BILL OF SALE AND NOTE

 EXHIBIT 10.7

                              BILL OF SALE AND NOTE

     This BILL OF SALE AND NOTE  ("Bill of Sale and  Note") is made and  entered
into this 1st day of October  1998,  by and between  CORNERSTONE  REALTY  INCOME
TRUST, INC., a Virginia corporation ("Seller"), and APPLE RESIDENTIAL MANAGEMENT
GROUP, INC., a Virginia corporation ("Buyer"), and consented to, with respect to
paragraph 4, by APPLE  RESIDENTIAL  INCOME TRUST,  INC., a Virginia  corporation
("Apple").

                                    RECITALS

     WHEREAS, effective October 1, 1998 (the "Effective Date"), Seller wishes to
sell and Buyer  wishes to  purchase a certain  Property  Acquisition/Disposition
Agreement  dated as of November 1, 1996 (the  "Agreement")  by and between Apple
and Apple Realty Group, Inc., a Virginia  corporation,  under which Apple Realty
Group,  Inc. was to provide  certain  services to Apple in  connection  with the
acquisition and disposition of residential  apartment  complexes in exchange for
certain compensation as described in the Agreement.

     WHEREAS,  as of March 1, 1997,  Seller  acquired all of the assets of Apple
Realty Group,  Inc.,  consisting  primarily of the Agreement,  and in connection
with such  acquisition  agreed to perform the  services of Apple  Realty  Group,
Inc., as successor to Apple Realty Group, Inc., under the Agreement, in exchange
for the consideration described in the Agreement.

     NOW, THEREFORE, in consideration of the premises herein contained and other
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the parties agree as follows:

1. Effective as of the Effective Date, Seller hereby sells, transfers,  conveys,
assigns  and  delivers  to Buyer the  Agreement  which  belongs  to  Seller,  as
successor to Apple Realty Group, Inc.

2.  Seller  hereby  agrees  that it will,  at the  request of Buyer and  without
further consideration, promptly take such further action and execute and deliver
such  additional  consents or similar  instruments as Buyer may reasonably  deem
necessary to complete the transfer of the  Agreement to Buyer and to endeavor to
obtain any  required  consents of third  parties,  and if any such  consents are
unobtainable, to use its best efforts to assure the benefits thereof to Buyer.

3. Buyer  hereby  agrees to provide to Apple  services  in  connection  with the
acquisition and disposition of residential  apartment  complexes in exchange for
certain compensation all as described in the Agreement.

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4. Apple hereby consents to (a) the transfer of the Agreement by Seller to Buyer
and (b) the assumption by Buyer of the  obligation to furnish  services to Apple
in exchange  for certain  compensation  all as described  in the  Agreement.  In
connection with such consent,  Apple and Buyer have entered into an amendment to
the Agreement, as described therein (a copy of which is attached as Exhibit A).

5. Buyer hereby promises to pay to the order of Seller, as the purchase price of
the Agreement,  the principal sum of Three Hundred Eleven Thousand,  One Hundred
Eleven Dollars ($311,111)  together with interest thereon in the manner provided
as follows:

          (a) a single  principal  payment in the amount of Three Hundred Eleven
          Thousand,  One Hundred Eleven Dollars  ($311,111) due on September 30,
          1999,  together with interest  thereon from the date hereof until paid
          in full. Interest on the outstanding principal amount shall be payable
          at the end of each calendar quarter commencing  December 31, 1998, and
          ending on  September  30,  1999,  at a rate per annum  equal to twelve
          percent (12%);  provided,  however,  that, to the extent  permitted by
          law, any overdue  interest shall bear interest for each day until paid
          at a rate per annum equal to fifteen percent (15%).  The final payment
          due on  September  30,  1999,  shall  in  any  event  be in an  amount
          sufficient to repay in full the then unpaid  principal  amount of this
          Bill of Sale and Note plus interest thereon as determined herein;

          (b) Buyer may prepay this Bill of Sale and Note in whole or in part at
          any time on or after December 31, 1998, without penalty; and

          (c) Buyer  shall make each  payment of  principal  or interest on this
          Bill of Sale and Note not later than 11:00 A.M.  (Eastern Time) on the
          date when due, in funds immediately available to Seller.

6. Buyer  agrees to pay on demand to Seller all costs of  collection,  including
reasonable attorneys' fees, if any part of this Bill of Sale and Note, principal
or interest, is collected after maturity with the aid of an attorney.

7. This Bill of Sale and Note  represents the entire  understanding  between the
Buyer and Seller with regard to the transaction described herein and may only be
amended by a written  instrument signed by the party against whom enforcement is
sought.

8. This  Bill of Sale and Note  shall be  construed  in  accordance  with and be
governed by the laws of the Commonwealth of Virginia.

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     IN WITNESS WHEREOF,  the Parties hereto have executed this Bill of Sale and
Note as of the day and year first above written.

                                     SELLER:

                                     Cornerstone Realty Income Trust, Inc.,
                                          a Virginia corporation

                                     By: S.J. Olander
                                        ----------------------------------

                                     Title: CFO
                                           -------------------------------

                                     BUYER:

                                     Apple Residential Management Group, Inc.,
                                           a Virginia corporation

                                     By: Glade M. Knight
                                        ----------------------------------

                                     Title: President
                                           -------------------------------

With respect to Paragraph 4,
Consented to by:

Apple Residential Income Trust, Inc.
      a Virginia corporation

By: Glade M. Knight
   ----------------------------------

Title: President
      -------------------------------

[EXHIBIT A - AMENDED AND RESTATED
PROPERTY ACQUISITION/DISPOSITION
AGREEMENT - NOT ATTACHED] 

Basic Info:

Name: BILL OF SALE AND NOTE
Type: Bill of Sale and Note
Date: Dec. 28, 1998
Company: CORNERSTONE REALTY INCOME TRUST INC
State: Virginia

Other info:

Date:

  • 1st day of October 1998
  • October 1 , 1998
  • November 1 , 1996
  • March 1 , 1997
  • September 30 , 1999
  • December 31 , 1998

Organization:

  • Apple Realty Group , Inc.
  • Bill of Sale
  • A.M. Eastern Time
  • Commonwealth of Virginia
  • Cornerstone Realty Income Trust , Inc.
  • Apple Residential Management Group , Inc.
  • Apple Residential Income Trust , Inc.

Location:

  • Virginia

Money:

  • $ 311,111

Person:

  • Glade M. Knight

Percent:

  • twelve percent
  • 12 %
  • fifteen percent
  • 15 %