for such year, (ii) 95% of its REIT capital gain
net income for such year and (iii) any undistributed taxable income from prior
periods, IPT will be subject to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed. IPT expects to, and will
take all measures within its control to, make timely distributions to the
shareholders of IPT sufficient to satisfy all annual distribution requirements.

However, it is possible that, from time to time, IPT may experience timing
differences between (i) the actual receipt of income and actual payment of
deductible expenses and (ii) the inclusion of that income and deduction of such
expenses in arriving at its REIT taxable income. For example, it is possible
that, from time to time, IPT may be allocated a share of net capital gain
attributable to the sale of depreciable property that exceeds its distributive
share of cash with respect to such sale. In addition, IPT, IPLP or an IPT
Partnership may incur expenditures (such as repayment of loan principal) that
do not give rise to a deduction and, with respect to the AMIT assets, may
accrue taxable income without a cash receipt to match the income. Therefore,
IPT may have less cash available for distribution than is necessary to meet its
annual 95% distribution requirement or to avoid corporate income tax or the
excise tax imposed on certain undistributed income. In such a situation, IPT
may find it necessary to arrange for short-term (or possibly long-term)
borrowings, to raise funds through the issuance of additional shares of common
or preferred stock or to pay distributions in the form of taxable stock
dividends.

Under certain circumstances, IPT may be able to rectify a failure to meet
the distribution requirements for a year by paying post-closing dividends to
its shareholders in a later year, which may be included in IPT's deduction for
dividends paid for the earlier year.

Recordkeeping Requirements

Pursuant to applicable Treasury Regulations, in order to be able to elect
to be taxed as a REIT, IPT must maintain certain records and request on an
annual basis certain information from its shareholders designed to disclose the
actual ownership of its outstanding capital stock. IPT intends to comply with
such requirements. For the years after 1997, failure to comply with these
record-keeping requirements generally will not result in loss of REIT status,
but could result in the imposition of monetary penalties.

Failure to Qualify

If IPT fails to qualify for taxation as a REIT in any taxable year, and no
relief provisions apply, IPT will be subject to tax (including any applicable
alternative minimum tax) on its taxable income at regular corporate rates. In
any year in which IPT fails to qualify, distributions to shareholders will
neither be required under U.S. federal income tax law nor deductible by IPT.
All distributions to shareholders will be taxable as ordinary income to the
extent of IPT's current and accumulated earnings and profits ("E&P") and,
subject to certain limitations in the Code, corporate distributees may be
eligible for the dividends received deduction. Unless entitled to relief under
specific statutory provisions, IPT also will be disqualified from taxation as a
REIT for the four taxable years following the year during which IPT ceases to
qualify as a REIT. It is not possible to predict whether IPT would be entitled
to any statutory relief in the event it failed to qualify as a REIT in any
taxable year.

TAXATION OF U.S. SHAREHOLDERS

Taxation of Taxable Domestic Shareholders

As long as IPT qualifies as a REIT, distributions made to IPT's taxable
U.S. shareholders out of current and accumulated E&P (and not designated as
capital gain dividends) will be taken into account by such U.S. shareholders as
ordinary income and will not be eligible for the dividends received deduction
generally available to corporations. Distributions that are designated as
capital gain dividends will be

146

taxed as long-term capital gains (to the extent they do not exceed IPT's actual
net capital gain for the taxable year) without regard to the shareholder's
holding period for the IPT Common Shares. Corporate shareholders, however, may
be required under Section 291 of the Code to treat up to 20% of certain capital
gain dividends (that relate to Section 1250 property) as ordinary income.
Distributions in excess of IPT's current and accumulated E&P will not be
taxable to a shareholder to the extent that the amount of such distribution
does not exceed a shareholder's adjusted basis in the IPT Common Shares, but
rather will reduce such adjusted basis. If the amount of such distributions
does exceed a shareholder's adjusted basis of the IPT Common Shares, such
distributions will be included in income as long-term capital gain (or
short-term capital gain if the IPT Common Shares have been held for one year or
less), assuming that the IPT Common Shares are a capital asset in the hands of
the shareholder. In addition, any distribution declared by IPT in October,
November or December of any year and payable to a shareholder of record on a
specific date in any such month shall be treated as both paid by IPT and
received by the shareholder on December 31 of such year, provided that the
distribution is actually paid by IPT during January of the following calendar
year.

Shareholders may not include in their individual income tax returns any
net operating losses or capital losses of IPT. Instead, such losses would be
carried forward by IPT for offset against its future income. Taxable
distributions from IPT and gain from the disposition of IPT Common Shares will
not be treated as passive activity income and, therefore, shareholders
generally will not be able to apply passive activity losses against such
income. In addition, taxable distributions from IPT generally will be treated
as investment income for purposes of the investment interest limitation.
Capital gains from the disposition of the IPT Common Shares (or distributions
treated as such) will be treated as investment income only if the shareholder
so elects.

In general, any gain or loss realized upon a taxable disposition of IPT
Common Shares by a shareholder that is not a dealer in stocks and securities
will be treated as long-term capital gain or loss if the IPT Common Shares have
been held for more than one year, and otherwise as short-term capital gain or
loss. However, any loss upon a sale or exchange of IPT Common Shares by a
shareholder who has held the IPT Common Shares for six months or less (after
applying certain holding period rules) will be treated as a long-term capital
loss to the extent that distributions from IPT were required to be treated by
such shareholder as long-term capital gain. All or part of any loss realized
upon the disposition of IPT Common Shares may be disallowed if other IPT Common
Shares are purchased within 30 days before or after such disposition.

Pursuant to recently enacted tax legislation, the taxation of capital
gains to individuals has changed. In general, the new tax legislation provides
that for capital gains recognized after July 28, 1997, the maximum tax rate on
those gains will be 20% (10% for individuals in the 15% tax brackets) if the
taxpayer holds the asset for more than 18 months and 28% for those assets held
for more than 12 months and not more than 18 months. After December 31, 2000 if
the asset is held for more than five years (beginning after December 31, 2000)
the maximum tax rate will be 18% (8% for individuals in the 15% tax bracket).
The new legislation also provides that Treasury Regulations may be issued to
apply the new tax rates on capital gains in the case of pass-through entities
(including a REIT) and sales and exchanges of interests in such entities. How
the Treasury Regulations will effect holders of shares of beneficial interest
of a REIT is uncertain. EACH SHAREHOLDER IS URGED TO CONSULT ITS OWN TAX
ADVISOR REGARDING THE EFFECT OF THE NEW TAX LEGISLATION.

Information Reporting and Backup Withholding

IPT will report to its U.S. shareholders and the IRS the amount of
distributions paid during each calendar year and the amount of tax withheld, if
any, with respect thereto. Under the backup withholding rules, a shareholder
may be subject to backup withholding at the rate of 31% of the dividends paid
amount unless such shareholder (a) is a corporation or comes within certain
other exemption categories and, when required, demonstrates this fact, or (b)
provides a taxpayer identification number, certifies as to no loss of exemption
from backup withholding, and otherwise complies with applicable requirements of
the backup withholding rules. A shareholder that does not provide IPT with its
correct taxpayer identification number may also be subject to penalties imposed
by the IRS. Any amount paid as backup withholding will be creditable against
the shareholder's income tax liability.

147

In addition, IPT may be required to withhold a portion of capital gain
distributions to any shareholder that fails to certify as to its non-foreign
status. See "-- Taxation of Non-U.S. Shareholders" below.

Treatment of Certain Tax-Exempt Shareholders

Distributions from IPT to a tax-exempt employee pension or profit-sharing
trust and individual retirement accounts generally will not constitute
unrelated business taxable income ("UBTI") provided that (i) such tax-exempt
shareholder has not financed the acquisition of its IPT Common Shares with
"acquisition indebtedness" within the meaning of the Code and (ii) the IPT
Common Shares are not otherwise used in an unrelated trade or business of such
tax-exempt shareholder. In addition, qualified pension trusts that hold more
than 10% (by value) of certain REITs may be required to treat a certain
percentage of such REIT's distributions as UBTI. This requirement will apply
only if (i) the REIT would not qualify for U.S. federal income tax purposes but
for the application of a "look-through" exception to the "five or fewer"
requirement applicable to IPT Common Shares held by qualified pension trusts
and (ii) the REIT is "predominantly held" by qualified pension trusts. A REIT
is predominantly held by a qualified pension trust if either (i) a single
qualified pension trust holds more than 25% by value of the IPT Common Shares
or (ii) one or more qualified pension trusts, each owning more than 10% by
value of the REIT interests, hold in the aggregate more than 50% of the REIT
interests.

TAXATION OF NON-U.S. SHAREHOLDERS

The rules governing U.S. federal income taxation of nonresident alien
individuals, foreign corporations, foreign partnerships and other foreign
shareholders (collectively, "Non-U.S. Shareholders") are complex and no attempt
will be made herein to provide more than a limited summary of such rules.
PROSPECTIVE NON-U.S. SHAREHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS TO
DETERMINE THE IMPACT OF U.S. FEDERAL, STATE AND LOCAL INCOME TAX LAWS WITH
REGARD TO AN INVESTMENT IN IPT COMMON SHARES, INCLUDING ANY REPORTING
REQUIREMENTS.

Distributions to Non-U.S. Shareholders that are not attributable to gain
from sales or exchanges by IPT of U.S. real property interests and are not
designated by IPT as capital gain distributions will be treated as
distributions of ordinary income to the extent that they are made out of
current or accumulated E&P of IPT. Such distributions generally will be subject
to a withholding tax equal to 30% of the gross amount of the distribution
unless an applicable tax treaty reduces that tax. However, if income from
investment in the IPT Common Shares is treated as effectively connected with
the Non-U.S. Shareholder's conduct of a U.S. trade or business, the Non-U.S.
Shareholder generally will be subject to a tax at graduated rates, in the same
manner as U.S. shareholders are taxed with respect to such distributions (and
may also be subject to the 30% branch profits tax if the shareholder is a
foreign corporation). IPT expects to withhold income tax at the rate of 30% on
the gross amount of any distributions paid to a Non-U.S. Shareholder that are
not designated as capital gain distributions unless (i) a lower treaty rate
applies and any required form evidencing eligibility for that reduced rate is
filed with IPT or (ii) the Non-U.S. Shareholder files an IRS Form 4224 with IPT
claiming that the distribution is "effectively connected" income.

Distributions to Non-U.S. Shareholders in excess of current and
accumulated E&P of IPT will not be taxable to a shareholder to the extent that
they do not exceed the shareholder's adjusted basis in the IPT Common Shares,
but rather will reduce such adjusted basis. To the extent that such
distributions exceed a Non-U.S. Shareholder's adjusted basis in the IPT Common
Shares, tax will be imposed if the Non-U.S. Shareholder would otherwise be
subject to tax on gain from the sale or disposition of its IPT Common Shares,
as described below. Because it generally cannot be determined at the time a
distribution is made whether or not such distribution will be in excess of
current and accumulated E&P, the entire amount of a distribution generally will
be subject to withholding in full at the rate applicable to dividends. However,
the Non-U.S. Shareholder may seek a refund of any overwithheld amounts from the
IRS if it is subsequently determined that such distribution was, in fact, in
excess of current and accumulated E&P of IPT.

For any year in which IPT qualifies as a REIT, distributions that are
attributable to gain from sales or exchanges by IPT of U.S. real property
interests (whether or not so designated by IPT) will be taxed

148

to a Non-U.S. Shareholder under the provisions of the Foreign Investment in
Real Property Tax Act of 1980, as amended ("FIRPTA"). Under FIRPTA, these
distributions are taxed to a Non-U.S. Shareholder as if such gain were
effectively connected with a U.S. business. Thus, Non-U.S. Shareholders will be
taxed on such distributions at the normal capital gain rates applicable to U.S.
shareholders (subject to applicable alternative minimum tax and a special
alternative minimum tax in the case of nonresident alien individuals).
Distributions subject to FIRPTA may also be subject to a 30% branch profits tax
in the hands of a corporate Non-U.S. Shareholder not entitled to treaty relief
or exemption. IPT is required by currently applicable Treasury Regulations to
withhold 35% of any distribution that is or could be designated by IPT as a
capital gain dividend. The amount withheld is creditable against the Non-U.S.
Shareholder's FIRPTA tax liability.

Gain recognized by a Non-U.S. Shareholder upon a sale of IPT Common Shares
generally will not be taxed under FIRPTA if IPT is a "domestically-controlled
REIT," defined generally as a REIT in which less than 50% in value of its
shares of beneficial interest was held directly or indirectly by foreign
persons at all times during a specified testing period. It is currently
anticipated that IPT will be a domestically-controlled REIT and, therefore,
that the sale of IPT Common Shares will not be subject to taxation under
FIRPTA. However, capital gains which are not subject to FIRPTA will nonetheless
be taxable to a Non-U.S. Shareholder if (i) an investment in the IPT Common
Shares is effectively connected with the Non-U.S. Shareholder's U.S. trade or
business, in which case the Non-U.S. Shareholder will be subject to the same
treatment as U.S. shareholders with respect to such gain or (ii) the Non-U.S.
shareholder is a nonresident alien individual who is present in the United
States for 183 days or more during the taxable year and certain other
conditions apply, in which case the nonresident alien individual will be
subject to a 30% tax on the individual's capital gains.

If IPT were not a domestically-controlled REIT, a Non-U.S. Shareholder's
sale of IPT Common Shares would be subject to tax provided that IPT meets the
definition of a "U.S. Real Property Holding Corporation" as defined under
Section 897(c)(2) under FIRPTA unless (i) the IPT Common Shares were listed and
"regularly traded" on an established securities market (such as the ASE) and
(ii) the selling Non-U.S. Shareholder held, directly or indirectly and through
attribution, no more than 5% of the IPT Common Shares during the five-year
period ending on the date of disposition. If the gain on the sale of IPT Common
Shares were subject to taxation under FIRPTA, the Non-U.S. Shareholder would be
subject to the same treatment as a U.S. shareholder with respect to the gain
(subject to applicable alternative minimum tax, a special alternative minimum
tax in the case of non-resident alien individuals and the possible application
of a 30% branch profits tax to corporate Non-U.S. Shareholders).

A person who purchases IPT Common Shares from a Non-U.S. Shareholder
subject to FIRPTA will be required to withhold 10% of the purchase price and
remit this amount to the IRS, unless the purchased IPT Common Shares are
"regularly traded" on an established securities market or the purchaser
otherwise receives a determination from the IRS that such withholding is not
required.

TAX ASPECTS OF IPT'S INVESTMENT IN IPLP AND THE IPT PARTNERSHIPS

The following discussion summarizes certain U.S. federal income tax
considerations applicable solely to IPT's investment in IPLP and the IPT
Partnerships. The discussion does not cover state or local tax laws or any U.S.
federal tax laws other than income tax laws.

General

IPT will hold direct or indirect interests in IPLP and the IPT
Partnerships. In general, partnerships are "pass-through" entities that are not
subject to U.S. federal income tax. Instead, the income of a partnership for
each taxable year is allocated to the partners based on the relevant provisions
in their agreement of partnership, and the partners report and are taxed on
their distributive shares of the items of income, gain, loss, deduction and
credit of the partnership without regard to whether they receive any
distributions. IPT will include its distributive share of these items of IPLP
and the IPT Partnerships for purposes of the various REIT income tests and in
the computation of its REIT taxable income. See "-- Taxation of IPT --
Requirements for Qualification." Any resulting increase in IPT's REIT taxable

149

income will increase its distribution requirements (see "-- Requirements for
Qualification -- Annual Distribution Requirements"), but will not be subject to
U.S. federal income tax in the hands of IPT provided that such income is
distributed by IPT to its shareholders as discussed above. Moreover, for
purposes of the REIT asset tests (see "-- Requirements for Qualification --
Asset Tests"), IPT will include its proportionate share of assets held by IPLP
and the IPT Partnerships.

Entity Classification

IPT's interests in IPLP and the IPT Partnerships involve special tax
considerations, including the possibility of a challenge by the IRS of the
status of IPLP or any of the IPT Partnerships as a partnership (as opposed to
an association taxable as a corporation) for U.S. federal income tax purposes.
If any of IPLP or the IPT Partnerships were to be treated as an association
taxable as a corporation, the character of IPT's assets and items of gross
income would change, which would preclude IPT from satisfying the asset tests
and possibly the income tests (see "-- Requirements for Qualification -- Asset
Tests" and "-- Gross Income Tests") and would prevent IPT from qualifying as a
REIT. See "-- Requirements for Qualification -- Failure to Qualify" above for a
discussion of the effect of IPT's failure to meet such tests for a taxable
year. In the opinion of Akin Gump, IPLP and the IPT Partnerships should be
treated for U.S. federal income tax purposes as a partnership (and not as an
association taxable as a corporation). Such opinion, however, is not binding on
the IRS and no assurance can be given that the IRS will not challenge the tax
status of IPLP.

Tax Allocations with Respect to Contributed Property

Pursuant to Section 704(c) of the Code, income, gain, loss and deduction
attributable to appreciated or depreciated property that is contributed to a
partnership in exchange for an interest in a partnership (such as IPLP) must be
allocated in a manner such that the contributing partner is charged with, or
benefits from, the unrealized gain or unrealized loss inherent in such property
at the time of the contribution. The amount of such unrealized gain or
unrealized loss is generally equal to the difference between the fair market
value and the adjusted tax basis of contributed property at the time of
contribution (the "Book-Tax Difference"). Such allocations are solely for U.S.
federal income tax purposes and do not affect the book capital accounts or
other economic or legal arrangements among the partners. Because Insignia and
certain of its subsidiaries have contributed appreciated property (i.e., the
interests in certain IPT Partnerships) to IPLP, the Partnership Agreement of
IPLP requires allocations with respect to such contributed property to be made
in a manner consistent with Section 704(c) of the Code.

In general, a partner that contributes appreciated property to IPLP will
be allocated a lesser amount of depreciation for tax purposes and, to the
extent that the Book-Tax Difference is not recouped through such
disproportionately lower depreciation allocations, increased amounts of taxable
income and gain on any sale by IPLP of such contributed assets (including for
this purpose, sale by the IPT Partnerships of the underlying properties). These
allocations attempt to eliminate the Book-Tax Difference over the life of the
assets giving rise to the Book-Tax Difference. However, the special allocation
rules under Section 704(c) do not always entirely rectify the Book-Tax
Difference on an annual basis or with respect to a specific taxable transaction
such as a sale. Thus, the carryover basis of the contributed assets in the
hands of IPLP may cause IPT to be allocated a lesser amount of depreciation and
other deductions, and a potentially greater amount of gain upon the sale of a
contributed asset, than it would have received if such properties had been
purchased. This may cause IPT to recognize taxable income in excess of cash
proceeds, which might adversely affect IPT's ability to comply with the REIT
distribution requirements. See "-- Requirements for Qualification --
Distribution Requirements."

OTHER TAX CONSIDERATIONS

IPT, IPLP, the IPT Partnerships and IPT's shareholders may be subject to
state or local taxation in various state or local jurisdictions, including
those in which they own property, transact business, or reside. The state and
local tax treatment of IPT and its shareholders may not conform to the federal
income tax consequences discussed above. CONSEQUENTLY, PROSPECTIVE SHAREHOLDERS
SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE EFFECT OF STATE AND LOCAL
TAX LAWS ON AN INVESTMENT IN IPT COMMON SHARES.

150

EXPERTS

The consolidated and combined financial statements of IPT and the IPT
Predecessor Entities at December 31, 1997, 1996, and 1995 and for each of the
three years in the period ended December 31, 1997 and the related financial
statement schedule appearing in this Proxy Statement/Prospectus and
Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon appearing elsewhere herein, and
are included in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.

The combined financial statements of Shelter Properties Partnerships at
December 31, 1996 and 1995, and for each of the three years in the period ended
December 31, 1996 and the related financial statement schedule appearing in
this Proxy Statement/Prospectus and Registration Statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
appearing elsewhere herein, and are included in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.

The combined financial statements of National Property Investors and
Century Properties Partnerships at December 31, 1996 and 1995 and for each of
the three years in the period ended December 31, 1996 and the related financial
statement schedule appearing in this Proxy Statement/Prospectus and
Registration Statement have been audited by Imowitz Koenig & Co., LLP,
("Imowitz Koenig") independent auditors, as set forth in their reports thereon
appearing elsewhere herein, and are included in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.

During December 1997 NPI 4 changed its accountants from Imowitz Koenig to
Ernst Young, LLP. There were no disagreements between NPI 4 and Imowitz Koenig
on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of Imowitz Koenig, would have caused it to make reference
thereto in connection with its reports on the financial statements of NPI 4.
NPI 4's decision to change to Ernst Young LLP was approved by the board of
directors of NPI 4's managing general partner.

The financial statements of Angeles Mortgage Investment Trust at December
31, 1997 and 1996 and for each of the three years in the period ended December
31, 1997, appearing in this Proxy Statement/Prospectus and Registration
Statement have been audited by BDO Seidman, LLP, independent Certified Public
Accountants, as set forth in their reports thereon appearing elsewhere herein,
are included in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.

LEGAL MATTERS

The validity of the securities to be issued in the Merger will be passed
upon by Miles & Stockbridge, P.C., Baltimore, Maryland. Certain tax matters
relating to the Merger will be passed upon by Akin, Gump, Strauss, Hauer &
Feld, L.L.P., Dallas, Texas.

151

GLOSSARY

Unless the context otherwise requires, the following capitalized terms
shall have the meanings set forth below for the purposes of this Proxy
Statement/Prospectus.

"1997 Share Incentive Plan" means IPT's 1997 Share Incentive Plan.

"Acquisition and Disposition Services Agreement" means that certain
Acquisition and Disposition Services Agreement, dated as of February 17, 1998,
by and among IPT, IPLP and Insignia.

"AIMCO" means Apartment Investment and Management Company, a Maryland
corporation.

"Akin Gump" means Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel to
IPT.

"AMIT" means Angeles Mortgage Investment Trust, a California
unincorporated business trust.

"AMIT Board" means the board of trustees of AMIT.

"AMIT Class A Shares means Class A common shares of beneficial interest,
par value $1.00 per Share, of AMIT.

"AMIT Class B Shares" means Class B common shares of beneficial interest,
par value $.01 per share, of AMIT.

"AMIT Loans" means the loan portfolio of AMIT.

"AMIT Record Date" means the close of business on May 13, 1998.

"AMIT Shares" means the AMIT Class A Shares and the AMIT Class B Shares.

"ASE" means the American Stock Exchange.

"Asset Agreement" means the Agreement Regarding Certain Assets, dated July
18, 1997, by and between AMIT and Insignia.

"Century Properties Partnerships" means Century Properties Fund XIV,
Century Properties XV, Century Properties XVI, Century Properties Fund XVII,
Century Properties Fund XVIII, Century Properties Fund XIX, Century Properties
Fund XX, Century Properties Fund XXIII, Century Pension Income Fund XXIII,
Century Pension Income Fund XXIV and Fox Strategic Housing Income Partners.

"Class A Exchange Ratio" means the ratio at which AMIT Class A Shares will
be converted into IPT Common Shares pursuant to the Merger Agreement.

"Class B Exchange Ratio" means the ratio at which AMIT Class B Shares will
be converted into IPT Common Shares pursuant to the Merger Agreement.

"Class B Voting Proxy" means the Irrevocable Proxy Agreement, dated April
14, 1995, by and between AMIT and MAE (as successor to MAE GP), pursuant to
which AMIT, as proxy for MAE, is required to vote all (100%) of the AMIT Class
B Shares held by MAE in accordance with the majority of the AMIT Class A Shares
represented at a meeting of AMIT shareholders on specified matters, including
but not limited to transactions between AMIT and affiliates of MAE GP
(including IPT and Insignia).

"Closing Date" means the date on which the closing of the Merger takes
place.

"Code" means the Internal Revenue Code of 1986, as amended.

"Commission" means the Securities and Exchange Commission.

"Consolidated Capital Partnerships" means Consolidated Capital Growth
Fund, Consolidated Capital Institutional Properties, Consolidated Capital
Institutional Properties/2, Consolidated Capital Institutional Properties/3,
Consolidated Capital Properties III, Consolidated Capital Properties IV,
Consolidated Capital Properties V and Consolidated Capital Properties VI.

"Controlled Partnerships" means the limited partnerships in which IPT owns
or controls the managing general partner.

G-1

"Effective Time" means the time at which the Articles of Merger are
accepted for record by the Maryland Department of Assessments and Taxation or
at such time thereafter as is provided in the Articles of Merger.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Exchange Agent" means First Union National Bank.

"Exchange Ratio" means collectively, the Class A Exchange Ratio and the
Class B Exchange Ratio.

"Expense Reimbursement Agreement" means the Agreement Regarding Expenses,
dated April 3, 1997, by and between Insignia and AMIT.

"FASB" means the Financial Accounting Standards Board.

"Funds From Operations" means IPT's net income (computed in accordance
with generally accepted accounting principles) excluding gains (or losses) from
debt restructuring and sales of property, plus depreciation and amortization of
real estate assets, and after adjustments for unconsolidated partnerships and
joint ventures.

"Insignia" means Insignia Financial Group, Inc., a Delaware corporation.

"Insignia/AIMCO Merger" means the proposed merger of Insignia with and
into AIMCO pursuant to the Insignia/AIMCO Merger Agreement.

"Insignia/AIMCO Merger Agreement" means that certain Amended and Restated
Agreement and Plan of Merger dated as of May 26, 1998 among AIMCO, AIMCO
Properties, L.P., Insignia and Insignia/ESG.

"Insignia/ESG" means Insignia/ESG Holdings, Inc., a wholly-owned
subsidiary of Insignia.

"Insignia-NPI" means Insignia NPI, L.L.C., a Delaware limited liability
company.

"IPC" means Insignia Properties Corporation, a Delaware corporation.

"IPLP" means Insignia Properties, L.P., a Delaware limited partnership.

"IPT" means Insignia Properties Trust, a Maryland real estate investment
trust.

"IPT/AIMCO Merger" means the proposed merger of IPT with and into AIMCO
after the consummation of the Insignia/AIMCO Merger.

"IPT Board" means the board of trustees of IPT.

"IPT Common Shares" means common shares of beneficial interest, par value
$.01 per share, of IPT.

"IPT Entity" means each of IPT, IPLP and each business entity which owns a
controlling interest in (i) any real property owned or otherwise controlled by
a Controlled Partnership (as of January 1, 1997) as of January 1, 1997, or (ii)
any real property or which IPT or IPLP, or either of them, acquires direct or
indirect acquisition of (a) such real property or (b) a controlling interest in
a business entity that owns such real property.

"IPT Partnerships" means the real estate limited partnerships of which IPT
owns, directly or indirectly, a material interest.

"IPT Share Value" means $10.62.

"IRS" means the Internal Revenue Service.

"LAC" means Liquidity Assistance L.L.C., a Delaware limited liability
company.

"MAE" means Metropolitan Asset Enhancement, L.P., a Delaware limited
partnership.

"MAE GP" means MAE GP Corporation, a Delaware corporation and wholly-owned
subsidiary of MAE.

G-2

"MAE GP Merger" means the merger of MAE GP with and into IPT.

"Merger" means the merger of AMIT with and into IPT pursuant to the Merger
Agreement.

"Merger Agreement" means the Agreement and Plan of Merger, dated as of
July 18, 1997, among AMIT, IPT, Insignia and MAE GP.

"NPI" means National Property Investors, Inc., a Delaware corporation.

"NPI 4" means National Property Investors 4, a California limited
partnership.

"National Properties Partnerships" means National Property Investors II,
National Property Investors III, National Property Investors 4, National
Property Investors 5, National Property Investors 6, National Property
Investors 7, National Property Investors 8.

"NPI Transaction" means the series of related transactions between IPC,
Insignia-NPI, certain other affiliates of Insignia, NPI and certain affiliates
of NPI pursuant to which, among other things, IFGP acquired all of the
outstanding stock of NPI and Insignia-NPI acquired limited partner interest in
certain of the National Properties Partnerships and Century Properties
Partnerships.

"OP Units" means units of limited partner interest in IPLP.

"Partnership Agreement" means the Fourth Amended and Restated Agreement of
Limited Partnership of IPLP.

"Preferred Shares" means preferred shares of beneficial interest, par
value $.01 per share, of IPT.

"Private Offerings" means collectively, the offering commencing in May
1997 and ending in August 1997 of IPT Common Shares to certain investors at a
purchase price of $10.00 per share, and an unrelated transaction in October
1997 whereby IPT sold 1,000,000 IPT Common Shares at a purchase price of $10.00
per share, to a single private investor, each made pursuant to a private
offering in reliance upon exemptions from the registration requirements of the
Securities Act.

"Property Management Agreements" means the property management agreements
pursuant to which affiliates of Insignia provide property management services
with respect to the properties owned by the IPT Partnerships.

"REIT" means a real estate investment trust.

"Securities Act" means the Securities Act of 1933, as amended.

"Shelter IV Option" means the option granted to IPLP under the Shelter IV
Option Agreement.

"Shelter Properties Partnerships" means Shelter Properties I Limited
Partnership, Shelter Properties II Limited Partnership, Shelter Properties III
Limited Partnership, Shelter Properties IV Limited Partnership, Shelter
Properties V Limited Partnership, Shelter Properties VI Limited Partnership,
and Shelter Properties VII Limited Partnership.

"Special Meeting" means the special meeting of AMIT shareholders to be
held on June 29, 1998, at the Beverly Hilton Hotel, 9876 Wilshire Boulevard,
Beverly Hills, California, commencing at 9:00 a.m., local time.

"Tax Agreement" means the Tax Indemnification Agreement, dated as of July
18, 1997, made by IPT in favor of the record holders of AMIT Shares as of the
Effective Time.

"Treasury Regulations" means treasury regulations promulgated under the
Code.

"Trust Amendment" means the proposed second amendment to AMIT's
Declaration of Trust to permit AMIT to merge and consolidate with other
entities, a copy of which is attached to this Proxy Statement/ Prospectus as
Annex B.

"Weil" means Christopher Weil & Company, Inc.

G-3

INDEX TO FINANCIAL STATEMENTS

PAGE
-----

Insignia Properties Trust and Predecessor Entities

Report of Ernst & Young LLP, Independent Auditors ....................................... F-2
Consolidated Balance Sheets for the three month period ended
March 31, 1998 and for the years ended December 31, 1997 and 1996 ..................... F-3
Consolidated Statements of Income for the three months ended March 31, 1998 and 1997
and for the year ended December 31, 1997 and Combined Statements of Income for the
years ended December 31, 1996 and 1995 ................................................ F-4
Consolidated Statements of Shareholders' Equity and Insignia Equity in Predecessors for
the three month period ended March 31, 1998 and for the year ended December 31, 1997
and the Combined Statements of Shareholders' equity and Insignia Equity in
predecessors for the years ended December 31, 1996 and 1995 ........................... F-5
Consolidated Statements of Cash Flows for the three months ended March 31, 1998 and
1997 and for the year ended December 31, 1997 and Combined Statements of Cash Flows
for the years ended December 31, 1996 and 1995 ........................................ F-6
Notes to Consolidated and Combined Financial Statements ................................. F-7
Schedule III: Real Estate and Accumulated Depreciation as of December 31, 1997 .......... F-22

Shelter Properties Partnerships

Report of Ernst & Young LLP, Independent Auditors ....................................... F-24
Combined Balance Sheets for the years ended December 31, 1996 and 1995 .................. F-25
Combined Statements of Operations for the years ended December 31, 1996, 1995
and 1994 .............................................................................. F-26
Combined Statements Changes in Partners' Capital (Deficit) for the years ended December
31, 1996, 1995 and 1994 ............................................................... F-27
Combined Statements of Cash Flows for the years ended December 31, 1996, 1995
and 1994 .............................................................................. F-28
Notes to Combined Financial Statements .................................................. F-29
Schedule III: Real Estate and Accumulated Depreciation as of December 31, 1996 .......... F-35

National Property Investors and Century Properties Partnerships

Report of Independent Auditors .......................................................... F-38
Combined Balance Sheets for the years ended December 31, 1996 and 1995 .................. F-39
Combined Statements of Operations for the years ended December 31, 1996, 1995
and 1994 .............................................................................. F-40
Combined Statements Changes in Partners' Capital (Deficit) for the years ended
December 31, 1996, 1995 and 1994 ...................................................... F-41
Combined Statements of Cash Flows for the years ended December 31, 1996, 1995
and 1994 .............................................................................. F-42
Notes to Combined Financial Statements .................................................. F-44
Schedule III: Real Estate and Accumulated Depreciation as of December 31, 1996 .......... F-52

Angeles Mortgage Investment Trust

Report of Independent Auditors .......................................................... F-57
Balance Sheets for years ended December 31, 1997 and 1996 ............................... F-58
Statement of Operations for years ended December 31, 1997, 1984 and 1995 ................ F-59
Statement of Changes in Shareholders' Equity for years ended December 31, 1997, 1996
and 1995 .............................................................................. F-60
Statement of Cash Flows for years ended December 31, 1997, 1996 and 1995 ................ F-61
Notes to Financial Statements ........................................................... F-62
Schedule III: Real Estate and Accumulated Depreciation as of December 31, 1997 .......... F-73
Schedule IV: Mortgage Loans on Real Estate as of December 31, 1997 ...................... F-74
Balance Sheets for the three months ended March 31, 1998 and December 31, 1997 .......... F-80
Statement of Operations for the three months ended March 31, 1998 and 1997 .............. F-81
Statement of Changes in Shareholders' Equity for the three months ended March 31, 1998 .. F-82
Statements of Cash Flows for the three months ended March 31, 1998 and 1997 ............. F-83
Notes to Financial Statements ........................................................... F-84

F-1

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

Shareholders and Board of Trustees
Insignia Properties Trust and Predecessor Entities

We have audited the accompanying consolidated balance sheets of Insignia
Properties Trust (a majority-owned subsidiary of Insignia Financial Group,
Inc.) as of December 31, 1997 and 1996, and the related consolidated statement
of income, shareholders' equity and cash flows for the year ended December 31,
1997, and the combined statements of income, shareholders' equity and cash
flows for each of the two years in the period ended December 31, 1996 of the
Insignia Properties Trust Predecessor Entities. Our audits also included the
financial statement schedule included on pages F-22 to F-23. These financial
statements and the financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and the financial statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Insignia
Properties Trust at December 31, 1997 and 1996, and the consolidated results of
its operations and its cash flows for the year ended December 31, 1997, and the
combined results of the operations and the cash flows of the Insignia
Properties Trust Predecessor Entities for each of the two years in the period
ended December 31, 1996, in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.

ERNST & YOUNG LLP

February 13, 1998,
except for Note 11, as to which the date is
March 17, 1998

F-2

INSIGNIA PROPERTIES TRUST

CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

DECEMBER 31
MARCH 31, ------------------------
1998 1997 1996
------------ ---------- -----------
(UNAUDITED)

ASSETS
Cash and cash equivalents ........................................... $ 23,338 $ 37,432 $ 4,928
Receivables ......................................................... 1 8 21
Investments in real estate limited partnerships ..................... 177,681 159,469 118,741
Apartment properties, net ........................................... 26,003 22,357 22,125
Other assets ........................................................ 7,068 6,802 1,942
-------- -------- --------
Total assets ......................................................... $234,091 $226,068 $147,757
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable--Due to Insignia ................................... $ 160 $ 841 $ 275
Distribution payable--Insignia ...................................... 1,490 1,260 --
Distributions payable ............................................... 2,914 2,786 5,880
Accrued expenses .................................................... 1,272 1,222 804
Note payable ........................................................ -- -- 430
Non-recourse mortgage notes ......................................... 21,957 19,300 19,300
-------- -------- --------
Total liabilities .................................................... 27,793 25,409 26,689

Minority interests in Operating Partnership .......................... 56,984 54,447 50,429
Shareholders' equity:
Preferred shares, par value $.01 per share--authorized
100,000,000 shares, issued and outstanding -0- (March 31,
1998, 1997 and 1996) .............................................. -- -- --
Common shares, par value $.01 per share--authorized
400,000,000 shares, issued and outstanding 19,427,760
(March 31, 1998), 18,573,151 (1997) and 11,168,036 (1996) ......... 194 186 112
Additional paid-in capital .......................................... 154,984 145,594 70,527
Unearned compensation ............................................... (5,462) -- --
Retained earnings ................................................... (402) 432 --
-------- -------- --------
Total shareholders' equity ........................................... 149,314 146,212 70,639
-------- -------- --------
Total liabilities and shareholders' equity ........................... $234,091 $226,068 $147,757
======== ======== ========

See accompanying notes.

F-3

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

CONSOLIDATED AND COMBINED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

THREE MONTHS ENDED
MARCH 31 YEAR ENDED DECEMBER 31
----------------------------- ------------------------------------
1998 1997 1997 1996 1995
-------------- -------------- -------------- ---------- ----------
(UNAUDITED)

REVENUES
Apartment rentals ............................ $ 1,771 $ 1,583 $ 6,646 $ 6,020 $ --
Equity earnings--limited partnership
interests ................................... 3,361 2,204 8,062 3,587 2,455
Other ........................................ 625 341 2,118 98 4
----------- ----------- ----------- -------- ------
5,757 4,128 16,826 9,705 2,459
EXPENSES
Apartment property operating expenses ........ 890 732 3,258 3,034 --
Apartment property interest .................. 406 372 1,486 1,812 --
Apartment property depreciation .............. 271 239 966 901 --
Administrative ............................... 352 271 1,314 34 113
Amortization ................................. 251 20 285 -- --
Other interest ............................... -- 7 47 11 --
----------- ----------- ----------- -------- ------
2,170 1,641 7,356 5,792 113
----------- ----------- ----------- -------- ------
Income before gain on sale of properties,
minority interest and extraordinary
items ....................................... 3,587 2,487 9,470 3,913 2,346
Gain of sale of properties ................... -- -- 1,044 -- --
----------- ----------- ----------- -------- ------
Income before minority interest and
extraordinary items ......................... 3,587 2,487 10,514 3,913 2,346
Minority interests in consolidated
subsidiaries and the Operating
Partnership ................................. (1,533) (1,827) (4,440) (356) (131)
----------- ----------- ----------- -------- ------
Income before extraordinary item ............. 2,054 660 6,074 3,557 2,215
Extraordinary loss (gain)--property
refinancings (net of minority interest) ..... 26 -- (70) (1,132) --
----------- ----------- ----------- -------- ------
Net income ................................... $ 2,080 $ 660 $ 6,004 $ 2,425 $2,215
=========== =========== =========== ======== ======
Net income per share:
Income before extraordinary item ............ $ .11 $ .06 $ .41 $ -- $ --
Extraordinary item .......................... -- -- ( .01) -- --
----------- ----------- ----------- -------- ------
Net income .................................. $ .11 $ .06 $ .40 $ -- $ --
=========== =========== =========== ======== ======
Weighted average shares outstanding .......... 18,835,911 11,179,036 14,694,327 -- --
=========== =========== =========== ======== ======

See accompanying notes.

F-4

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

CONSOLIDATED AND COMBINED STATEMENTS OF SHAREHOLDERS'
EQUITY AND INSIGNIA EQUITY IN PREDECESSORS
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

DISTRIBUTIONS
COMMON ADDITIONAL IN EXCESS OF INSIGNIA
STOCK PAID-IN UNEARNED ACCUMULATED EQUITY IN
CLASS A CAPITAL COMPENSATION EARNINGS PREDECESSORS
--------- ------------ -------------- -------------- -------------

Balance at December 31, 1994 ................. $ -- $ -- $ -- $ -- $ 38,346
Capital contribution by Insignia ............ -- -- -- -- 21,522
Distributions paid .......................... -- -- -- -- (10,209)
Net income for 1995 ......................... -- -- -- -- 2,215
---- -------- -------- -------- ---------
Balance at December 31, 1995 ................. -- -- -- -- 51,874
Issuance of 11,168,036 common shares ........ 112 78,587 -- -- --
Capital contribution by Insignia ............ -- -- -- -- 2,942
Distributions declared and paid ............. -- (2,180) -- -- (6,812)
Distributions declared ...................... -- (5,880) -- -- --
Net income for 1996 ......................... -- -- -- -- 2,425
Issuance of IPLP units in exchange for
Insignia limited partnership interests
--transferred to minority interest ....... -- -- -- -- (50,429)
---- -------- -------- -------- ---------
Balance at December 31, 1996 ................. 112 70,527 -- -- --
Issuance of 7,405,115 common shares ......... 74 75,067 -- -- --
Distributions declared and paid ............. -- -- -- (2,786) --
Distributions declared ...................... -- -- -- (2,786) --
Net income for 1997 ......................... -- -- -- 6,004 --
---- -------- -------- -------- ---------
Balance at December 31, 1997 ................. 186 145,594 -- 432 --
Issuance of 344,609 common shares
(unaudited) ............................... 3 3,625 -- -- --
Restricted share awards (510,000 shares)
(unaudited) ............................... 5 5,765 (5,462) -- --
Distributions declared (unaudited) .......... -- -- -- (2,914) --
Net income for 1998 (unaudited) ............. -- -- -- 2,080 --
---- -------- -------- -------- ---------
Balance at March 31, 1998 (unaudited) ........ $194 $154,984 $ (5,462) $ (402) $ --
==== ======== ======== ======== =========

See accompanying notes.

F-5

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

THREE MONTHS ENDED
MARCH 31 YEAR ENDED DECEMBER 31
-------------------------- --------------------------------------
1998 1997 1997 1996 1995
-------------- ----------- ------------ ------------ ------------
(UNAUDITED)

OPERATING ACTIVITIES
Net income .................................................. $ 2,080 $ 660 $ 6,004 $ 2,425 $ 2,215
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Apartment property depreciation ............................ 271 239 966 901 --
Amortization of organization and formation costs ........... 251 20 285 -- --
Equity earnings--partnership investments ................... (3,361) (2,204) (8,062) (3,587) (2,455)
Gain on sale of properties ................................. -- -- (1,044) -- --
Extraordinary loss--property refinancings .................. (26) -- 70 1,132 --
Minority interests in the Operating Partnership and
consolidated subsidiaries ................................ 1,533 1,827 4,440 356 131
Non-cash compensation ...................................... 308 -- -- -- --
Changes in operating assets and liabilities: ...............
Accounts receivable ...................................... 7 -- 13 (21) --
Other assets ............................................. (286) (257) (1,316) 6 --
Accounts payable and accrued expenses .................... (680) 530 982 208 9
--------- --------- --------- --------- ---------
Net cash provided by (used in) operating activities ......... 97 815 2,338 1,420 (100)
INVESTING ACTIVITIES
Purchase of partnership interests ........................... (13,551) (771) (30,592) (71,427) (24,147)
Investment in apartment property, net ....................... (3,804) -- -- (8,005) --
Distributions from partnerships ............................. 5,356 10,733 18,235 9,258 10,910
Organizational and formation costs .......................... -- -- (3,743) -- --
Acquisition costs ........................................... (163) -- -- -- --
Additions to apartment property ............................. (91) (76) (381) (733) --
Other ....................................................... -- -- -- 73 --
--------- --------- --------- --------- ---------
Net cash (used in) provided by investing activities ......... (12,253) 9,886 (16,481) (70,834) (13,237)
FINANCING ACTIVITIES
Payments on note payable .................................... -- -- (1,080) (310) --
Repayments of non-recourse mortgage note .................... (3) -- -- (16,876) --
Proceeds from note payable .................................. -- 650 650 -- --
Proceeds from refinancing of non-recourse mortgage note ..... 2,660 -- -- 19,300 --
Investments made by minority investors ...................... -- -- -- -- 2,652
Distributions made to minority investors .................... (494) (1,321) (1,321) (431) (100)
Debt issuance costs ......................................... -- -- -- (505) --
Debt extinguishment costs ................................... -- -- -- (333) --
Capital invested by Insignia ................................ -- -- -- 81,961 21,522
Loan costs paid ............................................. (55) -- (19) -- --
Distributions paid to Insignia by IPLP ...................... (1,260) (4,077) (5,337) (6,812) (10,209)
Distributions paid to common shareholders ................... (2,786) (5,880) (8,666) (2,180) --
Proceeds from issuance of common shares ..................... -- 110 62,420 -- --
---------- --------- --------- --------- ---------
Net cash (used in) provided by financing activities ......... (1,938) (10,518) 46,647 73,814 13,865
---------- --------- --------- --------- ---------
Increase in cash and cash equivalents ....................... (14,094) 183 32,504 4,400 528
Cash and cash equivalents at beginning of year .............. 37,432 4,928 4,928 528 --
---------- --------- --------- --------- ---------
Cash and cash equivalents at end of year .................... $ 23,338 $ 5,111 $ 37,432 $ 4,928 $ 528
========== ========= ========= ========= =========
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND
INVESTING ACTIVITIES
Issuance of IPT shares and OP units for partnership
interests .................................................. $ 6,656 $ -- $ 20,379 $ -- $ --
========== ========= ========= ========= =========

See accompanying notes.

F-6

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

(AMOUNTS AND DISCLOSURES AS OF MARCH 31, 1998 AND
1997 AND FOR THE PERIODS THEN ENDED ARE UNAUDITED)

1. ORGANIZATION AND BASIS OF PRESENTATION

Insignia Properties Trust ("IPT" or "the Company") was formed in 1996 by
Insignia Financial Group, Inc. ("Insignia") for the purpose of acquiring and
owning interests in multifamily residential properties, including limited and
general partner interests in partnerships which hold such real estate
properties. IPT has been organized in a manner that will allow it to be taxed
as a real estate investment trust ("REIT") under the Internal Revenue Code of
1986 beginning with the taxable year ended December 31, 1996. IPT was organized
as a Maryland Business Trust. Insignia and its affiliates have transferred to
IPT equity interests in entities comprising or controlling the general partners
of certain public real estate limited partnerships in exchange for shares of
beneficial interest of IPT. IPT has also issued common shares to Insignia and
certain of its employees and affiliates in exchange for the payment of certain
obligations of IPT. IPT began operations on December 31, 1996 as a result of
such transfers. The transfers were recorded at the historical cost of Insignia.

The Company is the sole general partner of Insignia Properties L.P.
("IPLP" or the "Operating Partnership"). Insignia and its subsidiaries, other
than IPT, have transferred to IPLP certain limited partner interests in real
estate limited partnerships (or equity interests in entities which own such
interests) owned by Insignia and its subsidiaries in exchange for units of
limited partner interest in IPLP, which units are exchangeable for common
shares of IPT or are redeemable for cash. Because these units are held by
Insignia, under the Limited Partnership Agreement, they are Class A units of
limited partner interest having special rights with respect to matters
concerning IPLP. As a result of these formation transactions, at December 31,
1997 and 1996, IPT was 75% and 98% owned by Insignia, with the remainder of its
shares owned by Metropolitan Asset Enhancement L.P. ("MAE LP") (an affiliated
company), certain Insignia employees and other non-affiliated investors. IPT's
ownership of IPLP was 66% and 57% at December 31, 1997 and 1996, respectively
and 66% at March 31, 1998. Insignia owns the remaining units in IPLP.

The formation transactions represent a reorganization of entities under
common control, and the accompanying financial statements represent the
consolidated and combined financial statements applicable to those assets and
entities contributed to IPT as a part of its formation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Combination

The accompanying financial statements include the consolidated balance
sheets of IPT as of March 31, 1998, December 31, 1997 and 1996, and the related
consolidated statements of income, shareholders' equity and cash flows for the
three months ended March 31, 1998 and 1997, the year ended December 31, 1997,
and the combined statements of income, shareholders' equity and cash flows for
the years ended December 31, 1996 and 1995 of Insignia Properties Trust
Predecessor Entities. The financial statements include wholly-owned
subsidiaries which comprise or control the general partners of the underlying
partnerships, the majority-owned subsidiary IPLP, and certain investments in
real estate limited partnerships which were owned by Insignia prior to
contribution to IPLP ("Predecessor Entities"). Insignia's ownership in IPLP is
shown as minority interest. See Notes 3 and 6 regarding consolidation of
National Property Investors 4 ("NPI 4"), a majority-owned operating
partnership.

Use of Estimates

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

F-7

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

Cash and Cash Equivalents

The amount of cash on deposit in federally insured institutions at times
exceeds the limit on insured deposits. The Company considers all highly liquid
investments with original maturities of three months or less to be cash
equivalents.

Investments in Real Estate Limited Partnerships

Investments in real estate limited partnerships represent general partner
interests (or interests in general partner interests) generally ranging from
0.2% to 3% in certain limited partnerships and limited partner interests in
real estate limited partnerships ranging from less than 1% to 62%. Partnerships
in which IPT has a general partner interest or limited partnership ownership
(in excess of 2.5%) are accounted for by the equity method, unless IPT has a
majority ownership and controls the partnership on a non-temporary basis, in
which case the partnership is consolidated.

Apartment Properties

At December 31, 1997, Apartment properties, consisting of land of
approximately $1.5 million, buildings and personal property of approximately
$22.7 million, are stated at cost, net of accumulated depreciation of
approximately $1.9 million. On January 28, 1998, Raintree Pensacola, L.P., a
limited partnership controlled by IPLP, acquired a property in Pensacola,
Florida referred to as the Raintree Apartments. The Raintree Apartments contain
168 residential apartment units. The aggregate purchase price paid for the
Raintree Apartments was approximately $3.7 million. Depreciation is computed
principally by the straight-line method over the estimated useful lives of the
assets. Buildings are being depreciated over the estimated life of 30 years and
personal property over the estimated life of 5 years (see Note 7).

In 1996, IPT adopted FASB Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets to be Disposed Of" (FAS 121), which requires
impairment losses to be recognized for long-lived assets used in operations
when indicators of impairment are present and the undiscounted cash flows are
not sufficient to recover the assets carrying amount. The impairment loss is
measured by comparing the fair value of the asset to its carrying amount. The
adoption of FAS 121 had no material effect on the accompanying financial
statements.

Revenue Recognition

Rental income attributable to leases is recorded when due from tenants and
is recognized monthly as it is earned, which is not materially different than
on a straight-line basis. Interest income is recorded on an accrual basis.

Lease Agreements

The Company generally leases apartment units for twelve-month terms or
less, renewable upon consent of both parties.

Loan Costs

Loan costs include fees and costs paid to third parties for obtaining or
refinancing outstanding indebtedness. These costs are amortized over the term
of the respective outstanding debt. Loan costs of approximately $524,000 and
$505,000, net of accumulated amortization of approximately $81,000 and $9,000,
at December 31, 1997 and 1996, respectively, are included in other assets.

Advertising Expense

IPT expenses the cost of advertising as incurred. The amounts incurred for
1997, 1996 and 1995 did not have a material effect on the financial statements.

F-8

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

Deferred Expenses

Deferred expenses are included in other assets and primarily consist of
organization costs which are being amortized using the straight-line method
over five years.

Distributions

The Company intends to pay distributions of at least the amount required
to maintain REIT status under the Internal Revenue Code. In August 1997, the
IPT Board adopted a policy to pay a quarterly distribution of $0.15 per common
share; however, the payment of any distribution will be dependent on the
liquidity and cash flows of the Company, which are primarily dependent on
distributions from the underlying partnerships.

Earnings Per Share

In 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings per Share. Statement 128 replaced the calculation of primary and
fully diluted earnings per share with basic and diluted earnings per share.
Unlike primary earnings per share, basic earnings per share excludes any
dilutive effects of options, warrants and convertible securities. Diluted
earnings per share is very similar to the previously reported fully diluted
earnings per share.

Earnings per share is computed based on the weighted average number of
common shares outstanding. The conversion of an OP Unit to a Common Share is
not considered a dilutive item since the allocation of earnings to an OP Unit
is equivalent to a Common Share. Earnings per share was not calculated prior to
1997 because IPT shares were not issued until December 30, 1996. Diluted
earnings per share is not presented because the Company has no dilutive items;
thus, basic and diluted earnings per share are equal.

Fair Value

FASB Statement No. 107, "Disclosure about Fair Value of Financial
Instruments," requires disclosure of fair value information about financial
instruments for which it is practicable to estimate that value. The fair values
of the Company's financial instruments at March 31, 1998, December 31, 1997 and
1996 approximate their carrying values.

Federal Income Taxes

The Company elected to be taxed as a real estate investment trust ("REIT")
under the Internal Revenue Code of 1986, as amended (the "Code"), beginning
with its taxable year ending December 31, 1996. Generally, a REIT which
complies with the provisions of the Code and distributes at least 95% of its
taxable income to its shareholders does not pay federal income taxes on its
distributed income. Since IPT distributed in excess of 100% of its taxable
income, no provision has been made for federal income taxes. If the Company
fails to qualify as a REIT in any year, its taxable income may be subject to
income tax at regular corporate rates (including any applicable alternative
minimum tax). Even if the Company qualifies for taxation as a REIT, the Company
may be subject to certain state and local taxes.

Distributions declared of $0.53 per share to shareholders of record on
December 30, 1996 and $0.15 per share to shareholders of record on October 31,
1997 were paid during the year ended December 31, 1997. Distributions paid to
shareholders of $0.20 per share were made during the year ended December 31,
1996. For federal tax purposes, the portions of the 1997 distribution relating
to return of capital and earnings and profits are 59% and 41%, respectively.
The 1996 distribution consisted entirely of a return of capital. No REIT
operating income was earned during 1996. Earnings and profits which determine
the taxability of dividends to shareholders, differ from net income reported
for financial reporting purposes due to differences for federal tax purposes in
the estimated useful lives to compute depreciation and the carrying value
(basis) of the investment in partnership interests.

F-9

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

Reclassifications

Certain amounts from prior years have been reclassified to conform with
the 1997 presentation.

Interim Unaudited Consolidated Financial Information

The accompanying consolidated financial statements for the three months
ended March 31, 1998 and 1997 are unaudited; however, in the opinion of
management, all adjustments (consisting solely of normal recurring accruals)
considered necessary for a fair presentation have been included. The results of
interim periods are not necessarily indicative of the results to be obtained
for a full year.

3. INVESTMENTS IN REAL ESTATE LIMITED PARTNERSHIPS

The Company has significant investments in 28 limited partnerships and
nominal investments in 20 limited partnerships which own (or previously owned)
real estate consisting primarily of apartments, and to a lesser extent
commercial property, throughout the United States. The Company's capital
ownership percentages (which are generally less than the operating percentages)
of the significant investments in partnerships at December 31, 1997 and date
acquired are as follows:

CAPITAL INITIAL
REAL ESTATE LIMITED PARTNERSHIP OWNERSHIP % ACQUISITION DATE
- - --------------------------------------------------------- ------------- -----------------

Consolidated Capital Growth Fund ........................ 39% December 1994
Consolidated Capital Institutional Properties ........... 26% December 1994
Consolidated Capital Institutional Properties/3 ......... 12% December 1994
Consolidated Capital VI ................................. 22% December 1994
Consolidated Capital III ................................ 24% January 1995
Consolidated Capital IV ................................. 27% January 1995
Johnstown/Consolidated Income Partners .................. 10% December 1995
Davidson Growth Plus, L.P. .............................. 11% December 1995
Shelter Properties I .................................... 39% May 1995
Shelter Properties II ................................... 33% May 1995
Shelter Properties III .................................. 34% May 1995
Shelter Properties V .................................... 39% May 1995
Shelter Properties VI ................................... 28% May 1995
National Property Investors III ......................... 45% January 1996
National Property Investors 5 ........................... 47% January 1996
National Property Investors 6 ........................... 44% January 1996
National Property Investors 7 ........................... 43% January 1996
National Property Investors 8 ........................... 38% January 1996
Century Property Fund XIV ............................... 41% January 1996
Century Property Fund XV ................................ 40% January 1996
Century Property Fund XVI ............................... 37% January 1996
Century Property Fund XVII .............................. 38% January 1996
Century Property Fund XVIII ............................. 29% January 1996
Century Property Fund XIX ............................... 33% January 1996
Century Property Fund XXII .............................. 27% January 1996
Fox Strategic Housing Income Partners ................... 15% August 1997
Consolidated Capital Institutional Properties/2 ......... 20% December 1997
Shelter Properties IV ................................... 32% December 1997

F-10

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

During 1998, as a result of the December Tender Offers and the MAE GP
Corporation Merger (see Note 11), the Company acquired significant investments
in the following 12 limited partnerships. The Company's capital ownership of
these significant investments at March 31, 1998 and date acquired are as
follows:

CAPITAL INITIAL
REAL ESTATE LIMITED PARTNERSHIP OWNERSHIP % ACQUISITION DATE
- - ----------------------------------------------------------- ------------- -----------------

Shelter Properties VII .................................... 15% March 1998
Multi-Benefit Realty Fund `87-1 ........................... 19% March 1998
Consolidated Capital Properties V ......................... 25% March 1998
Angeles Income Properties, Ltd. II ........................ 4% March 1998
Angeles Income Properties, Ltd. IV ........................ 6% March 1998
Angeles Income Properties, Ltd. 6 ......................... 4% March 1998
Angeles Opportunity Properties, Ltd. ...................... 3% March 1998
Angeles Partners IX ....................................... 5% March 1998
Angeles Partners XII ...................................... 4% March 1998
Davidson Diversified Real Estate II, L.P. ................. 3% March 1998
Davidson Income Real Estate, L.P. ......................... 2% March 1998
HCW Pension Real Estate Fund Limited Partnership .......... 1% March 1998

The Company also owns 62% of National Property Investors 4 and therefore
consolidates the financial statements of this partnership.

The acquisitions were accounted for as purchase transactions by the
predecessor entities of IPT. A summary of the acquisitions follows:

1994 TO 1996 ACQUISITIONS

Limited partnership interests in four of the Consolidated Capital
partnerships were purchased in December 1994 by Insignia. Limited partnership
interests in two other Consolidated Capital partnerships were acquired by
tender offer through consolidated 60% owned subsidiaries of Insignia in January
of 1995. The 40% minority interest in these subsidiaries was purchased in 1996.

The Shelter Properties limited partnership interests were acquired in May
1995 as a result of tender offers commenced by Insignia in April 1995. The
partnership interests in the National Property partnerships and the Century
partnerships were acquired in January 1996 in connection with the acquisition
by Insignia, and certain of its affiliates, of substantially all of the assets
of National Properties Investors, Inc. ("NPI Acquisition").

Limited partner interests in Davidson Growth Plus, L.P. were purchased in
December 1995 through a tender offer, and interests in Johnstown/Consolidated
Income Partners were acquired in private purchases during 1995 and 1996.

1997 ACQUISITIONS

In June 1997, Insignia acquired additional limited partnership interests
in the Shelter Properties portfolio and Davidson Growth Plus, L.P. in a
privately negotiated transaction ("High River Transaction"). Insignia
contributed, at Insignia's cost, the interests acquired in the High River
Transaction (with exception of the limited partner interests in Shelter
Properties IV Limited Partnership) to IPT in exchange for 1,162,451 IPT Common
Shares. IPT then contributed the interests to IPLP in exchange for 1,162,451
general partner units of IPLP.

F-11

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

In October 1997, a wholly-owned subsidiary of IPLP, completed tender
offers for limited partnership interest in six partnerships: Century Property
Fund XVII, Century Property Fund XIX, Century Property Fund XXII, National
Property Investors 4, Consolidated Capital Properties IV, and Fox Strategic
Housing Income Partners (the "August Tender Partnerships").

In December 1997, a wholly-owned subsidiary of IPLP, completed tender
offers for limited partnership interest in two partnerships: Consolidated
Capital Institutional Properties and Consolidated Capital Institutional
Properties/2 (the "December Tender Partnerships").

On December 31, 1997, IPLP exercised an option to acquire 16,010 limited
partner interests in Shelter Properties IV Limited Partnership in exchange for
a total of 1,016,448 units in IPLP to be issued to Insignia. The acquired
limited partner interests were recorded at Insignia's historical cost.

1998 ACQUISITIONS

On various dates in December 1997, a wholly-owned subsidiary of IPLP,
commenced tender offers to purchase units of limited partner interest in
Multi-Benefit Realty Fund 87-1, Century Properties Fund XIV, Century Properties
Fund XV, Century Properties Fund XVIII, Consolidated Capital Growth Fund,
Consolidated Capital Institutional Properties/3, Consolidated Capital
Properties V, Johnstown/ Consolidated Income Partners and Shelter Properties
VII Limited Partnership. These tender offers expired in January and February
1998 with IPLP acquiring additional limited partnership interest of
approximately $11.0 million, including acquisition costs of approximately $0.6
million.

MAE GP Corporation Merger

Effective February 25, 1998, MAE GP Corporation, which until then was a
wholly-owned subsidiary of MAE LP, was merged with and into IPT, with IPT
surviving the merger (the "MAE GP Merger"). As consideration for the MAE GP
Merger, IPT issued 344,609 IPT Common Shares to MAE LP valued for purposes of
the MAE GP Merger at $10.53 per share. MAE GP Corporation owned or controlled
equity interests in entities which comprised or controlled the general partners
of 29 public and 61 private real estate limited partnerships (collectively, the
"MAE Partnerships"), nine of which are included in the IPT Partnerships. The
MAE Partnerships own, in the aggregate, 167 properties containing approximately
31,000 residential apartment units and approximately 2.2 million square feet of
commercial space. In connection with the MAE GP Merger, all of the AMIT Class B
Shares, which were until then owned by MAE GP Corporation, were transferred by
dividend to MAE prior to the MAE GP Merger.

MAE and Insignia Contributions to IPLP

In connection with the MAE GP Merger, on February 17, 1998, IPLP purchased
certain assets from MAE for approximately $596,000 cash. The assets purchased
from MAE consisted of (i) a 99% limited partner interest in Insignia Jacques
Miller, L.P. ("IJM"), which in turn owns non-controlling equity interests in
entities that comprise or control the general partners of 30 of the MAE
Partnerships and various notes receivable (the 1% general partner interest in
IJM was acquired by IPT from MAE GP in the MAE GP Merger), and (ii) a 6.557%
limited partner interest in Buccaneer Trace Limited Partnership, which owns a
208-unit residential apartment complex located in Savannah, Georgia.

Equity in Earnings

Equity in earnings of the aforementioned partnerships have been included
in these financial statements from the date of their respective acquisition.
Equity in earnings from these partnerships amounted to approximately
$8,062,000, $3,587,000 and $2,455,000 for the years ended 1997, 1996 and

F-12

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

1995, respectively, and $3,361,000 and $2,204,000 for the three months ended
March 31, 1998 and 1997, respectively. Equity in earnings excludes the
Company's equity interest in extraordinary losses by the partnerships from
early extinguishments of debt which are reflected separately in the income
statement. The Company owns 62% of NPI 4 and, therefore, consolidates the
accounts of this partnership.

Summary of Investments

The following table presents a summary of investments made by IPT in
limited partnerships and the carrying amounts. The investment in NPI 4, in
which a 62% interest is held, is not included in the table below but rather is
included as a consolidated subsidiary in the accompanying financial statements.

(In Thousands)

ConCap acquisition in December 1994 .................................... $ 38,233
Equity earnings for 1994 ............................................. 113
---------
Balance at December 31, 1994 ........................................... 38,346
ConCap Tender Offers ................................................. 5,479
Shelter Tender Offers ................................................ 16,860
Other purchases ...................................................... 1,807
Equity earnings for 1995 ............................................. 2,455
Distributions received ............................................... (10,910)
---------
Balance at December 31, 1995 ........................................... 54,037
NPI Acquisition in January 1996 ...................................... 66,501
Purchase of minority interest ........................................ 3,923
Other purchases ...................................................... 1,083
Equity earnings for 1996 ............................................. 3,587
Equity in extraordinary losses -- refinancings ....................... (1,132)
Distributions received ............................................... (9,258)
---------
Balance at December 31, 1996 ........................................... 118,741
Purchases ............................................................ 30,592
Equity Earnings ...................................................... 8,062
Equity in extraordinary losses -- refinancings ....................... (70)
Issuance of IPT shares for partnership interests ..................... 20,379
Distributions received ............................................... (18,235)
---------
Balance at December 31, 1997 ........................................... 159,469
Purchases (unaudited) ................................................ 13,551
Equity Earnings (unaudited) .......................................... 3,361
Issuance of IPT shares for partnership interests (unaudited) ......... 6,656
Distributions received (unaudited) ................................... (5,356)
---------
Balance at March 31, 1998 .............................................. $ 177,681
=========

F-13

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

PRO FORMA INFORMATION (UNAUDITED)

Pro forma unaudited results of operations assuming consummation of the
1998 acquisitions at January 1, 1998 and 1997, the 1997 acquisitions at January
1, 1997 and 1996, the 1996 acquisitions at January 1, 1996 and 1995, and the
1995 acquisitions at January 1, 1995, are as follows:

THREE MONTHS ENDED
MARCH 31 YEAR ENDED DECEMBER 31
1998 1997 1997 1996 1995
--------- --------- ---------- ---------- ----------
(In Thousands, except per share data)

Revenues ................................... $5,973 $4,350 $20,748 $11,447 $10,720
Income before extraordinary items .......... 2,270 882 8,969 4,561 3,107
Net income ................................. 2,296 882 8,899 3,429 2,140
Per share amounts:
Income before extraordinary items ......... .12 .07 .59 .37 .25
Net income ................................ .12 .07 .58 .28 .17

Minority interest for years ended December 31, 1997, 1996 and 1995 and for
the three months ended March 31, 1998 and 1997 has been adjusted for the
aforementioned acquisitions. The pro forma information is not necessarily
indicative of what the Company's results of operations would have been if the
transactions had occurred at the beginning of each period presented.
Additionally, the pro forma information does not purport to be an indication of
the Company's results of operations for future periods.

The following summarized financial information represents the combined
results as reported by the forty (1998), twenty-eight (1997) and twenty-five
(1996) partnerships in which IPT has a significant investment (listed on page
F-10 and F-11) in their separate annual reports. The information below excludes
the financial information of NPI 4, which is consolidated by the Company. At
March 31, 1998, the information also excludes Raintree Apartments which is
consolidated by the Company.

CONDENSED BALANCE SHEET INFORMATION

MARCH 31, DECEMBER 31
1998 1997 1996
------------- ------------- -------------
(In Thousands)

Cash and investments ................................. $ 124,857 $ 102,994 $ 111,733
Restricted escrows, deposits and receivables ......... 53,774 45,127 21,055
Other assets ......................................... 24,236 19,249 35,473
Real estate .......................................... 1,823,025 1,424,835 1,251,952
Less accumulated depreciation ........................ (969,833) (750,292) (622,433)
---------- ---------- ----------
Net real estate ...................................... 853,192 674,543 629,519
---------- ---------- ----------
Total assets ......................................... $1,056,059 $ 841,913 $ 797,780
========== ========== ==========
Mortgage notes payable ............................... $ 887,366 $ 660,919 $ 618,176
Other liabilities .................................... 37,987 32,196 43,085
---------- ---------- ----------
Total liabilities .................................... 925,353 693,115 661,261
Partners' capital .................................... 130,706 148,798 136,519
---------- ---------- ----------
Total liabilities and partners' capital .............. $1,056,059 $ 841,913 $ 797,780
========== ========== ==========

F-14

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

CONDENSED STATEMENT OF EARNINGS INFORMATION

THREE MONTHS ENDED
MARCH 31 YEAR ENDED DECEMBER 31
1998 1997 1997 1996 1995
---------- ---------- ----------- ----------- -------------
(In Thousands)

Revenues ........................... $91,369 $64,036 $282,375 $247,017 $ 237,946
Expenses:
Property operations ............... 43,399 31,458 149,562 136,646 130,225
Provision for possible losses ..... -- -- -- -- 8,255
Interest .......................... 19,458 13,609 56,307 51,823 54,939
Depreciation and amortization ..... 17,932 12,603 56,456 49,762 49,855
General and administrative ........ 3,907 2,077 11,205 10,103 11,858
Partnership management fees........ -- -- -- -- 626
------- ------- -------- -------- ---------
Total expenses ..................... 84,696 59,747 273,530 248,334 255,758
Gain (loss) on disposition of
property .......................... (123) (39) 8,679 5,572 18,285
------- ------- -------- -------- ---------
Income before extraordinary item ... 6,550 4,250 17,524 4,255 473
Extraordinary items ................ -- (233) (200) 371 (2,884)
------- ------- -------- -------- ---------
Net income (loss) .................. $ 6,550 $ 4,017 $ 17,324 $ 4,626 $ (2,411)
======= ======= ======== ======== =========

At December 31, 1997, the unamortized excess of the Company's investments
over the respective partnerships' historical cost of their net assets was
approximately $125 million, which has been attributed to the fair values of the
investee's underlying properties and is being depreciated through equity
earnings over their useful lives (30 years). The Company's investment has been
recorded at the historical cost of the acquisitions by Insignia. The
Partnership interests were acquired over a three year period. The financial
results of each individual Partnership are reflected in equity earnings
subsequent to the date of acquisition.

4. LIABILITIES

Accounts Payable -- Due to Insignia

Accounts payable -- Due to Insignia represent payments made by Insignia on
behalf of IPT.

Distributions Payable

IPT's Board of Trustees declared a distribution of $2,786,000 and
$5,880,000 to shareholders of record on December 23, 1997 and December 30,
1996, respectively. The distributions were paid during January 1998 and 1997,
respectively. During March 1998, IPT declared a distribution of $2,914,000.

F-15

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

ACCRUED EXPENSES

DECEMBER 31
1997 1996
-------- -------
(In Thousands)

Accrued professional fees ......... $ 485 $ --
Tenant security deposits .......... 405 409
Accrued interest .................. 118 118
Management fees ................... 21 120
Other ............................. 193 157
------ ----
$1,222 $804
====== ====

5. NOTES PAYABLE

Note Payable

A note payable was issued in connection with the acquisition of the stock
of a corporate general partner and is payable as to principal and interest when
proceeds are received by that corporate general partner from an investment in a
limited partnership with a carrying amount of $430,020. The note payable is
unsecured and bears simple interest at 6.5% per annum. During 1997, the note
was paid in full.

Non-recourse Mortgage Notes

The $19.3 million non-recourse mortgage note is a first mortgage
encumbering the real estate of NPI 4. The note bears interest at 7.33%, with
interest only payable in monthly installments, and matures in 2003. IPT paid
interest of approximately $1,415,000 for 1997.

During 1998, as a result of the Raintree Apartment acquisition, IPT has a
non-recourse mortgage note of $2,657,000 encumbering the real estate of the
Raintree Apartments.

6. MINORITY INTEREST

Operating Partnership

Net income is allocated to the Minority Interests based upon their
respective ownership percentage of the Operating Partnership. Ownership
percentage is represented by dividing the number of OP Units held by the
Minority Interests by the OP Units held by Minority Interest and Common Shares
Outstanding. Such transactions and the proceeds therefrom are treated as
capital transactions and result in an allocation between Shareholder's Equity
and Minority Interest to account for the change in the respective percentage
ownership of the underlying equity of the Operating Partnership.

IPLP had 27,989,098 and 19,567,535 units outstanding, including and
9,415,947 and 8,399,499 units held by Insignia at December 31, 1997 and 1996,
respectively, and 28,961,835 units outstanding, including 9,934,475 units held
by Insignia at March 31, 1998. Pursuant to IPLP's partnership agreement, the
limited partners have received redemption rights, defined in the partnership
agreement, which will enable them to cause, subject to certain restrictions,
IPLP to redeem each unit for cash equal to the value of a common share of IPT
(or, at the general partner's election, it may purchase each unit offered for
redemption for one common share of IPT, subject to adjustment upon the
occurrence of share splits, merger, consolidations or similar pro rata share
transactions, which would have the effect of diluting the ownership interests
of the limited partners of IPLP or the shareholders of IPT).

NPI 4

NPI 4, in which a subsidiary of IPT is the sole general partner and IPLP
owns 62% of the limited partner interests (as of December 31, 1997 and March
31, 1998), is consolidated in the accompanying

F-16

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

financial statements. The 62% of the NPI 4 property effectively owned by IPLP
is stated at IPLP's cost, while the remaining 38% of the property not owned by
IPLP is stated at the historical depreciated cost of NPI 4. While Insignia paid
approximately $9 million for a 62% interest in the partnership, the 38%
minority interest is recorded at zero since the underlying partnership has a
partners' deficit. Accordingly, assets of $25.6 million and liabilities of $17
million were recorded in connection with the acquisition of a majority
ownership in NPI 4. The result is that the property is recorded on IPT's
financial statements at below estimated fair value. The distribution of $1.3
million to minority partners made in January 1997 by NPI 4 was recognized as a
loss to IPT for financial reporting purposes because generally accepted
accounting principles do not allow a negative (debit) balance in minority
interest. Additional losses will be recognized for NPI 4, or any other
partnership which becomes a consolidated partnership, whenever distributions
are made to minority partners in excess of the recognized minority interest in
such partnership.

7. SHAREHOLDERS' EQUITY

IPT's declaration of trust has authorized the issuance of up to
400,000,000 common shares and 100,000,000 preferred shares of beneficial
interest. In 1996, the Company was initially capitalized by the issuance of
7,283,780 common shares in payment of debt of $72,837,800 owed by IPT to
Insignia as a result of the acquisition of the NPI partnership interests. IPT
issued 3,271,547 common shares to Insignia in respect of Insignia's 100%
ownership interest in IPT. IPT subsequently issued an additional 612,709 common
shares to Insignia and an affiliate of Insignia in exchange for the
contribution to IPT of shares of stock of certain corporate general partners.
During 1997, IPT also issued 6,300 common shares to Insignia and 4,700 shares
to six accredited investors, who are executive officers of Insignia. In June
1997, the Company issued to Insignia 1,162,451 common shares of IPT in return
for the contribution of limited partnership interests owned by Insignia.

A private offering was completed in August 1997 with a total of 5,231,000
common shares issued at $10.00 per share. The Company also granted to certain
potential investors an option to purchase for cash up to 1,000,000 in the
aggregate, common shares of beneficial interest of IPT, at any time on or
before October 10, 1997, at the price of $10 per share, provided that the
purchaser is not in breach of certain covenants at the time of the purchase.
This option was exercised during 1997. IPLP had 27,989,098 and 19,567,535 units
outstanding at December 31, 1997 and 1996, respectively, which may be redeemed,
subject to certain restrictions, for an equivalent number of common shares of
IPT.

At December 31, 1997 approximately $6.3 million of the Company's retained
earnings is represented by undistributed earnings of the Company's underlying
investments in real estate limited partnerships that are accounted for by the
equity method.

Share Incentive Plan

In August 1997, IPT adopted the 1997 Share Incentive Plan (the "Plan") to
provide for the granting of share options and restricted shares to certain key
employees (including officers), directors, consultants and advisors of IPT,
including certain employees of Insignia. The Plan will be administered by the
Board of Trustees of IPT or a committee of the Board of Trustees. The Plan
provides that options granted under the Plan may be "incentive share options"
(as defined in the Code), non-qualified options or restricted shares, which
vest on the attainment of performance goals or subject to vesting requirements
or other restrictions prescribed by the Board of Trustees. The maximum number
of IPT common shares available for awards under the Plan is 1,200,000 shares,
subject to adjustment under certain circumstances. The Plan may be terminated
by the Board of Trustees of IPT at any time. As of December 31, 1997, the IPT
Board of Trustees had approved the granting of 25,000 share options and 38,000
restricted shares. Subsequent to December 31, 1997, these approved share
options and restricted shares were granted.

The exercise price of options granted under the Plan may not be less than
100% of the fair market value of an IPT common share on the date of grant.
However, an incentive share option granted to the

F-17

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

holder of more than 10% of the total combined voting power of all of the shares
of beneficial interest of IPT or any subsidiary must have an exercise price of
at least 110% of the fair market value of the shares on the date of grant and
the option by its terms must not be exercisable after the expiration of five
years from the date it is granted. Absent a public market for the IPT common
shares, the Plan provides for the fair market value to be determined by the
Board of Trustees (or a committee thereof if one has been appointed to
administer the Plan.

An option may not be granted with a term exceeding ten years (five years
in the case of incentive stock options granted to a holder of more than 10% of
the total voting power of all classes of IPT's capital stock on the date of the
grant). Options may be exercised by paying the purchase price in cash or, if
the option agreement permits, wholly or partly in IPT common shares already
owned by the optionee.

At or prior to the exercise of a nonqualified share option, the IPT Board
will have the discretion to permit the optionee, in lieu of purchasing the
entire number of shares subject to purchase under the option, to relinquish all
or part of the unexercised portion of the option for cash in the amount of the
difference between the aggregate value of the shares subject to the option and
the aggregate exercise price of the option. In the discretion of the optionee,
this amount may be paid in IPT common shares.

8. COMMITMENTS AND CONTINGENCIES

General Partners

The qualified REIT subsidiaries of IPT either control or serve as general
partner in limited partnerships and these subsidiaries may be liable for
recourse obligations of the limited partnerships if the limited partnerships
were unable to satisfy those obligations. IPT believes that each limited
partnership has more than adequate resources to discharge all recourse
obligations and maintain adequate insurance.

Loan Commitments

IPT is obligated to loan up to $500,000 to certain partnerships
($2,600,000 in aggregate) and $150,000 to certain other partnerships
($6,000,000 in aggregate) at interest rates not to exceed the prime rate plus
2%. Subsidiaries of IPT serve as general partner in these partnerships. There
were no amounts outstanding under these commitments at March 31, 1998, December
31, 1997 or 1996.

Year 2000 (Unaudited)

IPT is dependent upon Insignia for management and administrative services.
Insignia has completed an assessment and has determined that is will have to
modify or replace portions of its software so that its computer systems will
function properly with respect to dates in the year 2000 and thereafter. The
project is estimated to be completed not later than December 31, 1998, which is
prior to any anticipated impact on its operating systems. Insignia believes
that with modifications to existing software and conversions to new software,
the year 2000 issue will not pose significant operational problems for its
computer systems. IPT does not expect the conversion to have a material effect
on its financial position or results of operations. However, if such
modifications and conversions are not made, or are not completed in a timely
fashion, the year 2000 issue could have a material impact on the operations of
IPT.

Obligations to Former General Partners

Certain corporate general partners owned by IPT were acquired by Insignia
from unaffiliated prior owners. The acquisition agreements provided that
Insignia and IPT would be indemnified from claims attributable to events or
actions prior to their ownership, and Insignia (now IPT) indemnify the prior
owners from claims or causes of action arising after the change in ownership.
In addition, certain former owners of the general partners of seven limited
partners retained the obligation with respect to 100% (and in some instances
75%) for capital contributions that may be required by the general partners
upon windup of the applicable partnerships.

F-18

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

Environmental Liabilities

Under various Federal and state environmental laws and regulations, a
current or previous owner or operator of real estate may be required to
investigate and clean up certain hazardous or toxic substances or petroleum
product releases at the property, and may be held liable to a governmental
entity or to third parties for property damage and for investigation and
cleanup costs incurred by such parties in connection with contamination. In
addition, some environmental laws create a lien on the contaminated site in
favor of the government for damages and costs it incurs in connection with the
contamination. The owner or operator of a site may be liable under common law
to third parties for damages and injuries resulting from environmental
contamination emanating from the site. There can be no assurance that the
Company, any of its affiliates, or any assets owned or controlled by the
Company or any of its affiliates currently are in compliance with all of such
laws and regulations, or that the Company or its affiliates will not become
subject to liabilities that arise in whole or in part out of any such laws,
rules or regulations. Management is not currently aware of any environmental
liabilities which are expected to have a material adverse effect on the
Company's operations or financial condition.

Litigation

In January and February 1998, a limited partner in several partnerships in
which the Company owns limited partner interests commenced arbitration
proceedings and litigation against those partnerships and their corporate
general partners. The claims in both the arbitration and in complaints filed in
the Circuit Court of Jackson County, Missouri assert that the corporate general
partners owned by IPT breached certain contractual and fiduciary duties
allegedly owed to the claimant. The Company believes the claims asserted in
these proceedings to be without merit and intends to vigorously defend the
claims.

Certain subsidiaries and partnerships in which the Company owns limited
partner interests are defendants in lawsuits arising in the ordinary course of
business. Such lawsuits are primarily insured claims arising from accidents at
managed properties. Claims may demand substantial compensatory and punitive
damages. Management believes that the litigation will be resolved without a
material impact on the financial position or results of operations of the
Company.

9. RELATED PARTY TRANSACTIONS

Advisory Agreement

The Company initially engaged Insignia to provide a broad range of
services, including executive advisory, investment advisory, acquisition,
administrative, financial and accounting services. In consideration for these
services, the Company will pay Insignia an advisory fee as defined in the
Advisory Agreement adjusted annually based upon certain performance factors.
The initial fee for these services is $1.0 million divided equally between the
two components. In addition to the advisory fee, the Company agreed to pay to
Insignia an annual incentive fee on January 31 of each year beginning in 1998.
The incentive fee will be equal to 3% of the amount by which IPT's Funds from
Operations per share, as defined in the Advisory Agreement, for the year then
ending exceeds 105% of the greater of IPT's Funds from Operations per share for
the preceding year or the highest level of Funds from Operations per share of
IPT attained during any previous calendar year, multiplied by weighted average
number of IPT common shares then outstanding (including, for this purpose, all
OP Units not owned by IPT). Finally, the Company will reimburse Insignia for
certain costs incurred in connection with acquisition services and additional
services provided to the Company. During 1997, $1.7 million was paid to
Insignia in connection with the advisory agreement, including $0.7 million for
acquisition services which was capitalized by IPT. No such amounts were
incurred during 1996 and 1995.

Effective January 1, 1998, the Advisory Agreement between IPT, IPLP and
Insignia was terminated without penalty to IPT, IPLP or Insignia, and certain
provisions until then contained in the Advisory Agreement were incorporated
into the Partnership Agreement effective as of the same date. Also

F-19

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

effective upon the termination of the Advisory Agreement, IPT, IPLP and
Insignia entered into the Acquisition and Disposition Services Agreement. As of
January 1, 1998, the eleven employees of Insignia, who prior to that time had
worked exclusively on matters concerning IPT, became employees of IPT. Also,
effective on that date, certain executive officers of IPT, who are also
employed as executive officers of Insignia, received 510,000 restricted IPT
common shares, in the aggregate, which will vest ratably over a five-year
period. The restricted shares received by such officers constitutes the sole
compensation that they will receive from IPT for services rendered to IPT over
such five-year period by such shared employees.

Property Management

The Partnership agreement also provides that if, after taking into account
certain equitable adjustments specified in the Partnership Agreement, IPLP may
be required to pay an additional fee to Insignia (the "Contract Loss Fee") if
certain parameters are not met as specified in the Partnership Agreement.

Partnership Administration Services

Insignia currently provides partnership administration services to each
Controlled Partnership.
Such services, for which Insignia is typically paid on a reimbursement basis
only, generally include accounting functions, investor relations and the
preparation and filing of required reports under the Exchange Act.

10. ANGELES MORTGAGE INVESTMENT TRUST MERGER

On July 21, 1997, the Company announced that it had executed a definitive
merger agreement to merge with Angeles Mortgage Investment Trust ("AMIT"). The
definitive agreement provides that each AMIT Class A share will be exchanged
for 1.536 IPT common shares and each outstanding AMIT Class B share will be
exchanged for 0.0314 IPT common shares. The exchange ratios will be
appropriately adjusted based on the respective amounts of per-share dividends
declared or paid by AMIT since December 31, 1996 and by IPT since January 31,
1997. The proposed transaction is contingent upon, among other conditions,
AMIT's receipt of a fairness opinion and the approval of the proposed
transaction by certain governmental authorities and by the shareholders of
AMIT.

F-20

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS (CONTINUED)

11. OTHER MATTERS

Winthrop Option

On February 17, 1998, Insignia granted IPLP an option (the "Winthrop
Option") to acquire all but not less than all of the Winthrop Interest
(acquired by Insignia during 1997) at any time on or before December 31, 1998.
The Winthrop Option is exercisable by IPLP for an aggregate cash amount of
approximately $46 million, plus varying amounts of interest on approximately
$40 million, of such amount at a rate equal to Insignia's cost of funds (based
on the interest rate in effect from time to time under Insignia's revolving
credit agreement) and a ratable portion of the transaction costs incurred by
Insignia in connection with the acquisition.

Apartment Investment Management Company Merger

On March 17, 1998 Insignia entered into an agreement to merge its national
residential property management operations, and its controlling interest in
Insignia Properties Trust, with Apartment Investment Management Company
("AIMCO"), a publicly traded real estate investment trust. The closing, which
is expected to happen in the third quarter of 1998, is subject to customary
conditions, including government approvals and the approval of Insignia's
shareholders. In connection with the proposed merger, AIMCO has committed,
contingent upon consummation of such merger, to offer to acquire the equity of
IPT not owned by Insignia for not less than $13.25 per share.

Costs of Start-Up Activities

F-21

SCHEDULE III

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

REAL ESTATE AND ACCUMULATED DEPRECATION
DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)

INITIAL COST
----------------------
COST
BUILDINGS CAPITALIZED
AND (REMOVED)
PERSONAL SUBSEQUENT TO
ENCUMBRANCES LAND PROPERTY ACQUISITION
-------------- ---------- ----------- ---------------

Village of Pennbrook
Falls Township, Pennsylvania .. $ 19,300 $ 1,529 $ 21,541 $ 1,154
======== ======= ======== =======

GROSS AMOUNT AT WHICH CARRIED AT DECEMBER 31,
1997
------------------------------------------------
BUILDINGS
AND
RELATED
PERSONAL ACCUMULATED DATE OF DATE DEPRECIABLE
LAND PROPERTY TOTAL DEPRECIATION CONSTRUCTION ACQUIRED LIFE -- YEARS
---------- ---------- ----------- -------------- -------------- ---------- --------------

Village of Pennbrook
Falls Township, Pennsylvania .. $ 1,529 $ 22,695 $ 24,224 $ 1,867 1973 1/96 5-30
======= ======== ======== =======

F-22

SCHEDULE III

INSIGNIA PROPERTIES TRUST AND PREDECESSOR ENTITIES

REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
(DOLLARS IN THOUSANDS)

DECEMBER 31,
----------------------
1997 1996
---------- ---------

RECONCILIATION OF REAL ESTATE
Balance at beginning of year ............. $23,026 $ --
Acquisition ............................. 817 22,253
Apartment property improvements ......... 381 773
------- -------
Balance at end of year ................... $24,224 $23,026
======= =======
RECONCILIATION OF ACCUMULATED DEPRECIATION
Balance at beginning of year ............. $ 901 $ --
Additions charged to expense ............ 966 901
------- -------
Balance at end of year ................... $ 1,867 $ 901
======= =======

F-23

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

The Partners
Shelter Properties Partnerships

We have audited the accompanying combined balance sheets of Shelter
Properties Partnerships as of December 31, 1996 and 1995, and the related
combined statements of operations, changes in partners' capital (deficit) and
cash flows for each of the three years in the period ended December 31, 1996.
Our audits also included the financial statement schedule included on pages
F-35 to F-37. These financial statements and the financial statement schedule
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and the financial statement
schedule based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the combined financial position of the Shelter
Properties Partnerships at December 31, 1996 and 1995, and the combined results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1996, in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken
as a whole, present fairly in all material respects the information set forth
therein.

ERNST & YOUNG LLP

Greenville, South Carolina
February 5, 1997

F-24

SHELTER PROPERTIES PARTNERSHIPS

COMBINED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

DECEMBER 31,
----------------------------
1996 1995
------------- ------------

ASSETS
Cash:
Unrestricted .................................... $ 15,741 $ 11,607
Restricted ...................................... 986 983
Accounts receivable .............................. 125 118
Escrow for taxes and insurance ................... 1,466 1,196
Restricted escrows ............................... 5,505 4,400
Other assets ..................................... 2,480 2,118
Investment properties:
Land ............................................ 13,715 13,714
Buildings and related personal property ......... 180,571 177,167
---------- ---------
194,286 190,881
Less accumulated depreciation ................... (101,529) (94,084)
---------- ---------
92,757 96,797
---------- ---------
$ 119,060 $ 117,219
========== =========
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities:
Accounts payable ................................ $ 892 $ 1,411
Tenant security deposits ........................ 986 972
Accrued taxes ................................... 1,375 978
Other liabilities ............................... 1,733 2,963
Mortgage notes payable .......................... 87,997 83,744
---------- ---------
92,983 90,068
Partners' capital (deficit):
General partners ................................ (854) (856)
Limited partners ................................ 26,931 28,007
---------- ---------
26,077 27,151
---------- ---------
$ 119,060 $ 117,219
========== =========

See accompanying notes.

F-25

SHELTER PROPERTIES PARTNERSHIPS

COMBINED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)

YEAR ENDED DECEMBER 31
--------------------------------------
1996 1995 1994
---------- ---------- ------------

REVENUES
Rental income .............................................. $36,287 $36,170 $ 34,667
Other income ............................................... 2,366 2,161 1,960
------- ------- --------
Total revenue .............................................. 38,653 38,331 36,627
EXPENSES
Operating .................................................. 12,401 12,506 12,559
General and administrative ................................. 1,148 2,045 986
Maintenance ................................................ 6,237 6,253 6,070
Depreciation ............................................... 7,658 7,776 7,448
Interest ................................................... 7,734 8,156 8,405
Property taxes ............................................. 2,660 2,599 2,654
------- ------- --------
Total expenses ............................................. 37,838 39,335 38,122
Casualty gain .............................................. -- 199 2
Gain (loss) on sale of property, net ....................... -- 1,296 (60)
------- ------- --------
Income (loss) before extraordinary item .................... 815 491 (1,553)
Extraordinary item -- early extinguishment of debt ......... (633) -- (87)
------- ------- --------
Net income (loss) .......................................... $ 182 $ 491 $ (1,640)
======= ======= ========

See accompanying notes.

F-26

SHELTER PROPERTIES PARTNERSHIPS

COMBINED STATEMENTS CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(DOLLARS IN THOUSANDS)

LIMITED
PARTNERSHIP GENERAL LIMITED
UNITS PARTNERS PARTNERS TOTAL
------------- ---------- ------------ -----------

Net original capital contributions ......... $192,362 $ 10 $161,716 $161,726
======== ====== ======== ========
Partners' (deficit) capital at
December 31, 1993 ......................... 192,362 (817) 32,926 32,109
Distributions payable to partners ......... -- (15) (1,492) (1,507)
Net (loss) for the year ended
December 31, 1994 ....................... -- (16) (1,624) (1,640)
-------- ------ -------- --------
Partners' (deficit) capital at
December 31, 1994 ......................... 192,362 (848) 29,810 28,962
Distributions payable to partners ......... -- (13) (2,289) (2,302)
Net income for the year ended
December 31, 1995 ....................... -- 5 486 491
-------- ------ -------- --------
Partners' (deficit) capital at
December 31, 1995 ......................... 192,362 (856) 28,007 27,151
Distributions payable to partners ......... -- -- (1,256) (1,256)
Net income for the year ended
December 31, 1996 ....................... -- 2 180 182
-------- ------ -------- --------
Partners' (deficit) capital at
December 31, 1996 ......................... $192,362 $ (854) $ 26,931 $ 26,077
======== ====== ======== ========

See accompanying notes.

F-27

SHELTER PROPERTIES PARTNERSHIPS

COMBINED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

YEAR ENDED DECEMBER 31
----------------------------------------------
1996 1995 1994
------------- ------------- --------------

OPERATING ACTIVITIES
Net income (loss) ........................................... $ 182 $ 491 $(1,640)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation ............................................. 7,658 7,776 7,448
Amortization of discounts and loan costs ................. 757 795 786
Casualty (gain) .......................................... -- (199) (2)
(Gain) loss on sale of property .......................... -- (1,296) 60
Extraordinary item--early extinguishment of debt ......... 633 -- 87
Change in accounts:
Restricted cash ......................................... (4) 24 (77)
Accounts receivable ..................................... (6) (42) 118
Escrows for taxes ....................................... (271) 184 196
Other assets ............................................ (168) (3) 71
Accounts payable ........................................ (608) 376 (214)
Tenant security liability ............................... 16 (52) 95
Accrued taxes ........................................... 396 (200) (86)
Other liabilities ....................................... (230) 78 46
---------- --------- ---------
Net cash provided by operating activities ................... 8,355 7,932 6,888
INVESTING ACTIVITIES
Property improvements and replacements ...................... (3,594) (4,392) (3,670)
Deposits to restricted escrows .............................. (1,422) (793) (860)
Receipts from restricted escrows ............................ 318 1,095 1,487
Proceeds from sale of property .............................. -- 2,412 --
Insurance proceeds from property damage ..................... 59 296 89
Condemnation proceeds ....................................... -- -- 14
---------- --------- ---------
Net cash used in investing activities ....................... (4,639) (1,382) (2,940)
FINANCING ACTIVITIES
Payments on mortgage notes payable .......................... (2,820) (2,294) (2,114)
Repayment of mortgage notes payable ......................... (13,094) -- (7,371)
Proceeds from long-term borrowings .......................... 19,250 -- 7,074
Loan costs .................................................. (597) -- (91)
Debt extinguishment costs ................................... (66) -- (21)
Distributions paid .......................................... (2,255) (1,309) (1,505)
---------- --------- ---------
Net cash provided by (used in) financing activities ......... 418 (3,603) (4,028)
---------- --------- ---------
Net increase (decrease) in cash ............................. 4,134 2,947 (80)
Cash at beginning of year ................................... 11,607 8,660 8,740
---------- --------- ---------
Cash at end of year ......................................... $ 15,741 $11,607 $ 8,660
========== ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest ...................................... $ 6,989 $ 7,374 $ 7,621
========== ========= =========

See accompanying notes.

F-28

SHELTER PROPERTIES PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1996

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization

Insignia Properties Trust ("IPT" or "the Company") was formed in 1996 by
Insignia Financial Group, Inc. ("Insignia") for the purpose of acquiring and
owning interests in multifamily residential properties, including limited and
general partner interests in partnerships which hold such real estate
properties. IPT has been organized in a manner that will allow it to be taxed
as a real estate investment trust ("REIT") under the Internal Revenue Code of
1986 beginning with the taxable year ended December 31, 1996. Insignia and its
affiliates have transferred to IPT equity interests in entities comprising or
controlling the general partners of 46 public real estate limited partnerships
(the "Equity Partnerships") in exchange for shares of beneficial interest of
IPT. IPT has also issued common shares to Insignia and certain of its employees
and affiliates in exchange for the payment of certain obligations of IPT.
Insignia also transferred its limited partnership interests in certain limited
partnerships, including Shelter Properties Partnerships (defined below), to
Insignia Properties L.P. ("IPLP") in exchange for units of IPLP.

IPT is 98% owned by Insignia, with the remainder of its shares owned by
Metropolitan Asset Enhancement L.P., an affiliated company or certain Insignia
employees. As of December 31, 1996, IPLP is owned 57% by IPT with Insignia
owning the remaining 43%.

The accompanying financial statements represent the combined financial
statements applicable to certain assets and entities contributed to IPT as a
part of its formation.

Basis of Presentation

The accompanying combined financial statements include the assets,
liabilities and results of operations of 5 partnerships that Insignia acquired
limited partnership interests in during May 1995 as a result of tender offers.
Insignia subsequently transferred such partnership interests to IPT. Such
combined group is herein referred to as the Shelter Properties Partnerships
(the "Partnerships"). These Partnerships are part of the Equity Partnerships
mentioned above. The Partnerships operate apartment properties located in the
south and southwest.

Shelter Properties Partnerships

The Partnerships included in these combined financial statements and IPT's
ownership interest in each are as follows:

OWNERSHIP
PARTNERSHIP PERCENTAGE
- - ----------------------------------- -----------

Shelter Properties I ........... 27%
Shelter Properties II .......... 23%
Shelter Properties III ......... 24%
Shelter Properties V ........... 26%
Shelter Properties VI .......... 20%

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Combination

The combined financial statements include all of the accounts of the
Partnerships and their majority owned partnerships. All significant
interpartnership balances have been eliminated.

F-29

SHELTER PROPERTIES PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

Use of Estimates

Escrows for Taxes and Insurance

Currently, these funds are held by the Partnerships for the Partnerships'
properties. All tax escrow funds are designated for the payment of real estate
taxes.

Restricted Escrows

The Partnerships' maintain a capital improvement and a repair and
maintenance escrow account in which the funds deposited into these accounts are
designated for capital improvements or repairs and maintenance. Certain of
these accounts require the properties to maintain a per apartment unit balance
in reserve to cover necessary repairs and maintenance.

Depreciation

Depreciation is provided by the straight-line method over the estimated
lives of the apartment properties and related personal property. The estimated
lives of the apartment properties are from 15 to 37 years and the estimated
lives of the related personal property is from 5 to 7 years.

Loan Costs

Loan costs are included in other assets and are being amortized on a
straight-line basis over the life of the loans.

Unrestricted Cash

Unrestricted cash includes cash on hand and in banks, demand deposits,
money market investments, and certificates of deposit with original maturities
less than 90 days. At certain times, the amount of cash deposited at a bank may
exceed the limit on insured deposits.

Restricted Cash -- Tenant Security Deposits

The Partnerships require security deposits from lessees for the duration
of the lease and such deposits are considered restricted cash. Deposits are
refunded when the tenant vacates, provided the tenant has not damaged the unit
and is current on rental payments.

General and Limited Partner Allocations

Profits, gains, losses and cash distributions are allocated between
general and limited partners in accordance with the provisions of the
respective partnership agreements. In accordance with the partnership
agreements, the general partners of the partnerships may designate a portion of
cash generated from operations as "other reserves" in determining net cash from
operations available for distributions. At December 31, 1996, approximately $2
million has been designated as other reserves.

Leases

The Partnerships generally lease apartment units for twelve-month terms or
less. The Partnerships recognize income as earned on its leases. In addition,
the Corporate General Partner's policy is to offer rental concessions during
particularly slow months or in response to heavy competition from other similar
complexes in the area. Concessions are charged to expense as incurred.

F-30

SHELTER PROPERTIES PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

Investment Properties

The Partnerships have adopted FASB Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,"
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. For the years ended December 31, 1996, 1995 and 1994, no
adjustments for impairment of value were recorded. The impairment loss is
measured by comparing the fair value of the asset to its carrying amount. The
effect of adoption was not material.

Advertising

The Partnerships expense the costs of advertising as incurred. Advertising
expense, included in operating expenses, was approximately $433,000 (1996),
$411,000 (1995) and $445,000 (1994), respectively.

Fair Value

The Partnerships have implemented FASB Statement No. 107, "Disclosure
about Fair Value of Financial Instruments," which requires disclosure of fair
value information about financial instruments for which it is practicable to
estimate that value. The carrying amount of the Partnerships' cash and
investments approximates fair value due to short-term maturities. The
Partnerships estimate the fair value of its fixed rate mortgages by discounted
cash flow analysis, based on estimated borrowing rates currently available to
the Partnership.

3. MORTGAGES PAYABLE

Mortgages payable, which are collateralized by substantially all
investment properties are summarized as follows:

DECEMBER 31
1996 1995
---------- -----------
(DOLLARS IN THOUSANDS)

First mortgages with fixed interest rates ranging from 7.33% to 7.5%, due at
various dates through 2003 .................................................... $ 24,042 $ 4,866
First and second mortgages with fixed interest rates of 7.6%, maturing on
November 15, 2002 ............................................................. 58,533 60,042
First and second mortgages with fixed interest rates at 7.83%, due on
October 15, 2003 .............................................................. 1,727 1,746
Primarily first mortgages with fixed interest rates ranging from 8.00% --
9.5%, due at various dates through 2006 ....................................... -- 12,621
First mortgage with fixed interest rate at 10.375%, due on December 10,
2016 .......................................................................... 6,629 6,722
First mortgage with a variable interest rate due on June 10, 2001 .............. -- 1,600
-------- --------
90,931 87,597
Less unamortized discounts ..................................................... (2,934) (3,853)
-------- --------
Total mortgage payable ......................................................... $ 87,997 $ 83,744
======== ========

The estimated fair values of the Partnerships' aggregate debt approximates
its carrying value. This estimate is not necessarily indicative of the amounts
the Partnerships may pay in actual market transactions.

F-31

SHELTER PROPERTIES PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

The Partnerships exercised an interest rate buy-down option for some of
the refinanced mortgage notes reducing the stated rate from 8.76% to 7.6% and
8.13% to 7.83%. The fee for the interest rate reduction amounted to
approximately $4,731,000 and is being amortized as a loan discount by the
interest method over the life of the loan. The discount fee is reflected as a
reduction of the mortgage notes payable and increases the effective rate of the
debt to 8.76% and 8.13%.

During 1996 and 1994, Shelter I and Shelter V refinanced various
properties. As a result of the refinancings, the Partnerships recorded
extraordinary losses of approximately $633,000 (1996) and $87,000 (1994).

Annual principal payments and maturities in all mortgages payable are as
follows (in thousands):

1997 ............... $ 1,836
1998 ............... 1,985
1999 ............... 6,653
2000 ............... 2,208
2001 ............... 2,385
Thereafter ......... 75,864
-------
$90,931
=======

The mortgages payable are nonrecourse and are secured by pledge of the
respective apartment properties and by pledge of revenues from the respective
apartment properties. Also, all of the mortgages require prepayment penalties
if repaid prior to maturity and prohibit resale of the properties subject to
existing indebtedness.

4. INCOME TAX

The Partnerships have each received rulings from the Internal Revenue
Service that they will be classified as partnerships for Federal income tax
purposes. Accordingly, no provision for income taxes has been made in the
financial statements of the Partnerships. Taxable income or loss is reported in
the income tax returns of its partners.

The following is a reconciliation between the Partnerships' reported
amounts and Federal tax basis of net assets and liabilities (in thousands):

Net assets as reported ........... $ 26,077
Land and buildings ............... 18,244
Accumulated depreciation ......... (60,460)
Syndication fees ................. 20,272
Other ............................ 688
---------
Net assets -- tax basis .......... $ 4,821
=========

The aggregate cost of the Real Estate for Federal income tax purposes for 1996
and 1995, respectively, is approximately $213 million and $209 million. The
accumulated depreciation taken for Federal income tax purposes for 1996 and
1995, respectively, is approximately $162 million and $152 million.

5. TRANSACTIONS WITH AFFILIATES

The Partnerships have no employees and are dependent on the Corporate
General Partner and its affiliates for the management and administration of all
partnership activities. The partnership agreement

F-32

SHELTER PROPERTIES PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

provides for payments to affiliates for services and as reimbursement of
certain expenses incurred by affiliates on behalf of the Partnerships. Balances
and other transactions with Insignia Financial Group, Inc. and affiliates in
1996, 1995 and 1994 are as follows (in thousands):

DECEMBER 31
1996 1995 1994
--------- --------- ---------

Property management fees ............................ $1,901 $1,894 $1,804
Reimbursement for services of affiliates ............ 779 630 568
Due to General Partners ............................. 344 344 344
Due from General Partners ........................... 10 10 10
Property insurance commissions ...................... -- -- 86
Included in reimbursements for services of affiliates
for construction oversight costs .................. 18 -- --
Legal fees .......................................... 72 -- --

The Partnerships insure their properties under a master policy through an
agency and insurer unaffiliated with the Corporate General Partner. An
affiliate of the Corporate General Partner acquired, in the acquisition of a
business, certain financial obligations from an insurance agency which was
later acquired by the agent who placed the current year's master policy. The
current agent assumed the financial obligations to the affiliate of the
Corporate General Partner who receives payment on these obligations from the
agent. The amount of the Partnerships' insurance premiums accruing to the
benefit of the affiliate of the Corporate General Partner by virtue of the
agent's obligations is not significant.

A director of Insignia Financial Group, Inc. is affiliated with a
professional legal association that received fees in connection with the 1996
refinancings. These fees totaled $36,000 and have been capitalized as loan
costs.

6. SALE OF PROPERTY

On September 29, 1995, Shelter V sold Marble Hills Apartments to an
unaffiliated party. The buyer assumed the related mortgage notes payable. The
total outstanding balance on the mortgage notes payable was approximately
$3,344,000. The carrying amount of the property was approximately $2,412,000
after payment of closing costs. This disposition resulted in a gain of
approximately $1,296,000. Operating revenues and expenses from Marble Hills
were approximately $1,214,000 and $1,206,000 for 1995 and approximately
$1,242,000 and $1,365,000 for 1994, respectively.

7. CASUALTIES AND CONDEMNATIONS

The partnerships at times have casualty events which result in gains and
losses. During 1995 and 1994, the partnerships recorded $199,000 and $2,000 in
gains resulting from casualty events, respectively. In addition, the
partnerships recorded a gain of $14,000 in 1994 from the condemnation of land
for a road widening project.

8. CONTINGENCIES

Tender Offer Litigation

On or about April 26 and 27, 1995, six entities ("Affiliated Purchaser")
affiliated with the Partnerships commenced tender offers for limited partner
interests in six limited partnerships. On May 27, 1995, the Affiliated
Purchaser acquired 12,616 Units of the Partnerships pursuant to the tender
offer. On or about May 12, 1995, in the United States District Court for the
District of South Carolina, certain limited partners of the Shelter Properties
Partnerships commenced a lawsuit, on behalf of themselves, on

F-33

SHELTER PROPERTIES PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

behalf of a putative class of plaintiffs, and derivatively on behalf of the
Partnerships, challenging the actions taken by defendants (including Insignia,
the acquiring entities and certain officers of Insignia) in the management of
the Shelter Properties Partnerships and in connection with the tender offers
and certain other matters.

The plaintiffs alleged that, among other things: (i) the defendants
intentionally mismanaged the Partnerships and acted contrary to the limited
partners' best interests by prolonging the existence of the Partnerships in
order to perpetuate the revenues derived by Insignia (an affiliate of the
Corporate General Partner) and its affiliates from the Partnerships, (ii) the
defendants' actions reduced the demand for the Partnerships' limited partner
interests in the limited resale market by artificially depressing the trading
prices for limited partners' interests in order to create a favorable
environment for the tender offers; (iii) through the tender offers, the
acquiring entities sought to acquire effective voting control over the
Partnerships while paying highly inadequate prices; and (iv) the documents
disseminated to the class in connection with the tender offers contained false
and misleading statements and omissions of material facts concerning such
issues as the advantages to limited partners of tendering pursuant to the
tender offers, the true value of the interest, the true financial condition of
the Partnerships, the factors affecting the likelihood that properties owned by
the Partnerships will be sold or liquidated in the near future, the liquidity
and true value of the limited partner interests, the reasons for the limited
secondary market for limited partner interests, and the true nature of the
market for the underlying real estate assets owned by the Shelter Properties
Partnerships, all in violation of the Federal securities laws.

On September 27, 1995, the parties entered into a stipulation to settle
the matter. The principal terms of the stipulation require supplemental
payments to tendering limited partners aggregating approximately $6 million to
be paid by the Affiliated Purchaser, waiver by the Shelter Properties
Partnerships' general partners of any right to certain proceeds from a sale or
refinancing of the Partnerships' properties; some restrictions on Insignia's
ability to vote the limited partner interests it acquired; payment of $1.25
million (which amount is divided among the various partnerships and acquiring
entities) for plaintiffs' attorney fees and expenses in the litigation; and
general releases of all the defendants. Approximately $975,000 was paid by the
Partnerships and was expensed in 1995.

On June 24, 1996, after notice to the class and a hearing on the fairness
and adequacy of the notice and the terms of settlement, the court orally
approved the settlement. The court signed the formal order on July 30, 1996. No
appeal was filed within thirty days after the court entered the formal order,
and the settlement became effective on August 30, 1996. The Affiliated
Purchaser made the payments to investors in accordance with the settlement in
early September 1996.

General Contingencies

Certain of the partnerships are subject to various legal proceedings and
claims arising in the ordinary course of business, some of which are covered by
insurance. Management of the partnerships believes the ultimate resolution of
these matters is not likely to have a material adverse effect on the combined
financial statements.

9. SUBSEQUENT EVENT

Apartment Investment Management Company Merger (Unaudited)

On March 17, 1998 Insignia entered into an agreement to merge its national
residential property management operations, and its controlling interest in
Insignia Properties Trust, with Apartment Investment Management Company
("AIMCO"), a publicly traded real estate investment trust. The closing, which
is expected to happen in the third quarter of 1998, is subject to customary
conditions, including government approvals and the approval of Insignia's
shareholders. If the closing occurs, AIMCO will then control the General
Partners of the Shelter Properties Partnerships.

F-34

SCHEDULE III

SHELTER PROPERTIES PARTNERSHIPS

REAL ESTATE AND ACCUMULATED DEPRECATION
DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)

INITIAL COST
--------------------
COST
BUILDINGS CAPITALIZED
AND (REMOVED)
PERSONAL SUBSEQUENT TO
ENCUMBRANCES LAND PROPERTY ACQUISITION
-------------- -------- ----------- ---------------

Carriage House
Gastonia, North Carolina .......... $ 2,090 $ 166 $ 3,038 $ 592
Colony House Apartments
Murfreesboro, Tennessee ........... 2,474 183 4,408 1,069
Essex Park Apartments
Columbia, South Carolina .......... 3,318 473 7,406 1,820
Foxfire Apartments
Atlanta, Georgia .................. 4,792 830 9,122 301
Foxfire/Barcelona .................. 5,916 1,191 9,998 86
Durham, North Carolina ............ -- -- -- --
Heritage Pointe Apartments
Rome, Georgia ..................... 1,400 239 2,410 637
Lake Johnson Mews Apartments
Raleigh, North Carolina ........... 4,350 338 6,725 1,031
Milhopper Village Apartments
Gainesville, Florida .............. 2,700 239 4,305 949
North River Village Apartments
Atlanta, Georgia .................. 1,727 336 4,085 1,187
Nottingham Square
Des Moines, Iowa .................. 8,185 1,133 9,980 2,274
Old Salem Apartments
Charlottesville, Virginia ......... 6,629 654 12,664 2,306
Parktown Townhouses
Deer Park, Texas .................. 3,318 1,095 5,329 2,972
Quail Hollow Apartments
West Columbia, South
Carolina .......................... 2,850 459 3,754 1,022
Raintree Apartments
Anderson, South Carolina .......... 1,472 184 3,184 620
River Reach
Jacksonville, Florida ............. 7,693 1,872 10,854 1,418

(RESTUBBED TABLE CONTINUED FROM ABOVE)

GROSS AMOUNTS AT WHICH CARRIED AT DECEMBER
31, 1996
---------------------------------------------
BUILDINGS
AND
RELATED
PERSONAL ACCUMULATED DATE OF DATE DEPRECIABLE
LAND PROPERTY TOTAL DEPRECIATION CONSTRUCTION ACQUIRED LIFE -- YEARS
-------- ---------- ---------- -------------- -------------- ---------- --------------

Carriage House
Gastonia, North Carolina .......... $ 166 $ 3,630 $ 3,796 $ 1,906 1970-71 6/29/84 5-27
Colony House Apartments
Murfreesboro, Tennessee ........... 183 5,477 5,660 2,989 1970-72 10/30/81 5-36
Essex Park Apartments
Columbia, South Carolina .......... 473 9,226 9,699 5,074 1973 10/29/81 5-36
Foxfire Apartments
Atlanta, Georgia .................. 830 9,423 10,253 5,630 1969-71 7/19/83 5-29
Foxfire/Barcelona .................. 1,191 10,084 11,275 5,225 1973 3/28/85 5-29
Durham, North Carolina ............ -- -- -- -- 1975 9/30/84 5-31
Heritage Pointe Apartments
Rome, Georgia ..................... 239 3,047 3,286 2,218 1967-70 9/15/80 5-35
Lake Johnson Mews Apartments
Raleigh, North Carolina ........... 338 7,756 8,094 3,907 1972-73 9/30/83 5-30
Milhopper Village Apartments
Gainesville, Florida .............. 239 5,254 5,493 2,820 1970-76 11/22/83 5-29
North River Village Apartments
Atlanta, Georgia .................. 336 5,272 5,608 2,909 1969 4/21/82 5-32
Nottingham Square
Des Moines, Iowa .................. 1,133 12,254 13,387 6,083 1972 8/31/84 5-29
Old Salem Apartments
Charlottesville, Virginia ......... 654 14,970 15,624 8,018 1969-71 8/25/83 5-28
Parktown Townhouses
Deer Park, Texas .................. 1,095 8,301 9,396 5,725 1969 3/1/81 5-35
Quail Hollow Apartments
West Columbia, South
Carolina .......................... 459 4,776 5,235 3,421 1973 9/1/80 5-34
Raintree Apartments
Anderson, South Carolina .......... 184 3,804 3,988 2,486 1972-74 4/30/81 5-38
River Reach
Jacksonville, Florida ............. 1,872 12,272 14,144 6,033 1971 1/30/85 5-27

F-35

SCHEDULE III

SHELTER PROPERTIES PARTNERSHIPS

REAL ESTATE AND ACCUMULATED DEPRECATION (CONTINUED)
(DOLLARS IN THOUSANDS)

INITIAL COST
----------------------
COST
BUILDINGS CAPITALIZED
AND (REMOVED)
PERSONAL SUBSEQUENT TO
ENCUMBRANCES LAND PROPERTY ACQUISITION
-------------- ---------- ----------- ---------------

Rocky Creek
Augusta, Georgia ................... $ 2,268 $ 168 $ 3,821 $ 486
Signal Pointe Apartments
Winter Park, Florida ............... 4,399 535 8,062 2,515
Stone Mountain West
Apartments
Stone Mountain, Georgia ............ 3,000 210 3,408 988
Tar River Estates
Greenville, North Carolina ......... 5,165 474 9,985 2,593
The Lexington Apartments
Sarasota, Florida .................. 3,740 1,102 6,620 1,965
Village Garden
Fort Collins, Colorado ............. 2,663 420 3,050 472
Willowick Apartments
Greenville, South Carolina ......... 1,296 289 3,563 587
Windsor Hills Apartments
Blacksburg, Virginia ............... 4,536 520 4,575 1,082
Woodland Village Apartments
Columbia, South Carolina ........... 4,950 605 9,135 2,118
------- ------- -------- -------
$90,931 $13,715 $149,481 $31,090
======= ======= ======== =======

GROSS AMOUNTS AT WHICH CARRIED AT DECEMBER 31,
1996
------------------------------------------------
BUILDINGS
AND
RELATED
PERSONAL ACCUMULATED DATE OF DATE DEPRECIABLE
LAND PROPERTY TOTAL DEPRECIATION CONSTRUCTION ACQUIRED LIFE -- YEARS
---------- ---------- ----------- -------------- -------------- ---------- --------------

Rocky Creek
Augusta, Georgia ................... $ 168 $ 4,307 $ 4,475 $ 1,946 1979 6/29/84 5-35
Signal Pointe Apartments
Winter Park, Florida ............... 535 10,577 11,112 6,832 1970 6/30/81 5-37
Stone Mountain West Apartments
Stone Mountain, Georgia ............ 210 4,396 4,606 3,076 1972 12/31/80 5-37
Tar River Estates
Greenville, North Carolina ......... 474 12,578 13,052 6,861 1969-72 1/18/84 5-27
The Lexington Apartments
Sarasota, Florida .................. 1,102 8,585 9,687 4,247 1973-82 10/31/83 5-34
Village Garden
Fort Collins, Colorado ............. 420 3,522 3,942 1,607 1974 3/1/85 5-30
Willowick Apartments
Greenville, South Carolina ......... 289 4,150 4,439 2,316 1974 6/30/82 5-32
Windsor Hills Apartments
Blacksburg, Virginia ............... 520 5,657 6,177 4,237 1973 9/1/80 5-30
Woodland Village Apartments
Columbia, South Carolina ........... 605 11,253 11,858 5,963 1974 9/1/83 5-30
------- -------- -------- --------
$13,715 $180,571 $194,286 $101,529
======= ======== ======== ========

F-36

SCHEDULE III

SHELTER PROPERTIES PARTNERSHIPS

REAL ESTATE AND ACCUMULATED DEPRECATION (CONTINUED)

DECEMBER 31
-----------------------------------------
1996 1995 1994
------------ ------------ -----------
(IN THOUSANDS)

RECONCILIATION OF REAL ESTATE
Balance at beginning of year ............. $190,881 $194,997 $191,886
Property improvements ................... 3,594 4,392 3,670
Disposal of property .................... (189) (655) (559)
Sale of apartment property .............. -- (7,853) --
-------- -------- --------
Balance at end of year ................... $194,286 $190,881 $194,997
======== ======== ========
RECONCILIATION OF ACCUMULATED DEPRECIATION
Balance at beginning of year ............. $ 94,084 $ 90,437 $ 83,428
Additions charged to expense ............ 7,658 7,776 7,448
Sale of apartment property .............. -- (3,661) --
Disposal of property .................... (213) (468) (439)
-------- -------- --------
Balance at end of year ................... $101,529 $ 94,084 $ 90,437
======== ======== ========

F-37

INDEPENDENT AUDITORS' REPORT

To the National Property Investors and
Century Properties Partnerships
Greenville, South Carolina

We have audited the accompanying combined balance sheets of National
Property Investors and Century Properties Partnerships as of December 31, 1996
and December 31, 1995, and the related combined statements of operations,
statements of changes in partners' capital and statements of cash flows for
each of the three years in the period ended December 31, 1996, (see Note 1).
Our audit also included the supplemental schedule as of December 31, 1996.
These financial statements are the responsibility of the Partnerships'
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the combined financial position of
National Property Investors and Century Properties Partnerships as of December
31, 1996 and 1995, and the combined results of their operations and their cash
flows for each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles. Also in our opinion,
the related supplemental schedule, when considered in relation to the basic
combined financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.

IMOWITZ KOENIG & CO. LLP
Certified Public Accountants

New York, N.Y.
February 18, 1997

F-38

NATIONAL PROPERTY INVESTORS AND
CENTURY PROPERTIES PARTNERSHIPS

COMBINED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

DECEMBER 31,
-----------------------------
1996 1995
------------- -------------

ASSETS
Cash and cash equivalents ........................ $ 44,080 $ 34,735
Other assets ..................................... 24,757 17,956
Investment properties:
Land ............................................ 70,634 74,215
Buildings and related personal property ......... 590,209 595,812
---------- ----------
660,843 670,027
Less accumulated depreciation ................... (312,410) (298,586)
---------- ----------
Net real estate .................................. 348,433 371,441
---------- ----------
Total assets ..................................... $ 417,270 $ 424,132
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and other liabilities .......... $ 13,947 $ 10,305
Distribution payable ............................ 12,581 --
Mortgage notes payable .......................... 363,385 354,935
---------- ----------
Total liabilities ................................ 389,913 365,240
Partners' capital (deficit):
General partners ................................ (37,669) (36,877)
Limited partners ................................ 65,026 95,769
---------- ----------
Total partners' capital .......................... 27,357 58,892
---------- ----------
Total liabilities and partners' capital .......... $ 417,270 $ 424,132
========== ==========

See accompanying notes and auditors' report.

F-39

NATIONAL PROPERTY INVESTORS AND
CENTURY PROPERTIES PARTNERSHIPS

COMBINED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)

YEAR ENDED DECEMBER 31,
-------------------------------------------
1996 1995 1994
------------- ----------- -------------

REVENUE:
Rental income ........................................... $ 111,867 $115,759 $ 112,563
Other and interest income ............................... 6,703 5,787 2,551
--------- -------- ---------
Total revenue ............................................ 118,570 121,546 115,114
EXPENSES:
Operating ............................................... 63,107 63,802 61,615
General and administrative .............................. 4,014 3,466 4,069
Depreciation ............................................ 22,464 23,551 24,382
Interest ................................................ 31,711 34,740 36,032
--------- -------- ---------
Total expenses ........................................... 121,296 125,559 126,098
Gain on sale of property ................................. 3,638 13,756 1,580
Loss on sale of property ................................. -- (592) (149)
Minority interest in joint venture ....................... -- (868) (145)
Impairment loss .......................................... -- -- (500)
--------- -------- ---------
Income (loss) before extraordinary item .................. 912 8,283 (10,198)
Extraordinary item--early extinguishment of debt ......... (2,704) (3,158) (361)
--------- -------- ---------
Net (loss) income ........................................ $ (1,792) $ 5,125 $ (10,559)
========= ======== =========

See accompanying notes and auditors' report.

F-40

NATIONAL PROPERTY INVESTORS AND
CENTURY PROPERTIES PARTNERSHIPS

COMBINED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(DOLLARS IN THOUSANDS, EXCEPT PER UNIT DATA)

LIMITED
PARTNERSHIP GENERAL LIMITED
UNITS PARTNERS PARTNERS TOTAL
------------- ------------- ------------ -----------

Partners' (deficit) capital at December 31, 1993 ......... 1,012,492 $ (35,774) $ 109,589 $ 73,815
Net (loss) for the year ended December 31, 1994 .......... -- (835) (9,724) (10,559)
--------- --------- --------- ---------
Partners' (deficit) capital at December 31, 1994 ......... 1,012,492 (36,609) 99,865 63,256
Distributions payable to partners ........................ -- (189) (9,300) (9,489)
Net (loss) income for the year ended
December 31, 1995 ....................................... -- (79) 5,204 5,125
--------- --------- --------- ---------
Partners' (deficit) capital at December 31, 1995 ......... 1,012,492 (36,877) 95,769 58,892
Distributions payable to partners ........................ -- (595) (29,148) (29,743)
Net (loss) for the year ended December 31, 1996 .......... -- (197) (1,595) (1,792)
--------- --------- --------- ---------
Partners' (deficit) capital at December 31, 1996 ......... 1,012,492 $ (37,669) $ 65,026 $ 27,357
========= ========= ========= =========

See accompanying notes and auditors' report.

F-41

NATIONAL PROPERTY INVESTORS AND
CENTURY PROPERTIES PARTNERSHIPS

COMBINED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)

YEAR ENDED DECEMBER 31,
--------------------------------------------
1996 1995 1994
------------- ------------ -------------

OPERATING ACTIVITIES
Net (loss) income ................................................. $ (1,792) $ 5,125 $ (10,559)
Adjustments to reconcile net (loss) income to net cash provided
by operating activities:
Depreciation ..................................................... 22,464 23,551 24,382
Amortization of discounts and loan costs ......................... 2,457 2,910 2,731
Loss on disposal of property ..................................... -- 592 149
Gain on disposal of property ..................................... (3,638) (13,756) (1,580)
Provision for doubtful receivables ............................... -- 10 --
Impairment loss .................................................. -- -- 500
Minority interest in joint venture ............................... -- 868 145
Accrued interest added to note principal ......................... -- 81 29
Deferred interest expense ........................................ -- -- 21
Extraordinary item -- early extinguishment of debt ............... 2,704 3,158 361
Change in accounts:
Other assets ................................................... (787) (894) (1,930)
Accounts payable and other liabilities ......................... 4,621 (942) (1,153)
---------- --------- ---------
Net cash provided by operating activities ......................... 26,029 20,703 13,096
INVESTING ACTIVITIES
Property improvements and replacements ............................ (10,853) (6,215) (7,570)
Restricted cash (increase) decrease ............................... (3,346) 1,563 1,343
Net proceeds from sale of property ................................ 12,312 27,825 3,537
Proceeds for cash investments ..................................... -- -- 1,879
Proceeds from note receivable ..................................... -- -- 50
---------- --------- ---------
Net cash (used in) provided by investing activities ............... (1,887) 23,173 (761)
FINANCING ACTIVITIES
Payments on mortgage notes payable ................................ $ (5,898) $ (5,748) $ (7,857)
Repayment of mortgage notes payable ............................... (133,054) (82,470) (79,491)
Proceeds from long-term borrowings ................................ 147,032 79,643 74,100
Loan costs ........................................................ (4,520) (1,568) (1,887)
Debt extinguishment costs ......................................... (1,195) (1,766) --
Joint venture partner distributions ............................... -- (1,640) (143)
Payment of deferred interest payable .............................. -- (456) --
Due to affiliate .................................................. -- -- (103)
Repayment of note payable to affiliate of general partner ......... -- -- (978)
Distributions paid ................................................ (17,162) (9,489) --
---------- --------- ---------
Net cash used in financing activities ............................. (14,797) (23,494) (16,359)
---------- --------- ---------
Net increase (decrease) in cash and cash equivalents .............. 9,345 20,382 (4,024)
Cash and cash equivalents at beginning of year .................... 34,735 14,353 18,377
---------- --------- ---------
Cash and cash equivalents at end of year .......................... $ 44,080 $ 34,735 $ 14,353
========== ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest ............................................ $ 28,270 $ 32,842 $ 33,956
========== ========= =========
Property improvements and replacements in notes payable ........... $ -- $ 39 $ --
========== ========= =========

F-42

NATIONAL PROPERTY INVESTORS AND
CENTURY PROPERTIES PARTNERSHIPS

COMBINED STATEMENTS OF CASH FLOWS (CONTINUED)
(DOLLARS IN THOUSANDS)

YEAR ENDED DECEMBER 31,
----------------------------------
1996 1995 1994
---------- --------- ---------

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES
Accrued interest added to note principal ........................... $ -- $ -- $2,139
======== ====== ======
Replacement reserve holdback from proceeds of mortgage
refinancing ....................................................... $ -- $ -- $ 225
======== ====== ======
Property sales expenses accrued .................................... $ -- $ 91 $ --
======== ====== ======
Accrued interest assumed by purchaser of disposed property ......... $ 667 $ -- $ --
======== ====== ======
Mortgage note assumed by purchaser of disposed property ............ $ 2,173 $ -- $ --
======== ====== ======
Mortgage assumed on property sale .................................. $ -- $7,359 $ --
======== ====== ======
Accrued distribution to partners ................................... $ 12,581 $ -- $ --
======== ====== ======

See accompanying notes and auditors' report.

F-43

NATIONAL PROPERTY INVESTORS AND
CENTURY PROPERTIES PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1996

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization of Insignia Properties Trust

Insignia Properties Trust ("IPT" or the "Company") was formed in 1996 by
Insignia Financial Group, Inc. ("Insignia") for the purpose of acquiring and
owning interests in multifamily residential properties located throughout the
United States, including limited and general partner interests in partnerships
which hold such real estate properties. IPT has been organized in a manner that
will allow it to be taxed as a real estate investment trust ("REIT") under the
Internal Revenue Code of 1986 beginning with the taxable year ended December
31, 1996. Insignia and its affiliates have transferred to IPT equity interests
in entities comprising or controlling the general partners of 46 public real
estate limited partnerships (the "Equity Partnerships") in exchange for shares
of beneficial interest of IPT. IPT has also issued common shares to Insignia
and certain of its employees and affiliates in exchange for the payment of
certain obligations of IPT. Insignia also transferred its limited partnership
interests in certain limited partnerships, including National Property
Investors and Century Properties Partnerships (defined below), to Insignia
Properties L.P. ("IPLP") in exchange for units in IPLP.

IPT is 98% owned by Insignia, with the remainder of its shares owned by
Metropolitan Asset Enhancement L.P. (an affiliated company) or certain Insignia
employees. As of December 31, 1996, IPLP is owned 57% by IPT with Insignia
owning the remaining 43%.

Basis of Presentation

The accompanying combined financial statements include the assets,
liabilities and results of operations of 13 partnerships that Insignia acquired
limited (and general) partnership interests in January 1996 as a result of an
acquisition. Such combined group is herein referred to as the National Property
Investors ("NPI") and Century Properties Partnerships ("CP") (the
"Partnerships"). These Partnerships are part of the Equity Partnerships
mentioned above.

The Partnerships included in these combined financial statements and
IPLP's limited partnership ownership interest in each, as of December 31, 1996,
are as follows:

APPROXIMATE
OWNERSHIP
PARTNERSHIP PERCENTAGE
- - --------------------------------------------------------------------- ------------

National Property Investors III ("NPI III") ............... 45%
National Property Investors 4 ("NPI 4") ................... 54%
National Property Investors 5 ("NPI 5") ................... 46%
National Property Investors 6 ("NPI 6") ................... 44%
National Property Investors 7 ("NPI 7") ................... 42%
National Property Investors 8 ("NPI 8") ................... 37%
Century Properties Fund XIV ("CPF XIV") ................... 41%
Century Properties Fund XV ("CPF XV") ..................... 40%
Century Properties Fund XVI ("CPF XVI") ................... 37%
Century Properties Fund XVII ("CPF XVII") ................. 34%
Century Properties Fund XVIII ("CPF XVIII") ............... 29%
Century Properties Fund XIX ("CPF XIX") ................... 27%
Century Properties Growth Fund XXII ("CPGF XXII") ......... 20%

The ownership interests in CPF XIV and CPF XV do not include commercial
properties. IPLP did not acquire an economic interest in those properties.

F-44

NATIONAL PROPERTY INVESTORS AND
CENTURY PROPERTIES PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

The condensed, combined balance sheets of the commercial properties in CPF
XIV and CPF XV at December 31, 1996 and 1995; and the condensed, combined
statements of operations of the commercial properties in CPF XIV and CPF XV for
the years ended December 31, 1996, 1995 and 1994 are summarized as follows (in
thousands):

DECEMBER 31,
----------------------
1996 1995
--------- ----------

Total assets, primarily real estate at December 31, 1996 and 1995 ..... $6,733 $18,575
====== =======
Liabilities, primarily mortgages payable .............................. $4,176 $11,257
Equity ................................................................ 2,557 7,318
------ -------
Total liabilities and equity .......................................... $6,733 $18,575
====== =======

YEARS ENDED DECEMBER 31,
---------------------------------
1996 1995 1994
--------- --------- ---------

Total revenue .................................. $1,889 $6,355 $5,960
Operating and other expenses ................... 715 2,476 2,452
Depreciation ................................... 549 1,483 1,437
Mortgage interest .............................. 543 1,770 1,967
------ ------ ------
Total expenses ................................. 1,807 5,729 5,856

Gain on sale of property ....................... 3,638 3,857 --
Loss on sale of property ....................... -- (592) --
------ ------ ------
Income before extraordinary item ............... 3,720 3,891 104
Extraordinary item:
Loss on early extinguishment of debt ......... (411) (189) --
------ ------ ------
Net income ..................................... $3,309 $3,702 $ 104
====== ====== ======

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Combination

The combined financial statements include all of the accounts of the
Partnerships and all majority owned partnerships. All significant
interpartnership balances have been eliminated.

Use of Estimates

Depreciation

Depreciation is provided by the straight-line method over the estimated
lives of the rental properties and related personal property ranging from 5 to
39 years.

Deferred Costs

Deferred costs represent deferred financing costs and deferred leasing
commissions and are included in other assets. Deferred financing costs are
amortized as interest expense over the lives of the related loans, or expensed,
if financing is not obtained. Deferred leasing commissions are amortized over
the life

F-45

NATIONAL PROPERTY INVESTORS AND
CENTURY PROPERTIES PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

of the applicable lease. Such amortization is charged to operating expenses. As
of December 31, 1996 and 1995, accumulated amortization of deferred costs
totaled approximately $2,548,000 and $3,933,000, respectively.

Cash and Cash Equivalents

The Partnership considers all highly liquid investments with an original
maturity of three months or less at the time of purchase to be cash
equivalents. At certain times, the amount of cash deposited at a bank may
exceed the limit of insured deposits.

Leases

The Partnerships generally lease apartment units for twelve-month terms or
less and lease commercial units with remaining lease terms of up to five years.
The Partnership recognized income as earned on its leases.

Investment Properties

The Partnerships have adopted FASB Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,"
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. For the year ended December 31, 1994, an adjustment for
impairment of value of $500,000 was recorded. The impairment loss is measured
by comparing the fair value of the asset to its carrying amount. The effect of
adoption was not material.

Discounts on Notes Payable

Discounts on notes payable are amortized using the straight-line method
over the remaining terms of the related notes.

Income Taxes

Taxable income or loss of the Partnerships is reported in the income tax
returns of its partners. Accordingly, no provision for income taxes is made in
the financial statements of the Partnerships.

The tax basis of the Partnerships' assets and liabilities is approximately
$27.6 million less than the assets and liabilities as reported in the financial
statements.

The aggregate cost of the Real Estate for Federal income tax purposes at
December 31, 1996 and 1995, respectively, is approximately $662.2 million and
$675.7 million. The accumulated depreciation taken for Federal income tax
purposes at December 31, 1996 and 1995, respectively, is approximately $453.1
million and $445.8 million.

Advertising

The Partnerships expense the costs of advertising as incurred.

Fair Value

The Partnerships have implemented FASB Statement No. 107, "Disclosure
about Fair Value of Financial Instruments," which requires disclosure of fair
value information about financial instruments for which it is practicable to
estimate that value. The carrying amount of the Partnerships' financial
instruments (except for long term debt) approximates fair value due to
short-term maturities. The fair value of the Partnerships long term debt after
discounting the scheduled loan payments to maturity, approximates its carrying
balance.

F-46

NATIONAL PROPERTY INVESTORS AND
CENTURY PROPERTIES PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

General and Limited Partner Allocations

Profits, gains, losses and cash distributions are allocated between
general and limited partners in accordance with the provisions of the
respective partnership agreements. Upon sale of all properties and termination
of a Partnership, the general partners may be required to contribute certain
funds to the Partnership in accordance with the partnership agreement.

3. MORTGAGES PAYABLE

Mortgages payable, which are collateralized by substantially all
investment properties are summarized as follows:

DECEMBER 31,
-------------------------
1996 1995
----------- -----------
(DOLLARS IN THOUSANDS)

First mortgages with fixed interest rates ranging from 7.00% to 7.33%, due
at various dates through June 2021 ....................................... $103,685 $ 6,963
First mortgages with fixed interest rates ranging from 7.50% to 8.00%,
maturing at various dates through September 2021 ......................... 112,011 87,237
First and second mortgages with fixed interest rates ranging from 8.25% to
8.50%, due at various dates through July 2005 ............................ 54,538 72,346
First mortgages with fixed interest rates ranging from 8.56% to 9.00%, due
at various dates through December 2008 ................................... 26,092 46,080
First mortgages with fixed interest rates ranging from 9.38% to 10.64%, due
at various dates through February 2002 ................................... 41,202 59,762
First and second mortgages with fixed and variable interest rates, due at
various dates ............................................................ 30,465 88,394
-------- --------
367,993 360,782
Less: unamortized discounts ............................................... (4,608) (5,847)
-------- --------
Total mortgages payable ................................................... $363,385 $354,935
======== ========

The estimated fair value of the Partnerships' aggregate debt approximates
its carrying value. This estimate is not necessarily indicative of the amounts
the Partnerships may pay in actual market transactions.

During 1996, 1995 and 1994, various properties were either sold or
refinanced, which resulted in the Partnerships' recording extraordinary losses
of approximately $2,704,000 (1996), $3,158,000 (1995) and $361,000 (1994). The
extraordinary losses were incurred as a result of writing off unamortized loan
costs and prepayment premiums related to the old mortgages.

Annual principal payments and maturities for all mortgages payable as of
December 31, 1996 are as follows (in thousands):

1997 ............... $ 22,201
1998 ............... 2,770
1999 ............... 24,317
2000 ............... 44,652
2001 ............... 45,368
Thereafter ......... 228,685
--------
$367,993
========

F-47

NATIONAL PROPERTY INVESTORS AND
CENTURY PROPERTIES PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

The mortgages payable are nonrecourse and are secured by pledge of the
respective rental properties and by pledge of revenues from the respective
properties. Also, substantially all of the mortgages require prepayment
penalties if repaid prior to maturity and prohibit resale of the properties
subject to existing indebtedness.

As of December 31, 1996, one partnership was in default of a mortgage of
approximately $4,557,000 and in January 1997 two mortgages amounting to
approximately $12,510,000 on the same property were in default. The combined
carrying value of these properties at December 31, 1996 was approximately
$11,230,000.

4. TRANSACTIONS WITH AFFILIATES

The Partnerships have no employees and are dependent on the Corporate
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 as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnerships.

Transactions with Insignia, NPI, and affiliates of Insignia and NPI in
1996, 1995 and 1994 are as follows (in thousands):

DECEMBER 31,
---------------------------------
1996 1995 1994
--------- --------- ---------

Property management fees ................................ $5,687 $5,552 $4,758
Reimbursement for services of affiliates ................ 2,326 2,701 2,658
Property insurance premiums ............................. -- 3,218 1,054
Included in reimbursements for services of affiliates for
construction oversight costs ........................... 146 -- --
Brokerage fees .......................................... 1,057 181 --
Included in reimbursements for services of affiliates for
loan costs ............................................. 83 -- --
Partnership management fees ............................. 7 -- --
Management and operation fees paid to joint venture
partners ............................................... -- -- 104
Fees for real estate tax appeals ........................ -- 135 14
Administrative fees ..................................... 185 -- --

For the period of January 19, 1996 to December 31, 1996, the Partnerships
insured their properties under a master policy through an agency and insurer
unaffiliated with the Corporate General Partner. An affiliate of the Corporate
General Partner acquired, in the acquisition of a business, certain financial
obligations from an insurance agency which was later acquired by the agent who
placed the current year's master policy. The current agent assumed the
financial obligations to the affiliate of the Corporate General Partner who
receives payment on these obligations from the agent. The amount of the
Partnerships' insurance premiums accruing to the benefit of the affiliate of
the Corporate General Partner by virtue of the agent's obligations is not
significant.

Prior to January 19, 1996, the Partnerships paid insurance premiums to the
Corporate General Partner under a master insurance policy arranged for by the
Corporate General Partner.

An affiliate of the Corporate General Partner has established a revolving
credit facility (the "Partnership Revolver"), with each NPI Partnership, to be
used to fund deferred maintenance and working capital needs of the NPI
Partnerships. The maximum draw available to the NPI Partnerships under the
Partnership Revolver is $2,800,000. In addition, an affiliate of the Corporate
General Partner

F-48

NATIONAL PROPERTY INVESTORS AND
CENTURY PROPERTIES PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

has established a working capital line of credit for the CP Partnerships of
$150,000 per property. The maximum draw available to the CP Partnerships under
this credit facility was $5,100,000 at December 31, 1996. There has been no
loan activity or outstanding balances under these credit facilities during the
three year period ended December 31, 1996.

5. SALE OR DISPOSITION OF REAL ESTATE

On January 5, 1997, CPF XV sold Phoenix Business Park to an unrelated
third party for a contract price of $5,600,000. After payment of the mortgage
payable, closing costs and related expenses, CPF XV received proceeds of
approximately $2,314,000. A gain of approximately $1,000 will be recognized in
1997 on disposition of the property. A loss on early extinguishment of debt of
approximately $233,000 will be recognized in 1997.

On April 26, 1996, CPF XIV sold The Oaks Shopping Center, located in
Beaumont, Texas. The buyer of the property assumed the outstanding debt on the
property, and CPF XIV received net proceeds of $1,000. As a result of the sale,
CPF XIV paid a disposition fee of approximately $16,000. For financial
statement purposes, the sale resulted in a gain of $65,000. The Partnership had
recorded an $883,000 provision for impairment in 1992.

On March 7, 1996, CPF XIV sold Broadway Trade Center located in San
Antonio, Texas, to an unaffiliated third party for $3,825,000. After repayment
of the first, second and third mortgages totaling $1,591,000 and closing
expenses of $244,000, the net proceeds received by CPF XIV were $1,990,000. As
a result of the loans being paid in full, an extraordinary loss representing
the remaining unamortized mortgage discount of $315,000 was recorded. For
financial statement purposes, the sale resulted in a gain of $1,531,000. CPF
XIV had previously recorded a $1,421,000 provision for impairment of value for
the property.

On February 12, 1996, CPF XIV sold University Square, located in Bozeman,
Montana, to an unaffiliated third party for $4,850,000. After closing expenses
of $231,000, the net proceeds received by CPF XIV were $4,619,000. For
financial statement purposes, the sale resulted in a gain of $1,416,000.

On February 1, 1996, CPF XV sold Northbank Office Complex, located in
Eugene, Oregon, to an unaffiliated third party for $4,605,000. After payment of
the mortgage totaling approximately $2,443,000 and closing expenses, the net
proceeds received by CPF XV were approximately $1,992,000. For financial
statement purposes, the sale resulted in a gain on disposal of property of
approximately $881,000 and an extraordinary loss on early extinguishment of
debt of approximately $96,000.

On December 29, 1995, CPF XV sold Farmers Lane Plaza, located in Santa
Rosa, California, to an unaffiliated third party for $8,750,000. Net proceeds
to CPF XV after payment of closing costs and existing debt were approximately
$3,995,000. The sale resulted in a gain of $3,618,000. Subsequent to the
closing, CPF XV paid $255,000 in additional costs in connection with the sale.

On November 9, 1995, CPF XIV sold Wingren Plaza, located in Dallas, Texas,
for $1,000,000. After closing expenses of $68,000, the net proceeds received by
CPF XIV were $932,000. For financial statement purposes, the sale resulted in a
gain of $239,000. CPF XIV had previously recorded a $1,901,000 provision for
impairment of value in 1991.

On October 6, 1995, CPF XIV sold Duck Creek Shopping Center, located in
Garland, Texas, for $2,250,000. After closing expenses of $138,000, the net
proceeds received by CPF XIV were $2,112,000. For financial statement purposes,
the sale resulted in a loss of $36,000.

On September 12, 1995, CPF XIV sold Greenbriar Plaza Shopping Center,
located in Duncanville, Texas, for $1,050,000. After closing expenses of
$70,000, the net proceeds received by CPF XIV were $980,000. For financial
statement purposes, the sale resulted in a loss of $556,000.

F-49

NATIONAL PROPERTY INVESTORS AND
CENTURY PROPERTIES PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

On April 12, 1995, an affiliate of CPF XV's joint venture partner in
Plumtree Apartments acquired, pursuant to a right of first refusal, Plumtree
Apartments for $12,500,000. After repayment of existing loans of $4,595,000, a
prepayment premium of $42,000 and closing expenses of $113,000, net proceeds
received by the joint venture were $7,750,000. CPF XV retained $6,229,000 of
the $7,750,000 proceeds in accordance with the joint venture agreement. For
financial statement purposes, the sale resulted in a gain of $7,866,000.

On August 18, 1995, CPGF XXII sold Monterey Village Apartments to an
unaffiliated third party for $10,609,000. After assumption of the mortgage
balance of $7,359,000 and closing costs, CPGF XXII received net proceeds of
$2,926,000. For financial reporting purposes, the sale resulted in a gain on
disposition of $2,033,000. CPGF XXII also recognized an extraordinary loss on
extinguishment of debt of $217,000 in 1995 due to the write-off of unamortized
loan costs.

On January 28, 1994, NPI 7 sold its California property to an unaffiliated
third party, subject to the first and second mortgages. NPI 7's share of the
proceeds after closing expenses was $2,866,000. The sale resulted in a gain of
approximately $105,000. NPI 7 had recorded a $525,000 provision for loss on
disposition of this property during 1992. Net cash proceeds to NPI 7, after
closing expenses and $239,000 to purchase the third mortgage, at a discount
were approximately $277,000.

On January 28, 1994, NPI 8 sold its California property to an unaffiliated
third party, subject to the first and second mortgages. NPI 8's share of the
proceeds after closing expenses was $5,819,000. The sale resulted in a gain of
approximately $229,000. NPI 8 had recorded a $1,063,000 provision for loss on
disposition of this property during 1992. Net cash proceeds to NPI 8, after
deducting closing expenses and $486,000 to purchase the third mortgage at a
discount, were approximately $563,000.

In February 1994, CPF XIX sold Plantation Forest Apartments, located in
Atlanta, Georgia for $2,450,000. After assumption of the existing loan of
$1,965,000 and costs of sale of $3,000, the proceeds to CPF XIX were $482,000.
The net loss on the sale was $149,000.

In February 1994, CPF XVIII sold Plantation Ridge Apartments, located in
Marietta, Georgia for $15,353,000. The existing loans of $13,653,000 were
assumed by the buyer at the time of sale. After assumption of the existing
loans and costs of the sale of $210,000, proceeds to CPF XVIII were $1,490,000.
For financial statement purposes, CPF XVIII recorded a $1,246,000 gain on sale
of property.

6. OPERATING LEASES

The Partnerships lease their residential properties under short-term
operating leases. Lease terms are generally one year or less in duration. The
Partnership expects that in the normal course of business, these leases will be
renewed or replaced by other leases. Commercial office property leases vary
from periods ranging up to five years. The future minimum rental payments to be
received under operating leases that have initial or remaining noncancelable
lease terms in excess of one year as of December 31, 1996, are as follows (in
thousands):

1997 ................. $279
1998 ................. 230
1999 ................. 110
2000 ................. 73
2001 ................. 45
Thereafter ........... --
----
$737
====

F-50

NATIONAL PROPERTY INVESTORS AND
CENTURY PROPERTIES PARTNERSHIPS

NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)

For commercial leases with scheduled rental increases, rental income is
recognized on a straight-line basis over the life of the applicable leases.
There is no assurance that this income will continue at the same level when the
leases expire.

7. DISTRIBUTION PAYABLE

NPI 6 declared a distribution of approximately $10,621,000 in 1996 payable
to its partners. The distribution was paid in January 1997, with approximately
$10,515,000 being paid to the limited partners and approximately $106,000 being
paid to the Corporate General Partner. The distribution was from net proceeds
from mortgage refinancings and cash from operations.

NPI 7 declared a distribution of approximately $1,960,000 in 1996 payable
to its partners. The distribution was paid in January 1997, with approximately
$1,940,000 being paid to the limited partners and $20,000 being paid to the
Corporate General Partner.

F-51

SCHEDULE III

NATIONAL PROPERTY INVESTORS AND CENTURY PROPERTIES PARTNERSHIPS

REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)

INITIAL COST
------------------------
COST
CAPITALIZED
BUILDINGS AND (REMOVED)
PERSONAL SUBSEQUENT TO
ENCUMBRANCES LAND PROPERTY ACQUISITION
-------------- -------- --------------- ---------------

Alpine Village
Birmingham, AL ........... $ 2,100 $ 359 $ 3,515 $ 1,096
Autumn Run Apts.
Naperville, IL ........... 9,100 1,462 14,957 1,003
Cherry Creek Gardens Apts.
Englewood, CA ............ 7,766 1,320 11,879 1,448
Colony at Kenilworth
Towson, MA ............... 7,985 1,306 13,187 4,881
Cooper's Pointe Apts.
Charleston, SC ........... 4,217 513 6,696 191
Cooper's Pond Apts.
Tampa, FL ................ 7,771 1,476 12,505 216
Copper Mill Apts.
Richmond, VA ............. 6,052 933 8,061 333
Creekside Apts.
Denver, CO ............... 5,249 1,366 7,307 1,475
Fairview View I Apts.
Baton Rouge, LA .......... 4,000 762 7,048 1,115
Fairway II Apts.
Baton Rouge, LA .......... 4,200 1,086 8,788 474
Four Winds Apts.
Overland, KA ............. 9,607 1,363 14,288 531
Gateway Park
Dublin, CA ............... 1,518 484 1,135 176
Greenspoint Apts.
Phoenix, AZ .............. 8,900 2,165 11,199 426
Hampton Green
Apts. Dallas, TX ......... 5,755 2,086 9,474 568
Huntington Apts.
Morrisville, NC .......... 3,583 1,368 9,233 715

(RESTUBBED TABLE CONTINUED FROM ABOVE)

GROSS AMOUNTS AT WHICH CARRIED AT DECEMBER 31,
1996
-------------------------------------------------
BUILDINGS AND
RELATED
PERSONAL ACCUMULATED DATE OF DATE DEPRECIABLE
LAND PROPERTY TOTAL DEPRECIATION CONSTRUCTION ACQUIRED LIFE -- YEARS
-------- -------------- ---------- -------------- -------------- ---------- --------------

Alpine Village
Birmingham, AL ........... $ 366 $ 4,604 $ 4,970 $ 3,003 1972 10/16/84 5-27.5
Autumn Run Apts.
Naperville, IL ........... 1,458 15,964 17,422 6,080 1987 6/1/86 5-30
Cherry Creek Gardens Apts.
Englewood, CA ............ 1,320 13,327 14,647 6,419 1979 9/1/82 5-30
Colony at Kenilworth
Towson, MA ............... 1,366 18,008 19,374 12,291 1967 3/15/84 5-27.5
Cooper's Pointe Apts.
Charleston, SC ........... 510 6,890 7,400 2,954 1986 11/1/85 5-30
Cooper's Pond Apts.
Tampa, FL ................ 1,315 12,882 14,197 6,593 1979-81 3/1/83 5-30
Copper Mill Apts.
Richmond, VA ............. 929 8,398 9,327 3,156 1987 9/1/86 5-30
Creekside Apts.
Denver, CO ............... 1,366 8,782 10,148 4,159 1974 10/1/82 5-30
Fairview View I Apts.
Baton Rouge, LA .......... 767 8,158 8,925 5,592 1974 5/31/84 5-27.5
Fairway II Apts.
Baton Rouge, LA .......... 1,094 9,254 10,348 4,642 1981 11/1/84 5-27.5
Four Winds Apts.
Overland, KA ............. 1,357 14,825 16,182 5,494 1987 9/1/85 5-30
Gateway Park
Dublin, CA ............... 487 1,308 1,795 684 1977 10/1/80 5-39
Greenspoint Apts.
Phoenix, AZ .............. 2,141 11,649 13,790 5,007 1986 2/1/84 6-30
Hampton Green
Apts. Dallas, TX ......... 2,086 10,042 12,128 4,375 1986 12/1/85 5-30
Huntington Apts.
Morrisville, NC .......... 1,376 9,940 11,316 3,741 1986 2/1/88 5-29

F-52

SCHEDULE III

NATIONAL PROPERTY INVESTORS AND CENTURY PROPERTIES PARTNERSHIPS

REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)

INITIAL COST
------------------------
COST
CAPITALIZED
BUILDINGS AND (REMOVED)
PERSONAL SUBSEQUENT TO
ENCUMBRANCES LAND PROPERTY ACQUISITION
-------------- -------- --------------- ---------------

Lakeside Apts.
Lisle, IL .................. 17,200 2,087 15,363 3,378
Lakeside Place Apts.
Houston, TX ................ $14,636 $3,659 $21,481 $5,025
The Landings Apts.
Tampa, FL .................. 2,282 504 4,702 519
The Lodge Apts.
Denver, CO ................. 5,775 1,575 8,580 1,808
McMillan Place Apts.
Dallas, TX ................. 12,510 2,399 10,826 548
Misty Woods Apts.
Charlotte, NC .............. 5,407 429 6,846 277
Northwood I & II Apts.
Pensacola, FL .............. 5,000 478 7,919 991
Oak Run Apts.
Dallas, TX ................. 10,626 6,218 8,713 1,762
Oakwood Village
Orlando, FL ................ 4,012 589 7,181 1,626
Overlook Apts.
Salt Lake City, UT ......... 8,049 1,082 8,225 701
Palisades Apts.
Montgomery, AL ............. 4,899 970 8,448 2,444
Patchen Place Apts.
Lexington, KY .............. 3,000 706 6,409 1,286
Phoenix Business Park
Atlanta, GA ................ 2,578 746 5,176 2,412
The Pines Apts.
Roanoke, VA ................ 3,517 579 6,521 671
Pinetree Apts.
Charlotte, NC .............. 2,241 493 3,873 1,726

GROSS AMOUNTS AT WHICH CARRIED AT DECEMBER 31,
1996
------------------------------------------------
BUILDINGS AND
RELATED
PERSONAL ACCUMULATED DATE OF DATE DEPRECIABLE
LAND PROPERTY TOTAL DEPRECIATION CONSTRUCTION ACQUIRED LIFE -- YEARS
-------- -------------- --------- -------------- -------------- ---------- --------------

Lakeside Apts.
Lisle, IL .................. 2,093 18,735 20,828 13,439 1973-75 12/18/80 5-27.5
Lakeside Place Apts.
Houston, TX ................ $3,659 $26,506 $30,165 $13,811 1976-78 12/1/80 5-30
The Landings Apts.
Tampa, FL .................. 504 5,221 5,725 2,706 1979 6/1/82 5-30
The Lodge Apts.
Denver, CO ................. 1,577 10,386 11,963 4,886 1974 10/1/82 5-30
McMillan Place Apts.
Dallas, TX ................. 2,427 11,346 13,773 5,072 1985 6/1/85 6-30
Misty Woods Apts.
Charlotte, NC .............. 434 7,118 7,552 3,061 1986 6/1/85 6-30
Northwood I & II Apts.
Pensacola, FL .............. 483 8,905 9,388 4,616 1981 7/1/85 5-27.5
Oak Run Apts.
Dallas, TX ................. 6,218 10,475 16,693 5,037 1979 11/1/83 5-30
Oakwood Village
Orlando, FL ................ 595 8,801 9,396 6,501 1973 8/3/82 5-27.5
Overlook Apts.
Salt Lake City, UT ......... 1,078 8,930 10,008 4,053 1984 7/1/83 5-30
Palisades Apts.
Montgomery, AL ............. 976 10,886 11,862 8,515 1968-72 6/22/83 5-27.5
Patchen Place Apts.
Lexington, KY .............. 714 7,687 8,401 4,765 1971 7/1/85 5-27.5
Phoenix Business Park
Atlanta, GA ................ 746 7,588 8,334 3,286 1980 5/1/82 5-39
The Pines Apts.
Roanoke, VA ................ 584 7,187 7,771 4,152 1978 4/1/85 5-27.5
Pinetree Apts.
Charlotte, NC .............. 499 5,593 6,092 3,979 1974 7/80 5-27.5

F-53

SCHEDULE III

NATIONAL PROPERTY INVESTORS AND CENTURY PROPERTIES PARTNERSHIPS

REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)

INITIAL COST
-------------------------
COST
CAPITALIZED
BUILDINGS AND (REMOVED)
PERSONAL SUBSEQUENT TO
ENCUMBRANCES LAND PROPERTY ACQUISITION
-------------- --------- --------------- ---------------

Place du Plantier Apts.
Baton Rouge, LA ............ 3,800 840 7,773 1,197
Plantation Creek Apts.
Atlanta, GA ................ $15,788 $2,653 $20,827 $1,990
Preston Creek Apts.
Dallas, TX ................. 4,500 2,118 5,793 1,211
Promontory Point
Austin, TX ................. 2,840 1,690 10,129 (180)
Rocky Ridge
Birmingham, AL ............. 1,450 323 2,972 966
Sandspoint Apts.
Phoenix, AZ ................ 9,887 2,124 13,158 761
Ski Lodge Apts.
Montgomery, AL ............. 6,800 672 11,587 2,627
South Point Apts.
Durham, NC ................. 4,600 859 7,686 570
St. Charleston Village Apts.
Las Vegas, NV .............. 6,210 751 7,322 1,423
Stoney Creek Apts.
Dallas, TX ................. 6,995 1,803 12,509 (260)
Summerhill Apts.
Dallas, TX ................. 2,930 1,003 6,069 830
Summerwalk Apts.
Winter Park, FL ............ 4,557 427 6,347 561
Sun River Apts.
Tempe, AZ .................. 6,278 1,102 8,770 784
Sunrunner Apts.
St. Petersburg, FL ......... 3,250 634 6,485 145
Torrey Pines Village Apts.
Las Vegas, NV .............. 3,697 460 4,595 1,020

GROSS AMOUNTS AT WHICH CARRIED AT DECEMBER 31,
1996
--------------------------------------------------
BUILDINGS AND
RELATED
PERSONAL ACCUMULATED DATE OF DATE DEPRECIABLE
LAND PROPERTY TOTAL DEPRECIATION CONSTRUCTION ACQUIRED LIFE -- YEARS
--------- -------------- ---------- -------------- -------------- ---------- --------------

Place du Plantier Apts.
Baton Rouge, LA ............ 844 8,966 9,810 6,204 1974 5/1/84 5-27.5
Plantation Creek Apts.
Atlanta, GA ................ $2,655 $22,815 $25,470 $10,025 1977-78 6/1/84 5-30
Preston Creek Apts.
Dallas, TX ................. 2,107 7,015 9,122 3,466 1979 8/1/81 5-30
Promontory Point
Austin, TX ................. 1,595 10,044 11,639 4,294 1984 10/1/85 5-30
Rocky Ridge
Birmingham, AL ............. 330 3,931 4,261 2,670 1973 10/16/84 5-27.5
Sandspoint Apts.
Phoenix, AZ ................ 2,146 13,897 16,043 6,058 1986 2/1/84 6-30
Ski Lodge Apts.
Montgomery, AL ............. 676 14,210 14,886 9,403 1977 7/19/84 5-27.5
South Point Apts.
Durham, NC ................. 863 8,252 9,115 4,197 1980 3/1/86 5-27.5
St. Charleston Village Apts.
Las Vegas, NV .............. 743 8,753 9,496 4,920 1980 9/1/79 5-30
Stoney Creek Apts.
Dallas, TX ................. 1,689 12,363 14,052 5,461 1983 6/1/85 5-30
Summerhill Apts.
Dallas, TX ................. 999 6,903 7,902 3,600 1979 8/1/81 5-30
Summerwalk Apts.
Winter Park, FL ............ 431 6,904 7,335 4,806 1974 12/24/80 5-27.5
Sun River Apts.
Tempe, AZ .................. 1,090 9,566 10,656 5,169 1981 11/1/80 5-30
Sunrunner Apts.
St. Petersburg, FL ......... 587 6,677 7,264 3,160 1981 7/1/84 6-30
Torrey Pines Village Apts.
Las Vegas, NV .............. 455 5,620 6,075 3,095 1980 9/1/79 5-30

F-54

SCHEDULE III

NATIONAL PROPERTY INVESTORS AND CENTURY PROPERTIES PARTNERSHIPS

REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)

INITIAL COST
--------------------------
COST
CAPITALIZED
BUILDINGS AND (REMOVED)
PERSONAL SUBSEQUENT TO
ENCUMBRANCES LAND PROPERTY ACQUISITION
-------------- ---------- --------------- ---------------

The Village Apts.
Voorhees Township, NJ ......... 11,058 1,307 17,121 2,632
The Village in the Woods
Apts. Cypress, TX ............. $ 9,813 $ 2,852 $ 20,915 $ (9,497)
Village of Pennbrook
Falls Township, PA ............ 19,300 1,972 18,245 5,505
Williamsburg on the Lake
Indianapolis, IN .............. 7,400 590 14,822 2,808
Willow Park Altamonte
Springs, FL ................... 2,968 567 5,218 1,073
Wood Creek Apts.
Mesa, AZ ...................... 12,810 2,130 13,440 535
Wood Lake Apts.
Atlanta, GA ................... 7,649 1,206 10,980 612
Wood Ridge Apts.
Atlanta, GA ................... 8,883 1,632 12,321 781
Woods of Inverness Apts.
Houston, TX ................... 5,205 1,292 10,305 (2,622)
Plantation Crossing Apts.
Atlanta, GA ................... 5,182 1,062 7,576 417
-------- ------- -------- --------
$363,385 $72,632 $532,500 $ 55,711
======== ======= ======== ========

GROSS AMOUNTS AT WHICH CARRIED AT DECEMBER 31, 1996
----------------------------------------------------
BUILDINGS AND
RELATED
PERSONAL ACCUMULATED DATE OF DATE DEPRECIABLE
LAND PROPERTY TOTAL DEPRECIATION CONSTRUCTION ACQUIRED LIFE -- YEARS
---------- -------------- ----------- -------------- -------------- ---------- --------------

The Village Apts.
Voorhees Township, NJ ......... 1,329 19,731 21,060 10,703 1979-80 1/5/84 5-27.5
The Village in the Woods
Apts. Cypress, TX ............. $ 1,500 $ 12,770 $ 14,270 $ 6,083 1983 10/1/82 5-30
Village of Pennbrook
Falls Township, PA ............ 1,980 23,742 25,722 17,026 1973 12/15/81 5-27.5
Williamsburg on the Lake
Indianapolis, IN .............. 594 17,626 18,220 10,174 1974-76 3/1/86 5-27
Willow Park Altamonte
Springs, FL ................... 574 6,284 6,858 4,533 1973 12/13/82 5-27.5
Wood Creek Apts.
Mesa, AZ ...................... 2,117 13,988 16,105 6,339 1985 5/1/84 5-30
Wood Lake Apts.
Atlanta, GA ................... 1,206 11,592 12,798 5,299 1983 12/1/83 5-30
Wood Ridge Apts.
Atlanta, GA ................... 1,632 13,102 14,734 5,875 1982 4/1/84 6-30
Woods of Inverness Apts.
Houston, TX ................... 905 8,070 8,975 4,167 1981 7/1/82 5-30
Plantation Crossing Apts.
Atlanta, GA ................... 1,062 7,993 9,055 3,614 1980 6/84 6-30
------- -------- -------- --------
$70,634 $590,209 $660,843 $312,410
======= ======== ======== ========

F-55

NATIONAL PROPERTY INVESTORS AND
CENTURY PROPERTIES PARTNERSHIPS

REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)

DECEMBER 31,
-----------------------------------------
1996 1995 1994
------------ ------------ -----------

RECONCILIATION OF REAL ESTATE
Balance at beginning of year ........................... $ 670,026 $ 700,437 $ 730,969
Property improvements ................................. 10,853 6,215 7,570
Revaluation allowance on rental property sold ......... -- -- (3,073)
Cost of rental property disposed of ................... -- -- (20,288)
Disposal of properties ................................ (20,036) (36,625) (14,741)
--------- --------- ---------
Balance at end of year ................................. $ 660,843 $ 670,027 $ 700,437
========= ========= =========
RECONCILIATION OF ACCUMULATED DEPRECIATION
Balance at beginning of year ........................... $ 298,584 $ 289,734 $ 278,090
Additions charged to expense .......................... 22,464 23,551 24,382
Allowance for impairment of rental properties sold or
disposed of ......................................... -- -- (7,445)
Disposal of properties ................................ (8,638) (14,699) (5,293)
--------- --------- ---------
Balance at end of year ................................. $ 312,410 $ 298,586 $ 289,734
========= ========= =========

F-56

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Trustees of
Angeles Mortgage Investment Trust

We have audited the accompanying balance sheets of Angeles Mortgage Investment
Trust (the "Trust") as of December 31, 1997 and 1996, and the related
statements of operations, changes in shareholders' equity and cash flows for
each of the three years in the period ended December 31, 1997. We have also
audited schedules III and IV. These financial statements and schedules are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on the financial statements and schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and schedules are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements and
schedules. An audit also includes assessing the accounting principles used and
significant estimates made by the Trust's management, as well as evaluating the
overall presentation of the financial statements and schedules. We believe that
our audits provide a reasonable basis for our opinion.

At December 31, 1997, 50 percent of the Trust's notes receivable are due from
partnerships which affiliates of Insignia Financial Group, Inc. ("Insignia")
are the general partner. As discussed in Note 10, the Trust and an Insignia
affiliate (Insignia Properties Trust) have executed a merger agreement subject
to the approval of the Trust shareholders. If the merger is approved, the
Trust's business activities as it relates to these related party notes
receivable may be impacted due to overlapping management.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Trust at December 31, 1997
and 1996, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1997, in conformity with generally
accepted accounting principles.

Also, in our opinion the schedules present fairly, in all material respects,
the information set forth therein.

BDO Seidman, LLP

Dallas, Texas
January 15, 1998

F-57

ANGELES MORTGAGE INVESTMENT TRUST
BALANCE SHEETS

DECEMBER 31
-------------------------------
NOTES 1997 1996
----- ---- ----

ASSETS

Notes receivable 2,3,5,6
Mortgage notes receivable, (including
$16,344,000 and $16,791,000 due from affiliates
in 1997 and 1996) $ 39,347,000 $ 26,043,000
Promissory notes receivable, (including
$6,714,000 and $10,650,000 due from affiliates
in 1997 and 1996) 6,789,000 14,175,000
-------------- --------------

46,136,000 40,218,000
Allowance for estimated losses (8,826,000) (12,100,000)
-------------- --------------

37,310,000 28,118,000
Foreclosed real estate held for sale 4 4,521,000 5,070,000
Cash and cash equivalents 3,947,000 9,789,000
Accrued interest receivable 654,000 174,000
Prepaid expenses and other 98,000 224,000
-------------- --------------

Total assets $ 46,530,000 $ 43,375,000
============== ==============

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
Accounts payable and accrued expenses $ 588,000 $ 287,000
-------------- --------------

Total liabilities 588,000 287,000
-------------- --------------

Commitments and contingencies 1,2,3,4,6,10
- -

Shareholders' equity: 8,9
Class A Shares (2,617,000 in 1997 and 1996,
issued and outstanding, $1.00 par value,
unlimited shares authorized) 2,617,000 2,617,000
Class B Shares (1,675,113 issued and outstanding,
$.01 value, unlimited shares authorized) 14,000 14,000
Additional paid-in capital 50,199,000 50,199,000
Accumulated distributions in excess of cumulative net
income (6,888,000) (9,742,000)
-------------- --------------
Total shareholders' equity 45,942,000 43,088,000
-------------- --------------

Total liabilities and shareholders' equity $ 46,530,000 $ 43,375,000
============== ==============

The accompanying notes are an integral part of the financial statements.

F-58

ANGELES MORTGAGE INVESTMENT TRUST
STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31
-------------------------------------------
1997 1996 1995
------------ ------------ ------------

REVENUE:
Interest income (including $2,954,000, $2,405,000, and $1,710,000
from affiliates in 1997, 1996 and 1995, respectively) $ 5,109,000 $ 6,419,000 $ 3,017,000
Rental income 266,000 321,000 96,000
Gain from sale of real property 80,000 184,000 435,000
Recovery of bad debt from Angeles Corporation settlement -- -- 12,844,000
Recovery of other bad debts 1,744,000 3,126,000 3,110,000
------------ ------------ ------------
Total revenue 7,199,000 10,050,000 19,502,000
------------ ------------ ------------

COSTS AND EXPENSES:
Property operating expenses 56,000 180,000 262,000
Loss from sale of real property -- -- 3,000
Interest expense to bank -- -- 227,000
Legal expenses 393,000 (257,000) 851,000
General and administrative 958,000 858,000 835,000
Amortization 63,000 44,000 35,000
Income taxes 180,000 139,000 --
------------ ------------ ------------
Total costs and expenses 1,650,000 964,000 2,213,000
------------ ------------ ------------

INCOME BEFORE EXTRAORDINARY ITEM 5,549,000 9,086,000 17,289,000
EXTRAORDINARY ITEM - Debt forgiveness -- -- 1,844,000
------------ ------------ ------------
NET INCOME $ 5,549,000 $ 9,086,000 $ 19,133,000
============ ============ ============

PER CLASS A SHARE:
Net income before extraordinary $ 2.10 $ 3.33 $ 5.77
Extraordinary item -- -- 0.61
------------ ------------ ------------
Net income $ 2.10 $ 3.33 $ 6.38
============ ============ ============
Cash distributions $ 1.03 $ 0.52 $ --
============ ============ ============
Weighted average Class A Shares 2,617,000 2,704,375 2,968,532
============ ============ ============

The accompanying notes are an integral part of the financial statements.

F-59

ANGELES MORTGAGE INVESTMENT TRUST
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

ACCUMULATED
DISTRIBUTIONS IN
ADDITIONAL EXCESS OF
CLASS A CLASS B PAID-IN CUMULATIVE NET
SHARES SHARES CAPITAL INCOME TOTAL
------------ ------------ ------------ ---------------- ------------

Balance at January 1, 1995 $ 3,394,000 $ 14,000 $ 55,656,000 $(36,554,000) $ 22,510,000
Class A Shares received from (567,000) -- (3,687,000) -- (4,254,000)
Angeles Corporation settlement
Purchase of Class B Share Option (250,000) -- (250,000)
Net income -- -- 19,133,000 19,133,000
------------ ------------ ------------ ------------ ------------
Balance at December 31, 1995 2,827,000 14,000 51,719,000 (17,421,000) 37,139,000
Purchase of Class A Shares (210,000) (1,520,000) -- (1,730,000)
Net income -- -- -- 9,086,000 9,086,000
Cash distributions -- -- -- (1,407,000) (1,407,000)
------------ ------------ ------------ ------------ ------------
Balance at December 31, 1996 2,617,000 14,000 50,199,000 (9,742,000) 43,088,000
Net income -- -- -- 5,549,000 5,549,000
Cash distributions -- -- -- (2,695,000) (2,695,000)
------------ ------------ ------------ ------------ ------------
Balance at December 31, 1997 $ 2,617,000 $ 14,000 $ 50,199,000 $ (6,888,000) $ 45,942,000
------------ ------------ ------------ ------------ ------------

The accompanying notes are an integral part of the financial statements.

F-60

ANGELES MORTGAGE INVESTMENT TRUST
STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31
--------------------------------------------
1997 1996 1995
---- ---- ----

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,549,000 $ 9,086,000 $ 19,133,000
ADJUSTMENTS TO RECONCILE NET INCOME TO CASH FLOWS
FROM OPERATING ACTIVITIES:
- - --------------------------
Net gain from sale of real property (80,000) (184,000) (432,000)
Amortization 63,000 44,000 35,000
Recovery of bad debt (1,744,000) (3,126,000) (15,954,000)
Interest income in exchange of notes receivable or real property (864,000) (3,708,000) (501,000)
Extraordinary gain -- -- (1,844,000)
Decrease (increase) in interest receivable (480,000) 87,000 (108,000)
Decrease (increase) in prepaid expenses and other 64,000 215,000 (326,000)
(Decrease) increase in accounts payable and accrued expenses 301,000 94,000 (61,000)
Increase (decrease) in unearned loan fee income 115,000 56,000 (38,000)
------------ ------------ ------------
Cash flows from (used in) operating activities 2,924,000 2,564,000 (96,000)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of foreclosed real estate (37,000) -- (355,000)
Funding of notes receivable (14,251,000) (2,968,000) --
Principal collections of notes receivable 7,552,000 10,256,000 9,056,000
Proceeds from sale of real estate 665,000 1,845,000 1,952,000
Investment in securities -- (979,000) --
Principal collections of investment in securities -- 979,000 --
------------ ------------ ------------
Cash flows from (used in) investing activities (6,071,000) 9,133,000 10,653,000
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Draw on bank line of credit -- 430,000 --
Repayment of bank line of credit -- (430,000) (3,500,000)
Repayment of cash advances from affiliate partnerships -- -- (6,682,000)
Purchase of Class B share option -- -- (250,000)
Distributions to shareholders (2,695,000) (1,407,000) --
Purchase of Class A shares -- (1,730,000) --
------------ ------------ ------------
Cash flows used in financing activities (2,695,000) (3,137,000) (10,432,000)
------------ ------------ ------------
Increase (decrease) in cash and cash equivalents (5,842,000) 8,560,000 125,000
Cash and cash equivalents:
At beginning of period 9,789,000 1,229,000 1,104,000
------------ ------------ ------------
At end of period $ 3,947,000 $ 9,789,000 $ 1,229,000
============ ============ ============
Supplemental operating cash flow disclosure:
Cash received for interest $ 3,765,000 $ 2,798,000 $ 2,213,000
Cash paid for interest -- -- 312,000
Schedule of noncash financing and investing activities:
Carrying value of real estate in satisfaction of notes $ -- $ 2,019,000 $ 3,969,000
receivable with carrying values of $2,622,000 in 1996 and
$3,580,000 in 1995
Mortgage notes receivable from sale of real estate -- -- 700,000
Restructuring of past due interest into notes receivable -- 2,625,000 1,914,000
Notes receivable from lawsuit settlement -- 75,000 --
Recovery of Class A stock in connection with Angeles Settlement -- -- 4,254,000
Write-off of fully reserved note receivable 1,530,000 -- --

The accompanying notes are an integral part of the financial statements

F-61

ANGELES MORTGAGE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION, BUSINESS ACTIVITIES AND SIGNIFICANT EVENTS

Angeles Mortgage Investment Trust ("AMIT" or the "Trust") is an
unincorporated California business trust, which was organized to qualify as a
REIT for federal income tax purposes. AMIT was originally organized as a
publicly held limited partnership that began offering limited partnership units
on August 18, 1986 and commenced operations on July 9, 1987. In January 1989,
the holders of a majority of the limited partnership units elected to transfer
all of the partnership's assets to AMIT. Presently AMIT's capital structure
consists of 2,617,000 outstanding AMIT Class A Shares and 1,675,113 outstanding
AMIT Class B Shares. The AMIT Class A Shares are registered under the Exchange
Act and listed on the American Stock Exchange under the symbol "ANM". Each AMIT
Class A Share and each AMIT Class B Share is entitled to one vote with respect
to all matters put before AMIT's shareholders.

Angeles Funding Corporation ("AFC"), a wholly owned subsidiary of
Angeles Corporation ("Angeles") served as advisor to AMIT until February 1993.
Through AFC, AMIT had invested in various types of intermediate-term real
estate loans (the "AMIT Loans"). Prior to December 1996, the majority of the
AMIT Loans were made to partnerships that were once controlled by Angeles and
are now controlled by Insignia Financial Group, Inc., a Delaware corporation,
which through MAE GP, its affiliate, holds the Trust's Class B Shares,
(Insignia Financial Group, Inc. and its affiliates are collectively referred to
as "Insignia" in this document). These partnerships include private and public
real estate limited partnerships which were formed to acquire, own and operate
income-producing real properties. As of December 31, 1997, there were 23 AMIT
Loans outstanding, with an aggregate portfolio balance of approximately $37
million, net of loan loss reserves, and AMIT owned as a result of foreclosures
or receipt of deeds in lieu of foreclosure on certain assets securing certain
AMIT Loans approximately $4.5 million of real property. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations of
AMIT."

By virtue of its ownership of the Class B Shares, Insignia owns a 1%
interest in the profits, losses, credits and distributions of the Trust and 39%
of the Trust's total voting shares. As discussed in Note 7, "Notes to Financial
Statements", the Trust and MAE GP entered into an agreement, effective April
1995, pursuant to which MAE GP granted to the Trust the option to purchase all
the Class B Shares currently owned by MAE GP. The option is exercisable by the
Trust in 2005 for approximately $94,000. During the 10 year period that the
option is outstanding, all of the Class B Shares are required to vote, pursuant
to an irrevocable proxy, with the majority of Class A Shares in connection with
any proposal involving the Trust and Insignia or the election of any Trustee
nominated by MAE GP which is an insider affiliate of MAE GP including Insignia.
Such majority will be determined without consideration of the votes of "Excess
Class A Shares," as defined in the Trust's Declaration of Trust. With respect
to all other matters, MAE GP can vote the Class B Shares without restriction.

Beginning in February 1993, AMIT faced significant liquidity problems
caused by (i) the failure of a significant number of the obligors of the AMIT
Loans (primarily partnerships controlled by MAE) to fully service outstanding
debt obligations under their respective AMIT Loans, and (ii) Angeles' inability
to fully service its debt obligations under its promissory note payable to AMIT
or perform its other obligations to AMIT under its third party loan guarantees
and shareholder distribution guarantees. As of February 1993, approximately 75%
of the AMIT Loans were in payment default. In February 1993, Angeles informed
AMIT that it was unable to perform its obligations under its guarantees because
of liquidity problems caused by its inability to complete sales or refinancings
of real estate assets, its inability to fully realize asset values in a
continuing sluggish and depressed real estate market and the failure of the
obligors of the AMIT Loans to service fully, if at all, their debt obligations
to Angeles. On May 3, 1993, Angeles filed for protection under Chapter 11 of
the federal bankruptcy code. Angeles' failure to perform under its guarantees,
together with the defaults on AMIT Loans, resulted in AMIT's suspension of cash
distributions to the holders of AMIT Class A Shares starting in February 1993
and resuming in February 1996. AMIT filed various claims against Angeles and
eventually reached agreement with Angeles and the Committee of Creditors
Holding Unsecured Claims of Angeles to settle all claims between AMIT and
Angeles. The settlement agreement was approved by the Bankruptcy Court in March
1995. Under the agreement, AMIT received over $15 million in cash, notes and
AMIT Class A Shares.

Since February 1993 (when AMIT terminated its advisory agreement with
AFC), AMIT has restructured its loan portfolio and has paid in full its then
outstanding bank loan of $20 million. However, certain AMIT Loans, which in the
aggregate have a carrying value (net of loan loss reserves) of approximately
$1.3 million (constituting approximately 3% of AMIT's net investments), are
currently in default with respect to debt service obligations. AMIT's lending
is primarily concentrated in secured and, to a lesser extent, unsecured real
estate loans. The

F-62

realizable value of real estate collateralizing notes receivable or acquired in
loan foreclosure proceedings can only be determined based upon a sales
negotiation between independent third parties in an arm's length transaction.
In addition, considering that, in most cases, it is the proceeds of sale and/or
refinancing which will enable AMIT to receive funds, the actual proceeds may be
significantly impacted by the condition of the real estate industry at the time
the principal amounts become due or properties sold. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations of
AMIT."

AMIT will terminate December 31, 2003, unless extended to no later
than December 31, 2015 by vote of the shareholders of AMIT, or by the AMIT
Board to no later than December 31, 2020 without a vote of the shareholders of
AMIT if the AMIT Board believes that termination at such time would result in
material under-realization of the value of AMIT's assets. Upon liquidation of
AMIT, disposition proceeds will be distributed to the shareholders.

An entity will qualify for taxation as a REIT if it satisfies certain
income and asset tests. Among these tests is a requirement that a certain
percentage of assets constitute "real estate assets" and a certain percentage
of income be derived from such assets. AMIT's loan assets are collateralized in
a variety of ways, and some loans have not been collateralized. AMIT has not
requested nor obtained an IRS determination that any of its assets qualify as a
"real estate asset", and has not obtained an opinion of counsel that it
currently qualifies as a REIT. If AMIT were to fail to qualify as a REIT in any
taxable year, AMIT would not be allowed a deduction for dividend distributions
in computing taxable income and would be subject to federal income tax on its
taxable income at regular corporate rates. AMIT believes that it has operated
in a manner designed to qualify as a REIT. However, if the Internal Revenue
Service were successfully to challenge the qualification of AMIT's REIT assets,
AMIT would be subject to federal income tax only after the utilization of
AMIT's net operating losses.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING - The financial statements of the Trust are
prepared on the accrual basis and therefore, revenue is recorded as earned and
costs and expenses are recorded as incurred. The preparation of the financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the period. Actual results could differ from these
estimates. Certain prior years amounts have been reclassified to conform to
current year classifications.

CASH AND CASH EQUIVALENTS - For financial reporting purposes, the
Trust considers cash and cash equivalents to include cash on deposit and
amounts invested in money market funds with original maturity terms of less
than 90 days.

INTEREST RECOGNITION ON NOTES RECEIVABLE - Interest income is recorded
as earned in accordance with the terms of the loans. Interest income is not
recorded on individual loans if the carrying value of the receivable exceeds
the realizable value of the underlying collateral or if payments are in default
in excess of two months.

FORECLOSED REAL ESTATE HELD FOR SALE - Foreclosed real estate is
initially recorded at new cost, defined as the lower of original cost or fair
value minus estimated costs of sale. After foreclosure, the excess of new cost,
if any, over fair value minus estimated costs of sale is recognized in a
valuation allowance. Subsequent changes in fair value either increases or
decreases such valuation allowance. See "Allowance for Estimated Losses" below.

ALLOWANCE FOR ESTIMATED LOSSES - Valuation allowances are established
by the Trust for estimated losses on notes receivable and properties held for
sale to the extent that the investment in notes or properties exceeds the
Trust's estimate of net realizable values of the property or collateral
securing each note, or fair value if foreclosure is probable. The provision for
losses is based on estimates using the direct capitalization of net operating
income for the underlying properties. Capitalization rates have been determined
by using micro and macro economic factors. Actual losses may vary from current
estimates. Such estimates are reviewed periodically and any additional
provision determined to be necessary is charged against earnings in the period
in which it becomes reasonably estimated.

REVENUE RECOGNITION ON SALE OF REAL ESTATE - Sales of real estate are
recognized when and to the extent permitted by Statement of Financial
Accounting Standards No. 66, "Accounting for Sales of Real Estate."

INCOME TAXES - The Trust has elected to be taxed as a Real Estate
Investment Trust ("REIT") under the Internal Revenue Code for each taxable year
of operations. As a qualified REIT, the Trust is subject to income

F-63

taxation at corporate rates on its REIT taxable income. However, the Trust is
allowed a deduction for the amount of dividends paid to its shareholders,
thereby subjecting the distributed net income of the Trust to taxation at the
shareholder level only. As of December 31, 1997 the Trust had no tax loss
carryforwards.

NET INCOME PER CLASS A SHARE - The net income per Class A Share was
based on 2,617,000, 2,704,375, and 2,968,532 weighted average Class A Shares
outstanding during the years ended December 31, 1997, 1996 and 1995,
respectively, after deduction of the Class B Shares' 1% interest. The Trust
adopted Statement of Financial Accounting Standards No. 128 during 1997 and it
had no effect on the financial statements.

AMORTIZATION - The Trust amortizes loan fees to interest income over
the lives of the related Trust Loans. Loan fees and refinancing expenses paid
by the Trust are amortized over the life of the relevant loans. The Trust
amortizes leasing commissions to leasing commission expense over the term of
the related leases.

CONCENTRATION OF CREDIT RISK - Financial instruments which potentially
expose the Trust to concentrations of credit risk are primarily temporary cash
investments and mortgage and promissory notes receivable. The Trust places its
temporary cash investments with major financial institutions and, by policy,
limits the amount of credit exposure to any one financial institution. Of all
notes receivable, 50% are with partnerships who have previously defaulted on
their obligations (see Note 3).

INVESTMENT IN JOINT VENTURE - The Trust's investment in joint venture
is accounted for using the equity method since it is the Trust's intention to
dispose of the joint venture interest.

MARKET VALUE OF FINANCIAL INSTRUMENTS - The Trust used the following
assumptions in estimating the fair value of its notes receivable. For
performing notes receivable, the fair value was estimated by discounting future
cash flows using current interest rates for similar loans. For nonperforming
notes receivable, the estimated fair value of the Trust's interest in the
collateral property was used. The market value of notes receivable can only be
determined based upon a sales negotiation between independent third parties in
an arm's length transaction. Actual proceeds may be significantly impacted by
the condition of the real estate industry at the time the principal amounts
become due.

NOTE 3 - NOTES AND INTEREST RECEIVABLE

Notes receivable are collateralized by real property owned by the
borrowers of such Trust Loans, or by an assignment of the limited partnership
interest in the limited partnership that owns the property (but not the
specific underlying property) or by a general obligation of the limited
partnership that owns the property. All of the Trust's notes receivable
collateralize the Trust's line of credit with a third party lender (see Note 6).

Activity in the allowance for estimated loan losses was as follows:

1997 1996 1995
---- ---- ----
Balance at beginning of period $ 12,100,000 $ 13,598,000 $ 26,595,000
Provisions for losses -- 4,334,000 2,350,000
Deductions (3,274,000) (5,832,000) (15,347,000)
------------ ------------ ------------
Balance at end of period $ 8,826,000 $ 12,100,000 $ 13,598,000
============ ============ ============

The provisions for losses for 1996 and 1995 relate to debt
modifications whereby unrecorded past due interest receivable was restructured
as principal (see below).

The deductions to the estimated loan losses relate primarily to the
full or partial repayment of Trust loans and foreclosure of properties by
either the Trust or the first lien holder, where the Trust is in a second
position. During 1995 the Trust modified the Fox Run loans and capitalized
approximately $1,914,000 of past due interest and default interest into the
principal of the loans. The Trust reversed $1,800,000 of allowance for
estimated loss relating to the Fox Run loans, based upon improved property
performance, the commencement of modified debt service in the fourth quarter of
1995 and an anticipated refinancing of the mortgages on the property. In 1996
approximately $660,000 of deductions were due to the significant improvement of
property performance underlying certain of the Trust loans.

Included in the Trust's allowances for estimated losses on notes
receivable is approximately $4.8 million relating to one loan, -- a promissory
note on a Waukegan, Illinois apartment complex, referred to as Fox Crest. The
property has continued to improve in operations since February 1993, which may
lead to some future recovery of some portion of this promissory note. The
property still needs maintenance and capital improvements and has not

F-64

provided the Trust with any debt service since February 1993 and no debt
service is anticipated in the near future. The Trust has not reduced the
allowance. There can be no assurances that the value in this property will
exceed the first mortgage debt.

During the quarter ended March 31, 1997 the Trust restructured a first
mortgage referred to as LaSalle, on which the Trust had began foreclosure
proceedings in 1996. In connection with the related loan modification, the
Trust capitalized and recognized as interest income, approximately $409,000 of
past due interest, late fees, default interest along with approximately $14,000
of out-of-pocket costs incurred by the Trust during the foreclosure process.
The restructured loan required monthly interest only payments based upon the
stated note rate of 11.5% on the reconstituted loan balance. In October 1997
this loan was paid in full.

During the year ended December 31, 1997, four AMIT loans prepaid the
total outstanding principal balances of approximately, $6,800,000 and another
loan, referred to by the Trust as Northprior, made a substantial repayment in
the amount of $340,000. The four loans, which made full repayments, are
referred to by AMIT as Angeles Partners X ($614,000), Angeles Corporation
($3,450,000), Carriage Hills ($1,404,000) and LaSalle ($1,334,000). The
Northprior and Carriage Hill loans had been previously fully reserved for loan
loss and as a result of the principal repayments AMIT realized recovery of bad
debt in the amounts of $340,000 and $1404,000, respectively. In addition, the
Carriage Hills loan repaid all past due interest in the amount of $237,000
which the Trust recognized as interest income in November 1997.

During 1997 the Trust began receiving debt service on two loans which
had been previously restructured in 1996, the Angeles Partners XIV and Brittany
Point loans. The Angeles Partners XIV loan in October 1997 paid all past due
interest in the amount of $82,000 and made a partial principal repayment of
$48,000. During the first six months of 1997 the Brittany Point loan began
making cash flow interest payments to the Trust and effective July 1997 began
making monthly interest only payments at the stated interest rate of 12 1/2%.
As a result of the commencement of monthly debt service and significant
improvement of the property operations for the Brittany Point loan, the Trust
in December 1997 realized as interest income $337,000 of past due interest.

In December 1997 the Trust wrote-off a promissory note, with a
principal outstanding balance of $1,530,000 referred to by the Trust as Vista
Hills. Based upon the Trust's evaluation of the property operations and
discussions with the borrower regarding the likelihood of foreclosure by the
first lien holder in 1998 the Trust believed there would be no recovery in the
future. The Borrower had indicated to the Trust that the property would most
likely be foreclosed upon the first lien holder during 1998. The Trust had
previously fully provided for loan loss reserves for this loan and did not
realize any loss or gain from the sale.

In February 1997, AMIT made its first new loan since January 1993, in
the amount of $5,000,000, secured by first deeds of trust on three manufactured
home parks located in Texas. This new loan requires interest only payments at
8.9% and matures in December 2003. In April 1997, AMIT made a second new loan
in the amount of $2,950,000 secured by a first deed of trust on a 628,000
square foot industrial warehouse located in Martinsville, Virginia. This loan
requires interest only payments at 11% and matures in April 1998. In June 1997
AMIT made a new first mortgage loan in the amount of $1,900,000 secured by four
manufactured home parks located in Wyoming. The new loan requires interest only
payments of 9.07% and matures in December 2003. In December 1997 AMIT made
three first mortgage loans in the amounts and terms as follows: $1,300,500 on a
144,000 square foot office/warehouse facility located in Houston, Texas with an
8% interest rate, interest only payable monthly; $531,250 on a 56,080 square
foot industrial/warehouse located in Aiken, South Carolina with an 8% interest
rate, principal and interest payable monthly, with principal amortized over 20
years; and $2,185,000 on a 335,000 square foot industrial facility located in
Jackson, Tennessee, initially monthly interest only payable at a rate of 10 1/2
%, with the interest rated reduced to 230 basis points over ten-year Treasuries
upon the debt coverage ratio increasing to a stipulated level. All three of
these December 1997 first mortgage loans mature in December 2007.

In December 1997 the Trust purchased a second mortgage loan for
$384,000. This second mortgage loan is on a 186-unit apartment complex, Silver
Ridge Apartments, located in Maplewood, Minnesota. The Silver Ridge second
mortgage has a contract interest rate of 10% and a default rate of 12% and
matured December 31, 1997. In addition, during 1997 the Trust obtained judgment
liens against the Silver Ridge Apartments property based upon recourse
provisions on other Trust loans. Through one of these judgment liens the Trust
successfully foreclosed on the property in October 1997 and will be the owner
of the property after a twelve-month redemption period which ends in October
1998. Silver Ridge Apartments is also encumbered by a $4.5 million first
mortgage held by an independent third party.

As of December 31, 1997, the Trust has signed and proposed commitments
to fund approximately $1 million of new loans.

F-65

During 1996, the Trust began foreclosure proceedings on three
industrial properties in Cleveland, Ohio that represent additional collateral
available to the Trust through recourse provisions of a failed loan referred to
as Marina Plaza. Although the properties are heavily indebted and in need of
maintenance and capital improvements, the Trust has received early indications
of sales value from potential purchasers that may provide recovery of
approximately $300,000 which would be recognized as income after foreclosure
and sale of these properties.

As reported by the Trust in 1995, the Trust loan referred to as North
Prior defaulted on its obligation to the Trust as well as to the senior lender
on the property. The property was sold just prior to foreclosure with proceeds
sufficient to pay the senior lender the full amount of the senior obligation.
Proceeds above the senior obligation were escrowed for potential use in an
environmental remediation that occurred prior to the foreclosure and sale.
Approximately $870,000 remains in the escrow and in January 1998 a site closure
letter was received from the state environmental government authority. The
Trust will recognized income for amounts, when and if, received from escrow,
which is anticipated to occur in 1998.

During 1996 the Trust modified five loans referred to as Brittany
Point, Fox Crest, Carriage Hills, Vista Hills and Angeles Partners
XIV-Waterford. In connection, with the modifications, the Trust extended the
maturity dates on all of the loans except for Angeles Partners XIV-Waterford,
to December 31, 2000, March 1, 2003, September 1, 2000 and September 1, 2002,
respectively, and capitalized approximately $320,000, $1,765,000, $204,000,
$230,000 and $134,000, respectively, of past due interest into principal. The
modified notes require payments only out of cash flows provided by the
properties. The Trust did not recognize any interest income in connection with
these loan modifications.

During the last quarter of 1996 the Trust modified and received a
significant repayment on two of the Trust's largest loans. In October 1996, the
Arrowhead Joint Venture $6 million loan (which was previously secured only by a
partnership interest), along with a related $1.2 million unsecured preferred
partnership distribution interest ("Preferred Interest"), was restructured to a
$9 million first trust deed mortgage, with a current effective interest rate of
10.20% reducing to a 9.8% rate upon repayment of $1.5 million which is
scheduled to occur in late 1998. The restructuring has resulted in the Trust
significantly strengthening the collateral on this loan along with increasing
the annual debt service on this loan by approximately $400,000. The $1.2
million Preferred Interest was originally acquired in the settlement with
Angeles (see Note 9 of Notes to Financial Statements) and was previously valued
at zero as it had an indeterminable value when it was acquired. In addition,
the Trust capitalized approximately $1.7 million in deferred interest that was
not previously recognized in income, as full recovery of such interest was
until the modification, considered doubtful.

In December 1996, the Trust received approximately $7 million from its
three Fox Run mortgages as a result of the borrower refinancing the property.
The $7 million of cash proceeds represented the full repayment of approximately
$6.7 million of principal on these three loans with the remainder representing
a portion of the accrued interest associated with the loans. In addition to
this repayment, the Trust took back a new third mortgage on the Fox Run
property in the amount of $875,000. The $875,000 is comprised of approximately
$425,000 of the remaining accrued interest from the three Fox Run loans and
approximately $450,000 of accrued interest and principal on the Angeles
Partners XI-Harbour Landing promissory note. The Trust recognized $2 million of
bad debt recovery on this transaction, and approximately $900,000 of interest
income from accrued interest not previously recognized, as full recovery of
such interest was not reasonably assured until the repayment.

In addition, in December 1996 the Trust acquired, at par, three first
mortgage loans from an unaffiliated third party for approximately $2.9 million.
These mortgages are on three properties known as Hospitality Inns (three
separate properties and locations) on which the Trust held three second
mortgages. All of these six mortgages matured in October 1996. The Trust
restructured the first and second mortgage loans on these three properties
effective April 30, 1997. The loan modifications for each property provided
that the first and second mortgages be combined into one first mortgage loan.
In addition to combining the first and second mortgages on each property, the
Trust also capitalized and recognized as interest income, a total of
approximately $440,000 of accrued interest and late fees for all three loans.
Each restructured loan requires monthly principal and interest based upon the
stated note rate of 11% for two of the loans and 11.25% for the third loan on
the reconstituted loan balance, with principal paid based on a 30-year
amortization. The current monthly debt service the Trust receives from this
restructuring is $50,000. The Trust also received a one-point loan fee in
conjunction with the loan restructuring totaling approximately $52,000.

F-66

Notes receivable are summarized as follows:

DECEMBER 31
-----------------------------------------------------------
1997 1996
---------------------------- ---------------------------
ESTIMATED ESTIMATED
FAIR VALUE BOOK VALUE FAIR VALUE BOOK VALUE
------------ ------------ ------------ ------------

MORTGAGE NOTES RECEIVABLE:
First trust deeds, primarily requiring monthly $ 34,510,000 $ 33,038,000 $ 18,385,000 $ 17,868,000
interest only payments ranging from 8% to 12.5%,
maturing through December 2007

Second trust deeds, requiring monthly interest only 4,113,000 5,680,000 4,790,000 7,427,000
payments ranging from 10% to 12.5%, maturing through
December 2000

Third trust deed, requiring monthly interest and
principal payments of 11.25%, maturing January 2002 872,000 872,000 875,000 875,000
------------ ------------ ------------ ------------
39,495,000 39,590,000 24,050,000 26,170,000
Less: Unearned loan fees (243,000) (127,000)
------------ ------------
Net mortgage notes receivable 39,347,000 26,043,000

PROMISSORY NOTES RECEIVABLE:

Promissory notes receivable, requiring monthly 2,697,000 6,789,000 7,314,000 14,175,000
interest payments ranging from 8% to 12.5%, maturing
through March 2003 (See Note 5)
------------ ------------ ------------ ------------
NOTES RECEIVABLE $ 42,192,000 $ 46,136,000 $ 31,364,000 $ 40,218,000
============ ============ ============ ============

At December 31, 1997 mortgage notes receivable of $3,735,000 and
promissory notes receivable of $1,539,000, all of which are due from
affiliates, are in default.

With respect to the promissory notes receivable as of December 31,
1997, $4,764,000 is secured by partnership interests and other loans and
$2,024,000 are general obligations of partnerships or individuals. The
underlying properties are not collateral for such loans.

During year ended December 31, 1995, debt holders senior to the debts
of the Trust foreclosed upon two Trust Loans referred to as Marina Plaza and
Burnhamthorpe, respectively. Both loans had been fully reserved for loss.
However, due to recourse provisions on the Marina Plaza loan, the Trust was
able to obtain title to a property having an estimated value of $300,000.

Scheduled maturities of notes receivable due subsequent to December
31, 1997 are, $5,236,000 in 1998, $7,504,000 in 1999, $1,645,000 in 2000,
$1,567,000 in 2001, $6,081,000 in 2002 and $19,072,000 thereafter. It is likely
that the scheduled maturity dates, for certain of the notes, will be extended.

NOTE 4 - REAL ESTATE HELD FOR SALE

In August 1993, the Trust foreclosed on a parcel of land located in
Houston, Texas, referred to by the Trust as "Martinique", for which it held a
first trust deed mortgage. The Trust did not recognize a loss on foreclosure in
1993 in excess of the reserve of $600,000 previously provided. The property was
sold in December 1995, for $1.5 million and the Trust received net cash
proceeds of approximately $1,371,000. The Trust realized a $3,000 loss on the
sale.

In 1994, the Trust began a foreclosure action on a $1,500,000 first
trust deed mortgage held on a property referred to as 4851 Van Epps, an
industrial warehouse located in Cleveland, Ohio. The Trust had previously
provided a loss reserve of $600,000 on this loan. In September 1995 the Trust
obtained title to the property through a deed-in-lieu of foreclosure. In
October 1995 the Trust sold the property for $1,370,000, taking back a $700,000
first trust deed mortgage on the property and received net cash proceeds of
approximately $580,000. The Trust realized income of $435,000 from the sale.

F-67

In January 1994, the Trust acquired, through a foreclosure on its loan
of $3,600,000, a 220-unit apartment complex located in Decatur, Georgia. The
foreclosure resulted in no loss in 1994 as the reserve of $430,000 had been
previously provided. See Note 3. In April 1994, the Trust sold the property and
received net cash proceeds of approximately $3.3 million. The Trust recognized
income of $2,000 from the sale.

The Trust obtained title to the 4705 Van Epps property through a
deed-in-lieu of foreclosure in August 1995. The Trust had obtained a judgment
lien of approximately $2.7 million on this property as a result of recourse
provisions in the $2 million note referred to as Marina Plaza. In consideration
of the deed-in-lieu of foreclosure, the Trust agreed to reduce the judgment
lien by $500,000 and a payment of $5,000. The 4705 Van Epps property had a
$343,000 delinquent first mortgage from an independent financial institution
which the Trust was required to pay upon transfer of title to the Trust. The
Trust recorded this property at $500,000 and recognized approximately $151,000
as recovery of bad debt. The property was sold in February 1996 for $752,000,
received net cash proceeds of approximately $677,000 and realized a $184,000
gain on the sale.

In August 1996, the Trust foreclosed on a 443 unit mobile home park
located in Belton, Missouri, referred to by the Trust as Springdale Lake
Estates MHP ("Springdale"), for which it held a second trust deed mortgage in
the amount of $1,720,000 and had capitalized foreclosure costs of approximately
$2,000. Upon taking title to Springdale, the Trust assumed a first mortgage on
the property in the amount of approximately $2,800,000. The Trust did not
recognize any loss from the foreclosure as a reserve of $531,000 had been
previously provided. In October 1996, the Trust sold Springdale for $4,000,000
and received net cash proceeds of approximately $1,112,000 with no gain or loss
recognized on the sale.

As of December 31, 1997, the Trust owned three real estate properties
held for sale, referred to as University Center Phase IV a 56,000 square foot
retail center and University Center Phase I & II, a 51,200 square foot
warehouse office space, both of these properties are located in Fridley,
Minnesota, and a 240-acre parcel of raw land referred to as Colony Cove located
in Ellenton, Florida.

The Trust foreclosed on University Center Phase IV in December 1995,
on which it held a $1,800,00 first trust deed mortgage. This note contained
recourse provisions, accordingly, the Trust received as a function of the
foreclosure action, a judgment lien in the amount of $464,000 on a property
called University Center Phase I & II. As the Trust had two additional loans
with the same borrower, the borrower agreed to deed-in-lieu of foreclosure the
University Center Phase I & II property in consideration of reducing the
principal loan balance by $880,000 on a second trust deed mortgage held by the
Trust in the original amount of $2,600,000, known as Springdale Lake Estates.
The Trust recorded the University Center Phase I and II property at $1,100,000,
its estimated fair market value.

In October 1997 and previously in April 1996, the Trust foreclosed on
a 40 and an adjacent 200 acre parcel of land, respectively, located in
Ellenton, Florida, referred to by the Trust as "Colony Cove", for which it held
a first trust deed mortgage in the amount of $1,572,000 on the 200-acres and
had recourse, through provisions on the mortgage note, allowing the foreclosure
on the adjacent 40-acres. In conjunction with the foreclosures, the Trust
incurred approximately $178,000 in expenses, which have been capitalized into
the cost of the property. The Trust did not recognize any income or loss from
the foreclosure. During 1997 the Trust entered into a contract to sell
approximately 224 acres of this property zoned residential for $8,500 per acre.
The contract requires the sale to close in the latter part of 1998, although
there can be no assurances that this transaction will occur. Subsequent to
1997, in January 1998 the Trust garnished cash of approximately $160,000 held
by the borrower based upon the recourse provisions of the mortgage note. The
$160,000 reduced the capitalized cost of the property.

In June 1996, the Trust obtained through foreclosure a 57% joint
venture interest in a 160-acre parcel of land in Ocala, Florida. This property
was collateral for a Trust loan in the amount of $1,050,000, referred to as
"Rolling Greens." The Trust did not recognize any loss on the foreclosure as a
reserve of $465,000 had been previously provided. This property was sold in
1997 and the Trust received approximately $665,000 and realized a gain of
$80,000 on the sale.

NOTE 5 - ANGELES PROMISSORY NOTE RECEIVABLE

The Trust had provided Angeles with a $10,000,000 promissory note
receivable secured by real estate, expiring May 31, 1993. At December 31, 1994,
outstanding borrowings on the note were $9,255,000. As a result of the Angeles
settlement as discussed in Note 9 the Trust received over $15 million in cash,
notes and stock to settle this note along with other matters. The new note in
the amount of $6,100,000 received from Angeles in the settlement was fully
repaid during 1997.

F-68

NOTE 6 - NOTE PAYABLE TO BANK

The Trust's line of credit with the Bank, in the amount of $5 million
requires monthly interest only payments based upon prime plus 1/2% and matures
April 30, 1998. The line of credit with the Bank allows the Trust to draw on
such line to facilitate the foreclosure process on Trust Loans. In August 1995
the Trust drew down on such line of credit in the amount of $343,000 in order
to pay-off the first trust deed on a property obtained through a deed-in-lieu
of foreclosure (see Note 4). As of December 5, 1995, the Trust paid off the
remaining outstanding balance on the line of credit. In June 1996, the Trust
drew down for a three day period of time $480,000. During 1997 the Trust did
not draw on the line of credit and as of December 31, 1997 the Trust has no
outstanding borrowings with the Bank.

The Trust's average month-end borrowings on the working capital line
of credit were $0 in 1997 and 1996. In conjunction with the financing, the
Trust paid loan fees of $25,000, $19,000, and $43,000 in 1997, 1996 and 1995,
respectively.

NOTE 7 - RECORDED CASH ADVANCES FROM AFFILIATED PARTNERSHIPS AND PROPOSED
SETTLEMENT WITH INSIGNIA

In July 1993, the Trust had filed a lawsuit challenging the Trust's
indebtedness and any liability for principal and interest relating to funds
allegedly loaned to the Trust by eight partnerships. The balance outstanding on
these alleged loans, as of December 31, 1994, was $7,585,000 along with accrued
interest of approximately $941,000. Cross complaints were filed against the
Trust by certain of the lending partnerships in this same lawsuit seeking,
among other things, repayment in full of the alleged loans. Effective March 31,
1995, the following settlement was consummated between the Trust and seven
partnerships, Insignia and affiliates of Insignia. Funds were paid to such
entities on April 14, 1995 as follows:

o the Trust paid approximately, $5,752,000 in cash;

o the Trust purchased, for $250,000, an option from MAE GP Corporation,
an affiliate of Insignia, to purchase all the Class B Shares of the
Trust currently owned by the affiliate. Such holdings represent 100%
of the Trust's outstanding Class B Shares. The option is exercisable
by the Trust in 10 years for approximately $94,000. During the 10 year
period the option is outstanding all of the Class B Shares will be
voted, pursuant to an irrevocable proxy, with the majority of Class A
Shares in connection with any proposal involving the Trust and
Insignia or any affiliate thereof or election of any Trustee nominated
by or affiliated with Insignia. Such majority will be determined
without consideration of the votes of "Excess Class A Shares," as
defined in the Trust's Declaration of Trust. With respect to all other
matters the affiliate of Insignia can vote the Class B Shares without
restriction.

In addition, one partnership, not affiliated with Insignia, having an
alleged loan to the Trust of $1,150,000 along with accrued interest of
approximately $145,000 as of March 31, 1995, reached an agreement with the
Trust for a settlement of all claims between the Trust and the partnership.
Pursuant to this agreement the Trust paid a total of $930,000 of cash on May 9,
1995, upon execution of the settlement agreement.

As a result of this settlement the Trust recognized an extraordinary gain
of $1,844,000 summarized as follows:

Recorded cash advances from affiliated partnerships $ 7,585,000
Accrued interest on recorded cash advances through 12/31/94 941,000
-----------
Total recorded liabilities relating to recorded cash advances 8,526,000
Less:
Settlement of principal and interest on Insignia related partnerships (5,686,000)
Additional interest due on settlement of Insignia related partnerships (66,000)
Settlement of principal on non-Insignia related partnership (930,000)
-----------
Extraordinary gain $ 1,844,000
===========

F-69

NOTE 8 - SHAREHOLDERS' EQUITY

The Shares of the Trust are of two classes: Class A Shares (par value
$1.00 per share) and Class B Shares (par value $.01 per share). There is no
limit on the number of either Class A or Class B Shares which the Trust is
authorized to issue. Class A and Class B Shares are each entitled to one vote
per share with respect to the election of Trustees and other matters.

In 1995, the Trust purchased, for $250,000, an option from MAE GP
Corporation, an affiliate of Insignia to purchase all the Class B Shares of the
Trust currently owned by the affiliate. Such holdings represent 100% of the
Trust's outstanding Class B Shares. The option is exercisable by the Trust in
10 years for approximately $94,000. During the 10 year period the option is
outstanding, all of the Class B Shares will be voted, pursuant to an
irrevocable proxy, with majority of Class A Shares in connection with any
proposal involving the Trust and Insignia or any affiliate thereof or election
of any Trustee nominated by or affiliated with Insignia. The majority will be
determined without consideration of the votes of "Excess Class A Shares," as
defined in the Trust's Declaration of Trust. With respect to all other matters,
the affiliate of Insignia can vote the Class B Shares without restriction.

In November 1996, the Trust's Board of Trustees adopted a Shareholders
Rights Plan and declared a dividend of one Right on each outstanding share of
the Trust's Class A Shares to stockholders of record on November 18, 1996. The
Rights are exercisable if a person or group acquires 20% or more of the Trust's
Class A Shares or announces or commences a tender offer for 20% or more of the
such shares. When a person or group acquires such 20%, each exercisable Right
will entitle its holder (other than such person or group) to purchase, at the
Right's then-current exercise price, a number of the Trust's Class A Shares
having a market value of twice such price. In addition, if the Trust is
acquired in a merger or other business combination transaction after a person
has acquired 20% or more of the Trust's outstanding Class A Shares, each right
will entitle its holder to purchase, at the Right's then-current exercise
price, a number of the acquiring company's common shares having a market value
of twice such price. Prior to the acquisition by a person or group of
beneficial ownership of 20% or more of the Trust's common stock, the Rights are
redeemable for one cent per Right at the option of the Board of Trustees. The
Board of Trustees is also authorized, under certain circumstances, to reduce
the 20% threshold referred to above to not less than 10%. The Rights will
expire on December 31, 2003 unless otherwise extended by the Board of Trustees.

The Board of Trustees of the Trust has authorized the Trust to
repurchase, in open market transactions, up to 10% of its Class A Shares. The
Trust has repurchased 43,800 shares under this program. There were no purchases
in the open market in 1997, 1996 and 1995 however the Trust acquired 209,700
Class A Shares for $1,730,000 less $764,000 in expenses, in settlement of
actions it had brought against certain third parties.

In February 1993, the Trust's policy of distributing monthly the net
cash from operations to its Class A shareholders was temporarily suspended as a
result of the failure of the Insignia Partnerships and partnerships affiliated
with Angeles to fully service their Trust Loan obligations and Angeles'
inability to perform its guarantee of a minimum annual distribution of $2.00
per Class A Share through May 1994 or meet its obligations under its promissory
note receivable with the Trust because of its own liquidity problems. The Trust
made shareholder distributions aggregating $1.03 and $0.52 per share in 1997
and 1996, respectively, and made no distributions in 1995. In December 1997,
the Board of Trustees of the Trust declared a $.32 per share dividend payable
on February 11, 1998, to shareholders of record on January 13, 1998.

NOTE 9 - SETTLEMENT WITH ANGELES CORPORATION

Angeles had been unable to service its debt obligations under its
promissory note receivable with the Trust or perform its obligations under its
guarantees of the Trust's Loans. In May 1993 Angeles filed for protection under
Chapter 11 of the federal bankruptcy code. Angeles's failure to perform under
its debt obligations and guarantees with the Trust together with other matters,
resulted in the March 1994 filing by the Trustees, on behalf of the Trust, of
substantial claims against Angeles in a proof of claim in the Angeles
bankruptcy.

The Trust reached agreement with Angeles and the Committee of
Creditors Holding Unsecured Claims of Angeles to settlement of all claims
between the Trust and Angeles. The settlement agreement was approved by the
Bankruptcy Court under a plan of reorganization and the Trust received on April
14, 1995, after the effective date of Court approval (March 31, 1995), the
following:

o cash of $6.0 million;

o collateralized note payable of $6,100,000 due December 31, 1998,
interest paid quarterly at prime plus 1% not to exceed 8.5%;

F-70

o 567,326 Class A Shares of the Trust, owned by Angeles, representing
16% of the then total outstanding Class A Shares of the Trust;

o payment of $1 million on a third party claim;

o assignment of a third party preferred interest with a face value of
$1.2 million; and

o a release of all claims on behalf of Angeles against the Trust.

The $6.1 million note is collateralized with a pledge of Angeles's limited
partnership interest in a limited partnership whose assets are comprised of
notes and receivables from various real estate investment partnerships. This
note was paid in full during 1997.

The third party $1.2 million preferred interest received in the settlement
had an indeterminable value when acquired and therefore was recorded at zero.

The settlement transaction with Angeles resulted in the Trust recording
$12,844,000 as recovery of bad debt, summarized as follows:

Consideration received in settlement:
Cash $ 6,000,000
Collateralized note 6,100,000
Third party subordinated note 1,200,000
Reimbursement for third party claim 1,000,000
567,326 Class A Trust Shares (valued as of
effective date of settlement, $7.50/Class A share) 4,254,000
Other 745,000
------------

Total 19,299,000
Less:
Repayment of Angeles note receivable, net of reserve (4,255,000)
Reserve for third party subordinated note (1,200,000)
Payment of third party claim (1,000,000)
------------
Recovery of bad debt from Angeles Settlement $ 12,844,000
============

NOTE 10 - PROPOSED MERGER

On July 18, 1997, AMIT, IPT, Insignia and MAE GP entered into the
Merger Agreement which, provides for, among other things, the Merger of AMIT
with and into IPT, with IPT surviving the Merger. Upon consummation of the
Merger the separate existence of AMIT will cease. A Special Meeting of AMIT
shareholders will be called to consider and vote on proposals to approve and
adopt the Merger Agreement and the transactions contemplated thereby, including
the merger of AMIT with and into IPT, with IPT being the surviving entity (the
"Merger"), and approve the amendment of AMIT's Declaration of Trust (the "Trust
Amendment") to permit AMIT to merge and consolidate with other entities subject
to the required vote of the AMIT Board and AMIT's shareholders (collectively,
the "Merger Proposal"). It is currently expected that the Special Meeting of
Shareholders will convene in mid 1998. A proxy statement will be circulated to
all AMIT shareholders in advance of the meeting, containing information on the
proposed merger.

Pursuant to the Merger Agreement, each outstanding AMIT Class A Share
will be converted into IPT Common shares (the "Class A Exchange Ratio"). The
Class A Exchange Ratio is determined by adjusting the base exchange values set
in the Merger Agreement of $16.25 per AMIT Class A Share and $10.00 per IPT
Common Share to account for dividends paid by AMIT since December 31, 1996 and
by IPT since January 31, 1997. The Class A Exchange Ratio is subject to further
adjustment should either AMIT or IPT declare any additional dividends prior to
the Merger. No fractional IPT Common Shares will be issued. In lieu of any
fractional shares, an AMIT shareholder otherwise entitled to a fractional IPT
Common Share will receive cash from IPT in an amount determined by multiplying
such fractional share amount by the IPT Share Value.

During the year ending December 31, 1997, Insignia paid approximately
$1 million for professional and legal fees on behalf of the Trust with regard
to the proposed merger.

NOTE 11 - QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

F-71

The following table sets forth the selected quarterly financial
data for the Trust (in thousands except for per share amounts).

QUARTER ENDING
-------------------------------------------------
1997 12/31/97 9/30/97 6/30/97 3/31/97
- - ---- -------------------------------------------------

Revenue $ 3,118 $ 1,088 $ 1,758 $ 1,235

Net income $ 2,427 $ 778 $ 1,462 $ 882

PER CLASS A SHARE
Net income $ 0.92 $ 0.29 $ 0.55 $ 0.33

Weighted average Class A Shares 2,617 2,617 2,617 2,617
outstanding

QUARTER ENDING
-------------------------------------------------
1996 12/31/96 9/30/96 6/30/96 3/31/96
- - ---- -------------------------------------------------

Revenue $ 7,387 $ 878 $ 631 $ 1,154

Net income $ 6,780 $ 562 $ 1,033 $ 711

PER CLASS A SHARE
Net income $ 2.56 $ 0.21 $ 0.37 $ 0.25

Weighted average Class A Shares 2,617 2,617 2,757 2,827
outstanding

F-72

ANGELES MORTGAGE INVESTMENT TRUST
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1997

Cost capitalized
Initial Cost to subsequent to
Trust acquisition
----------------------------------------
Building Improve- Carrying
Encum- and land ments costs
Description brances improvements
- - ----------------------------------------------------------------------------------

University Center Phase IV $1,800,000 - -
Retail Shopping
Friedly, Minnesota

University Center Phase I & II 1,100,000 - -
Warehouse Office
Friedly, Minnesota

Colony Cove 1,714,000 - -
Raw Land
Ellenton, Florida
---------------------------------------------------
Total $0 $4,614,000 $0 $0
===================================================

Life on
which
depreciation
in latest
Gross amount at which Date of income
carried at close of Accumulated con- Date statements
Description period(1)(2) Depreciation struction acquired is computed
- - --------------------------------------------------------------------------------------------------------

University Center Phase IV $1,671,000 0 1975 Dec.-'95 N/A
Retail Shopping
Friedly, Minnesota

University Center Phase I & II 1,100,000 0 1975 Nov.-'95 N/A
Warehouse Office
Friedly, Minnesota

Colony Cove 1,750,000 0 N/A Apr.-'96 & N/A
Raw Land Oct.-'97
Ellenton, Florida
--------------------------------------
Total $4,521,000 $0
======================================

FOOTNOTES TO SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION

(1) Reconcilation of real property investment:

Balance at January 1, 1995
$ 1,400,000
Additions during period:
Acquisition through
foreclosure $ 4,312,000
Deductions during period $(2,312,000)
-----------
Balance at December 31, 1995 $ 3,400,000
-----------
Additions during period:
Acquisition through
foreclosure $ 3,490,000
Deductions during period $(1,820,000)
-----------
Balance at December 31, 1996 $ 5,070,000
-----------
Additions during period:
Acquisition through
foreclosure $ 36,000
Deductions during period
$ (585,000)
-----------
Balance at December 31, 1997 $ 4,521,000
===========

(2) The carrying value for federal income tax purposes is $4,521,000.

F-73

ANGELES MORTGAGE INVESTMENT TRUST
SCHEDULE IV- MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1997
(IN THOUSANDS)

FINAL PERIODIC FACE CARRYING PRINCIPAL AMOUNT OF LOANS
INTEREST MATURITY PAYMENT PRIOR AMOUNT OF AMOUNT OF SUBJECT TO DELINQUENT
DESCRIPTION RATE DATE TERMS LIENS MORTGAGES MORTGAGES(2)(3) PRINCIPAL OR INTEREST
----------- ---- ---- ----- ----- ---------- ----------- ---------------------

FIRST TRUST DEEDS
Lake Arrowhead Resort
Hotel
Lake Arrowhead, California 10.20% Nov-99 (1) (9) - 9,004 9,004 -

*Mesa Dunes, Wakonda, Town & Country
Retail Stores, 9.00% Dec-03 (4) - 5,000 3,390 -
Cedar Rapids / Des
Moines, Iowa

*Princeton Meadows Joint Venture
Golf Course,
Princeton Meadows, New Jersey 12.50% Sep-01 (1) - 1,280 1,567 -

Virginia Industrial Capital, LLC
Warehouse,
Martinsville, Virginia 11.00% Apr-98 (1) - 2,950 2,950 -

*Hospitality Inn
Hotel,
Pensacola, Florida 11.25% Nov-02 (4) - 1,652 1,648 -

*Hospitality Inn
Hotel,
Pensacola, Florida 11.00% Nov-02 (4) - 1,297 1,294 -

*Hospitality Inn
Hotel,
Jacksonville, Florida 11.00% Nov-02 (4) - 2,274 2,268 -

F-74

ANGELES MORTGAGE INVESTMENT TRUST
SCHEDULE IV- MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1997
(IN THOUSANDS)

FIRST TRUST DEEDS (CONTINUED)

Affordable Residential
Communities, LP I
Three manufactured home parks
Denton and Tyler, Texas 8.90% Dec-03 (1) - 5,000 5,000 -

JJ & T Enterprises, Inc.
Four manufactured home parks
Cheyenne, Wyoming 9.07% Dec-03 (1) - 1,900 1,900 -

American Industrial Capital, LLC
Office/warehouse
Houston, Texas 8.00% Dec-07 (1) - 1,301 1,301 -

American Industrial Capital, LLC
Industrial warehouse
Aiken, South Carolina 8.00% Dec-07 (4) - 531 531 -

American Industrial Capital, LLC
Industrial warehouse
Jackson, Tennessee 10.50% Dec-07 (1) - 2,185 2,185 -

------------------------------------------------------------------
TOTAL FIRST TRUST DEEDS 0 34,374 33,038 0

F-75

ANGELES MORTGAGE INVESTMENT TRUST
SCHEDULE IV- MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1997
(IN THOUSANDS)

SECOND TRUST DEEDS

*Silver Ridge
Apartments
Maplewood, Minnesota 10.00% Dec-97 (1) 4,525 375 385 385

*Bercado Shores
Apartments,
South Bend, Indiana 12.50% Jun-95 (1) 4,307 1,350 1,350 1,350

*Brittany Point
Apartments,
Huntsville, Alabama 12.50% Dec-00 (1) 9,536 1,570 1,570 -

Nolana Apartments, Inc.
Los Angeles, California 12.00% Sep-98 (1) 1,873 455 375 -

*Southgate
Apartments,
Bedford Heights, Ohio 11.50% Mar-95 (1) 2,723 2,000 2,000 2,000

-------------------------------------------------------------
TOTAL SECOND TRUST DEEDS 22,964 5,750 5,680 3,735

F-76

ANGELES MORTGAGE INVESTMENT TRUST
SCHEDULE IV- MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1997
(IN THOUSANDS)

THIRD TRUST DEEDS

*Fox Run (A) 11.25% Jan-02 (4) 30,400 875 872 -
Apartments,
Plainsboro, New Jersey
----------------------------------------------------------

TOTAL THIRD TRUST DEEDS 30,400 875 872 0

PROMISSORY NOTES RECEIVABLE

*North Prior 12.25% Jun-96 (1) - 2,000 679 679
Warehouse Complex,
St. Paul, Minnesota

J. Schultz 8.00% May-00 (1) - 75 75 -
An Individual

*Angeles Partners 16 12.50% Jun-97 (1) - 860 860 860
California Limited Partnership

*Angeles Partners XIV 12.00% Feb-98 (1) - 459 411 -
California Limited Partnership

*Fox Crest 12.50% Mar-03 (1) 6,682 4,764 4,764 -
Apartments,
Waukegan, Illinois
----------------------------------------------------------

TOTAL PROMISSORY NOTES RECEIVABLE 6,682 8,158 6,789 1,539
----- ----- ----- -----

F-77

ANGELES MORTGAGE INVESTMENT TRUST
SCHEDULE IV- MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1997
(IN THOUSANDS)

FACE CARRYING PRINCIPAL AMOUNT OF LOANS
PRIOR AMOUNT OF AMOUNT OF SUBJECT TO DELINQUENT
DESCRIPTION LIENS MORTGAGES MORTGAGES(2)(3) PRINCIPAL OR INTEREST
----------- ----- ---------- ----------- ---------------------

SUMMARY

TOTAL FIRST TRUST DEEDS 0 34,374 33,038 0
TOTAL SECOND TRUST DEEDS 22,964 5,750 5,680 3,735
TOTAL THIRD TRUST DEEDS 30,400 875 872 0
TOTAL PROMISSORY NOTES RECEIVABLE 6,682 8,158 6,789 1,539
------- ------- ------- ------
TOTAL $60,046 $49,157 46,379 $5,274
========================= ================================

UNEARNED LOAN FEES (243)
-------
46,136
ALLOWANCE FOR ESTIMATED LOSSES (8,826)
-------
$37,310
=======

F-78

ANGELES MORTGAGE INVESTMENT TRUST
FOOTNOTES TO SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
December 31, 1997

(1) Note requires periodic interest only payments through maturity, when the
principal balance is due.

(2) Reconciliation of notes receivable:

Balance at January 1, 1996 $ 45,369,000

Additions:
New mortgage loans (5) 15,574,000

Deductions:
Principal collections (6) (16,256,000)
Foreclosures (4,342,000)
------------
Balance at December 31, 1996 $ 40,345,000

Additions:
New mortgage loans (7) 15,116,000

Deductions:
Principal collections (7,552,000)
Write-off of loan (8) (1,530,000)
------------
Balance at December 31, 1997 $ 46,379,000
============

(3) The carrying amount for Federal income tax purposes is approximately
$42,245,000.

(4) Note requires monthly interest and principal payments through maturity,
when the principal balance is due.

(5) Amount includes modified loans in which accrued but unrecorded interest
income was recast as principal for the following loans; Lake Arrowhead -
$9,004,000, Fox Run - $875,000, Fox Crest - $1,764,000, Brittany -
$291,000 and Angeles Partners XIV - $134,000.

(6) Amount includes the refinancing of the Lake Arrowhead promissory note of
$6 million.

(7) Amount includes modified loans in which accrued but unrecorded interest
income was recast as principal for the following loans; Hospitality Inns
Pensacola I - $237,000, Hospitality Inns Pensacola II - $97,000,
Hospitality Inns Jacksonville - $106,000 and LaSalle - $423,000.

(8) Amount represents write-off of Vista Hills promissory note of $1,530,000.

(9) Requires a principal repayment of $1,500,000 in November 1998 with the
remaining outstanding principal balance due in 1999.

* Indicates a transaction with a partnership now controlled by IPT.

F-79

ANGELES MORTGAGE INVESTMENT TRUST
BALANCE SHEETS

MARCH 31 DECEMBER 31
1998 1997
------------ ------------

ASSETS

Notes Receivable (primarily due from affiliates):
Mortgage notes receivable $ 31,921,000 $ 39,347,000
Promissory notes receivable 6,789,000 6,789,000
------------ ------------
38,710,000 46,136,000
Less: Allowances for estimated losses (8,826,000) (8,826,000)
------------ ------------

29,884,000 37,310,000
Foreclosed real estate held for sale 8,730,000 4,521,000
Cash and cash equivalents 10,860,000 3,947,000
Restricted cash 943,000 --
Accrued interest receivable 615,000 654,000
Prepaid expenses and other 119,000 98,000
------------ ------------

Total assets $ 51,151,000 $ 46,530,000
============ ============

LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
Accounts payable and accrued expenses $ 537,000 $ 588,000
Mortgage loan payable 4,525,000 --
------------ ------------

Total liabilities 5,062,000 588,000
------------ ------------

Shareholders' equity:
Class A Shares (2,617,000 issued and outstanding,
$1.00 par value, unlimited shares authorized) 2,617,000 2,617,000
Class B Shares (1,675,113 issued and outstanding,
$.01 value, unlimited shares authorized) 14,000 14,000
Additional paid-in capital 50,199,000 50,199,000
Accumulated distributions in excess of cumulative net
income (6,741,000) (6,888,000)
------------ ------------
Total shareholders' equity 46,089,000 45,942,000
------------ ------------

Total liabilities and shareholders' equity $ 51,151,000 $ 46,530,000
============ ============

The accompanying notes are an integral part of the financial statements.

F-80

ANGELES MORTGAGE INVESTMENT TRUST
STATEMENT OF OPERATIONS

THREE MONTHS ENDED
MARCH 31
-----------------------
1998 1997
---------- ----------

REVENUE:
Interest income $ 973,000 $1,168,000
Rental income 87,000 67,000
---------- ----------

Total revenue 1,060,000 1,235,000
---------- ----------

COSTS AND EXPENSES:
General and administrative 56,000 335,000
Amortization 20,000 18,000
---------- ----------

Total costs and expenses 76,000 353,000
---------- ----------

NET INCOME $ 984,000 $ 882,000
========== ==========

NET INCOME PER CLASS A SHARE $ 0.37 $ 0.33
========== ==========

CASH DISTRIBUTIONS PER CLASS A SHARE $ 0.32 $ 0.22
========== ==========

WEIGHTED AVERAGE CLASS A SHARES OUTSTANDING 2,617,000 2,617,000
========== ==========

The accompanying notes are an integral part of the financial statements

F-81

ANGELES MORTGAGE INVESTMENT TRUST
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

ACCUMULATED
DISTRIBUTIONS IN
ADDITIONAL EXCESS OF
CLASS A CLASS B PAID-IN CUMULATIVE NET
SHARES SHARES CAPTIAL INCOME TOTAL
------------ ------------ ------------ ---------------- ------------

Balance at December 31, 1997 $ 2,617,000 $ 14,000 $ 50,199,000 ($ 6,888,000) $ 45,942,000
Distributions paid to Class A
Shareholders -- -- -- (837,000) (837,000)
Net income -- -- -- 984,000 984,000
------------ ------------ ------------ ------------ ------------
Balance at March 31, 1998 $ 2,617,000 $ 14,000 $ 50,199,000 ($ 6,741,000) $ 46,089,000
============ ============ ============ ============ ============

The accompanying notes are an integral part of the financial statements

F-82

ANGELES MORTGAGE INVESTMENT TRUST
STATEMENTS OF CASH FLOW

THREE MONTHS ENDED
MARCH 31
----------------------------
1998 1997
------------ ------------

Cash flows from operating activities:
Net income $ 984,000 $ 882,000
Adjustments to reconcile net income to cash
flows from operating activities:
Amortization 20,000 18,000
Interest income in exchange for notes receivable -- (423,000)
Decrease (increase) in interest receivable 39,000 (43,000)
Decrease (increase) in prepaid expenses and other assets (44,000) 45,000
Decrease in accounts payable and accrued expenses (455,000) (187,000)
Increase (decrease) in unearned loan fee income (63,000) 39,000
------------ ------------
Cash flows provided by (used in) operating activities 481,000 331,000
------------ ------------

Cash flows from investing activities:
Principal collections of notes receivable 11,973,000 2,036,000
Funding of notes receivable (4,865,000) (5,000,000)
Proceeds from foreclosure of real estate 161,000 --
------------ ------------

Cash flows provided by (used in) investing activities 7,269,000 (2,964,000)
------------ ------------

Cash flows used in financing activities:
Distributions to Class A Shareholders (837,000) (576,000)
------------ ------------

Increase (decrease) in cash and cash equivalents 6,913,000 (3,209,000)

Cash and cash equivalents:
At beginning of period 3,947,000 9,789,000
------------ ------------

At end of period $ 10,860,000 $ 6,580,000
============ ============

Schedule of noncash financing and investing activities:
Assumption of first mortgage loan payable $ 4,525,000 $ --
Conversion of second mortgage receivable to real property 380,000 --
Deed-in-lieu of foreclosure, real property 4,369,000 --

The accompanying notes are an integral part of the financial statements

F-83

ANGELES MORTGAGE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS

NOTE 1 - The accompanying financial statements have not been audited by
independent certified accountants, but in the opinion of management all of the
adjustments necessary to present fairly the financial position of Angeles
Mortgage Investment Trust (the "Trust") and the results of operations and its
cash flows at the date and for periods indicated have been included. Certain
prior year amounts have been reclassified to conform to current year
classifications.

The accompanying financial statements have been prepared in conformity
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly they do not include all the information and footnotes required by
generally accepted accounting principles for complete financial statements.

Operating results for the three-month period ended March 31, 1998 are
not indicative of the results that may be expected for the year ending December
31, 1998.

For further information, refer to the financial statements and notes
thereto included in the Trust's annual report on Form 10-K for the year ended
December 31, 1997.

NOTE 2 - The net income per Class A Share was based on 2,617,000 weighted
average Class A Shares outstanding during the three months ended March 31, 1998
and 1997 after deduction of the 1% interest for Class B Shares.

NOTE 3 - The Trust's $5 million line of credit expired April 30, 1997 and
required monthly interest only payments based upon prime plus .50% per annum.
In May 1998 the line of credit was renewed through October 1998 with the
ability to extend the line of credit through April 1999 at the Trust's option.
The renewed line of credit provides for the same interest rate and payment
terms and requires a $12,500 commitment fee paid quarterly. During the quarter
ended March 31, 1998, the Trust did not draw down on the line of credit.

NOTE 4 - In December 1997 the Trust purchased a second mortgage loan for
$380,000 on a 186-unit apartment complex, Silver Ridge Apartments, located in
Maplewood, Minnesota. The Silver Ridge second mortgage has an interest rate of
10% and default rate of 12% and matured December 31, 1997. In addition, during
1997 the Trust obtained judgement liens against the Silver Ridge Apartments
property based upon recourse provisions on other Trust loans. Through a
judgement lien, the Trust foreclosed on the property in October 1997 subject to
a twelve-month redemption period. On January 30, 1998, the Trust received title
to Silver Ridge Apartments through deed-in-lieu of foreclosure as a result of
provisions in the second mortgage held by the Trust. In connection with taking
title to Silver Ridge Apartments the Trust assumed a first trust deed mortgage
from a third party in the amount of $4,525,000. This first mortgage provides
for a variable interest rate not to exceed 12%, interest only paid monthly,
with a current interest rate of 3 1/2% per annum. The loan matures in July
2023.

In addition, the Trust assumed control of restricted cash relating to
Silver Ridge Apartments with a balance of $943,000 as of March 31, 1998. The
restricted cash balance is comprised of approximately $500,000, held by the
first mortgage lender in escrow for: principal $295,000; real estate taxes and
insurance $100,000; and processing and other fees of $43,000. The remaining
$443,000 relates to funds for capital improvements and tenant security
deposits.

F-84

ANNEX A

AGREEMENT AND PLAN OF MERGER

AMONG

ANGELES MORTGAGE INVESTMENT TRUST

INSIGNIA PROPERTIES TRUST

INSIGNIA FINANCIAL GROUP, INC.

(SOLELY FOR THE PURPOSE AND LIMITED TO THE PROVISIONS OF SECTIONS 6.6(B) AND
6.16 AND ARTICLES 5 AND 9)

AND

MAE GP CORPORATION

(SOLELY FOR THE PURPOSE AND LIMITED TO THE PROVISIONS OF SECTION 6.13 AND
ARTICLE 9)

DATED AS OF JULY 18, 1997

TABLE OF CONTENTS

PAGE
-----

ARTICLE 1
- - ------------------
THE MERGER
----------------------------------------------------------
SECTION 1.1 The Merger ............................................... A-1
SECTION 1.2 Effects of the Merger .................................... A-1
(a) Generally; Surviving Entity .............................. A-1
(b) Effective Time ........................................... A-1
(c) Declaration of Trust and Bylaws .......................... A-1
(d) Trustees and Officers .................................... A-1
(e) Post-Effective Time Status ............................... A-2

ARTICLE 2
- - ------------------
EXCHANGE RATIO; CONVERSION OF SHARES
-----------------------------------------------------------
SECTION 2.1 Exchange Ratio ........................................... A-2
SECTION 2.2 Conversion of Shares ..................................... A-2
(a) Canceled AMIT Shares ..................................... A-2
(b) Conversion of AMIT Class A ............................... A-2
(c) Conversion of AMIT Class B ............................... A-2
SECTION 2.3 Exchange of Shares; Responsibility for Payments .......... A-2
(a) Exchange Agent ........................................... A-2
(b) Exchange of AMIT Certificates ............................ A-2
SECTION 2.4 Dividends; Transfer Taxes ................................ A-2
SECTION 2.5 No Fractional Shares ..................................... A-3
SECTION 2.6 Closing of Transfer Books ................................ A-3
SECTION 2.7 The Closing .............................................. A-3
(a) Time and Place ........................................... A-3
(b) Actions at the Closing ................................... A-3

ARTICLE 3
- - ------------------
REPRESENTATIONS AND WARRANTIES OF AMIT
-----------------------------------------------------------
SECTION 3.1 Organization ............................................. A-4
(a) AMIT ..................................................... A-4
(b) AMIT Subsidiaries ........................................ A-4
SECTION 3.2 Qualification ............................................ A-4
SECTION 3.3 Power and Authority ...................................... A-4
SECTION 3.4 Capitalization ........................................... A-4
(a) AMIT ..................................................... A-4
(b) AMIT Subsidiaries ........................................ A-4
SECTION 3.5 Authority Relative to Transactions ....................... A-4
SECTION 3.6 Noncontravention ......................................... A-5
SECTION 3.7 Governmental Consents .................................... A-5
SECTION 3.8 Filings with the SEC ..................................... A-5
SECTION 3.9 Financial Statements ..................................... A-5
SECTION 3.10 Subsequent Events ........................................ A-5
SECTION 3.11 Undisclosed Liabilities .................................. A-5
SECTION 3.12 Broker's Fees ............................................ A-5
SECTION 3.13 Disclosure ............................................... A-5
SECTION 3.14 Compliance with State Takeover Statutes .................. A-6

PAGE
-----

ARTICLE 4
- - ------------------
REPRESENTATIONS AND WARRANTIES OF IPT
-----------------------------------------------------------------
SECTION 4.1 Organization .................................................... A-6
(a) IPT ............................................................. A-6
(b) IPLP ............................................................ A-6
(c) IPT Subsidiaries ................................................ A-6
(d) Investment Limited Partnerships ................................. A-6
SECTION 4.2 Qualification ................................................... A-6
SECTION 4.3 Power and Authority ............................................. A-6
SECTION 4.4 Capitalization of the Investment Limited Partnerships. .......... A-6
SECTION 4.5 Authority Relative to Transactions .............................. A-7
SECTION 4.6 Noncontravention ................................................ A-7
SECTION 4.7 Governmental Consents ........................................... A-7
SECTION 4.8 Filings with the SEC ............................................ A-7
SECTION 4.9 Financial Statements ............................................ A-7
(a) IPT ............................................................. A-7
(b) Investment Limited Partnerships ................................. A-7
SECTION 4.10 Subsequent Events ............................................... A-8
(a) IPT, IPT Subsidiaries and IPLP .................................. A-8
(b) Investment Limited Partnerships ................................. A-8
SECTION 4.11 Undisclosed Liabilities ......................................... A-8
(a) IPT, IPT Subsidiaries and IPLP .................................. A-8
(b) Investment Limited Partnerships ................................. A-8
SECTION 4.12 REIT Status ..................................................... A-8
SECTION 4.13 Broker's Fees ................................................... A-8
SECTION 4.14 Disclosure ...................................................... A-8
SECTION 4.15 Compliance with State Takeover Statutes ......................... A-8

ARTICLE 5
- - ------------------
REPRESENTATIONS AND WARRANTIES OF IFG
------------------------------------------------------------------
SECTION 5.1 Capitalization .................................................. A-9
(a) IPT ............................................................. A-9
(b) IPLP ............................................................ A-9
(c) IPT Subsidiaries ................................................ A-9
(d) Investment Limited Partnerships ................................. A-10

ARTICLE 6
- - ------------------
COVENANTS
------------------------------------------------------------------
SECTION 6.1 General ......................................................... A-10
SECTION 6.2 Regulatory Matters and Legal Approvals .......................... A-10
(a) Securities Laws ................................................. A-10
(b) State Corporate Law -- AMIT ..................................... A-10
(c) State Corporate Law -- IPT ...................................... A-10
(d) State Corporate Law -- All Parties .............................. A-10
(e) Listing ......................................................... A-10
SECTION 6.3 Operation of Business ........................................... A-11
SECTION 6.4 Dividend Payments ............................................... A-11
(a) IPT ............................................................. A-11
(b) AMIT ............................................................ A-11

PAGE
-----

SECTION 6.5 Obligation to Notify and Update .......................... A-12
(a) AMIT's Obligations ....................................... A-12
(b) IPT Group's Obligations .................................. A-12
SECTION 6.6 Confidentiality .......................................... A-12
(a) AMIT's Obligations ....................................... A-12
(b) IPT's Obligations ........................................ A-12
SECTION 6.7 Full Access .............................................. A-12
SECTION 6.8 Notice of Developments ................................... A-12
SECTION 6.9 Exclusive Dealing ........................................ A-12
SECTION 6.10 Fairness Opinion ......................................... A-13
SECTION 6.11 Employment Agreements .................................... A-13
(a) Ronald J. Consiglio ...................................... A-13
(b) Anna Merguerian .......................................... A-13
SECTION 6.12 Expense Reimbursement .................................... A-13
SECTION 6.13 Agreements Regarding the Shares of AMIT Class B .......... A-13
SECTION 6.14 Indemnification .......................................... A-13
(a) Indemnification .......................................... A-13
(b) Notice Required .......................................... A-14
(c) Defense of Indemnification Proceeding .................... A-14
(d) Settlement ............................................... A-14
(e) Right to Employ Counsel .................................. A-14
(f) Survival of this Section ................................. A-15
(g) Successors and Assigns Bound ............................. A-15
SECTION 6.15 Post-Merger IPT Trustees ................................. A-15
SECTION 6.16 Standstill Obligation .................................... A-15

ARTICLE 7
- - ------------------
CONDITIONS TO CONSUMMATION OF THE MERGER
-----------------------------------------------------------
SECTION 7.1 Conditions to Obligation of AMIT ......................... A-15
(a) Shareholder Approval ..................................... A-15
(b) Representations and Warranties ........................... A-15
(c) Performance of Covenants ................................. A-15
(d) Registration Statement ................................... A-15
(e) Listing .................................................. A-15
(f) Articles of Merger ....................................... A-15
(g) No Order ................................................. A-15
(h) Maryland Opinion Regarding AMIT .......................... A-15
(i) Opinion Regarding IPT, IFG and MAE ....................... A-16
(j) REIT Opinion ............................................. A-16
(k) Reorganization Opinion ................................... A-16
(l) Deliveries by IPT ........................................ A-16
SECTION 7.2 Conditions to Obligation of IPT and MAE .................. A-17
(a) Shareholder Approval ..................................... A-17
(b) Representations and Warranties ........................... A-17
(c) Performance of Covenants ................................. A-17
(d) Registration Statement ................................... A-17
(e) Listing .................................................. A-17
(f) Articles of Merger ....................................... A-17
(g) No Order ................................................. A-17

iii

PAGE
-----

(h) Maryland Opinion Regarding IPT ...................... A-17
(i) Opinion Regarding AMIT .............................. A-17
(j) REIT Opinion ........................................ A-18
(k) Reorganization Opinion .............................. A-18
(l) Deliveries .......................................... A-18

ARTICLE 8
- - -------------------
TERMINATION
------------------------------------------------------
SECTION 8.1 Termination of Agreement ............................ A-18
SECTION 8.2 Effect of Termination ............................... A-19

ARTICLE 9
- - -------------------
MISCELLANEOUS
------------------------------------------------------
SECTION 9.1 Survival of Representations and Warranties .......... A-19
SECTION 9.2 Severability ........................................ A-19
SECTION 9.3 Successors and Assigns .............................. A-19
SECTION 9.4 Counterparts ........................................ A-19
SECTION 9.5 Headings 26 ......................................... A-19
SECTION 9.6 Waiver 26 ........................................... A-19
SECTION 9.7 No Third-Party Beneficiaries 26 ..................... A-19
SECTION 9.8 Other Expenses 26 ................................... A-19
SECTION 9.9 Notices ............................................. A-19
SECTION 9.10 Governing Law ....................................... A-20
SECTION 9.11 Interpretation ...................................... A-20
(a) References .......................................... A-21
(b) Cross-Reference of Disclosures ...................... A-21
(c) Drafting ............................................ A-21
SECTION 9.12 Public Announcements ................................ A-21
SECTION 9.13 Entire Agreement .................................... A-21
SECTION 9.14 Amendment ........................................... A-21
SECTION 9.15 Disclosure Letters .................................. A-21

ARTICLE 10
- - -------------------
DEFINITIONS
------------------------------------------------------
SECTION 10.1 Definitions ......................................... A-21

EXHIBITS

Exhibit 1.2(b)...............................................Articles of Merger

Exhibit 3.1(a)..............AMIT's Declaration of Trust and Trustee Regulations

Exhibit 4.1(a)............................IPT's Declaration of Trust and Bylaws

Exhibit 5.1(b)...............................IPLP Limited Partnership Agreement

Exhibit 6.11(a)......................... Form of Consiglio Employment Agreement

Exhibit 6.11(b)........................ Form of Merguerian Employment Agreement

SCHEDULES

Schedule 1.2(d)............... Trustees and Officers of IPT Post-Effective Time

Schedule 3.1(b)............. AMIT Subsidiaries and Jurisdiction of Organization

Schedule 3.4(b)............................ Capitalization of AMIT Subsidiaries

Schedule 4.1(c).............. IPT Subsidiaries and Jurisdiction of Organization

Schedule 4.1(d) Investment Limited Partnerships and Jurisdiction of Organization

Schedule 4.4................ Capitalization of Investment Limited Partnerships

Schedule 4.9.......................................... IPT Financial Statements

Schedule 5.1(c)............................. Capitalization of IPT Subsidiaries

Schedule 5.1(d)................................ Investment Limited Partnerships

INDEX OF DEFINED TERMS

TERM LOCATION
- - ---- --------

Agreement ...................................... First Paragraph
AGSH&F ......................................... Section 7.1(i)
AMIT ........................................... First Paragraph
AMIT Class A ................................... Section 10.1(a)
AMIT Class A Certificate ....................... Section 2.2(b)
AMIT Class B ................................... Section 10.1(b)
AMIT Class B Certificate ....................... Section 2.2(c)
AMIT Declaration of Trust ...................... Section 3.1(a)
AMIT Disclosure Letter ......................... First Paragraph, Article 3
AMIT Dividend Amount ........................... Section 10.1(c)
AMIT Group ..................................... Section 10.1(d)
AMIT Public Reports ............................ Section 3.8
AMIT Shareholders .............................. Section 10.1(e)
AMIT Shares .................................... Section 3.4(a)
AMIT Subsidiaries .............................. Section 3.1(b)
Articles of Merger ............................. Section 1.2(b)
Canceled AMIT Shares ........................... Section 2.2(a)
Closing ........................................ Section 2.7(a)
Closing Date ................................... Section 2.7(a)
Code ........................................... Section 4.12
Competing Transaction .......................... Section 6.12
Effective Time ................................. Section 1.2(b)
Exchange Agent ................................. Section 2.3(a)
Exchange Ratio ................................. Section 2.1
Expense Letter ................................. Section 6.12
Fairness Opinion ............................... Section 6.10
Funds From Operations .......................... Section 10.1(f)
GAAP ........................................... Section 10.1(g)
GGFC&M ......................................... Section 2.7(a)
IFG ............................................ First Paragraph
IFG Confidentiality Agreement .................. Section 6.6(b)
IFG Disclosure Letter .......................... First Paragraph, Article 5
Indemnification Proceeding ..................... Section 6.14(a)
Indemnified Liabilities ........................ Section 6.14(a)
Indemnified Parties ............................ Section 6.14(a)
Investment Limited Partnerships ................ Section 4.1(d)
IPLP ........................................... Section 10.1(h)
IPLP Limited Partnership Agreement ............. Section 5.1(a)
IPLP GP Units .................................. Section 5.1(b)
IPLP LP Units .................................. Section 5.1(b)
IPLP Units ..................................... Section 5.1(b)
IPT ............................................ First Paragraph
IPT Balance Sheets ............................. Section 4.9(a)
IPT Base Value ................................. Section 10.1(i)

IPT Common ................................... Section 5.1(a)
IPT Disclosure Letter ........................ First Paragraph, Article 4
IPT Dividend Amount .......................... Section 10.1(j)
IPT Group .................................... Section 10.1(k)
IPT Financial Statements ..................... Section 4.9(a)
IPT Preferred ................................ Section 5.1(a)
IPT Private Placement ........................ Section 10.1(l)
IPT Share Value .............................. Section 10.1(m)
IPT Shareholders ............................. Section 10.1(n)
IPT Shares ................................... Section 5.1(a)
IPT Statements of Operations ................. Section 4.9(a)
IPT Stock Option Plan ........................ Section 10.1(o)
IPT Subsidiaries ............................. Section 4.1(c)
Irrevocable Voting Proxy ..................... Section 6.13
Joint Proxy/Prospectus ....................... Section 10.1(p)
Lien ......................................... Section 10.1(q)
M&S .......................................... Section 7.1(h)
MAE .......................................... First Paragraph
Material Adverse Effect ...................... Section 10.1(r)
MCAA ......................................... Section 1.1
Merger ....................................... Section 1.1
Ordinary Course of Business .................. Section 10.1(s)
Partnership Public Reports ................... Section 4.8
Party, Parties ............................... First Paragraph
Permitted Debt ............................... Section 10.1(t)
Person ....................................... Section 10.1(u)
Registration Statement ....................... Section 10.1(v)
REIT ......................................... Section 4.12
SEC Section .................................. 10.1(w)
Securities Act ............................... Section 10.1(x)
Securities Exchange Act ...................... Section 10.1(y)
Share Rights ................................. Section 10.1(z)
Signing Date ................................. First Paragraph
Special Meeting .............................. Section 10.1(aa)
Stock Option Agreement ....................... Section 3.4(a)

vii

ANNEX A

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") is entered into and
dated as of July 18, 1997 (the "SIGNING DATE") among Angeles Mortgage
Investment Trust, an unincorporated California business trust ("AMIT"),
Insignia Properties Trust, a Maryland real estate investment trust ("IPT"), and
solely for the purpose and limited to the provisions of Sections 6.6(b) and
6.16 and Articles 5 and 9, Insignia Financial Group, Inc., a Delaware
corporation ("IFG"), and solely for the purpose and limited to the provisions
of Section 6.13 and Article 9, MAE GP Corporation, a Delaware corporation
("MAE"). AMIT and IPT are sometimes collectively referred to as the "PARTIES,"
and individually referred to as a "PARTY."

RECITALS

A. Each of AMIT and IPT desires to effect a merger of AMIT with and into IPT,
on the terms and subject to the conditions set forth in this Agreement.

B. In order to induce AMIT to enter into this Agreement, IFG desires to enter
into this Agreement solely for the purpose and limited to the provisions of
Sections 6.6(b) and 6.16 and Articles 5 and 9, and MAE desires to enter
into this Agreement solely for the purpose and limited to the provisions of
Section 6.13 and Article 9.

C. The respective boards of trustees of AMIT and IPT have duly approved such
merger pursuant to the terms of this Agreement.

D. Certain capitalized terms used herein are defined in Article 10. An index of
defined terms has been provided for the convenience of the reader and in
order to eliminate the need for cross-references.

AGREEMENT

NOW, THEREFORE, for good, valid and binding consideration, the receipt and
sufficiency of which are hereby acknowledged, each of AMIT, IPT and, for the
limited purposes specifically stated herein, IFG and MAE, intending to be
legally bound, hereby agrees as follows:

ARTICLE 1.

THE MERGER

SECTION 1.1 The Merger. On the terms and subject to conditions set forth
in this Agreement, and in accordance with the applicable provisions of the
Maryland Corporations and Associations Article (the "MCAA"), AMIT shall merge
with and into IPT (the "MERGER") at the Effective Time.

SECTION 1.2 Effects of the Merger.

(a) Generally; Surviving Entity. The Merger shall have the effects set
forth in Section 8-501.1(n) of the MCAA. IPT shall survive and continue as the
successor entity and the separate existence of AMIT shall cease. IPT may, at
any time after the Effective Time, take any action (including executing and
delivering any document) in the name and on behalf of AMIT in order to carry
out and effectuate the transactions contemplated by this Agreement.

(b) Effective Time. The Merger shall be consummated (the "EFFECTIVE TIME")
upon the State Department of Assessments and Taxation of the State of Maryland
accepting for record the filing of the Articles of Merger in substantially the
form attached hereto as Exhibit 1.2(b) (the "ARTICLES OF MERGER").

(c) Declaration of Trust and Bylaws. The Declaration of Trust and Bylaws
of IPT, both as in effect at the Effective Time, shall be the Declaration of
Trust and Bylaws of IPT after the Effective Time.

(d) Trustees and Officers. As of the Effective Time, the persons listed on
Schedule 1.2(d) shall be the trustees and officers of IPT until the earlier of
their resignation, removal or death or until their respective successors are
duly elected and qualified, as the case may be.

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(e) Post-Effective Time Status. From and after the Effective Time, no AMIT
Shares which were outstanding immediately prior to the Effective Time shall be
deemed to be outstanding or have any rights other than those rights set forth
in this Agreement.

ARTICLE 2.

EXCHANGE RATIO; CONVERSION OF SHARES

SECTION 2.1 Exchange Ratio. As used herein, the term "EXCHANGE RATIO"
means a number equal to the quotient of (a) the lesser of (i) $16.25 or (ii)
the lowest gross per share dollar amount for which a share of AMIT Class A or
AMIT Class B is issued after the Signing Date, divided by (b) the IPT Share
Value.

SECTION 2.2 Conversion of Shares. As of the Effective Time, by virtue of
the Merger and without any action on the part of any holder of AMIT Class A and
AMIT Class B, as the case may be:

(a) Canceled AMIT Shares. Each share of AMIT Class A and AMIT Class B
which is held in treasury by AMIT or by any AMIT Subsidiary or owned of record
by IPT or any member of the IPT Group shall be canceled (collectively, the
"CANCELED AMIT SHARES").

(b) Conversion of AMIT Class A. Subject to Section 2.5, each then issued
and outstanding share of AMIT Class A (other than the Canceled AMIT Shares)
shall be converted solely into the right to receive, upon surrender of the
certificate formerly evidencing such share of AMIT Class A (an "AMIT CLASS A
CERTIFICATE") in accordance with Section 2.3(b), a number of newly-issued,
fully-paid and non-assessable shares of IPT Common equal to the Exchange Ratio.

(c) Conversion of AMIT Class B. Subject to Section 2.5, each then issued
and outstanding share of AMIT Class B (other than the Canceled AMIT Shares)
shall be converted solely into the right to receive, upon surrender of the
certificate formerly evidencing such share of AMIT Class B (an "AMIT CLASS B
CERTIFICATE") in accordance with Section 2.3(b), a number of newly-issued,
fully-paid and non-assessable shares of IPT Common equal to the quotient of (i)
the Exchange Ratio, divided by (ii) 49.

SECTION 2.3 Exchange of Shares; Responsibility for Payments.

(a) Exchange Agent. Prior to the Effective Time, IPT shall authorize First
Union National Bank, or such other nationally-recognized bank or trust company
that is reasonably acceptable to IPT, to act as the exchange agent hereunder
(the "EXCHANGE AGENT"). IPT shall pay all charges and expenses of the Exchange
Agent.

(b) Exchange of AMIT Certificates. As soon as practicable after the
Effective Time, the Exchange Agent shall mail and make available to each record
holder of an AMIT Class A Certificate or an AMIT Class B Certificate a notice
and letter of transmittal in customary form advising such holder of the
effectiveness of the Merger and the procedure for surrendering to the Exchange
Agent such AMIT Class A Certificate or such AMIT Class B Certificate for
exchange pursuant to this Agreement. Upon the surrender to the Exchange Agent
of such AMIT Class A Certificate or such AMIT Class B Certificate, as the case
may be, together with such letter of transmittal duly executed and completed in
accordance with the instructions thereon, the Exchange Agent shall promptly
cause to be delivered to such holder, and each such holder of an AMIT Class A
Certificate or an AMIT Class B Certificate, as the case may be, will be
entitled to receive (i) a certificate or certificates evidencing the number of
shares (rounded down to the nearest whole number) of IPT Common into which the
shares of AMIT Class A or AMIT Class B evidenced by such AMIT Class A
Certificate or AMIT Class B Certificate, respectively, were converted in the
Merger and (ii) a check payable to such holder representing the payment of
cash-in-lieu of fractional shares of IPT Common, if any, determined in
accordance with Section 2.4, to which such holder is entitled. The AMIT Class A
Certificates and AMIT Class B Certificates so surrendered shall forthwith be
canceled. The shares of IPT Common into which the shares of AMIT Class A and
AMIT Class B shall be converted in the Merger shall be deemed to have been
issued at the Effective Time.

SECTION 2.4 Dividends; Transfer Taxes. No dividends or distributions that
are declared or made on shares of IPT Common after the Effective Time or with a
record date after the Effective Time shall

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be paid to any Person entitled to receive certificates evidencing shares of IPT
Common pursuant to this Agreement unless and until such Person surrenders his
AMIT Class A Certificates or AMIT Class B Certificates, as the case may be.
Upon such surrender, there shall be paid to the Person in whose name the
certificates evidencing such shares of IPT Common shall be issued, any
dividends or distributions which became payable with respect to such shares of
IPT Common between the Effective Time and the time of such surrender. In no
event shall the Person entitled to receive such dividends or distributions be
entitled to receive any interest thereon. In the event that any certificates
evidencing shares of IPT Common are to be issued in a name other than that in
which the AMIT Class A Certificates or AMIT Class B Certificates surrendered in
exchange therefor are registered, it shall be a condition of such exchange that
the Person requesting such exchange (i) pay to the Exchange Agent any transfer
or other taxes required by reason of the issuance of certificates evidencing
such shares of IPT Common in a name other than that of the registered holder of
the AMIT Class A Certificate or AMIT Class B Certificate surrendered or (ii)
establish to the satisfaction of the Exchange Agent that such tax has been paid
or is not applicable.

SECTION 2.5 No Fractional Shares. No certificate or scrip evidencing a
fractional share of IPT Common shall be issued upon the surrender for exchange
of AMIT Class A Certificates or AMIT Class B Certificates evidencing shares of
AMIT Class A and AMIT Class B, respectively, pursuant to this Article 2, and no
dividend, distribution, stock split or other change in the capital structure of
IPT shall relate to any fractional security, and such fractional interest shall
not entitle the owner thereof to vote or to any rights of a security holder of
IPT. In lieu of any such fractional shares, each holder of AMIT Shares who
would otherwise have been entitled to a fraction of a share of IPT Common upon
surrender of AMIT Class A Certificates or AMIT Class B Certificates for
exchange pursuant to this Article 2 shall be paid by IPT an amount in cash
(without interest) upon such surrender equal to such fraction multiplied by the
IPT Share Value.

SECTION 2.6 Closing of Transfer Books. Upon the date of the Effective
Time, the stock transfer books of AMIT shall be closed and no transfer of AMIT
Shares shall be made thereafter. If, after the Effective Time, AMIT Class A
Certificates or AMIT Class B Certificates are presented to IPT, they shall be
canceled and exchanged for certificates evidencing shares of IPT Common and
cash as provided in this Article 2. Notwithstanding the foregoing, or any other
provision of this Article 2, neither the Exchange Agent nor any Party shall be
liable to a holder of AMIT Shares for any shares of IPT Common or dividends or
distributions thereon, or, in accordance with Section 2.5, amounts due in
respect of fractional interests, delivered to a public official pursuant to any
applicable escheat, unclaimed property or other similar law.

SECTION 2.7 The Closing.

(a) Time and Place. The closing of the transactions contemplated by this
Agreement (the "CLOSING") shall take place at the offices of Greenberg Glusker
Fields Claman & Machtinger LLP ("GGFC&M"), 1900 Avenue of the Stars, Suite
2100, Los Angeles, California, commencing at 9:00 a.m. local time as soon as
practicable following the satisfaction or waiver of all the conditions to the
obligations of the Parties to consummate the transactions contemplated hereby
(other than the conditions with respect to actions the Parties will take at the
Closing) or such other date as the Parties may mutually determine (the "CLOSING
DATE").

(b) Actions at the Closing. At the Closing, (i) IPT will deliver to AMIT
the various certificates, instruments and documents referred to in Section 7.1,
(ii) AMIT will deliver to IPT the various certificates, instruments and
documents referred to in Section 7.2 and (iii) IPT and AMIT will file with the
State Department of Assessments and Taxation of the State of Maryland the
Articles of Merger.

ARTICLE 3.

REPRESENTATIONS AND WARRANTIES OF AMIT

AMIT represents and warrants to IPT and IFG that the statements contained
in this Article 3 are correct and complete, except as set forth in the
disclosure letter provided by AMIT accompanying this Agreement (the "AMIT
DISCLOSURE LETTER"). The AMIT Disclosure Letter will be arranged in paragraphs
corresponding to the numbered and lettered sections contained in this Article
3.

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SECTION 3.1 Organization.

(a) AMIT. AMIT is an unincorporated business trust duly formed and validly
existing under the laws of the State of California, and has taken no action
which would cause its dissolution. Other than the AMIT Subsidiaries, AMIT is
not the record owner of any shares of capital stock of or other equity interest
in any Person. Attached hereto as Exhibit 3.1(a) is a complete and correct copy
of the AMIT Declaration of Trust (the "AMIT Declaration Of Trust") and the AMIT
Trustee Regulations, as each is in effect as of the Signing Date.

(b) AMIT Subsidiaries. Schedule 3.1(b) lists as of the Signing Date the
name and jurisdiction of organization of each Person in which AMIT owns any
shares of capital stock or other equity interest (collectively, the "AMIT
SUBSIDIARIES"). Each of the AMIT Subsidiaries is an entity validly existing and
in good standing under the laws of the jurisdiction of its organization. None
of the AMIT Subsidiaries is the record owner of any shares of capital stock of
or other equity interest in any Person.

SECTION 3.2 Qualification. Each member of the AMIT Group is duly qualified
and in good standing (where applicable) as a foreign entity under the laws of
each jurisdiction where such qualification is required, except where the lack
of such qualification would not have a Material Adverse Effect.

SECTION 3.3 Power and Authority. Each member of the AMIT Group has all
requisite power and authority to own and operate its properties and to conduct
the business in which it is currently engaged, except where the lack of such
power and authority would not have a Material Adverse Effect.

SECTION 3.4 Capitalization.

(a) AMIT. There is no limit upon the number of shares of AMIT beneficial
interest which may be issued. As of the Signing Date, 2,617,000 shares of AMIT
Class A are issued and outstanding and 1,675,113 shares of AMIT Class B are
issued and outstanding (collectively, the "AMIT SHARES"). No other shares of
AMIT beneficial interests are issued and outstanding or held in treasury. All
of the AMIT Shares have been duly authorized and are validly issued, fully paid
and nonassessable. Other than (i) the Share Rights, and (ii) AMIT's obligation
(if AMIT does not exercise its option to acquire the shares of AMIT Class B
pursuant to that certain Stock Option Agreement dated April 14, 1995 between
AMIT and MAE (the "STOCK OPTION AGREEMENT")) to issue shares of AMIT Class A
upon the conversion of the shares of AMIT Class B into shares of AMIT Class A
on the basis of one (1) share of AMIT Class A for forty-nine (49) shares of
AMIT Class B in accordance with the AMIT Declaration of Trust, there are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require AMIT to issue, sell, or otherwise cause to become
outstanding any of its shares of beneficial interests. There are no outstanding
or authorized share appreciation rights, phantom shares, profit participation,
or similar rights with respect to AMIT beneficial interests.

(b) AMIT Subsidiaries. Schedule 3.4(b) lists as of the Signing Date the
following information for each of the AMIT Subsidiaries: (i) the total number
of authorized shares of capital stock or other equity interests, (ii) the total
number of issued and outstanding shares of capital stock or other equity
interests and (iii) the total number of issued and outstanding shares of
capital stock or other equity interests owned by AMIT. No shares of capital
stock or other equity interests are held in treasury at any of the AMIT
Subsidiaries. All of the issued and outstanding shares of capital stock or
other equity interests of each of the AMIT Subsidiaries have been duly
authorized and are validly issued, fully paid, nonassessable and free and clear
of all Liens. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require any of the AMIT Subsidiaries
to issue, sell, or otherwise cause to become outstanding any of their shares of
capital stock or other equity interests. There are no outstanding or authorized
share or unit appreciation rights, phantom shares or units, profit
participation, or similar rights with respect to the shares of capital stock or
other equity interests of any of the AMIT Subsidiaries.

SECTION 3.5 Authority Relative to Transactions. Subject to AMIT's amending
its Declaration of Trust to allow for, among other things, the Merger, AMIT has
all requisite power and authority to execute

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and deliver this Agreement and to perform its obligations hereunder; provided,
however, that AMIT may not consummate the Merger unless and until it receives
the approval of its shareholders. This Agreement constitutes the valid and
legally binding obligation of AMIT, enforceable against it in accordance with
its terms and conditions.

SECTION 3.6 Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge or other restriction of any government,
governmental agency or court to which any member of the AMIT Group is subject
or any provision of the charter or bylaws of any member of the AMIT Group or
(ii) conflict with, result in a breach or the acceleration of, constitute a
default under, create in any Person the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument or other arrangement to which any member of the AMIT Group is a
party or by which it is bound or to which any of its assets is subject (or
result in the imposition of any Lien upon any of its assets); except in each
case where the violation, conflict, breach, default, acceleration, termination,
modification, cancellation, failure to give notice, or imposition of a Lien
would not have a Material Adverse Effect.

SECTION 3.7 Governmental Consents. Other than in connection with the
provisions of the Securities Act, the Securities Exchange Act and the state
securities laws and the filing of the Articles of Merger, no member of the AMIT
Group needs to give any notice to, make any filing with or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement, except in each case where the failure to give notice, to file or to
obtain any authorization, consent or approval would not have a Material Adverse
Effect.

SECTION 3.8 Filings with the SEC. AMIT has made all filings with the SEC
required under the Securities Act and the Securities Exchange Act within the
last three years (collectively, the "AMIT PUBLIC REPORTS"). Each of the AMIT
Public Reports complied with the Securities Act or the Securities Exchange Act,
as applicable, in all material respects.

SECTION 3.9 Financial Statements. The financial statements included in or
incorporated by reference into the AMIT Public Reports (including the related
notes and schedules) have been prepared in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby and present fairly, in
all material respects, the financial condition of AMIT as of the dates
indicated and the results of its operations and cash flows for the periods then
ended; provided, however, that the financial statements included in or
incorporated by reference into the interim AMIT Public Reports are subject to
normal year-end adjustments.

SECTION 3.10 Subsequent Events. Since the date of the balance sheet
included in or incorporated by reference into the most recent AMIT Public
Report, there has been no event or occurrence with respect to AMIT or the AMIT
Subsidiaries that has had, or could be expected to have, a Material Adverse
Effect.

SECTION 3.11 Undisclosed Liabilities. AMIT and the AMIT Subsidiaries have
no liabilities, contingent or otherwise, required to be disclosed by GAAP
except for (i) liabilities disclosed on the balance sheet or in the notes
relating thereto included in or incorporated by reference into the most recent
AMIT Public Report and (ii) current liabilities incurred in the Ordinary Course
of Business since the most recent AMIT Public Report.

SECTION 3.12 Broker's Fees. No member of the AMIT Group has any liability
or obligation to pay any broker's, finder's or agency fees or commissions to
any broker, finder, or agent with respect to the transactions contemplated by
this Agreement.

SECTION 3.13 Disclosure. The portion of the Joint Proxy/Prospectus for
which AMIT is responsible will comply with the Securities Act and the
Securities Exchange Act in all material respects. The Joint Proxy/Prospectus
will not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they will be made, not misleading;
provided, however, that AMIT makes no representation or warranty with respect
to any information that IPT will supply specifically for use in the Joint
Proxy/Prospectus.

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SECTION 3.14 Compliance with State Takeover Statutes. No "fair price,"
"moratorium," "business combination," "control share acquisition," or any other
anti-takeover statute enacted under the laws of the State of California applies
or purports to apply to AMIT, any of its equity securities, the Merger, this
Agreement or any of the transactions contemplated hereunder. AMIT has taken all
actions and done all things necessary to exempt itself and the Merger and all
related transactions with IPT from the operation of all "fair price,"
"moratorium," "business combination," "control share acquisition," or any other
anti-takeover statutes enacted under any federal law or regulation.

ARTICLE 4.

REPRESENTATIONS AND WARRANTIES OF IPT

IPT represents and warrants to AMIT that the statements contained in this
Article 4 are correct and complete, except as set forth in the disclosure
letter provided by IPT accompanying this Agreement (the "IPT DISCLOSURE
LETTER"). The IPT Disclosure Letter will be arranged in paragraphs
corresponding to the numbered and lettered sections contained in this Article
4.

SECTION 4.1 Organization.

(a) IPT. IPT is a real estate investment trust (as defined in Section
8-101(b) of the MCAA) duly formed, validly existing and in good standing under
the laws of the State of Maryland. Other than the IPT Subsidiaries and IPLP, as
of the Signing Date IPT is not the record owner of any shares of capital stock
of or other equity interest in any Person. Attached hereto as Exhibit 4.1(a) is
a complete and correct copy of IPT's Declaration of Trust and Bylaws, as each
is in effect as of the Signing Date.

(b) IPLP. IPLP is a limited partnership duly formed, validly existing and
in good standing under the laws of the State of Delaware. Other than the
Investment Limited Partnerships, as of the Signing Date IPLP is not the record
owner of any shares of capital stock of or other equity interest in any Person.

(c) IPT Subsidiaries. Schedule 4.1(c) lists as of the Signing Date the
name and jurisdiction of organization of each Person in which IPT is the record
owner of any shares of capital stock or other equity interests (collectively,
the "IPT SUBSIDIARIES"). Each of the IPT Subsidiaries is an entity validly
existing and in good standing under the laws of the jurisdiction of its
organization. Other than as listed on Schedule 4.4, as of the Signing Date none
of the IPT Subsidiaries is the record owner of any shares of capital stock of
or other equity interest in any Person.

(d) Investment Limited Partnerships. Schedule 4.1(d) lists as of the
Signing Date the name and jurisdiction of organization of each limited
partnership in which IPLP is the record owner of an equity interest (the
"INVESTMENT LIMITED PARTNERSHIPS"). Each of the Investment Limited Partnerships
is a limited partnership validly existing and in good standing under the laws
of the jurisdiction of its organization.

SECTION 4.2 Qualification. Each member of the IPT Group is duly qualified
and in good standing as a foreign entity under the laws of each jurisdiction
where such qualification is required, except where the lack of such
qualification would not have a Material Adverse Effect.

SECTION 4.3 Power and Authority. Each member of the IPT Group has all
requisite power and authority to own and operate its properties and to conduct
the business in which it is currently engaged, except where the lack of such
power and authority would not have a Material Adverse Effect.

SECTION 4.4 Capitalization of the Investment Limited
Partnerships. Schedule 4.4 lists as of July 11, 1997 for each of the Investment
Limited Partnerships the total number of issued and outstanding units of
beneficial interests. No units are held in treasury at any of the Investment
Limited Partnerships. All of the issued and outstanding units of each of the
Investment Limited Partnerships have been duly authorized and are validly
issued. There are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require any of the Investment Limited
Partnerships to issue, sell, or otherwise cause to become outstanding any of
their units. There are no outstanding or authorized unit appreciation rights,
phantom units, profit participation, or similar rights with respect to any of
the Investment Limited Partnerships.

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SECTION 4.5 Authority Relative to Transactions. IPT has all requisite
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder; provided, however, that IPT cannot consummate the Merger
unless and until it receives the approval of the IPT Shareholders as required
by the MCAA. This Agreement constitutes the valid and legally binding
obligation of IPT, enforceable against IPT in accordance with its terms and
conditions.

SECTION 4.6 Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge or other restriction of any government,
governmental agency or court to which any member of the IPT Group is subject or
any provision of the charter or bylaws of any member of the IPT Group or (ii)
conflict with, result in a breach or the acceleration of, constitute a default
under, create in any Person the right to accelerate, terminate, modify, or
cancel, or require any notice under any agreement, contract, lease, license,
instrument or other arrangement to which any member of the IPT Group is a party
or by which it is bound or to which any of its assets is subject (or result in
the imposition of any Lien upon any of its assets); except in each case where
the violation, conflict, breach, default, acceleration, termination,
modification, cancellation, failure to give notice, or the imposition of a Lien
would not have a Material Adverse Effect.

SECTION 4.7 Governmental Consents. Other than in connection with the
provisions of the Securities Act, the Securities Exchange Act and the state
securities laws and the filing of the Articles of Merger, no member of the IPT
Group needs to give any notice to, make any filing with or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement, except in each case where the failure to give notice, to file or to
obtain any authorization, consent or approval would not have a Material Adverse
Effect.

SECTION 4.8 Filings with the SEC. Each of the Investment Limited
Partnerships has made all filings with the SEC required under the Securities
Act and the Securities Exchange Act within the last three years (collectively,
the "PARTNERSHIP PUBLIC REPORTS"). Each of the Partnership Public Reports
complied with the Securities Act or the Securities Exchange Act, as applicable,
in all material respects.

SECTION 4.9 Financial Statements.

(a) IPT. Attached hereto as Schedule 4.9 is the unaudited consolidated
balance sheet of IPT, the IPT Subsidiaries and IPLP as of December 31, 1996 and
as of March 31, 1997, and the accompanying notes, if any (collectively, the
"IPT BALANCE SHEETS"), together with the related statements of operations and
cash flows for the year ended December 31, 1996 and the three-month period
ended March 31, 1997 (collectively, the "IPT STATEMENTS OF OPERATIONS," and
together with the IPT Balance Sheets, the "IPT Financial Statements"). The IPT
Balance Sheets have been prepared in accordance with GAAP (except for the
inclusion of certain notes and related schedules required by GAAP, and not
necessarily in accordance with SEC presentation requirements regarding
consolidation) applied on a consistent basis throughout the periods covered
thereby and present fairly, in all material respects, the consolidated
financial condition of IPT, the IPT Subsidiaries and IPLP as of the dates
indicated; provided, however, that the IPT Balance Sheet dated as of March 31,
1997 is subject to normal year-end adjustments. The IPT Statements of
Operations present fairly (but not necessarily in accordance with GAAP or SEC
presentation requirements), in all material respects, the results of operations
and cash flows of IPT, the IPT Subsidiaries and IPLP for the periods then
ended; provided, however, that the IPT Statements of Operations for the period
ended March 31, 1997 are subject to normal year-end adjustments. The audited
financial statements of IPT included in the Joint Proxy/Prospectus will not
differ substantively from the IPT Financial Statements in any manner which
would have a Material Adverse Effect.

(b) Investment Limited Partnerships. The financial statements included in
or incorporated by reference into the Partnership Public Reports (including the
related notes and schedules) have been prepared in accordance with GAAP applied
on a consistent basis throughout the periods covered thereby and present
fairly, in all material respects, the financial condition of the reporting
party as of the dates indicated and the results of its operations and cash
flows for the periods then ended; provided, however, that the financial
statements included in or incorporated by reference into the interim
Partnership Public Reports are subject to normal year-end adjustments.

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SECTION 4.10 Subsequent Events.

(a) IPT, IPT Subsidiaries and IPLP. Since the date of the IPT Financial
Statements, there has been no event or occurrence with respect to IPT, the IPT
Subsidiaries or IPLP that has had, or could be expected to have, a Material
Adverse Effect; provided, however, that with respect to any action, claim,
arbitration, inquiry, proceeding, hearing or investigation initiated by a
Person that owns a beneficial interest in a Person the securities for which any
member of the IPT Group has made a tender offer, the phrase "could be expected
to have a Material Adverse Effect" in the immediately preceding clause shall be
replaced by the phrase "will have a Material Adverse Effect".

(b) Investment Limited Partnerships. Since the date of the balance sheet
included in or incorporated by reference into the most recent Public Report,
there has been no event or occurrence with respect to any of the Investment
Limited Partnerships that has had, or could be expected to have, a Material
Adverse Effect.

SECTION 4.11 Undisclosed Liabilities.

(a) IPT, IPT Subsidiaries and IPLP. IPT, the IPT Subsidiaries and IPLP
have no liabilities, contingent or otherwise, required to be disclosed by GAAP
except for (i) liabilities disclosed on the balance sheet or in the notes
relating thereto included in the IPT Financial Statements and (ii) current
liabilities incurred in the Ordinary Course of Business since the date of the
IPT Financial Statements.

(b) Investment Limited Partnerships. The Investment Limited Partnerships
have no liabilities, contingent or otherwise, required to be disclosed by GAAP
except for (i) liabilities disclosed on the balance sheet or in the notes
relating thereto included in or incorporated by reference into the most recent
Public Report and (ii) current liabilities incurred in the Ordinary Course of
Business since the date of the most recent Public Report.

SECTION 4.12 REIT Status. For all years in which it has made an election
to be taxed as a real estate investment trust ("REIT"), IPT has continuously
been organized and operated in conformity with the requirements for
qualification as a REIT under the Internal Revenue Code of 1986, as amended
(the "CODE"). IPT has no intention of changing its operations or engaging in
activities which adversely affect its ability to qualify or make economically
undesirable its continued qualification as a REIT.

SECTION 4.13 Broker's Fees. None of the members of the IPT Group has any
liability or obligation to pay any broker's, finder's or agency fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement.

SECTION 4.14 Disclosure. The portions of the Joint Proxy/Prospectus for
which IPT is responsible will comply with the Securities Act and the Securities
Exchange Act in all material respects. The Joint Proxy/Prospectus will not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made therein, in the light of
the circumstances under which they will be made, not misleading; provided,
however, that IPT makes no representation or warranty with respect to any
information that AMIT will supply specifically for use in the Joint
Proxy/Prospectus.

SECTION 4.15 Compliance with State Takeover Statutes. IPT has taken all
actions and done all things necessary to exempt itself and the Merger and all
related transactions with AMIT from the operation of all "fair price,"
"moratorium," "business combination," "control share acquisition," or any other
anti-takeover statutes enacted under the MCAA (including the Maryland "business
combination" statute at Section 3-601 et. seq. of the MCAA and the Maryland
"control share" statute at Section 3-701 et. seq. of the MCAA) or under any
federal law or regulation.

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ARTICLE 5.

REPRESENTATIONS AND WARRANTIES OF IFG

IFG represents and warrants to AMIT that the statements contained in this
Article 5 are correct and complete, except as set forth in the disclosure
letter provided by IFG accompanying this Agreement (the "IFG DISCLOSURE
LETTER"). The IFG Disclosure Letter will be arranged in paragraphs
corresponding to the numbered and lettered sections contained in this Article
5.

SECTION 5.1 Capitalization.

(a) IPT. The total authorized number of shares of beneficial interest in
IPT is 500,000,000 shares (the "IPT SHARES"), of which 400,000,000 shares, par
value $.01 per share, are designated common shares (the "IPT COMMON") and
100,000,000 shares, par value $.01 per share, are designated preferred shares
(the "IPT PREFERRED"). On the Signing Date, 16,003,014 shares of IPT Common are
issued and outstanding and no shares of IPT Preferred are issued and
outstanding. No IPT Shares are held in treasury. All of the issued and
outstanding shares of IPT Common have been duly authorized and are validly
issued, fully paid and nonassessable. Other than IPT's issuance of shares of
IPT Common (i) upon the conversion of IPLP Units into shares of IPT Common on
the basis of one (1) share of IPT Common for one (1) IPLP Unit in accordance
with the Second Amended and Restated Agreement of Limited Partnership of IPLP
(the "IPLP LIMITED PARTNERSHIP AGREEMENT") and (ii) pursuant to an IPT Private
Placement, there are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require IPT to issue, sell, or otherwise
cause to become outstanding any of the IPT Shares. There are no outstanding or
authorized share appreciation rights, phantom shares, profit participation, or
similar rights with respect to the IPT Shares. From April 3, 1997 to the
Signing Date, no IPT Shares have been issued for consideration of less than ten
dollars ($10.00) per share.

(b) IPLP. As of the Signing Date, 16,003,014 general partnership units of
IPLP ("IPLP GP UNITS") and 8,399,499 limited partnership units of IPLP ("IPLP
LP UNITS") are issued and outstanding (the IPLP GP Units and IPLP LP Units are
sometimes collectively referred to as the "IPLP UNITS"). As of the Signing
Date, IPT is the record owner of all the IPLP GP Units and all such IPLP GP
Units are owned free and clear of all Liens. As of the Signing Date, IFG is the
record owner of all the IPLP LP Units, and therefore, in accordance with the
IPLP Limited Partnership Agreement, a copy of which is attached hereto as
Exhibit 5.1(b), all such IPLP LP Units are designated as Class A Units. No IPLP
Units are held in treasury. All of the issued and outstanding IPLP Units have
been duly authorized and are validly issued. No note, bond or other debt
security payable to IPLP was exchanged for any IPLP Units. None of the IPLP
Units is subject to any additional capital contribution, other than capital
contributions that may be required to be made by IPT, in its capacity as the
general partner of IPLP, pursuant to applicable partnership law. There are no
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require IPLP to issue, sell, or otherwise cause to become
outstanding any of the IPLP Units. There are no outstanding or authorized unit
appreciation rights, phantom units, profit participation, or similar rights
with respect to the IPLP Units. From April 3, 1997 to the Signing Date, no IPLP
Units have been issued for consideration of less than ten dollars ($10.00) per
unit.

(c) IPT Subsidiaries. Schedule 5.1(c) lists as of the Signing Date the
following information for each of the IPT Subsidiaries: (i) the total number of
authorized shares of capital stock or other equity interests, (ii) the total
number of issued and outstanding shares of capital stock or other equity
interests and (iii) the total number of issued and outstanding shares of
capital stock or other equity interests owned by IPT. No shares of capital
stock or other equity interests are held in treasury at any of the IPT
Subsidiaries. All of the issued and outstanding shares of capital stock or
other equity interests of each of the IPT Subsidiaries have been duly
authorized and are validly issued, fully paid, nonassessable and free and clear
of all Liens. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require any of the IPT Subsidiaries
to issue, sell, or otherwise cause to become outstanding any of their shares of
capital stock. There are no outstanding or authorized share or unit
appreciation rights, phantom shares or units, profit participation, or similar
rights with respect to the shares of capital stock or other equity interests of
any of the IPT Subsidiaries.

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(d) Investment Limited Partnerships. Schedule 5.1(d) lists as of July 11,
1997 the following information for each of the Investment Limited Partnerships:
(i) the name of the sole general partner or the managing general partner and
such general partner's percentage ownership interest, and (ii) the total number
of issued and outstanding units of beneficial interests owned by IPLP. All the
issued and outstanding units of beneficial interests owned by IPLP are free and
clear of all Liens.

ARTICLE 6.

COVENANTS

SECTION 6.1 General. Each of IPT and AMIT will use, and will cause each
member of the IPT Group and AMIT Group, respectively, to use, commercially
reasonable efforts to take all action and to do all things necessary or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement, including obtaining any third party consents.

SECTION 6.2 Regulatory Matters and Legal Approvals. Each of IPT and AMIT
will, and will cause each member of the IPT Group and AMIT Group, respectively,
to, give any notices to, make any filings with, and use commercially reasonable
efforts to obtain any authorizations, consents and approvals of governments and
governmental agencies in connection with the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing:

(a) Securities Laws. IPT and AMIT will prepare and, as soon as practicable
after receipt of the Fairness Opinion but in no event later than September 1,
1997, file with the SEC a Joint Proxy/Prospectus; provided, however, that the
obligation to file the Joint Proxy/Prospectus shall be subject to AMIT's
receipt of the Fairness Opinion. Each of IPT and AMIT will use its commercially
reasonable efforts to respond to the comments of the SEC thereon and will make
any further filings (including amendments and supplements) in connection
therewith that may be necessary or advisable. AMIT will provide IPT, and IPT
will provide AMIT, with whatever information and assistance in connection with
the foregoing filings that the requesting Party reasonably may request. IPT and
AMIT will take all actions that may be necessary or advisable under state
securities laws in connection with the offering and issuance of the shares of
IPT Common to be issued in connection with the Merger.

(b) State Corporate Law -- AMIT. AMIT will call a Special Meeting of its
shareholders and mail the Joint Proxy/Prospectus as soon as practicable in
order that its shareholders may consider and vote upon an amendment to the AMIT
Declaration of Trust to allow for, among other things, the Merger, the adoption
of this Agreement and the approval of the Merger. The Joint Proxy/Prospectus
will contain the affirmative recommendation of the AMIT board of trustees in
favor of the adoption of each of the foregoing matters; provided, however, that
no trustee of AMIT shall be required to violate any fiduciary duty or other
requirement imposed by law in connection therewith.

(c) State Corporate Law -- IPT. IPT will call a Special Meeting of its
shareholders as soon as practicable in order that its shareholders may consider
and vote upon, in accordance with the MCAA, the adoption of this Agreement, the
approval of the Merger, the approval of the issuance of shares of IPT Common
pursuant to Section 2.3(b) and any amendments to the IPT Declaration of Trust
made in accordance with Section 6.3(a). The materials provided to the IPT
Shareholders in connection with the Special Meeting will contain an affirmative
recommendation of the IPT board of trustees in favor of the adoption of each of
the foregoing matters; provided, however, that no trustee of IPT shall be
required to violate any fiduciary duty or other requirement imposed by law in
connection therewith.

(d) State Corporate Law -- All Parties. Each of IPT and AMIT shall take
all reasonable actions and do all things necessary so that no "fair price,"
"moratorium," "business combination," "control share acquisition," or any other
anti-takeover statute enacted under any state or federal law or regulation is
or becomes applicable to any Party or to this Agreement or the Merger and, if
any such law or regulation becomes applicable, take all reasonable actions and
do all things necessary to consummate the Merger and to otherwise minimize the
effects of such law or regulation.

(e) Listing. IPT will prepare and submit to the American Stock Exchange,
the New York Stock Exchange or the NASDAQ (as will be determined by an
agreement of the Parties) and will take such

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further actions as may be necessary to obtain a listing application covering
the shares of IPT Common outstanding as of the Effective Time and the shares of
IPT Common issuable in connection with the Merger.

SECTION 6.3 Operation of Business. Each of IPT and AMIT will not, and will
cause each member of the IPT Group and AMIT Group, respectively, not to, engage
in any practice, take any action, or enter into any transaction outside the
Ordinary Course of Business without the prior written consent of either IPT or
AMIT, as the case may be. Without limiting the generality of the foregoing,
each of IPT and AMIT will not, and will cause each member of the IPT Group and
AMIT Group, respectively, not to:

(a) authorize or effect any change in its charter or bylaws, other than
(i) in the case of AMIT, the amendment to the AMIT Declaration of Trust as
contemplated by Section 6.2(b)(i), or (ii) in the case of IPT, any amendment to
the IPT Declaration of Trust or Bylaws made in connection with the Merger or an
IPT Private Placement, provided that IPT may not amend the IPT Declaration of
Trust or Bylaws in any manner that would be adverse to the financial interests
of the IPT Shareholders;

(b) grant any options, warrants or other rights to purchase or obtain any
of its shares or beneficial interests or issue, sell, or otherwise dispose of
any of its shares or beneficial interests, other than (i) in the case of IPT,
(A) issuances or sales of shares of IPT Common pursuant to an IPT Private
Placement, (B) grants of options or other rights to purchase or obtain shares
of IPT Common pursuant to an IPT Stock Option Plan, provided, however, that any
option or other right to purchase or obtain shares of IPT Common granted prior
to the Effective Time must have a strike or exercise price of not less than the
IPT Base Value, (C) issuances or sales of shares of IPT Common for
consideration of not less than the IPT Base Value pursuant to a transaction
entered into in the Ordinary Course of Business, and (D) issuances or sales of
shares of IPT Common pursuant to the conversion of IPLP Units into shares of
IPT Common pursuant to the provisions of the IPLP Limited Partnership
Agreement; or (ii) in the case of IPLP, issuances or sales of IPLP Units for
consideration of not less than the IPT Base Value pursuant to a transaction
entered into in the Ordinary Course of Business;

(d) issue any note, bond, or other debt security or create, incur, assume,
or guarantee any indebtedness for borrowed money or capitalized lease
obligation other than (i) in the case of IPT or IPLP, a Permitted Debt; and
(ii) in the case of AMIT, in the Ordinary Course of Business;

(e) impose or permit to exist any Lien upon any of its assets;

(f) make any capital investment in, make any loan to, or acquire assets or
the securities or assets of any other Person other than in the Ordinary Course
of Business; provided, however, that in no event may AMIT acquire any interest
in any asset which would otherwise fail (i) to be a "real estate asset" as
defined in Section 856(c)(6)(B) of the Code or (ii) to generate income as
described in Section 856(c)(3) of the Code; provided, further, that the
immediately preceding proviso shall in no way limit the ability of AMIT to
renegotiate, restructure or exercise rights and default remedies with respect
to its portfolio of assets.

(g) make any change in employment terms for any of its trustees, officers,
and employees other than in the Ordinary Course of Business; and

(h) commit to any of the foregoing.

SECTION 6.4 Dividend Payments.

(a) IPT. IPT shall take all actions and do all things necessary to declare
and pay a dividend in an amount equal to $0.15 per share to all record holders
of IPT Common as of the first quarterly dividend record date after the
Effective Time.

(b) AMIT. AMIT shall take all actions and do all things necessary to
declare and pay a dividend in an amount equal to AMIT's earnings and profits at
the Effective Time so that, after giving effect to the Merger, IPT shall
continue to qualify as a REIT. AMIT shall provide to IPT, not later than twenty
(20) business days prior to AMIT's declaring the dividend required by this
section, all documents necessary to

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support (to the satisfaction of IPT and its counsel) the calculation of the
amount to be distributed pursuant to this section. This section does not limit,
and shall not be construed as limiting, AMIT's ability to declare and pay
dividends in the Ordinary Course of Business.

SECTION 6.5 Obligation to Notify and Update.

(a) AMIT's Obligations. Within ten (10) days after the last day of each
month prior to the Closing and within two (2) days prior to the Closing Date,
AMIT shall provide to IPT a written statement which sets forth all the material
terms of each loan transaction entered into or amended since the later of
January 1, 1997 or the date of the previous written statement provided pursuant
to this section; provided, however, that AMIT shall not be required to provide
a written statement with respect to (i) a restructuring or refinancing of a
loan outstanding before January 1, 1997 so long as such loan was and remains
secured by a direct interest in real property or (ii) any loan made to,
including any restructuring or refinancing of such loan, any member of the IPT
Group or to IFG or any controlled affiliate of IFG. This section does not
provide, and shall not be construed as providing, IPT with the right to object
to, or to otherwise restrict the ability of any member of the AMIT Group to
consummate, any loan transaction entered into in the Ordinary Course of
Business.

(b) IPT Group's Obligations. Within ten (10) days after the last day of
each month prior to the Closing and within two (2) days prior to the Closing
Date, IPT shall provide to AMIT a written statement which sets forth all the
changes to Schedules 4.1(c), 4.1(d), 4.4, 5.1(c) and 5.1(d) since the later of
the Signing Date or the date of the previous written statement provided
pursuant to this section. In addition to the written statement required by the
immediately preceding sentence, IPT shall promptly provide to AMIT the material
terms of any transaction which would affect Schedules 4.1(c), 4.1(d), 4.4,
5.1(c) and 5.1(d) and in which the aggregate purchase price exceeds five
hundred thousand dollars ($500,000). This section does not provide, and shall
not be construed as providing, AMIT with the right to object to, or to
otherwise restrict the ability of any member of the IPT Group to consummate,
any transaction entered into in the Ordinary Course of Business.

SECTION 6.6 Confidentiality.

(a) AMIT's Obligations. AMIT affirms all of its obligations under that
certain Letter Agreement dated October 28, 1996 from IFG to AMIT.

(b) IPT's Obligations. IFG affirms, and IPT hereby agrees to be bound by,
all the terms set forth in that certain Confidentiality Agreement effective
December 3, 1996 between IFG and AMIT (the "IFG CONFIDENTIALITY AGREEMENT")
which are applicable to IFG; provided, however, each of IPT, IFG and AMIT
acknowledges that the rights and obligations set forth in paragraph "e)" of
such Confidentiality Agreement have been duly terminated, and that such rights
and obligations are not revived or reinstated by this reference.

SECTION 6.7 Full Access. Subject to Section 6.6, AMIT will afford IPT and
its authorized representatives, and IPT will afford AMIT and its authorized
representatives, full and free access to such party's business, its personnel,
properties, contracts, books and records, and all other documents and data.

SECTION 6.8 Notice of Developments. Each of IPT and AMIT will give prompt
written notice to the other Parties of any event or occurrence which causes a
breach of any of the representations, warranties or covenants in this
Agreement. No disclosure by any Party pursuant to this section shall be deemed
to amend or supplement the disclosure letters or to prevent or cure any
misrepresentation or breach of covenant.

SECTION 6.9 Exclusive Dealing. During the period from the Signing Date
until and including the Closing Date, AMIT will not, and will not cause or
permit its affiliates to, directly or indirectly, through any representative or
otherwise, solicit or entertain offers from, negotiate with or in any manner
encourage, discuss, accept, or consider any proposal of any other Person
relating to the acquisition of any shares of AMIT, or the assets or business of
AMIT, in whole or in part, whether directly or indirectly, through purchase,
merger, consolidation, or otherwise (other than transactions in the Ordinary
Course of Business); provided, however, that AMIT and its trustees and officers
will remain free to entertain offers

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from, negotiate with, or discuss, accept or consider any proposal of any Person
to the extent their fiduciary duties may require. AMIT shall immediately notify
IPT regarding any contact between AMIT or its representatives and any other
Person regarding any of the foregoing.

SECTION 6.10 Fairness Opinion. AMIT shall take all reasonable actions and
do all things reasonably necessary to cause Christopher Weil & Company, Inc. to
promptly prepare and deliver to each of AMIT and IPT an opinion as to the
fairness to the AMIT Shareholders of the Exchange Ratio from a financial point
of view (the "FAIRNESS OPINION"). The Fairness Opinion shall be delivered prior
to the date the Joint Proxy/Prospectus is filed with the SEC and shall be
satisfactory in form and substance to each of AMIT and IPT.

SECTION 6.11 Employment Agreements.

(a) Ronald J. Consiglio. At the Closing, IPT and Ronald J. Consiglio shall
enter into the Employment Agreement in the form attached hereto as Exhibit
6.11(a).

(b) Anna Merguerian. At the Closing, IPT and Anna Merguerian shall enter
into the Employment Agreement in the form attached hereto as Exhibit 6.11(b).

SECTION 6.12 Expense Reimbursement. If, within fifteen (15) months of the
Signing Date or within nine (9) months of the termination date of this
Agreement, whichever is later, AMIT signs a letter of intent or other agreement
relating to a transaction (whether directly or indirectly, through purchase,
merger, consolidation or otherwise) as a result of which greater than fifty
percent (50%) of the persons comprising the board of trustees or directors of
the post-transaction entity (at any time during the nine month period
immediately following the consummation of such transaction) are persons other
than those persons which constitute the AMIT board of trustees on the Signing
Date (such acquisition, a "COMPETING TRANSACTION") and such Competing
Transaction is ultimately consummated, then, immediately upon the closing of
such Competing Transaction, AMIT shall pay to IPT or IFG, as the case may be,
an amount equal to the actual out-of-pocket expenses of each of IPT and IFG
incurred on behalf of AMIT pursuant to that certain Letter Agreement Regarding
Expenses dated April 3, 1997 (the "EXPENSE LETTER"); provided, however, that
AMIT shall have no payment obligations under this section if this Agreement is
terminated pursuant to Sections 8.1(a), 8.1(b), 8.1(c) or 8.1(e). This section
will not serve as the exclusive remedy to IPT or IFG under this Agreement in
the event of a breach by AMIT; rather, this section is intended to offset the
expenses incurred by IPT and IFG on behalf of AMIT in connection with this
Agreement and transactions contemplated hereunder. IPT and IFG will be entitled
to pursue all rights and remedies provided by law or in equity.

SECTION 6.13 Agreements Regarding the Shares of AMIT Class B. MAE and AMIT
hereby agree that, upon the consummation of the Merger, each of the Stock
Option Agreement and that certain Irrevocable Voting Proxy dated April 14, 1995
executed by MAE in favor of AMIT (the "IRREVOCABLE VOTING PROXY") shall
automatically and without any further action on the part of either MAE or AMIT
terminate in its entirety. To the extent any provision of this Agreement is
inconsistent with any provision of the Stock Option Agreement or the
Irrevocable Voting Proxy, such inconsistent provision of the Stock Option
Agreement or the Irrevocable Voting Proxy, as the case may be, shall be deemed
to be waived by AMIT and MAE. Notwithstanding any provision to the contrary,
the Stock Option Agreement and the Irrevocable Voting Proxy shall remain in
full force and effect at all times prior to the Effective Time.

SECTION 6.14 Indemnification.

(a) Indemnification. IPT shall indemnify, defend and hold harmless each
person who is now or who becomes prior to the Effective Time, an officer,
trustee or director of AMIT or any AMIT Subsidiary (the "INDEMNIFIED PARTIES")
against all losses, claims, damages, costs, expenses (including reasonable
attorneys' fees and expenses), liabilities, judgments or amounts that are paid
or agreed to be paid (with the approval of IPT, which approval shall not be
unreasonably withheld) in settlement of, or otherwise in connection with, any
threatened or actual claim, action, suit, proceeding or investigation (an
"INDEMNIFICATION PROCEEDING"), whether asserted or claimed at or after the
Signing Date, based on, arising out of or pertaining to this Agreement or the
Merger and which would not otherwise be an indemnifiable claim under the AMIT
Declaration of Trust ("INDEMNIFIED LIABILITIES"), in each case to the fullest
extent a

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corporation is permitted under the MCAA to indemnify its own directors or
officers as the case may be, and IPT will pay expenses in advance of the final
disposition of any such Indemnification Proceeding to each Indemnified Party to
the full extent permitted by law subject to the limitations set forth in this
section.

(b) Notice Required. Any Indemnified Party proposing to assert the right
to be indemnified under this section shall, promptly after receipt of notice of
commencement of any Indemnification Proceeding against such Indemnified Party
in respect of which a claim is to be made under this section, notify IPT of the
commencement of such Indemnification Proceeding enclosing a copy of all papers
served and other relevant documents.

(c) Defense of Indemnification Proceeding. If any such Indemnification
Proceeding is brought against any of the Indemnified Parties and such
Indemnified Parties notify IPT of its commencement, IPT will be entitled to
participate in and, to the extent that it elects by delivering written notice
to such Indemnified Parties promptly after receiving notice of the commencement
of the Indemnification Proceeding from the Indemnified Parties, to assume the
defense of the Indemnification Proceeding; and after notice from IPT to the
Indemnified Party of its election to assume the defense, IPT will not be liable
to the Indemnified Parties for any legal or other expenses except as provided
below and except for the reasonable costs of investigation subsequently
incurred by the Indemnified Parties in connection with the defense.

(d) Settlement. If IPT assumes the defense, then IPT shall have the right
to settle such Indemnification Proceeding without the consent of the
Indemnified Parties; provided, however, that IPT shall be required to obtain
such consent (which consent shall not be unreasonably withheld) if the
settlement includes any admission or wrongdoing on the part of the Indemnified
Parties or any decree or restriction on the Indemnified Parties; provided,
further, that IPT, in the defense of any such Indemnification Proceeding, shall
not, except with the consent of the Indemnified Parties (which consent shall
not be unreasonably withheld), consent to entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Parties of a release
from all liability with respect to such Indemnification Proceeding. IPT will
not be liable for any settlement of any Indemnification Proceeding or claim
effected without its written consent (which consent shall not be unreasonably
withheld).

(e) Right to Employ Counsel. The Indemnified Parties will have the right
to employ their own counsel in any such Indemnification Proceeding, but the
fees, expenses and other charges of such counsel will be at the expense of such
Indemnified Parties unless (i) the employment of counsel by the Indemnified
Parties has been authorized in writing by IPT, (ii) the Indemnified Parties
have reasonably concluded (based on advice of counsel) that there may be legal
defenses available to them that are different from or in addition to those
available to IPT, (iii) an actual or potential conflict exists (based on advice
of counsel to the Indemnified Parties) between the Indemnified Parties and IPT
(in which case IPT will not have the right to direct the defense of such
Indemnification Proceeding on behalf of the Indemnified Parties) or (iv) IPT
has not in fact employed counsel reasonably acceptable to the Indemnified
Parties to assume the defense of such Indemnification Proceeding within a
reasonable time after receiving notice of the commencement of the
Indemnification Proceeding; in each of which cases the reasonable fees,
disbursements and other charges of counsel selected by the Indemnified Parties
will be at the expense of IPT. It is understood that IPT shall not, in
connection with any Indemnification Proceeding or related Indemnification
Proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm admitted to
practice in such jurisdiction at any one time from all such Indemnified Parties
unless (a) the employment of more than one counsel has been authorized in
writing by IPT, (b) any of the Indemnified Parties have reasonably concluded
(based on advice of counsel) that there may be legal defenses available to them
that are different from or in addition to those available to other Indemnified
Parties or (c) an actual or potential conflict exists (based on advice of
counsel to the Indemnified Parties) between any of the Indemnified Parties and
the other Indemnified Parties; in each case of which IPT shall be obligated to
pay the reasonable fees and expenses of such additional counsel or counsels
selected by the Indemnified Party or Indemnified Parties.

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(f) Survival of this Section. In the event that this Agreement is
terminated in accordance with Section 8.1 without the Merger having been
consummated, the obligations of IPT under this section shall automatically
expire on the second anniversary of the date of such termination; provided,
however, that such expiration shall not affect IPT's obligations with respect
to claims properly asserted hereunder prior to such expiration.

(g) Successors and Assigns Bound. The provisions of this section are
intended to be for the benefit of, and shall be enforceable by, each
Indemnified Party, his or her heirs and his or her personal representatives and
shall be binding on all successors and assigns of IPT.

SECTION 6.15 Post-Merger IPT Trustees. As soon as practicable after the
consummation of the Merger, IPT shall take all actions and do all things
necessary (including increasing the number of trustees and seeking and
accepting resignations of incumbent trustees) to cause (i) those persons listed
on Schedule 1.2(d) to be elected or appointed as trustees (in accordance with
the classifications listed on Schedule 1.2(d)) to the IPT board of trustees.

SECTION 6.16 Standstill Obligation. During the period from the Signing
Date until the earlier of the termination of this Agreement or the Closing
Date, IFG will not, and will not cause any of its Affiliates (as such term is
defined in the IFG Confidentiality Agreement) to, directly or indirectly,
through representatives or otherwise, (a) acquire any additional AMIT Shares or
(b) initiate any communication with any AMIT Shareholder, provided, however,
that neither IFG nor its Affiliates will be restricted in any manner whatsoever
from initiating communication with any of its or their shareholders on matters
unrelated to the Merger, regardless of whether or not its or their shareholders
are also AMIT Shareholders.

ARTICLE 7.

CONDITIONS TO CONSUMMATION OF THE MERGER

SECTION 7.1 Conditions to Obligation of AMIT. The obligation of AMIT to
consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction or waiver of each of the conditions set
forth in this Section 7.1.

(a) Shareholder Approval. This Agreement and the Merger shall have
received the requisite approval from the shareholders of each of IPT and AMIT.

(b) Representations and Warranties. The representations and warranties
made by IPT and IFG in Articles 4 and 5, respectively, shall be true and
correct in all material respects (without giving effect to any "materiality"
qualification or limitation) as though made on and as of the Closing Date,
except to the extent the representation or warranty is expressly limited by its
terms to another date.

(c) Performance of Covenants. IPT shall have performed and complied in
all material respects with all of the covenants required by this Agreement to
be performed by IPT prior to or at the Closing.

(d) Registration Statement. The Registration Statement shall have become
effective under the Securities Act; and it is also a condition that AMIT shall
have become obligated to file the Joint Proxy/Prospectus pursuant to Section
6.2(a).

(e) Listing. The American Stock Exchange, the New York Stock Exchange or
the NASDAQ, as the case may be, shall have approved for listing (subject to
official notice of issuance) the shares of IPT Common outstanding as of the
Effective Time and the shares of IPT Common issuable in connection with the
Merger.

(f) Articles of Merger. The State Department of Assessments and Taxation
of the State of Maryland shall have accepted for record the filing of the
Articles of Merger.

(g) No Order. There shall not be any judgment, order, decree,
stipulation, injunction or charge in effect preventing consummation of any of
the transactions contemplated by this Agreement.

(h) Maryland Opinion Regarding AMIT. AMIT shall have received an opinion
of Miles & Stockbridge ("M&S"), special Maryland counsel, addressed to AMIT
dated as of the Closing Date, in

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form reasonably satisfactory to AMIT, as to the following matters: (A) IPT has
duly executed and delivered this Agreement; (B) this Agreement is a legal,
valid and binding obligation of IPT enforceable against it in accordance with
the terms of this Agreement (assuming corporate power, authority and
authorization); (C) this Agreement is a legal, valid and binding obligation of
each of IFG and MAE enforceable against each of them in accordance with the
terms of this Agreement (assuming corporate power, authority, authorization,
execution and delivery); (D) neither the execution and delivery by IPT of this
Agreement nor the consummation by it of the transactions contemplated hereby
will violate any Maryland law; (E) except for filing the Articles of Merger, no
authorization, consent, action, approval, license, exemption of or filing or
registration with any Maryland governmental entity or subdivision is necessary
for IPT to effect the transactions to be performed by it in this Agreement; and
(F) the shares of IPT Common to be issued pursuant to the Merger are duly
authorized and, when issued, are validly issued, fully paid and non-assessable;
in each case, with customary representations, exceptions, assumptions and
qualifications.

(i) Opinion Regarding IPT, IFG and MAE. AMIT shall have received an
opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P. ("AGSH&F"), counsel to
IPT, IFG and MAE, addressed to AMIT dated as of the Closing Date, in form
reasonably satisfactory to AMIT, as to the following matters: (A) each of IPT,
IFG and MAE is validly existing and, as of the date listed on a certificate of
good standing obtained from the Secretary of State of the State of Delaware or
Maryland, as the case may be, in good standing under the laws of such state;
(B) each of IPT, IFG and MAE has the requisite power and authority to enter
into this Agreement and perform its obligations hereunder; (C) the execution
and delivery of this Agreement and the performance by each of IPT, IFG and MAE
of its obligations hereunder have been duly authorized by all requisite
corporate action; (D) each of IFG and MAE has duly executed and delivered this
Agreement (assuming Delaware law applies to matters of execution and delivery);
(E) neither the execution and delivery of this Agreement nor the consummation
of the transactions contemplated hereby will result in a breach under any
provision of the declaration of trust or certificate of incorporation, as the
case may be, or bylaws of any of IPT, IFG or MAE or violate any Delaware law;
(F) except for filing the Articles of Merger and the effectiveness of the
Registration Statement and a California permit application, no authorization,
consent, action, approval, license, exemption of or filing or registration
with, in the case of each of IFG or MAE, any Delaware governmental entity or
subdivision, and in the case of IPT, IFG or MAE, with any United States
governmental entity or subdivision, is necessary to effect the transactions to
be performed by it in this Agreement; and (G) the portion of Joint
Proxy/Prospectus (excluding the financial statements contained therein) for
which IPT is responsible complies as to form with the Securities Act and the
Securities Exchange Act in all material respects; in each case, with customary
representations, exceptions, assumptions and qualifications.

(j) REIT Opinion. IPT shall have received the opinion specified in Section
7.2(j).

(k) Reorganization Opinion. AMIT shall have received an opinion of AGSH&F
addressed to AMIT dated as of the Closing Date, in form reasonably satisfactory
to AMIT, that, based upon certificates and letters acceptable to AGSH&F dated
as of the Closing Date, the Merger should qualify as a "reorganization" within
the meaning of Section 368 of the Code, with customary representations,
exceptions, assumptions and qualifications.

(l) Deliveries by IPT. IPT shall have delivered to AMIT each of the
following documents and instruments:

(i) A Certificate of Good Standing of IPT dated within ten (10) business
days of the Closing Date issued by the Secretary of State of the State of
Maryland;

(ii) A certificate of the Secretary or Assistant Secretary of IPT dated
the Closing Date certifying (A) IPT's Declaration of Trust, bylaws and good
standing, (B) the adoption and continued effect of the resolutions of IPT's
board of trustees authorizing this Agreement, the Merger and the
transactions contemplated by this Agreement and (C) the incumbency and
signatures of the officers of IPT authorized to execute this Agreement and
all other documents, instruments and agreements to be executed by IPT as
contemplated by this Agreement;

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(iii) A certificate of an executive officer of IPT dated the Closing Date
certifying the satisfaction of the conditions set forth in Sections 7.1(b)
and 7.1(c);

(iv) A certificate of an executive officer of IFG dated the Closing Date
certifying the satisfaction of the condition set forth in Sections 7.1(b)
with respect to IFG; and

(v) Such other documents, instruments and certificates as AMIT may
reasonably request for the transactions contemplated by this Agreement.

SECTION 7.2 Conditions to Obligation of IPT and MAE. The obligation of IPT
and MAE to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction or waiver of each of the conditions set
forth in this Section 7.2.

(a) Shareholder Approval. This Agreement and the Merger shall have
received the requisite approval from the shareholders of each of IPT and AMIT.

(b) Representations and Warranties. The representations and warranties
made by AMIT in Article 3 shall be true and correct in all material respects
(without giving effect to any "materiality" qualification or limitation) as
though made on and as of the Closing Date, except to the extent the
representation or warranty is expressly limited by its terms to another date.

(c) Performance of Covenants. AMIT shall have performed and complied in
all material respects with all of the covenants required by this Agreement to
be performed by AMIT prior to or at the Closing.

(d) Registration Statement. The Registration Statement shall have become
effective under the Securities Act.

(e) Listing. The American Stock Exchange, the New York Stock Exchange or
the NASDAQ shall have approved for listing (subject to official notice of
issuance) the shares of IPT Common outstanding as of the Effective Time and the
shares of IPT Common issuable in connection with the Merger.

(f) Articles of Merger. The State Department of Assessments and Taxation
of the State of Maryland shall have accepted for record the filing of the
Articles of Merger.

(g) No Order. There shall not be any judgment, order, decree, stipulation,
injunction or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement.

(h) Maryland Opinion Regarding IPT. IPT shall have received an opinion of
M&S, special Maryland counsel, addressed to IPT dated as of the Closing Date,
in form reasonably satisfactory to IPT, as to the following matters: (A) AMIT
has duly executed and delivered this Agreement (assuming Maryland law applies
to matters of execution and delivery); (B) this Agreement is a legal, valid and
binding obligation of AMIT enforceable against it in accordance with the terms
of this Agreement (assuming corporate power, authority, authorization,
execution and delivery); (C) this Agreement is a legal, valid and binding
obligation of each of IFG and MAE enforceable against each of them in
accordance with the terms of this Agreement (assuming corporate power,
authority, authorization, execution and delivery); and (D) except for filing
the Articles of Merger and the effectiveness of the Registration Statement, no
authorization, consent, action, approval, license, exemption of or filing or
registration with any Maryland governmental entity or subdivision is necessary
for IPT to effect the transactions to be performed by it in this Agreement; in
each case, with customary representations, exceptions, assumptions and
qualifications.

(i) Opinion Regarding AMIT. IPT shall have received an opinion of GGFC&M,
counsel to AMIT, addressed to IPT dated as of the Closing Date, in form
reasonably satisfactory to IPT, as to the following matters: (A) AMIT is
validly existing under the laws of California; (B) AMIT has the requisite power
and authority to own and operate its assets and to carry on its business as
conducted and to enter into this Agreement and perform its obligations
hereunder; (C) the execution and delivery of this Agreement and the performance
by AMIT of its obligations hereunder have been duly authorized by all requisite
corporate action; (D) AMIT has duly executed and delivered this Agreement
(assuming California law applied to matters of execution and delivery); (E)
neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby resulted in a breach under any provision

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of the AMIT Declaration of Trust or AMIT Trustee Regulations or violated any
California law; (F) except for filing the Articles of Merger and the
effectiveness of a California permit application, no authorization, consent,
action, approval, license, exemption of or filing or registration with any
California governmental entity or subdivision or with any United States
governmental entity or subdivision is necessary to effect the transactions to
be performed by AMIT in this Agreement; and (G) the portion of the Joint
Proxy/Prospectus (excluding the financial statements contained therein) for
which AMIT is responsible complies as to form with the Securities Act and the
Securities Exchange Act in all material respects; in each case, with customary
representations, exceptions, assumptions and qualifications.

(j) REIT Opinion. IPT shall have received an opinion of AGSH&F addressed
to IPT dated as of the Closing Date, in form reasonably satisfactory to IPT,
based upon certificates and letters acceptable to AGSH&F dated as of the
Closing Date, as to the following matters: (A) commencing with the taxable year
ending December 31, 1996, IPT was organized and has operated in conformity with
the requirements for qualification as a REIT within the meaning of the Code and
that, after giving effect to the Merger, IPT's proposed method of operation
will enable IPT to continue to meet the requirements for qualification and
taxation as a REIT within the meaning of the Code; (B) IPLP has been during and
since 1996, and continues to be, treated for federal income tax purposes as a
partnership and not as a corporation or an association taxable as a
corporation; in each case, with customary representations, exceptions,
assumptions and qualifications.

(k) Reorganization Opinion. AMIT shall have received the opinion specified
in Section 7.1(k).

(l) Deliveries. AMIT shall have delivered to IPT each of the following
documents and instruments:

(i) A certificate of the Secretary or Assistant Secretary of AMIT dated
the Closing Date certifying (A) the AMIT Declaration of Trust, as amended,
and the AMIT Trustee Regulations, (B) that no action has been taken that
would cause the dissolution of AMIT, (c) the adoption and continued effect
of the resolutions of the AMIT board of trustees authorizing this
Agreement, the Merger and the transactions contemplated by this Agreement
and (D) the incumbency and signatures of officers of AMIT authorized to
execute this Agreement and all other documents, instruments and agreements
to be executed by AMIT as contemplated by this Agreement;

(ii) A certificate of an executive officer of AMIT dated the Closing Date
certifying the satisfaction of the conditions set forth in Sections 7.2(b)
and 7.2(c); and

(iii) Such other documents, instruments and certificates as IPT may
reasonably request for the transactions contemplated by this Agreement.

ARTICLE 8.

TERMINATION

SECTION 8.1 Termination of Agreement. This Agreement may be terminated at
any time prior to the Effective Time (whether before or after shareholder or
beneficiary approval):

(a) by mutual written consent of the respective boards of trustees of AMIT
and IPT;

(b) by either AMIT or IPT, if the matters to be voted upon by such Party
shall not have received the requisite approval from such Party's shareholders
at the Special Meeting (or any adjournment thereof) called for such purpose;

(c) by either AMIT or IPT, if the Merger shall not have been consummated
on or before December 31, 1997, provided that, so long as an active
Registration Statement is on file with the SEC, the foregoing date shall be
extended automatically until the earlier of June 30, 1998 or ninety (90) days
after the Registration Statement is declared effective, provided further that
the Party seeking to terminate this Agreement is not otherwise in material
breach of its obligations under this Agreement;

(d) by IPT, if AMIT shall have failed to comply in any material respect
with any of their respective covenants or agreements contained in this
Agreement; provided, however, that if such failure is curable, notice of such
failure shall have been given by IPT to AMIT and AMIT shall not have cured such
failure within 30 days of notice thereof;

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(e) by AMIT, if IPT shall have failed to comply in any material respect
with any of its covenants or agreements contained in this Agreement; provided,
however, that if such failure is curable, notice of such failure shall have
been given by AMIT to IPT and IPT shall not have cured such failure within 30
days of notice thereof; or

(f) by AMIT, if IPT's Funds From Operations calculated on a weighted
average per share basis for the period commencing on January 1, 1997 and ending
on the ex- dividend date of the last dividend declared by AMIT prior to the
date of the Effective Time is less than the difference between the AMIT
Dividend Amount minus the quotient of (i) the product of (A) the IPT Base
Value, multiplied by (B) the amount of the cash dividend or distribution per
share declared and paid pursuant to Section 6.4(b), divided by (ii) $16.25.

SECTION 8.2 Effect of Termination. If any Party terminates this Agreement
pursuant to Section 8.1, all rights and obligations of the Parties hereunder
shall terminate without any liability of any Party to any other Party, except
for any liability of any Party then in breach; provided, however, that the
provisions set forth in Sections 6.6, 6.12 and 6.14 shall survive any such
termination.

ARTICLE 9.

MISCELLANEOUS

SECTION 9.1 Survival of Representations and Warranties. The
representations and warranties made in this Agreement shall not survive beyond
the Effective Time. This Section 9.1 shall not limit any covenant or agreement
of the Parties, IFG or MAE which by its terms contemplates performance after
the Effective Time.

SECTION 9.2 Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement and the application of such
provision to any other part or to any other circumstance shall not be affected
or impaired thereby.

SECTION 9.3 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the Parties, IFG and MAE; provided, however, that this
Agreement may not be assigned by any Party, IFG or MAE without the prior
written consent of the other Parties, IFG and MAE.

SECTION 9.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which when taken together shall constitute the same instrument.

SECTION 9.5 Headings. The table of contents, captions and headings used in
this Agreement are inserted for convenience only, and shall not be deemed to
constitute part of this Agreement or to affect the construction or
interpretation hereof.

SECTION 9.6 Waiver. Any of the terms or conditions of this Agreement may
be waived in writing at any time by the Person which is entitled to the
benefits thereof. No waiver of any provision of this Agreement shall be deemed
or shall constitute a waiver of such provision at any time in the future or a
waiver of any other provision hereof.

SECTION 9.7 No Third-Party Beneficiaries. Nothing in this Agreement,
express or implied, shall create or confer upon any Person, other than the
Parties, IFG or MAE or their respective successors and permitted assigns, any
rights, remedies, obligations or liabilities, except as otherwise provided
herein.

SECTION 9.8 Other Expenses. Except as otherwise provided herein and in the
Expense Letter, each of the Parties, IFG and MAE shall pay all costs and
expenses incurred by it or on its behalf in connection with this Agreement and
the transactions contemplated hereby, including fees and expenses of its own
financial consultants, accountants and legal counsel.

SECTION 9.9 Notices. Except as otherwise provided herein, any notice,
request, instruction, consent or other document required or permitted to be
given pursuant to this Agreement shall be in

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writing and delivered personally, by telecopy, by a nationally-recognized
overnight courier service or by registered or certified mail, postage prepaid,
as follows:

If to AMIT:

Angeles Mortgage Investment Trust
340 North Westlake Blvd., Suite 230
Westlake Village, CA 91362
Attn: Mr. Ronald J. Consiglio
Phone number: 805-449-1333
Fax number: 805-449-1336

copy (which shall not constitute notice to AMIT) to:
Greenberg Glusker Fields Claman & Machtinger LLP
1900 Avenue of the Stars, Suite 2100
Los Angeles, CA 90067
Attn: Jean Morris, Esq.
Fax number: 310-553-0687

If to IPT, IFG or MAE:

Insignia Properties Trust
One Insignia Financial Plaza
Greenville, SC 29602
Attn: Mr. Carroll Vinson
Phone number: 864-239-1000
Fax number: 864-239-1096; and

Insignia Properties Trust
One Insignia Financial Plaza
Greenville, SC 29602
Attn: General Counsel
Phone number: 864-239-1000
Fax number: 864-239-1096

copy (which shall not constitute notice IPT, IFG or MAE) to:
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1700 Pacific Avenue, Suite 4100
Dallas, TX 75201
Attn: Roger Arnold, Esq.
Fax number: 214-969-4343

or at such other address as shall be specified in writing by that Party, IFG or
MAE. Any notice, request, instruction, consent or other document delivered as
provided herein shall be deemed effectively given upon actual receipt by the
Party, IFG or MAE (but not necessarily the individual person) to be notified.

SECTION 9.10 Governing Law. This Agreement shall be construed in
accordance with and governed by the Laws of the State of Maryland applicable to
agreements made and to be performed wholly within such jurisdiction.

SECTION 9.11 Interpretation.

(a) References. Except as specifically stated otherwise, references to
articles, sections, exhibits, schedules and disclosure letters refer to
articles, sections, exhibits, schedules and disclosure letters in this
Agreement. References to "includes" and "including" mean "includes without
limitation" and "including without limitation." Wherever from the context it
appears appropriate, each term stated in either the singular or plural shall
include the singular and plural, and pronouns stated in the masculine, feminine
or neuter gender shall include the masculine, feminine and neuter gender.

A-20

(b) Cross-Reference of Disclosures. Any item disclosed in one section,
schedule or disclosure letter shall be deemed to be disclosed in any other
section, schedule or disclosure letter where such disclosure is relevant, even
if there is no express cross-reference, provided that the relevance of the
disclosure is reasonably apparent. Disclosure of items that may or may not be
required to be disclosed by this Agreement does not mean that such items are
material or create a standard of materiality, and shall not be deemed an
admission that any such disclosed matter is or may give rise to a breach of any
contract or violation of any law.

(c) Drafting. No provision of this Agreement shall be interpreted in favor
of, or against, either of the Parties, IFG or MAE by reason of the extent to
which either such Person or its counsel participated in the drafting thereof or
by reason of the extent to which any such provision is inconsistent with any
prior draft hereof or thereof.

SECTION 9.12 Public Announcements. Except and to the extent required by
law or the rules of any stock exchange, each of IFG, MAE, IPT and AMIT will
not, and will cause each member of the IPT Group and AMIT Group, respectively,
not to, without the prior written consent of the other Parties, and each will
direct their representatives not to, make, directly or indirectly, any public
comment, statement, or communication with respect to, or otherwise to disclose
or to permit the disclosure of this transaction or any of the terms,
conditions, or other aspects of this Agreement. If any of the Parties, IFG or
MAE is required by law or the rules of any stock exchange to make any such
disclosure, that Person must first provide to the other Parties, IFG and MAE
for approval (which will not be unreasonable withheld) the content of the
proposed disclosure, the reason that such disclosure is required by law, and
the time and place that the disclosure will be made.

SECTION 9.13 Entire Agreement. The Confidentiality Agreements described in
Section 6.6, this Agreement, the Expense Letter and the schedules, disclosure
letters and exhibits hereto, constitute the sole understanding of the Parties,
IFG and MAE with respect to the matters contemplated hereby and thereby and
supersedes and renders null and void all prior agreements and understandings,
written and oral, between the Parties, IFG and MAE with respect to such
matters. None of the Parties, IFG or MAE shall be liable or bound to any other
Person in any manner by any promises, conditions, representations, warranties
or covenants except as specifically set forth herein or therein.

SECTION 9.14 Amendment. No amendment, modification or alteration of the
terms or provisions of this Agreement, including any schedules, disclosure
letters and exhibits, shall be binding unless the same shall be in writing and
duly executed by the Person against whom such amendment, modification or
alteration is sought to be enforced.

SECTION 9.15 Disclosure Letters. If the disclosure letters becomes
misleading in any respect, the Parties shall notify the other, in writing, of
any facts making the disclosure letters misleading; provided, however, that no
such notice shall be deemed to amend or modify the representations and
warranties herein.

ARTICLE 10.

DEFINITIONS

SECTION 10.1 Definitions. For purposes of this Agreement, the terms set
forth below shall have the following meanings:

(a) "AMIT CLASS A" means any beneficial interest in AMIT designated as a
Class A Share, par value $1.00 per share, by the AMIT Declaration of Trust and
the Share Right associated with such Class A Share.

(b) "AMIT CLASS B" means any beneficial interest in AMIT designated as a
Class B Share, par value $.01 per share, by the AMIT Declaration of Trust.

(c) "AMIT DIVIDEND AMOUNT" means a dollar amount equal to the quotient of
(i) the product of (A) the IPT Base Value, multiplied by (B) the aggregate
amount of cash dividends or distributions per share which have been declared by
AMIT with respect to the AMIT Class A after January 1, 1997 and either

A-21

(1) have been paid on or prior to the date of the Effective Time or (2) are
payable to the record holders of the AMIT Class A on or prior to the date of
the Effective Time, divided by (ii) $16.25.

(d) "AMIT GROUP" means AMIT and the AMIT Subsidiaries.

(e) "AMIT SHAREHOLDER" means any Person which is a record holder of AMIT
Class A.

(f) "FUNDS FROM OPERATIONS" means, as to any Person for any specified
period, the sum of (i) such Person's net income before extraordinary and
non-recurring items and cumulative effect of accounting changes (computed in
accordance with GAAP) excluding gains or losses from debt restructuring and
sales of property during such period, plus (ii) depreciation and amortization
of such Person's real estate assets during such period, plus or minus, as the
case may be, (iii) the share of Funds from Operations attributable to such
Person in respect of its interest in each unconsolidated partnership and joint
venture during the same period.

(g) "GAAP" means United States generally accepted accounting principles in
effect at the time the relevant financial statements were prepared.

(h) "IPLP" means Insignia Properties L.P., a Delaware limited partnership.

(i) "IPT BASE VALUE" means the lesser of (i) $10.00 per share or (ii) the
lowest gross per share dollar amount for which an IPLP Unit or a share of IPT
Common or IPT Preferred is issued after the Signing Date.

(j) "IPT DIVIDEND AMOUNT" means a dollar amount equal to the aggregate
amount of cash dividends or distributions per share which have been declared by
IPT with respect to the IPT Common after January 31, 1997 and either (i) have
been paid on or prior to the date of the Effective Time or (ii) are payable to
the record holders of the IPT Common on or prior to the date of the Effective
Time.

(k) "IPT GROUP" means IPT, IPLP, the IPT Subsidiaries and the Investment
Limited Partnerships.

(l) "IPT PRIVATE PLACEMENT" means the issuance by IPT of shares of IPT
Common pursuant to an offering exempt from the registration provisions of the
Securities Act.

(m) "IPT SHARE VALUE" means a dollar amount equal to the sum of (i) the
IPT Base Value, plus (ii) the AMIT Dividend Amount, minus (iii) the IPT
Dividend Amount.

(n) "IPT SHAREHOLDER" means any Person which is a record holder of IPT
Common.

(o) "IPT STOCK OPTION PLAN" means a stock option plan adopted by the IPT
board of trustees (and, if applicable, the IPT Shareholders) after the Signing
Date, if at all, pursuant to which grants of options or other rights to
purchase or obtain shares of IPT Common may be made, provided, however that not
more than one million two hundred thousand (1,200,000) shares of IPT Common may
be reserved for issuance under such plan.

(p) "JOINT PROXY/PROSPECTUS" means the disclosure document combining the
Registration Statement and the proxy materials required under the Securities
Exchange Act in connection with AMIT's Special Meeting.

(q) "LIEN" means any mortgage, pledge, lien, encumbrance, charge or other
security interest, other than (i) mechanic's, materialman's and similar liens,
(ii) liens for taxes not yet due and payable or for taxes that the taxpayer is
contesting in good faith through appropriate proceedings, (iii) purchase money
liens and liens securing rental payments under capital lease arrangements, (iv)
liens incurred in the Ordinary Course of Business, (v) liens incurred to secure
Permitted Debt and (vi) liens described in the IPT Financial Statements.

(r) "MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
financial condition or results of operations of AMIT on the one hand, or the
members of IPT Group on the other hand, each taken as a whole, or (ii) the
ability of any Party to consummate the transactions contemplated by this
Agreement.

(s) "ORDINARY COURSE OF BUSINESS" means the events which constitute the
usual conduct of business consistent with past custom and practice, including
with respect to quantity and frequency. The Parties

A-22

acknowledge and agree to the following: (i) with respect to any member of the
AMIT Group, Ordinary Course of Business specifically includes (A) making,
negotiating, refinancing or other effecting loan transactions of the type and
nature AMIT is currently authorized to effect, (B) borrowing under AMIT's
existing line of credit with Imperial Bank, (C) acquiring a fee interest in
real property (whether at a foreclosure or by a deed-in-lieu of foreclosure)
which is secured by a mortgage held by AMIT, (D) the sale of a fee interest in
property acquired by AMIT pursuant to a foreclosure or a deed-in-lieu of
foreclosure, and (E) declaring and paying dividends on the issued and
outstanding shares of AMIT Class A in accordance and in amounts consistent with
past practices and trends, provided that AMIT shall have paid prior to the date
of the Effective Time all dividends declared by it; provided, however, in each
case that any action contemplated or taken must be an action which complies
with the requirements of and does not violate the restrictions set forth in
Sections 856-860 of the Code; and (ii) with respect to any member of the IPT
Group, Ordinary Course of Business specifically includes effecting transactions
(whether directly or indirectly, through purchase, merger, consolidation or
otherwise) as a result of which IPT or IPLP owns, directly or indirectly, a fee
or leasehold interest in real property or the securities or assets of any other
Person, provided, however, no member of the IPT Group may enter into any
transaction the effect of which would disqualify IPT as a REIT.

(t) "PERMITTED DEBT" means debt incurred by IPT or IPLP for the purpose of
acquiring, directly or indirectly, any fee or leasehold interest in real
property or the securities or assets of any other Person in a transaction
entered into in the Ordinary Course of Business.

(u) "PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other legal entity.

(v) "REGISTRATION STATEMENT" means a registration statement under the
Securities Act relating to (i) the offering and issuance of the shares of IPT
Common to be issued in connection with the Merger and (ii) the shares IPT
Common issued and outstanding as of the Effective Time.

(w) "SEC" means the Securities and Exchange Commission.

(x) "SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

(y) "SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.

(z) "SHARE RIGHT" means a right issued pursuant to that certain Rights
Agreement dated as of November 13, 1996 between AMIT, as issuer, and Chase
Mellon Shareholder Services, L.L.C., as rights agent.

(aa) "SPECIAL MEETING" means a special or annual meeting of the
shareholders held for the purpose of considering and voting upon the adoption
of this Agreement and the approval of the Merger.

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IN WITNESS WHEREOF, each of the Parties, IFG and MAE has caused this
Agreement to executed by a duly authorized officer as of the Signing Date.

ANGELES MORTGAGE INVESTMENT TRUST ("AMIT")

By: ---------------------------------------------
Ronald J. Consiglio
President

INSIGNIA PROPERTIES TRUST ("IPT")

By: ---------------------------------------------
James A. Aston
President

Insignia Financial Group, Inc. ("IFG"),
solely for the purpose and limited to the
provisions of Sections 6.6(b) and 6.16 and
Articles 5 and 9

By: ---------------------------------------------
Andrew L. Farkas
Chairman of the Board of Directors

MAE GP Corporation ("MAE"), solely for the
purpose and limited to the provisions of
Section 6.13 and Article 9

By: ------------------------------------------
Carroll D. Vinson
President

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ANNEX B

RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:

Greenberg Glusker Fields
Claman & Machtinger LLP
1900 Avenue of the Stars, #2100
Los Angeles, CA 90067
Attention: Jean Morris, Esq.

FORM OF
SECOND AMENDMENT TO
DECLARATION OF TRUST OF
ANGELES MORTGAGE INVESTMENT TRUST

This Second Amendment to the Declaration of Trust of Angeles Mortgage
Investment Trust is dated as of , 1998, amending that certain
Declaration of Trust dated September 1, 1988, and recorded under Document No.
88-1703136 in the Official Records in the Office of the Los Angeles County
Recorder, as amended by that certain First Amendment to Declaration of Trust
dated as of April 27, 1990, and recorded under Document No. 90-1161822 in the
Official Records in the Office of the Los Angeles County Recorder, State of
California.

Section 6.2 of the Declaration of Trust is hereby amended by redesignating
subsection (e) thereof as subsection (f) and adding a new subsection (e) as
follows:

(e) Merger or Consolidation. The Trust may be incorporated, merged with
another entity (whether or not the Trust is the surviving entity),
consolidated with one or more entities into a new entity, reorganized as a
new entity, and all or substantially all of the assets of the Trust may be
sold, leased, exchanged or otherwise disposed of upon majority vote of the
Shareholders with the Class A Shareholders and the Class B Shareholders
voting together as a single class with each Share held of record entitled
to one vote in person or by proxy.

The Declaration of Trust is further amended by retitling ARTICLE VIII
"Duration, Termination, Amendment, Merger and Qualification of Trust" and by
adding a new Section 8.5 as follows:

8.5 Merger Procedure.

(a) The Trust may merge with one or more real estate investment trusts
(as that term is defined in Section 23000 of the California Corporations
Code) or one or more limited partnerships, or consolidate with one or more
entities into a new entity, in any such case whether or not the other party
or parties to such merger are organized under the laws of the State of
California and whether or not the Trust is the surviving entity.

(b) A merger or consolidation pursuant to this Section 8.5 shall be
approved by a majority of the Trustees and the affirmative vote of the
holders of a majority of the Class A Shares and the Class B Shares voting
together as a single class.

(c) If the Trust is the surviving entity in any merger pursuant to this
Section 8.5, a copy of the merger agreement, in recordable form, and
executed by a majority of the Trustees and by the other party or parties,
shall be conclusive evidence of such merger when lodged among the records
of the Trust. The merger agreement shall be filed and recorded as provided
in Section 9.8 hereof.

Except as specifically amended by this Second Amendment, all of the terms
and conditions of the Declaration of Trust remain in full force and effect.
This Second Amendment may be executed in several counterparts, each of which
shall be deemed an original, and all of such counterparts together shall
constitute one and the same document.

B-1

IN WITNESS WHEREOF, the undersigned have executed this Second Amendment to
the Declaration of Trust as of the date first hereinabove set forth.

----------------------------------------
Ronald J. Consiglio

----------------------------------------
J. D'arcy Chisholm

----------------------------------------
Bryan L. Herrmann

----------------------------------------
Curtis J. Crivelli

B-2

STATE OF CALIFORNIA )
) Section :

COUNTY OF VENTURA )
On , 1998, before me, , a Notary Public, personally
appeared Ronald J. Consiglio, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Signature -------------------------------
(Seal)

STATE OF CALIFORNIA )
) Section :

COUNTY OF VENTURA )
On , 1998, before me, , a Notary Public, personally
appeared J. D'Arcy Chisholm, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Signature -------------------------------
(Seal)

STATE OF CALIFORNIA )
) Section :

COUNTY OF VENTURA )
On , 1998, before me, , a Notary Public, personally
appeared Bryan L. Herrmann, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Signature -------------------------------
(Seal)

B-3

STATE OF CALIFORNIA )
) Section :

COUNTY OF VENTURA )
On , 1998, before me, , a Notary Public, personally
appeared Curtis J. Crivelli, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person, or
the entity upon behalf of which the person acted, executed the instrument.

WITNESS my hand and official seal.

Signature -------------------------------
(Seal)

B-4

ANNEX C

[CHRISTOPHER WEIL & COMPANY, INC. LETTERHEAD]

November 13, 1997

Angeles Mortgage Investment Trust
340 N. Westlake Boulevard, Suite 230
Westlake Village, California 91362

Gentlemen:

You have asked for our opinion with respect to the fairness of the exchange
ratios, from a financial point of view, to the shareholders of Angeles Mortgage
Investment Trust (AMIT) as described in the Agreement and Plan of Merger among
Angeles Mortgage Investment Trust, Insignia Properties Trust (IPT), Insignia
Financial Group, Inc., and MAE GP Corporation dated as of July 18, 1997 (the
"Agreement" or "Proposed Transaction").

For purposes of this opinion we have, among other things, reviewed such
materials and considered such financial and other factors as we deemed
necessary, including:

1. AMIT's Annual Report, Form 10-K and related information for the year
ending December 31, 1996 and its Form 10-Q and related unaudited
financial information for the quarters ending March 31, 1997 and June
30, 1997;

2. IPT's consolidated financial statements and related information for the
period ending December 31, 1996 as well as the quarters ending March 31,
1997 and June 30, 1997;

3. Form 10-K's for the year ending December 31, 1996 and Form 10-Qs for
the quarters ending March 31, 1997 and June 30, 1997, and related
financial information thereto of the real estate limited partnerships in
which IPT has an interest (through the General Partner interest and a
significant Limited Partner interest);

4. Property-level operating and financial data relating to the business,
earnings, cash flow, book values and book/tax differences relating
thereto as well as estimated market value of the assets and prospects
for both AMIT and IPT as presently constituted;

5. The historical market prices and trading activity for the Class A
common shares of AMIT and for companies which we deemed to be reasonably
comparable to both AMIT and the merged entity in light of their current
businesses and prospects;

6. Publicly available financial and operating data for the companies which
we deemed to be reasonably comparable to the merged entity;

7. The discounted cash flow valuation analysis of the properties of the
real estate limited partnerships in which IPT has an interest prepared
by an independent consultant on behalf of AMIT in conjunction with IPT
internal valuations and/or partnership initiated independent appraisals;

8. Property inspection reports prepared by independent parties on behalf
of AMIT for a sample of the properties of the real estate limited
partnerships in which IPT has an interest;

9. the Agreement and the draft preliminary combined proxy statement and
prospectus related to the Proposed Transaction to be filed with the
Securities and Exchange Commission; and

10. Such other financial studies, analyses and investigations and such
other matters we deemed necessary.

We have met with senior management of AMIT and IPT to discuss: (i) the
prospects for their businesses, (ii) their estimates of such businesses' future
financial performance, (iii) the business plan for the operation of the merged
entity, and (iv) such other matters as we deemed relevant. We have also

C-1

visited selected properties. In preparing our opinion, we have relied on the
accuracy and completeness of publicly available information and of all the
information supplied or otherwise made available to us by AMIT and IPT, and we
have not independently verified such information or undertaken an independent
appraisal of the assets.

As you know, we have been retained by AMIT to render this opinion and other
financial advisory services in connection with the Proposed Transaction and
will receive a fee for such service.

This letter and the opinion expressed herein may not be reproduced,
summarized, excerpted from or otherwise publicly referred to or disclosed in
any manner, without our prior written consent. AMIT may, however, set forth in
full this letter in the combined proxy statement and prospectus related to the
Proposed Transaction.

This opinion is not intended to be, and does not constitute a
recommendation to any shareholder of AMIT as to how such shareholder should
vote in connection with the Proposed Transaction.

On the basis of and subject to the foregoing, we are of the opinion that
as of the date hereof, the exchange ratios are fair to the shareholders of AMIT
from a financial point of view.

Very truly yours,
Christopher Weil & Company, Inc.

/s/ James H. Kropp
-------------------------------------
James H. Kropp
Director of Investment Banking

C-2

ANNEX D

INFORMATION REGARDING THE
DIRECTORS AND EXECUTIVE OFFICERS OF INSIGNIA

Set forth in the table below are the name and the present principal occupations
or employment and the name, principal business and address of any corporation
or other organization in which such occupation or employment is conducted, and
the five-year employment history of each of the directors and executive
officers of Insignia. Unless otherwise indicated, each person identified below
is employed by Insignia and is a United States citizen. The principal business
address of Insignia and, unless otherwise indicated, the business address of
each person identified below, is One Insignia Financial Plaza, Greenville,
South Carolina 29602. Directors are identified by an asterisk.

PRESENT PRINCIPAL OCCUPATIONS
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- - -------------------------- ---------------------------------------------------------------------------

Andrew L. Farkas* Andrew L. Farkas has been a Director of Insignia since its inception in
July 1990. Mr. Farkas has been Chairman and Chief Executive Officer of
Insignia since January 1991 and President since May 1995. Mr. Farkas
has also been President of Metropolitan Asset Group, Ltd. ("MAG"), a
real estate investment banking firm, since 1983.
Robert J. Denison* Robert J. Denison has been a Director of Insignia since May 1996. For
1212 North Summit Drive more than the past five years, Mr. Denison's principal occupation has
Santa Fe, NM 87501 been as a General Partner of First Security Company II, L.P., an
investment advisory firm.
Robin L. Farkas* Robin L. Farkas has been a Director of Insignia since August 1993. Mr.
730 Park Ave. Farkas is the retired Chairman of the Board and Chief Executive Officer
New York, NY 10021 of Alexander's Inc., a real estate company. He also serves as a director
of Refac Technology Development Corporation, Noodle Kiddoodle,
and Containerways International Ltd.
Robert G. Koen* Robert G. Koen has been a Director of Insignia since August 1993.
125 West 55th Street Since February 1996, Mr. Koen has been a partner in the law firm of
New York, NY 10019 Akin, Gump, Strauss, Hauer & Feld, which represents Insignia and
certain of its affiliates from time to time. From January 1991 to February
1996, Mr. Koen was a partner in the law firm LeBoeuf, Lamb, Greene &
MacRae.
Michael I. Lipstein* Michael I. Lipstein has been a Director of Insignia since August 1993.
110 East 59th Street For more than the past five years, Mr. Lipstein's principal occupation has
New York, NY 10022 been as a self-employed consultant in the real estate business, including
ownership, management and lending.
Buck Mickel* Buck Mickel has been a Director of Insignia since August 1993. For
301 N. Main Street more than the past five years, Mr. Mickel's principal occupation has been
Greenville, SC 29601 to serve as Chairman of the Board and Chief Executive Officer of RSI
Holdings, a company which distributes outdoor equipment. Mr. Mickel
is also a director of The Liberty Corporation, NationsBank Corporation,
Emergent Group, Inc., Delta Woodside Industries, Inc., Duke Power
Company, and Textile Hall Corporation.
James A. Aston James A. Aston's principal employment has been with Insignia for more
than the past five years. Mr. Aston currently serves as Chief Financial
Officer of Insignia (since August 1996), with the Office of the Chairman
(since July 1994) and Executive Managing Director of Investment
Banking of Insignia (since January 1991).

D-1

PRESENT PRINCIPAL OCCUPATIONS
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- - ------------------------- -----------------------------------------------------------------------------

Albert J. Frazia Albert Frazia has been a Senior Vice President--Human Resources of
Insignia since August 1997. Prior to August 1997, Mr. Frazia's principal
employment for more than the prior five years was as Director--
Human Resources of E&Y Kenneth Leventhal Real Estate Group, New
York, New York.

Frank M. Garrison Frank M. Garrison's principal employment has been with Insignia for
102 Woodmont Boulevard more than the past five years. Mr. Garrison currently serves as an
Suite 400 Executive Managing Director of Insignia (since July 1994) and as
Nashville, TN 37205 President of Insignia Financial Services, a division of Insignia (since July
1994).

Adam B. Gilbert Adam B. Gilbert has been General Counsel and Secretary of Insignia
375 Park Avenue since March 1998. Prior to that time, Mr. Gilbert's principal occupation
Suite 3401 was as a partner with the law firm of Nixon, Hargrave, Devans & Doyle,
New York, NY 10152 LLP, New York, New York.

Jeffrey L. Goldberg Jeffrey L. Goldberg's principal employment has been with Insignia for
375 Park Avenue more than the past five years. Mr. Goldberg currently serves as a
Suite 3401 Managing Director--Investment Banking of Insignia (since July 1994).
New York, NY 10152

Edward S. Gordon Edward S. Gordon has been with the Office of the Chairman of Insignia
200 Park Avenue and has been Chairman of Insignia/ESG, Inc. since July 1996. Prior to
New York, NY 10166 July 1996, Mr. Gordon's principal employment for more than the prior
five years was as a founder and Chairman of Edward S. Gordon
Company, Incorporated ("ESG"), a commercial property management
and brokerage firm located in New York, New York that was acquired by
Insignia in June 1996.

Albert H. Gossett Albert H. Gossett's principal employment has been with Insignia for
more than the past five years. Mr. Gossett currently serves as a Senior
Vice President of Insignia (since July 1994) and as Chief Information
Officer of Insignia (since January 1991).

Henry Horowitz Henry Horowitz's principal employment has been with Insignia since
January 1993. Mr. Horowitz currently serves as an Executive Managing
Director of Insignia (since June 1994) and Chief Operating Officer of
Insignia Commercial Group (since January 1997). From January 1987 to
January 1993, Mr. Horowitz's principal employment was as Chief
Executive Officer of First Resource Realty, Inc., a commercial property
management organization located in Oklahoma that Insignia acquired in
January 1993.

Neil Kreisel Neil Kreisel has been an Executive Managing Director of Insignia since
909 Third Avenue September 1995 and President of Insignia Residential Group since
New York, NY 10022 September 1997. Mr. Kreisel has also served as President of Insignia
Management Services--New York, Inc., a subsidiary of Insignia, since
September 1995. Prior to September 1995, Mr. Kreisel's principal
occupation was to serve as President and Chief Executive Officer of
Kreisel Company, Inc., a residential property management firm located
in New York, New York which Insignia acquired in September 1995.

Martha Long Martha Long has been a Senior Vice President--Finance of Insignia
since January 1997 and Controller of Insignia since June 1994. Prior to
June 1994, Ms. Long was Senior Vice President and Controller of The
First Savings Bank, FSB located in Greenville, South Carolina.

D-2

PRESENT PRINCIPAL OCCUPATIONS
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
- - ---------------------------- ----------------------------------------------------------------------------

Thomas R. Shuler Thomas R. Shuler's principal employment has been with Insignia for
more than the past five years. Mr. Shuler currently serves as Chief
Operating Officer of Insignia Residential Group (since January 1997).

Stephen B. Siegel Stephen B. Siegel has been a Managing Director of Insignia since June
200 Park Avenue 1996, President of Insignia Commercial Group since January 1997 and
New York, NY 10166 President of Insignia/ESG, Inc. since June 1996. From February 1992
until July 1996, Mr. Siegel's principal employment was as President of
ESG. Mr. Siegel currently serves as a Director of Liberty Property Trust
and Tower Realty, Inc.

Ronald Uretta Ronald Uretta's principal employment has been with Insignia for more
than the past five years. Mr. Uretta currently serves as Chief Operating
Officer (since August 1996) and Treasurer (since January 1992) of
Insignia. Mr. Uretta has also served as the Chief Financial Officer and
Controller of MAG since September 1990.

Joseph T. Aveni Joseph T. Aveni's principal employment has been with Realty One, Inc.,
6000 Rockside Woods Blvd. a wholly-owned subsidiary of Insignia ("Realty One"), for more than
Cleveland, OH 44131 the past five years. Mr. Aveni currently serves as a Director and Chief
Executive Officer of Realty One (since October 1997).

Anthony M. Ciepiel Mr. Ciepiel currently serves as a Director and Chief Operating Officer of
6000 Rockside Woods Blvd. Realty One (since October 1997). From 1994 to 1997, Mr. Ciepiel was
Cleveland, OH 44131 the President of Realty One. Prior to 1994, Mr. Ciepiel was the Chief
Financial Officer and Executive Vice President of Griswold, Inc., a full
service advertising agency.

Andrew J.M. Huntley Andrew Huntley's principal employment has been with Richard Ellis
Group Limited, a wholly-owned U.K. subsidiary of Insignia ("Richard
Ellis"), for more than the past five years. Mr. Huntley currently serves as
Chairman of Richard Ellis (since Insignia's acquisition of Richard Ellis
in 1998).

Alan C. Froggatt Alan C. Froggatt's principal employment has been with Richard Ellis for
more than the past five years. Mr. Froggatt currently serves as Chief
Executive Officer of Richard Ellis (since Insignia's acquisition of
Richard Ellis in 1998).

Hugh V.A. Ellingham Hugh V.A. Ellingham's principal employment has been with Richard
Ellis for more than the past five years. Mr. Ellingham currently serves as
a Managing Director of Insignia for Richard Ellis (since Insignia's
acquisition of Richard Ellis in 1998) and has been a director of Richard
Ellis since its inception in 1997.

D-3

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF TRUSTEES AND OFFICERS

The Declaration of Trust and Bylaws of IPT authorize IPT to indemnify its
present and former trustees and officers and to pay or reimburse expenses for
such individuals in advance of the final disposition of a proceeding to the
maximum extent permitted from time to time under Maryland law. The Maryland
General Corporations Law, as applicable to Maryland REITs, currently provides
that indemnification of a person who is a party, or threatened to be made a
party, to legal proceedings by reason of the fact that such a person is or was
a trustee, officer, employee or agent of a corporation, or is or was serving as
a trustee, officer, employee or agent of a corporation or other firm at the
request of a corporation, against judgments, fines, penalties, amounts paid in
settlement and reasonable expenses, is mandatory in certain circumstances and
permissive in others, subject to authorization by the board of trustees, a
committee of the board of trustees consisting of two or more trustees not
parties to the proceeding (if there does not exist a majority vote quorum of
the board of trustees consisting of trustees not parties to the proceeding),
special legal counsel appointed by the board of trustees or such committee of
the board of trustees, or by the shareholders, so long as it is not established
that the act or omission of such person was material to the matter giving rise
to the proceedings and was committed in bad faith, was the result of active and
deliberate dishonesty, involved such person receiving an improper personal
benefit in money, property or services, or, in the case of criminal
proceedings, such person had reason to believe that his or her act or omission
was unlawful.

IPT has purchased an insurance policy which purports to insure the
officers and trustees of IPT against certain liabilities incurred by them in
the discharge of their functions as such officers and trustees, except for
liabilities resulting from their own malfeasance.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

EXHIBITS

EXHIBIT
NO. TITLE
- - -------------- ----------------------------------------------------------------------------------------

II-1

EXHIBIT
NO. TITLE
- - ---------- -------------------------------------------------------------------------------------------

+10.1 Fourth Amended and Restated Agreement of Limited Partnership of IPLP executed by IPT
and Insignia, dated February 17, 1998.
10.2 [Reserved]
+10.3 Acquisition and Disposition Services Agreement among IPT, IPLP and Insignia dated
February 17, 1998.
+10.4 Second Amended and Restated Advisory Agreement dated as of August 1, 1997 among IPT,
IPLP and Insignia.
+10.5 Termination Agreement dated February 17, 1998 among IPT, IPLP and Insignia
+10.6 Agreement Regarding Certain Assets between AMIT and Insignia dated July 18, 1997.
+10.7 Tax Indemnification Agreement executed by IPT in favor of the AMIT shareholders dated
July 18, 1997.
+10.8 Credit Agreement by and among IPLP, First Union National Bank and Lehman Commercial
Paper dated December 30, 1997.
+10.9 Unconditional Guaranty Agreement dated as of December 30, 1997 made by IPT in favor of
First Union National Bank, as Administrative Agent.
+10.10 Pledge and Security Agreement dated as of December 30, 1997 made by IPLP in favor of
First Union National Bank, as Administrative Agent.
+10.11 Pledge and Security Agreement dated as of December 30, 1997 made by IPT in favor of First
Union National Bank, as Administrative Agent.
+10.12 Winthrop Option Agreement by and between IPLP and Insignia, dated February 17, 1998.
+10.13 Shelter Option Agreement by and among SP IV Acquisition, L.L.C., Market Ventures, L.L.C.,
Liquidity Assistance L.L.C. and IPLP dated December 30, 1996.
+10.14 Amendment No. 1 to Shelter Option Agreement by and among Insignia, SP IV Acquisition,
L.L.C., Market Ventures, L.L.C., Liquidity Assistance L.L.C. and IPLP dated June 17, 1997.
*10.15 Amendment No. 2 to Shelter Option Agreement by and among Insignia, SP IV Acquisition,
L.L.C., Market Ventures, L.L.C., Liquidity Assistance L.L.C. and IPLP dated December 30,
1997.
+10.16 IPT 1997 Share Incentive Plan.
+10.17 Form of Investors Agreement entered into between IPT and purchasers of IPT Common
Shares in the Private Offerings.
+10.18 Registration Rights Agreement dated as of February 17, 1998 by and between IPT and
Insignia.
+10.19 Form of Registration Rights Agreement entered into between IPT and Insignia and its
affiliates.
*10.20 Stock Option Agreement dated April 14, 1995 by and between AMIT and MAE GP
Corporation.
*10.21 Irrevocable Voting Proxy granted by MAE GP Corporation in favor of AMIT dated April 14,
1995.
*21.1 Subsidiaries of IPT.

II-2

EXHIBIT
NO. TITLE
- - ---------------- -----------------------------------------------------------------------------------------

+23.1 Consent of Miles & Stockbridge, P.C. (Included in Exhibit 5.1)
+23.2 Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (included in Exhibits 8.1 and 8.2).
*23.3 Consent of Ernst & Young, L.L.P., independent auditors.
*23.4 Consent of Ernst & Young, L.L.P., independent auditors.
*23.5 Consent of BDO Seidman, LLP, certified public accountants.
*23.6 Consent of Imowitz & Koenig & Co., LLP, certified public accountants.
+24 Powers of Attorney (see the signature page to this Form S-4 Registration Statement).
+27.1 Financial Data Schedule.
+99.1 Consent of Ronald J. Consiglio to be named as proposed trustee of IPT.
+99.2 Consent of Bryan L. Hermann to be named as proposed trustee of IPT.
+99.3 Consent of Ronald Uretta to be named as proposed trustee of IPT.
+99.4 Consent of Warren M. Eckstein to be named as proposed trustee of IPT.
*99.5 Proxy Card.

- - ----------
* Filed herewith.

+ Previously filed.

** To be filed by amendment.

FINANCIAL STATEMENT SCHEDULES

Schedules have been omitted since the required information is not present,
or not present in amounts sufficient to require submission of the Schedule, or
because the information is included in the financial statements or notes
thereto.

ITEM 22. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to trustees, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the even that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a trustee, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the act and
will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes:

(1) To file, during any period during which offers or sales are being
made, a post-effective amendment to this Registration Statement:

(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(b) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;

II-3

(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.

(4) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means. This
includes information contained in documents filed subsequent to the effective
date of the registration statement through the date of responding to the
request.

(5) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it
became effective.

(6) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus
will contain the information called for by the applicable registration form
with respect to reofferings by person who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form;

(7) That every prospectus: (i) that is filed pursuant to paragraph (6)
immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Securities Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Amendment No. 1 to Registration Statement on Form S-4 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Greenville, State of South Carolina, on June 15, 1998.

INSIGNIA PROPERTIES TRUST

By: /s/ James A. Aston
-----------------------------------
James A. Aston
President

Pursuant to the requirements of the Securities Act, as amended, this
Amendment No. 1 to Registration Statement on Form S-4 has been signed by the
following persons in the capacities indicated on June 15, 1998.

NAME TITLE
- - ------------------------------- --------------------------------------------

/s/ James A. Aston Trustee, President
- - -----------------------------
James A. Aston

* Executive Managing Director, Trustee
- - -----------------------------
Frank M. Garrison

* Trustee, Chairman of the Board of Trustees,
- - ----------------------------- Chief Executive Officer
Andrew L. Farkas

* Controller
- - ----------------------------- (Principal Accounting Officer)
William D. Falls

*By /s/ James A. Aston
- - -----------------------------
James A. Aston
Attorney-in-fact

II-5

INDEX TO EXHIBITS

ITEM 601
REGULATION S-K
EXHIBIT
REFERENCE
NUMBER DESCRIPTION
- - ------------------- ----------------------------------------------------------------------------------

+2.1 Agreement and Plan of Merger, dated as of July 18,1997 among AMIT, IPT, Insignia
and MAE GP Corporation (attached as Annex A to the Proxy Statement/Prospectus
filed as part of this Registration Statement).
+2.2 Amended and Restated Agreement and Plan of Merger dated as of February 20, 1998
by and between IPT and MAE GP Corporation.
+3.1 Third Amended and Restated Declaration of Trust of IPT as filed with the Maryland
Department of Assessments and Taxation on February 23, 1998.
+3.2 Bylaws of IPT.
**4 Specimen certificate for IPT Common Shares.
+5.1 Opinion and Consent of Miles & Stockbridge, P.C. regarding legality of the shares
being registered.
+8.1 Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P. as to certain tax matters.
+8.2 Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P. as to certain tax matters.
*8.3 Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P. as to certain tax matters.
*8.4 Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P. as to certain tax matters.
*8.5 Private Letter Ruling to IPT from the Internal Reveue Service.
+10.1 Fourth Amended and Restated Agreement of Limited Partnership of IPLP executed
by IPT and Insignia, dated February 17, 1998.
10.2 [Reserved]
+10.3 Acquisition and Disposition Services Agreement among IPT, IPLP and Insignia dated
February 17, 1998.
+10.4 Second Amended and Restated Advisory Agreement dated as of August 1, 1997
among IPT, IPLP and Insignia.
+10.5 Termination Agreement dated February 17, 1998 among IPT, IPLP and Insignia
+10.6 Agreement Regarding Certain Assets between AMIT and Insignia dated July 18,
1997.
+10.7 Tax Indemnification Agreement executed by IPT in favor of the AMIT shareholders
dated July 18, 1997.
+10.8 Credit Agreement by and among IPLP, First Union National Bank and Lehman
Commercial Paper dated December 30, 1997.
+10.9 Unconditional Guaranty Agreement dated as of December 30, 1997 made by IPT in
favor of First Union National Bank, as Administrative Agent.
+10.10 Pledge and Security Agreement dated as of December 30, 1997 made by IPLP in
favor of First Union National Bank, as Administrative Agent.
+10.11 Pledge and Security Agreement dated as of December 30, 1997 made by IPT in favor
of First Union National Bank, as Administrative Agent.
+10.12 Winthrop Option Agreement by and between IPLP and Insignia, dated February 17,
1998.

ITEM 601
REGULATION S-K
EXHIBIT
REFERENCE
NUMBER DESCRIPTION
- - ------------------- -------------------------------------------------------------------------------------

+10.13 Shelter Option Agreement by and among SP IV Acquisition, L.L.C., Market
Ventures, L.L.C., Liquidity Assistance L.L.C. and IPLP dated December 30, 1996.
+10.14 Amendment No. 1 to Shelter Option Agreement by and among Insignia, SP IV
Acquisition, L.L.C., Market Ventures, L.L.C., Liquidity Assistance L.L.C. and IPLP
dated June 17, 1997.
*10.15 Amendment No. 2 to Shelter Option Agreement by and among Insignia, SP IV
Acquisition, L.L.C., Market Ventures, L.L.C., Liquidity Assistance L.L.C. and IPLP
dated December 30, 1997.
+10.16 IPT 1997 Share Incentive Plan.
+10.17 Form of Investors Agreement entered into between IPT and purchasers of IPT
Common Shares in the Private Offerings.
+10.18 Registration Rights Agreement dated as of February 17, 1998 by and between IPT
and Insignia.
+10.19 Form of Registration Rights Agreement entered into between IPT and Insignia and
its affiliates.
*10.20 Stock Option Agreement dated April 14, 1995 by and between AMIT and MAE GP
Corporation.
*10.21 Irrevocable Voting Proxy granted by MAE GP Corporation in favor of AMIT dated
April 14, 1995.
*21.1 Subsidiaries of IPT.
+23.1 Consent of Miles & Stockbridge, P.C. (Included in Exhibit 5.1)
+23.2 Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (included in Exhibits 8.1 and
8.2).
*23.3 Consent of Ernst & Young, L.L.P., independent auditors.
*23.4 Consent of Ernst & Young, L.L.P., independent auditors.
*23.5 Consent of BDO Seidman, LLP, certified public accountants.
*23.6 Consent of Imowitz & Koenig & Co., LLP, certified public accountants.
+24 Powers of Attorney (see the signature page to this Form S-4 Registration Statement).
+27.1 Financial Data Schedule.
+99.1 Consent of Ronald J. Consiglio to be named as proposed trustee of IPT.
+99.2 Consent of Bryan L. Hermann to be named as proposed trustee of IPT.
+99.3 Consent of Ronald Uretta to be named as proposed trustee of IPT.
+99.4 Consent of Warren M. Eckstein to be named as proposed trustee of IPT.
*99.5 Proxy Card.

- - ----------
* Filed herewith.

+ Previously filed.

** To be filed by amendment.

AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.
ATTORNEYS AT LAW

AUSTIN
BRUSSELS A REGISTERED LIMITED LIABILITY PARTNERSHIP
HOUSTON INCLUDING PROFESSIONAL CORPORATIONS
LONDON
LOS ANGELES 1700 PACIFIC AVENUE
MOSCOW SUITE 4100
NEW YORK DALLAS, TEXAS 75201-4675
PHILADELPHIA (214) 969-2800
SAN ANTONIO FAX (214) 969-4343
WASHINGTON

WRITER'S DIRECT DIAL NUMBER (214) 969 - 2800

June 17, 1998

Insignia Properties Trust
One Insignia Financial Plaza
P.O. Box 19059
Greenville, South Carolina 29602

Dear Sir or Madam:

You have requested our opinion regarding the federal income tax
treatment of the merger of Angeles Mortgage Investment Trust, an unincorporated
California business trust, ("AMIT") with and into Insignia Properties Trust, a
Maryland real estate investment trust ("IPT"). In rendering our opinion, we
have examined the Agreement and Plan of Merger, dated as of July 18, 1997, (the
"Merger Agreement") and such other documents as we have deemed necessary.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Merger Agreement.

Our opinion is based on the provisions of the Internal Revenue Code of
1986, as amended (the "Code"), Treasury Regulations promulgated under the Code,
judicial authority and currently published revenue rulings and procedures, all
as of the date of this letter, and all of which may change at any time. Any
change in the relevant facts (including any assumptions upon which this opinion
is, in part, based) or law could change our conclusions and would render our
opinion inapplicable. This opinion represents our best legal judgment and has
no binding effect on the IRS. Accordingly, no assurance can be given that the
IRS or a court would concur with the conclusions reached herein.

Based on the foregoing, it is our opinion that if the IPT/AIMCO Merger
is consummated after the Merger on the terms contemplated by the Insignia/AIMCO
Merger Agreement (i.e., in a cash-out merger), the following federal income
taxes would result:

Insignia Properties Trust
June 17, 1998
Page 2

delivered in the Merger, the total amount of cash received by the AMIT
shareholders (including cash received in lieu of a fractional IPT Common
Share), and the amount of liabilities of AMIT at the time of the Merger. If
AMIT was not deemed to be a qualified REIT as of the Effective Time for any
reason, IPT would become liable for any tax resulting from any such gain;

(ii) the AMIT shareholders would be treated as if all of their AMIT
Shares canceled in the Merger were redeemed in a fully taxable liquidation of
AMIT. Each AMIT shareholder would recognize taxable gain or loss in an amount
equal to the difference between: (a) such holder's adjusted tax basis in such
AMIT Shares and (b) the fair market value of the IPT Common Shares and the
total amount of cash received in exchange therefor (including cash received in
lieu of a fractional IPT Common Share);

(iii) the gain or loss recognized by each AMIT shareholder would be
capital gain or loss if the AMIT Shares surrendered in the Merger are held as
capital assets as of the Effective Time;

(iv) the tax basis of the IPT Common Shares received by the AMIT
shareholders at the Effective Time would equal the fair market value of such
IPT Common Shares at the Effective Time; and

(v) the holding period of the IPT Common Shares received by the AMIT
shareholders would commence on the day after the Effective Time.

If the IPT/AIMCO Merger is not consummated, we are unable to opine
whether the Merger will be treated as a reorganization within the meaning of
section 368(a) of the Code. However, if the Merger is not treated as a
reorganization under section 368(a) of the Code, it is our opinion that the
federal income tax consequences will be the same as described above. If the
Merger is treated as a reorganization under section 368(a) of the Code, it is
our opinion that the following federal income consequences would result:

(i) no gain or loss will be recognized by IPT or AMIT in connection
with the Merger;

(ii) no gain or loss will be recognized by a holder of AMIT Shares
upon the exchange of such holder's AMIT Shares solely for IPT Common Shares in
the Merger except where such holder receives cash proceeds in lieu of
fractional IPT Common Shares greater than the tax basis allocable to such
holder's fractional interests

(iii) the aggregate tax basis of the IPT Common Shares received by an
AMIT shareholder in the Merger (including any fractional share deemed received)
in exchange for AMIT Shares will be the same as the aggregate tax basis of the
shares of AMIT Shares surrendered in exchange therefor, decreased by the amount
of loss (if any) recognized by such shareholder in the Merger and by the amount
of cash received by such shareholder, and increased by the amount of gain (if
any) recognized by such shareholder in the Merger;

Insignia Properties Trust
June 17, 1998
Page 3

(iv) the holding period of the IPT Common Shares received by an AMIT
shareholder in exchange for AMIT Shares in the Merger will include the holding
period of the AMIT Shares surrendered in exchange therefor, provided that such
AMIT Shares are held as capital assets at the Effective Time; and

(v) a shareholder of AMIT who receives cash in lieu of a fractional
IPT Common Share will recognize gain or loss equal to the difference, if any,
between such shareholder's tax basis in the fractional share (as described in
paragraph (iii) above) and the amount of cash received. Such gain or loss will
be a capital gain or loss if the AMIT Shares are held by such shareholder as
capital assets at the Effective Time, unless the receipt of such cash by such
shareholder has the effect of a distribution of a dividend, in which case such
gain will be taxed as ordinary income to the extent of the earnings and profits
of IPT.

We express no opinion as to any other matter, including whether the
Merger would qualify as a reorganization within the meaning of section
368(a)(1) of the Code if the IPT/AIMCO Merger did not take place.

Except as set forth above, we express no opinion as to the tax
consequences to any party, whether federal, estate, local or foreign of the
Merger of any transactions related to the Merger. No reference may be made to
this opinion letter in any financial statement, or document, nor may this
opinion letter be distributed in any manner without our prior written consent,
except (i) such opinion may be furnished to the IRS in connection with an
examination of the transaction contemplated by the Merger Agreement and (ii) we
consent to the filing of this opinion as an Exhibit to the Registration
Statement.

Akin, Gump, Strauss, Hauer & Feld, L.L.P.
-----------------------------------------
/s/ Akin, Gump, Strauss, Hauer & Feld, L.L.P.

[FORM OF OPINION]

June __, 1998

Insignia Properties Trust
One Insignia Financial Plaza
P.O. Box 19059
Greenville, South Carolina 29602

Dear Sir or Madam:

You have requested our opinion regarding whether (i) Insignia
Properties Trust ("IPT") will qualify as a real estate investment trust
(a "REIT") within the meaning of Section 856(a) of the Internal Revenue Code
of 1986, as amended (the "Code") and (ii) Insignia Properties, L.P. ("IPLP")
and each partnership listed on Exhibit A attached hereto (each a "Partnership")
will be treated as a partnership for federal income tax purposes. In rendering
our opinion, we have examined such documents as we have deemed necessary. We
have assumed the current and continued correctness of the representations made
to us by IPT contained in the Certificate of Representations attached hereto as
Exhibit B, including, for purposes of whether IPT will be treated as a REIT,
whether each partnership in which a Partnership holds an interest is a
"partnership" for federal income tax purposes. We have made no independent
verification as to the correctness of such representations. Where any such
factual representation is qualified to the best knowledge of a person, we have
assumed that the representation is correct without regard to such
qualification. Further, we assume that all representations by IPT as to value
are correct and we have made no independent verification as to such values.

Our opinion is based on the provisions of the Code, Treasury
Regulations promulgated under the Code, judicial authority and currently
published revenue rulings and procedures, all as of the date of this letter,
and all of which may change at any time. Any change in the relevant facts
(including any assumptions upon which this opinion is, in part, based) or law
could change our conclusions and would render our opinion inapplicable. This
opinion represents our best legal judgment and has no binding effect on the
IRS. Accordingly, no assurance can be given that the IRS or a court would
concur with the conclusions reached herein.

Based on the foregoing, assuming that the election and actions of IPT
represented to us are and will be observed and completed as applicable in a
timely fashion, we are of the opinion

Insignia Properties Trust
Page 2
June___, 1998

that (i) IPT was organized in conformity with the requirements for
qualification as a "real estate investment trust" under the Code and its
proposed method of operation will enable it to continue to meet the
requirements for qualification and taxation as a "real estate investment trust"
under the Code; and immediately after the Merger (as defined in the Agreement
Plan of Merger, dated July 18, 1997) IPT will continue to qualify as a REIT and
(ii) that IPLP and each Partnership will be treated as a partnership for
federal income tax purposes.

We express no opinion as to any other matter. No reference may be made
to this opinion letter in any financial statement, or document, nor may this
opinion letter be distributed in any manner without our prior written consent,
except (i) such opinion may be furnished to the IRS in connection with an
examination and (ii) we consent to the filing of this opinion as an Exhibit to
the Registration Statement.

Internal Revenue Service Department of the Treasury

Washington, DC 20224
Index No: 856.07-00
Person to Contact:
Alan P. Parnes, Esq. Dianne O. Umberger
Proskauer Rose Goetz & Mendelsohn LLP Telephone Number:
1585 Broadway (202) 622-3960
New York, NY 10036 Refer Reply to:
CC: DOM: FI&P: 3/PLR-51943-96
Date:
Jan. 17, 1997

LEGEND:

Taxpayer = Insignia Properties Trust
EIN: 57-1045190

Corporation A = Insignia Properties Corporation

Corporation B = Fox Capital Management Corporation

Parent = Insignia Financial Group, Inc.

Property Partnership = Insignia Properties, L.P.

Indirect Subsidiaries = Metropolitan Asset Enhancement, L.P. and MAE GP
Corporation

Subsidiaries = NPI Equity Investments, Inc.
NPI Equity II Investments, Inc.
ConCap Equities, Inc.
ConCap Holdings, Inc.
Shelter Realty Corporation
Shelter Realty II Corporation
Shelter Realty III Corporation
Shelter Realty IV Corporation
Shelter Realty V Corporation
Shelter Realty VI Corporation
Shelter Realty VII Corporation
Davidson Growth Plus GP Corporation
U.S. Realty I GP Corporation

State A = Maryland

State B = Delaware

Date A = May 15, 1996

Date B = December 31, 1996

Date C = December 19, 1996

Date D = January 19, 1996

Date E = January 1, 1997

Date F = December 30, 1996

A = 2,400

B = 99 percent

C = 14

D = 60 percent

Dear Mr. Parnes:

This is in response to your letter dated May 16, 1996, submitted on
behalf of Taxpayer seeking a ruling regarding the qualification of Corporation
B and Subsidiaries as "qualified REIT subsidiaries" within the meaning of
section 856(i) of the Code.

FACTS

Taxpayer is a State A trust formed on Date A and is intended to
qualify as a real estate investment trust (REIT) under section 856 of the Code
for the taxable year ending on Date B. Taxpayer is and Corporation A was a
wholly-owned subsidiary of Parent. Parent, directly and indirectly through its
subsidiaries, owns limited partnership interests in limited partnerships that
own residential and commercial properties and provides property management
services to over A properties.

Taxpayer became the successor to Corporation A through the merger of
Corporation A into Taxpayer on Date C in a transaction that is intended to
qualify as a reorganization within the meaning of section 368(a)(1)(F). Though
the merger with Corporation A, Taxpayer owned a B general partnership interest
in Property Partnership, which was the successor to a limited liability company
in which Corporation A had a B interest. On Date D, Property Partnership
purchased interests in C limited partnerships that own multi-family residential
housing.

Taxpayer and Property Partnership have acquired additional real estate
assets through two transactions. First, parent (including its subsidiaries)
transferred on Date E limited partnerships and a D interest in two limited
liability companies to Property Partnership in exchange for

limited partner interests in Property Partnership. Taxpayer also acquired on
Date F from Parent (including its subsidiaries and Indirect Subsidiaries) all
of the stock of Subsidiaries, unrelated C corporations, in exchange for voting
beneficial interests in Taxpayer. Finally, Taxpayer purchased all of the stock
of Corporation B, a corporation intended to qualify under subchapter S of the
Code. Taxpayer and the shareholders of Corporation B made an election pursuant
to section 338(h)(10). Taxpayer plans to raise additional capital by selling
shares through a private placement and, at a later time, through a sale of
shares to the public.

Taxpayer has made the following representations pursuant to Rev. Proc.
86-42, 1986-2, C.B. 722:

1. The fair market value of Taxpayer's shares received by each of
Parent, Property Partnership, and Indirect Subsidiaries will be approximately
equal to the fair market value of the stock of the Subsidiaries surrendered by
Parent, Property Partnership, and Indirect Subsidiaries, respectively.

2. There is no plan or intention by the shareholders of any of the
Subsidiaries who own one percent or more of the stock of any of the
Subsidiaries, and to the best of the knowledge of the management of each of the
Subsidiaries, there is no plan or intention on the part of the remaining
shareholders of any of the Subsidiaries, to sell, exchange, or otherwise
dispose of a number of Taxpayer's shares received in the transaction that would
reduce any of the Subsidiaries' shareholders' ownership of acquired shares to a
number of shares having a value, as of the date of the transaction, of less
than 50 percent of the value of all of the formerly outstanding stock of the
relevant subsidiary as of the same date. For purposes of this representation,
shares of each of the Subsidiaries' stock exchanged for cash or other property,
surrendered by dissenters, or exchanged for cash in lieu of Taxpayer's
fractional shares will be treated as outstanding stock of the relevant
Subsidiary on the date of the transaction. Moreover, shares of each of the
Subsidiaries' stock and Taxpayer's shares held by the Subsidiaries'
shareholders and otherwise sold, redeemed, or disposed of prior or subsequent
to the transaction will be considered in making this representation.

3. Taxpayer will acquire at least 90 percent of the fair market value
of the net assets and at least 70 percent of the gross assets held by each of
the Subsidiaries immediately prior to the transaction. For purposes of this
representation, amounts paid by each of the Subsidiaries to dissenters, amounts
used by each of the Subsidiaries to pay for its respective reorganization
expenses, amounts paid by each of the Subsidiaries to its respective
shareholders who receive cash or other property, and all redemmptions and
distributions (except for regular, normal dividends) made by each of the
Subsidiaries immediately preceding the transfer will be included as assets of
each such Subsidiary held immediately prior to the transaction.

4. Taxpayer has no plans or intention to reacquire any of its shares
issued in he transaction.

5. Taxpayer has no plan or intention to sell or otherwise dispose of
any of the assets of the Subsidiaries acquired in the transaction, except for
dispositions made in the ordinary course of business or transfers described in
section 368(a)(2)(C).

6. The liabilities of each of the Subsidiaries assumed by Taxpayer and
the liabilities to which the transferred assets of each of the Subsidiaries are
subject were incurred by each of the Subsidiaries in the ordinary course of its
business.

7. Following the transaction, Taxpayer will continue the historic
business of each of the Subsidiaries or use a significant portion of each of
the Subsidiaries' assets in a business.

8. Taxpayer, the Subsidiaries, and the shareholders of the
Subsidiaries will pay their respective expenses, if any, incurred in connection
with the transaction.

9. There is no intercorporate indebtedness existing between Taxpayer
and any of the Subsidiaries that was issued or acquired, or will be settled, at
a discount.

10. No two parties to the transaction are investment companies as
defined in section 368 (a)(2)(F)(iii) and (iv).

11. Prior to the acquisition of the Subsidiaries, Taxpayer will not
own, directly or indirectly, nor has it owned during the past five years,
directly or indirectly, any of the stock of the Subsidiaries.

12. The fair market value of the assets of each of the Subsidiaries
transferred to Taxpayer will equal or exceed the sum of the liabilities assumed
by Taxpayer, plus the amount of liabilities, if any, to which the transferred
assets are subject.

13. None of the Subsidiaries are under the jurisdiction of a court in
a Title 11 or similar case within the meaning of section 368(a)(3)(A).

In making the representations, Taxpayer assumes that Subsidiaries will
be treated as having transferred their assets to Taxpayer in exchange for
Taxpayer's shares and the assumption by Taxpayer of their liabilities.

LAW
- - ---
Section 856(i)(1) of the Code requires that, for all purposes of the
Code, a corporation that is a "qualified REIT subsidiary" is not treated as a
separate corporation, and all assets, liabilities and items of income,
deduction, and credit of a "qualified REIT subsidiary" shall be treated as
being of the REIT.

Section 856(i)(2) of the Code defines the term "qualified REIT
subsidiary" as any corporation if 100 percent of the stock of such corporation
is held by the REIT at all times during the period such corporation was in
existence.

Prior to the enactment by Congress of the qualified REIT subsidiary
rules under section 856(i) of the Code, the REIT asset tests set out in section
856(c)(5) effectively precluded a REIT from holding assets in a subsidiary
corporation. Congress recognized that corporations often conduct their
activities through wholly-owned subsidiaries to insulate certain assets or
activities from liabilities associated with other assets or activities.
Congress enacted section 856(i) so that REITS could avail themselves of the
business advantages associated with the ownership of assets

through wholly-owned subsidiaries. S. Rep. No. 313, 99th Cong., 2d Sess. 775
(1986), 1986-3 C.B. 775.

Ordinarily, a REIT's acquisition of an existing corporation would
cause the REIT to fail to satisfy the limitations of section 856(c)(5).
Furthermore, the acquired corporation would not have been held by the REIT at
all times during its existence, so that it could not qualify as a "qualified
REIT subsidiary" under section 856(i)(2). The REIT would be required to
liquidate the acquired corporation shortly after the acquisition to maintain
its REIT status. Such a result would put the REIT at a competitive disadvantage
to subchapter C corporations and would frustrate Congressional intent behind
section 856(i). For this reason, under proper circumstances, the Service will
deem a liquidation of an acquired corporation so the REIT can be treated for
federal income tax purposes as having owned the corporation at all times during
the period the corporation was in existence. This will permit the corporation
to qualify as a "qualified REIT subsidiary" under section 856(i)(2) and the
REIT to satisfy the limitations of section 856(c)(5).

Taxpayer's acquisition of Subsidiaries presents proper circumstances
for a deemed liquidation. In order to be consistent with the purposes
underlying section 856(i) of the Code while satisfying section 856(c)(5),
Subsidiaries will be deemed to have been liquidated as part of Taxpayer's
integrated acquisition plan. For this reason, Taxpayer's acquisition of the
stock of Subsidiaries solely in exchange for its voting beneficial interests
will be treated as Taxpayer's acquisition of substantially all of the assets of
Subsidiaries solely in exchange for the voting interests of Taxpayer. See Rev.
Rul. 67 - 274, 1967-2 C.B. 141. Immediately following the asset acquisitions,
the assets of Subsidiaries will be deemed contributed by Taxpayer to new,
wholly-owned subsidiaries which were held by Taxpayer at all times during their
existence. A deemed contribution under these circumstances will not violate
section 368(a)(2)(G) because the new subsidiaries are not treated as separate
corporations for purposes of Subtitle A. Section 856(i)(1)(A).

Taxpayer's acquisition of Corporation B involves a different manner of
acquisition. As a consequence of the election under section 338(h)(10),
Corporation B will be treated as having liquidated as of the close of the
acquisition date (as that term is defined in section 338(h)(2)). Section
1.338(h)(10)-1(e). It is not treated as continuing in existence thereafter for
purposes of Subtitle A. Section 338(a). Thus, for purposes of section
856(i)(2), Taxpayer will be treated as if it held Corporation B at all times
during its new existence beginning immediately after the date on which it was
acquired by Taxpayer.

CONCLUSIONS
- - -----------

Based on the facts as represented, provided Taxpayer makes a valid
REIT election under section 856 for the taxable year that includes Taxpayer's
acquisition of Subsidiaries and Corporation B:

1) each of the Subsidiaries will be treated as a "qualified REIT
subsidiary" under section 856(i)(2) for all purposes of the Code from the date
each of the Subsidiaries was acquired by Taxpayer. Each of the Subsidiaries
will be treated as having transferred substantially all of its assets to
Taxpayer solely in exchange for shares of Taxpayer and the assumption of the
liabilities

of each of the Subsidiaries, and each acquisition will constitute a
reorganization within the meaning of section 368(a)(1)(C) of the Code;

2) provided that an election described in Notice 88-19, 1988-1 C.B.
486, is made with respect to a Subsidiary and its assets to make them subject
to rules similar to section 1374 with regard to any built-in gain liability
attributable to the assets at the time it qualifies as a "qualified REIT
subsidiary," such Subsidiary will not recognize the net built-in gain on its
assets as would be required absent such an election; and

3) Corporation B will be treated as a "qualified REIT subsidiary"
under section 856 (i)(2) immediately following the date on which it was
acquired by Taxpayer.

This ruling is directed only to the taxpayer who requested it. No
opinion is expressed as to the tax consequences of this transaction under any
other provision of the Code.

In particular, no opinion is expressed on the tax treatment of the
proposed transaction or of the effects resulting from the proposed transaction
under the regulations to be promulgated pursuant to Notice 88-19, 1988-1 C.B.
486. Temporary or final regulations pertaining to one or more of the issues
addressed in this ruling have not been adopted. Therefore, this ruling will be
modified or revoked by the adoption of temporary of final regulations, to the
extent the regulations are inconsistent with any conclusions of this ruling.
See 11.04 of Rev. Proc. 96-1, 1996-1 I.R.B. 39.

Further, no opinion is expressed as to whether Taxpayer's merger with
Corporation A constitutes a reorganization within the meaning of section
368(a)(1)(F). See 3.01(28) of Rev. Proc. 96-3, 1996-1 I.R.B. 86.

Section 6110(j)(3) of the Code provides that this ruling may not be
used or cited as precedent.

Sincerely yours,
Acting Assistant Chief Counsel
(Financial Institutions and Products)

By: /s/ Alice M. Bennett
-------------------------------------
Alice M. Bennett
Chief, Branch 3

Enclosures:
Copy of this letter
Copy for 6110 purposes

AMENDMENT NO. 2
TO
SHELTER OPTION AGREEMENT

This Amendment No. 2 to Shelter Option Agreement (this "Amendment") is
entered into as of December 30, 1997 by and among Insignia Financial Group,
Inc. ("IFG"), SP IV Acquisition, L.L.C. ("SP IV"), Market Venture, L.L.C.
("Market Ventures"), Liquidity Assistance L.L.C. ("LAC") and Insignia
Properties, L.P. (the "Partnership").

WHEREAS, SP IV, Market Ventures, LAC and the Partnership entered into
that certain Shelter Option Agreement dated as of December 30, 1996 (the
"Original Agreement");

WHEREAS, IFG, SP IV, Market Ventures, LAC and the Partnership entered
into that certain Amendment No. 1 to Shelter Option Agreement dated as of June
17, 1997, which amended the Original Agreement as provided therein (as amended,
the "Existing Agreement");

WHEREAS, capitalized terms used but not defined herein have the
meanings ascribed to them in the Existing Agreement;

WHEREAS, on September 1, 1997, the Partnership exercised the option
granted under the Existing Agreement by delivering an option exercise notice
(the "Exercise Notice"), with the transfer of Units pursuant thereto to be
effective as of 12:00 Midnight on December 31, 1997;

WHEREAS, subsequent to the date of the Existing Agreement and the
Exercise Notice, LAC and SP IV Acquisition, L.L.C. each transferred all of the
Units held by them to Market Ventures, and Market Ventures acquired additional
Units from unaffiliated third parties in private or open market transactions,
with the result that as of the date hereof (i) Market Ventures owns a total of
11,747 Units and IFG owns a total of 4,263 Units, and (ii) neither LAC nor SP
IV (nor any other affiliate of IFG) owns any Units;

NOW, THEREFORE, in consideration of the premises and the desire of the
parties to amend the Existing Agreement to account for the transfers described
in the preceding paragraph and to grant to the Partnership an option to acquire
the additional Units acquired by Market Ventures from unaffiliated third
parties, the parties hereby agree as follows:

1. The previously delivered Exercise Notice shall be void and of no
effect.

2. The term "Unitholder" in the Existing Agreement is hereby amended
to mean only IFG and Market Ventures.

3. The term "Units" in the Existing Agreement is hereby amended to
mean the 4,263 Units owned by IFG and the 11,747 Units owned by Market
Ventures.

4. Section 1 of the Existing Agreement is hereby deleted in its
entirety and replaced with the following:

"Each Unitholder hereby grants to the Partnership the option to
acquire the Units owned by such Unitholder in exchange for an
aggregate (for all of the Units) of 1,106,448 JP Units of the
Partnership ("LP Units"), all of which shall be issued to IFG. The
option may be exercised by the Partnership, in whole or in part,
at any time or from time to time, on or before December 31, 1997."

5. Except as described herein, the Existing Agreement is not amended,
waived or modified in any way and shall continue in full force and effect.

IN WITNESS WHEREOF, each of IFG, SP IV, Market Ventures, LAC and the
Partnership has caused this Amendment to be duly executed on its behalf as of
the date first above written.

INSIGNIA FINANCIAL GROUP, INC.

By:
-------------------------
Jeffrey P. Cohen
Senior Vice President

SP IV ACQUISITION, L.L.C.

By: Insignia Financial Group, Inc.,
its Member

By:
-------------------------
Jeffrey P. Cohen
Senior Vice President

MARKET VENTURES, L.L.C.

By: Insignia Financial Group, Inc.,
its Member

By:
-------------------------
Jeffrey P. Cohen
Senior Vice President

LIQUIDITY ASSISTANCE L.L.C.

By: Insignia Financial Group, Inc.,
its Member

By:
-------------------------
Jeffrey P. Cohen
Senior Vice President

INSIGNIA PROPERTIES, L.P.

By: Insignia Properties Trust,
its General Partner

By:
-------------------------
Jeffrey P. Cohen
Senior Vice President

STOCK OPTION AGREEMENT
----------------------

1. Identification.
--------------

This Stock Option Agreement (the "Option Agreement"), dated for
identification purposes April 14, 1995 is made and entered into by and between
MAE GP Corporation, a Delaware corporation ("MAE GP") and Angeles Mortgage
Investment Trust, a California business trust ("AMIT").

2. Recitals.
--------

2.1 AMIT and Insignia Financial Group, Inc., a Delaware corporation
("Insignia") and others, including affiliates of MAE GP, are parties to a
lawsuit captioned Angeles Mortgage Investment Trust, et al. v. Insignia
Financial Group, Inc., et al., Case No. BC 085673, now pending in the Superior
Court of the State of California for the County of Los Angeles (the "Action").

2.2 MAE GP is an affiliate of certain of the defendants named in the
Action.

2.3 In order to settle certain claims alleged in or related to the Action,
AMIT, MAE GP, Insignia and certain other parties related to Insignia are
entering into that certain Settlement Agreement dated November 9, 1994 (the
"Settlement Agreement"), which provides, among other things, that MAE GP shall
grant AMIT an option to purchase any and all AMIT Class B Shares (the "Shares")
now owned or hereafter acquired by MAE GP on or before that date which is ten
(10) years after the "Effective Date" (as such term is defined in the
Settlement Agreement).

2.4 MAE GP desires to grant to AMIT, and AMIT desires to accept, an option
to purchase the Shares, on the terms and conditions set forth below.

3. Grant of Option.
---------------

3.1 MAE GP hereby grants to AMIT an option (the "Option") to purchase the
Shares, on that date which is ten (10) years from the Effective Date (the
"Option Exercise Date"), for a purchase price equal to (i) Ninety-Three
Thousand Eight Hundred Fifty-Six Dollars ($93,856), plus (ii) any amounts paid
by MAE GP (the "Acquisition Costs") to purchase AMIT Class B Shares (the
"Additional Shares") in addition to the One Million Six Hundred Seventy-Five
Thousand One Hundred Thirteen (1,675,113) AMIT Class B Shares currently owned
by MAE GP (the "Initial Shares"), plus (iii) interest on the Acquisition Costs
at an annual rate equal to six and one-half percent (6%), which interest
shall commence to accrue as of the date MAE GP acquires any such Additional
Shares (collectively, the "Purchase Price").

3.2 In consideration for MAE GP's grant of the Option, AMIT shall pay to
MAE GP Two Hundred Fifty Thousand Dollars ($250,000), in cash or by certified
or-bank cashier's check, concurrently with the execution of this Option
Agreement.

4. Exercise of Option.
------------------

4.1 Unless the Additional Shares are acquired from AMIT, MAE GP shall
deliver written notice to AMIT following MAE GP's acquisition of Additional
Shares any time prior to the Option Exercise Date, which notice shall be
delivered within fifteen (15) business days of such acquisition, and which
notice shall specify the date of acquisition of the Additional Shares, the
number of Additional Shares which MAE GP acquired, the Acquisition Costs for
the

Additional Shares, and the total number of Shares owned by MAE GP following
such acquisition.

4.2 If AMIT desires to exercise the Option, it shall do so by delivery of
written notice thereof (the "Option Notice") to MAE GP on or before that date
which is thirty (30) days prior to the Option Exercise Date, which notice shall
specify the date on which the purchase and sale shall occur, which date shall
be on or after the Option Exercise Date, but in no event later than thirty (30)
days following the Option Exercise Date (the "Closing Date").

4.3 If AMIT elects to exercise the Option as specified in the Option
Notice, then MAE GP shall sell the Shares specified in the Option Notice to
AMIT, and AMIT shall purchase the Shares from MAE GP, on the Closing Date.

4.4 On the Closing Date, AMIT shall deliver to MAE GP cash or a certified
or bank cashier's check in the amount of the Purchase Price, representing
payment in full for the Shares, and MAE GP shall deliver to AMIT the original
certificate or certificates representing the Shares, together with stock
assignment separate from certificate(s), duly endorsed (with signatures
guaranteed, if requested by AMIT), in form and substance reasonably
satisfactory to AMIT.

5. Covenants, Representations and Warranties.
-----------------------------------------

5.1 Concurrently with the execution of this Option Agreement, MAE GP shall
deliver to AMIT an irrevocable voting proxy (which proxy shall be coupled with
an interest) with regard to the Shares, executed by MAE GP, which proxy shall
be in the form attached hereto as Exhibit "A" (the "Proxy"). Pursuant to the
terms of the Proxy, MAE GP shall transfer to AMIT any and all voting rights
with respect to the Shares with regard to any and all shareholder voting

which may occur relating to issues within the scope of the Proxy (the "Proxy
Issues"); provided, however, that AMIT must vote the Shares on Proxy Issues in
accordance with the vote of the majority of AMIT Class A Shares voting with
regard to any particular Proxy Issue, such majority to be determined without
consideration of the votes of "Excess Class A Shares" as defined in Paragraph
6.13 of AMIT's Declaration of Trust dated September 1, 1988.

5.2 MAE GP hereby waives any dividends ("Waived Dividends") from earnings
paid or declared by AMIT with respect to the Shares, and any capital
distributions ("Waived Distributions") paid or declared by AMIT with respect to
the Shares, during the period commencing with the date hereof and continuing
through the Option Exercise Date, or the Closing Date if AMIT elects to
exercise the Option (the "Option Period"); provided that, if AMIT fails to
exercise the Option by the Option Exercise Date, AMIT shall pay or distribute
(as applicable) to MAE GP, immediately after the Option Exercise Date, all
Waived Dividends and Waived Distributions, with interest on fourteen percent
(14%) of any cash Waived Dividends and cash Waived Distributions at the rate of
8.6% per annum from the date such dividend or distribution would have been
distributed by AMIT to MAE GP but for this waiver.

5.3 Concurrently with the execution of this Option Agreement, MAE GP shall
deliver to AMIT all outstanding certificates representing the Shares so that
such certificates can be endorsed with the following legend:

SALE, ASSIGNMENT, TRANSFER OR HYPOTHECATION OF THE
SHARES REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY
THE PROVISIONS OF AN OPTION AGREEMENT BETWEEN MAE GP
CORPORATION AND ANGELES MORTGAGE INVESTMENT TRUST DATED
AS OF APRIL 14, 1995, A COPY OF WHICH MAY BE INSPECTED
AT AMIT'S PRINCIPAL OFFICE, AND ALL OF

THE PROVISIONS OF WHICH ARE INCORPORATED BY REFERENCE IN THIS
CERTIFICATE.

Such legend shall be conspicuously endorsed by AMIT on the face of each
certificate representing the Shares, and then promptly returned to MAE GP.
During the Option Period, if MAE GP purchases Additional Shares, immediately
thereafter MAE GP shall deliver to AMIT the share certificates representing
such Additional Shares so that such certificates can be endorsed with the
legend set forth above and promptly returned to MAE GP. A copy of this Option
Agreement shall be delivered by AMIT to AMIT's secretary, who shall show a copy
of this Option Agreement to any person making proper inquiry about it.

5.4 MAE GP hereby represents and warrants to AMIT as follows:

(a) MAE GP is the owner of 1,675,113 issued and outstanding AMIT
Class B Shares. MAE GP owns such shares, i.e., the Initial Shares, free
and clear of any liens, encumbrances, charges, agreements and
restrictions, except for the restrictions imposed by this Option
Agreement, and as otherwise disclosed in writing on the Initial Shares,
and MAE GP shall maintain the Initial Shares free and clear of any liens,
encumbrances, charges, agreements and restrictions, except for the
restrictions imposed by this Option Agreement, and as otherwise disclosed
in writing on the Initial Shares, until the Option Exercise Date, or the
Closing Date if AMIT exercises the Option.

(b) To the extent MAE GP acquires Additional Shares, MAE GP shall own
and hold the Additional Shares free and clear of any liens, encumbrances,
charges, agreements and restrictions, except for the restrictions imposed
by this Option Agreement, and as otherwise

disclosed in writing on the Additional Shares, until the Option
Exercise Date, or the Closing Date if AMIT exercises the Option.

(c) MAE GP has or shall have the full power to transfer the Shares to
AMIT as of the Closing Date, in accordance with the terms hereof, without
obtaining the consent or approval of any person, entity or governmental
authority.

(d) MAE GP has not, voluntarily or by operation of law, assigned,
transferred, hypothecated or otherwise conveyed all or any portion of the
Shares, and shall not, voluntarily or by operation of law, assign,
transfer, hypothecate or otherwise convey all or any portion of the
Shares.

(e) Upon the due and valid execution and delivery of this Option
Agreement, this Option Agreement shall be binding upon MAE GP in
accordance with its terms.

5.5 AMIT hereby represents and warrants to MAE GP that upon the due and
valid execution and delivery of this Option Agreement, this option Agreement
shall be binding upon AMIT in accordance with its terms.

6. Issuance of New Shares.
----------------------

6.1 If AMIT issues Class A Shares in addition to the AMIT Class A Shares
currently issued and outstanding during the Option Period, MAE GP shall have
the right to purchase Additional Shares in a sufficient amount such that MAE GP
may maintain the current ratio of two (2) AMIT Class A Shares issued and
outstanding for each AMIT Class B Share which is issued and outstanding. MAE GP
may purchase the Additional Shares from AMIT at a purchase price per share
equal to 1/99th of the sale price of each AMIT Class A Share. Nothing in this

paragraph is intended to limit MAE GP's right to receive Additional Shares
under Paragraph 6.1 of AMIT's Declaration of Trust dated September l, 1988, or
applicable law.

6.2 AMIT shall deliver written notice to MAE GP prior to or concurrently
with its issuance of AMIT Class A Shares in addition to the AMIT Class A Shares
currently issued and outstanding, which notice shall specify the per share
selling price for each AMIT Class A Share. MAE GP shall have ten (10) business
days following its receipt of such notice to elect to purchase Additional
Shares, and shall exercise its election to purchase the Additional Shares by
delivery of written notice thereof to AMIT, together with cash or a certified
or bank cashier's check in the amount of the purchase price for the Additional
Shares (the "Purchase Notice"). Within ten (10) business days following AMIT's
receipt of the Purchase Notice, AMIT shall deliver to MAE GP a certificate or
certificates representing the Additional Shares.

7. Definition.
----------

The term "deliver" as used in this Option Agreement shall mean and refer
to personal delivery, except with respect to Section 4.2, in which case
"delivery" shall mean and refer to personal delivery, facsimile transmission or
United States mail.

8. Miscellaneous.
-------------

8.1 This Option Agreement is made under and shall be construed, governed
and enforced in accordance with the laws of the State of California.

8.2 This Option Agreement shall be binding upon and inure to the benefit
of the heirs, administrators, executives, representatives, successors, agents
and assigns of each of the parties hereto.

8.3 If any portion of this Option Agreement shall be held illegal,
unenforceable, void or voidable by any court having jurisdiction over the
subject matter hereof, each of the remaining terms hereof shall nevertheless
remain in full force and effect to the full extent permitted by law.

8.4 This Option Agreement may be executed in any number of counterparts,
each of which shall be deemed the original, but all of which, when taken
together, shall constitute one and the same instrument.

8.5 In the event of any action based upon a failure to perform any
obligation under this Option Agreement, or to enforce the provisions of this
Option Agreement, the prevailing party in such action will be entitled to
recover its reasonable attorneys' fees and costs from the non-prevailing party.

8.6 In addition to attorneys' fees and costs provided for in Section 8.5
hereof, the parties agree that if any dispute between the parties results in a
judgment in favor of either party, the prevailing party will be entitled to
recover from the other all attorneys' fees and costs incurred by it in
enforcing such judgment. This provision is intended to be severable from any
other provision of this Option Agreement, and is not to be deemed merged in the
judgment.

IN WITNESS WHEREOF, this Option Agreement has been executed by the parties
on the date and at the place set forth opposite their respective signatures
below.

"MAE GP"

MAE GP Corporation, a Delaware corporation

Dated: April 14, 1995 By:
----------------------------------------

Its:
----------------------------------------

"AMIT"

Angeles Mortgage Investment Trust, a
California business trust

Dated: April 14, 1995 By:
----------------------------------------

Its:
----------------------------------------

IRREVOCABLE VOTING PROXY

By execution hereof, MAE GP Corporation, a Delaware corporation ("MAE
GP"), appoints Angeles Mortgage Investment Trust, a California business trust
(AMIT), its true and lawful attorney and proxy, to vote all of the shares of
AMIT Class B Common Stock (the "Shares") held of record by MAE GP as of the
date hereof, or hereafter acquired by MAE GP on or before that date which is
ten (10) years from the "Effective Date" (as such term is defined in that
certain Settlement Agreement dated November 9, 1994 among AMIT, MAE GP and
certain other parties, as amended), for MAE GP and in its name, place and
stead, at any and all meetings of the shareholders, and otherwise to act for
MAE GP in the same manner and with the same effect as if MAE GP were personally
present at any such meeting and voting such securities or personally acting on
any matter submitted to shareholders for approval or consent with regard to
voting by AMIT shareholders on the following issues ("Proxy Issues"):

1.) Issues pertaining to extensions of credit or the sale
(except a sale of all or substantially all of AMIT's assets), modification or
refinance of loans made or to be made by AMIT to MAE GP or any person or entity
which is or was an affiliate or an officer, director or trustee of an affiliate
of MAE GP or an insider or an officer, director of trustee of an insider of MAE
GP;

2.) Issues pertaining to transactions between AMIT and
affiliates or insiders of MAE GP or any officer, director or trustee of an
affiliate or insider of MAE GP;

3.) Issues pertaining to the election or appointment of any
affiliate or insider of MAE GP or any officer, director or trustee of any
affiliate or insider of MAE GP as an officer or trustee of AMIT.

Provided, however, that AMIT must vote the Shares on Proxy Issues in
accordance with the vote of the majority of Class A Shares voted on any Proxy
Issue, such majority to be determined without consideration of the votes of
"Excess Class A Shares" as defined in Paragraph 6.13 of the AMIT Declaration of
Trust, dated September 1, 1988.

As used in this Irrevocable Voting Proxy, the term "affiliate" means:

(A) a person or entity that directly or indirectly owns,
controls, or holds with power to vote, 20 percent or more of the
outstanding voting securities of MAE GP or an affiliate of MAE GP
other than a person or entity that holds such securities --

(i) in a fiduciary or agency capacity without
sole discretionary power to vote such securities; or

(ii) solely to secure a debt, if such person or
entity has not in fact exercised such power to vote;

(B) a corporation 20 percent or more of whose outstanding
voting securities are directly or indirectly owned, controlled, or
held with power to vote, by MAE GP or an

affiliate of MAE GP, or by a person or entity that directly or
indirectly owns, controls, or holds with power to vote, 20 percent or
more of the outstanding voting securities of MAE GP or an affiliate of
MAE GP, other than a person or entity that holds such securities --

(i) in a fiduciary or agency capacity without sole
discretionary power to vote such securities; or

(ii) solely to secure a debt, if such person or
entity has not in fact exercised such power to vote;

(C) a person or entity whose business is operated under a
lease or operating agreement by MAE GP or an affiliate of MAE GP, or
person or entity substantially all of whose property is operated under
an operating agreement with MAE GP or an affiliate of MAE GP; or

(D) a person or entity that operates the business or
substantially all of the property of MAE GP or an affiliate of MAE GP
under a lease or operating agreement;

Provided, however, that an "affiliate" of MAE GP shall not include a person or
entity who is an affiliate of MAE GP solely because he/she/it is an affiliate
of AMIT (assuming "AMIT" were substituted for "MAE GP" in the above-referenced
definition of the term "affiliate").

As used in this Irrevocable Voting Proxy, the term "insider" means:

(E) director of MAE GP;

(F) officer of MAE GP;

(G) person in control of MAE GP;

(H) partnership in which MAE GP is a general partner;

(I) general partner of MAE GP; or

(J) relative of a general partner, director, officer, or
person in control of MAE GP;

(K) affiliate, or insider of an affiliate of MAE GP;

(L) managing agent of MAE GP.

Provided, however, that an "insider" of MAE GP shall not include a person or
entity that is an "insider" of MAE GP solely because he/she/it is an "insider"
or "affiliate" of AMIT (assuming "AMIT" were substituted for "MAE GP" in the
above-referenced definitions of "affiliate" and "insider").

MAE GP authorizes AMIT to substitute any person to act under this
proxy, to revoke any such substitution, and to file this proxy and any
substitution or revocation of substitution with the Secretary of AMIT.

This proxy is irrevocable until that date which is ten (10) years from
the Effective Date, and is coupled with an interest.

Certificate Number Number of Shares Class Shareholder
_________________ ________________ _____ ___________

B-0002 1,393,100 B MAE GP
B-0003 282,013 B MAE GP

DATED: April 14, 1995 MAE GP CORPORATION,
a Delaware Corporation

By: ______________________________

Its: ______________________________

- - -------------------------------------------------------
NAME STATE
- - -------------------------------------------------------
IPLP Acquisition I, L.L.C. DE
- - -------------------------------------------------------
Reedy River Properties, L.L.C. DE
- - -------------------------------------------------------
Madison River Properties, L.L.C. DE
- - -------------------------------------------------------
Broad River Properties, L.L.C. DE
- - -------------------------------------------------------
Raintree GP, LLC SC
- - -------------------------------------------------------
Insignia Properties, L.P. DE
- - -------------------------------------------------------
IAP GP Corporation DE
- - -------------------------------------------------------
MAE Delta, Inc. DE
- - -------------------------------------------------------
MAE Ventures, Inc. DE
- - -------------------------------------------------------
Angeles Securitization Corporation CA
- - -------------------------------------------------------
Angeles Investment Properties, Inc. CA
- - -------------------------------------------------------
Angeles Properties, Inc. CA
- - -------------------------------------------------------
Angeles Realty Corporation CA
- - -------------------------------------------------------
Angeles Realty Corporation II CA
- - -------------------------------------------------------
Angeles Acceptance Directives, Inc. CA
- - -------------------------------------------------------
Angeles Acceptance Pool, L.P. CA
- - -------------------------------------------------------
IH Inc. DE
- - -------------------------------------------------------
Davidson Properties, Inc. TN
- - -------------------------------------------------------
Davidson Diversified Properties, Inc. TN
- - -------------------------------------------------------
HCW General Partner, Ltd. TX
- - -------------------------------------------------------
ISLP, Limited Partnership DE
- - -------------------------------------------------------
MAERIL, Inc. DE
- - -------------------------------------------------------
MAE Investments, Inc. DE
- - -------------------------------------------------------
Diversified Equities, L.P. TN
- - -------------------------------------------------------
Residual Equities, L.P. DE
- - -------------------------------------------------------
Freeman Equities, L.P. TN
- - -------------------------------------------------------
Insignia Jacques Miller, L.P. DE
- - -------------------------------------------------------
MAE California, Inc. CA
- - -------------------------------------------------------
Calmark / Fort Collins, Inc. CA
- - -------------------------------------------------------
Heritage Park / MRA, Inc. CA
- - -------------------------------------------------------
Heritage Park Investors, Inc. CA
- - -------------------------------------------------------
Sturbrook Investors, Inc. CA
- - -------------------------------------------------------
MAE-JMA, Inc. DE
- - -------------------------------------------------------
JMA Equities, L.P. DE
- - -------------------------------------------------------
Jacques-Miller Associates TN
- - -------------------------------------------------------
CRPTEX, Inc. TX
- - -------------------------------------------------------
United Investors Real Estate, Inc. DE
- - -------------------------------------------------------
Tennessee Trust Company TN
- - -------------------------------------------------------
Tenntruco, Inc. NC
- - -------------------------------------------------------
API/AREC Partners, Ltd. (API) CA
- - -------------------------------------------------------
Davidson Growth Plus GP Corporation DE
- - -------------------------------------------------------
ConCap Equities, Inc. DE
- - -------------------------------------------------------
ConCap Holdings, Inc. TX
- - -------------------------------------------------------
Shelter Realty Corporation SC
- - -------------------------------------------------------
Shelter Realty II Corporation SC
- - -------------------------------------------------------
Shelter Realty III Corporation SC
- - -------------------------------------------------------

- - -------------------------------------------------------
NAME STATE
- - -------------------------------------------------------
Shelter Realty IV Corporation SC
- - -------------------------------------------------------
Shelter Realty V Corporation SC
- - -------------------------------------------------------
Shelter Realty VI Corporation SC
- - -------------------------------------------------------
Shelter Realty VII Corporation SC
- - -------------------------------------------------------
U.S. Realty I Corporation SC
- - -------------------------------------------------------
Fox Capital Management Corporation CA
- - -------------------------------------------------------
NPI Equity Investments, Inc. FL
- - -------------------------------------------------------
NPI Equity Investments II, Inc. FL
- - -------------------------------------------------------
Summerwalk G.P., Inc. SC
- - -------------------------------------------------------
CCP IV Briar Bay G.P., Inc. SC
- - -------------------------------------------------------
CPF 16 Landings G.P, Inc. SC
- - -------------------------------------------------------
CCP III Village Green G.P., Inc. SC
- - -------------------------------------------------------
IPT I, LLC DE
- - -------------------------------------------------------
Plainview G.P., Inc. DE
- - -------------------------------------------------------
G. P. Services III, Inc. DE
- - -------------------------------------------------------
G. P. Services IV, Inc. SC
- - -------------------------------------------------------
G. P. Services VI, Inc. SC
- - -------------------------------------------------------
G. P. Services IX, Inc. SC
- - -------------------------------------------------------
G. P. Services XI, Inc. SC
- - -------------------------------------------------------
G. P. Services XIII, Inc. SC
- - -------------------------------------------------------
G. P. Services XV, Inc. SC
- - -------------------------------------------------------
G. P. Services XVI, Inc. SC
- - -------------------------------------------------------
G. P. Services XVII, Inc. SC
- - -------------------------------------------------------
G. P. Services XVIII, Inc. SC
- - -------------------------------------------------------
G. P. Services XIX, Inc. SC
- - -------------------------------------------------------
Carriage APX, Inc. MI
- - -------------------------------------------------------
Vista APX, Inc. TX
- - -------------------------------------------------------
Lakewood AOPL, Inc. TX
- - -------------------------------------------------------
Granada AIPL 6, Inc. TX
- - -------------------------------------------------------
Deforest Ventures II, L.P. DE
- - -------------------------------------------------------

- - -------------------------------------------------------
Angeles Income Properties, Ltd. II CA
- - -------------------------------------------------------
Angeles Income Properties, Ltd. III CA
- - -------------------------------------------------------
Angeles Income Properties, Ltd. IV CA
- - -------------------------------------------------------
Angeles Income Properties, Ltd. V CA
- - -------------------------------------------------------
Angeles Income Properties, Ltd. 6 CA
- - -------------------------------------------------------
Angeles Opportunity Properties, Ltd. CA
- - -------------------------------------------------------
Angeles Park Communities, Ltd. CA
- - -------------------------------------------------------
Angeles Partners VII CA
- - -------------------------------------------------------
Angeles Partners VIII CA
- - -------------------------------------------------------
Angeles Partners IX CA
- - -------------------------------------------------------
Angeles Partners X CA
- - -------------------------------------------------------
Angeles Partners XI CA
- - -------------------------------------------------------
Angeles Partners XII CA
- - -------------------------------------------------------
Angeles Partners XIV CA
- - -------------------------------------------------------
Angeles Partners XV CA
- - -------------------------------------------------------
Angeles Partners 16 CA
- - -------------------------------------------------------
Baywood Partners, Ltd. AL
- - -------------------------------------------------------

- - -------------------------------------------------------
NAME STATE
- - -------------------------------------------------------
Cedar Creek Partners, Ltd. AL
- - -------------------------------------------------------
Colony Cove Partners, Ltd. CA
- - -------------------------------------------------------
Gulf Coast Partners, Ltd. AL
- - -------------------------------------------------------
Hospitality Partners II CA
- - -------------------------------------------------------
Hospitality Pensacola Partners, Ltd. CA
- - -------------------------------------------------------
La Colina Partners, Ltd. CA
- - -------------------------------------------------------
Lake Avenue Partners, Ltd. CA
- - -------------------------------------------------------
Magnolia State Partners, Ltd. MS
- - -------------------------------------------------------
Meadows Partners, Ltd. MS
- - -------------------------------------------------------
Meadows Partners IV, Ltd. MS
- - -------------------------------------------------------
Mid-States Partners, Ltd. CA
- - -------------------------------------------------------
Montgomery Partners, Ltd. CA
- - -------------------------------------------------------
Northbrook Partners, Ltd. MS
- - -------------------------------------------------------
Calmark / Fort Collins, Ltd. CA
- - -------------------------------------------------------
Calmark Heritage Park, Limited Partnership CA
- - -------------------------------------------------------
Calmark Heritage Park II, Limited Partnership CA
- - -------------------------------------------------------
Sturbrook Investors, Ltd. CA
- - -------------------------------------------------------
McCombs Pension Investment Fund, Ltd. CA
- - -------------------------------------------------------
McCombs Realty Partners, L.P. CA
- - -------------------------------------------------------
Davidson Diversified Real Estate I, L.P. DE
- - -------------------------------------------------------
Davidson Diversified Real Estate II, L.P. DE
- - -------------------------------------------------------
Davidson Diversified Real Estate III, L.P. DE
- - -------------------------------------------------------
Davidson Growth Plus, L.P. DE
- - -------------------------------------------------------
Davidson Income Real Estate, L.P. DE
- - -------------------------------------------------------
Chapel Hill, Ltd. DE
- - -------------------------------------------------------
Chelsea Place, Ltd. TN
- - -------------------------------------------------------
Eastgreen, Ltd. TN
- - -------------------------------------------------------
Lafayette Square Associates TN
- - -------------------------------------------------------
Lakeside Village, Limited Partnership TN
- - -------------------------------------------------------
Sharon Woods, L.P. TN
- - -------------------------------------------------------
Northgate Limited, L.P. DE
- - -------------------------------------------------------
Pinehurst, Ltd. TN
- - -------------------------------------------------------
Queen's Court Joint Venture TN
- - -------------------------------------------------------
Riding Club, Ltd. DE
- - -------------------------------------------------------
River Hill, Ltd. TN
- - -------------------------------------------------------
Shaker Square, Ltd. DE
- - -------------------------------------------------------
Stonecreek, Limited TN
- - -------------------------------------------------------
Villa Nova, Ltd. TN
- - -------------------------------------------------------
Walker Springs, Ltd. TN
- - -------------------------------------------------------
Wyckford Commons, L.P. DE
- - -------------------------------------------------------
Burgundy Court Associates, L.P. DE
- - -------------------------------------------------------
Catawba Club Associates, L.P. DE
- - -------------------------------------------------------
Columbus Associates, Ltd. TN
- - -------------------------------------------------------
Georgetown of Columbus Associates, L.P. DE
- - -------------------------------------------------------
Highridge Associates, L.P. DE
- - -------------------------------------------------------
Lake Eden Associates, L.P. DE
- - -------------------------------------------------------
Lakewood Associates, L.P. DE
- - -------------------------------------------------------
Landmark Associates, Ltd. TN
- - -------------------------------------------------------

- - -------------------------------------------------------
NAME STATE
- - -------------------------------------------------------
Quail Run Associates, L.P. DE
- - -------------------------------------------------------
Restaurant Properties 1978, Ltd. TN
- - -------------------------------------------------------
Snowden Village Associates, L.P. DE
- - -------------------------------------------------------
Sycamore Creek Associates, L.P. DE
- - -------------------------------------------------------
Thrippence Associates, Ltd. GA
- - -------------------------------------------------------
Thurber Manor Associates, L.P. DE
- - -------------------------------------------------------
Woodlawn Village Associates, L.P. DE
- - -------------------------------------------------------
Woodmere Associates, L.P. DE
- - -------------------------------------------------------
HCW Pension Real Estate Fund Limited MA
Partnership
- - -------------------------------------------------------
Investors First-Staged Equity, L.P. DE
- - -------------------------------------------------------
Investors First-Staged Equity, L.P. II DE
- - -------------------------------------------------------
VMS National Residential Properties Joint IL
Venture
- - -------------------------------------------------------
Kendall Townhome Investors, Ltd. FL
- - -------------------------------------------------------
Woodhaven Associates VA
- - -------------------------------------------------------
Yorktown Towers Associates IL
- - -------------------------------------------------------
United Investors Growth Properties MO
- - -------------------------------------------------------
United Investors Growth Properties II MO
- - -------------------------------------------------------
United Investors Income Properties MO
- - -------------------------------------------------------
United Investors Income Properties II MO
- - -------------------------------------------------------
Cedar Tree Investors, Limited Partnership KS
- - -------------------------------------------------------
Wingfield Club Investors, Limited Partnership KS
- - -------------------------------------------------------
Consolidated Capital Growth Fund CA
- - -------------------------------------------------------
Consolidated Capital Institutional Properties CA
- - -------------------------------------------------------
Consolidated Capital Equity Partners, L.P. CA
- - -------------------------------------------------------
Consolidated Capital Institutional Properties/2 CA
- - -------------------------------------------------------
Consolidated Capital Equity Partners/Two, L.P. CA
- - -------------------------------------------------------
Consolidated Capital Institutional Properties/3 CA
- - -------------------------------------------------------
Consolidated Capital Properties III CA
- - -------------------------------------------------------
Consolidated Capital Properties IV CA
- - -------------------------------------------------------
Consolidated Capital Properties V CA
- - -------------------------------------------------------
Consolidated Capital Properties VI CA
- - -------------------------------------------------------
Johnstown Consolidated Income Partners CA
- - -------------------------------------------------------
Multi-Benefit Realty Fund 87-1 (Class A) CA
- - -------------------------------------------------------
Multi-Benefit Realty Fund 87-1 (Class B) CA
- - -------------------------------------------------------
Shelter Properties I, Limited Partnership SC
- - -------------------------------------------------------
Shelter Properties II, Limited Partnership SC
- - -------------------------------------------------------
Shelter Properties III, Limited Partnership SC
- - -------------------------------------------------------
Shelter Properties IV, Limited Partnership SC
- - -------------------------------------------------------
Shelter Properties V, Limited Partnership SC
- - -------------------------------------------------------
Shelter Properties VI, Limited Partnership SC
- - -------------------------------------------------------
Shelter Properties VII, Limited Partnership SC
- - -------------------------------------------------------
U.S. Realty Partners, Limited Partnership SC
- - -------------------------------------------------------
Century Properties Fund XIV CA
- - -------------------------------------------------------
Century Properties Fund XV CA
- - -------------------------------------------------------
Century Properties Fund XVI CA
- - -------------------------------------------------------
Century Properties Fund XVII CA
- - -------------------------------------------------------

- - -------------------------------------------------------
NAME STATE
- - -------------------------------------------------------
Century Pension Income Fund XVIII CA
- - -------------------------------------------------------
Century Properties Fund XIX CA
- - -------------------------------------------------------
Century Properties Fund XX CA
- - -------------------------------------------------------
Century Properties Growth Fund XXII CA
- - -------------------------------------------------------
Century Pension Income Fund XXIII CA
- - -------------------------------------------------------
Century Pension Income Fund XXIV CA
- - -------------------------------------------------------
Fox Strategic Housing Income Partners CA
- - -------------------------------------------------------
National Property Investors III CA
- - -------------------------------------------------------
National Property Investors 4 CA
- - -------------------------------------------------------
National Property Investors 5 CA
- - -------------------------------------------------------
National Property Investors 6 CA
- - -------------------------------------------------------
National Property Investors 7 CA
- - -------------------------------------------------------
National Property Investors 8 CA
- - -------------------------------------------------------
Raintree Pensacola, L.P. SC
- - -------------------------------------------------------
Buccanner Trace, Limited Partnership SC
- - -------------------------------------------------------

Consent of Ernst & Young LLP, Independent Auditors

We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated February 5, 1997 with respect to the financial
statements and schedules of Shelter Properties Partnerships, included in the
Proxy Statement of Angeles Mortgage Investment Trust that is made a part of the
Registration Statement (Amendment No. 1 to Form S-4) and Prospectus of
Insignia Properties Trust.

/s/ ERNST & YOUNG LLP

Greenville, South Carolina
June 15, 1998

Consent of Ernst & Young LLP, Independent Auditors

We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated February 13, 1998, except for Note 11, as to which the
date is March 17, 1998 with respect to the financial statements and schedules
of Insignia Properties Trust and Predecessor Entities, included in the Proxy
Statement of Angeles Mortgage Investment Trust that is made a part of the
Registration Statement (Amendment No. 1 to Form S-4) and Prospectus of
Insignia Properties Trust.

/s/ ERNST & YOUNG LLP

Greenville, South Carolina
June 15, 1998

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Trustees of
Angeles Mortgage Investment Trust

We hereby consent to the use in the Proxy/Prospectus constituting a part of
this Registration Statement of our report dated January 15, 1998, relating to
the financial statements and schedules of Angeles Mortgage Investment Trust,
which are contained in that Prospectus.

We also consent to the reference to us under the caption "Experts" in the
Prospectus.

BDO Seidman, LLP

Dallas, Texas
June 17, 1998

IMOWITZ KOENIG & CO., LLP
CERTIFIED PUBLIC ACCOUNTANTS

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by Insignia Properties Trust on Amendment No. 1
to Form S-4 of our report dated February 18, 1997, on our audits of the
combined financial statements of National Property Investors and Century
Properties Partnerships as of December 31, 1996 and 1995, and for each of the
three years in the period ended December 31, 1996. We also consent to the
reference to our firm under the caption "Experts"

/s/ IMOWITZ KOENIG & CO., LLP

New York, NY
June 16, 1998

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES

ANGELES MORTGAGE INVESTMENT TRUST

The undersigned, hereby appoints Ronald J. Consiglio and Bryan L. Herrmann
as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all of the Class
A Common Shares of Angeles Mortgage Investment Trust held of record by the
undersigned on May 13, 1998, at a special meeting of shareholders to be held on
July 9, 1998, or any adjournment or postponement thereof.

1. To approve the Merger Proposal as further described in the accompanying
Proxy Statement/Prospectus.

FOR AGAINST ABSTAIN
------- ------- ------

2. Subject to approval of the Merger Proposal, to approve the Trust Amendment
Proposal as further described in the accompanying Proxy Statement/Prospectus.

FOR AGAINST ABSTAIN
------- ------- ------

3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the special meeting.

This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. If no direction
is made, this Proxy will be voted "FOR" the proposal. Receipt of
the Notice of the Special Meeting and the Proxy
Statement/Prospectus is hereby acknowledged.

Please sign exactly as name appears hereon.
When shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full corporate
name by President or other authorized officer.
If a partnership, please sign in partnership
name by authorized person.

Dated , 1998
-------

By:
-------------------------------------------
Signature

By:
-------------------------------------------
Signature, if held jointly

Votes MUST be indicated by
(x) in ink.

PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY.

[AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P. LETTERHEAD]

June 17, 1998

United States Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, DC 20549

Re: Insignia Properties Trust
Amendment No. 1 to Registration Statement on Form S-4
Registration No. 333-53815

Dear Ladies and Gentlemen:

On behalf of Insignia Properties Trust ("IPT"), we are filing by EDGAR the
above-referenced Amendment No. 1. Additionally, based on a telephone
conversation with Amy Trombly, we are also filing a Schedule 13E-3 regarding
the transaction. Set forth below are the following numbered responses that
correspond to the comments as listed in the comment letter (the "Comment
Letter") from Amy M. Trombly, Senior Counsel, which letter is dated May 12,
1998 and was faxed to us on June 3, 1998 with the exception of the first two
comments contained in the Comment Letter which we have previously responded to
in separate correspondence:

PRELIMINARY PROXY/PROSPECTUS
- - ----------------------------

RECOMMENDATION OF THE AMIT BOARD, PAGE 5
- - ----------------------------------------

1. Clarify what you mean by the "current Class A Exchange Ratio."
Prominently disclose, if true, that the compensation may be significantly below
$20.35. Discuss whether Management's determination of fairness contemplated the
range of possible compensation, not just the highest amount. Revise throughout
the disclosure.

RESPONSE: The disclosure has been modified to clarify
that the current Class A Exchange Ratio is
1.530. The rest of the disclosure has not
been modified since it is not true that the
compensation may be significantly below
what is disclosed in the document. The
compensation will only be reduced to the
extent that AMIT declares any additional
distributions after the date of

AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.

United States Securities and Exchange Commission
May 22, 1998
Page 3

the Proxy Statement/Prospectus with a record date prior
to the consummation of the Merger, and as stated in the
document AMIT does not intend to declare any such
distributions. Additionally, to the extent that the
ultimate compensation to be received by AMIT
shareholders is reduced by any such distributions, the
reduction will be substantially offset by the receipt
of the actual distribution to the AMIT shareholders.

Additionally, the projected compensation is
not the highest amount that may be received
by AMIT shareholders since the amount will
be increased by any additional
distributions declared by IPT prior to the
Merger. There is extensive disclosure in
the document regarding potential
adjustments to the Exchange Ratio, and
since the compensation to be received by
the AMIT shareholders will not be
significantly reduced, we believe that the
disclosure is adequate.

FEDERAL INCOME TAX CONSEQUENCES, PAGE 7
- - ---------------------------------------

2. We note that counsel is unable to opine on the tax consequences of the
Merger to the company and investors. Therefore, substantially revise this
section to state the matters that counsel can not opine on and discuss the
reasons why counsel can not opine. Do not state what counsel "believes" will
happen unless counsel provides an opinion. We may have further comment. See
Item 602(b)(8) of Regulation S-K. Revise elsewhere as necessary including the
"Federal Income Tax Considerations" section beginning on page 144.

RESPONSE: The disclosure has been revised to state
that counsel will provide an opinion that
if both the Merger and the IPT/AIMCO Merger
are consummated, the Merger will be taxable
to AMIT and its shareholders. Additionally,
the disclosure has been modified to make it
clear that there will be no opinion of
counsel as to whether the Merger will be
treated as a reorganization, assuming that
the Merger is consummated but the IPT/AIMCO
Merger is not consummated. However, counsel
will opine as to the federal income tax
consequences of the Merger in such event if
the Merger is treated as a reorganization
and if the Merger is not treated as a
reorganization. The "Federal Income Tax
Considerations" section has also been
revised in accordance with your comment.

3. Item 602(b)(8) also requires an opinion from counsel regarding whether
the company is a REIT, that IPT has been a REIT since inception and any effect
the Merger may have on the IPT's REIT status.

AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.

United States Securities and Exchange Commission
May 22, 1998
Page 4

RESPONSE: An opinion of counsel addressing IPT's REIT status was
filed as Exhibit 8.4 to Amendment No. 1 to the
Registration Statement and such opinion is discussed
on page 137 of the Proxy Statement/Prospectus.

We also note the request of Ms. Amy Trombly
in a telephone conference of June 12 that
an opinion be provided pursuant to
Regulation S-K, Item 601(b)(8) concerning
AMIT's status as a REIT. The response of
Greenberg Glusker Fields Claman &
Machtinger LLP on behalf of AMIT, is set
forth in the letter attached hereto.

4. Disclosure in this section should reflect counsel's opinion or a
discussion of the reasons why counsel can not opine. Do not state what AMIT and
IPT "believes" will happen. Please note that tax disclosure must be provide by
counsel, an independent or certified public accountant or a revenue ruling from
the IRS. It is unclear how AMIT and IPT meet these requirements. Revise
throughout the document including the "Federal Income Tax Considerations"
section beginning on page 144. See Item 602(b)(8) of Regulation S-K.

RESPONSE: The disclosure has been modified throughout the document
as discussed in response to comment #2 above to comply
with this comment.

5. Provide risk factor disclosure on the Cover Page regarding each matter
counsel can not opine on.

RESPONSE: We have added disclosure on the Cover Page
stating that in the event that the Merger
is consummated but the IPT/AIMCO Merger is
not consummated there will be no opinion of
counsel or IRS ruling regarding the federal
income tax consequences of the Merger.

6. We note in your response to comment 5 that "tax opinions have been
filed as exhibits to the Registration Statement." However, it appears that you
have filed a preliminary proxy with the staff. Additionally, we are unable to
locate the exhibits. Please advise. Also note that we may have additional
comments once we review the exhibits.

RESPONSE: As disclosed in the first paragraph of our
prior response letter, IPT filed a
Registration Statement on Form S-4, and
courtesy copies of the Proxy
Statement/Prospectus portion of the S-4,
marked to show changes from the Schedule
14-A, were delivered to the examiners. On
June 4, 1998, N. Kathleen Friday, P.C.
telephoned Ms. Amy Trombly and left her a
voice message to such effect and requested
any comments the staff may have with
respect to the remainder of the S-4.

AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.

United States Securities and Exchange Commission
May 22, 1998
Page 5

SUMMARY RISK FACTORS, PAGE 17
- - -----------------------------

7. We note the Summary Risk Factor on page 9. Additionally, discuss, if
true, that counsel can not opine on the consequences to the company of the
merger.

RESPONSE: We have added this disclosure.

AMIT'S REASONS FOR THE MERGER, PAGE 36
- - --------------------------------------

8. Indicate whether the AMIT Board considered that counsel can not opine
on the tax consequences of the transaction to the Company and investors. Also
indicate whether the AMIT Board considered that the transaction will most
likely be taxable to the Company and investors. Similarly revise for IPT.

RESPONSE: We have added the requested disclosures, see pages 37
and 38 of the Proxy Statement/Prospectus.

TAX TREATMENT OF THE MERGER, PAGE 41
- - ------------------------------------

9. Consistent with our prior comments, expand the first paragraph in this
section to explain in detail why counsel can not opine on whether Section
368(a) applies. For example, explain how the "substantial proprietary stake,"
"material interest" and "continuity of proprietary interest" requirements are
met. Also explain the areas of uncertainty.

RESPONSE: We have expanded the disclosure in this section to
explain why counsel can not opine as to whether the
Merger will qualify as a reorganization under Section
368(a) of the Code in the event that the Merger is
consummated but the IPT/AIMCO Merger is not consummated.
See page 44 of the Proxy Statement/Prospectus.

10. We note that counsel can not opine on whether Section 368(a) will
apply to the Merger. However, counsel should further discuss and provide an
opinion on the various outcomes whether or not the Section applies. Revise
elsewhere as necessary including the "Federal Income Tax Considerations"
section beginning on page 144.

RESPONSE: The disclosure has been modified to state that counsel
has provided an opinion that if both the Merger and the
IPT/AIMCO Merger are consummated, the Merger will be a
taxable transaction to AMIT and its shareholders and
the consequences thereof. Additionally, the disclosure
has been revised to state that counsel has opined as
to the tax consequences to the AMIT shareholders in
the event the Merger does or does not qualify as a
reorganization under the Code assuming that the
IPT/AIMCO Merger is not consummated (although counsel
is not opining

AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.

United States Securities and Exchange Commission
May 22, 1998
Page 6

as to whether or not the Merger should be treated as a
reorganization in such event). See page 44 of the
Proxy Statement/Prospectus. We have not added such
disclosure to the "Federal Income Tax Considerations"
section because that section does not discuss the tax
consequences of the Merger. Such discussion appears in
the section "The Merger -Federal Income Tax
Consequences of the Merger."

11. The tax disclosure seems to indicate that it is most likely that the
transaction will be taxable to the company and its investors. Therefore, the
disclosure regarding this scenario should be presented first. Revise elsewhere
as necessary.

RESPONSE: We have complied with this comment.

FEDERAL INCOME TAX CONSIDERATIONS, PAGE 144
- - -------------------------------------------

12. We reissue our prior comment 16. The tax disclosure should not be
tentative. Do not use terms such as "believe." Clearly state the matters
counsel is opining on. To the extent counsel can not opine on a matter, discuss
the reasons counsel can not opine. We note your response, however it appears
that you have not revised this section.

RESPONSE: We have revised this section based on this comment and
our conversations with Ms. Amy Trombly.

13. File the private letter ruling from the IRS as an Exhibit to the Form
S-4.

RESPONSE: We have filed the private letter ruling as Exhibit 8.5
to the Registration Statement.

14. The all capital sentence on page 150 should be revised so that
shareholders are "urged" rather than "advised" to consult their tax advisors.

RESPONSE: We have complied with this comment.

AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P.

United States Securities and Exchange Commission
May 22, 1998
Page 7

IPT would like to have the Registration Statement declared effective as
soon as practicable. Accordingly, we would greatly appreciate receiving any
additional comments the Staff may have as soon as practicable. Questions or
comments, if any, concerning the Registration Statement should be communicated
to the undersigned at (214) 969-2852, or in my absence to N. Kathleen Friday,
P.C. of this office at (214) 969-2827 or to Zachary N. Wittenberg at (214)
969-2703.

Sincerely,

Roger D. Arnold

NKF/CLW
cc: Ivette Leon (w/encl.)
Hugh Miller (w/encl.)
Amy Trombly (w/encl.)
Paula Dubberly (w/encl.)

LAW OFFICES OF
GREENBERG GLUSKER FIELDS CLAMAN & MACHTINGER LLP

ARTHUR N. GREENBERG JEAN MORRIS STEPHANIE H. GOLD RETIRED: PHILIP GLUSKER
SIDNEY J. MACHTINGER ELIZABETH WATSON STEPHEN S. SMITH JOSEPH M. CAHN
STEPHEN CLAMAN JILL A. COSSMAN KAREN E. POINTER
BERTRAM FIELDS ROGER L. FUNK PAUL A. BLECHNER
HARVEY R. FRIEDMAN RICHARD A. KALE STEPHEN P. CLARK
BERNARD SHEARER DEBBY R. ZURZOLO KRISTEN L. SPANIER
JON J. GALLO ARNOLD D. KAHN BARRY D. KELLMAN 1900 AVENUE OF THE STARS
PAULA J. PETERS MARK A. GOCHMAN DOUGLAS G. CROWELL SUITE 2100
MICHAEL K. COLLINS NANCY A. BERTRANDO GREGORY J. SATER LOS ANGELES, CALIFORNIA 90067-4590
JOHN L. CHILD BONNIE E. ESKENAZI MONA S. AMER TELEPHONE: (310) 553-3610
C. BRUCE LEVINE GLENN A. DRYFOOS STEPHEN B. ESPINOZA
MICHAEL A. GREENE RICHARD E. POSELL DAVID MORIARTY
GARRETT L. HANKEN JEFFREY SPITZ LAURA A. ZWICKER
NORMAN H. LEVINE STEVEN J. LURIE ELLEN C. WAGGONER
WILLIAM A. HALAMA BRIAN L. EDWARDS HILLARY S. BIBICOFF FAX
JAMES E. HORNSTEIN MICHAEL K. GRACE MICHELLE M. LYNN (310) 553-0687
ROBERT S. CHAPMAN LEE A. DRESIE ALISON F. CLARKE
ROBERT F. MARSHALL KEVIN L. JAMES SHANNON C. BOGLE WRITER'S DIRECT DIAL NUMBER
ROBERT E. BENNETT, JR. MARC M. STERN HEIDI M. BINFORD (310) 201-7422
MARC S. COHEN DAVID E. CRANSTON AUDREY J. HENNINGER
CHARLES N. SHEPHARD PATRICIA A. MILLETT MATTHEW N. FALLEY OUR FILE NUMBER:
DENNIS B. ELLMAN ELISABETH A. BASINI JILL M. KAZARES 04235-000.20
GARY L. KAPLAN JEFFREY A. KRIEGER AARON J. MOSS
ROBERT W. BARNES EDWARD SABIN SUSAN L. ROSS
LAWRENCE Y. ISER NANCY C. HSIEH JOAN H. CHO
MARK A. STANKEVICH DARRYL W. CLUSTER BOB BARADARAN
MARTIN H. WEBSTER CARLA M. ROBERTS JESSICA D. LAZARUS
MICHAEL V. BALES MICHAEL W. SCHOLTZ MICHAEL D. MCLACHLAN
HENRY D. FINKELSTEIN SHERI E. PORATH GARY D. ROTHSTEIN

June 17, 1998

United States Securities and Exchange
Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549

Re: Insignia Properties Trust
Amendment No. 1 to Registration Statement on Form S-4
Registration No. 333-53815
-----------------------------------------------------

Ladies and Gentlemen:

We represent Angeles Mortgage Investment Trust ("AMIT") in connection
with its proposed merger with Insignia Properties Trust ("IPT"). We understand
that Ms. Amy M. Trombley, Senior Counsel, advised IPT's counsel in a telephone
conference on June 12, 1998 that an opinion concerning AMIT's qualifications as
a REIT was required to be provided pursuant to Regulation S-K, Item 601(b)(8).

We note the Commission's position but respectfully request that it be
reexamined in light of the following. Our understanding of Regulation S-K, Item
601(b)(8) is that only tax matters "material to the transaction" are required
to be addressed in a tax opinion. We do not believe that AMIT's REIT status is
material to a merger transaction in which AMIT will cease to exist on
consummation of the merger. Accordingly, no provision was made in the merger
agreement for the delivery of a legal opinion regarding AMIT's REIT status, and
such an opinion is not a condition to the merger occurring. On the other hand,
IPT's REIT status is extremely important to the merger since it is the
surviving entity, and an opinion on that subject was required by the merger
agreement as a condition to the transaction proceeding. Likewise, the tax
treatment of the merger to the

United States Securities and Exchange Commission
June 17, 1998
Page

shareholders of AMIT is material and we believe has been fully and fairly
described in detail in the proxy statement/prospectus, and is the subject of a
reasoned opinion being provided by IPT's counsel.

As you are aware, there is a June 30 cut-off date in the Merger
Agreement, which allows either party to terminate the transaction if not
concluded by such date. AMIT's management believes that the IPT Merger alone,
or coupled with the AIMCO cash out merger proposal, provides good value for
AMIT's shareholders especially in the current lending/interest rate
environment. They are extremely concerned that any further delays might result
in IPT terminating the transaction and preventing the merger proposal from
being presented to shareholders. IPT has not, at this time, been willing to
commit to an extension of the June 30 date. The requirement that a REIT opinion
now be provided creates a serious timing issue. We have not generally
represented AMIT, but only commenced representing AMIT as corporate counsel
with this transaction. Accordingly, it would be extremely difficult, if not
impossible, for us to perform the requisite due diligence involving 5 years of
asset, income and shareholder request tests to be able to determine the issue
of AMIT's REIT status and render an appropriate legal opinion within a time
frame which would not jeopardize the merger to the detriment of AMIT
shareholders. Therefore, we respectfully request that you reconsider your
position as to the materiality of, and need for, a REIT qualification opinion
for AMIT, the entity disappearing in the merger.

We would be pleased to discuss this issue directly with you. If you
desire to do so please contact my partner Paula J. Peters at (310) 201-7428 or
me at (310) 201-7422.

We thank you in advance for your courtesy and consideration and we
look forward to your considered response.

Very truly yours,

Michael V. Bales

MVB:dw

cc: Ronald J. Consiglio
Ann Merguerian
Paula J. Peters, Esq.
Jean Morris, Esq.