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

10QSB 1 ccp4907.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, 2007

[ ]

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, 2007


Assets
Cash and cash equivalents		$ 9,105
Receivables and deposits		877
Restricted escrows		1,499
Other assets		1,306
Investment properties:
Land	$ 9,206
Buildings and related personal property	112,012
	121,218
Less accumulated depreciation	(60,018)	61,200
		$ 73,987
Liabilities and Partners' (Deficiency) Capital
Liabilities
Accounts payable		$ 1,867
Tenant security deposit liabilities		419
Accrued property taxes		645
Other liabilities		882
Distributions payable (Note B)		1,604
Mortgage notes payable		73,245
		78,662
Partners' (Deficiency) Capital
General partners	$ (7,110)
Limited partners (342,773 units issued and outstanding)	2,435	(4,675)
		$ 73,987

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,
	2007	2006	2007	2006
		(Restated)		(Restated)
Revenues:
Rental income	$ 4,309	$ 4,067	$12,780	$11,945
Other income	581	534	1,629	1,483
Total revenues	4,890	4,601	14,409	13,428

Expenses:
Operating	2,547	2,449	6,988	7,022
General and administrative	159	191	642	578
Depreciation	1,118	887	2,974	2,476
Interest	982	977	2,888	2,920
Property taxes	340	249	990	782
Total expenses	5,146	4,753	14,482	13,778

Loss before casualty gain and discontinued
operations	(256)	(152)	(73)	(350)
Casualty gains (Note E)	33	567	1,051	670
Income (loss) from discontinued operations
(Notes A and F)	--	135	(3,245)	285
Gain on sale of discontinued operations
(Note F)	--	--	29,021	--
Net (loss) income	$ (223)	$ 550	$26,754	$ 605

Net (loss) income allocated to general
partners	$ (9)	$ 22	$ (91)	$ 24
Net (loss) income allocated to limited
partners	(214)	528	26,845	581
	$ (223)	$ 550	$26,754	$ 605
Per limited partnership unit:
(Loss) income from continuing operations	$ (.62)	$ 1.16	$ 2.74	$ .89
Income (loss) from discontinued operations	--	.38	(9.09)	.80
Gain on sale of discontinued operations	--	--	84.67	--
Net (loss) income per limited partnership unit	$ (.62)	$ 1.54	$ 78.32	$ 1.69

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

See Accompanying Notes to Consolidated Financial Statements

CONSOLIDATED CAPITAL PROPERTIES IV

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' (DEFICIENCY) CAPITAL

(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, 2006	342,773	$(7,019)	$(24,410)	$(31,429)

Net (loss) income for the nine months
ended September 30, 2007	--	(91)	26,845	26,754

Partners' (deficiency) capital at
September 30, 2007	342,773	$(7,110)	$ 2,435	$ (4,675)

See Accompanying Notes to Consolidated Financial Statements

CONSOLIDATED CAPITAL PROPERTIES IV

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)


	Nine Months Ended
	September 30,
	2007	2006
Cash flows from operating activities:
Net income	$ 26,754	$ 605
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation	3,108	2,886
Amortization of loan costs	201	245
Casualty gains	(1,056)	(695)
Gain on sale of investment properties	(29,021)	--
Loss on extinguishment of debt	3,332	--
Change in accounts:
Receivables and deposits	(226)	408
Other assets	25	(358)
Accounts payable	93	83
Tenant security deposit liabilities	(8)	55
Accrued property taxes	(533)	(127)
Other liabilities	(181)	173
Due to affiliates	(152)	--
Net cash provided by operating activities	2,336	3,275
Cash flows from investing activities:
Net proceeds from sale of investment properties	33,631	--
Property improvements and replacements	(12,413)	(3,582)
Net withdrawals from restricted escrows	3,415	2,041
Insurance proceeds received	1,056	695
Net cash provided by (used in) investing activities	25,689	(846)
Cash flows from financing activities:
Payments on mortgage notes payable	(1,022)	(872)
Proceeds from mortgage notes payable	5,810	--
Repayment of mortgage notes payable	(19,507)	--
Loan costs and prepayment penalties paid	(3,147)	(23)
Advances from affiliate	1,685	--
Payments on advances from affiliate	(3,257)	--
Distributions to partners	--	(6,912)
Net cash used in financing activities	(19,438)	(7,807)
Net increase (decrease) in cash and cash equivalents	8,587	(5,378)
Cash and cash equivalents at beginning of period	518	6,230
Cash and cash equivalents at end of period	$ 9,105	$ 852

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, 2007 and 2006 approximately $1,193,000 and $229,000, respectively, of property improvements and replacements were included in accounts payable. At December 31, 2006 and 2005 approximately $1,906,000 and $147,000, respectively, of property improvements and replacements were included in accounts payable and are included in property improvements at September 30, 2007 and 2006, respectively.

Cash paid for interest, net of capitalized interest, was approximately $3,172,000 and $3,849,000 for the nine months ended September 30, 2007 and 2006, 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 Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of 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, 2007, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2007. For further information, refer to the consolidated financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006. The General Partner is a subsidiary of Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust.

In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the accompanying consolidated statements of operations for the three and nine months ended September 30, 2006 have been restated to reflect the operations of Citadel Apartments, The Apartments and Lake Forest Apartments as discontinued operations as a result of the sale of the respective properties during 2007. The operations for the three and nine months ended September 30, 2007 of these properties are included in income (loss) from discontinued operations. Citadel Apartments was sold on March 30, 2007. The Apartments and Lake Forest Apartments were both sold on April 3, 2007.

Certain reclassifications have been made to the 2006 balances to conform to the 2007 presentation.

Recent Accounting Pronouncement

In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157, “Fair Value Measurements”. SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. SFAS No. 157 applies whenever other standards require assets or liabilities to be measured at fair value and does not expand the use of fair value in any new circumstances. SFAS No. 157 establishes a hierarchy that prioritizes the information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, such as the reporting entity’s own data. SFAS No. 157 requires fair value measurements to be disclosed by level within the fair value hierarchy. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Partnership does not anticipate that the adoption of SFAS No. 157 will have a material effect on the Partnership’s consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Partnership has not yet determined whether it will elect the fair value option for any of its financial instruments.

In June 2007, the American Institute of Certified Public Accountants (“the AICPA”) issued Statement of Position No. 07-1, “Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” ("SOP 07-1"). SOP 07-1 provides guidance for determining whether the accounting principles of the AICPA Audit and Accounting Guide “Investment Companies” are required to be applied to an entity by clarifying the definition of an investment company and, whether investment company accounting should be retained by a parent company upon consolidation of an investment company subsidiary, or by an investor in the application of the equity method of accounting to an investment company investee. SOP 07-1 applies to reporting periods beginning on or after December 15, 2007; however, the FASB has decided to issue an exposure draft that would indefinitely delay the effective date of SOP 07-1 until the FASB can reassess the provisions of SOP 07-1. The Partnership is currently evaluating the impact, if any, that adoption of SOP 07-1 may have on its consolidated financial statements in the period of adoption.

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 $788,000 and $865,000 for the nine months ended September 30, 2007 and 2006 respectively, which is included in operating expenses and income (loss) from discontinued operations.

Affiliates of the General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $953,000 and $642,000 for the nine months ended September 30, 2007 and 2006, respectively, which is included in general and administrative expenses, investment properties and gain on sale of discontinued operations. The portion of these reimbursements included in investment properties and gain on sale of discontinued operations for the nine months ended September 30, 2007 and 2006, are construction management services provided by an affiliate of the General Partner of approximately $518,000 and $248,000, respectively.

In accordance with the Partnership Agreement, an affiliate of the General Partner advanced the Partnership approximately $1,685,000 during the nine months ended September 30, 2007 to assist with the payment of real estate taxes and operations for several investment properties and redevelopment draws for 865 Bellevue (formerly known as Knollwood Apartments). During the same period, the Partnership repaid approximately $3,347,000 which included approximately $90,000 of interest. The Partnership did not receive any advances or make any payments during the nine months ended September 30, 2006. Interest on advances was charged at prime plus 2%. Interest expense was approximately $75,000 and less than $1,000 for the nine months ended September 30, 2007 and 2006, respectively. There were no advances outstanding at September 30, 2007.

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, 2007 and 2006 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 have 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, 2007, the Partnership has distributed various amounts from the proceeds of property sales and refinancings. At September 30, 2007, approximately $1,604,000 of these distributions from proceeds are payable to the General Partner and special limited partners as these distributions are 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, 2007 and 2006, the Partnership was charged by AIMCO and its affiliates approximately $807,000 and $583,000, respectively, for insurance coverage and fees associated with policy claims administration.

Note C – Redevelopment of Property

During August 2006 the Partnership commenced with a phased redevelopment project for 865 Bellevue (formerly known as Knollwood Apartments). The initial phase of the redevelopment project was initially 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 consists 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. During the nine months ended September 30, 2007, the Partnership commenced with the second phase of the redevelopment project. The scope of the second phase of the redevelopment project consists of the addition of 34 garages, a gated entry, renovations to the clubhouse, pool, leasing and business center, tennis courts, new playground equipment and renovations to apartment kitchens, baths and living spaces. The revised estimated cost to complete both phases of the redevelopment project is approximately $20,742,000 and the redevelopment is expected to be completed by the end of 2008. During the year ended December 31, 2006, approximately $3,245,000 of redevelopment costs had been incurred. During the nine months ended September 30, 2007 additional costs of approximately $6,486,000 have been incurred. The Partnership expects to fund the redevelopment from operations, proceeds received in connection with the sales and financings of other investment properties 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 the nine months ended September 30, 2007, approximately $103,000 of construction period interest was capitalized related to the redevelopment.

Note D – Mortgage Financing

On August 31, 2007, the Partnership obtained an additional mortgage loan in the principal amount of $2,100,000 on its investment property Post Ridge Apartments, located in Nashville, Tennessee. The additional mortgage bears interest at 5.93% per annum and requires monthly payments of principal and interest of approximately $12,500 beginning October 1, 2007, through the January 1, 2020 maturity date. The additional mortgage has a balloon payment of approximately $1,644,000 due at maturity. If no event of default exists at maturity, the maturity date will automatically be extended for one additional year, to January 1, 2021, during which period the additional mortgage would bear interest at the one-month LIBOR rate plus 250 basis points and would require monthly payments of principal and interest. The Partnership may prepay the additional mortgage at any time with 30 days written notice to the lender subject to a prepayment penalty. 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. In connection with obtaining the additional loan, the Partnership incurred loan costs of approximately $44,000 which were capitalized and are included in other assets on the accompanying consolidated balance sheet.

In connection with the new additional mortgage loan, the Partnership also agreed to certain modifications on the existing first and second mortgage loans encumbering Post Ridge Apartments. The modification includes consolidating the existing loans, an interest rate of 6.665% per annum, monthly payments of principal and interest of approximately $26,400, commencing October 1, 2007 through the maturity date of January 1, 2022, at which time a balloon payment of approximately $3,086,000 is due. The previous terms for the first mortgage were an interest rate of 6.63% per annum through the maturity date of January 1, 2022 and monthly payments of approximately $34,000 through the maturity date, at which date the loan was scheduled to be fully amortized. The previous terms for the second mortgage were an interest rate of 7.04% per annum through the maturity date of January 1, 2022 and monthly payments of approximately $3,000 through the maturity date, at which date a balloon payment of approximately $173,000 was due. The Partnership may prepay the modified mortgage loan at any time subject to a prepayment penalty. 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 modified loan.

On September 21, 2007, the Partnership refinanced the mortgage encumbering one of its investment properties, Citadel Village Apartments, located in Colorado Springs, Colorado. The refinancing replaced the existing mortgage, which at the time of refinancing had a principal balance of approximately $1,766,000, with a new mortgage loan in the principal amount of approximately $3,710,000. The new loan was refinanced under a secured real estate credit facility (“Secured Credit Facility”) with AEGON USA Realty Advisors, Inc., as agent for Transamerica Occidental Life Insurance Company, which has a maturity of October 1, 2010, with two one-year extension options. The new mortgage requires monthly payments of interest only beginning on November 1, 2007, through the October 1, 2010 maturity date, at which date the entire principal balance of approximately $3,710,000 is due. The new loan has a variable interest rate of the one-month LIBOR rate plus 0.78%, which rate at September 30, 2007 is 6.28% per annum, and resets monthly. The variable interest rate may increase to the one-month LIBOR rate plus 0.98% if the debt service coverage ratio of the investment property decreases below a prescribed threshold. The Secured Credit Facility provides mortgage loans on properties owned by other partnerships that are affiliated with the general partner of the Partnership. The Secured Credit Facility creates separate loans for each property that are not cross-collateralized or cross-defaulted with the other property loans. The loans are prepayable without penalty. As a condition of the Secured Credit Facility, 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. In connection with refinancing the existing mortgage, the Partnership incurred loan costs of approximately $49,000 which were capitalized and are included in other assets on the accompanying consolidated balance sheet.

In accordance with the terms of the loan agreement relating to the new mortgage, the payment of the mortgage may be accelerated at the option of the lender if an Event of Default, as defined in the loan agreement, occurs. Events of Default include, but are not limited to, nonpayment of monthly interest and reserve requirements and nonpayment of amounts outstanding on or before the maturity date.

Note E – Casualty Events

In January 2007, Arbours of Hermitage Apartments suffered fire damage to eight rental units. The preliminary estimated cost to repair the units is approximately $940,000. Insurance proceeds of approximately $250,000 were received during the nine months ended September 30, 2007. The Partnership recognized a casualty gain of approximately $250,000 during the nine months ended September 30, 2007 as the damaged assets were fully depreciated at the time of the casualty. Additional insurance proceeds are expected to be received and the Partnership does not anticipate recognizing any loss related to this casualty.

In March 2007, Post Ridge Apartments suffered fire damage to one rental unit. Preliminary estimate of the cost to repair the unit is approximately $39,000. It is currently estimated that insurance proceeds will cover the costs to replace the damaged assets.

In December 2006, Rivers Edge Apartments suffered wind and water damage to some of its rental units. Insurance proceeds of approximately $33,000 were received during the three and nine months ended September 30, 2007. The Partnership recognized a casualty gain of approximately $33,000 during the three and nine months ended September 30, 2007 as the damaged assets were fully depreciated at the time of the casualty.

In October 2006, Post Ridge Apartments suffered fire damage to two rental units. The estimated cost to repair the damaged units is approximately $160,000. During the nine months ended September 30, 2007 the Partnership received approximately $99,000 of insurance proceeds related to this casualty. The Partnership recognized a casualty gain of approximately $99,000 during the nine months ended September 30, 2007 as the damaged assets were fully depreciated at the time of the casualty. Additional insurance proceeds are expected to be received and the Partnership does not anticipate recognizing any loss related to this casualty.

In July 2006, 865 Bellevue (formerly known as Knollwood Apartments) suffered fire damage to eighteen rental units. The estimated cost to repair the damaged units is approximately $924,000 which is expected to be covered by insurance proceeds. Insurance proceeds of approximately $657,000 were received during the nine months ended September 30, 2007 of which approximately $68,000 was to cover lost rents. The Partnership recognized a casualty gain of approximately $589,000 during the nine months ended September 30, 2007 as the damaged assets were fully depreciated at the time of the casualty. The Partnership does not anticipate receiving any additional proceeds related to this casualty. Included in these casualty costs are capitalized interest costs of approximately $48,000, capitalized tax expenses of approximately $7,000 and capitalized operating costs of approximately $2,000.

In June 2006, 865 Bellevue (formerly known as 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, 865 Bellevue (formerly known as 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. During the nine months ended September 30, 2007 the Partnership received additional insurance proceeds of approximately $80,000 related to this casualty which were recognized as a casualty gain during the nine months ended September 30, 2007.

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.

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.

During the year ended December 31, 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 during the nine months ended September 30, 2006.

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 year ended December 31, 2006, additional insurance proceeds of approximately $13,000 were received related to this casualty which were recognized as a casualty gain during the nine months ended September 30, 2006.

Note F – Sale of Investment Properties

On March 30, 2007, the Partnership sold Citadel Apartments to a third party for a gross sales price of $12,250,000. The net proceeds realized by the Partnership were approximately $12,040,000 after payment of closing costs of approximately $210,000. The Partnership used approximately $5,447,000 to repay the first and second mortgages encumbering the property. The Partnership realized a gain on sale of discontinued operations of approximately $10,844,000 during the nine months ended September 30, 2007 as a result of the sale. In addition, the Partnership recorded a loss on extinguishment of debt of approximately $1,092,000 due to the write-off of unamortized loan costs and the payment of a prepayment penalty associated with the payment of the first mortgage of approximately $1,005,000. The loss on extinguishment of debt is included in loss from discontinued operations. In accordance with SFAS No. 144 the operations of Citadel Apartments, income of approximately $26,000 and $135,000 including revenues of approximately $450,000 and $1,413,000, have been classified as income (loss) from discontinued operations on the accompanying consolidated statements of operations for the nine months ended September 30, 2007 and 2006, respectively.

On April 3, 2007, the Partnership sold Lake Forest Apartments to a third party for a gross sales price of $13,660,000. The net proceeds realized by the Partnership were approximately $13,486,000 after payment of closing costs of approximately $174,000. The Partnership used approximately $8,399,000 of the net proceeds to repay the first and second mortgages encumbering the property. The Partnership realized a gain on sale of discontinued operations of approximately $11,702,000 during the nine months ended September 30, 2007 as a result of the sale. In addition, the Partnership recorded a loss on extinguishment of debt of approximately $1,192,000 due to the write-off of unamortized loan costs and the payment of a prepayment penalty associated with the payment of the first mortgage of approximately $1,061,000. The loss on extinguishment of debt is included in loss from discontinued operations. In accordance with SFAS No. 144, the operations of Lake Forest Apartments, income of approximately $70,000 and $131,000, including revenues of approximately $653,000 and $1,798,000 have been classified as income (loss) from discontinued operations on the accompanying consolidated statements of operations for the nine months ended September 30, 2007 and 2006, respectively.

On April 3, 2007, the Partnership also sold The Apartments to the same third party for a gross sales price of $8,211,000. The net proceeds realized by the Partnership were approximately $8,105,000 after payment of closing costs of approximately $106,000. The Partnership used approximately $3,895,000 of the net proceeds to repay the mortgage encumbering the property. The Partnership realized a gain on sale of discontinued operations of approximately $6,475,000 during the nine months ended September 30, 2007 as a result of the sale. In addition, the Partnership recorded a loss on extinguishment of debt of approximately $1,048,000 due to the write-off of unamortized loan costs and the payment of a prepayment penalty associated with the payment of the first mortgage of approximately $988,000. The loss on extinguishment of debt is included in loss from discontinued operations. In accordance with SFAS No. 144, the operations of The Apartments, loss of approximately $9,000 and income of approximately $19,000, including revenues of approximately $401,000 and $1,109,000 have been classified as income (loss) from discontinued operations on the accompanying consolidated statements of operations for the nine months ended September 30, 2007 and 2006, respectively.

Note G - 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.

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. On December 14, 2006, Objector filed his Appellant’s Brief. The Partnership and its affiliates, as well as counsel for the Settlement Class, both filed Respondents’ Briefs on May 17, 2007. Objector filed his response on August 3, 2007. No hearing date has yet been scheduled.

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.

The Partnership is unaware of any 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 policies, procedures, third-party audits and training and the General Partner believes that these measures will prevent or eliminate mold exposure and will minimize the effects that mold may 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.

Excise Tax

During 2006, the Partnership received an excise tax audit assessment from the state of Tennessee in the amount of approximately $380,000 for the tax years 2002-2005. In October 2007, the Partnership and the Tennessee Department of Revenue entered into a settlement agreement that satisfied the Partnership’s Tennessee excise tax obligations for the tax years 2002-2005 and for the short period ending June 30, 2006. The Partnership will not have to pay any additional taxes, penalties or interest as part of this settlement.

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 eight apartment complexes. The following table sets forth the average occupancy of the properties for the nine months ended September 30, 2007 and 2006:


	Average Occupancy
Property	2007	2006

Arbours of Hermitage Apartments	95%	97%
Nashville, TN
Belmont Place (1)	95%	86%
Marietta, GA
Citadel Village Apartments (2)	96%	90%
Colorado Springs, CO
Foothill Place Apartments	96%	97%
Salt Lake City, UT
865 Bellevue (formerly known as	91%	93%
Knollwood Apartments)
Nashville, TN
Post Ridge Apartments	96%	96%
Nashville, TN
Rivers Edge Apartments (3)	98%	94%
Auburn, WA
Village East Apartments (4)	95%	91%
Cimarron Hills, CO

(1)

The increase in occupancy at Belmont Place Apartments is due to the redevelopment of the property being completed during late 2005 and units being leased up throughout 2006.

(2)

The increase in occupancy at Citadel Village Apartments is due to a reduction in turnover, a more stabilized market, improved curb appeal and increased advertising.

(3)

The increase in occupancy at Rivers Edge Apartments can be attributed to fewer move-outs during 2007 and a stronger market.

(4)

The increase in occupancy at Village East Apartments is due to a decrease in military deployments, increased advertising and improved curb appeal.

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 (loss) income for the three and nine months ended September 30, 2007 was approximately $223,000 and $26,754,000, respectively, compared to net income of approximately $550,000 and $605,000 for the three and nine months ended September 30, 2006, respectively. The increase in net income for the nine months ended September 30, 2007 is primarily due to the recognition of a gain on sale of discontinued operations, the recognition of casualty gains and a decrease in loss before casualty gain and discontinued operations, partially offset by an increase in loss from discontinued operations. The increase in net loss for the three months ended September 30, 2007 is due to a decrease in income from discontinued operations and the recognition of casualty gains in 2006 and an increase in loss before casualty gain and discontinued operations.

In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the consolidated statements of operations for the three and nine months ended September 30, 2006 have been restated to reflect the operations of Citadel Apartments, The Apartments and Lake Forest Apartments as discontinued operations as a result of the sale of the respective properties during 2007. The operations for the three and nine months ended September 30, 2007 of these properties are included in income (loss) from discontinued operations. Citadel Apartments was sold on March 30, 2007. The Apartments and Lake Forest Apartments were both sold on April 3, 2007.

On March 30, 2007, the Partnership sold Citadel Apartments to a third party for a gross sales price of $12,250,000. The net proceeds realized by the Partnership were approximately $12,040,000 after payment of closing costs of approximately $210,000. The Partnership used approximately $5,447,000 to repay the first and second mortgages encumbering the property. The Partnership realized a gain on sale of discontinued operations of approximately $10,844,000 during the nine months ended September 30, 2007 as a result of the sale. In addition, the Partnership recorded a loss on extinguishment of debt of approximately $1,092,000 due to the write-off of unamortized loan costs and the payment of a prepayment penalty associated with the payment of the first mortgage of approximately $1,005,000. The loss on extinguishment of debt is included in loss from discontinued operations. In accordance with SFAS No. 144 the operations of Citadel Apartments, income of approximately $26,000 and $135,000 including revenues of approximately $450,000 and $1,413,000, have been classified as income (loss) from discontinued operations on the consolidated statements of operations for the nine months ended September 30, 2007 and 2006, respectively.

On April 3, 2007, the Partnership sold Lake Forest Apartments to a third party for a gross sales price of $13,660,000. The net proceeds realized by the Partnership were approximately $13,486,000 after payment of closing costs of approximately $174,000. The Partnership used approximately $8,399,000 of the net proceeds to repay the first and second mortgages encumbering the property. The Partnership realized a gain on sale of discontinued operations of approximately $11,702,000 during the nine months ended September 30, 2007 as a result of the sale. In addition, the Partnership recorded a loss on extinguishment of debt of approximately $1,192,000 due to the write-off of unamortized loan costs and the payment of a prepayment penalty associated with the payment of the first mortgage of approximately $1,061,000. The loss on extinguishment of debt is included in loss from discontinued operations. In accordance with SFAS No. 144, the operations of Lake Forest Apartments, income of approximately $70,000 and $131,000, including revenues of approximately $653,000 and $1,798,000 have been classified as income (loss) from discontinued operations on the consolidated statements of operations for the nine months ended September 30, 2007 and 2006, respectively.

On April 3, 2007, the Partnership also sold The Apartments to the same third party for a gross sales price of $8,211,000. The net proceeds realized by the Partnership were approximately $8,105,000 after payment of closing costs of approximately $106,000. The Partnership used approximately $3,895,000 of the net proceeds to repay the mortgage encumbering the property. The Partnership realized a gain on sale of discontinued operations of approximately $6,475,000 during the nine months ended September 30, 2007 as a result of the sale. In addition, the Partnership recorded a loss on extinguishment of debt of approximately $1,048,000 due to the write-off of unamortized loan costs and the payment of a prepayment penalty associated with the payment of the first mortgage of approximately $988,000. The loss on extinguishment of debt is included in loss from discontinued operations. In accordance with SFAS No. 144, the operations of The Apartments, loss of approximately $9,000 and income of approximately $19,000, including revenues of approximately $401,000 and $1,109,000 have been classified as (loss) income from discontinued operations on the consolidated statements of operations for the nine months ended September 30, 2007 and 2006, respectively.

Total revenues increased for both the three and nine months ended September 30, 2007 due to increases in both rental income and other income. Rental income increased due to an increase in the average rental rates at seven of the investment properties and an increase in occupancy at four of the investment properties. Other income increased due to an increase in utility reimbursements, lease cancellation fees and interest income.

Total expenses increased for the three months ended September 30, 2007 due to increases in operating, depreciation and property tax expenses, partially offset by a decrease in general and administrative expenses. Interest expense remained relatively constant for the three month period. Total expenses increased for the nine months ended September 30, 2007 due to increases in general and administrative, depreciation and property tax expenses. Operating and interest expenses remained relatively constant for the nine month period. Depreciation expense increased for both periods due to assets being placed into service at Belmont Apartments, 865 Bellevue Apartments (formerly known as Knollwood Apartments) and Post Ridge Apartments. Property tax expense increased for both periods due to increases in the assessed value at Belmont Apartments and 865 Bellevue Apartments (formerly known as Knollwood Apartments). Operating expense increased for the three months ended September 30, 2007 due to increases in advertising, property, administrative and insurance expenses, partially offset by a decrease in maintenance expense. Maintenance expense decreased due to a decrease in clean up costs incurred in the prior year related to various types of property damages to 865 Bellevue (formerly known as Knollwood Apartments), Arbours of Hermitage Apartments and Foothills Place Apartments. Advertising expense increased due to increases in national advertising and periodicals at 865 Bellevue (formerly known as Knollwood Apartments), Post Ridge Apartments and Arbours of Hermitage Apartments. Property expense increased due to increases in payroll and utility costs at the investment properties. Administrative expense increased due to increases in office supplies, uniform purchases and applicant screening costs at 865 Bellevue (formerly known as Knollwood Apartments), applicant screening costs at Arbours of Hermitage Apartments, and increases in office supplies and credit card fees at Foothills Place Apartments. Insurance expense increased primarily due to an increase in insurance premiums at Belmont Apartments and 865 Bellevue (formerly known as Knollwood Apartments).

General and administrative costs decreased for the three months ended September 30, 2007 due to a decrease in reimbursements to the General Partner due to the 2007 sales of three investment properties prior to the third quarter of 2007. General and administrative costs increased for the nine months ended September 30, 2007 due to an increase in the costs included in reimbursements to the General Partner.

Included in general and administrative expenses for the nine months ended September 30, 2007 and 2006 are reimbursements to the General Partner as allowed under the Partnership Agreement. Also included in general and administrative expenses for the nine months ended September 30, 2007 and 2006 are costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement.

Liquidity and Capital Resources

At September 30, 2007, the Partnership had cash and cash equivalents of approximately $9,105,000 compared to approximately $852,000 at September 30, 2006. The increase in cash and cash equivalents of approximately $8,587,000 from December 31, 2006, is due to approximately $25,689,000 of cash provided by investing activities and approximately $2,336,000 of cash provided by operating activities, partially offset by approximately $19,438,000 of cash used in financing activities. Cash provided by investing activities consisted of proceeds from the sale of Citadel Apartments, The Apartments and Lake Forest Apartments, withdrawals from restricted escrows and insurance proceeds received partially offset by property improvements and replacements. Cash used in financing activities consisted of repayment of advances from an affiliate of the General Partner, the repayment of the debt encumbering Citadel Apartments, The Apartments, Lake Forest Apartments and Citadel Village Apartments, monthly payments on mortgage notes, payments of prepayment penalties related to Citadel Apartments, The Apartments and Lake Forest Apartments and payment of loan costs related to Citadel Village Apartments and Post Ridge Apartments, partially offset by proceeds from the refinancing of Citadel Village Apartments and additional financing on Post Ridge Apartments and the receipt of advances from an affiliate of the General Partner. The Partnership invests its working capital reserves in interest bearing accounts.

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, 2007, the Partnership completed approximately $15,000 of capital improvements at The Apartments, consisting primarily of floor covering and office computer replacements. These improvements were funded from operating cash flow. On April 3, 2007, the Partnership sold The Apartments to a third party.

Arbours of Hermitage Apartments

During the nine months ended September 30, 2007, the Partnership completed approximately $403,000 of capital improvements at Arbours of Hermitage Apartments, consisting primarily of electrical breaker improvements, plumbing fixtures, window coverings, floor covering replacements, grounds lighting, and casualty repairs. These improvements were funded from operating cash flow, insurance proceeds and advances from an affiliate of the General Partner. 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 2007. 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, 2007, the Partnership completed approximately $68,000 of capital improvements at Belmont Place, consisting primarily of floor covering, appliance and grounds lighting 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 2007. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

Citadel Village Apartments

During the nine months ended September 30, 2007, the Partnership completed approximately $229,000 of capital improvements at Citadel Village Apartments, consisting primarily of grounds lighting, landscaping enhancements, swimming pool and spa resurfacing, 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 2007. 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, 2007, the Partnership completed approximately $1,046,000 of capital improvements at Foothill Place Apartments, consisting primarily of recreational facility improvements, grounds lighting and signage replacements, plumbing upgrades, vinyl siding, floor covering, appliance and countertop replacements, structural improvements and sprinkler system improvements. 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 2007. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

865 Bellevue (formerly known as Knollwood Apartments)

During the nine months ended September 30, 2007, the Partnership completed approximately $9,296,000 of capital improvements at 865 Bellevue (formerly known as Knollwood Apartments), consisting primarily of appliance and floor covering replacements, furniture replacements and building and structural improvements. These improvements were funded from operating cash flow, insurance proceeds, Partnership reserves and advances from an affiliate of the General Partner. During August 2006 the Partnership commenced with a phased redevelopment project for 865 Bellevue (formerly known as Knollwood Apartments). The initial phase of the redevelopment project was initially 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 consists 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. During the nine months ended September 30, 2007, the Partnership commenced with the second phase of the redevelopment project. The scope of the second phase of the redevelopment project consists of the addition of 34 garages, a gated entry, renovations to the clubhouse, pool, leasing and business center, tennis courts, new playground equipment and renovations to apartment kitchens, baths and living spaces. The revised estimated cost to complete both phases of the redevelopment project is approximately $20,742,000 and the redevelopment is expected to be completed by the end of 2008. During the year ended December 31, 2006, approximately $3,245,000 of redevelopment costs had been incurred. During the nine months ended September 30, 2007 additional costs of approximately $6,486,000 have been incurred which is included in the $9,296,000 of capital improvements for the nine months ended September 30, 2007. The Partnership expects to fund the redevelopment from operations, proceeds received in connection with the sales and financings of other investment properties 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 the nine months ended September 30, 2007, approximately $103,000 of construction period interest was capitalized related to the redevelopment. Additional routine capital expenditures are anticipated during 2007. 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, 2007, the Partnership completed approximately $35,000 of capital improvements at Lake Forest Apartments, consisting primarily of floor covering replacements. These improvements were funded from operating cash flow. On April 3, 2007, the Partnership sold Lake Forest Apartments to a third party.

Post Ridge Apartments

During the nine months ended September 30, 2007, the Partnership completed approximately $316,000 of capital improvements at Post Ridge Apartments, consisting primarily of roof replacements, floor covering replacements, grounds lighting replacements and casualty repairs. 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 2007. 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, 2007, the Partnership completed approximately $99,000 of capital improvements at Rivers Edge Apartments, consisting primarily of dumpster enclosures, casualty repairs, washer/dryer replacements, countertop 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 2007. 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, 2007, the Partnership completed approximately $177,000 of capital improvements at Village East Apartments, consisting primarily of grounds lighting, floor covering replacements, water heater and HVAC replacements, landscaping enhancements, stair tread and hand rail replacements, 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 2007. 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, 2007, the Partnership completed approximately $16,000 of capital improvements at Citadel Apartments, consisting primarily of floor covering replacements. These improvements were funded from operating cash flow. Citadel Apartments was sold on March 30, 2007.

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 generally sufficient for any near-term needs (exclusive of capital improvements and the redevelopment project) of the Partnership. The mortgage indebtedness encumbering the Partnership’s investment properties of approximately $73,245,000 matures at various dates between 2007 and 2034 with balloon payments of approximately $2,000,000, $27,936,000, $3,710,000, $8,964,000, $1,644,000 and $3,086,000 due in 2007, 2008, 2010, 2015, 2020 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 during the nine months ended September 30, 2007 and 2006 (in thousands, except per unit data).


	Nine Months	Per Limited	Nine Months	Per Limited
	Ended	Partnership	Ended	Partnership
	September 30, 2007	Unit	September 30, 2006	Unit

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

(1)

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

(2)

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 zero and $1,000 was distributed to the general partner of the majority owned sub-tier limited partnerships during the nine months ended September 30, 2007 and 2006, 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 2007 or subsequent periods.

Other

In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 233,897.5 limited partnership units (the “Units”) in the Partnership representing 68.24% of the outstanding Units at September 30, 2007. 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 68.24% 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 including interest, property taxes and operating costs associated with redevelopment and construction projects are capitalized during periods in which redevelopment and construction projects are in progress in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 34 “Capitalization of Interest Costs” and 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.

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

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. On December 14, 2006, Objector filed his Appellant’s Brief. The Partnership and its affiliates, as well as counsel for the Settlement Class, both filed Respondents’ Briefs on May 17, 2007. Objector filed his response on August 3, 2007. No hearing date has yet been scheduled.

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

None.

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, 2007	By: /s/Martha L. Long
	Martha L. Long
	Senior Vice President

Date: November 13, 2007	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 (Incorprorated by reference to the Quarterly Report on Form 10-QSB for the quarter ended September 30, 2006).

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).

10.107

Promissory Note (Belmont) 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).

10.108

Form of Letter of Credit (Belmont) 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).

10.109

Deed to Secure Debt and Security Agreement (Belmont) 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).

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

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).

10.123

Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing (Village East) 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).

10.124

Promissory Note (Village East) 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).

10.125

Loan Agreement and Guarantee Agreement (Village East) 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).

10.126

Purchase and Sale contract between Consolidated Capital Properties IV, a California limited partnership, Apartment Associates, Ltd., a Texas limited partnership and the affiliated Selling Partnership, and Northview Realty Group, Inc., a Canadian corporation, dated December 4, 2006. (Incorporated by reference to Current Report on Form 8-K dated December 4, 2006).

10.126a

First Amendment to Purchase and Sale contract between Consolidated Capital Properties IV, a California limited partnership, Apartment Associates, Ltd., a Texas limited partnership and the affiliated Selling Partnership, and Northview Realty Group, Inc., a Canadian corporation, dated January 18, 2007. (Incorporated by reference to Current Report on Form 8-K dated January 18, 2007).

10.127

Purchase and Sale contract between ConCap Citadel Associates, Ltd., a Texas limited partnership, and Cash Investments of El Paso, LLC, a Texas limited liability company dated December 11, 2006. (Incorporated by reference to Current Report on Form 8-K dated December 11, 2006).

10.127a

First Amendment to Purchase and Sale contract between ConCap Citadel Associates, Ltd., a Texas limited partnership, and Cash Investments of El Paso, LLC, a Texas limited liability company dated January 12, 2007. (Incorporated by reference to Current Report on Form 8-K dated January 12, 2007).

10.128

Third Amendment to Purchase and Sale Contract between Consolidated Capital Properties IV, a California limited partnership, Apartment Associates, Ltd, a Texas limited partnership and the affiliated Selling Partnerships, and 11402 Evans Omaha LLC, 7349 Grant Omaha LLC, and 1010 Grand Plaza Omaha LLC, all three of which are Iowa limited liability companies, dated March 28, 2007. (Incorporated by reference to Current Report on Form 8-K dated March 28, 2007).

10.129

Multifamily Note between Capmark Bank and Post Ridge Associates, Ltd., Limited Partnership, a Tennesse limited partnership, dated August 31, 2007. (Incorporated by reference to Current Report on Form 8-K dated August 31, 2007.)

10.130

Amended and Restated Multifamily Note (Recast Transaction) between Federal Home Loan Mortgage Corporation and Post Ridge Associates, Ltd., Limited Partnership, a Tennesse limited partnership, dated August 31, 2007. (Incorporated by reference to Current Report on Form 8-K dated August 31, 2007.)

10.131

Deed of Trust, Security Agreement and Fixture Filing between CCP IV Associates, Ltd., a Texas limited partnership and Transamerica Occidental Life Insurance Company, an Iowa corporation dated September 21, 2007. (Incorporated by reference to Current Report on Form 8-K dated September 21, 2007.)

10.132

Secured Promissory Note between CCP IV Associates, Ltd., a Texas limited partnership and Transamerica Occidental Life Insurance Company, an Iowa corporation dated September 21, 2007. (Incorporated by reference to Current Report on Form 8-K dated September 21, 2007.)

10.133

Carveout Guarantee and Indemnity Agreement between AIMCO Properties, L.P., a Delaware limited partnership and Transamerica Occidental Life Insurance Company, an Iowa corporation dated September 21, 2007. (Incorporated by reference to Current Report on Form 8-K dated September 21, 2007.)

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.