**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**FORM      10-Q**

**QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934**

**TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934**

**LEASE      EQUITY APPRECIATION FUND I, L.P. **

| Delaware                               | 68-0492247                                          |
|----------------------------------------|-----------------------------------------------------|
| (State                of Organization) | (I.R.S.                Employer Identification No.) |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**INDEX      TO QUARTERLY REPORT**

**ON      FORM 10-Q**

|                       |                                                                                                                                                              | **PAGE**                     |
|----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------|
|                       |                                                                                                                                                              |                         |
| **PART                I**  | **FINANCIAL                INFORMATION**                                                                                                                          |                         |
| Item                1.     | Financial                Statements                                                                                                                               |                         |
|                       | Consolidated                Balance Sheets - September 30, 2006 (unaudited) and December 31,                2005                                             | 3                            |
|                       | Consolidated                Statements of Operations Three                and Nine Months Ended September 30, 2006 and 2005                (unaudited)            | 4                            |
|                       | Consolidated                Statement of Partners’ Capital and Comprehensive Income For                the Nine Months Ended September 30, 2006 (unaudited) | 5                            |
|                       | Consolidated                Statements of Cash Flows For                the Nine Months Ended September 30, 2006 and 2005                (unaudited)              | 6                            |
|                       | Notes                to Consolidated Financial Statements - September 30, 2006                (unaudited)                                                    | 7−                14   |
| ITEM                2.     | Management’s                Discussion and Analysis of Financial Condition and                Results of Operations                                         | 15                − 20 |
| ITEM                3.     | Quantitative                and Qualitative Disclosures about Market Risk                                                                                         | 21                           |
| ITEM                4.     | Controls                and Procedures                                                                                                                            | 21                           |
| **PART                II** | **OTHER                INFORMATION**                                                                                                                              |                         |
| ITEM                6.     | Exhibits                                                                                                                                                          | 21                           |
| **SIGNATURES**             | 22                                                                                                                                                                |

----

**PART      I.**
**FINANCIAL      INFORMATION**

**Item      1.**
**Financial      Statements**

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**CONSOLIDATED      BALANCE SHEETS**

|                                                                                                                                     |   | **September                30,** |       | **December                31,** |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|------------|---------------------------------|--------|
|                                                                                                                                     |   | **2006**                         |       | **2005**                        |   |
|                                                                                                                                     |   | (unaudited)                      |       |                            |   |
| **ASSETS**                                                                                                                               |   |                             |       |                            |   |
| Cash                                                                                                                                     |   | $                                | 4,614,489  |                            | $      | 3,205,731 |   |
| Restricted                cash                                                                                                           |   |                             | 2,007,560  |                            |   | 1,887,933 |   |
| Accounts                receivable                                                                                                       |   |                             | 50,278     |                            |   | 89,702 |   |
| Due                from lockbox                                                                                                          |   |                             | 529,051    |                            |   | 1,343,985 |   |
| Investment                in direct financing leases and notes, net                                                                      |   |                             | 86,174,848 |                            |   | 80,782,648 |   |
| Investment                in operating leases, net of accumulated depreciation of $1,322,857                and $1,069,031, respectively |   |                             | 1,191,501  |                            |   | 1,743,257 |   |
| Fair                value of interest rate swap                                                                                          |   |                             | 420,309    |                            |   | 658,610 |   |
| Other                assets                                                                                                              |   |                             | 1,215,626  |                            |   | 1,080,860 |   |
|                                                                                                                                     |   | $                                | 96,203,662 |                            | $      | 90,792,726 |   |
| **LIABILITIES                AND PARTNERS’ CAPITAL**                                                                               |   |                             |       |                            |   |   |   |
| **Liabilities:**                                                                                                                         |   |                             |       |                            |   |   |   |
| Debt                                                                                                                                     |   | $                                | 82,171,624 |                            | $      | 77,326,886 |   |
| Accounts                payable and accrued expenses                                                                                     |   |                             | 284,678    |                            |   | 418,278 |   |
| Due                to related parties                                                                                                    |   |                             | 2,433,767  |                            |   | 818,235 |   |
| Security                deposits                                                                                                    |   |                             | 947,140    |                            |   | 801,235 |   |
| Total                liabilities                                                                                                         |   |                             | 85,837,209 |                            |   | 79,364,634 |   |
| **Partners’                Capital**                                                                                          |   |                             | 10,366,453 |                            |   | 11,428,092 |   |
|                                                                                                                                     |   | $                                | 96,203,662 |                            | $      | 90,792,726 |   |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

**(unaudited)**

|                                                                                                                    |   | **Three                Months Ended****September                30,** |      | **Nine                Months Ended****September                30,** |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|-----------|----------------------------------------------------------------------|--------|
|                                                                                                                    |   | **2006**                                                              |      | **2005**                                                             |   | **2006** |   | **2005** |   |
| **Income:**                                                                                                             |   |                                                                  |      |                                                                 |   |   |   |   |   |
| Interest                on equipment financings                                                                         |   | $                                                                     | 1,746,788 |                                                                 | $      | 1,706,331 |   | $ | 4,835,763 |   | $ | 4,688,396 |   |
| Rental                income                                                                                            |   |                                                                  | 172,960   |                                                                 |   | 246,114 |   |   | 603,761 |   |   | 756,311 |   |
| Gain                on sale of equipment and lease dispositions, net                                               |   |                                                                  | 192,570   |                                                                 |   | 63,655 |   |   | 358,786 |   |   | 58,249 |   |
| Other                                                                                                                   |   |                                                                  | 145,368   |                                                                 |   | 107,992 |   |   | 420,866 |   |   | 270,139 |   |
|                                                                                                                    |   |                                                                  | 2,257,686 |                                                                 |   | 2,124,092 |   |   | 6,219,176 |   |   | 5,773,095 |   |
|                                                                                                                    |   |                                                                  |      |                                                                 |   |   |   |   |   |   |   |   |   |
| **Expenses:**                                                                                                           |   |                                                                  |      |                                                                 |   |   |   |   |   |   |   |   |   |
| Interest                expense                                                                                         |   |                                                                  | 1,193,696 |                                                                 |   | 1,201,831 |   |   | 3,352,125 |   |   | 3,274,962 |   |
| Depreciation                on operating leases                                                                         |   |                                                                  | 135,869   |                                                                 |   | 209,717 |   |   | 491,642 |   |   | 628,405 |   |
| Provision                for credit losses                                                                              |   |                                                                  | 229,994   |                                                                 |   | 446,693 |   |   | 569,254 |   |   | 999,928 |   |
| Management                fee to related party                                                                          |   |                                                                  | 265,055   |                                                                 |   | 218,124 |   |   | 799,723 |   |   | 596,463 |   |
| Administrative                expense reimbursed to related party                                                  |   |                                                                  | 150,983   |                                                                 |   | 103,858 |   |   | 419,936 |   |   | 451,645 |   |
| General                and administrative expenses                                                                      |   |                                                                  | 91,658    |                                                                 |   | 131,553 |   |   | 367,988 |   |   | 388,913 |   |
|                                                                                                                    |   |                                                                  | 2,067,255 |                                                                 |   | 2,311,776 |   |   | 6,000,668 |   |   | 6,340,316 |   |
| Net                income (loss)                                                                                   |   | $                                                                     | 190,431   |                                                                 | $      | (187,684 | ) | $ | 218,508 |   | $ | (567,221 | ) |
|                                                                                                                    |   |                                                                  |      |                                                                 |   |   |   |   |   |   |   |   |   |
| Weighted                average number of limited partner units outstanding                during the  period |   |                                                                  | 171,746   |                                                                 |   | 171,746 |   |   | 171,746 |   |   | 171,746 |   |
| Net                income (loss) attributed to limited partners per unit                                           |   | $                                                                     | 1.10      |                                                                 | $      | (1.08 | ) | $ | 1.26 |   | $ | (3.27 | ) |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**CONSOLIDATED      STATEMENTS OF PARTNERS’ CAPITAL **

**AND      COMPREHENSIVE INCOME (LOSS)**

**FOR      THE NINE MONTHS ENDED SEPTEMBER 30, 2006**

**(unaudited)**

|                                                 |   | **General                Partner** |    | **Limited                Partners** |   | **Accumulated                Other Comprehensive** |   |   **Partners’                Capital** |       | **Comprehensive                Income (Loss)** |   |
|------------------------------------------------------|--------|------------------------------------|---------|-------------------------------------|--------|----------------------------------------------------|--------|--------------------------------------------------------|------------|------------------------------------------------|--------|
|                                                 |   | **Amount**                         |    | **Units**                           |   | **Amount**                                         |   | **Income**                                             |       | **Total**                                      |   | **Total** |   |
| Balance,                January 1, 2006         |   | $                                  | (40,739 | )                                   |   | 171,746                                            |   | $                                                      | 10,810,221 |                                           | $      | 658,610 |   | $ | 11,428,092 |   |   |   |   |
| Cash                distributions paid               |   |                               | (10,419 | )                                   |   | -                                                  |   |                                                   | (1,031,427 | )                                              |   | − |   |   | (1,041,846 | ) |   |   |   |
| Net                income                            |   |                               | 2,185   |                                |   | -                                                  |   |                                                   | 216,323    |                                           |   | − |   |   | 218,508 |   | $ | 218,508 |   |
| Unrealized                loss on hedging derivative |   |                               | − |                                |   | −                                            |   |                                                   | −    |                                           |   | (238,301 | ) |   | (238,301 | ) |   | (238,301 | ) |
| Balance,                September 30, 2006      |   | $                                  | (48,973 | )                                   |   | 171,746                                            |   | $                                                      | 9,995,117  |                                           | $      | 420,309 |   | $ | 10,366,453 |   | $ | (19,793 | ) |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**(**
**unaudited**
**)**

|                                                                                                                                                  |   | **Nine                Months Ended****September                30,** |        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|-------------|
|                                                                                                                                                  |   | **2006**                                                             |        | **2005** |   |
| **Cash                flows from operating activities:**                                                                                              |   |                                                                 |        |   |   |
| Net                income (loss)                                                                                                                 |   | $                                                                    | 218,508     |   | $ | (567,221 | ) |
| Adjustments                to reconcile net income (loss) to net cash provided by  (used                in) operating                activities: |   |                                                                 |        |   |   |   |   |
| Gain                on sale of equipment and lease dispositions net                                                                                   |   |                                                                 | (358,786    | ) |   | (58,249 | ) |
| Depreciation                                                                                                                                          |   |                                                                 | 491,642     |   |   | 628,405 |   |
| Amortization                of deferred financing costs                                                                                               |   |                                                                 | 95,832      |   |   | 114,698 |   |
| Provision                for credit losses, net of recoveries                                                                                         |   |                                                                 | 569,254     |   |   | 999,928 |   |
| Changes                in operating assets and liabilities:                                                                                           |   |                                                                 |        |   |   |   |   |
| Accounts                receivable                                                                                                                    |   |                                                                 | 39,424      |   |   | (78,134 | ) |
| Due                from lockbox                                                                                                                       |   |                                                                 | 814,934     |   |   | (263,540 | ) |
| Other                assets                                                                                                                           |   |                                                                 | (227,515    | ) |   | (375,519 | ) |
| Accounts                payable and accrued expenses                                                                                                  |   |                                                                 | (133,600    | ) |   | (354,390 | ) |
| Due                to related parties, net                                                                                                            |   |                                                                 | 1,615,532   |   |   | (413,429 | ) |
| Net                cash provided by (used in) operating activities                                                                                    |   |                                                                 | 3,125,225   |   |   | (367,451 | ) |
|                                                                                                                                                  |   |                                                                 |        |   |   |   |   |
| **Cash                flows from investing activities:**                                                                                              |   |                                                                 |        |   |   |   |   |
| Investments                in direct financing leases and notes                                                                                       |   |                                                                 | (33,818,498 | ) |   | (52,620,474 | ) |
| Acquisitions                of equipment under operating leases                                                                                       |   |                                                                 | (35,452     | ) |   | (1,080,018 | ) |
| Proceeds                from direct financing leases and notes, net of earned income                                                             |   |                                                                 | 28,311,396  |   |   | 21,783,281 |   |
| Increase                in security deposits                                                                                                          |   |                                                                 | 145,904     |   |   | 413,847 |   |
| Net                cash used in investing activities                                                                                                  |   |                                                                 | (5,396,650  | ) |   | (31,503,364 | ) |
|                                                                                                                                                  |   |                                                                 |        |   |   |   |   |
| **Cash                flows from financing activities:**                                                                                              |   |                                                                 |        |   |   |   |   |
| (Increase)                decrease in restricted cash                                                                                                 |   |                                                                 | (119,626    | ) |   | 5,277,769 |   |
| Increase                in deferred financing costs                                                                                                   |   |                                                                 | (3,083      | ) |   | (9,867 | ) |
| Proceeds                from debt                                                                                                                     |   |                                                                 | 31,702,803  |   |   | 72,831,858 |   |
| Repayment                of debt                                                                                                                      |   |                                                                 | (26,858,065 | ) |   | (44,115,493 | ) |
| Partners’** **distributions                paid                                                                                            |   |                                                                 | (1,041,846  | ) |   | (1,041,847 | ) |
| Net                cash provided by financing activities                                                                                              |   |                                                                 | 3,680,183   |   |   | 32,942,420 |   |
|                                                                                                                                                  |   |                                                                 |        |   |   |   |   |
| Increase                in cash                                                                                                                  |   |                                                                 | 1,408,758   |   |   | 1,071,605 |   |
| Cash,                beginning of period                                                                                                         |   |                                                                 | 3,205,731   |   |   | 2,310,880 |   |
| Cash,                end of period                                                                                                               |   | $                                                                    | 4,614,489   |   | $ | 3,382,485 |   |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**September      30, 2006**

**NOTE      1 **
**-**
**      ORGANIZATION AND NATURE OF BUSINESS**

**NOTE      2 **
**-**
**      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Basis      of Presentation**

**Reclassifications**

**Classification      **

**Use      of Estimates**

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)**

**September      30, 2006**

**(unaudited)**

**NOTE      2 **
**-**
**      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES **
**-**
**      (Continued)**

**Use      of Estimates − (Continued)**

**Concentration      of Credit Risk**

**Revenue      Recognition**

*Direct      Financing Leases. *

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)**

**September      30, 2006**

**(unaudited)**

**NOTE      2 **
**-**
**      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES **
**-**
**      (Continued)**

**Revenue      Recognition − (Continued)**

*Operating      Leases. *

*Notes      Receivable.*

**Income      Taxes**

**Supplemental      Disclosure of Cash Flow Information**

|                              |   | **2006** |      | **2005** |   |
|-----------------------------------|--------|----------|-----------|----------|--------|
| **Cash                paid for:** |   |     |      |     |   |   |   |
| Interest                          |   | $        | 3,240,449 |     | $      | 3,123,569 |   |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)**

**September      30, 2006**

**(unaudited)**

**NOTE      2 **
**-**
**      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES **
**-**
**      (Continued)**

**Transfers      of Financial Assets**

*Accounting      for Transfers and Servicing of Financial Assets and Extinguishments of      Liabilities,*

**Fair      Value of Financial Instruments**

**NOTE      3 − RESTRICTED CASH**

**NOTE      4 − DUE FROM LOCKBOX**

**NOTE      5 **
**-**
**INVESTMENT      IN LEASES AND NOTES**

|                                         |   | **September                30,** |       | **December                31,** |   |
|----------------------------------------------|--------|----------------------------------|------------|---------------------------------|--------|
|                                         |   | **2006**                         |       | **2005**                        |   |
| Direct                financing leases       |   | $                                | 76,903,003 |                            | $      | 75,565,985 |   |
| Notes                receivable              |   |                             | 9,571,845  |                            |   | 5,621,663 |   |
|                                         |   |                             | 86,474,848 |                            |   | 81,187,648 |   |
| Allowance                for possible losses |   |                             | (300,000   | )                               |   | (405,000 | ) |
|                                         |   | $                                | 86,174,848 |                            | $      | 80,782,648 |   |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)**

**September      30, 2006**

**(unaudited)**

**NOTE      5 **
**-**
**INVESTMENT      IN LEASES AND NOTES − (Continued)**

|                                                      |   | **September                30,** |        | **December                31,** |   |
|-----------------------------------------------------------|--------|----------------------------------|-------------|---------------------------------|--------|
|                                                      |   | **2006**                         |        | **2005**                        |   |
| Total                future minimum lease payments        |   | $                                | 86,560,886  |                            | $      | 84,051,541 |   |
| Unearned                income                            |   |                             | (10,517,474 | )                               |   | (9,167,115 | ) |
| Residuals,                net of unearned residual income |   |                             | 859,591     |                            |   | 681,559 |   |
|                                                      |   | $                                | 76,903,003  |                            | $      | 75,565,985 |   |

|                                                                  |   | **Nine                Months Ended****September                30,** |     |
|-----------------------------------------------------------------------|--------|----------------------------------------------------------------------|----------|
|                                                                  |   | **2006**                                                             |     | **2005** |   |
| Allowance                for possible losses, beginning of the period |   | $                                                                    | 405,000  |   | $ | 120,000 |   |
| Provision                for credit losses                            |   |                                                                 | 569,254  |   |   | 999,928 |   |
| Net                write-offs                                         |   |                                                                 | (674,254 | ) |   | (798,353 | ) |
| Allowance                for possible losses, end of the period       |   | $                                                                    | 300,000  |   | $ | 321,575 |   |

| **Annual                Periods Ending****September                30,** |   | **Direct****Financing                Leases** |       | **Notes** |   | **Operating                Leases** |   | **Total** |
|--------------------------------------------------------------------------|--------|-----------------------------------------------|------------|-----------|--------|-------------------------------------|--------|-----------|
| 2007                                                                |   | $                                             | 36,060,404 |      | $      | 2,574,484                           |   | $         | 562,465 |   | $ | 39,197,353 |
| 2008                                                                |   |                                          | 23,521,385 |      |   | 2,131,051                           |   |      | 236,325 |   |   | 25,888,761 |
| 2009                                                                |   |                                          | 14,947,659 |      |   | 1,727,307                           |   |      | 121,542 |   |   | 16,796,508 |
| 2010                                                                |   |                                          | 6,742,395  |      |   | 1,371,803                           |   |      | 23,442 |   |   | 8,137,640 |
| 2011                                                                |   |                                          | 2,543,327  |      |   | 1,012,564                           |   |      | − |   |   | 3,555,891 |
| Thereafter                                                          |   |                                          | 2,745,716  |      |   | 754,636                             |   |      | − |   |   | 3,500,352 |
|                                                                     |   | $                                             | 86,560,886 |      | $      | 9,571,845                           |   | $         | 943,774 |   | $ | 97,076,505 |

**NOTE      6− OTHER ASSETS**

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)**

**September      30, 2006**

**(unaudited)**

**NOTE      7 **
**-**
**      DEBT**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | **September                30, 2006** |       | **December                31, 2005** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|------------|--------------------------------------|--------|
| WestLB                  AG, New York Branch revolving line of credit, with an aggregate                  borrowing                  limit of $75.0 million collateralized by specific lease receivables                  and                  related equipment, with a 1% credit reserve of the outstanding                  line of                  credit. As of June 30, 2006 interest on this facility was reduced                  to LIBOR                  plus .95% per annum from 1.10% per annum. To mitigate fluctuations                  in                  interest rates the Fund has entered into interest rate swap agreements.                  The interest rate swap agreements terminate at various dates ranging                  from                  August 2011 to July 2013. As of September 30, 2006, the interest                  rate swap                  agreements fix the interest rate on the outstanding balance at 5.56%                  on a weighted average basis. Interest and principal are due monthly.                  The                  line of credit is renewable for one year periods on December 31,                  2006 and                  2007. |   | $                                     | 72,724,824 |                                 | $      | 62,244,034 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                  |       |                                 |   |   |   |
| OFC                Capital, a division of ALFA Financial Corporation, collateralized                by                specific lease receivables equal to 93% of the aggregate payments                due                under the related equipment lease or equipment finance transaction,                discounted at an interest rate of 6.9%, funded subject to a credit                reserve                of 3% of the loan amount. Interest and principal are due monthly,                with a                final maturity date of February 15, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                  | 5,261,432  |                                 |   | 8,288,944 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                  |       |                                 |   |   |   |
| National                City Commercial Capital Corporation f/k/a Information Leasing Corporation,                collateralized by specified lease receivables, generally equal to                the sum                of the receivables, discounted to present value at 5.79%, less a                credit                reserve of 8% after security deposit. Interest and principal are                due                monthly, with a final maturity date of June 10, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                  | 4,185,368  |                                 |   | 6,793,908 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                  |       |                                 |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                  |       |                                 |   |   |   |
| Total                outstanding debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | $                                     | 82,171,624 |                                 | $      | 77,326,886 |   |

| 2007       |   | $      | 32,081,372 |   |
|------------|--------|--------|------------|--------|
| 2008       |   |   | 21,522,209 |   |
| 2009       |   |   | 15,241,968 |   |
| 2010       |   |   | 7,295,913  |   |
| 2011       |   |   | 3,373,925  |   |
| Thereafter |   |   | 2,656,237  |   |
|       |   | $      | 82,171,624 |   |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)**

**September      30, 2006**

**(unaudited)**

**NOTE      8 **
**-**
**      DERIVATIVE INSTRUMENTS**

**NOTE      9 **
**-**
**      TRANSACTIONS WITH AFFILIATES**

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)**

**September      30, 2006**

**(unaudited)**

**NOTE      9 **
**-**
**      TRANSACTIONS WITH AFFILIATES − (Continued)**

|                                              |   | **Three                Months Ended****September                30,** |    | **Nine                Months Ended****September                30,** |   |
|---------------------------------------------------|--------|-----------------------------------------------------------------------|---------|----------------------------------------------------------------------|--------|
|                                              |   | **2006**                                                              |    | **2005**                                                             |   | **2006** |   | **2005** |   |
| Acquisition                fees                   |   | $                                                                     | 123,394 |                                                                 | $      | 24,274 |   | $ | 535,654 |   | $ | 1,074,010 |   |
| Asset                management fees              |   | $                                                                     | 265,055 |                                                                 | $      | 218,124 |   | $ | 799,723 |   | $ | 596,463 |   |
| Reimbursed                administrative expenses |   | $                                                                     | 150,983 |                                                                 | $      | 103,858 |   | $ | 419,936 |   | $ | 451,645 |   |

**NOTE      10 **
**-**
**      ALLOCATION OF PARTNERSHIP INCOME, LOSS AND CASH      DISTRIBUTIONS**

**NOTE      11 **
**-**
**      COMPREHENSIVE INCOME (LOSS)**

**NOTE      12 **
**-**
** **
**NET      INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT**

----

**ITEM      2.**
**MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION **
**AND      RESULTS OF OPERATIONS (unaudited)**

**When      used in this Form 10-Q, the words “believes” “anticipates,” “expects” and      similar expressions are intended to identify forward-looking statements. Such      statements are subject to certain risks and uncertainties more particularly      described in Item 1A, under the caption “Risks Inherent in Our Business,” in our      annual report on Form 10-K for fiscal 2005. These risks and uncertainties could      cause actual results to differ materially. Readers are cautioned not to place      undue reliance on these forward-looking statements, which speak only as of      the      date hereof. We undertake no obligation to publicly release the results of      any      revisions to forward-looking statements which we may make to reflect events      or      circumstances after the date of this Form 10-Q or to reflect the occurrence      of      unanticipated events.**

**Overview**

| ·   | 500                or fewer employees; |
|--------------------|----------------------------------------|

| ·   | $1                billion or less in total assets; or |
|--------------------|-------------------------------------------------------|

| ·   | $100                million or less in total annual                sales. |
|--------------------|---------------------------------------------------------------------------|

----

**Our      Lease Portfolio **

**Direct      Financing Leases and Notes**

|                                 |   | **September                30, 2006** |   |                 |   | **December                31, 2005** |   |
|--------------------------------------|--------|---------------------------------------|--------|----------------------|--------|--------------------------------------|--------|
| **Type                of Equipment** |   | **Net                Investment**     |   |  **Percentage** |   | **Type                of Equipment** |   | **Net                Investment** |   |  **Percentage** |   |
| Medical                Equipment     |   | $                                     | 27,196 |                 |   | 31.4                                 | %      |   | Industrial                Equipment |   | $ | 22,098 |   |   | 27.2 | % |
| Industrial                Equipment  |   |                                  | 19,330 |                 |   | 22.3                                 |   |   | Medical                Equipment |   |   | 18,993 |   |   | 23.4 |   |
| Computers                            |   |                                  | 14,690 |                 |   | 17.0                                 |   |   | Computers |   |   | 13,302 |   |   | 16.4 |   |
| Office                Equipment      |   |                                  | 7,725  |                 |   | 8.9                                  |   |   | Office                Equipment |   |   | 9,398 |   |   | 11.6 |   |
| Garment                Care          |   |                                  | 3,567  |                 |   | 4.1                                  |   |   | Software |   |   | 4,269 |   |   | 5.2 |   |
| Software                             |   |                                  | 3,502  |                 |   | 4.1                                  |   |   | Garment                Care |   |   | 3,585 |   |   | 4.4 |   |
| Agriculture                          |   |                                  | 2,835  |                 |   | 3.3                                  |   |   | Building                systems |   |   | 2,980 |   |   | 3.7 |   |
| Restaurant                equipment  |   |                                  | 2,740  |                 |   | 3.2                                  |   |   | Restaurant                Equipment |   |   | 2,976 |   |   | 3.7 |   |
| Communications                       |   |                                  | 2,734  |                 |   | 3.2                                  |   |   | Communications |   |   | 2,409 |   |   | 3.0 |   |
| Building                Systems      |   |                                  | 2,156  |                 |   | 2.5                                  |   |   | Agriculture |   |   | 1,178 |   |   | 1.4 |   |
|                                 |   | $                                     | 86,475 |                 |   | 100.0                                | %      |   |   |   | $ | 81,188 |   |   | 100.0 | % |

**Operating      Leases**

|                                 |   | **September                30, 2006** |   |                 |   | **December                31, 2005** |   |
|--------------------------------------|--------|---------------------------------------|--------|----------------------|--------|--------------------------------------|--------|
| **Type                of Equipment** |   | **Net                Investment**     |   |  **Percentage** |   | **Type                of Equipment** |   | **Net                Investment** |   |  **Percentage** |   |
| Office                Equipment      |   | $                                     | 378    |                 |   | 31.7                                 | %      |   | Office                Equipment |   | $ | 505 |   |   | 29.1 | % |
| Industrial                Equipment  |   |                                  | 324    |                 |   | 27.2                                 |   |   | Computers |   |   | 476 |   |   | 27.3 |   |
| Communications                       |   |                                  | 242    |                 |   | 20.3                                 |   |   | Industrial                Equipment |   |   | 380 |   |   | 21.8 |   |
| Computers                            |   |                                  | 199    |                 |   | 16.7                                 |   |   | Communications |   |   | 323 |   |   | 18.5 |   |
| Medical                Equipment     |   |                                  | 42     |                 |   | 3.5                                  |   |   | Medical                Equipment |   |   | 41 |   |   | 2.3 |   |
| Software                             |   |                                  | 5      |                 |   | 0.4                                  |   |   | Software |   |   | 16 |   |   | 0.9 |   |
| Restaurant                Equipment  |   |                                  | 2      |                 |   | 0.2                                  |   |   | Restaurant                Equipment |   |   | 2 |   |   | 0.1 |   |
|                                 |   | $                                     | 1,192  |                 |   | 100.0                                | %      |   |   |   | $ | 1,743 |   |   | 100.0 | % |

----

**Direct      Financing Leases and Notes**

|                                                                 |   | **September                30, 2006** |   |                 |   | **December                31, 2005** |   |
|----------------------------------------------------------------------|--------|---------------------------------------|--------|----------------------|--------|--------------------------------------|--------|
| **Type                of Business**                                  |   | **Net                Investment**     |   |  **Percentage** |   | **Type                of Business**  |   | **Net                Investment** |   |  **Percentage** |   |
| Services                                                             |   | $                                     | 50,666 |                 |   | 58.6                                 | %      |   | Services |   | $ | 44,929 |   |   | 55.4 | % |
| Manufacturing                                                        |   |                                  | 8,850  |                 |   | 10.2                                 |   |   | Retail                Trade |   |   | 8,897 |   |   | 11.0 |   |
| Retail                Trade                                          |   |                                  | 8,379  |                 |   | 9.7                                  |   |   | Manufacturing |   |   | 8,774 |   |   | 10.8 |   |
| Construction                                                         |   |                                  | 4,569  |                 |   | 5.3                                  |   |   | Transportation/Communication/Energy |   |   | 3,826 |   |   | 4.7 |   |
| Transportation/Communication/Energy                                  |   |                                  | 3,288  |                 |   | 3.8                                  |   |   | Construction |   |   | 3,640 |   |   | 4.5 |   |
| Wholesale                Trade Real                Estate  |   |                                  | 3,196  |                 |   | 3.7                                  |   |   | Finance/Insurance/Real                Estate |   |   | 3,125 |   |   | 3.8 |   |
| Finance/Insurance/Real                Estate                         |   |                                  | 2,741  |                 |   | 3.2                                  |   |   | Wholesale                Trade |   |   | 3,085 |   |   | 3.8 |   |
| Agriculture/Forestry/Fishing                                         |   |                                  | 2,503  |                 |   | 2.9                                  |   |   | Agriculture/Forestry/Fishing |   |   | 2,446 |   |   | 3.0 |   |
| Public                Administration                                 |   |                                  | 345    |                 |   | 0.4                                  |   |   | Public                Administration |   |   | 1,246 |   |   | 1.5 |   |
| Other                                                                |   |                                  | 1,938  |                 |   | 2.2                                  |   |   | Other |   |   | 1,220 |   |   | 1.5 |   |
|                                                                 |   | $                                     | 86,475 |                 |   | 100.0                                | %      |   |   |   | $ | 81,188 |   |   | 100.0 | % |

**Operating      Leases**

|                                         |   | **September                30, 2006** |   |                 |   | **December                31, 2005** |   |
|----------------------------------------------|--------|---------------------------------------|--------|----------------------|--------|--------------------------------------|--------|
| **Type                of Business**          |   | **Net                Investment**     |   |  **Percentage** |   | **Type                of Business**  |   | **Net                Investment** |   |  **Percentage** |   |
| Services                                     |   | $                                     | 489    |                 |   | 40.9                                 | %      |   | Services |   | $ | 706 |   |   | 40.3 | % |
| Construction                                 |   |                                  | 377    |                 |   | 31.7                                 |   |   | Construction |   |   | 451 |   |   | 25.9 |   |
| Wholesale                Trade               |   |                                  | 96     |                 |   | 8.1                                  |   |   | Wholesale                Trade |   |   | 199 |   |   | 11.4 |   |
| Manufacturing                                |   |                                  | 76     |                 |   | 6.3                                  |   |   | Manufacturing |   |   | 136 |   |   | 7.8 |   |
| Transportation/Communication/Energy          |   |                                  | 70     |                 |   | 5.8                                  |   |   | Transportation/Communication/Energy |   |   | 113 |   |   | 6.5 |   |
| Finance/Insurance/Real                Estate |   |                                  | 66     |                 |   | 5.5                                  |   |   | Finance/Insurance/Real                Estate |   |   | 102 |   |   | 5.9 |   |
| Public                Administration         |   |                                  | 5      |                 |   | 0.5                                  |   |   | Public                Administration |   |   | 14 |   |   | 0.8 |   |
| Retail                Trade                  |   |                                  | 2      |                 |   | 0.2                                  |   |   | Retail                Trade |   |   | 12 |   |   | 0.7 |   |
| Other                                        |   |                                  | 11     |                 |   | 1.0                                  |   |   | Other |   |   | 10 |   |   | 0.7 |   |
|                                         |   | $                                     | 1,192  |                 |   | 100.0                                | %      |   |   |   | $ | 1,743 |   |   | 100.0 | % |

----

**Results      of Operations **

*Three      Months Ended September 30, 2006 compared to Three Months Ended September 30,      2005*

| ·   | Other                income increased to $145,368 for the three months ended September                30, 2006                as compared to $107,992 for the three months ended September 30,                2005, an                increase of $37,376 (34.6%). Other income consists primarily of late                fee                income. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Rental                income decreased to $172,960 for                the three months ended September 30, 2006 as compared to                $246,114 for                the three months ended September 30, 2005, a decrease of $73,154                (3.0%).                This decrease was primarily related to operating lease reaching                term. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Depreciation                on operating leases decreased to $135,869 for the three months ended                September 30, 2006 as compared to $209,717 for the three months ended                September 30, 2005, a decrease of $73,848 (35.2%). This decrease                is                principally the result of operating leases reaching                term. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Our                provision for credit losses decreased to $229,994 for                the three months ended September 30, 2006 as compared to $446,693                for the                three months ended September 30, 2005, a decrease of $216,699 (48.5%).                The                decrease in our provision for credit losses is principally a result                of                increased collection efforts and the maturing of the portfolio. We                provide                for bad debts when losses are likely to occur based on a migration                analysis of past due payments and economic                conditions. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Administrative                expenses reimbursed to related party increased to $150,983 for the                three                months ended September 30, 2006 as compared to $103,858 for the three                months ended September 30, 2005, an increase of $47,125 (45.4%). |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Management                fees increased to $265,055 for                the three months ended September 30, 2006 as compared to $218,124                for the                three months ended September 30, 2005, an increase of $46,931 (21.5%).                This increase is directly attributable to the increase in receipts                of financing assets, since management fees are paid based on lease                payments received. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Nine      Months Ended September 30, 2006 compared to Nine Months Ended September 30,      2005*

| ·   | Interest                income on equipment financings increased to $4,835,763 for                the nine months ended September 30, 2006 as compared to                $4,688,396 for                the nine months September 30, 2005 an increase of $147,367                (3.1%). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Gain                on sale of equipment and lease dispositions increased to                $358,786 for                the nine months ended September 30, 2006 as compared to                $58,249 for                the nine months ended September 30, 2005, an increase of $300,537                (515.9%). Gains and losses from equipment and lease dispositions                may vary                significantly from period to period. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Other                income increased to $420,866 for                the nine months ended September 30, 2006 as compared to                $270,139 for                the nine months ended September 30, 2005, an increase of $150,727                (55.8%).                Other income consists primarily of late fee income. Late fee income                has                increased due to the increase of the financing portfolio and an                increase in payment collection efforts. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Rental                income decreased to $603,761 for                the nine months ended September 30, 2006 as compared to                $756,311 for                the nine months ended September 30, 2005, a decrease of $152,550                (20.2%).                This decrease is principally the result of operating leases reaching                term. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Depreciation                on operating leases decreased to $491,642 for                the nine months ended September 30, 2006 as compared to $628,405                for the                nine months ended September 30, 2005, a decrease of $136,763 (21.8%).                This                decrease is principally the result of operating leases reaching                term. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Our                provision for credit losses decreased to $569,254 for                the nine months ended September 30, 2006 as compared to $999,928                for the                nine months ended September 30, 2005, a decrease of $430,674 (43.1%).                The                decrease in our provision for credit losses is principally a result                of                increased collection efforts and the maturing of the portfolio. We                provide                for bad debts when losses are likely to occur based on a migration                analysis of past due payments and economic                conditions. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Administrative                expenses reimbursed to related party decreased to $419,936 for                the nine months ended September 30, 2006 as compared to $451,645                for the                nine months ended September 30, 2005, a decrease of $31,709 (7.0%).                As our                investment in financing assets matures there is less expense incurred                by                our general partner to service our portfolio. As our portfolio matures,                we                require less support than during the start-up                phase. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Interest                expense increased to $3,352,125 for                the nine months ended September 30, 2006 as compared to $3,274,962                for the                nine months ended September 30, 2005, an increase of $77,163 (2.4%)                due to                an increase in LIBOR. On June 30, 2006 the interest rate margin on                our                West LB facility was reduced from 110 basis points to 95 basis                points. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Management                fees increased to $799,723 for                the nine months ended September 30, 2006 as compared to $596,463                for the                nine months ended September 30, 2005, an increase of $203,260 (34.1%).                This increase is directly attributable to the increase in                receipts from financing assets, since management fees are paid                based on lease payments received. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Liquidity      and Capital Resources**

|                                                                     |   | **September                30,** |       |
|--------------------------------------------------------------------------|--------|----------------------------------|------------|
|                                                                     |   | **2006**                         |       | **2005** |   |
| Net                cash provided by (used in) operating activities  |   | $                                | 3,125,225  |   | $ | (367,451 | ) |
| Net                cash used in investing activities                |   |                             | (5,396,650 | ) |   | (31,503,364 | ) |
| Net                cash provided by financing activities            |   |                             | 3,680,183  |   |   | 32,942,420 |   |
| Increase                in cash                                     |   | $                                | 1,408,758  |   | $ | 1,071,605 |   |

----

**ITEM      3.**
**QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**ITEM      4.**
**CONTROLS      AND PROCEDURES**

**PART      II - OTHER INFORMATION**

**ITEM      6.**
**EXHIBITS**

| Exhibit                No. |   | Description                                                                                                                                                         |
|----------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                        |   | Amended                and Restated Agreement of Limited Partnership (1)                                                                                            |
| 3.2                        |   | Certificate                of Limited Partnership (2)                                                                                                               |
| 4.1                        |   | Forms                of letters sent to limited partners confirming their investment                (2)                                                             |
| 31.1                       |   | Rule                13a-14(a)/Rule 15d-14(a) Certification of Chief Executive                Officer.                                                               |
| 31.2                       |   | Rule                13a-14(a)/Rule 15d-14(a) Certification of Chief Financial                Officer.                                                               |
| 32.1                       |   | Certification                of Chief Executive Officer pursuant to Section 1350 of Chapter 63                of Title                18 of the United States Code. |
| 32.2                       |   | Certification                of Chief Financial Officer pursuant to Section 1350 of Chapter 63                of Title                18 of the United States Code. |

| (1)   | Filed                previously as Appendix A to our Post-Effective Amendment No. 3 to                our                Registration Statement on Form S-1, filed on January 24,                2004. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Filed                previously as an Exhibit to Amendment No. 1 to our Registration Statement                on Form S-1 filed on June 7, 2002. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SIGNATURES**

|                             | **LEASE                EQUITY APPRECIATION FUND I, L.P.**                  |
|----------------------------------|----------------------------------------------------------------------------|
|                             | A                Delaware Limited Partnership                              |
|                             | By:                LEAF Financial Corporation, its General Partner         |
|                             |                                                                       |
| November                14, 2006 | /s/                Crit DeMent                                        |
|                             |  CRIT              DEMENT                                             |
|                             | Chairman                and Chief Executive Officer of the General Partner |
|                             |                                                                       |
| November                14, 2006 | /s/                Robert K. Moskovitz                                |
|                             |  ROBERT              K. MOSKOVITZ                                     |
|                             | Chief                Financial Officer, Treasurer of the General Partner   |
|                             |                                                                       |

----