aei accredited investor fund 2002

					            aei accredited investor
                  fund 2002
                        Annual Report 2007
                         Performance Summary
                                         For the
                                       Year 2007    Inception-to-Date
    Rental Income                     $3,250,062     $11,264,307
    Interest Income                      129,940         729,700
    Net Income                         3,223,303      10,075,694
    Distributions to Limited Partners 3,352,501       12,426,115
    fund ProPertieS                        Percent ownerShiP at 12/31/07
    Advance Auto (Batesville, IN)                    100.00%
    Applebee’s (Carmel, IN)                          100.00%
	   Applebee’s	(Greenfield,	IN)	                     100.00%
    Applebee’s (Sequim, WA)                          100.00%
    Best Buy (Midland, MI)                           100.00%
    CarMax (Columbia, SC)                             41.50%
    Jared Jewelry (Goodlettsville, TN)                24.16%
    Jared Jewelry (Hazelwood, MO)                     50.00%
    Jared Jewelry (Madison Heights, MI)               31.00%
    Jared Jewelry (Sugar Land, TX)                    60.00%
    Johnny Carino’s (Austin, TX)                     100.00%
    Johnny Carino’s (Longmont, TX)                    50.00%
    Johnny Carino’s (Olathe, KS)                     100.00%
    Johnny Carino’s (Tyler, TX)                      100.00%
    Tia’s Tex-Mex (Bowie, MD)                        100.00%
                          REPORT OF INDEPENDENT AUDITORS




To the Partners:
AEI Accredited Investor Fund 2002 Limited Partnership
St. Paul, Minnesota




        We have audited the accompanying balance sheet of AEI Accredited Investor Fund 2002
Limited Partnership (a Minnesota limited partnership) as of December 31, 2007 and 2006 and
the related statements of income, cash flows and changes in partners' capital for the years then
ended. These financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the
United States of America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes 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 financial statements referred to above present fairly, in all material
respects, the financial position of AEI Accredited Investor Fund 2002 Limited Partnership as of
December 31, 2007 and 2006, and the results of its operations and its cash flows for the years
then ended, in conformity with accounting principles generally accepted in the United States of
America.




                                                    Boulay, Heutmaker, Zibell & Co. P.L.L.P.
                                                    Certified Public Accountants

Minneapolis, Minnesota
March 24, 2008
          AEI ACCREDITED INVESTOR FUND 2002 LIMITED PARTNERSHIP
                             BALANCE SHEET
                              DECEMBER 31

                                            ASSETS

                                                                     2007                 2006
CURRENT ASSETS:
  Cash and Cash Equivalents                                  $      5,696,382     $      1,024,344
  Receivables                                                          20,366                    0
                                                                 --------------       --------------
        Total Current Assets                                       5,716,748             1,024,344
                                                                 --------------       --------------
INVESTMENTS IN REAL ESTATE:
   Land                                                           10,045,639           13,183,723
   Buildings and Equipment                                        19,756,050           24,031,044
   Accumulated Depreciation                                       (2,369,955)          (1,917,338)
                                                                 --------------       --------------
                                                                  27,431,734           35,297,429
   Real Estate Held for Sale                                       7,289,568            4,427,806
                                                                 --------------       --------------
        Net Investments in Real Estate                            34,721,302           39,725,235
                                                                 --------------       --------------
              Total Assets                                   $ 40,438,050         $ 40,749,579
                                                                 ========             ========

                         LIABILITIES AND PARTNERS' CAPITAL

CURRENT LIABILITIES:
  Payable to AEI Fund Management, Inc.                       $         28,087     $         66,506
  Distributions Payable                                               756,203              756,203
  Unearned Rent                                                        32,536                    0
                                                                 --------------       --------------
        Total Current Liabilities                                     816,826              822,709
                                                                 --------------       --------------
PARTNERS' CAPITAL:
  General Partner                                                      58,185               42,407
  Limited Partners, $1,000 per Unit;
    50,000 Units authorized;
    47,893 Units issued and outstanding                           39,563,039           39,884,463
                                                                 --------------       --------------
        Total Partners' Capital                                   39,621,224           39,926,870
                                                                 --------------       --------------
              Total Liabilities and Partners' Capital        $ 40,438,050         $ 40,749,579
                                                                 ========             ========


    The accompanying Notes to Financial Statements are an integral part of this statement.


                                               -2-
                               STATEMENT OF INCOME
                         FOR THE YEARS ENDED DECEMBER 31

                                                                     2007                 2006

RENTAL INCOME                                                $     2,290,592      $      2,098,177

EXPENSES:
  Partnership Administration – Affiliates                             353,358              377,356
  Partnership Administration and Property
    Management – Unrelated Parties                                     19,206               17,530
  Depreciation and Amortization                                       809,144              731,285
                                                                 --------------       --------------
        Total Expenses                                             1,181,708             1,126,171
                                                                 --------------       --------------

OPERATING INCOME                                                   1,108,884               972,006

OTHER INCOME:
  Interest Income                                                     129,940              121,055
                                                                 --------------       --------------

INCOME FROM CONTINUING OPERATIONS                                  1,238,824             1,093,061

Income from Discontinued Operations                                1,984,479             1,725,217
                                                                 --------------       --------------
NET INCOME                                                   $     3,223,303      $      2,818,278
                                                                 ========             ========
NET INCOME ALLOCATED:
  General Partner                                            $       192,226      $        212,085
  Limited Partners                                                 3,031,077             2,606,193
                                                                 --------------       --------------
                                                             $     3,223,303      $      2,818,278
                                                                 ========             ========
INCOME PER LIMITED PARTNERSHIP UNIT:
   Continuing Operations                                     $          24.57     $          21.68
   Discontinued Operations                                              38.72                32.74
                                                                 --------------       --------------
        Total                                                $          63.29     $          54.42
                                                                 ========             ========
Weighted Average Units Outstanding                                     47,893               47,893
                                                                 ========             ========




    The accompanying Notes to Financial Statements are an integral part of this statement.


                                             -3-
                            STATEMENT OF CASH FLOWS
                        FOR THE YEARS ENDED DECEMBER 31

                                                                     2007                 2006

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Income                                                 $     3,223,303      $      2,818,278

  Adjustments To Reconcile Net Income
  To Net Cash Provided By Operating Activities:
     Depreciation                                                     948,815            1,000,997
     Gain on Sale of Real Estate                                   (1,196,402)            (923,065)
     Increase In Receivables                                          (20,366)                   0
     Decrease in Payable to
       AEI Fund Management, Inc.                                      (38,419)             (41,472)
     Increase In Unearned Rent                                         32,536                    0
                                                                 --------------       --------------
         Total Adjustments                                           (273,836)              36,460
                                                                 --------------       --------------
         Net Cash Provided By
          Operating Activities                                     2,949,467             2,854,738
                                                                 --------------       --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Investments in Real Estate                                               0            (4,059,387)
  Proceeds From Sale of Real Estate                                5,251,520             4,056,380
                                                                 --------------       --------------
         Net Cash Provided By (Used For)
          Investing Activities                                     5,251,520                (3,007)
                                                                 --------------       --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Distributions to Partners                                        (3,528,949)          (3,528,948)
                                                                 --------------       --------------
NET INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS                                              4,672,038              (677,217)

CASH AND CASH EQUIVALENTS, beginning of period                     1,024,344             1,701,561
                                                                 --------------       --------------
CASH AND CASH EQUIVALENTS, end of period                     $     5,696,382      $      1,024,344
                                                                 ========             ========




    The accompanying Notes to Financial Statements are an integral part of this statement.


                                             -4-
                  STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                      FOR THE YEARS ENDED DECEMBER 31




                                           General       Limited
                                           Partner       Partners         Total


BALANCE, December 31, 2005             $      6,769    $ 40,630,771 $ 40,637,540

  Distributions                            (176,447)      (3,352,501)     (3,528,948)

  Net Income                               212,085        2,606,193        2,818,278
                                       -------------    --------------   -------------
BALANCE, December 31, 2006                  42,407       39,884,463      39,926,870

  Distributions                            (176,448)      (3,352,501)     (3,528,949)

  Net Income                               192,226        3,031,077        3,223,303
                                       -------------    --------------   -------------
BALANCE, December 31, 2007             $    58,185     $ 39,563,039 $ 39,621,224
                                       ========         ========         ========




    The accompanying Notes to Financial Statements are an integral part of this statement.


                                               -5-
                           NOTES TO FINANCIAL STATEMENTS
                             DECEMBER 31, 2007 AND 2006

(1) Organization –

       AEI Accredited Investor Fund 2002 Limited Partnership (Partnership) is a private
       placement available to accredited investors. The Partnership was formed to acquire and
       lease single tenant commercial real estate primarily in the restaurant and general retail
       industries throughout the United States. The Partnership's operations are managed by
       AEI Fund Management XVIII, Inc. (AFM), the General Partner. AEI Fund Management,
       Inc. (AEI), an affiliate of AFM, performs the administrative and operating functions for
       the Partnership.

       The terms of the Partnership offering called for a subscription price of $1,000 per
       Limited Partnership Unit, payable on acceptance of the offer. The Partnership
       commenced operations on October 31, 2002 when minimum subscriptions of 500
       Partnership Units ($500,000) were accepted. The offering was terminated on August 31,
       2004. The Partnership received subscriptions for 47,892.866 Limited Partnership Units
       ($47,892,866).

       Under terms of the Limited Partnership Agreement, the Limited Partners and General
       Partners contributed funds of $47,892,866 and $1,000, respectively. The Limited
       Partnership Agreement sets forth the methods for allocation of Net Cash Flow, Net
       Proceeds of Sale and profits, losses and other items.

       The General Partner is not required to currently fund a deficit capital balance. Upon
       liquidation of the Partnership or withdrawal by the General Partner, the General Partner
       will contribute to the Partnership an amount equal to the lesser of the deficit balance in its
       capital account or 1% of total Limited Partners' and General Partner's capital
       contributions.

(2) Summary of Significant Accounting Policies –

       Financial Statement Presentation

          The accounts of the Partnership are maintained on the accrual basis of accounting for
          both federal income tax purposes and financial reporting purposes.

       Accounting Estimates

          Management uses estimates and assumptions in preparing these financial statements
          in accordance with generally accepted accounting principles. Those estimates and
          assumptions may affect the reported amounts of assets and liabilities, the disclosure
          of contingent assets and liabilities, and the reported revenues and expenses. Actual
          results could differ from those estimates.




                                                -6-
(2) Summary of Significant Accounting Policies – (Continued)

          The Partnership regularly assesses whether market events and conditions indicate that
          it is reasonably possible to recover the carrying amounts of its investments in real
          estate from future operations and sales. A change in those market events and
          conditions could have a material effect on the carrying amount of its real estate.

       Cash Concentrations of Credit Risk

          The Partnership's cash is deposited primarily in two financial institutions and at times
          during the year it may exceed FDIC insurance limits.

       Statement of Cash Flows

          For purposes of reporting cash flows, cash and cash equivalents may include cash in
          checking, cash invested in money market accounts, certificates of deposit, federal
          agency notes and commercial paper with a term of three months or less.

       Receivables

          Credit terms are extended to tenants in the normal course of business. The
          Partnership performs ongoing credit evaluations of its customers’ financial condition
          and, generally, requires no collateral.

          Receivables are recorded at their estimated net realizable value. The Partnership
          follows a policy of providing an allowance for doubtful accounts; however, based on
          historical experience, and its evaluation of the current status of receivables, the
          Partnership is of the belief that such accounts will be collectible in all material
          respects and thus an allowance is not necessary. Accounts are considered past due if
          payment is not made on a timely basis in accordance with the Partnership’s credit
          terms. Receivables considered uncollectible are written off.

       Income Taxes

          The income or loss of the Partnership for federal income tax reporting purposes is
          includable in the income tax returns of the partners. In general, no recognition has
          been given to income taxes in the accompanying financial statements.

          The tax return and the amount of distributable Partnership income or loss are subject
          to examination by federal and state taxing authorities. If such an examination results
          in changes to distributable Partnership income or loss, the taxable income of the
          partners would be adjusted accordingly.




                                              -7-
(2) Summary of Significant Accounting Policies – (Continued)

       Real Estate

          The Partnership's real estate is leased under net leases, classified as operating leases.
          The leases provide for base annual rental payments payable in monthly installments.
          The Partnership recognizes rental revenue according to the terms of the individual
          leases. For leases which contain stated rental increases, the increases are recognized
          in the year in which they are effective. Contingent rental payments are recognized
          when the contingencies on which the payments are based are satisfied and the rental
          payments become due under the terms of the leases.

          The Partnership purchases properties and records them at cost. The Partnership
          compares the carrying amount of its properties to the estimated probability-weighted
          future cash flows expected to result from the property and its eventual disposition. If
          the sum of the expected future cash flows is less than the carrying amount of the
          property, the Partnership recognizes an impairment loss by the amount by which the
          carrying amount of the property exceeds the fair value of the property.

          The Partnership has capitalized as Investments in Real Estate certain costs incurred in
          the review and acquisition of the properties. The costs were allocated to the land,
          buildings and equipment.

          The buildings and equipment of the Partnership are depreciated using the straight-line
          method for financial reporting purposes based on estimated useful lives of 25 years
          and 5 years respectively.

          In accordance with Statement of Financial Accounting Standards No. 144,
          Accounting for the Impairment or Disposal of Long-Lived Assets, upon complete
          disposal of a property or classification of a property as Real Estate Held for Sale, the
          Partnership includes the operating results and sale of the property in discontinued
          operations. In addition, the Partnership reclassifies the prior periods’ operating
          results of the property to discontinued operations.

          The Partnership accounts for properties owned as tenants-in-common with affiliated
          Partnerships and/or unrelated third parties using the proportionate consolidation
          method. Each tenant-in-common owns a separate, undivided interest in the
          properties. Any tenant-in-common that holds more than a 50% interest does not
          control decisions over the other tenant-in-common interests. The financial statements
          reflect only this Partnership's percentage share of the properties' land, building and
          equipment, liabilities, revenues and expenses.




                                               -8-
(2) Summary of Significant Accounting Policies – (Continued)

          The Partnership’s properties are subject to environmental laws and regulations
          adopted by various governmental entities in the jurisdiction in which the properties
          are located. These laws could require the Partnership to investigate and remediate the
          effects of the release or disposal of hazardous materials at these locations if found.
          For each property, an environmental assessment is completed prior to acquisition. In
          addition, the lease agreements typically strictly prohibit the production, handling, or
          storage of hazardous materials (except where incidental to the tenant’s business such
          as use of cleaning supplies) in violation of applicable law to restrict environmental
          and other damage. Environmental liabilities are recorded when it is determined the
          liability is probable and the costs can reasonably be estimated. There were no
          environmental issues noted or liabilities recorded at December 31, 2007 and 2006.

       Reclassification

          Certain items related to discontinued operations in the prior year’s financial
          statements have been reclassified to conform to 2007 presentation. These
          reclassifications had no effect on Partners’ capital, net income or cash flows.

(3) Related Party Transactions –

       As of December 31, 2007, the Partnership owns a 24.1638% interest in a Jared Jewelry
       store in Goodlettsville, Tennessee. The remaining interests in this property are owned by
       unrelated third parties. AEI Income & Growth Fund 25 LLC, an affiliate of the
       Partnership, owned a 25% interest in this property until the interest was sold, in a series
       of transactions, to unrelated third parties in 2007. The Partnership owns a 50% interest in
       a Johnny Carino’s restaurant in Longmont, Colorado and a 60% interest in a Jared
       Jewelry store in Sugar Land, Texas. The remaining interests in these properties are
       owned by AEI Income & Growth Fund XXII Limited Partnership, an affiliate of the
       Partnership. The Partnership owns a 31% interest in a Jared Jewelry store in Madison
       Heights, Michigan. The remaining interests in this property are owned by AEI Income &
       Growth Fund 23 LLC and AEI Income & Growth Fund 25 LLC, affiliates of the
       Partnership. The Partnership owns a 50% interest in a Jared Jewelry store in Hazelwood,
       Missouri. The remaining interest in this property is owned by AEI Accredited Investor
       Fund V LP, an affiliate of the Partnership. The Partnership owns a 41.5% interest in a
       CarMax auto superstore. The remaining interests in this property are owned by AEI
       Income & Growth Fund 23 LLC and AEI Accredited Investor Fund V LP. The
       Partnership owns a 33% interest in a Dick’s Sporting Goods store. The remaining
       interests in this property are owned by AEI Accredited Investor Fund V LP and AEI
       Accredited Investor Fund VI LP, affiliates of the Partnership. The Partnership owns a
       55% interest in the Fresenius Medical Center in Greer, South Carolina. The remaining
       interest in this property is owned by AEI Accredited Investor Fund V LP.




                                               -9-
(3) Related Party Transactions – (Continued)

       The Partnership owned a 60% interest in an Eckerd drug store in Utica, New York. AEI
       Income & Growth Fund XXI Limited Partnership, an affiliate of the Partnership, owned a
       40% interest in this property until the interest was sold, in a series of transactions, to
       unrelated third parties in 2006 and 2007. The Partnership owned a 25% interest in a
       Tia’s Tex-Mex restaurant in Brandon, Florida. The remaining interest in this property
       was owned by AEI Income & Growth Fund 25 LLC. The Partnership owned a 50%
       interest in a Champps Americana restaurant. The remaining interest in this property was
       owned by AEI Private Net Lease Millennium Fund Limited Partnership, an affiliate of
       the Partnership.

       AEI and AFM received the following compensation and reimbursements for costs and
       expenses from the Partnership:
                                                         Total Incurred by the Partnership
                                                        for the Years ended December 31

                                                                         2007           2006
       a. AEI and AFM are reimbursed for all costs incurred in
          connection with managing the Partnership's operations,
          maintaining the Partnership's books and communicating
          the results of operations to the Limited Partners.         $    357,398 $     382,892
                                                                      ======== ========
       b. AEI and AFM are reimbursed for all direct expenses they
          have paid on the Partnership's behalf to third parties
          relating to Partnership administration and property
          management. These expenses included printing costs,
          legal and filing fees, direct administrative costs, outside
          audit costs, taxes, insurance and other property costs.     $    46,888   $    53,972
                                                                       ========     ========
       c. AEI is reimbursed for all costs and direct expenses incurred
          by it in acquiring properties on behalf of the Partnership. $         0   $    73,813
                                                                       ========     ========
       d. AEI is reimbursed for all costs incurred in connection
          with the sale of property.                                  $   176,329   $   155,862
                                                                       ========     ========

       The payable to AEI Fund Management, Inc. represents the balance due for the services
       described in 3a, b, c and d. This balance is non-interest bearing and unsecured and is to
       be paid in the normal course of business.




                                               - 10 -
(4) Investments in Real Estate –

       The Partnership leases its properties to various tenants under net leases, classified as
       operating leases. Under a net lease, the tenant is responsible for real estate taxes,
       insurance, maintenance, repairs and operating expenses for the property. For some
       leases, the Partnership is responsible for repairs to the structural components of the
       building. At the time the properties were acquired, the remaining primary lease terms
       varied from 9 to 20 years. The leases provide the tenants with two to four five-year
       renewal options subject to the same terms and conditions as the primary term. The leases
       contain rent clauses which entitle the Partnership to receive additional rent in future years
       based on stated rent increases.

       The cost of the properties not held for sale and related accumulated depreciation at
       December 31, 2007 are as follows:
                                               Buildings and                Accumulated
Property                             Land       Equipment         Total     Depreciation

Johnny Carino’s, Austin, TX       $ 1,062,400         $ 1,446,576     $ 2,508,976     $       316,656
Johnny Carino’s, Longmont, CO          560,383            733,022       1,293,405             117,284
Jared Jewelry, Madison Heights, MI 477,030                781,134       1,258,164             121,075
Applebee’s, Carmel, IN               1,439,755          1,538,215       2,977,970             225,606
Applebee’s, Greenfield, IN             702,035          1,872,762       2,574,797             274,670
Jared Jewelry, Sugar Land, TX          755,710          1,545,099       2,300,809             213,739
Best Buy, Midland, MI                1,445,414          3,272,188       4,717,602             409,025
Johnny Carino’s, Tyler, TX             891,991          1,677,248       2,569,239             176,111
CarMax, Columbia, SC                 1,901,558          3,639,782       5,541,340             333,646
Advance Auto Parts, Batesville, IN     214,591          1,219,286       1,433,877              77,221
Applebee’s, Sequim, WA                 594,772          2,030,738       2,625,510             104,922
                                   -------------      -------------   -------------       -------------
                                   $ 10,045,639       $19,756,050     $29,801,689     $ 2,369,955
                                    ========          ========        ========        ========

       On May 31, 2006, the Partnership purchased an Advance Auto Parts store in Batesville,
       Indiana for $1,433,877. The property is leased to Advance Stores Company, Inc. under a
       Lease Agreement with a remaining primary term of 13.6 years and initial annual rent of
       $99,907.

       On September 21, 2006, the Partnership purchased an Applebee’s restaurant in Sequim,
       Washington for $2,625,510. The property is leased to Apple Washington LLC under a
       Lease Agreement with a primary term of 20 years and initial annual rent of $189,288.

       Subsequent to December 31, 2007, the Partnership purchased a 33% interest in a Dick’s
       Sporting Goods store in Topeka, Kansas for approximately $2,255,000. The property is
       leased to Dick’s Sporting Goods, Inc. under a Lease Agreement with a remaining primary
       term of 9 years and initial annual rent of $167,063.




                                                  - 11 -
(4) Investments in Real Estate – (Continued)

       Subsequent to December 31, 2007, the Partnership purchased a 55% interest in a
       Fresenius Medical Center in Greer, South Carolina for approximately $1,473,000. The
       property is leased to RCG University Division, Inc. under a Lease Agreement with a
       remaining primary term of 11.5 years and initial annual rent of $111,936.

       In November 2007, Kona Restaurant Group, Inc. (KRG), the tenant of the Johnny
       Carino’s restaurants, approached the Partnership with a request to adjust the rent on the
       properties in Austin, Texas and Longmont, Colorado to a market rental rate based on the
       restaurants’ performance and the current conditions in the market. Subsequent to
       December 31, 2007, after reviewing the financial statements for the restaurants and KRG,
       the Partnership agreed to amend the Leases to reduce the current annual rent for the
       properties by 30% to $242,640. This amount is scheduled to increase annually by 1.5%.
       In addition, the amendments provide for additional rental payments if the restaurants’
       sales exceed certain stated amounts. The amendments will expire in two years unless
       Fired Up, Inc., the parent company of KRG and guarantor of the Leases, achieves certain
       other expense and debt reduction measures.

       For properties owned as of December 31, 2007, the minimum future rent payments
       required by the leases are as follows:

                                 2008                     $ 2,994,581
                                 2009                       3,041,714
                                 2010                       3,069,756
                                 2011                       3,097,103
                                 2012                       3,128,171
                                 Thereafter                27,806,510
                                                            -------------
                                                          $ 43,137,835
                                                           ========

       There were no contingent rents recognized in 2007 and 2006.




                                               - 12 -
(5) Major Tenants –

      The following schedule presents rent revenue from individual tenants, or affiliated groups
      of tenants, who each contributed more than ten percent of the Partnership's total rent
      revenue for the years ended December 31:

          Tenants                      Industry                       2007             2006

      Kona Restaurant Group, Inc.      Restaurant             $        762,072     $    756,813
      Sterling Jewelers Inc.           Retail                          649,326          649,057
      Apple American Group             Restaurant                      614,074          477,366
      CarMax Auto Superstores, Inc.    Retail                          389,836          385,980
      Best Buy Stores, L.P.            Retail                          349,288          349,288
                                                                  --------------   --------------
      Aggregate rent revenue of major tenants                 $     2,764,596      $ 2,618,504
                                                                  ========         ========
      Aggregate rent revenue of major tenants as
      a percentage of total rent revenue                                  87%               82%
                                                                  ========         ========

(6) Discontinued Operations –

      During 2006, the Partnership sold its remaining 47.3426% interest in the Mimi’s Café
      restaurant in Kansas City, Missouri, in two separate transactions, to unrelated third
      parties. The Partnership received total net sale proceeds of $1,422,540, which resulted in
      a net gain of $405,272. The cost and related accumulated depreciation of the interests
      sold was $1,051,535 and $34,267, respectively.

      During 2006, the Partnership sold its remaining 47.1732% interest in the Eckerd drug
      store in Utica, New York, in five separate transactions, to unrelated third parties. The
      Partnership received total net sale proceeds of $2,633,840, which resulted in a net gain of
      $517,793. The cost and related accumulated depreciation of the interests sold was
      $2,178,382 and $62,335, respectively.

      On September 26, 2006, Tia’s Florida, LLC and Tia’s Maryland, LLC, the tenants of the
      Tia’s Tex-Mex restaurant in Brandon, Florida and Bowie, Maryland filed for Chapter 7
      bankruptcy, which leads to liquidation and dissolution of the companies. The tenants
      closed the restaurants. The primary guarantor of the Leases, Julio’s Investors LLC
      (Julio’s), continued to pay the rent and property expenses. In the second quarter of 2007,
      the Partnership and Julio’s entered into an agreement whereby the Partnership would
      release Julio’s from its Lease guarantee for the Brandon property in exchange for a lump
      sum payment of $75,670. This payment was contingent on completion of the sale of the
      property and was received on July 30, 2007.




                                             - 13 -
(6) Discontinued Operations – (Continued)

      On June 22, 2007, the Partnership sold the Tia’s Tex-Mex restaurant in Brandon, Florida
      to an unrelated third party. The Partnership received net sale proceeds of $721,184,
      which resulted in a net gain of $20,148. At the time of sale, the cost and related
      accumulated depreciation was $753,674 and $52,638, respectively. At December 31,
      2006, the property was classified as Real Estate Held for Sale with a book value of
      $701,036.

      Subsequent to December 31, 2007, the Partnership and Julio’s entered into an agreement
      whereby the Partnership released Julio’s from its Lease guarantee for the Bowie property
      in exchange for a lump sum payment of $750,000. The Partnership is actively marketing
      the property for sale. While the property is vacant, the Partnership is responsible for real
      estate taxes and other costs associated with maintaining the property. At December 31,
      2007 and 2006, the property was classified as Real Estate Held for Sale with a book value
      of $2,248,908.

      On March 15, 2007, the Partnership sold its 50% interest in the Champps Americana
      restaurant in Orland Park, Illinois to an unrelated third party. The Partnership received
      net sale proceeds of $2,011,237, which resulted in a net gain of $533,375. At the time of
      sale, the cost and related accumulated depreciation was $1,579,283 and $101,421,
      respectively. At December 31, 2006, the property was classified as Real Estate Held for
      Sale with a book value of $1,477,862.

      During 2007, the Partnership sold 50.8362% of the Jared Jewelry store in Goodlettsville,
      Tennessee, in eight separate transactions, to unrelated third parties. The Partnership
      received total net sale proceeds of $2,519,099, which resulted in a net gain of $642,879.
      The cost and related accumulated depreciation of the interests sold was $2,009,054 and
      $132,834, respectively.

      Subsequent to December 31, 2007, the Partnership sold its remaining 24.1638% interest
      in the Jared Jewelry store in Goodlettsville, Tennessee, in three separate transactions, to
      unrelated third parties. The Partnership received total net sale proceeds of approximately
      $1,189,000, which resulted in a net gain of approximately $297,200. The cost and related
      accumulated depreciation of the interests sold was $954,956 and $63,141, respectively.
      At December 31, 2007, the property was classified as Real Estate Held for Sale with a
      book value of $891,815.

      In November 2007, Kona Restaurant Group, Inc. (KRG) informed the Partnership that it
      was closing the Johnny Carino’s restaurant in Olathe, Kansas due to lower than expected
      sales and operating losses. Subsequent to December 31, 2007, the Partnership and KRG
      entered into an agreement to amend the Lease to reduce the current annual rent for the
      property by 50% to $108,017. The Partnership is actively marketing the property for
      sale. As part of the agreement, Fired Up, Inc., the guarantor of the Lease, agreed to
      provide a Note to the Partnership with a principal balance equal to the difference between
      the net proceeds from the sale of the property and the Partnership’s original cost of the
      property. The Note will bear interest at a 7% rate with scheduled payments over a five-
      year term and a balloon payment at the end of the term. At December 31, 2007, the
      property was classified as Real Estate Held for Sale with a book value of $2,559,176.

                                              - 14 -
(6) Discontinued Operations – (Continued)

       Subsequent to December 31, 2007, the Partnership entered into an agreement to sell the
       Johnny Carino’s restaurant in Olathe, Kansas to an unrelated third party. The sale is
       subject to contingencies and may not be completed. If the sale is completed, the
       Partnership expects to receive net proceeds of approximately $1,786,000. If the sale is
       not completed, the Partnership will seek another buyer for the property and may not be
       able to negotiate a purchase agreement with similar economic terms.

       The Partnership is attempting to sell its 50% interest in the Jared Jewelry store in
       Hazelwood, Missouri. At December 31, 2007, the property was classified as Real Estate
       Held for Sale with a book value of $1,589,669.

       During 2007 and 2006, the Partnership distributed net sale proceeds of $553,233 and
       $650,402 to the Limited and General Partners as part of their quarterly distributions,
       which represented a return of capital of $10.97 and $12.91 per Limited Partnership Unit,
       respectively. The remaining net sale proceeds will either be reinvested in additional
       property or distributed to the Partners in the future.

       The financial results for these properties are reflected as Discontinued Operations in the
       accompanying financial statements. The following are the results of discontinued
       operations for the years ended December 31:
                                                                      2007           2006

       Rental Income                                           $      883,800     $ 1,113,842
       Lease Settlement Income                                         75,670               0
       Property Management Expenses                                   (31,722)        (41,978)
       Depreciation                                                  (139,671)       (269,712)
       Gain on Disposal of Real Estate                              1,196,402         923,065
                                                                   ------------     ------------
               Income from Discontinued Operations             $    1,984,479     $ 1,725,217
                                                                   =======          =======

(7) Partners' Capital –

       Cash distributions of $176,448 and $176,447 were made to the General Partner and
       $3,352,501 and $3,352,501 were made to the Limited Partners for the years ended
       December 31, 2007 and 2006, respectively. The Limited Partners' distributions represent
       $70.00 per Limited Partnership Unit outstanding using 47,893 weighted average Units in
       2007 and 2006.

       As part of the Limited Partner distributions discussed above, the Partnership distributed
       net sale proceeds of $525,571 and $617,882 in 2007 and 2006, respectively. The
       distributions reduced the Limited Partners’ Adjusted Capital Contributions.

       After the effect of the return of capital from the sale of property, the Adjusted Capital
       Contribution, as defined in the Partnership Agreement, is $958.25 per original $1,000
       invested.


                                              - 15 -

				
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