UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                           FORM 10-QSB

           Quarterly Report Under Section 13 or 15(d)
             of The Securities Exchange Act of 1934

             For the Quarter Ended:  March 31, 2005

               Commission file number:  000-30449


                   AEI INCOME & GROWTH FUND 23 LLC
(Exact Name of Small Business Issuer as Specified in its Charter)


      State of Delaware                    41-1922579
(State or other Jurisdiction of         (I.R.S. Employer
Incorporation or Organization)         Identification No.)


    30 East 7th Street, Suite 1300, St. Paul, Minnesota 55101
             (Address of Principal Executive Offices)

                         (651) 227-7333
                   (Issuer's telephone number)


                        Not Applicable
 (Former name, former address and former fiscal year, if changed
                       since last report)

Check  whether  the issuer (1) filed all reports required  to  be
filed  by Section 13 or 15(d) of the Securities Exchange  Act  of
1934  during the preceding 12 months (or for such shorter  period
that  the registrant was required to file such reports), and  (2)
has  been  subject to such filing requirements for  the  past  90
days.

                          Yes [X]   No

         Transitional Small Business Disclosure Format:

                          Yes       No [X]


                 AEI INCOME & GROWTH FUND 23 LLC


                              INDEX




PART I.Financial Information

 Item 1. Balance Sheet as of March 31, 2005 and December 31, 2004

         Statements for the Periods ended March 31, 2005 and 2004:

            Income

            Cash Flows

            Changes in Members' Equity

         Notes to Financial Statements

 Item 2. Management's Discussion and Analysis

 Item 3. Controls and Procedures

PART II. Other Information

 Item 1. Legal Proceedings

 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 Item 3. Defaults Upon Senior Securities

 Item 4. Submission of Matters to a Vote of Security Holders

 Item 5. Other Information

 Item 6. Exhibits

         Signatures


                 AEI INCOME & GROWTH FUND 23 LLC
                          BALANCE SHEET
              MARCH 31, 2005 AND DECEMBER 31, 2004

                           (Unaudited)

                             ASSETS

                                                      2005          2004
CURRENT ASSETS:
  Cash and Cash Equivalents                       $ 2,488,752   $ 1,444,797

INVESTMENTS IN REAL ESTATE:
  Land                                              2,013,500     2,013,500
  Buildings and Equipment                           3,510,920     3,510,920
  Accumulated Depreciation                           (304,108)     (264,634)
                                                   -----------   -----------
                                                    5,220,312     5,259,786
  Real Estate Held for Sale                         2,050,000     3,150,000
                                                   -----------   -----------
      Net Investments in Real Estate                7,270,312     8,409,786
                                                   -----------   -----------
          Total Assets                            $ 9,759,064   $ 9,854,583
                                                   ===========   ===========


                      LIABILITIES AND MEMBERS' EQUITY

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.            $    34,780   $    83,806
  Distributions Payable                               170,521       170,599
  Unearned Rent                                        12,484             0
                                                   -----------   -----------
      Total Current Liabilities                       217,785       254,405
                                                   -----------   -----------
MEMBERS' EQUITY (DEFICIT):
  Managing Members' Equity                                690       (15,053)
  Limited Members' Equity, $1,000 per Unit;
   24,000 Units authorized; 13,349 Units issued;
   13,288 Units outstanding                         9,540,589     9,615,231
                                                   -----------   -----------
      Total Members' Equity                         9,541,279     9,600,178
                                                   -----------   -----------
         Total  Liabilities and Members' Equity   $ 9,759,064   $ 9,854,583
                                                   ===========   ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
                 AEI INCOME & GROWTH FUND 23 LLC
                       STATEMENT OF INCOME
                 FOR THE PERIODS ENDED MARCH 31

                           (Unaudited)

                                                        2005         2004

RENTAL INCOME                                      $   130,351  $   117,278

EXPENSES:
   LLC Administration - Affiliates                      33,674       31,550
   LLC Administration and Property
      Management - Unrelated Parties                     8,011        6,844
      Depreciation                                      39,474       34,059
                                                    -----------  -----------
        Total Expenses                                  81,159       72,453
                                                    -----------  -----------

OPERATING INCOME                                        49,192       44,825

OTHER INCOME:
   Interest Income                                       7,301        4,874
                                                    -----------  -----------

INCOME FROM CONTINUING OPERATIONS                       56,493       49,699

Income (Loss) from Discontinued Operations              56,636      (48,017)
                                                    -----------  -----------
NET INCOME                                         $   113,129  $     1,682
                                                    ===========  ===========
NET INCOME ALLOCATED:
   Managing Members                                $    20,904  $        50
   Limited Members                                      92,225        1,632
                                                    -----------  -----------
                                                   $   113,129  $     1,682
                                                    ===========  ===========
INCOME (LOSS) PER LLC UNIT:
   Continuing Operations                           $      4.12  $      3.63
   Discontinued Operations                                2.82        (3.51)
                                                    -----------  -----------
         Total                                     $      6.94  $       .12
                                                    ===========  ===========
Weighted Average Units Outstanding                      13,288       13,298
                                                    ===========  ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
                 AEI INCOME & GROWTH FUND 23 LLC
                     STATEMENT OF CASH FLOWS
                 FOR THE PERIODS ENDED MARCH 31

                           (Unaudited)

                                                          2005       2004
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income                                      $   113,129  $     1,682

   Adjustments to Reconcile Net Income to Net Cash
   Provided by Operating Activities:
     Depreciation                                       39,474       34,059
     Gain on Sale of Real Estate                       (88,442)           0
     Increase (Decrease) in Payable to
        AEI Fund Management, Inc.                      (49,026)      82,669
     Increase in Unearned Rent                          12,484       13,913
                                                    -----------  -----------
        Total Adjustments                              (85,510)     130,641
                                                    -----------  -----------
        Net Cash Provided By
            Operating Activities                        27,619      132,323
                                                    -----------  -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Investments in Real Estate                                0   (2,151,969)
   Proceeds from Sale of Real Estate                 1,188,442            0
                                                    -----------  -----------
        Net Cash Provided By (Used For)
            Investing Activities                     1,188,442   (2,151,969)
                                                    -----------  -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Decrease in Distributions Payable                       (78)      (9,210)
   Distributions to Members                           (172,028)    (230,319)
                                                    -----------  -----------
        Net Cash Used For
            Financing Activities                      (172,106)    (239,529)
                                                    -----------  -----------
NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                              1,043,955   (2,259,175)

CASH AND CASH EQUIVALENTS, beginning of period       1,444,797    3,431,557
                                                    -----------  -----------
CASH AND CASH EQUIVALENTS, end of period           $ 2,488,752  $ 1,172,382
                                                    ===========  ===========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
                 AEI INCOME & GROWTH FUND 23 LLC
             STATEMENT OF CHANGES IN MEMBERS' EQUITY
                 FOR THE PERIODS ENDED MARCH 31

                           (Unaudited)


                                                                    Limited
                                                                     Member
                             Managing      Limited                   Units
                             Members       Members      Total     Outstanding


BALANCE, December 31, 2003  $ (20,054)  $ 9,775,430   $ 9,755,376   13,298.07

  Distributions                (3,475)     (226,844)     (230,319)

  Net Income                       50         1,632         1,682
                             ---------   -----------   -----------  ----------
BALANCE, March 31, 2004     $ (23,479)  $ 9,550,218   $ 9,526,739   13,298.07
                             =========   ===========   ===========  ==========


BALANCE, December 31, 2004  $ (15,053)  $ 9,615,231   $ 9,600,178   13,288.07

  Distributions                (5,161)     (166,867)     (172,028)

  Net Income                   20,904        92,225       113,129
                             ---------   -----------   -----------  ----------
BALANCE, March 31, 2005     $     690   $ 9,540,589   $ 9,541,279   13,288.07
                             =========   ===========   ===========  ==========

 The accompanying Notes to Financial Statements are an integral
                     part of this statement.
</PAGE>
<PAGE>
                 AEI INCOME & GROWTH FUND 23 LLC
                  NOTES TO FINANCIAL STATEMENTS
                         MARCH 31, 2005

                           (Unaudited)

(1)  The  condensed  statements included herein have been  prepared
     by  the  Company,  without audit, pursuant to  the  rules  and
     regulations  of  the Securities and Exchange  Commission,  and
     reflect   all  adjustments  which  are,  in  the  opinion   of
     management,  necessary to a fair statement of the  results  of
     operations for the interim period, on a basis consistent  with
     the  annual audited statements.  The adjustments made to these
     condensed   statements  consist  only  of   normal   recurring
     adjustments.   Certain information, accounting  policies,  and
     footnote    disclosures   normally   included   in   financial
     statements  prepared  in  accordance with  generally  accepted
     accounting principles have been condensed or omitted  pursuant
     to  such  rules and regulations, although the Company believes
     that  the  disclosures  are adequate to make  the  information
     presented   not  misleading.   It  is  suggested  that   these
     condensed  financial  statements be read in  conjunction  with
     the  financial  statements  and  the  summary  of  significant
     accounting  policies  and  notes  thereto  included   in   the
     Company's latest annual report on Form 10-KSB.

(2)  Organization -

     AEI  Income  & Growth Fund 23 LLC (the Company),  a  Limited
     Liability Company, was formed on October 14, 1998 to acquire
     and  lease commercial properties to operating tenants.   The
     Company's operations are managed by AEI Fund Management XXI,
     Inc.  (AFM),  the Managing Member.  Robert P.  Johnson,  the
     President  and sole director of AFM, serves as  the  Special
     Managing  Member.  AFM is a wholly owned subsidiary  of  AEI
     Capital  Corporation of which Mr. Johnson  is  the  majority
     shareholder.  AEI Fund Management, Inc. (AEI), an  affiliate
     of  AFM, performs the administrative and operating functions
     for the Company.

     The  terms of the offering call for a subscription price  of
     $1,000 per LLC Unit, payable on acceptance of the offer. The
     Company  commenced  operations on September  30,  1999  when
     minimum  subscriptions of 1,500 LLC Units ($1,500,000)  were
     accepted.  The offering terminated March 22, 2001  when  the
     extended  offering  period expired.   The  Company  received
     subscriptions for 13,349.321 LLC Units.  Under the terms  of
     the  Operating Agreement, the Limited Members  and  Managing
     Members   contributed  funds  of  $13,349,321  and   $1,000,
     respectively.  The Company shall continue until December 31,
     2048,  unless dissolved, terminated and liquidated prior  to
     that date.

     During operations, any Net Cash Flow, as defined, which  the
     Managing Members determine to distribute will be distributed
     97%  to  the Limited Members and 3% to the Managing Members.
     Distributions to Limited Members will be made  pro  rata  by
     Units.

                 AEI INCOME & GROWTH FUND 23 LLC
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(2)  Organization - (Continued)

     Any  Net  Proceeds  of Sale, as defined, from  the  sale  or
     financing of properties which the Managing Members determine
     to distribute will, after provisions for debts and reserves,
     be  paid  in  the following manner: (i) first,  99%  to  the
     Limited  Members  and 1% to the Managing Members  until  the
     Limited  Members  receive  an amount  equal  to:  (a)  their
     Adjusted Capital Contribution plus (b) an amount equal to 7%
     of their Adjusted Capital Contribution per annum, cumulative
     but not compounded, to the extent not previously distributed
     from  Net  Cash  Flow; (ii) any remaining  balance  will  be
     distributed  90%  to  the Limited Members  and  10%  to  the
     Managing Members.  Distributions to the Limited Members will
     be made pro rata by Units.

     For  tax  purposes,  profits  from  operations,  other  than
     profits  attributable  to  the  sale,  exchange,  financing,
     refinancing  or  other  disposition  of  property,  will  be
     allocated  first  in the same ratio in  which,  and  to  the
     extent, Net Cash Flow is distributed to the Members for such
     year.  Any additional profits will be allocated in the  same
     ratio  as  the  last dollar of Net Cash Flow is distributed.
     Net  losses  from operations will be allocated  99%  to  the
     Limited Members and 1% to the Managing Members.

     For  tax purposes, profits arising from the sale, financing,
     or  other  disposition  of property  will  be  allocated  in
     accordance  with  the Operating Agreement  as  follows:  (i)
     first,  to  those  Members with deficit  balances  in  their
     capital  accounts  in an amount equal to  the  sum  of  such
     deficit  balances; (ii) second, 99% to the  Limited  Members
     and  1%  to the Managing Members until the aggregate balance
     in  the Limited Members' capital accounts equals the sum  of
     the Limited Members' Adjusted Capital Contributions plus  an
     amount  equal  to 7% of their Adjusted Capital Contributions
     per  annum, cumulative but not compounded, to the extent not
     previously  allocated;  (iii)  third,  the  balance  of  any
     remaining  gain  will then be allocated 90% to  the  Limited
     Members  and  10% to the Managing Members.  Losses  will  be
     allocated 98% to the Limited Members and 2% to the  Managing
     Members.

     The  Managing Members are not required to currently  fund  a
     deficit capital balance.  Upon liquidation of the Company or
     withdrawal  by a Managing Member, the Managing Members  will
     contribute to the Company an amount equal to the  lesser  of
     the  deficit balances in their capital accounts or 1.01%  of
     the  total capital contributions of the Limited Members over
     the amount previously contributed by the Managing Members.

                 AEI INCOME & GROWTH FUND 23 LLC
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(3)  Investments in Real Estate -

     On February 6, 2004, the Company purchased a 48% interest in
     a  Jared  Jewelry  store  in Madison Heights,  Michigan  for
     $1,948,038.   The  property is leased to  Sterling  Jewelers
     Inc. under a Lease Agreement with a primary term of 20 years
     and  annual rental payments of $149,808.  The purchase price
     and  annual rental payments shown are approximately 10% less
     than amounts reported prior to June 30, 2004.  As part of an
     agreement between the lessee and the property developer, the
     monthly  rent was reduced by approximately 10%  based  on  a
     final  accounting of the development costs.  As part of  the
     purchase  agreement between the property developer  and  the
     Company, the purchase price paid by the Company was  reduced
     by the same percentage so the rate of return realized by the
     Company  remains the same.  The remaining interests  in  the
     property were purchased by AEI Income & Growth Fund  25  LLC
     and  AEI  Accredited Investor Fund 2002 Limited Partnership,
     affiliates of the Company.

(4)  Payable to AEI Fund Management, Inc. -

     AEI  Fund  Management, Inc. performs the administrative  and
     operating  functions for the Company.  The  payable  to  AEI
     Fund   Management  represents  the  balance  due  for  those
     services.    This  balance  is  non-interest   bearing   and
     unsecured  and  is  to  be  paid in  the  normal  course  of
     business.

(5)  Discontinued Operations -

     In  July 2003, the lessee of the Razzoo's restaurants in San
     Antonio, Texas and Alpharetta, Georgia notified the  Company
     that  it was experiencing financial difficulty stemming from
     lower  than expected sales and that it might not be able  to
     pay  future  rents.  During the summer of 2003,  the  lessee
     closed  the  restaurant in San Antonio.  In late  2003,  the
     lessee closed the restaurant in Alpharetta and said that  it
     no  longer intended to operate restaurants at the sites.  On
     December 5, 2003, the Company terminated the lease  for  the
     property  in San Antonio, effective December 31,  2003,  and
     was  prepared to commence a legal action against the  lessee
     and  the  majority shareholder of the lessee, who guaranteed
     the lease until December 19, 2003.  Before the Company filed
     its  legal action, the lessee filed suit against the Company
     with respect to the Company's lease termination.  The lessee
     paid  the  rent due for the property in San Antonio  through
     December 31, 2003.  Due to the lease termination, the lessee
     did not pay any rent for 2004.

                 AEI INCOME & GROWTH FUND 23 LLC
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(5)  Discontinued Operations - (Continued)

     The  parties  reached  an agreement, effective  November  1,
     2004,  to terminate their legal actions, terminate the lease
     for  the property in Alpharetta and return possession of the
     property  to  the Company.  Rents were current  through  the
     date of termination for the property in Alpharetta.  As part
     of  the  agreement the Company received a settlement payment
     of  $610,142,  of  which $288,040 were allocated  to  rental
     income,  representing rent for the property in  San  Antonio
     for  the  period from January 1, 2004 through the settlement
     date and $322,102 were allocated as reimbursement of certain
     property  management and legal expenses it incurred  related
     to  the two properties.  The Company listed the property for
     sale with a real estate broker in the Alpharetta area.   The
     Company  previously listed the property in San  Antonio  for
     sale  or  lease with a real estate broker in the San Antonio
     area.   While  the properties were vacant, the  Company  was
     responsible  for real estate taxes and other costs  required
     to maintain the properties.

     As  of  December  31, 2003, based on an analysis  of  market
     conditions   in   the  area,  the  Company  determined   the
     properties were impaired in accordance with the requirements
     of  Statement  of  Financial Accounting Standards  No.  144,
     Accounting  for  the  Impairment or Disposal  of  Long-Lived
     Assets.   As  a  result, in the fourth quarter  of  2003,  a
     charge to discontinued operations for real estate impairment
     of  $1,148,880  was  recognized  for  the  property  in  San
     Antonio, which was the difference between the book value  at
     December 31, 2003 of $3,198,880 and the estimated fair value
     of $2,050,000.  A charge to discontinued operations for real
     estate  impairment  of  $451,513  was  recognized  for   the
     property in Alpharetta, which was the difference between the
     book  value  at  December 31, 2003  of  $1,551,513  and  the
     estimated  fair  value  of  $1,100,000.   The  charges  were
     recorded  against  the  cost  of  the  land,  buildings  and
     equipment.   At  December  31,  2004,  the  properties  were
     classified as Real Estate Held for Sale.

     In  October 2004, the Company entered into an agreement with
     a  subsidiary of Darden Restaurants, Inc. (DRI) to lease the
     property  in  San  Antonio.   DRI  intends  to  remodel  the
     building  and  operate it as a Smokey Bones BBQ  restaurant.
     The  Lease Agreement has a primary term of ten years,  which
     may  be  renewed for up to four consecutive  terms  of  five
     years.   The  annual rent for the primary term is  $165,000.
     Under  the Lease, DRI had a feasibility period of a  maximum
     of  150  days  to pursue licenses, permits and  governmental
     approvals  for the contemplated use of the property  and  to
     perform  other due diligence on the site.  On  February  16,
     2005,  DRI  completed its feasibility  work  and  the  Lease
     became   effective.   After  the  effective  date,  DRI   is
     responsible all property expenses, except real estate taxes.
     DRI  will commence paying rent and real estate taxes on  the
     earlier  of the date the restaurant opens to the public  for
     business  or  120  days  after the end  of  the  feasibility
     period.

                 AEI INCOME & GROWTH FUND 23 LLC
                  NOTES TO FINANCIAL STATEMENTS
                           (Continued)

(5)  Discontinued Operations - (Continued)

     In  December 2004, the Company entered into an agreement  to
     sell the property in Alpharetta to an unrelated third party.
     On  March  29,  2005,  the  sale  closed  with  the  Company
     receiving net sale proceeds of $1,188,442, which resulted in
     a net gain of $88,442.

     During  the  three months ended March 31, 2004, the  Company
     distributed  $171,717 of net sale proceeds,  generated  from
     property sales in 2003, to the Limited and Managing  Members
     as  part of their quarterly distributions, which represented
     a  return  of  capital of $12.78 per LLC Unit.  The  Company
     anticipates the remaining net sale proceeds will  either  be
     reinvested  in  additional property or  distributed  to  the
     Members in the future.

     The financial results for these properties are reflected  as
     Discontinued   Operations  in  the  accompanying   financial
     statements.   The following are the results of  discontinued
     operations for the three months ended March 31:

                                                     2005       2004

     Rental Income                                $       0   $  41,077
     Property Management Expenses                   (31,806)    (89,094)
     Depreciation                                         0           0
     Gain on Disposal of Real Estate                 88,442           0
                                                   ---------   ---------
       Income (Loss) from Discontinued Operations $  56,636   $ (48,017)
                                                   =========   =========

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS

        The Management's Discussion and Analysis contains various
"forward  looking  statements"  within  the  meaning  of  federal
securities  laws  which  represent management's  expectations  or
beliefs  concerning future events, including statements regarding
anticipated  application of cash, expected  returns  from  rental
income,  growth  in revenue, taxation levels, the sufficiency  of
cash to meet operating expenses, rates of distribution, and other
matters.  These, and other forward looking statements made by our
managers, must be evaluated in the context of a number of factors
that   may   affect  our  financial  condition  and  results   of
operations, including the following:

    Market and economic conditions which affect the value
    of the properties we own and the cash from rental
    income such properties generate;

    the federal income tax consequences of rental income,
    deductions, gain on sales and other items and the
    affects of these consequences for members;

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

    resolution by our managers of conflicts with which they
    may be confronted;

    the success of our managers of locating properties with
    favorable risk return characteristics;

    the effect of tenant defaults; and

    the condition of the industries in which the tenants of
    properties owned by the Company operate.

The Application of Critical Accounting Policies

        The  preparation  of  the Company's financial  statements
requires  management to make estimates and assumptions  that  may
affect the reported amounts of assets, liabilities, revenues  and
expenses,  and  related  disclosure  of  contingent  assets   and
liabilities. Management evaluates these estimates on  an  ongoing
basis,  including  those related to the carrying  value  of  real
estate  and  the  allocation  by AEI  Fund  Management,  Inc.  of
expenses to the Company as opposed to other funds they manage.

        The Company purchases properties and records them in  the
financial statements at the lower of cost or estimated realizable
value.   The  Company  initially records the properties  at  cost
(including  capitalized acquisition expenses).   The  Company  is
required   to  periodically  evaluate  the  carrying   value   of
properties  to  determine  whether  their  realizable  value  has
declined.   For  properties the Company will  hold  and  operate,
management   determines  whether  impairment  has   occurred   by
comparing the property's probability-weighted cash flows  to  its
current carrying value.  For properties held for sale, management
determines  whether  impairment has  occurred  by  comparing  the
property's estimated fair value less cost to sell to its  current
carrying  value.   If  the carrying value  is  greater  than  the
realizable  value, an impairment loss is recorded to  reduce  the
carrying value of the property to its realizable value.  A change
in  these assumptions or analysis could cause material changes in
the carrying value of the properties.

       AEI Fund Management Inc. allocates expenses to each of the
funds  they manage primarily on the basis of the number of  hours
devoted  by  their employees to each fund's affairs.   They  also
allocate  expenses at the end of each month that are not directly
related to a fund's operations based upon the number of investors
in the fund and the fund's capitalization relative to other funds
they  manage.  The Company reimburses these expenses  subject  to
detailed limitations contained in the Operating Agreement.

        Management  of the Company has discussed the  development
and   selection  of  the  above  accounting  estimates  and   the
management  discussion  and analysis disclosures  regarding  them
with the managing member of the Company.

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

Results of Operations

        For  the three months ended March 31, 2005 and 2004,  the
Company  recognized rental income from continuing  operations  of
$130,351  and  $117,278, respectively.  In  2005,  rental  income
increased  due  to  additional rent received  from  one  property
acquisition in 2004 and rent increases on two properties.

        For  the three months ended March 31, 2005 and 2004,  the
Company  incurred  LLC  administration expenses  from  affiliated
parties   of   $33,674   and   $31,550,   respectively.     These
administration  expenses  include  costs  associated   with   the
management of the properties, processing distributions, reporting
requirements  and correspondence to the Limited Members.   During
the  same  periods,  the Company incurred LLC administration  and
property management expenses from unrelated parties of $8,011 and
$6,844,  respectively.  These expenses represent direct  payments
to third parties for legal and filing fees, direct administrative
costs,  outside audit costs, taxes, insurance and other  property
costs.

        For  the three months ended March 31, 2005 and 2004,  the
Company   recognized  interest  income  of  $7,301  and   $4,874,
respectively.  In 2005, interest income increased mainly  due  to
higher money market interest rates.

        In  accordance  with  Statement of  Financial  Accounting
Standards  No. 144, Accounting for the Impairment or Disposal  of
Long-Lived  Assets,  upon  complete disposal  of  a  property  or
classification of a property as Real Estate Held  for  Sale,  the
Company  includes the operating results and sale of the  property
in   discontinued   operations.    In   addition,   the   Company
reclassifies the prior periods operating results and any  partial
sales  of the property to discontinued operations.  For the three
months  ended March 31, 2005, the Company recognized income  from
discontinued operations of $56,636, representing gain on disposal
of real estate of $88,442, which was partially offset by property
management expenses of $31,806.  For the three months ended March
31,  2004,  the  Company  recognized  a  loss  from  discontinued
operations  of $48,017, representing rental income less  property
management expenses.

        In  July 2003, the lessee of the Razzoo's restaurants  in
San  Antonio, Texas and Alpharetta, Georgia notified the  Company
that it was experiencing financial difficulty stemming from lower
than  expected sales and that it might not be able to pay  future
rents.   During  the  summer  of  2003,  the  lessee  closed  the
restaurant  in San Antonio.  In late 2003, the lessee closed  the
restaurant  in Alpharetta and said that it no longer intended  to
operate  restaurants  at the sites.  On  December  5,  2003,  the
Company  terminated the lease for the property  in  San  Antonio,
effective December 31, 2003, and was prepared to commence a legal
action  against  the lessee and the majority shareholder  of  the
lessee, who guaranteed the lease until December 19, 2003.  Before
the Company filed its legal action, the lessee filed suit against
the Company with respect to the Company's lease termination.  The
lessee  paid the rent due for the property in San Antonio through
December 31, 2003.  Due to the lease termination, the lessee  did
not pay any rent for 2004.


ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        The  parties reached an agreement, effective November  1,
2004,  to terminate their legal actions, terminate the lease  for
the  property in Alpharetta and return possession of the property
to   the  Company.   Rents  were  current  through  the  date  of
termination  for  the property in Alpharetta.   As  part  of  the
agreement  the Company received a settlement payment of $610,142,
of  which  $288,040 were allocated to rental income, representing
rent  for the property in San Antonio for the period from January
1,  2004  through the settlement date and $322,102 were allocated
as   reimbursement  of  certain  property  management  and  legal
expenses it incurred related to the two properties.  Following an
analysis  of  the  lessee's business at these locations  and  its
financial condition, and its intent to no longer operate at these
sites,  the Company determined the best course of action  was  to
negotiate a settlement with the lessee and take possession of the
property  in  Alpharetta.  With possession of the  property,  the
Company  can  now  move  forward with selling  the  property  and
reinvesting  the  proceeds from the sale in  replacement  income-
producing  property.  The Company listed the  property  for  sale
with  a  real estate broker in the Alpharetta area.  The  Company
previously listed the property in San Antonio for sale  or  lease
with  a  real estate broker in the San Antonio area.   While  the
properties  were  vacant, the Company was  responsible  for  real
estate taxes and other costs required to maintain the properties.

        As  of  December 31, 2003, based on an analysis of market
conditions  in  the area, the Company determined  the  properties
were impaired in accordance with the requirements of Statement of
Financial  Accounting  Standards  No.  144,  Accounting  for  the
Impairment or Disposal of Long-Lived Assets.  As a result, in the
fourth  quarter of 2003, a charge to discontinued operations  for
real  estate  impairment  of $1,148,880 was  recognized  for  the
property  in  San Antonio, which was the difference  between  the
book  value at December 31, 2003 of $3,198,880 and the  estimated
fair  value  of $2,050,000.  A charge to discontinued  operations
for  real  estate impairment of $451,513 was recognized  for  the
property in Alpharetta, which was the difference between the book
value  at December 31, 2003 of $1,551,513 and the estimated  fair
value of $1,100,000.  The charges were recorded against the  cost
of  the land, buildings and equipment.  At December 31, 2004, the
properties were classified as Real Estate Held for Sale.

        In  October  2004, the Company entered into an  agreement
with a subsidiary of Darden Restaurants, Inc. (DRI) to lease  the
property in San Antonio.  DRI intends to remodel the building and
operate it as a Smokey Bones BBQ restaurant.  The Lease Agreement
has  a primary term of ten years, which may be renewed for up  to
four  consecutive terms of five years.  The annual rent  for  the
primary term is $165,000.  Under the Lease, DRI had a feasibility
period  of a maximum of 150 days to pursue licenses, permits  and
governmental  approvals for the contemplated use of the  property
and  to perform other due diligence on the site.  On February 16,
2005,  DRI  completed its feasibility work and the  Lease  became
effective.   After  the effective date, DRI  is  responsible  all
property  expenses, except real estate taxes.  DRI will  commence
paying rent and real estate taxes on the earlier of the date  the
restaurant opens to the public for business or 120 days after the
end of the feasibility period.  After DRI starts to pay rent, the
Company intends to sell the property and invest the proceeds from
the sale in replacement income-producing property.

       In December 2004, the Company entered into an agreement to
sell the property in Alpharetta to an unrelated third party.   On
March  29,  2005, the sale closed with the Company receiving  net
sale  proceeds  of $1,188,442, which resulted in a  net  gain  of
$88,442.

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        In  2003, the Company received $342,225 of rental  income
from  the  Razzoo's  restaurant  in  San  Antonio,  Texas,  which
represented  a  significant percentage  of  the  Company's  total
rental  income for the year.  During 2004, the loss of rent  from
the  property and the real estate taxes and other costs  required
to  maintain the property resulted in a significant reduction  in
the  Company's  Net Cash Flow available for distribution.   As  a
result,  effective  April  1,  2004,  the  Company  reduced   its
distribution rate from 7% to 6% of the Limited Members'  Adjusted
Capital  Contributions.  Effective July 1, 2004, the distribution
rate  was reduced further to 5%.  Until the Razzoo's transactions
discussed  above  are completed, the loss of  rent  and  property
expenses  will result in a significant reduction in the Company's
Net  Cash Flow available for distribution.  The Company plans  to
use  the  settlement proceeds and a portion of its cash  reserve,
which consists of profits generated from the sale of property  in
2003, to maintain the current level of distributions.

        Inflation  has  had  a  minimal  effect  on  income  from
operations.   Leases  may contain rent increases,  based  on  the
increase  in  the  Consumer Price Index over a specified  period,
which  will result in an increase in rental income over the  term
of  the  leases.   In addition, leases may contain  rent  clauses
which  entitle the Company to receive additional rent  in  future
years if gross receipts for the property exceed certain specified
amounts.   Increases  in sales volumes of  the  tenants,  due  to
inflation  and  real sales growth, may result in an  increase  in
rental  income over the term of the leases.  Inflation  also  may
cause the real estate to appreciate in value.  However, inflation
and  changing prices may have an adverse impact on the  operating
margins  of  the  properties' tenants, which could  impair  their
ability  to  pay rent and subsequently reduce the Net  Cash  Flow
available for distributions.

Liquidity and Capital Resources

        During  the  three  months  ended  March  31,  2005,  the
Company's cash balances increased $1,043,955 as a result of  cash
generated  from the sale of property, which was partially  offset
by  distributions paid to the Members in excess of cash generated
from  operating activities.  During the three months ended  March
31,  2004, the Company's cash balances decreased $2,259,175 as  a
result  of cash used to purchase property and distributions  paid
to  the  Members  in  excess  of cash  generated  from  operating
activities.

        Net  cash provided by operating activities decreased from
$132,323 in 2004 to $27,619 in 2005 as a result of a decrease  in
total   rental  and  interest  income  in  2005  and  net  timing
differences  in the collection of payments from the  lessees  and
the  payment  of  expenses,  which were  partially  offset  by  a
decrease  in LLC administration and property management  expenses
in 2005.

        The  major  components of the Company's  cash  flow  from
investing activities are investments in real estate and  proceeds
from  the  sale  of real estate.  During the three  months  ended
March 31, 2004, the Company expended $2,151,969 to invest in real
properties  (inclusive of acquisition expenses)  as  the  Company
reinvested  cash generated from property sales in  2003.   During
the three months ended March 31, 2005, the Company generated cash
flow from the sale of real estate of $1,188,442.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

        On February 6, 2004, the Company purchased a 48% interest
in  a  Jared  Jewelry  store  in Madison  Heights,  Michigan  for
$1,948,038.   The  property is leased to Sterling  Jewelers  Inc.
under  a  Lease  Agreement with a primary term of  20  years  and
annual  rental  payments  of $149,808.  The  purchase  price  and
annual  rental  payments shown are approximately  10%  less  than
amounts reported prior to June 30, 2004.  As part of an agreement
between  the lessee and the property developer, the monthly  rent
was  reduced by approximately 10% based on a final accounting  of
the development costs.  As part of the purchase agreement between
the  property developer and the Company, the purchase price  paid
by  the Company was reduced by the same percentage so the rate of
return  realized by the Company remains the same.  The  remaining
interests in the property were purchased by AEI Income  &  Growth
Fund  25  LLC  and  AEI  Accredited Investor  Fund  2002  Limited
Partnership, affiliates of the Company.

        The  Company's  primary  use of  cash  flow,  other  than
investment   in  real  estate,  is  distribution  and  redemption
payments  to Members.  The Company declares its regular quarterly
distributions  before  the  end of  each  quarter  and  pays  the
distribution in the first ten days after the end of each quarter.
The  Company attempts to maintain a stable distribution rate from
quarter  to  quarter.  Redemption payments are paid to  redeeming
Members on a semi-annual basis.

        For  the three months ended March 31, 2005 and 2004,  the
Company   declared  distributions  of  $172,028   and   $230,319,
respectively.  Pursuant to the Operating Agreement, distributions
of Net Cash Flow were allocated 97% to the Limited Members and 3%
to  the Managing Members.  Distributions of Net Proceeds of  Sale
were  allocated 99% to the Limited Members and 1% to the Managing
Members.   The Limited Members received distributions of $166,867
and  $226,844 and the Managing Members received distributions  of
$5,161 and $3,475 for the periods, respectively.

        During the three months ended March 31, 2004, the Company
distributed  $171,717  of  net  sale  proceeds,  generated   from
property  sales in 2003, to the Limited and Managing  Members  as
part of their quarterly distributions, which represented a return
of  capital of $12.78 per LLC Unit.  The Company anticipates  the
remaining  net  sale  proceeds  will  either  be  reinvested   in
additional property or distributed to the Members in the future.

        The  Company may acquire Units from Limited  Members  who
have  tendered  their Units to the Company.  Such  Units  may  be
acquired  at  a discount.  The Company will not be  obligated  to
purchase  in  any year any number of Units that, when  aggregated
with  all  other transfers of Units that have occurred since  the
beginning   of  the  same  calendar  year  (excluding   Permitted
Transfers as defined in the Operating Agreement), would exceed 2%
of  the  total number of Units outstanding on January 1  of  such
year.   In  no  event shall the Company be obligated to  purchase
Units  if,  in  the sole discretion of the Managing Member,  such
purchase would impair the capital or operation of the Company.

        During 2004, one Limited Member redeemed a total of  10.0
Units for $6,224 in accordance with the Operating Agreement.  The
Company acquired these Units using Net Cash Flow from operations.
In  prior  years, a total of six Limited Members  redeemed  51.25
Units  for  $35,623.   The  redemptions  increase  the  remaining
Limited Member's ownership interest in the Company.  As a  result
of  these  redemption  payments and  pursuant  to  the  Operating
Agreement, the Managing Members received distributions of $193 in
2004.


ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)

       The continuing rent payments from the properties, together
with  cash  generated from property sales, should be adequate  to
fund  continuing distributions and meet other Company obligations
on both a short-term and long-term basis.

ITEM 3.   CONTROLS AND PROCEDURES

       (a) Evaluation of disclosure controls and procedures

        Under  the  supervision  and with  the  participation  of
management, including its President and Chief Financial  Officer,
the Managing Member of the Company evaluated the effectiveness of
the   design  and  operation  of  its  disclosure  controls   and
procedures (as defined in Rule 13a-14(c) under the Exchange Act).
Based  upon  that  evaluation, the President and Chief  Financial
Officer of the Managing Member concluded that, as of the  end  of
the  period  covered by this report, the disclosure controls  and
procedures of the Company are adequately designed to ensure  that
information required to be disclosed by us in the reports we file
or   submit  under  the  Exchange  Act  is  recorded,  processed,
summarized  and  reported, within the time periods  specified  in
applicable rules and forms.

       (b)  Changes in internal controls

        There  were no significant changes made in the  Company's
internal controls during the most recent period covered  by  this
report that have materially affected, or are reasonably likely to
materially affect, the Company's internal control over  financial
reporting.


                   PART II - OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

       There  are no material pending legal proceedings to  which
the  Company  is  a party or of which the Company's  property  is
subject.

ITEM  2.UNREGISTERED  SALES  OF  EQUITY  SECURITIES  AND  USE  OF
        PROCEEDS

        (a) During the period covered by this report, the Company
did  not sell any equity securities that are not registered under
the Securities Act of 1933.

       (b) Not applicable.

                   PART II - OTHER INFORMATION
                           (Continued)

ITEM  2.UNREGISTERED  SALES  OF  EQUITY  SECURITIES  AND  USE  OF
        PROCEEDS  (Continued)

        (c)  Pursuant to Section 7.7 of the Operating  Agreement,
each Limited Member has the right to present Units to the Company
for  purchase by submitting notice to the Managing Member  during
January or July of each year.  The purchase price of the Units is
equal to 80% of the net asset value of the Units, as of the first
business  day  of January or July of each year, as determined  by
the  Managing  Member in accordance with the  provisions  of  the
Operating  Agreement.   Units  tendered  to  the  Company  during
January  and  July  are redeemed on April 1st  and  October  1st,
respectively, of each year subject to the following  limitations.
The  Company  will not be obligated to purchase in any  year  any
number of Units that, when aggregated with all other transfers of
Units that have occurred since the beginning of the same calendar
year  (excluding Permitted Transfers as defined in the  Operating
Agreement),  would  exceed  2%  of  the  total  number  of  Units
outstanding  on  January 1 of such year.  In no event  shall  the
Company be obligated to purchase Units if, in the sole discretion
of the Managing Member, such purchase would impair the capital or
operation  of  the Company.  During the period  covered  by  this
report, the Company did not purchase any Units.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

      None.

ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      None

ITEM 5.OTHER INFORMATION

      None.

ITEM 6.EXHIBITS

                           Description

    31.1  Certification  of Chief Executive Officer  of  Managing
    Member  pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a))  and
    Section 302 of the Sarbanes-Oxley Act of 2002.

    31.2  Certification  of Chief Financial Officer  of  Managing
    Member  pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a))  and
    Section 302 of the Sarbanes-Oxley Act of 2002.

    32    Certification  of  Chief Executive  Officer  and  Chief
    Financial Officer of Managing Member pursuant to Section  906
    of the Sarbanes-Oxley Act of 2002.


                           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.


Dated:  May 6, 2005           AEI Income & Growth Fund 23 LLC
                              By:  AEI Fund Management XXI, Inc.
                              Its: Managing Member



                              By: /s/ Robert P Johnson
                                      Robert P. Johnson
                                      President
                                      (Principal Executive Officer)



                              By: /s/ Patrick W Keene
                                      Patrick W. Keene
                                      Chief Financial Officer
                                      (Principal Accounting Officer)