SHELTER PROPERTIES VII LTD PARTNERSHIP
10QSB, 1998-05-01
REAL ESTATE
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    FORM 10-QSB--QUARTERLY OR TRANSITIONAL 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, 1998

                                       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)

                                 (864) 239-1000
                           Issuer's telephone number

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the 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, 1998


Assets
  Cash and cash equivalents                                   $   780
  Receivables and deposits                                        214
  Restricted escrows                                               88
  Other assets                                                    180
  Investment properties:
    Land                                       $ 1,774
    Buildings and related personal property     19,746
                                                21,520
    Less accumulated depreciation              (10,113)
                                                               11,407

                                                              $12,669

Liabilities and Partners' Capital (Deficit)
Liabilities
  Accounts payable                                            $    32
  Tenant security deposit liabilities                              77
  Accrued property taxes                                           99
  Other liabilities                                                93
  Mortgage notes payable                                       11,071

Partners' Capital (Deficit)
  General partners                             $  (133)
  Limited partners (17,343 units
    issued and outstanding)                      1,430
                                                                1,297

                                                              $12,669

          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,
                                                       1998             1997
Revenues:
 Rental income                                         $ 927            $ 860
 Other income                                             50               40
 Casualty gain                                            --               52
   Total revenues                                        977              952

Expenses:
 Operating                                               314              337
 General and administrative                               36               18
 Depreciation                                            207              190
 Interest                                                224              227
 Property taxes                                           62               44
   Total expenses                                        843              816

 Net income                                            $ 134            $ 136


Net income allocated to general partners (1%)          $   1            $   1
Net income allocated to limited partners (99%)           133              135

                                                       $ 134            $ 136

Net income per limited partnership unit                $7.67            $7.76

          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)

<TABLE>
<CAPTION>
                                      Limited
                                    Partnership    General       Limited
                                       Units       Partners      Partners       Total
<S>                                  <C>          <C>          <C>            <C>
Original capital contributions        17,343       $   2        $17,343        $17,345

Partners' capital (deficit)
  at December 31, 1997                17,343       $(134)       $ 1,297        $ 1,163

Net income for the three months
  ended March 31, 1998                    --           1            133            134

Partners' capital (deficit)
  at March 31, 1998                   17,343       $(133)       $ 1,430        $ 1,297
<FN>
          See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>

d)                 SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                  (Unaudited)
    
                                                             Three Months Ended
                                                                 March 31,
                                                            1998          1997
Cash flows from operating activities:
  Net income                                              $  134        $  136
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation                                             207           190
    Amortization of discounts and loan costs                  11            11
    Casualty gain                                             --           (52)
    Change in accounts:
      Receivables and deposits                                84           103
      Other assets                                            15             4
      Accounts payable                                       (65)            8
      Tenant security deposit liabilities                     (1)          (11)
      Accrued property taxes                                 (85)          (98)
      Other liabilities                                      (11)          (79)

         Net cash provided by operating activities           289           212

Cash flows from investing activities:
  Property improvements and replacements                     (73)          (93)
  Insurance proceeds received                                 --            52
  Deposits to restricted escrows                              (1)           (1)

         Net cash used in investing activities               (74)          (42)

Cash flows from financing activities:
  Payments on mortgage notes payable                         (47)          (44)

         Net cash used in financing activities               (47)          (44)

Net increase in cash and cash equivalents                    168           126

Cash and cash equivalents at beginning of period             612         1,055
Cash and cash equivalents at end of period                $  780        $1,181

Supplemental disclosure of cash flow information:
  Cash paid for interest                                  $  213        $  217

           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 consolidated financial statements of Shelter
Properties VII (the "Partnership") 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, 1998, are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 1998.  For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Partnership's annual report on Form 10-KSB for
the year ended December 31, 1997.

Certain reclassifications have been made to the 1997 information to conform to
the 1998 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)
                                                      1998        1997

Net cash provided by operating activities            $ 289      $ 212
  Payments on mortgage notes payable                   (47)       (44)
  Property improvements and replacements               (73)       (93)
  Change in restricted escrows, net                     (1)        (1)
  Changes in reserves for net operating
   liabilities                                          63         73
  Additional reserves                                 (231)      (148)

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

At March 31, 1998 and 1997, the Corporate General Partner believed it to be in
the best interest of the Partnership to reserve an addition $231,000 and
$148,000, respectively 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 Corporate General Partner is wholly-owned by
Insignia Properties Trust ("IPT"), an affiliate of Insignia Financial Group,
Inc. ("Insignia").  The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following transactions with
Insignia and its affiliates were incurred in 1998 and 1997:

<TABLE>
<CAPTION>
                                                      Three Months Ended March 31,
                                                              (in thousands)
                                                          1998             1997
<S>                                                      <C>              <C>
Property management fees (included in operating           $ 47             $46
 expenses)
Reimbursement for services of affiliates
 (included in general and administrative
 expenses and investment properties) (1)                    23              36

(1)  Included in "Reimbursements for Services of Affiliates" for 1997 is 
     approximately $20,000, in reimbursements for construction oversight costs.

For the period of January 1, 1997 to August 31, 1997, the Partnership insured
its properties under a master policy through an agency affiliated with the
Corporate General Partner with an 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 master policy.  The
agent assumed the financial obligations to the affiliate of the Corporate
General Partner, which receives payment 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.

During December 1997, Insignia affiliates (the "Purchaser") commenced tender
offers for limited partnership interests in ten real estate limited partnerships
(including the Partnership) in which various Insignia affiliates act as general
partner. The Purchaser offered to purchase up to 7,000 of the outstanding units
of limited partnership interest in the Partnership at $350 per Unit, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated December 17, 1997 (the "Offer to Purchase") and the
related Assignment of Partnership Interest attached as Exhibits (a)(1) and
(a)(2), respectively, to the Tender Offer Statement on Schedule 14D-1 originally
filed with the Securities and Exchange Commission on December 17, 1997. Because
of the existing and potential future conflicts of interest (described in the
Partnership's Statements on Schedule 14D-9 filed with the Securities and
Exchange Commission), neither the Partnership nor the Corporate General Partner
expressed any opinion as to the Offer to Purchase and made no recommendation as
to whether unit holders should tender their units in response to the Offer to
Purchase. In addition, because of these conflicts of interest, including as a
result of the Purchaser's affiliation with various Insignia affiliates that 
provide property management services to the Partnership's properties, the manner
in which the Purchaser votes its limited partner interests in the Partnership 
may not always be consistent with the best interests of the other limited 
partners.  During February 1998, the tender offers were completed and Insignia 
Properties, L.P., an affiliate of Insignia, tendered 2,180 units of limited 
partnership interest in the Partnership.

On March 17, 1998, Insignia entered into an agreement to merge its national
residential property management operations, and its controlling interest in IPT,
with Apartment Investment and Management Company ("AIMCO"), a publicly traded
real estate investment trust.  The closing, which is anticipated to happen in
the third quarter of 1998, is subject to customary conditions, including
government approvals and the approval of Insignia's shareholders.  If the
closing occurs, AIMCO will then control the General Partner of the Partnership.

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, 1998 and 1997:


                                                      Average
                                                     Occupancy
Property                                           1998      1997

Hickory Ridge Apartments
 Memphis, Tennessee                                 93%       88%

Governor's Park Apartments
 Ft. Collins, Colorado                              97%       94%

Results of Operations

The Corporate General Partner attributes the increase in occupancy at Hickory
Ridge to increased curb appeal as a result of the completion of an exterior
building improvement project in 1997 in addition to an aggressive marketing and
concession program which was utilized in the first quarter to retain residents
through the winter months.  The increase in occupancy at Governor's Park is
attributed to roof repairs which were completed at the property during 1997
which has improved the appeal of this property.

The Partnership reported net income of $134,000 for the three months ended March
31, 1998 as compared to net income of approximately $136,000 for the three
months ended March 31, 1997.  The decrease in net income is attributable to
increases in general and administrative expenses, depreciation, and property
taxes and the casualty gain which was recorded during the first quarter of 1997.
General and administrative expenses increased due to increases in audit fees and
partnership administration cost reimbursements.  Depreciation expense increased
during the three months ended March 31, 1998 compared to the corresponding
period in 1997 due to the purchase of approximately $996,000 of property
improvements and replacements during the year ended 1997. Property taxes
increased due to an increase in the assessed value of the Hickory Ridge
Apartments for 1998.  The casualty gain resulted from the proceeds receivable
from the Partnership's insurance carrier which exceeded the basis of the
property which was replaced for the effects of hail damage at Governor's Park
Apartments during 1997.

The decrease in net income was partially offset by an increase in rental income
and a decrease in operating expenses.  Rental income increased as  a result of
the increases in occupancy at both properties as discussed above.  Rental income
also increased due to an increase in rental rates at both investment properties.
Operating expenses decreased as a result of the completion of water damage
repairs at Governor's Park during 1997.

Included in operating expenses for the three months ended March 31, 1998 was
approximately $8,000 of major repairs and maintenance comprised of parking lot
and gutter repairs and window coverings.  Included in operating expenses for the
three months ended March 31, 1997 was approximately $21,000 of major repairs and
maintenance comprised of exterior building improvements 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.

Liquidity and Capital Resources

At March 31, 1998, the Partnership had cash and cash equivalents of
approximately $780,000 compared to approximately $1,181,000 for the
corresponding period of 1997. The net increase in cash and cash equivalents for
the three months ended March 31, 1998 and 1997 is $168,000 and $126,000,
respectively.  Net cash provided by operating activities increased due to an
increase in other liabilities and accrued property taxes. These increases were
partially offset by the decrease in accounts payable all of which are
attributable to the timing of payments to creditors.  Net cash used in investing
activities increased due to the absence of any insurance proceeds in 1998.  Net
cash used in financing activities in 1998 was comparable to 1997.

The Corporate General Partner has budgeted $155,000 in 1998 for parking area
repair and overlay and roof repairs at Hickory Ridge Apartments, which are to be
funded from operations and Partnership reserves.  This work has not begun as of
March 31, 1998. The Partnership has no other material capital programs scheduled
to be performed in 1998, 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 $11,071,000, 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 for the three months ended
March 31, 1998 and March 31, 1997, respectively.

Year 2000

The Partnership is dependent upon the Corporate General Partner and Insignia for
management and administrative services.  Insignia has completed an assessment
and will have to modify or replace portions of its software so that its computer
systems will function properly with respect to dates in the year 2000 and
thereafter (the "Year 2000 Issue").  The project is estimated to be completed
not later than December 31, 1998, which is prior to any anticipated impact on
its operating systems.  The Corporate General Partner believes that with
modifications to existing software and conversions to new software, the Year
2000 Issue will not pose significant operational problems for its computer
systems. However, if such modifications and conversions are not made, or are not
completed timely, the Year 2000 Issue could have a material impact on the
operations of the Partnership.

Other

Certain items discussed in this quarterly report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Reform Act") and such may involve known and unknown risks,
uncertainties and other factors which   may cause the actual results,
performance or achievements of the Partnership to be materially different from
any future results, performance or achievements expressed or implied by such
forward-looking statements.  Such forward-looking statements speak only as of
the date of this quarterly report.  The Partnership expressly disclaims any
obligation or undertaking to release publicly any updates of revisions to any
forward-looking statements contained herein to reflect any change in the
Partnership's expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.


                          PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled ROSALIE NUANES, ET AL. V. INSIGNIA
FINANCIAL GROUP, INC., ET AL. in Superior Court of the State of California for
the County of San Mateo.  The plaintiffs named as defendants, among others, the
Partnership, the Corporate General Partner and several of their affiliated
partnerships and corporate entities.  The complaint purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia and its affiliates of
interests in certain general partner entities, past tender offers by Insignia
affiliates to acquire limited partnership units, the management of partnerships
by Insignia affiliates as well as a recently announced agreement between
Insignia and Apartment Investment and Management Company.  The complaint seeks
monetary damages and equitable relief,  including judicial dissolution of the
Partnership.  The Corporate General Partner was only recently served with the
complaint which it believes to be without merit, and intends to vigorously
defend the action.

In April 1998, a limited partner of the Partnership commenced an action in the
Circuit Court for Jackson County, Missouri entitled BOND PURCHASE LLC V. SHELTER
REALTY PROPERTIES VII, L.P. [sic], ET AL.  The complaint claims that the
Partnership and an affiliate of the Corporate General Partner breached certain
contractual and fiduciary duties allegedly owed to the claimant and seeks
damages and injunctive relief.  The Corporate General Partner believes the
claims to be without merit and intends to vigorously defend the claims.

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, 1998.

                                   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
                                 Vice President and Treasurer


                             Date: May 1, 1998



</TABLE>

<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from 
Shelter Properties VII Limited Partnership 1998 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-31-1998
<PERIOD-END>                               MAR-31-1998   
<CASH>                                             780
<SECURITIES>                                         0
<RECEIVABLES>                                      214
<ALLOWANCES>                                         0
<INVENTORY>                                          0
<CURRENT-ASSETS>                                     0<F1>
<PP&E>                                          21,520
<DEPRECIATION>                                (10,113)   
<TOTAL-ASSETS>                                  12,669   
<CURRENT-LIABILITIES>                                0<F1>
<BONDS>                                         11,071     
                                0     
                                          0  
<COMMON>                                             0
<OTHER-SE>                                       1,297    
<TOTAL-LIABILITY-AND-EQUITY>                    12,669    
<SALES>                                              0
<TOTAL-REVENUES>                                   977    
<CGS>                                                0
<TOTAL-COSTS>                                        0
<OTHER-EXPENSES>                                   843    
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                                 224    
<INCOME-PRETAX>                                      0
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                                  0
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                       134     
<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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