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, 2006

               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 Exchange Act during the  past
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

Indicate by check mark whether the registrant is a shell  company
(as defined in Rule 12b-2 of the Exchange Act).  Yes       No [X]

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, 2006 and December 31, 2005

         Statements for the Periods ended March 31, 2006 and 2005:

           Operations

           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

<PAGE>
                 AEI INCOME & GROWTH FUND 23 LLC
                          BALANCE SHEET
              MARCH 31, 2006 AND DECEMBER 31, 2005
                           (Unaudited)

                             ASSETS
                                                      2006          2005
CURRENT ASSETS:
  Cash and Cash Equivalents                      $   425,138    $   493,402
  Prepaid Expenses                                     3,611              0
                                                  -----------    -----------
      Total Current Assets                           428,749        493,402
                                                  -----------    -----------
INVESTMENTS IN REAL ESTATE:
  Land                                             2,632,218      2,632,218
  Buildings and Equipment                          4,695,212      4,695,212
  Accumulated Depreciation                          (485,730)      (435,186)
                                                  -----------    -----------
                                                   6,841,700      6,892,244
  Real Estate Held for Sale                        2,050,000      2,050,000
                                                  -----------    -----------
      Net Investments in Real Estate               8,891,700      8,942,244
                                                  -----------    -----------
OTHER ASSETS:
   Lease Acquisition Costs - Net of Amortization      76,312         78,375
                                                  -----------    -----------
          Total Assets                           $ 9,396,761    $ 9,514,021
                                                  ===========    ===========

                   LIABILITIES AND MEMBERS' EQUITY

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.           $       270    $    75,734
  Distributions Payable                              170,515        170,515
  Unearned Rent                                       13,750              0
                                                  -----------    -----------
      Total Current Liabilities                      184,535        246,249
                                                  -----------    -----------
MEMBERS' EQUITY (DEFICIT):
  Managing Members' Equity                            (1,060)           607
  Limited Members' Equity, $1,000 per Unit;
   24,000 Units authorized; 13,349 Units issued;
   13,242 Units outstanding                        9,213,286      9,267,165
                                                  -----------    -----------
      Total Members' Equity                        9,212,226      9,267,772
                                                  -----------    -----------
        Total Liabilities and Members' Equity    $ 9,396,761    $ 9,514,021
                                                  ===========    ===========

 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)

                                                      2006         2005

RENTAL INCOME                                    $   162,850   $   130,351

EXPENSES:
   LLC Administration - Affiliates                    32,142        33,674
   LLC Administration and Property
      Management - Unrelated Parties                   6,902         8,011
   Depreciation                                       50,544        39,474
                                                  -----------   -----------
        Total Expenses                                89,588        81,159
                                                  -----------   -----------

OPERATING INCOME                                      73,262        49,192

OTHER INCOME:
   Interest Income                                     4,077         7,301
                                                  -----------   -----------

INCOME FROM CONTINUING OPERATIONS                     77,339        56,493

Income from Discontinued Operations                   39,142        56,636
                                                  -----------   -----------
NET INCOME                                       $   116,481   $   113,129
                                                  ===========   ===========
NET INCOME ALLOCATED:
   Managing Members                              $     3,494   $    20,904
   Limited Members                                   112,987        92,225
                                                  -----------   -----------
                                                 $   116,481   $   113,129
                                                  ===========   ===========
INCOME PER LLC UNIT:
   Continuing Operations                         $      5.66   $      4.12
   Discontinued Operations                              2.87          2.82
                                                  -----------   -----------
         Total                                   $      8.53   $      6.94
                                                  ===========   ===========
Weighted Average Units Outstanding                    13,242        13,288
                                                  ===========   ===========


 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)

                                                       2006          2005
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income                                     $   116,481   $   113,129

   Adjustments to Reconcile Net Income to Net Cash
   Provided by Operating Activities:
     Depreciation                                      50,544        39,474
     Amortization                                       2,063             0
     Gain on Sale of Real Estate                            0       (88,442)
     Increase in Prepaid Expenses                      (3,611)            0
     Decrease in Payable to
        AEI Fund Management, Inc.                     (75,464)      (49,026)
     Increase in Unearned Rent                         13,750        12,484
                                                   -----------   -----------
        Total Adjustments                             (12,718)      (85,510)
                                                   -----------   -----------
        Net Cash Provided By
            Operating Activities                      103,763        27,619
                                                   -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Proceeds from Sale of Real Estate                        0     1,188,442
                                                   -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Decrease in Distributions Payable                        0           (78)
   Distributions to Members                          (172,027)     (172,028)
                                                   -----------   -----------
        Net Cash Used For
            Financing Activities                     (172,027)     (172,106)
                                                   -----------   -----------
NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS                               (68,264)    1,043,955

CASH AND CASH EQUIVALENTS, beginning of period        493,402     1,444,797
                                                   -----------   -----------
CASH AND CASH EQUIVALENTS, end of period          $   425,138   $ 2,488,752
                                                   ===========   ===========

 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, 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
                             ========   ===========  ===========  ==========


BALANCE, December 31, 2005  $    607   $ 9,267,165  $ 9,267,772   13,241.65

  Distributions               (5,161)     (166,866)    (172,027)

  Net Income                   3,494       112,987      116,481
                             --------   -----------  -----------  ----------
BALANCE, March 31, 2006     $ (1,060)  $ 9,213,286  $ 9,212,226   13,241.65
                             ========   ===========  ===========  ==========

 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, 2006

                           (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 called 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  September  15,  2005,  the  Company  purchased  a  13.5%
     interest  in  a  CarMax auto superstore in  Columbia,  South
     Carolina  for $1,803,010.  The property is leased to  CarMax
     Auto  Superstores,  Inc.  under a  Lease  Agreement  with  a
     primary  term  of  15  years and annual rental  payments  of
     $124,504.   The  remaining interests in  the  property  were
     purchased  by  AEI  Accredited Investor  Fund  2002  Limited
     Partnership  and  AEI  Accredited  Investor   Fund   V   LP,
     affiliates of the Company.

(4)  Lease Acquisition Costs -

     The  Company paid a lease commission of $82,500 to the  real
     estate  broker who assisted the Company in locating the  new
     lessee  for  the former Razzoo's restaurant in San  Antonio,
     Texas.   On  July 1, 2005, the Company began amortizing  the
     commission  using the straight-line method over the  10-year
     term of the Lease.  At March 31, 2006 and December 31, 2005,
     the   accumulated  amortization  was  $6,188   and   $4,125,
     respectively.

(5)  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.

(6)  Discontinued Operations -

     In  July 2003, the tenant 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 2003,  the  tenant  closed  the
     restaurants and said that it no longer intended  to  operate
     restaurants at the sites.  Subsequent to these actions,  the
     tenant  and the Company reached a settlement related to  the
     properties,  the  leases for the properties were  terminated
     and  the tenant returned possession of the properties to the
     Company.  While the properties were vacant, the Company  was
     responsible  for real estate taxes and other costs  required
     to maintain the properties.


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

(6)  Discontinued Operations - (Continued)

     In  October 2004, the Company entered into an agreement with
     GMRI  Texas L.P. (GMRI), a subsidiary of Darden Restaurants,
     Inc.,  to  lease  the  property in San Antonio.   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,  GMRI  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, GMRI
     completed   its  feasibility  work  and  the  Lease   became
     effective.   After the effective date, GMRI  is  responsible
     for   all  property  expenses,  except  real  estate  taxes.
     Pursuant  to the Lease, GMRI commenced paying rent and  real
     estate taxes on June 16, 2005, which was 120 days after  the
     end  of the feasibility period.  During this 120-day period,
     GMRI  remodeled the building and converted it into a  Smokey
     Bones BBQ restaurant.  The Company is actively marketing the
     property  for  sale  and has listed it with  a  real  estate
     broker.   At  March  31,  2006 and December  31,  2005,  the
     property was classified as Real Estate Held for Sale with  a
     book value of $2,050,000.

     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.  At the time of sale, the net  book
     value of the property was $1,100,000.

     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:

                                                 2006       2005

     Rental Income                           $  41,250   $       0
     Property Management Expenses                  (45)    (31,806)
     Amortization                               (2,063)          0
     Gain on Disposal of Real Estate                 0      88,442
                                              ---------   ---------
       Income from Discontinued Operations   $  39,142   $  56,636
                                              =========   =========

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;

   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.

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

        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.

Results of Operations

        For  the three months ended March 31, 2006 and 2005,  the
Company  recognized rental income from continuing  operations  of
$162,850  and  $130,351, respectively.  In  2006,  rental  income
increased  due  to  additional rent received  from  one  property
acquisition in 2005 and rent increases on two properties.

        For  the three months ended March 31, 2006 and 2005,  the
Company  incurred  LLC  administration expenses  from  affiliated
parties   of   $32,142   and   $33,674,   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 $6,902 and
$8,011,  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, 2006 and 2005,  the
Company   recognized  interest  income  of  $4,077  and   $7,301,
respectively.   In  2006, interest income decreased  due  to  the
Company having less money invested in a money market account  due
to property acquisitions.

        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, 2006, the Company recognized income  from
discontinued  operations of $39,142, representing, rental  income
less  property  management expenses and  amortization.   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.


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

        In  July 2003, the tenant 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 2003, the tenant closed the restaurants and  said
that  it no longer intended to operate restaurants at the  sites.
Subsequent to these actions, the tenant and the Company reached a
settlement  related  to  the  properties,  the  leases  for   the
properties were terminated and the tenant returned possession  of
the properties to the Company.  While the properties were vacant,
the Company was responsible for real estate taxes and other costs
required to maintain the properties.

        In  October  2004, the Company entered into an  agreement
with  GMRI Texas L.P. (GMRI), a subsidiary of Darden Restaurants,
Inc.,  to lease the property in San Antonio.  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,  GMRI   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, GMRI completed its feasibility work  and  the
Lease  became  effective.   After the  effective  date,  GMRI  is
responsible for all property expenses, except real estate  taxes.
Pursuant to the Lease, GMRI commenced paying rent and real estate
taxes  on June 16, 2005, which was 120 days after the end of  the
feasibility  period.  During this 120-day period, GMRI  remodeled
the building and converted it into a Smokey Bones BBQ restaurant.
The  Company is actively marketing the property for sale and  has
listed  it  with  a real estate broker.  The Company  intends  to
invest the proceeds from the potential sale in replacement income-
producing property.  At March 31, 2006 and December 31, 2005, the
property was classified as Real Estate Held for Sale with a  book
value of $2,050,000.

       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.  At the time of sale, the net book value of the property
was $1,100,000.

        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.

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

Liquidity and Capital Resources

        During  the  three  months  ended  March  31,  2006,  the
Company's  cash  balances  decreased  $68,264  as  a  result   of
distributions  paid to the Members in excess  of  cash  generated
from  operating activities.  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.

        Net  cash provided by operating activities increased from
$27,619 in 2005 to $103,763 in 2006 as a result of an increase in
total  rental and interest income in 2006 and a decrease  in  LLC
administration  and property management expenses in  2006,  which
were partially offset by net timing differences in the collection
of payments from the tenants and the payment of expenses.

        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, 2005, the Company generated cash flow from the sale  of
real estate of $1,188,442.

        On  September  15,  2005, the Company purchased  a  13.5%
interest  in a CarMax auto superstore in Columbia, South Carolina
for   $1,803,010.   The  property  is  leased  to   CarMax   Auto
Superstores, Inc. under a Lease Agreement with a primary term  of
15  years  and annual rental payments of $124,504.  The remaining
interests  in  the  property  were purchased  by  AEI  Accredited
Investor   Fund  2002  Limited  Partnership  and  AEI  Accredited
Investor Fund V LP, 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, 2006 and 2005,  the
Company   declared  distributions  of  $172,027   and   $172,028,
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 $166,866
and  $166,867 and the Managing Members received distributions  of
$5,161 and $5,161 for the periods, respectively.

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

        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 2005, two Limited Members redeemed a total of 46.42
Units  for  $32,090  in accordance with the Operating  Agreement.
The  Company  acquired  these Units  using  Net  Cash  Flow  from
operations.   In  prior years, a total of seven  Limited  Members
redeemed  61.25 Units for $41,847.  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 $993 in 2005.

       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.

        (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.

                   PART II - OTHER INFORMATION
                           (Continued)

ITEM 6.EXHIBITS

    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 5, 2006           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)