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

                                   Form 10-KSB

(Mark One)
[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934


                 For the fiscal year ended December 31, 2004

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934


               For the transition period _________to _________

                         Commission file number 0-13454

                          NATIONAL PROPERTY INVESTORS 7
                 (Name of small business issuer in its charter)

         California                                              13-3230613
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                         55 Beattie Place, P.O. Box 1089
                        Greenville, South Carolina 29602
                    (Address of principal executive offices)

                                 (864) 239-1000
                            Issuer's telephone number

        Securities registered under Section 12(b) of the Exchange Act:

                                      None

        Securities registered under Section 12(g) of the Exchange Act:

                      Units of Limited Partnership Interest
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act of 1934 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___

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year.  $1,292,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests as of December 31, 2004. No market exists for the limited  partnership
interests of the Registrant,  and,  therefore,  no aggregate market value can be
determined.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE

The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including,  without limitation:  national and local
economic  conditions;  the terms of  governmental  regulations  that  affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates;  financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest;  real estate risks, including variations of real estate values and
the general  economic  climate in local markets and  competition  for tenants in
such markets;  litigation,  including  costs  associated  with  prosecuting  and
defending  claims  and  any  adverse   outcomes,   and  possible   environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.

                                     PART I

Item 1.     Description of Business

National  Property   Investors  7  (the  "Partnership"  or  "Registrant")  is  a
California  limited  partnership  formed in October  1983.  The  Partnership  is
engaged in the business of  operating  and holding  real estate  properties  for
investment.  NPI Equity  Investments,  Inc., a Florida  corporation,  became the
Partnership's  managing general partner (the "Managing  General Partner" or "NPI
Equity") on December 20, 1991. The Managing  General Partner was a subsidiary of
National Property Investors, Inc. ("NPI") until December 31, 1996, at which time
Insignia  Properties Trust ("IPT") acquired the stock of NPI Equity.  On October
1, 1998, IPT merged into Apartment  Investment and Management Company ("AIMCO"),
a publicly  traded real  estate  investment  trust.  The  partnership  agreement
provides  that the  Partnership  is to terminate  on December  31, 2008,  unless
terminated prior to such date.

From  February 1984 through  February  1985,  the  Partnership  offered  100,000
limited  partnership  units at $500 per unit for an aggregate of $50,000,000 and
sold  60,517  units  providing  net  proceeds  of  $30,259,000,  pursuant  to  a
Registration Statement filed with the Securities and Exchange Commission.  Since
its initial offering, the Partnership has not received, nor are limited partners
required to make,  additional  capital  contributions.  The net proceeds of this
offering were used to purchase seven income  producing  residential  real estate
properties.  The Partnership's  original property  portfolio was  geographically
diversified  with properties  acquired in six states.  One property was sold and
another was foreclosed on in 1994. Three properties were sold in 2003 and one in
2004. The Partnership  continues to own and operate one remaining  property (see
"Item 2. Description of Property").

The  Partnership has no employees.  The Managing  General Partner is vested with
full authority as to the general  management and supervision of the business and
affairs of the Partnership. The limited partners have no right to participate in
the  management  or conduct of such  business and  affairs.  An affiliate of the
Managing  General  Partner  provides  day-to-day   management  services  to  the
Partnership's investment property.

Risk Factors

The  real  estate  business  in which  the  Partnership  is  engaged  is  highly
competitive.  There are other  residential  properties within the market area of
the Partnership's  property.  The number and quality of competitive  properties,
including  those which may be managed by an affiliate  of the  Managing  General
Partner,  in such market area could have a material  effect on the rental market
for the  apartments  at the  Partnership's  property  and the rents  that may be
charged  for  such  apartments.  While  the  Managing  General  Partner  and its
affiliates  own and/or  control a significant  number of apartment  units in the
United  States,  such  units  represent  an  insignificant  percentage  of total
apartment  units in the United  States and  competition  for the  apartments  is
local.

Laws benefiting  disabled persons may result in the Partnership's  incurrence of
unanticipated  expenses.  Under the Americans with  Disabilities Act of 1990, or
ADA,  all places  intended to be used by the public are required to meet certain
Federal  requirements  related to access and use by disabled persons.  Likewise,
the Fair Housing Amendments Act of 1988, or FHAA, requires apartment  properties
first occupied after March 13, 1990 to be accessible to the  handicapped.  These
and other  Federal,  state  and  local  laws may  require  modifications  to the
Partnership's  property, or restrict renovations of the property.  Noncompliance
with these laws could result in the  imposition  of fines or an award of damages
to  private  litigants  and  also  could  result  in an  order  to  correct  any
non-complying  feature,  which could result in substantial capital expenditures.
Although the Managing General Partner believes that the  Partnership's  property
is  substantially in compliance with the present  requirements,  the Partnership
may incur unanticipated expenses to comply with the ADA and the FHAA.

Both the income and expenses of operating the property owned by the  Partnership
are subject to factors outside of the Partnership's  control, such as changes in
the supply and demand for  similar  properties  resulting  from  various  market
conditions, increases/decreases in unemployment or population shifts, changes in
the  availability of permanent  mortgage  financing,  changes in zoning laws, or
changes in patterns or needs of users. In addition,  there are risks inherent in
owning  and  operating  residential   properties  because  such  properties  are
susceptible  to the  impact of  economic  and other  conditions  outside  of the
control of the Partnership.

From time to time, the Federal Bureau of  Investigation,  or FBI, and the United
States  Department  of  Homeland  Security  issue  alerts  regarding   potential
terrorist threats  involving  apartment  buildings.  Threats of future terrorist
attacks,  such as those  announced  by the FBI and the  Department  of  Homeland
Security,  could  have a  negative  effect on rent and  occupancy  levels at the
Partnership's  property.  The effect that future terrorist activities or threats
of such activities could have on the  Partnership's  operations is uncertain and
unpredictable.  If the  Partnership  were to incur a loss at the  property  as a
result of an act of terrorism,  the  Partnership  could lose all or a portion of
the capital  invested in the  property,  as well as the future  revenue from the
property.  In this regard, the Partnership has purchased insurance to cover acts
of terrorism.  The Managing General Partner does not anticipate that these costs
will have a negative effect on the Partnership's  financial condition or results
of operations.

There have been, and it is possible there may be other, Federal, state and local
legislation  and  regulations   enacted   relating  to  the  protection  of  the
environment.  The Partnership is unable to predict the extent,  if any, to which
such new  legislation  or  regulations  might occur and the degree to which such
existing or new legislation or regulations  might adversely  affect the property
owned by the Partnership.

The  Partnership  monitors its property for evidence of  pollutants,  toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental  testing has been performed which resulted in no material  adverse
conditions or liabilities.  In no case has the Partnership  received notice that
it is a potentially  responsible party with respect to an environmental clean up
site.

A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operation"  included in "Item 6" of this Form
10-KSB.

Item 2.     Description of Property

The following table sets forth the Partnership's investment property:
<TABLE>
<CAPTION>

                                   Date of
Property                           Purchase       Type of Ownership          Use

<S>                                 <C>
Fairway View II Apartments          11/84    Fee ownership subject to    Apartment
  Baton Rouge, Louisiana                     first mortgage              204 units
</TABLE>

On April 30, 2004, the  Partnership  sold The Pines  Apartments to a third party
for net proceeds of approximately $8,748,000 after payment of closing costs. The
Partnership realized a gain of approximately $6,645,000 as a result of the sale.
The Partnership used  approximately  $3,790,000 of the net proceeds to repay the
mortgage encumbering the property. In addition,  the Partnership recorded a loss
on early  extinguishment  of debt of  approximately  $1,119,000  as a result  of
unamortized loan costs being written off and a prepayment  penalty.  This amount
is  included  in loss  from  discontinued  operations.  Included  in  loss  from
discontinued  operations  for the  years  ended  December  31,  2004 and 2003 is
approximately $473,000 and $1,497,000, respectively, of revenue generated by the
property.

On October 31, 2003, the  Partnership  sold Patchen Place  Apartments to a third
party for net  proceeds of  approximately  $6,815,000  after  payment of closing
costs. The Partnership  realized a gain of approximately  $4,703,000 as a result
of the sale. The Partnership used  approximately  $4,254,000 of the net proceeds
to repay the mortgage  encumbering  the property.  In addition,  the Partnership
recorded a loss on early  extinguishment  of debt of approximately  $92,000 as a
result of  unamortized  loan costs being written off. This amount is included in
loss from discontinued operations. Included in loss from discontinued operations
for the year ended  December  31, 2003 is  approximately  $1,076,000  of revenue
generated by the property.

On December 9, 2003, the Partnership sold Northwoods Apartments to a third party
for net proceeds of  approximately  $11,454,000  after payment of closing costs.
The Partnership  realized a gain of approximately  $8,028,000 as a result of the
sale. The Partnership used approximately $6,611,000 of the net proceeds to repay
the mortgage encumbering the property.  In addition,  the Partnership recorded a
loss on early  extinguishment  of debt of approximately  $207,000 as a result of
unamortized  loan costs being  written off. This amount is included in loss from
discontinued  operations.  Included in loss from discontinued operations for the
years ended December 31, 2003 is approximately  $2,010,000 of revenue  generated
by the property.

On December 30, 2003,  the  Partnership  sold South Point  Apartments to a third
party for net  proceeds of  approximately  $8,135,000  after  payment of closing
costs. The Partnership  realized a gain of approximately  $4,973,000 as a result
of the sale. The Partnership used  approximately  $4,948,000 of the net proceeds
to repay the mortgage  encumbering  the property.  In addition,  the Partnership
recorded a loss on early  extinguishment of debt of approximately  $105,000 as a
result of  unamortized  loan costs being written off. This amount is included in
loss from discontinued operations. Included in loss from discontinued operations
for the year ended  December  31, 2003 is  approximately  $1,262,000  of revenue
generated by the property.

Schedule of Property

Set forth  below for the  Partnership's  property is the gross  carrying  value,
accumulated depreciation,  depreciable life, method of depreciation, and Federal
tax basis.
<TABLE>
<CAPTION>

                                                               Method
                     Carrying    Accumulated   Depreciable       of          Federal
Property              Value     Depreciation      Life      Depreciation    Tax Basis
                         (in thousands)                                    (in thousands)

<S>                  <C>           <C>          <C>                          <C>
Fairway View II      $11,312       $ 7,533      5-30 yrs         S/L         $ 1,624
</TABLE>

See  "Item  7.  Financial  Statements,  Note  A"  for  a  description  of  the
Partnership's capitalization and depreciation policies.

Schedule of Property Indebtedness

The  following  table  sets  forth  certain  information  relating  to the loans
encumbering the Partnership's property.
<TABLE>
<CAPTION>

                         Principal                                        Principal
                        Balance At                                         Balance
                       December 31,    Interest    Period    Maturity       Due At
Property                   2004        Rate (1)   Amortized    Date      Maturity (2)
                      (in thousands)                                    (in thousands)

<S>                       <C>           <C>        <C>       <C>   <C>       <C>
   Fairway View II        $ 5,015       7.03%      20 yrs    12/01/21        $ --
</TABLE>

(1)   Fixed rate mortgage.

(2)   See "Item 7. Financial  Statements - Note B" for information  with respect
      to the  Partnership's  ability  to prepay  this  loan and  other  specific
      details about the loan.

On May 16, 2003, the  Partnership  refinanced the mortgage  encumbering  Patchen
Place Apartments.  The refinancing  replaced the existing mortgage of $3,000,000
with a new mortgage in the amount of $4,290,000.  Total  capitalized  loan costs
were  approximately  $98,000  during  the year  ended  December  31,  2003.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately  $7,000 during the year ended  December 31, 2003, due to the write
off of unamortized loan costs and debt discounts, which is included in loss from
discontinued operations.  The new mortgage was repaid with the proceeds from the
sale of  Patchen  Place  Apartments  in  October  2003 (see  "Item 7.  Financial
Statements - Note E").

On June 27, 2003,  the  Partnership  refinanced the mortgage  encumbering  South
Point Apartments.  The refinancing  replaced the existing mortgage of $4,600,000
with a new mortgage in the amount of $5,000,000.  Total  capitalized  loan costs
were  approximately  $115,000  during  the year ended  December  31,  2003.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately  $7,000 during the year ended  December 31, 2003, due to the write
off of unamortized loan costs and debt discounts, which is included in loss from
discontinued operations.  The new mortgage was repaid with the proceeds from the
sale of South  Point  Apartments  in  December  2003  (see  "Item  7.  Financial
Statements - Note E").

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

As of July 1 and August 1,  2003,  the loans on  Patchen  Place and South  Point
Apartments,  respectively,  were  assumed  by a  different  lender.  The  credit
facility  ("Permanent Credit Facility") with the new lender matures in September
2007 with an option for the Partnership to elect one five-year  extension.  This
Permanent  Credit  Facility  also  created  separate  loans  for  each  property
refinanced   thereunder,   which   loans   are   not   cross-collateralized   or
cross-defaulted  with each other. Each note under this Permanent Credit Facility
is initially a variable rate loan, and after three years the Partnership has the
option of  converting  the note to a fixed rate loan.  The interest  rate on the
variable  rate  loans  is  85  basis  points  over  the  Fannie  Mae  discounted
mortgage-backed  security index (1.92% per annum at December 31, 2003),  and the
rate resets monthly. Each loan automatically renews at the end of each month. In
addition,   monthly   principal   payments  are  required  based  on  a  30-year
amortization schedule,  using the interest rate in effect during the first month
that the properties are on the Permanent Credit Facility.  The loans were repaid
when Patchen Place  Apartments  sold in October 2003 and South Point  Apartments
sold in December 2003.

Rental Rates and Occupancy

Average  annual  rental rates and  occupancy for 2004 and 2003 for the remaining
property:

                                     Average Annual                   Average
                                      Rental Rates                   Occupancy
                                       (per unit)
Property                          2004            2003           2004       2003

Fairway View II (1)              $7,054          $7,071           86%       90%

(1)   The  Managing  General  Partner  attributes  the  decrease in occupancy at
      Fairway View II to strong  competition  from new construction in the local
      market area.

As noted under "Item 1.  Description of Business",  the real estate  industry is
highly  competitive.  The property of the  Partnership is subject to competition
from other  residential  apartment  complexes in the area. The Managing  General
Partner  believes  that the property is adequately  insured.  The property is an
apartment  complex  which leases  units for lease terms of one year or less.  No
residential  tenant  leases  10% or  more of the  available  rental  space.  The
property  is in good  physical  condition,  subject to normal  depreciation  and
deterioration as is typical for assets of this type and age.

Real Estate Taxes and Rates

Real estate taxes and rates in 2004 for the property were:

                                       2004            2004
                                       Taxes          Rates
                                         (in thousands)

          Fairway View II              $ 46           10.23%

Capital Improvements

Fairway View II

During the year ended December 31, 2004, the Partnership completed approximately
$311,000 of capital  improvements  at Fairway View II,  consisting  primarily of
structural and electrical upgrades,  roof replacements,  building  improvements,
and floor covering and air conditioning unit  replacements.  These  improvements
were funded from operating cash flow. The  Partnership  regularly  evaluates the
capital improvement needs of the property. While the Partnership has no material
commitments for property improvements and replacements,  certain routine capital
expenditures are anticipated during 2005. Such capital  expenditures will depend
on the physical  condition of the property as well as  replacement  reserves and
anticipated cash flow generated by the property.

The Pines

During the year ended December 31, 2004, the Partnership completed approximately
$35,000 of capital  improvements  at The Pines,  consisting  primarily  of floor
covering and roof replacements and heating system upgrades.  These  improvements
were funded from operating  cash flow.  The Pines  Apartments was sold April 30,
2004.

Capital  expenditures will be incurred only if cash is available from operations
or from  Partnership  reserves.  To the extent  that  capital  improvements  are
completed,  the Partnership's  distributable cash flow, if any, may be adversely
affected at least in the short term.

Item 3.     Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the  Partnership,  its Managing  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purported  to  assert  claims  on  behalf  of a class of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  that are named as nominal  defendants,  challenging,  among  other
things,  the  acquisition  of  interests  in certain  Managing  General  Partner
entities by Insignia Financial Group, Inc.  ("Insignia") and entities that were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged into AIMCO.  The plaintiffs  sought  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition,  during the third quarter of 2001, a complaint  captioned Heller v.
Insignia  Financial  Group (the  "Heller  action")  was filed  against  the same
defendants  that are named in the  Nuanes  action.  On or about  August 6, 2001,
plaintiffs filed a first amended  complaint.  The Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary  duty,  unfair  competition,  conversion,  unjust  enrichment,  and
judicial dissolution.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a court  appointed
appraiser.  An affiliate of the Managing General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval,  if it is granted, and to
provide  partners with the independent  appraisals at the time of these tenders.
The proposed  settlement also provided for the limitation of the allowable costs
which  the  Managing   General   Partner  or  its  affiliates  will  charge  the
Partnerships  in connection with this litigation and imposes limits on the class
counsel  fees and  costs in this  litigation.  On April  11,  2003,  notice  was
distributed  to  limited   partners   providing  the  details  of  the  proposed
settlement.

On June 13, 2003, the court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector") filed an appeal (the "Appeal") seeking to vacate and/or reverse the
order approving the settlement and entering  judgment  thereto.  On November 24,
2003,  the Objector  filed an  application  requesting  the court order AIMCO to
withdraw settlement tender offers it had commenced,  refrain from making further
offers  pending  the appeal and auction  any units  tendered  to third  parties,
contending  that the offers did not  conform  with the terms of the  settlement.
Counsel  for the  Objector  (on behalf of another  investor)  had  alternatively
requested the court take certain action  purportedly to enforce the terms of the
settlement agreement. On December 18, 2003, the court heard oral argument on the
motions  and denied them both in their  entirety.  The  Objector  filed a second
appeal challenging the court's use of a referee and its order requiring Objector
to pay those fees.

On January 28, 2004,  the  Objector  filed his opening  brief in the Appeal.  On
April 23, 2004, the Managing General Partner and its affiliates filed a response
brief in support of the settlement and the judgment thereto. The plaintiffs have
also filed a brief in support of the settlement. On June 4, 2004, Objector filed
a reply to the briefs  submitted by the Managing General Partner and Plaintiffs.
In addition both the Objector and plaintiffs filed briefs in connection with the
second  appeal.  The Court of Appeals  heard oral  argument  on both  appeals on
September 22, 2004 and took the matters under submission.

The  Managing  General  Partner  does  not  anticipate  that  any  costs  to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.

As previously disclosed,  AIMCO Properties L.P. and NHP Management Company, both
affiliates of the Managing General  Partner,  are defendants in an action in the
United States District Court,  District of Columbia.  The plaintiffs have styled
their  complaint  as a  collective  action  under the Fair Labor  Standards  Act
("FLSA") and seek to certify state subclasses in California,  Maryland,  and the
District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties
L.P. failed to compensate  maintenance  workers for time that they were required
to be "on-call." Additionally, plaintiffs allege AIMCO Properties L.P. failed to
comply  with the FLSA in  compensating  maintenance  workers  for time that they
worked in responding to a call while  "on-call."  The  defendants  have filed an
answer to the amended complaint denying the substantive  allegations.  Discovery
relating  to the  certification  of the  collective  action  has  concluded  and
briefing on the matter is underway.  Although the outcome of any  litigation  is
uncertain,  AIMCO  Properties,  L.P. does not believe that the ultimate  outcome
will have a material  adverse  effect on its  financial  condition or results of
operations.  Similarly,  the Managing  General Partner does not believe that the
ultimate  outcome  will have a  material  adverse  effect  on the  Partnership's
financial condition or results of operations.

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

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

During the quarter ended December 31, 2004, no matter was submitted to a vote of
security holders through the solicitation of proxies or otherwise.

Item 5.     Market for the Partnership's Equity and Related Partner Matters

The  Partnership,  a publicly-held  limited  partnership,  offered up to 100,000
limited  partnership  units (the  "Units")  and sold  60,517  Units  aggregating
$30,259,000.  At December 31, 2004, the  Partnership had 1,069 holders of record
owning an aggregate of 60,517 Units.  Affiliates of the Managing General Partner
owned  42,461.67  Units or 70.16% at December 31, 2004. No public trading market
has developed for the Units,  and it is not anticipated  that such a market will
develop in the future.

The following table sets forth the distributions made by the Partnership for the
years ended December 31, 2004 and 2003 (in thousands, except per unit data).
<TABLE>
<CAPTION>

                                          Per Limited                         Per Limited
                          Year Ended      Partnership        Year Ended       Partnership
                      December 31, 2004       Unit       December 31, 2003       Unit

<S>                          <C>              <C>             <C>               <C>
Operations                   $ --             $ --            $ 1,217           $ 19.90
Refinancing (1)                 --               --             1,347             22.04
Sales proceeds (2)           7,143           116.86             7,340            120.08
                           $ 7,143          $116.86           $ 9,904           $162.02
</TABLE>

(1)   From the  refinancings of Patchen Place Apartments in May 2003 and South
      Point Apartments in June 2003.

(2)   For 2004,  proceeds  from the sales of South Point  Apartments in December
      2003 and The Pines  Apartments in April 2004. For 2003,  proceeds from the
      sale  of  Patchen  Place  Apartments  in  October  2003  and  the  sale of
      Northwoods I and II Apartments in December 2003.

Future cash  distributions  will depend on the levels of net cash generated from
operations  and the timing of the debt  maturity,  refinancing  and/or  property
sale. The Partnership's cash available for distribution is reviewed on a monthly
basis.  There can be no assurance,  however,  that the Partnership will generate
sufficient   funds  from   operations,   after  required   capital   improvement
expenditures,  to  permit  any  distributions  to its  partners  during  2005 or
subsequent periods. See "Item 2. Description of Property - Capital Improvements"
for information relating to anticipated capital expenditures at the property.

In addition to its indirect  ownership of the Managing  General Partner interest
in the  Partnership,  AIMCO  and its  affiliates  owned  42,461.67  Units in the
Partnership representing 70.16% of the outstanding Units at December 31, 2004. A
number of these Units were  acquired  pursuant to tender offers made by AIMCO or
its  affiliates.  It is  possible  that  AIMCO or its  affiliates  will  acquire
additional  Units in  exchange  for cash or a  combination  of cash and units in
AIMCO  Properties,  L.P.,  the operating  partnership  of AIMCO,  either through
private purchases or tender offers. Pursuant to the Partnership Agreement,  unit
holders holding a majority of the Units are entitled to take action with respect
to a variety of matters that include,  but are not limited to, voting on certain
amendments  to the  Partnership  Agreement  and  voting to remove  the  Managing
General  Partner.  As a result of its  ownership  of  70.16% of the  outstanding
Units,  AIMCO and its  affiliates are in a position to influence all such voting
decisions with respect to the Partnership.  However,  DeForest Ventures II L.P.,
from whom Insignia  Properties LP ("IPLP") an affiliate of the Managing  General
Partner and of AIMCO acquired 25,399 Units (41.97% of the units), agreed for the
benefit of non-tendering unit holders, that it would vote its Units: (i) against
any increase in compensation  payable to the Managing  General Partner or to its
affiliates;  and (ii) on all other matters submitted by it or its affiliates, in
proportion  to the  votes  cast by third  party  unit  holders.  Except  for the
foregoing,  no other  limitations  are  imposed on IPLP's,  AIMCO's or any other
affiliates  right to vote each unit held.  Although the Managing General Partner
owes fiduciary duties to the limited  partners of the Partnership,  the Managing
General Partner also owes fiduciary duties to AIMCO as its sole stockholder.  As
a result,  the duties of the  Managing  General  Partner,  as  Managing  General
Partner, to the Partnership and its limited partners may come into conflict with
the duties of the Managing General Partner to AIMCO as its sole stockholder.

Item 6.     Management's Discussion and Analysis or Plan of Operation

This item should be read in conjunction with the financial  statements and other
items contained elsewhere in this report.

The  Partnership's  financial  results depend upon a number of factors including
the ability to attract and maintain tenants at the investment property, interest
rates on the mortgage loan,  costs incurred to operate the investment  property,
general economic conditions and weather. As part of the ongoing business plan of
the  Partnership,  the  Managing  General  Partner  monitors  the rental  market
environment of its investment  property to assess the  feasibility of increasing
rents, maintaining or increasing occupancy levels and protecting the Partnership
from increases in expenses.  As part of this plan, the Managing  General Partner
attempts  to  protect  the  Partnership  from the  burden  of  inflation-related
increases  in  expenses  by  increasing  rents and  maintaining  a high  overall
occupancy  level.   However,   the  Managing  General  Partner  may  use  rental
concessions and rental rate reductions to offset  softening  market  conditions;
accordingly,  there is no guarantee  that the Managing  General  Partner will be
able to sustain such a plan.  Further,  a number of factors that are outside the
control of the  Partnership  such as the local economic  climate and weather can
adversely or positively affect the Partnership's financial results.

Results of Operations

The  Partnership's net income for the years ended December 31, 2004 and 2003 was
approximately  $5,218,000  and  $17,225,000  respectively.  The  decrease in net
income for the year ended December 31, 2004 is due a decrease in the gain on the
sale of  discontinued  operations  and an  increase  in loss  from  discontinued
operations.

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
the  accompanying  statements of operations for the year ended December 31, 2003
reflect  the  operations  of Patchen  Place,  Northwoods  I & II and South Point
Apartments as loss from  discontinued  operations due to their sales in 2003. In
addition,  the statements of operations have been restated as of January 1, 2003
to reflect the  operations  of The Pines  Apartments  as loss from  discontinued
operations due to its sale in April 2004.

On April 30, 2004, the  Partnership  sold The Pines  Apartments to a third party
for net proceeds of approximately $8,748,000 after payment of closing costs. The
Partnership realized a gain of approximately $6,645,000 as a result of the sale.
The Partnership used  approximately  $3,790,000 of the net proceeds to repay the
mortgage encumbering the property. In addition,  the Partnership recorded a loss
on early  extinguishment  of debt of  approximately  $1,119,000  as a result  of
unamortized loan costs being written off and a prepayment  penalty.  This amount
is  included  in loss  from  discontinued  operations.  Included  in  loss  from
discontinued  operations  for the  years  ended  December  31,  2004 and 2003 is
approximately $473,000 and $1,497,000 respectively,  of revenue generated by the
property.

On October 31, 2003, the  Partnership  sold Patchen Place  Apartments to a third
party for net  proceeds of  approximately  $6,815,000  after  payment of closing
costs. The Partnership  realized a gain of approximately  $4,703,000 as a result
of the sale. The Partnership used  approximately  $4,254,000 of the net proceeds
to repay the mortgage  encumbering  the property.  In addition,  the Partnership
recorded a loss on early  extinguishment  of debt of approximately  $92,000 as a
result of  unamortized  loan costs being written off. This amount is included in
loss from discontinued operations. Included in loss from discontinued operations
for the year ended  December  31, 2003 is  approximately  $1,076,000  of revenue
generated by the property.

On December 9, 2003, the Partnership sold Northwoods Apartments to a third party
for net proceeds of  approximately  $11,454,000  after payment of closing costs.
The Partnership  realized a gain of approximately  $8,028,000 as a result of the
sale. The Partnership used approximately $6,611,000 of the net proceeds to repay
the mortgage encumbering the property.  In addition,  the Partnership recorded a
loss on early  extinguishment  of debt of approximately  $207,000 as a result of
unamortized  loan costs being  written off. This amount is included in loss from
discontinued  operations.  Included in loss from discontinued operations for the
year ended December 31, 2003 is approximately $2,010,000 of revenue generated by
the property.

On December 30, 2003,  the  Partnership  sold South Point  Apartments to a third
party for net  proceeds of  approximately  $8,135,000  after  payment of closing
costs. The Partnership  realized a gain of approximately  $4,973,000 as a result
of the sale. The Partnership used  approximately  $4,948,000 of the net proceeds
to repay the mortgage  encumbering  the property.  In addition,  the Partnership
recorded a loss on early  extinguishment of debt of approximately  $105,000 as a
result of  unamortized  loan costs being written off. This amount is included in
loss from discontinued operations. Included in loss from discontinued operations
for the year ended  December  31, 2003 is  approximately  $1,262,000  of revenue
generated by the property.

On February 15, 2003, an ice storm caused damage to exterior sections on some of
the buildings and to the  landscaping  at Patchen  Place  Apartments.  No actual
units were damaged  during the storm.  As a result of the damage,  approximately
$40,000 of fixed assets and $35,000 of accumulated depreciation were written off
resulting in a net write off of approximately  $5,000. The Partnership  received
approximately  $59,000  in  proceeds  from the  insurance  company to repair the
damaged  units.   For  financial   statement   purposes,   a  casualty  gain  of
approximately  $54,000 was recognized during the year ended December 31, 2003 as
a result of the difference  between the proceeds received and the net book value
of the assets  written  off.  This amount is included in loss from  discontinued
operations.

Excluding the gain on sales and the discontinued  operations,  the Partnership's
loss from  continuing  operations for the years ended December 31, 2004 and 2003
was approximately $256,000 and $350,000, respectively. The decrease in loss from
continuing  operations for the year ended December 31, 2004 is due to a decrease
in total expenses partially offset by decrease in total revenues. Total revenues
decreased  due to a decrease in rental  income caused by a decrease in occupancy
at the investment property.

Total expenses  decreased for the year ended December 31, 2004 due to a decrease
in general  and  administrative  expenses,  partially  offset by an  increase in
operating expense. Operating expenses increased due to increases in advertising,
property, and administrative  expenses.  Advertising expense increased due to an
increase in leasing  promotions at the investment  property.  Property  expenses
increased  due to increases in employee  apartments,  and  utilities,  partially
offset  by a  decrease  in  contract  courtesy  patrol.  Administrative  expense
increased due to increases in training and travel expenses and credit collection
and eviction expenses.  In addition,  the Partnership  expensed loan costs for a
refinancing of the mortgage  encumbering  the investment  property which did not
close.

General and  administrative  expense  decreased due to decreases in the costs of
services  included  in the  management  reimbursements  charged by the  Managing
General  Partner,  as allowed under the Partnership  Agreement,  and in the fees
paid to the Managing  General  Partner in  connection  with  distributions  from
operations.  Also included in general and  administrative  expense for the years
ended  December 31, 2004 and 2003 are costs  associated  with the  quarterly and
annual  communications  with  investors and  regulatory  agencies and the annual
audit required by the Partnership Agreement.

Liquidity and Capital Resources

At  December  31,  2004,  the  Partnership  had  cash and  cash  equivalents  of
approximately  $248,000  compared to  approximately  $3,628,000  at December 31,
2003. The decrease in cash and cash equivalents of  approximately  $3,380,000 is
due to  approximately  $11,000 and  $11,858,000  of cash used in  operating  and
financing activities, respectively, partially offset by approximately $8,489,000
of cash  provided by investing  activities.  Cash used in  financing  activities
consisted of the  repayment of the mortgage  encumbering  The Pines  Apartments,
principal  payments on the mortgages  encumbering the  Partnership's  investment
properties,  debt  extinguishment  costs  and  distributions  to  the  partners,
partially offset by advances  received from an affiliate of the Managing General
Partner.  Cash provided by investing  activities  consisted of net proceeds from
the sale of The Pines  Apartments  and net  receipts  from  restricted  escrows,
partially  offset by property  improvements  and  replacements.  The Partnership
invests its working capital in interest bearing accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures required at the property to adequately maintain the physical assets
and other operating needs of the Partnership and to comply with Federal,  state,
and local  legal and  regulatory  requirements.  The  Managing  General  Partner
monitors  developments  in the  area of legal  and  regulatory  compliance.  For
example,  the  Sarbanes-Oxley  Act  of  2002  mandates  or  suggests  additional
compliance  measures  with  regard to  governance,  disclosure,  audit and other
areas.  In light of these changes,  the  Partnership  expects that it will incur
higher expenses related to compliance.  The Partnership  regularly evaluates the
capital improvement needs of the property. While the Partnership has no material
commitments for property improvements and replacements,  certain routine capital
expenditures are anticipated during 2005. Such capital  expenditures will depend
on the physical  condition of the property as well as  replacement  reserves and
anticipated cash flow generated by the property.  Capital  expenditures  will be
incurred only if cash is available from operations or from Partnership reserves.
To the  extent  that  capital  improvements  are  completed,  the  Partnership's
distributable cash flow, if any, may be adversely affected at least in the short
term.

On May 16, 2003, the  Partnership  refinanced the mortgage  encumbering  Patchen
Place Apartments.  The refinancing  replaced the existing mortgage of $3,000,000
with a new mortgage in the amount of $4,290,000.  Total  capitalized  loan costs
were  approximately  $98,000  during  the year  ended  December  31,  2003.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately  $7,000 during the year ended  December 31, 2003, due to the write
off of unamortized loan costs and debt discounts, which is included in loss from
discontinued operations.  The new mortgage was repaid with the proceeds from the
sale of Patchen Place Apartments in October 2003.

On June 27, 2003,  the  Partnership  refinanced the mortgage  encumbering  South
Point Apartments.  The refinancing  replaced the existing mortgage of $4,600,000
with a new mortgage in the amount of $5,000,000.  Total  capitalized  loan costs
were  approximately  $115,000  during  the year ended  December  31,  2003.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately  $7,000 during the year ended  December 31, 2003, due to the write
off of unamortized loan costs and debt discounts, which is included in loss from
discontinued operations.  The new mortgage was repaid with the proceeds from the
sale of South Point Apartments in December 2003.

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

As of July 1 and August 1,  2003,  the loans on  Patchen  Place and South  Point
Apartments,  respectively,  were  assumed  by a  different  lender.  The  credit
facility  ("Permanent Credit Facility") with the new lender matures in September
2007 with an option for the Partnership to elect one five-year  extension.  This
Permanent  Credit  Facility  also  created  separate  loans  for  each  property
refinanced   thereunder,   which   loans   are   not   cross-collateralized   or
cross-defaulted  with each other. Each note under this Permanent Credit Facility
is initially a variable rate loan, and after three years the Partnership has the
option of  converting  the note to a fixed rate loan.  The interest  rate on the
variable  rate  loans  is  85  basis  points  over  the  Fannie  Mae  discounted
mortgage-backed  security index (1.92% per annum at December 31, 2003),  and the
rate resets monthly. Each loan automatically renews at the end of each month. In
addition,   monthly   principal   payments  are  required  based  on  a  30-year
amortization schedule,  using the interest rate in effect during the first month
that the properties are on the Permanent Credit Facility.  The loans were repaid
when Patchen Place  Apartments  sold in October 2003 and South Point  Apartments
sold in December 2003.

The  Partnership's  assets are thought to be sufficient for any near-term  needs
(exclusive  of  capital   improvements)   of  the   Partnership.   The  mortgage
indebtedness encumbering the investment property of approximately $5,015,000 has
a maturity  date of December 1, 2021 at which time the loan is  scheduled  to be
fully amortized.

Pursuant to the Partnership Agreement,  the term of the Partnership is scheduled
to expire on December 31, 2008. Accordingly,  prior to such date the Partnership
will need to  either  sell its  investment  property  or extend  the term of the
Partnership.

The  Partnership  distributed  the  following  amounts  during  the years  ended
December 31, 2004 and 2003 (in thousands, except per unit data):
<TABLE>
<CAPTION>

                                          Per Limited                         Per Limited
                          Year Ended      Partnership        Year Ended       Partnership
                      December 31, 2004       Unit       December 31, 2003       Unit

<S>                          <C>              <C>             <C>               <C>
Operations                   $ --             $ --            $ 1,217           $ 19.90
Refinancing (1)                 --               --             1,347             22.04
Sales proceeds (2)           7,143           116.86             7,340            120.08
                           $ 7,143          $116.86           $ 9,904           $162.02
</TABLE>

(1)   From the  refinancings of Patchen Place Apartments in May 2003 and South
      Point Apartments in June 2003.

(2)   For 2004,  proceeds  from the sales of South Point  Apartments in December
      2003 and The Pines  Apartments in April 2004. For 2003,  proceeds from the
      sale  of  Patchen  Place  Apartments  in  October  2003  and  the  sale of
      Northwoods I and II Apartments in December 2003.

Future cash  distributions  will depend on the levels of net cash generated from
operations  and the timing of the debt  maturity,  refinancing  and/or  property
sale. The Partnership's cash available for distribution is reviewed on a monthly
basis.  There can be no assurance,  however,  that the Partnership will generate
sufficient   funds  from   operations,   after  required   capital   improvement
expenditures,  to  permit  any  distributions  to its  partners  during  2005 or
subsequent periods.

In addition to its indirect  ownership of the Managing  General Partner interest
in the Partnership, AIMCO and its affiliates owned 42,461.67 limited partnership
units (the "Units") in the  Partnership  representing  70.16% of the outstanding
Units at December 31, 2004.  A number of these Units were  acquired  pursuant to
tender offers made by AIMCO or its affiliates.  It is possible that AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unit  holders  holding a majority of the Units are  entitled to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Managing General  Partner.  As a result of its ownership of 70.16% of
the outstanding  Units,  AIMCO and its affiliates are in a position to influence
all such voting  decisions with respect to the  Partnership.  However,  DeForest
Ventures II L.P., from whom Insignia  Properties LP ("IPLP") an affiliate of the
Managing  General  Partner and of AIMCO  acquired  25,399  Units  (41.97% of the
units), agreed for the benefit of non-tendering unit holders, that it would vote
its Units:  (i) against any  increase in  compensation  payable to the  Managing
General Partner or to its affiliates; and (ii) on all other matters submitted by
it or its  affiliates,  in  proportion  to the votes  cast by third  party  unit
holders.  Except for the foregoing,  no other limitations are imposed on IPLP's,
AIMCO's  or any other  affiliates  right to vote each unit  held.  Although  the
Managing  General Partner owes fiduciary  duties to the limited  partners of the
Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as
its sole stockholder.  As a result,  the duties of the Managing General Partner,
as Managing  General  Partner,  to the Partnership and its limited  partners may
come into conflict with the duties of the Managing  General  Partner to AIMCO as
its sole stockholder.

Critical Accounting Policies and Estimates

A summary of the Partnership's  significant  accounting  policies is included in
"Note A - Organization and Significant Accounting Policies" which is included in
the financial statements in "Item 7. Financial Statements". The Managing General
Partner  believes that the consistent  application of these policies enables the
Partnership  to provide  readers of the  financial  statements  with  useful and
reliable  information  about the  Partnership's  operating results and financial
condition. The preparation of financial statements in conformity with accounting
principles  generally  accepted in the United States requires the Partnership to
make  estimates and  assumptions.  These  estimates and  assumptions  affect the
reported  amounts  of  assets  and  liabilities  at the  date  of the  financial
statements  as well as reported  amounts of  revenues  and  expenses  during the
reporting  period.  Actual results could differ from these estimates.  Judgments
and  assessments  of  uncertainties  are required in applying the  Partnership's
accounting  policies  in  many  areas.  The  Partnership  believes  that  of its
significant  accounting  policies,  the following may involve a higher degree of
judgment and complexity.

Impairment of Long-Lived Assets

Investment property is recorded at cost, less accumulated  depreciation,  unless
considered  impaired.  If events or  circumstances  indicate  that the  carrying
amount of a property may be impaired, the Partnership will make an assessment of
its recoverability by estimating the undiscounted  future cash flows,  excluding
interest charges, of the property.  If the carrying amount exceeds the aggregate
future cash flows,  the  Partnership  would  recognize an impairment loss to the
extent the carrying amount exceeds the fair value of the property.

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's  investment  property.  These factors include, but are not limited
to,  changes  in the  national,  regional  and  local  economic  climate;  local
conditions,  such as an oversupply of multifamily  properties;  competition from
other available  multifamily property owners and changes in market rental rates.
Any adverse changes in these factors could cause impairment of the Partnership's
assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
The Partnership will offer rental concessions during particularly slow months or
in response  to heavy  competition  from other  similar  complexes  in the area.
Rental income attributable to leases, net of any concessions, is recognized on a
straight-line  basis over the term of the lease.  The Partnership  evaluates all
accounts  receivable  from  residents and  establishes  an allowance,  after the
application of security deposits,  for accounts greater than 30 days past due on
current tenants and all receivables due from former tenants.

ITEM 7.     FINANCIAL STATEMENTS

NATIONAL PROPERTY INVESTORS 7

LIST OF FINANCIAL STATEMENTS

      Report of Independent Registered Public Accounting Firm

      Balance Sheet - December 31, 2004

      Statements of Operations - Years ended December 31, 2004 and 2003

      Statements  of Changes in Partners'  Deficit - Years ended  December 31,
      2004 and 2003

      Statements of Cash Flows - Years ended December 31, 2004 and 2003

      Notes to Financial Statements

           Report of Independent Registered Public Accounting Firm



The Partners
National Property Investors 7


We have audited the accompanying  balance sheet of National Property Investors 7
as of December 31, 2004, and the related  statements of  operations,  changes in
partners'  deficit and cash flows for each of the two years in the period  ended
December 31, 2004.  These  financial  statements are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes consideration of
internal  control  over  financial  reporting  as a basis  for  designing  audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Partnership's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements,  assessing the  accounting  principles
used and  significant  estimates made by management,  and evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial position of National Property Investors 7
at December 31, 2004,  and the results of its  operations and its cash flows for
each of the two years in the period ended December 31, 2004, in conformity  with
accounting principles generally accepted in the United States.


                                                          /s/ERNST & YOUNG LLP



Greenville, South Carolina
March 10, 2005

                          NATIONAL PROPERTY INVESTORS 7

                                  BALANCE SHEET
                        (in thousands, except unit data)

                                December 31, 2004

<TABLE>
<CAPTION>


Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $ 248
   Receivables and deposits                                                       82
   Restricted escrows                                                            182
   Other assets                                                                  189
   Investment property (Notes B, E and F):
      Land                                                    $ 1,094
      Buildings and related personal property                   10,218
                                                               11,312
      Less accumulated depreciation                             (7,533)        3,779

                                                                            $ 4,480
Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                           $ 44
   Tenant security deposit liabilities                                            23
   Other liabilities                                                             133
   Mortgage notes payable (Note B)                                             5,015
   Due to affiliates (Note D)                                                    301

Partners' Deficit
   General partner                                             $ (312)
   Limited partners (60,517 units issued and
      outstanding)                                                (724)       (1,036)

                                                                            $ 4,480

              See Accompanying Notes to Financial Statements
</TABLE>


                          NATIONAL PROPERTY INVESTORS 7

                            STATEMENTS OF OPERATIONS
                      (in thousands, except per unit data)


<TABLE>
<CAPTION>

                                                               Years Ended December 31,
                                                                   2004         2003
                                                                             (Restated)
Revenues:
<S>                                                               <C>          <C>
   Rental income                                                  $ 1,205      $ 1,283
   Other income                                                        87           85
      Total revenues                                                1,292        1,368

Expenses:
   Operating                                                          587          499
   General and administrative                                         168          432
   Depreciation                                                       378          370
   Interest                                                           370          376
   Property taxes                                                      45           41
      Total expenses                                                1,548        1,718

Loss from continuing operations                                      (256)        (350)
Loss from discontinued operations (Note A)                         (1,171)        (129)
Gain on sale of discontinued operations (Note E)                    6,645       17,704

Net income (Note C)                                               $ 5,218      $17,225

Net income allocated to general partner (1%)                       $ 52         $ 172
Net income allocated to limited partners (99%)                      5,166       17,053

                                                                  $ 5,218      $17,225
Net income per limited partnership unit:
  Loss from continuing operations                                 $ (4.20)     $ (5.73)
  Loss from discontinued operations                                (19.15)       (2.10)
  Gain on sale of discontinued operations                          108.71       289.62

                                                                  $ 85.36      $281.79

Distribution per limited partnership unit                         $116.86      $162.02

              See Accompanying Notes to Financial Statements
</TABLE>


                          NATIONAL PROPERTY INVESTORS 7

                   STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
                        (in thousands, except unit data)


<TABLE>
<CAPTION>

                                             Limited
                                           Partnership  General    Limited
                                              Units     Partner    Partners     Total

<S>                                          <C>          <C>      <C>         <C>
Original capital contributions               60,517       $ 1      $30,259     $30,260

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

Distributions to partners                        --         (99)    (9,805)     (9,904)

Net income for the year ended
  December 31, 2003                              --         172     17,053      17,225

Partners' (deficiency) capital at
  December 31, 2003                          60,517        (293)     1,182         889

Distributions to partners                        --         (71)    (7,072)     (7,143)

Net income for the year ended
  December 31, 2004                              --          52      5,166       5,218

Partners' deficit at December 31, 2004       60,517      $ (312)    $ (724)    $(1,036)

              See Accompanying Notes to Financial Statements
</TABLE>

                          NATIONAL PROPERTY INVESTORS 7

                            STATEMENTS OF CASH FLOWS
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                Years Ended December 31,
                                                                    2004         2003
Cash flows from operating activities:
<S>                                                                <C>          <C>
  Net income                                                       $ 5,218      $17,225
  Adjustments to reconcile net income to net cash (used in)
   provided by operating activities:
     Depreciation                                                      507        1,953
     Amortization of loan costs                                         11           70
     Casualty gain                                                      --          (54)
     Loss on early extinguishment of debt                            1,119          418
     Gain on sale of discontinued operations                        (6,645)     (17,704)
     Change in accounts:
      Receivables and deposits                                         291         (148)
      Other assets                                                      13            8
      Accounts payable                                                (213)        (142)
      Tenant security deposit liabilities                              (12)         (97)
      Accrued property taxes                                            --            1
      Other liabilities                                               (239)         (93)
      Due to affiliates                                                (61)          72
          Net cash (used in) provided by operating activities          (11)       1,509

Cash flows from investing activities:
  Property improvements and replacements                              (346)        (546)
  Net withdrawals from restricted escrows                               87          347
  Insurance proceeds received                                           --           59
  Net proceeds from sale of discontinued operations                  8,748       26,404
          Net cash provided by investing activities                  8,489       26,264

Cash flows from financing activities:
  Advances from affiliates                                             290           --
  Payments on mortgage notes payable                                  (188)        (519)
  Repayment of mortgage notes payable                               (3,790)     (23,413)
  Proceeds from mortgage notes payable                                  --        9,290
  Loan costs paid                                                       --         (213)
  Debt extinguishment cost                                          (1,027)          --
  Distributions to partners                                         (7,143)      (9,904)
          Net cash used in financing activities                    (11,858)     (24,759)

Net (decrease) increase in cash and cash equivalents                (3,380)       3,014

Cash and cash equivalents at beginning of year                       3,628          614
Cash and cash equivalents at end of year                            $ 248       $ 3,628
Supplemental disclosure of cash flow information:
  Cash paid for interest                                            $ 460       $ 1,580

              See Accompanying Notes to Financial Statements
</TABLE>

                          NATIONAL PROPERTY INVESTORS 7

                          NOTES TO FINANCIAL STATEMENTS

                                December 31, 2004


Note A - Organization and Significant Accounting Policies

Organization:  National Property Investors 7 (the "Partnership" or "Registrant")
is a  California  limited  partnership  organized in October 1983 to acquire and
operate  residential  apartment  complexes.  The Partnership's  managing general
partner is NPI Equity  Investments,  Inc. ("NPI Equity" or the "Managing General
Partner"). NPI Equity was a wholly owned subsidiary of Insignia Properties Trust
("IPT").  On February 26, 1999,  IPT was merged into  Apartment  Investment  and
Management  Company  ("AIMCO"),  a publicly traded real estate investment trust.
The  Partnership  Agreement  provides  that the  Partnership  will  terminate on
December  31, 2008,  unless  terminated  prior to such date.  As of December 31,
2004, the  Partnership  operates one  residential  apartment  complex located in
Lousiana.

Basis of  Presentation:  In accordance  with  Statement of Financial  Accounting
Standards  ("SFAS") No. 144, the  accompanying  statements of operations for the
year ended December 31, 2003 reflect the operations of Patchen Place, Northwoods
I & II and South Point  Apartments as loss from  discontinued  operations due to
their sales in 2003.  Patchen Place was sold in October 2003 and  Northwoods I &
II and South Point were sold in December  2003.  In addition,  the  statement of
operations  has been restated as of January 1, 2003 to reflect the operations of
The Pines  Apartments as loss from  discontinued  operations  due to its sale in
April 2004.

Allocation of Profits,  Gains,  and Losses:  Profits,  gains,  and losses of the
Partnership are allocated between the general and limited partners in accordance
with the provisions of the Partnership Agreement.

Profits,  not including  gains from property  dispositions,  are allocated as if
they were distributions of net cash from operations.

Any gain from property  dispositions  attributable to the excess, if any, of the
indebtedness relating to a property immediately prior to the disposition of such
property  over  the  Partnership's  adjusted  basis  in the  property  shall  be
allocated to each partner  having a negative  capital  account  balance,  to the
extent of such negative  balance.  The balance of any gain shall be treated on a
cumulative basis as if it constituted an equivalent  amount of distributable net
proceeds and shall be  allocated  to the general  partner to the extent that the
general  partner  would have received  distributable  net proceeds in connection
therewith; the balance shall be allocated to the limited partners.  However, the
interest of the general partner will be equal to at least 1% of each gain at all
times during the existence of the Partnership.

All  losses,  including  losses  attributable  to  property  dispositions,   are
allocated 99% to the limited partners and 1% to the general partner.

Accordingly,  net income as shown in the statements of operations and changes in
partner's  deficit for 2004 and 2003 was allocated  99% to the limited  partners
and 1% to the general partner.  Net income per limited partnership unit for each
such year was computed as 99% of net income divided by 60,517 units outstanding.

Cash and Cash Equivalents: Cash and cash equivalents include cash on hand and in
banks.  At certain times,  the amount of cash deposited at a bank may exceed the
limit on insured  deposits.  Cash  balances  include  approximately  $245,000 at
December 31, 2004 that are  maintained  by an affiliated  management  company on
behalf of affiliated entities in cash concentration accounts.

Leases: The Partnership  generally leases apartment units for twelve-month terms
or less. The Partnership will offer rental concessions during  particularly slow
months or in response to heavy  competition from other similar  complexes in the
area.  Rental  income  attributable  to  leases,  net  of  any  concessions,  is
recognized on a straight-line  basis over the term of the lease. The Partnership
evaluates all accounts  receivable  from residents and establishes an allowance,
after the application of security  deposits,  for accounts  greater than 30 days
past due on current tenants and all receivables due from former tenants.

Tenant  Security  Deposits:  The  Partnership  requires  security  deposits from
lessees  for the  duration  of the  lease  and such  deposits  are  included  in
receivables  and  deposits.  Deposits  are  refunded  when the  tenant  vacates,
provided  the  tenant  has not  damaged  its space and is  current on its rental
payments.

Restricted Escrows:  At the time of the refinancing of the mortgage  encumbering
Fairway View II Apartments during 2001,  approximately  $179,000 of the proceeds
were  designated  for certain  capital  improvements.  At December 31, 2004, the
escrow balance is approximately $182,000.

Deferred  Costs:  Loan  costs  of  approximately   $181,000,   less  accumulated
amortization of approximately  $28,000,  are included in other assets.  The loan
costs are amortized  over the term of the related loan  agreement.  Amortization
expense from  continuing  operations  for both the years ended December 31, 2004
and  2003  was  approximately  $9,000  and  is  included  in  interest  expense.
Amortization  expense is  expected  to be  approximately  $9,000 for each of the
years 2005 through 2009.

Leasing   commissions  and  other  direct  costs  incurred  in  connection  with
successful  leasing  efforts are  deferred and  amortized  over the terms of the
related leases. Amortization of these costs is included in operating expenses.

Investment  Property:  Investment property consists of one apartment complex and
is stated at cost.  Acquisition  fees are  capitalized as a cost of real estate.
The  Partnership  capitalizes  all  expenditures  in excess of $250 that clearly
relate  to the  acquisition  and  installation  of real  and  personal  property
components.  These  expenditures  include  costs  incurred  to replace  existing
property components, costs incurred to add a material new feature to a property,
and costs that  increase  the useful  life or  service  potential  of a property
component.  These  capitalized costs are depreciated over the useful life of the
asset.  Expenditures for ordinary  repairs,  maintenance and apartment  turnover
costs are expensed as incurred.

In accordance  with SFAS No. 144,  "Accounting for the Impairment or Disposal of
Long-Lived  Assets," the  Partnership  records  impairment  losses on long-lived
assets used in operations when events and circumstances indicate that the assets
might be impaired and the  undiscounted  cash flows estimated to be generated by
those assets are less than the carrying amounts of those assets.  No adjustments
for  impairment of value were  recorded in the years ended  December 31, 2004 or
2003.

Depreciation:  Depreciation  is  provided by the  straight-line  method over the
estimated  life of the apartment  property and related  personal  property.  For
Federal income tax purposes,  the  accelerated  cost recovery method is used for
real property over 19 years for additions  after May 8, 1985, and before January
1, 1987. As a result of the Tax Reform Act of 1986, for additions after December
31, 1986, the modified accelerated cost recovery method is used for depreciation
of (1) real property over 27 1/2 years and (2) personal property  additions over
5 years.

Fair Value of Financial Instruments: SFAS No. 107, "Disclosures about Fair Value
of  Financial  Instruments",  as amended  by SFAS No.  119,  "Disclosures  about
Derivative  Financial  Instruments  and Fair  Value of  Financial  Instruments",
requires  disclosure  of fair value  information  about  financial  instruments,
whether or not recognized in the balance  sheet,  for which it is practicable to
estimate  fair  value.  Fair value is defined in the SFAS as the amount at which
the  instruments  could be exchanged in a current  transaction  between  willing
parties,  other than in a forced or liquidation  sale. The Partnership  believes
that the carrying  amounts of its  financial  instruments  (except for long term
debt)  approximate  their fair  values due to the short term  maturity  of these
instruments.  The Partnership  estimates the fair value of its long-term debt by
discounting  future  cash flows  using a discount  rate  commensurate  with that
currently  believed to be available to the Partnership  for similar term,  fully
amortizing long-term debt. The fair value of the Partnership's long term debt at
the Partnership's incremental borrowing rate, approximates its carrying balance.

Segment Reporting: SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related  Information"  established  standards  for the way that public  business
enterprises  report  information  about operating  segments in annual  financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports.  It also established  standards
for related disclosures about products and services, geographic areas, and major
customers.  As defined in SFAS No. 131, the  Partnership has only one reportable
segment.

Use of Estimates:  The  preparation of financial  statements in conformity  with
accounting   principles   generally  accepted  in  the  United  States  requires
management to make estimates and assumptions that affect the amounts reported in
the financial  statements and  accompanying  notes.  Actual results could differ
from those estimates.

Advertising:  The  Partnership  expenses the costs of  advertising  as incurred.
Advertising  costs of  approximately  $31,000 and  $132,000  for the years ended
December 31, 2004 and 2003, respectively,  are included in operating expense and
loss from discontinued operations.

Note B - Mortgage Note Payable
<TABLE>
<CAPTION>

                        Principal     Monthly                              Principal
                       Balance At     Payment      Stated                   Balance
                      December 31,   Including    Interest    Maturity      Due At
Property                  2004        Interest    Rate (1)      Date       Maturity
                            (in thousands)                              (in thousands)

<S>                      <C>            <C>         <C>       <C>   <C>      <C>
   Fairway View II       $ 5,015        $ 42        7.03%     12/01/21       $ --
</TABLE>

The mortgage note payable is a fixed rate mortgage that is  non-recourse  and is
secured  by a pledge of the  Partnership's  rental  property  and by a pledge of
revenues  from the  rental  property.  The  mortgage  note  payable  includes  a
prepayment penalty if repaid prior to maturity. Further, the property may not be
sold subject to existing indebtedness.

On May 16, 2003, the  Partnership  refinanced the mortgage  encumbering  Patchen
Place Apartments.  The refinancing  replaced the existing mortgage of $3,000,000
with a new mortgage in the amount of $4,290,000.  Total  capitalized  loan costs
were  approximately  $98,000  during  the year  ended  December  31,  2003.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately  $7,000 during the year ended  December 31, 2003, due to the write
off of unamortized loan costs and debt discounts, which is included in loss from
discontinued operations.  The new mortgage was repaid with the proceeds from the
sale of Patchen Place Apartments in October 2003 (see "Note E").

On June 27, 2003,  the  Partnership  refinanced the mortgage  encumbering  South
Point Apartments.  The refinancing  replaced the existing mortgage of $4,600,000
with a new mortgage in the amount of $5,000,000.  Total  capitalized  loan costs
were  approximately  $115,000  during  the year ended  December  31,  2003.  The
Partnership   recognized  a  loss  on  the  early   extinguishment  of  debt  of
approximately  $7,000 during the year ended  December 31, 2003, due to the write
off of unamortized loan costs and debt discounts, which is included in loss from
discontinued operations.  The new mortgage was repaid with the proceeds from the
sale of South Point Apartments in December 2003 (see "Note E").

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

As of July 1 and August 1,  2003,  the loans on  Patchen  Place and South  Point
Apartments,  respectively,  were  assumed  by a  different  lender.  The  credit
facility  ("Permanent Credit Facility") with the new lender matures in September
2007 with an option for the Partnership to elect one five-year  extension.  This
Permanent  Credit  Facility  also  created  separate  loans  for  each  property
refinanced   thereunder,   which   loans   are   not   cross-collateralized   or
cross-defaulted  with each other. Each note under this Permanent Credit Facility
is initially a variable rate loan, and after three years the Partnership has the
option of  converting  the note to a fixed rate loan.  The interest  rate on the
variable  rate  loans  is  85  basis  points  over  the  Fannie  Mae  discounted
mortgage-backed  security index (1.92% per annum at December 31, 2003),  and the
rate resets monthly. Each loan automatically renews at the end of each month. In
addition,   monthly   principal   payments  are  required  based  on  a  30-year
amortization schedule,  using the interest rate in effect during the first month
that the properties are on the Permanent Credit Facility.  The loans were repaid
when Patchen Place  Apartments  sold in October 2003 and South Point  Apartments
sold in December 2003.

Scheduled principal payments of the mortgage note payable subsequent to December
31, 2004 are as follows (in thousands):

                               2005              $  159
                               2006                 170
                               2007                 183
                               2008                 196
                               2009                 210
                            Thereafter            4,097

                               Total            $ 5,015

Note C - Income Taxes

The Partnership has received a ruling from the Internal  Revenue Service that it
will  be  classified  as  a  partnership   for  Federal   income  tax  purposes.
Accordingly,  no provision for income taxes is made in the financial  statements
of the Partnership. Taxable income or loss of the Partnership is reported in the
income tax returns of its partners.

The  following is a  reconciliation  of reported net income and Federal  taxable
income (in thousands, except per unit data):

                                              2004         2003
Net income as reported                       $ 5,218      $17,225
Add (deduct):
  Depreciation differences                       373          811
  Prepaid rent                                  (124)         (53)
  Gain on sale                                 1,081        4,173
  Other                                         (357)         (27)

Federal taxable income                       $ 6,191      $22,129

Federal taxable income per
  limited partnership unit                   $101.29      $362.01

The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):

                                                 2004
Net liabilities as reported                    $(1,036)
Land and buildings                                (324)
Accumulated depreciation                        (1,831)
Syndication and distribution costs               3,555
Prepaid rent                                        38
Other                                               79

Net assets - Federal tax basis                  $ 481

Note D - Transactions with Affiliated Parties

The Partnership has no employees and depends on the Managing General Partner and
its  affiliates  for  the  management  and  administration  of  all  Partnership
activities.  The Partnership  Agreement  provides for payments to affiliates for
services and as  reimbursement  of certain  expenses  incurred by  affiliates on
behalf of the Partnership.

Affiliates of the Managing General Partner receive 5% of gross receipts from all
of  the  Partnership's   properties  as  compensation  for  providing   property
management  services.  The  Partnership  paid to such  affiliates  approximately
$93,000  and  $339,000  for  the  years  ended   December  31,  2004  and  2003,
respectively, which is included in operating expenses and loss from discontinued
operations.

Affiliates of the Managing General Partner charged the Partnership reimbursement
of accountable  administrative  expenses amounting to approximately $111,000 and
$270,000 for the years ended December 31, 2004 and 2003, respectively,  which is
included in general and  administrative  expenses and investment  property.  The
portion of these  reimbursements  included in investment  property for the years
ended  December  31, 2004 and 2003 are fees related to  construction  management
services   provided  by  an  affiliate  of  the  Managing   General  Partner  of
approximately  $23,000 and $15,000  respectively.  The  construction  management
service fees are calculated based on a percentage of additions to the investment
properties. At December 31, 2004, approximately $7,000 in reimbursements was due
to the  Managing  General  Partner and is included in due to  affiliates  on the
accompanying balance sheet.

For services relating to the  administration of the Partnership and operation of
Partnership  properties,  the  Managing  General  Partner is entitled to receive
payment for  non-accountable  expenses up to a maximum of $150,000 per year from
distributions from operations,  based upon the number of Partnership units sold,
subject  to  certain   limitations.   The  Managing   General  Partner  received
approximately  $62,000 in such  reimbursements  for the year ended  December 31,
2003 which is included in general and administrative expenses. No such fees were
earned for the year ended December 31, 2004 as there were no distributions  from
operations.

For managing the affairs of the Partnership, the Managing General Partner of the
Partnership  is entitled to receive a  partnership  management  fee.  The fee is
equal to 4% of the  Partnership's  adjusted cash from operations,  as defined in
the Partnership  Agreement,  in any year, provided that 50% of the fee shall not
be paid until the Partnership has distributed to the limited  partners  adjusted
cash from operations in such year which is equal to 5% of the limited  partners'
adjusted invested capital, as defined,  on a non-cumulative  basis. In addition,
50% of the fee shall not be paid until the  Partnership  has  distributed to the
limited partners adjusted cash from operations in such year which is equal to 8%
of the limited partners'  adjusted  invested capital on a non-cumulative  basis.
The fee shall be paid when adjusted cash from  operations is  distributed to the
limited partners.  The Managing General Partner earned approximately $53,000 for
such fees during the year ended December 31, 2003,  which is included in general
and  administrative  expenses.  The Managing General Partner was not entitled to
receive this fee during the year ended December 31, 2004.

Upon the sale of the Partnership's properties, NPI Equity will be entitled to an
incentive  compensation  fee equal to a declining  percentage of the  difference
between the total amount distributed to limited partners and the appraised value
of their investment at February 1, 1992. The percentage amount to be realized by
NPI Equity,  if any,  will be  dependent  upon the year in which the property is
sold.  Payment of the incentive  compensation fee is subordinated to the receipt
by the limited partners, of: (a) distributions from capital transaction proceeds
of an amount equal to their appraised  investment in the Partnership at February
1, 1992; and (b) distributions from all sources (capital transactions as well as
cash  flow)  of an  amount  equal to six  percent  (6%)  per  annum  cumulative,
non-compounded,  on their present  appraised  investment in the  Partnership  at
February 1, 1992.  During the year ended  December 31, 2003,  these  preferences
were met and the Managing General Partner was entitled to approximately $180,000
related to the sales of Northwoods I & II and South Point Apartments. During the
year ended  December 31,  2004,  the  Managing  General  Partner was entitled to
approximately $97,000 related to the sale of The Pines Apartments in April 2004.

An affiliate of the Managing  General Partner earned  approximately  $93,000 for
services related to the refinancings of Patchen Place and South Point Apartments
during the year ended  December 31, 2003.  These costs were  capitalized  at the
time of the refinancings  and subsequently  written off when the properties were
sold later in 2003 (see "Note E").

NPI Equity,  on behalf of the Partnership and certain  affiliated  partnerships,
has established a revolving credit facility (the  "Partnership  Revolver") to be
used to fund deferred  maintenance  and working capital needs of the Partnership
and certain other  affiliated  partnerships in the National  Property  Investors
Partnership  Series.  The maximum draw  available to the  Partnership  under the
Partnership Revolver is $500,000. Loans under the Partnership Revolver will have
a term of 365 days, be unsecured and bear interest at the prime rate plus 2% per
annum. The maturity date of any such borrowing  accelerates in the event of: (i)
the removal of NPI Equity as the managing  general  partner  (whether or not for
cause);  (ii) the sale or refinancing of a property by the Partnership  (whether
or not a borrowing under the Partnership  Revolver was made with respect to such
property);  or (iii) the liquidation of the  Partnership.  During the year ended
December 31, 2004, the Partnership  received  approximately  $290,000 under this
revolver to pay  outstanding  accounts  payable at Fairway  View II  Apartments.
Interest expense for the year ended December 31, 2004 was approximately  $4,000.
At December 31, 2004,  approximately  $294,000 in principal and accrued interest
was included in due to affiliates.

The  Partnership  insures its  property up to certain  limits  through  coverage
provided by AIMCO which is  generally  self-insured  for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability.  The Partnership  insures its property above the AIMCO limits through
insurance  policies  obtained  by  AIMCO  from  insurers  unaffiliated  with the
Managing General Partner. During the years ended December 31, 2004 and 2003, the
Partnership  was charged by AIMCO and its affiliates  approximately  $43,000 and
$92,000,  respectively,  for insurance  coverage and fees associated with policy
claims administration.

In addition to its indirect  ownership of the Managing  General Partner interest
in the Partnership, AIMCO and its affiliates owned 42,461.67 limited partnership
units (the "Units") in the  Partnership  representing  70.16% of the outstanding
Units at December 31, 2004.  A number of these Units were  acquired  pursuant to
tender offers made by AIMCO or its affiliates.  It is possible that AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unit  holders  holding a majority of the Units are  entitled to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Managing General  Partner.  As a result of its ownership of 70.16% of
the outstanding  Units,  AIMCO and its affiliates are in a position to influence
all such voting  decisions with respect to the  Partnership.  However,  DeForest
Ventures II L.P., from whom Insignia  Properties LP ("IPLP") an affiliate of the
Managing  General  Partner and of AIMCO  acquired  25,399  Units  (41.97% of the
units), agreed for the benefit of non-tendering unit holders, that it would vote
its Units:  (i) against any  increase in  compensation  payable to the  Managing
General Partner or to its affiliates; and (ii) on all other matters submitted by
it or its  affiliates,  in  proportion  to the votes  cast by third  party  unit
holders.  Except for the foregoing,  no other limitations are imposed on IPLP's,
AIMCO's  or any other  affiliates  right to vote each unit  held.  Although  the
Managing  General Partner owes fiduciary  duties to the limited  partners of the
Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as
its sole stockholder.  As a result,  the duties of the Managing General Partner,
as Managing  General  Partner,  to the Partnership and its limited  partners may
come into conflict with the duties of the Managing  General  Partner to AIMCO as
its sole stockholder.

Note E - Sale of Discontinued Operations

On April 30, 2004, the  Partnership  sold The Pines  Apartments to a third party
for net proceeds of approximately $8,748,000 after payment of closing costs. The
Partnership realized a gain of approximately $6,645,000 as a result of the sale.
The Partnership used  approximately  $3,790,000 of the net proceeds to repay the
mortgage encumbering the property. In addition,  the Partnership recorded a loss
on early  extinguishment  of debt of  approximately  $1,119,000  as a result  of
unamortized loan costs being written off and a prepayment  penalty.  This amount
is  included  in loss  from  discontinued  operations.  Included  in  loss  from
discontinued  operations  for the  years  ended  December  31,  2004 and 2003 is
approximately $473,000 and $1,497,000, respectively, of revenue generated by the
property.

On October 31, 2003, the  Partnership  sold Patchen Place  Apartments to a third
party for net  proceeds of  approximately  $6,815,000  after  payment of closing
costs. The Partnership  realized a gain of approximately  $4,703,000 as a result
of the sale. The Partnership used  approximately  $4,254,000 of the net proceeds
to repay the mortgage  encumbering  the property.  In addition,  the Partnership
recorded a loss on early  extinguishment  of debt of approximately  $92,000 as a
result of  unamortized  loan costs being written off. This amount is included in
loss from discontinued operations. Included in loss from discontinued operations
for the year ended  December  31, 2003 is  approximately  $1,076,000  of revenue
generated by the property.

On December 9, 2003, the Partnership sold Northwoods Apartments to a third party
for net proceeds of  approximately  $11,454,000  after payment of closing costs.
The Partnership  realized a gain of approximately  $8,028,000 as a result of the
sale. The Partnership used approximately $6,611,000 of the net proceeds to repay
the mortgage encumbering the property.  In addition,  the Partnership recorded a
loss on early  extinguishment  of debt of approximately  $207,000 as a result of
unamortized  loan costs being  written off. This amount is included in loss from
discontinued  operations.  Included in loss from discontinued operations for the
years ended December 31, 2003 is approximately  $2,010,000 of revenue  generated
by the property.

On December 30, 2003,  the  Partnership  sold South Point  Apartments to a third
party for net  proceeds of  approximately  $8,135,000  after  payment of closing
costs. The Partnership  realized a gain of approximately  $4,973,000 as a result
of the sale. The Partnership used  approximately  $4,948,000 of the net proceeds
to repay the mortgage  encumbering  the property.  In addition,  the Partnership
recorded a loss on early  extinguishment of debt of approximately  $105,000 as a
result of  unamortized  loan costs being written off. This amount is included in
loss from discontinued operations. Included in loss from discontinued operations
for the year ended  December  31, 2003 is  approximately  $1,262,000  of revenue
generated by the property.

Note F - Real Estate and Accumulated Depreciation
<TABLE>
<CAPTION>

                                              Initial Cost
                                             To Partnership
                                             (in thousands)
                                                      Buildings           Cost
                                                     and Related       Capitalized
                                                       Personal       Subsequent to
Description             Encumbrance        Land        Property        Acquisition
                       (in thousands)                                (in thousands)

<S>                       <C>            <C>           <C>               <C>
Fairway View II           $ 5,015        $ 1,086       $ 8,788           $ 1,438
</TABLE>

<TABLE>
<CAPTION>

                      Gross Amount at Which
                             Carried
                        At December 31, 2004
                         (in thousands)
                            Buildings
                           And Related
                            Personal            Accumulated     Year of      Date    Depreciable
Description         Land    Property    Total   Depreciation  Construction Acquired  Life-Years
                                               (in thousands)

<S>                <C>       <C>       <C>        <C>             <C>        <C>        <C>
Fairway View II    $ 1,094   $10,218   $11,312    $ 7,533         1981       11/84      5-30
</TABLE>

Reconciliation of "real estate and accumulated depreciation":

                                               Years Ended December 31,
                                                   2004         2003
                                                    (in thousands)
Investment Properties
Balance at beginning of year                     $ 19,746     $ 49,491
  Property improvements                               346          546
  Property dispositions from casualty                  --          (40)
  Property dispositions from sales                 (8,780)     (30,251)
Balance at end of year                           $ 11,312     $ 19,746

Accumulated Depreciation
Balance at beginning of year                     $ 13,725     $ 33,658
  Additions charged to expense                        507        1,953
  Property dispositions from casualty                  --          (35)
  Property dispositions from sales                 (6,699)     (21,851)
Balance at end of year                           $ 7,533      $ 13,725

The  aggregate  cost of the real  estate  for  Federal  income tax  purposes  at
December  31,  2004 and 2003,  is  approximately  $10,988,000  and  $19,154,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 2004 and 2003,  is  approximately  $9,364,000  and  $16,736,000,
respectively.

Note G - Casualty Gain

On February 15, 2003 an ice storm caused damage to exterior  sections on some of
the buildings and to the  landscaping  at Patchen  Place  Apartments.  No actual
units were damaged  during the storm.  As a result of the damage,  approximately
$40,000 of fixed assets and $35,000 of accumulated depreciation were written off
resulting in a net write off of approximately  $5,000. The Partnership  received
approximately  $59,000  in  proceeds  from the  insurance  company to repair the
damaged  units.   For  financial   statement   purposes,   a  casualty  gain  of
approximately  $54,000 was recognized during the year ended December 31, 2003 as
a result of the difference  between the proceeds received and the net book value
of the assets  written  off.  This amount is included in loss from  discontinued
operations.

Note H - Contingencies

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the  Partnership,  its Managing  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purported  to  assert  claims  on  behalf  of a class of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  that are named as nominal  defendants,  challenging,  among  other
things,  the  acquisition  of  interests  in certain  Managing  General  Partner
entities by Insignia Financial Group, Inc.  ("Insignia") and entities that were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged into AIMCO.  The plaintiffs  sought  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition,  during the third quarter of 2001, a complaint  captioned Heller v.
Insignia  Financial  Group (the  "Heller  action")  was filed  against  the same
defendants  that are named in the  Nuanes  action.  On or about  August 6, 2001,
plaintiffs filed a first amended  complaint.  The Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary  duty,  unfair  competition,  conversion,  unjust  enrichment,  and
judicial dissolution.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a court  appointed
appraiser.  An affiliate of the Managing General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval,  if it is granted, and to
provide  partners with the independent  appraisals at the time of these tenders.
The proposed  settlement also provided for the limitation of the allowable costs
which  the  Managing   General   Partner  or  its  affiliates  will  charge  the
Partnerships  in connection with this litigation and imposes limits on the class
counsel  fees and  costs in this  litigation.  On April  11,  2003,  notice  was
distributed  to  limited   partners   providing  the  details  of  the  proposed
settlement.

On June 13, 2003, the court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector") filed an appeal (the "Appeal") seeking to vacate and/or reverse the
order approving the settlement and entering  judgment  thereto.  On November 24,
2003,  the Objector  filed an  application  requesting  the court order AIMCO to
withdraw settlement tender offers it had commenced,  refrain from making further
offers  pending  the appeal and auction  any units  tendered  to third  parties,
contending  that the offers did not  conform  with the terms of the  settlement.
Counsel  for the  Objector  (on behalf of another  investor)  had  alternatively
requested the court take certain action  purportedly to enforce the terms of the
settlement agreement. On December 18, 2003, the court heard oral argument on the
motions  and denied them both in their  entirety.  The  Objector  filed a second
appeal challenging the court's use of a referee and its order requiring Objector
to pay those fees.

On January 28, 2004,  the  Objector  filed his opening  brief in the Appeal.  On
April 23, 2004, the Managing General Partner and its affiliates filed a response
brief in support of the settlement and the judgment thereto. The plaintiffs have
also filed a brief in support of the settlement. On June 4, 2004, Objector filed
a reply to the briefs  submitted by the Managing General Partner and Plaintiffs.
In addition both the Objector and plaintiffs filed briefs in connection with the
second  appeal.  The Court of Appeals  heard oral  argument  on both  appeals on
September 22, 2004 and took the matters under submission.

The  Managing  General  Partner  does  not  anticipate  that  any  costs  to the
Partnership, whether legal or settlement costs, associated with these cases will
be material to the Partnership's overall operations.

As previously disclosed,  AIMCO Properties L.P. and NHP Management Company, both
affiliates of the Managing General  Partner,  are defendants in an action in the
United States District Court,  District of Columbia.  The plaintiffs have styled
their  complaint  as a  collective  action  under the Fair Labor  Standards  Act
("FLSA") and seek to certify state subclasses in California,  Maryland,  and the
District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties
L.P. failed to compensate  maintenance  workers for time that they were required
to be "on-call." Additionally, plaintiffs allege AIMCO Properties L.P. failed to
comply  with the FLSA in  compensating  maintenance  workers  for time that they
worked in responding to a call while  "on-call."  The  defendants  have filed an
answer to the amended complaint denying the substantive  allegations.  Discovery
relating  to the  certification  of the  collective  action  has  concluded  and
briefing on the matter is underway.  Although the outcome of any  litigation  is
uncertain,  AIMCO  Properties,  L.P. does not believe that the ultimate  outcome
will have a material  adverse  effect on its  financial  condition or results of
operations.  Similarly,  the Managing  General Partner does not believe that the
ultimate  outcome  will have a  material  adverse  effect  on the  Partnership's
financial condition or results of operations.

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

Environmental

Various  Federal,  state and local laws subject  property owners or operators to
liability for management,  and the costs of removal or  remediation,  of certain
hazardous  substances  present on a property.  Such laws often impose  liability
without regard to whether the owner or operator knew of, or was responsible for,
the release or presence of the  hazardous  substances.  The  presence of, or the
failure to manage or remedy properly,  hazardous substances may adversely affect
occupancy at affected  apartment  communities and the ability to sell or finance
affected properties.  In addition to the costs associated with investigation and
remediation  actions brought by government  agencies,  the presence of hazardous
substances  on a  property  could  result in claims by  private  plaintiffs  for
personal injury,  disease,  disability or other  infirmities.  Various laws also
impose  liability for the cost of removal,  remediation or disposal of hazardous
substances  through a  licensed  disposal  or  treatment  facility.  Anyone  who
arranges for the disposal or treatment of hazardous  substances  is  potentially
liable  under such laws.  These laws often impose  liability  whether or not the
person arranging for the disposal ever owned or operated the disposal  facility.
In connection with the ownership and operation of its property,  the Partnership
could  potentially be liable for  environmental  liabilities or costs associated
with its property.

Mold

The Partnership is aware of lawsuits  against owners and managers of multifamily
properties asserting claims of personal injury and property damage caused by the
presence of mold, some of which have resulted in substantial  monetary judgments
or settlements. The Partnership has only limited insurance coverage for property
damage loss claims  arising from the  presence of mold and for  personal  injury
claims related to mold exposure. Affiliates of the Managing General Partner have
implemented a national  policy and  procedures to prevent or eliminate mold from
its properties  and the Managing  General  Partner  believes that these measures
will  eliminate,  or at least  minimize,  the  effects  that mold  could have on
residents.  To date,  the  Partnership  has not incurred  any material  costs or
liabilities  relating to claims of mold  exposure  or to abate mold  conditions.
Because the law  regarding  mold is unsettled and subject to change the Managing
General  Partner  can make no  assurance  that  liabilities  resulting  from the
presence of or exposure to mold will not have a material  adverse  effect on the
Partnership's financial condition or results of operations.

As  previously  disclosed,  the  Central  Regional  Office of the United  States
Securities  and  Exchange   Commission   (the  "SEC")  is  conducting  a  formal
investigation relating to certain matters.  Although the staff of the SEC is not
limited  in the  areas  that it may  investigate,  AIMCO  believes  the areas of
investigation include AIMCO's miscalculated monthly net rental income figures in
third quarter 2003,  forecasted  guidance,  accounts payable,  rent concessions,
vendor  rebates,  capitalization  of payroll and certain  other  costs,  and tax
credit  transactions.  AIMCO is cooperating  fully. AIMCO is not able to predict
when the matter  will be  resolved.  AIMCO does not  believe  that the  ultimate
outcome  will  have a  material  adverse  effect on its  consolidated  financial
condition or results of operations. Similarly, the Managing General Partner does
not believe that the ultimate outcome will have a material adverse effect on the
Partnership's financial condition or results of operations.

Item 8.     Changes in and  Disagreements  with  Accountants on Accounting and
            Financial Disclosures

            None.

Item 8a.    Controls and Procedures

(a) Disclosure Controls and Procedures.  The Partnership's management,  with the
participation of the principal executive officer and principal financial officer
of the Managing  General  Partner,  who are the equivalent of the  Partnership's
principal executive officer and principal financial officer,  respectively,  has
evaluated  the  effectiveness  of  the  Partnership's  disclosure  controls  and
procedures (as such term is defined in Rules  13a-15(e) and 15d-15(e)  under the
Securities  Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this report.  Based on such  evaluation,  the principal
executive  officer  and  principal  financial  officer of the  Managing  General
Partner, who are the equivalent of the Partnership's principal executive officer
and principal  financial officer,  respectively,  have concluded that, as of the
end of such period,  the  Partnership's  disclosure  controls and procedures are
effective.

(b) Internal Control Over Financial  Reporting.  There have not been any changes
in the Partnership's  internal control over financial reporting (as such term is
defined in Rules  13a-15(f)  and  15d-15(f)  under the Exchange  Act) during the
fourth quarter of 2004 that have materially  affected,  or are reasonably likely
to  materially  affect,  the  Partnership's   internal  control  over  financial
reporting.

Item 8b.    Other Information

            None.

                                    PART III

Item 9.     Directors,  Executive  Officers,  Promoters  and Control  Persons;
            Compliance with Section 16(a) of the Exchange Act

National  Property  Investors 7 (the  "Partnership" or the  "Registrant") has no
officers or directors.  The managing  general  partner of the Partnership is NPI
Equity Investments,  Inc. ("NPI Equity" or the "Managing General Partner").  The
present directors and officers of the Managing General Partner are listed below:

Name                        Age    Position

Martha L. Long               45    Director and Senior Vice President
Harry G. Alcock              42    Director and Executive Vice President
Miles Cortez                 61    Executive Vice President, General Counsel
                                     and Secretary
Patti K. Fielding            41    Executive Vice President
Paul J. McAuliffe            48    Executive Vice President and Chief
                                     Financial Officer
Thomas M. Herzog             42    Senior Vice President and Chief Accounting
                                     Officer
Stephen B. Waters            43    Vice President

Martha L. Long has been a Director  and Senior Vice  President of the Managing
General  Partner  since  February  2004.  Ms.  Long has been with AIMCO  since
October  1998 and has served in  various  capacities.  From 1998 to 2001,  Ms.
Long served as Senior Vice  President and Controller of AIMCO and the Managing
General  Partner.  During  2002 and 2003,  Ms.  Long  served  as  Senior  Vice
President of Continuous Improvement for AIMCO.

Harry G. Alcock was appointed as a Director of the Managing  General  Partner in
October 2004 and was appointed  Executive Vice President of the Managing General
Partner  in  February  2004 and has been  Executive  Vice  President  and  Chief
Investment Officer of AIMCO since October 1999. Prior to October 1999 Mr. Alcock
served as a Vice President of AIMCO from July 1996 to October 1997,  when he was
promoted to Senior Vice  President  Acquisitions  where he served until  October
1999. Mr. Alcock has had responsibility for acquisition and financing activities
of AIMCO since July 1994.

Miles  Cortez was  appointed  Executive  Vice  President,  General  Counsel  and
Secretary  of the  Managing  General  Partner in  February  2004 and of AIMCO in
August 2001. Prior to joining AIMCO, Mr. Cortez was the senior partner of Cortez
Macaulay Bernhardt & Schuetze LLC, a Denver law firm, from December 1997 through
September 2001.

Patti K. Fielding was appointed  Executive  Vice President - Securities and Debt
of the Managing  General Partner in February 2004 and of AIMCO in February 2003.
Ms.  Fielding  was  appointed  Treasurer  of  AIMCO  in  January  2005.  She  is
responsible  for  debt  financing  and the  treasury  department.  Ms.  Fielding
previously  served as Senior Vice  President - Securities and Debt of AIMCO from
January 2000 to February 2003. Ms.  Fielding  joined AIMCO in February 1997 as a
Vice President.

Paul J. McAuliffe has been Executive Vice President and Chief Financial  Officer
of the Managing  General  Partner since April 2002. Mr.  McAuliffe has served as
Executive Vice  President of AIMCO since  February 1999 and was appointed  Chief
Financial Officer of AIMCO in October 1999. From May 1996 until he joined AIMCO,
Mr. McAuliffe was Senior Managing Director of Secured Capital Corp.

Thomas M.  Herzog was  appointed  Senior  Vice  President  and Chief  Accounting
Officer of the Managing General Partner in February 2004 and of AIMCO in January
2004.  Prior to joining AIMCO in January 2004, Mr. Herzog was at GE Real Estate,
serving  as Chief  Accounting  Officer & Global  Controller  from  April 2002 to
January 2004 and as Chief Technical Advisor from March 2000 to April 2002. Prior
to joining GE Real  Estate,  Mr.  Herzog was at  Deloitte & Touche LLP from 1990
until 2000.

Stephen B. Waters was appointed Vice President of the Managing  General  Partner
in April  2004.  Mr.  Waters  previously  served as a  Director  of Real  Estate
Accounting   since   joining   AIMCO  in   September   1999.   Mr.   Waters  has
responsibilities for real estate and partnership accounting with AIMCO.

One or more of the above persons are also directors and/or officers of a general
partner (or general partner of a general partner) of limited  partnerships which
either have a class of  securities  registered  pursuant to Section 12(g) of the
Securities Exchange Act of 1934, or are subject to the reporting requirements of
Section  15(d) of such Act.  Further,  one or more of the above persons are also
directors and/or officers of Apartment Investment and Management Company and the
general  partner  of  AIMCO  Properties,  L.P.,  entities  that  have a class of
securities  registered  pursuant to Section 12(g) of the Securities Exchange Act
of 1934, or are subject to the reporting  requirements of Section 15 (d) of such
Act.

The board of directors of the Managing  General Partner does not have a separate
audit committee. As such, the board of directors of the Managing General Partner
fulfills  the  functions  of an audit  committee.  The  board of  directors  has
determined  that  Martha L. Long meets the  requirement  of an "audit  committee
financial expert".

The directors and officers of the Managing  General  Partner with authority over
the Partnership are all employees of subsidiaries of AIMCO.  AIMCO has adopted a
code of ethics that applies to such  directors  and  officers  that is posted on
AIMCO's  website  (www.AIMCO.com).   AIMCO's  website  is  not  incorporated  by
reference to this filing.

Item 10.    Executive Compensation

Neither the directors nor officers of the Managing  General Partner received any
remuneration from the Partnership during the year ended December 31, 2004.

Item 11.    Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information regarding limited partnership
units of the Partnership owned by each person who is known by the Partnership to
own beneficially or exercise voting or dispositive  control over more than 5% of
the Partnership's limited partnership units, by each of the directors and by all
directors and executive  officers of the Managing  General Partner as a group as
of December 31, 2004.

                                       Amount and Nature
        Name of Beneficial Owner      of Beneficial Owner     % of Class

        AIMCO IPLP, L.P.                   25,399.00            41.97%
          (an affiliate of AIMCO)
        AIMCO Properties, L.P.             17,062.67            28.19%
          (an affiliate of AIMCO)

AIMCO  IPLP,  L.P.  is  indirectly  ultimately  owned by AIMCO.  Its  business
address is 55 Beattie Place, Greenville, South Carolina 29602.

AIMCO  Properties,  L.P. is indirectly  ultimately  controlled  by AIMCO.  Its
business address is 4582 S. Ulster St. Parkway,  Suite 1100, Denver,  Colorado
80237.

No director or officer of the Managing General Partner owns any units.

Item 12.    Certain Relationships and Related Transactions

The Partnership has no employees and depends on the Managing General Partner and
its  affiliates  for  the  management  and  administration  of  all  Partnership
activities.  The Partnership  Agreement  provides for payments to affiliates for
services and as  reimbursement  of certain  expenses  incurred by  affiliates on
behalf of the Partnership.

Affiliates of the Managing General Partner receive 5% of gross receipts from all
of  the  Partnership's   properties  as  compensation  for  providing   property
management  services.  The  Partnership  paid to such  affiliates  approximately
$93,000  and  $339,000  for  the  years  ended   December  31,  2004  and  2003,
respectively, which is included in operating expenses and loss from discontinued
operations.

Affiliates of the Managing General Partner charged the Partnership reimbursement
of accountable  administrative  expenses amounting to approximately $111,000 and
$270,000 for the years ended December 31, 2004 and 2003, respectively,  which is
included in general and  administrative  expenses and investment  property.  The
portion of these  reimbursements  included in investment  property for the years
ended  December  31, 2004 and 2003 are fees related to  construction  management
services   provided  by  an  affiliate  of  the  Managing   General  Partner  of
approximately  $23,000 and $15,000  respectively.  The  construction  management
service fees are calculated based on a percentage of additions to the investment
properties. At December 31, 2004, approximately $7,000 in reimbursements was due
to the  Managing  General  Partner and is included in due to  affiliates  on the
accompanying balance sheet.

For services relating to the  administration of the Partnership and operation of
Partnership  properties,  the  Managing  General  Partner is entitled to receive
payment for  non-accountable  expenses up to a maximum of $150,000 per year from
distributions from operations,  based upon the number of Partnership units sold,
subject  to  certain   limitations.   The  Managing   General  Partner  received
approximately  $62,000 in such  reimbursements  for the year ended  December 31,
2003 which is included in general and administrative expenses. No such fees were
earned for the year ended December 31, 2004 as there were no distributions  from
operations.

For managing the affairs of the Partnership, the Managing General Partner of the
Partnership  is entitled to receive a  partnership  management  fee.  The fee is
equal to 4% of the  Partnership's  adjusted cash from operations,  as defined in
the Partnership  Agreement,  in any year, provided that 50% of the fee shall not
be paid until the Partnership has distributed to the limited  partners  adjusted
cash from operations in such year which is equal to 5% of the limited  partners'
adjusted invested capital, as defined,  on a non-cumulative  basis. In addition,
50% of the fee shall not be paid until the  Partnership  has  distributed to the
limited partners adjusted cash from operations in such year which is equal to 8%
of the limited partners'  adjusted  invested capital on a non-cumulative  basis.
The fee shall be paid when adjusted cash from  operations is  distributed to the
limited partners.  The Managing General Partner earned approximately $53,000 for
such fees during the year ended December 31, 2003,  which is included in general
and  administrative  expenses.  The Managing General Partner was not entitled to
receive this fee during the year ended December 31, 2004.

Upon the sale of the Partnership's properties, NPI Equity will be entitled to an
incentive  compensation  fee equal to a declining  percentage of the  difference
between the total amount distributed to limited partners and the appraised value
of their investment at February 1, 1992. The percentage amount to be realized by
NPI Equity,  if any,  will be  dependent  upon the year in which the property is
sold.  Payment of the incentive  compensation fee is subordinated to the receipt
by the limited partners, of: (a) distributions from capital transaction proceeds
of an amount equal to their appraised  investment in the Partnership at February
1, 1992; and (b) distributions from all sources (capital transactions as well as
cash  flow)  of an  amount  equal to six  percent  (6%)  per  annum  cumulative,
non-compounded,  on their present  appraised  investment in the  Partnership  at
February 1, 1992.  During the year ended  December 31, 2003,  these  preferences
were met and the Managing General Partner was entitled to approximately $180,000
related to the sales of Northwoods I & II and South Point Apartments. During the
year ended  December 31,  2004,  the  Managing  General  Partner was entitled to
approximately $97,000 related to the sale of The Pines Apartments in April 2004.

An affiliate of the Managing  General Partner earned  approximately  $93,000 for
services related to the refinancings of Patchen Place and South Point Apartments
during the year ended  December 31, 2003.  These costs were  capitalized  at the
time of the refinancings  and subsequently  written off when the properties were
sold later in 2003.

NPI Equity,  on behalf of the Partnership and certain  affiliated  partnerships,
has established a revolving credit facility (the  "Partnership  Revolver") to be
used to fund deferred  maintenance  and working capital needs of the Partnership
and certain other  affiliated  partnerships in the National  Property  Investors
Partnership  Series.  The maximum draw  available to the  Partnership  under the
Partnership Revolver is $500,000. Loans under the Partnership Revolver will have
a term of 365 days, be unsecured and bear interest at the prime rate plus 2% per
annum. The maturity date of any such borrowing  accelerates in the event of: (i)
the removal of NPI Equity as the managing  general  partner  (whether or not for
cause);  (ii) the sale or refinancing of a property by the Partnership  (whether
or not a borrowing under the Partnership  Revolver was made with respect to such
property);  or (iii) the liquidation of the  Partnership.  During the year ended
December 31, 2004, the Partnership  received  approximately  $290,000 under this
revolver to pay  outstanding  accounts  payable at Fairway  View II  Apartments.
Interest expense for the year ended December 31, 2004 was approximately  $4,000.
At December 31, 2004,  approximately  $294,000 in principal and accrued interest
was included in due to affiliates.

The  Partnership  insures its  property up to certain  limits  through  coverage
provided by AIMCO which is  generally  self-insured  for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability.  The Partnership  insures its property above the AIMCO limits through
insurance  policies  obtained  by  AIMCO  from  insurers  unaffiliated  with the
Managing General Partner. During the years ended December 31, 2004 and 2003, the
Partnership  was charged by AIMCO and its affiliates  approximately  $43,000 and
$92,000,  respectively,  for insurance  coverage and fees associated with policy
claims administration.

In addition to its indirect  ownership of the Managing  General Partner interest
in the Partnership, AIMCO and its affiliates owned 42,461.67 limited partnership
units (the "Units") in the  Partnership  representing  70.16% of the outstanding
Units at December 31, 2004.  A number of these Units were  acquired  pursuant to
tender offers made by AIMCO or its affiliates.  It is possible that AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unit  holders  holding a majority of the Units are  entitled to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Managing General  Partner.  As a result of its ownership of 70.16% of
the outstanding  Units,  AIMCO and its affiliates are in a position to influence
all such voting  decisions with respect to the  Partnership.  However,  DeForest
Ventures II L.P., from whom Insignia  Properties LP ("IPLP") an affiliate of the
Managing  General  Partner and of AIMCO  acquired  25,399  Units  (41.97% of the
units), agreed for the benefit of non-tendering unit holders, that it would vote
its Units:  (i) against any  increase in  compensation  payable to the  Managing
General Partner or to its affiliates; and (ii) on all other matters submitted by
it or its  affiliates,  in  proportion  to the votes  cast by third  party  unit
holders.  Except for the foregoing,  no other limitations are imposed on IPLP's,
AIMCO's  or any other  affiliates  right to vote each unit  held.  Although  the
Managing  General Partner owes fiduciary  duties to the limited  partners of the
Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as
its sole stockholder.  As a result,  the duties of the Managing General Partner,
as Managing  General  Partner,  to the Partnership and its limited  partners may
come into conflict with the duties of the Managing  General  Partner to AIMCO as
its sole stockholder.

Item 13.    Exhibits

            See Exhibit Index attached.

Item 14.    Principal Accountant Fees and Services

The Managing  General Partner has  reappointed  Ernst & Young LLP as independent
auditors to audit the financial  statements  of the  Partnership  for 2005.  The
aggregate  fees billed for  services  rendered by Ernst & Young LLP for 2004 and
2003 are described below.

Audit Fees. Fees for audit services  totaled  approximately  $44,000 and $67,000
for 2004 and 2003,  respectively.  Fees for audit services also include fees for
the reviews of the Partnership's Quarterly Reports on Form 10-QSB.

Tax Fees. Fees for tax services  totaled  approximately  $16,000 and $28,000 for
2004 and 2003, respectively.

                                   SIGNATURES



In accordance  with Section 13 or 15(d) of the Exchange Act, the  Registrant has
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                    NATIONAL PROPERTY INVESTORS 7


                                    By:   NPI EQUITY INVESTMENTS, INC.
                                          Managing General Partner


                                    By:   /s/Martha L. Long
                                          Martha L. Long
                                          Senior Vice President


                                          /s/Stephen B. Waters
                                    By:   Stephen B. Waters
                                          Vice President


                                    Date: March 18, 2005


In  accordance  with the Exchange  Act, this Report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
date indicated.


/s/Harry G. Alcock            Director and Executive        Date: March 18, 2005
Harry G. Alcock               Vice President


/s/Martha L. Long             Director and Senior Vice      Date: March 18, 2005
Martha L. Long                President


/s/Stephen B. Waters          Vice President                Date: March 18, 2005
Stephen B. Waters

EXHIBIT INDEX



Exhibit Number    Description of Exhibit

 2.5              Master Indemnity Agreement dated as of August 17, 1995. (1)

 3.4              (a)   Agreement of Limited Partnership. (2)

                  (b) Amendments to the Agreement of Limited Partnership. (3)

                  (c) Amendments to the Agreement of Limited Partnership. (4)

                  (d) Amendments to the Agreements of Limited Partnership. (5)

(1)               Incorporated  by  reference to Exhibit 2.5 to Form 8-K filed
                  by Insignia with the Securities  and Exchange  Commission on
                  September 1, 1995.

(2)               Incorporated  by reference to Exhibit A to the Prospectus of
                  the  Registrant  dated  July  5,  1978,   contained  in  the
                  Registrant's  Registration  Statement on Form S-11 (Reg. No.
                  2-599991).

(3)               Incorporated by reference to the Definitive Proxy Statement of
                  the Partnership dated July 2, 1981.

(4)               Incorporated by reference to Definitive Proxy statement of the
                  Partnership dated April 3, 1991.

(5)               Incorporated  by  reference,  to the  Statement  Furnished  in
                  Connection With the Solicitation of Consents of the Registrant
                  dated August 28, 1992.

10.12             Multifamily  Note dated  November 30,  2001,  by and between
                  National   Property   Investors  7,  a  California   Limited
                  Partnership  and GMAC  Commercial  Mortgage  Corporation,  a
                  California   corporation   relating   to  Fairway   View  II
                  Apartments  (incorporated  by reference to the  Registrant's
                  Annual  Report on Form  10-KSB for the year  ended  December
                  31, 2002).

10.17             Purchase and Sale  Contract  between  Registrant  and Vermeil,
                  LLC,  dated July 31, 2003  (incorporated  by  reference to the
                  Registrant's  Quarterly  Report on Form 10-QSB for the quarter
                  ended September 30, 2003).

10.18             Reinstatement  and  Amendment  of Purchase  and Sale  Contract
                  between  Registrant and Vermeil,  LLC, dated September 5, 2003
                  (incorporated  by  reference  to  the  Registrant's  Quarterly
                  Report on Form  10-QSB for the  quarter  ended  September  30,
                  2003).

10.19             Purchase and Sale Contract  between  Registrant and Watervliet
                  Shores  Associates,  dated September 11, 2003 (incorporated by
                  reference to the Registrant's Current Report on Form 8-K dated
                  December 9, 2003).

10.20             Purchase and Sale Contract  between  Registrant and The Dilweg
                  Companies,  LLC,  dated  October  20,  2003  (incorporated  by
                  reference to the Registrant's Current Report on Form 8-K dated
                  December 30, 2003).

10.21             Amendment to Purchase and Sale Contract between Registrant and
                  The  Dilweg   Companies,   LLC,   dated   October   27,   2003
                  (incorporated by reference to the Registrant's  Current Report
                  on Form 8-K dated December 30, 2003).

10.22             Reinstatement  and Second  Amendment  to  Purchase  and Sale
                  Contract between  Registrant and The Dilweg Companies,  LLC,
                  dated  November 6, 2003  (incorporated  by  reference to the
                  Registrant's  Current  Report on Form 8-K dated December 30,
                  2003).

10.23             Third   Amendment  to  Purchase  and  Sale  Contract   between
                  Registrant and The Dilweg  Companies,  LLC, dated December 17,
                  2003  (incorporated by reference to the  Registrant's  Current
                  Report on Form 8-K dated December 30, 2003).

10.24             Assignment  and  Assumption  of Real Estate  Sale  Agreement
                  between The Dilweg  Companies,  LLC and HD South Point, LLC,
                  dated  December 30, 2003  (incorporated  by reference to the
                  Registrant's  Current  Report on Form 8-K dated December 30,
                  2003).

10.25             Purchase  and Sale  Contract  between  Registrant  and Jackson
                  Square Properties,  LLC, dated February 21, 2004 (incorporated
                  by  reference  to the  Registrant's  Quarterly  Report on Form
                  10-QSB for the quarter ended March 31, 2004).

10.26             Amendment to Purchase and Sale Contract between Registrant and
                  Jackson   Square   Properties,   LLC  dated   March  23,  2004
                  (incorporated  by  reference  to  the  Registrant's  Quarterly
                  Report on Form 10-QSB for the quarter ended March 31, 2004).

31.1              Certification  of  equivalent  of  Chief  Executive  Officer
                  pursuant     to     Securities     Exchange     Act    Rules
                  13a-14(a)/15d-14(a),  as Adopted  Pursuant to Section 302 of
                  the Sarbanes-Oxley Act of 2002.

31.2              Certification  of  equivalent  of  Chief  Financial  Officer
                  pursuant     to     Securities     Exchange     Act    Rules
                  13a-14(a)/15d-14(a),  as Adopted  Pursuant to Section 302 of
                  the Sarbanes-Oxley Act of 2002.

32.1              Certification   Pursuant  to  18  U.S.C.  Section  1350,  as
                  Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley  Act
                  of 2002.



Exhibit 31.1


                                  CERTIFICATION


I, Martha L. Long, certify that:


1.    I have  reviewed  this annual  report on Form 10-KSB of National  Property
      Investors 7;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the small  business  issuer as of, and for, the periods  presented in this
      report;

4.    The  small  business  issuer's  other  certifying  officer(s)  and  I  are
      responsible  for  establishing  and  maintaining  disclosure  controls and
      procedures (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
      the small business issuer and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            small business issuer, including its consolidated  subsidiaries,  is
            made  known to us by  others  within  those  entities,  particularly
            during the period in which this report is being prepared;

      (b)   Evaluated  the   effectiveness   of  the  small  business   issuer's
            disclosure  controls and procedures and presented in this report our
            conclusions about the  effectiveness of the disclosure  controls and
            procedures, as of the end of the period covered by this report based
            on such evaluation; and

      (c)   Disclosed in this report any change in the small  business  issuer's
            internal  control over financial  reporting that occurred during the
            small  business  issuer's  most  recent  fiscal  quarter  (the small
            business  issuer's  fourth  fiscal  quarter in the case of an annual
            report) that has  materially  affected,  or is reasonably  likely to
            materially affect, the small business issuer's internal control over
            financial reporting; and

5.    The  small  business  issuer's  other  certifying  officer(s)  and I  have
      disclosed,  based on our most recent  evaluation of internal  control over
      financial reporting, to the small business issuer's auditors and the audit
      committee of the small  business  issuer's  board of directors (or persons
      performing the equivalent functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely  affect the small business  issuer's
            ability  to  record,   process,   summarize  and  report   financial
            information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees who have a significant  role in the small  business
            issuer's internal control over financial reporting.

Date:  March 18, 2005

                                    /s/Martha L. Long
                                    Martha L. Long
                                    Senior  Vice   President   of  NPI  Equity
                                    Investments,   Inc.,   equivalent  of  the
                                    chief executive officer of the Partnership




Exhibit 31.2


                                  CERTIFICATION


I, Stephen B. Waters, certify that:


1.    I have  reviewed  this annual  report on Form 10-KSB of National  Property
      Investors 7;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the small  business  issuer as of, and for, the periods  presented in this
      report;

4.    The  small  business  issuer's  other  certifying  officer(s)  and  I  are
      responsible  for  establishing  and  maintaining  disclosure  controls and
      procedures (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
      the small business issuer and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            small business issuer, including its consolidated  subsidiaries,  is
            made  known to us by  others  within  those  entities,  particularly
            during the period in which this report is being prepared;

      (b)   Evaluated  the   effectiveness   of  the  small  business   issuer's
            disclosure  controls and procedures and presented in this report our
            conclusions about the  effectiveness of the disclosure  controls and
            procedures, as of the end of the period covered by this report based
            on such evaluation; and

      (c)   Disclosed in this report any change in the small  business  issuer's
            internal  control over financial  reporting that occurred during the
            small  business  issuer's  most  recent  fiscal  quarter  (the small
            business  issuer's  fourth  fiscal  quarter in the case of an annual
            report) that has  materially  affected,  or is reasonably  likely to
            materially affect, the small business issuer's internal control over
            financial reporting; and

5.    The  small  business  issuer's  other  certifying  officer(s)  and I  have
      disclosed,  based on our most recent  evaluation of internal  control over
      financial reporting, to the small business issuer's auditors and the audit
      committee of the small  business  issuer's  board of directors (or persons
      performing the equivalent functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely  affect the small business  issuer's
            ability  to  record,   process,   summarize  and  report   financial
            information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees who have a significant  role in the small  business
            issuer's internal control over financial reporting.

Date:  March 18, 2005

                                    /s/Stephen B. Waters
                                    Stephen B. Waters
                                    Vice President of NPI Equity
                                    Investments, Inc., equivalent of
                                    the chief financial officer of the
                                    Partnership

Exhibit 32.1


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                Section 906 of the Sarbanes-Oxley Act of 2002



In  connection  with the  Annual  Report  on Form  10-KSB of  National  Property
Investors 7 (the  "Partnership"),  for the year ended December 31, 2004 as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
Martha  L.  Long,  as the  equivalent  of the  Chief  Executive  Officer  of the
Partnership,  and Stephen B. Waters,  as the  equivalent of the Chief  Financial
Officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that, to the best of his knowledge:

      (1)   The Report fully complies with the  requirements of Section 13(a) or
            15(d) of the Securities Exchange Act of 1934; and

      (2)   The  information  contained in the Report  fairly  presents,  in all
            material respects, the financial condition and results of operations
            of the Partnership.


                                           /s/Martha L. Long
                                    Name:  Martha L. Long
                                    Date:  March 18, 2005


                                           /s/Stephen B. Waters
                                    Name:  Stephen B. Waters
                                    Date:  March 18, 2005


This  certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley  Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.