SHELTER PROPERTIES VII LTD PARTNERSHIP
10QSB, 1997-05-14
REAL ESTATE
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            FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                        QUARTERLY OR TRANSITIONAL REPORT


                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-QSB

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


                 For the quarterly period ended March 31, 1997

                                       or

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


               For the transition period from.........to.........

                         Commission file number 0-14369


                   SHELTER PROPERTIES VII LIMITED PARTNERSHIP
       (Exact name of small business issuer as specified in its charter)


         South Carolina                                  57-0784852
(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)                  (Zip Code)

                    Issuer's telephone number (864) 239-1000

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


                           PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

a)                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                           CONSOLIDATED BALANCE SHEET
                        (in thousands, except unit data)
                                  (Unaudited)

                                 March 31, 1997


Assets
  Cash and cash equivalents:
    Unrestricted                                              $ 1,181
    Restricted--tenant security deposits                           69
  Accounts receivable                                              63
  Escrows for taxes                                                64
  Restricted escrows                                               84
  Other assets                                                    214
  Investment properties:
    Land                                       $ 1,774
    Buildings and related personal property     18,873
                                                20,647
    Less accumulated depreciation               (9,324)        11,323

                                                              $12,998

Liabilities and Partners' Capital (Deficit)

Liabilities
  Accounts payable                                            $    46
  Tenant security deposits                                         69
  Accrued taxes                                                    77
  Other liabilities                                                81
  Mortgage notes payable                                       11,245

Partners' Capital (Deficit)
  General partners                             $  (134)
  Limited partners (17,343 units
    issued and outstanding)                      1,614          1,480

                                                              $12,998

          See Accompanying Notes to Consolidated Financial Statements

b)                SHELTER PROPERTIES VII LIMITED PARTNERSHIP

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


                                                         Three Months Ended
                                                              March 31,
                                                        1997           1996
Revenues:
 Rental income                                         $ 865          $ 851
 Interest income                                          11             10
 Other income                                             29             27
 Casualty gain                                            52             --
   Total revenues                                        957            888

Expenses:
 Operating                                               242            242
 General and administrative                               18             38
 Maintenance                                             100             82
 Depreciation                                            190            182
 Interest                                                227            230
 Property taxes                                           44             44
   Total expenses                                        821            818

Net income                                             $ 136          $  70

Net income allocated to general partners (1%)          $   1          $   1
Net income allocated to limited partners (99%)           135             69

                                                       $ 136          $  70

Net income per limited partnership unit                $7.76          $3.98

          See Accompanying Notes to Consolidated Financial Statements


c)                 SHELTER PROPERTIES VII LIMITED PARTNERSHIP

        CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
                    (amounts in thousands, except unit data)
                                  (Unaudited)


                                  Limited
                                Partnership  General   Limited
                                   Units    Partners   Partners    Total

Original capital contributions    17,343      $   2     $17,343   $17,345

Partners' capital (deficit)
  at December 31, 1996            17,343      $(135)    $ 1,479   $ 1,344

Net income for the three
  months ended March 31, 1997                     1         135       136

Partners' capital (deficit)
  at March 31, 1997               17,343      $(134)    $ 1,614   $ 1,480

          See Accompanying Notes to Consolidated Financial Statements


d)                 SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                  (Unaudited)


                                                        Three Months Ended
                                                            March 31,
                                                         1997        1996
Cash flows from operating activities:
  Net income                                          $  136        $  70
  Adjustments to reconcile net income to net
   cash provided by operating activities:
    Depreciation                                         190          182
    Amortization of discounts and loan costs              11           11
    Change in accounts:
      Restricted cash                                     10           (1)
      Accounts receivable                                 (3)           2
      Escrows for taxes                                   96           94
      Other assets                                         4            5
      Accounts payable                                     8           (8)
      Tenant security deposit liabilities                (11)           1
      Accrued taxes                                      (98)         (96)
      Other liabilities                                  (79)          10

         Net cash provided by operating activities       264          270

Cash flows from investing activities:
  Property improvements and replacements                 (93)         (33)
  Deposits to restricted escrows                          (1)          (1)
  Receipts from restricted escrows                        --            7

         Net cash used in investing activities           (94)         (27)

Cash flows from financing activities:
  Payments on mortgage notes payable                     (44)         (41)

         Net cash used in financing activities           (44)         (41)

Net increase in cash                                     126          202

Cash and cash equivalents at beginning of period       1,055          680
Cash and cash equivalents at end of period            $1,181        $ 882

Supplemental disclosure of cash flow information:
  Cash paid for interest                              $  217        $ 220

          See Accompanying Notes to Consolidated Financial Statements

e)                  SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Article 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 Shelter Realty VII Corporation (the "Corporate General
Partner"), all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included.  Operating results for the
three month period ended March 31, 1997, are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 1997.  For
further information, refer to the financial statements and footnotes thereto
included in the Partnership's annual report on Form 10-KSB for the year ended
December 31, 1996.

Certain reclassifications have been made to the 1996 information to conform to
the 1997 presentation.

NOTE B - RECONCILIATION OF CASH FLOWS

The following is a reconciliation of the subtotal on the accompanying statements
of cash flows captioned "net cash provided by operating activities" to "net cash
used in operations," as defined in the partnership agreement.  However, "net
cash used in operations" should not be considered an alternative to net income
as an indicator of the Partnership's operating performance or to cash flows as a
measure of liquidity.
                                                     Three Months Ended
                                                          March 31,
                                                        (in thousands)
                                                       1997        1996

Net cash provided by operating activities            $ 264        $ 270
  Payments on mortgage notes payable                   (44)         (41)
  Property improvements and replacements               (93)         (33)
  Change in restricted escrows, net                     (1)           6
  Changes in reserves for net operating
   liabilities                                          73           (7)
  Additional reserves                                 (200)        (200)

      Net cash used in operations                    $  (1)       $  (5)

At March 31, 1997 and 1996, the Corporate General Partner believed it to be in
the best interest of the Partnership to reserve an addition $200,000 to fund
maintenance items and capital improvements at the various properties.

NOTE C - TRANSACTIONS WITH AFFILIATED PARTIES

The Partnership has no employees and is dependent on the Corporate 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
Insignia Financial Group, Inc. and affiliates in 1997 and 1996 are as follows
(in thousands):


                                                     Three Months Ended
                                                          March 31,
                                                      1997        1996

Property management fees                            $ 46          $ 44
Reimbursement for services of affiliates              36            26

Included in "Reimbursement for services of affiliates" for 1997 is approximately
$20,000 of reimbursements for construction oversight costs.

The Partnership insures its properties under a master policy through an agency
and insurer unaffiliated with the Corporate General Partner.  An affiliate of
the Corporate 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 Corporate 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 Corporate General Partner by virtue of the agent's obligations is not
significant.

NOTE D - CASUALTY GAIN

During the quarter ended March 31, 1997, the Partnership recorded a casualty
gain resulting from hail damage at Governor's Park Apartments.  The damage
resulted in a gain of approximately $52,000 arising from proceeds receivable
from the Partnership's insurance carrier which exceeded the basis of the
property which was replaced.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The Partnership's investment properties consists of two apartment complexes.
The following table sets forth the average occupancy of the properties for the
three months ended March 31, 1997 and 1996:


                                                        Average
                                                       Occupancy
Property                                            1997        1996
Hickory Ridge Apartments
 Memphis, Tennessee                                  88%         97%

Governor's Park Apartments
 Ft. Collins, Colorado                               94%         92%

The Corporate General Partner attributes the decrease in occupancy at Hickory
Ridge to soft market conditions due to new construction and a lack of market
ready units and models for new renters.

The partnership reported net income for the three months ended March 31, 1997,
of approximately $136,000 as compared to net income of approximately $70,000 for
the corresponding period of 1996.  The increase in net income is attributed to
increases in rental income, casualty gain and a decrease in general and
administrative as well as operating expenses.  Rental income increased at
Governor's Park due to rental rate increases over the past year and an increase
in occupancy.  During the quarter ended March 31, 1997, the Partnership recorded
a casualty gain resulting from hail damage at Governor's Park Apartments.  The
damage resulted in a gain of approximately $52,000 arising from proceeds
receivable from the Partnership's insurance carrier which exceeded the basis of
the property which was to be replaced.  Operating expenses decreased in 1997 due
to decreases in advertising, administrative, and insurance expenses.

Partially offsetting these items was an increase in maintenance expense.
Maintenance expense increased due to repairs necessary for water damage that
occurred at Governor's Park.  Included in maintenance expense for the period
ended March 31, 1997, is approximately $21,000 of major repairs and maintenance
comprised primarily of exterior building and construction oversight costs.

As part of the ongoing business plan of the Partnership, the Corporate 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 increases in
expense.  As part of this plan, the Corporate 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 Corporate General Partner will be able to sustain
such a plan.

At March 31, 1997, the Partnership had unrestricted cash of approximately
$1,181,000 compared to approximately $882,000 for the corresponding period of
1996.  Net cash provided by operating activities decreased due to decreases in
accrued taxes and other liabilities which were partially offset by a decrease in
restricted cash.  Net cash used in investing activities increased primarily due
to an increase in property improvements and replacements in 1997 as compared to
1996.  Net cash used in financing activities in 1997 was comparable to 1996.

The Corporate General Partner budgeted $210,000.00 in 1997 for vinyl siding and
other exterior renovations for the remaining buildings at Hickory Ridge
Apartments, which are to be funded from operations and Partnership reserves. The
partnership has no other material capital programs scheduled to be performed in
1997, although certain routine capital expenditures and maintenance expenses
will be incurred only if cash is available from operations or is received from
the capital reserve account.

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.  Such assets are currently
thought to be sufficient for any near-term needs of the Partnership.  The
mortgage indebtedness of approximately $11,245,000, net of discount, is
amortized over varying periods with required balloon payments ranging from March
1, 2001, to October 15, 2003, at which time the properties will either be
refinanced or sold.  Future cash distributions will depend on the levels of net
cash generated from operations, property sales, and the availability of cash
reserves.  No cash distributions were recorded in 1996 or the three months ended
March 31, 1997.



                          PART II - OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

       a)    Exhibits:

             Exhibit 27, Financial Data Schedule, is filed as part of this
             report.

       b)    Reports on Form 8-K:

             None filed during the quarter ended March 31, 1997.


                                   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.



                             SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                             By: Shelter Realty VII Corporation
                                 Corporate General Partner


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


                             By:/s/ Ronald Uretta      
                                Ronald Uretta
                                Treasurer
                                (Principal Financial Officer
                                and Principal Accounting Officer)



                             Date:  May 14, 1997




<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Shelter
Properties VII Limited Partnership 1997 First Quarter 10-QSB and is qualified in
its entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000758009
<NAME> SHELTER PROPERTIES VII LIMITED PARTNERSHIP
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   3-MOS
<FISCAL-YEAR-END>                          DEC-31-1997
<PERIOD-END>                               MAR-31-1997
<CASH>                                           1,181
<SECURITIES>                                         0
<RECEIVABLES>                                       63
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                                     0<F1>
<PP&E>                                          20,647
<DEPRECIATION>                                 (9,324)
<TOTAL-ASSETS>                                  12,998
<CURRENT-LIABILITIES>                                0<F1>
<BONDS>                                         11,245
                                0
                                          0
<COMMON>                                             0
<OTHER-SE>                                       1,480
<TOTAL-LIABILITY-AND-EQUITY>                    12,998
<SALES>                                              0
<TOTAL-REVENUES>                                   957
<CGS>                                                0
<TOTAL-COSTS>                                        0
<OTHER-EXPENSES>                                   821
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                 227
<INCOME-PRETAX>                                      0
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                                  0
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                       136
<EPS-PRIMARY>                                     7.76<F2>
<EPS-DILUTED>                                        0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
        

</TABLE>


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