Resource Real Estate Investors 7, L.P. - FORM 10-K

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EXCEL - IDEA: XBRL DOCUMENT - Resource Real Estate Investors 7, L.P.	Financial_Report.xls
EX-32.1 - EXHIBIT 32.1 - Resource Real Estate Investors 7, L.P.	r7-20141231xex321.htm
EX-31.2 - EXHIBIT 31.2 - Resource Real Estate Investors 7, L.P.	r7-20141231xex312.htm
EX-31.1 - EXHIBIT 31.1 - Resource Real Estate Investors 7, L.P.	r7-20141231xex311.htm
EX-32.2 - EXHIBIT 32.2 - Resource Real Estate Investors 7, L.P.	r7-20141231xex322.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

(Mark One)



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

For the fiscal year ended December 31, 2014



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

For the transition period from _________ to __________

Commission file number 0-53962

Resource Real Estate Investors 7, L.P.

(Exact name of registrant as specified in its charter)



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

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

(Address of principal executive offices) (Zip code)

(215) 231-7050

(Registrant's telephone number, including area code)

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

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

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



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

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

There is no public market for the Registrant' securities.

Documents Incorporated by Reference: None

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RESOURCE REAL ESTATE INVESTORS 7, L.P.

INDEX TO ANNUAL REPORT

ON FORM 10-K



			Page
PART I
	Item 1:	Business	3
	Item 1A:	Risk Factors	5
	Item 1B:	Unresolved Staff Comments	5
	Item 2:	Properties	5
	Item 3:	Legal Proceedings	5

PART II
	Item 5:	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	6
	Item 6:	Selected Financial Data	6
	Item 7:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	7
	Item 7A:	Quantitative and Qualitative Disclosures About Market Risk	11
	Item 8:	Financial Statements and Supplementary Data	12
	Item 9:	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	24
	Item 9A:	Controls and Procedures	24
	Item 9B:	Other Information	24

PART III
	Item 10:	Directors, Executive Officers and Corporate Governance	25
	Item 11:	Executive Compensation	27
	Item 12:	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	27
	Item 13:	Certain Relationships and Related Transactions, and Director Independence	27
	Item 14:	Principal Accounting Fees and Services	29

PART IV
	Item 15:	Exhibits and Financial Statement Schedules	30

SIGNATURES			31

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PART I

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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


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


•	decrease in tenant occupancy rates;


•	increased rates of tenant default


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


•	increase in operating expenses at our properties;


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


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


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


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

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

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

ITEM 1. BUSINESS

General

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

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

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

We will terminate on March 28, 2016, unless we are sooner dissolved or terminated. We plan to continue past the termination date based on the assumption that the General Partner will exercise its right to extend the term of the Partnership for the two one-year extensions. Our General Partner has complete and exclusive discretion in the management of our business.

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Our Management

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

Real Estate Manager

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

Distribution Allocations

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

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


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


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

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


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


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


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

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

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Redemption of Units

We are permitted, in our General Partner’s sole discretion, to redeem units upon a unitholder’s request. However, we have no obligation to redeem units at any time, and we can decline to redeem units for any reason. For example, if our General Partner determines that we do not have the necessary cash flow, taking into account future distributions to our other limited partners, investments, and foreseeable operating expenses, a unitholder’s request may be declined. In addition, our General Partner may not approve the redemption of units if it concludes that the redemption might cause our total unit transfers in the year, subject to certain exceptions, to exceed 2% of our total capital or profits interests. All of these determinations are subjective and will be made in our General Partner’s sole discretion. We will also determine the redemption price based on provisions set forth in the First Amended and Restated Agreement of Limited Partnership, or the Partnership Agreement. To the extent the formula for arriving at the redemption price has any subjective determinations, they will fall within the sole discretion of our General Partner. If we lack the requisite liquidity to redeem the units, our General Partner, in its sole discretion, may purchase the units on generally the same terms as we would have redeemed the units. As of the date of this Report, 5,000 units have been redeemed. During the years ended December 31, 2013 and December 31, 2014, we did not receive any redemption requests.

Available Information

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

ITEM 1A. RISK FACTORS

Omitted as permitted under rules applicable to smaller reporting companies.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Omitted as permitted under rules applicable to smaller reporting companies.

ITEM 2. PROPERTIES

See Item 7 - “Overview.”

ITEM 3. LEGAL PROCEEDINGS

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

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PART II

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

AND ISSUER PURCHASES OF EQUITY SECURITIES

Our limited partner units are not publicly traded. There is no market for our limited partner units and it is unlikely that any will develop. As of March 24, 2015 there were 588 holders of record of our limited partnership units.

We pay distributions monthly. No distributions were paid to the General Partner for either 2014 or 2013, except for distributions on the limited partner units it owns. Total distributions paid to limited partners were $1.6 million in each of those years. The following table details these distributions by month:



	December 31, 2014				December 31, 2013
	Distributions		Per Unit		Distributions		Per Unit
January	$	136,495	$	0.042	$	136,494	$	0.042
February	136,495		0.042		136,495		0.042
March	136,495		0.042		136,495		0.042
April	136,495		0.042		136,496		0.042
May	136,494		0.042		136,496		0.042
June	136,869		0.042		136,496		0.042
July	136,870		0.042		136,496		0.042
August	136,870		0.042		136,495		0.042
September	136,870		0.042		136,495		0.042
October	136,870		0.042		136,495		0.042
November	136,870		0.042		136,495		0.042
December	136,871		0.042		136,495		0.042
Total distributions for the year	$	1,640,564	$	0.504	$	1,637,943	$	0.504

We do not have any equity compensation plans.

ITEM 6. SELECTED FINANCIAL DATA

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

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

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

Overview

We are a Delaware limited partnership that was formed on March 28, 2008 and commenced operations on June 16, 2008. Through wholly owned subsidiaries, we own in fee, operate and invest in multifamily residential rental properties located in Georgia, Maine, South Carolina and Texas. We also may invest in interests in real estate mortgages and other debt instruments that are secured, directly or indirectly, by a multifamily residential rental property or an interest in an entity that directly owns such a property. As of December 31, 2014, we did not own any real estate debt investments. If we were to acquire mortgages or other real estate debt investments in the future, these investments would be in an amount that would not cause us to become an investment company within the meaning of Section 3(a)(1) of the Investment Company Act of 1940.

As of December 31, 2014, we own six multifamily residential rental Properties through our 100% owned subsidiaries, as follows:



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

_________


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

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



	Average Occupancy Rate ⁽¹⁾		Average Effective Rent per Square Foot ⁽²⁾				Ratio of Operating Expense to Revenue ⁽³⁾
	December 31,		December 31,				December 31,
Apartment Complex	2014	2013	2014		2013		2014	2013
Tamarlane	96.8%	97.0%	$	1.34	$	1.28	40%	36%
Bent Oaks	95.9%	97.2%	$	1.22	$	1.16	52%	53%
Cape Cod	94.1%	96.1%	$	0.96	$	0.96	58%	54%
Woodhollow	93.9%	97.7%	$	1.06	$	1.03	56%	52%
Hills	95.7%	94.6%	$	0.76	$	0.71	47%	46%
Village	94.3%	94.3%	$	0.54	$	0.53	59%	57%

_________


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


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


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

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Results of Operations

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

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


Ÿ	occupancy and rental rates,


Ÿ	property operating expenses,


Ÿ	interest rates on the related financing, and


Ÿ	capital expenditures.

The amount of rental revenues from our Properties depends upon their occupancy rates and concessions granted. We seek to maximize our occupancy rates through aggressive property-level programs, including, in particular, our Lease Rent Optimizer, or LRO, program which includes rent concessions. Under our LRO program, we seek to price our rents for apartment units on a daily basis, based upon inventory in the marketplace and competitors’ pricing. Our Properties experienced an overall decrease in the average occupancy rate during the year ended December 31, 2014 of approximately (1.1%), with an average occupancy of 95.1% as compared to an average occupancy rate of 96.2% during the same period of 2013. Our Properties also experienced an overall increase in the average effective rent per square foot of $0.40 during the year ended December 31, 2014 compared to the same period in 2013 for the same properties.

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

With the exception of three mortgage notes, our existing financing is at fixed rates of interest and, accordingly, our interest cost has remained relatively stable during the period of our ownership of the Properties. Based upon current economic conditions and their effect on interest rates, and because two of our mortgage notes that have May 1, 2015 maturities have options to extend the maturity dates for one year, which we exercised, we expect that our financing costs will remain relatively stable during fiscal year 2015. However, should interest rates change materially, the interest component of our variable rate financing, which is based upon the one-month London Interbank Offered Rate plus 323 basis points, and is capped at 7%, could change.

Year Ended December 31, 2014 Compared to Year Ended December 31, 2013

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



	December 31,						Increase (Decrease)
	2014			2013			Amount			Percent
Revenues:
Rental income	$	12,278		$	11,751		$	527		4	%

Expenses:
Rental operating	6,097			5,467			630			12	%
Management fees – related parties	935			906			29			3	%
General and administrative	574			522			52			10	%
Depreciation and amortization	2,706			2,944			(238		)	(8	)%
Total expenses	10,312			9,839			473			5	%
Income before other expenses	1,966			1,912			54			3	%

Other expenses:
Interest expense, net	(2,529		)	(2,564		)	(35		)	(1	)%
Casualty loss	—			(28		)	(28		)	(100	)%
Loss on disposal of fixed assets	(37		)	(89		)	(52		)	(58	)%
Net loss	$	(600	)	$	(769	)	$	(169	)	(22	)%

Weighted average number of limited partner units outstanding	3,270			3,270

Net loss per weighted average limited partner unit	$	(0.18	)	$	(0.24	)

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Revenues

We attribute the $527,000 increase in revenues principally to an increase in average effective rent per square foot at the Properties. We were able to increase rents as a result of stable occupancy and strong market demand. Occupancy rates have remained consistent during the year ended December 31, 2014 compared to the same period in 2013 for the same properties.

Expenses

We attribute the $473,000 increase in expenses principally to:


•	a $630,000 increase in rental operating expenses, primarily due to a $169,000 increase in insurance expense for all Properties resulting from claims against our self-insurance fund, a $65,000 increase in real estate taxes for the Properties due to assessment increases, and $384,000 increase in repairs and maintenance, generally carpet and vinyl replacements, building repairs, and HVAC repairs.


•	a $52,000 increase in general and administrative due primarily to an increase in audit and legal fees.


•	a $29,000 increase in management fees corresponding to the increase in revenues.

Partially offsetting these increases in expenses was a decrease attributed principally to:


Ÿ	a $238,000 decrease in depreciation due to the disposal of appliances, carpeting and flooring and an increase in the capitalization threshold.

Other Expenses

We attribute the $115,000 decrease in other expenses primarily to:


•	a $28,000 decrease in casualty losses due to wind damage that occurred at Bent Oaks in 2013.


•	a $52,000 decrease in the loss on disposals.


•	a $35,000 decrease in interest expense related to the paydown of principal balances on our mortgage notes.

Liquidity and Capital Resources

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



	Years Ended
	December 31,
	2014			2013
Provided by operating activities ⁽¹⁾	$	2,446		$	3,133
Used in investing activities	(622		)	(1,254		)
Used in financing activities	(2,298		)	(2,156		)
Net decrease in cash	$	(474	)	$	(277	)


(1)	Includes changes in operating assets and liabilities.

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

While the two Tamarlane mortgage notes are set to mature on May 1, 2015, we exercised the option to extend the maturity date on both Tamarlane notes for an additional year to May 1, 2016 and plan to sell the property during the extension period.

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During the year ended December 31, 2014, we incurred a net loss; our results are substantially affected by non-cash expenses, principally depreciation and amortization expense, as is common for entities that own real properties. Our net loss for the years ended December 31, 2014 and 2013 of $600,000 and $769,000, respectively, included $2.7 million and $2.9 million, respectively, of depreciation and amortization expense. Excluding these non-cash expenses, our operations generated $2.5 million and $3.7 million, respectively, of positive adjusted cash flow from operations for the years ended December 31, 2014 and 2013, respectively. We define adjusted cash flow from operations, a non-GAAP liquidity measure, as net cash provided by operating activities as adjusted for net changes in operating assets and liabilities. Management views adjusted cash flow from operations as a useful and appropriate supplement to cash provided by operating activities, since distributions to the limited partners depend upon this measure. Unless our properties are affected by the factors referred to above in this discussion and in “Results of Operations,” we anticipate that we will generate positive adjusted cash flow from operations for the year ending December 31, 2015.

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



	Years Ended
	December 31,
	2014		2013
Net cash provided by operating activities	$	2,446	$	3,133
Net changes in operating assets and liabilities	100		598
Adjusted cash flow from operations (non-GAAP)	$	2,546	$	3,731

Under our capital improvements program, we expect to spend approximately $4 million in the next three years for property improvements intended to increase the Properties’ appeal to tenants. As we implement planned improvements to our Properties, we seek to maintain our occupancy rates and, potentially, to increase our rental rates and our cash flow from operating activities.

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

The following table sets forth the capital expenditures incurred during the year ended December 31, 2014 and estimated future capital expenditures, which are discretionary in nature (in thousands):



Subsidiaries	Capital Expenditures		Future Discretionary Capital Expenditures
Tamarlane	$	74	$	325
Bent Oaks	28		688
Cape Cod	52		986
Woodhollow	37		599
Hills	87		552
Village	307		921
Total	$	585	$	4,071

Our capital expenditures were $585,000 during the year ended December 31, 2014. We have planned a series of future major capital projects for our Properties, including further landscaping, parking lot paving, signage upgrades, upgrades to exterior structures, replacing the HVAC condensing units and replacing water heaters. We review future expenditures periodically and adjust them based on both operating results and local market conditions. If market conditions improve and there is an acceptable return on the additional expenditures, we will consider restoring a previously contemplated interior upgrade program. We cannot assure you that we will complete projects currently planned or that we will not change our plans in response to changes in market conditions.

In connection with the acquisitions of our Properties, we have $48.7 million of total mortgage financing outstanding. For information regarding mortgage financing with respect to each Property, see Note 6 of the notes to our consolidated financial statements.

The purchase of the Village during the year ended December 31, 2012 completed our asset acquisition plans. The remaining offering proceeds have been reserved for estimated future capital expenditures as noted above.

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Our payables to related parties consist of investment management fees due to our General Partner, payable monthly, equal to 1% of the gross offering proceeds, net of any limited partnership interest owned by the General Partner. The General Partner must subordinate up to 100% of its annual investment management fee to the receipt by the limited partners of their Preferred Return. The limited partners have not received their Preferred Return over the six years the Partnership has been operating and we do not anticipate they will receive the return in 2015.

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

Redemption of Units

We are permitted, in our General Partner’s sole discretion, to redeem units upon a unitholder’s request. However, we have no obligation to redeem units at any time, and we can decline to redeem units for any reason. See Item 1, "Redemption of Units." Cumulatively through December 31, 2014, a total of 5,000 units have been redeemed at an aggregate price of $46,710, although were no units were redeemed in the year then ended.

Legal Proceedings

Critical Accounting Policies

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

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

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

Impairment. We review the carrying value of each Property to determine if circumstances that indicate impairment in the carrying value of the investment exist or that depreciation periods should be modified. If we determine that an asset’s estimated future cash flows will not be sufficient to recover its carrying amount, we will record an impairment charge to reduce the carrying amount for that asset to its estimated fair value. We have not recognized any impairments of our Properties for the years ended December 31, 2014 and 2013.

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

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

Off-Balance Sheet Arrangements

As of December 31, 2014 and 2013, we do not have any off-balance sheet arrangements or obligations, including contingent obligations, other than guarantees by the General Partner of certain limited standard exceptions to the non-recourse nature of the mortgage notes which are secured by the Properties.


ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

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

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners of

Resource Real Estate Investors 7, L.P.

We have audited the accompanying consolidated balance sheets of Resource Real Estate Investors 7, L.P. (a Delaware partnership) and subsidiaries (the “Partnership”) as of December 31, 2014 and 2013, and the related consolidated statements of operations, changes in partners’ capital, and cash flows for each of the two years in the period ended December 31, 2014. Our audits of the basic consolidated financial statements included the financial statement schedule listed in the index appearing under Item 15(a)(2). These financial statements and financial statement schedules are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Partnership's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Resource Real Estate Investors 7, L.P. and subsidiaries as of December 31, 2014 and 2013 and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

/s/ GRANT THORNTON LLP

Philadelphia, Pennsylvania

March 24, 2015

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RESOURCE REAL ESTATE INVESTORS 7, L.P.

CONSOLIDATED BALANCE SHEETS

(in thousands)



	December 31,
	2014			2013
ASSETS
Rental properties, at cost:
Land	$	8,715		$	8,715
Buildings and improvements	58,624			58,248
Personal property	2,127			1,949
Construction-in-progress	—			87
Identifiable intangible assets	2,378			2,378
	71,844			71,377
Accumulated depreciation and amortization	(16,255		)	(13,628		)
	55,589			57,749

Cash	4,483			4,957
Restricted cash	1,989			1,712
Tenant receivables, net	20			22
Accounts receivable due from related parties	99			195
Prepaid expenses and other assets	140			150
Deferred financing costs, net	430			634
Total assets	$	62,750		$	65,419

LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:
Mortgage notes payable	$	48,692		$	49,350
Accounts payable and accrued expenses	548			734
Real estate tax payable	988			976
Accrued interest	196			200
Payables to related parties	2,010			1,645
Prepaid rent	122			88
Security deposits	273			265
Total liabilities	52,829			53,258
Partners’ capital	9,921			12,161
Total liabilities and partners’ capital	$	62,750		$	65,419

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

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RESOURCE REAL ESTATE INVESTORS 7, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per unit data)



	Years Ended
	December 31,
	2014			2013
Revenues:
Rental income	$	12,278		$	11,751

Expenses:
Rental operating	6,097			5,467
Management fees – related parties	935			906
General and administrative	574			522
Depreciation and amortization	2,706			2,944
Total expenses	10,312			9,839

Income before other expenses	1,966			1,912

Other expenses:
Interest expense, net	(2,529		)	(2,564		)
Casualty loss	—			(28		)
Loss on disposal of fixed assets	(37		)	(89		)
Net loss	$	(600	)	$	(769	)

Weighted average number of limited partner units outstanding	3,270			3,270

Net loss per weighted average limited partner unit	$	(0.18	)	$	(0.24	)

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

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RESOURCE REAL ESTATE INVESTORS 7, L.P.

CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS’ CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(in thousands, except units)



	General		Limited Partners
	Partner		Units	Amount			Total
Balance at January 1, 2013	$	1	3,269,655	$	14,566		$	14,567
Distributions	—		—	(1,637		)	(1,637		)
Net loss	—		—	(769		)	(769		)
Balance at December 31, 2013	1		3,269,655	12,160			12,161
Distributions	—		—	(1,640		)	(1,640		)
Net loss	—		—	(600		)	(600		)
Balance at December 31, 2014	$	1	3,269,655	$	9,920		$	9,921

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

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RESOURCE REAL ESTATE INVESTORS 7, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



	Years Ended
	December 31,
	2014			2013
Cash flows from operating activities:
Net loss	$	(600	)	$	(769	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	2,706			2,944
Amortization of deferred financing costs	204			209
Casualty loss	—			28
Losses on disposal/sale of fixed assets	37			89
Changes in operating assets and liabilities, excluding the effects of acquisition:
Restricted cash	(277		)	(177		)
Tenant receivables, net	2			(18		)
Prepaid expense and other assets	12			74
Insurance proceeds received	—			35
Accounts receivable - related parties	96			(195		)
Accounts payable and accrued expenses	(149		)	199
Real estate tax payable	12			392
Accrued interest	(4		)	(2		)
Payables to related parties	365			313
Prepaid rent	34			2
Security deposits	8			9
Net cash provided by operating activities	2,446			3,133

Cash flows from investing activities:
Capital expenditures	(622		)	(1,254		)
Net cash used in investing activities	(622		)	(1,254		)

Cash flows from financing activities:
Distributions to limited partners	(1,640		)	(1,637		)
Principal payments on mortgage notes payable	(658		)	(519		)
Net cash used in financing activities	(2,298		)	(2,156		)

Net decrease in cash	(474		)	(277		)
Cash at beginning of period	4,957			5,234
Cash at end of period	$	4,483		$	4,957

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

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RESOURCE REAL ESTATE INVESTORS 7, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014

NOTE 1 – NATURE OF BUSINESS AND OPERATIONS

Resource Real Estate Investors 7, L.P. (“R-7” or the “Partnership”) is a Delaware limited partnership which owns and operates multifamily residential rental properties located in Georgia, Maine, Texas and South Carolina (the “Properties”). The Partnership also may invest in interests in real estate mortgages and other debt instruments that are secured, directly or indirectly, by multifamily residential rental properties although the Partnership had no such investments as of December 31, 2014 and 2013. The Partnership was formed on March 28, 2008 and commenced operations on June 16, 2008. The General Partner, Resource Capital Partners, Inc. (“RCP”, the “General Partner”, or “GP”), is in the business of sponsoring and managing real estate investment limited partnerships and tenant in common programs. RCP contributed $1,000 in cash as its minimum capital contribution to the Partnership. In addition, during the years ended December 31, 2014 and 2013, RCP held a 5.62% limited partnership interest in the Partnership. RCP is an indirect wholly owned subsidiary of Resource America, Inc. (“RAI”), a publicly traded company (NASDAQ: REXI) operating in the real estate, financial fund management and commercial finance sectors.

The Partnership will continue until March 28, 2016, unless terminated earlier in accordance with the First Amended and Restated Agreement of Limited Partnership (the “Agreement”). The GP has the right to extend the Partnership term for one or more periods to a maximum of two years in the aggregate following the initial termination date. We plan to continue past the termination date based on the assumption that the General Partner will exercise its right to extend the term of the Partnership for the two one-year extensions.

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

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

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

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Principles of Consolidation

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



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

All intercompany transactions and balances have been eliminated in consolidation.

(Back to Index)

RESOURCE REAL ESTATE INVESTORS 7, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)

DECEMBER 31, 2014

Use of Estimates

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

Supplemental Disclosure of Cash Flow Information

During the years ended December 31, 2014 and 2013, the Partnership paid $2.3 million and $2.4 million, respectively, in cash for interest.

Advertising

The Partnership expenses advertising costs as they are incurred. Advertising costs, which are included in rental operating expenses, totaled $131,000 and $145,000 for the years ended December 31, 2014 and 2013, respectively.

Deferred Financing Costs

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

Concentration of Credit Risk

Financial instruments, which potentially subject the Partnership to concentration of credit risk, consist of periodic temporary deposits of cash. At December 31, 2014, the Partnership had $4.6 million of deposits at various banks, of which $2.4 million was over the insurance limit of the Federal Deposit Insurance Corporation. No losses have been experienced on such deposits.

Income Taxes

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

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

The Partnership is subject to examination by the U.S. Internal Revenue Service and by the taxing authorities in those states in which the Partnership has significant business operations. The Partnership is not currently undergoing any examinations by taxing authorities. The Partnership may be subject to U.S. federal income tax and state/local income tax examinations for years 2011 through 2014.

Revenue Recognition

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

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

The future minimum rental payments to be received from noncancelable operating leases is approximately $6.1 million and $80,000 for the years ending December 31, 2015 and 2016, respectively, and none thereafter.

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RESOURCE REAL ESTATE INVESTORS 7, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)

DECEMBER 31, 2014

Long-Lived Assets

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

Rental Properties

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



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

Tenant Receivables

Tenant receivables are stated at amounts due from tenants net of an allowance for uncollectible receivables. Payment terms vary and receivables outstanding longer than the payment terms are considered past due. The Partnership determines its allowance by considering a number of factors, including the length of time receivables are past due, security deposits held, the Partnership’s previous loss history, the tenants’ current ability to pay their obligations to the Partnership, the general condition of the economy and the industry as a whole. The Partnership writes off receivables when they become uncollectible. At December 31, 2014 and 2013, there were $44 and $2,000, respectively, in allowances for uncollectible receivables.

Redemptions

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

Acquisition

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

NOTE 3 − RESTRICTED CASH

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



	Years Ended
	December 31,
	2014		2013
Real estate taxes	$	1,089	$	882
Insurance	227		278
Capital improvements	673		552
Total	$	1,989	$	1,712

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RESOURCE REAL ESTATE INVESTORS 7, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)

DECEMBER 31, 2014

NOTE 4 – DEFERRED FINANCING COSTS

Deferred financing costs include unamortized costs incurred to obtain financing which are being amortized over the term of the related debt. Accumulated amortization as of December 31, 2014 and 2013 was $1.2 million and $967,000, respectively. Estimated amortization of the Properties’ existing deferred financing costs for the next five years ending December 31, and thereafter, is as follows (in thousands):



2015	$	162
2016	88
2017	82
2018	80
2019	18
	$	430

NOTE 5 – MORTGAGE NOTES PAYABLE

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



	Balance at
	December 31,						Annual Interest Rate		Average
Property	2014		2013		Maturity Date		Annual Interest Rate		Monthly Debt Service
Tamarlane	$	8,906	$	8,906	05/01/2016	⁽⁶⁾	4.92%		$	37	⁽¹⁾
Tamarlane	935		952		05/01/2016	⁽⁶⁾	6.12%		$	6	⁽²⁾
Bent Oaks	5,820		5,903		01/01/2019	⁽⁴⁾	5.99%	⁽⁴⁾	$	37	⁽²⁾
Cape Cod	6,045		6,133		01/01/2019	⁽⁴⁾	5.91%	⁽⁴⁾	$	38	⁽²⁾
Woodhollow	4,991		5,060		01/01/2019	⁽⁴⁾	6.14%	⁽⁴⁾	$	32	⁽²⁾
Hills	12,527		12,816		01/01/2016		3.40%	⁽³⁾	$	60	⁽³⁾
Village	9,468		9,580		04/01/2019		3.76%	⁽⁵⁾	$	31	⁽⁵⁾
Total	$	48,692	$	49,350

____________________


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


(2)	Monthly payment includes principal and interest.


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


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


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


(6)	The Partnership exercised the option to extend maturity date for an additional 1 year to May 1, 2015. During the extension period, the interest rate would convert to the Federal Home Loan Mortgage Corporation Bill Index Rate plus 2.5%.

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



2015	$	10,571
2016	12,680
2017	479
2018	504
2019	24,458
	$	48,692

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RESOURCE REAL ESTATE INVESTORS 7, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)

DECEMBER 31, 2014

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

NOTE 6 – CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

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

Substantially all of the accounts receivable due from related parties represents escrow funds held by RAI for self-insurance. The Partnership's properties participate in insurance pools with other properties directly and indirectly managed by RAI for both property insurance and general liability. RAI holds the escrow funds related to the insurance pools on its books. The insurance pool covers losses up to $2.5 million for property losses and $750,000 for general liability losses. Catastrophic insurance would cover property losses in excess of the insurance pool up to $85 million. Therefore, unforeseen or catastrophic losses in excess of the Partnership's insured limits could have a material adverse on the Partnership financial condition and operating results.

RCP is entitled to receive an annual investment management fee, payable monthly, equal to 1% of the gross offering proceeds, net of any amounts otherwise attributable to LP interests owned by RCP. During the term of the Partnership, RCP must subordinate up to 100% of its annual investment management fee to the receipt by the LPs of their Preferred Return. As of December 31, 2014 and 2013, investment management fees due to RCP totaled $1.9 million and $1.5 million, respectively.

A wholly-owned subsidiary of RCP, Resource Real Estate Management, LLC (“RREML”) is entitled to receive property and debt management fees. RREML engaged Resource Real Estate Management, Inc (“RREMI”), an indirect wholly owned subsidiary of RAI, to manage the Partnership’s Properties. As of December 31, 2014 and 2013, property management fees due totaled $85,000 and $49,000, respectively.

During the ordinary course of business, RCP and RREMI advance funds for ordinary operating expenses on behalf of the Properties, which are repaid within a few days. As of December 31, 2014 and 2013, advances due totaled $67,000 and $62,000, respectively.

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



	Years Ended December 31,
	2014		2013
RCP:
Investment management fees	$	322	$	321

RREML:
Property management fees - 5% of gross cash receipts	613		585
	$	935	$	906

NOTE 7 – FAIR VALUE OF FINANCIAL INSTRUMENTS

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

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RESOURCE REAL ESTATE INVESTORS 7, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)

DECEMBER 31, 2014

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

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

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

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


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

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



	December 31, 2014				December 31, 2013
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Mortgage notes payable:
Tamarlane	$	9,842	$	9,867	$	9,858	$	10,061
Bent Oaks	5,820		6,327		5,903		6,305
Cape Cod	6,045		6,554		6,133		6,529
Woodhollow	4,990		5,416		5,060		5,404
Hills	12,527		12,342		12,816		12,679
Village	9,468		9,485		9,580		9,260
Total mortgage notes payable	$	48,692	$	49,991	$	49,350	$	50,238

NOTE 8 - INSURANCE CLAIM

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

NOTE 9 – SUBSEQUENT EVENTS

The Partnership sold Woodland Hills on March 19, 2015 for $25.2 million and the Partnership will recognize a gain.

The Partnership has evaluated subsequent events through the date these consolidated financial statements were issued and determined that no events have occurred, other than those disclosed above, which would require an adjustment to the consolidated financial statements.

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ITEM 9. CHANGES IN AND DISABREEMENTS WITH ACCOUNTANTS ON

ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls

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

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

Management's Report on Internal Controls over Financial Reporting

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

Our General Partner assessed the effectiveness of our internal control over financial reporting as of December 31, 2014. In making this assessment, the General Partner used the criteria set forth in the 2013 version of the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based upon this assessment, our General Partner concluded that, as of December 31, 2014, our internal control over financial reporting is effective.

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

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during our quarter ended December 31, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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

Directors and Executive Officers of Our General Partner

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



NAME	AGE	POSITION OR OFFICE
Jonathan Z. Cohen	44	Director and Chairman of the Board
Alan F. Feldman	51	Director and Senior Vice President
David E. Bloom	50	Director and Senior Vice President
Kevin M. Finkel	43	President
Steven R. Saltzman	51	Vice President of Finance and Chief Financial and Accounting Officer
Darshan V. Patel	44	Chief Legal Officer and Secretary

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

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

David E. Bloom, a Director since 2002, President from 2002 to 2006 and Senior Vice President since 2006. Mr. Bloom also has served as President and a Director of Resource Real Estate since 2004, and as a Senior Vice President of Resource America, a position he has held since September 2001. Mr. Bloom joined Resource America from Colony Capital, LLC, a Los Angeles-based real estate fund, where he was a Senior Vice President as well as a Principal of Colony Capital Asia Pacific from 1999 to 2001. While at Colony, Mr. Bloom was responsible for the identification, evaluation and consummation of new investments, and he actively participated in the firm’s equity and debt raising efforts. From 1998 to 1999, Mr. Bloom was a Director at Sonnenblick-Goldman Company, a New York based real estate investment bank. From 1992 to 1998, Mr. Bloom practiced law in the real estate

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and corporate departments of Wilkie Farr & Gallagher in New York and Drinker Biddle & Reath in Philadelphia. Prior to practicing law, Mr. Bloom began his real estate career in 1987 as an Acquisitions and Development Associate with Strouse, Greenberg & Company, a regional full-service real estate company. Mr. Bloom’s extensive experience and knowledge in the real estate business is an asset to our General Partner’s board.

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

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

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

Code of Business Conduct and Ethics

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

Audit Committee Financial Expert

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

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, which we refer to as the Exchange Act, requires the directors and executive officers of our General Partner, our General Partner, and holders greater than 10% of our limited partnership interests to file reports with the SEC. SEC regulations require us to identify anyone who filed a required report late during the most recent fiscal year. Based on our review of these reports, we believe that the filing requirements for all of these reporting persons were complied with during 2014.

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ITEM 11. EXECUTIVE COMPENSATION

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

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

RELATED STOCKHOLDER MATTERS

The following table sets forth the number and percentage of our limited partnership interests owned by beneficial owners of 5% or more of our limited partnership interests as well as the beneficial ownership of our General Partner, and its officers and directors, as of March 27, 2015. Under the terms of the Partnership Agreement, our affairs are managed by our General Partner. We do not have any officers or directors. This information is reported in accordance with the beneficial ownership rules of the SEC under which a person is deemed to be the beneficial owner of a security if that person has or shares voting power or investment power with respect to such security or has the right to acquire such ownership within 60 days.



Title of Class	Name and address of beneficial owner ⁽¹⁾	Amount and nature of beneficial ownership ⁽²⁾	Percent of Class
Units of limited partnership interest	Resource Capital Partners, Inc.	183,768 units	5.62%

Units of limited partnership interest	Jonathan Z. Cohen, Chairman of the Board and Director	−	−
	Alan F. Feldman, Senior Vice President and Director	−	−
	Kevin M. Finkel, President	−	−
	Steven R. Saltzman, Vice President - Finance	−	−
	David E. Bloom, Senior Vice President and Director	−	−
	Darshan V. Patel, Chief Legal Officer and Assistant Secretary	−	−
	Michael S. Yecies, Secretary
	All directors and executive officers as a group	−	−


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


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

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND

DIRECTOR INDEPENDENCE

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

Property Management Fees

We pay Resource Real Estate Management, an affiliate of our General Partner, a monthly property management fee in an amount equal to 5% of our gross cash receipts from the operation of our Properties. This fee is for Resource Real Estate Management’s services in managing the Properties or obtaining and supervising subcontractor Property managers, which may be affiliates of Resource Real Estate Management or independent third-parties. Resource Real Estate Management is permitted to manage the Properties through a property management affiliate or subcontract the management of the Properties out to unaffiliated third-party subcontractors. If Resource Real Estate Management subcontracts the management of the Properties, then it will pay all management fees payable to the subcontractor managers of our Properties. For the year ended December 31, 2014, Resource Real Estate Management earned $613,000 in real estate property management fees.

Deferral of Real Estate Management Fees

We pay Resource Real Estate Management or its affiliates the real estate management fees for our Real Estate Investments from our operating revenues and our General Partner may, in its discretion, from time to time defer payment of all or any portion of such fees related to our Real Estate Investments, and accrue the same, if it deems our operating revenues are insufficient to pay such fees and still satisfy our investment objectives. We will pay any deferred fees to Resource Real Estate Management when our General Partner deems our operating revenues are sufficient to make such payment. As of December 31, 2014, no fees had been deferred.

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Investment Management Fees

We pay our General Partner or its affiliates an annual investment management fee payable from our revenues in an amount equal to 1% of the gross offering proceeds from the offering that have been, and continue to be, deployed in real estate investments. The investment management fee is for our General Partner’s professional services rendered in our administration, including, but not limited to, the preparation and distribution of our required quarterly and annual reports to our limited partners. Since the annual investment management fee is for our General Partner’s professional services, it is in addition to the reimbursements we pay our General Partner for certain administrative expenses that it and its affiliates incur on our behalf as described below in “Reimbursement of Administrative Expenses and Direct Costs.” Up to 100% of our General Partner’s annual investment management fee is subordinated to our limited partners’ receipt of their Preferred Return. Our General Partner is entitled at any time to an additional share of our cash distributions to recoup any investment management fees or distributions that were previously subordinated to the extent that our cash distributions to our limited partners exceeded their Preferred Return. For the year ended December 31, 2014, our General Partner earned $322,000 in investment management fees, the payment of which was deferred under the subordination clause of the Partnership Agreement. The payment of the fees earned in the prior years have been deferred as well.

Property Financing Fee for Refinancing a Property

We pay our General Partner or its affiliates a property financing fee equal to 0.5% of the face amount of any refinancing we obtain for our interest in the Properties. This fee is for our General Partner’s or its affiliates’ services in obtaining the financing and negotiating its terms. The property financing fee for refinancing will not be paid for real estate debt investments. There were no refinancings of the Properties during the year ended December 31, 2014, accordingly, no fees were paid.

Cash Distributions to Our General Partner

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


•	distributable cash from operations;


•	distributable cash from capital transactions; and


•	cash distributions to the partners upon our liquidation.

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

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


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


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


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

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


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


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

•

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


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


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

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


•	next, to our General Partner as reimbursement for any fees previously subordinated to distributions to our limited partners; and


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

There were no distributions to the General Partner as of December 31, 2014 and 2013.

Director Independence

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

Parent Entities

See Item 1, “Business - General”

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit Fees. The aggregate fees billed by our independent auditors, Grant Thornton LLP for the periods ended December 31, 2014 and 2013 for professional services rendered were $112,000 and $102,000, respectively.

Audit-Related Fees. We did not incur any audit related fees from Grant Thornton LLP during 2014 and 2013.

Tax Fees. We did not incur any fees for tax services from Grant Thornton LLP during 2014 and 2013.

All Other Fees. We did not incur any other fees from Grant Thornton LLP during 2014 and 2013.

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

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES


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

1. Financial Statements



	Report of Independent Registered Public Accounting Firm
	Consolidated Balance Sheets at December 31, 2014 and 2013
	Consolidated Statements of Operations for the Years Ended December 31, 2014 and 2013
	Consolidated Statements of Changes in Partners’ Capital for the Years Ended December 31, 2014 and 2013
	Consolidated Statements of Cash Flows for the Years Ended December 31, 2014 and 2013
	Notes to Consolidated Financial Statements - December 31, 2014

2. Financial Statement Schedules

Schedule III Investments in Real Estate

3. Exhibits



Exhibit No.		Description
3.1		Amended and Restated Agreement of Limited Partnership. ⁽¹⁾
3.2		Certificate of Limited Partnership. ⁽¹⁾
4.1		Forms of letters sent to limited partners confirming their investment. ⁽¹⁾
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Chief Executive Officer pursuant to Section 1350 18 U.S.C., as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Chief Financial Officer pursuant to Section 1350 18 U.S.C., as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1		The following information from the Partnership's annual report on Form 10-K for the year ended December 31, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statement of Changes in Partners' Capital; and (iv) Consolidated Statements of Cash Flows.


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

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



	RESOURCE REAL ESTATE INVESTORS 7, L.P.
	By: Resource Capital Partners, Inc., its general partner

March 24, 2015	By: /s/ Kevin M. Finkel
	Kevin M. Finkel
	President
	(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.



/s/ Jonathan Z. Cohen	Director	March 24, 2015
JONATHAN Z. COHEN

/s/ Alan F. Feldman	Director and Senior Vice President	March 24, 2015
ALAN F. FELDMAN

/s/ David E. Bloom	Director and Senior Vice President	March 24, 2015
DAVID E. BLOOM

/s/ Kevin M. Finkel	President	March 24, 2015
KEVIN M. FINKEL	(Principal Executive Officer)

/s/ Steven R. Saltzman	Vice President - Finance	March 24, 2015
STEVEN R. SALTZMAN	(Principal Financial and Accounting Officer)

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Resource Real Estate Investors 7, L.P.

SCHEDULE III

Real Estate and Accumulated Depreciation

December 31, 2014

(dollars in thousands)



Column A	Column B		Column C		Column D		Column E		Column F			Column G	Column H	Column I
Description	Encumbrances		Initial cost to Company		Cost capitalized subsequent to acquisition		Gross amount at which carried at close of period		Accumulated depreciation			Date of construction	Date acquired	Life on which depreciation in latest income is computed
			Buildings and land improvements		Improvements carrying costs		Buildings and land improvements total
Real estate owned:
Residential	9,841		$	12,632	$	1,363	$	13,995	(3,657		)	1985	7/31/2008	3 - 27.5 years
Portland, ME

Residential	5,820		7,902		1,141		9,043		(2,218		)	1978	12/10/2008	3- 27.5 years
Austin, TX

Residential	6,045		8,407		507		8,914		(2,143		)	1985	12/10/2008	3 - 27.5 years
San Antonio, TX

Residential	4,991		6,765		966		7,731		(1,853		)	1974	12/12/2008	3 - 27.5 years
Austin, TX

Residential	12,527		17,157		2,050		19,207		(4,429		)	1985	12/19/2008	3 - 27.5 years
Decatur, GA

Residential	9,468		11,500		1,454		12,954		(1,955		)	1970	3/7/2012	3 - 27.5 years
Columbia, SC
	$	48,692	$	64,363	$	7,481	$	71,844	$	(16,255	)



	2014			2013
Balance at the beginning of the period	$	71,377		$	70,526
Additions during period:
Improvements	584			1,254
Purchase of new asset	—			—
Other - basis adjustment	—			60
Deductions during period:
Sale of land	—			—
Disposals	(117		)	(463		)
Balance at the end of the period	$	71,844		$	71,377

Resource Real Estate Investors 7, L.P. - FORM 10-K - March 24, 2015

Attached files

Resource Real Estate Investors 7, L.P. Reports