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                                                                    EXHIBIT 10.7

                        DIVERSIFIED INVESTMENTS PORTFOLIO

                               THIRD AMENDMENT TO
                           PURCHASE AND SALE AGREEMENT

         THIS THIRD AMENDMENT TO PURCHASE AND SALE AGREEMENT (this "Amendment")
is made and entered into as of the 22nd day of January, 2004, by and among MHC
OPERATING LIMITED PARTNERSHIP (together with its affiliates, designees and
assigns, the "Purchaser"), an Illinois limited partnership having an address of
Two North Riverside Plaza, Suite 800, Chicago, Illinois 60606, DIVERSIFIED
INVESTMENTS SERVICES, LLC ("Diversified"), a Delaware limited liability company
having an address of 7625 Wisconsin Avenue, Suite 150, Bethesda, Maryland 20814,
and the Sellers, each having an address of c/o Diversified Investments Services,
LLC, 7625 Wisconsin Avenue, Suite 150, Bethesda, Maryland 20814.

                                R E C I T A L S:

         A.       The parties hereto have entered into that certain Purchase and
Sale Agreement dated as of December 8, 2003, as amended by that certain First
Amendment to Purchase and Sale Agreement dated December 23, 2003 and further
amended by that certain Second Amendment to Purchase and Sale Agreement dated
January 21, 2004 (collectively, the "Purchase Agreement"). Capitalized terms
used but not otherwise defined herein shall have the meanings set forth in the
Purchase Agreement.

         B.       The parties hereto desire to amend the Purchase Agreement as
hereinafter provided.

         THEREFORE, the parties hereto agree to amend the Purchase Agreement as
follows:

                               A G R E E M E N T:

         1.       INSPECTION PERIOD. Notwithstanding anything to the contrary
contained in the Purchase Agreement, the Inspection Period as provided in
Section 9A of the Purchase Agreement and amended by the Second Amendment to
Purchase and Sale Agreement shall be extended through 5:00 p.m. (Chicago,
Illinois time) on January 23, 2004.

         2.       EFFECT. Except as amended herein, all terms and provisions
contained in the Purchase Agreement shall remain in full force and effect.

         3.       COUNTERPARTS. This Amendment may be executed in one or more
counterparts, all of which taken together shall constitute one and the same
agreement.

                            [SIGNATURE PAGES FOLLOW]

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         IN WITNESS WHEREOF, the parties have executed this Amendment as of the
respective dates set forth below.

WITNESSES:                             PURCHASER:

__________________________________     MHC OPERATING PARTNERSHIP,
Name:_____________________________     an Illinois limited partnership
__________________________________
Name:_____________________________     By: MANUFACTURED HOME COMMUNITIES, INC.,
                                           a Maryland corporation, its general
                                           partner

                                           By:__________________________________
                                              Name:_____________________________
                                              Title:____________________________

                                              Date: January ___, 2004

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WITNESSES:

                                       SELLERS:

__________________________________     COACHWOOD COLONY MHP, LLC, a Florida
Name:_____________________________     limited liability company
__________________________________
Name:_____________________________     By: DIVERSIFIED INVESTMENTS -
                                           COACHWOOD COLONY MHP, LLC, a Florida
                                           limited liability company, as its
                                           Sole and Managing Member

                                           By: _________________________________
                                               Barry L. Haase
                                               Manager

WITNESSES:

                                       DIVERSIFIED INVESTMENTS -
                                       COACHWOOD COLONY MHP, LLC, a Florida
                                       limited liability company
__________________________________
Name:_____________________________     By: __________________________________
__________________________________         Barry L. Haase
Name:_____________________________         Manager

WITNESSES:

                                       SHANGRI-LA MOBILE HOME PARK, L.P., a
                                       Delaware limited partnership, authorized
                                       to transact business in the State of
                                       Florida as SHANGRI-LA MOBILE HOME PARK OF
                                       LARGO, LTD.

__________________________________     By: DIVERSIFIED INVESTMENTS - SHANGRI-LA,
Name:_____________________________         INC., a Delaware corporation, as its
__________________________________         General Partner
Name:_____________________________
                                           By: _________________________________
                                               Barry L. Haase
                                               Chairman

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WITNESSES:

                                       DIVERSIFIED INVESTMENTS - SHANGRI-LA,
                                       INC., a Delaware corporation
__________________________________
Name:_____________________________     By: ________________________________
__________________________________         Barry L. Haase
Name:_____________________________         Chairman

WITNESSES:

                                       TAMPA BAY COMMUNITIES, L.P., a Florida
                                       limited partnership

__________________________________
Name:_____________________________     By:  DIVERSIFIED INVESTMENTS - TBC, INC.,
__________________________________          a Florida corporation, as its
Name:_____________________________          General Partner

                                            By:   _________________________
                                                  Barry L. Haase
                                                  CEO

WITNESSES:

                                       SIXTH AVENUE, LLC, a Florida limited
                                       liability company

__________________________________
Name:_____________________________     By: DIVERSIFIED INVESTMENTS - SIXTH
__________________________________         AVENUE LLC, a Florida limited
Name:_____________________________         liability company, as its Sole and
                                           Managing Member

                                           By:  ________________________________
                                                Barry L. Haase
                                                Manager

WITNESSES:

                                       DIVERSIFIED INVESTMENTS - SIXTH AVENUE,
                                       LLC, a Florida limited liability company

__________________________________
Name:_____________________________     By:  ________________________________
__________________________________          Barry L. Haase
Name:_____________________________          Manager

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WITNESSES:

                                       SOUTHERNAIRE MHP, LLC, a Florida limited
                                       liability company

__________________________________
Name:_____________________________     By: DIVERSIFIED INVESTMENTS -
__________________________________         SOUTHERNAIRE, LLC, a Florida limited
Name:_____________________________         liability company, as its Sole and
                                           Managing Member

                                           By:  ________________________________
                                                Barry L. Haase
                                                Manager

WITNESSES:

                                       DIVERSIFIED INVESTMENTS -
                                       SOUTHERNAIRE, LLC, a Florida limited
                                       liability company
__________________________________
Name:_____________________________     By:_______________________________
__________________________________        Barry L. Haase
Name:_____________________________        Manager

WITNESSES:

                                       TERRA CEIA, LLC, a Florida limited
                                       liability company

__________________________________
Name:_____________________________     By: DIVERSIFIED INVESTMENTS - TERRA CEIA,
__________________________________         LLC, a Florida limited liability
Name:_____________________________         company, as its Sole and Managing
                                           Member

                                           By:  ________________________________
                                                Barry L. Haase
                                                Manager

WITNESSES:

                                       DIVERSIFIED INVESTMENTS - TERRA CEIA,
__________________________________     LLC, a Florida limited liability company
Name:_____________________________
__________________________________     By:  ________________________________
Name:_____________________________          Barry L. Haase
                                            Manager

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WITNESSES:

                                       TOPICS RVP, LLC, a Florida limited
                                       liability company

__________________________________
Name:_____________________________     By: DIVERSIFIED INVESTMENTS  - TOPICS
__________________________________         RVP, LLC, a Florida limited liability
Name:_____________________________         company, as its Sole and Managing
                                           Member

                                           By:  ________________________________
                                                Barry L. Haase
                                                Manager

WITNESSES:

                                       DIVERSIFIED INVESTMENTS - TOPICS RVP,
                                       LLC, a Florida limited liability company

__________________________________
Name:_____________________________     By:  __________________________________
__________________________________          Barry L. Haase
Name:_____________________________          Manager

WITNESSES:

                                       GOOSE CK, LLC, a North Carolina limited
                                       liability company

__________________________________
Name:_____________________________     By: DIVERSIFIED INVESTMENTS - GC, LLC, a
__________________________________         North Carolina limited liability
Name:_____________________________         company, as its Sole Member

                                           By: EAST WEST COMMUNITIES, LLC, a
                                               Delaware limited liability
                                               company, as its Sole Member

                                               By: DIVERSIFIED INVESTMENTS - EW,
                                                   LLC, a Delaware limited
                                                   liability company, as its
                                                   Managing Member

                                                   By:__________________________
                                                      Barry L. Haase
                                                      Managing Member

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WITNESSES:

                                       DIVERSIFIED INVESTMENTS - GC, LLC, a
                                       North Carolina limited liability company

__________________________________
Name:_____________________________     By: EAST WEST COMMUNITIES, LLC, a
__________________________________         Delaware limited liability company,
Name:_____________________________         as its Sole Member

                                           By: DIVERSIFIED INVESTMENTS - EW,
                                               LLC, a Delaware limited liability
                                               company, as its Managing Member

                                               By: ___________________________
                                                   Barry L. Haase
                                                   Managing Member

WITNESSES:

                                       WATERWAY RV, LLC, a Delaware limited
                                       liability company

__________________________________
Name:_____________________________     By: SIERRA LAKES, L.L.C., a Delaware
__________________________________         limited liability company, as its
Name:_____________________________         Sole and Managing Member

                                           By: DIVERSIFIED INVESTMENTS PARTNERS,
                                               LLC, a Delaware limited liability
                                               company, as its Managing Member

                                               By:______________________________
                                                  Barry L. Haase
                                                  Managing Member

WITNESSES:

                                       SIERRA LAKES, L.L.C., a Delaware limited
                                       liability company

__________________________________
Name:_____________________________     By:  DIVERSIFIED INVESTMENTS PARTNERS,
__________________________________          LLC, a Delaware limited liability
Name:_____________________________          company, as its Managing Member

                                            By: _______________________________
                                                Barry L. Haase
                                                Managing Member

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WITNESSES:

                                       CACTUS GARDENS RV, LLC, an Arizona
                                       limited liability company

__________________________________
Name:_____________________________     By: DIVERSIFIED INVESTMENTS - CACTUS
__________________________________         GARDENS, LLC, an Arizona limited
Name:_____________________________         liability company, as its Managing
                                           Member

                                           By:  ________________________________
                                                Barry L. Haase
                                                Manager

WITNESSES:

                                       DIVERSIFIED INVESTMENTS - CACTUS GARDENS,
                                       LLC, an Arizona limited liability company
__________________________________
Name:_____________________________     By: __________________________________
__________________________________         Barry L. Haase
Name:_____________________________         Manager

WITNESSES:

                                       DESERT PARADISE RV, LLC, an Arizona
                                       limited liability company

__________________________________
Name:_____________________________     By: SIERRA LAKES, L.L.C., a Delaware
__________________________________         limited liability company, as its
Name:_____________________________         Sole and Managing Member

                                           By: DIVERSIFIED INVESTMENTS PARTNERS,
                                               LLC, a Delaware limited liability
                                               company, as its Managing Member

                                               By:______________________________
                                                  Barry L. Haase
                                                  Managing Member

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WITNESSES:

                                       SUNI SANDS, LLC, an Arizona limited
                                       liability company

__________________________________
Name:_____________________________     By: DIVERSIFIED INVESTMENTS - SUNI SANDS,
__________________________________         LLC, an Arizona limited liability
Name:_____________________________         company, as its Sole and Managing
                                           Member

                                           By:  ________________________________
                                                Barry L. Haase
                                                Manager

WITNESSES:                             DIVERSIFIED INVESTMENTS - SUNI SANDS,
                                       LLC, an Arizona limited liability company

__________________________________     By:  ___________________________________
Name:_____________________________          Barry L. Haase
__________________________________          Manager
Name:_____________________________

WITNESSES:                             DIVERSIFIED INVESTMENTS SERVICES, LLC, a
                                       Delaware limited liability company

__________________________________
Name:_____________________________     By:    __________________________________
__________________________________     Name:  Barry L. Haase
Name:_____________________________     Title: Manager

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