SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: February 1, 1999

                      APPLE RESIDENTIAL INCOME TRUST, INC.
             (Exact name of registrant as specified in its charter)

  VIRGINIA                         0-23983                         54-1816010
 (State of                      (Commission                     (IRS Employer
incorporation)                  File Number)                 Identification No.)

 306 EAST MAIN STREET
  RICHMOND, VIRGINIA                                                 23219
(Address of principal                                             (Zip Code)
  executive offices)

               Registrant's telephone number, including area code:
                                 (804) 643-1761


<PAGE>



                      APPLE RESIDENTIAL INCOME TRUST, INC.

                                    FORM 8-K

                                      Index

                                                                           PAGE
                                                                          NUMBER
                                                                          ------
Item 2.    Acquisition or Disposition of Assets                             3

Item 7.    Financial Statements, Pro Forma Financial
           Information and Exhibits

       a.  Independent Auditors' Report                                     7
           (Grayson Square Apartments)*

           Historical Statement of Income and
           Direct Operating Expenses
           (Grayson Square Apartments)*

           Note to Historical Statement of
           Income and Direct Operating
           Expenses (Grayson Square Apartments)*

       b.  Pro Forma Statement of Operations                                8
           for the Year ended December 31, 1998
           (unaudited)*

           Pro Forma Balance Sheet as of
           December 31, 1998 (unaudited)*

       c.  Exhibits

           4        Instruments Defining the Rights of Lenders

           10.1     Purchase Contract for Grayson Square Apartments

           10.2     Property Management Agreement for
                    Grayson Square Apartments

           10.3     Certificate of Limited Partnership of Apple REIT VII
                    Limited Partnership.

           10.4     Limited Partnership Agreement of Apple REIT VII
                    Limited Partnership

           23.1     Consent of Independent Auditors*

-----------------------
* To be filed by amendment.

                                       -2-


<PAGE>



Item 2.  Acquisition or Disposition of Assets

                            GRAYSON SQUARE APARTMENTS

                                Grapevine, Texas

     On February 1, 1999, Apple REIT VII Limited Partnership  (together with its
parent companies,  Apple Residential Income Trust, Inc., Apple General, Inc. and
Apple  Limited,  Inc., the  "Company")  purchased the Grayson Square  Apartments
located at 2300 Grayson Drive, Grapevine, Texas (the "Property").

     The Property  comprises 200  apartment  units.  The purchase  price for the
Property  was  $9,350,000.  The seller was  Grapevine I Partners,  Ltd., a Texas
limited partnership, which is not affiliated with the Company, Apple Residential
Management Group,  Inc. (the "Advisor") or their affiliates.  The purchase price
was paid through a  combination  of (i)  approximately  $2,357,215 in cash using
proceeds  from  the  sale  of  the  Common  Shares  of  the  Company,  and  (ii)
approximately $6,992,785 by assumption of a mortgage loan. Title to the Property
was conveyed to the Company by special warranty deed.

     The Property was acquired  with the  assumption  of a mortgage  loan in the
original principal amount of $7,350,000 held by Fannie Mae. On February 1, 1999,
the outstanding balance of the mortgage loan was $6,992,785. The interest on the
mortgage loan currently is 6.505% per annum;  amortization is based on a 28-year
amortization  term; and  prepayments  are permitted  after May 1, 2001 with a 2%
prepayment penalty,  after May 1, 2002 with a 1% prepayment  penalty,  and after
May 1, 2003 with no prepayment  penalty.  The maturity date of the mortgage loan
is April 1, 2005, and the balance due at maturity,  assuming no payment has been
made on  principal  in  advance  of its due date,  is  $6,200,873.  The  current
required monthly payment of principal and interest is $46,634.00.

     In connection  with the original  financing of the  Property,  the previous
owner of the Property agreed to certain  restrictions on the use of the Property
set forth in a special warranty deed and deed  restrictions.  In connection with
the purchase of the  Property  and the  assumption  of the  mortgage  loan,  the
Company  entered  into an  assumption  of the  special  warranty  deed  and deed
restrictions.  Among the restrictions  agreed to by the Company is that at least
20% of the  apartment  units must be occupied by the persons who, at the time of
initial  occupancy of the apartment  units, are "lower income tenants." The term
lower income tenants is defined, generally, as one or more persons who occupy an
apartment  unit whose  aggregate  anticipated  income does not exceed 80% of the
median income for the area where the Property is located.

     LOCATION.  The Property is located on Grayson  Drive near  Highways 121 and
114 in Grapevine,  Texas.  The Property is within Tarrant  County,  near Dallas,
Texas.   The  Property  is  located  within  the  greater   Dallas/Forth   Worth
metropolitan statistical area, or as it is called locally, "The Metroplex."

     The following information is based in part upon information provided by the
Dallas  Chamber  of  Commerce.   The  Dallas/Fort  Worth  Metroplex  is  in  the
north-central  part  of  Texas  and is  composed  of  nine  counties.  The  1996
population of The Metroplex was approximately 4,400,000. The Dallas metropolitan
area is the second largest in the state, behind Houston.

                                       -3-


<PAGE>



     The economy of the Dallas/Forth Worth area is complex and diversified.  Key
economic  factors  include a large  manufacturing  base  (including  as products
military hardware,  electronics,  automobiles,  industrial equipment,  oil-field
parts,   food   products   and   chemicals),    banking,   insurance   services,
communications,  oil and gas production and air transportation.  Major employers
in the area include Texas Instruments, Southwestern Bell, General Motors, J.C.
Penney, NationsBank and Vought Aircraft Company.

     The Metroplex is also an established  transportation center for the nation.
The Dallas/Fort Worth International Airport occupies  approximately 17,600 acres
of land between the two cities. It is the second largest  commercial  airport in
the United States in terms of land area,  and is the second  busiest  airport in
the world, with more than 2,500 daily arrivals and departures.

     The area also has a  well-established  system  of  interstate  highway  and
supporting  secondary routes. The Metroplex is located at the hub of Interstates
35, 45, 20 and 30. Two outer loops,  Interstate 635 in Dallas and Interstate 820
in Forth Worth, surround the respective cities.

     The many  institutions  of higher  learning  in the area  include  Southern
Methodist University, the University of Texas at Dallas, the University of Texas
at Arlington, the University of North Texas, and Texas Christian University.

     The Property is in a  neighborhood  consisting  of other  multi-family  and
single-family  housing,  and commercial and retail development.  The Property is
located  near  restaurants,  businesses,  schools and  churches,  and is readily
accessible  from  Highways  121, 114 and 360.  The Property is an  approximately
25-minute drive from Dallas,  an  approximately  15-minute drive from Fort Worth
and an approximately  10-minute drive from the Dallas/Fort  Worth  International
Airport.

     DESCRIPTION  OF THE  PROPERTY.  The Property  consists of 200  garden-style
apartment units in 20 two-story  buildings on approximately  10.8 acres of land.
The Property was constructed in 1985.  There are four apartment unit types.  The
unit mix and rents being charged new tenants as of February 1999 are as follows:

<TABLE>
<CAPTION>
                                                                      APPROXIMATE INTERIOR               MONTHLY
QUANTITY                                 TYPE                              SQUARE FOOTAGE                 RENTAL
--------                                 ----                              --------------                 ------
<S><C>        <C>                                                                 <C>                     <C>     
     30         One bedroom, one bathroom                                           600                    $ 540
     60         One bedroom, one bathroom                                           750                      640
     60         One bedroom, one bathroom w/den                                     900                      740
     50         Two bedrooms, two bathrooms                                        1,018                     875
</TABLE>

     The apartments provide a total of approximately  168,000 square feet of net
rentable area.

     The Company  believes that the Property has generally been well  maintained
and is in good  condition.  However,  the  Company  has  budgeted  approximately
$200,000 for repairs and

                                       -4-


<PAGE>



improvements  to  the  Property,  to  include  clubhouse  renovations,  exterior
painting, replacement of gutters and downspouts, and interior upgrades.

     The following information is provided by the seller.  Physical occupancy at
the Property  averaged  approximately 96% in 1994, 99% in 1995, 96% in 1996, 95%
in 1997, and 92% in 1998.  Leases at the Property are generally for terms of one
year or less.  Average  rental  rates for the past  five  years  have  generally
increased.  As an example, a one-bedroom,  one-bathroom  apartment unit with den
(900 square feet) rented for $615 in 1994,  $660 in 1995,  $670 in 1996, $690 in
1997, and $705 in 1998. The average  effective  annual rental per square foot at
the Property for 1994 through 1998 was $8.43,  $9.05,  $9.19,  $9.46, and $9.67,
respectively.

     The Property has an outdoor  swimming  pool, a Jacuzzi,  a playground and a
fitness center.  There is also a clubhouse with a leasing office and ample paved
parking for the tenants.

     The buildings are wood frame  construction  with exteriors  consisting of a
combination  of brick  veneer and painted  wood  siding.  The  buildings  are on
concrete  slab  foundations  and roofs are  pitched  and  covered  with  asphalt
shingles on plywood sheathing.

     Each  apartment  unit has  wall-to-wall  carpeting  in the living areas and
vinyl floors in the kitchen and bath. Each apartment unit has a cable television
hook-up and an individually  controlled heating and air-conditioning  unit. Each
kitchen has a  refrigerator/freezer,  electric  range and oven,  dishwasher  and
garbage disposal.  All of the units, other than the smallest  one-bedroom units,
have  full-sized  washer/dryer  connections.  Each  upstairs  unit  has  vaulted
ceilings and each downstairs  unit has nine-foot  ceilings.  Selected  apartment
units have a wood-burning fireplace and built-in bookcases.  Each apartment unit
has walk-in closets,  private outside  storage,  a covered balcony or patio, and
ceiling  fans.  The owner of the Property  pays for cold water,  sewer  service,
trash  removal,  gas for hot water  and  basic  cable  television  service.  The
residents pay for their electricity  usage,  which includes  cooking,  lighting,
heating and air-conditioning.

     There  are at  least  four  apartment  properties  that  compete  with  the
Property.  All  offer  similar  amenities  and  generally  have  rents  that are
comparable to those of the Property.  Based on a recent  telephone  survey,  the
Advisor  estimates  that  occupancy  in  nearby  competing  properties  averaged
approximately 89% on February 1, 1999.

     As of February 10, 1999, the Property was approximately  88% occupied.  The
tenants are a mix of white-collar workers, students and retired persons.

     The  following  table sets forth 1998 real  estate tax  information  on the
Property:

 JURISDICTION        ASSESSED VALUE        TAX RATE          TAX
 ------------        --------------        --------          ---

Tarrant County         $ 7,000,000        $ 0.60532      $ 42,372.12

City of Grapevine        7,000,000          1.92279        134,595.30
                                                          -----------
Total                                                    $ 176,967.42


                                      -5-

<PAGE>


     The basis of the  depreciable  residential  real  property  portion  of the
Property (currently estimated at about $8,778,065) will be depreciated over 27.5
years on a straight-line  basis. The basis of the personal property portion will
be depreciated in accordance with the modified  accelerated cost recovery system
of the Internal  Revenue Code of 1986,  as amended (the  "Code").  Amounts to be
spent by the  Company  on  repairs  and  improvements  will be  treated  for tax
purposes as permitted by the Code based on the nature of the expenditures.

     The Advisor and the Company  believe that the Property is and will continue
to be adequately covered by property and liability insurance.

     MATERIAL  FACTORS  CONSIDERED  IN  ASSESSING  THE  PROPERTY.   The  factors
considered  by the Advisor and the  Company to be  relevant  in  evaluating  the
Property for acquisition by the Company included the following:

         1.       The  Metroplex  was  perceived  as  being  characterized  by a
                  diverse,  stable and steadily growing economy. It was believed
                  that these factors would support  stable  occupancy  rates and
                  reasonable increases in rents at the Property.

         2.       The  Property  was  perceived  as being in a desirable  rental
                  market of the  Metroplex  with a location  convenient to major
                  employment  areas  as well as  recreational  attractions.  For
                  example,  the  Property is close to the new  1,000-acre  Texas
                  Motor  Speedway,  which is  expected  to create  approximately
                  6,200 new permanent and temporary jobs.

         3.       Based upon an engineering report and its own inspections,  the
                  Advisor  believes  that the Property has been well  maintained
                  and is in good condition,  although the Advisor  believes that
                  the planned  repairs and  improvements  for the Property  will
                  allow further increase in rents.

     ACQUISITION AND MANAGEMENT  SERVICES AND FEES. In consideration of services
rendered to the Company in connection  with the selection and acquisition of the
Property, the Company paid Cornerstone Realty Income Trust, Inc. became entitled
to a property acquisition fee equal to 2% of the purchase price of the Property,
or $187,000.  At closing,  $47,144 of the fee was paid. The balance will be paid
if and when the debt  encumbering  the  Property is repaid.  Cornerstone  Realty
Income Trust,  Inc. will also serve as property manager for the Property and for
its services will be paid by the Company a monthly management fee equal to 5% of
the gross revenues of the Property plus reimbursement of certain expenses.

     The Company is not aware of any material  adverse  factors  relating to the
Property not set forth in this report that will cause the financial  information
contained in this report not to be  necessarily  indicative of future  operating
results.



                                       -6-


<PAGE>



                                   ITEM 7.a.*





---------------- 
* To be filed by  amendment.It is  impracticable  to include herein the required
financial statements for the Property. The required financial statements will be
filed as an amendment  to this report as soon as possible,  but in no event more
than 60 days after the date of filing of this report.



                                       -7-


<PAGE>



                                   ITEM 7.b.*





----------------
* To be filed by amendment.  It is  impracticable to include herein the required
pro forma financial  information.  The required pro forma financial  information
will be filed as an  amendment  to this  report as soon as  possible,  but in no
event more than 60 days after the date of filing of this report.



                                       -8-


<PAGE>




                                   SIGNATURES
                                   ----------

Pursuant  to the  requirements  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.

                                        Apple Residential Income Trust, Inc.


Date: February 16, 1999                 By: /s/ Glade M. Knight                
                                            -----------------------------
                                           Glade M. Knight
                                           President of Apple Residential
                                           Income Trust, Inc.



                                       -9-


<PAGE>



                                  EXHIBIT INDEX

                      Apple Residential Income Trust, Inc.
                         Form 8-K dated February 1, 1999

EXHIBIT NUMBER                        EXHIBIT
--------------                        -------

     4                 Instruments Defining the Rights of Lenders

     10.1              Purchase Contract for Grayson Square Apartments

     10.2              Property Management Agreement for Grayson Square
                       Apartments

     10.3              Certificate of Limited Partnership of Apple REIT VII
                       Limited Partnership.

     10.4              Limited Partnership Agreement of Apple REIT VII
                       Limited Partnership.

     23.1              Consent of Independent Auditors*








* To be filed by amendment.

                                      -10-
[{"type": "8-K", "sequence": "1", "description": "FORM 8-K", "secsgml_size_bytes": 18837}]
{"company-data": {"conformed-name": "APPLE RESIDENTIAL INCOME TRUST INC", "cik": "0001021351", "assigned-sic": "6798", "irs-number": "541816010", "state-of-incorporation": "VA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-23983", "film-number": "99540105"}, "business-address": {"street1": "306 EAST MAIN STREET", "city": "RICHMOND", "state": "VA", "zip": "23219", "phone": "8046431761"}, "mail-address": {"street1": "306 EAST MAIN STREET", "city": "RICHMOND", "state": "VA", "zip": "23219"}}
SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: February 1, 1999

                      APPLE RESIDENTIAL INCOME TRUST, INC.
             (Exact name of registrant as specified in its charter)

  VIRGINIA                         0-23983                         54-1816010
 (State of                      (Commission                     (IRS Employer
incorporation)                  File Number)                 Identification No.)

 306 EAST MAIN STREET
  RICHMOND, VIRGINIA                                                 23219
(Address of principal                                             (Zip Code)
  executive offices)

               Registrant's telephone number, including area code:
                                 (804) 643-1761
APPLE RESIDENTIAL INCOME TRUST, INC.

                                    FORM 8-K

                                      Index

                                                                           PAGE
                                                                          NUMBER
                                                                          ------
Item 2.    Acquisition or Disposition of Assets                             3

Item 7.    Financial Statements, Pro Forma Financial
           Information and Exhibits

       a.  Independent Auditors' Report                                     7
           (Grayson Square Apartments)*

           Historical Statement of Income and
           Direct Operating Expenses
           (Grayson Square Apartments)*

           Note to Historical Statement of
           Income and Direct Operating
           Expenses (Grayson Square Apartments)*

       b.  Pro Forma Statement of Operations                                8
           for the Year ended December 31, 1998
           (unaudited)*

           Pro Forma Balance Sheet as of
           December 31, 1998 (unaudited)*

       c.  Exhibits

           4        Instruments Defining the Rights of Lenders

           10.1     Purchase Contract for Grayson Square Apartments

           10.2     Property Management Agreement for
                    Grayson Square Apartments

           10.3     Certificate of Limited Partnership of Apple REIT VII
                    Limited Partnership.

           10.4     Limited Partnership Agreement of Apple REIT VII
                    Limited Partnership

           23.1     Consent of Independent Auditors*

-----------------------
* To be filed by amendment.

                                       -2-
Item 2.  Acquisition or Disposition of Assets

                            GRAYSON SQUARE APARTMENTS

                                Grapevine, Texas

     On February 1, 1999, Apple REIT VII Limited Partnership  (together with its
parent companies,  Apple Residential Income Trust, Inc., Apple General, Inc. and
Apple  Limited,  Inc., the  "Company")  purchased the Grayson Square  Apartments
located at 2300 Grayson Drive, Grapevine, Texas (the "Property").

     The Property  comprises 200  apartment  units.  The purchase  price for the
Property  was  $9,350,000.  The seller was  Grapevine I Partners,  Ltd., a Texas
limited partnership, which is not affiliated with the Company, Apple Residential
Management Group,  Inc. (the "Advisor") or their affiliates.  The purchase price
was paid through a  combination  of (i)  approximately  $2,357,215 in cash using
proceeds  from  the  sale  of  the  Common  Shares  of  the  Company,  and  (ii)
approximately $6,992,785 by assumption of a mortgage loan. Title to the Property
was conveyed to the Company by special warranty deed.

     The Property was acquired  with the  assumption  of a mortgage  loan in the
original principal amount of $7,350,000 held by Fannie Mae. On February 1, 1999,
the outstanding balance of the mortgage loan was $6,992,785. The interest on the
mortgage loan currently is 6.505% per annum;  amortization is based on a 28-year
amortization  term; and  prepayments  are permitted  after May 1, 2001 with a 2%
prepayment penalty,  after May 1, 2002 with a 1% prepayment  penalty,  and after
May 1, 2003 with no prepayment  penalty.  The maturity date of the mortgage loan
is April 1, 2005, and the balance due at maturity,  assuming no payment has been
made on  principal  in  advance  of its due date,  is  $6,200,873.  The  current
required monthly payment of principal and interest is $46,634.00.

     In connection  with the original  financing of the  Property,  the previous
owner of the Property agreed to certain  restrictions on the use of the Property
set forth in a special warranty deed and deed  restrictions.  In connection with
the purchase of the  Property  and the  assumption  of the  mortgage  loan,  the
Company  entered  into an  assumption  of the  special  warranty  deed  and deed
restrictions.  Among the restrictions  agreed to by the Company is that at least
20% of the  apartment  units must be occupied by the persons who, at the time of
initial  occupancy of the apartment  units, are "lower income tenants." The term
lower income tenants is defined, generally, as one or more persons who occupy an
apartment  unit whose  aggregate  anticipated  income does not exceed 80% of the
median income for the area where the Property is located.

     LOCATION.  The Property is located on Grayson  Drive near  Highways 121 and
114 in Grapevine,  Texas.  The Property is within Tarrant  County,  near Dallas,
Texas.   The  Property  is  located  within  the  greater   Dallas/Forth   Worth
metropolitan statistical area, or as it is called locally, "The Metroplex."

     The following information is based in part upon information provided by the
Dallas  Chamber  of  Commerce.   The  Dallas/Fort  Worth  Metroplex  is  in  the
north-central  part  of  Texas  and is  composed  of  nine  counties.  The  1996
population of The Metroplex was approximately 4,400,000. The Dallas metropolitan
area is the second largest in the state, behind Houston.

                                       -3-
The economy of the Dallas/Forth Worth area is complex and diversified.  Key
economic  factors  include a large  manufacturing  base  (including  as products
military hardware,  electronics,  automobiles,  industrial equipment,  oil-field
parts,   food   products   and   chemicals),    banking,   insurance   services,
communications,  oil and gas production and air transportation.  Major employers
in the area include Texas Instruments, Southwestern Bell, General Motors, J.C.
Penney, NationsBank and Vought Aircraft Company.

     The Metroplex is also an established  transportation center for the nation.
The Dallas/Fort Worth International Airport occupies  approximately 17,600 acres
of land between the two cities. It is the second largest  commercial  airport in
the United States in terms of land area,  and is the second  busiest  airport in
the world, with more than 2,500 daily arrivals and departures.

     The area also has a  well-established  system  of  interstate  highway  and
supporting  secondary routes. The Metroplex is located at the hub of Interstates
35, 45, 20 and 30. Two outer loops,  Interstate 635 in Dallas and Interstate 820
in Forth Worth, surround the respective cities.

     The many  institutions  of higher  learning  in the area  include  Southern
Methodist University, the University of Texas at Dallas, the University of Texas
at Arlington, the University of North Texas, and Texas Christian University.

     The Property is in a  neighborhood  consisting  of other  multi-family  and
single-family  housing,  and commercial and retail development.  The Property is
located  near  restaurants,  businesses,  schools and  churches,  and is readily
accessible  from  Highways  121, 114 and 360.  The Property is an  approximately
25-minute drive from Dallas,  an  approximately  15-minute drive from Fort Worth
and an approximately  10-minute drive from the Dallas/Fort  Worth  International
Airport.

     DESCRIPTION  OF THE  PROPERTY.  The Property  consists of 200  garden-style
apartment units in 20 two-story  buildings on approximately  10.8 acres of land.
The Property was constructed in 1985.  There are four apartment unit types.  The
unit mix and rents being charged new tenants as of February 1999 are as follows:
APPROXIMATE INTERIOR               MONTHLY
QUANTITY                                 TYPE                              SQUARE FOOTAGE                 RENTAL
--------                                 ----                              --------------                 ------
30         One bedroom, one bathroom                                           600                    $ 540
     60         One bedroom, one bathroom                                           750                      640
     60         One bedroom, one bathroom w/den                                     900                      740
     50         Two bedrooms, two bathrooms                                        1,018                     875
The apartments provide a total of approximately  168,000 square feet of net
rentable area.

     The Company  believes that the Property has generally been well  maintained
and is in good  condition.  However,  the  Company  has  budgeted  approximately
$200,000 for repairs and

                                       -4-
improvements  to  the  Property,  to  include  clubhouse  renovations,  exterior
painting, replacement of gutters and downspouts, and interior upgrades.

     The following information is provided by the seller.  Physical occupancy at
the Property  averaged  approximately 96% in 1994, 99% in 1995, 96% in 1996, 95%
in 1997, and 92% in 1998.  Leases at the Property are generally for terms of one
year or less.  Average  rental  rates for the past  five  years  have  generally
increased.  As an example, a one-bedroom,  one-bathroom  apartment unit with den
(900 square feet) rented for $615 in 1994,  $660 in 1995,  $670 in 1996, $690 in
1997, and $705 in 1998. The average  effective  annual rental per square foot at
the Property for 1994 through 1998 was $8.43,  $9.05,  $9.19,  $9.46, and $9.67,
respectively.

     The Property has an outdoor  swimming  pool, a Jacuzzi,  a playground and a
fitness center.  There is also a clubhouse with a leasing office and ample paved
parking for the tenants.

     The buildings are wood frame  construction  with exteriors  consisting of a
combination  of brick  veneer and painted  wood  siding.  The  buildings  are on
concrete  slab  foundations  and roofs are  pitched  and  covered  with  asphalt
shingles on plywood sheathing.

     Each  apartment  unit has  wall-to-wall  carpeting  in the living areas and
vinyl floors in the kitchen and bath. Each apartment unit has a cable television
hook-up and an individually  controlled heating and air-conditioning  unit. Each
kitchen has a  refrigerator/freezer,  electric  range and oven,  dishwasher  and
garbage disposal.  All of the units, other than the smallest  one-bedroom units,
have  full-sized  washer/dryer  connections.  Each  upstairs  unit  has  vaulted
ceilings and each downstairs  unit has nine-foot  ceilings.  Selected  apartment
units have a wood-burning fireplace and built-in bookcases.  Each apartment unit
has walk-in closets,  private outside  storage,  a covered balcony or patio, and
ceiling  fans.  The owner of the Property  pays for cold water,  sewer  service,
trash  removal,  gas for hot water  and  basic  cable  television  service.  The
residents pay for their electricity  usage,  which includes  cooking,  lighting,
heating and air-conditioning.

     There  are at  least  four  apartment  properties  that  compete  with  the
Property.  All  offer  similar  amenities  and  generally  have  rents  that are
comparable to those of the Property.  Based on a recent  telephone  survey,  the
Advisor  estimates  that  occupancy  in  nearby  competing  properties  averaged
approximately 89% on February 1, 1999.

     As of February 10, 1999, the Property was approximately  88% occupied.  The
tenants are a mix of white-collar workers, students and retired persons.

     The  following  table sets forth 1998 real  estate tax  information  on the
Property:

 JURISDICTION        ASSESSED VALUE        TAX RATE          TAX
 ------------        --------------        --------          ---

Tarrant County         $ 7,000,000        $ 0.60532      $ 42,372.12

City of Grapevine        7,000,000          1.92279        134,595.30
                                                          -----------
Total                                                    $ 176,967.42

                                      -5-
The basis of the  depreciable  residential  real  property  portion  of the
Property (currently estimated at about $8,778,065) will be depreciated over 27.5
years on a straight-line  basis. The basis of the personal property portion will
be depreciated in accordance with the modified  accelerated cost recovery system
of the Internal  Revenue Code of 1986,  as amended (the  "Code").  Amounts to be
spent by the  Company  on  repairs  and  improvements  will be  treated  for tax
purposes as permitted by the Code based on the nature of the expenditures.

     The Advisor and the Company  believe that the Property is and will continue
to be adequately covered by property and liability insurance.

     MATERIAL  FACTORS  CONSIDERED  IN  ASSESSING  THE  PROPERTY.   The  factors
considered  by the Advisor and the  Company to be  relevant  in  evaluating  the
Property for acquisition by the Company included the following:

         1.       The  Metroplex  was  perceived  as  being  characterized  by a
                  diverse,  stable and steadily growing economy. It was believed
                  that these factors would support  stable  occupancy  rates and
                  reasonable increases in rents at the Property.

         2.       The  Property  was  perceived  as being in a desirable  rental
                  market of the  Metroplex  with a location  convenient to major
                  employment  areas  as well as  recreational  attractions.  For
                  example,  the  Property is close to the new  1,000-acre  Texas
                  Motor  Speedway,  which is  expected  to create  approximately
                  6,200 new permanent and temporary jobs.

         3.       Based upon an engineering report and its own inspections,  the
                  Advisor  believes  that the Property has been well  maintained
                  and is in good condition,  although the Advisor  believes that
                  the planned  repairs and  improvements  for the Property  will
                  allow further increase in rents.

     ACQUISITION AND MANAGEMENT  SERVICES AND FEES. In consideration of services
rendered to the Company in connection  with the selection and acquisition of the
Property, the Company paid Cornerstone Realty Income Trust, Inc. became entitled
to a property acquisition fee equal to 2% of the purchase price of the Property,
or $187,000.  At closing,  $47,144 of the fee was paid. The balance will be paid
if and when the debt  encumbering  the  Property is repaid.  Cornerstone  Realty
Income Trust,  Inc. will also serve as property manager for the Property and for
its services will be paid by the Company a monthly management fee equal to 5% of
the gross revenues of the Property plus reimbursement of certain expenses.

     The Company is not aware of any material  adverse  factors  relating to the
Property not set forth in this report that will cause the financial  information
contained in this report not to be  necessarily  indicative of future  operating
results.

                                       -6-
ITEM 7.a.*

---------------- 
* To be filed by  amendment.It is  impracticable  to include herein the required
financial statements for the Property. The required financial statements will be
filed as an amendment  to this report as soon as possible,  but in no event more
than 60 days after the date of filing of this report.

                                       -7-
ITEM 7.b.*

----------------
* To be filed by amendment.  It is  impracticable to include herein the required
pro forma financial  information.  The required pro forma financial  information
will be filed as an  amendment  to this  report as soon as  possible,  but in no
event more than 60 days after the date of filing of this report.

                                       -8-
SIGNATURES
                                   ----------

Pursuant  to the  requirements  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.

                                        Apple Residential Income Trust, Inc.

Date: February 16, 1999                 By: /s/ Glade M. Knight                
                                            -----------------------------
                                           Glade M. Knight
                                           President of Apple Residential
                                           Income Trust, Inc.

                                       -9-
EXHIBIT INDEX

                      Apple Residential Income Trust, Inc.
                         Form 8-K dated February 1, 1999

EXHIBIT NUMBER                        EXHIBIT
--------------                        -------

     4                 Instruments Defining the Rights of Lenders

     10.1              Purchase Contract for Grayson Square Apartments

     10.2              Property Management Agreement for Grayson Square
                       Apartments

     10.3              Certificate of Limited Partnership of Apple REIT VII
                       Limited Partnership.

     10.4              Limited Partnership Agreement of Apple REIT VII
                       Limited Partnership.

     23.1              Consent of Independent Auditors*

* To be filed by amendment.

                                      -10-