MODIFICATION AGREEMENT

     This Modification Agreement ("Modification") dated this 2nd day of
October, 1996, by and between ALLIANCE HOLDINGS, L.L.C., an Illinois limited
liability company ("Purchaser") and BALCOR PENSION INVESTORS-IV, an Illinois
limited partnership ("Seller").

                             W I T N E S S E T H:

     WHEREAS, Purchaser and Seller entered into an Agreement of Sale dated
August 29, 1996  ("Contract") for the Del Lago Apartments, Tampa, Florida; and

     WHEREAS, Purchaser and Seller desire to modify the Contract as hereinafter
provided; and

     NOW, THEREFORE, in consideration of the sum of Ten and 00/100 Dollars
($10.00) and other good and valuable consideration, in hand paid, the receipt
and sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:

     1.  The amount Three Million One Hundred Thousand and 00/100 Dollars
($3,100,000.00) contained in Section 1 of the Contract is hereby deleted and
the amount Two Million Eight Hundred Thousand and 00/100 Dollars
($2,800,000.00) is hereby substituted therefor.

     2.  The date September 5, 1996 contained in Section 7.1 of the Contract is
hereby deleted and the date October 15, 1996 is hereby substituted therefor.

     3.  Section 7.1 is further modified by inserting in the last full
paragraph of said Section, following "(ii)" and before "Earnest Money", the
following:  "one-half (1/2) of" and by adding to the same sentence, following
the word "thereon", the following phrase: "the other half of the Earnest Money
to be disbursed to Seller without further authorization of Purchaser being
required,".

     4.  The date October 7, 1996 contained in Section 8 of the Contract is
hereby deleted and the date October 30, 1996 is hereby substituted therefor.

     5.  Section 8 is further modified by adding the following thereto:
"Notwithstanding anything to the contrary contained herein, Purchaser shall
have the right to extend the Closing Date to December 30, 1996, upon (i)
written notice to Seller effective on or before October 25, 1996 of Purchaser's
intention to so extend the Closing Date and (ii) payment by Purchaser to
Seller, on or before October 25, 1996, of the amount Seventy-Five Thousand and
00/100 Dollars ($75,000.00), which amount shall be non-refundable to Purchaser
(except in the event of Seller default) and applicable to the Purchase Price
(in the event this transaction proceeds to Closing).

     6.  Except as above provided, the Contract remains unmodified and in full
force and effect.

PURCHASER:                         SELLER:

ALLIANCE HOLDINGS, L.L.C.,         BALCOR PENSION INVESTORS-IV,
an Illinois limited liability      an Illinois limited partnership
company
                                   By:  Balcor Mortgage Advisors-II, 
                                        an Illinois general partnership,
                                        its general partner

By:  /s/ Andrew W. Schor           By:  The Balcor Company, a Delaware
    --------------------------          corporation, a general partner
Name:    Andrew W. Schor
    --------------------------          By:   /s/ James E. Mendelson
Its:     President                           -------------------------------
    --------------------------          Name:     James E. Mendelson
                                             -------------------------------
                                        Its:      Authorized Representative
                                             -------------------------------