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 September 30, 2003


[ ] 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)

                               September 30, 2003
<TABLE>
<CAPTION>

Assets
<S>                                                                            <C>
   Cash and cash equivalents                                                   $ 616
   Receivables and deposits                                                       462
   Restricted escrows                                                             376
   Other assets                                                                   846
   Assets held for sale (Note F)                                                1,993
   Investment properties:
       Land                                                    $ 3,024
       Buildings and related personal property                   37,307
                                                                 40,331
       Less accumulated depreciation                            (27,656)       12,675
                                                                             $ 16,968
Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                            $ 36
   Tenant security deposit liabilities                                            111
   Accrued property taxes                                                         293
   Other liabilities                                                              300
   Mortgage notes payable                                                      20,704
   Liabilities related to assets held for sale (Note F)                         4,287

Partners' Deficit:
   General partner                                              $ (389)
   Limited partners (60,517 units
      issued and outstanding)                                    (8,374)       (8,763)
                                                                             $ 16,968


                   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         Nine Months Ended
                                              September 30,              September 30,
                                            2003         2002          2003         2002
                                                      (Restated)                 (Restated)
Revenues:
<S>                                       <C>           <C>          <C>          <C>
  Rental income                           $ 1,488       $ 1,505      $ 4,390      $ 4,532
  Other income                                117           131          333          353
     Total revenues                         1,605         1,636        4,723        4,885

Expenses:
  Operating                                   606           577        1,727        1,684
  General and administrative                   98           111          305          364
  Depreciation                                404           401        1,228        1,212
  Interest                                    314           385        1,098        1,177
  Property taxes                              111            97          301          297
     Total expenses                         1,533         1,571        4,659        4,734

Income from continuing operations              72            65           64          151
Income (loss) from discontinued
  operations (Note F)                          24           (28)        (100)        (123)
Net income (loss)                           $ 96         $ 37         $ (36)        $ 28

Net income (loss) allocated to
  general partner (1%)                      $ 1          $ --          $ --         $ --
Net income (loss) allocated to
  limited partners (99%)                       95            37          (36)          28
                                            $ 96         $ 37         $ (36)        $ 28

Net income (loss) per limited partnership unit:
    Income from continuing operations      $ 1.18       $ 1.07        $ 1.05       $ 2.48
    Income (loss) from discontinued
      operations                             0.39         (0.46)       (1.64)       (2.02)
                                           $ 1.57       $ 0.61       $ (0.59)      $ 0.46
Distributions per limited
  partnership unit                        $ 10.72       $ 6.63       $ 37.54      $ 27.35

                   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' deficit at
   December 31, 2002                  60,517      $ (366)     $(6,066)     $(6,432)

Distributions to partners                 --          (23)     (2,272)      (2,295)

Net loss for the nine months
   ended September 30, 2003               --           --         (36)         (36)

Partners' deficit at
   September 30, 2003                 60,517      $ (389)     $(8,374)     $(8,763)


                   See Accompanying Notes to Financial Statements

</TABLE>

<PAGE>
                          NATIONAL PROPERTY INVESTORS 7

                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                 Nine Months Ended
                                                                   September 30,
                                                                  2003         2002
Cash flows from operating activities:
<S>                                                              <C>          <C>
  Net (loss) income                                              $ (36)       $ 28
  Adjustments to reconcile net (loss) income to net cash
   provided by operating activities:
     Depreciation                                                 1,586        1,559
     Amortization of loan costs                                      53           49
     Casualty gain                                                  (54)          --
     Loss on early extinguishment of debt                            14           --
     Change in accounts:
      Receivables and deposits                                     (144)         139
      Other assets                                                 (112)          (4)
      Accounts payable                                              (41)         (37)
      Tenant security deposit liabilities                            (1)          22
      Accrued property taxes                                        293          276
      Other liabilities                                            (169)         188
        Net cash provided by operating activities                 1,389        2,220

Cash flows from investing activities:
  Property improvements and replacements                           (426)        (550)
  Insurance proceeds received                                        59           --
  Net receipts from (deposits to) restricted escrows                147          (44)
        Net cash used in investing activities                      (220)        (594)

Cash flows from financing activities:
  Repayment of mortgage notes payable                            (7,600)          --
  Proceeds from mortgage notes payable                            9,290           --
  Payments on mortgage notes payable                               (349)        (299)
  Loan costs paid                                                  (213)          --
  Distributions to partners                                      (2,295)      (1,672)
        Net cash used in financing activities                    (1,167)      (1,971)

Net increase (decrease) in cash and cash equivalents                  2         (345)
Cash and cash equivalents at beginning of period                    614          912

Cash and cash equivalents at end of period                       $ 616        $ 567

Supplemental disclosure of cash flow information:
  Cash paid for interest                                        $ 1,285      $ 1,307

Supplemental disclosure of non-cash activity:
  Replacement reserves in accounts receivable                     $ 93        $ --


                   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 and
nine month periods ended  September 30, 2003 are not  necessarily  indicative of
the results that may be expected  for the fiscal year ending  December 31, 2003.
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,  2002.  The  Managing  General  Partner is an  affiliate of
Apartment  Investment and Management Company  ("AIMCO"),  a publicly traded real
estate investment trust.

Effective  April  1,  2002,  the  Partnership  adopted  Statement  of  Financial
Accounting  Standards ("SFAS") No. 145, "Rescission of FASB Statements No. 4, 44
and 64". SFAS No. 4 "Reporting  Gains and Losses from  Extinguishment  of Debt,"
required  that all gains and losses from  extinguishment  of debt be  aggregated
and, if material,  classified as an  extraordinary  item.  SFAS No. 145 rescinds
SFAS No. 4, and accordingly, gains and losses from extinguishment of debt should
only be  classified  as  extraordinary  if they are  unusual in nature and occur
infrequently. Neither of these criteria applies to the Partnership. As a result,
the  accompanying  statements of  operations  for 2003 reflect the loss on early
extinguishment  of debt at Patchen Place and South Point  Apartments  (see "Note
C") in discontinued  operations and in interest  expense,  respectively,  rather
than as an extraordinary item.

Effective  January 1, 2002,  the  Partnership  adopted  Statement  of  Financial
Accounting  Standards  ("SFAS")  No.  144,  "Accounting  for the  Impairment  or
Disposal of Long-Lived  Assets",  which  established  standards for the way that
public business  enterprises report information about long-lived assets that are
either  being held for sale or have  already  been  disposed of by sale or other
means. The standard  requires that results of operations for a long-lived assets
that is being held for sale or has  already  been  disposed  of be  reported  as
discontinued operations on the statement of operations.  In accordance with SFAS
144,  Patchen  Place  Apartments  are  considered  as assets held for sale as of
September 30, 2003 as the Partnership sold this property on October 31, 2003. As
a result,  the accompanying  statements of operations are restated as of January
1, 2002 to reflect the  operations of Patchen Place  Apartments as income (loss)
from  discontinued  operations.  The  balance  sheet  reflects  the  assets  and
liabilities of Patchen Place  Apartments as assets held for sale and liabilities
related  to  assets  held for sale,  respectively.  Approximately  $933,000  and
$909,000 in revenues  for Patchen  Place  Apartments  are included in the income
(loss) from discontinued operations for the nine months ended September 30, 2003
and 2002, respectively.

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.

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 $271,000 and $283,000 for the nine months ended September 30, 2003
and 2002, respectively, which is included in operating expenses and discontinued
operations.

An  affiliate  of  the  Managing  General  Partner  received   reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $178,000 and
$213,000 for the nine months ended  September  30, 2003 and 2002,  respectively,
which  is  included  in  general  and  administrative   expense  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  $13,000 and $24,000 for the nine months ended  September 30, 2003
and 2002, respectively.  The construction management service fees are calculated
based on a percentage of current year 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 $91,000 in reimbursements for both of the nine month periods ended
September  30, 2003 and 2002,  which is  included in general and  administrative
expenses.

For managing the affairs of the  Partnership,  the Managing  General  Partner 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 nine months ended  September 30, 2003. The Managing  General  Partner
was paid  approximately  $29,000 during the nine months ended September 30, 2002
for such fees.

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 September 30, 2003,
the Partnership had no outstanding amounts due under this Partnership Revolver.

An affiliate of the Managing  General Partner earned  approximately  $93,000 for
services related to the refinancings of Patchen Place and South Point Apartments
during the nine months ended  September 30, 2003.  These costs were  capitalized
and are included in other assets on the balance sheet.

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 the nine months ended September 30, 2003 and
2002,  the  Partnership  was charged by AIMCO and its  affiliates  approximately
$92,000 and $78,000,  respectively,  for insurance  coverage and fees associated
with policy claims administration.

Note C - Refinancing of Mortgage Notes Payable

On May 16, 2003, the  Partnership  refinanced the mortgage  encumbering  Patchen
Place Apartments.  The refinancing  replaced the existing mortgage of $3,000,000
with a new mortgage in the amount of $4,290,000.  Total  capitalized  loan costs
were approximately  $98,000 during the nine months ended September 30, 2003. The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately $7,000 during the nine months ended September 30, 2003, due to the
write off of  unamortized  loan  costs and debt  discounts  and the  payment  of
prepayment penalties, which is included in loss from discontinued operations.

On June 27, 2003,  the  Partnership  refinanced the mortgage  encumbering  South
Point Apartments.  The refinancing  replaced the existing mortgage of $4,600,000
with a new mortgage in the amount of $5,000,000.  Total  capitalized  loan costs
were approximately $115,000 during the nine months ended September 30, 2003. The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately $7,000 during the nine months ended September 30, 2003, due to the
write off of  unamortized  loan  costs and debt  discounts  and the  payment  of
prepayment penalties, which is included in interest expense.

Initially the May 16, 2003  refinancing of Patchen Place Apartments and the June
27, 2003  refinancing  of South Point  Apartments  were under an interim  credit
facility  ("Interim Credit Facility") which also provided for the refinancing of
several other properties. The Interim Credit Facility created separate loans for
each property refinanced thereunder,  which loans were not  cross-collateralized
or  cross-defaulted  with each  other.  During  the term of the  Interim  Credit
Facility,  Patchen  Place and  South  Point  Apartments  were  required  to make
interest-only  payments.  The first  month's  interest  rate for  Patchen  Place
Apartments was 2.78% and for South Point Apartments was 2.60%.

As of July 1 and August 1,  2003,  the loans on  Patchen  Place and South  Point
Apartments,  respectively,  were  assumed  by a  different  lender.  The  credit
facility  ("Permanent  Credit  Facility")  with the new lender has a maturity of
five years with an option for the Partnership to elect one five-year  extension.
This  Permanent  Credit  Facility also created  separate loans for each property
refinanced   thereunder,   which   loans   are   not   cross-collateralized   or
cross-defaulted  with each other. Each note under this Permanent Credit Facility
is initially a variable rate loan, and after three years the Partnership has the
option of  converting  the note to a fixed rate loan.  The interest  rate on the
variable  rate  loans  is  85  basis  points  over  the  Fannie  Mae  discounted
mortgage-backed  security index (1.9% per annum at September 30, 2003),  and the
rate resets monthly. Each loan automatically renews at the end of each month. In
addition,   monthly   principal   payments  are  required  based  on  a  30-year
amortization schedule,  using the interest rate in effect during the first month
that the  properties  are on the  Permanent  Credit  Facility.  The loans may be
prepaid without penalty.

Note D - Casualty Event

On February 15, 2003 an ice storm caused damage to exterior  sections on some of
the buildings and to the  landscaping  at Patchen  Place  Apartments.  No actual
units were  damaged  during this storm.  Reconstruction  costs of  approximately
$68,000 have been  incurred as of September 30, 2003. As a result of the damage,
approximately  $40,000 of fixed assets and approximately  $35,000 of accumulated
depreciation  were  written off  resulting  in a net write off of  approximately
$5,000.  The  property  received  approximately  $59,000  in  proceeds  from the
insurance  company  to repair  the damage  and  recognized  a  casualty  gain of
approximately $54,000,  which is included in loss from discontinued  operations,
as a result of the  difference  between the  proceeds  received and the net book
value of the assets written off.

Note E - 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
filed an appeal  seeking  to vacate  and/or  reverse  the  order  approving  the
settlement and entering judgment  thereto.  The Managing General Partner intends
to file a respondent's  brief in support of the order  approving  settlement and
entering judgment thereto.

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.

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.  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  Complaint  also  attempts  to certify a subclass  for  salaried
service  directors who are challenging  their  classification as exempt from the
overtime  provisions of the FLSA.  AIMCO  Properties L.P. has filed an answer to
the Complaint denying the substantive  allegations.  Although the outcome of any
litigation  is  uncertain,  in the opinion of the Managing  General  Partner the
claims will not result in any material liability to the Partnership.

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

Note F - Subsequent Event

On October 31,  2003,  the  Partnership  sold  Patchen  Place  Apartments  to an
unrelated party for  approximately  $6,995,000.  After payment of closing costs,
the net proceeds received by the Partnership were approximately $6,841,000.  The
sale of the property resulted in a gain on the sale during the fourth quarter of
2003 of  approximately  $4,703,000.  In accordance with SFAS No. 144, the assets
and  liabilities  of the property  have been  classified  as held for sale as of
September 30, 2003 and the  operations of the property have been shown as income
(loss)  from  discontinued  operations  for the  three  and  nine  months  ended
September 30, 2003 and 2002. Revenues for the nine month periods ended September
30, 2003 and 2002 were approximately $933,000 and $909,000, respectively.

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 properties consist of five apartment complexes. The
following  table sets forth the average  occupancy of the properties for each of
the nine month periods ended September 30, 2003 and 2002:

                                                   Average Occupancy
                                                   2003       2002

      Fairway View II Apartments                    91%        93%
         Baton Rouge, Louisiana
      The Pines Apartments                          92%        94%
         Roanoke, Virginia
      Patchen Place Apartments (1)                  93%        87%
         Lexington, Kentucky
      Northwoods I and II Apartments                96%        95%
         Pensacola, Florida
      South Point Apartments                        90%        92%
         Durham, North Carolina

(1)   The  Managing  General  Partner  attributes  the  increase in occupancy at
      Patchen Place Apartments to increased marketing efforts.

Results of Operations

The  Partnership's  net loss for the nine months  ended  September  30, 2003 was
approximately  $36,000 compared to net income of  approximately  $28,000 for the
nine months ended September 30, 2002. The Partnership's net income for the three
months ended September 30, 2003 was approximately $96,000 compared to net income
of  approximately  $37,000 for the three months  ended  September  30, 2002.  On
October 30, 2003, the Partnership  sold Patchen Place Apartments to an unrelated
party for  approximately  $6,995,000.  After payment of closing  costs,  the net
proceeds received by the Partnership were approximately $6,841,000.  The sale of
the property resulted in a gain on the sale during the fourth quarter of 2003 of
approximately  $4,703,000.  In  accordance  with SFAS No.  144,  the  assets and
liabilities  of the  property  have  been  classified  as  held  for  sale as of
September 30, 2003 and the  operations of the property have been shown as income
(loss)  from  discontinued  operations  for the  three  and  nine  months  ended
September 30, 2003 and 2002. Revenues for the nine month periods ended September
30, 2003 and 2002 were approximately $933,000 and $909,000, respectively.

Excluding the income (loss) from discontinued operations,  the Partnership's net
income from  continuing  operations for the nine months ended September 30, 2003
was approximately $64,000 compared to approximately $151,000 for the nine months
ended September 30, 2002. The  Partnership's  income from continuing  operations
for the three months ended September 30, 2003 was approximately $72,000 compared
to net income from continuing  operations of approximately $65,000 for the three
months  ended  September  30, 2002.  The decrease in net income from  continuing
operations for the nine months ended September 30, 2003 was due to a decrease in
total revenues partially offset by a decrease in total expenses. The increase in
income from continuing  operations for the three months ended September 30, 2003
was due to a decrease in total expenses  partially offset by a decrease in total
revenues.

The decrease in total revenues for the three and nine months ended September 30,
2003 was due to a decrease in rental and other income.  Rental income  decreased
primarily due to decreases in average  rental rates at South Point and The Pines
Apartments and a decrease in occupancy at Fairway View II, The Pines,  and South
Point Apartments and increased  concessions at Northwoods I and II and The Pines
Apartments.  These were partially offset by increased rental rates at Northwoods
I and II and Fairway  View  Apartments  and reduced  concessions  at  Southpoint
Apartments and reduced bad debt expense at Northwoods  Apartments.  Other income
decreased primarily due to decreased lease cancellation fees at Northwoods I and
II Apartments.

The decrease in total expenses for the three and nine months ended September 30,
2003 was due to a decrease in interest and general and  administrative  expenses
partially  offset  by  an  increase  in  operating  expenses.  Interest  expense
decreased  due  to  principal   payments  on  the  mortgages   encumbering   the
Partnership's properties which decreased the debt balance and the refinancing of
South Point Apartments in June 2003 at a lower interest rate. Operating expenses
increased  primarily  due to an increase in  maintenance  expenses.  Maintenance
expense  increased  due to  increases  in  contract  labor for  cleaning,  trash
removal,  yard and grounds  work and  interior  painting at Fairway View II, The
Pines, and South Point Apartments.

General  and  administrative  expenses  decreased  for the three and nine months
ended  September  30, 2003  primarily due to a reduction in the cost of services
included in the management  reimbursements  paid to the Managing General Partner
as allowed  under the  Partnership  Agreement.  Also  included  in  general  and
administrative expenses at both September 30, 2003 and 2002 are costs associated
with the  quarterly and annual  communications  with  investors  and  regulatory
agencies and the annual audit required by the Partnership Agreement.

As part of the ongoing  business plan of the  Partnership,  the Managing General
Partner  monitors  the  rental  market  environment  of each  of its  investment
properties  to assess  the  feasibility  of  increasing  rents,  maintaining  or
increasing  occupancy  levels and protecting the  Partnership  from increases in
expense.  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.

Liquidity and Capital Resources

At  September  30,  2003,  the  Partnership  had cash and  cash  equivalents  of
approximately  $616,000 as compared to  approximately  $567,000 at September 30,
2002.  Cash and cash  equivalents  increased  by  approximately  $2,000 from the
Partnership's  year ended December 31, 2002 due to  approximately  $1,389,000 of
cash  provided  by  operating   activities  partially  offset  by  approximately
$1,167,000 of cash used in financing  activities and  approximately  $220,000 of
cash used in investing  activities.  Cash used in financing activities consisted
of payments of principal  made on the mortgages  encumbering  the  Partnership's
properties,  repayment of the mortgage notes encumbering Patchen Place and South
Point  Apartments,  loan costs paid,  and  distributions  to partners  partially
offset by proceeds from mortgage notes payable due to the refinancing of Patchen
Place and South Point Apartments. Cash used in investing activities consisted of
property  improvements and replacements  partially offset by insurance  proceeds
received and net  withdrawals  from escrow  accounts  maintained by the mortgage
lenders.  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 September 30, 2003,
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 various  properties  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
each of the Partnership's properties are detailed below.

Fairway View II

During the nine months ended  September  30,  2003,  the  Partnership  completed
approximately  $34,000 of capital  improvements  at Fairway View II  Apartments,
consisting  primarily of roof upgrades and 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  $35,000  in  capital
improvements  during the remainder of 2003. The additional capital  improvements
will consist  primarily of floor covering,  air conditioning  unit and appliance
replacements  and  parking  lot  and  balcony   upgrades.   Additional   capital
improvements may be considered and will depend on the physical  condition of the
property as well as capital  reserves and the anticipated cash flow generated by
the property.

The Pines

During the nine months ended  September  30,  2003,  the  Partnership  completed
approximately   $44,000  of  capital   improvements  at  The  Pines  Apartments,
consisting primarily of water heater, floor covering and appliance 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  $35,000 in capital  improvements
during the remainder of 2003. The additional  capital  improvements will consist
primarily of floor covering, air conditioning unit, and appliance  replacements.
Additional  capital  improvements  may be  considered  and  will  depend  on the
physical  condition  of the  property  as  well  as the  anticipated  cash  flow
generated by the property.

Patchen Place

During the nine months ended  September  30,  2003,  the  Partnership  completed
approximately  $183,000 of capital  improvements  at Patchen  Place  Apartments,
consisting  primarily of roof upgrades,  floor covering,  air conditioning unit,
water heater,  and appliance  replacements.  These improvements were funded from
operating cash flow, insurance proceeds, and replacement reserves. Patchen Place
was sold on October 31, 2003.

Northwoods I and II

During the nine months ended  September  30,  2003,  the  Partnership  completed
approximately $90,000 of capital improvements at Northwoods I and II Apartments,
consisting  primarily of floor covering,  air  conditioning  unit, and appliance
replacements and structural  improvements.  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
$33,000 in capital  improvements  during the remainder of 2003.  The  additional
capital  improvements  will consist  primarily of floor  covering and  appliance
replacements.  Additional capital improvements may be considered and will depend
on the physical  condition of the property as well as the anticipated  cash flow
generated by the property.

South Point

During the nine months ended  September  30,  2003,  the  Partnership  completed
approximately  $75,000  of  capital  improvements  at  South  Point  Apartments,
consisting  primarily of floor  covering,  appliance and air  conditioning  unit
replacements.  These  improvements  were  funded  from  operating  cash flow and
replacement reserves. The Partnership evaluates the capital improvement needs of
the property  during the year and  currently  expects to complete an  additional
$10,000 in capital  improvements  during the remainder of 2003.  The  additional
capital   improvements   will  consist  primarily  of  floor  covering  and  air
conditioning  unit  replacements.   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 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   Partnership's   investment   properties   of
approximately  $24,976,000  has maturity  dates  ranging from October 1, 2012 to
December 1, 2021.  The mortgage  indebtedness  encumbering  Fairway View II, The
Pines, and Northwood I and II Apartments of  approximately  $15,714,000 that was
refinanced during 2000 and 2001 requires monthly payments until the loans mature
between  January 2020 and December 2021 at which time the loans are scheduled to
be fully  amortized.  The mortgage  indebtedness  encumbering  Patchen Place and
South Point Apartments of $9,262,000, that was refinanced during the nine months
ended September 30, 2003, has balloon  payments due in September  2007.  Patchen
Place  Apartments  was sold on October 31, 2003,  at which time the mortgage was
repaid in full.  The Managing  General  Partner  will  attempt to refinance  the
indebtedness  on South Point  Apartments  and/or sell the property  prior to the
maturity  date.  If the property  cannot be  refinanced or sold for a sufficient
amount, the Partnership may risk losing the property through foreclosure.

On May 16, 2003, the  Partnership  refinanced the mortgage  encumbering  Patchen
Place Apartments.  The refinancing  replaced the existing mortgage of $3,000,000
with a new mortgage in the amount of $4,290,000.  Total  capitalized  loan costs
were approximately  $98,000 during the nine months ended September 30, 2003. The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately $7,000 during the nine months ended September 30, 2003, due to the
write off of unamortized loan costs and debt discounts and payment of prepayment
penalties, which are included in loss from discontinued operations.

On June 27, 2003,  the  Partnership  refinanced the mortgage  encumbering  South
Point Apartments.  The refinancing  replaced the existing mortgage of $4,600,000
with a new mortgage in the amount of $5,000,000.  Total  capitalized  loan costs
were approximately $115,000 during the nine months ended September 30, 2003. The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately $7,000 during the nine months ended September 30, 2003, due to the
write off of unamortized loan costs and debt discounts and payment of prepayment
penalties, which are included in interest expense.

Initially the May 16, 2003  refinancing of Patchen Place Apartments and the June
27, 2003  refinancing  of South Point  Apartments  were under an interim  credit
facility  ("Interim Credit Facility") which also provided for the refinancing of
several other properties. The Interim Credit Facility created separate loans for
each property refinanced thereunder,  which loans were not  cross-collateralized
or  cross-defaulted  with each  other.  During  the term of the  Interim  Credit
Facility,  Patchen  Place and  South  Point  Apartments  were  required  to make
interest-only  payments.  The first  month's  interest  rate for  Patchen  Place
Apartments was 2.78% and for South Point Apartments was 2.60%.

As of July 1 and August 1,  2003,  the loans on  Patchen  Place and South  Point
Apartments,  respectively,  were  assumed  by a  different  lender.  The  credit
facility  ("Permanent  Credit  Facility")  with the new lender has a maturity of
five years with an option for the Partnership to elect one five-year  extension.
This  Permanent  Credit  Facility also created  separate loans for each property
refinanced   thereunder,   which   loans   are   not   cross-collateralized   or
cross-defaulted  with each other. Each note under this Permanent Credit Facility
is initially a variable rate loan, and after three years the Partnership has the
option of  converting  the note to a fixed rate loan.  The interest  rate on the
variable  rate  loans  is  85  basis  points  over  the  Fannie  Mae  discounted
mortgage-backed  security index (1.9% per annum at September 30, 2003),  and the
rate resets monthly. Each loan automatically renews at the end of each month. In
addition,   monthly   principal   payments  are  required  based  on  a  30-year
amortization schedule,  using the interest rate in effect during the first month
that the  properties  are on the  Permanent  Credit  Facility.  The loans may be
prepaid without penalty.

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 nine months ended
September 30, 2003 and 2002 (in thousands, except per unit data):
<TABLE>
<CAPTION>

                                       Per Limited                         Per Limited
                  Nine Months Ended    Partnership   Nine Months Ended     Partnership
                 September 30, 2003       Unit       September 30, 2002       Unit

<S>                     <C>              <C>               <C>               <C>
Operations              $ 948            $15.50            $1,430            $23.38
Refinancing              1,347 (1)        22.04               242 (2)          3.97
    Total              $2,295            $37.54            $1,672            $27.35
</TABLE>

(1)   Distribution  from the  refinancing  of  Patchen  Place  and  South  Point
      Apartments during May 2003.

(2)   Distribution  from the remaining  proceeds from the refinancing of Fairway
      View II Apartments in November  2001 and the  refinancing  of Northwoods I
      and II Apartments in August 2001, respectively.

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 2003 or subsequent periods.

Other

In addition to its  indirect  ownership of the 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
September  30,  2003. 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,  unitholders  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 voting decisions with respect to the Partnership. However, DeForest Ventures
II L.P., from whom Insignia  Properties LP ("IPLP") 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  properties  are  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 properties.  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 and
the Partnership  fully reserves all balances  outstanding  over thirty days. 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
filed an appeal  seeking  to vacate  and/or  reverse  the  order  approving  the
settlement and entering judgment  thereto.  The Managing General Partner intends
to file a respondent's  brief in support of the order  approving  settlement and
entering judgment thereto.

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.

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.  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  Complaint  also  attempts  to certify a subclass  for  salaried
service  directors who are challenging  their  classification as exempt from the
overtime  provisions of the FLSA.  AIMCO  Properties L.P. has filed an answer to
the Complaint denying the substantive  allegations.  Although the outcome of any
litigation  is  uncertain,  in the opinion of the Managing  General  Partner the
claims will not result in any material liability to the Partnership.

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 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:

                  None filed during the quarter ended September 30, 2003.


<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/Patrick J. Foye
                                          Patrick J. Foye
                                          Executive Vice President


                                    By:   /s/Paul J. McAuliffe
                                          Paul J. McAuliffe
                                          Executive Vice President
                                          and Chief Financial Officer


                                    Date: November 12, 2003



<PAGE>



Exhibit 31.1


                                  CERTIFICATION


I, Patrick J. Foye, 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:  November 12, 2003

                                /s/Patrick J. Foye
                                Patrick J. Foye
                                Executive   Vice   President   of   NPI   Equity
                                Investments,   Inc.,  equivalent  of  the  chief
                                executive officer of the Partnership


<PAGE>



Exhibit 31.2


                                  CERTIFICATION


I, Paul J. McAuliffe, 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:  November 12, 2003

                                /s/Paul J. McAuliffe
                                Paul J. McAuliffe
                                Executive  Vice  President  and Chief  Financial
                                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 September 30,
2003 as filed with the  Securities  and Exchange  Commission  on the date hereof
(the  "Report"),  Patrick  J. Foye,  as the  equivalent  of the chief  executive
officer of the  Partnership,  and Paul J.  McAuliffe,  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/Patrick J. Foye
                                    Name:  Patrick J. Foye
                                    Date:  November 12, 2003


                                           /s/Paul J. McAuliffe
                                    Name:  Paul J. McAuliffe
                                    Date:  November 12, 2003


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 10.13





                           PURCHASE AND SALE CONTRACT

                                     BETWEEN



                         NATIONAL PROPERTY INVESTORS 7,

                        a California limited partnership





                                    AS SELLER





                                       AND



                                  VERMEIL, LLC,

                      a Kentucky limited liability company



                                  AS PURCHASER

                                  PATCHEN PLACE





<PAGE>









                           PURCHASE AND SALE CONTRACT

      THIS PURCHASE AND SALE CONTRACT  (this  "Contract")  is entered into as of
the 31st day of July,  2003  (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  VERMEIL,  LLC, a Kentucky  limited  liability  company,  having a principal
address  at  501  S.  Second  Street,  Suite  200,  Louisville,  Kentucky  40202
("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 Fayette  County,  Kentucky,  as
more particularly described in Exhibit A attached hereto and made a part hereof,
and the improvements thereon, commonly known as PATCHEN PLACE.

      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
1"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 "Broker" shall have the meaning set forth in Section 9.1. 1.1.6  "Business
Day" means any day other than a Saturday  or Sunday or Federal  holiday or legal
holiday in the  States of  Colorado,  Texas,  or  Kentucky,  or any day on which
Lender is not open for business.
1.1.7  "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.
1.1.8  "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.  1.1.9 "Code"
shall have the meaning set forth in Section  2.3.6.  1.1.10  "Consent  Contract"
shall have the meaning set forth in Section 14.2.
1.1.11  "Consultants"  shall have the meaning set forth in Section  3.1.  1.1.12
"Damage Notice" shall have the meaning set forth in Section 11.1.  1.1.13 "Deed"
shall have the meaning set forth in Section 5.2.1.  1.1.14 "Deed of Trust" shall
have the meaning set forth in Section 4.5. 1.1.15 "Deposit" means, to the extent
actually  deposited by Purchaser with Escrow Agent,  the Initial Deposit and the
Additional  Deposit.  1.1.16  "Escrow Agent" shall have the meaning set forth in
Section  2.2.1.  1.1.17  "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 1.1.17.
1.1.18 "Existing Survey" shall have the meaning set forth in Section 4.2. 1.1.19
"Feasibility Period" shall have the meaning set forth in Section 3.1.
1.1.20  "Financing  Contingency  Period"  shall  have the  meaning  set forth in
Section  3.7.  1.1.21  "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 1.1.21.
1.1.22  "Final  Response  Deadline"  shall have the meaning set forth in Section
4.3.  1.1.23  "General  Assignment"  shall have the meaning set forth in Section
5.2.3.
1.1.24      "Good Funds" shall have the meaning set forth in Section 2.2.1.
1.1.25      "Improvements"  means all  buildings and  improvements  located on
the Land taken "as is."
1.1.26  "Initial  Deposit"  shall have the meaning  set forth in Section  2.2.1.
1.1.27 "Land" means all of those certain  tracts of land located in the State of
Kentucky  described on Exhibit A, and all rights,  privileges and  appurtenances
pertaining thereto.
1.1.28  "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.
1.1.29      "Leases  Assignment"  shall have the  meaning set forth in Section
5.2.4.
1.1.30      "Lender" means Fannie Mae.
1.1.31  "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 Fees to
be determined as of the Closing Date. 1.1.32 "Loan" means the indebtedness owing
to Lender evidenced by the Note.
1.1.33 "Loan Payoff" shall have the meaning set forth in Section  5.4.7.  1.1.34
"Losses" shall have the meaning set forth in Section 3.4.1.  1.1.35  "Materials"
shall have the meaning set forth in Section 3.5. 1.1.36 "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 "PATCHEN PLACE" 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).
1.1.37  "Note" means that  certain  Multifamily  Note in the original  principal
amount of $4,290,000.00,  dated May 16, 2003,  executed by Seller and payable to
the order of Lender.
1.1.38  "Objection  Deadline"  shall have the meaning set forth in Section  4.3.
1.1.39 "Objection Notice" shall have the meaning set forth in Section 4.3.
1.1.40  "Objections"  shall have the  meaning set forth in Section  4.3.  1.1.41
"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.
1.1.42  "Permitted  Exceptions" shall have the meaning set forth in Section 4.4.
1.1.43  "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.
1.1.44 "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.  1.1.45  "Property  Contracts  Notice" shall have the
meaning set forth in Section 3.6.
1.1.46      "Property  Manager"  means the  current  property  manager  of the
Property.
1.1.47      "Proration  Schedule"  shall have the meaning set forth in Section
5.4.1.
1.1.48      "Purchase  Price" means the  consideration to be paid by Purchaser
to Seller for the purchase of the Property pursuant to Section 2.2.
1.1.49      "Regional  Property  Manager"  shall have the meaning set forth in
Section 6.4.
1.1.50      "Response  Deadline"  shall have the  meaning set forth in Section
4.3.
1.1.51      "Response Notice" shall have the meaning set forth in Section 4.3.
1.1.52      "Seller's  Indemnified  Parties"  shall have the meaning set forth
in Section 3.4.1.
1.1.53      "Seller's  Representations"  shall have the  meaning  set forth in
Section 6.1.
1.1.54      "Survey" shall have the meaning ascribed thereto in Section 4.2.
1.1.55      "Survival Period" shall have the meaning set forth in Section 6.3.
1.1.56      "Survival  Provisions" shall have the meaning set forth in Section
13.28.
1.1.57 "Tenant" means any person or entity entitled to occupy any portion of the
Property under a Lease.  1.1.58 "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.  1.1.59 "Tenant  Security Deposit Balance" shall have the meaning set
forth in Section 5.4.6.2.
1.1.60  "Terminated  Contracts" shall have the meaning set forth in Section 3.6.
1.1.61  "Testing"  shall  have the  meaning  set forth in Section  14.2.  1.1.62
"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. 1.1.63 "Title Commitment" shall
have the meaning ascribed thereto in Section 4.1.
1.1.64      "Title Documents" shall have the meaning set forth in Section 4.1.
1.1.65      "Title Insurer" shall have the meaning set forth in Section 2.2.1.
1.1.66      "Title Policy" shall have the meaning set forth in Section 4.1.
1.1.67      "Uncollected  Rents"  shall have the  meaning set forth in Section
5.4.6.1.
1.1.68      "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 Seven  Million  and No/100  ($7,000,000.00)  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
Insurance Company, c/o Lolly Avant, Vice President,  3D International  Building,
1900 West Loop South,  Suite 650, Houston,  Texas 77027,  800-879-1677  ("Escrow
Agent" or "Title  Insurer")  an  initial  deposit  (the  "Initial  Deposit")  of
$70,000.00 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 $70,000.00  by wire 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 Omitted.
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).
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 state 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 AND FINANCING CONTINGENCY 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 the date which is 30
days after the Effective Date (the  "Feasibility  Period"),  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. (in the time zone in which the Escrow Agent
is located) on the date of expiration of the  Feasibility  Period.  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.  Purchaser shall conduct and
shall cause its  Consultants to conduct any and all Inspections in such a manner
as to avoid any disruption or disturbance of Tenants' occupancy of 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.  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.  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  (a)  casualty  insurance  and  comprehensive  public
liability  insurance with coverages of not less than $1,000,000.00 for injury or
death to one or more  persons and  $1,000,000.00  with  respect to the  property
damage,  by water or  otherwise,  and (b)  workmen's  compensation  insurance if
required by state law (and if none is  required  by state law, it is  understood
that Purchaser  shall assume all liability for its employees and Seller shall be
indemnified  from liability for same).  Additionally,  Purchaser shall cause its
third party  consultants  to maintain (i) 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 (ii) worker's compensation insurance for all of their respective
employees  in  accordance  with the law of the  state in which the  Property  is
located.  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 the  earlier  to occur of (x)  Purchaser's  or  Purchaser's
Consultants' entry onto the Property,  or (y) the expiration of 5 days after the
Effective Date. 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 10 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 make the
documents set forth on Schedule 3.5 (the "Materials")  available at the Property
for review and copying by Purchaser at Purchaser's sole cost and expense. In the
alternative,  at Seller's option and within the foregoing 10-day period,  Seller
may  deliver  some  or all of the  Materials  to  Purchaser,  or 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.  3.7 Financing  Contingency  Period.  3.7.1  Purchaser
shall have a period of 45 days  following  the  Effective  Date (the  "Financing
Contingency Period") to obtain a commitment for financing the acquisition of the
Property,  the  principal  amount of which  financing  shall be  limited  to the
following  parameters:  (a) a loan-to-value ratio not less than 80% of the value
of the property,  (b) bear interest at not more than 6.0% per annum,  (c) a term
of 10 years, or such term as is customary for securitized loan transactions, and
(d) an amortization  of not less than 30 years.  In the event that,  after using
commercially  reasonable efforts,  Purchaser is unable to obtain such commitment
for  the  acquisition  of  the  Property  prior  to the  end  of  the  Financing
Contingency  Period,  Purchaser  may, at its option,  by the delivery of written
notice by Purchaser  to Seller and Escrow Agent not later than 5:00 p.m.,  Texas
time,  on the last  day of the  Financing  Contingency  Period,  terminate  this
Contract,  whereupon  this  Contract  shall  terminate  and the Deposit shall be
returned to Purchaser by Escrow Agent and this Contract shall  automatically  be
of no further force and effect and neither  party shall have any further  rights
or obligations hereunder, except as provided in Section 5.3. 3.7.2 Following the
expiration  of  the  Financing   Contingency  Period,   Purchaser  assumes  full
responsibility  to  expeditiously  and diligently  initiate and pursue all steps
necessary  to  obtain  the  funds  required  for  settlement,   and  Purchaser's
acquisition  of such  funds  shall  not be a  contingency  or  condition  to the
Closing.

                                   ARTICLE 4
                                      TITLE
4.1 Title  Documents.  Within 10 calendar 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 an owner's title  insurance  policy (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.  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  or make  available at the
Property any existing  survey of the Property (the  "Existing  Survey") which to
Seller's  knowledge is in Seller's  possession or reasonable control (subject to
Section 3.5.2);  provided,  however,  in the event that such Existing Survey was
prepared in connection with the sale of the Property,  then Seller shall deliver
the same to  Purchaser  and  Purchaser  shall pay the costs  thereof.  Purchaser
acknowledges  and agrees  that  delivery  of the  Existing  Survey is subject to
Section  3.5.2.  To the extent that  Purchaser  desires that a new survey of the
Property be prepared (or that the Existing  Survey be updated),  Purchaser shall
so advise  Seller in writing no later than 5 Business  Days after the  Effective
Date, in which event Purchaser 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  Purchaser
determines in its reasonable discretion).  Purchaser shall be solely responsible
for the cost and expense of the  preparation  of any new survey or any update to
the Exiting Survey.  4.3 Objection and Response  Process.  On or before the date
which is 15 days after the Effective Date (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 20 days after the  Effective  Date (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 25 days after the Effective
Date (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   Omitted;   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 Fees due in  connection  with the Loan Payoff shall be
paid by Purchaser.

                                   ARTICLE 5
                                     CLOSING
5.1 Closing Date.  The Closing shall occur 30 days  following the  expiration of
the Financing  Contingency  Period (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.  Notwithstanding  the foregoing to the contrary,  Seller
shall have the option,  by delivering  written notice to Purchaser to extend the
Closing  Date to the last  Business  Day of the month in which the Closing  Date
otherwise would occur pursuant to the preceding sentence,  or to such other date
(either  in the same  month or the  next) as  Seller  reasonably  determines  is
desirable in connection with the Loan Payoff.  Further,  the Closing Date may be
extended  without  penalty  at the  option of Seller to a date not later than 30
days  following  the  Closing  Date  specified  in the  first  sentence  of this
paragraph above (or, if applicable, as extended by Seller pursuant to the second
sentence of this paragraph) to satisfy a condition to be satisfied by Seller, or
such later date as is mutually acceptable to Seller and Purchaser.
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  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.
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 F.
5.3.8 The Vendor Terminations.
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 Omitted.
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  shall be based
upon the  assessed  valuation  and tax rate  figures  for the year in which  the
Closing occurs to the extent the same are available; provided, that in the event
that actual  figures  (whether for the assessed value of the Property or for the
tax rate) for the year of Closing are not  available  at the Closing  Date,  the
proration  shall be made using figures from the preceding year. The proration of
real  property  taxes or  installments  of  assessments  shall be final  and not
subject to re-adjustment after Closing.
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.
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 state 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 (a) one-half of any sales,  use,  gross receipts or similar
taxes, (b) the cost of recording any instruments required to discharge any liens
or  encumbrances  against the Property,  (c) any premiums or fees required to be
paid by Purchaser with respect to the Title Policy  pursuant to Section 4.1, and
(d) one-half of the customary  closing  costs of the Escrow Agent.  Seller shall
pay (i) any transfer  tax, (ii) one-half of any sales,  use,  gross  receipts or
similar  taxes,  (iii)  the base  premium  for the Title  Policy  to the  extent
required by Section 4.1, and (iv) one-half of the customary closing costs of the
Escrow Agent.
5.4.11  Survival.  The  provisions of this Section 5.4 shall survive the Closing
and delivery of the Deed to  Purchaser.  5.4.12  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 60 days after
Closing,  or (b)  subject  to such  60-day  period,  unless  such  items  exceed
$5,000.00 in magnitude (either individually or in the 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,  subject to Section 8.2.4,  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,  and except for that
certain  pending suit filed on March 8, 2002 with the  Commonwealth  of Kentucky
Fayette  Circuit Court,  between Dawn  Summerville  and AIMCO/dba  Patchen Place
Apartments  and/or  Patchen  Place  Associates  Limited  Partnership,  Case  No.
02-CI-01005,   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,  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 or 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 6 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 $50,000 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 the claim for damage (either in the aggregate
or as to any individual  claim) 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 Ms. Mindy Daugherty,  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  Kentucky.  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.

      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.
8.2 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. 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 Hendricks & Partners,  1025 E. Maple, Suite 200, Birmingham,  MI 48009
("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 Survival. 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.  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.

                                   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, (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  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 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  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,  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 OR ITS OBLIGATION TO CONSUMMATE
THE  TRANSACTIONS  CONTEMPLATED  BY THIS CONTRACT.  UNDER NO  CIRCUMSTANCES  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 OR ITS OBLIGATIONS UNDER THIS CONTRACT.  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 Section 2.3.5
and Section 9.3 above,  neither the Escrow Agent's nor the Broker's execution of
this Contract shall be a pre-requisite 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),  (b)  Purchaser  is not  released  from  its  liability
hereunder,  and  (c)  Seller  consents  thereto  (which  consent  shall  not  be
unreasonably  withheld or delayed).  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;  or (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:

            Vermeil, LLC
            c/o Mackin and Company, Inc.
            501 S. Second Street, Suite 200
            Louisville, Kentucky 40202
            Attention:  Mr. Mike Mackin
            Telephone: 502-533-4900
            Facsimile: 502-581-1653

            and a copy to:

            Thomas, Dodson & Wolford
            9200 Shelbyville Road
            Louisville, Kentucky 40222
            Attention:  Hal Thomas, Esq.
            Telephone: 502-426-1700
            Facsimile: 502-426-0457

            To Seller:

                                    c/o AIMCO
            Stanford Place 3
            4582 South Ulster Street Parkway
            Suite 1100
            Denver, Colorado  80237
            Attention:  Patrick Slavin
            Telephone:  303-691-4340
            Facsimile:  303-300-3282

            And:

            c/o AIMCO
            Stanford Place 3
            4582 South Ulster Street Parkway
            Suite 1100
            Denver, Colorado  80237
            Attention:  Mr. Harry Alcock
            Telephone:  303-691-4344
            Facsimile:  303-300-3282

<PAGE>


            with copy to:

            Chad Asarch, Esq.
            Vice President and Assistant General Counsel
            AIMCO
            Stanford Place 3
            4582 South Ulster Street Parkway
            Suite 1100
            Denver, Colorado  80237
            Telephone:  303-691-4303
            Facsimile:  303-300-3260

            and a copy to:

            Loeb & Loeb LLP
            1000 Wilshire Boulevard, Suite 1800
            Los Angeles, California  90017
            Attention:  Karen N. Higgins, Esq., and
                        Loretta Thompson, Esq.
            Telephone:  213-688-3400
            Facsimile:  213-688-3460

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

            Fidelity National Title Insurance Company
            3D International Building
            1900 West Loop South, Suite 650
            Houston, Texas  77027
            Attention:  Lolly Avant, Vice President
            Telephone:  800-879-1677
            Facsimile:  713-623-4406

      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  State  of  Kentucky  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
state 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 foregoing,
the parties (and each employee,  representative,  or other agent of the parties)
may disclose to any and all persons,  without  limitation  of any kind,  the tax
treatment  and any  facts  that  may be  relevant  to the tax  structure  of the
transaction,  provided, however, that no party (and no employee, representative,
or other  agent  thereof)  shall  disclose  any  other  information  that is not
relevant to understanding the tax treatment and tax structure of the transaction
(including the identity of any party and any information that could lead another
to determine the identity of any party),  or any other information to the extent
that  such  disclosure  could  result in a  violation  of any  federal  or state
securities law. 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  substantially  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 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 Financing  Contingency Period, 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"),  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 any  similar
state 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.  Any  matter to be  settled by
arbitration  shall be submitted to the American  Arbitration  Association in the
state 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 state 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,  13.21 and 13.23),  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 amounts 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  Contract.  Testing  (the  "Testing")  has been  performed  at the
Property with respect to lead-based  paint.  Law Engineering  and  Environmental
Services,  Inc. performed the Testing and reported its findings in the Report of
Findings  dated May 14,  2001,  a copy of which is attached  hereto as Exhibit H
(the "Report").  The Report  certifies the Property as lead based paint free. By
execution hereof,  Purchaser  acknowledges  receipt of a copy of the Report, the
Lead-Based  Paint  Disclosure  Statement  attached  hereto  as  Exhibit  G,  and
acknowledges  receipt of that certain Consent Agreement (the "Consent Contract")
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 lead based paint free,  Seller is not  required  under the Consent
Contract 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  Contract and the
provisions  contained herein related thereto and (2) that Purchaser shall not be
deemed to be a third party beneficiary to the Consent  Contract.  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.

<PAGE>

      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/Patrick F. Slavin
                                          Name: Patrick F. Slavin
                                          Title:Senior Vice President


                                   Purchaser:

                                    VERMEIL, LLC, a Kentucky limited
                                    liability company


                                    By:   /s/Mike Mackin
                                    Name: Mike Mackin
                                    Title:Member and Manager

<PAGE>

                           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 August 1, 2003 as the date of opening of escrow
and designates 03-193561 as the escrow number assigned to this escrow.

                                    ESCROW AGENT:

                                    FIDELITY NATIONAL TITLE INSURANCE COMPANY


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

<PAGE>

                                                                         Page(s)

                              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  transaction  described in the Contract to which this signature page is
attached  is as set forth in a  separate  agreement  between  Seller  and Broker
payable 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:

                                    HENDRICKS & PARTNERS

                                    By: /s/Todd Stofflet
                                    Name: Todd Stofflet
                                    Title: Senior Advisor

<PAGE>


                                                                   Exhibit 10.14
                            REINSTATEMENT & AMENDMENT
                          OF PURCHASE AND SALE CONTRACT

                           (Patchen Place Apartments)


      THIS   REINSTATEMENT   AND   AMENDMENT  OF  PURCHASE  AND  SALE   CONTRACT
("Reinstatement")  is  entered  into as of the 5th day of  September,  2003 (the
"Effective  Date") by and between NATIONAL  PROPERTY  INVENSTORS 7, a California
limited  partnership,  having a principal  address at 4582 South  Ulster  Street
Parkway,  Suite 1100,  Denver,  Colorado 80237  ("Seller")  and VERMEIL,  LLC, a
Kentucky limited liability company,  having a principal address at 501 S. Second
Street, Suite 200, Louisville, Kentucky 40202 ( the "Purchaser").

                                    RECITALS

A. Seller and Purchaser  entered into a Purchase and Sale  Contract  dated as of
July 31,  2003 (the  "Contract"),  pursuant  to which  Seller  agreed to sell to
Purchaser,  and Purchaser  agreed to buy from Seller the Property (as defined in
the Contract).

B. Pursuant to the terms of the Contract, Purchaser delivered to Escrow Agent an
Initial  Deposit of $70,000.00,  which Initial  Deposit  continues to be held by
Escrow Agent.

C. Pursuant to a letter to Seller dated as of September 2, 2003 from  Purchaser,
Purchaser terminated the Contract. Seller and Purchaser have agreed to reinstate
and modify the terms of the Contract as set forth in this Reinstatement.

D. All  capitalized  terms not otherwise  defined herein shall have the meanings
ascribed to them in the Contract.

            NOW  THEREFORE,   for  valuable   consideration,   the  receipt  and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
Seller and Purchaser agree as follows:

                                   AGREEMENTS

1. Reinstatement.  The  Contract is hereby  reinstated  as if such  Contract had
   never been  terminated  and shall remain in full force and effect and binding
   on the  parties  hereto,  subject  to the terms and  conditions  thereof  and
   hereof.
2. Waiver of  Feasibility  Period  Contingencies.  Purchaser  hereby  agrees and
   acknowledges that all contingencies  relating to the Feasibility  Period have
   been  satisfied  or  waived by  Purchaser  as of the  Effective  Date of this
   Agreement.  Additionally,  Purchaser hereby  acknowledges and agrees that all
   contingencies  relating to  Purchaser's  review of the Title  Commitment  and
   Survey,  as more  particularly  set forth in  Section  4.1,  Section  4.2 and
   Section  4.3 of  the  Contract,  have  been  waived  by  Purchaser  as of the
   Effective Date of this Agreement.
3. Waiver of Financing  Contingency.  Purchaser  hereby agrees and  acknowledges
   that all contingencies relating to the Financing Contingency Period have been
   satisfied or waived by Purchaser as of the Effective Date of this Agreement.
4. Closing  Date.  The first  sentence of Section 5.1 of the  Contract is hereby
   deleted in its entirety and replaced with the following:

            The Closing  shall occur on October  31, 2003 (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.  Additional  Deposit.  Purchaser  shall  deliver the  Additional  Deposit (as
defined  in the  Contract)  by wire  transfer  of Good  Funds in the  amount  of
$70,000.00  to Escrow  Agent no later than 12:00 noon (in the time zone in which
the Escrow  Agent is located) as of the  Effective  Date of this  Reinstatement,
which funds together with the Initial Deposit shall be non-refundable when paid,
except as  otherwise  expressly  provided  in the  Contract,  and shall be held,
credited and  disbursed in the manner  provided for in the Contract with respect
to the Deposit.

6. Closing Credit.  For valuable  consideration,  the receipt and sufficiency of
which is hereby acknowledged,  the Purchaser shall receive upon Closing a credit
in the amount of $26,050.00  ("Closing  Credit"),  which Closing Credit shall be
shown as a credit in favor of Purchaser and a debit against  Seller on the final
closing settlement statement.  7. Effectiveness of Contract.  Except as modified
by this Reinstatement,  all the terms of the Contract shall remain unchanged and
in full force and effect.
8.  Counterparts.  This  Reinstatement may be executed in counterparts,  and all
counterparts together shall be construed as one document.

9.  Telecopied  Signatures.  A counterpart of this  Reinstatement  signed by one
party  to  this  Reinstatement  and  telecopied  to  the  other  party  to  this
Reinstatement  or its  counsel  (i) shall  have the same  effect as an  original
signed  counterpart of this  Reinstatement,  and (ii) shall be conclusive proof,
admissible  in  judicial   proceedings,   of  such  party's  execution  of  this
Reinstatement.

<PAGE>

      IN  WITNESS   WHEREOF,   Seller  and  Purchaser  have  entered  into  this
Reinstatement  and  Amendment of Purchase and Sale Contract as of the date first
above stated.


                              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:

                                  VERMEIL, LLC,
                              a Kentucky limited liability company

                              By: /s/Mike Mackin
                              Name: Mike Mackin
                              Its:  Member and Manager

<PAGE>