NATIONAL PROPERTY INVESTORS 7, 10KSB, 1997-03-07

NATIONAL PROPERTY INVESTORS 7
10KSB, 1997-03-07
REAL ESTATE

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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
X ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1996

__TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]

For the transition period from to

Commission file number 0-13454

NATIONAL PROPERTY INVESTORS 7

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

One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina, 29602
(Address of principal executive offices)

(864) 239-1000
Issuer's telephone number

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

None

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

Limited Partnership Units

(Title of class)

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

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

State issuer's revenues for its most recent fiscal year. $7,339,000

State the aggregate market value of the voting stock held by nonaffiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within the past 60 days. Market value information
for Registrant's Partnership Interests is not available. Should a trading market
develop for these Interests, it is the Managing General Partner's belief that
such trading would not exceed $25 million.

DOCUMENTS INCORPORATED BY REFERENCE
None

PART I

Item 1. Description of Business

National Property Investors 7 (the "Partnership" or "Registrant") was organized
in October 1983 as a California limited partnership under the Uniform Limited
Partnership Laws of California. NPI Equity Investments, Inc., a Florida
corporation, became the Registrant's managing general partner (the "Managing
General Partner") on December 20, 1991, succeeding NPI Management Corp. (the
"Prior Managing General Partner"). The Managing General Partner also acquired
the general partner interest of IRI Properties Capital Corp., the Registrant's
former corporate general partner, on December 20, 1991, and CDG Associates, the
Registrant's former associate general partner, during January 1992. The
Managing General Partner is a wholly owned subsidiary of National Property
Investors, Inc. ("NPI"), which is wholly owned by an affiliate of Insignia
Financial Group, Inc. ("Insignia").

The Partnership's Registration Statement, filed pursuant to the Securities Act
of 1933 (No. 2-84975), was declared effective by the Securities and Exchange
Commission on February 10, 1984. The Partnership marketed its securities
pursuant to its Prospectus dated February 10, 1984, which was thereafter
supplemented (hereinafter the "Prospectus"). This Prospectus was filed with the
Securities and Exchange Commission pursuant to Rule 424 (b) and 424 (c) of the
Securities Act of 1933.

The principal business of the Partnership is and has been to acquire, hold for
investment, and ultimately sell income-producing real property. The Partnership
is a "closed" limited partnership real estate syndicate formed to acquire multi-
family residential properties.

From February 1984 through February 1985, the Partnership offered $50,000,000 in
Limited Partnership units and sold units having an initial cost of $30,259,000.
The net proceeds of this offering were used to purchase seven income producing
real properties. The Partnership's original property portfolio was
geographically diversified with properties acquired in six states. One property
was sold and another was foreclosed on in 1994. Subsequent to the completion of
the acquisition activities in March 1986, the principal activity of the
Partnership has been managing its portfolio. See "Item 2, Description of
Properties" for a description of the Partnership's properties.

The Registrant is involved in only one industry segment, as described above.
The business of the Registrant is not seasonal. The Registrant does not engage
in any foreign operations or derive revenues from foreign sources.

Both the income and the expenses of operating the properties owned by the
Registrant are subject to factors outside the Registrant's control, such as
oversupply of similar rental facilities resulting from overbuilding, increases
in unemployment or population shifts, changes in zoning laws or changes in
patterns of needs of the users. Expenses such as local real estate taxes are
subject to change and cannot always be reflected in rental increases due to
market conditions or existing leases. The profitability and marketability of
developed real property may be adversely affected by changes in general and
local economic conditions and in prevailing interest rates, and favorable
changes in such factors will not necessarily enhance the profitability of
marketability of such property. Even under the most favorable market conditions
there is no guarantee that any property owned by the Registrant can be sold or,
if sold, that such sale can be made upon favorable terms.

It is possible that legislation on the state or local level may be enacted in
the states where the Registrant's properties are located which may include some
form of rent control. There have been, and it is possible there may be other,
Federal, state and local legislation and regulations enacted relating to the
protection of the environment. The Managing General Partner is unable to
predict the extent, if any, to which such existing or new legislation or
regulations might adversely affect the properties still owned by the Registrant.

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

The Registrant maintains property and liability insurance on the properties and
believes such coverage to be adequate.

At this time it appears that the original investment objective of capital growth
will not be attained and that investors will not receive a return of all their
invested capital. The extent to which invested capital is returned to investors
is dependent upon the success of the general partners' strategy as well as upon
significant improvement in the performance of the Registrant's remaining
properties and the markets in which such properties are located and on the sales
price of the remaining properties. In this regard, some or all of the remaining
properties have been held longer than originally expected. The ability to hold
and operate these properties is dependent on the Registrant's ability to obtain
financing, refinancing or debt modification as required.

The Registrant has no employees. Management and administrative services are
performed by the Managing General Partner and by Insignia Residential Group,
L.P., an affiliate of Insignia Financial Group, Inc. ("Insignia"), the ultimate
parent company of the Managing General Partner. Pursuant to a management
agreement between them, Insignia Residential Group, L.P. provides property
management services to the Registrant.

The real estate business in which the Partnership is engaged is highly
competitive, and the Partnership is not a significant factor in this industry.
The Registrant's properties are subject to competition from similar properties
in the vicinity in which the properties are located. In addition, various
limited partnerships have been formed by the General Partners and/or their
affiliates to engage in business which may be competitive with the Registrant.

New officers and directors of each of those entities were elected. See "Item 9,
Directors and Executive Officers of the Registrant."

On January 19, 1996, Insignia NPI L.L.C. ("Insignia LCC"), an affiliate of
Insignia acquired from DeForest II all of its interest in the Registrant.
Pursuant to a Schedule 13-D filed by Insignia Properties, LP with the Securities
and Exchange Commission, Insignia Properties, LP acquired 25,065 limited
partnership units or approximately 41.4% of the total limited partnership units
of the Registrant.

Item 2. Description of Properties:

The following table sets forth the Partnership's investments in properties:

Date of
Property Purchase Type of Ownership Use

Fairway II Apartments 11/84 Fee ownership subject to Apartment
Baton Rouge, Louisiana first mortgage 204 units

The Pines Apartments 04/85 Fee ownership subject to Apartment
Roanoke, Virginia first mortgage 216 units

Patchen Place Apartments 07/85 Fee ownership subject to Apartment
Lexington, Kentucky first mortgage 202 units

Northwood I & II Apartments 07/85 Fee ownership subject to Apartment
Pensacola, Florida first mortgage 320 units

South Point Apartments 03/86 Fee ownership subject to Apartment
Durham, North Carolina first mortgage 180 units

Schedule of Properties:
(dollar amounts in thousands)

Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis

Fairway View II $10,348 $ 4,642 5-27.5 yrs S/L $ 2,951
The Pines 7,771 4,152 5-27.5 yrs S/L 2,244
Patchen Place 8,401 4,765 5-27.5 yrs S/L 2,646
Northwoods I & II 9,388 4,616 5-27.5 yrs S/L 2,929
South Point 9,115 4,197 5-27.5 yrs S/L 3,413

Total $45,023 $22,372 $14,183

See "Note A" of the financial statements included in "Item 7." for a description
of the Partnership's depreciation policy.

Schedule of Mortgages:
(dollar amounts in thousands)

Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1996 Rate Amortized Date Maturity

Fairway View II $ 4,200 7.33% None 11/01/03 $ 4,200
The Pines 3,517 8.56% 30 yrs 02/01/01 3,357
Patchen Place 3,000 7.33% None 11/01/03 3,000
Northwoods I & II 5,000 7.33% None 11/01/03 5,000
South Point 4,600 7.33% None 11/01/03 4,600

Total $20,317 $20,157

Schedule of Rental Rates and Occupancy:

Average Annual Average
Rental Rates Occupancy
Property 1996 1995 1996 1995

Fairway View II $6,399/unit $6,565/unit 96% 97%
The Pines 6,471/unit 6,197/unit 98% 98%
Patchen Place 6,602/unit 6,453/unit 92% 92%
Northwoods I & II 5,836/unit 5,543/unit 97% 98%
South Point 7,934/unit 7,521/unit 91% 96%

The Managing General Partner attributes the decrease in occupancy at South Point
to a number of new apartments in the Durham area. In addition, no lease
concessions are being offered at the property.

As noted under "Item 1. Description of Business," the real estate industry is
highly competitive. All of the properties of the Partnership are subject to
competition from other apartment complexes in the area. The General Partner
believes that all of the properties are adequately insured. The multi-family
residential properties' lease terms are for one year or less. No residential
tenant leases 10% or more of the available rental space.

Real estate taxes and rates in 1996 for each property were:

1996 1996
Billing Rate

Fairway View II $ 53,475 10.01%
The Pines 69,749 1.13%
Patchen Place 44,697 .97%
Northwoods I & II 124,721 2.25%
South Point 97,099 1.62%

Item 3. Legal Proceedings

The Registrant is unaware of any pending or outstanding litigation that is not
of a routine nature. The Managing General Partner of the Registrant believes
that all such pending or outstanding litigation will be resolved without a
material adverse effect upon the business, financial condition, or operations of
the Partnership.

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

The unit holders of the Registrant did not vote on any matter during the fiscal
year covered by this report.

PART II

Item 5. Market for the Partnership's Common Equity and Related Security Holder
Matters

There is no established market for the Units and it is not anticipated that any
will occur in the foreseeable future. As of December 31, 1996, there were 1,994
holders of record owning an aggregate of 60,517 units.

No distributions were paid during the year ended December 31, 1996 and 1995. At
December 31, 1996, distributions of approximately $1,960,000 had been declared
and accrued. These distributions were paid to the partners in January 1997.
Approximately $1,940,000 ($32.06 per limited partnership unit) went to the
limited partners and approximately $20,000 to the general partners. The
distributions originated from refinancing proceeds of Fairway View II, Patchen
Place, Northwoods I & II, and South Point of approximately $1,561,000 and the
remaining from operations of approximately $399,000. Future cash distributions
will be dependent on the levels of net cash generated from operations,
refinancings, property sales and the availability of cash reserves.

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

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

Results of Operations

The Partnership's net loss for the year ended December 31, 1996, was
approximately $57,000 compared to net income of approximately $198,000 for the
corresponding period of 1995. The change in net income (loss) from 1995 to 1996
is primarily attributable to increases in operating, interest and general and
administrative expenses. The increase in operating expense is attributable to
the completion of repair work in 1996 related to a fire at Fairway View II in
1995. Included in operating expense is $251,000 of repairs and maintenance
comprised of major landscaping, exterior building repairs, and parking lot
repairs for the year ended December 31, 1996. Interest expense increased
primarily due to the increased mortgage principal balance on the Northwoods
property. The refinancings (see Liquidity and Capital Resources) replaced
existing debt of approximately $14,554,000 with new mortgage indebtedness of
approximately $16,800,000. The Southpoint, Patchen Place and Fairway View II
properties were refinanced with conventional debt and are no longer subject to
certain requirements of the Department of Housing and Urban Development. The
Partnership recorded an extraordinary loss on the refinancings of $90,000. The
increase in general and administrative expense is primarily due to increased
professional fees and related costs. Partially offsetting the items noted above
are increases in other income and rental income. Other income increased due to
an increase in interest-bearing reserves. Rental income increased due to rental
rate increases at all properties except Fairway View II, which were partially
offset by a decline in occupancy at Southpoint Apartments. Occupancy at the
Partnership's remaining properties remained relatively constant.

The decrease in income is also attributable to an increase in operating expense
and general and administrative expenses. The increase in operating expense is
attributable to the completion of repair work in 1996 related to a fire at
Fairway View II in 1995. Included in operating expense is $251,000 of major
repairs and maintenance comprised of major landscaping, exterior building
repairs, and parking lot repairs for the year ended December 31, 1996. The
increase in general and administrative expense is due to increased professional
expenses, such as audit and legal expense. The increase in expense
reimbursements during the year ended December 31, 1996, is directly attributable
to the combined transition efforts of the Greenville, South Carolina, and
Atlanta, Georgia, administrative offices during the year-end close, preparation
of the 1995 10-K and tax return (including the limited partner K-1's), filing of
the first two quarterly reports and transition of asset management
responsibilities to the new administration. Offsetting the items noted above are
increases in other income and rental income. Other income increased due to an
increase in interest-bearing reserves. Rental income increased due to rental
rate increases at all properties except for Fairway View II Apartments.
Occupancy rates remained relatively consistent at all the properties except for
South Point which was offset by rental rate increases.

As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of each of its investment
properties to assess the feasibility of increasing rents, maintaining or
increasing occupancy levels and protecting the Partnership from the burden of
increases in expense. 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, due to changing market conditions, which can result
in the use of rental concessions and rental reductions to offset softening
market conditions, there is no guarantee that the Managing General Partner will
be able to sustain such a plan.

Capital Resources and Liquidity

At December 31, 1996, the Partnership held unrestricted cash of approximately
$5,471,000 compared to approximately $2,277,000 at December 31, 1995. Net cash
provided by operating activities increased primarily as a result of the change
in other assets and accounts payable due to the timing of collections on
accounts receivable and the timing of payments on accounts payable. Offsetting
the above increases in cash was the decrease in net income, as discussed above.
Net cash used in investing activities increased due to an increase in property
improvements and replacements. The change from cash used in financing
activities in 1995 to cash provided by financing activities in 1996 is due to
the refinancing of Fairway View II, Patchen Place, Northwoods, and South Point.
In November 1996, the Partnership refinanced the mortgages secured by the
Fairway View II, Patchen Place and Southpoint properties, which were purchased
on behalf of the Partnership by three lower tier partnerships, in which the
Partnership held a 99.99% interest as a general partner. In conjunction with
the refinancing of the properties, ownership of Fairway View II, Patchen Place
and Southpoint reverted to the Partnership and the three lower tier partnerships
were dissolved. The properties were refinanced with conventional debt no longer
subject to certain requirements of the Department of Housing and Urban
Development.

The Partnership has no material capital programs scheduled to be performed in
1997, although certain routine capital expenditures and maintenance expenses
have been budgeted. These capital expenditures and maintenance expenses will be
incurred only if cash is available from operations or is received from the
capital reserve account.

On July 12, 1996, the Partnership refinanced the mortgage encumbering Northwoods
Apartments. The refinancing replaced indebtedness on Northwoods in the amount
of approximately $1,926,00. The debt refinanced carried a stated interest rate
of 9.4% and had a maturity date of May 1, 1996. An extension to July 1, 1996,
had been granted. The new mortgage indebtedness of $5,000,000 carried an
interest rate of 2.5% plus the LIBOR rate, and the maturity date had been
extended to November 15, 1996.

On November 13, 1996, the Partnership refinanced the mortgage encumbering
Northwoods Apartments. The refinancing replaced indebtedness on Northwoods in
the amount of $5,000,000. The refinancing replaced the existing indebtedness
which carried an interest rate of 2.5% plus the LIBOR rate and had a maturity
date of November 15, 1996. The new mortgage indebtedness of $5,000,000 carries a
stated interest rate of 7.33%. The loan requires interest only payments with the
principal balance maturing on November 1, 2003.

On November 13, 1996, the Partnership refinanced the mortgage encumbering
Patchen Place Apartments. The refinancing replaced indebtedness on Patchen
Place in the amount of approximately $2,802,000. The refinancing replaced the
existing indebtedness which carried an interest rate of 7% and had a maturity
date of November 2013. The new mortgage indebtedness of $3,000,000 carries a
stated interest rate of 7.33%. The loan requires interest only payments with
the principal balance maturing on November 1, 2003.

On November 13, 1996, the Partnership refinanced the mortgage encumbering South
Point Apartments. The refinancing replaced indebtedness on South Point in the
amount of approximately $4,165,000. The refinancing replaced the existing
indebtedness which carried an interest rate of 7.5% and had a maturity date of
September 2021. The new mortgage indebtedness of $4,600,000 carries a stated
interest rate of 7.33%. The loan requires interest only payments with the
principal balance maturing on November 1, 2003. As a result of the refinancing,
the Partnership recognized an extraordinary loss on extinguishment of debt of
approximately $43,000 due to pre-payment penalties.

On November 13, 1996, the Partnership refinanced the mortgage encumbering
Fairway View II Apartments. The refinancing replaced indebtedness on Fairway
View II in the amount of approximately $5,661,000. The refinancing replaced the
existing indebtedness which carried an interest rate of 7.5% and had a maturity
date of July 2020. The new mortgage indebtedness of $4,200,000 carries a stated
interest rate of 7.33%. The loan requires interest only payments with the
principal balance maturing on November 1, 2003. As a result of the refinancing,
the Partnership recognized an extraordinary loss on extinguishment of debt of
approximately $47,000 due to pre-payment penalties.

The Managing General Partner has extended to the Partnership a credit line of up
to $500,000. At the present time, the Partnership has no outstanding amounts
due under this line of credit. Based on present plans, management does not
anticipate the need to borrow in the near future. Other than cash and cash
equivalents, the line of credit is the Partnership's only unused source of
liquidity.

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 properties to adequately maintain the physical
assets and other operating needs of the Partnership. The mortgage indebtedness
of approximately $20,317,000 with stated interest rates of 7.33% to 8.56%, has
maturity dates ranging from February 1, 2001 to November 1, 2003. No
distributions were paid during the year ended December 31, 1996, and 1995. At
December 31, 1996, distributions of approximately $1,960,000 had been declared
and accrued. These distributions were paid to the partners in January 1997.
Approximately $1,940,000 ($32.06 per limited partnership unit) was distributed
to the limited partners and approximately $20,000 to the general partners. The
distributions originated from refinancing proceeds of Fairway View II, Patchen
Place, Northwoods I & II, and South Point, of approximately $1,561,000, and the
remaining from operations of approximately $399,000. Future cash distributions
will be dependent on the levels of net cash generated from operations,
refinancings, property sales and the availability of cash reserves.

ITEM 7. FINANCIAL STATEMENTS

NATIONAL PROPERTY INVESTORS 7

LIST OF FINANCIAL STATEMENTS

Independent Auditors' Report

Balance Sheet - December 31, 1996

Consolidated Statements of Operations - Years ended December 31, 1996 and
1995

Consolidated Statements of Changes in Partners' Capital (Deficit) - Years
ended December 31, 1996 and 1995

Consolidated Statements of Cash Flows - Years ended December 31, 1996 and
1995

Notes to Consolidated Financial Statements

Independent Auditors' Report

To the Partners
National Property Investors 7
Greenville, South Carolina

We have audited the accompanying balance sheet of National Property Investors 7,
(a limited partnership) (the "Partnership") as of December 31, 1996, and the
related consolidated statements of operations, partners' capital deficit and
cash flows for each of the two years in the period ended December 31,
1996. These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position National Property Investors 7 and
its subsidiaries as of December 31, 1996, and the results of its operations and
its cash flows for each of the two years in the period ended December 31, 1996,
in conformity with generally accepted accounting principles.

/s/ Imowitz Koenig & Co., LLP

New York, N.Y.
January 30, 1997

NATIONAL PROPERTY INVESTORS 7

BALANCE SHEET
(in thousands except unit data)

December 31, 1996

Assets
Cash and cash equivalents $ 5,471
Escrow deposits 624
Other assets 999
Investment properties (Notes B and E)
Land $ 3,738
Buildings and related
personal property 41,285
45,023
Less accumulated depreciation (22,372) 22,651

$29,745

Liabilities and Partners' Capital (Deficit)

Liabilities
Accounts payable and accrued expenses $ 473
Distribution Payable 1,960
Tenants' security deposits 149
Mortgage notes payable (Note B) 20,317

Partners' Capital (Deficit)
General partner $ (234)
Limited partners (60,517 units issued
and outstanding) 7,080 6,846

$29,745

See Accompanying Notes to Consolidated Financial Statements

NATIONAL PROPERTY INVESTORS 7

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands except unit data)

Years Ended December 31,
1996 1995

Revenues:
Rental income $6,938 $6,879
Other income 401 262
Total revenues 7,339 7,141

Expenses:
Operating 3,649 3,454
Interest 1,620 1,516
Depreciation 1,681 1,713
General and administrative 356 260
Total expense 7,306 6,943

Income before extraordinary item 33 198

Extraordinary item - loss on early
extinguishment of debt (Note B) (90) --

Net (loss) income (Note C) $ (57) $ 198

Net (loss) income allocated to
general partners (1%) $ (1) $ 2
Net (loss) income allocated to
limited partners (99%) (56) 196
Net (loss) income $ (57) $ 198

Net (loss) income per limited partnership unit:
Income before extraordinary item $ .54 $ 3.24
Extraordinary item - loss on early
extinguishment of debt (1.47) --
Net (loss) income $ (.93) $ 3.24

Distribution per unit of limited partnership unit: $32.05 $ --

See Accompanying Notes to Consolidated Financial Statements

NATIONAL PROPERTY INVESTORS 7

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

Limited
Partnership General Limited
Units Partners Partners Total

Original Capital contributions 60,517 $ 1 $30,259 $30,260

Partners' (deficit) capital at
December 31, 1994 60,517 $(215) $ 8,880 $ 8,665

Net income for the year ended
December 31,1995 2 196 198

Partners' (deficit) capital at
December 31, 1995 60,517 (213) 9,076 8,863

Net loss for the year ended
ended December 31, 1996 (1) (56) (57)

Distributions payable (20) (1,940) (1,960)

Partners' (deficit) capital at
December 31, 1996 60,517 $(234) $ 7,080 $ 6,846

See Accompanying Notes to Consolidated Financial Statements

NATIONAL PROPERTY INVESTORS 7

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Years Ended December 31,
1996 1995

Cash flows from operating activities:
Net (loss) income $ (57) $ 198
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 1,681 1,713
Amortization of loan costs 47 49
Extraordinary item - loss on early
extinguishment of debt 90 --
Change in accounts:
Escrow deposits (33) (167)
Other assets 211 (181)
Accounts payable and accrued expenses 253 8
Tenants' security deposit (23) (7)

Net cash provided by
operating activities 2,169 1,613

Cash flows from investing activities:
Property improvements and replacements (400) (125)
Restricted cash decrease 149 29

Net cash used in investing activities (251) (96)

Cash flows from financing activities:
Payments on mortgage notes payable (253) (312)
Repayment of mortgage notes payable (19,554) --
Proceeds from long-term borrowings 21,800 --
Prepayment penalties (90) --
Loan costs paid (627) (44)
Note principal repayments -- (50)
Payment of deferred interest payable -- (456)
Net cash provided by (used in)
financing activities 1,276 (862)

Net increase in cash and
cash equivalents 3,194 655

Cash and cash equivalents at beginning of year 2,277 1,622

Cash and cash equivalents at end of year $ 5,471 $2,277

Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,510 $1,910

Supplemental disclosure of non-cash financing activities
Accrued Distribution to Partners $ 1,960 $ --

See Accompanying Notes to Consolidated Financial Statements

NATIONAL PROPERTY INVESTORS 7

Notes to Consolidated Financial Statements

December 31, 1996

Note A - Organization and Significant Accounting Policies

Organization:

National Property Investors 7 (the "Partnership") is a California limited
partnership organized in October 1983, to acquire and operate residential
apartment complexes. The Partnership's General Partner is NPI Equity
Investments, Inc. ("NPI Equity" or the "Managing General Partner"). NPI Equity
is a wholly owned subsidiary of National Property Investors, Inc. ("NPI, Inc.").
On January 19, 1996, the stockholders of NPI, Inc. sold all of the issued and
outstanding stock of NPI, Inc. to an affiliate of Insignia Financial Group, Inc.
("Insignia"). The Partnership will terminate on December 31, 2008, or sooner,
in accordance with the terms of the Agreement of Limited Partnership. As of
December 31, 1996, the Partnership operates five residential apartment complexes
located throughout the United States.

Principles of Consolidation:

In November 1996, the Partnership refinanced the mortgages secured by the
Fairway View II, Patchen Place and Southpoint properties, which were purchased
on behalf of the Partnership by three lower tier partnerships, in which the
Partnership held a 99.99% interest as a general partner. In conjunction with
the refinancing of the properties, ownership of Fairway View II, Patchen Place
and Southpoint reverted to the Partnership and the three lower tier partnerships
were dissolved. The statements of operations for the years ended December 31,
1996 and December 31, 1995, and the statements of cash flows at December 31,
1995, are consolidated. All significant intercompany transactions and balances
have been eliminated.

Depreciation:

Depreciation is computed by the straight-line method over estimated useful lives
ranging from 10 to 27.50 years for buildings and improvements and seven years
for furnishings.

Cash and Cash Equivalents:

The Partnership considers all highly liquid investments with a maturity, when
purchased, of three months or less to be cash equivalents. At certain times,
the amount of cash deposited at a bank may exceed the limit on insured deposits.

Leases:

The Partnership generally leases apartment units for twelve-month terms or less.
The Partnership recognizes income as earned on its leases. The Managing General
Partner finds it necessary to offer rental concessions during particularly slow
months or in response to heavy competition from other similar complexes in the
area. During 1996, the properties offered various concessions including reduced
rent for the first month, variable move-in allowances, and reduced security
deposits. Concessions are charged to expense as incurred.

Tenant Security Deposits:

The Partnership requires security deposits from all apartment lessees for the
duration of the lease and are included in other assets. Deposits are refunded
when the tenant vacates the apartment if there has been no damage to the unit.

Loan Costs:

Loan costs of approximately $760,000 are included in "Other assets and deferred
costs" in the accompanying balance sheet and are being amortized on a straight-
line basis over the lives of the related loans. At December 31, 1996,
accumulated amortization is approximately $68,000. Amortization of loan costs
is included in interest expense.

Investment Properties:

In 1995 the Partnership adopted "FASB Statement No. 121," "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,"
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. The impairment loss is measured by comparing the fair value of
the asset to its carrying amount. The effect of adoption was not material.

Fair Value:

In 1995, the Partnership implemented "Statement of Financial Accounting
Standards No. 107," "Disclosure about Fair Value of Financial Instruments," as
amended by "SFAS No. 119," "Disclosures about Derivative Financial Instruments
and Fair Value of Financial Instruments," which requires disclosure of fair
value information about financial instruments for which it is practicable to
estimate that value. The carrying amount of the Partnership's cash and cash
equivalents approximates fair value due to short-term maturities. The
Partnership estimates the fair value of its fixed rate mortgage by discounted
cash flow analysis, based on estimated borrowing rates currently available to
the Partnership (Note B).

Use of Estimates:

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

Advertising:

The Partnership expenses the costs of advertising as incurred. Advertising
expense, included in operating expenses, was approximately $81,000 and $77,000
for the years ended December 31, 1996 and 1995, respectively.

Reclassifications:

Certain reclassifications have been made to the 1995 balances to conform to the
1996 presentation.

Note B - Mortgage Notes Payable

The principle terms of mortgage notes payable are as follows (dollar amounts in
thousands):

Principal Monthly Principal
Balance At Payment Stated Balance
December 31, Including Interest Maturity Due At
Property 1996 Interest Rate Date Maturity

Fairway View II $ 4,200 $ 26 7.33% 11/01/03 $ 4,200
The Pines 3,517 28 8.56% 02/01/01 3,357
Patchen Place 3,000 18 7.33% 11/01/03 3,000
Northwoods I & II 5,000 31 7.33% 11/01/03 5,000
South Point 4,600 28 7.33% 11/01/03 4,600

Total $20,317 $131 $20,157

On July 12, 1996, the Partnership refinanced the mortgage encumbering Northwoods
Apartments. The refinancing replaced indebtedness on Northwoods in the amount
of approximately $1,926,000. The debt refinanced carried a stated interest rate
of 9.4% and had a maturity date of May 1, 1996. An extension to July 1, 1996,
had been granted. The new mortgage indebtedness of $5,000,000 carried an
interest rate of 2.5% plus the LIBOR rate, and the maturity date had been
extended to November 15, 1996.

On November 13, 1996, the Partnership refinanced the mortgage encumbering
Northwoods Apartments. The refinancing replaced indebtedness on Northwoods in
the amount of $5,000,000. The refinancing replaced the existing indebtedness
which carried an interest rate of 2.5% plus the LIBOR rate and had a maturity
date of November 15, 1996. The new mortgage indebtedness of $5,000,000 carries a
stated interest rate of 7.33%. The loan requires interest-only payments with the
principal balance maturing on November 1, 2003.

On November 13, 1996, the Partnership refinanced the mortgage encumbering
Patchen Place Apartments. The refinancing replaced indebtedness on Patchen
Place in the amount of approximately $2,802,000. The refinancing replaced the
existing indebtedness which carried an interest rate of 7% and had a maturity
date of November, 2013. The new mortgage indebtedness of $3,000,000 carries a
stated interest rate of 7.33%. The loan requires interest-only payments with
the principal balance maturing on November 1, 2003.

On November 13, 1996, the Partnership refinanced the mortgage encumbering South
Point Apartments. The refinancing replaced indebtedness on South Point in the
amount of approximately $4,165,000. The refinancing replaced the existing
indebtedness which carried an interest rate of 7.5% and had a maturity date of
September, 2021. The new mortgage indebtedness of $4,600,000 carries a stated
interest rate of 7.33%. The loan requires interest-only payments with the
principal balance maturing on November 1, 2003. As a result of the refinancing,
the Partnership recognized an extraordinary loss on extinguishment of debt of
approximately $43,000 due to pre-payment penalties.

On November 13, 1996, the Partnership refinanced the mortgage encumbering
Fairway View II Apartments. The refinancing replaced indebtedness on Fairway
View II in the amount of approximately $5,661,000. The refinancing replaced the
existing indebtedness which carried an interest rate of 7.5% and had a maturity
date of July, 2020. The new mortgage indebtedness of $4,200,000 carries a
stated interest rate of 7.33%. The loan requires interest-only payments with
the principal balance maturing on November 1, 2003. As a result of the
refinancing, the Partnership recognized an extraordinary loss on extinguishment
of debt of approximately $47,000 due to pre-payment penalties.

The mortgage notes payable are non-recourse and are secured by pledge of the
respective apartment properties and by pledge of revenues from the respective
apartment properties. The refinanced notes cannot be prepaid prior to November
15, 1997, thereafter, they require prepayment penalties if repaid prior to
maturity and prohibit resale of the property subject to existing indebtedness.

The estimated fair values of the Partnership's aggregate debt is approximately
$20,317,000. This estimate is not necessarily indicative of the amounts the
Partnership may pay in actual market transactions.

Scheduled principal payments on the mortgage notes payable subsequent to
December 31, 1996, are as follows (in thousands):

1997 $ 34
1998 37
1999 41
2000 44
2001 3,361
Thereafter 16,800

$20,317

In November 1996, the Partnership refinanced the mortgages secured by the
Fairway View II, Patchen Place and Southpoint properties, which were purchased
on behalf of the Partnership by three lower tier partnerships, in which the
Partnership held a 99.99% interest as a general partner. In conjunction with
the refinancing of the properties, ownership of Fairway View II, Patchen Place
and Southpoint reverted to the Partnership and the three lower tier partnerships
were dissolved. The properties were refinanced with conventional debt no longer
subject to certain requirements of the Department of Housing and Urban
Development.

Note C - Income Taxes

Taxable income or loss of the Partnership is reported in the income tax returns
of its partners. Accordingly, no provision for income taxes is made in the
financial statements of the Partnership.

Differences between the net income (loss) as reported and Federal taxable income
result primarily from depreciation over different methods and lives and on
differing cost bases. The following is a reconciliation of reported net income
(loss) and Federal taxable income (in thousands except unit data):

1996 1995

Net (loss) income as reported $(57) $ 198
Add (deduct):
Depreciation differences (67) (26)
Miscellaneous 71 (19)

Federal taxable income $(53) $ 153

Federal taxable income
per limited partnership unit $.87 $2.50

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

1996

Net assets as reported $ 6,846
Land and buildings (1,514)
Accumulated depreciation (6,957)
Syndication and distribution costs 3,555
Prepaid rent 34
Other 16
Distributions accrued 1,960

Net assets - Federal tax basis $ 3,940

Note D - Transactions with Affiliated Parties

The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. Balances and other transactions with
affiliates of the Managing General Partner during the years ended December 31,
1996 and 1995 are (in thousands):

1996 1995

Property management fees $356 $345

Reimbursement for services of
affiliates 206 227

In addition to the items noted above, during the year ended December 31, 1996,
the Partnership paid approximately $175,000 to affiliates of the Managing
General Partner for expense reimbursements and brokerage fees incurred in
connection with the July 12, 1996, and November 13, 1996, refinancings of
Northwoods Apartments, Fairway View II Apartments, Patchen Place Apartments and
South Point Apartments. These charges have been capitalized as loan costs, and
will be amortized over the lives of the related loans.

Property management fees are included in operating expenses. Reimbursement for
services of affiliates are included in general and administrative expenses. For
services relating to the administration of the Partnership and operation of
Partnership properties, NPI Equity is entitled to receive payment for non-
accountable expenses up to a maximum of $150,000 per year, based upon the number
of Partnership units sold, subject to certain limitations. NPI Equity was
entitled to approximately $35,000 of reimbursement for the year ended December
31, 1996, and was not entitled to any reimbursement for 1995.

For managing the affairs of the Registrant, the Managing General Partner of the
Registrant is entitled to receive a partnership management fee. The fee is
equal to 4% of the Registrant's adjusted cash from operations, 50% of which is
subordinated to the limited partners' receipt of an 8% return on adjusted
invested capital and 50% of which is subordinated to the limited partners'
receipt of a 5% return on adjusted invested capital. The Managing General
Partner of the Registrant was not entitled to receive a fee for the years ended
December 31, 1996 and 1995.

The Managing General Partners is entitled to receive 1% of adjusted cash from
operations and an allocation of 1% of the net income or loss of the Partnership.
There were no distributions of adjusted cash from operations for the years ended
December 31, 1996 and 1995, however, a distribution to the general partner of
$20,000 was accrued at December 31, 1996. The distribution was paid in 1997.
Limited partners received a distribution of $1,940,000 which was accrued at
December 31, 1996, and paid in 1997. The distributions were primarily from
refinancing proceeds.

For the period January 19, 1996, to December 31, 1996, the Partnership insures
its properties under a master policy through an agency and insurer unaffiliated
with the General Partner. An affiliate of the General Partner acquired, in the
acquisition of a business, certain financial obligations from an insurance
agency which was later acquired by the agent who placed the current year's
master policy. The current agent assumed the financial obligations to the
affiliate of the General Partner, who receives payments on these obligations
from the agent. The amount of the Partnership's insurance premiums accruing to
the benefit of the affiliate of the General Partner by virtue of the agent's
obligations is not significant.

Included in operating expenses for the year ended December 31, 1995, are
insurance premiums of approximately $187,000 which were paid to the Managing
General Partner under a master insurance policy arranged for by the Managing
General Partner.

The Managing General Partner has extended to the Partnership a credit line of up
to $500,000. Loans under the Partnership Revolver will have a term of 365 days,
be unsecured and bear interest at the rate of 2% per annum in excess of the
prime rate announced from time to time by Chemical Bank, N.A. The maturity date
of such borrowing will be accelerated in the event of: (i) the removal of the
managing general partner (whether not For Cause); (ii) the sale or refinancing
of a property by the Partnership; or (iii) the liquidation of the Partnership.
At the present time, the Partnership has no outstanding amounts due under this
line of credit.

Note E - Investment Properties and Accumulated Depreciation
(dollar amounts in thousands)

Initial Cost
To Partnership
Cost
Buildings Capitalized
and Related (Removed)
Personal Subsequent to
Description Encumbrances Land Property Acquisition

Fairway View II $ 4,200 $1,086 $ 8,788 $ 474
The Pines 3,517 579 6,521 671
Patchen Place 3,000 706 6,409 1,286
Northwoods I & II 5,000 478 7,919 991
South Point 4,600 859 7,686 570

Total $20,317 $3,708 $37,323 $3,992

<TABLE>
<CAPTION>
Gross Amount at Which Carried
At December 31, 1996
Buildings
And Related
Personal Accumulated Year of Date Depreciable
Description Land Property Total Depreciation Construction Acquired Life-Years
<S> <C> <C> <C> <C> <C> <C> <C>
Fairway View II $1,094 $ 9,254 $10,348 $ 4,642 1981 11/84 5-27.5 yrs.
The Pines 584 7,187 7,771 4,152 1978 04/85 5-27.5 yrs.
Patchen Place 714 7,687 8,401 4,765 1971 07/85 5-27.5 yrs.
Northwoods I & II 483 8,905 9,388 4,616 1981 07/85 5-27.5 yrs.
South Point 863 8,252 9,115 4,197 1980 03/86 5-27.5 yrs.

Total $3,738 $41,285 $45,023 $22,372
</TABLE>

Reconciliation of Investment Properties and Accumulated Depreciation
(in thousands):

Years Ended December 31,
1996 1995

Balance at beginning of year $44,647 $44,522
Property Improvements 400 125
Disposals of property (24) --

Balance at end of year $45,023 $44,647

Years Ended December 31,
1996 1995

Accumulated Depreciation

Balance at beginning of year $20,701 $18,988
Additions charged to expense 1,681 1,713
Disposals of property (10) --

Balance at end of year $22,372 $20,701

The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1996 and 1995 is $43,512,000 and $43,111,000, respectively. The
accumulated depreciation taken for Federal income tax purposes at December 31,
1996 and 1995 is $29,329,000 and $27,581,000, respectively.

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

There were no disagreements with Imowitz Koenig & Co., LLP regarding the 1996 or
1995 audits of the Partnership's financial statements.

PART III

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

The Registrant has no officers or directors. The Managing General Partner is
NPI Equity Investments, Inc. NPI Equity Investments, Inc. is a wholly owned
affiliate of National Properties, Inc. ("NPI, Inc."), which is a wholly owned
affiliate of Insignia.

The names and ages of, as well as the positions and offices held by, the
executive officers and directors of NPI Equity Investments, Inc. are set forth
below. There are no family relationships between or among any officers or
directors.

Name Age Position

William H. Jarrard, Jr. 50 President and
Director

Ronald Uretta 40 Vice President and
Treasurer

John K. Lines, Esq. 37 Vice President and
Secretary

Kelley M. Buechler 39 Assistant Secretary

William H. Jarrard, Jr. has been Managing Director - Partnership Administration
of Insignia since January 1991. Mr. Jarrard served as Managing Director -
Partnership Administration and Asset Management from July 1994 until January
1996.

Ronald Uretta has been Insignia's Treasurer since January 1992. Since August
1996, he has also served as Chief Operating Officer. He also served as
Secretary from January 1992 to June 1994 and as Chief Financial Officer from
January 1992 to August 1996. Since September 1990, Mr. Uretta has also served as
the Chief Financial Officer and controller of MAG.

John K. Lines, Esq. has been Vice President and Secretary of the Managing
General Partner since January 1996, Insignia's General Counsel since June 1994,
and General Counsel and Secretary since July 1994. From May 1993 until June
1994, Mr. Lines was the Assistant General Counsel and Vice President of Ocwen
Financial Corporation, West Palm Beach, Florida. From October 1991 until May
1993, Mr. Lines was a Senior Attorney with Banc One Corporation, Columbus, Ohio.
From May 1984 until October 1991, Mr. Lines was an attorney with Squire Sanders
& Dempsey, Columbus, Ohio.

Kelley M. Buechler has been Assistant Secretary of the Managing General Partner
and Assistant Secretary of Insignia since 1991. During the five years prior to
joining Insignia in 1991, she served in similar capacities with U. S. Shelter.

Item 10. Executive Compensation

No direct form of compensation or remuneration was paid by the Partnership to
any officer or director of the Managing General Partner. The Partnership has no
plan, nor does the Partnership presently propose a plan, which will result in
any remuneration being paid to any officer or director upon termination of
employment. However, fees and other payments have been made to the Partnership's
Managing General Partner and its affiliates, as described in "Item 12. Certain
Relationships and Related Transactions".

Item 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information regarding limited partnership
units of the Registrant owned by each person who is known by the Registrant to
own beneficially or exercise voting or dispositive control over more than 5% of
the Registrant's limited partnership units.

Name and address of Amount and nature of
Beneficial Owner Beneficial Owner % of Class
Insignia Properties, LP (1) 25,065 41.4

(1) The business address of Insignia Properties, LP is One Insignia Financial
Plaza, Greenville, South Carolina.

No director or officer of the Managing General Partner owns any units. There
are no arrangements known to the Registrant, the operation of which may, at a
subsequent date, result in a change of control of the Registrant.

Item 12. Certain Relationships and Related Transactions

1996 1995

Property management fees $356 $345

Reimbursement for services of
affiliates 206 227

The Managing General Partner has extended to the Partnership a credit line of up
to $500,000. Loans under the Partnership Revolver will have a term of 365 days,
be unsecured and bear interest at the rate of 2% per annum in excess of the
prime rate announced from time to time by Chemical Bank, N.A. The maturity date
of such borrowing will be accelerated in the event of: (i) the removal of the
managing general partner (whether or not For Cause); (ii) the sale or
refinancing of a property by the Partnership; or (iii) the liquidation of the
Partnership. At the present time, the Partnership has no outstanding amounts
due under this line of credit.

As a result of its ownership of 25,065 limited partnership units, Insignia
Properties, LP could be in a position to significantly influence all voting
decisions with respect to the Registrant. Under the Partnership Agreement, unit
holders holding a majority of the Units are entitled to take action with respect
to a variety of matters. When voting on matters, Insignia Properties, LP would
in all likelihood vote the Units it acquired in a manner favorable to the
interest of the Managing General Partner because of its affiliation with the
Managing General Partner. However, DeForest II, from whom Insignia Properties,
LP acquired its Units, had agreed for the benefit of non-tendering unit holders,
that it would will vote its 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 units holders. Except for the foregoing, no other limitations are
imposed on Insignia Properties, LP's right to vote each Unit acquired.

Item 13. Exhibits and Reports on Form 8-K

(a) Exhibits:

The Exhibits listed on the accompanying Index to Exhibits are filed as
part of this Annual Report and incorporated in this Annual Report as set
forth in said Index.

(b) Reports on Form 8-K filed in the fourth quarter of fiscal year in 1996:

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized this 26th of March 1996.

NATIONAL PROPERTY INVESTORS 7

By: NPI EQUITY INVESTMENTS, INC.
General Partner

By: /s/William H. Jarrard, Jr.
William H. Jarrard, Jr.
President and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated.

Signature/Name Title Date

/s/ William H. Jarrard, Jr. President and March 7, 1997
William H. Jarrard, Jr. Director

/s/ Ronald Uretta Principal Financial March 7, 1997
Ronald Uretta Officer and Principal
Accounting Officer

NATIONAL PROPERTY INVESTORS 7

EXHIBIT INDEX

Exhibit Description of Exhibit
Number
(a) (2)

2.1 NPI, Inc. Stock Purchase Agreement, dated as of August 1995, incorporated
by reference to the Registrant'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 Exhibit 2.1 to 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 Exhibit 2.2 to Form 8-K filed by Insignia with the Securities
and Exchange Commission on September 1, 1995.

2.5 Master Indemnity Agreement dated as of August 17, 1995, incorporated by
reference to Exhibit 2.5 to Form 8-K filed by Insignia with the Securities
and Exchange Commission on September 1, 1995.

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

(b) Amendments to the Agreement of Limited Partnership, incorporated by
reference to Definitive Proxy Statement of the Registrant dated July 2,
1981.

(c) Amendments to the Agreement of Limited Partnership, incorporated by
reference to the Definitive Proxy Statement of the Registrant dated April
3, 1991.

(d) Amendments to the Agreement of Limited Partnership incorporated by
reference to the Statement Furnished In Connection With The Solicitation Of
Consents of the Registrant dated August 28, 1992.

10.1 (a) Purchase Agreement dated as of November 20, 1990, by and between the
Managing General Partner and the Prior Managing General Partner, IRI
Properties Capital Corp. and RPMC, incorporated by reference to Exhibit
10(a) to the Registrant's Current Report on Form 8-K dated November 20,
1990. (10)

(b) Amendments to Purchase Agreement dated as of November 20, 1990, by and
between the Managing General Partner and the Prior Managing General
Partner, IRI Properties Capital Corp. and RPMC, incorporated by reference
to Exhibit 10(a) to the Registrant's Current Report on Form 8-K dated June
21, 1991. (11)

(c) Property Management Agreement dated June 21, 1991, by and between the
Registrant and NPI Management incorporated by reference to Exhibit 10.4 to
the Registrant's Annual Report on Form 10-K for the year ended December 31,
1991. (10)

10.8 Multifamily Note and Addendum, dated January 4, 1994, made by the
Registrant for the benefit of Hanover Capital Mortgage Corporation, as
it pertains to The Pines Apartments (11)

10.9 Multifamily Deed of Trust, Assignment of Rents and Security Agreement
and Rider, dated January 4, 1994, between the Registrant and Hanover
Capital Mortgage Corporation, as it pertains to The Pines Apartments
(11)

10.11 Multifamily Note secured by a Mortgage or Deed of Trust dated November
1, 1996, between National Property Investors 7 and Lehman Brothers
Holdings, Inc., d/b/a Lehman Capital, a Division of Lehman Brothers
Holdings Inc., relating to Northwoods Apartments.

10.12 Multifamily Note secured by a Mortgage or Deed of Trust dated November
1, 1996, between National Property Investors 7 and Lehman Brothers
Holdings, Inc., d/b/a Lehman Capital, a Division of Lehman Brothers
Holdings Inc., relating to South Point Apartments.

10.13 Multifamily Note secured by a Mortgage or Deed of Trust dated November
1, 1996, between National Property Investors 7 and Lehman Brothers
Holdings, Inc., d/b/a Lehman Capital, a Division of Lehman Brothers
Holdings Inc., relating to Patchen Place Apartments.

10.14 Multifamily Note secured by a Mortgage or Deed of Trust dated November
1, 1996, between National Property Investors 7 and Lehman Brothers
Holdings, Inc., d/b/a Lehman Capital, a Division of Lehman Brothers
Holdings Inc., relating to Fairway View II Apartments.

27 Financial Data Schedule

(1) Incorporated by reference to Exhibit 2 to the Registrant's Current
Report on Form 8-K dated August 17, 1995.

(2) Incorporated by reference to Exhibit 2.1 to Form 8-K filed by Insignia
Financial Group, Inc. with the Securities and Exchange Commission on
September 1, 1995.

(3) Incorporated by reference to Exhibit 2.2 to Form 8-K filed by Insignia
Financial Group, Inc. with the Securities and Exchange Commission on
September 1, 1995.

(4) Incorporated by reference to Exhibit 2.4 to Form 8-K filed by Insignia
Financial Group, Inc. with the Securities and Exchange Commission on
September 1, 1995.

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

(6) Incorporated by reference to Exhibit A to the Prospectus of the
Registrant dated February 10, 1984 contained in the Registrant's
Registration Statement on Form S-11 (Reg. No. 2-87725).

(7) Incorporated by reference to the Definitive Proxy Statement of the
Registrant dated April 3, 1991.

(8) Incorporated by reference to the Statement Furnished In Connection
With The Solicitation Of Consents Of the Registrant dated August 28,
1992.

(9) Incorporated by reference to the Registrant's Current Report on Form
8-K dated November 15, 1984.

(10) Incorporated by reference to the Registrant's Annual Report on Form
10-K For the year ended December 31, 1991. Identical agreements have
been entered into for each of the Registrant's properties. The only
difference in the agreements is that the applicable property name has
been inserted into the agreement.

(11) Incorporated by reference to the Registrant's Annual Report on Form
10-K for the period ended December 13, 1993.

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from National
Property Investors 7 1996 Year-End 10-KSB and is qualified in its entirety by
reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000732439
<NAME> NATIONAL PROPERTY INVESTORS 7
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 5,471
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 45,023
<DEPRECIATION> 22,372
<TOTAL-ASSETS> 29,745
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 20,317
0
0
<COMMON> 0
<OTHER-SE> 6,846
<TOTAL-LIABILITY-AND-EQUITY> 29,745
<SALES> 0
<TOTAL-REVENUES> 7,339
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,306
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,620
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 33
<DISCONTINUED> 0
<EXTRAORDINARY> (90)
<CHANGES> 0
<NET-INCOME> (57)
<EPS-PRIMARY> (.93)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has unclassified balance sheet.
<F2>Multiplier is 1.
</FN>

</TABLE>

Exhibit 10.11

Loan No. 734079745
Northwood I & II

MULTIFAMILY NOTE
US $5,000,000
New York, New York
As of November 1, 1996

FOR VALUE RECEIVED, the undersigned promise to pay LEHMAN BROTHERS HOLDINGS
INC. d/b/a Lehman Capital, A Division of Lehman Brothers Holdings Inc., 3 World
Financial Center, New York, New York 10285, or order, the principal sum of FIVE
MILLION AND 00/100 Dollars, with interest on the unpaid principal balance from
the date of this Note, until paid, at the rate of 7.33 percent per annum.
Interest only shall be payable at 3 World Financial Center, New York, New York
10285, or such other place as the holder hereof may designate in writing, in
consecutive monthly installments of Thirty Thousand Five Hundred Forty-One and
67/100 Dollars ($30,541.67) on the first day of each month beginning December 1,
1996, until the entire indebtedness evidenced hereby is fully paid, except that
any remaining indebtedness, if not sooner paid, shall be due and payable on
November 1, 2003.

If any installment under this Note is not paid when due, the entire
principal amount outstanding hereunder and accrued interest thereon shall at
once become due and payable, at the option of the and holder hereof. The holder
hereof may exercise this option to accelerate during any default by the
undersigned regardless of any prior forbearance. In the event of any default in
the payment of this Note, and if the same is referred to an attorney at law for
collection or any action at law or in equity is brought with respect hereto, the
undersigned shall pay the holder hereof all expenses and costs, including, but
not limited to, attorney's fees.

Prepayments shall be applied against the outstanding principal balance of
this Note and shall not extend or postpone the due date of any subsequent
monthly installments or change the amount of such installments, unless the
holder hereof shall agree otherwise in writing. The holder hereof may require
that any partial prepayments be made on the date monthly installments are due
and be in the amount of that part of one or more monthly installments which
would be applicable to principal.

From time to time, without affecting the obligation of the undersigned or
the successors or assigns of the undersigned to pay the outstanding principal
balance of this Note and observe the covenants of the undersigned contained
herein, without affecting the guaranty of any person, corporation, partnership
or other entity for payment of the outstanding principal balance of this Note,
without giving notice to or obtaining the consent of the undersigned, the
successors or assigns of the undersigned or guarantors, and without liability on
the part of the holder hereof, the holder hereof may, at the option of the
holder hereof, extend the time for payment of said outstanding principal balance
or any part thereof, reduce the payments thereon, release anyone liable on any
of said outstanding principal balance, accept a renewal of this Note, modify the
terms and time of payment of said outstanding principal balance, join in any
extension or subordination agreement, release any security given herefor, take
or release other or additional security, agree in writing with the undersigned
to modify the rate of interest or period of amortization of this Note or change
the amount of the monthly installments payable hereunder.

Presentment, notice of dishonor, and protest are hereby waived by all
makers, sureties, guarantors and endorsers hereof. This Note shall be the joint
and several obligation of all makers, sureties, guarantors and endorsers, and
shall be binding upon them and their successors and assigns.

The indebtedness evidenced by this Note is secured by a Mortgage or Deed of
Trust dated as of the date hereof, and reference is made thereto for rights as
to acceleration of the indebtedness evidenced by this Note. This Note shall be
governed by the law of the jurisdiction in which the Property subject to the
Mortgage or Deed of Trust is located.

The undersigned shall pay any installment of interest due hereunder within
ten (10) calendar days after such installment of interest is due. The
undersigned shall pay any other installment due hereunder or due in accordance
with the terms of the Mortgage or Deed of Trust securing this Note, within
thirty (30) calendar days of the date such installment is due.

IN WITNESS WHEREOF, Borrower has executed this Note or has caused the same
to be executed by its representatives thereunto duly authorized.

BORROWER: NATIONAL PROPERTY INVESTORS 7, a California
limited partnership d/b/a National Property Investors 7,
Ltd. in Florida

WITNESSES:
By: NPI Equity Investments, Inc., a Florida
corporation, its general partner
/s/ Joe Lythli
Name: Joe Lythli
By: /s/ William H. Jarrard, Jr.
Name: William H. Jarrard, Jr.
/s/ Toni Malek Title: President
Name: Toni Malek
LENDER: LEHMAN BROTHERS HOLDINGS INC. D/B/A
LEHMAN CAPITAL, A DIVISION OF LEHMAN
BROTHERS HOLDINGS INC., a Delaware
corporation

WITNESSES: By: /s/ Larry J. Kravetz
Larry J. Kravetz
Authorized Signatory
/s/ Toni Malek
Name: Toni Malek

/s/ Paul A. Hughson
Name: Paul A. Hughson

PAY TO THE ORDER OF FEDERAL HOME LOAN
MORTGAGE CORPORATION WITHOUT RECOURSE.
This 1st day of November, 1996.

LEHMAN BROTHERS HOLDINGS INC. d/b/a
Lehman Capital, A Division of Lehman Brothers
Holdings Inc., a Delaware corporation

By: /s/ Larry J. Kravetz
Name: Larry J. Kravetz
Title: Authorized Signatory

Exhibit 10.12

Loan No. 734079737
South Point

MULTIFAMILY NOTE
US $4,600,000
New York, New York
As of November 1, 1996

FOR VALUE RECEIVED, the undersigned promise to pay LEHMAN BROTHERS HOLDINGS
INC. d/b/a Lehman Capital, A Division of Lehman Brothers Holdings Inc., 3 World
Financial Center, New York, New York 10285, or order, the principal sum of Four
Million Six Hundred Thousand and 00/100 Dollars, with interest on the unpaid
principal balance from the date of this Note, until paid, at the rate of 7.33
percent per annum. Interest only shall be payable at 3 World Financial Center,
New York, New York 10285, or such other place as the holder hereof may designate
in writing, in consecutive monthly installments of Twenty-Eight Thousand Ninety-
Eight and 33/100 Dollars (US $28,098.33) on the first day of each month
beginning December 1, 1996, until the entire indebtedness evidenced hereby is
fully paid, except that any remaining indebtedness, if not sooner paid, shall be
due and payable on November 1, 2003.

If any installment under this Note is not paid when due, the entire
principal amount outstanding hereunder and accrued interest thereon shall at
once become due and payable, at the option of the holder hereof. The holder
hereof may exercise this option to accelerate during any default by the
undersigned regardless of any prior forbearance. In the event of any default in
the payment of this Note, and if the same is referred to an attorney at law for
collection or any action at law or in equity is brought with respect hereto, the
undersigned shall pay the holder hereof all expenses and costs, including, but
not limited to, attorney's fees.

From time to time, without affecting the obligation of the undersigned or
the successors or assigns of the undersigned to pay the outstanding principal
balance of this Note and observe the covenants of the undersigned contained
herein, without affecting the guaranty of any person, corporation, partnership
or other entity for payment of the outstanding principal balance of this Note,
without giving notice to or obtaining the consent of the undersigned, the
successors or assigns of the undersigned or guarantors, and without liability on
the part of the holder hereof, the holder hereof may, at the option of the
holder hereof, extend the time for payment of said outstanding principal balance
or any part thereof, reduce the payments thereon, release anyone liable on any
of said outstanding principal balance, accept a renewal of this Note, modify the
terms and time of payment of said outstanding principal balance, join in any
extension or subordination agreement, release any security given herefor, take
or release other or additional security, and agree in writing with the
undersigned to modify the rate of interest or period of amortization of this
Note or change the amount of the monthly installments payable hereunder.

IN WITNESS WHEREOF, Borrower has executed this Note or has caused the same
to be executed by its representatives thereunto duly authorized.

NATIONAL PROPERTY INVESTORS 7, a California
limited partnership [SEAL]

[CORPORATE SEAL] By: NPI Equity Investments, Inc., a Florida
corporation, its general partner

ATTEST: By: /s/ William H. Jarrard, Jr.
Name: William H. Jarrard, Jr.
/s/ Kelley M. Buechler Title: President
Kelley M. Buechler
Assistant Secretary

PAY TO THE ORDER OF FEDERAL HOME LOAN
MORTGAGE CORPORATION WITHOUT RECOURSE.
This 1st day of November, 1996.

LEHMAN BROTHERS HOLDINGS INC. d/b/a
Lehman Capital, A Division of Lehman Brothers
Holdings Inc., a Delaware corporation

By: /s/ Paul A. Hughson
Name: Paul A. Hughson
Title: Authorized Signatory

Exhibit 10.13

Loan No. 734105819
Patchen Place

MULTIFAMILY NOTE
US $3,000,000
New York, New York
As of November 1, 1996

FOR VALUE RECEIVED, the undersigned promise to pay LEHMAN BROTHERS HOLDINGS
INC. d/b/a Lehman Capital, A Division of Lehman Brothers Holdings Inc., 3 World
Financial Center, New York, New York 10285, or order, the principal sum of THREE
MILLION AND 00/100 Dollars, with interest on the unpaid principal balance from
the date of this Note, until paid, at the rate of 7.33 percent per annum.
Interest only shall be payable at 3 World Financial Center, New York, New York
10285, or such other place as the holder hereof may designate in writing, in
consecutive monthly installments of Eighteen Thousand Three Hundred Twenty-Five
and 00/100 Dollars ($18,325.00) on the first day of each month beginning
December 1, 1996, until the entire indebtedness evidenced hereby is fully paid,
except that any remaining indebtedness, if not sooner paid, shall be due and
payable on November 1, 2003.

If any installment under this Note is not paid when due, the entire
principal amount outstanding hereunder and accrued interest thereon shall at
once become due and payable, at the option of the holder hereof. The holder
hereof may exercise this option to accelerate during any default by the
undersigned regardless of any prior forbearance. In the event of any default in
the payment of this Note, and if the same is referred to an attorney at law for
collection or any action at law or in equity is brought with respect hereto, the
undersigned shall pay the holder hereof all expenses and costs, including, but
not limited to, attorney's fees.

From time to time, without affecting the obligation of the undersigned or
the successors or assigns of the undersigned to pay the outstanding principal
balance of this Note and observe the covenants of the undersigned contained
herein, without affecting the guaranty of any person, corporation, partnership
or other entity for payment of the outstanding principal balance of this Note,
without giving notice to or obtaining the consent of the undersigned, the
successors or assigns of the undersigned or guarantors, and without liability on
the part of the holder hereof, the holder hereof may, at the option of the
holder hereof, extend the time for payment of said outstanding principal balance
or any part thereof, reduce the payments thereon, release anyone liable on any
of said outstanding principal balance, accept a renewal of this Note, modify the
terms and time of payment of said outstanding principal balance, join in any
extension or subordination agreement, release any security given herefor, take
or release other or additional security, and agree in writing with the
undersigned to modify the rate of interest or period of amortization of this
Note or change the amount of the monthly installments payable hereunder.

IN WITNESS WHEREOF, Borrower has executed this Note or has caused the same
to be executed by its representatives thereunto duly authorized.

NATIONAL PROPERTY INVESTORS 7, a California
limited partnership

By: NPI Equity Investments, Inc., a Florida
corporation, its general partner

By: /s/William H. Jarrard, Jr.
Name: William H. Jarrard, Jr.
Title: President

PAY TO THE ORDER OF FEDERAL HOME LOAN
MORTGAGE CORPORATION WITHOUT RECOURSE.
This 1st day of November, 1996.

LEHMAN BROTHERS HOLDINGS INC. d/b/a
Lehman Capital, A Division of Lehman Brothers
Holdings Inc., a Delaware corporation

By: /s/Larry J. Kravetz
Name: Larry J. Kravetz
Title: Authorized Signatory

Exhibit 10.14

Loan No. 734079729
Fairway View II

MULTIFAMILY NOTE
US $4,200,000
New York, New York
As of November 1, 1996

FOR VALUE RECEIVED, the undersigned promise to pay LEHMAN BROTHERS HOLDINGS
INC. d/b/a Lehman Capital, A Division of Lehman Brothers Holdings Inc., 3 World
Financial Center, New York, New York 10285, or order, the principal sum of Four
Million Two Hundred Thousand and 00/100 Dollars, with interest on the unpaid
principal balance from the date of this Note, until paid, at the rate of 7.33
percent per annum. Interest only shall be payable at 3 World Financial Center,
New York, New York 10285, or such other place as the holder hereof may designate
in writing, in consecutive monthly installments of Twenty-Five Thousand Six
Hundred Fifty-Five and 00/100 Dollars (US $25,655.00) on the first day of each
month beginning December 1, 1996, until the entire indebtedness evidenced hereby
is fully paid, except that any remaining indebtedness, if not sooner paid, shall
be due and payable on November 1, 2003.

If any installment under this Note is not paid when due, the entire
principal amount outstanding hereunder and accrued interest thereon shall at
once become due and payable, at the option of the holder hereof. The holder
hereof may exercise this option to accelerate during any default by the
undersigned regardless of any prior forbearance. In the event of any in the
payment of this Note, and if the same is referred to an attorney at law for
collection or any action at law or in equity is brought with respect hereto, the
undersigned shall pay the holder hereof all expenses and costs, including, but
not limited to, attorney's fees.

Prepayments shall be applied against the outstanding principal balance of
this Note and shall not extend or wazzu postpone the due date of subsequent
monthly installments or change the amount of such installments, unless the
holder hereof shall agree otherwise in writing. The holder hereof may require
that any partial prepayments be made on the date monthly installments are due
and be in the amount of that part of one or more monthly installments which
would be applicable to principal.

From time to time, without affecting the obligation of the undersigned or
the successors or assigns of the undersigned to pay the outstanding principal
balance of this Note and observe the covenants of the undersigned contained
herein, without affecting the guaranty of any person, corporationwazzu ,
partnership or other entity for payment of the outstanding principal balance of
this Note, without giving notice to or obtaining the consent of the undersigned,
the successors or assigns of the undersigned or , and without liability on the
part of the holder hereof, the holder hereof may, at the option of the holder
hereof, extend the time for payment of said outstanding principal balance or any
default part thereof, reduce the payments thereon, release anyone liable on any
of said outstanding principal balance, accept a renewal of this Note, modify the
terms and time of payment of said outstanding principal balance, join in any
extension or subordination agreement, release any security given herefor, take
or release other or additional security, and agree in writing with the
undersigned to modify the rate of interest or period of amortization of this
Note or change the amount of the monthly installments payable hereunder.

The indebtedness evidenced by this Note is secured by a Mortgage guarantors
or Deed of Trust dated as of the date hereof, and reference is made thereto for
rights as to acceleration of the indebtedness evidenced by this Note. This Note
shall be governed by the law of the jurisdiction in which the Property subject
to the Mortgage or Deed of Trust is located.

IN WITNESS WHEREOF, Borrower has executed this Note or has caused the same
to be executed by its representatives thereunto duly authorized.

NATIONAL PROPERTY INVESTORS 7, a California
limited partnership

By: NPI Equity Investments, Inc., a Florida
corporation, its general partner

By: /s/ William H. Jarrard, Jr.
Name: William H. Jarrard, Jr.
Title: President

PAY TO THE ORDER OF FEDERAL HOME LOAN
MORTGAGE CORPORATION WITHOUT RECOURSE.
This 1st day of November, 1996.

LEHMAN BROTHERS HOLDINGS INC. d/b/a
Lehman Capital, A Division of Lehman Brothers
Holdings Inc., a Delaware corporation

By: /s/ Larry J. Kravetz
Name: Larry J. Kravetz
Title: Authorized Signatory