SCHEDULE 14A INFORMATION
              Proxy Statement Pursuant to Section 14(a) Securities
                              Exchange Act of 1934

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                       REAL ESTATE ASSOCIATES LIMITED III

                (Name of Registrant as Specified in Its Charter)

                              BOND PURCHASE, L.L.C.

    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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                              Bond Purchase, L.L.C.
                                 104 Armour Road
                        North Kansas City, Missouri 64116


                                                               November 27, 2001

                        NAPICO's $3 Million Distribution

Dear Fellow Limited Partner:

     NAPICO stated in a June 20, 2001, Securities and Exchange Commission filing
it mailed to you that it "...determined to distribute to the limited partners up
to $3  million  of  your  Partnership's  cash  reserves  by year  end...."  This
commitment was repeated under the heading of "Is it Necessary to Maintain a Cash
Reserve?"  in a July 26,  2001,  SEC filing that was also mailed to you.  NAPICO
filed with the SEC two  additional  communications  that it sent to the  limited
partners since July;  one on August 22 and another on October 29.  Conspicuously
absent from both letters is NAPICO's commitment to disburse the cash.

     Was  NAPICO  hoping  that  this  solicitation  would  be over  and that its
commitment would be forgotten? We expect NAPICO to live up to its promise to you
and  disburse  the 3 million  dollars  by year's  end -- 3 million  dollars  you
already have paid taxes on.

     We wanted to share with you comments we have received  from fellow  limited
partners.  The following hand written,  unsolicited comments have reinforced our
belief  that  NAPICO's  management  has been a  disaster  and  that all  limited
partners have suffered too long.

          o    Please throw out Casden and Boxenbaum et al.

          o    Sell everything now and give us our money!

          o    I want  this  Partnership  to be  sold  and  assets  paid  to the
               partners - the sooner the better.

          o    ...liquidate A.S.A.P.

          o    We would  prefer  to close  out the  Partnership.  It just  keeps
               costing  us money -- with no return.  [We  believe  this  limited
               partner is  referring to the  additional  expense  incurred  when
               preparing K1 tax information.]

          o    20 years is long enough.

          o    20 years is too long to be left holding the bag.

We could not have said it better ourselves -- 20 years is TOO long!

     In addition to the comments above,  many limited  partners told us they are
disgusted and have long since  written off this  "investment"  as  essentially a
total loss.  Consequently,  there are numerous limited partners who have not yet
decided to take any action.  We urge



those limited partners to consider the cash currently being held by NAPICO,  the
value remaining in the local limited  partnerships  owned by the Partnership and
the intrinsic value of the management contract. If you have not acted to replace
NAPICO  because you are hoping this entire sad episode  simply will go away,  we
ask that you consider Bond Purchase's history of maximizing  investor value, our
plan to maximize the value of the remaining  REAL III assets and our  commitment
to execute  our plan for the  benefit of all  limited  partners in a prudent and
timely manner.  As the  Partnership's  largest holder,  we are not interested in
continuing to allow the Partnership to languish as it has for the last 20 years.

     We are  extending  this  solicitation  until  January 15, 2002, to keep the
pressure on NAPICO to distribute the $3 million and to give all limited partners
the  opportunity  to review our  materials  and our plan to  maximize  the value
remaining in REAL III. We welcome your questions regarding our plan to:

          o    distribute the approximately 5.6 million tax paid dollars hoarded
               by  NAPICO  for over 3 years not just the 3  million  dollars  it
               claims it will distribute by year end:

          o    liquidate the partnership through third-party bidding to maximize
               the remaining value in the Partnership;

          o    reduce the management fee by 10%; and

          o    if we are successful in replacing  NAPICO as the general partner,
               we  plan  to  re-solicit  the  limited   partners  to  amend  the
               Partnership  Agreement to call for the  Partnership  to end on or
               before December 31, 2004 (the Partnership  currently stipulates a
               termination date of 2032).

     If you have not voted or are  unsure  if you have  returned  a  revocation,
please take this  opportunity to mark,  sign,  date and return the enclosed BLUE
consent form in the postage paid envelope  provided or for your  convenience you
may fax your vote toll free 1.866.470.4300.

     If you have any questions or need assistance with voting your units, please
contact  N.S.  Taylor &  Associates,  Inc. who is assisting us with this matter.
They can be reached toll free at 1.800.711.8662.

     This letter is being  mailed to limited  partners on or about  November 27,
2001. Thank you for your continued support.


                                                               Very Truly Yours,



                                                           Bond Purchase, L.L.C.


                                (form of consent)
                       Real Estate Associates Limited III
              a California Limited Partnership (the "Partnership")

                           CONSENT OF LIMITED PARTNER

          THIS CONSENT IS SOLICITED ON BEHALF OF BOND PURCHASE, L.L.C.

LIMITED PARTNERS WHO RETURN A SIGNED CONSENT BUT FAIL TO INDICATE THEIR APPROVAL
OR  DISAPPROVAL  AS TO ANY MATTER  WILL BE DEEMED TO HAVE VOTED TO APPROVE  SUCH
MATTER.  THIS  CONSENT  IS  VALID  FROM THE DATE OF ITS  EXECUTION  UNLESS  DULY
REVOKED.

  THIS CONSENT CARD WILL REVOKE ANY PREVIOUSLY EXECUTED REVOCATION OF CONSENT.

     The undersigned has received the Consent Solicitation Statement dated March
13, 2001, as amended  November 20, 2001  ("Consent  Solicitation  Statement") by
Bond Purchase,  L.L.C., a Missouri limited liability company ("Bond Purchase."),
seeking the approval by written consent of the following proposals:

(1)  the  removal  of  the  current  general  partners,   National   Partnership
Investments  Corp.,  a  California  corporation  and Coast  Housing  Investments
Associates, a California limited partnership; and

(2) the  continuation of the Partnership and the election of New G.P. as the new
general  partner of the  Partnership  (which is  conditioned  on the approval of
proposal (1) above).

Each  of  the  undersigned,  by  signing  and  returning  this  Consent,  hereby
constitutes  and  appoints  Bond  Purchase,  acting  through  its  officers  and
employees as his or her  attorney-in-fact  for the purposes of executing any and
all  documents  and taking any and all actions  required  under the  Partnership
Agreement in connection with this Consent and the Consent Solicitation Statement
or in order to  implement  an approved  proposal;  and hereby  votes all limited
partnership  interests of the  Partnership  held of record by the undersigned as
follows for the proposals set forth above,  subject to the Consent  Solicitation
Statement.

Proposal                                          FOR     AGAINST     ABSTAIN

1. Removal of General Partners                    [ ]       [ ]         [ ]

2. Continuation of the Partnership  and           [ ]       [ ]         [ ]
   election of new general partner,  New G.P.

(Please sign exactly as your name appears on the  Partnership's  records.  Joint
owners should each sign. Attorneys-in-fact, executors, administrators, trustees,
guardians,  corporation  officers or others  acting in  representative  capacity
should indicate the capacity in which they sign and should give FULL title,  and
submit appropriate evidence of authority to execute the Consent)

                                            Dated: _______________________, 2001
                                                 (Important - please fill in)

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