10-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K/A

(Amendment No. 1)

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2013

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT OF 1934

 For the transition period from _________ to __________

Commission file number 0-53962

Resource Real Estate Investors 7, L.P.

(Exact name of registrant as specified in its charter)

Delaware	26-2726308
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

One Crescent Drive, Suite 203, Navy Yard Corporate Center, Philadelphia, PA  19112

(Address of principal executive offices) (Zip code)

(215) 231-7050

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Limited Partnership Units

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

Indicate by check mark whether the registrant (1) has 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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o		Accelerated filer	o
Non-accelerated filer	o	(Do not check if a smaller reporting company)	Smaller reporting company	þ

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

There is no public market for the Registrant' securities.

Documents Incorporated by Reference: None

ANNUAL REPORT ON FORM 10-K/A

For the year ended December 31, 2013

EXPLANATORY NOTE

We are filing this Amendment No. 1 on Form 10-K/A (this “Amendment”) to our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, as filed with the Securities and Exchange Commission on March 26, 2014 (the “Form 10-K”), to amend the opinion date in Part II, Item 8 of the Form 10-K for a typographical error.  In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications of our Chief Executive Officer and Chief Financial Officer have been included as exhibits to this Amendment.

Except as described above, no other changes have been made in this Amendment to modify or update the other disclosures presented in the Form 10-K.

Since we want to present our Form 10-K as a single document, we have elected to refile the Form 10-K in its entirety.

RESOURCE REAL ESTATE INVESTORS 7, L.P.

INDEX TO ANNUAL REPORT

ON FORM 10-K/A

			Page
PART I
	Item 1:	Business	3
	Item 1A:	Risk Factors	5
	Item 1B:	Unresolved Staff Comments	5
	Item 2:	Properties	5
	Item 3:	Legal Proceedings	5
PART II
	Item 5:	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	6
	Item 6:	Selected Financial Data	6
	Item 7:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
	Item 7A:	Quantitative and Qualitative Disclosures About Market Risk	12
	Item 8:	Financial Statements and Supplementary Data	13
	Item 9:	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	26
	Item 9A:	Controls and Procedures	26
	Item 9B:	Other Information	26
PART III
	Item 10:	Directors, Executive Officers and Corporate Governance	27
	Item 11:	Executive Compensation	29
	Item 12:	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	29
	Item 13:	Certain Relationships and Related Transactions, and Director Independence	29
	Item 14:	Principal Accounting Fees and Services	31
PART IV
	Item 15:	Exhibits and Financial Statement Schedules	32
SIGNATURES			33

PART I

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The information contained in this Annual Report on Form 10-K/A (this “Report”) include “forward-looking statements.” Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expects,” “intend,” “may,” “plan,” “potential,” “project,” “should,” “will” and “would” or the negative of these terms or other comparable terminology.

Forward-looking statements contained in this Report are based on our beliefs, assumptions and expectations for our future performance, taking into account all information currently available to us. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or are within our control. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements. Forward-looking statements we make in this Report are subject to various risks and uncertainties that could cause actual results to vary from our forward-looking statements, including:

• changes in our industry, interest rates or the general economy;

• decrease in tenant occupancy rates;

• increased rates of tenant default

• availability, terms and deployment of debt funding for any property we may acquire;

• increase in operating expenses at our properties;

• increase in capital expenditures to maintain or enhance our properties;

• the timing of cash flows, if any, from our investments and payments for debt service;

• the degree and the nature of our competition in the geographic areas in which our properties are located; and

• availability and retention of qualified personnel to manage and operate out properties.

We caution you not to place undue reliance on these forward-looking statements which speak only as of the date of this Report. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable law or regulation, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this filing or to reflect the occurrence of unanticipated events.

As used herein, the terms “we,” “us,” or “our” refer to Resource Real Estate Investors 7, L.P.

ITEM 1.        BUSINESS

General

Resource Real Estate Investors 7, L.P., is a Delaware limited partnership which was formed on March 28, 2008 and commenced operations on June 16, 2008. We own in fee, operate and invest in multifamily residential rental properties, which we refer to as the Properties, located in Georgia, Maine, South Carolina and Texas. We may also invest in interests in real estate mortgages and other debt instruments that are secured, directly or indirectly, by a multifamily residential rental property or an interest in an entity that directly owns such a property. We currently do not own any real estate debt investments.

Our general partner, Resource Capital Partners, Inc., or the General Partner, is in the business of sponsoring and managing real estate investment limited partnerships and tenant in common programs, or TICs. Our General Partner operates and manages our Properties on our behalf, and is responsible for evaluating, managing, refinancing, and selling our Properties on our behalf. Our General Partner is an indirect wholly owned subsidiary of Resource America, Inc., or Resource America, a publicly traded company (NASDAQ: REXI) operating in the real estate, financial fund and commercial finance management sectors.

Our goals are to generate regular cash distributions from our operations, gains from the potential appreciation in the value of our Properties, and cash for our partners’ distributions from the sale or refinancing of the Properties.

We will terminate on March 28, 2016, unless we are sooner dissolved or terminated. Our General Partner from time to time, in its discretion, may extend the term for up to an aggregate of two years. Our General Partner has complete and exclusive discretion in the management of our business.

3

Our Management

As we do not have any officers, directors or employees, we rely solely on the officers and employees of our General Partner and its affiliates for the management of our Properties. Our General Partner and its affiliates, Resource Real Estate Management, LLC and Resource Real Estate, Inc., also conduct business activities of their own in which we have no economic interest. Employees of our General Partner and its affiliates who provide us with services are not required to work full-time on our affairs. These employees devote significant time to the affairs of our General Partner and its affiliates and are compensated by our General Partner and its affiliates for the services rendered to them. There may be significant conflicts between us and our General Partner and its affiliates regarding the availability of those employees to manage us and our Properties.

Real Estate Manager

Resource Real Estate Management, LLC, or Resource Real Estate Management, a wholly owned subsidiary of our General Partner, manages or supervises the management of our Properties under a real estate management agreement with us or our subsidiary holding legal title to a particular Real Estate Investment. Resource Real Estate Management is a Delaware limited liability company that was formed in 2005 for the purpose of managing the real estate investments of our General Partner and its affiliates either for their own account or for other real estate programs. In October 2007, Resource Real Estate Management, Inc., d/b/a Resource Residential, a wholly owned subsidiary of Resource America, was formed to manage residential real estate investments for Resource Real Estate Management. For a discussion of the management fees payable under these arrangements, see Item 13.

Resource Real Estate, Inc., or Resource Real Estate, an indirect wholly owned subsidiary of Resource America, is the parent company of our General Partner and an affiliate of Resource Real Estate Management.

Distribution Allocations

Distributable cash, which includes both distributable cash from operations as well as from capital transactions, will be distributed as described below.

Distributable cash from operations will be distributed in the following order of priority:

• first, 100% to the limited partners until they have each received distributions from us, including distributions of distributable cash from capital transactions, equal to their respective preferred return of 8.25% if they subscribed for their units on or before December 31, 2007 or 8% if they subscribed for their units after December 31, 2007, which we refer to as their Preferred Return; and

• thereafter, 80% to the limited partners and 20% to our General Partner.

Distributable cash from capital transactions, which includes cash received from the sale or refinancing of a Property, or the sale or repayment in full of all outstanding principal and interest due and owing to us on a Real Estate Debt Investment, will be distributed in the following order of priority:

• first, 100% to our limited partners until they have each received distributions from us, including distributions of distributable cash from operations, equal to their respective Preferred Return;

• second, 100% to our limited partners until their respective adjusted capital contribution has been reduced to zero; and

• thereafter, 80% to our limited partners and 20% to our General Partner.

An adjusted capital contribution is the amount originally paid for the limited partnership interest, less previous distributions of distributable cash from capital transactions.

4

Redemption of Units

We are permitted, in our General Partner’s sole discretion, to redeem units upon a unitholder’s request. However, we have no obligation to redeem units at any time, and we can decline to redeem units for any reason. For example, if our General Partner determines that we do not have the necessary cash flow, taking into account future distributions to our other limited partners, investments, and foreseeable operating expenses, a unitholder’s request may be declined. In addition, our General Partner may not approve the redemption of units if it concludes that the redemption might cause our total unit transfers in the year, subject to certain exceptions, to exceed 2% of our total capital or profits interests. All of these determinations are subjective and will be made in our General Partner’s sole discretion. We will also determine the redemption price based on provisions set forth in the First Amended and Restated Agreement of Limited Partnership, or the Partnership Agreement. To the extent the formula for arriving at the redemption price has any subjective determinations, they will fall within the sole discretion of our General Partner. If we lack the requisite liquidity to redeem the units, our General Partner, in its sole discretion, may purchase the units on generally the same terms as we would have redeemed the units. As of the date of this report, 5,000 units have been redeemed. During the years ended December 31, 2012 and December 31, 2013, we did not receive any redemption requests.

Sale of Units

From June 16, 2008 through August 31, 2009, we privately sold our limited partnership interest units at $10.00 per unit to accredited investors, as that term is defined in Rule 501(a) of Regulation D of the Securities Act. We sold a total of 3,274,655 units, including 180,768 units to our General Partner, for total proceeds, before commissions, fees and expenses, of approximately $32.5 million. We refer to these sales as the Offering. Resource Securities, Inc., an affiliate of our General Partner, served as the dealer-manager in the Offering.

Available Information

We file annual, quarterly and current reports with the Securities and Exchange Commission, or SEC. The public may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The internet address of the SEC site is http://www.sec.gov.

ITEM 1A.        RISK FACTORS

Omitted as permitted under rules applicable to smaller reporting companies.

ITEM 1B.        UNRESOLVED STAFF COMMENTS

Omitted as permitted under rules applicable to smaller reporting companies.

ITEM 2.        PROPERTIES

See Item 7 - “Overview.”

ITEM 3.        LEGAL PROCEEDINGS

We are a party to various routine legal proceedings arising out of the ordinary course of our business. Management believes that none of these actions, individually or in the aggregate, will have a material adverse effect on our financial condition or results of operations.

5

PART II

ITEM 5.        MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCK MATTERS

AND ISSUER PURCHASES OF EQUITY SECURITIES

Our limited partner units are not publicly traded. There is no market for our limited partner units and it is unlikely that any will develop. As of March 26, 2014, there were 588 holders of record of our limited partnership units.

We pay distributions monthly. No distributions were paid to the General Partner for either 2013 or 2012, except for distributions on the limited partner units it owns. Total distributions paid to limited partners were $1.6 million in each of those years. The following table details these distributions by month:

	December 31, 2013				December 31, 2012
	Distributions		Per Unit		Distributions		Per Unit
January	$	136,494	$	0.042	$	136,494	$	0.042
February	136,495		0.042		136,494		0.042
March	136,495		0.042		136,494		0.042
April	136,496		0.042		136,494		0.042
May	136,496		0.042		136,494		0.042
June	136,496		0.042		136,494		0.042
July	136,496		0.042		136,494		0.042
August	136,495		0.042		136,494		0.042
September	136,495		0.042		136,494		0.042
October	136,495		0.042		136,494		0.042
November	136,495		0.042		136,494		0.042
December	136,495		0.042		136,494		0.042
Total distributions for the year	$	1,637,943	$	0.504	$	1,637,928	$	0.504

We do not have any equity compensation plans.

ITEM 6.        SELECTED FINANCIAL DATA

Selected financial data have been omitted as permitted under rules applicable to smaller reporting companies.

6

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion relates to our financial statements and should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report.  Statements contained in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” that are not historical facts may be forward-looking statements.  Such statements are subject to certain risks and uncertainties, which could cause actual results to materially differ from those projected.  See “Cautionary Note Regarding Forward-Looking Statements.” 

Overview

We are a Delaware limited partnership that was formed on March 28, 2008 and commenced operations on June 16, 2008.  Through wholly owned subsidiaries, we own in fee, operate and invest in multifamily residential rental properties located in Georgia, Maine, South Carolina and Texas.   We also may invest in interests in real estate mortgages and other debt instruments that are secured, directly or indirectly, by a multifamily residential rental property or an interest in an entity that directly owns such a property.  As of December 31, 2013, we did not own any real estate debt investments.  If we were to acquire mortgages or other real estate debt investments in the future, these investments would be in an amount that would not cause us to become an investment company within the meaning of Section 3(a)(1) of the Investment Company Act of 1940.

As of December 31, 2013, we own six multifamily residential rental Properties through our 100% owned subsidiaries, as follows:

Subsidiary / Property	Purchase Date	Leverage Ratio (1)	Number of Units	Property Location
RRE Tamarlane Holdings, LLC, or Tamarlane	07/31/2008	68%	115	Portland, ME
RRE Bent Oaks Holdings, LLC, or Bent Oaks	12/10/2008	57%	146	Austin, TX
RRE Cape Cod Holdings, LLC, or Cape Cod	12/10/2008	57%	212	San Antonio, TX
RRE Woodhollow Holdings, LLC, or Woodhollow	12/12/2008	60%	108	Austin, TX
RRE Woodland Hills Holdings, LLC, or Hills	12/19/2008	65%	228	Decatur, GA
RRE Woodland Village Holdings, LLC, or Village	03/07/2012	77%	308	Columbia, SC
			1,117

_________

(1) Original face value of mortgage divided by total property capitalization, including reserves, escrows, fees and closing costs.

The following table sets forth operating statistics about our multifamily residential rental properties:

	Average Occupancy Rate (1)		Average Effective Rent per Square Foot (2)				Ratio of Operating Expense to Revenue (3)
	December 31,		December 31,				December 31,
Apartment Complex	2013	2012	2013		2012		2013		2012
Tamarlane	97.0%	96.4%	$	1.28	$	1.21	36	%	38%
Bent Oaks	97.2%	95.7%	$	1.16	$	1.05	53	%	55%
Cape Cod	96.1%	95.9%	$	0.96	$	0.92	54	%	52%
Woodhollow	97.7%	94.4%	$	1.03	$	0.93	52	%	60%
Hills	94.6%	95.8%	$	0.71	$	0.69	46	%	48%
Village	94.3%	93.6%	$	0.53	$	0.51	57	%	63%

_________

(1) Number of occupied units divided by total units adjusted for any unrentable units; average calculated on a weekly basis.

(2) Average rental revenue divided by total rentable square footage.  We calculate average rental revenue by dividing gross rental revenue by the number of months in the period.

(3) Rental operating expenses, excluding certain one-time expenses funded from reserves for capital expenditures, and general and administrative expenses, excluding asset management fees and transaction expenses, as a percentage of rental income, excluding any adjustment for concessions.

7

Results of Operations

We generate our income from the net revenues we receive from our Properties.  We also may, in the future, generate funds from the sale or refinancing of our Properties.  We do not expect that we will sell or refinance our Properties during the next year.  Should economic conditions in the areas in which our Properties are located deteriorate, we could experience lower occupancy, lower rental revenues and higher operating costs, all of which could harm our operations and financial condition, reduce the value of our Properties and limit our ability to make distributions to our limited partners.

Our operating results and cash flows from our Properties are affected by four principal factors:

Ÿ occupancy and rental rates,

Ÿ property operating expenses,

Ÿ interest rates on the related financing, and

Ÿ capital expenditures.

The amount of rental revenues from our Properties depends upon their occupancy rates and concessions granted.  We seek to maximize our occupancy rates through aggressive property-level programs, including, in particular, our Lease Rent Optimizer, or LRO, program which includes rent concessions.  Under our LRO program, we seek to price our rents for apartment units on a daily basis, based upon inventory in the marketplace and competitors’ pricing.  Our Properties experienced an overall increase in the average occupancy rate during the years endedDecember 31, 2013 of approximately 0.9%, with an average occupancy of 96.2% as compared to an average occupancy rate of 95.3% during the same period of 2012. Our Properties also experienced an overall increase in the average effective rent per square foot of $0.04 during the year ended December 31, 2013 compared to the same period in 2012 for the same properties.

We seek to control operating expenses through our General Partner’s automated purchase order system that compares actual to budgeted expenses and requires management approval of variances, and through the use of third-party service providers to seek best available pricing.

With the exception of one mortgage note, our existing financing is at fixed rates of interest and, accordingly, our interest cost has remained relatively stable during the period of our ownership of the Properties.  Based upon current economic conditions and their effect on interest rates, and because our existing financing extends through periods ranging from 2015 to 2019, we expect that our financing costs will remain relatively stable during substantially all of the expected term of these notes.  However, should interest rates change materially, the interest component of our variable rate financing, which is based upon the one-month London Interbank Offered Rate plus 323 basis points, and is capped at 7%, could change.

Year EndedDecember 31, 2013 Compared to Year EndedDecember 31, 2012

The following table sets forth the results of our operations for the periods indicated (in thousands, except per unit data):

	December 31,						Increase (Decrease)
	2013			2012			Amount			Percent
Revenues:
Rental income	$	11,751		$	10,525		$	1,226		12	%
Expenses:
Rental operating	5,467			5,253			214			4	%
Management fees – related parties	906			839			67			8	%
General and administrative	522			876			(354		)	(40	)%
Depreciation and amortization	2,944			3,076			(132		)	(4	)%
Total expenses	9,839			10,044			(205		)	(2	)%
Income before other expenses	1,912			481			1,431			(298	)%
Other expenses:
Interest expense, net	(2,564		)	(2,516		)	(48		)	2	%
Casualty loss	(28		)	—			(28		)	100	%
Loss on disposal of fixed assets	(89		)	(1		)	(88		)	8,800	%
Loss on partial sale of land	—			(198		)	198			(100	)%
Net loss	$	(769	)	$	(2,234	)	$	1,465		66	%
Weighted average number of limited partner units outstanding	3,270			3,270
Net loss per weighted average limited partner unit	$	(0.24	)	$	(0.68	)

8

Revenues

We attribute the $1.2 million increase in revenues principally to an increase of $652,000 in revenues from our ownership of the Village property for the full year in 2013 as compared to ten months for the prior year period.  The remainder of the increase can be attributed to increases in average effective rent per square foot at the Properties and the increase in the average occupancy rates at the Properties.  Occupancy rates have varied within our expected range.  We were able to increase rents as a result of stable occupancy and market demand.

Expenses

We attribute the $205,000 decrease in expenses principally to a decrease of $354,000 in general and administrative expense mostly attributed to $323,000 of acquisition expense recorded in 2012 in conjunction with the purchase of the Village property. In addition, we attribute the $132,000 decrease in depreciation and amortization primarily due to the expiration of the amortization of the acquired in-place leases at the Village.

Partially offsetting these decreases in expenses were increases attributed principally to:

Ÿ a $214,000 increase in operating expenses due primarily to an increase of $270,000 in operating expenses from our ownership of the Village property for the full year in 2013 as compared to ten months for the prior year period. Offsetting this increase were decreases in insurance expense across all Properties due to premium refunds; and

Ÿ a $67,000 increase in management fees due primarily to the increase in tenant fees for the Village property along with an increase in rental income as a result of an increase in average effective rent per square foot at all of the Properties.

Other expenses

We attribute the decrease in other expenses primarily to:

• a $198,000 decrease in loss on a parcel of land at Cape Cod taken by eminent domain which occurred in 2012.

Partially offsetting these decreases were the following increases:

Ÿ a $48,000 increase in interest expense attributable to debt placed in conjunction with the Village property acquisition;

Ÿ a $28,000 increase in casualty loss expense related to wind damage at Bent Oaks; and

Ÿ a $88,000 increase in losses related to the disposition of fixed assets.

Liquidity and Capital Resources

The following table sets forth our sources and uses of cash (in thousands):

	Years Ended
	December 31,
	2013			2012
Provided by operating activities (1)	$	3,133		$	1,936
Used in investing activities	(1,254		)	(4,165		)
Used in financing activities	(2,156		)	(2,301		)
Net decrease in cash	$	(277	)	$	(4,530	)

(1) Includes changes in operating assets and liabilities.

Our liquidity needs consist principally of funds used to pay the Properties’ debt service, operating expenses, capital expenditures and monthly distributions to the limited partners.  Our ability to meet our liquidity needs will be subject to our ability to generate cash from operations, to control property operating expenses and, with respect to capital expenditures, the use of cash reserves established when the Properties were purchased.  The ability to generate cash from operations will depend on the occupancy rates, rates charged to tenants compared with competing properties in the area and the ability of tenants to pay rent.  Occupancy rates can fluctuate based on changes in local market conditions where the Properties are located such as: excessive building resulting in an oversupply of similar properties, deterioration of surrounding areas, a decrease in market rates or local economic conditions including unemployment rates.  The rental rates charged to tenants compared to competing properties can be impacted by a lack of perceived safety, convenience and attractiveness of a property.

9

During the year ended December 31, 2013, we incurred a net loss; our results are substantially affected by non-cash expenses, principally depreciation and amortization expense, as is common for entities that own real properties.  Our net loss for the years endedDecember 31, 2013 and 2012 of $(769,000) and $2.2 million, respectively, included $2.9 million and $3.1 million, respectively, of depreciation and amortization expense.  Excluding these non-cash expenses our operations generated $3.7 million and $2.6 million, respectively, of positive adjusted cash flow from operations for the years endedDecember 31, 2013 and 2012, respectively.  We define adjusted cash flow from operations, a non-GAAP liquidity measure, as net cash provided by operating activities as adjusted for net changes in operating assets and liabilities.  Management views adjusted cash flow from operations as a useful and appropriate supplement to cash provided by operating activities, since distributions to the limited partners depend upon this measure.  Unless our properties are affected by the factors referred to above in this discussion and in “Results of Operations,” we anticipate that we will generate positive adjusted cash flow from operations for the year ending December 31, 2014.

The following table reconciles net cash provided by operating activities to adjusted cash flow from operations, a non-GAAP measure, as described in the paragraph above (in thousands):

	Years Ended
	December 31,
	2013		2012
Net cash provided by operating activities	$	3,133	$	1,936
Net changes in operating assets and liabilities	598		698
Adjusted cash flow from operations (non-GAAP)	$	3,731	$	2,634

Under our capital improvements program, we expect to spend approximately $5.3 million in the next four years for property improvements intended to increase the Properties’ appeal to tenants.  As we implement planned improvements to our Properties, we seek to maintain our occupancy rates and, potentially, to increase our rental rates and our cash flow from operating activities.

We are planning improvements to the Properties for the next four years based on the assumption that the General Partner will exercise its right to extend the term of the partnership for the two one-year extensions. At this time we expect to extend to ensure that we maximize the return to our investors.

The following table sets forth the capital expenditures incurred during the year ended December 31, 2013 and estimated future capital expenditures, which are discretionary in nature (in thousands):

Subsidiaries	Capital Expenditures		Future Discretionary Capital Expenditures
Tamarlane	$	143	$	440
Bent Oaks	197		761
Cape Cod	189		1,041
Woodhollow	183		773
Hills	160		952
Village	382		1,326
Total	$	1,254	$	5,293

Our capital expenditures were $1.3 million during the year ended December 31, 2013.  We have planned a series of future major capital projects for our Properties, including further landscaping, parking lot paving, signage upgrades, upgrades to exterior structures, replacing the HVAC condensing units and replacing water heaters.  We review future expenditures periodically and adjust them based on both operating results and local market conditions.  If market conditions improve and there is an acceptable return on the additional expenditures, we will consider restoring a previously contemplated interior upgrade program.  We cannot assure you that we will complete projects currently planned or that we will not change our plans in response to changes in market conditions.

In connection with the acquisitions of our Properties, we have $49.4 million of total mortgage financing outstanding.  For information regarding mortgage financing with respect to each Property, see Note 6 of the notes to our consolidated financial statements.

10

During the year ended December 31, 2012, we acquired the Village for $11.5 million.  In connection with this purchase, we obtained a $9.6 million first mortgage.  Although the acquisition has reduced our liquidity by approximately $3.1 million and thereby reduced the amount available for our capital improvements program, we believe that we have retained sufficient liquidity to fund that program in the future and that the acquisition should increase our cash flow from operations going forward.

The purchase of the Village completed our asset acquisition plans.  The remaining offering proceeds have been reserved for estimated future capital expenditures as noted above.

Our payables to related parties consist of investment management fees due to our General Partner, payable monthly, equal to 1% of the gross offering proceeds, net of any limited partnership interest owned by the General Partner.  The General Partner must subordinate up to 100% of its annual investment management fee to the receipt by the limited partners of their Preferred Return.  The limited partners have not received their Preferred Return over the five years the Partnership has been operating and we do not anticipate they will receive the return in 2014.

Our debt service requirements for the next 12 months are $2.5 million in the aggregate.

Redemption of Units

We are permitted, in our General Partner’s sole discretion, to redeem units upon a unitholder’s request.  However, we have no obligation to redeem units at any time, and we can decline to redeem units for any reason.  See Item 1, "Redemption of Units." Cumulatively through December 31, 2013, a total of 5,000 units have been redeemed at an aggregate price of $46,710, although no units were redeemed in the year then ended.

Legal Proceedings

We are a party to various routine legal proceedings arising out of the ordinary course of our business.  Management believes that none of these actions, individually or in the aggregate, will have a material adverse effect on our financial condition or results of operations.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of our assets, liabilities, revenues and cost and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to certain accrued liabilities. We base our estimates on historical experience and on various other assumptions that we believe reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We have identified the following policies as critical to our business operations and the understanding of our results of operations.

Property Acquisitions. We allocated the purchase price of acquired properties to the acquired tangible assets and liabilities, consisting of land, building, tenant improvements, long-term debt and identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, the value of in-place leases, the value of unamortized lease origination costs and the value of tenant relationships, based in each case on their relative fair values. The value of in-place leases is amortized over the average remaining term of the respective lease on a straight line basis.

Impairment. We review the carrying value of each Property to determine if circumstances that indicate impairment in the carrying value of the investment exist or that depreciation periods should be modified. If we determine that an asset’s estimated future cash flows will not be sufficient to recover its carrying amount, we will record an impairment charge to reduce the carrying amount for that asset to its estimated fair value. We have not recognized any impairments of our Properties for the years endedDecember 31, 2013 and 2012.

Revenue Recognition. We derive our revenue primarily from rental of residential housing units with lease agreement terms of generally one year or less. We recognize rent as income on a straight-line basis over the term of the related lease. Additionally, any incentives included in the lease are amortized on a straight-line basis over the term of the related lease.

Included within rental income are other income amounts such as utility reimbursements, late fees, parking fees, pet fees and lease application fees which are recognized when earned.

11

Off-Balance Sheet Arrangements

As of December 31, 2013 and 2012, we do not have any off-balance sheet arrangements or obligations, including contingent obligations, other than guarantees by the General Partner of certain limited standard expectations to the non-recourse nature of the mortgage notes which are secured by the Properties.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Omitted pursuant to Regulation S-K, Item 305(e).

12

ITEM 8.        FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

13

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of

Resource Real Estate Investors 7, L.P.

We have audited the accompanying consolidated balance sheets of Resource Real Estate Investors 7, L.P. (a Delaware partnership) and subsidiaries (the “Partnership”) as of December 31, 2013 and 2012, and the related consolidated statements of operations, changes in partners’ capital, and cash flows for each of the two years in the period ended December 31, 2013. Our audits of the basic consolidated financial statements included the financial statement schedule listed in the index appearing under Item 15(a)(2). These financial statements and financial statement schedules are the responsibility of the Partnership’s management.Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Partnership's internal control over financial reporting.Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting.Accordingly, we express no such opinion.An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Resource Real Estate Investors 7, L.P. and subsidiaries as of December 31, 2013 and 2012 and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2013 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the related financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

/s/ GRANT THORNTON LLP

Philadelphia, Pennsylvania

March 26, 2014

14

RESOURCE REAL ESTATE INVESTORS 7, L.P.

CONSOLIDATED BALANCE SHEETS

(in thousands)

	December 31,
	2013			2012
ASSETS
Rental properties, at cost:
Land	$	8,715		$	9,737
Buildings and improvements	58,248			56,566
Personal property	1,949			1,762
Construction-in-progress	87			83
Identifiable intangible assets	2,378			2,378
	71,377			70,526
Accumulated depreciation and amortization	(13,628		)	(10,938		)
	57,749			59,588
Cash	4,957			5,234
Restricted cash	1,712			1,535
Tenant receivables, net	22			4
Accounts receivable due from related parties	195			—
Prepaid expenses and other assets	150			224
Deferred financing costs, net	634			843
Total assets	$	65,419		$	67,428
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
Mortgage notes payable	$	49,350		$	49,869
Accounts payable and accrued expenses	734			531
Real estate tax payable	976			584
Accrued interest	200			202
Payables to related parties	1,645			1,333
Prepaid rent	88			86
Security deposits	265			256
Total liabilities	53,258			52,861
Partners’ capital	12,161			14,567
Total liabilities and partners’ capital	$	65,419		$	67,428

The accompanying notes are an integral part of these consolidated financial statements.

15

RESOURCE REAL ESTATE INVESTORS 7, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per unit data)

	Years Ended
	December 31,
	2013			2012
Revenues:
Rental income	$	11,751		$	10,525
Expenses:
Rental operating	5,467			5,253
Management fees – related parties	906			839
General and administrative	522			876
Depreciation and amortization	2,944			3,076
Total expenses	9,839			10,044
Income before other expenses	1,912			481
Other expenses:
Interest expense, net	(2,564		)	(2,516		)
Casualty loss	(28		)	—
Loss on partial sale of land	—			(198		)
Loss on disposal of fixed assets	(89		)	(1		)
Net loss	$	(769	)	$	(2,234	)
Weighted average number of limited partner units outstanding	3,270			3,270
Net loss per weighted average limited partner unit	$	(0.24	)	$	(0.68	)

The accompanying notes are an integral part of these consolidated financial statements.

16

RESOURCE REAL ESTATE INVESTORS 7, L.P.

CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS’ CAPITAL

FOR THE YEARS MONTHS ENDED DECEMBER 31, 2013 AND 2012

(in thousands, except units)

	General		Limited Partners
	Partner		Units	Amount			Total
Balance at January 1, 2012	$	1	3,269,655	$	18,438		$	18,439
Distributions	—		—	(1,638		)	(1,638		)
Net loss	—		—	(2,234		)	(2,234		)
Balance at December 31, 2012	1		3,269,655	14,566			14,567
Distributions	—		—	(1,637		)	(1,637		)
Net loss	—		—	(769		)	(769		)
Balance at December 31, 2013	$	1	3,269,655	$	12,160		$	12,161

The accompanying notes are an integral part of this consolidated financial statement.

17

RESOURCE REAL ESTATE INVESTORS 7, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Years Ended
	December 31,
	2013			2012
Cash flows from operating activities:
Net loss	$	(769	)	$	(2,234	)
Adjustments to reconcile net loss to net cash provided by   operating activities:
Depreciation and amortization	2,944			3,076
Amortization of deferred financing costs	209			197
Casualty loss	28			—
Losses on disposal/sale of fixed assets	89			199
Changes in operating assets and liabilities, excluding the effects of acquisition:
Restricted cash	(177		)	(1		)
Tenant receivables, net	(18		)	7
Prepaid expense and other assets	74			109
Insurance proceeds received	35			—
Accounts receivable - related parties	(195		)	—
Accounts payable and accrued expenses	199			139
Real estate tax payable	392			79
Accrued interest	(2		)	28
Payables to related parties	313			349
Prepaid rent	2			(40		)
Security deposits	9			28
Net cash provided by operating activities	3,133			1,936
Cash flows from investing activities:
Capital expenditures	(1,254		)	(1,651		)
Proceeds from sale of land	—			37
Purchase of the Village property	—			(2,551		)
Net cash used in investing activities	(1,254		)	(4,165		)
Cash flows from financing activities:
Distributions to limited partners	(1,637		)	(1,638		)
Principal payments on mortgage notes payable	(519		)	(488		)
Payment of deferred financing costs	—			(175		)
Net cash used in financing activities	(2,156		)	(2,301		)
Net decrease in cash	(277		)	(4,530		)
Cash at beginning of period	5,234			9,764
Cash at end of period	$	4,957		$	5,234

The accompanying notes are an integral part of these consolidated financial statements.

18

RESOURCE REAL ESTATE INVESTORS 7, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2013

NOTE 1 – NATURE OF BUSINESS AND OPERATIONS

Resource Real Estate Investors 7, L.P. (“R-7” or the “Partnership”) is a Delaware limited partnership which owns and operates multifamily residential rental properties located in Georgia, Maine, Texas and South Carolina (the “Properties”).  The Partnership also may invest in interests in real estate mortgages and other debt instruments that are secured, directly or indirectly, by multifamily residential rental properties although the Partnership had no such investments as of December 31, 2013 and 2012.  The Partnership was formed on March 28, 2008 and commenced operations on June 16, 2008.  The General Partner, Resource Capital Partners, Inc. (“RCP”, the “General Partner”, or “GP”), is in the business of sponsoring and managing real estate investment limited partnerships and tenant in common programs.  RCP contributed $1,000 in cash as its minimum capital contribution to the Partnership.  In addition, RCP held a 5.62% limited partnership interest in the Partnership at December 31, 2013, and held a 5.53% limited partnership interest at December 31, 2012.  RCP is an indirect wholly owned subsidiary of Resource America, Inc. (“RAI”), a publicly traded company (NASDAQ: REXI) operating in the real estate, financial fund management and commercial finance sectors.

The Partnership will continue until March 28, 2016, unless terminated earlier in accordance with the First Amended and Restated Agreement of Limited Partnership (the “Agreement”).  The GP has the right to extend the Partnership term for one or more periods to a maximum of two years in the aggregate following the initial termination date.

The Agreement provides that income is allocated as follows: first, to the Limited Partners (“LPs”) and the GP (collectively, the “Partners”) in proportion to and to the extent of the deficit balances, if any, in their respective capital accounts; second, to the Partners in proportion to the allocations of Distributable Cash (as defined in the Agreement); and third, 100% to the LPs.  All losses are allocated as follows: first, 100% to the LPs until the LPs have been allocated losses equal to the excess, if any, of their aggregate capital account balances over the aggregate Adjusted Capital Contributions (as defined in the Agreement); second, to the Partners in proportion to and to the extent of their respective remaining positive capital account balances, if any; and third, 100% to the LPs.

Distributable cash from operations, payable monthly, as determined by the GP, is first allocated 100% to the LPs until the LP’s have received their Preferred Return (as defined in the Agreement); and thereafter, 80% to the LPs and 20% to the GP.

Distributable cash from capital transactions, as determined by the GP, is first allocated 100% to the LPs until the LPs have received their Preferred Return; second, 100% to the LPs until their Adjusted Capital Contributions (as defined in the Agreement) have been reduced to zero; and thereafter, 80% to the LPs and 20% to the GP.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows:

Principles of Consolidation

The consolidated financial statements include the accounts of the Partnership and its wholly-owned subsidiaries, as follows:

Subsidiaries	Number of Units	Location
RRE Tamarlane Holdings, LLC, or Tamarlane Apartments (“Tamarlane”)	115	Portland, ME
RRE Bent Oaks Holdings, LLC, or Bent Oaks Apartments (“Bent Oaks”)	146	Austin, TX
RRE Cape Cod Holdings,  LLC, or Cape Cod Apartments (“Cape Cod”)	212	San Antonio, TX
RRE Woodhollow Holdings, LLC, or Woodhollow Apartments (“Woodhollow”)	108	Austin, TX
RRE Woodland Hills Holdings, LLC, or Woodland Hills Apartments (“Hills”)	228	Decatur, GA
RRE Woodland Village Holdings, LLC, or Woodland Village Apartments (“Village”)	308	Columbia, SC
	1,117

All intercompany transactions and balances have been eliminated in consolidation.

19

RESOURCE REAL ESTATE INVESTORS 7, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)

DECEMBER 31, 2013

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  The Partnership estimates the allowance for uncollectible receivables and loan losses and adjusts the balance quarterly.  Actual results could differ from those estimates.

Supplemental Disclosure of Cash Flow Information

During the years endedDecember 31, 2013 and 2012, the Partnership paid $2.4 million and $2.3 million, respectively, in cash for interest.

Advertising

The Partnership expenses advertising costs as they are incurred.  Advertising costs, which are included in rental operating expenses, totaled $145,000 and $122,000 for the years endedDecember 31, 2013 and 2012, respectively.

Deferred Financing Costs

Costs incurred to obtain financing have been capitalized and are being amortized over the term of the related debt using the effective yield method.

Concentration of Credit Risk

Financial instruments, which potentially subject the Partnership to concentration of credit risk, consist of periodic temporary deposits of cash. At December 31, 2013, the Partnership had $5.1 million of deposits at various banks, of which $2.9 million was over the insurance limit of the Federal Deposit Insurance Corporation. No losses have been experienced on such deposits.

Income Taxes

Income taxes or credits resulting from earnings or losses are payable by or accrue to the benefit of the partners; accordingly, no provision has been made for income taxes in these consolidated financial statements.

The Partnership evaluates the benefits of tax positions taken or expected to be taken in its tax returns under a two-step recognition and measurement process.  Only the largest amount of benefits from the tax positions that will more likely than not be sustainable upon examination are recognized by the Partnership.  The Partnership does not have any unrecognized tax benefits, nor interest and penalties, recorded in the Consolidated Balance Sheets or Consolidated Statements of Operations and does not anticipate significant adjustments to the total amount of unrecognized tax benefits within the next twelve months.

The Partnership is subject to examination by the U.S. Internal Revenue Service and by the taxing authorities in those states in which the Partnership has significant business operations.  The Partnership is not currently undergoing any examinations by taxing authorities.  The Partnership may be subject to U.S. federal income tax and state/local income tax examinations for years 2010 through 2013.

Revenue Recognition

Revenue is primarily derived from the rental of residential housing units with lease agreement terms of generally one year or less.  The Partnership recognizes revenue in the period that rent is earned, which is on a monthly basis.  The Partnership recognizes rent as income on a straight-line basis over the term of the related lease.  Additionally, any incentives included in the lease are amortized on a straight-line basis over the term of the related lease.

Included within rental income are other income amounts such as utility reimbursements, late fees, parking fees, pet fees and lease application fees which are recognized when earned or received.

The future minimum rental payments to be received from noncancelable operating leases is approximately $5.2 million and $2,000 for the years ending December 31,2014 and 2015, respectively, and none thereafter.

20

RESOURCE REAL ESTATE INVESTORS 7, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)

DECEMBER 31, 2013

Long-Lived Assets

The Partnership reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  If it is determined that an asset’s estimated future cash flows will not be sufficient to recover its carrying amount, an impairment charge will be recorded to reduce the carrying amount for that asset to its estimated fair value.  The Partnership impaired assets at one of the Properties due to a wind storm in 2013 (see Note 9).  Insurance proceeds covered the majority of the impairment.

Rental Properties

Rental properties are carried at cost, net of accumulated depreciation.  Buildings and improvements and personal property are depreciated for financial reporting purposes on the straight-line method over their estimated useful lives.  The value of in-place leases is amortized over the average remaining term of the respective leases on a straight-line basis.  Useful lives used for calculating depreciation for financial reporting purposes are as follows:

Buildings and improvements	5 - 27.5 years
Personal property	3 - 15 years

Tenant Receivables

Tenant receivables are stated at amounts due from tenants net of an allowance for uncollectible receivables.  Payment terms vary and receivables outstanding longer than the payment terms are considered past due.  The Partnership determines its allowance by considering a number of factors, including the length of time receivables are past due, security deposits held, the Partnership’s previous loss history, the tenants’ current ability to pay their obligations to the Partnership, the general condition of the economy and the industry as a whole.  The Partnership writes off receivables when they become uncollectible.  At December 31, 2013 and 2012, there were $1,232 and $955, respectively, in allowances for uncollectible receivables.

Redemptions

The LPs may request redemption of their units at any time.  The Partnership has no obligation to redeem any units and will do so only at the GP’s discretion.  If the Partnership redeems units, the redemption price is generally the amount of the initial investment less all distributions from the Partnership to the LP, and less all organization and offering expenses charged to the LP.

Reclassification

Real estate tax payable was reclassified from accounts payable and accrued expenses in the 2012 consolidated balance sheet to conform to the 2013 presentation.

21

RESOURCE REAL ESTATE INVESTORS 7, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)

DECEMBER 31, 2013

NOTE 3 − RESTRICTED CASH

Restricted cash represents escrow deposits with lenders to be used to pay real estate taxes, insurance, and capital improvements.  A summary of the components of restricted cash follows (in thousands):

	Years Ended
	December 31,
	2013		2012
Real estate taxes	$	882	$	603
Insurance	278		221
Capital improvements	552		711
Total	$	1,712	$	1,535

NOTE 4 - ACQUISITION

The cost of Properties is allocated to net tangible assets based on relative fair values. Fair value estimates are based on information obtained from a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of each property and other market data, as well as information obtained about each property as a result of due diligence, marketing and leasing activities.

During the year ended December 31, 2012, the Partnership acquired the Village, a multifamily residential apartment complex in Columbia, South Carolina, which was accounted for using the purchase method of accounting. Based on an appraisal of the property, the Partnership revalued the assets and liabilities during 2013. This resulted in a $1,022,000 decrease in the value of the Land and a corresponding increase in the value of the Buildings. The following table presents the purchase price allocation to the assets and liabilities assumed, based on the fair values at the date of acquisition (in thousands):

Date acquired	March 7, 2012
Land	$	1,232
Buildings	9,710
Identifiable intangible assets	558
Note payable – mortgage	(9,580		)
Escrowed funds and advances	589
Other assets and liabilities assumed, net	(37		)
Cash paid for property acquisition	$	2,472

NOTE 5 – DEFERRED FINANCING COSTS

Deferred financing costs include unamortized costs incurred to obtain financing which are being amortized over the term of the related debt.  Accumulated amortization as of December 31, 2013 and 2012 was $967,000 and $758,000, respectively.  Estimated amortization of the Properties’ existing deferred financing costs for the next five years ending December 31, and thereafter, is as follows (in thousands):

2014	$	207
2015	162
2016	88
2017	82
2018	80
Thereafter	15
	$	634

22

RESOURCE REAL ESTATE INVESTORS 7, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)

DECEMBER 31, 2013

NOTE 6 – MORTGAGE NOTES PAYABLE

The following is a summary of mortgage notes payable (in thousands, except percentages):

	Balance at
	December 31,								Average
Property	2013		2012		Maturity Date		Annual Interest Rate		Monthly Debt Service
Tamarlane	$	8,906	$	8,906	05/01/2015		4.92%		$	37	(1)
Tamarlane	952		967		05/01/2015		6.12%		$	6	(2)
Bent Oaks	5,903		5,982		01/01/2019	(4)	5.99%	(4)	$	37	(2)
Cape Cod	6,133		6,216		01/01/2019	(4)	5.91%	(4)	$	38	(2)
Woodhollow	5,060		5,126		01/01/2019	(4)	6.14%	(4)	$	32	(2)
Hills	12,816		13,092		01/01/2016		3.40%	(3)	$	60	(3)
Village	9,580		9,580		04/01/2019		3.76%	(5)	$	31	(5)
Total	$	49,350	$	49,869

____________________

(1) Interest only through the date of maturity, at which time the principal is due.

(2) Monthly payment includes principal and interest.

(3) Monthly payment includes principal and interest. Interest is variable and calculated monthly based upon the one-month British Bankers Association London Interbank Offered Rate plus 323 basis points, capped at 7% for the term of the loan.

(4) The Partnership has an option to extend the maturity date for an additional one year to January 1, 2020.  During the extension period, the interest rate would convert to the Federal Home Loan Mortgage Corporation Bill Index Rate plus 2.5%.

(5) Interest only payments of approximately $31,000 through April 1, 2014; thereafter, monthly payment including principal and interest will total $44,422.

Annual principal payments on the mortgage notes payable for each of the next five years ending December 31, and thereafter, are as follows (in thousands):

2014	$	657
2015	10,569
2016	12,683
2017	479
2018	504
Thereafter	24,458
	$	49,350

The mortgage notes payable are with recourse only to the Properties securing them subject to certain limited standard exceptions, as defined in the mortgage notes, which the GP has guaranteed with respect to each property.  These exceptions are referred to as “carveouts”.  In general, carveouts relate to damages suffered by the lender for a subsidiary’s failure to pay rents, insurance or condemnation proceeds to the lender, to pay water, sewer and other public assessments or charges, to pay environmental compliance costs or to deliver books and records, in each case as required in the loan documents.  The exceptions also require the GP to guarantee payment of audit costs, lender’s enforcement of its rights under the loan documents and payment of the loan if the subsidiary voluntarily files for bankruptcy or seeks reorganization, or if a related party of the subsidiary does so with respect to the subsidiary.

23

RESOURCE REAL ESTATE INVESTORS 7, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)

DECEMBER 31, 2013

NOTE 7 – CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     In the ordinary course of its business operations, the Partnership has ongoing relationships with several related entities.

Substantially all of the receivables from related parties represents escrow funds held by RAI for self-insurance. The Properties are partially self-insured with respect to property and casualty. Therefore, unforeseen or catastrophic losses in excess of the Partnership's insured limits could have a material adverse effect on the Partnership's financial condition and operating results.

     RCP is entitled to receive an annual investment management fee, payable monthly, equal to 1% of the gross offering proceeds, net of any amounts otherwise attributable to LP interests owned by RCP.  During the term of the Partnership, RCP must subordinate up to 100% of its annual investment management fee to the receipt by the LPs of their Preferred Return.  As of December 31, 2013 and 2012, investment management fees due to RCP totaled $1.5 million and $1.2 million, respectively.

A wholly-owned subsidiary of RCP, Resource Real Estate Management, LLC (“RREML”) is entitled to receive property and debt management fees.  RREML engaged Resource Real Estate Management, Inc (“RREMI”), an indirect wholly owned subsidiary of RAI, to manage the Partnership’s Properties.  As of December 31, 2013 and 2012, property management fees due totaled $49,000 and $81,000, respectively.

During the ordinary course of business, RCP and RREMI advance funds for ordinary operating expenses on behalf of the Properties, which are repaid within a few days.  As of December 31, 2013 and 2012, advances due totaled $62,000 and $38,000, respectively.

The Partnership is obligated to pay fees and reimbursements of expenses to related parties.  These activities are summarized as follows (in thousands):

	Years Ended   December 31,
	2013		2012
RCP:
Investment management fees	$	321	$	321
RREML:
Property management fees - 5% of gross cash receipts	585		518
	$	906	$	839

NOTE 8 – FAIR VALUE OF FINANCIAL INSTRUMENTS

In analyzing the fair value of its financial instruments disclosed or accounted for on a fair value basis, the Partnership follows the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  The Partnership determines fair value based on quoted prices when available or, if quoted prices are not available, through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the financial instruments.  The fair value of cash, tenant receivables and accounts payable approximate their carrying values due to their short term nature.  The hierarchy followed defines three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets that the reporting entity has the ability to access at the measurement date. 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or can be corroborated with observable market data for substantially the entire contractual term of the asset.

Level 3 - Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset and are consequently not based on market activity, but rather through particular valuation techniques.

The following methods and assumptions were used to estimate the fair value of the Partnership’s financial instruments:

24

RESOURCE REAL ESTATE INVESTORS 7, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)

DECEMBER 31, 2013

Ÿ Mortgage notes payable.  Rates currently available to the Partnership for debt with similar terms and remaining maturities are used to estimate the fair value of existing debt.

The carrying amounts and estimated fair values of the Partnership’s financial instruments were as follows (in thousands):

	December 31, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Mortgage notes payable:
Tamarlane	$	9,858	$	10,061	$	9,873	$	10,083
Bent Oaks	5,903		6,305		5,982		6,596
Cape Cod	6,133		6,529		6,216		6,828
Woodhollow	5,060		5,404		5,126		5,659
Hills	12,816		12,679		13,092		12,729
Village	9,580		9,260		9,580		9,430
Total mortgage notes payable	$	49,350	$	50,238	$	49,869	$	51,325

NOTE 9 - INSURANCE CLAIM

On February 25, 2013, Bent Oaks suffered roof damage as the result of a windstorm.  The damage was partially covered by insurance.  The Partnership reduced the net carrying value of buildings and improvements for Bent Oaks by $61,000. The Partnership received insurance proceeds of $35,000 during the year ended December 31, 2013.  Additional non-capitalized expenses incurred in conjunction with this claim were $2,000 for the year ended December 31, 2013.   The Partnership recorded a loss of $28,000 for the year ended December 31, 2013.

NOTE 10 – SALE OF LAND

On May 1, 2012, the Partnership sold 1.4 acres of land to the City of San Antonio, Texas, pursuant to an eminent domain proceding at less than its book value, generating a loss of $198,000.

NOTE 11 – SUBSEQUENT EVENTS

The Partnership has evaluated subsequent events and determined that no events have occurred which would require an adjustment to the consolidated financial statements.

25

ITEM 9.     CHANGES IN AND DISABREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.     CONTROLS AND PROCEDURES

Disclosure Controls

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodic reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our General Partner, including its chief executive officer and its chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.  In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Under the supervision of the chief executive officer and chief financial officer of our General Partner, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report.  Based upon that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are effective at the reasonable assurance level.

Management's Report on Internal Controls over Financial Reporting

Our General Partner is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our General Partner assessed the effectiveness of our internal control over financial reporting as of December 31, 2013. In making this assessment, the General Partner used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, in Internal Control - Integrated Framework of 1992. Based upon this assessment, our General Partner concluded that, as of December 31, 2013, our internal control over financial reporting is effective.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our independent registered public accounting firm pursuant to the Dodd-Frank Wall Street Consumer Protection Act, which exempted smaller reporting companies from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during our year ended December 31, 2013 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.     OTHER INFORMATION

None.

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PART III

ITEM 10.        DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

We do not have any officers, directors or employees. Rather, our General Partner manages our activities and supervises our Real Estate Investments using its affiliates under the provisions of our Limited Partnership Agreement which governs its conduct. Officers of our General Partner and its affiliates may spend a substantial amount of time managing its business and affairs and may face a conflict regarding the allocation of their time between our business and affairs and their other business interests.

Directors and Executive Officers of Our General Partner

The following table sets forth information with respect to the executive officers, directors and key personnel of our General Partner:

NAME	AGE	POSITION OR OFFICE
Jonathan Z. Cohen	43	Director
Alan F. Feldman	50	Director and Senior Vice President
David E. Bloom	49	Director and Senior Vice President
Kevin M. Finkel	42	President
Steven R. Saltzman	50	Vice President of Finance and Chief Financial and Accounting Officer
Darshan V. Patel	43	Chief Legal Officer and Secretary

Jonathan Z. Cohen, a Director since 2002. Mr. Cohen also has served as Chairman and a Director of Resource Real Estate Management since 2005 and as Chief Executive Officer, President and a Director of Resource Capital Corp., (NYSE: RSO), a real estate investment trust managed by Resource America, since its formation in 2005. Mr. Cohen has been President since 2003 and Chief Executive Officer since 2004 of Resource America and also has served as Chairman and a Director of Resource Financial Institutions Group, Inc., a subsidiary of Resource America, since 2005. Mr. Cohen was Executive Vice President of Resource America from 2001 to 2003, Senior Vice President from 1999 to 2001 and Chief Operating Officer from 2002 to 2004. Mr. Cohen has been Vice Chairman of the Managing Board of Atlas Pipeline Partners GP, LLC, the general partner of Atlas Pipeline Partners, L.P., a publicly registered (NYSE: APL) natural gas pipeline company since its formation in 1999, Vice Chairman of Atlas Energy, Inc. (formally Atlas America, Inc.), a publicly-traded natural gas and oil exploration and production company since 2000 and Vice Chairman of Atlas Energy Resources, a natural gas and oil exploration and production company since 2006. Mr. Cohen was the Vice Chairman of RAIT Investment Trust, (now RAIT Financial Trust), or RAIT, a publicly-traded REIT (NYSE: RAS) from 2003 to 2006, and Secretary, trustee and a member of RAIT’s investment committee from 1997 to 2006. Among the reasons for his appointment as director, Mr. Cohen’s financial, business and real estate experience add strategic vision to our General Partner’s board.

Alan F. Feldman, a Director and Senior Vice President since 2004.  Mr. Feldman also has served as Chief Executive Officer of Resource Real Estate, a subsidiary of Resource America, since 2004, and of Resource Real Estate Opportunity REIT, a real estate investment trust managed by Resource America, since 2009, President and a Director of Resource Real Estate Management since 2005 and a Senior Vice President of Resource America since 2002.  Mr. Feldman was President of Resource Properties, a subsidiary of Resource America, from 2002 to 2005.  From 1998 to 2002, Mr. Feldman was a Vice President at Lazard Freres & Co., an investment banking firm, specializing in real estate mergers and acquisitions, asset and portfolio sales and recapitalization.  From 1992 through 1998 Mr. Feldman was an Executive Vice President of the Pennsylvania Real Estate Investment Trust and its predecessor, The Rubin Organization, where he was responsible for the firm’s 20 million square feet of managed retail properties.  From 1990 to 1992 Mr. Feldman was a Director at Strouse, Greenberg & Co., a regional full service real estate company.  From 1986 through 1988, Mr. Feldman was an engineer at Squibb Corporation.  Mr. Feldman’s extensive experience and knowledge in the real estate business is an asset to our General Partner’s board.

David E. Bloom, a Director since 2002, President from 2002 to 2006 and Senior Vice President since 2006. Mr. Bloom also has served as President and a Director of Resource Real Estate since 2004, and as a Senior Vice President of Resource America, a position he has held since September 2001. Mr. Bloom joined Resource America from Colony Capital, LLC, a Los Angeles-based real estate fund, where he was a Senior Vice President as well as a Principal of Colony Capital Asia Pacific from 1999 to 2001. While at Colony, Mr. Bloom was responsible for the identification, evaluation and consummation of new investments, and he actively participated in the firm’s equity and debt raising efforts. From 1998 to 1999, Mr. Bloom was a Director at Sonnenblick-Goldman Company, a New York based real estate investment bank. From 1992 to 1998, Mr. Bloom practiced law in the real estate and corporate departments of Wilkie Farr & Gallagher in New York and Drinker Biddle & Reath in Philadelphia. Prior to practicing law, Mr. Bloom began his real estate career in 1987 as an Acquisitions and Development Associate with Strouse, Greenberg & Company, a regional full-service real estate company. Mr. Bloom’s extensive experience and knowledge in the real estate business is an asset to our General Partner’s board.

27

Kevin M. Finkel, President since 2006 and Senior Vice President from 2003 to 2006. Mr. Finkel also has served as Executive Vice President since 2008 and Director of Acquisitions since 2004 of Resource Real Estate. Mr. Finkel joined Resource America in 2002, and has been a Vice President of Resource America since 2006. Prior to joining Resource America, Mr. Finkel was an investment banker at Barclays Capital from 1998 to 2000 and at Deutsche Bank Securities from 1994 to 1998.

Steven R. Saltzman, Vice President of Finance and Chief Financial and Accounting Officer since August 2003. Mr. Saltzman also has served as Vice President and Controller of Resource Real Estate since 2004 and Vice President of Finance of Resource Real Estate Management since 2006. From 1999 to 2003, Mr. Saltzman was Controller at WP Realty, Inc., a regional developer and property manager specializing in community shopping centers.  Mr. Saltzman began his real estate career in 1988 as a Property Controller at The Rubin Organization, a predecessor to the Pennsylvania Real Estate Investment Trust.  Mr. Saltzman began his professional career at Price Waterhouse from 1985 to 1988. 

Darshan V. Patel, Chief Legal Officer and Secretary since 2002.  Mr. Patel also has served as Vice President of Resource America since 2005 and Associate General Counsel for Resource America since 2001.  From 1998 to 2001, Mr. Patel was associated with the law firm of Berman, Paley, Goldstein & Kannry practicing commercial litigation and real estate law.  From 1996 to 1998, Mr. Patel was associated with the law firm of Glynn & Associates practicing litigation and real estate law. 

Code of Business Conduct and Ethics

Because we do not directly employ any persons, we rely on a Code of Business Conduct and Ethics adopted by Resource America that applies to the principal executive officer, principal financial officer and principal accounting officer of our General Partner, as well as to persons performing services for us generally. You may obtain a copy of this code of ethics by a request to our General Partner, Resource Capital Partners, at One Crescent Drive, Suite 203, Navy Yard Corporate Center, Philadelphia, PA 19112.

Audit Committee Financial Expert

Neither we nor our General Partner’s Board of Directors has a standing audit committee; our General Partner’s entire Board of Directors acts as the audit committee. Our General Partner’s Board of Directors does not currently have any member who qualifies as an audit committee financial expert. We believe that the cost related to retaining such a financial expert at this time is prohibitive for a small entity such as ours, and that it would reduce amounts otherwise distributable to our LPs.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, which we refer to as the Exchange Act, requires the directors and executive officers of our General Partner, our General Partner, and holders greater than 10% of our limited partnership interests to file reports with the SEC. SEC regulations require us to identify anyone who filed a required report late during the most recent fiscal year. Based on our review of these reports, we believe that the filing requirements for all of these reporting persons were complied with during 2013.

28

ITEM 11.        EXECUTIVE COMPENSATION

We have no directors or officers and we do not directly employ any persons to manage or operate our business. Our affairs are managed by our General Partner and its affiliates. As compensation for its services, we pay our General Partner various fees as set forth in Item 13.

ITEM 12.        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

RELATED STOCKHOLDER MATTERS

The following table sets forth the number and percentage of our limited partnership interests owned by beneficial owners of 5% or more of our limited partnership interests as well as the beneficial ownership of our General Partner, and its officer and directors, as of March 26, 2014. Under the terms of the Partnership Agreement, our affairs are managed by our General Partner. We do not have any officers or directors. This information is reported in accordance with the beneficial ownership rules of the SEC under which a person is deemed to be the beneficial owner of a security if that person has or shares voting power or investment power with respect to such security or has the right to acquire such ownership within 60 days.

Title of Class	Name and address of beneficial owner (1)	Amount and nature of beneficial ownership (2)	Percent of Class
Units of limited partnership interest	Resource Capital Partners, Inc.	183,768 units	5.62%
Units of limited partnership interest	Jonathan Z. Cohen, Chairman of the Board	−	−
	Alan F. Feldman, Senior Vice President and Director	−	−
	Kevin M. Finkel, President	−	−
	Steven R. Saltzman, Vice President - Finance	−	−
	David E. Bloom, Senior Vice President and Director	−	−
	Darshan V. Patel, Chief Legal Office and Assistant Secretary	−	−
	All directors and executive officers as a group	−	−

(1) The address for each beneficial owner is One Crescent Drive, Suite 203, Philadelphia, Pennsylvania 19112.

(2) Beneficial ownership for officers and directors excludes amounts that may be attributable to them as a result of the units beneficially owned by Resource Capital Partners.

ITEM 13.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND

DIRECTOR INDEPENDENCE

We pay our General Partner and its affiliates the following fees for their services.

Property Management Fees

We pay Resource Real Estate Management, an affiliate of our General Partner, a monthly property management fee in an amount equal to 5% of our gross cash receipts from the operation of our Properties. This fee is for Resource Real Estate Management’s services in managing the Properties or obtaining and supervising subcontractor Property managers, which may be affiliates of Resource Real Estate Management or independent third-parties. Resource Real Estate Management is permitted to manage the Properties through a property management affiliate or subcontract the management of the Properties out to unaffiliated third-party subcontractors. If Resource Real Estate Management subcontracts the management of the Properties, then it will pay all management fees payable to the subcontractor managers of our Properties. For the year ended December 31, 2013, Resource Real Estate Management earned $585,000 in real estate property management fees.

Deferral of Real Estate Management Fees

We pay Resource Real Estate Management or its affiliates the real estate management fees for our Real Estate Investments from our operating revenues and our General Partner may, in its discretion, from time to time defer payment of all or any portion of such fees related to our Real Estate Investments, and accrue the same, if it deems our operating revenues are insufficient to pay such fees and still satisfy our investment objectives. We will pay any deferred fees to Resource Real Estate Management when our General Partner deems our operating revenues are sufficient to make such payment. As of December 31, 2013, no fees had been deferred.

29

Investment Management Fees

We pay our General Partner or its affiliates an annual investment management fee payable from our revenues in an amount equal to 1% of the gross offering proceeds from the offering that have been, and continue to be, deployed in Real Estate Investments. The investment management fee is for our General Partner’s professional services rendered in our administration, including, but not limited to, the preparation and distribution of our required quarterly and annual reports to our limited partners. Since the annual investment management fee is for our General Partner’s professional services, it is in addition to the reimbursements we pay our General Partner for certain administrative expenses that it and its affiliates incur on our behalf as described below in “Reimbursement of Administrative Expenses and Direct Costs.” Up to 100% of our General Partner’s annual investment management fee is subordinated to our limited partners’ receipt of their Preferred Return. Our General Partner is entitled at any time to an additional share of our cash distributions to recoup any investment management fees or distributions that were previously subordinated to the extent that our cash distributions to our limited partners exceeded their Preferred Return. For the year ended December 31, 2013, our General Partner earned $321,000 in investment management fees, the payment of which was deferred under the subordination clause of the Partnership Agreement. The payment of the fees earned in the prior years have been deferred as well.

Property Financing Fee for Refinancing a Property

We pay our General Partner or its affiliates a property financing fee equal to 0.5% of the face amount of any refinancing we obtain for our interest in the Properties. This fee is for our General Partner’s or its affiliates’ services in obtaining the financing and negotiating its terms. The property financing fee for refinancing will not be paid for Real Estate Debt Investments. There were no refinancings of the Properties during the year ended December 31, 2013, accordingly, no fees were paid.

Cash Distributions to Our General Partner

Our General Partner will receive distributions from us from the following sources:

• distributable cash from operations;

• distributable cash from capital transactions; and

• cash distributions to the partners upon our liquidation.

Cash distributions from our operations will be first paid to our limited partners until they have received distributions totaling their Preferred Return and thereafter, 80% to our limited partners and 20% to our General Partner.

Cash distributions from capital transactions, which include cash we receive from the sale or refinancing of a Property or the sale or repayment in full of all outstanding principal and interest due and owing to us on a Real Estate Debt Investment, are distributed in the following order:

• first, 100% to our limited partners until they receive distributions, including distributions of distributable cash from operations, totaling their Preferred Return;

• second, 100% to our limited partners until their respective adjusted capital contributions (amount originally paid for a limited partnership interest less previous distributions of distributable cash from capital transactions) have been reduced to zero; and

• thereafter, 80% to our limited partners and 20% to our General Partner.

When we dissolve and liquidate, we will distribute the liquidation proceeds in the following order of priority:

• first, to the payment of our creditors in the order of priority provided by law, except obligations to partners or their affiliates;

• next, to establish any reserve that our General Partner (or any other person effecting the winding up) determines is reasonably necessary for any contingent or unforeseen liability or obligation;

• next, to the payment of all unpaid fees (other than our General Partner’s right to reimbursement of any previous fees subordinated to distributions to our limited partners) and other obligations owed by us to our General Partner and its affiliates (other than expense reimbursements), such as loans to us, in proportion to, and to the extent of, the unpaid fees, advances and other obligations to our General Partner and its affiliates under the Partnership Agreement;

• next, to the payment of all expense reimbursements (other than our General Partner’s right to reimbursement of any previous subordination distributions to our limited partners) to which our General Partner or its affiliates may be entitled under the Partnership Agreement;

• next, to the partners in proportion to, and to the extent of, the positive balances of their capital accounts;

30

• next, 100% to our limited partners until they have received their respective Preferred Returns;

• next, to our General Partner as reimbursement for any previous subordination distributions to our limited partners, if any; and

• thereafter, 80% to our limited partners and 20% to our General Partner.

There were no distributions to the General Partner as of December 31, 2013 and 2012.

Director Independence

Because we are not listed on any national securities exchange or inter-dealer quotation system, we have elected to use the NASDAQ National Stock Market’s definition of “independent director” in evaluating whether any of our General Partner’s directors are independent. Under this definition, the board of directors of our General Partner has determined that our General Partner does not have any independent directors, nor are we required to have any.

Parent Entities

See Item 1, “Business - General”

ITEM 14.        PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit Fees. The aggregate fees billed by our independent auditors, Grant Thornton LLP for the periods ended December 31, 2013 and 2012 for professional services rendered were $102,000 and $93,000, respectively.

Audit-Related Fees. We did not incur any audit related fees from Grant Thornton LLP during 2013 and 2012.

Tax Fees. We did not incur any fees for tax services from Grant Thornton LLP during 2013 and 2012.

All Other Fees. We did not incur any other fees from Grant Thornton LLP during 2013 and 2012.

Procedures for Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditor. As a limited partnership, we do not have an audit committee. Our General Partner’s Board of Directors, acting as a committee of the whole, reviews and approves in advance any audit and any permissible non-audit engagement or relationship between us and our independent auditors.

31

PART IV

ITEM 15.        EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this Annual Report on Form 10-K/A:

1.Financial Statements

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets at December 31, 2013 and 2012

Consolidated Statements of Operations for the

Years Ended December 31, 2013 and 2012

Consolidated Statements of Changes in Partners’ Capital for the Years Ended

December 31, 2013 and 2012

Consolidated Statements of Cash Flows for the Years Ended December 31, 2013 and 2012

Notes to Consolidated Financial Statements - December 31, 2013

2.Financial Statement Schedules

Schedule III Investments in Real Estate

3.Exhibits

Exhibit No.	Description
3.1	Amended and Restated Agreement of Limited Partnership. (1)
3.2	Certificate of Limited Partnership. (1)
4.1	Forms of letters sent to limited partners confirming their investment. (1)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 1350 18 U.S.C., as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 1350 18 U.S.C., as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1	The following information from the Partnership's annual report on Form 10-K for the year ended December 31, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statement of Changes in Partners' Capital; and (iv) Consolidated Statements of Cash Flows.

(1) Filed previously as an exhibit to the Partnership’s registration statement on Form 10 for the year ended December 31, 2008 and by this reference incorporated herein.

32

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 hereunto duly authorized.

	RESOURCE REAL ESTATE INVESTORS 7, L.P.
	By:  Resource Capital Partners, Inc., its general partner
March 28, 2014	By:         /s/ Kevin M. Finkel
	Kevin M. Finkel
	President
	(Principal Executive Officer)

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 dates indicated.

/s/ Jonathan Z. Cohen	Director	March 28, 2014
JONATHAN Z. COHEN
/s/ Alan F. Feldman	Director and Senior Vice President	March 28, 2014
ALAN F. FELDMAN
/s/ David E. Bloom	Director and Senior Vice President	March 28, 2014
DAVID E. BLOOM
/s/ Kevin M. Finkel	President	March 28, 2014
KEVIN M. FINKEL	(Principal Executive Officer)
/s/ Steven R. Saltzman	Vice President - Finance	March 28, 2014
STEVEN R. SALTZMAN	(Principal Financial and Accounting Officer)

33

Resource Real Estate Investors 7, L.P.

SCHEDULE III

Real Estate and Accumulated Depreciation

December 31, 2013

(dollars in thousands)

Column A	Column B		Column C		Column D		Column E		Column F			Column G	Column H	Column I
Description	Encumbrances		Initial cost to Company		Cost capitalized subsequent to acquisition		Gross amount at which carried at close of period		Accumulated depreciation			Date of construction	Date acquired	Life on which depreciation in latest income is computed
			Buildings and land improvements		Improvements carrying costs		Buildings and land improvements total
Real estate owned:
Residential	9,858		$	12,632	$	1,321	$	13,953	(3,165		)	1985	7/31/2008	3 - 27.5 years
Portland, ME
Residential	5,903		7,902		1,115		9,017		(1,892		)	1978	12/10/2008	3- 27.5 years
Austin, TX
Residential	6,133		8,407		457		8,864		(1,821		)	1985	12/10/2008	3 - 27.5 years
San Antonio, TX
Residential	5,060		6,765		937		7,702		(1,561		)	1974	12/12/2008	3 - 27.5 years
Austin, TX
Residential	12,816		17,157		2,021		19,178		(3,783		)	1985	12/19/2008	3 - 27.5 years
Decatur, GA
Residential	9,580		11,500		1,163		12,663		(1,406		)	1970	3/7/2012	3 - 27.5 years
Columbia, SC
	$	49,350	$	64,363	$	7,014	$	71,377	$	(13,628	)

	2013			2012
Balance at the beginning of the period	$	70,526		$	57,611
Additions during period:
Improvements	1,254			1,651
Purchase of new asset	—			11,500
Other - basis adjustment	60			—
Deductions during period:
Sale of land	—			(235		)
Disposals	(463		)	(1		)
Balance at the end of the period	$	71,377		$	70,526

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Kevin M. Finkel, certify that:

1) I have reviewed this annual report on Form 10-K/A for the year ended December 31, 2013 of Resource Real Estate Investors 7, L.P.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5) The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

	RESOURCE REAL ESTATE INVESTORS 7, L.P.
	By:  Resource Capital Partners, Inc., its general partner
March 28, 2014	By:        /s/ Kevin M. Finkel
	Kevin M. Finkel
	President
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Steven R. Saltzman, certify that:

1) I have reviewed this annual report on Form 10-K/A for the year ended December 31, 2013 of Resource Real Estate Investors 7, L.P.;

2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4) The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5) The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

	RESOURCE REAL ESTATE INVESTORS 7, L.P.
	By:  Resource Capital Partners, Inc., its general partner
March 28, 2014	By:          /s/ Steven R. Saltzman
	Steven R. Saltzman
	Vice President - Finance
	(Principal Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARANES-OXLEY ACT OF 2002

In connection with the Annual Report of Resource Real Estate Investors 7, L.P. (“the Company”) on Form 10-K/A for the year ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Kevin M. Finkel, President of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	RESOURCE REAL ESTATE INVESTORS 7, L.P.
	By:  Resource Capital Partners, Inc., its general partner
March 28, 2014	By:      /s/ Kevin M. Finkel
	Kevin M. Finkel
	President
	(Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARANES-OXLEY ACT OF 2002

In connection with the Annual Report of Resource Real Estate Investors 7, L.P. (“the Company”) on Form 10-K/A for the year ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Steven R. Saltzman, Vice President - Finance of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	RESOURCE REAL ESTATE INVESTORS 7, L.P.
	By:  Resource Capital Partners, Inc., its general partner
March 28, 2014	By:      /s/ Steven R. Saltzman
	Steven R. Saltzman
	Vice President - Finance
	(Principal Accounting Officer)

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes payable	$ 49,350	$ 49,869
Carrying Value [Member] | Tamarlane [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes payable	9,858	9,873
Carrying Value [Member] | Bent Oaks [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes payable	5,903	5,982
Carrying Value [Member] | Cape Cod [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes payable	6,133	6,216
Carrying Value [Member] | Woodhollow [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes payable	5,060	5,126
Carrying Value [Member] | Hills [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes payable	12,816	13,092
Carrying Value [Member] | Village [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes payable	9,580	9,580
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes payable	50,238	51,325
Fair Value [Member] | Tamarlane [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes payable	10,061	10,083
Fair Value [Member] | Bent Oaks [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes payable	6,305	6,596
Fair Value [Member] | Cape Cod [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes payable	6,529	6,828
Fair Value [Member] | Woodhollow [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes payable	5,404	5,659
Fair Value [Member] | Hills [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes payable	12,679	12,729
Fair Value [Member] | Village [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage notes payable	$ 9,260	$ 9,430

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Carrying and fair values of financial instruments

The carrying amounts and estimated fair values of the Partnership’s financial instruments were as follows (in thousands):

	December 31, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Mortgage notes payable:
Tamarlane	$	9,858	$	10,061	$	9,873	$	10,083
Bent Oaks	5,903		6,305		5,982		6,596
Cape Cod	6,133		6,529		6,216		6,828
Woodhollow	5,060		5,404		5,126		5,659
Hills	12,816		12,679		13,092		12,729
Village	9,580		9,260		9,580		9,430
Total mortgage notes payable	$	49,350	$	50,238	$	49,869	$	51,325

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ACQUISITION

12 Months Ended

Dec. 31, 2013

Business Combinations [Abstract]

ACQUISITIONS

ACQUISITION

The cost of Properties is allocated to net tangible assets based on relative fair values. Fair value estimates are based on information obtained from a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of each property and other market data, as well as information obtained about each property as a result of due diligence, marketing and leasing activities.

During the year ended December 31, 2012, the Partnership acquired the Village, a multifamily residential apartment complex in Columbia, South Carolina, which was accounted for using the purchase method of accounting. Based on an appraisal of the property, the Partnership revalued the assets and liabilities during 2013. This resulted in a $1,022,000 decrease in the value of the Land and a corresponding increase in the value of the Buildings. The following table presents the purchase price allocation to the assets and liabilities assumed, based on the fair values at the date of acquisition (in thousands):

Date acquired	March 7, 2012
Land	$	1,232
Buildings	9,710
Identifiable intangible assets	558
Note payable – mortgage	(9,580		)
Escrowed funds and advances	589
Other assets and liabilities assumed, net	(37		)
Cash paid for property acquisition	$	2,472

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ACQUISITION (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013
Woodland Village [Member]
Business Acquisition [Line Items]
Date acquired	Mar. 07, 2012
Land	$ 1,232
Buildings	9,710
Identifiable intangible assets	558
Note payable - mortgage	(9,580)
Escrowed funds and advances	589
Other assets and liabilities assumed, net	(37)
Cash paid for property acquisitions	2,472
Land [Member]
Business Acquisition [Line Items]
(Decrease) in land and increase in building	(1,022)
Building [Member]
Business Acquisition [Line Items]
(Decrease) in land and increase in building	$ 1,022

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RESTRICTED CASH (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	$ 1,712	$ 1,535
Real Estate Taxes [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	882	603
Insurance [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	278	221
Capital Improvements [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash	$ 552	$ 711

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DEFERRED FINANCING COSTS (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Deferred Finance Costs [Abstract]
Accumulated amortization, deferred finance costs	$ 967	$ 758
Estimated amortization expense of deferred financing costs [Abstract]
2014	207
2015	162
2016	88
2017	82
2018	80
Thereafter	15
Total	$ 634	$ 843

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MORTGAGE NOTES PAYABLE (Details) (USD $)	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012
Debt Instrument [Line Items]
Mortgage Notes Payable	$ 49,350,000		$ 49,869,000
Annual principal payments on the mortgage notes payable [Abstract]
2014	657,000
2015	10,569,000
2016	12,683,000
2017	479,000
2018	504,000
Thereafter	24,458,000
Total	49,350,000
Mortgage Notes Payable [Member]
Debt Instrument [Line Items]
Mortgage Notes Payable	49,350,000		49,869,000
Tamarlane [Member] | Mortgage Notes Payable [Member] | Tamarlane 4.92% [Member]
Debt Instrument [Line Items]
Mortgage Notes Payable	8,906,000		8,906,000
Maturity Date	May 01, 2015
Annual Interest Rate (in hundredths)	4.92%
Average Monthly Debt Service	37,000	[1]
Tamarlane [Member] | Mortgage Notes Payable [Member] | Tamarlane 6.12% [Member]
Debt Instrument [Line Items]
Mortgage Notes Payable	952,000		967,000
Maturity Date	May 01, 2015
Annual Interest Rate (in hundredths)	6.12%
Average Monthly Debt Service	6,000	[2]
Bent Oaks [Member] | Mortgage Notes Payable [Member]
Debt Instrument [Line Items]
Mortgage Notes Payable	5,903,000		5,982,000
Maturity Date	Jan. 01, 2019	[3]
Annual Interest Rate (in hundredths)	5.99%	[3]
Average Monthly Debt Service	37,000	[2]
Basis points added to variable interest rate (in hundredths)	2.50%
Option to extend maturity	1 year
Variable rate basis during loan extension	Federal Home Loan Mortgage Corporation Bill Index Rate
Cape Cod [Member] | Mortgage Notes Payable [Member]
Debt Instrument [Line Items]
Mortgage Notes Payable	6,133,000		6,216,000
Maturity Date	Jan. 01, 2019	[3]
Annual Interest Rate (in hundredths)	5.91%	[3]
Average Monthly Debt Service	38,000	[2]
Basis points added to variable interest rate (in hundredths)	2.50%
Option to extend maturity	1 year
Variable rate basis during loan extension	Federal Home Loan Mortgage Corporation Bill Index Rate
Woodhollow [Member] | Mortgage Notes Payable [Member]
Debt Instrument [Line Items]
Mortgage Notes Payable	5,060,000		5,126,000
Maturity Date	Jan. 01, 2019	[3]
Annual Interest Rate (in hundredths)	6.14%	[3]
Average Monthly Debt Service	32,000	[2]
Basis points added to variable interest rate (in hundredths)	2.50%
Option to extend maturity	1 year
Variable rate basis during loan extension	Federal Home Loan Mortgage Corporation Bill Index Rate
Hills [Member] | Mortgage Notes Payable [Member]
Debt Instrument [Line Items]
Mortgage Notes Payable	12,816,000		13,092,000
Maturity Date	Jan. 01, 2016
Annual Interest Rate (in hundredths)	3.40%	[4]
Average Monthly Debt Service	60,000	[4]
Variable rate basis	one-month British Bankers Association London Interbank Offered Rate
Basis points added to variable interest rate (in hundredths)	3.23%
Interest rate cap (in hundredths)	7.00%
Village [Member] | Mortgage Notes Payable [Member]
Debt Instrument [Line Items]
Mortgage Notes Payable	9,580,000		9,580,000
Maturity Date	Apr. 01, 2019
Annual Interest Rate (in hundredths)	3.76%	[5]
Average Monthly Debt Service	31,000	[5]
Monthly payment, principal and interest	$ 44,422

[1] Interest only through the date of maturity, at which time the principal is due.

[2] Monthly payment includes principal and interest.

[3] The Partnership has an option to extend the maturity date for an additional one year to January 1, 2020. During the extension period, the interest rate would convert to the Federal Home Loan Mortgage Corporation Bill Index Rate plus 2.5%.

[4] Monthly payment includes principal and interest. Interest is variable and calculated monthly based upon the one-month British Bankers Association London Interbank Offered Rate plus 323 basis points, capped at 7% for the term of the loan.

[5] Interest only payments of approximately $31,000 through April 1, 2014; thereafter, monthly payment including principal and interest will total $44,422.

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RESTRICTED CASH

12 Months Ended

Dec. 31, 2013

Restricted Cash and Investments [Abstract]

RESTRICTED CASH

RESTRICTED CASH

Restricted cash represents escrow deposits with lenders to be used to pay real estate taxes, insurance, and capital improvements.  A summary of the components of restricted cash follows (in thousands):

	Years Ended
	December 31,
	2013		2012
Real estate taxes	$	882	$	603
Insurance	278		221
Capital improvements	552		711
Total	$	1,712	$	1,535

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Related Party Transaction [Line Items]
Total fees	$ 906,000	$ 839,000
Property management fee, percent	5.00%
RCP [Member]
Related Party Transaction [Line Items]
Annual investment management fee as a percentage of gross proceeds (in hundredths)	1.00%
Percentage of annual investment management fee subordinated to the receipt by the Limited Partners (in hundredths)	100.00%
Investment management fees due	1,500,000	1,200,000
Management fees - related parties	321,000	321,000
RREML [Member]
Related Party Transaction [Line Items]
Fees and advances due	49,000	81,000
Management fees - related parties	585,000	518,000
RCP and RREMI [Member]
Related Party Transaction [Line Items]
Fees and advances due	$ 62,000	$ 38,000

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Rental properties, at cost:
Land	$ 8,715	$ 9,737
Buildings and improvements	58,248	56,566
Personal property	1,949	1,762
Construction-in-progress	87	83
Identifiable intangible assets	2,378	2,378
Rental property, at cost	71,377	70,526
Accumulated depreciation and amortization	(13,628)	(10,938)
Rental property, net	57,749	59,588
Cash	4,957	5,234
Restricted cash	1,712	1,535
Tenant receivables, net	22	4
Accounts receivable due from related parties	195	0
Prepaid expenses and other assets	150	224
Deferred financing costs, net	634	843
Total assets	65,419	67,428
Liabilities:
Mortgage notes payable	49,350	49,869
Accounts payable and accrued expenses	734	531
Real estate tax payable	976	584
Accrued interest	200	202
Payables to related parties	1,645	1,333
Prepaid rent	88	86
Security deposits	265	256
Total liabilities	53,258	52,861
Partners’ capital	12,161	14,567
Total liabilities and partners’ capital	$ 65,419	$ 67,428

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NATURE OF BUSINESS AND OPERATIONS

12 Months Ended

Dec. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NATURE OF BUSINESS AND OPERATIONS

NATURE OF BUSINESS AND OPERATIONS

Resource Real Estate Investors 7, L.P. (“R-7” or the “Partnership”) is a Delaware limited partnership which owns and operates multifamily residential rental properties located in Georgia, Maine, Texas and South Carolina (the “Properties”).  The Partnership also may invest in interests in real estate mortgages and other debt instruments that are secured, directly or indirectly, by multifamily residential rental properties although the Partnership had no such investments as of December 31, 2013 and 2012.  The Partnership was formed on March 28, 2008 and commenced operations on June 16, 2008.  The General Partner, Resource Capital Partners, Inc. (“RCP”, the “General Partner”, or “GP”), is in the business of sponsoring and managing real estate investment limited partnerships and tenant in common programs.  RCP contributed $1,000 in cash as its minimum capital contribution to the Partnership.  In addition, RCP held a 5.62% limited partnership interest in the Partnership at December 31, 2013, and held a 5.53% limited partnership interest at December 31, 2012.  RCP is an indirect wholly owned subsidiary of Resource America, Inc. (“RAI”), a publicly traded company (NASDAQ: REXI) operating in the real estate, financial fund management and commercial finance sectors.

The Partnership will continue until March 28, 2016, unless terminated earlier in accordance with the First Amended and Restated Agreement of Limited Partnership (the “Agreement”).  The GP has the right to extend the Partnership term for one or more periods to a maximum of two years in the aggregate following the initial termination date.

The Agreement provides that income is allocated as follows: first, to the Limited Partners (“LPs”) and the GP (collectively, the “Partners”) in proportion to and to the extent of the deficit balances, if any, in their respective capital accounts; second, to the Partners in proportion to the allocations of Distributable Cash (as defined in the Agreement); and third, 100% to the LPs.  All losses are allocated as follows: first, 100% to the LPs until the LPs have been allocated losses equal to the excess, if any, of their aggregate capital account balances over the aggregate Adjusted Capital Contributions (as defined in the Agreement); second, to the Partners in proportion to and to the extent of their respective remaining positive capital account balances, if any; and third, 100% to the LPs.

Distributable cash from operations, payable monthly, as determined by the GP, is first allocated 100% to the LPs until the LP’s have received their Preferred Return (as defined in the Agreement); and thereafter, 80% to the LPs and 20% to the GP.

Distributable cash from capital transactions, as determined by the GP, is first allocated 100% to the LPs until the LPs have received their Preferred Return; second, 100% to the LPs until their Adjusted Capital Contributions (as defined in the Agreement) have been reduced to zero; and thereafter, 80% to the LPs and 20% to the GP.

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SALE OF LAND (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended	12 Months Ended
	May 01, 2012 acre	Dec. 31, 2013	Dec. 31, 2012
Gain (Loss) on Disposition of Property Plant Equipment [Abstract]
Number of acres sold	1.4
Loss on sale of land	$ 198	$ 0	$ (198)

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DEFERRED FINANCING COSTS (Tables)

12 Months Ended

Dec. 31, 2013

Deferred Finance Costs [Abstract]

Estimated amortization expense of the existing deferred financing costs

Estimated amortization of the Properties’ existing deferred financing costs for the next five years ending December 31, and thereafter, is as follows (in thousands):

2014	$	207
2015	162
2016	88
2017	82
2018	80
Thereafter	15
	$	634

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SCHEDULE III Real Estate and Accumulated Depreciation (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	$ 49,350
Initial cost to Company	64,363
Cost capitalized subsequent to acquisition	7,014
Gross amount at which carried at close of period	71,377
Accumulated depreciation	(13,628)
Reconciliation of Carrying Amount of Real Estate Investments [Roll Forward]
Balance at the beginning of the period	70,526	57,611
Additions during period [Abstract]
Improvements	1,254	1,651
Purchase of new asset	0	11,500
Other - basis adjustment	60	0
Deductions during period [Abstract]
Sale of land	0	(235)
Disposals	(463)	(1)
Balance at the end of the period	71,377	70,526
Residential Portland, ME [Member]
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	9,858
Initial cost to Company	12,632
Cost capitalized subsequent to acquisition	1,321
Gross amount at which carried at close of period	13,953
Accumulated depreciation	(3,165)
Date of construction	1985
Date acquired	Jul. 31, 2008
Residential Portland, ME [Member] | Minimum [Member]
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Residential Portland, ME [Member] | Maximum [Member]
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Residential Austin, TX One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	5,903
Initial cost to Company	7,902
Cost capitalized subsequent to acquisition	1,115
Gross amount at which carried at close of period	9,017
Accumulated depreciation	(1,892)
Date of construction	1978
Date acquired	Dec. 10, 2008
Residential Austin, TX One [Member] | Minimum [Member]
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Residential Austin, TX One [Member] | Maximum [Member]
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Residential San Antonio, TX [Member]
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	6,133
Initial cost to Company	8,407
Cost capitalized subsequent to acquisition	457
Gross amount at which carried at close of period	8,864
Accumulated depreciation	(1,821)
Date of construction	1985
Date acquired	Dec. 10, 2008
Residential San Antonio, TX [Member] | Minimum [Member]
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Residential San Antonio, TX [Member] | Maximum [Member]
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Residential Austin, TX Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	5,060
Initial cost to Company	6,765
Cost capitalized subsequent to acquisition	937
Gross amount at which carried at close of period	7,702
Accumulated depreciation	(1,561)
Date of construction	1974
Date acquired	Dec. 12, 2008
Residential Austin, TX Two [Member] | Minimum [Member]
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Residential Austin, TX Two [Member] | Maximum [Member]
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Residential Decatur, GA [Member]
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	12,816
Initial cost to Company	17,157
Cost capitalized subsequent to acquisition	2,021
Gross amount at which carried at close of period	19,178
Accumulated depreciation	(3,783)
Date of construction	1985
Date acquired	Dec. 19, 2008
Residential Decatur, GA [Member] | Minimum [Member]
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Residential Decatur, GA [Member] | Maximum [Member]
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months
Residential Columbia SC [Member]
Real Estate and Accumulated Depreciation [Line Items]
Encumbrances	9,580
Initial cost to Company	11,500
Cost capitalized subsequent to acquisition	1,163
Gross amount at which carried at close of period	12,663
Accumulated depreciation	$ (1,406)
Date of construction	1970
Date acquired	Mar. 07, 2012
Residential Columbia SC [Member] | Minimum [Member]
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	3 years
Residential Columbia SC [Member] | Maximum [Member]
Real Estate and Accumulated Depreciation [Line Items]
Life on which depreciation in latest income is computed	27 years 6 months

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2013

Related Party Transactions [Abstract]

Summary of payables, fees paid and expenses reimbursed to related parties

The Partnership is obligated to pay fees and reimbursements of expenses to related parties.  These activities are summarized as follows (in thousands):

	Years Ended   December 31,
	2013		2012
RCP:
Investment management fees	$	321	$	321
RREML:
Property management fees - 5% of gross cash receipts	585		518
	$	906	$	839

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows:

Principles of Consolidation

The consolidated financial statements include the accounts of the Partnership and its wholly-owned subsidiaries, as follows:

Subsidiaries	Number of Units	Location
RRE Tamarlane Holdings, LLC, or Tamarlane Apartments (“Tamarlane”)	115	Portland, ME
RRE Bent Oaks Holdings, LLC, or Bent Oaks Apartments (“Bent Oaks”)	146	Austin, TX
RRE Cape Cod Holdings,  LLC, or Cape Cod Apartments (“Cape Cod”)	212	San Antonio, TX
RRE Woodhollow Holdings, LLC, or Woodhollow Apartments (“Woodhollow”)	108	Austin, TX
RRE Woodland Hills Holdings, LLC, or Woodland Hills Apartments (“Hills”)	228	Decatur, GA
RRE Woodland Village Holdings, LLC, or Woodland Village Apartments (“Village”)	308	Columbia, SC
	1,117

All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  The Partnership estimates the allowance for uncollectible receivables and loan losses and adjusts the balance quarterly.  Actual results could differ from those estimates.

Supplemental Disclosure of Cash Flow Information

During the years endedDecember 31, 2013 and 2012, the Partnership paid $2.4 million and $2.3 million, respectively, in cash for interest.

Advertising

The Partnership expenses advertising costs as they are incurred.  Advertising costs, which are included in rental operating expenses, totaled $145,000 and $122,000 for the years endedDecember 31, 2013 and 2012, respectively.

Deferred Financing Costs

Costs incurred to obtain financing have been capitalized and are being amortized over the term of the related debt using the effective yield method.

Concentration of Credit Risk

Financial instruments, which potentially subject the Partnership to concentration of credit risk, consist of periodic temporary deposits of cash. At December 31, 2013, the Partnership had $5.1 million of deposits at various banks, of which $2.9 million was over the insurance limit of the Federal Deposit Insurance Corporation. No losses have been experienced on such deposits.

Income Taxes

Income taxes or credits resulting from earnings or losses are payable by or accrue to the benefit of the partners; accordingly, no provision has been made for income taxes in these consolidated financial statements.

The Partnership evaluates the benefits of tax positions taken or expected to be taken in its tax returns under a two-step recognition and measurement process.  Only the largest amount of benefits from the tax positions that will more likely than not be sustainable upon examination are recognized by the Partnership.  The Partnership does not have any unrecognized tax benefits, nor interest and penalties, recorded in the Consolidated Balance Sheets or Consolidated Statements of Operations and does not anticipate significant adjustments to the total amount of unrecognized tax benefits within the next twelve months.

The Partnership is subject to examination by the U.S. Internal Revenue Service and by the taxing authorities in those states in which the Partnership has significant business operations.  The Partnership is not currently undergoing any examinations by taxing authorities.  The Partnership may be subject to U.S. federal income tax and state/local income tax examinations for years 2010 through 2013.

Revenue Recognition

Revenue is primarily derived from the rental of residential housing units with lease agreement terms of generally one year or less.  The Partnership recognizes revenue in the period that rent is earned, which is on a monthly basis.  The Partnership recognizes rent as income on a straight-line basis over the term of the related lease.  Additionally, any incentives included in the lease are amortized on a straight-line basis over the term of the related lease.

Included within rental income are other income amounts such as utility reimbursements, late fees, parking fees, pet fees and lease application fees which are recognized when earned or received.

The future minimum rental payments to be received from noncancelable operating leases is approximately $5.2 million and $2,000 for the years ending December 31,2014 and 2015, respectively, and none thereafter.

Long-Lived Assets

The Partnership reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  If it is determined that an asset’s estimated future cash flows will not be sufficient to recover its carrying amount, an impairment charge will be recorded to reduce the carrying amount for that asset to its estimated fair value.  The Partnership impaired assets at one of the Properties due to a wind storm in 2013 (see Note 9).  Insurance proceeds covered the majority of the impairment.

Rental Properties

Rental properties are carried at cost, net of accumulated depreciation.  Buildings and improvements and personal property are depreciated for financial reporting purposes on the straight-line method over their estimated useful lives.  The value of in-place leases is amortized over the average remaining term of the respective leases on a straight-line basis.  Useful lives used for calculating depreciation for financial reporting purposes are as follows:

Buildings and improvements	5 - 27.5 years
Personal property	3 - 15 years

Tenant Receivables

Tenant receivables are stated at amounts due from tenants net of an allowance for uncollectible receivables.  Payment terms vary and receivables outstanding longer than the payment terms are considered past due.  The Partnership determines its allowance by considering a number of factors, including the length of time receivables are past due, security deposits held, the Partnership’s previous loss history, the tenants’ current ability to pay their obligations to the Partnership, the general condition of the economy and the industry as a whole.  The Partnership writes off receivables when they become uncollectible.  At December 31, 2013 and 2012, there were $1,232 and $955, respectively, in allowances for uncollectible receivables.

Redemptions

The LPs may request redemption of their units at any time.  The Partnership has no obligation to redeem any units and will do so only at the GP’s discretion.  If the Partnership redeems units, the redemption price is generally the amount of the initial investment less all distributions from the Partnership to the LP, and less all organization and offering expenses charged to the LP.

Reclassification

Real estate tax payable was reclassified from accounts payable and accrued expenses in the 2012 consolidated balance sheet to conform to the 2013 presentation.

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Revenues:
Rental income	$ 11,751	$ 10,525
Expenses:
Rental operating	5,467	5,253
Management fees – related parties	906	839
General and administrative	522	876
Depreciation and amortization	2,944	3,076
Total expenses	9,839	10,044
Income before other expenses	1,912	481
Other expenses:
Interest expense, net	(2,564)	(2,516)
Casualty loss	(28)	0
Loss on partial sale of land	0	(198)
Loss on disposal of fixed assets	(89)	(1)
Net loss	$ (769)	$ (2,234)
Weighted average number of limited partner units outstanding	3,270	3,270
Net loss per weighted average limited partner unit	$ (0.24)	$ (0.68)

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SCHEDULE III Real Estate and Accumulated Depreciation

12 Months Ended

Dec. 31, 2013

SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract]

SCHEDULE III Real Estate and Accumulated Depreciation [Text Block]

Resource Real Estate Investors 7, L.P.

SCHEDULE III

Real Estate and Accumulated Depreciation

December 31, 2013

(dollars in thousands)

Column A	Column B		Column C		Column D		Column E		Column F			Column G	Column H	Column I
Description	Encumbrances		Initial cost to Company		Cost capitalized subsequent to acquisition		Gross amount at which carried at close of period		Accumulated depreciation			Date of construction	Date acquired	Life on which depreciation in latest income is computed
			Buildings and land improvements		Improvements carrying costs		Buildings and land improvements total
Real estate owned:
Residential	9,858		$	12,632	$	1,321	$	13,953	(3,165		)	1985	7/31/2008	3 - 27.5 years
Portland, ME
Residential	5,903		7,902		1,115		9,017		(1,892		)	1978	12/10/2008	3- 27.5 years
Austin, TX
Residential	6,133		8,407		457		8,864		(1,821		)	1985	12/10/2008	3 - 27.5 years
San Antonio, TX
Residential	5,060		6,765		937		7,702		(1,561		)	1974	12/12/2008	3 - 27.5 years
Austin, TX
Residential	12,816		17,157		2,021		19,178		(3,783		)	1985	12/19/2008	3 - 27.5 years
Decatur, GA
Residential	9,580		11,500		1,163		12,663		(1,406		)	1970	3/7/2012	3 - 27.5 years
Columbia, SC
	$	49,350	$	64,363	$	7,014	$	71,377	$	(13,628	)

	2013			2012
Balance at the beginning of the period	$	70,526		$	57,611
Additions during period:
Improvements	1,254			1,651
Purchase of new asset	—			11,500
Other - basis adjustment	60			—
Deductions during period:
Sale of land	—			(235		)
Disposals	(463		)	(1		)
Balance at the end of the period	$	71,377		$	70,526

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Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	Resource Real Estate Investors 7, L.P.
Entity Central Index Key	0001486279
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	0
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2013
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Public Float	$ 0

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Partnership and its wholly-owned subsidiaries, as follows:

Subsidiaries	Number of Units	Location
RRE Tamarlane Holdings, LLC, or Tamarlane Apartments (“Tamarlane”)	115	Portland, ME
RRE Bent Oaks Holdings, LLC, or Bent Oaks Apartments (“Bent Oaks”)	146	Austin, TX
RRE Cape Cod Holdings,  LLC, or Cape Cod Apartments (“Cape Cod”)	212	San Antonio, TX
RRE Woodhollow Holdings, LLC, or Woodhollow Apartments (“Woodhollow”)	108	Austin, TX
RRE Woodland Hills Holdings, LLC, or Woodland Hills Apartments (“Hills”)	228	Decatur, GA
RRE Woodland Village Holdings, LLC, or Woodland Village Apartments (“Village”)	308	Columbia, SC
	1,117

All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  The Partnership estimates the allowance for uncollectible receivables and loan losses and adjusts the balance quarterly.  Actual results could differ from those estimates.

Advertising

Advertising

The Partnership expenses advertising costs as they are incurred.  Advertising costs, which are included in rental operating expenses

Deferred Financing Costs

Deferred Financing Costs

Costs incurred to obtain financing have been capitalized and are being amortized over the term of the related debt using the effective yield method.

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments, which potentially subject the Partnership to concentration of credit risk, consist of periodic temporary deposits of cash. At December 31, 2013, the Partnership had $5.1 million of deposits at various banks, of which $2.9 million was over the insurance limit of the Federal Deposit Insurance Corporation. No losses have been experienced on such deposits.

Income Taxes

Income Taxes

Income taxes or credits resulting from earnings or losses are payable by or accrue to the benefit of the partners; accordingly, no provision has been made for income taxes in these consolidated financial statements.

The Partnership evaluates the benefits of tax positions taken or expected to be taken in its tax returns under a two-step recognition and measurement process.  Only the largest amount of benefits from the tax positions that will more likely than not be sustainable upon examination are recognized by the Partnership.  The Partnership does not have any unrecognized tax benefits, nor interest and penalties, recorded in the Consolidated Balance Sheets or Consolidated Statements of Operations and does not anticipate significant adjustments to the total amount of unrecognized tax benefits within the next twelve months.

The Partnership is subject to examination by the U.S. Internal Revenue Service and by the taxing authorities in those states in which the Partnership has significant business operations.  The Partnership is not currently undergoing any examinations by taxing authorities.  The Partnership may be subject to U.S. federal income tax and state/local income tax examinations for years 2010 through 2013.

Revenue Recognition

Revenue Recognition

Revenue is primarily derived from the rental of residential housing units with lease agreement terms of generally one year or less.  The Partnership recognizes revenue in the period that rent is earned, which is on a monthly basis.  The Partnership recognizes rent as income on a straight-line basis over the term of the related lease.  Additionally, any incentives included in the lease are amortized on a straight-line basis over the term of the related lease.

Included within rental income are other income amounts such as utility reimbursements, late fees, parking fees, pet fees and lease application fees which are recognized when earned or received.

Long-Lived Assets

Long-Lived Assets

The Partnership reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  If it is determined that an asset’s estimated future cash flows will not be sufficient to recover its carrying amount, an impairment charge will be recorded to reduce the carrying amount for that asset to its estimated fair value.

Rental Properties

Rental Properties

Rental properties are carried at cost, net of accumulated depreciation.  Buildings and improvements and personal property are depreciated for financial reporting purposes on the straight-line method over their estimated useful lives.  The value of in-place leases is amortized over the average remaining term of the respective leases on a straight-line basis.  Useful lives used for calculating depreciation for financial reporting purposes are as follows:

Buildings and improvements	5 - 27.5 years
Personal property	3 - 15 years

Tenant Receivables

Tenant Receivables

Tenant receivables are stated at amounts due from tenants net of an allowance for uncollectible receivables.  Payment terms vary and receivables outstanding longer than the payment terms are considered past due.  The Partnership determines its allowance by considering a number of factors, including the length of time receivables are past due, security deposits held, the Partnership’s previous loss history, the tenants’ current ability to pay their obligations to the Partnership, the general condition of the economy and the industry as a whole.  The Partnership writes off receivables when they become uncollectible.

Redemptions

Redemptions

The LPs may request redemption of their units at any time.  The Partnership has no obligation to redeem any units and will do so only at the GP’s discretion.  If the Partnership redeems units, the redemption price is generally the amount of the initial investment less all distributions from the Partnership to the LP, and less all organization and offering expenses charged to the LP.

Reclassification

Reclassification

Real estate tax payable was reclassified from accounts payable and accrued expenses in the 2012 consolidated balance sheet to conform to the 2013 presentation.

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CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (USD $) In Thousands, except Share data, unless otherwise specified	Total	General Partner [Member]	Limited Partners [Member]
Balance at Dec. 31, 2011	$ 18,439	$ 1	$ 18,438
Balance (in units) at Dec. 31, 2011			3,269,655
Increase (Decrease) in Partners' Capital [Roll Forward]
Distributions	(1,638)		(1,638)
Net loss	(2,234)		(2,234)
Balance at Dec. 31, 2012	14,567	1	14,566
Balance (in units) at Dec. 31, 2012			3,269,655
Increase (Decrease) in Partners' Capital [Roll Forward]
Distributions	(1,637)		(1,637)
Net loss	(769)		(769)
Balance at Dec. 31, 2013	$ 12,161	$ 1	$ 12,160
Balance (in units) at Dec. 31, 2013			3,269,655

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2013

Related Party Transactions [Abstract]

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     In the ordinary course of its business operations, the Partnership has ongoing relationships with several related entities.

Substantially all of the receivables from related parties represents escrow funds held by RAI for self-insurance. The Properties are partially self-insured with respect to property and casualty. Therefore, unforeseen or catastrophic losses in excess of the Partnership's insured limits could have a material adverse effect on the Partnership's financial condition and operating results.

     RCP is entitled to receive an annual investment management fee, payable monthly, equal to 1% of the gross offering proceeds, net of any amounts otherwise attributable to LP interests owned by RCP.  During the term of the Partnership, RCP must subordinate up to 100% of its annual investment management fee to the receipt by the LPs of their Preferred Return.  As of December 31, 2013 and 2012, investment management fees due to RCP totaled $1.5 million and $1.2 million, respectively.

A wholly-owned subsidiary of RCP, Resource Real Estate Management, LLC (“RREML”) is entitled to receive property and debt management fees.  RREML engaged Resource Real Estate Management, Inc (“RREMI”), an indirect wholly owned subsidiary of RAI, to manage the Partnership’s Properties.  As of December 31, 2013 and 2012, property management fees due totaled $49,000 and $81,000, respectively.

During the ordinary course of business, RCP and RREMI advance funds for ordinary operating expenses on behalf of the Properties, which are repaid within a few days.  As of December 31, 2013 and 2012, advances due totaled $62,000 and $38,000, respectively.

The Partnership is obligated to pay fees and reimbursements of expenses to related parties.  These activities are summarized as follows (in thousands):

	Years Ended   December 31,
	2013		2012
RCP:
Investment management fees	$	321	$	321
RREML:
Property management fees - 5% of gross cash receipts	585		518
	$	906	$	839

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MORTGAGE NOTES PAYABLE

12 Months Ended

Dec. 31, 2013

Notes Payable [Abstract]

MORTGAGE NOTES PAYABLE

MORTGAGE NOTES PAYABLE

The following is a summary of mortgage notes payable (in thousands, except percentages):

	Balance at
	December 31,								Average
Property	2013		2012		Maturity Date		Annual Interest Rate		Monthly Debt Service
Tamarlane	$	8,906	$	8,906	05/01/2015		4.92%		$	37	(1)
Tamarlane	952		967		05/01/2015		6.12%		$	6	(2)
Bent Oaks	5,903		5,982		01/01/2019	(4)	5.99%	(4)	$	37	(2)
Cape Cod	6,133		6,216		01/01/2019	(4)	5.91%	(4)	$	38	(2)
Woodhollow	5,060		5,126		01/01/2019	(4)	6.14%	(4)	$	32	(2)
Hills	12,816		13,092		01/01/2016		3.40%	(3)	$	60	(3)
Village	9,580		9,580		04/01/2019		3.76%	(5)	$	31	(5)
Total	$	49,350	$	49,869

____________________

(1) Interest only through the date of maturity, at which time the principal is due.

(2) Monthly payment includes principal and interest.

(3) Monthly payment includes principal and interest. Interest is variable and calculated monthly based upon the one-month British Bankers Association London Interbank Offered Rate plus 323 basis points, capped at 7% for the term of the loan.

(4) The Partnership has an option to extend the maturity date for an additional one year to January 1, 2020.  During the extension period, the interest rate would convert to the Federal Home Loan Mortgage Corporation Bill Index Rate plus 2.5%.

(5) Interest only payments of approximately $31,000 through April 1, 2014; thereafter, monthly payment including principal and interest will total $44,422.

Annual principal payments on the mortgage notes payable for each of the next five years ending December 31, and thereafter, are as follows (in thousands):

2014	$	657
2015	10,569
2016	12,683
2017	479
2018	504
Thereafter	24,458
	$	49,350

The mortgage notes payable are with recourse only to the Properties securing them subject to certain limited standard exceptions, as defined in the mortgage notes, which the GP has guaranteed with respect to each property.  These exceptions are referred to as “carveouts”.  In general, carveouts relate to damages suffered by the lender for a subsidiary’s failure to pay rents, insurance or condemnation proceeds to the lender, to pay water, sewer and other public assessments or charges, to pay environmental compliance costs or to deliver books and records, in each case as required in the loan documents.  The exceptions also require the GP to guarantee payment of audit costs, lender’s enforcement of its rights under the loan documents and payment of the loan if the subsidiary voluntarily files for bankruptcy or seeks reorganization, or if a related party of the subsidiary does so with respect to the subsidiary.

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MORTGAGE NOTES PAYABLE (Tables)

12 Months Ended

Dec. 31, 2013

Notes Payable [Abstract]

Summary of mortgage notes payable

The following is a summary of mortgage notes payable (in thousands, except percentages):

	Balance at
	December 31,								Average
Property	2013		2012		Maturity Date		Annual Interest Rate		Monthly Debt Service
Tamarlane	$	8,906	$	8,906	05/01/2015		4.92%		$	37	(1)
Tamarlane	952		967		05/01/2015		6.12%		$	6	(2)
Bent Oaks	5,903		5,982		01/01/2019	(4)	5.99%	(4)	$	37	(2)
Cape Cod	6,133		6,216		01/01/2019	(4)	5.91%	(4)	$	38	(2)
Woodhollow	5,060		5,126		01/01/2019	(4)	6.14%	(4)	$	32	(2)
Hills	12,816		13,092		01/01/2016		3.40%	(3)	$	60	(3)
Village	9,580		9,580		04/01/2019		3.76%	(5)	$	31	(5)
Total	$	49,350	$	49,869

____________________

(1) Interest only through the date of maturity, at which time the principal is due.

(2) Monthly payment includes principal and interest.

(3) Monthly payment includes principal and interest. Interest is variable and calculated monthly based upon the one-month British Bankers Association London Interbank Offered Rate plus 323 basis points, capped at 7% for the term of the loan.

(4) The Partnership has an option to extend the maturity date for an additional one year to January 1, 2020.  During the extension period, the interest rate would convert to the Federal Home Loan Mortgage Corporation Bill Index Rate plus 2.5%.

(5) Interest only payments of approximately $31,000 through April 1, 2014; thereafter, monthly payment including principal and interest will total $44,422

Annual principal payments on mortgage notes payable

Annual principal payments on the mortgage notes payable for each of the next five years ending December 31, and thereafter, are as follows (in thousands):

2014	$	657
2015	10,569
2016	12,683
2017	479
2018	504
Thereafter	24,458
	$	49,350

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Consolidated subsidiaries

The consolidated financial statements include the accounts of the Partnership and its wholly-owned subsidiaries, as follows:

Subsidiaries	Number of Units	Location
RRE Tamarlane Holdings, LLC, or Tamarlane Apartments (“Tamarlane”)	115	Portland, ME
RRE Bent Oaks Holdings, LLC, or Bent Oaks Apartments (“Bent Oaks”)	146	Austin, TX
RRE Cape Cod Holdings,  LLC, or Cape Cod Apartments (“Cape Cod”)	212	San Antonio, TX
RRE Woodhollow Holdings, LLC, or Woodhollow Apartments (“Woodhollow”)	108	Austin, TX
RRE Woodland Hills Holdings, LLC, or Woodland Hills Apartments (“Hills”)	228	Decatur, GA
RRE Woodland Village Holdings, LLC, or Woodland Village Apartments (“Village”)	308	Columbia, SC
	1,117

Useful lives used for calculating depreciation for financial reporting

Useful lives used for calculating depreciation for financial reporting purposes are as follows:

Buildings and improvements	5 - 27.5 years
Personal property	3 - 15 years

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SALE OF LAND

12 Months Ended

Dec. 31, 2013

Gain (Loss) on Disposition of Property Plant Equipment [Abstract]

SALE OF LAND

SALE OF LAND

On May 1, 2012, the Partnership sold 1.4 acres of land to the City of San Antonio, Texas, pursuant to an eminent domain proceding at less than its book value, generating a loss of $198,000.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

In analyzing the fair value of its financial instruments disclosed or accounted for on a fair value basis, the Partnership follows the fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  The Partnership determines fair value based on quoted prices when available or, if quoted prices are not available, through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the financial instruments.  The fair value of cash, tenant receivables and accounts payable approximate their carrying values due to their short term nature.  The hierarchy followed defines three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets that the reporting entity has the ability to access at the measurement date. 

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or can be corroborated with observable market data for substantially the entire contractual term of the asset.

Level 3 - Unobservable inputs that reflect the entity’s own assumptions about the assumptions that market participants would use in the pricing of the asset and are consequently not based on market activity, but rather through particular valuation techniques.

The following methods and assumptions were used to estimate the fair value of the Partnership’s financial instruments:

Ÿ Mortgage notes payable.  Rates currently available to the Partnership for debt with similar terms and remaining maturities are used to estimate the fair value of existing debt.

The carrying amounts and estimated fair values of the Partnership’s financial instruments were as follows (in thousands):

	December 31, 2013				December 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Mortgage notes payable:
Tamarlane	$	9,858	$	10,061	$	9,873	$	10,083
Bent Oaks	5,903		6,305		5,982		6,596
Cape Cod	6,133		6,529		6,216		6,828
Woodhollow	5,060		5,404		5,126		5,659
Hills	12,816		12,679		13,092		12,729
Village	9,580		9,260		9,580		9,430
Total mortgage notes payable	$	49,350	$	50,238	$	49,869	$	51,325

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INSURANCE CLAIM

12 Months Ended

Dec. 31, 2013

Extraordinary and Unusual Items [Abstract]

INSURANCE CLAIM

INSURANCE CLAIM

On February 25, 2013, Bent Oaks suffered roof damage as the result of a windstorm.  The damage was partially covered by insurance.  The Partnership reduced the net carrying value of buildings and improvements for Bent Oaks by $61,000. The Partnership received insurance proceeds of $35,000 during the year ended December 31, 2013.  Additional non-capitalized expenses incurred in conjunction with this claim were $2,000 for the year ended December 31, 2013.   The Partnership recorded a loss of $28,000 for the year ended December 31, 2013.

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SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2013

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

The Partnership has evaluated subsequent events and determined that no events have occurred which would require an adjustment to the consolidated financial statements.

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INSURANCE CLAIM (Details) (USD $) In Thousands, unless otherwise specified	0 Months Ended	12 Months Ended
	Feb. 25, 2013	Dec. 31, 2013	Dec. 31, 2012
Extraordinary and Unusual Items [Abstract]
Reduction of carrying value of rental property	$ 61
Insurance proceeds received		35	0
Non-capitalized expenses incurred in claim		2
Casualty loss		$ 28	$ 0

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ACQUISITION (Tables)

12 Months Ended

Dec. 31, 2013

Business Combinations [Abstract]

Purchase price allocation to the assets and liabilities assumed

During the year ended December 31, 2012, the Partnership acquired the Village, a multifamily residential apartment complex in Columbia, South Carolina, which was accounted for using the purchase method of accounting. Based on an appraisal of the property, the Partnership revalued the assets and liabilities during 2013. This resulted in a $1,022,000 decrease in the value of the Land and a corresponding increase in the value of the Buildings. The following table presents the purchase price allocation to the assets and liabilities assumed, based on the fair values at the date of acquisition (in thousands):

Date acquired	March 7, 2012
Land	$	1,232
Buildings	9,710
Identifiable intangible assets	558
Note payable – mortgage	(9,580		)
Escrowed funds and advances	589
Other assets and liabilities assumed, net	(37		)
Cash paid for property acquisition	$	2,472

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NATURE OF BUSINESS AND OPERATIONS (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Limited Partnership, Summary of Ownership Structure [Line Items]
Minimum number of periods partnership agreement can be extended	1 year
Maximum period that partnership agreement can be extended	2 years
Allocation of income, loss and distributable cash	The Agreement provides that income is allocated as follows: first, to the Limited Partners (“LPs”) and the GP (collectively, the “Partners”) in proportion to and to the extent of the deficit balances, if any, in their respective capital accounts; second, to the Partners in proportion to the allocations of Distributable Cash (as defined in the Agreement); and third, 100% to the LPs.  All losses are allocated as follows: first, 100% to the LPs until the LPs have been allocated losses equal to the excess, if any, of their aggregate capital account balances over the aggregate Adjusted Capital Contributions (as defined in the Agreement); second, to the Partners in proportion to and to the extent of their respective remaining positive capital account balances, if any; and third, 100% to the LPs.
General Partner [Member]
Limited Partnership, Summary of Ownership Structure [Line Items]
Minimum capital contribution	$ 1,000
Limited partnership interest (in hundredths)	5.62%	5.53%
Distributable cash from operations allocated, excess (in hundredths)	20.00%
Distributable cash from capital transactions allocated, excess (in hundredths)	20.00%
Limited Partners [Member]
Limited Partnership, Summary of Ownership Structure [Line Items]
Income allocation to Limited Partners (in hundredths)	100.00%
Losses allocated to Limited Partners until their aggregate capital account balances (in hundredths)	100.00%
Losses allocated to Limited Partners, excess (in hundredths)	100.00%
Distributable cash from operations allocated to Limited Partners (in hundredths)	100.00%
Distributable cash from operations allocated, excess (in hundredths)	80.00%
Distributable cash from capital transactions allocated to Limited Partners after receiving Preferred Return (in hundredths)	100.00%
Distributable cash from capital transactions allocated to Limited Partners after receiving Adjusted Capital Contributions (in hundredths)	100.00%
Distributable cash from capital transactions allocated, excess (in hundredths)	80.00%

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Cash flows from operating activities:
Net loss	$ (769)	$ (2,234)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	2,944	3,076
Amortization of deferred financing costs	209	197
Casualty loss	28	0
Losses on disposal/sale of fixed assets	89	199
Changes in operating assets and liabilities, excluding the effects of acquisition:
Restricted cash	(177)	(1)
Tenant receivables, net	(18)	7
Prepaid expense and other assets	74	109
Insurance proceeds received	35	0
Accounts receivable - related parties	(195)	0
Accounts payable and accrued expenses	199	139
Real estate tax payable	392	79
Accrued interest	(2)	28
Payables to related parties	313	349
Prepaid rent	2	(40)
Security deposits	9	28
Net cash provided by operating activities	3,133	1,936
Cash flows from investing activities:
Capital expenditures	(1,254)	(1,651)
Proceeds from sale of land	0	37
Purchase of the Village property	0	(2,551)
Net cash used in investing activities	(1,254)	(4,165)
Cash flows from financing activities:
Distributions to limited partners	(1,637)	(1,638)
Principal payments on mortgage notes payable	(519)	(488)
Payment of deferred financing costs	0	(175)
Net cash used in financing activities	(2,156)	(2,301)
Net decrease in cash	(277)	(4,530)
Cash at beginning of period	5,234	9,764
Cash at end of period	$ 4,957	$ 5,234

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DEFERRED FINANCING COSTS

12 Months Ended

Dec. 31, 2013

Deferred Finance Costs [Abstract]

DEFERRED FINANCING COSTS

DEFERRED FINANCING COSTS

Deferred financing costs include unamortized costs incurred to obtain financing which are being amortized over the term of the related debt.  Accumulated amortization as of December 31, 2013 and 2012 was $967,000 and $758,000, respectively.  Estimated amortization of the Properties’ existing deferred financing costs for the next five years ending December 31, and thereafter, is as follows (in thousands):

2014	$	207
2015	162
2016	88
2017	82
2018	80
Thereafter	15
	$	634

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	12 Months Ended
	Dec. 31, 2013 Unit Property	Dec. 31, 2012
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Number of Units	1,117
Supplemental Disclosure of Cash Flow Information [Abstract]
Cash paid for interest	$ 2,400,000	$ 2,300,000
Advertising [Abstract]
Advertising expense	145,000	122,000
Concentration of Credit Risk [Abstract]
Deposits at banks	5,100,000
Deposits over insurance limit of the Federal Deposit Insurance Corporation	2,900,000
Revenue Recognition [Abstract]
Approximate lease agreement term	1 year
Future minimum rental payments to be received [Abstract]
2014	5,200,000
2015	2,000
Thereafter	0
Long-Lived Assets [Abstract]
Number of properties with impaired assets due to wind storm	1
Tenant Receivables [Abstract]
Allowance for uncollectible receivables	$ 1,232	$ 955
Buildings and improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	5 years
Buildings and improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	27 years 6 months
Personal property [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	3 years
Personal property [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Estimated useful life	15 years
Tamarlane [Member]
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Number of Units	115
Location	Portland, ME
Bent Oaks [Member]
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Number of Units	146
Location	Austin, TX
Cape Cod [Member]
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Number of Units	212
Location	San Antonio, TX
Woodhollow [Member]
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Number of Units	108
Location	Austin, TX
Hills [Member]
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Number of Units	228
Location	Decatur, GA
Village [Member]
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]
Number of Units	308
Location	Columbia, SC

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RESTRICTED CASH (Tables)

12 Months Ended

Dec. 31, 2013

Restricted Cash and Investments [Abstract]

Summary of components of restricted cash

A summary of the components of restricted cash follows (in thousands):

	Years Ended
	December 31,
	2013		2012
Real estate taxes	$	882	$	603
Insurance	278		221
Capital improvements	552		711
Total	$	1,712	$	1,535