OCCUPANCY AGREEMENT

      3808 Towne Crossing Boulevard, Mesquite, TX ("Leased Premises")
          AEI Real Estate Fund XVI Limited Partnership
          AEI Real Estate Fund XVII Limited Partnership



           THIS AGREEMENT, effective as of February 17, 2000,  by
     and between AEI Real Estate Fund XVI Limited Partnership and
     AEI Real Estate Fund XVII Limited Partnership ("Lessor") and
     Nick Mehmeti and Duncan Burch ("Buyers").

           Whereas Buyers and Lessor have entered into a Purchase
     Agreement  for  the  Leased Premises,  subject  to  a  Lease
     (attached  hereto dated effective as of  March 15,  1997  by
     and  between Texas Sports City Cafe', LTD. and Lessor, which
     Lease is currently in default; and

           Whereas,  Buyers  wish to use and  occupy  the  Leased
     Premises  during  their  due  diligence  period  under   the
     Purchase  Agreement and have in fact been so  occupying  the
     Leased Premises since February 17, 2000;

           Now,  therefore, the parties hereto wish  to  evidence
     their  respective understanding and expectation arising  out
     of Buyers use and occupancy of the Leased Premises.

     1.    Buyer will immediately obtain insurance on the  Leased
     Premises in the amounts and under the terms specified by the
     Lease  as  if  Buyers were the Lessee thereunder,  and  will
     provide Lessor with a binder to prove it.  Insurance must be
     maintained while the Buyer is occupying the Leased Premises.

     2.    Buyer will pay $6,000 per month due and payable on the
     15th  of every month for each month or portion thereof Buyer
     is in occupancy of the Leased Premises. The rent will be pro-
     rated for February from Thursday, February 17, 2000. Rent is
     due in advance on the fifteenth of each month.

     3.    Taxes will be paid by Buyer while occupying our  site.
     Taxes  will  be pro-rated beginning Thursday,  February  17,
     2000 to the date of sale or termination of Buyer's occupancy
     of  the Leased Premises, whichever is earlier. The pro-rated
     taxes   will  be  due  and  payable  at  closing,  or   upon
     termination of the Buyer's occupancy of the Leased Premises.

     Buyer  is  responsible for all utilities and maintenance  of
     the  Leased Premises under the same terms and conditions  as
     set  forth  in  the Lease from Thursday, February  17,  2000
     until  the  date  Buyer  purchases the  Leased  Premises  or
     vacates the Leased Premises.

     Buyer  acknowledges and agrees that Buyer's  rights  to  use
     and  occupancy  of the Leased Premises are  subject  to  the
     Lease,  and  the  assertion of Lessee's  rights  thereunder,
     over  which  Lessor has no control.  While the Lease  is  in
     default,  and Buyer is in compliance with the terms  hereof,
     Lessor  shall  make no efforts to terminate  the  Lease  nor
     terminate  Buyer's right to occupancy, subject to the  terms
     hereof.   However,  termination of  the  Purchase  Agreement
     shall  operate to terminate this Occupancy Agreement, and  a
     default  under  this Occupancy Agreement by Buyer  shall  be
     grounds for termination of the Purchase Agreement.



     Nothing  herein shall grant Buyers any rights to the  Leased
     Premises  except as set forth herein,  or in the Lease,  nor
     shall  Lessor  be obligated to Buyers or be deemed  to  have
     made  any  representations to Buyers respecting  the  Leased
     Premises,  except  as set forth herein or  in  the  Purchase
     Agreement.




Executed As of March 29, 2000       Executed As of March 29, 2000


/s/ Nick Mehmeti                         /s/ Duncan Burch
    Nick Mehmeti                             Duncan Burch


Executed As of April 5, 2000


AEI Real Estate Fund XVI Limited Partnership

By:  AEI Fund Management XVI, Inc.

     By:/s/ Robert P Johnson
            Robert P. Johnson, President


Executed As of April 5, 2000

AEI Real Estate Fund XVII Limited Partnership

By:  AEI Fund Management XVII, Inc.

     By:/s/ Robert P Johnson
            Robert P. Johnson, President



Occupancy Agreement, Mesquite, Tx.