SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
   
                                               (Amendment No. 4)
    
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Filed by a Party other than the Registrant           [  ]

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[ ]      Soliciting Material Pursuant to Section 240.14a-11(c) or
         Section 240.14a-12

                           Famous Host Lodging V, L.P.
                (Name of Registrant as Specified In Its Charter)


                                      N/A
(Name of Person(s) Filing Proxy Statement if other than the Registrant)


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

                  -------------------------------------------------------

         2)       Aggregate number of securities to which transaction
                  applies:

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


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         4)       Proposed maximum aggregate value of transaction:

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[X]      Fee paid previously with preliminary materials.

[X]      Check box if any part of the fee is offset as  provided  by  Exchange
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         2)       Form, Schedule or Registration Statement No.:

                  Schedule 14A

         3)       Filing Party:

                  Registrant

         4)       Dated Filed:

                  May 15, 1998






 
 



                                                                  
                                                       REVISED PRELIMINARY COPY
 
                                                                             

                         CONSENT SOLICITATION STATEMENT
                                                                             

                       PROPOSED ACTION BY WRITTEN CONSENT
                               OF LIMITED PARTNERS
                                       OF
                           FAMOUS HOST LODGING V, L.P.
   
                               November ____, 1998

                                  INTRODUCTION

     The limited  partners  (the  "Limited  Partners") of FAMOUS HOST LODGING V,
L.P., a California limited partnership (the  "Partnership"),  are being asked by
the Partnership and Grotewohl Management  Services,  Inc. (the "Managing General
Partner") to consider and approve by written consent the proposed sale of all of
the Partnership's  interests in real property and related personal property (the
"Property") for an aggregate  purchase price of $4,100,000,  and the dissolution
of the Partnership, which proposal is described hereinafter (the "Proposal"). If
the  Proposal is approved  and the  proposed  sale is  consummated,  among other
things,  all of the Partnership's  assets will be liquidated and the Partnership
will be dissolved. (See "Effects of Approval of the Proposal" below.)

     If the Proposal is approved, the Partnership will be authorized to sell the
Property to Tiburon Capital Corporation,  or a nominee thereof (the "Buyer"). It
is expected  that  Tiburon  Capital  Corporation  will form a limited  liability
company  for the  purpose of buying and owning the  Property,  and that  Tiburon
Capital  Corporation,  as the managing  member  thereof,  will have the power to
direct such Buyer's  affairs and control all its major  decisions.  As discussed
below under  "Purchase  Agreement,"  Mark  Grotewohl,  a former  employee of the
Partnership and the son of the two owners of the Managing General Partner,  or a
limited  liability  entity to be formed by him,  will be a member of the  Buyer.
Mark Grotewohl or his wholly-owned  entity will enter into a contract to provide
all  centralized   property  management  services  to  the  Buyer  and  pay  all
centralized  property  management  expenses  in  exchange  for 4 1/2%  of  gross
property  revenues.   The  management  contract  will  provide  for  performance
objectives  which, if not met, will entitle the Buyer to terminate the contract.
As an additional  management  incentive Mr. Grotewohl or his wholly-owned entity
will receive on account of his or its  membership  in the Buyer up to 50% of the
profits from the Property  after return of all capital to all equity  investors,
plus a return thereon of at least 14% per annum.  Neither Mark Grotewohl nor his
wholly-owned entity has or will have any interest in Tiburon Capital Corporation
or any voting  rights in the Buyer with respect to major  decisions  (e.g.,  the
sale of refinancing of the Property).

     The Limited Partners are urged to consider the following risk factors:
                                       
     - Inasmuch as the Buyer is engaging in the  transaction  in order to make a
profit by operating the Property, the Buyer's interests differ from those of the
Limited Partners. (See "Purchase Agreement" and "Special Factors.")
    
                                       i



     - The  Managing  General  Partner  is  subject to  conflicts  of  interest,
including  conflicts  arising  from  the  settlement  of  lawsuits  (see  "Legal
Proceedings"),  which may have impacted its decision to sell the  Property,  its
conduct of  negotiations  leading to the  proposed  sale of the Property and its
recommendation with respect thereto. (See "Conflicts of Interest.")
   
     - The  Managing  General  Partner did not list the Property for sale with a
broker to obtain competitive bids.  Instead,  the Managing General Partner based
the purchase price for the Property on a formal  appraisal of the Property as of
January 1, 1998.  (See "Special  Factors" and  "Conflicts of  Interest.")  It is
possible,  then, that the Partnership might have received a higher price for the
Property if it had solicited offers by listing the Property.
    
     - The  appraiser  may be subject to  conflicts  of  interest in that it has
prepared other appraisals for the Managing  General Partner.  (See "Appraisal of
the Property/Fairness Opinion.")

     -  The   Managing   General   Partner   did  not  retain  an   unaffiliated
representative  to act solely on behalf of the Limited  Partners in  negotiating
the terms of the proposed transaction. (See "Special Factors.")
   
     - The Limited  Partners  will be allocated  taxable gain if the Property is
sold.   (See  "Effects  of  Approval  of  the  Proposal  -  Federal  Income  Tax
Consequences.")

     Specifically, the Limited Partners are being asked to approve the following
Proposal:

     An amendment to the Partnership  Agreement to grant to the Managing General
Partner  authority  to sell the Property  and related  personal  property to the
Buyer, notwithstanding that Mark Grotewohl will be an Affiliate of the Buyer; to
dissolve and wind up the affairs of the Partnership;  to distribute the proceeds
of the sale and any other cash held by the  Partnership  in accordance  with the
Partnership  Agreement;  to terminate  the  Partnership;  and to take any action
deemed  necessary or appropriate  by it to accomplish  the foregoing.  The exact
wording  of  such  amendment  is  set  forth  under  "Amendment  to  Partnership
Agreement."

     If the Limited Partners  approve the Proposal,  closing of the sale will be
subject  to  certain  terms  and  conditions,   including  the  availability  of
sufficient debt financing to the Buyer. (See "Purchase  Agreement.") If the sale
is consummated, distributions will be made to the Limited Partners in accordance
with  the  terms of the  Partnership's  Certificate  and  Agreement  of  Limited
Partnership  (the  "Partnership  Agreement").  In an amendment to the settlement
agreement respecting the lawsuits discussed below (see "Legal Proceedings"), the
Partnership  agreed to close the  proposed  transaction  within a 30-day  period
after  approval  thereof by the Limited  Partners,  so as to provide the Limited
Partners with the proceeds from the sale as quickly as possible.

     The  Proposal is subject to the approval of a  majority-in-interest  of the
Limited  Partners.  If the Limited  Partners do not  approve the  Proposal,  the
Partnership  will not sell the Property  pursuant to the Proposal.  Rather,  the
Managing  General  Partner will entertain  other offers to sell the Property and
will submit one or more of such offers to the Limited Partners for approval,  in
the  discretion  of the  Managing  General  Partner.  Pending  any  sale  of the
Property, the Partnership will continue to operate the Property as usual.
      
                                     ii

   
     The purchase  agreement was executed on April 30, 1998 by John F. Dixon and
William R. Dixon, Jr., on behalf of the Buyer, and Philip B. Grotewohl and David
P. Grotewohl,  on behalf of the Partnership.  The purchase agreement also covers
the  proposed  sale  of  the  properties  of  four  other   California   limited
partnerships as to which the Managing General Partner serves as general partner.
The term of all such  purchases  are  identical,  except  for the  amount  being
offered  for each  property.  The Buyer has the right to  rescind  the  purchase
agreement  if any of the  five  partnerships  fails to  approve  the sale of its
property or properties to the Buyer.
    
     THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF
SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION  CONTAINED
IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
   
     This Consent  Solicitation  Statement  and the  enclosed  form of Action By
Written  Consent  of Limited  Partners  (the  "Consent")  were first sent to the
Limited Partners on or about November __, 1998.

     Units of limited  partnership  interest in the  Partnership  (the  "Units")
represented  by Consents  duly  executed and returned to the  Partnership  on or
before  December  __, 1998  (unless  extended by the  Managing  General  Partner
pursuant to notice mailed to the Limited Partners) will be voted or not voted in
accordance with the instructions  contained therein.  If no instructions for the
Proposal  are given on an executed and returned  Consent,  Units so  represented
will be voted in favor of the Proposal.  The Managing  General Partner will take
no action with respect to the Proposal  except as specified in the duly executed
and returned Consents.
    
     The  cost  of  this   solicitation  of  Consents  is  being  borne  by  the
Partnership.  Such  solicitation is being made by mail and, in addition,  may be
made by officers and  employees  of the  Partnership  and the  Managing  General
Partner, either in person or by telephone or telegram.

                                      iii


                                TABLE OF CONTENTS

                                                                           Page
   
Special Factors.............................................................. 1
Outstanding Voting Securities and Voting Rights.............................. 6
Consent Under Partnership Agreement.......................................... 8
The Property and the Partnership's Business.................................. 8
  Narrative Description of Business.......................................... 8
    (a)  Franchise Agreements................................................ 8
    (b)  Operation of the Hotel and Restaurant............................... 8
    (c)  Competition......................................................... 9
  Property................................................................... 9
Management...................................................................10
Purchase Agreement...........................................................11
Conflicts of Interest........................................................13
Effects of Approval of the Proposal..........................................13
  General....................................................................13
  Determination and Use of Net Proceeds......................................14
  Federal Income Tax Consequences............................................15
    (a)  General.............................................................15
    (b)  Characterization of Gain............................................16
  Dissolution of the Partnership.............................................17
Appraisal of the Property/Fairness Opinion...................................17
Legal Proceedings............................................................20
Amendment to Partnership Agreement...........................................23
Financial Information........................................................24
  Selected Partnership Financial Data........................................24
  Management's Discussion and Analysis of Financial Condition and
    Results of Operations....................................................24
      I.  Fiscal Year Financial Statements...................................24
          (a)  Liquidity and Capital Resources...............................24
          (b)  Results of Operations.........................................25
      II. Interim Financial Statements.......................................28
          (a)  Liquidity and Capital Resources...............................28
          (b)  Results of Operations.........................................28
  Other Financial Information................................................28
Financial Statements........................................................F-i
    

                                       iv




                                                              


                                 SPECIAL FACTORS

     A number  of  special  factors  apply to the  Proposal.  Some  factors  are
described more fully elsewhere in this Consent Solicitation Statement and should
be read in  conjunction  with the rest of this Consent  Solicitation  Statement.
Limited  Partners are urged to read all of this Consent  Solicitation  Statement
carefully.
   
     The primary purpose of the Proposal is to provide Limited  Partners with an
opportunity  to liquidate  their  investment  in the  Partnership.  Based on (i)
comments and questions  from Limited  Partners with respect to a liquidation  of
their investment,  (ii) the lack of a public market for the Units, and (iii) the
original objective of the Partnership  respecting the sale of the Property,  the
Managing  General  Partner  believes  such  liquidity  is desired by the Limited
Partners.
    
     The  Partnership  was  formed in 1984 and its  motel  property  located  in
Barstow, California opened for business during 1985.

     This Consent  Solicitation  Statement  has been prepared to ask the Limited
Partners  to  approve  the sale of the  Property  for cash in the  amount of the
appraised fair market value of $4,100,000.
   
     It has always  been the  intention  of the  Partnership  to  liquidate  the
Property when it became apparent that the best interests of the Limited Partners
would be served by doing so. The Managing General Partner has received inquiries
from the Limited  Partners over the years as to when the Property was to be sold
and the Partnership  liquidated.  Its response,  until  recently,  has been that
because of overbuilt and  depressed  motel market  conditions,  the time was not
right  for a sale  of the  Property.  During  1997  and the  early  part of 1998
conditions changed,  and the Managing General Partner believes that the Property
should be sold pursuant to the  Proposal,  which was executed on April 30, 1998,
and the Partnership liquidated.

     During September and October 1997,  Everest Properties II, LLC, a member of
an  affiliated  group of  entities  which is the largest  investor  group in the
Partnership  (the "Everest  Group"),  made an offer to purchase the Property and
the motel properties of four other California  limited  partnerships as to which
the Managing  General Partner serves as general partner (the Partnership and the
four other partnerships are referred to herein as the "GMS  Partnerships").  The
purchase price set forth in the October offer for the Property was $2,614,730, a
price far below  $4,100,000,  the appraised  value as of January 1, 1998 and the
price offered in the Proposal.  The Managing  General Partner rejected the offer
of the Everest  Group.  Subsequent  conflicts  between the Everest Group and the
Partnership  resulted in  lawsuits.  Inasmuch as the  Managing  General  Partner
agreed with the Everest Group in principle  that the Property  should be sold, a
settlement was reached whereby, among other things, the Managing General Partner
agreed to take steps to sell the  Property and the  properties  of the other GMS
Partnerships,  and the lawsuits were dismissed. (See "Legal Proceedings.") In an
amendment  to the  settlement  agreement,  the Everest  Group agreed to vote its
Units in favor of the Proposal.  (See "Outstanding  Voting Securities and Voting
Rights.")

     The Managing General Partner  considered seeking third party buyers for the
Property (and expects to do so if the Proposal is disapproved) but believes that
it is unlikely that a sale  materially  more  favorable to the Limited  Partners
could have been  arranged last spring,  or can be arranged now,  because (i) the
proposed purchase price is equal to the appraised value determined as of January
    
                                       1

   
1, 1998, and (ii) in the opinion of the Managing General Partner,  the market is
now less  favorable  to sellers  than it was at the time the  contract  with the
Buyer was  negotiated.  It is also possible that a delay in pursuing the Buyer's
offer by listing the Property would have resulted in the loss of that offer.

     In this regard, prior to negotiating the terms represented by the Proposal,
the Managing  General  Partner  received in writing from two real estate brokers
who are not  affiliated  with the  Partnership or the Managing  General  Partner
suggested sale strategies for the sale of the Property and the properties of the
other GMS Partnerships. One broker suggested a sealed bid sales strategy with an
emphasis of obtaining a single purchaser or a minimum number of purchasers. This
broker presented a broker's value for the eight individual  properties which, in
the aggregate  ($28,250,000),  was slightly  lower than the aggregate  appraised
value  ($28,900,000) of the eight  properties.  However,  the values assigned by
this broker to the properties were, in some instances,  lower than the appraised
values and, in other instances, higher. (For example, the broker assigned values
to the South San Francisco,  Sacramento,  Modesto,  Santa Rosa, San  Bernardino,
Bakersfield,  Pleasanton  and  Barstow  properties  of  $7,500,000,  $2,600,000,
$1,250,000,  $1,700,000,  $1,700,000,  $1,800,000,  $7,800,000,  and $3,900,000,
respectively,  as compared to the appraised values  determined by PKF Consulting
of  $7,600,000,  $2,700,000,  $1,800,000,  $2,200,000,  $1,600,000,  $1,300,000,
$7,600,000 and $4,100,000,  respectively.)  The other broker  suggested that the
eight  properties  would  derive  the  highest  value  if sold  as a  portfolio,
particularly  if the buyer  were  trying to break  into the  California  lodging
industry.  The aggregate list price determined by this broker  ($29,000,000) was
substantially  the same as the aggregate  appraised values. As was the case with
the first broker, this broker assigned list prices to the eight properties which
were, in some instances,  lower than those of the appraised values and, in other
instances,  higher.  (This broker assigned list prices,  assuming the properties
were sold individually, to the South San Francisco,  Sacramento,  Modesto, Santa
Rosa,  San  Bernardino,   Bakersfield,  Pleasanton  and  Barstow  properties  of
$7,663,176,   $2,562,833,   $1,177,217,   $1,600,182,   $1,417,824,  $1,634,820,
$7,947,436 and $3,558,296,  respectively.) Limited Partners should be aware that
"list" prices and "values" assigned by brokers are prices to be used to position
properties for ultimate sale over a period of time.  Such  estimated  prices are
not intended to be  appraised  values,  are not the work  product of  recognized
experts,  are not the  result of the  rigorous  efforts  entailed  in  producing
appraised values, may reflect marketing strategy more than an honest estimate of
the probable value and, therefore,  may not accurately reflect the actual amount
of a sale price for any given property.  Indeed, the Managing General Partner is
aware that the competition  between these two brokers to obtain the listings may
have,  in some  instances,  resulted in an upward bias in the brokers'  reports.
Accordingly,  the Managing  General Partner does not believe that the prices and
values  submitted  by the  brokers  should be relied upon in  connection  with a
Limited Partner's  determination of the manner in which the Limited Partner will
vote on the Proposal.  The Managing General Partner has included the information
set forth in this  paragraph so that Limited  Partners will have before them all
third-party information possessed by the Managing General Partner at the time it
negotiated the terms of the Proposal.

     It was not until after the Managing  General  Partner's  receipt of the PKF
Consulting  appraisal,  and the  broker's  reports  discussed  in the  preceding
paragraph that Tiburon  Capital  Corporation  (together  with its nominees,  the
"Buyer") was  introduced  to the  Managing  General  Partner by Mark  Grotewohl.
Philip  Grotewohl,  on  behalf  of  the  Managing  General  Partner,   conducted
negotiations relative to the sale of the Property.
       
                                    2

   

     As discussed  more fully below under  "Appraisal  of the  Property/Fairness
Opinion,"  the  Property  has  been  appraised  by PKF  Consulting,  a  national
hospitality  industry  specialist.  PKF Consulting is an  international  firm of
management consultants,  industry specialists, and appraisers who provide a wide
range of services  to the  hospitality,  real  estate,  and tourism  industries.
Headquartered  in San  Francisco,  PKF  Consulting  has  offices  in  New  York,
Philadelphia,  Atlanta,  Boston,  Houston,  Los Angeles,  Washington,  D.C., and
abroad. As a member of the Pannell Kerr Forster International  Association,  PKF
Consulting has access to the resources of one of the world's largest  accounting
and consulting firms, with 300 offices in 90 countries.  Its conclusion was that
the fair market value of the Property as of January 1, 1998 is $4,100,000, which
is the purchase  price of the Property set forth in the  Proposal.  The purchase
price is to be paid in cash, and the net proceeds thereof will be distributed in
accordance  with  the  Partnership   Agreement  upon  the  close  of  the  sales
transactions  and the concomitant  dissolution of the  Partnership.  The amended
settlement agreement with the Everest Group and the contract of sale between the
Partnership and the Buyer provide for a closing of the sale within 30 days after
approval  of the sale by the Limited  Partners,  in order to provide for a rapid
distribution  of sale  proceeds  to the  Limited  Partners.  Termination  of the
Partnership will occur as soon as the winding up process can be completed.

     The  Partnership  and the Managing  General  Partner are  recommending  the
approval of the Proposal by the Limited Partners for the following reasons:

     oThe  Managing  General  Partner  believes  that the subject  contract  was
entered into at the crest of a seller's market, which has now subsided.  In this
regard,  Limited  Partners should note that economic  journalists  have reported
adverse changes in credit  availability and consumer  confidence since the terms
of the Proposal were negotiated,  factors which could adversely affect the value
of the Property.  The Managing  General Partner believes that now is the time to
sell the Property.

     o The Partnership's intention has always been to sell the Property when the
market  conditions  warranted sale. It was never an investment  objective of the
Partnership to hold the Property permanently.

     o The Managing General Partner  understands that the  circumstances of many
of the  Limited  Partners  have  changed  over the life of the  Partnership  and
believes that the Limited  Partners  should be presented  with an opportunity to
liquidate  their  investments.  In this  regard  the  Managing  General  Partner
believes that it is important that the Limited Partners  understand that no true
market  exists  for  the  sale  of  the  Limited  Partner's   investment  Units.
Heretofore,  to dispose of their  Units,  Limited  Partners  have had to arrange
private sales,  or accept tender offers,  at prices well below the real value of
the underlying assets.

     o The  Property  is  proposed  to be  sold  to the  Buyer  for  $4,100,000,
approximately  $1,485,000 more than was offered for the Property in October 1997
by the Everest  Group.  The sales price is equal to the  appraised  value of the
Property as of January 1, 1998 as determined by PKF  Consulting,  an independent
real estate advisory firm  specializing in the valuation of lodging  properties.
The proposed sale will be for all cash.  PKF  Consulting has rendered a fairness
opinion, stating its opinion that the sales price is fair to the Partnership.

     o As of August 31, 1998, the Limited  Partners had already  received,  over
the  life  of the  Partnership,  the sum of  $693.19  per  Unit  in the  form of
    
                                       3

   
quarterly distributions.  Upon the sale of the Property as described herein, the
Limited  Partners  would  receive  an  additional  pre-tax  distribution  in the
estimated  amount of  approximately  $433 per Unit (less any amounts withheld by
the Managing  General Partner pending the outcome of the arbitration  proceeding
discussed under "Legal  Proceedings").  For a discussion of other effects of the
sale of the Property, including Federal income tax consequences, see "Effects of
Approval of the Proposal" below.

     Notwithstanding the preceding,  Limited Partners should note that the Buyer
hopes to benefit from its  acquisition  of the  Property,  and that the Managing
General  Partner has a conflict of interest  (see  "Conflicts  of  Interest") in
proposing the sale at this time.  The fair market value and net cash flow of the
Property may increase over time. Therefore, it is possible that Limited Partners
would receive a greater return on their investment if the Partnership  continued
to own  and  operate  the  Property  and  sold it at a later  date,  instead  of
consummating a sale under the Proposal.  The Limited  Partners would likely fare
worse under a strategy of retaining the Property if its value were to decline.

     The Managing General Partner has faced substantial conflicts of interest in
proposing,   negotiating  and  structuring  the  Proposal.   See  "Conflicts  of
Interest."  Although,  as discussed above, the Managing General Partner believes
that  the  Limited  Partners  are  interested  in a means of  liquidating  their
investment,  the Proposal has not been  initiated by the Limited  Partners.  The
steps that have been and are being taken to provide the  Limited  Partners  with
procedural  safeguards  are: (i) the  submission  of the Proposal to the Limited
Partners  (all of whom  are  unaffiliated  with  the  Partnership,  the  General
Partners and Mark Grotewohl) for their approval;  (ii) the  commissioning  of an
independent  appraisal  of the Property  upon which the  Proposal is based;  and
(iii) the  commissioning  of a fairness  opinion  respecting  the Proposal.  The
factors are listed in descending  order of  importance,  i.e.,  the first factor
listed  was  given  the most  weight  in the  determination  that  the  proposed
transaction is procedurally fair, although,  as a practical matter, this process
is an  approximation  of the weight given to each factor  because each factor is
relevant and the  Partnership,  the Managing  General Partner and Mark Grotewohl
were  not  able to weigh  the  relative  importance  of each  factor  precisely.
Although the Partnership has not retained an independent  representative for the
Limited  Partners,  the  Partnership,  the  Managing  General  Partner  and Mark
Grotewohl  believe  that the steps taken and to be taken  constitute  sufficient
procedural  safeguards for the Limited Partners' interests and that the proposed
transaction is procedurally  fair. The Managing General Partner's  determination
was made by Philip Grotewohl, as the sole director thereof.

     Further,  the Partnership,  the Managing General Partner and Mark Grotewohl
believe  that  the  proposed   transaction   represented   by  the  Proposal  is
substantively  fair to the  Limited  Partners.  The  Partnership,  the  Managing
General Partner and Mark Grotewohl have considered a number of material  factors
in connection  with  developing  such  beliefs.  The factors are listed below in
descending order of importance, i.e., the first factor listed was given the most
weight in the determination that the proposed transaction is substantively fair,
although,  as a practical matter, this process is an approximation of the weight
given to each factor  because each factor is relevant and the  Partnership,  the
Managing  General Partner and Mark Grotewohl were not able to weigh the relative
importance of each factor precisely:

     (i) The purchase  price of the Property is equal to the appraised  value of
the Property as of January 1, 1998;
    
                                       4

   

     (ii) The Units are at present  illiquid and the cash to be  distributed  to
the  Limited  Partners as a result of the  proposed  sale will  provide  Limited
Partners  with  liquidity  and cash in an amount  greater  than the recent sales
prices for the Units and the net book value of the Units(as discussed below);

     (iii) The purchase price will be paid entirely in cash;

     (iv) The  Partnership,  the  Managing  General  Partner and Mark  Grotewohl
believe that a current  appraisal  of the might  reflect a lower value than that
reflected in the January 1, 1998 appraisal;

     (v) The  Partnership  has received an opinion from PKF Consulting  that the
terms of the proposed sale are fair to the Limited Partners;

     (vi) The purchase price for the Property is substantially greater than that
proposed by the Everest  Group,  the only other firm offer made for the Property
during the preceding 18 months; and

     (vii) A sale of the Property  rather than the continued  ownership  thereof
will be consistent with the Partnership's investment objectives.

     The  appraisal  prepared by PKF  Consulting  was  received by the  Managing
General  Partner  prior to the  time  that  negotiations  with  the  Buyer  were
commenced. The Managing General Partner relied on the appraisal to determine the
valuation of $4,100,000 for the Property.  As further discussed in the appraisal
(see "Appraisal of the Property/Fairness  Opinion"),  PKF Consulting relied on a
sales comparison  analysis,  a direct  capitalization of income analysis,  and a
discounted cash flow analysis.  Inasmuch as the Property consists of an actively
operated  business,  the  appraisal  sets  forth a single  value for the "as is"
market  value and the  "going  concern"  value.  Accordingly,  in relying on the
appraisal,  the  Partnership,  the Managing  General  Partner and Mark Grotewohl
considered the "as is" market value and the "going  concern"  value,  as well as
current  and  historical  prices for other  motels.  They did not  consider  the
current  liquidation  value of the Property because it is clear that the highest
and best use of the Property is as an operating motel. To sell the buildings and
personal  property in a  liquidation  sale would be ill  advised.  Further,  the
Managing  General  Partner  deemed  the net  book  value of the  Property  to be
irrelevant,  given the holding period for the Property. Based upon experience in
the lodging  industry,  as well as general  familiarity  with  industry  news as
reported by trade journals,  the  Partnership,  the Managing General Partner and
Mark  Grotewohl  reasonably  believe that the appraised fair market value of the
Property as  determined by PKF  Consulting  as of January 1, 1998 was fair.  PKF
Consulting was retained because of its reputation and expertise. The Partnership
paid PKF  Consulting  approximately  $8,100  for its  services  in the  proposed
transaction and the other GMS  Partnerships  paid PKF Consulting an aggregate of
approximately $41,400.

     With respect to item (ii) above,  in the absence of an  established  public
market in which Units are being  traded,  the Managing  General  Partner was not
able to determine accurately any market values for the Units. However, according
to Partnership Spectrum,  an independent third party publication,  and Schedules
13-D filed by the Everest  Group,  from August 1996 to August  1998,  there were
sales of Units (including sales made pursuant to tender offers) at rates ranging
from  $150 per  Unit to $365  per  Unit.  The  proposed  sale  would  result  in
distributions of  approximately  $433 per Unit (less any amounts withheld by the
Managing  General  Partner  pending  the outcome of the  arbitration  proceeding
discussed  under "Legal  Proceedings").  During the past two years,  neither the
    
                                       5

   
Partnership,  the Managing  General  Partner nor Mark Grotewohl has purchased or
sold any Units.  The net book value of the  Partnership  as of June 30, 1998 was
$249.43  per Unit.  During  the past two  years no offers  have been made by any
unaffiliated entity for a sale of Limited Partners' interests in the Partnership
allowing the purchaser thereof to exercise control over the Partnership.

     Against the proposed transaction are the fact of an inside transaction, the
Managing General  Partner's  decision not to solicit bids from independent third
parties,  and the possibility that the continued ownership of the Property could
be more economically  beneficial than a sale at this time. The Partnership,  the
Managing General Partner and Mark Grotewohl  believe the factors listed above in
favor of the transaction outweigh these negative considerations.

                 OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS

     The only outstanding  class of voting  securities of the Partnership is the
Units. Each Unit entitles its holder to one vote on the Proposal.

     All Limited  Partners as of the date action is taken on the  Proposal  (the
"Record  Date") are  entitled  to notice of and to vote on the  Proposal.  As of
August 31, 1998 there were 9,022 Units  outstanding and a total of 1,764 Limited
Partners  entitled to vote such Units.  With respect to the Proposal to be voted
upon,  the favorable  vote of Limited  Partners  holding in excess of 50% of the
Units outstanding as of the Record Date will be required for approval.

     There are no rights of  appraisal  or similar  rights of  dissenters  under
California  law or  otherwise  with  regard to the  Proposal  to be voted  upon.
Dissenting  Limited Partners are protected under California law by virtue of the
fiduciary  duty of the  Managing  General  Partner to act with  prudence  in the
business affairs of the Partnership on behalf of the Partnership and the Limited
Partners.
    
     As of August 31,  1998 no person or group of related  persons  was known by
the Partnership to be the beneficial owner of more than 5% of the Units,  except
the following group of related Unit holders:

                                       6


 Everest Lodging Investors, LLC            261 Units                  2.89%
 Everest Madison Investors, LLC            298 Units                  3.30%

         Total                             559 Units                 6.19%
   
     None  of  Grotewohl  Management   Services,   Inc.  (the  Managing  General
Partner),Robert  J. Dana (the associate general  partner),  Philip B. Grotewohl,
David  P.  Grotewohl  or Mark  Grotewohl,  or any of their  affiliates,  are the
beneficial owners of any Units.

     As set forth above,  the Everest Group owns 559 Units (6.19% of the total).
In a  written  agreement  dated  April 21,  1998 (a date  prior to the date Mark
Grotewohl  terminated his employment with the  Partnership)  entered into by the
GMS  Partnerships,   Mark  Grotewohl,   Everest   Properties  II,  LLC,  Everest
Properties, LLC, Everest Madison Investors, LLC, Everest Lodging Investors, LLC,
KM Investments,  LLC and Everest  Financial,  Inc., which amended the settlement
agreement dated February 20, 1998 (discussed  below under "Legal  Proceedings"),
the Everest Group agreed to vote in favor of the Proposal upon  satisfaction  of
the following conditions:  (i) execution by the GMS Partnerships of an exclusive
sales agency  contract in favor of the Everest Group;  (ii) execution by the GMS
Partnerships  with an entity affiliated with Mark Grotewohl not later than April
30, 1998 of  purchase  agreements  for the  properties  of the GMS  Partnerships
providing  for sale  prices  equal to the  respective  appraised  values  of the
properties  and for full  payment in cash at the time of the  closing of escrow;
(iii)  the  grant to the  Everest  Group of the  first  opportunity  to  arrange
financing for the proposed  transactions;  and (iv) the diligent preparation and
dissemination  by  the  Partnership  of  this  Consent  Solicitation  Statement.
Condition  (i) was  satisfied  on May 8, 1998 by the  execution  of an exclusive
sales agency  contract  granting the Everest Group an exclusive  listing for the
sale of the Property and the properties  owned by the other GMS Partnerships for
a six-month period. For a discussion of the commissions payable pursuant to such
contract, see "Purchase Agreement" below.

     No meeting  will be held with  regard to this  solicitation  of the Limited
Partners.  Voting may be accomplished by completing and returning to the offices
of the Partnership,  at 2030 J Street, Sacramento,  California 95814, telephone:
(916) 442-9183,  the form of Consent included  herewith.  Only Consents received
prior to the close of  business  on the date (the  "Action  Date")  which is the
earlier  of (i) the date on  which  the  Partnership  receives  approval  and/or
disapproval of the Proposal by a  majority-in-interest  of the Limited Partners,
or (ii)  December __, 1998  (unless  extended by the  Managing  General  Partner
pursuant to notice mailed to the Limited  Partners),  will be counted toward the
vote on the  Proposal.  However,  Limited  Partners  are urged to  return  their
Consents at the earliest practicable date.

     If a Limited Partner has delivered an executed  Consent to the Partnership,
the Limited Partner may revoke such Consent not later than the close of business
on the date  immediately  prior to the Action Date.  As of the Action Date,  the
action which is the subject of this  solicitation  will either be effective  (if
the requisite number of executed Consents have been received by the Partnership)
or the  solicitation  period will have expired without approval of the Proposal.
The only  method  for  revoking  a  Consent  once it has been  delivered  to the
Partnership is by the delivery to the Partnership  prior to the Action Date of a
written  instrument  executed by the Limited  Partner who  executed  the Consent
which  states that the Consent  previously  executed  and  delivered  is thereby
revoked. Other than the substance of the revocation described above, no specific
form is required  for such  revocation.  An  instrument  of  revocation  will be
effective  only  upon  its  actual  receipt  prior  to the  Action  Date  by the
    
                                       7


Partnership or its authorized  agent at the  Partnership's  place of business as
set forth in the foregoing paragraph.

                       CONSENT UNDER PARTNERSHIP AGREEMENT

     Pursuant   to   Section   14.1(e)   of   the   Partnership   Agreement,   a
majority-in-interest of the Limited Partners must approve or disapprove the sale
at one time of all or substantially all of the Partnership's  properties.  Also,
under  Section  11.2  of  the  Partnership  Agreement,  the  Partnership  is not
permitted to sell its property to  "Affiliates"  of the General  Partners.  (The
Partnership Agreement defines "Affiliate" of a person as (i) any person directly
or  indirectly  controlling,  controlled  by, or under common  control with such
other  person,  (ii)  any  person  owning  or  controlling  10% or  more  of the
outstanding  voting  securities of such person,  (iii) any officer,  director or
general partner of such person, and (iv) any person who is an officer,  director
or general partner of any of the foregoing.  Although it might be contended that
the Buyer is an Affiliate of the Managing General Partner, in the opinion of the
Managing General Partner the Buyer does not come within such definition, because
the  Managing  General  Partner  does not  believe  that  Mark  Grotewohl  is an
Affiliate of the Managing General  Partner.  (See "Purchase  Agreement'  below.)
However,  recognizing  the  possibility  that  reasonable  minds might differ in
resolving that issue, and because the Property constitutes  substantially all of
the  Partnership's  properties  (as discussed  below under "The Property and the
Partnership's  Business"),  the Managing General Partner is seeking the approval
of the proposed sale of the Property to the Buyer on the terms described  herein
by a majority-in-interest of the Limited Partners.

                   THE PROPERTY AND THE PARTNERSHIP'S BUSINESS

     The Property  consists of a leasehold  interest in land located in Barstow,
California,  the hotel property constructed thereon by the Partnership,  another
leasehold interest in a restaurant, and the related personal property.

Narrative Description of Business

     (a) Franchise Agreements

     The  Partnership  operates its hotel  property as a  franchisee  of Holiday
Inns,  Inc.  Holiday Inns offer  accommodations  in the mid-range of the lodging
industry in terms of facilities and prices.

     (b) Operation of the Hotel and Restaurant

     Brown & Grotewohl,  a California general  partnership which is an affiliate
of the  Managing  General  Partner  (the  "Manager"),  manages and  operates the
Partnership's hotel and restaurant.  The Manager's  management  responsibilities
include,  but  are  not  limited  to,  the  supervision  and  direction  of  the
Partnership's employees who operate the hotel and restaurant,  the establishment
of  room  rates  and  the  direction  of  the  promotional   activities  of  the
Partnership's  employees.  In  addition,  the Manager  directs  the  purchase of
replacement  equipment and supplies,  maintenance activity and the engagement or
selection  of  all  vendors,   suppliers  and   independent   contractors.   The
Partnership's  financial  accounting  activities  are performed by the hotel and
restaurant staff and a centralized accounting staff, all of which work under the
direction of the Managing General Partner or the Manager. Together, these staffs
perform all  bookkeeping  duties in  connection  with the hotel and  restaurant,
including  all  collections  and  all  disbursements  to be  paid  out of  funds
generated  by hotel and  restaurant  operations  or  otherwise  supplied  by the
Partnership.

                                       8


     As of December 31, 1997,  the  Partnership  employed a total of 49 persons,
either full or  part-time,  at its hotel and  restaurant,  including  eight desk
clerks, 16 housekeeping and laundry personnel,  four maintenance personnel,  one
general manager,  four cooks and dishwashers,  11 servers and bus persons,  four
bartenders and one restaurant manager. In addition, and as of the same date, the
Partnership  employed  11 persons in  administrative  positions  at its  central
office in Sacramento,  California,  all of whom worked for the  Partnership on a
part-time basis. They included accounting, investor service, sales and marketing
and  hotel  supervisory  personnel,   secretarial   personnel,   and  purchasing
personnel.

     (c) Competition

     As  discussed  in greater  detail  below,  the  Partnership  faces  intense
competition from hotels and motels of varying quality and size,  including other
mid-range  hotels and motels which are part of nationwide  chains and which have
access to nationwide reservation systems.

Property

     On May 10, 1984,  the  Partnership  entered into a long-term  lease of 3.05
acres of unimproved land located on East Main Street in Barstow, California. The
leasehold is located  within a 15-acre  parcel which was developed as a lodging,
restaurant,  retail and theater  complex known as "Barstow  Station  Too!".  The
Partnership's  hotel is the only hotel or motel to be included  in the  complex.
The  original  term of the lease was for 50 years  with the  lessee's  option to
renew for three additional 10-year periods.
 
     The Barstow hotel, which consists of 148 guestrooms,  was placed in service
on December 31, 1985, at which date 96 guestrooms  were available for occupancy.
The remaining 52 guestrooms became available for occupancy on March 15, 1986.

     On June 15, 1987 the Partnership commenced operation of a family restaurant
and cocktail lounge  immediately  adjacent to the Barstow hotel. The Partnership
leases the  restaurant  facility  from Fred  Rosenberg,  the lessor of the hotel
site.

     On May 30, 1990, the Partnership  entered into a written agreement with the
lessor  for the  amendment  of the hotel and  restaurant  facility  leases.  The
restaurant facility lease term was extended from January 1, 1991 to December 31,
2010;  however,  the  Partnership  has the option of terminating the lease after
January 1, 2001 if the Partnership  should  terminate its license to operate the
hotel as a franchise of Holiday Inns,  Inc.  Additional  rent for the hotel site
and  restaurant  facility  was changed so as to be the amount by which 9% of the
combined annual gross sales from the hotel and restaurant  facility  exceeds the
combined  annual minimum rent ($275,556 as of December 31, 1997;  $280,116 as of
December 31, 1998) under the hotel site and restaurant facility leases.

     The leases provide that the improvements  constructed by the Partnership on
the leased premises will remain the property of the Partnership during the lease
term but that upon expiration of the leases, title to any such improvements will
pass to the lessor.

     In 1997, the  Partnership  incurred a total of $285,302 in rent expense for
its Barstow hotel site and restaurant  facility.  In addition,  the  Partnership
pays all property taxes and assessments for each leasehold site.

                                       9


     The Partnership's  hotel achieved the following average occupancy rates and
average room rates during 1997, 1996 and 1995:


                                         1997           1996         1995
                                    -------------------------------------------
Average Occupancy Rate                   68.6%         71.1%         74.9%
Average Room Rate                       $66.30         $64.63       $60.95

     The following lodging facilities provide direct and indirect competition to
the Partnership's Barstow hotel:


                                                                  Approximate
                                                 Number              Distance
                 Facility                       Of Rooms          From The Hotel
- --------------------------------------------------------------------------------
Quality Inn                                        100               Adjacent
Days Inn                                           113              0.25 Mile
Comfort Inn                                                         0.50 Mile
Vagabond Inn                                        67              0.50 Mile
Best Western                                        79              0.50 Mile
Holiday Inn Express                                 65              3.00 Miles

     The Barstow  hotel's  major  sources of  patronage  are  generated by local
military bases, with civilian Federal employees,  military personnel and Federal
government contractors generating approximately 26% of the hotel's room revenue.
The  Barstow  area also  attracts  traveling  salespeople  and other  commercial
travelers, as well as leisure travelers.
 
     For a  discussion  of the  revenue  received  by the  Partnership  from the
restaurant see "Management's  Discussion and Analysis of Financial Condition and
Results of Operations."

                                   MANAGEMENT

     The Partnership is a California limited  partnership which has no executive
officers or directors. The principal business address of the Partnership is 2030
J Street, Sacramento, CA 95814. The Partnership's general partners are Grotewohl
Management  Services,  Inc., as managing general partner, and Robert J. Dana, as
associate general partner.

     Grotewohl  Management  Services,  Inc. is a  California  corporation  owned
one-half by Philip B.  Grotewohl  and  one-half by his former  wife,  who is not
involved in the day-to-day  operations of Grotewohl Management  Services,  Inc.,
and who does not serve as a director  or  executive  officer  thereof.  The sole
director of Grotewohl  Management  Services,  Inc. is Philip Grotewohl,  and the
executive officer of Grotewohl  Management  Services,  Inc. is Philip Grotewohl.
David  Grotewohl  has  authority  to sign  documents  on behalf of the  Managing
General Partner as its nominal President and Chief Financial Officer, but has no
executive  duties. He does act as "inside" legal counsel to the Managing General
Partner,  and his  principal  occupation  has  been to head  the  operation  and
maintenance  of the Property and the  properties of the other GMS  Partnerships.
The principal business address of Grotewohl Management Services,  Inc. is 2030 J
Street,  Sacramento,  CA 95814. During the past five years Grotewohl  Management
Services,  Inc.  and its  affiliate,  Brown & Grotewohl,  a  California  general
partnership  one-half owned by Philip Grotewohl and one-half owned by the Estate
of Dennis A. Brown,  principally  have been  engaged in the business of managing
various limited  partnerships which own and operate lodging  facilities,  and in
the  business of managing  such lodging  facilities.  During the past five years
Philip  Grotewohl's  business  activities  have been  conducted  solely  through

                                       10


Grotewohl  Management  Services,  Inc.  and  Brown &  Grotewohl.  The  principal
business address of Philip Grotewohl is 2030 J Street,  Sacramento, CA 95814. In
addition to the services described above, during the past two and three-quarters
years David  Grotewohl  has been engaged  part-time as a sole  proprietor in the
marketing  of  consumer  products  and  services  under the  business  name "The
Biscayne  Group." The principal  business  address of David  Grotewohl is 2030 J
Street, Sacramento, CA 95814.

     Robert J. Dana is the associate  general partner of the Partnership and, as
such,  has no control over the  management of the  Partnership.  During the past
five years Robert J. Dana has been self-employed through D/S Telecom and Telecom
Options as a seller of long-distance  telephone services. The principal business
address of Robert J. Dana is 6439 Timber Springs Drive, Santa Rosa, CA 95409.

                               PURCHASE AGREEMENT

     On April 30, 1998,  the  Partnership  entered into an agreement to sell the
Property to Tiburon Capital Corporation, San Francisco, California, or a nominee
of Tiburon Capital Corporation (the "Buyer"), for the sum of $4,100,000, payable
in cash at the close of escrow.  Escrow was opened at Chicago Title Company, San
Francisco, California on June 10, 1998.
   
     Except  as  otherwise  indicated,  the  following  paragraph  is  based  on
information  provided by the Buyer.  Tiburon Capital Corporation is a California
corporation  formed in 1992. All of its stock has been owned since its inception
equally by William R. Dixon,  Jr., Herbert J. Jaffe,  John L. Wright and John F.
Dixon.  Management and control persons of Tiburon Capital Corporation consist of
its stockholders.  Tiburon Capital  Corporation and its related entities are and
have been  involved in many business  transactions,  including the ownership and
asset or property management of real estate assets. (The owners,  management and
the control  persons of such  related  entities are two or more of the owners of
Tiburon Capital Corporation.) In many instances,  the real estate assets were or
are owned by limited  partnerships  or limited  liability  companies  formed and
syndicated  by Tiburon  Capital  Corporation  or its  related  entities  for the
specific purpose of owning such assets. The form of an entity owning real estate
assets is typically  dictated by investors and/or lenders.  If the proposed sale
is  consummated,  a nominee of Tiburon  Capital  Corporation,  which  would be a
limited liability  company,  would actually  purchase the Properties  instead of
Tiburon Capital Corporation. The members of such limited liability company would
be Tiburon Capital Corporation,  Mark Grotewohl or his wholly-owned entity, and,
perhaps,  others. Mark Grotewohl's interest in the Buyer would be limited to 50%
of the profits  remaining  after return of all capital to all equity  investors,
plus a  return  thereon  of at  least  14%  per  annum.  Mark  Grotewohl  or his
wholly-owned entity also would provide centralized  property management services
to the  Buyer.  The fee for  this  service  would  be 4 1/2% of  gross  property
revenues,  from which Mark Grotewohl  would be required to fund all  centralized
property  management  expenses.  The  foregoing  would be reflected in a written
agreement if the Proposal were  approved.  It is possible that some terms of the
relationships  would vary from those as  described,  but in no event  would Mark
Grotewohl's  interest in the Buyer or the eight  properties  be greater  than as
indicated.

     Mark Grotewohl is the son of Philip Grotewohl.  During the last five years,
until April 30, 1998,  Mark  Grotewohl  was employed as the  marketing and sales
director for the five GMS Partnerships. Since that time, Mark Grotewohl has been
engaged in  facilitating  the proposed  transaction,  and is operating  from the
offices  of the  Managing  General  Partner.  It might be  contended  that  Mark
    
                                       11


Grotewohl is, by virtue of his past  relationship  with the  Partnership and the
other GMS  Partnerships,  an  Affiliate  of the  Partnership  as  defined in its
Partnership  Agreement.  Under Section 11.2 of the  Partnership  Agreement,  the
Partnership  is not permitted to sell its real property to  "Affiliates"  of the
General Partners.  (The Partnership Agreement defines an "Affiliate" of a person
as (i) any person  directly or indirectly  controlling,  controlled by, or under
common control with such person,  (ii) any person owning or  controlling  10% or
more of the  outstanding  voting  securities of such person,  (iii) any officer,
director,  or  general  partner  of such  person,  and (iv) any person who is an
officer,  director  or general  partner of any of the  foregoing.  The  Managing
General  Partner  believes  that,  based on the  facts and  circumstances,  Mark
Grotewohl is not an Affiliate of the  Partnership,  because Mark  Grotewohl  (i)
does not control the Partnership or the Managing General  Partner,  (ii) owns no
voting securities in the Partnership or the Managing General Partner,  and (iii)
is not an officer,  director or partner of the Managing  General  Partner or the
Partnership.  However,  the Managing General Partner  recognizes that reasonable
minds could differ as to the  resolution  of this issue and has decided to treat
this transaction as an inside transaction.

     The Buyer has made a contemporaneous offer to purchase the motel properties
of the four  other  GMS  Partnerships.  The  offers  made by the  Buyer  for the
properties of each of the GMS Partnerships have been evaluated  independently by
the Managing General  Partner.  Other than with respect to the purchase price of
each motel,  the offers are on identical  terms. If the limited  partners of the
other Partnerships do not approve the sale of their respective properties to the
Buyer,  however,  the Buyer has the right and  option  not to  proceed  with the
proposed  purchase of the  Property  from the  Partnership,  even if the Limited
Partners  approve this sale. In this regard,  the  Partnership has not solicited
any offers to purchase  the  Property or the motel  properties  of the other GMS
Partnerships,  has not listed the Property or the motel  properties of the other
GMS  Partnerships  for sale  with  independent  brokers,  and has not  otherwise
actively sought competing offers for the Property or the motel properties of the
other GMS  Partnerships.  Consequently,  the offer presented by the Buyer is the
only offer that the  Managing  General  Partner has received for the Property or
the motel properties of the other GMS Partnerships other than those presented by
the Everest Group.
   
     There are a number of  significant  conditions to the  consummation  of the
proposed sale of the Property to the Buyer; therefore, there can be no assurance
as to  whether,  or when,  such  transaction  will be  consummated.  Among these
conditions  are  the  Partnership's  receipt  of the  approval  of  the  Limited
Partners;  the Buyer's receipt (at the Partnership's expense) and approval of an
ALTA Survey and  preliminary  title report for the Property;  the absence of any
damage or loss to the  Property  prior to the closing date in excess of $50,000;
the  decision by the Buyer,  in its  unfettered  discretion,  to  terminate  the
proposed  purchase prior to June 30, 1998; the Buyer's receipt prior to June 30,
1998 of a loan commitment for financing in an amount of not less than 90% of the
purchase  price of the Property  (the Buyer has since  waived but not  satisfied
this contingency);  and receipt by the Partnership of any necessary approvals of
the sale by, among others,  the franchisor,  the landlords,  and the subtenants.
The Managing  General  Partner  expects that such  conditions will be satisfied;
however,  there  can be no  assurances  in this  regard.  No  federal  or  state
regulatory  requirements  must be  complied  with,  or  approvals  obtained,  in
connection with the transaction.
    
     The Buyer  will  deposit  the sum of  $21,000  into  escrow on the date the
Partnership  notifies  the Buyer that the Limited  Partners  have  approved  the
proposed  sale of the  Property  to the Buyer.  Should the Buyer  default in the

                                       12


performance of its  obligations  under the purchase  agreement,  the Partnership
will be entitled to retain said deposit as its only damages.

     The  Partnership  and the Buyer  will share  closing  costs.  The  Managing
General Partner  anticipates that the  Partnership's  share of aggregate closing
costs,  including  real  estate  brokerage  commissions,  will be  approximately
$153,750.  Included  therein is a real estate  brokerage  commission  payable to
Everest  Financial,  Inc., a member of the Everest Group,  in an amount equal to
2.75% of the purchase price. Everest Financial, Inc. has agreed to reallow 1.25%
of the purchase price to the Buyer's broker or, at the Buyer's option, the Buyer
will be entitled to a credit  against the purchase  price in the amount of 1.25%
of the purchase price.

                              CONFLICTS OF INTEREST

     The  Managing  General  Partner  is  subject to  substantial  conflicts  of
interest in connection with the Proposal  arising out of its  relationship  with
the Partnership, including the conflicts discussed below.

     Philip B.  Grotewohl,  the  co-owner  and chief  executive  officer  of the
Managing General Partner,  is the father of Mark Grotewohl,  an affiliate of the
Buyer. Accordingly, the Managing General Partner faced a significant conflict of
interest in determining the terms of the proposed transaction with the Buyer, in
determining not to solicit bids from independent third parties, and in rendering
its  recommendation  as to the  fairness of the  proposed  transaction  with the
Buyer. The Managing General Partner also faced significant conflicts of interest
in  determining  to sell the Property at this time in that it agreed to sell the
Property in the  agreement  settling  the  lawsuits  brought  against and by the
Everest Group. (See "Legal  Proceedings.") The state court action by the Everest
Group brought partly in response to the Managing General Partner's federal court
action  brought  against the Everest  Group  alleged  violations by the Managing
General  Partner of the  Partnership  Agreement and of its fiduciary duty to the
Partnership.  Accordingly,  the Managing General Partner may have been motivated
to agree to sell the Property as a result of the lawsuits rather than in pursuit
of  the  best  interests  of the  Limited  Partners.  However,  based  upon  its
experience in the lodging industry, as well as general familiarity with industry
news as reported by trade journals,  the Managing  General Partner believes that
the appraised  market value of the Property as  determined by PKF  Consulting is
fair and reasonable. The Managing General Partner also believes that the sale of
the  Property  in  accordance  with the terms and  conditions  outlined  in this
Consent  Solicitation  Statement  will  assist the  Partnership  in meeting  its
investment  objectives.  Nonetheless,  there  can be no  assurance  that (i) the
Limited  Partners  would not  receive a greater  amount of sale  proceeds if the
Managing  General  Partner  were to  solicit  bids for the  Property  from third
parties,  or (ii) the  continued  retention and operation of the Property by the
Partnership coupled with a sale of the Property at a later date would not result
in greater after-tax distributions to the Limited Partners.

                       EFFECTS OF APPROVAL OF THE PROPOSAL
   
     Set forth below is a discussion  of the effects of the sale of the Property
pursuant to the Proposal.

General

     The  consummation of the sale of the Property  pursuant to the Proposal and
the concomitant  dissolution of the  Partnership  should result in the following
    
                                       13


consequences for the Partnership, the Limited Partners and the General Partners:

     (i) The Limited  Partners are expected to receive the  distributions of net
cash proceeds from the sale of the Property as described below.

     (ii) The Limited  Partners and the General Partners are expected to realize
the Federal income tax consequences as described below.

     (iii) All of the  Partnership's  assets and liabilities will be liquidated,
the Partnership  will be dissolved and terminated,  and the  registration of the
Units under the Securities Exchange Act of 1934 will be terminated.

     The  consequences  stated  above  are  discussed  in  more  detail  in  the
subsections which follow. Those subsections, in part, include computations as to
the cash proceeds to be received and  distributed  by the  Partnership,  and the
taxable gain and allocations thereof to be made by the Partnership, in the event
the proposed sale is consummated.  HOWEVER, THIS INFORMATION IS PRESENTED SOLELY
FOR THE PURPOSES OF EVALUATING THE PROPOSAL. ALL AMOUNTS ARE ESTIMATES ONLY. ALL
COMPUTATIONS ARE BASED ON ASSUMPTIONS (SUCH AS THE DATE OF SALE, THE EXPENSES OF
THE SALE,  AND THE RESULTS OF PARTNERSHIP  OPERATIONS  THROUGH THE DATE OF SALE)
WHICH MAY OR MAY NOT  PROVE TO BE  ACCURATE  AND  SHOULD  NOT BE RELIED  UPON TO
INDICATE THE ACTUAL RESULTS WHICH MAY BE ATTAINED.

Determination and Use of Net Proceeds

     The following is a summary of the  projected  amount of cash to be received
by the  Partnership  and the projected  amount of cash to be  distributed to the
Limited  Partners,  assuming  the  Property  is sold for a gross  sales price of
$4,100,000. This summary has been prepared by the Managing General Partner.

     If the proposed  transaction  with the Buyer is consummated on November 30,
1998, it is estimated that the Partnership would
receive the following net proceeds:

Gross sales price                                                   $4,100,000

Less: Real estate commission                                          (112,750)
      Estimated escrow and closing costs                               (76,000)
      Termination payment to franchisor                                (89,000)
 
Net proceeds of sale                                                $3,822,250

     Included in closing costs set forth above are, among other items, estimated
legal fees of $37,000,  estimated  fees in  connection  with the  appraisal  and
fairness opinion of $10,000,  estimated accounting fees of $16,000 and estimated
fees  in  connection  with  solicitation   activities  of  $4,000.   Because  of
unanticipated  expenses  of  acquiring a Holiday  Inn  franchise,  the Buyer has
decided  that it will not  operate  the motel as a Holiday  Inn.  Therefore  the
present  franchise will be terminated.  The early  termination  will require the
payment of a termination fee of approximately  $178,000, of which the Seller has
agreed to pay one-half ($89,000).

     The Partnership's  real property taxes are payable twice yearly on April 10
and December 10,  partially in arrears,  in the current  amount of $31,560 each.
The Partnership's  minimum lease payment for its leasehold  interests is $23,343
monthly. Accordingly, if the proposed transaction with the Buyer is consummated,
the actual date of consummation  will determine whether there is a credit to the

                                       14


Partnership  for  prorated  lease  payments  and/or a credit  to the  Buyer  for
prorated real  property  taxes.  Similarly,  the amount  indicated  below as the
estimate  of  reserves   available  for   distribution  on  dissolution  of  the
Partnership  will vary  depending  on the  actual  date of  consummation  of the
proposed transaction.
   
     The net proceeds of $3,822,250  estimated to be received by the Partnership
from the proposed transaction, in the estimated amount of approximately $433 per
Unit based on a closing date of November 30, 1998, less amounts  withheld by the
Managing General Partner in consideration of the pending  arbitration  discussed
under  "Legal  Proceedings,"  would  be  distributed  entirely  to  the  Limited
Partners.  The Managing General Partner,  in its discretion,  will determine the
amount,  if any,  which  would be so  withheld.  Accordingly,  the  amount to be
withheld  could be an amount  ranging from zero to the maximum amount prayed for
or awarded in the arbitration,  plus attorneys' fees. (See "Legal Proceedings.")
To the extent that the amount  withheld is not used to pay damages or attorneys'
fees, it would be  distributed  to the Limited  Partners.  In the unlikely event
that the amount withheld were  insufficient  to satisfy such  obligations of the
Partnership, the Limited Partners could be required to return a portion of their
distributions to the Partnership.

     At the date of sale the  Partnership  would have regular  cash  reserves on
hand.  These regular cash reserves would be retained for the payment of accounts
payable and other  liabilities and expenses incurred to that date or expected to
be incurred in connection with the operation of the Property through the date of
sale  and  the  operation  and  winding-up  of  the   Partnership   through  its
termination, including severance pay to certain employees of the Partnership and
the other GMS  Partnerships,  and the balance,  estimated to be $85,000 or $9.42
per Unit, also would be distributed entirely to the Limited Partners.

     Alternatively,  if the Property is not sold pursuant to the  Proposal,  the
Partnership would continue to operate the Property for an indeterminate  period.
The  Managing  General  Partner  estimates  that if the Property is not sold the
Partnership  will make average annual  distributions  to the Limited Partners of
from zero to $324,792  ($36.00 per Unit) for the  foreseeable  future.  However,
there can be no assurance that the Managing General  Partner's  estimate in this
regard will be borne out.
    
Federal Income Tax Consequences

     (a)  General.  The  following  is a  summary  of  the  Federal  income  tax
consequences  expected  to  result  from a sale  of the  Property  based  on the
Internal Revenue Code of 1986, as amended (the "Code'),  existing laws, judicial
decisions and administrative regulations, rulings and practices. This summary is
general  in content  and does not  include  considerations  which  might  affect
certain  Limited   Partners,   such  as  Limited   Partners  which  are  trusts,
corporations  or  tax-exempt  entities,  or  Limited  Partners  who  must pay an
alternative  minimum  tax.  Except as  otherwise  specifically  indicated,  this
summary does not address any state or local tax consequences.

     Tax counsel to the  Partnership,  Derenthal & Dannhauser,  has delivered an
opinion to the  Partnership  which  states that the  following  summary has been
reviewed  by it  and,  to the  extent  the  summary  involves  matters  of  law,
represents its opinion, subject to the assumptions, qualifications,  limitations
and uncertainties set forth therein.

                                       15



     (b) Characterization of Gain. Upon the sale of property,  the owner thereof
measures his gain or loss by the difference  between the amount of consideration
received  in  connection  with the sale and the  owner's  adjusted  basis in the
property. A gain will be recognized for Federal income tax purposes.  This is so
because the depreciation  used for Federal income tax purposes,  which decreases
adjusted basis, was greater than that used for book purposes.

     The Property should constitute "Section 1231 property" (i.e., real property
and depreciable  assets used in a trade or business which are held for more than
one year) rather than "dealer" property (i.e.,  property which is held primarily
for sale to customers in the ordinary course of business).  While it is possible
that the  Internal  Revenue  Service  will argue that the  Property  is "dealer"
property,  gain  upon the sale of which  would  be taxed  entirely  as  ordinary
income,  tax counsel to the Partnership is of the opinion that it is more likely
than not that such an assertion would not be sustained by a court.

     A Limited  Partner's  allocable share of Section 1231 gain from the sale of
the  Property  would be  combined  with any other  Section  1231 gains or losses
incurred by him in the year of sale,  and his net  Section  1231 gains or losses
would be taxed as long-term capital gains or constitute  ordinary losses, as the
case may be,  except that a Limited  Partner's  net  Section  1231 gains will be
treated as ordinary income to the extent of net Section 1231 losses for the five
most recent years which have not previously been offset against net Section 1231
gains.

     Long-term  gain on sale of Section 1231  property is taxed as follows:  (i)
the excess of accelerated depreciation over straight-line  depreciation is taxed
at  ordinary  income  rates,  (ii) to the  extent  that any other  gain would be
treated as ordinary income if the property were  depreciable  personal  property
rather than depreciable  real property,  at a maximum rate of 25%, and (iii) the
balance at a maximum rate of 20%.
 
     Set forth below are the Managing General  Partner's  estimates of the total
taxable gain for Federal income tax purposes, and the allocations thereof, which
will result if the proposed  sale of the  Property to the Buyer is  consummated,
based on an assumed  closing date of November 30, 1998.  These  estimates do not
include any amounts relating to Partnership  operations prior to the sale of the
Property or relating to dissolution of the Partnership.  These estimates are not
the subject of an opinion of counsel.

                                       16



                                    Portion
                    Total           Taxed As       Portion        Portion
                    Estimated       Ordinary       Taxed At       Taxed At
                    Gain            Income         25% Rate       20% Rate

Limited Partners    $2,677,000      $    0        $2,677,000      $    0

General Partners        27,000           0            27,000           0

Total               $2,704,000      $    0        $2,704,000      $    0

Per Unit               $296.72      $    0           $296.72      $    0

     Because of different methods of depreciation used for California income tax
purposes than for Federal  income tax  purposes,  the Managing  General  Partner
anticipates that  consummation of the proposed  transaction would produce a gain
for California income tax purposes in the amount of approximately $1,971,000, of
which  approximately  $20,000 and  $1,951,000  would be allocated to the General
Partners and to the Limited Partners, respectively.

Dissolution of the Partnership

     Section 18.1(e) of the Partnership  Agreement provides that the Partnership
shall be dissolved upon the sale of all lodging  properties or interests therein
and the conversion  into cash of any proceeds of sale  originally  received in a
form other than cash.

     If the  proposal  is  approved  by a  majority-in-interest  of the  Limited
Partners,  and  if the  proposed  sale  of  the  Property  is  consummated,  the
Partnership  will be dissolved,  the Managing  General  Partner will commence to
wind up the business of the  Partnership,  and after  payment of all expenses of
the  Partnership   (including  the  expense  of  a  final   accounting  for  the
Partnership)  the remaining cash reserves of the Partnership will be distributed
in accordance  with the provisions of the  Partnership  Agreement.  The Managing
General  Partner will then take all necessary  steps toward  termination  of the
Partnership's Certificate of Limited Partnership.
 
                   APPRAISAL OF THE PROPERTY/FAIRNESS OPINION

     The  appraisal  of the Property and the  fairness  opinion  respecting  the
proposed  transaction  with the  Buyer  were  prepared  by PKF  Consulting,  San
Francisco,  California.  PKF  Consulting  was selected by the  Managing  General
Partner based on the Managing  General  Partner's  belief as to the expertise of
PKF Consulting in appraising  motel properties in the State of California and in
rendering  fairness  opinions  with  respect to the sale  thereof.  The Managing
General Partner's belief is based on past experience with PKF Consulting,  which
rendered  appraisals  of the  Property  and  the  properties  of the  other  GMS
Partnerships  in  1988,  on  its  knowledge  of  the  lodging  industry,  and on
recommendations  from others in the lodging  industry,  including  attorneys and
accountants.  PKF Consulting also prepared appraisals of the motel properties of
the other GMS  Partnerships.  PKF  Consulting  was  instructed  to  prepare  its
appraisals  based on the assumption that the Property was to be sold on the open
market to  knowledgeable  buyers and that there  would be no  pressure to make a
quick sale.  PKF  Consulting was not advised that an affiliate of Mark Grotewohl
would be a potential buyer of the Property.  No limitations  were imposed by the

                                       17


Partnership on the appraiser's investigation. PKF Consulting delivered a written
report,  dated February 20, 1998,  which stated that the "as is" market value of
the Property as of January 1, 1998 was $4,100,000. PKF Consulting also delivered
its  written  fairness  opinion,  dated May 19,  1998,  to the  effect  that the
proposed  transaction  with the  Buyer is fair and  equitable  from a  financial
standpoint  to the  Limited  Partners.  The amount  offered by the Buyer for the
Property  is based  upon,  and is equal to,  the  market  value set forth in the
appraisals.

     Other than with  respect to the  rendering  of the  appraisal  reports  and
fairness opinions referred to above, during the past two years there has been no
material  relationship  between  PKF  Consulting  and  the  Partnership  or  its
affiliates.  PKF Consulting  received a total of approximately  $49,000 from the
Partnership  and the other GMS  Partnerships in connection with the rendering of
such appraisal reports and fairness opinions.

     PKF Consulting is an international firm of management consultants, industry
specialists,  and  appraisers  who  provide  a wide  range  of  services  to the
hospitality,   real  estate,  and  tourism  industries.   Headquartered  in  San
Francisco,  PKF  Consulting  has  offices  in New York,  Philadelphia,  Atlanta,
Boston, Houston, Los Angeles,  Washington,  D.C., and abroad. As a member of the
Pannell Kerr Forster International Association, PKF Consulting has access to the
resources of one of the world's largest  accounting and consulting  firms,  with
300 offices in 90 countries.

     The services  offered by PKF  Consulting  include:  market and  feasibility
studies;   real  estate   appraisals  and  business   valuations;   tourism  and
recreational studies; strategic planning; operational reviews; asset management;
chain  and  management  company  selection;  real  estate  consulting  services;
financial  consulting;  and litigation  support,  expert witness and arbitration
services.

     The following is excerpted from the appraisal reports:

     "The  scope  of  this  appraisal   included  a  detailed  analysis  of  the
competitive market position of each of the eight properties.  More specifically,
the market analysis for each property included the following work program.

     1)  In-depth  analysis  of the  historical  operating  performance  of each
property.

     2) Detailed  inspection of each property,  focused on identifying  areas of
deferred maintenance and/or functional obsolescence.

     3) Evaluation of the economic  environment of each property's local market,
focusing on  economic  factors  which  impact the demand for hotel rooms such as
changes in employment, office space absorption, airport utilization,  attendance
at tourist attractions and convention facilities, etc.

     4) Primary market research in each market area,  including  interviews with
key demand  generators,  inspection  and  evaluation of  competitive  hotels and
discussions  with persons  familiar with the development  patterns of each local
market.

     5)  Analysis of each  property's  future  market  position.  This  analysis
included a projection of the current and future demand for hotel  accommodations
in each  market,  including  an  assessment  of existing  and  potential  future

                                       18

competitive supply, and the share of the market that each hotel could reasonably
be able to capture over the next five to ten years.             

     Based on the foregoing scope of work, it was concluded that the Highest and
Best Use of each property is as currently improved.

     In  developing  a  value  conclusion  for  each  hotel,  two of  the  three
traditional  approaches to valuation  have been used:  the Sales  Comparison and
Income Capitalization Approaches. In the Sales Comparison Approach, the value of
the subject properties were estimated based on an analysis of the sales of other
similar facilities using a unit indicator of price per room or multiple of rooms
revenue. In the Income  Capitalization  Approach,  the value of each property is
estimated  based on an  analysis  of the  historical  and  projected  income and
expenses generated by each facility during a typical holding period. Both direct
capitalization and yield capitalization  (discounted cash flow analysis) methods
were employed.

     The  earnings  stream  most  commonly  used as the  basis  for  the  Income
Capitalization  method of valuation is the projected net operating  income (NOI)
from  operations  after the  deduction of real estate taxes and  insurance,  but
before  the  deduction  of  interest,  depreciation,  amortization  and taxes on
income.  Also deducted from the profit from  operations is a reserve for capital
improvements for each property. The projected operating income for each property
was based on a review of local market  conditions and the  historical  operating
results of each hotel,  coupled  with an analysis  of the  historical  operating
results of  comparable  hotels as  compiled  in PKF  Consulting's  1997 issue of
'Trends in the Hotel Industry.'

     Under the direct capitalization method, the NOI for a typical or stabilized
year of  operation  is  converted  into a value  estimate  by  dividing it by an
appropriate income  capitalization  rate. The capitalization rate represents the
relationship  between  income  and value  observed  in the market and is derived
through an analysis of comparable sales as well as other analyses.

     In yield  capitalization,  the value of a property is the present  value of
the net  operating  income of each  property  in each  year of a holding  period
(typically  ten years) plus the present  value of the property as if sold at the
end of the holding period (the "reversion"). The present value of these elements
is  obtained  by  applying  a  market-derived  discount  rate.  The value of the
reversion is obtained through the  capitalization  of the adjusted income at the
end of the holding period,  which should be a normalized or typical year, with a
deduction for the costs of sale.

     In our analysis, the discount rates used to value the subject hotels ranged
from 13.0 to 14.5  percent;  going-in  capitalization  rates ranged from 10.0 to
11.5 percent;  and  reversionary  capitalization  rates ranged from 10.5 to 12.0
percent.  Differences  in the  discount  and  capitalization  rates  applied  to
individual properties were based on a combination of factors,  including the age
and  condition  of  the  hotels,  local  market  conditions,  durability  of the
projected income stream, and the ownership rights appraised (fee simple interest
or leasehold interest).

                                       19


     The Cost Approach has not been included in the estimate of the value of the
subject  properties.  The Cost  Approach is most  applicable in the valuation of
special use properties, properties which are proposed or under construction, and
aged  properties,  in which the value of the improvements may be nominal and the
value of the property as a whole approaches land value.  The subject  properties
are all going  concerns and the  existing  improvements  contribute  significant
value to the property.  The costs to replace these facilities are of little more
than historical significance and are not used by the typical investor interested
in the purchase of an existing property."

     Upon request the  Partnership  will furnish to a Limited  Partner,  without
charge,  a copy of the appraisal  report.  In this regard  Limited  Partners are
cautioned to refer to the entire appraisal  report,  inasmuch as the opinions of
value stated  therein are subject to the  assumptions  and  limiting  conditions
stated  therein.  Furthermore,  Limited  Partners should be aware that appraised
values are opinions and, as such, may not represent the realizable  value of the
Property.  Upon request, the Partnership will also furnish to a Limited Partner,
without charge, a copy of the fairness opinion.

                                LEGAL PROCEEDINGS
   
     On October  27, 1997 a complaint  was filed in the United  States  District
Court,  Eastern  District  of  California  by the  Partnership,  the  other  GMS
Partnerships,  and  the  Managing  General  Partner,  as  plaintiffs  (the  "GMS
Plaintiffs").  The complaint named as defendants Everest/Madison Investors, LLC,
Everest Lodging Investors, LLC, Everest Properties,  LLC, Everest Partners, LLC,
Everest Properties II, LLC, Everest Properties,  Inc., W. Robert Kohorst,  David
I. Lesser,  The Blackacre  Capital Group,  L.P.,  Blackacre  Capital  Management
Corp., Jeffrey B. Citrin, Ronald J. Kravit, and Stephen P. Enquist (the "Federal
Defendants").  The factual basis underlying the GMS Plaintiffs' causes of action
pertained  to tender  offers  directed  by the  Federal  Defendants  to  limited
partners of the GMS Partnerships, and to indications of interest made by certain
of the Federal  Defendants in purchasing the properties of the GMS Partnerships.
The complaint requested the following relief: (i) a declaration that each of the
Federal  Defendants  had  violated  Sections  13(d),  14(d)  and  14(e)  of  the
Securities  and Exchange  Act of 1934 (the  "Exchange  Act"),  and the rules and
regulations  promulgated by the Securities and Exchange  Commission  thereunder;
(ii) a declaration  that certain of the Federal  Defendants had violated Section
15(a) of the Exchange  Act and the rules and  regulations  thereunder;  (iii) an
order permanently  enjoining the Federal  Defendants from (a) soliciting tenders
of or accepting for purchase securities of the GMS Partnerships,  (b) exercising
any voting rights attendant to the securities  already acquired,  (c) soliciting
proxies from the limited  partners of the GMS  Partnerships,  and (d)  violating
Sections 13 or 14 of the Exchange Act or the rules and  regulations  promulgated
thereunder;  (iv) an order  enjoining  certain of the  Federal  Defendants  from
violating  Section  15(a) of the  Exchange  Act and the  rules  and  regulations
promulgated thereunder; (v) an order directing certain of the Federal Defendants
to offer to each  person who sold  securities  in the GMS  Partnerships  to such
defendants  the right to rescind  such  sale;  (vi) a  declaration  that the GMS
Partnerships  need not  provide  to the  Federal  Defendants  a list of  limited
partners  in the GMS  Plaintiffs  or any other  information  respecting  the GMS
Partnerships  which  is not  publicly  available;  and  (vii)  awarding  the GMS
Plaintiffs  reasonable  attorneys' fees, costs of suit incurred,  and such other
and further relief as the Court may deem just and proper.
    
     On October  28,  1997 a complaint  was filed in the  Superior  Court of the
State of California,  Sacramento  County by Everest Lodging  Investors,  LLC and

                                       20


Everest/Madison Investors, LLC, as plaintiffs (the "State Plaintiffs"),  against
Philip B. Grotewohl, the Managing General Partner, Kenneth M. Sanders, Robert J.
Dana,  Borel  Associates,  and  BWC  Incorporated,  as  defendants  (the  "State
Defendants"),  and the GMS Partnerships,  as nominal defendants. On November 11,
1998 the  complaint  was  amended  and Mark and David  Grotewohl  were  added as
defendants.  The State  Plaintiffs  alleged that the State  Defendants  received
unauthorized  rebates of franchise fees paid to Super 8 Motels,  Inc.,  that the
Managing  General  Partner  caused  the GMS  Partnerships  to make  unauthorized
payments  of  salaries  and  expenses,  and  reimbursements  of  expenses to the
Managing General Partner, that the Managing General Partner refused to cooperate
with  the  State   Plaintiffs'   efforts  to  buy  the  properties  of  the  GMS
Partnerships,   and  that  the  Managing  General  Partner  refused  to  provide
information required by the GMS Partnerships' governing documents and California
law.  The  Managing  General  Partner  believes  that  these   allegations  were
unjustified.  As amended,  the complaint  requested the following relief:  (i) a
declaration  that the  action  was a  proper  derivative  action;  (ii) an order
requiring the State  Defendants to discharge their  fiduciary  duties to the GMS
Partnerships  by  accepting no  kickbacks,  charging no  unauthorized  expenses,
responding  in good  faith  to the  offer  made  by an  affiliate  of the  State
Plaintiffs to purchase the  properties of the GMS  Partnerships  and  disclosing
such offers to the limited partners of the GMS Partnerships,  and delivering all
information  respecting the GMS Partnerships  requested by the State Plaintiffs;
(iii) an order  enjoining the State  Defendants  from breaching  their fiduciary
duties;  (iv)  disgorgement of profits in excess of the reasonable  value of the
services actually rendered; (v) appointment of a receiver; and (vi) an award for
compensatory  and punitive damages and, under RICO,  treble damages,  and costs,
all in an amount to be determined.
   
     On February 20,  1998,  the parties  entered  into a  settlement  agreement
pursuant to which both of the above  complaints were dismissed.  Pursuant to the
terms  of the  settlement  agreement,  the  Federal  Defendants  (excluding  The
Blackacre Capital Group, L.P.,  Blackacre Capital  Management Corp.,  Jeffrey B.
Citrin, Ronald J. Kravit and Stephen P. Enquist) agreed not to generally solicit
the acquisition of any additional  units of the GMS  Partnerships  without first
filing necessary documents with the Securities and Exchange Commission, and also
agreed to conduct any such  solicitation  in compliance  with the  provisions of
Section 14 of the Exchange Act and Regulation 14D, notwithstanding that any such
solicitation  might  otherwise  be exempt  from such  requirements.  It was also
agreed,  among other things,  that the Managing General Partner would retain, on
behalf of the GMS  Partnerships,  a real estate broker to market for sale all of
the properties of the GMS  Partnerships.  The Managing General Partner agreed to
evaluate  and consider in good faith a designee of Everest  Properties,  Inc. to
serve as the real estate broker. Further, the Managing General Partner agreed to
include in any listing  agreement  between the GMS  Partnerships  and their real
estate  broker a provision  requiring  the broker to share  one-half of the real
estate commission payable with Everest  Properties,  Inc. or its designee in the
event that Everest  Properties,  Inc. or its designee were the procuring  broker
for the property  generating the real estate  commission.  The Managing  General
Partner  also  agreed to proceed in a  commercially  reasonable  manner with the
marketing of all properties of the GMS Partnerships, and agreed to entertain all
bona fide offers, whether made for all of the properties of the GMS Partnerships
as a group,  for all of the  properties  of a particular  GMS  Partnership  as a
group, or for an individual property. The Managing General Partner agreed, by no
later than June 30, 1998, to accept for  submission  to the limited  partners of
any GMS Partnership  either (i) any bona fide offer (an  "Acceptable  Offer") to
purchase one or more of the properties of a GMS  Partnership if the offer were a
cash  offer  at a  price  equal  to 75% or more of the  appraised  value  of the
property or properties,  or (ii) any offer for a property or properties of a GMS
    
                                       21

   
Partnership on terms deemed by the Managing General Partner to be more favorable
to that GMS Partnership  than the Acceptable  Offer.  In addition,  the Managing
General Partner agreed to submit the offer for approval to the limited  partners
of the GMS Partnership and other procedures as required by the GMS Partnership's
Agreement of Limited  Partnership  and  applicable  law.  The  Managing  General
Partner  retained  the  right to  recommend  to the  limited  partners  of a GMS
Partnership rejection of any proposal if the proposed sales price were less than
the appraised  value of the property or were not payable  entirely in cash.  The
Managing General Partner also agreed that, upon the sale of a property of one of
the GMS Partnerships, the Managing General Partner would distribute promptly the
proceeds of the sale after  payment of payables and retention of reserves to pay
anticipated  expenses.  Under the  terms of the  settlement  agreement,  the GMS
Partnerships  agreed to reimburse the Everest  Defendants for certain costs, not
to exceed $60,000,  to be allocated among the GMS Partnerships.  Of this amount,
the Partnership paid $12,000.
    
     For a  discussion  of the  amendment  to  such  settlement  agreement,  see
"Outstanding Voting Securities and Voting Rights."
   
     In addition,  Fred Rosenberg,  dba Barstow Station,  Too, the Partnership's
lessor (the "Lessor") has served upon the Partnership a Demand for  Arbitration,
dated  September  24,  1998.  In the  demand,  the  Lessor  has  asked for (i) a
declaration  that  the  Partnership  is in  violation  of the  lease in that the
Partnership's  restaurant  is not open for lunch (the Lessor  alleging that this
practice is not customary for  businesses of like  character in Barstow and that
the lease  requires the  Partnership  to operate the  restaurant in such alleged
customary fashion) and that the meeting and banquet rooms are not being operated
for lunch;  (ii)  damages in an amount to be proved but  believed to be at least
$250,000.  On October 23,  1998 the  Partnership  transmitted  its answer to the
demand and the  Partnership  and the  Managing  General  Partner  transmitted  a
counterclaim  praying  for a  dismissal  of the  Lessor's  demand,  compensatory
damages for the Lessor's  breach of the implied  covenant of good faith and fair
dealing contained in the lease, a declaration that no violation of the lease has
occurred,  and  damages  equal to  reasonable  attorneys'  fees and  costs.  The
counterclaim alleges that the Lessor breached his implied covenant of good faith
and fair dealing by leasing nearby  property to the Sizzler  Restaurant and Taco
Bell,  and that the  changes in  operating  policies  were  dictated  by changed
economic  circumstances since the lease was executed more than 14 years' ago and
by the Lessor's actions in leasing nearby property to direct competitors.
    
                                       22

   
                       AMENDMENT TO PARTNERSHIP AGREEMENT

     Set forth below is the  proposed  amendment  to the  Partnership  Agreement
which is the subject of this Consent Solicitation
Statement:

     Section 22. SALE OF PROPERTY

     22.1 Sale and Disposition of Partnership Assets

     Notwithstanding  anything  contained  in this  Agreement  to the  contrary,
including Section 11.2 hereof,  the General  Partners,  for and on behalf of the
Partnership,  are hereby authorized (i) to sell the Partnership's  real property
interests,  including  its motel,  and  related  personal  property,  to Tiburon
Capital  Corporation or a nominee thereof,  including a nominee as to which Mark
Grotewohl is an Affiliate,  on the terms and conditions  outlined in the Consent
Solicitation  Statement of the Partnership  dated  _____________,  1998; (ii) to
dissolve and wind up the affairs of the  Partnership;  (iii) to  distribute  the
proceeds of the sale and any other cash held by the  Partnership  in  accordance
with this  Agreement;  (iv) to terminate  the  Partnership;  and (v) to take any
action deemed necessary or appropriate to accomplish the foregoing.

    
                                       23



                              FINANCIAL INFORMATION

Selected Partnership Financial Data

     The Partnership's book values per Unit as of December 31, 1997 and June 30,
1998 were $249.43 and $249.43, respectively.

     Following are selected  financial  data of the  Partnership  for the period
from January 1, 1993 to December 31, 1997.


                           Year Ended      Year Ended        Year Ended       Year Ended        Year Ended
                         December 31,    December 31,      December 31,     December 31,      December 31,
                              1997           1996             1995              1994             1993    
                                                                                
Guest room income          $2,458,115      $2,489,982        $2,466,338       $2,526,730        $2,458,535
Restaurant income            $690,622        $655,746          $636,141         $701,900          $775,129
Net income (loss)            $(45,074)        $14,787           $78,676         $188,470           $82,208

Per Partnership Unit:
  Cash distributions(1)        $36.80          $36.80            $36.80           $34.40            $16.00
  Net income (loss)            $(4.95)          $1.62             $8.63           $20.68             $9.02

                           December 31,     December 31,      December 31,     December 31,      December 31,
                               1997             1996              1995            1994              1993     

Total assets               $2,430,463      $2,815,123        $3,127,918       $3,411,671        $3,523,707
Long-term debt                  ----         ----               ----             ----             ----
_________
<FN>

     (1) On an annual basis, to the extent cash distributions exceed net income,
Limited  Partners  receive a return of capital  rather than a return on capital.
However,  an annual  analysis will be misleading if the Limited  Partners do not
receive their investment back upon liquidation of the Partnership. For investors
who purchased their Units directly from the Partnership, the original investment
was $1,000 per Unit, cumulative  allocations of income through December 31, 1997
were  approximately  $43.54  per  Unit,  and  cumulative  distributions  through
December 31, 1997 were  approximately  $637.70 per Unit.  Investors  who did not
purchase  Units  directly  from the  Partnership  must  consult  with  their own
advisers in this regard.
</FN>


     Management's  Discussion and Analysis of Financial Condition and Results of
Operations

     I. Fiscal Year Financial Statements

     (a) Liquidity and Capital Resources

     The Managing  General Partner  believes that the  Partnership's  liquidity,
defined as its ability to generate sufficient cash to satisfy its cash needs, is
adequate.  The  Partnership's  primary source of liquidity is its cash flow from
operations.  The  Partnership  had, as of December 31, 1997,  current  assets of
$216,599,  current liabilities of $176,765 and, therefore,  an operating reserve
of $39,834. The Managing General Partner's reserves target is 5% of the adjusted
capital contributions,  which are approximately $5,536,000. Current reserves are
below the  $276,800  reserves  target  partially  because the  Managing  General
Partner decided to pay for renovations and replacements from cash on hand rather
than by incurring debt. The reserve will be replenished during the coming fiscal
year to the extent made possible by operations.

     The Partnership's Property is currently unencumbered. Although no assurance
can be had in this  regard,  the  Managing  General  Partner  believes  that the
Partnership's  equity in its  Property  provides a potential  source of external
liquidity (through financing) in the event the Partnership's  internal liquidity
is impaired.

     During  1997,  the  Partnership   expended  $103,300  for  renovations  and
replacements,  of which  $50,387  was  capitalized.  The  expenditures  included

                                       24


$25,714  for desk  chairs,  chairs and sleep  sofas,  $19,721  for  parking  lot
repairs, $12,341 for guestroom carpet, $6,200 for security equipment, $7,478 for
lamp and ballast  upgrades,  $5,700 for roof  repairs and $7,132 for  restaurant
signage.

     During  1996,  the  Partnership   expended   $70,569  for  renovations  and
replacements,  of which  $29,643  was  capitalized.  The  expenditures  included
$11,148 for computer systems,  $9,103 for replacement chairs, $5,797 for carpet,
$5,195  for tub  refinishing,  $4,745  for  roof  repairs  and  $4,000  for pool
replastering.
 
     The  Partnership   currently  has  no  material   commitments  for  capital
expenditures.  The  Property  is in  full  operation  and  no  further  property
acquisitions or extraordinary  capital expenditures are planned. If the Property
is not sold the  Managing  General  Partner  is aware of no  material  trends or
changes with respect to the mix or relative  cost of the  Partnership's  capital
resources.  If the Property is retained  adequate working capital is expected to
be generated by motel operations.

     (b) Results of Operations

     (i) Combined Financial Results

     The following  tables  summarize the  Partnership's  operating  results for
1995, 1996 and 1997 on a combined basis. Individual hotel and restaurant results
follow in separate subsections.  The income and expense numbers in the following
tables are shown on an accrual basis and other  payments on a cash basis.  Total
expenditures  and debt  service  include  the  operating  expenses of the motel,
together with the cost of capital improvements.

                                       Average         Average
                                        Hotel           Hotel
                                      Occupancy         Room
Fiscal Year Ended:                       Rate           Rate
- ------------------------------------------------------------------

December 31, 1995                       74.9%          $60.95

December 31, 1996                       71.1%          $64.63

December 31, 1997                       68.6%          $66.30


                                            Total              Partnership
                        Total            Expenditures           Cash Flow
Fiscal Year Ended:     Revenues        and Debt Service            (1)
- -------------------------------------------------------------------------------

December 31, 1995     $3,213,820              $3,158,485           $55,335

December 31, 1996     $3,257,416              $2,961,860          $295,556

December 31, 1997     $3,250,726              $3,063,793          $186,933

     (1) While  Partnership  Cash Flow as it is used here is not an amount found
in the financial  statements,  the Managing  General Partner believes that it is
the best  indicator of the annual  change in the amount,  if any,  available for
distribution  to the Limited  Partners  because it tracks the  definition of the
term "Cash Flow" as it is used in the Partnership Agreement.  These calculations

                                       25


are reconciled to the financial statements in the following table.

     Following is a  reconciliation  of Total  Expenditures  and Debt Service as
used  above to Total  Expenses  shown on the  Statement  of  Operations  (in the
audited financial statements):

                                    1997            1996           1995
                                    -------------------------------------------
Total Expenditures and Debt Service $3,063,793      $2,961,860    $3,158,485
Net Additions to Fixed Assets          (50,387)        (29,643)     (306,084)
Depreciation and Amortization           281,791        299,764       278,574
Other Items                                 603         10,648         4,170
                                    ============================================
Total Expenses                       $3,295,800     $3,242,629    $3,135,145
                                    ============================================

     A  reconciliation  of  Partnership  Cash Flow (from the chart above) to Net
Income (Loss) as shown on the Statements of Operations (in the audited financial
statements) is as follows:

                                    1997             1996            1995 
                                    --------------------------------------------
Partnership  Cash Flow             $186,933        $295,556        $55,335
Net Additions to Fixed Assets        50,387          29,643        306,084
Depreciation  and  Amortization    (281,791)       (299,764)      (278,574)
Other Items                            (603)        (10,648)        (4,169)
                                   ============================================
Net   Income                        ($45,074)       $14,787        $78,676
                                   =============================================

     Following is a reconciliation of Partnership Cash Flow (shown above) to the
aggregate  total of Cash Flow from  Hotel  Operations  (shown in the  succeeding
subsection)  and the Total  Restaurant Net Loss (shown in the second  succeeding
subsection):

                                    1997              1996            1995
                                    --------------------------------------------
Cash Flow from Hotel Operations     $408,473          $467,476         $251,271
Total Restaurant Net Loss           (231,552)         (182,081)        (207,886)
                                    --------------------------------------------
Aggregate Cash Flow 
  from Property Operations          $176,921          285,395           43,385
Interest on Cash Reserves              6,938            9,131           11,825
Other Income (Net of Other Expenses) 
  Not Allocated to the Property        3,074            1,030              125
                                     ===========================================
Partnership Cash Flow               $186,933         $295,556          $55,335
                                     ===========================================

(ii)     Hotel Operations

     The following table summarizes the operating results of the hotel for 1997,
1996, and 1995. Total expenditures  include the operating expenses of the hotel,
together with the cost of capital  improvements and those  Partnership  expenses
properly allocable to such hotel.

                                                                 Cash Flow
                                                                    from
                           Total               Total                Hotel
Fiscal Year Ended:        Revenues         Expenditures          Operations
- -------------------------------------------------------------------------------
December 31, 1995         $2,565,636            $2,314,365            $251,271

December 31, 1996         $2,591,465            $2,123,989            $467,476

December 31, 1997         $2,553,167            $2,144,694            $408,473

     The  Partnership's  hotel  experienced  a $38,298 or 1.5% decrease in total
revenues during 1997 as compared to 1996. The decrease in average occupancy rate

                                       26


from 71.1% in 1996 to 68.6% in 1997 was  partially  offset by an increase in the
average  daily  rate  from  $64.63  in 1996 to  $66.30  in 1997.  The  occupancy
generated by the group market  segments  declined  while  occupancy by the other
market  segments  stayed  about the same.  The average  room rate for all market
segments increased due to rate increases.

     The  Partnership's  hotel  achieved  a $25,829  or 1.0%  increase  in total
revenues  during  1996 as  compared  to  1995.  The 5%  decline  in the  average
occupancy  rate was offset by the $3.68  increase in the average room rate.  The
occupancy  generated by the government and corporate  market  segments  declined
while  occupancy by the other market segments  increased.  The average room rate
for all market segments increased due to rate increases.

     The Barstow  hotel's total  expenditures  increased  $20,705 or 1.0% during
1997 as compared  to 1996.  This  included  increases  of $7,855 for  additional
billboards,  $9,139 for central  overhead  allocation,  $8,776 for travel  agent
commissions, $8,145 for legal fees and $43,879 for renovations and replacements.
These  increases  were  partially  offset by  reductions  of $34,243 in security
services.

     The Barstow hotel's total  expenditures  decreased  $190,376 or 8.2% during
1996 as  compared  to 1995.  This  decrease  is  primarily  attributable  to the
reduction in renovations and replacements. This decrease was partially offset by
increased  expenditures  of $69,170 for security  services,  of $9,858 for front
desk wages and salaries, of $8,589 in workers' compensation insurance, of $7,311
for print  advertising,  of $16,780 for  commissions and of $7,250 for appraisal
fees.

(iii)    Restaurant Operations
 
     The following table summarizes the operating  results of the restaurant for
1997, 1996, and 1995:


                                                         1997                         1996                          1995
                                                                                                            
Food Sales                                           $533,750     100.0%           $506,255     100.0%         $496,097       100.0%
Cost of Food Sales                                   (229,820)    -43.1%           (203,022)    -40.1%         (183,583)      -37.0%
                                              ----------------           --------------------           -----------------
Gross Profit from Food Sales                         $303,930      56.9%            303,233      59.9%          312,514        63.0%

Beverage Sales                                        156,871     100.0%            149,490     100.0%          140,044       100.0%
Cost of Beverages Sold                                (50,488)    -32.2%            (50,866)    -34.0%          (47,772)      -34.1%
                                              ---------------            --------------------           -----------------
Gross Profit from Beverage Sales                     $106,383      67.8%              98,624     66.0%           92,272        65.9%

                                              ----------------           --------------------           -----------------
Combined Gross Profit                                 410,313      59.4%             401,857     61.3%          404,786        63.6%
Restaurant Operating Expenses                       (641,865)     -92.9%           (583,938)    -89.0%         (612,672)      -96.3%
                                              ----------------           --------------------           -----------------

Total Restaurant Net Loss                          ($231,552)     -33.5%          $(182,081)    -27.8%        $(207,886)      -32.7%
                                              ================           ====================           =================


     The Partnership's restaurant experienced a $49,471 or 27.2% increase in its
net loss  during  1997 as  compared  to 1996.  There was an  effort to  increase
restaurant  sales,  but the costs rose  faster  than  revenue.  Holiday  Inn has
modified its standards so that the restaurant  operations can be reduced from 16
hours per day to six hours per day.  Effective February 23, 1998, the restaurant
hours were reduced to seven hours per day. Financial projections of the modified
operation  indicate that future  restaurant  operating losses will be much lower
than those experienced during the last three fiscal years.

                                       27


     The  Partnership's  restaurant  achieved a $25,805 or 12.4% decrease in its
net  loss  during  1996  as  compared  to  1995.  The  improved  performance  is
attributable  to the  elimination  of  $20,000  in  professional  fees  and some
renovations paid in the previous year.

     II. Interim Financial Statements

     (a) Liquidity and Capital Resources

     As of June 30, 1998, the Partnership's  current assets of $344,323 exceeded
its current liabilities of $186,967, providing an operating reserve of $157,356.
Cash  distributions  have been  suspended in order to replenish the  Partnership
reserves.  The  Statement  of Cash Flows for the six months  ended June 30, 1998
shows that the  Partnership  continues to generate  cash  sufficient to meet its
cash needs.

     The Partnership expended $42,580 on renovations and replacements during the
six  months  ended  June  30,  1998,  of  which  $13,970  was  capitalized.  The
expenditures  included  $8,970 for guestroom  carpet,  $5,000 for the restaurant
signs and $18,915 for roof repairs.

     (b) Results of Operations

     Total income  decreased  $55,140 or 3.3% for the first two quarters of 1998
as compared  to the first two  quarters of 1997.  Hotel room  revenue  increased
$25,987  or 2.0% due to an  increase  in the  average  room rate from  $66.11 to
$68.77,  which was  partially  offset by a decrease in the  occupancy  rate from
72.9% to 71.5%.  The decrease in occupancy was due primarily to reduced military
activity at Fort Irwin.  Restaurant  revenue decreased $80,829 or 25.3% due to a
reduction in daily operating hours from 16 to seven.
   
     Total  expenses   decreased  $64,238  or  4.0%  primarily  due  to  reduced
restaurant  costs and the  reversal in the three months ended June 30, 1998 of a
contingent  liability previously accrued during the three months ended March 31,
1998 in the amount of $100,250.  The  contingent  liability  arose from a notice
issued by the California Franchise Tax Board (the "FTB") wherein the FTB claimed
that the  Partnership  had failed to file its  required  information  income tax
returns.  Upon  establishing to the satisfaction of the FTB that the returns had
been filed, the FTB waived its notice and the Partnership  reversed the accrual.
This  reversal (in an amount equal to the accrual) also gives rise to the credit
in general and administrative expenses for the three months ended June 30, 1998.

Other Financial Information

     In 1996 the  computers  used by the  Partnership  at the  Managing  General
Partner's  offices in Sacramento  were  updated.  In the process of updating its
hardware and software,  the Managing  General  Partner  eliminated any potential
Year 2000  problem  with  respect to such  computers.  Similarly,  the  Managing
General  Partner does not  anticipate  any  material  Year 2000 problem with the
computers in use at the motel. The Managing General Partner has not investigated
and does not know whether any Year 2000  problems may arise from its third party
vendors.  Because  the  motel  is  a  "budget"  motel,  the  Partnership's  most
significant  vendors are its utility  providers and banks. To the extent banking
services,  utility  services and other goods and services are  unavailable  as a
result of Year 2000  problems  with the  computer  systems  of such  vendors  or
otherwise, the ability of the Partnership to conduct business at its motel would
be compromised. No contingency plans have been developed in this regard.
    
                                       28


     Items 304 and 305 of  Regulation  S-K  promulgated  by the  Securities  and
Exchange Commission are not applicable to the Partnership.

                                       29


                                                              







                              FINANCIAL STATEMENTS

                                       for

                         CONSENT SOLICITATION STATEMENT

                                       of

                           FAMOUS HOST LODGING V, L.P.
   
                                November __, 1998
    












                                      F-i




                          INDEX TO FINANCIAL STATEMENTS


FAMOUS HOST LODGING V, L.P.                                             Page

INDEPENDENT AUDITORS' REPORT .........................................   F-1

FINANCIAL STATEMENTS:
Balance Sheets, December 31, 1997 and 1996............................   F-2
Statements of Operations for the Years Ended
     December 31, 1997, 1996 and 1995.................................   F-3
Statements of Partners' Equity for the Years
     Ended December 31, 1997, 1996 and 1995...........................   F-4
Statements of Cash Flows for the Years Ended
     December 31, 1997, 1996 and 1995.................................   F-5
Notes to Financial Statements.........................................   F-7


Balance Sheets, June 30, 1998 and December 31, 1997 (Unaudited).......   F-12
Statements of Operations for the Three Months and Six Months
     Ended June 30, 1998 and 1997 (Unaudited).........................   F-13
Statements of Partners' Equity for the Six Months
     Ended June 30, 1998 and 1998 (Unaudited).........................   F-14
Statements of Cash Flows for the Six Months
     Ended June 30, 1998 and 1997 (Unaudited).........................   F-15
Notes to Financial Statements.........................................   F-16





                                      F-ii



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS




To the Partners
Famous Host Lodging V, L.P.

We have audited the accompanying  balance sheets of Famous Host Lodging V, L.P.,
a California  limited  partnership,  as of December  31, 1997 and 1996,  and the
related  statements of operations,  partners' equity, and cash flows for each of
the years in the three year period  ended  December 31,  1997.  These  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  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 financial  statements  referred to above present fairly, in
all material respects,  the financial position of Famous Host Lodging V, L.P. as
of December 31, 1997 and 1996,  and the results of its  operations  and its cash
flows for each of the years in the three year period ended December 31, 1997, in
conformity with generally accepted accounting principles.


VOCKER KRISTOFFERSON AND CO.


February 26, 1998
San Mateo, California


                                       F-1
e-super8/s8597fs.wp8.wpd






                           FAMOUS HOST LODGING V, L.P.
                       (A California Limited Partnership)
                                 BALANCE SHEETS
                           December 31, 1997 and 1996


                                                        ASSETS

                                                                                      1997             1996
                                                                                  ------------     --------
Current Assets:
                                                                                            
   Cash and temporary investments (Notes 1, 3, 8 and 9)                            $  146,113       $  246,283
   Accounts receivable                                                                 32,624           24,531
   Prepaid expenses                                                                    37,862           39,762
                                                                                   ----------      -----------
      Total Current Assets                                                            216,599          310,576
                                                                                    ---------       ----------

Property and Equipment (Note 2):
   Building                                                                         4,077,604        4,077,604
   Furniture and equipment                                                          1,294,151        1,253,417
   Projects in progress                                                                -                58,444
                                                                                -------------      -----------
                                                                                    5,371,755        5,389,465
   Accumulated depreciation and amortization                                        (3,190,183)      (2,917,212)
                                                                                    ----------       ----------
      Property and Equipment, Net                                                   2,181,572        2,472,253
                                                                                   ----------       ----------

Other Assets                                                                           32,294           32,294
                                                                                  -----------      -----------

             Total Assets                                                          $2,430,465       $2,815,123
                                                                                   ==========       ==========

                                           LIABILITIES AND PARTNERS' EQUITY

Current Liabilities:
   Accounts payable and accrued liabilities                                         $ 165,909       $  184,017
   Due to related parties                                                              10,856              322
                                                                                   ----------     ------------

      Total Liabilities                                                               176,765          184,339
                                                                                    ---------      -----------


Contingent Liabilities and Lease Commitments (Notes 4 and 5)

Partners' Equity:
   General Partners                                                                     3,385            3,836
   Limited Partners: 10,000 units authorized,
      9,022 units issued and outstanding                                            2,250,315        2,626,948
                                                                                    ---------       ----------
      Total Partners' Equity                                                        2,253,700        2,630,784
                                                                                    ---------       ----------

             Total Liabilities and Partners' Equity                                $2,430,465       $2,815,123
                                                                                   ==========       ==========



                 See accompanying notes to financial statements.
                                       F-2






                           FAMOUS HOST LODGING V, L.P.
                       (A California Limited Partnership)
                            STATEMENTS OF OPERATIONS



                                                                                 Years Ended December 31:
                                                                        1997              1996                1995
                                                                    ------------     ------------         ---------
Income:
                                                                                                       
   Guest room                                                        $2,458,115        $2,489,982        $2,466,338
   Restaurant                                                           690,622           655,746           636,141
   Telephone and vending                                                 55,707            65,512            54,893
   Interest                                                               6,938             9,131            11,825
   Other                                                                 39,344            37,045            44,624
                                                                   ------------       -----------        ----------
       Total Income                                                   3,250,726         3,257,416         3,213,821
                                                                    -----------        ----------        ----------


Expenses:
   Hotel and restaurant operations (Notes 4, 5 and 6)                 1,886,822         1,900,900         1,790,818
   Restaurant operations (Note 4,5 and 6)                               887,991           800,817           844,027
   General and administrative (Note 4)                                   77,356            78,787            61,637
   Depreciation and amortization (Note 2)                               281,791           299,764           278,574
   Property management fees (Note 4)                                    161,840           162,361           160,089
                                                                    -----------       -----------        ----------
       Total Expenses                                                 3,295,800         3,242,629         3,135,145
                                                                     ----------        ----------        ----------

       Net Income (Loss)                                            $   (45,074)     $    14,787       $    78,676
                                                                     ===========      ===========       ===========




Net Income (Loss) Allocable to General Partners                           $(451)            $148              $787
                                                                           =====             ====             ====

Net Income (Loss) Allocable to Limited Partners                        $(44,623)          $14,639          $77,889
                                                                       ========           =======          =======

Net Income (Loss) Per Partnership Unit (Note 1)                           $4.95             $1.62            $8.63
                                                                          =====             =====            =====

Distributions to Limited Partners Per
   Partnership Unit (Note 1)                                             $36.80            $36.80           $36.80
                                                                         ======            ======           ======




                 See accompanying notes to financial statements.
                                       F-3






                           FAMOUS HOST LODGING V, L.P.
                       (A California Limited Partnership)
                         STATEMENTS OF PARTNERS' EQUITY



                                                                                Years Ended December 31:
                                                                        1997             1996              1995
                                                                     ----------       ----------       --------
General Partners:
                                                                                                      
   Balance, beginning of year                                         $   3,836     $     3,688         $   2,901
   Net income (Loss)                                                       (451)            148               787
                                                                     -----------    ------------        ----------
       Balance, End of Year                                               3,385           3,836             3,688
                                                                     ----------     ------------        ----------


Limited Partners:
   Balance, beginning of year                                         2,626,948       2,944,319         3,198,440
   Net income (Loss)                                                    (44,623)         14,639            77,889
   Less: Cash distribution to limited partners                         (332,010)       (332,010)         (332,010)
                                                                     -----------     -----------        ----------
       Balance, End of Year                                           2,250,315       2,626,948         2,944,319
                                                                     ----------       ----------        ----------


       Total Partners' Equity                                        $2,253,700      $2,630,784        $2,948,007
                                                                     ==========      ==========        ==========





                 See accompanying notes to financial statements.
                                       F-4






                           FAMOUS HOST LODGING V, L.P.
                       (A California Limited Partnership)
                            STATEMENTS OF CASH FLOWS



                                                                                                            Years Ended December 31:
                                                                         1997             1996             1995
                                                                    ------------     ------------      --------

Cash Flows From Operating Activities:
                                                                                                      
   Received from hotel and restaurant operations                     $3,237,065       $3,255,807        $3,224,408
   Expended for hotel and restaurant operations
     and general and administrative expenses                         (2,963,719)      (2,942,661)       (2,878,610)
   Interest received                                                      8,651            8,216            11,223
                                                                   ------------     ------------       -----------
       Net Cash Provided by Operating Activities                        281,997          321,362           357,021
                                                                    -----------      -----------       -----------


Cash Flows From Investing Activities:
   Proceeds from sale of property and equipment                             230              500             3,060
   Purchases of property and equipment                                  (50,387)         (29,643)         (306,084)
                                                                     -----------     -----------        ----------
       Net Cash Used by Investing Activities                            (50,157)         (29,143)         (303,024)
                                                                     -----------     -----------        ----------


Cash Flows From Financing Activities:
   Distributions paid to limited partners                              (332,010)        (332,010)         (332,010)
                                                                      ----------      -----------        ----------
       Net Cash Used by Financing Activities                            (332,010)       (332,010)         (332,010)
                                                                      ----------      -----------        ----------


       Net Increase (Decrease) in Cash
         and Temporary Investments                                      (100,170)        (39,791)         (278,013)


Cash and Temporary Investments:
   Beginning of year                                                    246,283          286,074           564,087
                                                                     ----------      -----------        ----------

        End of Year                                                   $ 146,113       $  246,283        $  286,074
                                                                      =========       ==========        ==========




                 See accompanying notes to financial statements.
                                       F-5






                           FAMOUS HOST LODGING V, L.P.
                       (A California Limited Partnership)
                      STATEMENTS OF CASH FLOWS (Continued)



                                                                                                            Years Ended December 31:
                                                                         1997             1996             1995
                                                                     -----------       ----------       -------
Reconciliation of Net Income (Loss) to Net Cash
  Provided by Operating Activities:

                                                                                                      
   Net income (loss)                                                   $ (45,074)       $ 14,787          $ 78,676
                                                                       ----------       --------          --------

   Adjustments  to  reconcile  net  income  to 
    net cash  provided  by  operating
    activities:
       Depreciation and amortization                                    281,791          299,764           278,574
       (Gain) loss on disposition of property and equipment              59,047             (500)            4,170
       (Increase) decrease in accounts receivable                        (8,093)           6,607            21,810
       (Increase) decrease in prepaid expenses                            1,900           (3,724)            5,210
       (Increase) decrease in other assets                                 -                 -              (1,000)
       Increase (decrease) in accounts payable and
         accrued liabilities                                            (18,108)           4,106           (18,863)
       Increase (decrease) in due to related parties                     10,534              322           (11,556)
                                                                     ----------       ----------         ---------
           Total Adjustments                                            327,071          306,575           278,345
                                                                      ---------         --------         ---------

           Net Cash Provided By Operating Activities                   $281,997         $321,362          $357,021
                                                                       ========         ========          ========





                 See accompanying notes to financial statements.
                                       F-6






                           FAMOUS HOST LODGING V, L.P.
                       (A California Limited Partnership)
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - THE PARTNERSHIP

Famous Host Lodging V, L.P. is a limited partnership  organized under California
law on January 17, 1984, to acquire and/or develop and operate hotel  properties
in the State of California.  The term of the  Partnership  expires  December 31,
2023, and may be dissolved earlier under certain circumstances.  On February 13,
1991 the Partnership Agreement was amended to change the name of the Partnership
from  "Super 8 Lodging V, Ltd." to  "Famous  Host  Lodging V, L.P." The hotel in
Barstow,  California  was  opened  in  December  1985.  In 1987 the  Partnership
commenced  operation  of a family  restaurant  and cocktail  lounge  immediately
adjacent to the hotel. The Partnership grants credit to customers, substantially
all of which are local businesses.

The managing general partner is Grotewohl Management  Services,  Inc., the fifty
percent  stockholder and officer of which is Philip B.  Grotewohl.  In addition,
there is one individual associate general partner.

The net income or net loss of the  Partnership  is  allocated  1% to the General
Partners and 99% to the Limited  Partners.  Net income (loss) and  distributions
per  partnership  unit are based upon 9,022 units  outstanding.  All partnership
units are owned by the Limited Partners.

The partnership agreement requires that the Partnership maintain working capital
reserves for normal repairs, replacements,  working capital and contingencies in
an amount of at least 5% of gross  proceeds  of the public  offering of units as
adjusted for distributions of sales proceeds ($276,799 at December 31, 1997). As
of December 31, 1997, the Partnership had working capital of only $39,834 due to
capital  renovations  made during 1996 and  distributions to limited partners in
1996 and 1997.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Items  of  Partnership  income  or loss are  passed  through  to the  individual
partners for income tax purposes, along with any income tax credits.  Therefore,
no  federal  or  California  income  taxes  are  provided  for in the  financial
statements of the Partnership. At December 31, 1997, assets and liabilities on a
tax  basis  were  approximately  $750,000  lower  than  on a book  basis  due to
accelerated depreciation methods used for tax purposes.

Property and equipment are recorded at cost.  Depreciation  and amortization are
computed using the following estimated useful lives and methods:

         Description                  Methods                 Useful Lives

     Building and components      150% declining balance      10-25 years
                                  and straight-line

     Furniture and equipment      200% declining balance       4-7 years
                                  and straight-line


Costs incurred in connection with maintenance and repair are charged to expense.
Major renewals and betterments  that materially  prolong the lives of assets are
capitalized.

Long-lived assets are revised for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.  If the
sum of the expected future undiscounted cash flows is less than the carrying
amount of the asset, a loss is recognized for the difference between the fair
value and the carrying value of the asset.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect certain  reported amounts and  disclosures.  Accordingly,  actual results
could differ from those estimates.


                                       F-7




                           FAMOUS HOST LODGING V, L.P.
                       (A California Limited Partnership)
                    NOTES TO FINANCIAL STATEMENTS (Continued)


NOTE 3 - CASH AND TEMPORARY INVESTMENTS

Cash and temporary  investments  as of December 31, 1997 and 1996 consist of the
following:

                                                1997              1996
                                              --------          ------
    Cash in bank                             $  71,809          $ 57,133
    Money market accounts                       74,304            89,150
    Certificates of deposit                      -               100,000
                                              --------          --------
        Total Cash and Temporary Investments  $146,113          $246,283
                                              ========          ========


Temporary investments are recorded at cost, which approximates market value. The
Partnership  considers  temporary  investments and all highly liquid  marketable
securities  with  original  maturities  of  five  months  or  less  to  be  cash
equivalents for purposes of the statement of cash flows.

NOTE 4 - RELATED PARTY TRANSACTIONS

Property Management Fees
The General Partners,  or their  affiliates,  handle the management of the hotel
property  of the  Partnership.  The  fee for  this  service  is 5% of the  gross
revenues from Partnership  operations,  as defined in the partnership agreement,
and amounted to $161,840 in 1997, $162,361 in 1996 and $160,089 in 1995.

Subordinated Distributions to General Partners
During the Partnership's  operational stage, the General Partners are to receive
an  aggregate  of 10% of  Partnership  distributions  from  cash  available  for
distribution, of which 9% will constitute a fee for managing the Partnership and
1% will be on  account  of  their  interest  in the  income  and  losses  of the
Partnership.  These distributions are subordinated,  however, to payment to each
Limited  Partner  during  such year of  distributions  from cash  available  for
distribution  equal to a 14% per annum  non-cumulative  return  on his  adjusted
capital  contribution.  Through December 31, 1997, the Limited Partners have not
received a 14%  non-cumulative  return in any year,  therefore no  distributions
have been made or have accrued to the General Partners.

Subordinated Incentive Distributions
Under  the terms of the  partnership  agreement,  the  General  Partners  are to
receive an aggregate of 15% of  Partnership  distributions  of net proceeds from
the sale or refinancing of Partnership properties. The aggregate distribution of
15% is composed of a 14% subordinated  incentive fee as additional  compensation
for  services  rendered by the General  Partners  and the 1% on account of their
interest in the income and losses of the Partnership.  These  distributions  are
subordinated,  however,  to  net  proceeds  from  the  sale  or  refinancing  of
Partnership  properties  remaining after distribution to the Limited Partners of
any portion thereof required to cause distributions to the Limited Partners from
all  sources  to be equal  to their  capital  contributions  plus 10% per  annum
cumulative return on their adjusted capital contributions. At December 31, 1997,
the Limited Partners had not received the 10% per annum cumulative  return,  and
accordingly, no such proceeds have been distributed to the General Partners.


                                       F-8




                           FAMOUS HOST LODGING V, L.P.
                       (A California Limited Partnership)
                    NOTES TO FINANCIAL STATEMENTS (Continued)



NOTE 4 - RELATED PARTY TRANSACTIONS (Continued)

Administrative  Expenses Shared by the Partnership and Its Affiliates There
are certain administrative  expenses allocated between the Partnership and other
partnerships  managed  by the  General  Partners  and  their  affiliates.  These
expenses,  which are allocated based on usage,  are telephone,  data processing,
rent of the  administrative  office,  and  administrative  salaries.  Management
believes that the methods used to allocate  shared  administrative  expenses are
reasonable.  The  administrative  expenses  allocated  to the  Partnership  were
approximately  $230,000 in 1997,  $225,000 in 1996 and  $223,000 in 1995 and are
included  in  general  and  administrative  expenses  and hotel  and  restaurant
operations  expenses in the accompanying  statements of operations.  Included in
administrative  salaries are  allocated  amounts paid to two  employees  who are
related to Philip B.  Grotewohl,  the fifty  percent  stockholder  of  Grotewohl
Management Services, Inc. (see Note 1), the General Partner.

NOTE 5 - LEASE COMMITMENTS

The Partnership  leases 3.05 acres of land in Barstow,  California for a term of
50 years  beginning in 1984. The  Partnership  has the right to extend the lease
for three  consecutive  periods of ten years each.  The base rent  payments  are
subject  to annual  upward  or  downward  adjustments  based on  changes  in the
Consumer  Price  Index.  The  Partnership  also leases the site  adjacent to its
Barstow hotel that contains a restaurant  and lounge.  The lease  provides for a
20-year term ending  December  31, 2010 with an option to  terminate  this lease
after  termination  of the Holiday Inn license  agreement.  The option cannot be
exercised  before the tenth year of the  renewal  term and  requires  six months
written notice.

Both leases  contain  provisions  requiring the lessee to pay all property taxes
and assessments. The leases provide for payment of the excess of percentage rent
over the base rent. The  percentage  rent is 9% of the combined gross hotel room
revenues and gross restaurant and lounge sales.

Rental  expense  under  these  leases  incurred by the  Partnership  amounted to
$299,375  in 1997,  $299,569  in 1996 and  $297,167  in 1995.  Such  amounts are
included  in  hotel  and  restaurant  operations  expense  in  the  accompanying
statements of operations.

Future lease commitments at December 31, 1997, using the current minimum monthly
amounts, are as follows:


Years Ended                           Hotel Land     Restaurant
December 31:                            Lease           Lease          Total

  1998                                $  163,428    $   116,688    $   280,116
  1999                                   163,428        116,688        280,116
  2000                                   163,428        116,688        280,116
  2001                                   163,428        116,688        280,116
  2002                                   163,428        116,688        280,116
  2003-2035                            5,147,982        933,504      6,081,486
                                      ----------    -----------     ----------

Total minimum future lease payments   $5,965,122     $1,516,944     $7,482,066
                                      ==========     ==========     ==========



                                       F-9




                           FAMOUS HOST LODGING V, L.P.
                       (A California Limited Partnership)
                    NOTES TO FINANCIAL STATEMENTS (Continued)


NOTE 6 - HOTEL AND RESTAURANT OPERATING EXPENSES

The following table summarizes the major components of hotel and restaurant
operating expenses for the following years:



                                                               1997                  1996                 1995

                                                                                                    
Hotel operating expenses:
Salaries and related expenses                               $ 473,267           $   464,624            $ 448,159
Rent                                                          235,753               238,538              235,455
Franchise, advertising and reservation fees                   175,932               179,762              177,711
Utilities                                                     151,979               155,573              163,683
Allocated costs, mainly indirect salaries                     186,004               184,064              181,607
Renovations and replacements                                   52,913                40,926               77,384
Maintenance expenses                                          106,149               125,157              139,443
Property taxes                                                 63,790                65,322               61,697
Property insurance                                             43,021                41,984               39,776
Other operating expenses                                      398,014               404,950              265,903
                                                           ----------           -----------             --------

          Total hotel operating expenses                   $1,886,822            $1,900,900           $1,790,818
                                                           ==========            ==========           ==========


Restaurant operating expenses:
Salaries and related expenses                               $ 393,229           $   343,962            $ 341,357
Cost of food and beverage                                     287,070               253,888              231,355
Rent                                                           65,302                63,068               60,818
Utilities                                                      49,693                48,678               52,858
Property taxes                                                 10,504                11,551               10,307
Property insurance                                              8,595                 9,525                9,802
Other operating expenses                                       73,598                70,145              137,530
                                                            ---------            ----------             --------

           Total restaurant
              operating expenses                             $887,991              $800,817             $844,027
                                                             ========              ========             ========


NOTE 7 - COMMITMENTS

Franchise Fees
In February 1991, the Partnership  obtained a ten-year franchise  agreement with
Holiday Inns,  Inc. to operate its Barstow hotel and  restaurant  under the name
"Holiday Inn." The Partnership  pays monthly  franchise fees of 4% of gross room
revenues of the hotel and makes monthly  contributions of 1 1/2% and 1% of guest
room revenues to a marketing fund and reservation fund, respectively.

NOTE 8 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash and temporary  investments  approximates  fair value
because of the short-term maturity of those investments.


                                      F-10




                           FAMOUS HOST LODGING V, L.P.
                       (A California Limited Partnership)
                    NOTES TO FINANCIAL STATEMENTS (Continued)


NOTE 9 - CONCENTRATION OF CREDIT RISK

The Partnership  maintains its cash accounts in five commercial banks located in
California.  Accounts  at  each  bank  are  guaranteed  by the  Federal  Deposit
Insurance  Corporation  (FDIC) up to $100,000  per bank.  A summary of the total
uninsured cash balances (not reduced by  outstanding  checks) as of December 31,
1997 follows:

          Total cash in all California banks                    $177,077
          Portion insured by FDIC                               (131,674)
            Uninsured cash balance                              $ 45,403
                                                                ========

NOTE 10 - LEGAL PROCEEDINGS AND SUBSEQUENT EVENT

On October 27, 1997, a complaint was filed in the United States  District  Court
by the Managing General Partner naming as defendants  Everest/Madison Investors,
LLC,  Everest  Lodging  Investors,  LLC,  Everest  Properties  II, LLC,  Everest
Properties,  Inc., W. Robert  Kohorst,  David I. Lesser,  The Blackacre  Capital
Group, L.P.,  Blackacre Capital Management Corp.,  Jeffrey B. Citron,  Ronald J.
Kravit,  and Stephen P.  Enquist.  The  complaint  alleged  that the  defendants
violated certain  provisions of the Security and Exchange Act of 1934 and sought
injunctive and declarative relief.

On October 28, 1997, a complaint was filed in the Superior Court of the State of
California,   Sacramento   County  by  Everest   Lodging   Investors,   LLC  and
Everest/Madison Investors, LLC as plaintiffs against the General Partners of the
Partnership and four other  partnerships  which have common general  partners as
nominal defendants.  The complaint pertained to the receipt by the defendants of
franchise fees and  reimbursement of expenses,  the indications of interest made
by the plaintiffs in purchasing the  properties of the nominal  defendants,  and
the alleged  refusal of the  defendants to provide  information  required by the
terms of the Partnership's partnership agreement and California law.

On February 20, 1998, the parties  entered into a settlement  agreement and both
of the above complaints were dismissed.  Pursuant to the terms of the settlement
agreement, the General Partner has agreed to proceed with the marketing for sale
of the properties of the Partnerships,  among other things, if by June 30, 1998,
it receives an offer to purchase one or more  properties  for a cash price equal
to 75% or more of the  appraised  value.  In addition,  the General  Partner has
agreed to submit the offer for  approval to the limited  partners as required by
the  partnership  agreements  and applicable  law. The General  Partner has also
agreed that upon the sale of one or more properties,  to distribute promptly the
proceeds of the sale after  payment of payables and retention of reserves to pay
anticipated expenses. The Everest Defendants agreed not to generally solicit the
acquisition of any additional units of the Partnerships without first filing the
necessary  documents with the SEC. Under the terms of the settlement  agreement,
the  Partnerships  have agreed to reimburse the Everest  Defendants  for certain
costs not to exceed  $60,000,  to be allocated among the  Partnerships.  Of this
amount,  the Partnership  will pay  approximately  $12,000 during the year ended
December 31, 1998.


                                      F-11






                           Famous Host Lodging V, L.P.
                       (A California Limited Partnership)
                                  Balance Sheet
                       June 30, 1998 and December 31, 1997

                                                         6/30/98      12/31/97
                                                       ----------    ----------
                                     ASSETS
Current Assets:
   Cash and temporary investments                     $   275,409   $   146,113
   Accounts receivable                                     37,987        32,624
   Prepaid expenses                                        30,927        37,862
                                                       ----------    ----------
    Total current assets                                  344,323       216,599
                                                       ----------    ----------

Property and Equipment:
   Buildings                                            4,077,604     4,077,604
   Furniture and equipment                              1,308,121     1,294,151
                                                       ----------    ----------
                                                        5,385,725     5,371,755
   Accumulated depreciation                            (3,320,794)   (3,190,183)
                                                       ----------    ----------

    Property and equipment, net                         2,064,931     2,181,572
                                                       ----------    ----------

Other Assets:                                              32,294        32,294
                                                       ----------   ----------

    Total Assets                                      $ 2,441,548   $ 2,430,465
                                                       ==========    ==========

                        LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
   Accounts payable and accrued liabilities           $   186,967   $   176,765
                                                       ----------    ----------
    Total liabilities                                     186,967       176,765
                                                       ----------    ----------

Contingent Liabilities (See Note 1)

Partners' Equity:
   General Partners                                         4,224         3,385
   Limited Partners (9,022 units
    issued and outstanding)                             2,250,357     2,250,315
                                                       ----------    ----------
    Total partners' equity                              2,254,581     2,253,700
                                                       ----------    ----------

Total Liabilities and Partners' Equity                $ 2,441,548   $ 2,430,465
                                                       ==========    ==========




                                   UNAUDITED
    The accompanying notes are an integral part of the financial statements.

                                      F-12

                           Famous Host Lodging V, L.P.
                       (A California Limited Partnership)
                             Statement of Operations
                For the Six Months Ending June 30, 1998 and 1997

                            Three Months  Six Months  Three Months   Six Months
                                Ended        Ended         Ended        Ended
                               6/30/98      6/30/98       6/30/97      6/30/97
                             ----------   ----------   -----------   ----------

Income:
 Hotel room                 $   664,962  $ 1,317,738  $    587,612  $ 1,291,751
 Restaurant                     104,095      239,119       165,713      319,948
 Telephone and vending           10,949       23,943        12,429       26,909
 Interest                           857        1,649         4,118        5,810
 Other                           16,353       29,645        12,936       22,816
                             ----------   ----------   -----------   ----------
  Total Income                  797,216    1,612,094       782,808    1,667,234
                             ----------   ----------   -----------   ----------

Expenses:
 Motel operating expenses
  (Note 2)                      467,135      922,132       445,874      895,150
Restaurant operations 
  (Note 2)                      129,137      311,293       230,450      434,189
General and administrative      (68,347)      84,130        17,442       40,198
 Depreciation and
  amortization                   65,495      130,611        70,239      139,992
 Property management fees        39,527       80,045        38,707       82,920
                             ----------   ----------   -----------   ----------
  Total Expenses                632,947    1,528,211       802,712    1,592,449
                             ----------   ----------   -----------   ----------

 Net Income (Loss)          $   164,269  $    83,883  $    (19,904) $    74,785
                             ==========   ==========   ===========   ==========

Net Income (Loss) Allocable
 to General Partners             $1,643         $839         ($199)        $748
                             ==========   ==========   ===========   ==========

Net Income (Loss) Allocable
 to Limited Partners           $162,626      $83,044      ($19,705)     $74,037
                             ==========   ==========   ===========   ==========

Net Income (Loss)
 per Partnership Unit            $18.03        $9.20        ($2.18)       $8.21
                             ==========   ==========   ===========   ==========

Distribution to Limited Partners
 per Partnership Unit             $9.20       $18.40         $9.20       $18.40
                             ==========   ==========   ===========   ==========






                                   UNAUDITED
    The accompanying notes are an integral part of the financial statements.

                                      F-13

                           Famous Host Lodging V, L.P.
                       (A California Limited Partnership)
                    Statement of Changes in Partners' Equity
                For the Six Months Ending June 30, 1998 and 1997


                                                          1998          1997
                                                       ----------    ----------

General Partners:
 Balance at beginning of year                         $     3,385   $     3,836
 Net income (loss)                                            839           748
                                                       ----------    ----------
  Balance at end of period                                  4,224         4,584
                                                       ----------    ----------


Limited Partners:
 Balance at beginning of year                           2,250,315     2,626,948
 Net income (loss)                                         83,044        74,037
 Distributions to limited partners                        (83,002)     (166,005)
                                                       ----------    ----------
  Balance at end of period                              2,250,357     2,534,980
                                                       ----------    ----------

  Total Partners' Equity                              $ 2,254,581   $ 2,539,564
                                                       ==========    ==========




























                                   UNAUDITED
    The accompanying notes are an integral part of the financial statements.

                                      F-14

                           Famous Host Lodging V, L.P.
                       (A California Limited Partnership)
                             Statement of Cash Flows
                For the Six Months Ending June 30, 1998 and 1997

                                                          1998          1997
                                                       ----------    ----------
Cash flows from operating activities:
 Received from hotel and restaurant revenues          $ 1,605,082   $ 1,662,323
 Expended for hotel and restaurant operation
  and general and administrative expenses              (1,380,463)   (1,421,142)
 Interest received                                          1,649         5,379
                                                       ----------    ----------
   Net cash provided (used) by operating activities       226,268       246,560
                                                       ----------    ----------
Cash flows from investing activities:
 Purchases of property and equipment                      (13,970)      (27,818)
 Proceeds from sale of equipment                             -              230
                                                       ----------    ----------
   Net cash provided (used) by investing activities       (13,970)      (27,588)
                                                       ----------    ----------
Cash flows from financing activities:
 Distributions paid to limited partners                   (83,002)     (166,005)
                                                       ----------    ----------
   Net cash provided (used) by operating activities       (83,002)     (166,005)
                                                       ----------    ----------
   Net increase (decrease) in cash
     and temporary investments                            129,296        52,967

   Cash and Temporary Investments:
      Beginning of year                                   146,113       246,283
                                                       ----------    ----------

         End of Period                                $   275,409   $   299,250
                                                       ==========    ==========

Reconciliation  of net income  (loss) to net cash  provided  (used) by operating
activities:

 Net income (loss)                                    $    83,883   $    74,785
                                                       ----------    ----------
 Adjustments to reconcile net income to net cash used by operating activities:
   Depreciation and amortization                          130,611       139,992
   (Gain) loss on disposition of
    property and equipment                                   -             (230)
   (Increase) decrease in accounts receivable              (5,363)          468
   (Increase) decrease in prepaid expenses                  6,935         3,976
   Increase (decrease) in accounts payable
     and accrued liabilities                               10,202        27,569
                                                       ----------    ----------
          Total adjustments                               142,385       171,775
                                                       ----------    ----------
          Net cash provided (used) by
            operating activities                      $   226,268   $   246,560
                                                       ==========    ==========

                                   UNAUDITED
    The accompanying notes are an integral part of the financial statements.

                                      F-15

                           Famous Host Lodging V, L.P.
                       (A California Limited Partnership)
                          Notes to Financial Statements
                             June 30, 1998 and 1997

Note 1:
The attached interim financial  statements include all adjustments which are, in
the opinion of management,  necessary to a fair statement of the results for the
period presented.

Users  of  these  interim  financial  statements  should  refer  to the  audited
financial  statements  for the year  ended  December  31,  1997  for a  complete
disclosure  of  significant  accounting  policies and practices and other detail
necessary for a fair presentation of the financial statements.

In accordance  with the  partnership  agreement,  the following  information  is
presented  related to fees paid to the General  Partners or  affiliates  for the
period.

   Property Management Fees               $80,045

In February,  1991 the Partnership  terminated its franchise and its affiliation
with Super 8 Motels, Inc. and began operating as a Holiday Inn. Accordingly,  no
franchise or  advertising  fees have been paid to the General  Partners or their
affiliates for the period.

Partnership  management  fees  and  subordinated  incentive   distributions  are
contingent  in nature  and none have been  accrued or paid  during  the  current
period.

Note 2:
The following table summarizes the major components of hotel operating  expenses
for the periods reported:

                            Three Months  Six Months  Three Months   Six Months
                                Ended        Ended        Ended         Ended
                               6/30/98      6/30/98      6/30/97       6/30/97
                             ----------   ----------   -----------   ----------
Motel Operating Costs:
Salaries and related
 costs                      $   124,283  $   248,928  $   119,818   $   244,224
Rent                             64,655      126,450       57,623       123,811
Franchise, advertising and
 reservation fees                45,045       91,577       42,249        92,095
Utilities                        31,657       65,750       35,083        68,291
Allocated costs, mainly
 indirect salaries               47,755       97,516       44,313        88,423
Maintenance, repairs &
 replacements                    48,003       88,434       38,016        69,097
Property taxes                   16,024       32,049       15,870        31,741
Property insurance               10,409       21,063       12,299        23,017
Other operating expenses         79,304      150,365       80,603       154,451
                             -----------  ----------   ----------    ----------
                                467,135      922,132      445,874       895,150
                             ===========  ==========   ==========    ==========

Restaurant Operating Expenses:
Salaries and related costs       49,987      125,776       98,333       187,657
Cost of Food and Beverage        37,454       85,093       69,111       129,659
Rent                              9,369       22,895       14,914        30,543
Utilities                         7,704       16,518       12,139        22,631
Property taxes                    2,631        5,259        2,622         5,244
Property insurance                2,286        4,523        2,061         4,655
Other operating expenses         19,706       51,229       31,270        53,800
                             -----------  ----------   ----------    ----------
                                129,137      311,293      230,450       434,189
                             ===========  ==========   ==========    ==========

The following  additional material  contingencies are required to be restated in
interim reports under federal securities law: None.

                                      F-16



 
                                                                    APPENDIX 1
                  ACTION BY WRITTEN CONSENT OF LIMITED PARTNERS

                           FAMOUS HOST LODGING V, L.P.
                                  2030 J Street
                          Sacramento, California 95814
                                 (916) 442-9183

     THIS  CONSENT IS SOLICITED  ON BEHALF OF THE  PARTNERSHIP  AND THE MANAGING
GENERAL PARTNER.

     The undersigned  hereby  acknowledges  receipt of the Consent  Solicitation
Statement dated  ______________,  1998 and hereby votes all the units of limited
partnership interest of Famous Host Lodging V, L.P. (the "Partnership"), held of
record by him, her or it as follows:
   
     The  Proposal.  The  Partnership's  Certificate  and  Agreement  of Limited
Partnership will be amended to grant to the General  Partners  authority to sell
the  Partnership's  motel and  related  personal  property  to  Tiburon  Capital
Corporation, or a nominee thereof, as specifically set forth under "Amendment to
the Partnership  Agreement" on page ___ in the accompanying Consent Solicitation
Statement.

                         FOR [ ] AGAINST [ ] ABSTAIN [ ]


     This Consent, when properly executed and returned to the Partnership,  will
be voted in the manner directed herein by the undersigned limited partner. IF NO
DIRECTION IS MADE FOR THE PROPOSAL,  THIS CONSENT,  IF SO EXECUTED AND RETURNED,
WILL BE VOTED FOR THE PROPOSAL.
    
Please sign exactly        When Units are held by joint tenants, both should
as name appears below:     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
                           ___________________________________ 
                           Signature
 
                           ___________________________________ 
                           Additional signature, if held jointly
PLEASE MARK, SIGN, DATE AND
RETURN THIS
POSTPAID CONSENT CARD.


   
                                                                   APPENDIX 2
To all Limited Partners of Famous Host Lodging V, L.P.

     We are  pleased  to submit  to you the  enclosed  materials  for use in our
solicitation  of the  Limited  Partners'  approval of the  proposed  sale of the
Partnership's motel assets to Tiburon Capital Corporation.

     All of our Limited  Partners should  carefully read the enclosed  materials
and then vote for or against the proposed sale by marking, signing and returning
the enclosed ballot form in the enclosed stamped, addressed envelope.

     It must be understood that the proposed sale cannot be considered  approved
without  the  affirmative  vote of the  owners  of more than 50% of the units of
limited partnership  interest.  Therefore,  if a Limited Partner does not return
his signed ballot,  that Limited Partner will have effectively voted against the
sale.

     The  Managing  General  Partner  believes  that  this  proposed  sale at an
all-cash  price  equal  to the  full  amount  of  the  recent  appraisal  of the
Partnership's  motel would be  favorable  to the Limited  Partners and should be
approved.  It believes that this is  particularly  true in light of the national
and world-wide economic  uncertainties that have developed since the contract of
sale was made on April 30, 1998.

     The  Limited  Partners  should be aware that Mark  Grotewohl,  a son of the
owners  of  the  Managing  General  Partner,   and  a  former  employee  of  the
Partnership, will be employed by the buyer as the property manager and will have
a profits (but not a capital) interest in the buyer.

     We estimate that after we have received the required  affirmative vote, the
sale and distribution of proceeds should be completed within 45 days.

     Please  mark  the  enclosed  ballot  and  return  it to us in the  enclosed
envelope. And please call us if you have any questions.

Sincerely yours,