Exhibit (a)(3)



July 20, 2007

TO:        UNIT HOLDERS OF DAVIDSON DIVERSIFIED REAL ESTATE II, L.P.

SUBJECT:   OFFER TO PURCHASE UNITS

Dear Unit Holder:

As  described  in  the  enclosed  Offer  to  Purchase  and  related  Letters  of
Transmittal   (the  "Offer")  the   Purchasers   named  in  the  attached  Offer
(collectively  the  "Purchasers")  are  offering  to purchase up to 244 Units of
limited partnership  interest (the "Units") in DAVIDSON  DIVERSIFIED REAL ESTATE
II, L.P. (the "Partnership") at a purchase price equal to:

                                 $8,000 per Unit

The Offer will provide you with an  opportunity  to liquidate  all, or a portion
of, your  investment in DAVIDSON  DIVERSIFIED  REAL ESTATE II, L.P.  without the
usual  transaction  costs  associated with market sales or partnership  transfer
fees. Reasons you may wish to sell your Units include:

      o     UNCERTAINTY OF PARTNERSHIP TERMINATION.  Our offer provides you with
            the  opportunity  to  receive  a  guaranteed  amount  of  money in a
            specified time period.  The general  partner has given no indication
            when the  partnership  will be  liquidating.  The  Partnership  term
            extends through December 31, 2008 and some of the mortgages come due
            in 2029! Therefore, investors may not see liquidity for some time.

      o     NO  DISTRIBUTIONS.  The Partnership has paid no distributions  since
            1997! The  Partnership  has stated that "In light of the significant
            amount due to  affiliates of the Managing  General  Partner at March
            31, 2007, it is not anticipated  that the Partnership  will make any
            distributions in the foreseeable future."

      o     ILLIQUIDITY  OF  UNITS.  The  relative   illiquidity  of  the  Units
            resulting  from the  absence of a formal  trading  market  makes the
            Units difficult to sell.

      o     NO FUTURE  IRS FILING  REQUIREMENTS.  The tax year in which you sell
            your Units will be the final year for which you will be obligated to
            file a K-1 for the  Partnership  with  your  tax  return.  This  may
            represent a reduction in costs  associated  with filing  complicated
            tax  returns.  Your  decision  to sell may have other  favorable  or
            unfavorable tax  consequences  and potential  sellers should consult
            their individual tax advisers.

      o     ELIMINATION OF RETIREMENT  ACCOUNT FEES. If you sell your Units, you
            may avoid  incurring fees for having this  investment in your IRA or
            retirement   account.   Because  many   custodians   have   transfer
            restrictions  against limited partnership units or charge additional
            fees for holding this type of asset,  many  investors are faced with
            the task of searching  for a way to avoid these fees.  Once our cash
            payment is sent directly to your retirement account, you are free to
            consolidate  your  retirement  accounts or  transfer  the funds to a
            custodian that offers lower fees.

After  carefully  reading the enclosed Offer, if you elect to tender your Units,
mail (using the  enclosed  pre-addressed,  postage  paid  envelope) or fax (then
mail) a duly completed and executed copy of the Letter of  Transmittal  (printed
on pink paper) and change of address forms, and any other documents  required by
the Letter of Transmittal, to the Depositary for the Offer at:

                         MacKenzie Patterson Fuller, LP
                               1640 School Street
                            Moraga, California 94556
                            Facsimile: (925) 631-9119

If you have any  questions or need  assistance,  please call the  Depositary  at
800-854-8357.

This Offer expires (unless extended) August 21, 2007.