Amendment No. 2
                               to
                           Agreement
                       dated March 6, 1998



          This Amendment No. 2 (the "Agreement"), dated as of
June 29, 1998, amends the agreement, dated March 6, 1998 (the
"Agreement") and as amended by Amendment No. 1 thereto, dated as
of May 20, 1998 ("Amendment No. 1"), among Presidio Capital
Corp., a corporation organized in the British Virgin Islands
("Presidio"), American Real Estate Holdings, L.P., a Delaware
limited partnership ("AREH") and Olympia Investors, L.P., a
Delaware limited partnership ("Olympia").  Capitalized terms used
herein and not otherwise defined will have the meanings ascribed
to them in the Agreement.

          The parties agree as follows:

          1.   The following proviso is hereby added to the end
of Section 5 of the Agreement:

     "; provided, however, that AREH shall have no obligation to
     cause Units of a Partnership to be voted in favor of any
     proposal otherwise covered by this Section 5 if such
     proposal (a) is made prior to the first anniversary of the
     completion of the Offer relating to such Partnership and (b)
     relates to a transaction or series of related transactions
     constituting a "roll-up transaction" (within the meaning of
     Regulation S-K, Item 901), other than a proposal for the
     conversion of such Partnership into a stand-alone (i.e., not
     part of another entity or entities), actively traded, real
     estate investment trust pursuant to Section 3(a)(10) of the
     Securities Act of 1933, where the terms and conditions of
     the transaction, or series of related transactions,
     including any related tender offer for Units or any sale or
     financing of Partnership properties, are approved, after a
     hearing upon the fairness of such terms and conditions at
     which all limited partners have the right to appear, by the
     court in connection with a settlement of the litigation
     described in Item 4, paragraph 12 of the Schedules 14D-9
     filed by HEP 85 and HEP 88 in connection with the Offers for
     Units of those Partnerships and in Item 4, paragraph 11 of
     the Schedule 14D-9 filed by HEP 86 in connection with the
     Offer for Units of HEP 86."

          2.   All references in the Agreement and in Amendment
No. 1 to "the agreement" or "this agreement" shall hereinafter be
deemed to refer to the Agreement as amended by Amendment No. 1
and by this Amendment.  Except as expressly amended by Amendment
No. 1 and hereby, the Agreement shall remain in full force and
effect as originally executed by the parties.

          3.   The provisions of Section 8.3 of the Agreement are
incorporated by reference herein as if fully set forth herein,
except that, for purposes of this Amendment, all references to
"the agreement" in said Section shall be deemed to refer to this
Amendment.

          4.   This Amendment may be executed in counterparts,
each of which shall be considered an original, but both of which
together shall constitute the same instrument.

          IN WITNESS WHEREOF, the undersigned have caused this
Amendment to be executed by their duly authorized representatives
as of the date first above written.

                              PRESIDIO CAPITAL CORP.


                              By:  /s/ Allan B. Rothschild
                                   Allan B. Rothschild,
                                   Authorized Signatory


                              OLYMPIA INVESTORS, L.P.

                              By:  Olympia-GP, Inc.


                              By:  /s/ Martin L. Hirsch
                                   Martin L. Hirsch, 
                                   Vice President




                              AMERICAN REAL ESTATE HOLDINGS, L.P.

                              By:  American Property Investors,
                              Inc.


                              By:  /s/ Martin L. Hirsch
                                   Martin L. Hirsch,
                                   Vice President