UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549



Form 10-QSB



(Mark One)

[X]

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the quarterly period ended September 30, 2007





[ ]

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT





For the transition period from _________to _________



Commission file number 0-10412





NATIONAL PROPERTY INVESTORS 4

(Exact name of small business issuer as specified in its charter)







California

13-3031722

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)



55 Beattie Place, PO Box 1089

Greenville, South Carolina  29602

(Address of principal executive offices)



(864) 239-1000

(Issuer's telephone number)





Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X  No ___



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









PART I  FINANCIAL INFORMATION





ITEM 1.

FINANCIAL STATEMENTS







NATIONAL PROPERTY INVESTORS 4

BALANCE SHEET

(Unaudited)

(in thousands, except unit data)



September 30, 2007



|                                        |           |         
|--------------------------------------- | --------- | --------
|Assets                                  |           |         
|Cash and cash equivalents               |           | $    284
|Receivables and deposits                |           | 55      
|Other assets                            |           | 1,434   
|Investment property:                    |           |         
|Land                                    | $  1,980  |         
|Buildings and related personal property | 37,157    |         
|                                        | 39,137    |         
|Less accumulated depreciation           | (28,472)  | 10,665  
|                                        |           | $12,438 
|Liabilities and Partners' Deficit       |           |         
|Liabilities                             |           |         
|Accounts payable                        |           | $    118
|Tenant security deposit liabilities     |           | 541     
|Other liabilities                       |           | 446     
|Mortgage notes payable (Note E)         |           | 39,325  
|                                        |           |         
|Partners' Deficit                       |           |         
|General partner                         | $   (424) |         
|Limited partners (60,005 units          |           |         
|issued and outstanding)                 | (27,568)  | (27,992)
|                                        |           | $12,438 





See Accompanying Notes to Financial Statements

















NATIONAL PROPERTY INVESTORS 4

STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per unit data)





|                           |                     |                     |         |        
|-------------------------- | ------------------- | ------------------- | ------- | -------
|                           | Three Months        | Nine Months        
|                           | Ended September 30, | Ended September 30,
|                           | 2007                | 2006                | 2007    | 2006   
|Revenues:                  |                     |                     |         |        
|Rental income              | $ 1,985             | $ 1,983             | $ 6,037 | $ 5,942
|Other income               | 212                 | 148                 | 774     | 517    
|Total revenues             | 2,197               | 2,131               | 6,811   | 6,459  
|                           |                     |                     |         |        
|Expenses:                  |                     |                     |         |        
|Operating                  | 782                 | 653                 | 2,651   | 2,372  
|General and administrative | 43                  | 44                  | 164     | 132    
|Depreciation               | 362                 | 343                 | 1,065   | 1,035  
|Interest                   | 682                 | 690                 | 2,046   | 1,903  
|Property taxes             | 178                 | 187                 | 524     | 522    
|Total expenses             | 2,047               | 1,917               | 6,450   | 5,964  
|                           |                     |                     |         |        
|Net income                 | $150                | $214                | $361    | $495   
|                           |                     |                     |         |        
|Net income allocated to    |                     |                     |         |        
|general partner (1%)       | $     2             | $     2             | $     4 | $     5
|Net income allocated to    |                     |                     |         |        
|limited partners (99%)     | 148                 | 212                 | 357     | 490    
|                           |                     |                     |         |        
|                           | $150                | $214                | $361    | $495   
|Net income per limited     |                     |                     |         |        
|partnership unit           | $2.47               | $3.53               | $5.95   | $8.17  
|                           |                     |                     |         |        
|Distributions per limited  |                     |                     |         |        
|partnership unit           | $--                 | $104.76             | $10.55  | $104.76





See Accompanying Notes to Financial Statements

















NATIONAL PROPERTY INVESTORS 4

STATEMENT OF CHANGES IN PARTNERS' DEFICIT

(Unaudited)

(in thousands, except unit data)













|                               |             |          |           |          
|------------------------------ | ----------- | -------- | --------- | ---------
|                               | Limited     |          |          
|                               | Partnership | General  | Limited   |          
|                               | Units       | Partner  | Partners  | Total    
|                               |             |          |           |          
|Original capital contributions | 60,005      | $1       | $30,003   | $30,004  
|                               |             |          |           |          
|Partners' deficit at           |             |          |           |          
|December 31, 2006              | 60,005      | $  (422) | $(27,292) | $(27,714)
|                               |             |          |           |          
|Distributions to partners      | --          | (6)      | (633)     | (639)    
|                               |             |          |           |          
|Net income for the nine months |             |          |           |          
|ended September 30, 2007       | --          | 4        | 357       | 361      
|                               |             |          |           |          
|Partners' deficit at           |             |          |           |          
|September 30, 2007             | 60,005      | $(424)   | $(27,568) | $(27,992)





See Accompanying Notes to Financial Statements











NATIONAL PROPERTY INVESTORS 4

STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)



|                                                     |                   |        
|---------------------------------------------------- | ----------------- | -------
|                                                     | Nine Months Ended
|                                                     | September 30,    
|                                                     | 2007              | 2006   
|Cash flows from operating activities:                |                   |        
|Net income                                           | $   361           | $   495
|Adjustments to reconcile net income to net cash      |                   |        
|provided by operating activities:                    |                   |        
|Depreciation                                         | 1,065             | 1,035  
|Amortization of loan costs                           | 42                | 31     
|Casualty loss                                        | 6                 | --     
|Change in accounts:                                  |                   |        
|Receivables and deposits                             | 51                | (35)   
|Other assets                                         | (304)             | (250)  
|Accounts payable                                     | (7)               | 146    
|Tenant security deposit liabilities                  | 41                | 80     
|Due to affiliates                                    | --                | (333)  
|Other liabilities                                    | 15                | 210    
|Net cash provided by operating activities            | 1,270             | 1,379  
|Cash flows from investing activities:                |                   |        
|Insurance proceeds returned                          | (6)               | --     
|Property improvements and replacements               | (844)             | (2,009)
|Net cash used in investing activities                | (850)             | (2,009)
|Cash flows from financing activities:                |                   |        
|Proceeds from mortgage note payable                  | --                | 13,250 
|Loan costs refunded (paid)                           | 4                 | (167)  
|Distributions to partners                            | (639)             | (6,350)
|Advances from affiliate                              | 39                | 645    
|Payments on advances from affiliate                  | (39)              | (5,169)
|Payments on mortgage note payable                    | (203)             | (601)  
|Net cash (used in) provided by financing activities  | (838)             | 1,608  
|                                                     |                   |        
|Net (decrease) increase in cash and cash equivalents | (418)             | 978    
|Cash and cash equivalents at beginning of period     | 702               | 123    
|Cash and cash equivalents at end of period           | $284              | $1,101 
|                                                     |                   |        
|Supplemental disclosure of cash flow information:    |                   |        
|Cash paid for interest                               | $2,006            | $1,993 
|                                                     |                   |        
|Supplemental disclosure of non-cash flow activity:   |                   |        
|Property improvements and replacements included in   |                   |        
|accounts payable                                     | $12               | $123   



Included in property improvements and replacements for the nine months ended September 30, 2007 and 2006 are approximately $44,000 and $547,000 of property improvements and replacements, respectively, which were included in accounts payable at December 31, 2006 and 2005, respectively.



See Accompanying Notes to Financial Statements











NATIONAL PROPERTY INVESTORS 4

NOTES TO FINANCIAL STATEMENTS

(Unaudited)



Note A  Basis of Presentation



The accompanying unaudited financial statements of National Property Investors 4 (the "Partnership" or the "Registrant") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of NPI Equity Investments, Inc. (NPI Equity or the "Managing General Partner"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 2007 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2007. For further information, refer to the financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006. The Managing General Partner is a subsidiary of Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust.



Recent Accounting Pronouncements



In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements. SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. SFAS No. 157 applies whenever other standards require assets or liabilities to be measured at fair value and does not expand the use of fair value in any new circumstances. SFAS No. 157 establishes a hierarchy that prioritizes the information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, such as the reporting entitys own data. SFAS No. 157 requires fair value measurements to be disclosed by level within the fair value hierarchy. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Partnership does not anticipate that the adoption of SFAS No. 157 will have a material effect on the Partnerships financial statements.



In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Partnership has not yet determined whether it will elect the fair value option for any of its financial instruments.



In June 2007, the American Institute of Certified Public Accountants (the AICPA) issued Statement of Position No. 07-1, Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies ("SOP 07-1").  SOP 07-1 provides guidance for determining whether the accounting principles of the AICPA Audit and Accounting Guide Investment Companies are required to be applied to an entity by clarifying the definition of an investment company and, whether investment company accounting should be retained by a parent company upon consolidation of an investment company subsidiary, or by an investor in the application of the equity method of accounting to an investment company investee.  SOP 07-1 applies to reporting periods beginning on or after December 15, 2007; however, the FASB has decided to issue an exposure draft that would indefinitely delay the effective date of SOP 07-1 until the FASB can reassess the provisions of SOP 07-1.  The Partnership is currently evaluating the impact, if any, that adoption of SOP 07-1 may have on its financial statements in the period of adoption.



Note B - 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 for reimbursement of certain expenses incurred by affiliates on behalf of the Partnership.



Affiliates of the Managing General Partner receive 5% of gross receipts from the Partnership's property as compensation for providing property management services.  The Partnership paid to such affiliates approximately $338,000 and $321,000 for the nine months ended September 30, 2007 and 2006, respectively, which are included in operating expenses.



Affiliates of the Managing General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $178,000 and $186,000 for the nine months ended September 30, 2007 and 2006, respectively, which is included in general and administrative expenses and investment property.  The portion of these reimbursements included in investment property for the nine months ended September 30, 2007 and 2006 are construction management services provided by an affiliate of the Managing General Partner of approximately $63,000 and $84,000, respectively.



For services relating to the administration of the Partnership and operation of the Partnership's property, the Managing General Partner is entitled to receive payment for non-accountable expenses up to a maximum of $100,000 per year based upon the number of Partnership units sold, subject to certain limitations. The Managing General Partner received approximately $12,000 for the nine months ended September 30, 2007, which is included in general and administrative expenses. There were no such fees for the nine months ended September 30, 2006.



In addition to the amounts discussed above, as compensation for services rendered in managing the Partnership, the Managing General Partner is entitled to receive a Partnership Management Fee in conjunction with distributions of cash from operations, subject to certain limitations. During the nine months ended September 30, 2007, approximately $4,000 was paid in conjunction with the distributions from operations and is included in general and administrative expenses. There were no such fees paid for the nine months ended September 30, 2006, as there were no distributions from operations.



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 $300,000. 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 the 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 nine months ended September 30, 2006, the Managing General Partner agreed to advance funds in excess of the Partnership Revolver to fund redevelopment work and a rate lock deposit in connection with obtaining a second mortgage at Village of Pennbrook Apartments and advanced approximately $645,000. During the nine months ended September 30, 2007, the Managing General Partner advanced approximately $39,000 to the Partnership to fund operating expenses. Interest expense for the nine months ended September 30, 2007 and 2006 amounted to less than $1,000 and approximately $251,000, respectively.











During the nine months ended September 30, 2007 and 2006, the outstanding advances and associated accrued interest of approximately $39,000 and $5,602,000, respectively, were repaid with cash from operations and proceeds from the second mortgage obtained on Village of Pennbrook Apartments, respectively. There were no outstanding advances or associated accrued interest payable to affiliates of the Managing General Partner at September 30, 2007.



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, general liability 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 nine months ended September 30, 2007 and 2006, the Partnership was charged by AIMCO and its affiliates approximately $227,000 and $160,000, respectively, for insurance coverage and fees associated with policy claims administration.



Note C  Redevelopment of Property



During 2005, the Partnership began a redevelopment project at Village of Pennbrook Apartments. The redevelopment project consisted of major landscaping, exterior upgrades and structural improvements and was completed in December 2006 at a total cost of approximately $7,057,000. The project was financed with operating cash flow and advances from an affiliate of the Managing General Partner, which accrued interest at prime plus 2%.

Note D  Casualty Event



In August 2006, Village of Pennbrook Apartments incurred damages as a result of a broken water supply line.  The property suffered damages of approximately $76,000.  Insurance proceeds of approximately $57,000 were received during the year ended December 31, 2006 to cover the damages.  After writing off the fully depreciated cost of the damaged asset, the Partnership recognized a casualty gain of approximately $57,000 for the year ended December 31, 2006. During the nine months ended September 30, 2007, the estimate of damages to the property was revised to approximately $61,000. As a result, approximately $6,000 of insurance proceeds were refunded during the nine months ended September 30, 2007, resulting in a casualty loss of approximately $6,000, which is included in operating expenses.



Note E  Mortgage Financing



On June 30, 2006, the Partnership obtained a second mortgage loan in the principal amount of $13,250,000 on Village of Pennbrook Apartments. The Partnership received net proceeds of approximately $13,077,000 after payment of costs and fees associated with obtaining the second mortgage loan. The second mortgage loan bears interest at a fixed rate of 6.32% per annum and requires monthly payments of interest only beginning on August 1, 2006, until July 1, 2009. From August 1, 2009 through the maturity date of September 1, 2021, the second mortgage loan requires monthly payments of principal and interest of approximately $82,000 with a balloon payment of approximately $10,561,000 due at maturity. The Partnership may repay the second mortgage loan at any time with 30 days written notice to the lender, subject to a prepayment penalty as defined in the agreements documenting the second mortgage loan. Total capitalized loan costs incurred during the nine months ended September 30, 2006 associated with the new loan were approximately $167,000, approximately $4,000 of which was refunded during the nine months ended September 30, 2007.



In connection with the second mortgage loan financing, the Partnership agreed to certain modifications of the existing mortgage loan encumbering Village of Pennbrook Apartments.  The modification of terms consisted of a fixed interest rate of 7.06% per annum, monthly payments of principal and interest of approximately $177,000 commencing August 1, 2006, through September 1, 2021, with a balloon payment of approximately $19,515,000 due at the maturity date of September 1, 2021. Prior to these modifications, the interest rate on the existing mortgage was a fixed rate of 7.01% per annum through its maturity of September 1, 2021, and required monthly payments of approximately $236,000 through the maturity date, at which time the loan was scheduled to be fully amortized.



Note F  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 28, 2002, the trial court granted defendants motion to strike the complaint.  Plaintiffs took an appeal from this order.



On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. 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 May 4, 2004, the Objector filed a second appeal challenging the courts use of a referee and its order requiring Objector to pay those fees.



On March 21, 2005, the Court of Appeals issued opinions in both pending appeals.  With regard to the settlement and judgment entered thereto, the Court of Appeals vacated the trial courts order and remanded to the trial court for further findings on the basis that the state of the record is insufficient to permit meaningful appellate review.  The matter was transferred back to the trial court on June 21, 2005.  With regard to the second appeal, the Court of Appeals reversed the order requiring the Objector to pay referee fees. With respect to the related Heller appeal, on July 28, 2005, the Court of Appeals reversed the trial courts order striking the first amended complaint.



On August 18, 2005, Objector and his counsel filed a motion to disqualify the trial court based on a peremptory challenge and filed a motion to disqualify for cause on October 17, 2005, both of which were ultimately denied and/or struck by the trial court.  On or about October 13, 2005 Objector filed a motion to intervene and on or about October 19, 2005 filed both a motion to take discovery relating to the adequacy of plaintiffs as derivative representatives and a motion to dissolve the anti-suit injunction in connection with settlement.  On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion.  On February 3, 2006, the Court held a hearing on the various matters pending before it and ordered additional briefing from the parties and Objector. On June 30, 2006, the trial court entered an order confirming its approval of the class action settlement and entering judgment thereto after the Court of Appeals had remanded the matter for further findings.  The substantive terms of the settlement agreement remain unchanged.  The trial court also entered supplemental orders on July 1, 2006, denying Objectors Motion to File a Complaint in Intervention, Objectors Motion for Leave of Discovery and Objectors Motion to Dissolve the Anti-Suit Injunction.  Notice of Entry of Judgment was served on July 10, 2006. On August 31, 2006, the Objector filed a Notice of Appeal to the Courts June 30, 2006 and July 1, 2006 orders. On December 14, 2006, Objector filed his Appellants Brief. The Partnership and its affiliates, as well as counsel for the Settlement Class, both filed Respondents Briefs on May 17, 2007.  Objector filed his response on August 3, 2007.  No hearing date has yet been scheduled.



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.



The Partnership is unaware of any other pending or outstanding litigation matters involving it or its investment property that are 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, and potential fines or penalties imposed by such agencies in connection therewith, 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, operation and management 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 policies, procedures, third-party audits and training and the Managing General Partner believes that these measures will prevent or eliminate mold exposure and will minimize the effects that mold may 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.













ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION



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.



The Partnership's investment property consists of one apartment complex, Village of Pennbrook Apartments, located in Falls Township, Pennsylvania. The average occupancy was 96% and 97% for the nine months ended September 30, 2007 and 2006, respectively.



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 mortgage loans, 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 three and nine months ended September 30, 2007 was approximately $150,000 and $361,000, respectively, compared to net income of approximately $214,000 and $495,000 for the three and nine months ended September 30, 2006, respectively. The decrease in net income for both the three and nine months ended September 30, 2007 is due to an increase in total expenses, partially offset by an increase in total revenues.



Total expenses increased for the three months ended September 30, 2007 due to increases in operating and depreciation expenses.  Interest, general and administrative and property tax expenses remained relatively constant for the three months ended September 30, 2007.  Total expenses increased for the nine months ended September 30, 2007 due to increases in operating, interest, general and administrative and depreciation expenses. Property tax expense remained relatively constant for the nine months ended September 30, 2007.  The increase in operating expenses for the three months ended September 30, 2007 is primarily due to increases in insurance expense as a result of increased premiums, utilities and payroll related expenses at the Partnerships investment property. Operating expenses increased for the nine months ended September 30, 2007 primarily due to increases in contract services, snow removal, costs incurred related to a water filtration issue affecting three units and an increase in insurance expense as a result of increased premiums at the property. Depreciation expense increased for both the three and nine months ended September 30, 2007 due to property improvements and replacements placed into service at the property during the past twelve months which are now being depreciated. Interest expense increased for the nine months ended September 30, 2007 primarily due to a higher average debt balance as a result of the second mortgage obtained on the Partnerships investment property in June 2006 (as discussed in Liquidity and Capital Resources), partially offset by a decrease in interest on advances from affiliates.



The increase in general and administrative expenses for the nine months ended September 30, 2007 is primarily due to increases in accountable and non-accountable reimbursements and the Partnership management fee paid to the Managing General Partner as allowed under the Partnership Agreement. Also included in general and administrative expenses for the three and nine months ended September 30, 2007 and 2006 are costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement.



The increase in total revenues for the three months ended September 30, 2007 is due to an increase in other income.  Rental income remained relatively constant for the three months ended September 30, 2007.  Total revenues increased for the nine months ended September 30, 2007 due to increases in both rental and other income.  The increase in other income for both periods is primarily due to an increase in tenant utility reimbursements at the property.  The increase in rental income for the nine months ended September 30, 2007 is due to an increase in the average rental rate, partially offset by a decrease in occupancy and an increase in bad debt expense at the Partnerships investment property.



In August 2006, Village of Pennbrook Apartments incurred damages as a result of a broken water supply line.  The property suffered damages of approximately $76,000. Insurance proceeds of approximately $57,000 were received during the year ended December 31, 2006 to cover the damages.  After writing off the fully depreciated cost of the damaged asset, the Partnership recognized a casualty gain of approximately $57,000 for the year ended December 31, 2006. During the nine months ended September 30, 2007, the estimate of damages to the property was revised to approximately $61,000. As a result, approximately $6,000 of insurance proceeds were refunded during the nine months ended September 30, 2007, resulting in a casualty loss of approximately $6,000, which is included in operating expenses.



Liquidity and Capital Resources



At September 30, 2007, the Partnership had cash and cash equivalents of approximately $284,000, compared to approximately $1,101,000 at September 30, 2006. Cash and cash equivalents decreased approximately $418,000, from December 31, 2006, due to approximately $850,000 and $838,000 of cash used in investing and financing activities, respectively, partially offset by approximately $1,270,000 of cash provided by operating activities.  Cash used in investing activities consisted of property improvements and replacements and insurance proceeds returned related to the casualty discussed above. Cash used in financing activities consisted of distributions to partners, payments of principal made on the first mortgage encumbering Village of Pennbrook Apartments, and payments on advances from an affiliate of the Managing General Partner, partially offset by advances received from an affiliate of the Managing General Partner and loan costs refunded related to the second mortgage obtained on Village of Pennbrook Apartments. The Partnership invests its working capital reserves in interest bearing accounts.



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 $300,000. 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 the 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 nine months ended September 30, 2006, the Managing General Partner agreed to advance funds in excess of the Partnership Revolver to fund redevelopment work and a rate lock deposit in connection with obtaining a second mortgage at Village of Pennbrook Apartments and advanced approximately $645,000. During the nine months ended September 30, 2007, the Managing General Partner advanced approximately $39,000 to the Partnership to fund operating expenses. Interest expense for the nine months ended September 30, 2007 and 2006 amounted to less than $1,000 and approximately $251,000, respectively. During the nine months ended September 30, 2007 and 2006, the outstanding advances and associated accrued interest of approximately $39,000 and $5,602,000, respectively, were repaid with cash from operations and proceeds from the second mortgage obtained on Village of Pennbrook Apartments, respectively. There were no outstanding advances or associated accrued interest payable to affiliates of the Managing General Partner at September 30, 2007.



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. Capital improvements planned for the Partnerships property are detailed below.



During the nine months ended September 30, 2007, the Partnership completed approximately $812,000 of capital improvements at Village of Pennbrook Apartments, consisting primarily of roof replacement, heating and air conditioning upgrades, handrails and stair treads, water heaters, major landscaping, exterior lighting, appliance and floor covering replacements and construction related to the casualty discussed above. 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, additional routine capital expenditures are anticipated during 2007.  Such capital expenditures will depend on the physical condition of the property as well as 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.



The Partnership's assets are thought to be generally sufficient for any near-term needs (exclusive of capital improvements) of the Partnership. On June 30, 2006, the Partnership obtained a second mortgage loan in the principal amount of $13,250,000 on Village of Pennbrook Apartments. The Partnership received net proceeds of approximately $13,077,000 after payment of costs and fees associated with obtaining the second mortgage loan. The second mortgage loan bears interest at a fixed rate of 6.32% per annum and requires monthly payments of interest only beginning on August 1, 2006, until July 1, 2009. From August 1, 2009 through the maturity date of September 1, 2021, the second mortgage loan requires monthly payments of principal and interest of approximately $82,000 with a balloon payment of approximately $10,561,000 due at maturity. The Partnership may repay the second mortgage loan at any time with 30 days written notice to the lender, subject to a prepayment penalty as defined in the agreements documenting the second mortgage loan. Total capitalized loan costs incurred during the nine months ended September 30, 2006 associated with the new loan were approximately $167,000, approximately $4,000 of which was refunded during the nine months ended September 30, 2007.















In connection with the second mortgage loan financing, the Partnership agreed to certain modifications of the existing mortgage loan encumbering Village of Pennbrook Apartments.  The modification of terms consisted of a fixed interest rate of 7.06% per annum, monthly payments of principal and interest of approximately $177,000 commencing August 1, 2006, through September 1, 2021, with a balloon payment of approximately $19,515,000 due at the maturity date of September 1, 2021. Prior to these modifications, the interest rate on the existing mortgage was a fixed rate of 7.01% per annum through its maturity of September 1, 2021, and required monthly payments of approximately $236,000 through the maturity date, at which time the loan was scheduled to be fully amortized.



The Partnership distributed the following amounts during the nine months ended September 30, 2007 and 2006 (in thousands, except per unit data):



|              |                    |             |                    |            
|------------- | ------------------ | ----------- | ------------------ | -----------
|              | Nine Months        | Per Limited | Nine Months        | Per Limited
|              | Ended              | Partnership | Ended              | Partnership
|              | September 30, 2007 | Unit        | September 30, 2006 | Unit       
|              |                    |             |                    |            
|Operations    | $  190             | $  3.14     | $   --             | $    --    
|Financing (1) | 449                | 7.41        | 6,350              | 104.76     
|Total         | $639               | $10.55      | $6,350             | $104.76    
|              |                    |             |                    |            



(1)

Proceeds from the second mortgage obtained on Village of Pennbrook Apartments in June 2006.



Future cash distributions will depend on the levels of cash generated from operations, the timing of the debt maturities, property sale and/or refinancings. 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 capital expenditures to permit additional distributions to its partners in 2007 or subsequent periods.



Other



In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 47,850 limited partnership units (the "Units") in the Partnership representing 79.74% of the outstanding Units at September 30, 2007. 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, unitholders 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 79.74% of the outstanding Units, AIMCO is in a position to influence all such voting decisions with respect to the Partnership. With respect to 26,466 Units, AIMCO IPLP, L.P., an affiliate of AIMCO, is required to vote such Units: (i) against any increase in compensation payable to the Managing General Partner or to affiliates; and (ii) on all other matters submitted by it or its affiliates, in proportion to the votes cast by non-tendering unitholders. Except for the foregoing, no other limitations are imposed on AIMCO's or AIMCO IPLP, L.P.'s ability to influence voting decisions with respect to the Partnership. 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



The financial statements are prepared in accordance with accounting principles generally accepted in the United States which require the Partnership to make estimates and assumptions. The Partnership believes that of its significant accounting policies, the following may involve a higher degree of judgment and complexity.



Impairment of Long-Lived Asset



Investment property is recorded at cost, less accumulated depreciation, unless the carrying amount of the asset is not recoverable.  If events or circumstances indicate that the carrying amount of the property may not be recoverable, the Partnership will make an assessment of its recoverability by comparing the carrying amount to the Partnerships estimate of the undiscounted future cash flows, excluding interest charges, of the property.   If the carrying amount exceeds the aggregate undiscounted future cash flows, the Partnership would recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property.



Real property investment is 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, general economic climate; competition from other apartment communities and other housing options; local conditions, such as loss of jobs or an increase in the supply of apartments that might adversely affect apartment occupancy or rental rates; changes in governmental regulations and the related cost of compliance; increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents; and changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multi-family housing.  Any adverse changes in these factors could cause impairment of the Partnerships asset.



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 3.

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 fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Partnerships internal control over financial reporting.















PART II - OTHER INFORMATION





ITEM 1.

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 28, 2002, the trial court granted defendants motion to strike the complaint.  Plaintiffs took an appeal from this order.



On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. 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 May 4, 2004, the Objector filed a second appeal challenging the courts use of a referee and its order requiring Objector to pay those fees.



On March 21, 2005, the Court of Appeals issued opinions in both pending appeals.  With regard to the settlement and judgment entered thereto, the Court of Appeals vacated the trial courts order and remanded to the trial court for further findings on the basis that the state of the record is insufficient to permit meaningful appellate review.  The matter was transferred back to the trial court on June 21, 2005.  With regard to the second appeal, the Court of Appeals reversed the order requiring the Objector to pay referee fees. With respect to the related Heller appeal, on July 28, 2005, the Court of Appeals reversed the trial courts order striking the first amended complaint.



On August 18, 2005, Objector and his counsel filed a motion to disqualify the trial court based on a peremptory challenge and filed a motion to disqualify for cause on October 17, 2005, both of which were ultimately denied and/or struck by the trial court.  On or about October 13, 2005 Objector filed a motion to intervene and on or about October 19, 2005 filed both a motion to take discovery relating to the adequacy of plaintiffs as derivative representatives and a motion to dissolve the anti-suit injunction in connection with settlement.  On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion.  On February 3, 2006, the Court held a hearing on the various matters pending before it and ordered additional briefing from the parties and Objector. On June 30, 2006, the trial court entered an order confirming its approval of the class action settlement and entering judgment thereto after the Court of Appeals had remanded the matter for further findings.  The substantive terms of the settlement agreement remain unchanged.  The trial court also entered supplemental orders on July 1, 2006, denying Objectors Motion to File a Complaint in Intervention, Objectors Motion for Leave of Discovery and Objectors Motion to Dissolve the Anti-Suit Injunction.  Notice of Entry of Judgment was served on July 10, 2006.  On August 31, 2006, the Objector filed a Notice of Appeal to the Courts June 30, 2006 and July 1, 2006 orders. On December 14, 2006, Objector filed his Appellants Brief. The Partnership and its affiliates, as well as counsel for the Settlement Class, both filed Respondents Briefs on May 17, 2007.  Objector filed his response on August 3, 2007.  No hearing date has yet been scheduled.



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.



ITEM 5.

OTHER INFORMATION



None.



ITEM 6.

EXHIBITS



See Exhibit Index.













SIGNATURES







In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.







|                        |                                   
|----------------------- | ----------------------------------
|                        | NATIONAL PROPERTY INVESTORS 4     
|                        |                                   
|                        | By:   NPI EQUITY INVESTMENTS, INC.
|                        | Managing General Partner          
|                        |                                   
|Date: November 13, 2007 | By:   /s/Martha L. Long           
|                        | Martha L. Long                    
|                        | Senior Vice President             
|                        |                                   
|Date: November 13, 2007 | By:   /s/Stephen B. Waters        
|                        | Stephen B. Waters                 
|                        | Vice President                    













NATIONAL PROPERTY INVESTORS 4



EXHIBIT INDEX



Exhibit

Description of Exhibit





2.1

NPI, Inc. Stock Purchase Agreement dated as of August 17, 1995, incorporated by reference to the Partnership's Current Report on Form 8-K dated August 17, 1995.



2.2

Partnership Units Purchase Agreement dated as of August 17, 1995 incorporated by reference to Current Report on Form 8-K filed by Insignia Financial Group, Inc. ("Insignia") with the Securities and Exchange Commission on September 1, 1995.



2.3

Management Purchase Agreement dated as of August 17, 1995, incorporated by reference to Current Report on Form 8-K filed by Insignia Financial Group, Inc. with the Securities and Exchange Commission on September 1, 1995.



3.4

Agreement of Limited Partnership, incorporated by reference to Exhibit A to the Prospectus of the Partnership dated September 20, 1983, as amended on June 13 1989, and as thereafter supplemented contained in the fiscal Partnership's Registration Statement on Form S-11 (Reg. No. 2-63733).



3.4a

Amendment to the Limited Partnership Agreement dated December 22, 2005 initially filed with the Registrants Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005 and incorporated herein by reference.



10.1

Agreement to Purchase Village of Pennbrook Apartments dated November 25, 1981 between the Partnership and SB Partners, incorporated by reference to the Partnership's Current Report on Form 8-K dated November 25, 1981.



10.8

Multifamily Note dated June 30, 2006 between National Property Investors 4, a California limited partnership, and Capmark Finance Inc., a California corporation, incorporated by reference to the Partnerships Current Report on Form 8-K dated June 30, 2006.



10.9

Amended and Restated Multifamily Mortgage, Assignment of Rents and Security Agreement dated June 30, 2006 between National Property Investors 4, a California limited partnership, and the Federal Home Loan Mortgage Corporation, incorporated by reference to the Partnerships Current Report on Form 8-K dated June 30, 2006.



10.10

Amended and Restated Multifamily Note dated June 30, 2006 between National Property Investors 4, a California limited partnership, and the Federal Home Loan Mortgage Corporation, incorporated by reference to the Partnerships Current Report on Form 8-K dated June 30, 2006.



10.11

Amended and Restated Guaranty, dated June 30, 2006 between National Property Investors 4, a California limited partnership, and the Federal Home Loan Mortgage Corporation, incorporated by reference to the Partnerships Current Report on Form 8-K dated June 30, 2006.



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 of equivalent of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.