FORM 10-QSB—QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF

10QSB 1 ccp4906.htm FORM 10-QSB—QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-QSB

(Mark One)

[X]

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

For the quarterly period ended September 30, 2006

[ ]

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

For the transition period from _________to _________

Commission file number 0-11002

CONSOLIDATED CAPITAL PROPERTIES IV

(Exact Name of Small Business Issuer as Specified in Its Charter)

California

94-2768742

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

55 Beattie Place, PO Box 1089

Greenville, South Carolina 29602

(Address of principal executive offices)

(864) 239-1000

(Registrant's telephone number)

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

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

PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

CONSOLIDATED CAPITAL PROPERTIES IV

CONSOLIDATED BALANCE SHEET

(in thousands, except unit data)

September 30, 2006


Assets
Cash and cash equivalents		$ 852
Receivables and deposits		726
Restricted escrows		4,476
Other assets		2,164
Investment properties:
Land	$ 11,030
Buildings and related personal property	124,233
	135,263
Less accumulated depreciation	(81,962)	53,301
		$ 61,519
Liabilities and Partners' Deficit
Liabilities
Accounts payable		$ 606
Tenant security deposit liabilities		427
Accrued property taxes		1,049
Other liabilities		1,229
Distributions payable (Note B)		1,604
Mortgage notes payable		88,289
		93,204
Partners' Deficit
General partners	$ (7,028)
Limited partners (342,773 units issued and outstanding)	(24,657)	(31,685)
		$ 61,519

See Accompanying Notes to Consolidated Financial Statements

CONSOLIDATED CAPITAL PROPERTIES IV

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands, except per unit data)


	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2006	2005	2006	2005
Revenues:
Rental income	$ 5,391	$ 4,965	$15,873	$13,513
Other income	670	570	1,876	1,543
Casualty gains (Note C)	592	40	695	92
Total revenues	6,653	5,575	18,444	15,148

Expenses:
Operating	3,140	2,795	9,095	7,449
General and administrative	191	193	578	570
Depreciation	1,028	976	2,886	2,410
Interest	1,362	1,321	4,063	3,134
Property taxes	382	446	1,217	1,200
Loss on early extinguishment of debt (Note E)	--	12	--	12
Total expenses	6,103	5,743	17,839	14,775

Net income (loss)	$ 550	$ (168)	$ 605	$ 373

Net income (loss) allocated to general
partners (4%)	$ 22	$ (7)	$ 24	$ 15
Net income (loss) allocated to limited
partners (96%)	528	(161)	581	358
	$ 550	$ (168)	$ 605	$ 373

Net income (loss) per limited partnership unit	$ 1.54	$ (0.47)	$ 1.69	$ 1.04

Distributions per limited partnership unit	$ --	$ 42.08	$ 20.16	$ 42.08

See Accompanying Notes to Consolidated Financial Statements

CONSOLIDATED CAPITAL PROPERTIES IV

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT

(Unaudited)

(in thousands, except unit data)


	Limited			Total
	Partnership	General	Limited	Partners'
	Units	Partners	Partners	Deficit

Original capital contributions	343,106	$ 1	$171,553	$171,554

Partners' deficit at
December 31, 2005	342,773	$ (6,764)	$(18,326)	$(25,090)

Distributions to partners	--	(288)	(6,912)	(7,200)

Net income for the nine months
ended September 30, 2006	--	24	581	605

Partners' deficit at
September 30, 2006	342,773	$ (7,028)	$(24,657)	$(31,685)

See Accompanying Notes to Consolidated Financial Statements

CONSOLIDATED CAPITAL PROPERTIES IV

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)


	Nine Months Ended
	September 30,
	2006	2005
Cash flows from operating activities:
Net income	$ 605	$ 373
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation	2,886	2,410
Amortization of loan costs	245	149
Casualty gain	(695)	(92)
Loss on early extinguishment of debt	--	12
Change in accounts:
Receivables and deposits	408	(280)
Other assets	(358)	(288)
Accounts payable	83	(278)
Tenant security deposit liabilities	55	75
Accrued property taxes	(127)	(14)
Other liabilities	173	257
Due to affiliates	--	12
Net cash provided by operating activities	3,275	2,336
Cash flows from investing activities:
Property improvements and replacements	(3,582)	(15,209)
Net withdrawals from (deposits to) restricted escrows	2,041	(4,961)
Insurance proceeds received	695	92
Net cash used in investing activities	(846)	(20,078)
Cash flows from financing activities:
Payments on mortgage notes payable	(872)	(364)
Proceeds from mortgage notes payable	--	47,950
Repayment of mortgage notes payable	--	(15,750)
Loan costs and prepayment penalties paid	(23)	(474)
Advances from affiliate	--	5,984
Payments on advances from affiliate	--	(6,029)
Distributions to partners	(6,912)	(14,807)
Net cash (used in) provided by financing activities	(7,807)	16,510
Net decrease in cash and cash equivalents	(5,378)	(1,232)
Cash and cash equivalents at beginning of period	6,230	4,539
Cash and cash equivalents at end of period	$ 852	$ 3,307

Supplemental Disclosures of Cash Flow Information and Non-Cash Activities.

During the nine months ended September 30, 2006 distributions payable to partners was adjusted by approximately $288,000 for non-cash activity.

At September 30, 2006 and 2005 approximately $229,000 and $266,000, respectively, of property improvements and replacements were included in accounts payable. At December 31, 2005 and 2004 approximately $147,000 and $3,307,000, respectively, of property improvements and replacements were included in accounts payable and are included in property improvements at September 30, 2006 and 2005, respectively.

Cash paid for interest was approximately $3,907,000 and $3,307,000 for the nine months ended September 30, 2006 and 2005, respectively.

See Accompanying Notes to Consolidated Financial Statements

CONSOLIDATED CAPITAL PROPERTIES IV

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note A – Basis of Presentation

The accompanying unaudited consolidated financial statements of Consolidated Capital Properties IV (the "Partnership" or "Registrant") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulations S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of ConCap Equities, Inc. ("CEI" or the "General Partner"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2006 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2006. For further information, refer to the consolidated financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-K for the fiscal year ended December 31, 2005. The General Partner is a subsidiary of Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust.

Note B - Transactions with Affiliated Parties

The Partnership has no employees and depends on the General Partner and its affiliates for the management and administration of all Partnership activities. The Partnership Agreement provides for certain payments to affiliates for services and for reimbursements of certain expenses incurred by affiliates on behalf of the Partnership.

Affiliates of the General Partner receive 5% of gross receipts from all the Partnership's properties as compensation for providing property management services. The Partnership paid to such affiliates approximately $865,000 and $720,000 for the nine months ended September 30, 2006 and 2005 respectively, which is included in operating expenses.

Affiliates of the General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $642,000 and $596,000 for the nine months ended September 30, 2006 and 2005, respectively, which is included in general and administrative expenses and investment properties. The portion of these reimbursements included in investment properties for the nine months ended September 30, 2006 and 2005, are fees related to construction management services provided by an affiliate of the General Partner of approximately $248,000 and $203,000, respectively.

In accordance with the Partnership Agreement, an affiliate of the General Partner advanced the Partnership approximately $5,984,000 during the nine months ended September 30, 2005 to assist with the construction of Belmont Place Apartments. During the same period, the Partnership repaid principal and interest of approximately $6,083,000 on this advance.

Interest on advances is charged at prime plus 2%. Interest expense was approximately $54,000 for the nine months ended September 30, 2005. There were no advances received during the nine months ended September 30, 2006 and all such advances and accrued interest were repaid during the year ended December 31, 2005.

The Partnership Agreement provides for a special management fee equal to 9% of the total distributions made to the limited partners from cash flow provided by operations to be paid to the General Partner for executive and administrative management services. There were no such special management fees paid or earned during the nine months ended September 30, 2006 and 2005 as there were no operating distributions during this time.

For acting as real estate broker in connection with the sale of South Port Apartments in 2003, the General Partner was paid a real estate commission of approximately $295,000. When the Partnership terminates, the General Partner will be required to return this commission if the limited partners do not receive their original invested capital plus a 6% per annum cumulative return.

As of September 30, 2006 the Partnership has distributed various amounts from the proceeds of property sales and refinancings. At September 30, 2006, approximately $1,604,000 of these distributions from proceeds is payable to the General Partner and special limited partners as this distribution is subordinated and deferred per the Partnership Agreement until the limited partners receive 100% of their original capital contributions from surplus cash.

The Partnership insures its properties up to certain limits through coverage provided by AIMCO which is generally self-insured for a portion of losses and liabilities related to workers compensation, property casualty, general liability and vehicle liability. The Partnership insures its properties above the AIMCO limits through insurance policies obtained by AIMCO from insurers unaffiliated with the General Partner. During the nine months ended September 30, 2006 and 2005, the Partnership was charged by AIMCO and its affiliates approximately $583,000 and $297,000, respectively, for insurance coverage and fees associated with policy claims administration.

Note C - Casualty Events

In July 2006, Lake Forest Apartments suffered water damage as a result of a water main failure. Insurance proceeds of approximately $25,000 were received during the nine months ended September 30, 2006. The Partnership recognized a casualty gain of approximately $25,000 during the nine months ended September 30, 2006 as the damaged assets were fully depreciated at the time of the casualty.

In July 2006, Knollwood Apartments suffered water and fire damage to eighteen rental units. The General Partner is working with the insurance company to finalize the estimated costs and insurance proceeds to be received. It is currently estimated that insurance proceeds will cover the costs to replace the damaged assets.

In June 2006, Knollwood Apartments suffered fire damage from an electrical breaker box malfunction. Insurance proceeds of approximately $30,000 were received during the nine months ended September 30, 2006. The Partnership recognized a casualty gain of approximately $30,000 during the three and nine months ended September 30, 2006 as the damaged assets were fully depreciated at the time of the casualty.

In March 2006, Knollwood Apartments suffered water and fire damage to eighteen rental units. Insurance proceeds of approximately $480,000 were received during the nine months ended September 30, 2006. The Partnership recognized a casualty gain of approximately $480,000 during the nine months ended September 30, 2006 as the damaged assets were fully depreciated at the time of the casualty.

In February 2006, Citadel Village Apartments suffered fire damage to three rental units. Insurance proceeds of approximately $132,000 were received during the nine months ended September 30, 2006. The Partnership recognized a casualty gain of approximately $132,000 during the nine months ended September 30, 2006 as the damaged assets were fully depreciated at the time of the casualty.

During the nine months ended September 30, 2006, the Partnership received approximately $15,000 of insurance proceeds related to a 2003 fire at Citadel Village Apartments. The Partnership had been appealing the actual insurance proceeds received in prior years and was awarded an additional settlement in 2006. The Partnership recognized a casualty gain of approximately $15,000 as a result of the additional proceeds.

In August 2005, Post Ridge Apartments suffered fire damage to some of its rental units. Insurance proceeds of approximately $13,000 were received during the year ended December 31, 2005. The Partnership recognized a casualty gain of approximately $13,000 during the year ended December 31, 2005 as the damaged assets were fully depreciated at the time of the casualty. During the nine months ended September 30, 2006, additional insurance proceeds of approximately $13,000 were received related to this casualty which was recognized as a casualty gain.

In May 2005, Knollwood Apartments suffered fire damage to some of its rental units. Insurance proceeds of approximately $40,000 were received during the nine months ended September 30, 2005. The Partnership recognized a casualty gain of approximately $40,000 during the nine months ended September 30, 2005 as the damaged assets were fully depreciated at the time of the casualty.

In July 2004, Citadel Village Apartments suffered hail and wind damage to some of its rental units. Insurance proceeds of approximately $50,000 were received during the nine months ended September 30, 2005. The Partnership recognized a casualty gain of approximately $50,000 during the nine months ended September 30, 2005 as the damaged assets were fully depreciated at the time of the casualty.

In February 2004, Knollwood Apartments suffered fire damage to some of its rental units. Insurance proceeds of approximately $47,000 were received during the nine months ended September 30, 2004. The Partnership recognized a casualty gain of approximately $47,000 during the nine months ended September 30, 2004 as the damaged assets were fully depreciated at the time of the casualty. During the nine months ended September 30, 2005, the Partnership received approximately $2,000 in additional proceeds which was recognized as a casualty gain.

Note D – Redevelopment

During August 2006 the Partnership commenced with a phased redevelopment project for Knollwood Apartments. The initial phase of the redevelopment project is estimated to cost approximately $7,500,000 and to be completed by the middle of 2007. The scope of the initial phase of the redevelopment project will consist of modifications to the electrical wiring, replacement of HVAC and water heaters, new siding, windows and doors, clubhouse renovations and major landscaping. Temporary roofing will also be installed while permits are obtained for planned roof replacements. The Partnership expects to fund the redevelopment from operations and advances from an affiliate of the General Partner. During the construction period, certain expenses will be capitalized and depreciated over the remaining life of the property.

During 2003, the General Partner determined that Belmont Place Apartments suffered from severe structural defects in the buildings’ foundation and as such, demolished the property. The General Partner designed and approved a redevelopment plan for the property. Site work on the redevelopment began during the fourth quarter of 2003. At December 31, 2005, all 326 units had been completed and were available for rental.

The Partnership entered into a construction contract with Casden Builders, Inc. (a related party) to develop the new Belmont Place Apartments at an estimated cost of approximately $26.9 million. The construction contract provided for the payment of the cost of the work plus a fee without a maximum guaranteed price. Construction was completed in 2005 at a total project cost of approximately $31.9 million. The Partnership funded construction expenditures from operating cash flow, proceeds from a cross collateralized loan, Partnership reserves, loans from an affiliate of the General Partner and sales proceeds. During the nine months ended September 30, 2005, approximately $7,443,000 of construction costs were incurred. Included in these construction costs are capitalized interest costs of approximately $394,000, capitalized tax and insurance expenses of approximately $6,000 and other construction period operating costs of approximately $10,000 for the nine months ended September 30, 2005. There were no capitalized costs related to the redevelopment during the nine months ended September 30, 2006.

Note E – Mortgage Financing

On August 31, 2005, the Partnership refinanced the first mortgage encumbering its investment property, Arbours of Hermitage. The Partnership recognized a loss on early extinguishment of debt of approximately $5,000 during the nine months ended September 30, 2005 due to the write off of unamortized loan costs. The new mortgage loan, in the principal amount of $11,000,000, replaced the existing mortgage loan, which had an outstanding balance at the time of the refinancing of $5,650,000. Closing costs of approximately $89,000 were capitalized and are included in other assets. The new mortgage requires monthly payments of principal and interest of approximately $59,000, beginning on October 10, 2005 until the loan matures on September 10, 2015, with a fixed interest rate of 5.06% and a balloon payment of approximately $8,964,000, due at maturity. The Partnership is prohibited from prepaying the loan prior to October 10, 2007. On or after October 10, 2007, the loan may be prepaid with the payment of a prepayment penalty, as defined in the loan agreement. As a condition of the loan, the lender required AIMCO Properties, L.P., an affiliate of the Partnership, to guarantee the obligations and liabilities of the Partnership with respect to the new mortgage financing.

On August 30, 2005, the Partnership refinanced the first mortgage encumbering one of its investment properties, Foothill Place Apartments. The Partnership recognized a loss on early extinguishment of debt of approximately $7,000 during the nine months ended September 30, 2005 due to the write off of unamortized loan costs. The new mortgage loan, in the principal amount of $17,700,000, replaced the existing mortgage loan, which had an outstanding balance of $10,100,000. Closing costs of approximately $180,000 were capitalized and are included in other assets. The new mortgage requires monthly payments of principal and interest of approximately $92,000, beginning on October 1, 2005 until the loan matures on September 1, 2008, with a fixed interest rate of 4.72% and a balloon payment of approximately $16,836,000 due at maturity. The Partnership may extend the term of the loan for two successive one-year periods by exercising the extension options as defined in the loan agreement. The Partnership may prepay the loan with no penalty if prepayment in full is made no more than twelve months before the maturity date or during the extension periods. However, if the loan is prepaid prior to twelve months before the maturity date then a prepayment penalty, as defined in the loan agreement, will apply.

On April 29, 2005, the Partnership obtained a mortgage in the principal amount of $19,250,000 on Belmont Place Apartments. The Partnership received proceeds from the mortgage of approximately $14,084,000 after payment of closing costs and the funding of two letters of credit, as discussed below. Closing costs of approximately $205,000 were capitalized and are included in other assets. The new mortgage requires monthly payments of interest beginning on June 1, 2005 until November 1, 2006. Beginning December 1, 2006, monthly payments of principal and interest of $108,180 are required until the loan matures November 1, 2034. The lender can exercise a call option on the mortgage on June 1, 2012 and every fifth anniversary thereafter. The interest rate is fixed at 5.14% for the life of the mortgage.

In conjunction with the mortgage, the Partnership has provided to the lender two letters of credit, each in the amount of $2,500,000, to secure the Partnership’s obligations under the mortgage. The letters of credit are secured by proceeds from the mortgage financing which were deposited into an escrow account. The lender will release the first letter of credit when the property has achieved annual rental income of approximately $2.9 million from 60% of the rental units and will release the second letter of credit when the property has achieved annual rental income of approximately $3.9 million from 88% of the rental units. The first letter of credit for $2.5 million was released during the fourth quarter of 2005 and the funds were returned to the Partnership. The amount returned included interest of approximately $33,000. The second letter of credit for $2.5 million was released during the first quarter of 2006 and the funds were returned to the Partnership. The amount returned included interest of approximately $65,000.

Note F - Contingencies

In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its General Partner and several of their affiliated partnerships and corporate entities. The action purported to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) that are named as nominal defendants, challenging, among other things, the acquisition of interests in certain General Partner entities by Insignia Financial Group, Inc. ("Insignia") and entities that were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary damages and equitable relief, including judicial dissolution of the Partnership. In addition, during the third quarter of 2001, a complaint captioned Heller v. Insignia Financial Group (the "Heller action") was filed against the same defendants that are named in the Nuanes action. On or about August 6, 2001, plaintiffs filed a first amended complaint. The Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial dissolution. On January 28, 2002, the trial court granted defendants motion to strike the complaint. Plaintiffs took an appeal from this order.

On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. On June 13, 2003, the court granted final approval of the settlement and entered judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector ("Objector") filed an appeal (the “Appeal”) seeking to vacate and/or reverse the order approving the settlement and entering judgment thereto. On May 4, 2004 the Objector filed a second appeal challenging the court’s use of a referee and its order requiring Objector to pay those fees.

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

On August 18, 2005, Objector and his counsel filed a motion to disqualify the trial court based on a peremptory challenge and filed a motion to disqualify for cause on October 17, 2005, both of which were ultimately denied and/or struck by the trial court. On or about October 13, 2005 Objector filed a motion to intervene and on or about October 19, 2005 filed both a motion to take discovery relating to the adequacy of plaintiffs as derivative representatives and a motion to dissolve the anti-suit injunction in connection with settlement. On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion. On February 3, 2006, the Court held a hearing on the various matters pending before it and ordered additional briefing from the parties and Objector. On June 30, 2006, the trial court entered an order confirming its approval of the class action settlement and entering judgment thereto after the Court of Appeals had remanded the matter for further findings. The substantive terms of the settlement agreement remain unchanged. The trial court also entered supplemental orders on July 1, 2006, denying Objector’s Motion to File a Complaint in Intervention, Objector’s Motion for Leave of Discovery and Objector’s Motion to Dissolve the Anti-Suit Injunction. Notice of Entry of Judgment was served on July 10, 2006. On August 31, 2006, the Objector filed a Notice of Appeal to the Court’s June 30, 2006 and July 1, 2006 orders.

The General Partner does not anticipate that any costs to the Partnership, whether legal or settlement costs, associated with these cases will be material to the Partnership’s overall operations.

AIMCO Properties L.P. and NHP Management Company, both affiliates of the General Partner, are defendants in a lawsuit alleging that they willfully violated the Fair Labor Standards Act (“FLSA”) by failing to pay maintenance workers overtime for all hours worked in excess of forty per week. The complaint, filed in the United States District Court for the District of Columbia, attempts to bring a collective action under the FLSA and seeks to certify state subclasses in California, Maryland, and the District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties L.P. and NHP Management Company failed to compensate maintenance workers for time that they were required to be "on-call." Additionally, the complaint alleges AIMCO Properties L.P. and NHP Management Company failed to comply with the FLSA in compensating maintenance workers for time that they worked in excess of 40 hours in a week. In June 2005 the court conditionally certified the collective action on both the on-call and overtime issues. Approximately 1,049 individuals opted in to the class. The defendants moved to decertify the collective action on both issues and the plaintiffs have responded. Because the court denied plaintiffs’ motion to certify state subclasses, in September 2005, the plaintiffs filed a class action with the same allegations in the Superior Court of California (Contra Costa County), and in November 2005 in Montgomery County Maryland Circuit Court. The California and Maryland cases have been stayed pending the outcome of the decertification motion in the District of Columbia case. Although the outcome of any litigation is uncertain, AIMCO Properties, L.P. does not believe that the ultimate outcome will have a material adverse effect on its consolidated financial condition or results of operations. Similarly, the General Partner does not believe that the ultimate outcome will have a material adverse effect on the Partnership’s consolidated financial condition or results of operations.

The Partnership is unaware of any other pending or outstanding litigation matters involving it or its investment properties that are not of a routine nature arising in the ordinary course of business.

Environmental

Various Federal, state and local laws subject property owners or operators to liability for management, and the costs of removal or remediation, of certain hazardous substances present on a property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of the hazardous substances. The presence of, or the failure to manage or remedy properly, hazardous substances may adversely affect occupancy at affected apartment communities and the ability to sell or finance affected properties. In addition to the costs associated with investigation and remediation actions brought by government agencies, and potential fines or penalties imposed by such agencies in connection therewith, the presence of hazardous substances on a property could result in claims by private plaintiffs for personal injury, disease, disability or other infirmities. Various laws also impose liability for the cost of removal, remediation or disposal of hazardous substances through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous substances is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of its properties, the Partnership could potentially be liable for environmental liabilities or costs associated with its properties.

Mold

The Partnership is aware of lawsuits against owners and managers of multifamily properties asserting claims of personal injury and property damage caused by the presence of mold, some of which have resulted in substantial monetary judgments or settlements. The Partnership has only limited insurance coverage for property damage loss claims arising from the presence of mold and for personal injury claims related to mold exposure. Affiliates of the General Partner have implemented a national policy and procedures to prevent or eliminate mold from its properties and the General Partner believes that these measures will minimize the effects that mold could have on residents. To date, the Partnership has not incurred any material costs or liabilities relating to claims of mold exposure or to abate mold conditions. Because the law regarding mold is unsettled and subject to change the General Partner can make no assurance that liabilities resulting from the presence of or exposure to mold will not have a material adverse effect on the Partnership’s consolidated financial condition or results of operations.

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The matters discussed in this report contain certain forward-looking statements, including, without limitation, statements regarding future financial performance and the effect of government regulations. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors including, without limitation: national and local economic conditions; the terms of governmental regulations that affect the Registrant and interpretations of those regulations; the competitive environment in which the Registrant operates; financing risks, including the risk that cash flows from operations may be insufficient to meet required payments of principal and interest; real estate risks, including variations of real estate values and the general economic climate in local markets and competition for tenants in such markets; litigation, including costs associated with prosecuting and defending claims and any adverse outcomes, and possible environmental liabilities. Readers should carefully review the Registrant's financial statements and the notes thereto, as well as the risk factors described in the documents the Registrant files from time to time with the Securities and Exchange Commission.

The Partnership's investment properties consist of eleven apartment complexes. The following table sets forth the average occupancy of the properties for the nine months ended September 30, 2006 and 2005:


	Average Occupancy
Property	2006	2005

The Apartments	94%	94%
Omaha, NE
Arbours of Hermitage Apartments (2)	97%	92%
Nashville, TN
Belmont Place (3)	86%	39%
Marietta, GA
Citadel Apartments (4)	96%	94%
El Paso, TX
Citadel Village Apartments (4)	90%	85%
Colorado Springs, CO
Foothill Place Apartments (5)	97%	93%
Salt Lake City, UT
Knollwood Apartments	93%	95%
Nashville, TN
Lake Forest Apartments (1)	96%	93%
Omaha, NE
Post Ridge Apartments	96%	94%
Nashville, TN
Rivers Edge Apartments	94%	94%
Auburn, WA
Village East Apartments (6)	91%	71%
Cimarron Hills, CO

(1) The increase in occupancy at Lake Forest Apartments is due to an improved tenant base, more effective marketing, and an improved pricing structure developed to maintain competitiveness with other properties in the market.

(2)

The increase in occupancy at Arbours of Hermitage Apartments is due to increased curb appeal and resident retention efforts.

(3)

The increase in occupancy at Belmont Place Apartments is due to the redevelopment of the property being completed during late 2005 and all units being available for rental.

(4)

The increase in occupancy at Citadel Apartments and Citadel Village Apartments is due to improved resident retention efforts and military personnel returning to the respective areas.

(5) The increase in occupancy at Foothill Place Apartments is due to improved market conditions in the local area and improved resident retention efforts.

(6) The increase in occupancy at Village East Apartments is due to an improved tenant base, increased marketing efforts by the leasing staff, improved curb appeal and the return of military personnel.

The Partnership’s financial results depend upon a number of factors including the ability to attract and maintain tenants at the investment properties, interest rates on mortgage loans, costs incurred to operate the investment properties, general economic conditions and weather. As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, the General Partner may use rental concessions and rental rate reductions to offset softening market conditions, accordingly, there is no guarantee that the General Partner will be able to sustain such a plan. Further, a number of factors that are outside the control of the Partnership such as the local economic climate and weather can adversely or positively affect the Partnership’s financial results.

Results of Operations

The Partnership’s net income for the three and nine months ended September 30, 2006 was approximately $550,000 and $605,000, respectively, compared to a net loss and net income of approximately $168,000 and $373,000 for the three and nine months ended September 30, 2005, respectively. The increase in net income for both the three and nine months ended September 30, 2006 is due to an increase in total revenues partially offset by an increase in total expenses.

Total expenses increased for both the three and nine months ended September 30, 2006 due to increases in operating, depreciation and interest expense expenses. Property tax expense decreased for the three months ended September 30, 2006 and remained relatively constant for the nine months ended September 30, 2006. General and administrative expense remained relatively constant for both the three and nine months ended September 30, 2006. Operating expenses increased for both the three and nine months ended September 30, 2006 due to increases in property, property administrative, insurance, management fee and maintenance expenses partially offset by a decrease in advertising expense. Property expense increased due to the resumption of regular property operations at Belmont Place during 2006 and increased utility expense at ten of the investment properties. Property administrative expenses increased due to an increase in legal costs at Citadel Village related to arbitration with a vendor over payment of prior services. The increase in administrative expense for the nine months ended September 30, 2006 is also due to the recording of a liability during the three months ended June 30, 2006 relating to forfeiture of unclaimed property pursuant to applicable state and local laws. Based on inquiries from state officials, affiliates of the General Partner have reviewed the Partnership’s historic forfeiture of unclaimed property pursuant to applicable state and local laws and, as a result, the Partnership has recorded an estimate of amounts that may be due. Management fees increased due to the increase in rental income on which such fees are based. Insurance expense increased due to an increase in hazard insurance costs at Arbours of Hermitage Apartments, Knollwood Apartments, Belmont Place and Post Ridge Apartments. Maintenance expense increased due to normal maintenance expense at Belmont Place due to higher occupancy levels, an increase in repair costs associated with plumbing leaks at Arbours of Hermitage and an increase in repair costs associated with minor damages at Citadel Village Apartments, Post Ridge Apartments, Knollwood Apartments and Foothill Place Apartments. Advertising expense decreased due to a decrease in newspaper advertising and periodical costs at Citadel Village Apartments, Village East Apartments, The Apartments, Lake Forest Apartments, and Foothills Place Apartments. Depreciation expense increased primarily due to assets being placed into service at Belmont Place Apartments. Interest expense increased primarily due to new mortgage financing at Belmont Place Apartments during 2005 and the increase in the mortgage balances on Arbours of Hermitage, Knollwood, and Foothill Place upon their refinancings during the second half of 2005 and a decrease in capitalized interest associated with the redevelopment of Belmont Place Apartments. Property tax expense decreased for the three months ended September 30, 2006 due to the timing of the receipt of tax increases in the prior year which resulted in adjustments to tax expense in the third quarter of 2005.

Included in general and administrative expenses for the three and nine months ended September 30, 2006 and 2005 are management reimbursements to the General Partner as allowed under the Partnership Agreement. Also included in general and administrative expenses are costs associated with the quarterly and annual communication with investors and regulatory agencies and the annual audit required by the Partnership Agreement.

Total revenues increased for both the three and nine months ended September 30, 2006 due to increases in rental income, other income and casualty gains. Rental income increased due to an increase in the average rental rates at all of the investment properties and an increase in occupancy at eight of the investment properties. Other income increased due to an increase in various fees charged at Belmont Place as the property is now able to lease units and an increase in interest income as a result of larger cash balances, and an increase in interest earned on capital reserves at Knollwood.

The Partnership entered into a construction contract with Casden Builders, Inc. (a related party) to develop the new Belmont Place Apartments at an estimated cost of approximately $26.9 million. The construction contract provided for the payment of the cost of the work plus a fee without a maximum guaranteed price. Construction was completed in 2005 at a total project cost of approximately $31.9 million. The Partnership funded construction expenditures from operating cash flow, proceeds from a cross collateralized loan, Partnership reserves, loans from an affiliate of the General Partner and sales proceeds. During the nine months ended September 30, 2005, approximately $7,743,000 of construction costs were incurred. Included in these construction costs are capitalized interest costs of approximately $394,000, capitalized tax and insurance expenses of approximately $6,000 and other construction period operating costs of approximately $10,000 for the nine months ended September 30, 2006. There were no capitalized costs related to the redevelopment during the nine months ended September 30, 2006.

In February 2004, Knollwood Apartments suffered fire damage to some of the rental units. Insurance proceeds of approximately $47,000 were received during the nine months ended September 30, 2004. The Partnership recognized a casualty gain of approximately $47,000 during the nine months ended September 30, 2004 as the damaged assets were fully depreciated at the time of the casualty. During the nine months ended September 30, 2005, the Partnership received approximately $2,000 in additional proceeds which was recognized as a casualty gain.

Liquidity and Capital Resources

At September 30, 2006, the Partnership had cash and cash equivalents of approximately $852,000 compared to approximately $3,307,000 at September 30, 2005. The decrease in cash and cash equivalents of approximately $5,378,000 from December 31, 2005, is due to approximately $7,807,000 of cash used in financing activities and approximately $846,000 of cash used in investing activities partially offset by approximately $3,275,000 of cash provided by operating activities. Cash used in financing activities consisted of distributions to partners, principal payments on the mortgages encumbering the investment properties and additional loan costs paid related to some of the loans obtained in late 2005. Cash used in investing activities consisted of property improvements and replacements partially offset by withdrawals from restricted escrows and the receipt of insurance proceeds from the casualties at Citadel Village Apartments, Lake Forest Apartments, Knollwood Apartments and Post Ridge Apartments. The Partnership invests its working capital reserves in interest bearing accounts.

quarter of 2006 and the funds were returned to the Partnership. The amount returned included interest of approximately $65,000.

The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the properties to adequately maintain the physical assets and other operating needs of the Partnership and to comply with Federal, state, and local legal and regulatory requirements. The General Partner monitors developments in the area of legal and regulatory compliance. For example, the Sarbanes-Oxley Act of 2002 mandates or suggests additional compliance measures with regard to governance, disclosure, audit and other areas. In light of these changes, the Partnership expects that it will incur higher expenses related to compliance. Capital improvements planned for each of the Partnership's properties are detailed below.

The Apartments

During the nine months ended September 30, 2006, the Partnership completed approximately $142,000 of capital improvements at The Apartments, consisting primarily of exterior siding, floor covering and appliance replacements. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

Arbours of Hermitage Apartments

During the nine months ended September 30, 2006, the Partnership completed approximately $228,000 of capital improvements at Arbours of Hermitage Apartments, consisting primarily of water heater and air conditioning upgrades, siding improvements, swimming pool upgrades, plumbing and electrical improvements and floor covering and appliance replacements. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

Belmont Place

During the nine months ended September 30, 2006, the Partnership completed approximately $54,000 of capital improvements at Belmont Place Apartments, consisting primarily of fencing, office furniture, major landscaping and floor covering replacements. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

Citadel Apartments

During the nine months ended September 30, 2006, the Partnership completed approximately $79,000 of capital improvements at Citadel Apartments, consisting primarily of roof replacement, heating and air conditioning upgrades, furniture and fixtures and floor covering replacements. These improvements were funded from operating cash flow and replacement reserves. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital expenditures will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property.

Citadel Village Apartments

During the nine months ended September 30, 2006, the Partnership completed approximately $450,000 of capital improvements at Citadel Village Apartments, consisting primarily of structural and building improvements, casualty repairs, fitness equipment, new signage, major landscaping, appliance and floor covering replacements. These improvements were funded from operating cash flow and insurance proceeds. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

Foothill Place Apartments

During the nine months ended September 30, 2006, the Partnership completed approximately $919,000 of capital improvements at Foothill Place Apartments, consisting primarily of swimming pool, plumbing fixture and air conditioning upgrades, counter top, appliance and floor covering replacements, structural upgrades and balcony replacements. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

Knollwood Apartments

During the nine months ended September 30, 2006, the Partnership completed approximately $956,000 of capital improvements at Knollwood Apartments, consisting primarily of building improvements, casualty repairs, roof replacement, electrical upgrades, air conditioning, appliance and floor covering replacements, swimming pool and structural improvements. These improvements were funded from operating cash flow and insurance proceeds. During August 2006 the Partnership commenced with a phased redevelopment project for Knollwood Apartments. The initial phase of the redevelopment project is estimated to cost approximately $7,500,000 and to be completed by the middle of 2007. The scope of the initial phase of the redevelopment project will consist of modifications to the electrical wiring, replacement of HVAC and water heaters, new siding, windows and doors, clubhouse renovations and major landscaping. Temporary roofing will also be installed while permits are obtained for planned roof replacements. The Partnership expects to fund the redevelopment from operations and advances from an affiliate of the General Partner. During the construction period, certain expenses will be capitalized and depreciated over the remaining life of the property. Additional routine capital expenditures are anticipated during 2006. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

Lake Forest Apartments

During the nine months ended September 30, 2006, the Partnership completed approximately $265,000 of capital improvements at Lake Forest Apartments, consisting primarily of water heater upgrades, office computers, casualty repairs, clubhouse renovations, curbing and sidewalk upgrades, air conditioning, exterior painting, and floor covering replacements. These improvements were funded from operating cash flow and insurance proceeds. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital expenditures will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property.

Post Ridge Apartments

During the nine months ended September 30, 2006, the Partnership completed approximately $184,000 of capital improvements at Post Ridge Apartments, consisting primarily of building improvements, casualty repairs, water/sewer and plumbing upgrades and floor covering replacements. These improvements were funded from operating cash flow and insurance proceeds. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

Rivers Edge Apartments

During the nine months ended September 30, 2006, the Partnership completed approximately $162,000 of capital improvements at Rivers Edge Apartments, consisting primarily of structural improvements, fencing, and floor covering replacements. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

Village East Apartments

During the nine months ended September 30, 2006, the Partnership completed approximately $225,000 of capital improvements at Village East Apartments, consisting primarily of swimming pool upgrades, fencing, heating and cooling upgrades, major landscaping, floor covering and appliance replacements. These improvements were funded from operating cash flow. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2006. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

Capital expenditures will be incurred only if cash is available from operations or from Partnership reserves. To the extent that capital improvements are completed, the Partnership's distributable cash flow, if any, may be adversely affected at least in the short term.

The Partnership's assets are thought to be sufficient for any near-term needs (exclusive of capital improvements) of the Partnership. The mortgage indebtedness encumbering the Partnership’s investment properties of approximately $88,289,000 matures at various dates between 2007 and 2034 with balloon payments of approximately $7,574,000, $27,936,000, $9,003,000, $8,964,000 and $173,000 due in 2007, 2008, 2014, 2015 and 2022, respectively. The General Partner will attempt to refinance such indebtedness and/or sell the properties prior to such maturity dates. If a property cannot be refinanced or sold for a sufficient amount, the Partnership will risk losing such property through foreclosure.

The Partnership distributed the following amounts to its limited partners during the nine months ended September 30, 2006 and 2005 (in thousands, except per unit data).


	Nine Months	Per Limited	Nine Months	Per Limited
	Ended	Partnership	Ended	Partnership
	September 30, 2006	Unit	September 30, 2005	Unit

Financing (1)	$6,687	$19.51	$ --	$ --
Sale (2)	225	.65	14,425	42.08
Total	$6,912	$20.16	$14,425	$42.08

(1)

Portion of second mortgage loan proceeds obtained on Lake Forest Apartments during 2004.

(2)

2005 is comprised of the remaining sale proceeds from the sale of Southport Apartments in March 2003, sale proceeds from the sale of Point West Apartments in March 2004 and Nob Hill Apartments in October 2004 and a portion of the sale proceeds from the sale of Briar Bay Apartments in October 2004. 2006 is comprised of the remaining sale proceeds from the 2004 sale of Briar Bay Apartments.

In conjunction with the transfer of funds from their certain majority owned sub-tier limited partnerships to the Partnership, approximately $1,000 and $382,000 was distributed to the general partner of the majority owned sub-tier limited partnerships during the nine months ended September 30, 2006 and 2005, respectively.

Future cash distributions will depend on the levels of cash generated from operations and the timing of debt maturities, property sales and/or refinancings. The Partnership’s cash available for distribution is reviewed on a monthly basis. There can be no assurance, however, that the Partnership will generate sufficient funds from operations, after planned capital improvement expenditures, to permit additional distributions to its partners in 2006 or subsequent periods.

Other

In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 224,768 limited partnership units (the “Units”) in the Partnership representing 65.57% of the outstanding Units at September 30, 2006. A number of these Units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will acquire additional Units in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the General Partner. As a result of its ownership of 65.57% of the outstanding Units, AIMCO is in a position to control all such voting decisions with respect to the Partnership. Although the General Partner owes fiduciary duties to the limited partners of the Partnership, the General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the General Partner, as general partner, to the Partnership and its limited partners may come into conflict with the duties of the General Partner to AIMCO as its sole stockholder.

Critical Accounting Policies and Estimates

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

Impairment of Long-Lived Assets

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

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

Capitalized Costs Related to Redevelopment and Construction Projects

The Partnership capitalizes costs incurred in connection with capital expenditure activities, including redevelopment and construction projects. Costs associated with redevelopment projects are capitalized in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 67, “Accounting for Costs and the Initial Rental Operations of Real Estate Properties.” Included in these capitalized costs are payroll costs associated with time spent by site employees in connection with the planning, execution and control of all capital expenditure activities at the property level. The Partnership capitalizes interest, property taxes and operating costs during periods in which redevelopment and construction projects are in progress.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less. The Partnership will offer rental concessions during particularly slow months or in response to heavy competition from other similar complexes in the area. Rental income attributable to leases, net of any concessions, is recognized on a straight-line basis over the term of the lease. The Partnership evaluates all accounts receivable from residents and establishes an allowance, after the application of security deposits, for accounts greater than 30 days past due on current tenants and all receivables due from former tenants.

ITEM 3.

CONTROLS AND PROCEDURES

(a)

Disclosure Controls and Procedures. The Partnership’s management, with the participation of the principal executive officer and principal financial officer of the General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the principal executive officer and principal financial officer of the General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures are effective.

(b)

Internal Control Over Financial Reporting. There have not been any changes in the Partnership’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

The General Partner does not anticipate that any costs to the Partnership, whether legal or settlement costs, associated with these cases will be material to the Partnership’s overall operations.

ITEM 5.

OTHER INFORMATION

On October 15, 2006, the Seventh Amendment to The Limited Partnership Agreement of the Partnership was amended to allow the Partnership to 1) engage the General Partner and its affiliates to provide services to Partnership on third-party market terms in connection with any redevelopment of the Partnership’s properties. The amendment to the Partnership Agreement is included as Exhibit 3.1 to this report.

ITEM 6.

EXHIBITS

See Exhibit Index.

SIGNATURES

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


	CONSOLIDATED CAPITAL PROPERTIES IV

	By: ConCap Equities, Inc.
	General Partner

Date: November 13, 2006	By: /s/Martha L. Long
	Martha L. Long
	Senior Vice President

Date: November 13, 2006	By: /s/Stephen B. Waters
	Stephen B. Waters
	Vice President

CONSOLIDATED CAPITAL PROPERTIES IV

EXHIBIT INDEX

Exhibit

Certificate of Limited Partnership, as amended to date.

3.1

Seventh Amendment to The Limited Partnership Agreement of Consolidated Capital Properties IV, dated October 15, 2006.

10.78

Multifamily Note dated February 2, 2000 between Apartment Associates, Ltd., a Texas limited partnership and ARCS Commercial Mortgage Co., L.P., a California limited partnership. (Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 1999).

10.81

Multifamily Note dated August 29, 2000 between ConCap Rivers Edge Associates, Ltd., a Texas Limited Partnership, and GMAC Commercial Mortgage Corporation, a California Corporation. (Incorporated by reference to Quarterly Report on Form 10-Q for the quarter ended September 30, 2000.)

10.89

Form of Multifamily Note dated October 22, 2003 between Post Ridge Associates, Ltd., Limited Partnership, a Tennessee limited partnership, and GMAC Commercial Mortgage Corporation, a California corporation. (Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2003).

10.90

Form of Replacement Reserve Agreement dated October 22, 2003 between Post Ridge Associates, Ltd., Limited Partnership, a Tennessee limited partnership, and GMAC Commercial Mortgage Corporation, a California corporation. (Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2003).

10.91

Form of Repair Agreement dated October 22, 2003 between Post Ridge Associates, Ltd., Limited Partnership, a Tennessee limited partnership, and GMAC Commercial Mortgage Corporation, a California corporation. (Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2003).

10.92

Form of Cross-Collateralization Agreement dated October 22, 2003 between Post Ridge Associates, Ltd., Limited Partnership, a Tennessee limited partnership, and Federal Home Loan Mortgage Corporation, a corporation organized and existing under the laws of the United States of America. (Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2003).

10.93

Form of Cross-Collateralization Agreement dated October 22, 2003 between Foothill Chimney Associates Limited Partnership, a Georgia limited partnership, and Federal Home Loan Mortgage Corporation, a corporation organized and existing under the laws of the United States of America. (Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2003).

10.94

Form of Debt Service Escrow Agreement dated October 22, 2003 between Foothill Chimney Associates Limited Partnership, a Georgia limited partnership, and Federal Homes Loan Mortgage Corporation, a corporate instrumentality of the United States of America. (Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2003).

10.95

Form of Second Modification to Replacement Reserve Agreement dated October 22, 2003 between Foothill Chimney Associates Limited Partnership, a Georgia limited partnership, and Federal Homes Loan Mortgage Corporation, a corporate instrumentality of the United States of America. (Incorporated by reference to the Annual Report on Form 10-K for the year ended December 31, 2003).

10.98

Multifamily Note dated June 21, 2004 between Concap Citadel Associates, Ltd., a Texas limited partnership, and GMAC Commercial Mortgage Bank. (Incorporated by reference to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).

10.99

Replacement Reserve Agreement dated June 21, 2004 between Concap Citadel Associates, Ltd. a Texas limited partnership, and GMAC Commercial Mortgage Bank. (Incorporated by reference to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).

10.100

Allonge and Amendment to Multifamily Note dated June 21, 2004 between Concap Citadel Associates, Ltd., a Texas limited partnership, and Federal Home Loan Mortgage Corporation. (Incorporated by reference to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).

10.101

Multifamily Note dated June 8, 2004 between Consolidated Capital Properties IV, a California limited partnership, doing business in Nebraska as Consolidated Capital Properties IV Limited Partnership and GMAC Commercial Mortgage Bank. (Incorporated by reference to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).

10.102

Replacement Reserve Agreement dated June 8, 2004 between Consolidated Capital Properties IV, a California limited partnership, doing business in Nebraska as Consolidated Capital Properties IV Limited Partnership and GMAC Commercial Mortgage Bank. (Incorporated by reference to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).

10.103

Allonge and Amendment to Multifamily Note dated June 8, 2004 between Consolidated Capital Properties IV, a California limited partnership, doing business in Nebraska as Consolidated Capital Properties IV Limited Partnership and Federal Home Loan Mortgage Corporation. (Incorporated by reference to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2004).

10.107

Promissory Note dated April 29, 2005 between Foothill Chimney Associates Limited Partnership, a Georgia limited partnership and ING USA Annuity and Life Insurance Company. (Incorporated by reference to current report on Form 8-K dated April 29, 2005) (Belmont Mortgage)

10.108

Form of Letter of Credit dated April 29, 2005 between Foothill Chimney Associates Limited Partnership, a Georgia limited partnership and ING USA Annuity and Life Insurance Company. (Incorporated by reference to current report on Form 8-K dated April 29, 2005) (Belmont Mortgage)

10.109

Deed to Secure Debt and Security Agreement dated April 29, 2005 between Foothill Chimney Associates Limited Partnership, a Georgia limited partnership and ING USA Annuity and Life Insurance Company. (Incorporated by reference to current report on Form 8-K dated April 29, 2005) (Belmont Mortgage)

10.110

Deed of Trust, Assignment of Leases and Rents and Security Agreement dated August 31, 2005 between AIMCO Arbours of Hermitage, LLC, a Delaware limited liability company and New York Life Insurance Company. (Incorporated by reference to current report on Form 8-K dated August 31, 2005)

10.111

Promissory Note dated August 31, 2005 between AIMCO Arbours of Hermitage, LLC, a Delaware limited liability company and New York Life Insurance Company. (Incorporated by reference to current report on Form 8-K dated August 31, 2005)

10.112

Guarantee Agreement dated August 31, 2005 between AIMCO Properties, L.P., a Delaware limited partnership and New York Life Insurance Company. (Incorporated by reference to current report on Form 8-K dated August 31, 2005)

10.113

Deed of Trust, Security Agreement and Fixture Filing dated August 30, 2005 between Foothill Chimney Associates L.P., a Georgia limited partnership and Transamerica Financial Life Insurance Company. (Incorporated by reference to the Quarterly Report on Form 10-Q dated September 30, 2005.)

10.114

Promissory Note dated August 30, 2005 between Foothill Chimney Associates, L.P., a Georgia limited partnership and Transamerica Financial Life Insurance Company. (Incorporated by reference to the Quarterly Report on Form 10-Q dated September 30, 2005.)

10.115

Deed of Trust, Assignment of Leases and Rents and Security Agreement dated November 30, 2005 between AIMCO Knollwood, LLC, a Delaware limited liability company and New York Life Insurance Company (Incorporated by reference to current report on Form 8-K dated November 30, 2005)

10.116

Promissory Note dated November 30, 2005 between AIMCO Knollwood, LLC, a Delaware limited liability company and New York Life Insurance Company. (Incorporated by reference to current report on Form 8-K dated November 30, 2005)

10.117

Form of Escrow Agreement dated November 30, 2005 between AIMCO Knollwood, LLC, a Delaware limited liability company and New York Life Insurance Company. (Incorporated by reference to current report on Form 8-K dated November 30, 2005)

10.118

Guarantee Agreement dated November 30, 2005 between AIMCO Properties, L.P., a Delaware limited partnership and New York Life Insurance Company. (Incorporated by reference to current report on Form 8-K dated November 30, 2005)

10.119

Multifamily Deed of Trust, Assignment of Rents and Security Agreement dated November 30, 2005 between CCP IV Associates, LTD, a Texas limited partnership and GMAC Commercial Mortgage Corporation. (Incorporated by reference to current report on Form 8-K dated November 30, 2005) (Citadel Village mortgage)

10.120

Multifamily Note dated November 30, 2005 between CCP IV Associates, LTD, a Texas limited partnership and GMAC Commercial Mortgage Corporation. (Incorporated by reference to current report on Form 8-K dated November 30, 2005) (Citadel Village mortgage)

10.121

Guarantee Agreement dated November 30, 2005 between AIMCO Properties, L.P., a Delaware limited partnership and GMAC Commercial Mortgage Corporation. (Incorporated by reference to current report on Form 8-K dated November 30, 2005) (Citadel Village mortgage)

10.122

Replacement Reserve and Security Agreement dated November 30, 2005 between CCP IV Associates, LTD, a Texas limited partnership and GMAC Commercial Mortgage Corporation. (Incorporated by reference to current report on Form 8-K dated November 30, 2005) (Citadel Village mortgage)

10.123

Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing dated November 30, 2005 between CCP IV Associates, LTD, a Texas limited partnership and GMAC Commercial Mortgage Corporation. (Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 2005) (Village East mortgage)

10.124

Promissory Note dated November 30, 2005 between CCP IV Associates, LTD, a Texas limited partnership and GMAC Commercial Mortgage Corporation. (Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 2005) (Village East mortgage)

10.125

Loan Agreement and Guarantee Agreement dated November 30, 2005 between CCP IV Associates, LTD, a Texas limited partnership and GMAC Commercial Mortgage Corporation. (Incorporated by reference to Annual Report on Form 10-K for the year ended December 31, 2005) (Village East mortgage)

31.1

Certification of equivalent of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of equivalent of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

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

Exhibit 31.1

CERTIFICATION

I, Martha L. Long, certify that:

I have reviewed this quarterly report on Form 10-QSB of Consolidated Capital Properties IV;

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;

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 small business issuer as of, and for, the periods presented in this report;

The small business issuer'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)) for the small business issuer 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 small business issuer, 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)

Evaluated the effectiveness of the small business issuer'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

(c)

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

The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer'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 small business issuer'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 small business issuer's internal control over financial reporting.

Date: November 13, 2006

/s/Martha L. Long

Martha L. Long

Senior Vice President of ConCap Equities, Inc., equivalent of the chief executive officer of the Partnership

Exhibit 31.2

CERTIFICATION

I, Stephen B. Waters, certify that:

I have reviewed this quarterly report on Form 10-QSB of Consolidated Capital Properties IV;

(a)

(b)

(c)

(a)

(b)

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

Date: November 13, 2006

/s/Stephen B. Waters

Stephen B. Waters

Vice President of ConCap Equities, Inc., equivalent of the chief financial officer of the Partnership

Exhibit 32.1

Certification of CEO and CFO

Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-QSB of Consolidated Capital Properties IV (the "Partnership"), for the quarterly period ended September 30, 2006 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Martha L. Long, as the equivalent of the chief executive officer of the Partnership, and Stephen B. Waters, as the equivalent of the chief financial officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(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 Partnership.


	/s/Martha L. Long
	Name: Martha L. Long
	Date: November 13, 2006

	/s/Stephen B. Waters
	Name: Stephen B. Waters
	Date: November 13, 2006

This certification is furnished with this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.