United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

(Mark One)
[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

               For the quarterly period ended March 31, 2004


[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934


            For the transition period from _________to _________

                         Commission file number 0-13454


                          NATIONAL PROPERTY INVESTORS 7
             (Exact name of registrant as specified in its charter)



         California                                         13-3230613
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                         Identification No.)

                   55 Beattie Place, Post Office Box 1089
                      Greenville, South Carolina 29602
                  (Address of principal executive offices)

                                 (864) 239-1000
                           (Issuer's telephone number)

<PAGE>

                         PART I - FINANCIAL INFORMATION


ITEM 1.     FINANCIAL STATEMENTS

                          NATIONAL PROPERTY INVESTORS 7

                                  BALANCE SHEET
                                   (Unaudited)
                        (in thousands, except unit data)

                                 March 31, 2004
<TABLE>
<CAPTION>

Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $ 697
   Receivables and deposits                                                     364
   Restricted escrows                                                           181
   Other assets                                                                 292
   Investment property:
       Land                                                  $ 1,094
       Buildings and related personal property                  9,921
                                                               11,015
       Less accumulated depreciation                           (7,249)        3,766
   Assets held for sale                                                       2,190
                                                                            $ 7,490
Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                          $ 27
   Tenant security deposit liabilities                                           15
   Accrued property taxes                                                        14
   Other liabilities                                                            200
   Mortgage note payable                                                      5,127
   Liabilities related to assets held for sale                                3,860

Partners' Deficit:
   General partner                                            $ (319)
   Limited partners (60,517 units
      issued and outstanding)                                  (1,434)       (1,753)
                                                                            $ 7,490


               See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

                          NATIONAL PROPERTY INVESTORS 7

                            STATEMENTS OF OPERATIONS
                                   (Unaudited)
                      (in thousands, except per unit data)

<TABLE>
<CAPTION>

                                                               Three Months Ended
                                                                    March 31,
                                                               2004          2003
                                                                          (Restated)
Revenues:
<S>                                                           <C>            <C>
   Rental income                                              $ 296          $ 333
   Other income                                                   17             16
       Total revenues                                            313            349

Expenses:
   Operating                                                      97             96
   General and administrative                                     49            112
   Depreciation                                                   94             94
   Interest                                                       93             95
   Property taxes                                                 12             12
       Total expenses                                            345            409

Loss from continuing operations                                  (32)           (60)
Income (loss) from discontinued operations                        14            (12)

Net loss                                                      $ (18)         $ (72)

Net loss allocated to general partner (1%)                        --             (1)
Net loss allocated to limited partners (99%)                     (18)           (71)

                                                              $ (18)         $ (72)

Per limited partnership unit:
  Loss from continuing operations                            $ (0.52)       $ (0.97)
  Income (loss) from discontinued operations                    0.22          (0.20)

                                                             $ (0.30)       $ (1.17)

Distributions per limited partnership unit                   $ 42.93        $ 5.37

               See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

                          NATIONAL PROPERTY INVESTORS 7

                    STATEMENT OF CHANGES IN PARTNERS' DEFICIT
                                   (Unaudited)
                        (in thousands, except unit data)
<TABLE>
<CAPTION>

                                     Limited
                                   Partnership    General     Limited
                                      Units       Partner     Partners      Total

<S>                                   <C>           <C>       <C>          <C>
Original capital contributions        60,517        $ 1       $30,259      $30,260

Partners' (deficiency) capital
   at December 31, 2003               60,517      $ (293)     $ 1,182       $ 889

Distributions to partners                 --          (26)     (2,598)      (2,624)

Net loss for the three months
   ended March 31, 2004                   --           --         (18)         (18)

Partners' deficit at
   March 31, 2004                     60,517      $ (319)     $(1,434)     $(1,753)


               See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>
                          NATIONAL PROPERTY INVESTORS 7

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                   Three Months Ended
                                                                         March 31,
                                                                     2004        2003
Cash flows from operating activities:
<S>                                                                <C>          <C>
  Net loss                                                         $ (18)       $ (72)
  Adjustments to reconcile net loss to net cash (used in)
   provided by operating activities:
     Depreciation                                                     191          530
     Amortization of loan costs                                         4           19
     Change in accounts:
      Receivables and deposits                                          9          (44)
      Other assets                                                    (63)         (51)
      Accounts payable                                               (208)          14
      Tenant security deposit liabilities                              (1)          (6)
      Accrued property taxes                                           30          102
      Other liabilities                                              (147)         (96)
      Due to affiliates                                               (72)          --
        Net cash (used in) provided by operating activities          (275)         396

Cash flows from investing activities:
  Property improvements and replacements                              (39)         (95)
  Net withdrawals from restricted escrows                              88           10
        Net cash provided by (used in) investing activities            49          (85)

Cash flows from financing activities:
  Loan costs paid                                                     (15)          --
  Payments on mortgage notes payable                                  (66)        (105)
  Distributions to partners                                        (2,624)        (329)
        Net cash used in financing activities                      (2,705)        (434)

Net decrease in cash and cash equivalents                          (2,931)        (123)

Cash and cash equivalents at beginning of period                    3,628          614

Cash and cash equivalents at end of period                         $ 697        $ 491

Supplemental disclosure of cash flow information:
  Cash paid for interest                                           $ 141        $ 430

               See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>

                          NATIONAL PROPERTY INVESTORS 7

                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

Note A - Basis of Presentation

The accompanying unaudited financial statements of National Property Investors 7
(the  "Partnership"  or  "Registrant")  have been  prepared in  accordance  with
generally accepted accounting  principles for interim financial  information and
with  the  instructions  to Form  10-QSB  and Item  310(b)  of  Regulation  S-B.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of NPI Equity Investments, Inc. (the "Managing General Partner"),
all adjustments  (consisting of normal recurring accruals)  considered necessary
for a fair  presentation  have been  included.  Operating  results for the three
month period ended March 31, 2004 are not necessarily  indicative of the results
that may be expected for the fiscal year ending  December 31, 2004.  For further
information, refer to the financial statements and footnotes thereto included in
the  Partnership's  Annual  Report on Form  10-KSB  for the  fiscal  year  ended
December 31, 2003.  The  Managing  General  Partner is an affiliate of Apartment
Investment  and  Management  Company  ("AIMCO"),  a publicly  traded real estate
investment trust.

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
the  accompanying  statement of operations  for the three months ended March 31,
2003 has been restated to reflect the operations of Patchen Place,  Northwoods I
& II and South Point  Apartments  as loss from  discontinued  operations  due to
their sales in 2003. Patchen Place was sold in October 2003 and Northwoods I and
II and South Point were sold in December 2003. In addition, The Pines of Roanoke
Apartments is included in income  (loss) from  discontinued  operations  for the
three months ended March 31, 2004 and 2003 due to its sale in April 2004.

Note B - Transactions with Affiliated Parties

The  Partnership  has no employees  and is  dependent  on the  Managing  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
Partnership  activities.  The  Partnership  Agreement  provides  for payments to
affiliates for services and as  reimbursement  of certain  expenses  incurred by
affiliates on behalf of the Partnership.

During  the three  months  ended  March 31,  2004 and  2003,  affiliates  of the
Managing  General Partner were entitled to receive 5% of gross receipts from all
of  the  Partnership's   properties  as  compensation  for  providing   property
management  services.  The  Partnership  paid to such  affiliates  approximately
$36,000  and  $92,000  for the  three  months  ended  March  31,  2004 and 2003,
respectively, which is included in operating expenses and loss from discontinued
operations.

An  affiliate  of  the  Managing  General  Partner  received   reimbursement  of
accountable  administrative  expenses  amounting  to  approximately  $26,000 and
$69,000 for the three months ended March 31, 2004 and 2003, respectively,  which
is included in general and  administrative  expenses and investment  properties.
Included in these amounts are fees related to construction  management  services
provided by an affiliate of the Managing General Partner of approximately $2,000
for both the three  months  ended  March 31,  2004 and  2003.  The  construction
management  service fees are  calculated  based on a percentage  of additions to
investment properties.

For services relating to the  administration of the Partnership and operation of
Partnership  properties,  the  Managing  General  Partner is entitled to receive
payment for  non-accountable  expenses up to a maximum of $150,000 per year from
distributions from operations,  based upon the number of Partnership units sold,
subject  to  certain   limitations.   The  Managing   General  Partner  received
approximately  $29,000 in reimbursements  for the three month period ended March
31, 2003, which is included in general and administrative expenses. No such fees
were earned during the same period in 2004.

For managing the affairs of the Partnership, the Managing General Partner of the
Partnership  is entitled to receive a  partnership  management  fee.  The fee is
equal to 4% of the  Partnership's  adjusted cash from operations,  as defined in
the Partnership  Agreement,  in any year, provided that 50% of the fee shall not
be paid until the Partnership has distributed to the limited  partners  adjusted
cash from operations in such year which is equal to 5% of the limited  partners'
adjusted invested capital, as defined,  on a non-cumulative  basis. In addition,
50% of the fee shall not be paid until the  Partnership  has  distributed to the
limited partners adjusted cash from operations in such year which is equal to 8%
of the limited partners'  adjusted  invested capital on a non-cumulative  basis.
The fee shall be paid when adjusted cash from  operations is  distributed to the
limited partners.  The Managing General Partner was not entitled to receive this
fee during the three months ended March 31, 2004 or 2003.

NPI Equity,  on behalf of the Partnership and certain  affiliated  partnerships,
has established a revolving credit facility (the  "Partnership  Revolver") to be
used to fund deferred  maintenance  and working capital needs of the Partnership
and certain other  affiliated  partnerships in the National  Property  Investors
Partnership  Series.  The maximum draw  available to the  Partnership  under the
Partnership Revolver is $500,000. Loans under the Partnership Revolver will have
a term of 365 days, be unsecured and bear interest at the prime rate plus 2% per
annum. The maturity date of any such borrowing  accelerates in the event of: (i)
the removal of NPI Equity as the managing  general  partner  (whether or not for
cause);  (ii) the sale or refinancing of a property by the Partnership  (whether
or not a borrowing under the Partnership  Revolver was made with respect to such
property);  or (iii) the liquidation of the Partnership.  At March 31, 2004, the
Partnership had no outstanding amounts due under this Partnership Revolver.

The  Partnership  insures its properties up to certain  limits through  coverage
provided by AIMCO which is  generally  self-insured  for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance  policies  obtained  by  AIMCO  from  insurers  unaffiliated  with the
Managing General Partner.  During 2004, the Partnership anticipates its cost for
insurance coverage and fees associated with policy claims administration will be
approximately  $13,000.  The  Partnership was charged  approximately  $92,000 in
2003.

Note C - Contingencies

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the  Partnership,  its Managing  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purported  to  assert  claims  on  behalf  of a class of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  that are named as nominal  defendants,  challenging,  among  other
things,  the  acquisition  of  interests  in certain  Managing  General  Partner
entities by Insignia Financial Group, Inc.  ("Insignia") and entities that were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged into AIMCO.  The plaintiffs  sought  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition, during the third quarter of 2001, a complaint (the "Heller action")
was filed  against  the same  defendants  that are named in the  Nuanes  action,
captioned  Heller v.  Insignia  Financial  Group.  On or about  August 6,  2001,
plaintiffs filed a first amended  complaint.  The Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary  duty,  unfair  competition,  conversion,  unjust  enrichment,  and
judicial dissolution.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a Court  appointed
appraiser.  An affiliate of the Managing General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval,  if it is granted, and to
provide  partners with the independent  appraisals at the time of these tenders.
The proposed  settlement also provided for the limitation of the allowable costs
which  the  Managing   General   Partner  or  its  affiliates  will  charge  the
Partnerships  in connection with this litigation and imposes limits on the class
counsel  fees and  costs in this  litigation.  On April  11,  2003,  notice  was
distributed  to  limited   partners   providing  the  details  of  the  proposed
settlement.

On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector")  filed an  appeal  seeking  to  vacate  and/or  reverse  the  order
approving the settlement and entering  judgment  thereto.  On November 24, 2003,
the Objector filed an  application  requesting the Court order AIMCO to withdraw
settlement  tender offers it had  commenced,  refrain from making further offers
pending the appeal and auction any units tendered to third  parties,  contending
that the offers did not conform  with the terms of the  Settlement.  Counsel for
the Objector (on behalf of another  investor)  had  alternatively  requested the
Court take certain  action  purportedly  to enforce the terms of the  settlement
agreement.  On December 18, 2003,  the Court heard oral  argument on the motions
and denied them both in their entirety.  On January 28, 2004, Objector filed his
opening brief in his pending  appeal.  On April 23, 2004,  the Managing  General
Partner and its  affiliates  filed a response brief in support of the settlement
and the judgment  thereto.  Plaintiffs have also filed a brief in support of the
settlement.  Objector is  scheduled  to file a reply brief no later than May 13,
2004.

On August 8, 2003 AIMCO  Properties  L.P., an affiliate of the Managing  General
Partner,  was served  with a  Complaint  in the United  States  District  Court,
District of Columbia alleging that AIMCO Properties L.P.  willfully violated the
Fair Labor Standards Act (FLSA) by failing to pay maintenance  workers  overtime
for all hours  worked in excess of forty per week.  On March 5, 2004  Plaintiffs
filed an amended complaint also naming NHP Management Company,  which is also an
affiliate  of the  Managing  General  Partner.  The  Complaint  is  styled  as a
Collective  Action  under  the FLSA and seeks to  certify  state  subclasses  in
California, Maryland, and the District of Columbia. Specifically, the plaintiffs
contend that AIMCO Properties L.P. failed to compensate  maintenance workers for
time  that they were  required  to be  "on-call".  Additionally,  the  Complaint
alleges AIMCO  Properties  L.P.  failed to comply with the FLSA in  compensating
maintenance  workers  for time that they  worked in  responding  to a call while
"on-call".  The Defendants have filed an answer to the Amended Complaint denying
the substantive allegations. Discovery is currently underway.

The  Managing  General  Partner  does  not  anticipate  that  any  costs  to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.

The  Partnership  is unaware  of any other  pending  or  outstanding  litigation
matters involving it or its investment property that are not of a routine nature
arising in the ordinary course of business.

Pursuant to a formal order of investigation received by AIMCO on March 29, 2004,
the  Central  Regional  Office of the  United  States  Securities  and  Exchange
Commission is conducting an  investigation  relating to certain  matters.  AIMCO
believes the areas of investigation  include AIMCO's  miscalculated  monthly net
rental  income  figures in third  quarter 2003,  forecasted  guidance,  accounts
payable,  rent concessions,  vendor rebates,  and capitalization of expenses and
payroll.  AIMCO is cooperating  fully.  AIMCO does not believe that the ultimate
outcome  will  have a  material  adverse  effect on its  consolidated  financial
condition or results of  operations  taken as a whole.  Similarly,  the Managing
General Partner does not believe that the ultimate  outcome will have a material
adverse effect on the Partnership's financial condition or results of operations
taken as a whole.

Note D - Subsequent Event

On April 30, 2004, the  Partnership  sold The Pines of Roanoke  Apartments to an
unrelated  third party for  approximately  $9,300,000.  After payment of closing
costs, the gain on the sale of The Pines of Roanoke Apartments was approximately
$6,566,000.  Assets  and  liabilities  of The Pines of  Roanoke  Apartments  are
classified as held for sale in the accompanying balance sheet at March 31, 2004.
The Pines of Roanoke  Apartments  had  revenues of  approximately  $370,000  and
$364,000 for the three months ended March 31, 2004 and 2003,  respectively.  The
Partnership  is  evaluating  the  proceeds,  if any,  to be  distributed  to the
partners.

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including,  without limitation:  national and local
economic  conditions;  the terms of  governmental  regulations  that  affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates;  financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest;  real estate risks, including variations of real estate values and
the general  economic  climate in local markets and  competition  for tenants in
such markets;  litigation,  including  costs  associated  with  prosecuting  and
defending  claims  and  any  adverse   outcomes,   and  possible   environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.

The Partnership's  investment  property consists of one apartment  complex.  The
following table sets forth the average occupancy of the property for each of the
three month periods ended March 31, 2004 and 2003:

                                                   Average Occupancy
                                                    2004       2003

      Fairway View II Apartments (1)                82%        92%
         Baton Rouge, Louisiana

(1)   The  Managing  General  Partner  attributes  the  decrease in occupancy at
      Fairway View II Apartments to strong  competition from new construction in
      the local market area.

The  Partnership's  financial  results  are  dependent  upon a number of factors
including  the  ability  to  attract  and  maintain  tenants  at the  investment
property,  interest  rates on  mortgage  loans,  costs  incurred  to operate the
investment  property,  general economic  conditions and weather.  As part of the
ongoing business plan of the Partnership,  the Managing General Partner monitors
the  rental  market  environment  of  its  investment  property  to  assess  the
feasibility of increasing rents,  maintaining or increasing occupancy levels and
protecting the Partnership from increases in expenses. As part of this plan, the
Managing  General Partner attempts to protect the Partnership from the burden of
inflation-related  increases in expenses by increasing  rents and  maintaining a
high overall  occupancy  level.  However,  the Managing  General Partner may use
rental  concessions  and  rental  rate  reductions  to offset  softening  market
conditions, accordingly, there is no guarantee that the Managing General Partner
will be able to sustain  such a plan.  Further,  a number of  factors  which are
outside the control of the  Partnership  such as the local economic  climate and
weather can adversely or positively impact the Partnership's financial results.

Results of Operations

The  Partnership's  net loss for the three  months ended March 31, 2004 and 2003
was approximately  $18,000 and $72,000,  respectively.  The decrease in net loss
for the three months ended March 31, 2004 is due to a decrease in total expenses
and a decrease in the loss from  discontinued  operations  partially offset by a
decrease in total revenues.

In  accordance  with  Statement of Financial  Accounting  Standards No. 144, the
accompanying  statement of operations  for the three months ended March 31, 2003
has been restated to reflect the operations of Patchen  Place,  Northwoods I and
II and South Point  Apartments as loss from  discontinued  operations due to the
sale of these  properties  during  2003.  In  addition,  The  Pines  of  Roanoke
Apartments is included in income  (loss) from  discontinued  operations  for the
three months ended March 31, 2004 and 2003 due to its sale in April 2004.

Excluding the discontinued  operations,  the Partnership's  loss from continuing
operations for the three months ended March 31, 2004 and 2003 was  approximately
$32,000  and  $60,000,  respectively.  The  decrease  in  loss  from  continuing
operations  for the three  months  ended  March 31, 2004 is due to a decrease in
total expenses partially offset by a decrease in total revenues.  Total revenues
decreased  due to a decrease in rental  income caused by a decrease in occupancy
at Fairway View II Apartments.

Total  expenses  decreased  for the three  months  ended March 31, 2004 due to a
decrease  in general and  administrative  expenses.  General and  administrative
expense decreased due to decreases in the management  reimbursements paid to the
Managing General Partner, as allowed under the Partnership Agreement, and in the
fees paid to the Managing General Partner in connection with  distributions from
operations. Included in general and administrative expenses for the three months
ended March 31, 2004 and 2003 are costs associated with the quarterly and annual
communications  with  investors  and  regulatory  agencies  and the annual audit
required by the Partnership Agreement.

Liquidity and Capital Resources

At  March  31,  2004,  the  Partnership   had  cash  and  cash   equivalents  of
approximately  $697,000  compared to  approximately  $491,000 at March 31, 2003.
Cash  and  cash  equivalents  decreased  by  approximately  $2,931,000  from the
Partnership's  year ended December 31, 2003 due to  approximately  $2,705,000 of
cash used in financing  activities  and  approximately  $275,000 of cash used in
operating activities partially offset by approximately  $49,000 of cash provided
by investing activities. Cash used in financing activities consisted of payments
of principal  made on the  mortgages  encumbering  Fairway View II and The Pines
Apartments,  distributions to partners and loan cost additions. Cash provided by
investing  activities  consisted  of the  refund of  escrows  maintained  by the
previous  mortgage  lenders  partially  offset  by  property   improvements  and
replacements.  The Partnership  invests its working capital reserves in interest
bearing accounts.

NPI Equity,  on behalf of the Partnership and certain  affiliated  partnerships,
has established a revolving credit facility (the  "Partnership  Revolver") to be
used to fund deferred  maintenance  and working capital needs of the Partnership
and certain other  affiliated  partnerships in the National  Property  Investors
Partnership  Series.  The maximum draw  available to the  Partnership  under the
Partnership Revolver is $500,000. Loans under the Partnership Revolver will have
a term of 365 days, be unsecured and bear interest at the prime rate plus 2% per
annum. The maturity date of any such borrowing  accelerates in the event of: (i)
the removal of NPI Equity as the managing  general  partner  (whether or not for
cause);  (ii) the sale or refinancing of a property by the Partnership  (whether
or not a borrowing under the Partnership  Revolver was made with respect to such
property);  or (iii) the liquidation of the Partnership.  At March 31, 2004, the
Partnership had no outstanding amounts due under this Partnership Revolver.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures required at the property to adequately maintain the physical assets
and other operating  needs of the Partnership and to comply with Federal,  state
and local  legal and  regulatory  requirements.  The  Managing  General  Partner
monitors  developments  in the area of legal and  regulatory  compliance  and is
studying  new  federal  laws,  including  the  Sarbanes-Oxley  Act of 2002.  The
Sarbanes-Oxley Act of 2002 mandates or suggests  additional  compliance measures
with regard to governance,  disclosure, audit and other areas. In light of these
changes,  the Partnership  expects that it will incur higher expenses related to
compliance,  including increased legal and audit fees. Capital  improvements for
the Partnership's property are detailed below.

Fairway View II

During  the  three  months  ended  March 31,  2004,  the  Partnership  completed
approximately  $14,000 of capital  improvements  at Fairway View II  Apartments,
consisting  primarily of floor covering and air conditioning unit  replacements.
These  improvements  were  funded  from  operating  cash flow.  The  Partnership
evaluates  the capital  improvement  needs of the  property  during the year and
currently  expects to complete  an  additional  $98,000 in capital  improvements
during the remainder of 2004.  Additional capital improvements may be considered
and will depend on the physical condition of the property as well as replacement
reserves and the anticipated cash flow generated by the property.

The Pines

During  the  three  months  ended  March 31,  2004,  the  Partnership  completed
approximately   $25,000  of  capital   improvements  at  The  Pines  Apartments,
consisting  primarily of floor covering and roof replacements and heating system
upgrades. These improvements were funded from operating cash flow. Subsequent to
March 31, 2004 the property was sold.

The additional  capital  improvements will be incurred only if cash is available
from operations or from Partnership  reserves.  To the extent that such budgeted
capital improvements are completed,  the Partnership's  distributable cash flow,
if any, may be adversely affected at least in the short term.

The  Partnership's  assets are thought to be sufficient for any near-term  needs
(exclusive  of  capital   improvements)   of  the   Partnership.   The  mortgage
indebtedness  encumbering the investment  property of  approximately  $5,127,000
matures  December  1,  2021 at  which  time the  loan is  scheduled  to be fully
amortized.

Pursuant to the Partnership Agreement,  the term of the Partnership is scheduled
to expire on December 31, 2008. Accordingly,  prior to such date the Partnership
will need to either  sell its  investment  properties  or extend the term of the
Partnership.

The Partnership  distributed the following amounts during the three months ended
March 31, 2004 and 2003 (in thousands, except per unit data):
<TABLE>
<CAPTION>

                         Three Months     Per Limited       Three Months      Per Limited
                            Ended         Partnership          Ended          Partnership
                        March 31, 2004        Unit         March 31, 2003        Unit

<S>                          <C>              <C>              <C>              <C>
Operations                   $ --             $ --             $ 329            $ 5.37
Sale proceeds (1)            2,624            42.93                --               --
                            $2,624           $42.93            $ 329            $ 5.37
</TABLE>

(1)   Proceeds from the sales of South Point and  Northwoods I and II Apartments
      in December 2003.

Future cash  distributions  will depend on the levels of net cash generated from
operations, the availability of cash reserves and the timing of debt maturities,
refinancings  and/or  property  sales.  The  Partnership's  cash  available  for
distribution is reviewed on a monthly basis. There can be no assurance, however,
that the  Partnership  will  generate  sufficient  funds from  operations  after
required capital  expenditures,  to permit further distributions to its partners
during the remainder of 2004 or subsequent periods.

Other

In addition to its indirect  ownership of the Managing  General Partner interest
in the Partnership, AIMCO and its affiliates owned 41,649.67 limited partnership
units (the "Units") in the  Partnership  representing  68.82% of the outstanding
Units at March 31,  2004.  A number of these  Units were  acquired  pursuant  to
tender offers made by AIMCO or its affiliates.  It is possible that AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unit  holders  holding a majority of the Units are  entitled to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Managing General  Partner.  As a result of its ownership of 68.82% of
the outstanding  Units,  AIMCO and its affiliates are in a position to influence
all such voting  decisions with respect to the  Partnership.  However,  DeForest
Ventures II L.P.,  from whom AIMCO IPLP,  L.P.,  an  affiliate  of the  Managing
General  Partner  and of AIMCO,  acquired  25,399  Units  (41.97% of the units),
agreed for the benefit of  non-tendering  unit  holders,  that it would vote its
Units: (i) against any increase in compensation  payable to the Managing General
Partner or to its affiliates;  and (ii) on all other matters  submitted by it or
its  affiliates,  in  proportion  to the votes cast by third party unit holders.
Except for the foregoing, no other limitations are imposed on IPLP's, AIMCO's or
any other affiliates right to vote each unit held. Although the Managing General
Partner owes fiduciary duties to the limited  partners of the  Partnership,  the
Managing  General  Partner  also  owes  fiduciary  duties  to  AIMCO as its sole
stockholder.  As a  result,  the  duties of the  Managing  General  Partner,  as
Managing General  Partner,  to the Partnership and its limited partners may come
into conflict with the duties of the Managing  General  Partner to AIMCO, as its
sole stockholder.

Critical Accounting Policies and Estimates

The financial  statements are prepared in accordance with accounting  principles
generally  accepted in the United States which require the  Partnership  to make
estimates and  assumptions.  The  Partnership  believes that of its  significant
accounting  policies,  the following may involve a higher degree of judgment and
complexity.

Impairment of Long-Lived Assets

Investment property is recorded at cost, less accumulated  depreciation,  unless
considered  impaired.  If events or  circumstances  indicate  that the  carrying
amount of a property may be impaired, the Partnership will make an assessment of
its recoverability by estimating the undiscounted  future cash flows,  excluding
interest charges, of the property.  If the carrying amount exceeds the aggregate
future cash flows,  the  Partnership  would  recognize an impairment loss to the
extent the carrying amount exceeds the fair value of the property.

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's  investment  property.  These factors include, but are not limited
to,  changes  in the  national,  regional  and  local  economic  climate;  local
conditions,  such as an oversupply of multifamily  properties;  competition from
other available  multifamily property owners and changes in market rental rates.
Any adverse changes in these factors could cause impairment of the Partnership's
assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
Rental income  attributable to leases is recognized monthly as it is earned. The
Partnership  evaluates all accounts receivable from residents and establishes an
allowance, after the application of security deposits, for accounts greater than
30 days past due on current tenants and all receivables due from former tenants.
The Partnership will offer rental concessions during particularly slow months or
in response to heavy  competition from other similar  complexes in the area. Any
concessions  given at the inception of the lease are amortized  over the life of
the lease.

ITEM 3.     CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures.  The Partnership's management,  with the
participation of the principal executive officer and principal financial officer
of the Managing  General  Partner,  who are the equivalent of the  Partnership's
principal executive officer and principal financial officer,  respectively,  has
evaluated  the  effectiveness  of  the  Partnership's  disclosure  controls  and
procedures (as such term is defined in Rules  13a-15(e) and 15d-15(e)  under the
Securities  Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this report.  Based on such  evaluation,  the principal
executive  officer  and  principal  financial  officer of the  Managing  General
Partner, who are the equivalent of the Partnership's principal executive officer
and principal  financial officer,  respectively,  have concluded that, as of the
end of such period,  the  Partnership's  disclosure  controls and procedures are
effective.

(b) Internal Control Over Financial  Reporting.  There have not been any changes
in the Partnership's  internal control over financial reporting (as such term is
defined in Rules  13a-15(f)  and  15d-15(f)  under the Exchange  Act) during the
fiscal quarter to which this report relates that have  materially  affected,  or
are reasonably likely to materially affect,  the Partnership's  internal control
over financial reporting.

                           PART II - OTHER INFORMATION


ITEM 1.     LEGAL PROCEEDINGS

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the  Partnership,  its Managing  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purported  to  assert  claims  on  behalf  of a class of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  that are named as nominal  defendants,  challenging,  among  other
things,  the  acquisition  of  interests  in certain  Managing  General  Partner
entities by Insignia Financial Group, Inc.  ("Insignia") and entities that were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged into AIMCO.  The plaintiffs  sought  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition, during the third quarter of 2001, a complaint (the "Heller action")
was filed  against  the same  defendants  that are named in the  Nuanes  action,
captioned  Heller v.  Insignia  Financial  Group.  On or about  August 6,  2001,
plaintiffs filed a first amended  complaint.  The Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary  duty,  unfair  competition,  conversion,  unjust  enrichment,  and
judicial dissolution.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a Court  appointed
appraiser.  An affiliate of the Managing General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval,  if it is granted, and to
provide  partners with the independent  appraisals at the time of these tenders.
The proposed  settlement also provided for the limitation of the allowable costs
which  the  Managing   General   Partner  or  its  affiliates  will  charge  the
Partnerships  in connection with this litigation and imposes limits on the class
counsel  fees and  costs in this  litigation.  On April  11,  2003,  notice  was
distributed  to  limited   partners   providing  the  details  of  the  proposed
settlement.

On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector")  filed an  appeal  seeking  to  vacate  and/or  reverse  the  order
approving the settlement and entering  judgment  thereto.  On November 24, 2003,
the Objector filed an  application  requesting the Court order AIMCO to withdraw
settlement  tender offers it had  commenced,  refrain from making further offers
pending the appeal and auction any units tendered to third  parties,  contending
that the offers did not conform  with the terms of the  Settlement.  Counsel for
the Objector (on behalf of another  investor)  had  alternatively  requested the
Court take certain  action  purportedly  to enforce the terms of the  settlement
agreement.  On December 18, 2003,  the Court heard oral  argument on the motions
and denied them both in their entirety.  On January 28, 2004, Objector filed his
opening brief in his pending  appeal.  On April 23, 2004,  the Managing  General
Partner and its  affiliates  filed a response brief in support of the settlement
and the judgment  thereto.  Plaintiffs have also filed a brief in support of the
settlement.  Objector is  scheduled  to file a reply brief no later than May 13,
2004.

On August 8, 2003 AIMCO  Properties  L.P., an affiliate of the Managing  General
Partner,  was served  with a  Complaint  in the United  States  District  Court,
District of Columbia alleging that AIMCO Properties L.P.  willfully violated the
Fair Labor Standards Act (FLSA) by failing to pay maintenance  workers  overtime
for all hours  worked in excess of forty per week.  On March 5, 2004  Plaintiffs
filed an amended complaint also naming NHP Management Company,  which is also an
affiliate  of the  Managing  General  Partner.  The  Complaint  is  styled  as a
Collective  Action  under  the FLSA and seeks to  certify  state  subclasses  in
California, Maryland, and the District of Columbia. Specifically, the plaintiffs
contend that AIMCO Properties L.P. failed to compensate  maintenance workers for
time  that they were  required  to be  "on-call".  Additionally,  the  Complaint
alleges AIMCO  Properties  L.P.  failed to comply with the FLSA in  compensating
maintenance  workers  for time that they  worked in  responding  to a call while
"on-call".  The Defendants have filed an answer to the Amended Complaint denying
the substantive allegations. Discovery is currently underway.

The  Managing  General  Partner  does  not  anticipate  that  any  costs  to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a) Exhibits:

                  Exhibit 3.4(a), Agreement of Limited Partnership, incorporated
                  by reference to Exhibit A to the Prospectus of the Partnership
                  dated July 5, 1978, included in the Partnership's Registration
                  Statement on Form S-11 (Reg. No. 2-599991).

                  Exhibit   3.4(b),   Amendments   to   Agreement   of   Limited
                  Partnership, incorporated by reference to the Definitive Proxy
                  Statement of the Partnership, dated July 2, 1981.

                  Exhibit   3.4(c),   Amendments   to   Agreement   of   Limited
                  Partnership, incorporated by reference to the Definitive Proxy
                  Statement of the Partnership, dated April 3, 1991.

                  Exhibit  3.4(d),   Amendments  to  the  Agreement  of  Limited
                  Partnership,   incorporated  by  reference  to  the  Statement
                  Furnished in Connection  with the  Solicitation of Consents of
                  the Partnership dated August 28, 1992.

                  Exhibit 10.25,  Purchase and Sale Contract between  Registrant
                  and Jackson Square Properties, LLC, dated February 21, 2004.

                  Exhibit 10.26, Amendment to Purchase and Sale Contract between
                  Registrant and Jackson Square Properties,  LLC dated March 23,
                  2004.

                  Exhibit 31.1,  Certification  of equivalent of Chief Executive
                  Officer   pursuant   to   Securities    Exchange   Act   Rules
                  13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002.

                  Exhibit 31.2,  Certification  of equivalent of Chief Financial
                  Officer   pursuant   to   Securities    Exchange   Act   Rules
                  13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the
                  Sarbanes-Oxley Act of 2002.

                  Exhibit  32.1,  Certification  Pursuant  to 18 U.S.C.  Section
                  1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002.

            b)    Reports on Form 8-K filed  during the quarter  ended March 31,
                  2004:

                  Current  Report on Form 8-K dated  December 30, 2003 and filed
                  on  January  13,  2004   disclosing  the  sale  of  Southpoint
                  Apartments.


<PAGE>



                                   SIGNATURES



In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.



                                    NATIONAL PROPERTY INVESTORS 7


                                    By:   NPI EQUITY INVESTMENTS, INC.
                                          Its Managing General Partner


                                    By:   /s/Martha L. Long
                                          Martha L. Long
                                          Senior Vice President


                                    By:   /s/Thomas M. Herzog
                                          Thomas M. Herzog
                                          Senior Vice President
                                          and Chief Accounting Officer


                                    Date: May 13, 2004

<PAGE>

Exhibit 31.1


                                  CERTIFICATION


I, Martha L. Long, certify that:


1.    I have reviewed this quarterly report on Form 10-QSB of National  Property
      Investors 7;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the registrant as of, and for, the periods presented in this report;

4.    The  registrant's  other  certifying  officer(s) and I are responsible for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for the registrant
      and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            registrant,  including its consolidated subsidiaries,  is made known
            to us by others  within  those  entities,  particularly  during  the
            period in which this report is being prepared;

      (b)   Evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures and presented in this report our  conclusions  about
            the effectiveness of the disclosure  controls and procedures,  as of
            the  end  of the  period  covered  by  this  report  based  on  such
            evaluation; and

      (c)   Disclosed  in this  report any change in the  registrant's  internal
            control  over   financial   reporting   that  occurred   during  the
            registrant's  most recent fiscal  quarter (the  registrant's  fourth
            fiscal  quarter in the case of an annual report) that has materially
            affected,   or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and

5.    The registrant's other certifying  officer(s) and I have disclosed,  based
      on  our  most  recent   evaluation  of  internal  control  over  financial
      reporting,  to the  registrant's  auditors and the audit  committee of the
      registrant's  board of directors  (or persons  performing  the  equivalent
      functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely affect the  registrant's  ability to
            record, process, summarize and report financial information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal control over financial reporting.

Date:  May 13, 2004

                                    /s/Martha L. Long
                                    Martha L. Long
                                    Senior  Vice  President  of  NPI  Equity
                                    Investments,  Inc.,  equivalent  of  the
                                    chief    executive    officer   of   the
                                    Partnership


<PAGE>



Exhibit 31.2


                                  CERTIFICATION


I, Thomas M. Herzog, certify that:


1.    I have reviewed this quarterly report on Form 10-QSB of National  Property
      Investors 7;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the registrant as of, and for, the periods presented in this report;

4.    The  registrant's  other  certifying  officer(s) and I are responsible for
      establishing  and  maintaining  disclosure  controls  and  procedures  (as
      defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for the registrant
      and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            registrant,  including its consolidated subsidiaries,  is made known
            to us by others  within  those  entities,  particularly  during  the
            period in which this report is being prepared;

      (b)   Evaluated the effectiveness of the registrant's  disclosure controls
            and  procedures and presented in this report our  conclusions  about
            the effectiveness of the disclosure  controls and procedures,  as of
            the  end  of the  period  covered  by  this  report  based  on  such
            evaluation; and

      (c)   Disclosed  in this  report any change in the  registrant's  internal
            control  over   financial   reporting   that  occurred   during  the
            registrant's  most recent fiscal  quarter (the  registrant's  fourth
            fiscal  quarter in the case of an annual report) that has materially
            affected,   or  is  reasonably  likely  to  materially  affect,  the
            registrant's internal control over financial reporting; and

5.    The registrant's other certifying  officer(s) and I have disclosed,  based
      on  our  most  recent   evaluation  of  internal  control  over  financial
      reporting,  to the  registrant's  auditors and the audit  committee of the
      registrant's  board of directors  (or persons  performing  the  equivalent
      functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely affect the  registrant's  ability to
            record, process, summarize and report financial information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees  who have a  significant  role in the  registrant's
            internal control over financial reporting.

Date:  May 13, 2004

                                    /s/Thomas M. Herzog
                                    Thomas M. Herzog
                                    Senior   Vice    President   and   Chief
                                    Accounting   Officer   of   NPI   Equity
                                    Investments,  Inc.,  equivalent  of  the
                                    chief    financial    officer   of   the
                                    Partnership


<PAGE>


Exhibit 32.1


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                           As Adopted Pursuant to
               Section 906 of the Sarbanes-Oxley Act of 2002



In  connection  with the  Quarterly  Report on Form 10-QSB of National  Property
Investors 7 (the  "Partnership"),  for the quarterly period ended March 31, 2004
as filed with the  Securities  and Exchange  Commission  on the date hereof (the
"Report"),  Martha L. Long, as the equivalent of the Chief Executive  Officer of
the Partnership,  and Thomas M. Herzog, as the equivalent of the Chief Financial
Officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that, to the best of his knowledge:

      (1)   The Report fully complies with the  requirements of Section 13(a) or
            15(d) of the Securities Exchange Act of 1934; and

      (2)   The  information  contained in the Report  fairly  presents,  in all
            material respects, the financial condition and results of operations
            of the Partnership.


                                           /s/Martha L. Long
                                    Name:  Martha L. Long
                                    Date:  May 13, 2004


                                           /s/Thomas M. Herzog
                                    Name:  Thomas M. Herzog
                                    Date:  May 13, 2004


This  certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley  Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

<PAGE>

                                                                   Exhibit 10.25

                           PURCHASE AND SALE CONTRACT

                                     BETWEEN

                         NATIONAL PROPERTY INVESTORS 7,

                        a California limited partnership

                                    AS SELLER

                                       AND

                         JACKSON SQUARE PROPERTIES, LLC

                   a California limited liability company

                                  AS PURCHASER

                           PINES OF ROANOKE APARTMENTS

<PAGE>

ARTICLE 1      DEFINED TERMS.................................................1

ARTICLE 2      PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT...................6

      2.1   Purchase and Sale................................................6

      2.2   Purchase Price and Deposit.......................................6

      2.3   Escrow Provisions Regarding Deposit..............................7

ARTICLE 3      FEASIBILITY PERIOD............................................8

      3.1   Feasibility Period...............................................8

      3.2   Expiration of Feasibility Period.................................8

      3.3   Conduct of Investigation.........................................9

      3.4   Purchaser Indemnification........................................9

      3.5   Property Materials..............................................10

      3.6   Property Contracts..............................................11

ARTICLE 4      TITLE........................................................11

      4.1   Title Documents.................................................11

      4.2   Survey..........................................................12

      4.3   Objection and Response Process..................................12

      4.4   Permitted Exceptions............................................13

      4.5   Existing Deed of Trust..........................................13

ARTICLE 5      CLOSING......................................................13

      5.1   Closing Date....................................................13

      5.2   Seller Closing Deliveries.......................................14

      5.3   Purchaser Closing Deliveries....................................14

      5.4   Closing Prorations and Adjustments..............................15

      5.5   Post Closing Adjustments........................................18

ARTICLE 6      REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER.......19

      6.1   Seller's Representations........................................19

      6.2   AS-IS...........................................................20

      6.3   Survival of Seller's Representations............................21

      6.4   Definition of Seller's Knowledge................................21

      6.5   Representations And Warranties Of Purchaser.....................21

ARTICLE 7      OPERATION OF THE PROPERTY....................................22

      7.1   Leases and Property Contracts...................................22

      7.2   General Operation of Property...................................22

      7.3   Liens...........................................................22

ARTICLE 8      CONDITIONS PRECEDENT TO CLOSING..............................23

      8.1   Purchaser's Conditions to Closing...............................23

      8.2   Seller's Conditions to Closing..................................23

ARTICLE 9      BROKERAGE....................................................24

      9.1   Indemnity.......................................................24

      9.2   Broker Commission...............................................24

      9.3   Broker Signature Page...........................................24

      9.4   Purchaser's Consultant..........................................25

ARTICLE 10     DEFAULTS AND REMEDIES........................................25

      10.1  Purchaser Default...............................................25

      10.2  Seller Default..................................................25

ARTICLE 11     RISK OF LOSS OR CASUALTY.....................................26

      11.1  Major Damage....................................................26

      11.2  Minor Damage....................................................26

      11.3  Repairs.........................................................27

ARTICLE 12     EMINENT DOMAIN...............................................27

      12.1  Eminent Domain..................................................27

ARTICLE 13     MISCELLANEOUS................................................27

      13.1  Binding Effect of Contract......................................27

      13.2  Exhibits And Schedules..........................................27

      13.3  Assignability...................................................27

      13.4  Binding Effect..................................................28

      13.5  Captions........................................................28

      13.6  Number And Gender Of Words......................................28

      13.7  Notices.........................................................28

      13.8  Governing Law And Venue.........................................30

      13.9  Entire Agreement................................................30

      13.10 Amendments......................................................30

      13.11 Severability....................................................30

      13.12 Multiple Counterparts/Facsimile Signatures......................30

      13.13 Construction....................................................30

      13.14 Confidentiality.................................................30

      13.15 Time Of The Essence.............................................31

      13.16 Waiver..........................................................31

      13.17 Attorneys Fees..................................................31

      13.18 Time Periods....................................................31

      13.19 1031 Exchange...................................................31

      13.20 No Personal Liability of Officers, Trustees or Directors
            of Seller's Partners............................................32

      13.21 No Exclusive Negotiations.......................................32

      13.22 ADA Disclosure..................................................32

      13.23 No Recording....................................................32

      13.24 Relationship of Parties.........................................33

      13.25 Dispute Resolution..............................................33

      13.26 AIMCO Marks.....................................................33

      13.27 Non-Solicitation of Employees...................................33

      13.28 Survival........................................................34

      13.29 Multiple Purchasers.............................................34

ARTICLE 14     LEAD-BASED PAINT DISCLOSURE..................................34

      14.1  Disclosure......................................................34

      14.2  Consent Agreement...............................................34


                           PURCHASE AND SALE CONTRACT

      THIS PURCHASE AND SALE CONTRACT  (this  "Contract")  is entered into as of
the 12th day of February,  2004 (the "Effective  Date") by and between  NATIONAL
PROPERTY  INVESTORS 7, a California  limited  partnership,  having an address at
4582 South Ulster Street Parkway, Suite 1100, Denver, Colorado 80237 ("Seller"),
and JACKSON SQUARE  PROPERTIES,  LLC, a California  limited  liability  company,
having a principal address at 500 Washington  Street,  Suite 700, San Francisco,
California 94111 ("Purchaser").

      NOW,  THEREFORE,  in  consideration  of mutual covenants set forth herein,
Seller and Purchaser hereby agree as follows:

                                    RECITALS

      A.....Seller  owns the real  estate  located  in the  County  of  Roanoke,
Virginia, as more particularly described in Exhibit A attached hereto and made a
part hereof,  and the improvements  thereon,  commonly known as Pines at Roanoke
Apartments, located at 4630 Roxbury Lane, Roanoke, Virginia 24018.

      B.....Purchaser  desires to  purchase,  and Seller  desires to sell,  such
land,  improvements and certain associated property, on the terms and conditions
set forth below.

                                  ARTICLE 1...
                                  DEFINED TERMS

1.1  Unless  otherwise  defined  herein,   any  term  with  its  initial  letter
capitalized in this Contract shall have the meaning set forth in this ARTICLE 1.

1.1.1 "ADA" shall have the meaning set forth in Section 13.22.

1.1.2 "Additional  Deposit"  shall  have the  meaning  set forth in  Section
2.2.2.

1.1.3 "AIMCO" shall have the meaning set forth in Section 14.2.

1.1.4 "AIMCO  Marks" means all words,  phrases,  slogans,  materials,  software,
proprietary systems, trade secrets, proprietary information and lists, and other
intellectual property owned or used by Seller, the Property Manager, or AIMCO in
the marketing,  operation or use of the Property (or in the marketing, operation
or use of any other properties managed by the Property Manager or owned by AIMCO
or an affiliate of either Property Manager or AIMCO).

1.1.5 [Intentionally left blank].

1.1.6 [Intentionally left blank].

1.1.7 [Intentionally left blank].

1.1.8 "Broker" shall have the meaning set forth in Section 9.1.

1.1.9  "Business  Day" means any day other than a Saturday  or Sunday or Federal
holiday  or legal  holiday  in the States of  California,  Colorado  or Texas or
Commonwealth of Virginia.

1.1.10......"Closing"  means  the  consummation  of the  purchase  and  sale and
related transactions  contemplated by this Contract in accordance with the terms
and conditions of this Contract.

1.1.11......"Closing  Date"  means  the date on which  date the  Closing  of the
conveyance of the Property is required to be held pursuant to Section 5.1.

1.1.12......"Code" shall have the meaning set forth in Section 2.3.6.

1.1.13......"Consent  Agreement" shall have the meaning set forth in Section
14.2.

1.1.14......"Consultants" shall have the meaning set forth in Section 3.1.

1.1.15......"Damage  Notice"  shall  have the  meaning  set forth in Section
11.1.

1.1.16......"Deed" shall have the meaning set forth in Section 5.2.1.

1.1.16.5 "Deed of Trust" shall have the meaning set forth in Section 4.5.

1.1.17......"Deposit"  means, to the extent actually deposited by Purchaser with
Escrow Agent, the Initial Deposit and the Additional Deposit.

1.1.18......"Escrow Agent" shall have the meaning set forth in Section 2.2.1.

1.1.19......"Excluded  Permits" means those Permits which, under applicable law,
are  nontransferable  and such other  Permits,  if any, as may be  designated as
Excluded Permits on Schedule 1.1.19.

1.1.20......"Existing Survey" shall have the meaning set forth in Section 4.2.

1.1.21......"Feasibility  Period"  shall have the  meaning  set forth in Section
3.1.

1.1.21.5 "FHA" shall have the meaning set forth in Section 13.22.

1.1.22......"Final  Response  Deadline"  shall have the meaning set forth in
Section 4.3.

1.1.23......"Fixtures  and  Tangible  Personal  Property"  means  all  fixtures,
furniture,  furnishings,  fittings, equipment,  machinery, apparatus, appliances
and other articles of tangible  personal  property located on the Land or in the
Improvements  as of the Effective Date and used or usable in connection with the
occupation  or  operation  of all or any part of the  Property,  but only to the
extent transferable. The term "Fixtures and Tangible Personal Property" does not
include  (a)  equipment  leased  by  Seller  and the  interest  of Seller in any
equipment  provided to the  Property for use, but not owned or leased by Seller,
or (b) property owned or leased by any Tenant or guest, employee or other person
furnishing  goods or services to the  Property,  or (c) property  and  equipment
owned by Seller, which in the ordinary course of business of the Property is not
used exclusively for the business,  operation or management of the Property,  or
(d) the property and equipment, if any, expressly identified in Schedule 1.1.23.

1.1.24......"General  Assignment"  shall have the  meaning  set forth in Section
5.2.3.

1.1.25......"Good Funds" shall have the meaning set forth in Section 2.2.1.

1.1.26......"Improvements"  means all buildings and improvements  located on
the Land taken "as is."

1.1.27......"Initial  Deposit"  shall have the  meaning set forth in Section
2.2.1.

1.1.28......"Land"  means all of those  certain  tracts of land  located  in the
Commonwealth of Virginia described on Exhibit A, and all rights,  privileges and
appurtenances pertaining thereto.

1.1.29......"Lease(s)"  means  the  interest  of  Seller  in and to all  leases,
subleases and other occupancy contracts, whether or not of record, which provide
for the use or occupancy of space or  facilities  on or relating to the Property
and which are in force as of the Closing Date for the applicable Property.

1.1.30......""Leases  Assignment"  shall have the  meaning  set forth in Section
5.2.4.

1.1.31......"Lender"  means Federal Home Loan Mortgage Corporation,  as assignee
of, and whose servicer is, GMAC Commercial Mortgage Corporation.

1.1.31.5  "Lender  Fees" shall mean all fees and  expenses  (including,  without
limitation,  all  prepayment  penalties  and pay-off fees) imposed or charged by
Lender or its counsel in  connection  with the Loan  Payoff,  and, to the extent
that the Loan Payoff occurs on a date other than as permitted under the Note and
Deed of Trust, any amounts of interest charged by Lender for the period from the
Closing Date to the permitted  prepayment  date, the amount of the Lender's Fees
to be determined as of the Closing Date.

1.1.31.5.5 "Liability Cap" has the meaning set forth in Section 6.3.

1.1.32......"Loan" means the  indebtedness  owing to Lender evidenced by the
Note.

1.1.33......[Intentionally left blank].

1.1.34......"Loan  Balance"  shall  have the  meaning  set forth in  Section
2.2.3.

1.1.35......"Loan Payoff" shall have the meaning set forth in Section 5.4.7.

1.1.36......"Losses" shall have the meaning set forth in Section 3.4.1.

1.1.37......"Materials" shall have the meaning set forth in Section 3.5.

1.1.38......"Miscellaneous  Property Assets" means all contract rights,  leases,
concessions,  warranties, plans, drawings and other items of intangible personal
property  relating to the  ownership  or  operation of the Property and owned by
Seller, excluding, however, (a) receivables, (b) Property Contracts, (c) Leases,
(d) Permits, (e) cash or other funds, whether in petty cash or house "banks," or
on deposit in bank accounts or in transit for deposit,  (f) refunds,  rebates or
other claims, or any interest thereon,  for periods or events occurring prior to
the Closing  Date,  (g) utility and similar  deposits,  (h)  insurance  or other
prepaid items,  (i) Seller's  proprietary  books and records,  or (j) any right,
title or interest in or to the AIMCO  Marks.  The term  "Miscellaneous  Property
Assets" also shall  include all of Seller's  rights,  if any, in and to the name
"Pines at Roanoke" as it relates  solely to use in connection  with the Property
(and not with respect to any other property owned or managed by Seller, Property
Manager, AIMCO, or their respective affiliates).

1.1.39......"Note" means that certain Multifamily Note in the original principal
amount of $4,225,000,  dated December 9, 1999, executed by Seller and payable to
the order of GMAC Commercial Mortgage Company.

1.1.40......"Objection  Deadline"  shall have the  meaning  set forth in Section
4.3.

1.1.41......"Objection  Notice"  shall have the meaning set forth in Section
4.3.
1.1.42......"Objections" shall have the meaning set forth in Section 4.3.

1.1.43......"Permits" means all licenses and permits granted by any governmental
authority having  jurisdiction over the Property owned by Seller and required in
order to own and operate the Property.

1.1.44......"Permitted  Exceptions"  shall have the meaning set forth in Section
4.4.

1.1.45......"Property"  means (a) the Land and  Improvements  and all  rights of
Seller,  if  any,  in  and to all of  the  easements,  rights,  privileges,  and
appurtenances belonging or in any way appertaining to the Land and Improvements,
(b) the  right,  if any and only to the  extent  transferable,  of Seller in the
Property  Contracts,  Leases,  Permits  (other than Excluded  Permits),  and the
Fixtures and Tangible  Personal  Property,  and (c) the  Miscellaneous  Property
Assets  owned by  Seller  which  are  located  on the  Property  and used in its
operation.

1.1.46......"Property  Contracts"  means all  contracts,  agreements,  equipment
leases, purchase orders, maintenance,  service, or utility contracts and similar
contracts,  excluding  Leases,  which  relate  to  the  ownership,  maintenance,
construction or repair and/or operation of the Property,  but only to the extent
the  assignment  of such  contract to  Purchaser  is  permitted  pursuant to the
express  terms of such  contract and not  including  (a) any national  contracts
entered into by Seller,  Property Manager, or AIMCO with respect to the Property
(i) which terminate  automatically  upon transfer of the Property by Seller,  or
(ii) which Seller, in Seller's sole discretion, elects to terminate with respect
to the Property effective as of the Closing Date, or (b) any property management
contract  for the  Property.  Property  Contracts  shall not include  forward or
similar  long-term  contracts  to purchase  electricity,  natural  gas, or other
utilities  which  contracts  shall  be  "Utility   Contracts"  governed  by  the
provisions of Section 5.4.11.

1.1.47......"Property  Contracts  Notice"  shall have the  meaning  set forth in
Section 3.6.

1.1.48......"Property  Manager"  means  the  current  property  manager  of  the
Property.

1.1.49......"Proration  Schedule"  shall have the  meaning  set forth in Section
5.4.1.

1.1.50......"Purchase  Price" means the consideration to be paid by Purchaser to
Seller for the purchase of the Property pursuant to Section 2.2.

1.1.51......"Regional  Property  Manager"  shall have the  meaning  set forth in
Section 6.4.

1.1.52......"Remediation" shall have the meaning set forth in Section  14.2.

1.1.52.5 "Report" shall have the meaning set forth in Section 14.2.

1.1.53......[Intentionally left blank]

1.1.54......"Response  Deadline" shall have the meaning set forth in Section
4.3.

1.1.55......"Response  Notice"  shall have the  meaning set forth in Section
4.3.

1.1.55.5  "Section  1031  Exchange"  shall have the meaning set forth in Section
13.19.

1.1.56......"Seller's  Indemnified Parties" shall have the meaning set forth
in Section  3.4.1

1.1.57......"Seller's  Representations"  shall have the meaning set forth in
Section 6.1.

1.1.58......"Survey" shall have the meaning ascribed thereto in Section 4.2.

1.1.59......"Survival  Period"  shall have the  meaning set forth in Section
6.3.

1.1.60......"Survival  Provisions"  shall  have  the  meaning  set  forth in
Section 13.28.

1.1.61......"Tenant"  means any person or entity  entitled to occupy any portion
of the Property under a Lease.

1.1.62......"Tenant  Deposits"  means all security  deposits,  prepaid  rentals,
cleaning fees and other  refundable  deposits and fees  collected  from Tenants,
plus any interest  accrued  thereon,  paid by Tenants to Seller  pursuant to the
Leases.  Tenant Deposits shall not include any  non-refundable  deposits or fees
paid by Tenants to Seller, either pursuant to the Leases or otherwise.

1.1.63......"Tenant  Security  Deposit Balance" shall have the meaning set forth
in Section 5.4.6.2.

1.1.64......"Terminated  Contracts"  shall  have the  meaning  set  forth in
Section 3.6.

1.1.65......"Testing" shall have the meaning set forth in Section 14.2.

1.1.66......"Third-Party   Reports"   means  any   reports,   studies  or  other
information  prepared or  compiled  for  Purchaser  by any  Consultant  or other
third-party in connection with Purchaser's investigation of the Property.

1.1.67......"Title  Commitment"  shall  have the  meaning  ascribed  thereto  in
Section 4.1.

1.1.68......"Title Documents" shall have the meaning set forth in Section 4.1.

1.1.69......"Title Insurer" shall have the meaning set forth in Section 2.2.1.

1.1.70......"Title Policy" shall have the meaning set forth in Section  4.1.

1.1.71......"Uncollected  Rents" shall have the meaning set forth in Section
5.4.6.1.

1.1.72......"Utility  Contract " shall have the meaning set forth in Section
5.4.11.

1.1.73......"Vendor  Terminations"  shall  have  the  meaning  set  forth in
Section 5.2.5.

                                  ARTICLE 2...
                PURCHASE AND SALE, PURCHASE PRICE & DEPOSIT

2.1  Purchase  and  Sale.  Seller  agrees to sell and  convey  the  Property  to
Purchaser  and  Purchaser  agrees to purchase the Property  from Seller,  all in
accordance with the terms and conditions set forth in this Contract.

2.2 Purchase Price and Deposit.  The total purchase price ("Purchase Price") for
the Property  shall be an amount equal to  $9,300,000.00,  less the Lender Fees,
which amount shall be paid by Purchaser, as follows:

2.2.1 On the Effective Date,  Purchaser shall deliver to Fidelity National Title
Company, c/o Lolly Avant, National Commercial Closing Specialist, 1900 West Loop
South, Suite 650, Houston, TX 77027, telephone 1-800-879-1677 ("Escrow Agent" or
"Title  Insurer") an initial  deposit (the "Initial  Deposit") of $100,000.00 by
wire transfer of immediately available funds ("Good Funds"). The Initial Deposit
shall be held and disbursed in accordance  with the escrow  provisions set forth
in Section 2.3.

2.2.2 On the day that the Feasibility Period expires, Purchaser shall deliver to
Escrow Agent an additional deposit (the "Additional  Deposit") of $400,000.00 by
wire by  transfer  of Good  Funds.  The  Additional  Deposit  shall  be held and
disbursed in accordance with the escrow provisions set forth in Section 2.3.

2.2.3 [Intentionally left blank].

2.2.4 The balance of the Purchase  Price for the  Property  shall be paid to and
received by Escrow Agent by wire transfer of Good Funds no later than 11:00 a.m.
(in the time zone in which Escrow Agent is located) on the Closing Date (or such
earlier  time as  required by  Seller's  lender but no more than 1 Business  Day
prior to the Closing Date).

2.3   Escrow Provisions Regarding Deposit.

2.3.1  Escrow  Agent shall hold the Deposit and make  delivery of the Deposit to
the party entitled thereto under the terms of this Contract.  Escrow Agent shall
invest the Deposit in such short-term,  high-grade securities,  interest-bearing
bank accounts,  money market funds or accounts,  bank certificates of deposit or
bank repurchase  contracts as Escrow Agent,  in its discretion,  deems suitable,
and all interest and income  thereon  shall become part of the Deposit and shall
be remitted to the party entitled to the Deposit pursuant to this Contract.

2.3.2 Escrow Agent shall hold the Deposit  until the earlier  occurrence  of (i)
the  Closing  Date,  at which  time the  Deposit  shall be applied  against  the
Purchase  Price,  or (ii) the date on which Escrow Agent shall be  authorized to
disburse  the  Deposit as set forth in  Section  2.3.3.  The tax  identification
numbers of the parties shall be furnished to Escrow Agent upon request.

2.3.3 If the Deposit has not been released  earlier in  accordance  with Section
2.3.2,  and either party makes a written demand upon Escrow Agent for payment of
the Deposit,  Escrow Agent shall give written  notice to the other party of such
demand.  If Escrow  Agent does not  receive a written  objection  from the other
party to the proposed  payment  within 5 Business  Days after the giving of such
notice,  Escrow  Agent is hereby  authorized  to make such  payment  (subject to
Purchaser's obligation under Section 3.5.2 to return all Third-Party Reports and
information and Materials provided to Purchaser as a pre-condition to the return
of the  Deposit  to  Purchaser).  If Escrow  Agent  does  receive  such  written
objection within such 5-Business Day period, Escrow Agent shall continue to hold
such amount until otherwise directed by written instructions from the parties to
this Contract or a final  judgment or  arbitrator's  decision.  However,  Escrow
Agent  shall  have the right at any time to deposit  the  Deposit  and  interest
thereon,  if any, with a court of competent  jurisdiction in the commonwealth in
which the Property is located.  Escrow  Agent shall give written  notice of such
deposit  to Seller and  Purchaser.  Upon such  deposit,  Escrow  Agent  shall be
relieved  and  discharged  of  all  further  obligations  and   responsibilities
hereunder.

2.3.4  The  parties  acknowledge  that  Escrow  Agent  is  acting  solely  as  a
stakeholder at their request and for their convenience,  that Escrow Agent shall
not be deemed to be the agent of either of the  parties  for any act or omission
on its part unless  taken or suffered in bad faith in willful  disregard of this
Contract  or  involving  gross  negligence.  Seller and  Purchaser  jointly  and
severally  shall  indemnify and hold Escrow Agent  harmless from and against all
costs, claims and expenses,  including  reasonable  attorney's fees, incurred in
connection with the performance of Escrow Agent's duties hereunder,  except with
respect to actions or omissions  taken or suffered by Escrow Agent in bad faith,
in willful  disregard of this Contract or involving gross negligence on the part
of the Escrow Agent.

2.3.5 The  parties  shall  deliver  to  Escrow  Agent an  executed  copy of this
Contract,  which shall constitute the sole instructions to Escrow Agent.  Escrow
Agent shall execute the  signature  page for Escrow Agent  attached  hereto with
respect to the  provisions  of this Section  2.3;  provided,  however,  that (a)
Escrow  Agent's  signature  hereon  shall not be a  prerequisite  to the binding
nature of this Contract on Purchaser and Seller, and the same shall become fully
effective  upon  execution by  Purchaser  and Seller,  and (b) the  signature of
Escrow Agent will not be necessary to amend any provision of this Contract other
than this Section 2.3.

2.3.6 Escrow Agent, as the person responsible for closing the transaction within
the meaning of Section  6045(e)(2)(A)  of the Internal  Revenue Code of 1986, as
amended (the "Code"),  shall file all necessary information,  reports,  returns,
and statements regarding the transaction required by the Code including, but not
limited  to, the tax  reports  required  pursuant  to Section  6045 of the Code.
Further, Escrow Agent agrees to indemnify and hold Purchaser,  Seller, and their
respective  attorneys and brokers harmless from and against any Losses resulting
from Escrow Agent's failure to file the reports Escrow Agent is required to file
pursuant to this section.

2.3.7 The  provisions of this Section 2.3 shall survive the  termination of this
Contract,  and if not so  terminated,  the Closing  and  delivery of the Deed to
Purchaser.

                                  ARTICLE 3...
                               FEASIBILITY PERIOD

3.1  Feasibility  Period.  Subject to the terms of  Section  3.3 and 3.4 and the
right of Tenants  under the Leases,  from the  Effective  Date to and  including
March 15, 2004 (the "Feasibility  Period"),  and thereafter to and including the
Closing  Date  (provided  that this  Contract is then in full force and effect),
Purchaser, and its agents,  contractors,  engineers,  surveyors,  attorneys, and
employees  (collectively,  "Consultants") shall have the right from time to time
to enter onto the Property:

3.1.1 To conduct and make any and all customary  studies,  tests,  examinations,
inquiries, and inspections, or investigations (collectively,  the "Inspections")
of or concerning the Property  (including,  without limitation,  engineering and
feasibility  studies,  evaluation  of drainage and flood  plain,  soil tests for
bearing capacity and percolation and surveys, including topographical surveys);

3.1.2 To confirm any and all matters which  Purchaser may  reasonably  desire to
confirm with respect to the Property;

3.1.3 To  ascertain  and  confirm  the   suitability  of  the  property  for
Purchaser's intended use of the Property; and

3.1.4 To review the Materials at Purchaser's sole cost and expense.

3.2  Expiration  of  Feasibility  Period.  If the  results of any of the matters
referred to in Section 3.1 appear  unsatisfactory to Purchaser for any reason or
if Purchaser  elects not to proceed with the  transaction  contemplated  by this
Contract for any other reason, or for no reason whatsoever,  in Purchaser's sole
and absolute  discretion,  then Purchaser shall have the right to terminate this
Contract by giving  written  notice to that effect to Seller and Escrow Agent on
or before 5:00 p.m.  (California time) on March 15, 2004. If Purchaser exercises
such right to  terminate,  this  Contract  shall  terminate and be of no further
force and effect  subject to and except for  Purchaser's  liability  pursuant to
Section  3.3 and any  other  provision  of this  Contract  which  survives  such
termination,  and Escrow  Agent shall  forthwith  return the Initial  Deposit to
Purchaser  (subject to Purchaser's  obligation under Section 3.5.2 to return all
Third-Party  Reports and  information  and Materials  provided to Purchaser as a
pre-condition  to the return of the  Initial  Deposit).  If  Purchaser  fails to
provide Seller with written notice of termination prior to the expiration of the
Feasibility  Period in strict  accordance  with the  notice  provisions  of this
Contract,  Purchaser's  right to  terminate  under  this  Section  3.2  shall be
permanently  waived and this Contract shall remain in full force and effect, the
Deposit  (including  both the Initial  Deposit and, when delivered in accordance
with  Section  2.2.2,  the  Additional  Deposit)  shall be  non-refundable,  and
Purchaser's  obligation  to purchase the Property  shall be  non-contingent  and
unconditional except only for satisfaction of the conditions expressly stated in
Section 8.1.

3.3  Conduct of  Investigation.  Purchaser  shall not permit any  mechanic's  or
materialmen's  liens or any other  liens to attach to the  Property by reason of
the performance of any work or the purchase of any materials by Purchaser or any
other party in connection  with any  Inspections  conducted by or for Purchaser.
Purchaser  shall give notice to Seller a reasonable time prior to entry onto the
Property and shall permit  Seller to have a  representative  present  during all
Inspections conducted at the Property.  All information made available by Seller
to Purchaser in  accordance  with this  Contract or obtained by Purchaser in the
course of its  Inspections  shall be  treated  as  confidential  information  by
Purchaser,  and,  prior to the purchase of the Property by Purchaser,  Purchaser
shall use its best  efforts to  prevent  its  Consultants  from  divulging  such
information  to any unrelated  third parties  except as reasonably  necessary to
third  parties  engaged by Purchaser  for the limited  purpose of analyzing  and
investigating  such  information for the purpose of consummating the transaction
contemplated by this Contract.  The provisions of this Section 3.3 shall survive
the termination of this Contract, and if not so terminated shall survive (except
for the confidentiality provisions of this Section 3.3) the Closing and delivery
of the Deed to Purchaser.

3.4   Purchaser Indemnification.

3.4.1 Purchaser shall  indemnify,  hold harmless and, if requested by Seller (in
Seller's  sole  discretion),  defend (with counsel  approved by Seller)  Seller,
together with Seller's affiliates,  parent and subsidiary entities,  successors,
assigns, partners, managers, members, employees,  officers, directors, trustees,
shareholders,  counsel,  representatives,  agents,  Property  Manager,  Regional
Property  Manager,   and  AIMCO  (collectively,   including  Seller,   "Seller's
Indemnified Parties"),  from and against any and all damages,  mechanics' liens,
liabilities,  losses,  demands,  actions,  causes of action,  claims,  costs and
expenses (including  reasonable  attorneys' fees, including the cost of in-house
counsel  and  appeals)  (collectively,  "Losses")  arising  from or  related  to
Purchaser's or its Consultant's entry onto the Property,  and any Inspections or
other  matters  performed by Purchaser  with respect to the Property  during the
Feasibility  Period or otherwise (but excluding any liability arising out of the
discovery of any  hazardous  materials or other  substances as long as Purchaser
immediately  stops all work upon discovery of such  substances  and  immediately
notifies Seller).

3.4.2  Notwithstanding  anything in this Contract to the contrary,  Seller shall
have the right, without limitation,  to disapprove any and all entries, surveys,
tests  (including,  without  limitation,  a Phase II environmental  study of the
Property), investigations and other matters that in Seller's reasonable judgment
could result in any injury to the Property or breach of any contract,  or expose
Seller to any Losses or violation  of  applicable  law, or  otherwise  adversely
affect the Property or Seller's interest therein;  provided,  however, if Seller
disapproves  any  such  investigation,  Seller  shall  reimburse  Purchaser  for
Purchaser's  reasonable,  documented  out-of-pocket  expenses incurred up to the
time of such disapproval  (but not to exceed $15,000).  Purchaser shall use best
efforts to minimize  disruption to Tenants in connection with Purchaser's or its
Consultants'  activities  pursuant to this Section.  No consent by the Seller to
any such activity shall be deemed to constitute a waiver by Seller or assumption
of  liability  or risk  by  Seller.  Purchaser  hereby  agrees  to  restore,  at
Purchaser's sole cost and expense,  the Property to the same condition  existing
immediately prior to Purchaser's exercise of its rights pursuant to this Article
3. Purchaser  shall  maintain and cause its third party  consultants to maintain
(a)  casualty  insurance  and  comprehensive  public  liability  insurance  with
coverages of not less than  $1,000,000.00  for injury or death to any one person
and  $3,000,000.00  for injury or death to more than one person and  $500,000.00
with  respect  to  property  damage,  by water or  otherwise,  and (b)  worker's
compensation  insurance for all of their respective employees in accordance with
the law of the  commonwealth  in which the  Property is located.  As a condition
precedent to Purchaser's entry onto the Property,  Purchaser shall deliver proof
of the insurance  coverage required pursuant to this Section 3.4.2 to Seller (in
the form of a certificate  of insurance)  prior to  Purchaser's  or  Purchaser's
Consultants'  entry onto the Property.  The provisions of this Section 3.4 shall
survive the termination of this Contract, and if not so terminated,  the Closing
and delivery of the Deed to Purchaser.

3.5   Property Materials.

3.5.1 Within 5 Business  Days after the  Effective  Date,  and to the extent the
same exist and are in Seller's  possession  or  reasonable  control  (subject to
Section 3.5.2), Seller agrees to deliver to Purchaser the documents set forth on
Schedule  3.5 (the  "Materials").  In the  alternative,  at Seller's  option and
within  the  foregoing  5-day  period,  Seller  may make the same  available  to
Purchaser on a secure web site  (Purchaser  agrees that any item to be delivered
by Seller under this Contract shall be deemed  delivered to the extent available
to Purchaser on such secured web site). To the extent that Purchaser  determines
that any of the Materials have not been made available or delivered to Purchaser
pursuant to this Section 3.5.1,  Purchaser  shall notify Seller and Seller shall
use  commercially  reasonable  efforts to deliver the same to Purchaser within 5
Business Days after such notification is received by Seller; provided,  however,
that  under no  circumstances  will  the  Feasibility  Period  be  extended  and
Purchaser's  sole remedy will be to terminate this Contract  pursuant to Section
3.2.

3.5.2 In providing  such  information  and  Materials to  Purchaser,  other than
Seller's Representations,  Seller makes no representation or warranty,  express,
written,  oral,  statutory,   or  implied,  and  all  such  representations  and
warranties are hereby  expressly  excluded and  disclaimed.  Any information and
Materials  provided by Seller to Purchaser  under the terms of this  Contract is
for  informational  purposes only and,  together with all  Third-Party  Reports,
shall be returned by Purchaser to Seller as a condition to return of the Deposit
to Purchaser (if Purchaser is otherwise entitled to such Deposit pursuant to the
terms of this Contract) if this Contract is terminated for any reason. Purchaser
shall not in any way be entitled to rely upon the  accuracy of such  information
and  Materials.  Purchaser  recognizes  and agrees that the  Materials and other
documents and information delivered or made available by Seller pursuant to this
Contract may not be complete or constitute  all of such  documents  which are in
Seller's  possession  or control,  but are those that are readily  available  to
Seller after  reasonable  inquiry to  ascertain  their  availability.  Purchaser
understands that,  although Seller will use commercially  reasonable  efforts to
locate and make  available  the  Materials  and other  documents  required to be
delivered or made available by Seller pursuant to this Contract,  Purchaser will
not rely on such  Materials or other  documents as being a complete and accurate
source of  information  with  respect to the  Property,  and will instead in all
instances rely  exclusively on its own Inspections and Consultants  with respect
to all  matters  which it deems  relevant to its  decision  to acquire,  own and
operate the Property.

3.5.3 The  provisions of this Section 3.5 shall survive the Closing and delivery
of the Deed to Purchaser. 3.6 Property Contracts. On or before the expiration of
the  Feasibility  Period,  Purchaser may deliver  written  notice to Seller (the
"Property  Contracts Notice")  specifying any Property Contracts with respect to
which  Purchaser  desires to have Seller  deliver  notices of termination at the
Closing (the  "Terminated  Contracts");  provided that (a) the effective date of
such  termination  after  Closing  shall be subject to the express terms of such
Terminated  Contracts,  (b) if any such Property Contract cannot by its terms be
terminated,  it shall be assumed by Purchaser and not be a Terminated  Contract,
and (c) to the extent that any such Terminated  Contract  requires  payment of a
penalty or premium for cancellation,  Purchaser shall be solely  responsible for
the payment of any such  cancellation  fees or penalties.  If Purchaser fails to
deliver  the  Property  Contracts  Notice on or  before  the  expiration  of the
Feasibility Period,  there shall be no Terminated  Contracts and Purchaser shall
assume all Property Contracts at the Closing.

                                  ARTICLE 4...
                                      TITLE

4.1 Title  Documents.  Within 5 Business Days after the Effective  Date,  Seller
shall cause to be delivered to Purchaser a standard  form  commitment  for title
insurance  ("Title  Commitment")  for the  Property  in an  amount  equal to the
Purchase  Price from Title Insurer for a standard  coverage  policy of insurance
(the "Title Policy") on the most recent standard American Land Title Association
form,  together with copies of all instruments  identified as exceptions therein
(together  with  the  Title  Commitment,   referred  to  herein  as  the  "Title
Documents").  Seller shall be responsible  only for payment of the basic premium
for the Title Policy,  but only to the extent of the premium due with respect to
the first  $9,000,000 of the amount  insured and Purchaser  shall be responsible
for the amount of the basic  premium  attributable  to the amount of coverage in
excess thereof.  Purchaser shall be solely  responsible for payment of all other
costs relating to procurement of the Title Commitment, the Title Policy, and any
requested endorsements.

4.2  Survey.  Within 3 Business  Days after the  Effective  Date,  Seller  shall
deliver  to  Purchaser  the  currently  existing  survey  of the  Property  (the
"Existing  Survey")  (subject to Section 3.5.2);  provided,  however,  Purchaser
shall pay the costs thereof not to exceed $10,500.  Purchaser  acknowledges  and
agrees that  delivery of the  Existing  Survey is subject to Section  3.5.2.  If
Purchaser desires a new or updated survey, Purchaser shall request the same from
Seller in writing no later than 5 Business  Days after the  Effective  Date,  in
which event Seller  shall order such new or updated  survey  (together  with the
Existing  Survey,  referred to herein as the  "Survey")  from the  surveyor  who
prepared the Existing  Survey (or from such other surveyor as Seller  determines
in its reasonable  discretion).  Purchaser  shall be solely  responsible for the
cost and  expense of the  preparation  of any  updated  or new survey  requested
pursuant to the terms of this Section 4.2.

4.3 Objection and Response  Process.  On or before March 8, 2004 (the "Objection
Deadline"),  Purchaser shall give written notice (the "Objection Notice") to the
attorneys  for  Seller of any  matter  set forth in the Title  Documents  or the
Survey to which  Purchaser  objects (the  "Objections").  If Purchaser  fails to
tender an Objection Notice on or before the Objection Deadline,  Purchaser shall
be deemed to have approved and irrevocably  waived any objections to any matters
covered by the Title Documents and the Survey.  On or before March 11, 2004 (the
"Response  Deadline"),  Seller may, in Seller's sole discretion,  give Purchaser
notice (the "Response  Notice") of those  Objections  which Seller is willing to
cure, if any. Seller shall be entitled to reasonable adjournments of the Closing
Date to cure the Objections. If Seller fails to deliver a Response Notice by the
Response  Deadline,  Seller  shall  be  deemed  to have  elected  not to cure or
otherwise  resolve any matter set forth in the Objection Notice. If Purchaser is
dissatisfied  with the Response Notice,  Purchaser may, as its exclusive remedy,
elect by  written  notice  given to Seller on or before  the  expiration  of the
Feasibility  Period (the  "Final  Response  Deadline")  either (a) to accept the
Title  Documents and Survey with  resolution,  if any, of the  Objections as set
forth in the Response Notice (or if no Response Notice is tendered,  without any
resolution  of the  Objections)  and without any  reduction  or abatement of the
Purchase  Price,  or (b) to terminate this Contract,  in which event the Initial
Deposit shall be returned to Purchaser (subject to Purchaser's  obligation under
Section 3.5.2 to return all  Third-Party  Reports and  information and Materials
provided to Purchaser as a pre-condition to the return of the Initial  Deposit).
If Purchaser  fails to give notice to terminate  this  Contract on or before the
Final Response  Deadline,  Purchaser  shall be deemed to have elected to approve
and  irrevocably  waived  any  objections  to any  matters  covered by the Title
Documents or the Survey,  subject only to resolution,  if any, of the Objections
as set forth in the  Response  Notice  (or if no  Response  Notice is  tendered,
without any resolution of the Objections).

4.4 Permitted Exceptions.  The Deed delivered pursuant to this Contract shall be
subject to the following, all of which shall be deemed "Permitted Exceptions":

4.4.1 All matters shown in the Title  Documents  and the Survey,  other than (a)
those  Objections,  if any,  which  Seller  has agreed to cure  pursuant  to the
Response  Notice  under  Section  4.3,  (b)  mechanics'  liens and taxes due and
payable with respect to the period preceding Closing, (c) the standard exception
regarding  the rights of parties in  possession  which shall be limited to those
parties in  possession  pursuant to the Leases,  and (d) the standard  exception
pertaining to taxes which shall be limited to taxes and  assessments  payable in
the year in which the Closing occurs and subsequent taxes and assessments;

4.4.2 All Leases;

4.4.3 [Intentionally left blank];

4.4.4 Applicable zoning and governmental regulations and ordinances;

4.4.5 Any defects in or objections to title to the Property, or title
exceptions or encumbrances, arising by, through or under Purchaser; and

4.4.6 The terms and conditions of this Contract.

4.5 Existing  Deed of Trust.  It is understood  and agreed that,  whether or not
Purchaser  gives an Objection  Notice with respect  thereto,  any deeds of trust
and/or mortgages (including any and all mortgages which secure the Note) against
the  Property  (whether  one or more,  the "Deed of Trust ") shall not be deemed
Permitted Exceptions, whether Purchaser gives written notice of such or not, and
shall be paid off,  satisfied,  discharged  and/or  cured by Seller at  Closing,
provided that the Lender's Fees due in connection  with the Loan Payoff shall be
paid by Purchaser, subject to the provisions of Section 2.2.

                                  ARTICLE 5...
                                     CLOSING

5.1 Closing Date. The Closing shall occur on April 30, 2004 (the "Closing Date")
through an escrow with Escrow  Agent,  whereby the Seller,  Purchaser  and their
attorneys  need  not be  physically  present  at the  Closing  and  may  deliver
documents by overnight air courier or other means.

5.2 Seller Closing Deliveries. No later than 1 Business Day prior to the Closing
Date, Seller shall deliver to Escrow Agent, each of the following items:

5.2.1  Special  Warranty  Deed (the "Deed") in the form attached as Exhibit B to
Purchaser, subject to the Permitted Exceptions.

5.2.2 A Bill of Sale in the form attached as Exhibit C.

5.2.3 A General  Assignment  in the form  attached  as  Exhibit D (the  "General
Assignment").

5.2.4 An  Assignment  of Leases and  Security  Deposits in the form  attached as
Exhibit E (the "Leases Assignment").

5.2.5 A letter in the form  attached  hereto as Exhibit F prepared by  Purchaser
and  countersigned  by  Seller  to  each of the  vendors  under  the  Terminated
Contracts  informing them of the termination of such  Terminated  Contract as of
the Closing Date (subject to any delay in the  effectiveness of such termination
pursuant to the  express  terms of each  applicable  Terminated  Contract)  (the
"Vendor Terminations").

5.2.6 A closing statement executed by Seller.

5.2.7 A title  affidavit or at Seller's option an indemnity,  as applicable,  in
the customary  form  reasonably  acceptable to Seller to enable Title Insurer to
delete the standard  exceptions to the title insurance  policy set forth in this
Contract (other than matters  constituting any Permitted  Exceptions and matters
which are to be completed or performed  post-Closing)  to be issued  pursuant to
the Title  Commitment;  provided that such  affidavit does not subject Seller to
any greater liability, or impose any additional  obligations,  other than as set
forth in this Contract; and

5.2.8 A certification of Seller's non-foreign status pursuant to Section 1445 of
the Internal Revenue Code of 1986, as amended.

5.2.9 Resolutions,  certificates of good standing, and such other organizational
documents  as  Title  Insurer  shall  reasonably  require  evidencing   Seller's
authority to consummate this transaction.

5.3  Purchaser  Closing  Deliveries.  No later than 1 Business  Day prior to the
Closing  Date  (except  for the  balance of the  Purchase  Price  which is to be
delivered at the time specified in Section  2.2.4),  Purchaser  shall deliver to
the Escrow Agent (for  disbursement  to Seller upon the  Closing) the  following
items with respect to the Property being conveyed at such Closing:

5.3.1 The full Purchase  Price (with credit for the Deposit),  plus or minus the
adjustments or prorations required by this Contract.

5.3.2 A title  affidavit (or at Purchaser's  option an indemnity)  pertaining to
Purchaser's  activity on the Property  prior to Closing,  in the customary  form
reasonably  acceptable  to  Purchaser,  to enable  Title  Insurer  to delete the
standard  exceptions  to the title  insurance  policy set forth in this Contract
(other than matters  constituting any Permitted Exceptions and matters which are
to be completed or performed  post-Closing)  to be issued  pursuant to the Title
Commitment;  provided  that such  affidavit  does not subject  Purchaser  to any
greater liability, or impose any additional obligations, other than as set forth
in this Contract.

5.3.3 Any  declaration or other  statement which may be required to be submitted
to the local assessor with respect to the terms of the sale of the Property.

5.3.4 A closing statement executed by Purchaser.

5.3.5 A countersigned counterpart of the General Assignment.

5.3.6 A countersigned counterpart of the Leases Assignment.

5.3.7 Notification  letters to all Tenants prepared and executed by Purchaser in
the form attached hereto as Exhibit G.

5.3.8  The  Vendor  Terminations.  Purchaser  shall be  solely  responsible  for
identifying  each  of  the  Terminated  Contracts  (subject  to  the  terms  and
conditions  of Section  3.6) and  addressing  and  preparing  each of the Vendor
Terminations for execution by Purchaser and Seller.

5.3.9 Any cancellation  fees or penalties due to any vendor under any Terminated
Contract as a result of the termination thereof.

5.3.10......Resolutions,   certificates   of  good  standing,   and  such  other
organizational  documents as Title Insurer shall reasonably  require  evidencing
Purchaser's authority to consummate this transaction.

5.3.11......[Intentionally deleted].

5.3.12......The  Lender Fees  (subject to reduction  from the Purchase  Price in
accordance with Section 2.2).

5.4   Closing Prorations and Adjustments.

5.4.1 General. All normal and customarily proratable items,  including,  without
limitation,  collected rents, operating expenses, personal property taxes, other
operating  expenses and fees,  shall be prorated as of the Closing Date,  Seller
being charged or credited,  as appropriate,  for all of same attributable to the
period up to the  Closing  Date (and  credited  for any  amounts  paid by Seller
attributable  to the  period  on or  after  the  Closing  Date,  if  assumed  by
Purchaser) and Purchaser being responsible for, and credited or charged,  as the
case may be, for all of same attributable to the period on and after the Closing
Date.  Seller shall prepare a proration  schedule (the "Proration  Schedule") of
the adjustments described in this Section 5.4 prior to Closing. Such adjustments
shall be paid by Purchaser to Seller (if the  prorations  result in a net credit
to Seller) or by Seller to Purchaser (if the  prorations  result in a net credit
to  Purchaser),  by  increasing  or reducing the cash to be paid by Purchaser at
Closing.

5.4.2 Operating Expenses. All of the operating,  maintenance,  taxes (other than
real  estate  taxes,  such as rental  taxes),  and other  expenses  incurred  in
operating  the  Property  that  Seller  customarily  pays,  and any other  costs
incurred in the ordinary  course of business for the management and operation of
the Property,  shall be prorated on an accrual basis.  Seller shall pay all such
expenses that accrue prior to Closing and Purchaser  shall pay all such expenses
that accrue from and after the Closing Date.

5.4.3  Utilities.  The final  readings and final  billings for utilities will be
made if possible as of the Closing Date, in which case Seller shall pay all such
bills as of the Closing Date and no proration  shall be made at the Closing with
respect to utility bills.  Otherwise,  a proration  shall be made based upon the
parties'  reasonable good faith estimate and a readjustment  made within 30 days
after the Closing,  if necessary.  Seller shall be entitled to the return of any
deposit(s)  posted by it with any utility company,  and Seller shall notify each
utility company serving the Property to terminate Seller's account, effective as
of noon on the Closing Date.

5.4.4 Real Estate  Taxes.  Any real  estate ad valorem or similar  taxes for the
Property,  or any  installment  of  assessments  payable in  installments  which
installment is payable in the calendar year of Closing, shall be prorated to the
date of Closing, based upon actual days involved. The proration of real property
taxes or  installments  of  assessments  for the tax year in which  the  Closing
occurs shall be shall be subject to re-adjustment when the actual property taxes
are known; provided,  however,  neither Purchaser nor Seller shall be liable for
any reproration and payment of less than $2,500.00;  provided, further, that the
party seeking  reproration must provide written notice to the other party within
30 days after such taxes are finally  known,  accompanied  with a statement  and
calculation of reproration;  provided,  however,  that no re-adjustment shall be
made with respect to an increase in real property  taxes which are  attributable
solely to the  occurrence  of the sale of the Property to Purchaser  pursuant to
this Contract.

5.4.5  Property  Contracts.  Purchaser  shall assume at Closing the  obligations
under the  Property  Contracts  assumed by  Purchaser,  subject to  proration of
operating expenses under Section 5.4.2.

5.4.6 Leases.

                  5.4.6.1 All  collected  rent (whether  fixed monthly  rentals,
additional rentals,  escalation  rentals,  retroactive  rentals,  operating cost
pass-throughs  or other sums and charges  payable by Tenants  under the Leases),
income and expenses from any portion of the Property shall be prorated as of the
Closing Date  (prorated  for any partial  month).  Purchaser  shall  receive all
collected rent and income attributable to dates from and after the Closing Date.
Seller shall receive all collected rent and income  attributable  to dates prior
to the Closing Date.  Notwithstanding the foregoing, no prorations shall be made
in relation to either (a) non-delinquent  rents which have not been collected as
of the Closing Date, or (b) delinquent rents existing, if any, as of the Closing
Date (the foregoing (a) and (b) referred to herein as the "Uncollected  Rents").
In adjusting for  Uncollected  Rents,  no adjustments  shall be made in Seller's
favor for rents  which  have  accrued  and are  unpaid  as of the  Closing,  but
Purchaser shall pay Seller such accrued  Uncollected Rents as and when collected
by  Purchaser.  Purchaser  agrees  to  bill  Tenants  of the  Property  for  all
Uncollected Rents and to take reasonable  actions to collect  Uncollected Rents.
After  the  Closing,  Seller  shall  continue  to have  the  right,  but not the
obligation,  in its own name,  to demand  payment of and to collect  Uncollected
Rents  owed  to  Seller  by any  Tenant,  which  right  shall  include,  without
limitation,  the right to  continue  or commence  legal  actions or  proceedings
against  any  Tenant  and  the  delivery  of the  Leases  Assignment  shall  not
constitute a waiver by Seller of such right.  Purchaser agrees to cooperate with
Seller in  connection  with all  efforts by Seller to collect  such  Uncollected
Rents and to take all steps, whether before or after the Closing Date, as may be
necessary  to carry  out the  intention  of the  foregoing,  including,  without
limitation,  the delivery to Seller,  within 7 days after a written request,  of
any relevant books and records (including,  without limitation, rent statements,
receipted  bills and copies of tenant checks used in payment of such rent),  the
execution of any and all consents or other documents, and the undertaking of any
act reasonably necessary for the collection of such Uncollected Rents by Seller;
provided, however, that Purchaser's obligation to cooperate with Seller pursuant
to this sentence shall not obligate Purchaser to terminate any Tenant lease with
an existing  Tenant or evict any existing  Tenant from the  Property,  nor shall
Seller  have the  right  to seek to  terminate  any  Tenant  Lease or evict  any
existing Tenant.

                  5.4.6.2 At Closing,  Purchaser  shall receive a credit against
the Purchase  Price in an amount equal to the received and unapplied  balance of
all cash (or cash equivalent)  Tenant Deposits,  including,  but not limited to,
security,  damage or other refundable  deposits or required to be paid by any of
the Tenants to secure their respective  obligations under the Leases,  together,
in all cases,  with any  interest  payable to the Tenants  thereunder  as may be
required by their  respective  Tenant  Lease or  commonwealth  law (the  "Tenant
Security Deposit Balance").  Any cash (or cash equivalents) held by Seller which
constitute the Tenant  Security  Deposit  Balance shall be retained by Seller in
exchange for the foregoing  credit  against the Purchase  Price and shall not be
transferred  by  Seller  pursuant  to this  Contract  (or  any of the  documents
delivered at Closing),  but the obligation  with respect to the Tenant  Security
Deposit Balance  nonetheless shall be assumed by Purchaser.  The Tenant Security
Deposit  Balance shall not include any  non-refundable  deposits or fees paid by
Tenants to Seller, either pursuant to the Leases or otherwise.

                  5.4.6.3  With respect to operating  expenses,  taxes,  utility
charges,  other operating cost  pass-throughs,  retroactive rental  escalations,
sums or charges  payable by Tenants under the Tenant Leases,  to the extent that
Seller has received as of the Closing payments  allocable to periods  subsequent
to Closing,  the same shall be properly  prorated with an adjustment in favor of
Purchaser,  and  Purchaser  shall  reserve a credit  therefor at  Closing.  With
respect to any  payments  received by Purchaser  after the Closing  allocable to
Seller prior to Closing, Purchaser shall promptly pay the same to Seller.

5.4.7 Existing Loan. On the Closing Date, Seller shall pay (which payment may be
made by Seller  out of the  proceeds  of the  Purchase  Price)  the  outstanding
principal  balance of the Note together with all interest accrued under the Note
prior to the Closing Date (the "Loan  Payoff").  Purchaser  shall pay all Lender
Fees (subject to reduction  from the Purchase  Price in accordance  with Section
2.2).  Any  existing  reserves,   impounds  and  other  accounts  maintained  in
connection  with the Loan  shall be  released  in Good  Funds to  Seller  at the
Closing  unless  credited by Lender against the amount due from Seller under the
Note.

5.4.8  Insurance.  No proration shall be made in relation to insurance  premiums
and insurance policies will not be assigned to Purchaser.

5.4.9 Employees.  All of Seller's and Seller's manager's on-site employees shall
have their employment at the Property terminated as of the Closing Date.

5.4.10......Closing   Costs.   Purchaser   shall  pay  any  grantee's  (but  not
grantor's),  sales,  use,  recordation,  gross  receipts or similar  taxes,  any
premiums or fees  required  to be paid by  Purchaser  with  respect to the Title
Policy  pursuant to Section 4.1, and one-half of the customary  closing costs of
the Escrow Agent;  however,  Purchaser  shall be responsible  for any such taxes
otherwise  imposed on Seller  that are  attributable  to the amount in excess of
$9,000,000 of the Purchase Price.  Seller shall pay the grantor's tax payable in
the Commonwealth of Virginia (up to $9,000,000 of the Purchase Price),  the cost
of recording  any  instrument  required to discharge  any liens or  encumbrances
against  the  Property,  the base  premium  for the Title  Policy to the  extent
required by Section  4.1,  and one-half of the  customary  closing  costs of the
Escrow Agent.

5.4.11......Utility  Contracts.  If Seller has entered into an agreement for the
purchase of  electricity,  gas or other  utility  service for the  Property or a
group of  properties  (including  the  Property) (a "Utility  Contract"),  or an
affiliate of Seller has entered into a Utility Contract,  then, at the option of
Seller,  (a) Purchaser  either shall assume the Utility Contract with respect to
the Property,  or (b) the reasonably  calculated  costs of the Utility  Contract
attributable  to the Property from and after the Closing shall be paid to Seller
at the  Closing and Seller  shall  remain  responsible  for  payments  under the
Utility Contract.

5.4.12......Survival.  The  provisions  of this  Section  5.4 shall  survive the
Closing and delivery of the Deed to Purchaser.

5.4.13......Possession.  Possession  of the  Property,  subject  to the  Leases,
Property  Contracts which are not identified as Terminated  Contracts during the
Feasibility  Period  (subject to the  limitations of Section 3.6), and Permitted
Exceptions,  shall be  delivered  to  Purchaser at the Closing upon release from
escrow of all items to be  delivered  by  Purchaser  pursuant  to  Section  5.3,
including,  without  limitation,  the Purchase Price.  To the extent  reasonably
available to Seller,  originals or copies of the Leases and Property  Contracts,
lease files,  warranties,  guaranties,  operating manuals, keys to the property,
and Seller's books and records (other than  proprietary  information)  regarding
the Property  shall be made  available  to  Purchaser at the Property  after the
Closing.

5.5 Post  Closing  Adjustments.  In  general,  and  except as  provided  in this
Contract or the Closing  Documents,  Seller shall be entitled to all income, and
shall pay all expenses, relating to the operation of the Property for the period
prior to the Closing  Date and  Purchaser  shall be entitled to all income,  and
shall pay all expenses, relating to the operation of the Property for the period
commencing on and after the Closing  Date.  Purchaser or Seller may request that
Purchaser and Seller  undertake to re-adjust any item on the Proration  Schedule
(or any item omitted therefrom) in accordance with the provisions of Section 5.4
of  this  Contract;  provided,  however,  that  neither  party  shall  have  any
obligation  to  re-adjust  any items (a) after the  expiration  of 90 days after
Closing,  or (b) subject to such 90-day period,  unless and until all such items
exceed  $5,000.00 in magnitude in aggregate.  The provisions of this Section 5.6
shall survive the Closing and delivery of the Deed to Purchaser.

                                  ARTICLE 6...
           REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER

6.1 Seller's Representations. Except, in all cases, for any fact, information or
condition  disclosed  in the Title  Documents,  the  Permitted  Exceptions,  the
Property Contracts,  or the Materials,  or which is otherwise known by Purchaser
prior to the Closing,  Seller represents and warrants to Purchaser the following
(collectively,  the "Seller's  Representations") as of the Effective Date and as
of the Closing Date  (provided  that  Purchaser's  remedies if any such Seller's
Representations are untrue as of the Closing Date are limited to those set forth
in Section 8.1):

6.1.1 Seller is duly organized,  validly existing and in good standing under the
laws of the state of its  formation  set forth in the initial  paragraph of this
Contract; and has or at the Closing shall have the entity power and authority to
sell and convey the  Property  and to execute  the  documents  to be executed by
Seller and prior to the Closing will have taken as  applicable,  all  corporate,
partnership, limited liability company or equivalent entity actions required for
the  execution  and  delivery  of this  Contract,  and the  consummation  of the
transactions  contemplated by this Contract.  The compliance with or fulfillment
of the terms and conditions hereof will not conflict with, or result in a breach
of, the terms,  conditions or provisions of, or constitute a default under,  any
contract to which Seller is a party or by which Seller is otherwise bound, which
conflict,  breach or default  would have a material  adverse  affect on Seller's
ability to consummate the  transaction  contemplated  by this Contract or on the
Property.  Subject to Section  8.2.4,  this  Contract  is a valid,  binding  and
enforceable agreement against Seller in accordance with its terms;

6.1.2 Other than the Leases,  the  Property is not subject to any written  lease
executed by Seller or, to Seller's knowledge,  any other possessory interests of
any person;

6.1.3 Seller is not a "foreign  person," as that term is used and defined in the
Internal Revenue Code, Section 1445, as amended;

6.1.4  Except for any actions by Seller to evict  Tenants  under the Leases,  to
Seller's   knowledge,   there  are  no  actions,   proceedings,   litigation  or
governmental investigations or condemnation actions either pending or threatened
against the Property;

6.1.5 To Seller's  knowledge,  Seller has not received any written notice from a
governmental  agency of any uncured material  violations of any federal,  state,
commonwealth,   county  or  municipal  law,  ordinance,   order,  regulation  or
requirement affecting the Property; and

6.1.6 To Seller's  knowledge,  Seller has not received any written notice of any
material default by Seller under any of the Property  Contracts that will not be
terminated on the Closing Date.

6.2 AS-IS.  Except for  Seller's  Representations,  the  Property  is  expressly
purchased  and sold "AS IS," "WHERE  IS," and "WITH ALL  FAULTS."  The  Purchase
Price  and  the  terms  and  conditions  set  forth  herein  are the  result  of
arm's-length  bargaining  between  entities  familiar with  transactions of this
kind, and said price, terms and conditions reflect the fact that Purchaser shall
have the benefit of, and is not relying upon, any information provided by Seller
or Broker statements, representations or warranties, express or implied, made by
or enforceable directly against Seller or Broker, including, without limitation,
any  relating  to the  value of the  Property,  the  physical  or  environmental
condition of the Property,  any state, federal,  county or local law, ordinance,
order or permit;  or the  suitability,  compliance  or lack of compliance of the
Property with any regulation, or any other attribute or matter of or relating to
the Property  (other than any covenants of title contained in the Deed conveying
the Property and Seller's  Representations).  Purchaser agrees that Seller shall
not be responsible or liable to Purchaser for any defects,  errors or omissions,
or  on  account  of  any  conditions  affecting  the  Property.  Purchaser,  its
successors  and assigns,  and anyone  claiming by,  through or under  Purchaser,
hereby fully releases Seller's  Indemnified Parties from, and irrevocably waives
its right to  maintain,  any and all claims and causes of action that it or they
may now have or hereafter  acquire  against  Seller's  Indemnified  Parties with
respect to any and all Losses  arising from or related to any  defects,  errors,
omissions or other conditions  affecting the Property.  Purchaser represents and
warrants  that,  as of the date  hereof and as of the Closing  Date,  it has and
shall have reviewed and conducted such independent analyses, studies (including,
without limitation,  environmental  studies and analyses concerning the presence
of  lead,  asbestos,  PCBs  and  radon  in and  about  the  Property),  reports,
investigations  and  inspections as it deems  appropriate in connection with the
Property. If Seller provides or has provided any documents,  summaries, opinions
or  work  product  of  consultants,   surveyors,  architects,  engineers,  title
companies,  governmental  authorities or any other person or entity with respect
to the Property, including, without limitation, the offering prepared by Broker,
Purchaser  and Seller  agree that Seller has done so or shall do so only for the
convenience of both parties,  Purchaser  shall not rely thereon and the reliance
by Purchaser upon any such documents,  summaries, opinions or work product shall
not  create or give rise to any  liability  of or against  Seller's  Indemnified
Parties.  Purchaser  shall  rely  only  upon any  title  insurance  obtained  by
Purchaser  with respect to title to the  Property.  Purchaser  acknowledges  and
agrees that no representation  has been made and no responsibility is assumed by
Seller with  respect to current and future  applicable  zoning or building  code
requirements  or the  compliance  of the  Property  with any other laws,  rules,
ordinances or regulations,  the financial earning capacity or expense history of
the Property,  the continuation of contracts,  continued occupancy levels of the
Property,  or any part  thereof,  or the  continued  occupancy by tenants of any
Leases or, without limiting any of the foregoing, occupancy at Closing. Prior to
Closing,  Seller shall have the right,  but not the  obligation,  to enforce its
rights  against any and all  Property  occupants,  guests or tenants.  Purchaser
agrees that the departure or removal,  prior to Closing,  of any of such guests,
occupants or tenants  shall not be the basis for, nor shall it give rise to, any
claim on the part of Purchaser, nor shall it affect the obligations of Purchaser
under this Contract in any manner  whatsoever;  and Purchaser  shall close title
and accept  delivery of the Deed with or without such tenants in possession  and
without any  allowance or reduction in the Purchase  Price under this  Contract.
Purchaser  hereby  releases  Seller  from  any and all  claims  and  liabilities
relating to the  foregoing  matters.  The  provisions  of this Section 6.2 shall
survive the Closing and delivery of the Deed to Purchaser.

6.3  Survival  of  Seller's  Representations.  Seller and  Purchaser  agree that
Seller's  Representations  shall survive  Closing for a period of 12 months (the
"Survival  Period").  Seller shall have no liability  after the Survival  Period
with respect to Seller's  Representations  contained herein except to the extent
that  Purchaser has  requested  arbitration  against  Seller during the Survival
Period for breach of any of  Seller's  Representations.  Under no  circumstances
shall Seller be liable to Purchaser for more than $360,000 (the "Liability Cap")
in any  individual  instance or in the  aggregate  for all  breaches of Seller's
Representations, nor shall Purchaser be entitled to bring any claim for a breach
of Seller's  Representations  unless and until the claim for damage by Purchaser
exceeds $5,000. In the event that Seller breaches any  representation  contained
in Section 6.1 and  Purchaser  had knowledge of such breach prior to the Closing
Date, Purchaser shall be deemed to have waived any right of recovery, and Seller
shall not have any liability in connection therewith.

6.4 Definition of Seller's  Knowledge.  Any  representations and warranties made
"to the  knowledge of Seller"  shall not be deemed to imply any duty of inquiry.
For purposes of this  Contract,  the term  Seller's  "knowledge"  shall mean and
refer only to actual  knowledge of the Designated  Representative  of the Seller
and shall  not be  construed  to refer to the  knowledge  of any other  partner,
officer,  director,  agent,  employee or  representative  of the Seller,  or any
affiliate of the Seller,  or to impose upon such Designated  Representative  any
duty to  investigate  the matter to which such actual  knowledge  or the absence
thereof  pertains,  or  to  impose  upon  such  Designated   Representative  any
individual   personal   liability.   As  used   herein,   the  term   Designated
Representative shall refer to Regina Harris who is the Regional Property Manager
handling this Property (the "Regional Property Manager").

6.5  Representations  And  Warranties Of Purchaser.  For the purpose of inducing
Seller to enter into this  Contract and to  consummate  the sale and purchase of
the Property in accordance herewith, Purchaser represents and warrants to Seller
the following as of the Effective Date and as of the Closing Date:

6.5.1 Purchaser is a limited liability company duly organized,  validly existing
and in good standing under the laws of the State of California.

6.5.2  Purchaser,  acting  through  any of  its  or  their  duly  empowered  and
authorized officers or members,  has all necessary entity power and authority to
own and use its  properties and to transact the business in which it is engaged,
and has full power and  authority  to enter into this  Contract,  to execute and
deliver the  documents  and  instruments  required of Purchaser  herein,  and to
perform  its  obligations  hereunder;  and no  consent  of  any  of  Purchaser's
partners, directors, officers or members are required to so empower or authorize
Purchaser. The compliance with or fulfillment of the terms and conditions hereof
will not  conflict  with,  or result in a breach of, the  terms,  conditions  or
provisions of, or constitute a default under, any contract to which Purchaser is
a party or by which  Purchaser is otherwise  bound,  which  conflict,  breach or
default  would  have  a  material  adverse  affect  on  Purchaser's  ability  to
consummate the  transaction  contemplated  by this Contract.  This Contract is a
valid,  binding and enforceable  agreement  against Purchaser in accordance with
its terms.

6.5.3 No pending or, to the knowledge of Purchaser, threatened litigation exists
which  if  determined   adversely   would  restrain  the   consummation  of  the
transactions  contemplated by this Contract or would declare illegal, invalid or
non-binding any of Purchaser's obligations or covenants to Seller.

6.5.4  Other  than  Seller's  Representations,  Purchaser  has not relied on any
representation  or  warranty  made by  Seller  or any  representative  of Seller
(including, without limitation, Broker) in connection with this Contract and the
acquisition of the Property.

6.5.5 The Broker and its  affiliates  do not, and will not at the Closing,  have
any  direct or  indirect  legal,  beneficial,  economic  or voting  interest  in
Purchaser  (or in an  assignee of  Purchaser,  which  pursuant to Section  13.3,
acquires the Property at the  Closing),  nor has  Purchaser or any  affiliate of
Purchaser  granted (as of the Effective  Date or the Closing Date) the Broker or
any of its  affiliates  any right or option to acquire  any  direct or  indirect
legal, beneficial, economic or voting interest in Purchaser.

      The  provisions of this Section 6.5 shall survive the Closing and delivery
of the Deed to Purchaser.

                                  ARTICLE 7...
                            OPERATION OF THE PROPERTY

7.1 Leases and Property Contracts.  During the period of time from the Effective
Date to the Closing  Date, in the ordinary  course of business  Seller may enter
into new  Property  Contracts,  new  Leases,  renew  existing  Leases or modify,
terminate or accept the surrender or forfeiture of any of the Leases, modify any
Property  Contracts,  or institute  and  prosecute  any  available  remedies for
default under any Lease or Property Contract without first obtaining the written
consent  of  Purchaser;  provided,  however,  Seller  agrees  that  any such new
Property  Contracts or any new or renewed Leases shall not have a term in excess
of 1 year (or such longer  period of time for which such  Property  Contracts or
Leases are entered into by Seller in the ordinary course of its operation of the
Property)  without the prior written  consent of Purchaser,  which consent shall
not be unreasonably withheld, conditioned or delayed.

7.2 General  Operation of  Property.  Except as  specifically  set forth in this
Article 7, Seller shall  operate the Property  after the  Effective  Date in the
ordinary  course of  business,  and except as  necessary  in the  Seller's  sole
discretion  to address (a) any life or safety  issue at the  Property or (b) any
other  matter  which in  Seller's  reasonable  discretion  materially  adversely
affecting the use, operation or value of the Property,  Seller will not make any
material  alterations  to the  Property  or remove  any  material  Fixtures  and
Tangible  Personal Property without the prior written consent of Purchaser which
consent shall not be unreasonably withheld, denied or delayed.

7.3 Liens.  Other than utility  easements and temporary  construction  easements
granted by Seller in the ordinary course of business,  Seller  covenants that it
will not  voluntarily  create or cause any lien or  encumbrance to attach to the
Property  between the Effective Date and the Closing Date (other than Leases and
Property  Contracts as provided in Section 7.1) unless  Purchaser  approves such
lien or  encumbrance,  which  approval  shall not be  unreasonably  withheld  or
delayed. If Purchaser approves any such subsequent lien or encumbrance, the same
shall be deemed a Permitted Encumbrance for all purposes hereunder.

                                  ARTICLE 8...
                         CONDITIONS PRECEDENT TO CLOSING

8.1  Purchaser's  Conditions to Closing.  Purchaser's  obligation to close under
this Contract,  shall be subject to and conditioned upon the fulfillment of each
and all of the following conditions precedent:

8.1.1 All of the  documents  required to be  delivered by Seller to Purchaser at
the  Closing  pursuant  to the  terms  and  conditions  hereof  shall  have been
delivered;

8.1.2 Each of the representations,  warranties and covenants of Seller contained
herein shall be true in all material respects as of the Closing Date;

8.1.3 Seller shall have complied  with,  fulfilled and performed in all material
respects  each of the  covenants,  terms and  conditions  to be  complied  with,
fulfilled or performed by Seller hereunder; and

8.1.4  Neither  Seller nor  Seller's  general  partner  shall be a debtor in any
bankruptcy  proceeding  nor shall have been in the last 6 months a debtor in any
bankruptcy proceeding.

8.1.5 Seller has, on or before April 16, 2004,  notified  Purchaser  that Seller
has received the consents  required  under Section  8.2.4(a) to  consummate  the
transactions contemplated by this Agreement.

      Notwithstanding anything to the contrary, there are no other conditions on
Purchaser's  obligation  to Close except as expressly  set forth in this Section
8.1. If any  condition set forth in Sections  8.1.1,  8.1.3 or 8.1.4 is not met,
Purchaser may (a) waive any of the foregoing  conditions  and proceed to Closing
on the Closing Date with no offset or deduction from the Purchase  Price, or (b)
if such failure  constitutes  a default by Seller,  exercise any of its remedies
pursuant to Section  10.2.  If the  condition  set forth in Section 8.1.2 is not
met,  Purchaser  may, as its sole and  exclusive  remedy,  (i) notify  Seller of
Purchaser's  election to  terminate  this  Contract  and receive a return of the
Deposit  from the Escrow  Agent,  or (ii) waive such  condition  and  proceed to
Closing on the Closing Date with no offset or deduction from the Purchase Price.
If the  condition  stated in Section  8.1.5 is not  satisfied by April 16, 2004,
Purchaser  may, on or before April 23, 2004, as its sole and  exclusive  remedy,
terminate this Agreement,  recover the Deposit and recover its direct and actual
out-of-pocket  expenses and costs (documented by paid invoices to third parties)
in connection with this transaction, but not to exceed $20,000 in aggregate.

8.2 Seller's Conditions to Closing. Without limiting any of the rights of Seller
elsewhere  provided  for in this  Contract,  Seller's  obligation  to close with
respect to  conveyance of the Property  under this Contract  shall be subject to
and conditioned upon the fulfillment of each and all of the following conditions
precedent:

8.2.1 All of the  documents  and funds  required to be delivered by Purchaser to
Seller at the Closing  pursuant to the terms and  conditions  hereof  shall have
been delivered;

8.2.2  Each  of the  representations,  warranties  and  covenants  of  Purchaser
contained herein shall be true in all material respects as of the Closing Date;

8.2.3  Purchaser  shall have  complied  with,  fulfilled  and  performed  in all
material  respects each of the  covenants,  terms and  conditions to be complied
with, fulfilled or performed by Purchaser hereunder; and

8.2.4 Seller shall have received all consents and approvals to the  consummation
of the  transactions  contemplated  hereby (a) of  Seller's  partners,  members,
managers,  shareholders  or  directors  to the extent  required by Seller's  (or
Seller's affiliates') organizational documents, or (b) that are required by law.
In the event that this Contract is terminated because Seller is unable to obtain
the  consents  stated in Section  8.2.4.(a),  then  Purchaser's  sole rights and
remedies  are as stated in  Section  8.1 for a failure  of  condition  stated in
Section 8.1.5.

8.2.5 [Intentionally deleted.]

      If any of the foregoing  conditions  to Seller's  obligation to close with
respect to  conveyance of the Property  under this Contract are not met,  Seller
may (a) waive any of the  foregoing  conditions  and  proceed  to Closing on the
Closing Date, or (b) terminate this Contract, and, if such failure constitutes a
default by Purchaser, exercise any of its remedies under Section 10.1.

                                  ARTICLE 9...
                                    BROKERAGE

9.1  Indemnity.  Seller  represents  and warrants to Purchaser that it has dealt
only with Marcus & Millichap  having an office at 1250 24th Street,  N.W., Suite
750,  Attention:  C.  Richard  Struse,   Washington,  DC  20037  ("Broker"),  in
connection with this Contract. Seller and Purchaser each represents and warrants
to the other that,  other than  Broker,  it has not dealt with or  utilized  the
services of any other real estate  broker,  sales person or finder in connection
with this Contract, and each party agrees to indemnify,  hold harmless,  and, if
requested in the sole and absolute  discretion of the  indemnitee,  defend (with
counsel  approved by the indemnitee) the other party from and against all Losses
relating to brokerage commissions and finder's fees arising from or attributable
to the acts or omissions  of the  indemnifying  party.  The  provisions  of this
Section  9.1 shall  survive  the  termination  of this  Contract,  and if not so
terminated, the Closing and delivery of the Deed to Purchaser.

9.2 Broker  Commission.  If the Closing  occurs,  Seller  agrees to pay Broker a
commission  according to the terms of a separate  contract.  Broker shall not be
deemed a party or third party beneficiary of this Contract.

9.3 Broker  Signature  Page.  As a condition to Seller's  obligation  to pay the
commission  pursuant to Section 9.2, Broker shall execute the signature page for
Broker  attached  hereto solely for purposes of confirming the matters set forth
therein;  provided,  however,  that (a) Broker's signature hereon shall not be a
prerequisite to the binding nature of this Contract on Purchaser and Seller, and
the same shall become fully  effective  upon  execution by Purchaser and Seller,
and (b) the  signature of Broker will not be necessary to amend any provision of
this Contract.

9.4 Purchaser's  Consultant.  Seller agrees, at the request of Purchaser, to pay
Arroyo and Coates a consulting  fee in the amount of $300,000  from the Purchase
Price, if and only if the Closing occurs.

                                  ARTICLE 10..
                              DEFAULTS AND REMEDIES

10.1 Purchaser Default.  If Purchaser  defaults in its obligations  hereunder to
(a) deliver the Initial  Deposit or Additional  Deposit (or any other deposit or
payment  required  of  Purchaser  hereunder),  (b)  deliver  to the  Seller  the
deliveries specified under Section 5.3 on the date required  thereunder,  or (c)
deliver the Purchase  Price at the time  required by Section  2.2.4 and close on
the purchase of the Property on the Closing Date, then,  immediately and without
notice or cure,  Purchaser shall forfeit the Deposit, and the Escrow Agent shall
deliver the Deposit to Seller,  and neither  party shall be obligated to proceed
with the purchase and sale of the Property. If, Purchaser defaults in any of its
other  representations,  warranties or obligations under this Contract, and such
default  continues for more than 10 days after written notice from Seller,  then
Purchaser  shall  forfeit the Deposit,  and the Escrow  Agent shall  deliver the
Deposit to Seller,  and neither  party shall be  obligated  to proceed  with the
purchase  and sale of the  Property.  The  Deposit  is  liquidated  damages  and
recourse to the Deposit is, except for Purchaser's indemnity and confidentiality
obligations  hereunder,  Seller's  sole and  exclusive  remedy  for  Purchaser's
failure to perform  its  obligation  to  purchase  the  Property  or breach of a
representation  or warranty.  Seller  expressly  waives the remedies of specific
performance  and  additional  damages for such default by Purchaser.  SELLER AND
PURCHASER ACKNOWLEDGE THAT SELLER'S DAMAGES WOULD BE DIFFICULT TO DETERMINE, AND
THAT THE DEPOSIT IS A REASONABLE  ESTIMATE OF SELLER'S DAMAGES  RESULTING FROM A
DEFAULT BY PURCHASER IN ITS  OBLIGATION  TO PURCHASE  THE  PROPERTY.  SELLER AND
PURCHASER  FURTHER  AGREE  THAT  THIS  SECTION  10.1.1 IS  INTENDED  TO AND DOES
LIQUIDATE  THE AMOUNT OF DAMAGES  DUE SELLER,  AND SHALL BE  SELLER'S  EXCLUSIVE
REMEDY AGAINST PURCHASER,  BOTH AT LAW AND IN EQUITY, ARISING FROM OR RELATED TO
A  BREACH  BY  PURCHASER  OF  ITS  OBLIGATION  TO  CONSUMMATE  THE  TRANSACTIONS
CONTEMPLATED BY THIS CONTRACT,  OTHER THAN WITH RESPECT TO PURCHASER'S INDEMNITY
AND CONFIDENTIALITY OBLIGATIONS HEREUNDER.

10.2  Seller  Default.  If  Seller,  prior  to  the  Closing,  defaults  in  its
representations,  warranties,  covenants,  or  obligations  under this Contract,
including  to sell the  Property as required by this  Contract  and such default
continues for more than 10 days after written  notice from  Purchaser,  then, at
Purchaser's  election and as Purchaser's sole and exclusive  remedy,  either (A)
this Contract shall terminate,  and all payments and things of value,  including
the  Deposit,  provided by  Purchaser  hereunder  shall be returned to Purchaser
(subject to Purchaser's obligation under Section 3.5.2 to return all Third-Party
Reports and information  and Materials  provided to Purchaser as a pre-condition
to the return of the Deposit) and Purchaser may recover, as its sole recoverable
damages (but without limiting its right to receive a refund of the Deposit), its
direct and actual out-of-pocket  expenses and costs (documented by paid invoices
to third parties) in connection with this  transaction,  which damages shall not
exceed $20,000 in aggregate,  or (B) Purchaser may seek specific  performance of
Seller's  obligation  to deliver  the Deed  pursuant to this  Contract  (but not
damages).  Purchaser  agrees  that  it  shall  promptly  deliver  to  Seller  an
assignment of all of Purchaser's  right,  title and interest in and to (together
with possession of) all plans,  studies,  surveys,  reports, and other materials
paid for with the  out-of-pocket  expenses  reimbursed by Seller pursuant to the
foregoing sentence. SELLER AND PURCHASER FURTHER AGREE THAT THIS SECTION 10.2 IS
INTENDED TO AND DOES LIMIT THE AMOUNT OF DAMAGES DUE  PURCHASER AND THE REMEDIES
AVAILABLE  TO PURCHASER  FOR A DEFAULT BY SELLER PRIOR TO CLOSING,  AND SHALL BE
PURCHASER'S  EXCLUSIVE REMEDY AGAINST SELLER,  BOTH AT LAW AND IN EQUITY ARISING
FROM OR RELATED  TO A BREACH BY SELLER OF ITS  REPRESENTATIONS,  WARRANTIES,  OR
COVENANTS  PRIOR TO CLOSING OR ITS  OBLIGATION  TO CONSUMMATE  THE  TRANSACTIONS
CONTEMPLATED BY THIS CONTRACT.  UNDER NO CIRCUMSTANCES,  WHETHER BEFORE OR AFTER
CLOSING,   MAY   PURCHASER   SEEK  OR  BE  ENTITLED  TO  RECOVER  ANY   SPECIAL,
CONSEQUENTIAL, PUNITIVE, SPECULATIVE OR INDIRECT DAMAGES, ALL OF WHICH PURCHASER
SPECIFICALLY   WAIVES,   FROM   SELLER  FOR  ANY   BREACH  BY  SELLER,   OF  ITS
REPRESENTATIONS, WARRANTIES OR COVENANTS; PROVIDED, HOWEVER, THAT, TO THE EXTENT
INCLUDED WITHIN THE LIMIT ON DAMAGES  RECOVERABLE UNDER THE LIABILITY CAP STATED
IN SECTION 6.3,  PURCHASER MAY,  DURING THE SURVIVAL  PERIOD,  SEEK TO PROVE AND
RECOVER  INDIRECT,  CONSEQUENTIAL AND SPECIAL DAMAGES RESULTING FROM A BREACH OF
SELLER'S  REPRESENTATIONS.  PURCHASER  SPECIFICALLY WAIVES THE RIGHT TO FILE ANY
LIS PENDENS OR ANY LIEN AGAINST THE PROPERTY UNLESS AND UNTIL IT HAS IRREVOCABLY
ELECTED TO SEEK  SPECIFIC  PERFORMANCE  OF THIS CONTRACT AND HAS FILED AN ACTION
SEEKING SUCH REMEDY.

                                  ARTICLE 11..
                            RISK OF LOSS OR CASUALTY

11.1 Major  Damage.  In the event that the  Property is damaged or  destroyed by
fire or other  casualty  prior to  Closing,  and the cost of repair is more than
$300,000,  then  Seller  shall  have no  obligation  to  repair  such  damage or
destruction and shall notify  Purchaser in writing of such damage or destruction
(the "Damage Notice").  Within 10 days after  Purchaser's  receipt of the Damage
Notice,  Purchaser  may  elect at its  option  to  terminate  this  Contract  by
delivering  written notice to Seller.  In the event Purchaser fails to terminate
this Contract  within the foregoing  10-day period,  this  transaction  shall be
closed in accordance with the terms of this Contract for the full Purchase Price
notwithstanding  any such damage or destruction  and Purchaser shall receive all
insurance proceeds  pertaining thereto (plus a credit against the Purchase Price
in the amount of any  deductible  payable by Seller in connection  therewith) at
Closing.

11.2 Minor  Damage.  In the event that the  Property is damaged or  destroyed by
fire or other casualty prior to the Closing, and the cost of repair is less than
$300,000,  this transaction shall be closed in accordance with the terms of this
Contract,  notwithstanding the damage or destruction;  provided, however, Seller
shall make such repairs to the extent of any recovery from insurance  carried on
the Property if they can be reasonably  effected before the Closing.  Subject to
Section 11.3, if Seller is unable to effect such repairs,  then Purchaser  shall
receive all insurance  proceeds  pertaining  thereto (plus a credit  against the
Purchase Price in the amount of any  deductible  payable by Seller in connection
therewith) at Closing.

11.3  Repairs.  To the  extent  that  Seller  elects  to  commence  any  repair,
replacement or  restoration of the Property prior to Closing,  then Seller shall
be entitled to receive and apply available  insurance proceeds to any portion of
such repair, replacement or restoration completed or installed prior to Closing,
with Purchaser being  responsible for completion of such repair,  replacement or
restoration after Closing from the balance of any available  insurance proceeds.
The  provisions  of this Section 11.3 shall  survive the Closing and delivery of
the Deed to Purchaser.

                                  ARTICLE 12..
                                 EMINENT DOMAIN

12.1 Eminent  Domain.  In the event that,  at the time of Closing,  any material
part of the Property is (or  previously  has been)  acquired,  or is about to be
acquired, by any governmental agency by the powers of eminent domain or transfer
in lieu  thereof  (or in the event  that at such time there is any notice of any
such  acquisition  or  intent  to  acquire  by any  such  governmental  agency),
Purchaser  shall  have the right,  at  Purchaser's  option,  to  terminate  this
Contract by giving written notice within 10 days after Purchaser's  receipt from
Seller of notice of the occurrence of such event, and if Purchaser so terminates
this  Contract  shall  recover the  Deposit  hereunder  (subject to  Purchaser's
obligation under Section 3.5.2 to return all Third-Party Reports and information
and  Materials  provided to  Purchaser as a  pre-condition  to the return of the
Deposit).  If Purchaser  fails to  terminate  this  Contract  within such 10-day
period,  this  transaction  shall be closed in accordance with the terms of this
Contract  for the full  Purchase  Price and  Purchaser  shall  receive  the full
benefit of any  condemnation  award. It is expressly  agreed between the parties
hereto that this  section  shall in no way apply to  customary  dedications  for
public purposes which may be necessary for the development of the Property.

                                  ARTICLE 13..
                                  MISCELLANEOUS

13.1 Binding  Effect of Contract.  This Contract  shall not be binding on either
party until executed by both Purchaser and Seller. As provided in Sections 2.3.5
and Section 9.3,  above,  neither Escrow Agent's nor Broker's  execution of this
Contract shall not be a prerequisite to its effectiveness.

13.2 Exhibits And Schedules. All Exhibits and Schedules,  whether or not annexed
hereto, are a part of this Contract for all purposes.

13.3  Assignability.  This Contract is not assignable by Purchaser without first
obtaining the prior written  approval of the Seller,  except that  Purchaser may
assign this  Contract to one or more  entities  so long as (a)  Purchaser  is an
affiliate of the purchasing entity(ies),  and Purchaser is not released from its
liability  hereunder,  (b) if Purchaser  is not an  affiliate of the  purchasing
entity(ies) then Seller has consented in its reasonable discretion and Purchaser
is not  released  from its  liability  hereunder,  or (c) if Purchaser is not an
affiliate  of the  purchasing  entity(ies),  then such  purchasing  entities are
affiliates of David  Gustafson,  Eric Wilcox  and/or Ken Meislin,  are using the
transaction  for  purposes of a Section  1031  Exchange,  and  Purchaser  is not
released from liability  hereunder.  As used herein, an affiliate is a person or
entity  controlled by, under common control with, or controlling  another person
or entity.

13.4 Binding  Effect.  Subject to Section 13.3,  this Contract  shall be binding
upon and inure to the  benefit of Seller  and  Purchaser,  and their  respective
successors, heirs and permitted assigns.

13.5 Captions.  The captions,  headings,  and arrangements used in this Contract
are for convenience only and do not in any way affect, limit, amplify, or modify
the terms and provisions hereof.

13.6 Number And Gender Of Words.  Whenever  herein the singular  number is used,
the same shall  include the plural  where  appropriate,  and words of any gender
shall include each other gender where appropriate.

13.7 Notices. All notices,  demands,  requests and other communications required
or  permitted  hereunder  shall  be in  writing,  and  shall  be (a)  personally
delivered  with  a  written  receipt  of  delivery;  (b)  sent  by a  nationally
recognized  overnight  delivery service requiring a written  acknowledgement  of
receipt or providing a certification of delivery or attempted delivery; (c) sent
by  certified or  registered  mail,  return  receipt  requested,  or (d) sent by
confirmed  facsimile  transmission with an original copy thereof  transmitted to
the recipient by one of the means  described in  subsections  (a) through (c) no
later than 3 Business Days  thereafter.  All notices  shall be deemed  effective
when actually delivered as documented in a delivery receipt; provided,  however,
that if the notice was sent by  overnight  courier or mail as  aforesaid  and is
affirmatively  refused or cannot be delivered during customary business hours by
reason of the absence of a signatory to acknowledge  receipt,  or by reason of a
change of  address  with  respect  to which the  addressor  did not have  either
knowledge or written notice  delivered in accordance with this  paragraph,  then
the first attempted delivery shall be deemed to constitute delivery.  Each party
shall be  entitled  to  change  its  address  for  notices  from time to time by
delivering to the other party notice  thereof in the manner herein  provided for
the  delivery of  notices.  All notices  shall be sent to the  addressee  at its
address set forth following its name below:

      ......To Purchaser:
      ......Jackson Square Properties, LLC
      ......500 Washington Street, Suite 700
      ......San Francisco, California  94111
      ......Attention:  Curtis Gardner and Thomas Coates
      ......Telephone:  415-445-7800
      ......Facsimile:  415-544-9134 AND 415-544-9135

      ......with copy to:

      ......Holland & Knight, LLP
      ......10 St. James Avenue
      ......Boston, MA  02116
      ......Attention:  John P. O'Neill
      ......Phone:  617-305-2011
      ......Fax:  617-523-6850


      ......To Seller:
            c/o AIMCO
            4582 South Ulster Street Parkway
            Suite 1100
            Denver, Colorado  80237
            Attention:  Patrick Slavin and Kris Vercauteren
            Telephone:  303-691-4340
            Facsimile:  303-300-3282

      ......And:

            c/o AIMCO
            4582 South Ulster Street Parkway
            Suite 1100
            Denver, Colorado  80237
            Attention:  Mr. Harry Alcock
            Telephone:  303-691-4344
            Facsimile:  303-300-3282

      ......with copy to:
            Chad Asarch, Esq.
      ......Vice President and Assistant General Counsel
      ......AIMCO
            4582 South Ulster Street Parkway
            Suite 1100
            Denver, Colorado  80237
      ......Telephone: 303-691-4303
            Facsimile:  303-300-3260

      ......and a copy to:

      ......Brownstein Hyatt & Farber, P.C.
      ......410 17th Street, 22nd Floor
      ......Denver, Colorado  80202
      ......Attention:  Gary M. Reiff, Esq.
      ......Telephone: 303-223-1100
      ......Facsimile:  303-223-1111

      Any notice required hereunder to be delivered to the Escrow Agent shall be
delivered in accordance with above provisions as follows:

      ......Fidelity National Title Company
      ......1900 West Loop South, Suite 650
      ......Houston, Texas  77027
      ......Attention:  Lolly Avant, National Commercial Closing Specialist
      ......Telephone:  800-879-1672

      Unless specifically  required to be delivered to the Escrow Agent pursuant
to the terms of this  Contract,  no notice  hereunder  must be  delivered to the
Escrow  Agent in order to be  effective  so long as it is delivered to the other
party in accordance with the above provisions.

13.8  Governing Law And Venue.  The laws of the  Commonwealth  of Virginia shall
govern the  validity,  construction,  enforcement,  and  interpretation  of this
Contract,  unless  otherwise  specified  herein  except for the conflict of laws
provisions  thereof.  Subject to Section 13.25,  all claims,  disputes and other
matters in question  arising out of or relating to this Contract,  or the breach
thereof,  shall be decided by proceedings instituted and litigated in a court of
competent  jurisdiction  in the  commonwealth in which the Property is situated,
and the parties hereto  expressly  consent to the venue and jurisdiction of such
court.

13.9 Entire  Agreement.  This Contract  embodies the entire Contract between the
parties  hereto  concerning  the subject  matter hereof and supersedes all prior
conversations,  proposals,  negotiations,  understandings and Contracts, whether
written or oral.

13.10  Amendments.  This  Contract  shall  not  be  amended,  altered,  changed,
modified,  supplemented or rescinded in any manner except by a written  contract
executed by all of the  parties;  provided,  however,  that,  (a) as provided in
Section 2.3.5 above,  the signature of the Escrow Agent shall not be required as
to any  amendment of this  Contract  other than an amendment of Section 2.3, and
(b) as provided in Section 9.3, above,  the signature of the Broker shall not be
required as to any amendment of this Contract.

13.11 Severability. In the event that any part of this Contract shall be held to
be invalid or unenforceable by a court of competent jurisdiction, such provision
shall be reformed,  and enforced to the maximum extent permitted by law. If such
provision  cannot be reformed,  it shall be severed  from this  Contract and the
remaining portions of this Contract shall be valid and enforceable.

13.12 Multiple Counterparts/Facsimile  Signatures. This Contract may be executed
in a  number  of  identical  counterparts.  This  Contract  may be  executed  by
facsimile signatures which shall be binding on the parties hereto, with original
signatures to be delivered as soon as reasonably practical thereafter.

13.13  Construction.  No provision of this Contract  shall be construed in favor
of, or against,  any particular  party by reason of any presumption with respect
to the drafting of this Contract;  both parties,  being  represented by counsel,
having fully participated in the negotiation of this instrument.

13.14  Confidentiality.  Purchaser  shall not disclose the terms and  conditions
contained in this Contract and shall keep the same  confidential,  provided that
Purchaser may disclose the terms and conditions of this Contract (a) as required
by law, (b) to consummate the terms of this Contract,  or any financing relating
thereto,  or (c) to Purchaser's or Seller's lenders,  attorneys and accountants.
Any  information  and  Materials  provided by Seller to Purchaser  hereunder are
confidential  and  Purchaser  shall be prohibited  from making such  information
public  to  any  other  person  or  entity  other  than  its  agents  and  legal
representatives,  without  Seller's  prior written  authorization,  which may be
granted or denied in Seller's sole discretion. Notwithstanding the provisions of
Section 13.9,  Purchaser agrees that the covenants,  restrictions and agreements
of Purchaser  contained in any  confidentiality  agreement executed by Purchaser
prior to the  Effective  Date shall  survive the  execution of this Contract and
shall not be superceded hereby.

13.15 Time Of The  Essence.  It is expressly  agreed by the parties  hereto that
time is of the essence with respect to this Contract.

13.16 Waiver.  No delay or omission to exercise any right or power accruing upon
any default,  omission,  or failure of  performance  hereunder  shall impair any
right or power or shall be construed to be a waiver thereof,  but any such right
and  power  may be  exercised  from  time to time and as often as may be  deemed
expedient. No waiver, amendment, release, or modification of this Contract shall
be established by conduct,  custom, or course of dealing and all waivers must be
in writing and signed by the waiving party.

13.17 Attorneys Fees. In the event either party hereto  commences  litigation or
arbitration  against the other to enforce its rights  hereunder,  the prevailing
party in such  litigation  shall be entitled to recover from the other party its
reasonable  attorneys'  fees and  expenses  incidental  to such  litigation  and
arbitration, including the cost of in-house counsel and any appeals.

13.18 Time  Periods.  Should the last day of a time  period fall on a weekend or
legal holiday,  the next Business Day thereafter  shall be considered the end of
the time period.

13.19  1031  Exchange.  Seller  and  Purchaser  acknowledge  and agree  that the
purchase  and sale of the  Property  may be part of a  tax-free  exchange  under
Section 1031 (a "Section  1031  Exchange")  of the Code for either  Purchaser or
Seller.  Each party hereby agrees to take all reasonable  steps on or before the
Closing  Date to  facilitate  such  exchange if  requested  by the other  party,
provided  that (a) no party  making  such  accommodation  shall be  required  to
acquire  any  substitute  property,  (b) such  exchange  shall  not  affect  the
representations,  warranties, liabilities and obligations of the parties to each
other under this Contract,  (c) no party making such  accommodation  shall incur
any  additional  cost,  expense or liability in  connection  with such  exchange
(other than expenses of reviewing and executing documents required in connection
with such  exchange),  and (d) no dates in this  Contract  will be extended as a
result  thereof.  Notwithstanding  anything  to the  contrary  contained  in the
foregoing,  if Seller so elects to close  the  transfer  of the  Property  as an
exchange,  then (i) Seller, at its sole option,  may delegate its obligations to
transfer the Property under this Contract,  and may assign its rights to receive
the Purchase  Price from  Purchaser,  to a deferred  exchange  intermediary  (an
"Intermediary") or to an exchange accommodation titleholder, as the case may be;
(ii) such delegation and assignment shall in no way reduce,  modify or otherwise
affect the obligations of Seller  pursuant to this Contract;  (iii) Seller shall
remain  fully  liable  for  its  obligations  under  this  Contract  as if  such
delegation  and  assignment  shall not have taken place;  (iv)  Intermediary  or
exchange accommodation titleholder,  as the case may be, shall have no liability
to  Purchaser;  and (v) the closing of the transfer of the Property to Purchaser
shall be  undertaken by direct deed from Seller (or, if  applicable,  from other
affiliates  of Seller whom Seller will cause to execute such deeds) to Purchaser
or to exchange  accommodation  titleholder,  as the case may be. Notwithstanding
anything to the contrary  contained in the foregoing,  if Purchaser so elects to
close the acquisition of the Property as an exchange, then (i) Purchaser, at its
sole option,  may delegate its  obligations  to acquire the Property  under this
Contract,  and may assign its rights to receive the Property from Seller,  to an
Intermediary or to an exchange  accommodation  titleholder,  as the case may be;
(ii) such delegation and assignment shall in no way reduce,  modify or otherwise
affect the obligations of Purchaser  pursuant to this Contract;  (iii) Purchaser
shall  remain fully liable for its  obligations  under this  Contract as if such
delegation  and  assignment  shall not have taken place;  (iv)  Intermediary  or
exchange accommodation titleholder,  as the case may be, shall have no liability
to Seller;  and (v) the closing of the  acquisition of the Property by Purchaser
or the  exchange  accommodation  titleholder,  as the  case  may  be,  shall  be
undertaken by direct deed from Seller (or, if applicable,  from other affiliates
of Seller  whom Seller will cause to execute  such  deeds) to  Purchaser  (or to
exchange accommodation titleholder, as the case may be).

13.20 No Personal  Liability  of  Officers,  Trustees or  Directors  of Seller's
Partners.  Purchaser  acknowledges  that this Contract is entered into by Seller
which is a California  limited  partnership,  and Purchaser  agrees that none of
Seller's  Indemnified  Parties  shall  have any  personal  liability  under this
Contract  or  any  document   executed  in  connection  with  the   transactions
contemplated by this Contract.

13.21 No Exclusive Negotiations. Seller shall have the right, at all times prior
to the expiration of the Feasibility Period (but not after the expiration of the
Feasibility  Period if this  Contract  remains  in full  force and  effect),  to
solicit  backup offers and enter into  discussions,  negotiations,  or any other
communications  concerning  or  related  to the  sale of the  Property  with any
third-party;  provided,  however,  that such  communications  are subject to the
terms of this  Contract,  and that Seller  shall not enter into any  contract or
binding  Contract  with a third-party  for the sale of the Property  unless such
Contract is contingent on the termination of this Contract  without the Property
having been conveyed to Purchaser.

13.22 ADA Disclosure. Purchaser acknowledges that the Property may be subject to
the federal  Americans  With  Disabilities  Act (the "ADA") and the federal Fair
Housing Act (the "FHA").  The ADA, which  requires,  among other  matters,  that
tenants  and/or owners of "public  accommodations"  remove  barriers in order to
make the Property  accessible to disabled persons and provide auxiliary aids and
services  for  hearing,  vision  or speech  impaired  persons.  Seller  makes no
warranty,  representation  or  guarantee of any type or kind with respect to the
Property's compliance with the ADA or FHA (or any similar state, commonwealth or
local law), and Seller expressly disclaims any such representation.

13.23 No  Recording.  Purchaser  shall not cause or allow this  Contract  or any
contract or other document related hereto,  nor any memorandum or other evidence
hereof,  to be recorded or become a public record without Seller's prior written
consent,  which  consent may be withheld at  Seller's  sole  discretion.  If the
Purchaser  records this Contract or any other  memorandum  or evidence  thereof,
Purchaser shall be in default of its obligations under this Contract.  Purchaser
hereby appoints the Seller as Purchaser's attorney-in-fact to prepare and record
any documents  necessary to effect the nullification and release of the Contract
or  other  memorandum  or  evidence  thereof  from  the  public  records.   This
appointment shall be coupled with an interest and irrevocable.

13.24  Relationship of Parties.  Purchaser and Seller acknowledge and agree that
the  relationship  established  between the parties pursuant to this Contract is
only that of a seller and a purchaser of property.  Neither Purchaser nor Seller
is, nor shall either hold itself out to be, the agent, employee,  joint venturer
or partner of the other party.

13.25  Dispute  Resolution.  Any  controversy,  dispute,  or claim of any nature
arising  out of, in  connection  with,  or in  relation  to the  interpretation,
performance,  enforcement  or breach of this Contract (and any closing  document
executed in connection herewith), including any claim based on contract, tort or
statute,  shall be resolved at the written request of any party to this Contract
by binding arbitration. The arbitration shall be administered in accordance with
the  then  current  Commercial  Arbitration  Rules of the  American  Arbitration
Association;  provided,  however,  that (a) the parties  shall have the right to
conduct  reasonable  discovery;  and (b) the  arbitrator  (i) shall be a retired
judge,  (ii) shall decide all matters in accordance  with the governing law, and
(iii) shall render a written  decision.  Any matter to be settled by arbitration
shall be submitted to the American  Arbitration  Association in the commonwealth
in which the Property is located.  The parties  shall  attempt to designate  one
arbitrator from the American Arbitration  Association.  If they are unable to do
so within 30 days after written demand therefor,  then the American  Arbitration
Association  shall designate an arbitrator.  The arbitration  shall be final and
binding, and enforceable in any court of competent jurisdiction.  The arbitrator
shall award attorneys' fees (including  those of in-house  counsel) and costs to
the  prevailing  party and charge the cost of  arbitration to the party which is
not the prevailing party.  Notwithstanding anything herein to the contrary, this
Section  13.25 shall not prevent  Purchaser or Seller from seeking and obtaining
equitable  relief  on  a  temporary  or  permanent  basis,  including,   without
limitation, a temporary restraining order, a preliminary or permanent injunction
or similar equitable relief, from a court of competent  jurisdiction  located in
the  commonwealth  in which the Property is located (to which all parties hereto
consent to venue and  jurisdiction) by instituting a legal action or other court
proceeding  in order to protect or enforce  the rights of such party  under this
Contract or to prevent  irreparable  harm and injury.  The court's  jurisdiction
over any such equitable matter,  however, shall be expressly limited only to the
temporary,  preliminary,  or permanent equitable relief sought; all other claims
initiated  under this  Contract  between the parties  hereto shall be determined
through final and binding arbitration in accordance with this Section 13.25.

13.26 AIMCO Marks.  Purchaser agrees that Seller, the Property Manager or AIMCO,
or their  respective  affiliates,  are the sole  owners of all right,  title and
interest  in and to the AIMCO  Marks (or have the right to use such AIMCO  Marks
pursuant to license  agreements with third parties) and that no right,  title or
interest in or to the AIMCO Marks is granted, transferred,  assigned or conveyed
as a result of this Contract.  Purchaser  further agrees that Purchaser will not
use the AIMCO Marks for any purpose.

13.27  Non-Solicitation  of Employees.  Purchaser  acknowledges and agrees that,
without the express  written  consent of Seller,  neither  Purchaser  nor any of
Purchaser's  employees,  affiliates  or agents  shall  solicit  any of  Seller's
employees  or  any  employees  located  at the  Property  (or  any  of  Seller's
affiliates'  employees  located at any property  owned by such  affiliates)  for
potential employment.

13.28  Survival.  Except for (a) all of the provisions of this Article 13 (other
than  Section  13.19 and 13.21,  and (b) any  provision of this  Contract  which
expressly  states that it shall so survive,  and (c) any payment  obligation  of
Purchaser under this Contract (the foregoing (a), (b) and (c) referred to herein
as the "Survival Provisions"), none of the terms and provisions of this Contract
shall survive the  termination of this Contract,  and, if the Contract is not so
terminated,  all of the terms and  provisions of this  Contract  (other than the
Survival  Provisions)  shall be merged into the Closing  documents and shall not
survive Closing.

13.29 Multiple Purchasers.  As used in this Contract, the term "Purchaser" means
all entities  acquiring any interest in the Property at the Closing,  including,
without  limitation,  any  assignee(s)  of the  original  Purchaser  pursuant to
Section 13.3 of this Contract. In the event that "Purchaser" has any obligations
or makes any covenants,  representations or warranties under this Agreement, the
same shall be made  jointly  and  severally  by all  entities  being a Purchaser
hereunder.  In the event that Seller  receives  notice  from any entity  being a
Purchaser  hereunder,  the same shall be deemed to  constitute  notice  from all
entities  being a  Purchaser  hereunder.  In the event that any  entity  being a
Purchaser hereunder takes any action,  breaches any obligation or otherwise acts
pursuant  to the  terms of this  Contract,  the same  shall be  deemed to be the
action of the other  entity(ies)  being a Purchaser  hereunder and the action of
"Purchaser"  under this  Contract.  In the event that Seller is required to give
notice or take action with respect to Purchaser  under this Contract,  notice to
any entity  being a Purchaser  hereunder  or action  with  respect to any entity
being a Purchaser  hereunder shall be a notice or action to all entities being a
Purchaser  hereunder.  In the event that any entity being a Purchaser  hereunder
desires to bring an action or arbitration  against  Seller,  such action must be
joined by all entities being a Purchaser hereunder in order to be effective.  In
the event that there is any  agreement  by Seller to pay any amount  pursuant to
this Contract to Purchaser under any  circumstance,  that amount shall be deemed
maximum  aggregate amount to be paid to all parties being a Purchaser  hereunder
and not an amount that can be paid to each party being a Purchaser hereunder. In
the event that  Seller is required  to return the  Initial  Deposit,  Additional
Deposit or other amount to Purchaser, Seller shall return the same to any entity
being a  Purchaser  hereunder  and,  upon such  return,  shall  have no  further
liability to any other entity being a Purchaser  hereunder for such amount.  The
foregoing  provisions  also shall  apply to any  documents,  including,  without
limitation,  the  General  Assignment  and  Assumption  and the  Assignment  and
Assumption of Leases and Security  Deposits,  executed in  connection  with this
Contract and the transaction(s) contemplated hereby.

                                  ARTICLE 14..
                           LEAD-BASED PAINT DISCLOSURE

14.1 Disclosure.  Seller and Purchaser hereby  acknowledge  delivery of the Lead
Based Paint  Disclosure  attached as Exhibit G hereto.  The  provisions  of this
Section 14.1 shall survive the Closing and delivery of the Deed to Purchaser.

14.2  Consent  Agreement.  Testing  (the  "Testing")  has been  performed at the
Property with respect to lead-based  paint.  Connor  Environmental  Services and
Engineering  Assessments  performed the Testing and reported its findings in the
Lead-Based Paint Inspection and Assessment  Report dated May 15, 2003, a copy of
which has been provided to Purchaser (the  "Report").  The Report  certifies the
Property as free of (a) lead based  hazards,  (b) dust lead hazards and (c) soil
lead hazards. By execution hereof,  Purchaser  acknowledges receipt of a copy of
the Report, the Lead-Based Paint Disclosure Statement attached hereto as Exhibit
H, and  acknowledges  receipt of that certain  Consent  Agreement  (the "Consent
Agreement")  by and among the  United  States  Environmental  Protection  Agency
(executed  December 19, 2001), the United States Department of Housing and Urban
Development  (executed January 2, 2002), and Apartment Investment and Management
Company ("AIMCO")  (executed  December 18, 2001).  Because the Property has been
certified as free of (x) lead based hazards,  (y) dust lead hazards and (z) soil
lead hazards, Seller is not required under the Consent Agreement to remediate or
abate any  lead-based  paint  condition  at the  Property  prior to the Closing.
Purchaser  acknowledges and agrees that (1) after Closing, the Purchaser and the
Property shall be subject to the Consent Agreement and the provisions  contained
herein related  thereto and (2) that Purchaser shall not be deemed to be a third
party beneficiary to the Consent Agreement.  The provisions of this Section 14.2
shall survive the  termination of this Contract,  and if not so terminated,  the
Closing and delivery of the Deed to  Purchaser.  Seller shall provide the notice
attached hereto as Exhibit I prior to the Closing.

                [Remainder of Page Intentionally Left Blank]



      NOW,  THEREFORE,  the parties hereto have executed this Contract as of the
date first set forth above.

                                          Seller:

                                          NATIONAL PROPERTY INVESTORS, 7,
                                          a California limited partnership

                                          By:  NPI Equity Investments, Inc.
                                          a Florida corporation,
                                          its General Partner



                                          By:  /s/Harry Alcock
                                          Name:  Harry Alcock
                                          Title:  Executive Vice President


                                          Purchaser:


                                          JACKSON SQUARE PROPERTIES, LLC,
                                          a California limited liability
                                          company


                                          By:  /s/Curtis Gardner
                                          Name:  Curtis Gardner
                                          Title:  Managing Member



                           ESCROW AGENT SIGNATURE PAGE

      The  undersigned  executes  the Contract to which this  signature  page is
attached  for the purpose of agreeing  to the  provisions  of Section 2.3 of the
Contract,  and hereby  establishes  February  13, 2004 as the date of opening of
escrow and designates 04-193705 as the escrow number assigned to this escrow.

                                    ESCROW AGENT:

                                    FIDELITY NATIONAL TITLE COMPANY


                                    By:   /s/Lolly Avant
                                    Name:  Lolly Avant
                                    Title: Vice President



                              BROKER SIGNATURE PAGE


      The undersigned  Broker hereby executes this Broker  Signature Page solely
to  confirm  the  following:  (a)  Broker  represents  only  the  Seller  in the
transaction  described in the Contract to which this signature page is attached,
(b) Broker  acknowledges  that the only compensation due to Broker in connection
with the  Closing of the  transaction  described  in the  Contract to which this
signature  page is  attached  is as set forth in a  separate  agreement  between
Seller and Broker at the  Closing,  and (c) Broker  represents  and  warrants to
Seller  that  Broker  and its  affiliates  has  not and  will  not  receive  any
compensation (cash or otherwise) from or on behalf of Purchaser or any affiliate
thereof in  connection  with the  transaction,  and do not,  and will not at the
Closing,  have any direct or  indirect  legal,  beneficial,  economic  or voting
interest in Purchaser (or in an assignee of Purchaser, which pursuant to Section
13.3 of the  Contract,  acquires the Property at the Closing) nor has  Purchaser
granted (as of the Effective  Date or the Closing Date) the Broker or any of its
affiliates  any  right or option  to  acquire  any  direct  or  indirect  legal,
beneficial, economic or voting interest in Purchaser.


                                          BROKER:

                                          MARCUS AND MILLICHAP REAL ESTATE
                                          BROKERAGE COMPANY OF WASHINGTON,
                                          D.C.



                                          By:   /s/Andrew P. Boyle
                                          Name: Andrew P. Boyle
                                          Title: Broker of Record/Regional
                                          Manager

<PAGE>

                                                                   Exhibit 10.26
                               FIRST AMENDMENT TO
                           PURCHASE AND SALE CONTRACT

      THIS  FIRST   AMENDMENT  to  Purchase  and  Sale  Contract   (this  "First
Amendment"),  is made as of the 23rd day of March, 2004 (the "Amendment  Date"),
by and between NATIONAL PROPERTY INVESTORS 7, a California  limited  partnership
("Seller"),  and JACKSON SQUARE PROPERTIES,  LLC, a California limited liability
company ("Purchaser").

                                    RECITALS:

      WHEREAS,  Seller and Purchaser entered into the Purchase and Sale Contract
dated February 12, 2004 (the "Contract"),  for certain real property situated in
Roanoke County, Virginia, and more specifically described in the Contract; and

      WHEREAS,  Seller and  Purchaser  desire to amend the Contract on the terms
and conditions set forth below.

      NOW, THEREFORE,  in consideration of the mutual covenants set forth in the
Contract and herein and for other good and valuable  consideration,  the receipt
and sufficiency of which are hereby acknowledged,  Seller and Purchaser agree to
amend the Contract as follows:

                                   AGREEMENT:

1.  Investigation of Lead Based Paint.  From the Amendment Date through and unto
April 13,  2004 (the "Lead  Based  Paint  Inspection  Period"),  Purchaser  may,
subject  to the  rights  of  Tenants  and  during  normal  business  hours  with
reasonable  prior  notice,  enter the  clubhouse on the Property to continue its
inspection and testing  regarding the presence of lead based paint.  Purchaser's
entry into the  clubhouse,  inspection  and testing  are subject to  Purchaser's
obligations  under the  Contract,  including  Section 3.4 of the  Contract,  and
specifically   including   providing   the   insurance  set  forth  therein  and
indemnifying  Seller from any Losses  related  thereto.  Purchaser  shall obtain
Seller's prior  approval,  which shall not be  unreasonably  withheld or denied,
with respect to all testing activities  contemplated by this section.  Purchaser
hereby  waives any right  pursuant to Section  3.4.2 of the  Contract to recover
out-of-pocket expenses from Seller.

2. Seller's  Indemnity.  If Purchaser closes on the acquisition of the Property,
then Seller shall hold harmless and indemnify  Purchaser from any loss,  cost or
expense (including, without limitation,  reasonable attorneys fees and expenses)
arising out of any failure by Seller to comply with the Consent  Agreement as it
relates to the Property.

3. Additional Deposit. On or before the Amendment Date,  Purchaser shall deposit
the Additional Deposit pursuant to the Contract.

4. Acknowledgement of Waiver of Contingencies.  Except as stated in this Section
4,  Purchaser  agrees  that  Purchaser's  right to  terminate  the  Contract  is
irrevocably   waived,  the  Deposit   (including  the  Additional   Deposit)  is
non-refundable,   and  Purchaser's   obligation  to  purchase  the  Property  is
non-contingent and unconditional  except only for satisfaction of the conditions
expressly stated in Section 8.1 of the Contract.  Notwithstanding the foregoing,
Purchaser may, on or prior to the expiration of the Lead Based Paint  Inspection
Period,  terminate the Contract if it concludes (in its  reasonable  discretion)
that, based on its inspections and testing,  the presence of lead based paint at
the clubhouse constitutes a material unacceptable  condition on the Property. If
Purchaser terminates this the Contract as stated in the preceding sentence, this
Contract  shall  terminate and be of no further force and effect  subject to and
except for Purchaser's liability pursuant to Section 3.3 and any other provision
of this  Contract  which  survives  such  termination,  and Escrow  Agent  shall
forthwith  return the Deposit to Purchaser  (subject to  Purchaser's  obligation
under  Section  3.5.2 to return all  Third-Party  Reports  and  information  and
Materials  provided  to  Purchaser  as a  pre-condition  to  the  return  of the
Deposit).

5.  Miscellaneous.  The  following  provisions  shall apply with respect to this
First Amendment:

(a) Except as modified  herein,  the Contract is in full force and effect and is
hereby ratified by Purchaser and Seller.

(b)  Capitalized  terms not defined  herein  shall have the same  meaning as set
forth in the Contract.

(c) In the event of any conflict  between the Contract and this First Amendment,
the terms and conditions of this First Amendment shall control.

(d) This First Amendment may be executed in counterparts,  each of which (or any
combination  of  which)  when  signed by all of the  parties  shall be deemed an
original,  but all of which when taken together shall  constitute one agreement.
Executed  copies hereof may be delivered by telecopier and upon receipt shall be
deemed originals and binding upon the parties hereto, and actual originals shall
be promptly delivered thereafter.

                            [signature page follows]



      NOW,  THEREFORE,  the parties hereto have executed this First Amendment as
of the date first set forth above.


                                          SELLER:

                                          NATIONAL PROPERTY INVESTORS, 7,
                                          a California limited partnership

                                          By:  NPI Equity Investments, Inc.
                                          a Florida corporation,
                                          its General Partner



                                          By:  /s/Brian J. Bornhorst
                                          Name:  Brian J. Bornhorst
                                          Title:  Vice President


                                          PURCHASER:


                                          JACKSON SQUARE PROPERTIES, LLC,
                                          a California limited liability
                                          company


                                          By:  /s/Curtis Gardner
                                          Name:  Curtis Gardner
                                          Title:  Managing Member