Investment in the Units involves certain risks. The “Risk Factors” section of this Memorandum contains a detailed discussion of the most important risks under the categories of “Business Risks,” “Partnership Organization and Offering Related Risks,” “Federal Income Tax Risks” and “Special ERISA Risks.” Please refer to those sections of the Memorandum for a more complete discussion of the risks involved in an investment in the Partnership. Included in such risks are:

Business Risks

General Risks related to the ownership and operation of real estate such as revenues from operations not being sufficient to cover operating expenses and debt service, changes in economic conditions, and improper management of particular properties. Risks related in the possible delay in sale or refinancing of properties in sufficient amounts to retire mortgage indebtedness and to provide distributions to the Partners.

Risks related to the Partnership’s use of mortgage debt, including the risk of loss of a mortgaged property through foreclosure if payments are not kept current or extensions granted.

Partnership Organization and Offering Related Risks:

Risks related to the total reliance on the General Partners for the selection of properties to be purchased by the Partnership and the management of such properties thereafter without the participation or control of the Limited Partners. The General Partners have identified potential investments project for the Partnership. Please review the “Addendum” accompanying this Memorandum for details thereof.

The risk that an investor may not be able to sell its Units, because there will be no public market for the Units and transferability is further limited by the Partnership Agreement.

The risk that if the Partnership invests in a joint venture or limited partnership there may be conflicts of interest with the other partners and the Partnership may rely on others for management decsions.

The risk that the Partnership will not have sufficient revenues from operations to pay cash distributions to Limited Partners.

Federal Income Tax Risks:

The risk that the Partnership will be classified as a corporation for federal income tax purposes, with a consequent reduction in economic benefits to investors.

The risk that tax-exempt investors will be allocated unrelated business taxable income.

The General Partners will have conflicts of interest in their management of the Partnership, including having interests that are inconsistent with those of the investors in some respects and being permitted to engage in other activities that may be in conflict with those of the Partnership, such as sponsoring other investment programs or investing in properties, without providing the benefits of such activities to the Partnership or its Limited Partners. The section of this Memorandum entitled “Conflicts of Interests” discusses the most important of these conflicts of interests and how the General Partners intend to deal with them.