Aei Income & Growth Fund 25 LLC – ‘10KSB’ for 12/31/06

On:  Tuesday, 3/27/07, at 4:06pm ET   ·   For:  12/31/06   ·   Accession #:  819577-7-19   ·   File #:  0-50609

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Annual Report by a Small Business   —   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Annual Report by a Small Business                     46±   207K 
 2: EX-31.1     Certification -- Sarbanes-Oxley Act - Sect. 302        2±     9K 
 3: EX-31.2     Certification -- Sarbanes-Oxley Act - Sect. 302        2±     9K 
 4: EX-32       Certification -- Sarbanes-Oxley Act - Sect. 906        1      6K 

10KSB   —   Annual Report by a Small Business
Document Table of Contents

10KSB
1st “Page” of 6
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION                
Washington, D.C. 20549                

FORM 10-KSB               

Annual Report Under Section 13 or 15(d) of The Securities               
Exchange Act of 1934                

For the Fiscal Year Ended:  December 31, 2006               

Commission file number:  000-50609                

AEI INCOME & GROWTH FUND 25 LLC               
(Name of small business issuer in its charter)                

State of Delaware                75-3074973                     
(State or other jurisdiction of      (I.R.S. Employer                     
incorporation or organization)     Identification No.)                    

30 East 7th Street, Suite 1300, St. Paul, Minnesota 55101           
(Address of principal executive offices)            

(651) 227-7333              
(Issuer's telephone number)               

Securities registered under Section 12(b) of the Exchange Act:                  
          Name of each exchange on
Title of each class             which registered                      
None                          None                    

Securities registered under Section 12(g) of the Exchange Act:                  

Limited Liability Company Units           
(Title of class)                

Check  whether  the issuer (1) filed all reports required  to  be               
filed by Section 13 or 15(d) of the Exchange Act during the  past               
12  months  (or  for such shorter period that the registrant  was               
required to file such reports), and (2) has been subject to  such               
filing requirements for the past 90 days.         Yes [X]  No                   

Check if disclosure of delinquent filers in response to Rule  405               
of  Regulation  S-B  is  not  contained  in  this  Form,  and  no               
disclosure  will  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-KSB or  any               
amendment to this Form 10-KSB.  [X]                                             

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

The  Issuer's revenues for the year ended December 31, 2006  were               
$2,477,088.                                                                     

As  of  February 28, 2007, there were 42,305.862 Units of limited               
membership interest outstanding and owned by nonaffiliates of the               
registrant,  which  Units had an aggregate  market  value  (based               
solely  on  the price at which they were sold since there  is  no               
ready market for such Units) of $42,305,862.                                    

DOCUMENTS INCORPORATED BY REFERENCE               
The registrant has not incorporated any documents by reference                
into this report.               

Transitional Small Business Disclosure Format:    Yes      No [X]               

PART I                

ITEM 1.   DESCRIPTION OF BUSINESS.                                              

AEI  Income  & Growth Fund 25 LLC (the "Company"  or  the       
"Registrant") is a limited liability company which was  organized               
pursuant  to the laws of the State of Delaware on June 24,  2002.               
The  registrant  is  comprised of AEI Fund Management  XXI,  Inc.               
(AFM),  as  the Managing Member, Robert P. Johnson, the President               
and  sole  director of AFM, as the Special Managing  Member,  and               
purchasers of LLC Units as Limited Members.  The Company  offered               
for  sale up to $50,000,000 of limited membership interests  (the               
"Units")  (50,000  Units  at  $1,000  per  Unit)  pursuant  to  a               
registration  statement  effective May  13,  2003.   The  Company               
commenced   operations  on  September  11,  2003   when   minimum               
subscriptions of 1,500 LLC Units ($1,500,000) were accepted.  The               
offering  terminated  May  12, 2005 when  the  extended  offering               
period   expired.    The  Company  received   subscriptions   for               
42,434.763   LLC  Units.   Under  the  terms  of  the   Operating               
Agreement,  the Limited Members and Managing Members  contributed               
funds of $42,434,763 and $1,000, respectively.                                  

The  Company was organized to acquire existing and  newly       
constructed  commercial properties, to lease such  properties  to               
tenants under triple net leases, to hold such properties  and  to               
eventually sell such properties.  From subscription proceeds, the               
Company purchased fifteen properties, including partial interests               
in  eight properties at a total cost of $36,389,018.  The balance               
of  the  subscription  proceeds was applied to  organization  and               
syndication costs.  The properties are commercial, single  tenant               
buildings leased under triple net leases.                                       

The Company's properties were purchased with subscription       
proceeds without any indebtedness.  The Company will not  finance               
properties  in  the future to obtain proceeds  for  new  property               
acquisitions.  If it is required to do so, the Company may  incur               
short-term   indebtedness  to  finance   day-to-day   cash   flow               
requirements (including cash flow necessary to repurchase Units).               
The Company may borrow to finance the refurbishing of a property.               

The  Company will hold its properties until the  Managing       
Members  determine  that  the sale or other  disposition  of  the               
properties  is  advantageous in view of the Company's  investment               
objectives.  In deciding whether to sell properties, the Managing               
Members will consider factors such as potential appreciation, net               
cash  flow  and income tax considerations.  In addition,  certain               
tenants  may  be granted options to purchase properties  after  a               
specified  portion  of the lease term has elapsed.   The  Company               
expects to sell some or all of its properties prior to its  final               
liquidation  and  to  reinvest the proceeds from  such  sales  in               
additional  properties.  The Company reserves the right,  at  the               
discretion of the Managing Members, to either distribute proceeds               
from  the  sale of properties to the Members or to reinvest  such               
proceeds  in  additional  properties,  provided  that  sufficient               
proceeds  are distributed to the Limited Members to  pay  federal               
and state income taxes related to any taxable gain recognized  as               
a  result  of the sale.  It is anticipated that the Company  will               
commence liquidation through the sale of its remaining properties               
eight  to twelve years after completion of the acquisition phase,               
depending  upon  the then current real estate and money  markets,               
the  economic  climate  and the income tax  consequences  to  the               
Members.                                                                        

ITEM 1.   DESCRIPTION OF BUSINESS.  (Continued)                                 

Leases                                                                          

Although there are variations in the specific terms of the        
leases,  the following is a summary of the general terms  of  the               
Company's  leases.  The properties are leased to various  tenants               
under  triple  net  leases,  which are  classified  as  operating               
leases.  Under a triple net lease, the tenant is responsible  for               
all  real  estate  taxes,  insurance,  maintenance,  repairs  and               
operating expenses for the property.  The primary lease terms are               
for  13  to 20 years.  The leases provide for base annual  rental               
payments,  payable  in  monthly installments,  and  contain  rent               
clauses  which entitle the Company to receive additional rent  in               
future years based on stated rent increases.                                    

The leases provide the tenants with two to four five-year       
renewal options subject to the same terms and conditions  as  the               
primary  term. Certain tenants may be granted options to purchase               
the  property at a formula price, which would exceed the original               
cost.  The actual sale price of a property to a tenant may or may               
not   exceed  original  cost  depending  on  market   and   other               
conditions.                                                                     

Property Activity                                                               

On February 6, 2004, the Company purchased a 21% interest       
in  a  Jared  Jewelry  store  in Madison  Heights,  Michigan  for               
$852,592.  The property is leased to Sterling Jewelers Inc. under               
a  Lease  Agreement with a primary term of 20 years  and  initial               
annual  rent  of $65,541.  The purchase price and initial  annual               
rent shown are approximately 10% less than amounts reported prior               
to June 30, 2004.  As part of an agreement between the tenant and               
the   property  developer,  the  monthly  rent  was  reduced   by               
approximately 10% based on a final accounting of the  development               
costs.   As  part of the purchase agreement between the  property               
developer and the Company, the purchase price paid by the Company               
was reduced by the same percentage so the rate of return realized               
by  the Company remains the same.  The remaining interests in the               
property  were purchased by AEI Income & Growth Fund 23  LLC  and               
AEI Accredited Investor Fund 2002 Limited Partnership, affiliates               
of the Company.                                                                 

On February 6, 2004, the Company purchased a 25% interest       
in  a  Jared  Jewelry  store  in  Goodlettsville,  Tennessee  for               
$988,254.  The property is leased to Sterling Jewelers Inc. under               
a  Lease  Agreement with a primary term of 20 years  and  initial               
annual  rent of $75,840.  The remaining interest in the  property               
was  purchased  by  AEI  Accredited Investor  Fund  2002  Limited               
Partnership.                                                                    

ITEM 1.   DESCRIPTION OF BUSINESS.  (Continued)                                 

On February 20, 2004, the Company purchased a 50% interest        
in  a parcel of land in Kansas City, Missouri for $650,000.   The               
Company  obtained title to the land in the form of  an  undivided               
fee  simple interest in the 50% interest purchased.  The land  is               
leased  to SWH Corporation (SWH) under a Lease Agreement  with  a               
primary  term  of  20 years and initial annual rent  of  $39,000.               
Simultaneously with the purchase of the land, the Company entered               
into  a  Development Financing Agreement under which the  Company               
advanced  funds  to SWH for the construction  of  a  Mimi's  Cafe               
restaurant  on the site.  Pursuant to the Lease, any improvements               
to  the land during the term of the Lease become the property  of               
the  lessor.  The Company charged interest on the advances  at  a               
rate  of  6%.   On  June  30,  2004, after  the  development  was               
completed,  the  Lease Agreement was amended to  require  initial               
annual  rent  of  $101,750.  The Company's  share  of  the  total               
acquisition   costs,  including  the  cost  of  the   land,   was               
$1,110,561.  The remaining interest in the property was purchased               
by AEI Accredited Investor Fund 2002 Limited Partnership.                       

During  the fourth quarter of 2005, the Company sold  its       
interest  in the Mimi's Cafe restaurant in Kansas City, Missouri,               
in  three separate transactions, to unrelated third parties.  The               
Company  received  total net sale proceeds of  $1,507,118,  which               
resulted  in  a  net  gain of $434,154.   The  cost  and  related               
accumulated depreciation of the interests sold was $1,110,561 and               
$37,597, respectively.                                                          

On  April  30, 2004, the Company purchased an  Applebee's       
restaurant  in Macedonia, Ohio for $3,134,798.  The  property  is               
leased  to Apple Ohio LLC under a Lease Agreement with a  primary               
term of 20 years and initial annual rent of $238,673.                           

On  November 2, 2004, the Company purchased a  parcel  of       
land  in  Pueblo,  Colorado for $622,500.  The  Company  obtained               
title  to  the  land  in  the form of  an  undivided  fee  simple               
interest.   The  land  is leased to Kona Restaurant  Group  (KRG)               
under  a  Lease  Agreement with a primary term of  17  years  and               
initial  annual rent of $35,794.  Effective March 31,  2005,  the               
annual  rent was increased to $50,423.  Simultaneously  with  the               
purchase  of  the  land, the Company entered into  a  Development               
Financing Agreement under which the Company advanced funds to KRG               
for the construction of a Johnny Carino's restaurant on the site.               
Pursuant  to the Lease, any improvements to the land  during  the               
term  of the Lease become the property of the lessor.  Initially,               
the  Company charged interest on the advances at a rate of 5.75%.               
Effective  March  31, 2005, the interest rate  was  increased  to               
8.1%.  On June 20, 2005, after the development was completed, the               
Lease  Agreement was amended to require initial  annual  rent  of               
$182,663.   Total acquisition costs, including the  cost  of  the               
land, were $2,291,218.                                                          

On January 14, 2005, the Company purchased a 60% interest       
in   a  Jared  Jewelry  store  in  Auburn  Hills,  Michigan   for               
$2,199,067.   The  property is leased to Sterling  Jewelers  Inc.               
under a Lease Agreement with a remaining primary term of 15 years               
and  initial annual rent of $153,780.  The remaining interest  in               
the  property  was  purchased by AEI Income  &  Growth  Fund  XXI               
Limited Partnership, an affiliate of the Company.                               

On  February  9,  2005, the Company purchased  a  Tractor       
Supply  Company  store in Marion, Indiana  for  $2,939,385.   The               
property  is  leased  to  Tractor Supply Company  under  a  Lease               
Agreement with a primary term of 15 years and initial annual rent               
of $210,014.                                                                    

ITEM 1.   DESCRIPTION OF BUSINESS.  (Continued)                                 

On March 18, 2005, the Company purchased a 45% interest in        
a   CarMax  auto  superstore  in  Lithia  Springs,  Georgia   for               
$4,242,438.   The property is leased to CarMax Auto  Superstores,               
Inc.  under  a Lease Agreement with a remaining primary  term  of               
13.4  years  and initial annual rent of $306,180.  The  remaining               
interests in the property were purchased by AEI Income  &  Growth               
Fund XXI Limited Partnership, AEI Income & Growth Fund 24 LLC and               
AEI  Private  Net  Lease  Millennium  Fund  Limited  Partnership,               
affiliates of the Company.                                                      

On  October  25,  2005, the Company purchased  a  Tractor       
Supply  Company  store in Yankton, South Dakota  for  $2,265,936.               
The  property is leased to Tractor Supply Company under  a  Lease               
Agreement with a remaining primary term of 13.2 years and initial               
annual rent of $164,712.                                                        

On December 1, 2005, the Company purchased a Jared Jewelry        
store in Concord, New Hampshire for $4,157,634.  The property  is               
leased  to Sterling Jewelers Inc. under a Lease Agreement with  a               
primary term of 20 years and initial annual rent of $286,495.                   

On   December  16,  2005,  the  Company  completed   the      
acquisition  of  a  Jared Jewelry store in  Aurora,  Illinois  by               
purchasing the building for $1,992,600.  Previously, on  November               
21,  2005, the Company purchased the land under the building  for               
$2,200,000.   Total  acquisition  costs,  including   acquisition               
expenses,  were $4,271,332.  The land and building are leased  to               
Sterling  Jewelers  Inc.  under Lease Agreements  with  remaining               
primary terms of 14.4 years and initial annual rent of $306,353.                

On December 22, 2005, the Company purchased a 60% interest        
in  a  Gart Sports store in Wichita, Kansas for $3,346,155.   The               
property  is  leased to TSA Stores, Inc. under a Lease  Agreement               
with  a  remaining primary term of 11.2 years and initial  annual               
rent  of  $279,088.   The  store  was  converted  into  a  Sports               
Authority  store  in  May 2006.  The remaining  interest  in  the               
property  is  owned  by  AEI Income &  Growth  Fund  26  LLC,  an               
affiliate of the Company.                                                       

On  February 17, 2006, the Company purchased  an  Advance       
Auto  Parts  store  in  Brownsville, Texas for  $1,585,269.   The               
property is leased to Advance Stores Company, Inc. under a  Lease               
Agreement with a remaining primary term of 14.5 years and initial               
annual rent of $109,973.                                                        

On September 26, 2006, Tia's Florida, LLC, the tenant  of       
the  Tia's  Tex-Mex  restaurant in  Brandon,  Florida  filed  for               
Chapter  7 bankruptcy, which leads to liquidation and dissolution               
of  the  company.  The tenant closed the restaurant.  The primary               
guarantor  of  the  Lease, Julio's Investors  LLC  (Julio's),  is               
continuing  to pay the rent and property expenses.   The  Company               
and  Julio's  are  discussing a potential  buyout  of  the  Lease               
guarantee  whereby  the Company would release  Julio's  from  its               
guarantee  in  exchange for a lump sum payment.  The  Company  is               
actively  marketing  the  property for  sale.   The  Company  has               
evaluated the Lease and property value and decided that there  is               
no  impairment  loss  at this time.  At December  31,  2006,  the               
property was classified as Real Estate Held for Sale with a  book               
value of $2,131,848.                                                            

ITEM 1.   DESCRIPTION OF BUSINESS.  (Continued)                                 

On December 21, 2006, the Company purchased a 35% interest        
in  an  Advance  Auto  Parts store in Indianapolis,  Indiana  for               
$669,976.  The property is leased to Advance Stores Company, Inc.               
under  a  Lease Agreement with a remaining primary term  of  13.5               
years and initial annual rent of $46,937.  The remaining interest               
in  the  property was purchased by AEI Income & Growth Fund  XXII               
Limited Partnership, an affiliate of the Company.                               

Major Tenants                                                                   

During 2006, five tenants each contributed more than  ten       
percent of the Company's total rental revenue.  The major tenants               
in aggregate contributed 79% of total rental revenue in 2006.  It               
is  anticipated  that, based on minimum rental payments  required               
under  the  leases, each major tenant will continue to contribute               
more than ten percent of rental revenue in 2007 and future years.               
Any  failure of these major tenants could materially  affect  the               
Company's net income and cash distributions.                                    

Competition                                                                     

The  Company  is  a minor factor in the  commercial  real       
estate  business.   There are numerous entities  engaged  in  the               
commercial  real  estate  business which have  greater  financial               
resources  than the Company.  At the time the Company  elects  to               
dispose  of its properties, it will be in competition with  other               
persons and entities to find buyers for its properties.                         

Employees                                                                       

The Company has no direct employees.  Management services       
are  performed for the Company by AEI Fund Management,  Inc.,  an               
affiliate of AFM.                                                               

ITEM 2.   DESCRIPTION OF PROPERTIES.                                            

Investment Objectives                                                           

The  Company's  investment  objectives  are  to  acquire      
existing or newly-developed commercial properties that offer  the               
potential  for  (i) regular cash distributions of  lease  income;               
(ii)  growth  in lease income through rent escalation provisions;               
(iii) preservation of capital through all-cash transactions; (iv)               
capital  growth through appreciation in the value of  properties;               
and  (v)  stable  property  performance through  long-term  lease               
contracts.  The Company does not have a policy, and there  is  no               
limitation, as to the amount or percentage of assets that may  be               
invested  in any one property.  However, to the extent  possible,               
the  Managing Members attempt to diversify the type and  location               
of the properties.                                                              

ITEM 2.   DESCRIPTION OF PROPERTIES. (Continued)                                

Description of Properties                                                       

The  Company's properties are commercial,  single  tenant       
buildings.  The properties were acquired on a debt-free basis and               
are  leased to various tenants under triple net leases, which are               
classified  as operating leases.  The only exceptions  are  under               
the  leases  for  the  Sports Authority and  Advance  Auto  Parts               
stores,  the Company is responsible for repairs to the structural               
components  of the building, except for the roof,  which  is  the               
tenant's  responsibility.  The Company  holds  an  undivided  fee               
simple interest in the properties.                                              

The  Company's  properties are  subject  to  the  general       
competitive conditions incident to the ownership of single tenant               
investment  real estate.  Since each property is leased  under  a               
long-term  lease, there is little competition until  the  Company               
decides to sell the property.  At this time, the Company will  be               
competing  with other real estate owners, on both a national  and               
local level, in attempting to find buyers for the properties.  In               
the  event  of  a tenant default, the Company would be  competing               
with  other  real estate owners, who have property vacancies,  to               
attract  a  new  tenant  to  lease the property.   The  Company's               
tenants  operate in industries that are very competitive and  can               
be  affected  by  factors such as changes in  regional  or  local               
economies, seasonality and changes in consumer preference.                      

The  following table is a summary of the properties  that       
the Company acquired and owned as of December 31, 2006.                         

                     Total Property               Annual    Annual
             Purchase   Acquisition                 Lease     Rent Per
Property          Date        Costs      Tenant        Payment   Sq. Ft.    

Johnny Carino's                                                                 
Restaurant                                                                      
Lake Charles, LA                       Kona Restaurant                        
(50.0%)          12/9/03  $1,146,533    Group, Inc.     $108,513   $33.23     

Tia's Tex-Mex                                                                   
Restaurant                                                                      
Brandon, FL                                Tia's                              
(75.0%)         12/10/03  $2,261,506    Florida, LLC    $229,500   $44.39     

Jared Jewelry Store                                                             
Madison Heights, MI                      Sterling                             
(21.0%)           2/6/04  $  852,592   Jewelers Inc.    $ 65,541   $51.44     

Jared Jewelry Store                                                             
Goodlettsville, TN                       Sterling                             
(25.0%)           2/6/04  $  988,254   Jewelers Inc.    $ 83,424   $57.35     

Applebee's Restaurant                                                           
Macedonia, OH    4/30/04  $3,134,798 Apple Ohio, LLC    $238,673   $44.20     

ITEM 2.   DESCRIPTION OF PROPERTIES. (Continued)                                

                     Total Property               Annual    Annual
             Purchase   Acquisition                 Lease     Rent Per
Property          Date        Costs      Tenant        Payment   Sq. Ft.    

Jared Jewelry Store                                                             
Auburn Hills, MI                         Sterling                             
(60.0%)          1/14/05  $2,199,067  Jewelers Inc.     $153,780   $44.50     

Tractor Supply Store                   Tractor Supply                           
Marion, IN        2/9/05  $2,939,385     Company        $210,014   $11.00     

CarMax Auto Superstore                                                          
Lithia Springs, GA                     CarMax Auto                            
(45.0%)          3/18/05  $4,242,438 Superstores, Inc.  $306,180   $35.36     

Johnny Carino's                                                                 
Restaurant                             Kona Restaurant                          
Pueblo, CO       6/20/05  $2,291,218    Group, Inc.     $182,663   $27.13     

Tractor Supply Store                    Tractor Supply                          
Yankton, SD     10/25/05  $2,265,936     Company        $164,712   $ 8.56     

Jared Jewelry Store                       Sterling                              
Concord, NH      12/1/05  $4,157,634  Jewelers Inc.     $286,495   $48.82     

Jared Jewelry Store                       Sterling                              
Aurora, IL      12/16/05  $4,271,332  Jewelers Inc.     $306,353   $50.63     

Sports Authority Store                                                          
Wichita, KS                                                                   
(60.0%)         12/22/05  $3,346,155 TSA Stores, Inc.   $279,088   $ 8.90     

Advance Auto Parts Store               Advance Stores                           
Brownsville, TX  2/17/06  $1,585,269  Company, Inc.     $109,973   $15.98     

Advance Auto Parts Store                                                        
Indianapolis, IN                      Advance Stores                          
(35.0%)         12/21/06  $  669,976  Company, Inc.     $ 46,937   $19.16     

ITEM 2.   DESCRIPTION OF PROPERTIES. (Continued)                                

The  properties  listed above with  a  partial  ownership       
percentage  are  owned  with  affiliates  of  the  Company.   The               
remaining  interest  in the Johnny Carino's  restaurant  in  Lake               
Charles,  Louisiana is owned by AEI Private Net Lease  Millennium               
Fund  Limited Partnership.  The remaining interests in the  Tia's               
Tex-Mex restaurant and the Jared Jewelry store in Goodlettsville,               
Tennessee are owned by AEI Accredited Investor Fund 2002  Limited               
Partnership.  The remaining interests in the Jared Jewelry  store               
in  Madison  Heights, Michigan are owned by AEI Income  &  Growth               
Fund  23  LLC  and  AEI  Accredited Investor  Fund  2002  Limited               
Partnership.   The remaining interest in the Jared Jewelry  store               
in  Auburn  Hills, Michigan is owned by AEI Income & Growth  Fund               
XXI  Limited Partnership.  The remaining interests in the  CarMax               
auto superstore are owned by AEI Income & Growth Fund XXI Limited               
Partnership, AEI Income & Growth Fund 24 LLC and AEI Private  Net               
Lease   Millennium  Fund  Limited  Partnership.   The   remaining               
interest  in the Sports Authority store is owned by AEI Income  &               
Growth  Fund 26 LLC.  The remaining interest in the Advance  Auto               
Parts  store  in Indianapolis, Indiana is owned by AEI  Income  &               
Growth Fund XXII Limited Partnership.                                           

The  Company 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               
Company's percentage share of the properties' land, building  and               
equipment, liabilities, revenues and expenses.                                  

At  the  time the properties were acquired, the remaining       
primary  lease terms varied from 13 to 20 years, except  for  the               
Sports  Authority store, which had a remaining  primary  term  of               
11.2 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.                                                               

Pursuant to the lease agreements, the tenants are required        
to provide proof of adequate insurance coverage on the properties               
they  occupy.   The Managing Members believe the  properties  are               
adequately covered by insurance and consider the properties to be               
well-maintained and sufficient for the Company's operations.                    

For tax purposes, the Company's properties are depreciated        
under the Modified Accelerated Cost Recovery System (MACRS).  The               
largest depreciable component of a property is the building which               
is  depreciated, using the straight-line method, over  39  years.               
The  remaining depreciable components of a property are  personal               
property  and land improvements which are depreciated,  using  an               
accelerated method, over 5 and 15 years, respectively.  Since the               
Company  has  tax-exempt Members, the Company is subject  to  the               
rules  of  Section 168(h)(6) of the Internal Revenue  Code  which               
requires  a  percentage of the properties' depreciable components               
to  be  depreciated  over  longer lives using  the  straight-line               
method.  In general, the federal tax basis of the properties  for               
tax  depreciation purposes will be the same as the basis for book               
depreciation purposes.                                                          

At  December 31, 2006, all properties listed  above  were       
100% occupied.                                                                  

ITEM 3.  LEGAL PROCEEDINGS.                                                   

None.                                                             

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.                  

None.                                                             

PART II               

ITEM 5.   MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS                 
AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.         

(a) As of December 31, 2006, there were 1,138 holders  of       
record of the registrant's LLC Units.  There is no other class of               
security  outstanding or authorized.  The registrant's Units  are               
not  a  traded security in any market.  During the period covered               
by  this  report, the Company did not sell any equity  securities               
that are not registered under the Securities Act of 1933.                       

Cash distributions of $67,713 and $47,821 were made to the        
Managing Members and $2,227,740 and $1,771,796 were made  to  the               
Limited   Members   in   2006   and  2005,   respectively.    The               
distributions  were made on a quarterly basis and  represent  Net               
Cash   Flow,  as  defined,  except  as  discussed  below.   These               
distributions  should  not be compared  with  dividends  paid  on               
capital stock by corporations.                                                  

As  part  of the Limited Members' distributions discussed       
above,  the Company distributed $57,000 and $335,000 of  proceeds               
from property sales in 2006 and 2005, respectively.                             

(b) Not applicable.                                               

(c)  Pursuant to Section 7.7 of the Operating  Agreement,       
each Limited Member has the right to present Units to the Company               
for  purchase by submitting notice to the Managing Member  during               
January or July of each year.  The purchase price of the Units is               
equal to 80% of the net asset value of the Units, as of the first               
business  day  of January or July of each year, as determined  by               
the  Managing  Member in accordance with the  provisions  of  the               
Operating  Agreement.   Units  tendered  to  the  Company  during               
January  and  July  are redeemed on April 1st  and  October  1st,               
respectively, of each year subject to the following  limitations.               
The  Company will not be obligated to purchase in any  year  more               
than 2% of the total number of Units outstanding on January 1  of               
such  year.   In  no  event  shall the Company  be  obligated  to               
purchase Units if, in the sole discretion of the Managing Member,               
such  purchase  would  impair the capital  or  operation  of  the               
Company.                                                                        

ITEM 5.   MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS                 
AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.         

Small Business Issuer Purchases of Equity Securities                
                                                        Maximum Number
                                     Total Number of Units of Units that May
             Total Number Average   Purchased as Part of  Yet Be Purchased
             of Units   Price Paid Publicly Announced    Under the Plans
Period       Purchased   per Unit   Plans or Programs     or Programs     

10/1/06 to 10/31/06  128.90  $767.31        128.90(1)              (2)          

11/1/06 to 11/30/06      --       --            --                  --          

12/1/06 to 12/31/06      --       --            --                  --          

(1)  The Company's repurchase plan is mandated by the Operating             
Agreement as included in the prospectus related to the original   
offering of the Units.                                            
(2)  The  Operating  Agreement contains annual limitations  on              
repurchases  described in the paragraph  above  and  has  no      
expiration date.                                                  

Other Information                                                               

The  Company is required, pursuant to NASD Rule 2810,  to       
disclose  in each annual report distributed to Limited Members  a               
per  Unit  estimated value, the method by which it was  developed               
and the date of the data used to develop the estimated value.  At               
December 31, 2006, the Company's Units were valued at $954.  This               
value  was the aggregate estimated value of the Company's  assets               
less  the  Company's liabilities, and less the value attributable               
to the interest of the Managing Members, divided by the number of               
Units   outstanding.    The  Company's  cash,   receivables   and               
liabilities  were  valued at face value.  Each of  the  Company's               
properties  were  valued  by  dividing  their  rental  income  on               
December  1,  2006 by a capitalization rate the  Managing  Member               
believed  to be representative of the retail market for the  sale               
of  each  property.   No  independent  property  appraisals  were               
obtained.   The valuations performed by the Managing Member  were               
estimates  only, and were based on a number of assumptions  which               
may  not  be accurate or complete.  In addition, property  values               
are  subject  to change and could decline after the date  of  the               
valuations.  Accordingly, this estimated value, prepared  by  the               
Managing  Member, should not be viewed as the amount at  which  a               
Limited Member may be able to sell his units, or the fair  market               
value of the Company properties, nor does it represent the amount               
of  net  proceeds Limited Members would receive  if  the  Company               
properties   were  sold  and  the  proceeds  distributed   in   a               
liquidation of the Company.                                                     

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.                                 

The Management's Discussion and Analysis contains various       
"forward  looking  statements"  within  the  meaning  of  federal               
securities  laws  which  represent management's  expectations  or               
beliefs  concerning future events, including statements regarding               
anticipated  application of cash, expected  returns  from  rental               
income,  growth  in  revenue, the sufficiency  of  cash  to  meet               
operating  expenses, rates of distribution,  and  other  matters.               
These,  and other forward looking statements made by the Company,               
must be evaluated in the context of a number of factors that  may               
affect   the   Company's  financial  condition  and  results   of               
operations, including the following:                                            

Market and economic conditions which affect the value                   
of the properties the Company owns and the cash from                    
rental income such properties generate;                                 

the federal income tax consequences of rental income,                   
deductions, gain on sales and other items and the                       
affects of these consequences for Members;                              

resolution by the Managing Members of conflicts with                    
which they may be confronted;                                           

the success of the Managing Members of locating                         
properties with favorable risk return characteristics;                  

the effect of tenant defaults; and                                      

the condition of the industries in which the tenants of                 
properties owned by the Company operate.                                

The Application of Critical Accounting Policies                                 

The  preparation  of  the Company's financial  statements       
requires  management to make estimates and assumptions  that  may               
affect the reported amounts of assets, liabilities, revenues  and               
expenses,  and  related  disclosure  of  contingent  assets   and               
liabilities. Management evaluates these estimates on  an  ongoing               
basis,  including  those related to the carrying  value  of  real               
estate  and  the  allocation  by AEI  Fund  Management,  Inc.  of               
expenses to the Company as opposed to other funds they manage.                  

The Company purchases properties and records them in  the       
financial statements at the lower of cost or estimated realizable               
value.   The  Company  initially records the properties  at  cost               
(including  capitalized acquisition expenses).   The  Company  is               
required   to  periodically  evaluate  the  carrying   value   of               
properties  to  determine  whether  their  realizable  value  has               
declined.   For  properties the Company will  hold  and  operate,               
management   determines  whether  impairment  has   occurred   by               
comparing the property's probability-weighted cash flows  to  its               
current carrying value.  For properties held for sale, management               
determines  whether  impairment has  occurred  by  comparing  the               
property's estimated fair value less cost to sell to its  current               
carrying  value.   If  the carrying value  is  greater  than  the               
realizable  value, an impairment loss is recorded to  reduce  the               
carrying value of the property to its realizable value.  A change               
in  these assumptions or analysis could cause material changes in               
the carrying value of the properties.                                           

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)                    

AEI  Fund Management, Inc. allocates expenses to each  of       
the  funds  they manage primarily on the basis of the  number  of               
hours  devoted  by their employees to each fund's affairs.   They               
also  allocate  expenses at the end of each month  that  are  not               
directly related to a fund's operations based upon the number  of               
investors  in the fund and the fund's capitalization relative  to               
other  funds they manage.  The Company reimburses these  expenses               
subject  to  detailed  limitations  contained  in  the  Operating               
Agreement.                                                                      

Management  of the Company has discussed the  development       
and   selection  of  the  above  accounting  estimates  and   the               
management  discussion  and analysis disclosures  regarding  them               
with the managing member of the Company.                                        

Results of Operations                                                           

For  the  years  ended December 31, 2006  and  2005,  the       
Company  recognized rental income from continuing  operations  of               
$2,477,088 and $1,266,269, respectively.  In 2006, rental  income               
increased  mainly  due  to  additional  rent  received  from  ten               
property  acquisitions in 2005 and 2006 as the  Company  invested               
its available subscription proceeds.                                            

For  the  years  ended December 31, 2006  and  2005,  the       
Company  incurred  LLC  administration expenses  from  affiliated               
parties   of   $373,208   and  $368,821,   respectively.    These               
administration  expenses  include  costs  associated   with   the               
management of the properties, processing distributions, reporting               
requirements  and correspondence to the Limited Members.   During               
the  same  periods,  the Company incurred LLC administration  and               
property  management expenses from unrelated parties  of  $43,290               
and  $42,737,  respectively.   These  expenses  represent  direct               
payments  to  third  parties for legal and  filing  fees,  direct               
administrative costs, outside audit costs, taxes,  insurance  and               
other property costs.                                                           

For  the  years  ended December 31, 2006  and  2005,  the       
Company  recognized  interest income  of  $65,952  and  $399,001,               
respectively.   In  2006, interest income decreased  due  to  the               
Company  receiving interest income from construction advances  in               
2005  and the Company having less money invested in money  market               
accounts due to property acquisitions.                                          

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               
Company  includes the operating results and sale of the  property               
in   discontinued   operations.    In   addition,   the   Company               
reclassifies the prior periods operating results and any  partial               
sales  of the property to discontinued operations.  For the  year               
ended  December  31,  2006, the Company  recognized  income  from               
discontinued  operations of $211,827 representing  rental  income               
less property management expenses and depreciation.  For the year               
ended  December  31,  2005, the Company  recognized  income  from               
discontinued  operations of $681,952, representing rental  income               
less  property management expenses and depreciation  of  $247,798               
and gain on disposal of real estate of $434,154.                                

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)                    

During  the fourth quarter of 2005, the Company sold  its       
50%  interest  in  the  Mimi's Cafe restaurant  in  Kansas  City,               
Missouri,  in  three  separate transactions, to  unrelated  third               
parties.   The  Company  received  total  net  sale  proceeds  of               
$1,507,118, which resulted in a net gain of $434,154.   The  cost               
and  related accumulated depreciation of the interests  sold  was               
$1,110,561 and $37,597, respectively.                                           

On September 26, 2006, Tia's Florida, LLC, the tenant  of       
the  Tia's  Tex-Mex  restaurant in  Brandon,  Florida  filed  for               
Chapter  7 bankruptcy, which leads to liquidation and dissolution               
of  the  company.  The tenant closed the restaurant.  The primary               
guarantor  of  the  Lease, Julio's Investors  LLC  (Julio's),  is               
continuing  to pay the rent and property expenses.   The  Company               
and  Julio's  are  discussing a potential  buyout  of  the  Lease               
guarantee  whereby  the Company would release  Julio's  from  its               
guarantee  in  exchange for a lump sum payment.  The  Company  is               
actively  marketing  the  property for  sale.   The  Company  has               
evaluated the Lease and property value and decided that there  is               
no  impairment  loss  at this time.  At December  31,  2006,  the               
property was classified as Real Estate Held for Sale with a  book               
value of $2,131,848.                                                            

Inflation  has  had  a  minimal  effect  on  income  from       
operations.   Leases  may contain rent increases,  based  on  the               
increase  in  the  Consumer Price Index over a specified  period,               
which  will result in an increase in rental income over the  term               
of  the  leases.   In addition, leases may contain  rent  clauses               
which  entitle the Company to receive additional rent  in  future               
years if gross receipts for the property exceed certain specified               
amounts.   Increases  in sales volumes of  the  tenants,  due  to               
inflation  and  real sales growth, may result in an  increase  in               
rental  income over the term of the leases.  Inflation  also  may               
cause the real estate to appreciate in value.  However, inflation               
and  changing prices may have an adverse impact on the  operating               
margins  of  the  properties' tenants, which could  impair  their               
ability  to  pay rent and subsequently reduce the Net  Cash  Flow               
available for distributions.                                                    

Liquidity and Capital Resources                                                 

The  Company's primary sources of cash are proceeds  from       
the  sale  of Units, interest income, rental income and  proceeds               
from  the  sale  of  property.  Its  primary  uses  of  cash  are               
investment  in real properties, payment of expenses  involved  in               
the sale of Units, the management of properties, the organization               
and   administration  of  the  Company,  and   the   payment   of               
distributions.                                                                  

The  Company generated $2,139,229 of cash from operations       
during  the year ended December 31, 2006, representing net income               
of   $1,413,376   and  a  non-cash  expense   of   $939,138   for               
depreciation, which were partially offset by $213,285 increase in               
the  payable  to  the Company's managers.  The Company  generated               
$1,693,608 of cash from operations during the year ended December               
31,  2005,  representing net income before gain on sale  of  real               
estate  of  $1,036,963,  a  non-cash  expense  of  $546,189   for               
depreciation  and  $110,456  of net  timing  differences  in  the               
collection  of  payments  from the tenants  and  the  payment  of               
expenses.                                                                       

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)                    

The  major  components of the Company's  cash  flow  from       
investing activities are investments in real estate and  proceeds               
from  the  sale of real estate.  During the years ended  December               
31,   2006   and  2005,  the  Company  expended  $2,257,245   and               
$25,033,830   to   invest  in  real  properties   (inclusive   of               
acquisition expenses).  During the year ended December 31,  2005,               
the  Company generated cash flow from the sale of real estate  of               
$1,507,118.                                                                     

On  November 2, 2004, the Company purchased a  parcel  of       
land  in  Pueblo,  Colorado for $622,500.  The  Company  obtained               
title  to  the  land  in  the form of  an  undivided  fee  simple               
interest.   Simultaneously with the purchase  of  the  land,  the               
Company  entered  into  a Development Financing  Agreement  under               
which the Company advanced funds to KRG for the construction of a               
Johnny  Carino's restaurant on the site.  Pursuant to the  Lease,               
any  improvements to the land during the term of the Lease become               
the  property  of  the  lessor.  Initially, the  Company  charged               
interest on the advances at a rate of 5.75%.  Effective March 31,               
2005, the interest rate was increased to 8.1%.  On June 20, 2005,               
the   development   was  completed.   Total  acquisition   costs,               
including the cost of the land, were $2,291,218.                                

On January 14, 2005, the Company purchased a 60% interest       
in   a  Jared  Jewelry  store  in  Auburn  Hills,  Michigan   for               
$2,199,067.  On February 9, 2005, the Company purchased a Tractor               
Supply Company store in Marion, Indiana for $2,939,385.  On March               
18,  2005, the Company purchased a 45% interest in a CarMax  auto               
superstore in Lithia Springs, Georgia for $4,242,438.  On October               
25, 2005, the Company purchased a Tractor Supply Company store in               
Yankton,  South Dakota for $2,265,936.  On December 1, 2005,  the               
Company purchased a Jared Jewelry store in Concord, New Hampshire               
for  $4,157,634.  On December 16, 2005, the Company completed the               
acquisition  of  a  Jared Jewelry store in Aurora,  Illinois  for               
$4,271,332.   On December 22, 2005, the Company purchased  a  60%               
interest  in  a  Sports Authority store in  Wichita,  Kansas  for               
$3,346,155.                                                                     

On  February 17, 2006, the Company purchased  an  Advance       
Auto  Parts  store  in  Brownsville, Texas  for  $1,585,269.   On               
December  21,  2006, the Company purchased a 35% interest  in  an               
Advance Auto Parts store in Indianapolis, Indiana for $669,976.                 

During the offering of Units, the Company's primary source        
of  cash  flow  was  from  the sale of LLC  Units.   The  Company               
commenced  the  offering of LLC Units to  the  public  through  a               
registration  statement that became effective May  13,  2003  and               
continued  until May 12, 2005, when the extended offering  period               
expired.  The Company raised a total of $42,434,763 from the sale               
of  42,434.763  Units.  From subscription proceeds,  the  Company               
paid  organization  and  syndication costs  (which  constitute  a               
reduction of capital) of $6,045,745.                                            

After  completion of the acquisition phase, the Company's       
primary  use of cash flow is distribution and redemption payments               
to   Members.    The  Company  declares  its  regular   quarterly               
distributions  before  the  end of  each  quarter  and  pays  the               
distribution in the first ten days after the end of each quarter.               
The  Company attempts to maintain a stable distribution rate from               
quarter  to  quarter.  Redemption payments are paid to  redeeming               
Members on a semi-annual basis.                                                 

ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS.  (Continued)                    

For  the  years  ended December 31, 2006  and  2005,  the       
Company  declared  distributions of  $2,295,453  and  $1,819,617,               
respectively.  Pursuant to the Operating Agreement, distributions               
of Net Cash Flow were allocated 97% to the Limited Members and 3%               
to  the Managing Members.  Distributions of Net Proceeds of  Sale               
were  allocated 99% to the Limited Members and 1% to the Managing               
Members.    The   Limited  Members  received   distributions   of               
$2,227,740  and  $1,771,796  and the  Managing  Members  received               
distributions   of   $67,713  and  $47,821   for   the   periods,               
respectively.  In 2006, distributions were higher mainly  due  to               
an  increase in the distribution rate per Unit, effective January               
1,  2006, and an increase in the number of Units outstanding from               
the sale of additional Units through May 12, 2005.                              

During 2006 and 2005, the Company distributed $57,576 and       
$338,384 of net sale proceeds to the Limited and Managing Members               
as part of their quarterly distributions, which represented $1.35               
and  $7.89  per LLC Unit, respectively.  The Company  anticipates               
the  remaining  net sale proceeds will either  be  reinvested  in               
additional property or distributed to the Members in the future.                

The  Company may acquire Units from Limited  Members  who       
have  tendered  their Units to the Company.  Such  Units  may  be               
acquired  at  a discount.  The Company will not be  obligated  to               
purchase  in any year more than 2% of the total number  of  Units               
outstanding  on  January 1 of such year.  In no event  shall  the               
Company be obligated to purchase Units if, in the sole discretion               
of the Managing Member, such purchase would impair the capital or               
operation of the Company.                                                       

During 2006, one Limited Member redeemed a total of 128.9       
Units  for  $98,907  in accordance with the Operating  Agreement.               
The  Company  acquired  these Units  using  Net  Cash  Flow  from               
operations.   During 2005, the Company did not redeem  any  Units               
from the Limited Members.  The redemptions increase the remaining               
Limited Member's ownership interest in the Company.  As a  result               
of  these  redemption  payments and  pursuant  to  the  Operating               
Agreement, the Managing Members received distributions of  $3,059               
in 2006.                                                                        

The continuing rent payments from the properties, together        
with  cash  generated from property sales, should be adequate  to               
fund  continuing distributions and meet other Company obligations               
on both a short-term and long-term basis.                                       

ITEM 7.   FINANCIAL STATEMENTS.                                                 

See accompanying index to financial statements.                   

AEI INCOME & GROWTH FUND 25 LLC               

INDEX TO FINANCIAL STATEMENTS               

Report of Independent Registered Public Accounting Firm                         

Balance Sheet as of December 31, 2006 and 2005                                  

Statements for the Years Ended December 31, 2006 and 2005:                      

Income                                                                

Cash Flows                                                            

Changes in Members' Equity                                            

Notes to Financial Statements                                                   

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM               

To the Members:                                                                 
AEI Income & Growth Fund 25 LLC                                                 
St. Paul, Minnesota                                                             

We have audited the accompanying balance sheet of AEI Income          
& Growth Fund 25 LLC (a Delaware limited liability company) as of               
December 31, 2006 and 2005, and the related statements of income,               
cash  flows  and  changes in members' equity for the  years  then               
ended.  These financial statements are the responsibility of  the               
Company's  management.   Our  responsibility  is  to  express  an               
opinion on these financial statements 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.  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  Income & Growth Fund 25 LLC as of December 31, 2006  and               
2005,  and  the results of its operations and its cash flows  for               
the  years then ended, in conformity with U.S. generally accepted               
accounting principles.                                                          

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

Minneapolis, Minnesota                                                          
March 23, 2007                                                                  

10KSB
2nd “Page” of 6
TOC
1st
Previous
Next
↓Bottom
Just 2nd
AEI INCOME & GROWTH FUND 25 LLC               
BALANCE SHEET               
DECEMBER 31               

ASSETS                

                                              2006          2005
CURRENT ASSETS:                                                                 
Cash and Cash Equivalents                      $   794,181   $ 3,249,144    

INVESTMENTS IN REAL ESTATE:                                                     
Land                                            11,051,339    11,315,152    
Buildings and Equipment                         23,039,248    22,779,696    
Accumulated Depreciation                        (1,511,835)     (702,355)   
                                             -----------   -----------
                                            32,578,752    33,392,493
Real Estate Held for Sale                        2,131,848             0    
                                             -----------   -----------
Net Investments in Real Estate              34,710,600    33,392,493
                                             -----------   -----------
     Total  Assets                         $35,504,781   $36,641,637
                                             ===========   ===========

LIABILITIES AND MEMBERS' EQUITY   

CURRENT LIABILITIES:                                                            
Payable to AEI Fund Management, Inc.           $    64,049   $   277,334    
Distributions Payable                              654,931       594,459    
                                             -----------   -----------
Total Current Liabilities                      718,980       871,793
                                             -----------   -----------
MEMBERS' EQUITY (DEFICIT):                                                      
Managing Members' Equity                           (24,269)        4,102    
Limited Members' Equity, $1,000 per Unit;                                   
50,000 Units authorized; 42,435 Units issued;                             
42,306 and 42,435 Units outstanding in                                    
2006  and 2005, respectively                   34,810,070    35,765,742   
                                             -----------   -----------
Total Members' Equity                       34,785,801    35,769,844
                                             -----------   -----------
   Total Liabilities and Members' Equity   $35,504,781   $36,641,637
                                             ===========   ===========

The accompanying Notes to Financial Statements are an integral                
part of this statement.               
</PAGE>                                                                         

10KSB
3rd “Page” of 6
TOC
1st
Previous
Next
↓Bottom
Just 3rd
AEI INCOME & GROWTH FUND 25 LLC               
STATEMENT OF INCOME               
FOR THE YEARS ENDED DECEMBER 31               

                                               2006         2005

RENTAL INCOME                                    $ 2,477,088   $ 1,266,269      

EXPENSES:                                                                       
LLC Administration - Affiliates                    373,208       368,821    
LLC Administration and Property                                             
Management - Unrelated Parties                   43,290        42,737 
Depreciation                                       924,993       464,547    
                                             -----------   -----------
Total Expenses                               1,341,491       876,105
                                             -----------   -----------

OPERATING INCOME                                   1,135,597       390,164      

OTHER INCOME:                                                                   
Interest Income                                     65,952       399,001    
                                             -----------   -----------

INCOME FROM CONTINUING OPERATIONS                  1,201,549       789,165      

Income from Discontinued Operations                  211,827       681,952      
                                             -----------   -----------
NET INCOME                                       $ 1,413,376   $ 1,471,117      
                                             ===========   ===========
NET INCOME ALLOCATED:                                                           
Managing Members                               $    42,401   $    59,126    
Limited Members                                  1,370,975     1,411,991    
                                             -----------   -----------
                                           $ 1,413,376   $ 1,471,117
                                             ===========   ===========
INCOME PER LLC UNIT:                                                            
Continuing Operations                          $     27.49   $     19.85    
Discontinued Operations                               4.84         16.76    
                                             -----------   -----------
 Total                                     $     32.33   $     36.61
                                             ===========   ===========
Weighted Average Units Outstanding                    42,403        38,571      
                                             ===========   ===========

The accompanying Notes to Financial Statements are an integral                
part of this statement.               
</PAGE>                                                                         

10KSB
4th “Page” of 6
TOC
1st
Previous
Next
↓Bottom
Just 4th
AEI INCOME & GROWTH FUND 25 LLC               
STATEMENT OF CASH FLOWS               
FOR THE YEARS ENDED DECEMBER 31               

                                                 2006         2005

CASH FLOWS FROM OPERATING ACTIVITIES:                                           
Net Income                                     $ 1,413,376   $ 1,471,117    

Adjustments To Reconcile Net Income                                         
To Net Cash Provided By Operating Activities:                               
Depreciation                                    939,138       546,189 
Gain on Sale of Real Estate                           0      (434,154)
Decrease in Receivables                               0         6,259 
Increase (Decrease) in Payable to                                     
  AEI Fund Management, Inc.                   (213,285)      104,197
                                             -----------   -----------
 Total Adjustments                             725,853       222,491
                                             -----------   -----------
Net Cash Provided By                                              
     Operating Activities                    2,139,229     1,693,608
                                             -----------   -----------
CASH FLOWS FROM INVESTING ACTIVITIES:                                           
Investments in Real Estate                      (2,257,245)  (25,033,830)   
Proceeds from Sale of Real Estate                        0     1,507,118    
                                             -----------   -----------
Net Cash Used For                                                 
    Investing Activities                     (2,257,245)  (23,526,712)
                                             -----------   -----------
CASH FLOWS FROM FINANCING ACTIVITIES:                                           
Capital Contributions from Limited Members               0    12,842,884    
Organization and Syndication Costs                       0    (1,684,246)   
Increase in Distributions Payable                   60,472       325,855    
Distributions to Members                        (2,295,453)   (1,819,617)   
Redemption Payments                               (101,966)            0    
                                             -----------   -----------
Net Cash Provided By (Used For)                                   
   Financing Activities                     (2,336,947)    9,664,876
                                             -----------   -----------
NET DECREASE IN CASH                                                            
AND CASH EQUIVALENTS                           (2,454,963)  (12,168,228)  

CASH AND CASH EQUIVALENTS, beginning of period     3,249,144    15,417,372      
                                             -----------   -----------
CASH AND CASH EQUIVALENTS, end of period         $   794,181   $ 3,249,144      
                                             ===========   ===========

The accompanying Notes to Financial Statements are an integral                
part of this statement.               
</PAGE>                                                                         

10KSB
5th “Page” of 6
TOC
1st
Previous
Next
↓Bottom
Just 5th
AEI INCOME & GROWTH FUND 25 LLC               
STATEMENT OF CHANGES IN MEMBERS' EQUITY               
FOR THE YEARS ENDED DECEMBER 31               

                                                         Limited
                                                          Member
                    Managing    Limited                  Units
                       Members     Members     Total     Outstanding

BALANCE, December 31, 2004  $ (7,203) $24,966,909  $24,959,706   29,591.88      

Capital Contributions            0   12,842,884   12,842,884   12,842.88    

Organization and                                                            
Syndication Costs              0   (1,684,246)  (1,684,246)             

Distributions              (47,821)  (1,771,796)  (1,819,617)               

Net Income                  59,126    1,411,991    1,471,117                
                        --------  -----------  -----------  ----------
BALANCE, December 31, 2005     4,102   35,765,742   35,769,844   42,434.76      

Distributions              (67,713)  (2,227,740)  (2,295,453)               

Redemption Payments         (3,059)     (98,907)    (101,966)    (128.90)   

Net Income                  42,401    1,370,975    1,413,376                
                        --------  -----------  -----------  ----------
BALANCE, December 31, 2006  $(24,269) $34,810,070  $34,785,801   42,305.86      
                        ========  ===========  ===========  ==========

The accompanying Notes to Financial Statements are an integral                
part of this statement.               
</PAGE>                                                                         

10KSB
Last “Page” of 6
TOC
1st
Previous
Next
↓Bottom
Just 6th
AEI INCOME & GROWTH FUND 25 LLC               
NOTES TO FINANCIAL STATEMENTS               
DECEMBER 31, 2006 AND 2005                

(1)  Organization -                                                             

AEI  Income  & Growth Fund 25 LLC (the Company),  a  Limited          
Liability  Company, was formed on June 24, 2002  to  acquire          
and  lease commercial properties to operating tenants.   The          
Company's operations are managed by AEI Fund Management XXI,          
Inc.  (AFM),  the Managing Member.  Robert P.  Johnson,  the          
President  and sole director of AFM, serves as  the  Special          
Managing  Member.  AFM is a wholly owned subsidiary  of  AEI          
Capital  Corporation of which Mr. Johnson  is  the  majority          
shareholder.  AEI Fund Management, Inc. (AEI), an  affiliate          
of  AFM, performs the administrative and operating functions          
for the Company.                                                      

The terms of the offering called for a subscription price of          
$1,000  per  LLC Unit, payable on acceptance of  the  offer.          
The  Company commenced operations on September 11, 2003 when          
minimum  subscriptions of 1,500 LLC Units ($1,500,000)  were          
accepted.   The offering terminated May 12, 2005,  when  the          
extended  offering  period expired.   The  Company  received          
subscriptions for 42,434.763 Units.  Under the terms of  the          
Operating  Agreement,  the  Limited  Members  and   Managing          
Members   contributed  funds  of  $42,434,763  and   $1,000,          
respectively.  The Company shall continue until December 31,          
2053,  unless dissolved, terminated and liquidated prior  to          
that date.                                                            

During operations, any Net Cash Flow, as defined, which  the          
Managing Members determine to distribute will be distributed          
97%  to  the Limited Members and 3% to the Managing Members.          
Distributions to Limited Members will be made  pro  rata  by          
Units.                                                                

Any  Net  Proceeds  of Sale, as defined, from  the  sale  or          
financing of properties which the Managing Members determine          
to distribute will, after provisions for debts and reserves,          
be  paid  in  the following manner: (i) first,  99%  to  the          
Limited  Members  and 1% to the Managing Members  until  the          
Limited  Members  receive  an amount  equal  to:  (a)  their          
Adjusted Capital Contribution plus (b) an amount equal to 7%          
of their Adjusted Capital Contribution per annum, cumulative          
but not compounded, to the extent not previously distributed          
from  Net  Cash  Flow; (ii) any remaining  balance  will  be          
distributed  90%  to  the Limited Members  and  10%  to  the          
Managing Members.  Distributions to the Limited Members will          
be made pro rata by Units.                                            

For  tax  purposes,  profits  from  operations,  other  than          
profits  attributable  to  the  sale,  exchange,  financing,          
refinancing  or  other  disposition  of  property,  will  be          
allocated 97% to the Limited Members and 3% to the  Managing          
Members.   Net losses from operations will be allocated  99%          
to the Limited Members and 1% to the Managing Members.                

AEI INCOME & GROWTH FUND 25 LLC               
NOTES TO FINANCIAL STATEMENTS               
DECEMBER 31, 2006 AND 2005                

(1)  Organization - (Continued)                                                 

For  tax purposes, profits arising from the sale, financing,          
or  other  disposition  of property  will  be  allocated  in          
accordance  with  the Operating Agreement  as  follows:  (i)          
first,  to  those  Members with deficit  balances  in  their          
capital  accounts  in an amount equal to  the  sum  of  such          
deficit  balances; (ii) second, 99% to the  Limited  Members          
and  1%  to the Managing Members until the aggregate balance          
in  the Limited Members' capital accounts equals the sum  of          
the Limited Members' Adjusted Capital Contributions plus  an          
amount  equal  to 7% of their Adjusted Capital Contributions          
per  annum, cumulative but not compounded, to the extent not          
previously  allocated;  (iii)  third,  the  balance  of  any          
remaining  gain  will then be allocated 90% to  the  Limited          
Members  and  10% to the Managing Members.  Losses  will  be          
allocated 99% to the Limited Members and 1% to the  Managing          
Members.                                                              

The  Managing Members are not required to currently  fund  a          
deficit capital balance.  Upon liquidation of the Company or          
withdrawal  by a Managing Member, the Managing Members  will          
contribute to the Company an amount equal to the  lesser  of          
the  deficit balances in their capital accounts or 1.01%  of          
the  total capital contributions of the Limited Members over          
the amount previously contributed by the Managing Members.            

(2)  Summary of Significant Accounting Policies -                               

Financial Statement Presentation                                      

The  accounts of the Company 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.                 

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

AEI INCOME & GROWTH FUND 25 LLC               
NOTES TO FINANCIAL STATEMENTS               
DECEMBER 31, 2006 AND 2005                

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

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  Company  performs  ongoing   credit        
evaluations  of  its customers' financial  condition  and,        
generally, requires no collateral.                                

Receivables   are   recorded  at   their   estimated   net        
realizable  value.   The  Company  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 Company  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 Company's credit        
terms.   Receivables considered uncollectible are  written        
off.                                                              

Income Taxes                                                          

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

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

Real Estate                                                           

The  Company's  real  estate is leased  under  triple  net        
leases   classified  as  operating  leases.   The   leases        
provide  for  base  annual  rental  payments  payable   in        
monthly  installments.   The  Company  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.                                          

AEI INCOME & GROWTH FUND 25 LLC               
NOTES TO FINANCIAL STATEMENTS               
DECEMBER 31, 2006 AND 2005                

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

Real  estate is recorded at the lower of cost or estimated        
net  realizable value.  The Company 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  Company  recognizes   an        
impairment  loss  by  the amount  by  which  the  carrying        
amount  of  the  property exceeds the fair  value  of  the        
property.                                                         

The  Company 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   Company   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 Company includes the operating results        
and  sale of the property in discontinued operations.   In        
addition,  the  Company  reclassifies  the  prior  periods        
operating  results and any partial sales of  the  property        
to discontinued operations.                                       

The  Company  accounts for properties owned as tenants-in-        
common  with  affiliated Companies 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 Company's  percentage  share        
of   the   properties'  land,  building   and   equipment,        
liabilities, revenues and expenses.                               

The  Company'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  Company   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, 2006 and 2005.               

AEI INCOME & GROWTH FUND 25 LLC               
NOTES TO FINANCIAL STATEMENTS               
DECEMBER 31, 2006 AND 2005                

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

Reclassification                                                      

Certain  items  in  the prior year's financial  statements        
have  been  reclassified to conform to 2006  presentation.        
These   reclassifications  had  no  effect   on   Members'        
capital, net income or cash flows.                                

Recently Issued Accounting Pronouncements                             

Management  has  reviewed recently  issued,  but  not  yet        
effective,  accounting pronouncements and does not  expect        
the  implementation  of  these pronouncements  to  have  a        
significant effect on the Company's financial statements.         

(3)  Related Party Transactions -                                               

The  Company  owns  a  50% interest  in  a  Johnny  Carino's          
restaurant  in  Lake  Charles,  Louisiana.   The   remaining          
interest in this property is owned by AEI Private Net  Lease          
Millennium  Fund  Limited Partnership, an affiliate  of  the          
Company. The Company owns a 75% interest in a Tia's  Tex-Mex          
restaurant  and a 25% interest in a Jared Jewelry  store  in          
Goodlettsville, Tennessee.  The remaining interests in these          
properties  are owned by AEI Accredited Investor  Fund  2002          
Limited  Partnership,  an affiliate  of  the  Company.   The          
Company  owns  a  21% 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  Accredited  Investor  Fund  2002  Limited  Partnership,          
affiliates of the Company.  The Company owns a 60%  interest          
in  a  Jared  Jewelry store in Auburn Hills, Michigan.   The          
remaining interest in this property is owned by AEI Income &          
Growth  Fund  XXI Limited Partnership, an affiliate  of  the          
Company.   The Company owns a 45% interest in a CarMax  auto          
superstore.   The remaining interests in this  property  are          
owned  by  AEI Income & Growth Fund XXI Limited Partnership,          
AEI  Income & Growth Fund 24 LLC and AEI Private  Net  Lease          
Millennium  Fund  Limited  Partnership,  affiliates  of  the          
Company.   The Company owns a 60% interest in a Gart  Sports          
store.  The remaining interest in this property is owned  by          
AEI  Income  &  Growth  Fund 26 LLC,  an  affiliate  of  the          
Company.  The Company owns a 35% interest in an Advance Auto          
Parts   store  in  Indianapolis,  Indiana.   The   remaining          
interest  in this property is owned by AEI Income  &  Growth          
Fund  XXII Limited Partnership, an affiliate of the Company.          
The   Company  owned  a  50%  interest  in  a  Mimi's   Cafe          
restaurant.   AEI  Accredited  Investor  Fund  2002  Limited          
Partnership owned a 50% interest in this property until  the          
interest was sold, in a series of transactions, to unrelated          
third parties in 2005 and 2006.                                       

AEI INCOME & GROWTH FUND 25 LLC               
NOTES TO FINANCIAL STATEMENTS               
DECEMBER 31, 2006 AND 2005                

(3)  Related Party Transactions - (Continued)                                   

AEI,  AFM  and  AEI  Securities,  Inc.  (ASI)  received  the          
following  compensation  and reimbursements  for  costs  and          
expenses from the Company:                                            

                                     Total Incurred by the Company
                                      for the Year Ended December 31

                                                     2006       2005
a.AEI and AFM are reimbursed for all costs incurred in                          
connection with managing the Company's operations,                          
maintaining the Company's books and communicating                           
the results of operations to the Limited Members.     $ 375,778  $  368,821 
                                                      ========   =========
b.AEI and AFM are reimbursed for all direct expenses they                       
have paid on the Company's behalf to third parties                          
relating to LLC 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.                                       $  44,904  $   43,835 
                                                      ========   =========
c.AEI is reimbursed for all costs and direct expenses incurred                  
by it in acquiring properties on behalf of the Company.                     
The amounts are net of financing and commitment fees and                    
expense reimbursements received by the Company from                         
the sellers and/or tenants in the amount of $8,461                          
for 2005.                                             $  57,020  $  397,652 
                                                      ========   =========
d.AEI is reimbursed for all costs incurred in connection                        
with the sale of property.                            $       0  $   50,988 
                                                      ========   =========
e.ASI was the underwriter of the Company's offering.  AEI                       
Capital Corporation is the sole stockholder of ASI, which is                
a member of the National Association of Securities Dealers,                 
Inc.  ASI received, as underwriting commissions 10% for                     
sale of certain subscription Units (a majority of this                      
amount was re-allowed to other participating                                
broker/dealers). These costs are treated as a reduction                     
of members' capital.                                  $       0  $1,283,772 
                                                      ========   =========
f.AEI is reimbursed for all costs incurred in connection                        
with managing the Company's offering and organization.$       0  $  321,847 
                                                      ========   =========

AEI INCOME & GROWTH FUND 25 LLC               
NOTES TO FINANCIAL STATEMENTS               
DECEMBER 31, 2006 AND 2005                

(3)  Related Party Transactions - (Continued)                                   
                                             Total Incurred by the Company
                                              for the Year Ended December 31

                                                         2006         2005
g.AEI is reimbursed for all direct expenses it has paid on the                  
Company's behalf to third parties relating to the offering                  
and organization of the Company.  These expenses included                   
printing costs, legal and filing fees, direct administrative                
costs, underwriting costs and due diligence fees.     $       0  $   78,627 
                                                      ========   =========

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

(4)  Investments in Real Estate -                                               

The  Company leases its properties to various tenants  under          
triple net leases, which are classified as operating leases.          
Under a triple net lease, the tenant is responsible for  all          
real  estate  taxes,  insurance,  maintenance,  repairs  and          
operating expenses of the property.  The only exceptions are          
under  the Leases for the Sports Authority and Advance  Auto          
Parts stores, the Company is responsible for repairs to  the          
structural components of the building, except for the  roof,          
which  is  the  tenant's responsibility.  At  the  time  the          
properties were acquired, the remaining primary lease  terms          
varied  from 13 to 20 years, except for the Sports Authority          
store,  which  had a remaining primary term of  11.2  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  Company to receive additional rent  in  future          
years based on stated rent increases.                                 

AEI INCOME & GROWTH FUND 25 LLC               
NOTES TO FINANCIAL STATEMENTS               
DECEMBER 31, 2006 AND 2005                

(4)  Investments in Real Estate - (Continued)                                   

The   Company's  properties  are  commercial,  single-tenant          
buildings.  The Johnny Carino's restaurant in Lake  Charles,          
Louisiana  was constructed and acquired in 2003.  The  Tia's          
Tex-Mex  restaurant was constructed in 1995 and acquired  in          
2003.   The Jared Jewelry store in Madison Heights, Michigan          
was  constructed  in 2003 and acquired in 2004.   The  Jared          
Jewelry  store in Goodlettsville, Tennessee was  constructed          
in 2001 and acquired in 2004.  The Applebee's restaurant was          
constructed in 1994 and acquired in 2004.  The land for  the          
Johnny  Carino's restaurant in Pueblo, Colorado was acquired          
in  2004 and construction of the restaurant was completed in          
2005.  The Jared Jewelry store in Auburn Hills, Michigan was          
constructed  in 1999 and acquired in 2005.  The CarMax  auto          
superstore and the Tractor Supply Company store in  Yankton,          
South  Dakota were constructed in 2003 and acquired in 2005.          
The  Tractor Supply Company store in Marion, Indiana and the          
Jared   Jewelry   store  in  Concord,  New  Hampshire   were          
constructed  and acquired in 2005.  The Jared Jewelry  store          
in  Aurora, Illinois was constructed in 2000 and acquired in          
2005.   The Sports Authority store was constructed in  1996,          
renovated  in  2001 and acquired in 2005.  The Advance  Auto          
Parts  stores were constructed in 2005 and acquired in 2006.          
There   have  been  no  costs  capitalized  as  improvements          
subsequent to the acquisitions.                                       

The  cost  of  the properties not held for sale and  related          
accumulated  depreciation  at  December  31,  2006  are   as          
follows:                                                              

                                          Buildings and        Accumulated
 Property                            Land    Equipment   Total  Depreciation

Johnny Carino's,Lake Charles, LA $   305,000 $   841,533 $ 1,146,533 $  127,832 
Jared Jewelry, Madison Heights, MI   323,259     529,333     852,592     60,873 
Jared Jewelry, Goodlettsville, TN    465,521     522,733     988,254     60,114 
Applebee's, Macedonia, OH          1,571,267   1,563,531   3,134,798    166,776 
Jared Jewelry, Auburn Hills, MI      421,489   1,777,578   2,199,067    139,243 
Tractor Supply, Marion, IN           217,920   2,721,465   2,939,385    204,110 
CarMax Auto Superstore,                                                         
Lithia Springs, GA                1,834,445   2,407,993   4,242,438    172,573
Johnny Carino's, Pueblo, CO         627,314   1,663,904   2,291,218    127,428  
Tractor Supply, Yankton, SD          351,221   1,914,715   2,265,936     92,545 
Jared Jewelry, Concord, NH         1,061,663   3,095,971   4,157,634    134,159 
Jared Jewelry, Aurora, IL          2,243,623   2,027,709   4,271,332     84,486 
Sports Authority, Wichita, KS      1,046,434   2,299,721   3,346,155     95,816 
Advance Auto Parts, Brownsville, TX  292,522   1,292,747   1,585,269     45,246 
Advance Auto Parts, Indianapolis, IN 289,661     380,315     669,976        634 
                                 ----------  ----------  ----------  ---------
                                $11,051,339 $23,039,248 $34,090,587 $1,511,835
                                 ==========  ==========  ==========  =========

AEI INCOME & GROWTH FUND 25 LLC               
NOTES TO FINANCIAL STATEMENTS               
DECEMBER 31, 2006 AND 2005                

(4)  Investments in Real Estate - (Continued)                                   

On  November 2, 2004, the Company purchased a parcel of land          
in  Pueblo,  Colorado  for $622,500.  The  Company  obtained          
title  to  the land in the form of an undivided  fee  simple          
interest.  The land is leased to Kona Restaurant Group (KRG)          
under a Lease Agreement with a primary term of 17 years  and          
initial  annual rent of $35,794.  Effective March 31,  2005,          
the  annual  rent was increased to $50,423.   Simultaneously          
with  the purchase of the land, the Company entered  into  a          
Development  Financing  Agreement under  which  the  Company          
advanced  funds  to  KRG for the construction  of  a  Johnny          
Carino's restaurant on the site.  Pursuant to the Lease, any          
improvements to the land during the term of the Lease become          
the  property of the lessor.  Initially, the Company charged          
interest  on  the  advances at a rate of  5.75%.   Effective          
March 31, 2005, the interest rate was increased to 8.1%.  On          
June  20,  2005,  after the development was  completed,  the          
Lease  Agreement was amended to require initial annual  rent          
of $182,663.  Total acquisition costs, including the cost of          
the land, were $2,291,218.                                            

On January 14, 2005, the Company purchased a 60% interest in          
a   Jared  Jewelry  store  in  Auburn  Hills,  Michigan  for          
$2,199,067.   The  property is leased to  Sterling  Jewelers          
Inc.  under a Lease Agreement with a remaining primary  term          
of 15 years and initial annual rent of $153,780.                      

On  February 9, 2005, the Company purchased a Tractor Supply          
Company  store  in  Marion,  Indiana  for  $2,939,385.   The          
property is leased to Tractor Supply Company under  a  Lease          
Agreement with a primary term of 15 years and initial annual          
rent of $210,014.                                                     

On March 18, 2005, the Company purchased a 45% interest in a          
CarMax  auto  superstore  in  Lithia  Springs,  Georgia  for          
$4,242,438.    The  property  is  leased  to   CarMax   Auto          
Superstores, Inc. under a Lease Agreement with  a  remaining          
primary  term  of  13.4  years and initial  annual  rent  of          
$306,180.                                                             

On  October 25, 2005, the Company purchased a Tractor Supply          
Company store in Yankton, South Dakota for $2,265,936.   The          
property is leased to Tractor Supply Company under  a  Lease          
Agreement  with a remaining primary term of 13.2  years  and          
initial annual rent of $164,712.                                      

On  December 1, 2005, the Company purchased a Jared  Jewelry          
store  in  Concord,  New  Hampshire  for  $4,157,634.    The          
property is leased to Sterling Jewelers Inc. under  a  Lease          
Agreement with a primary term of 20 years and initial annual          
rent of $286,495.                                                     

AEI INCOME & GROWTH FUND 25 LLC               
NOTES TO FINANCIAL STATEMENTS               
DECEMBER 31, 2006 AND 2005                

(4)  Investments in Real Estate - (Continued)                                   

On  December 16, 2005, the Company completed the acquisition          
of  a  Jared Jewelry store in Aurora, Illinois by purchasing          
the  building  for $1,992,600.  Previously, on November  21,          
2005, the Company purchased the land under the building  for          
$2,200,000.  Total acquisition costs, including  acquisition          
expenses, were $4,271,332.  The land and building are leased          
to  Sterling  Jewelers  Inc.  under  Lease  Agreements  with          
remaining  primary  terms of 14.4 years and  initial  annual          
rent of $306,353.                                                     

On  December 22, 2005, the Company purchased a 60%  interest          
in  a  Gart  Sports store in Wichita, Kansas for $3,346,155.          
The  property  is leased to TSA Stores, Inc. under  a  Lease          
Agreement  with a remaining primary term of 11.2  years  and          
initial  annual rent of $279,088.  The store  was  converted          
into a Sports Authority store in May 2006.                            

On  February 17, 2006, the Company purchased an Advance Auto          
Parts  store  in  Brownsville, Texas  for  $1,585,269.   The          
property is leased to Advance Stores Company, Inc.  under  a          
Lease  Agreement with a remaining primary term of 14.5 years          
and initial annual rent of $109,973.                                  

On  December 21, 2006, the Company purchased a 35%  interest          
in  an Advance Auto Parts store in Indianapolis, Indiana for          
$669,976.  The property is leased to Advance Stores Company,          
Inc.  under a Lease Agreement with a remaining primary  term          
of 13.5 years and initial annual rent of $46,937.                     

For  properties owned as of December 31, 2006,  the  minimum          
future rent payments required by the leases are as follows:           

2007           $ 2,797,100        
2008             2,833,167        
2009             2,865,261        
2010             2,919,216        
2011             2,963,682        
Thereafter      28,221,877        
         -----------
       $42,600,303
         ===========

There were no contingent rents recognized in 2006 or 2005.            

AEI INCOME & GROWTH FUND 25 LLC               
NOTES TO FINANCIAL STATEMENTS               
DECEMBER 31, 2006 AND 2005                

(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  Company's  total          
rent revenue for the year ended December 31:                          

Tenants                       Industry         2006         2005    

Sterling Jewelers Inc.         Retail       $  890,285   $  336,467   
Tractor Supply Company         Retail          374,726      218,064   
CarMax Auto Superstores, Inc.  Retail          306,180      241,158   
Kona Restaurant Group, Inc.    Restaurant      291,176      224,405   
TSA Stores, Inc.               Retail          279,088          N/A   
Apple Ohio, LLC                Restaurant          N/A      238,673   
Tia's Florida, LLC             Restaurant          N/A      229,500   
                                           ----------   ----------
Aggregate rent revenue of major tenants     $2,141,455   $1,488,267   
                                           ==========   ==========
Aggregate rent revenue of major tenants as                            
a percentage of total rent revenue                  79%          93%  
                                           ==========   ==========

(6)  Discontinued Operations -                                                  

During the fourth quarter of 2005, the Company sold its  50%          
interest  in  the  Mimi's Cafe restaurant  in  Kansas  City,          
Missouri, in three separate transactions, to unrelated third          
parties.   The Company received total net sale  proceeds  of          
$1,507,118,  which resulted in a net gain of $434,154.   The          
cost  and  related accumulated depreciation of the interests          
sold was $1,110,561 and $37,597, respectively.                        

On September 26, 2006, Tia's Florida, LLC, the tenant of the          
Tia's  Tex-Mex  restaurant  in Brandon,  Florida  filed  for          
Chapter  7  bankruptcy,  which  leads  to  liquidation   and          
dissolution   of  the  company.   The  tenant   closed   the          
restaurant.   The  primary guarantor of the  Lease,  Julio's          
Investors LLC (Julio's), is continuing to pay the  rent  and          
property expenses.  The Company and Julio's are discussing a          
potential buyout of the Lease guarantee whereby the  Company          
would  release Julio's from its guarantee in exchange for  a          
lump  sum  payment.  The Company is actively  marketing  the          
property for sale.  The Company has evaluated the Lease  and          
property value and decided that there is no impairment  loss          
at  this  time.   At  December 31, 2006,  the  property  was          
classified as Real Estate Held for Sale with a book value of          
$2,131,848.                                                           

AEI INCOME & GROWTH FUND 25 LLC               
NOTES TO FINANCIAL STATEMENTS               
DECEMBER 31, 2006 AND 2005                

(6)  Discontinued Operations - (Continued)                                      

During  2006  and 2005, the Company distributed $57,576  and          
$338,384  of  net sale proceeds to the Limited and  Managing          
Members  as  part  of  their quarterly distributions,  which          
represented $1.35 and $7.89 per LLC Unit, respectively.  The          
Company  anticipates the remaining net  sale  proceeds  will          
either  be  reinvested in additional property or distributed          
to the Members 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:                           

                                   2006       2005

Rental Income                            $ 230,156   $ 330,538        
Property Management Expenses                (4,184)     (1,098)       
Depreciation                               (14,145)    (81,642)       
Gain on Disposal of Real Estate                  0     434,154        
                                   ---------   ---------
Income from Discontinued Operations $ 211,827   $ 681,952   
                                   =========   =========

(7)  Members' Capital -                                                         

Cash  distributions of $67,713 and $47,821 were made to  the          
Managing Members and $2,227,740 and $1,771,796 were made  to          
the  Limited Members for the years ended December  31,  2006          
and  2005, respectively.  The Limited Members' distributions          
represent  $52.54 and $45.94 per LLC Unit outstanding  using          
42,403  and 38,571 weighted average Units in 2006 and  2005,          
respectively.  The distributions represent $29.99 and $36.61          
per  Unit  of  Net Income and $22.55 and $9.33 per  Unit  of          
return   of   contributed  capital   in   2006   and   2005,          
respectively.                                                         

As  part  of  the  Limited Members' distributions  discussed          
above,  the  Company  distributed $57,000  and  $335,000  of          
proceeds from property sales in 2006 and 2005, respectively.          

The  Company may acquire Units from Limited Members who have          
tendered  their  Units to the Company.  Such  Units  may  be          
acquired  at a discount.  The Company will not be  obligated          
to  purchase in any year more than 2% of the total number of          
Units  outstanding on January 1 of such year.  In  no  event          
shall the Company be obligated to purchase Units if, in  the          
sole discretion of the Managing Members, such purchase would          
impair the capital or operation of the Company.                       

AEI INCOME & GROWTH FUND 25 LLC               
NOTES TO FINANCIAL STATEMENTS               
DECEMBER 31, 2006 AND 2005                

(7)  Members' Capital - (Continued)                                             

During  2006, one Limited Member redeemed a total  of  128.9          
Units   for   $98,907  in  accordance  with  the   Operating          
Agreement.  The Company acquired these Units using Net  Cash          
Flow  from  operations.  During 2005, the  Company  did  not          
redeem  any Units from the Limited Members.  The redemptions          
increase  the remaining Limited Members' ownership  interest          
in  the Company.  As a result of this redemption payment and          
pursuant  to  the Operating Agreement, the Managing  Members          
received distributions of $3,059 in 2006.                             

After  the  effect  of  redemptions,  the  Adjusted  Capital          
Contribution,  as  defined in the  Operating  Agreement,  is          
$1,003.05 per original $1,000 invested.                               

(8)  Income Taxes -                                                             

The   following  is  a  reconciliation  of  net  income  for          
financial reporting purposes to income reported for  federal          
income tax purposes for the years ended December 31:                  

                                                 2006         2005

 Net Income for Financial Reporting Purposes     $1,413,376   $1,471,117

Depreciation for Tax Purposes Under                                   
  Depreciation for Financial Reporting Purposes     282,780      177,695

  Amortization of Start-Up and Organization Costs     (3,819)      (3,819)

Gain on Sale of Real Estate for Tax Purposes                          
   Under Gain for Financial Reporting Purposes             0      (12,306)
                                                   ----------   ----------
       Taxable Income to Members                 $1,692,337   $1,632,687
                                                   ==========   ==========

AEI INCOME & GROWTH FUND 25 LLC               
NOTES TO FINANCIAL STATEMENTS               
DECEMBER 31, 2006 AND 2005                

(8)  Income Taxes - (Continued)                                                 

The  following  is a reconciliation of Members'  Equity  for          
financial reporting purposes to Members' Equity reported for          
federal income tax purposes for the years ended December 31:          

                                                     2006         2005

  Members' Equity for Financial Reporting Purposes $34,785,801 $35,769,844

Adjusted Tax Basis of Investments in Real Estate                      
Over Net Investments in Real Estate                                 
   for Financial Reporting Purposes                    497,299     214,519

  Capitalized Start-Up Costs Under Section 195          13,093      13,092

   Amortization of Start-Up and Organization Costs      (11,775)     (7,956)

Organization and Syndication Costs Treated as                         
Reduction of Capital for Financial Reporting                        
   Purposes                                          6,021,670   6,021,670
                                                    ----------  ----------
        Members' Equity for Tax Reporting Purposes $41,306,088 $42,011,169
                                                    ==========  ==========

(9)  Fair Value of Financial Instruments -                                      

The estimated fair values of the financial instruments, none          
of  which  are held for trading purposes, are as follows  at          
December 31:                                                          

                   2006                 2005
                 Carrying     Fair    Carrying        Fair
                  Amount     Value     Amount        Value

Money Market Funds  $  794,181  $  794,181  $3,249,144  $3,249,144    
                 ---------   ---------   ---------   ---------
Total Cash and                                                    
Cash Equivalents $  794,181  $  794,181  $3,249,144  $3,249,144 
                 =========   =========   =========   =========

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON                      
ACCOUNTING AND FINANCIAL DISCLOSURE.                              

None.                                                             

ITEM 8A.  CONTROLS AND PROCEDURES.                                              

(a) Evaluation of disclosure controls and procedures              

Under  the  supervision  and with  the  participation  of       
management, including its President and Chief Financial  Officer,               
the Managing Member of the Company evaluated the effectiveness of               
the   design  and  operation  of  its  disclosure  controls   and               
procedures (as defined in Rule 13a-14(c) under the Exchange Act).               
Based  upon  that  evaluation, the President and Chief  Financial               
Officer of the Managing Member concluded that, as of the  end  of               
the  period  covered by this report, the disclosure controls  and               
procedures of the Company are adequately designed to ensure  that               
information required to be disclosed by us in the reports we file               
or   submit  under  the  Exchange  Act  is  recorded,  processed,               
summarized  and  reported, within the time periods  specified  in               
applicable   rules  and  forms  and  that  such  information   is               
accumulated   and  communicated  to  management,  including   the               
President and Chief Financial Officer of the Managing Member,  in               
a   manner   that  allows  timely  decisions  regarding  required               
disclosure.                                                                     

(b)  Changes in internal controls                                 

There  were no significant changes made in the  Company's       
internal controls during the most recent period covered  by  this               
report that have materially affected, or are reasonably likely to               
materially affect, the Company's internal control over  financial               
reporting.                                                                      

ITEM 8B.  OTHER INFORMATION.                                                    

None.                                                             

PART III                

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND                          
CONTROL PERSONS AND CORPORATE GOVERNANCE;                         
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.                

The registrant is a limited liability company and has  no       
officers,  directors, or direct employees.  The Managing  Members               
manage  and  control  the  Company's  affairs  and  have  general               
responsibility  and  the  ultimate  authority  in   all   matters               
affecting the Company's business.  The Managing Members  are  AEI               
Fund  Management XXI, Inc. (AFM), the Managing Member, and Robert               
P.  Johnson, Chief Executive Officer, President and sole director               
of  AFM,  the  Special Managing Member.  AFM is  a  wholly  owned               
subsidiary of AEI Capital Corporation of which Mr. Johnson is the               
majority   shareholder.   AFM  has  only  one  senior   financial               
executive,  its  Chief Financial Officer.   The  Chief  Financial               
Officer  reports  directly to Mr. Johnson and is accountable  for               
his actions to Mr. Johnson.  Although Mr. Johnson and AFM require               
that  all  of  their  personnel, including  the  Chief  Financial               
Officer, engage in honest and ethical conduct, ensure full, fair,               
accurate, timely, and understandable disclosure, comply with  all               
applicable  governmental laws, rules and regulations, and  report               
to  Mr. Johnson any deviation from these principles, because  the               
organization  is  composed of only approximately 35  individuals,               
because  the  management  of a company  by  an  entity  that  has               
different  interests in distributions and income  than  investors               
involves numerous conflicts of interest that must be resolved  on               
a  daily  basis, and because the ultimate decision maker  in  all               
instances  is Mr. Johnson, AFM has not adopted a formal  code  of               
conduct.   Instead,  the materials pursuant  to  which  investors               
purchase Units disclose these conflicts of interest in detail and               
Mr.  Johnson,  as  the  CEO and sole director  of  AFM,  resolves               
conflicts  to  the  best  of  his ability,  consistent  with  his               
fiduciary obligations to AFM and the fiduciary obligations of AFM               
to the Company.  The director and officers of AFM are as follows:               

Robert  P.  Johnson, age 62, is Chief Executive  Officer,       
President  and  sole director and has held these positions  since               
the  formation  of AFM in August 1994, and has  been  elected  to               
continue  in these positions until December 2007.  From  1970  to               
the  present, he has been employed exclusively in the  investment               
industry,  specializing in limited partnership  investments.   In               
that capacity, he has been involved in the development, analysis,               
marketing   and  management  of  public  and  private  investment               
programs investing in net lease properties as well as public  and               
private  investment  programs investing  in  energy  development.               
Since 1971, Mr. Johnson has been the president, a director and  a               
registered principal of AEI Securities, Inc., which is registered               
with  the SEC as a securities broker-dealer, is a member  of  the               
National Association of Securities Dealers, Inc. (NASD) and is  a               
member  of the Security Investors Protection Corporation  (SIPC).               
Mr.  Johnson  has  been president, a director and  the  principal               
shareholder   of  AEI  Fund  Management,  Inc.,  a  real   estate               
management  company founded by him, since 1978.  Mr.  Johnson  is               
currently  a general partner or principal of the general  partner               
in ten limited partnerships and a managing member in four LLCs.                 

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND                          
CONTROL PERSONS AND CORPORATE GOVERNANCE;                         
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.                
(Continued)                                                       

Patrick  W.  Keene,  age 47, is Chief Financial  Officer,       
Treasurer  and  Secretary  and has  held  these  positions  since               
January  22,  2003  and  has been elected to  continue  in  these               
positions  until December 2007.  Mr. Keene has been  employed  by               
AEI  Fund  Management, Inc. and affiliated entities  since  1986.               
Prior  to being elected to the positions above, he was Controller               
of  the various entities.  From 1982 to 1986, Mr. Keene was  with               
KPMG  Peat  Marwick  Certified Public Accountants,  first  as  an               
auditor and later as a tax manager.  Mr. Keene is responsible for               
all accounting functions of AFM and the registrant.                             

Since Mr. Johnson serves as the Special Managing Member of        
the  Company,  as well as the sole director of AFM,  all  of  the               
duties  that might be assigned to an audit committee are assigned               
to  Mr. Johnson.  Mr. Johnson is not an audit committee financial               
expert, as defined.  As an officer and majority owner, through  a               
parent  company, of AFM, and as the Special Managing Member,  Mr.               
Johnson is not a "disinterested director" and may be subject to a               
number of conflicts of interests in his capacity as sole director               
of AFM.                                                                         

Before the independent auditors are engaged, Mr. Johnson,       
as the sole director of AFM, approves all audit-related fees, and               
all permissible nonaudit fees, for services of our auditors.                    

Section 16(a) Beneficial Ownership Reporting Compliance                         

Under federal securities laws, the directors and officers       
of  the Managing Member of the Company, and any beneficial  owner               
of  more than 10% of a class of equity securities of the Company,               
are  required  to report their ownership of the Company's  equity               
securities  and  any changes in such ownership to the  Securities               
and  Exchange Commission (the "Commission").  Specific due  dates               
for  these  reports have been established by the Commission,  and               
the  Company is required to disclose in this Annual Report on 10-               
KSB any delinquent filing of such reports and any failure to file               
such  reports  during the fiscal year ended  December  31,  2006.               
Based upon information provided by officers and directors of  the               
Managing Member, all officers, directors and 10% owners filed all               
reports on a timely basis in the 2006 fiscal year.                              

ITEM 10.  EXECUTIVE COMPENSATION.                                               

The Managing Member and affiliates are reimbursed at cost       
for  all  services performed on behalf of the registrant and  for               
all  third party expenses paid on behalf of the registrant.   The               
cost for services performed on behalf of the registrant is actual               
time  spent  performing such services plus  an  overhead  burden.               
These  services include organizing the registrant  and  arranging               
for  the  offer  and  sale  of Units,  reviewing  properties  for               
acquisition and rendering administrative, property management and               
property  sales services.  The amount and nature of such payments               
are detailed in Item 12 of this annual report on Form 10-KSB.                   

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                   
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.                   

The following table sets forth information pertaining  to       
the ownership of the Units by each person known by the Company to               
beneficially  own  5%  or  more of the Units,  by  each  Managing               
Member, and by each officer or director of the Managing Member as               
of February 28, 2007:                                                           

Name and Address                   Number of     Percent              
of Beneficial Owner                  Units Held    of Class               

AEI Fund Management XXI, Inc.            0            0%                  
Robert P. Johnson                        0            0%                  
Patrick W. Keene                         0            0%                  

Address for all:                                                          
1300 Wells Fargo Place                                                    
30 East 7th Street, St. Paul, Minnesota 55101                             

The  Managing Members know of no holders of more than 5%  of  the               
outstanding Units.                                                              

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND                   
DIRECTOR INDEPENDENCE.                                        

The  registrant,  AFM  and  its  affiliates  have  common       
management and utilize the same facilities.  As a result, certain               
administrative  expenses  are  allocated  among   these   related               
entities.   All  of  such activities and any  other  transactions               
involving the affiliates of the Managing Member of the registrant               
are  governed  by,  and  are conducted in  conformity  with,  the               
limitations  set  forth  in  the  Operating  Agreement   of   the               
registrant.   Reference  is  made to  Note  3  of  the  Financial               
Statements,   as  presented,  and  is  incorporated   herein   by               
reference,  for  details of related party  transactions  for  the               
years ended December 31, 2006 and 2005.                                         

Neither  the registrant, nor the Managing Member  of  the       
registrant,  has a board of directors consisting of  any  members               
who are "independent."  The sole director of the Managing Member,               
Robert  P.  Johnson, is also the Special Managing Member  of  the               
registrant,  and is the Chief Executive Officer,  and  indirectly               
the  principal owner, of the Managing Member.  Accordingly, there               
is  no  disinterested  board,  or other  functioning  body,  that               
reviews  related party transactions, or the transactions  between               
the  registrant and the Managing Members, except as performed  in               
connection with the audit of its financial statements.                          

The  limitations  included  in  the  Operating  Agreement       
require  that  the  cumulative  reimbursements  to  the  Managing               
Members and their affiliates for certain expenses will not exceed               
an  amount  equal to the sum of (i) 20% of capital contributions,               
(ii)  1% of gross revenues, plus an initial leasing fee of 3%  of               
gross  revenues for the first five years of the original term  of               
each lease, (iii) 3% of Net Proceeds of Sale, and (iv) 10% of Net               
Cash  Flow  less  the Net Cash Flow actually distributed  to  the               
Managing Members. The cumulative reimbursements subject  to  this               
limitation  are reimbursements for (i) organization and  offering               
expenses, including commissions, (ii) acquisition expenses, (iii)               
services  provided  in the sales effort of properties,  and  (iv)               
expenses  of  controlling persons and overhead expenses  directly               
attributable   to  the  forgoing  services  or  attributable   to               
administrative   services.  As  of  December  31,   2006,   these               
cumulative  reimbursements  to the  Managing  Members  and  their               
affiliates did not exceed the limitation amount.                                

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND                   
DIRECTOR INDEPENDENCE.  (Continued)                         

The following table sets forth the forms of compensation,       
distributions  and cost reimbursements paid by the registrant  to               
the  Managing Members or their Affiliates in connection with  the               
operation  of  the Fund and its properties for  the  period  from               
inception through December 31, 2006.                                            

Person or Entity                                      Amount Incurred From      
Receiving                 Form and Method         Inception (June 24, 2002)   
Compensation               of Compensation            To December 31, 2006      

AEI Securities,Inc.  Selling Commissions equal to 10%         $4,240,243        
of porceeds, most of which were       
reallowed to Participating Dealers.   

Managing Members     Reimbursement at Cost for other          $1,805,502        
and Affiliates       Organization and Offering Costs.                           

Managing Members     Reimbursement at Cost for all            $  569,906        
and Affiliates       Acquisition Expenses.                                      

Managing Members     Reimbursement at Cost for all            $  911,032        
and Affiliates       Administrative Expenses attributable                       
to the Fund, including all            
expenses related to management of     
the Fund's properties and all other   
transfer agency, reporting,           
Member relations and other            
administrative functions.             

Managing Members     Reimbursement at Cost for all            $   50,988        
and Affiliates       expenses related to the disposition                        
of the Fund's properties.             

Managing Members     3% of Net Cash Flow in any fiscal year.  $  136,757        

Managing Members     1% of distributions of Net Proceeds      $    3,960        
of Sale until Limited Members have    
received an amount equal to           
   (a) their Adjusted Capital Contributions,
 plus (b) an amount equal to 7% of their
   Adjusted Capital Contributions per annum,
cumulative but not compounded, to the 
extent  not  previously distributed.  
10%  of  distributions of Net Proceeds
of  Sale thereafter.                  

PART IV               

ITEM 13.  EXHIBITS.                                                             

3.1   Certificate of Limited Liability Company (incorporated          
by   reference   to   Exhibit  3.1   of   the   registrant's          
Registration  Statement on Form SB-2 filed on September  17,          
2002 [File No. 333-99677]).                                           

3.2  Operating Agreement to the Prospectus (incorporated  by          
reference  to  Exhibit  A  of the registrant's  Registration          
Statement  on  Form SB-2 filed on April 14, 2003  [File  No.          
333-99677]).                                                          

10.1 Net Lease Agreement dated December 9, 2003 between  the          
Company,  AEI  Private  Net Lease  Millennium  Fund  Limited          
Partnership and Kona Restaurant Group, Inc. relating to  the          
Property  at  2638  Derek  Drive,  Lake  Charles,  Louisiana          
(incorporated  by  reference to Exhibit  10.2  of  Form  8-K          
filed December 24, 2003).                                             

10.2  Net  Lease Agreement dated December 10,  2003  between          
the  Company,  AEI  Accredited Investor  Fund  2002  Limited          
Partnership  and Tia's Florida LLC relating to the  Property          
at   144   Brandon  Town  Center  Drive,  Brandon,   Florida          
(incorporated  by  reference to Exhibit  10.2  of  Form  8-K          
filed December 24, 2003).                                             

10.3  Assignment and Assumption of Lease dated  February  6,          
2004  between the Company, AEI Accredited Investor Fund 2002          
Limited  Partnership  and Transgate,  LLC  relating  to  the          
Property  at 914 Two Mile Parkway, Goodlettsville, Tennessee          
(incorporated  by  reference to Exhibit  10.2  of  Form  8-K          
filed February 20, 2004).                                             

10.4  Assignment and Assumption of Lease dated  February  6,          
2004  between the Company, AEI Income & Growth Fund 23  LLC,          
AEI  Accredited  Investor Fund 2002 Limited Partnership  and          
Transmadison,  LLC relating to the Property  at  451  W.  14          
Mile  Road,  Madison  Heights,  Michigan  (incorporated   by          
reference  to  Exhibit 10.2 of Form 8-K filed  February  20,          
2004).                                                                

10.5  Assignment  and Assumption of Lease  dated  April  30,          
2004  between the Company and PRECO II CRIC LLC relating  to          
the   Property   at   7159  Macedonia   Commons   Boulevard,          
Macedonia,  Ohio (incorporated by reference to Exhibit  10.2          
of Form 8-K filed May 7, 2004).                                       

10.6 Net Lease Agreement dated November 2, 2004 between  the          
Company  and  Kona Restaurant Group, Inc.  relating  to  the          
Property  at  5700 North Elizabeth Street, Pueblo,  Colorado          
(incorporated  by reference to Exhibit 10.2 of  Form  10-QSB          
filed November 12, 2004).                                             

10.7  Assignment and Assumption of Lease dated  January  14,          
2005  between  the  Company, AEI Income &  Growth  Fund  XXI          
Limited  Partnership and LMB Auburn Hills I LLC relating  to          
the  Property  at 3960 Baldwin Road, Auburn Hills,  Michigan          
(incorporated by reference to Exhibit 10.18 of  Form  10-KSB          
filed March 30, 2005).                                                

10.8 Assignment of Lease dated February 9, 2005 between  the          
Company and Brody Capital Management, Inc. relating  to  the          
Property  at  3416  South  Western Avenue,  Marion,  Indiana          
(incorporated  by  reference to Exhibit  10.2  of  Form  8-K          
filed February 15, 2005).                                             

10.9  Assignment  and Assumption of Lease  dated  March  18,          
2005  between  the  Company, AEI Income &  Growth  Fund  XXI          
Limited  Partnership, AEI Income & Growth Fund 24  LLC,  AEI          
Private  Net  Lease Millennium Fund Limited Partnership  and          
Silver  Capital  Net  Lease Fund II,  LLC  relating  to  the          
Property  at  1977  Thornton Road, Lithia  Springs,  Georgia          
(incorporated  by  reference to Exhibit  10.2  of  Form  8-K          
filed March 24, 2005).                                                

10.11     First Amendment to Net Lease Agreement dated  June          
20,  2005  between  the Company and Kona  Restaurant  Group,          
Inc.  relating  to  the  Property at  5700  North  Elizabeth          
Street,  Pueblo,  Colorado  (incorporated  by  reference  to          
Exhibit 10.1 of Form 10-QSB filed August 12, 2005).                   

ITEM 13.  EXHIBITS. (Continued)                                                 

10.12      Assignment  and Assumption of Purchase  Agreement          
dated  October  7,  2005 between the Company  and  AEI  Fund          
Management,  Inc. relating to the Property at 2908  Broadway          
Avenue, Yankton, South Dakota (incorporated by reference  to          
Exhibit 10.1 of Form 10-QSB filed November 14, 2005).                 

10.13      Assignment  and Assumption of Purchase  Agreement          
dated  October  24, 2005 between the Company  and  AEI  Fund          
Management,  Inc.  relating to the Property  at  1016  North          
Route  59,  Aurora, Illinois (incorporated by  reference  to          
Exhibit 10.1 of Form 8-K filed December 22, 2005).                    

10.14      Assignment and Assumption of Net Lease  Agreement          
dated   October  25,  2005  between  the  Company  and   CDK          
Associates  LLC  relating to the Property at  2908  Broadway          
Avenue, Yankton, South Dakota (incorporated by reference  to          
Exhibit 10.2 of Form 10-QSB filed November 14, 2005).                 

10.15      Assignment  and Assumption of Purchase  Agreement          
dated  October  31, 2005 between the Company  and  AEI  Fund          
Management,  Inc.  relating to the Property  at  297  Loudon          
Road,  Concord, New Hampshire (incorporated by reference  to          
Exhibit 10.3 of Form 10-QSB filed November 14, 2005).                 

10.16      Real Estate Purchase Contract dated November  18,          
2005  between  the Company and Commercial Net Lease  Realty,          
Inc.  relating  to  the  Property at 1016  North  Route  59,          
Aurora, Illinois (incorporated by reference to Exhibit  10.2          
of Form 8-K filed December 22, 2005).                                 

10.17      Assignment and Assumption of Lease  and  Guaranty          
dated  November 22, 2005 between the Company  and  Lafayette          
Village,  LLC relating to the Property at 1016  North  Route          
59,  Aurora, Illinois (incorporated by reference to  Exhibit          
10.3 of Form 8-K filed December 22, 2005).                            

10.18      Assignment and Assumption of Lease dated December          
1,  2005  between the Company and Loudon Road  N.H.  Rte.  9          
Development,  LLC  relating to the Property  at  297  Loudon          
Road,  Concord, New Hampshire (incorporated by reference  to          
Exhibit 10.2 of Form 8-K filed December 7, 2005).                     

10.19      Assignment  and  Assumption  of  Lease  Agreement          
dated  December 16, 2005 between the Company and  Commercial          
Net  Lease  Realty, Inc. relating to the  Property  at  1016          
North  Route 59, Aurora, Illinois (incorporated by reference          
to Exhibit 10.4 of Form 8-K filed December 22, 2005).                 

10.20      Assignment  of  Agreement of  Purchase  and  Sale          
dated  December  21,  2005 between  the  Company,  AEI  Fund          
Management   XVII,  Inc.  and  AEI  Fund  Management,   Inc.          
relating  to the Property at 6959 East 21st Street, Wichita,          
Kansas (incorporated by reference to Exhibit 10.1 of Form 8-          
K filed December 30, 2005).                                           

10.21      Assignment and Assumption of Lease  and  Guaranty          
dated  December  22,  2005 between  the  Company,  AEI  Fund          
Management XVII, Inc. and Silver Capital Net Lease  Fund  I,          
LLC  relating  to  the Property at 6959  East  21st  Street,          
Wichita,  Kansas (incorporated by reference to Exhibit  10.2          
of Form 8-K filed December 30, 2005).                                 

10.22       Assignment  of  Commercial  Purchase  and   Sale          
Contract dated January 16, 2006 between the Company and  AEI          
Fund  Management, Inc. relating to the Property at 5825 East          
Ruben Torres Boulevard, Brownsville, Texas (incorporated  by          
reference  to Exhibit 10.27 of Form 10-KSB filed  March  30,          
2006).                                                                

10.23      Assignment and Assumption of Lease dated February          
17,  2006  between  the Company and Meyer-Lamph  Development          
Group,  LTD.  relating to the Property at  5825  East  Ruben          
Torres   Boulevard,  Brownsville,  Texas  (incorporated   by          
reference  to Exhibit 10.28 of Form 10-KSB filed  March  30,          
2006).                                                                

31.1  Certification of Chief Executive Officer  of  Managing          
Member pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a))  and          
Section 302 of the Sarbanes-Oxley Act of 2002.                        

31.2  Certification of Chief Financial Officer  of  Managing          
Member pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a))  and          
Section 302 of the Sarbanes-Oxley Act of 2002.                        

32    Certification  of Chief Executive  Officer  and  Chief          
Financial  Officer  of Managing Member pursuant  to  Section          
906 of the Sarbanes-Oxley Act of 2002.                                

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.                                

The  following  is a summary of the fees  billed  to  the       
Company   by  Boulay,  Heutmaker,  Zibell  &  Co.  P.L.L.P.   for               
professional  services rendered for the years ended December  31,               
2006 and 2005:                                                                  

Fee Category                            2006       2005               

Audit Fees                           $  14,650   $ 14,850             
Audit-Related Fees                           0        218             
Tax Fees                                     0          0             
All Other Fees                               0          0             
                          ---------   --------
Total Fees                      $  14,650   $ 15,068        
                          =========   ========

Audit  Fees  - Consists of fees billed for professional  services               
rendered   for  the  audit  of  the  Company's  annual  financial               
statements   and  review  of  the  interim  financial  statements               
included  in  quarterly reports, and services that  are  normally               
provided   by  Boulay,  Heutmaker,  Zibell  &  Co.  P.L.L.P.   in               
connection with statutory and regulatory filings or engagements.                

Audit-Related  Fees - Consists of fees billed for  assurance  and               
related  services that are reasonably related to the  performance               
of  the  audit  or  review of financial statements  and  are  not               
reported under "Audit Fees." These services include consultations               
concerning financial accounting and reporting standards.                        

Tax  Fees - Consists of fees billed for professional services for               
federal and state tax compliance, tax advice and tax planning.                  

All Other Fees - Consists of fees for products and services other               
than the services reported above.                                               

Policy   for  Preapproval  of  Audit  and  Permissible  Non-Audit               
Services of Independent Auditors                                                

Before the Independent Auditors are engaged by the Company        
to render audit or non-audit services, the engagement is approved               
by Mr. Johnson acting as the Company's audit committee.                         

SIGNATURES                

In  accordance with Section 13 or 15(d) of  the  Exchange       
Act, the registrant caused this report to be signed on its behalf               
by the undersigned, thereunto duly authorized.                                  

AEI INCOME & GROWTH FUND 25 
Limited Liability Company   
     By: AEI Fund Management XXI, Inc.
Its Managing Member 

March 23, 2007            By:/s/ Robert P Johnson                               
                           Robert P. Johnson, President and Director
               (Principal Executive Officer)

In accordance with the Exchange Act, this report has been       
signed below by the following persons on behalf of the registrant               
and in the capacities and on the dates indicated.                               

Name                              Title                       Date    

/s/Robert P Johnson  President (Principal Executive Officer)  March 23, 2007    
Robert P. Johnson and Sole Director of Managing Member                    

/s/Patrick W Keene   Chief Financial Officer and Treasurer    March 23, 2007    
Patrick W. Keene  (Principal Accounting Officer)                          

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10KSB’ Filing		Date		First		Last			Other Filings
Filed on:		3/27/07
		3/23/07		1		6
		2/28/07		1		6
For Period End:		12/31/06		1		6			10KSB/A
		12/21/06		1		6
		12/1/06		1
		9/26/06		1		6
		3/30/06		6					10KSB
		2/17/06		1		6
		1/16/06		6
		1/1/06		1
		12/31/05		1		6			10KSB
		12/30/05		6					8-K
		12/22/05		1		6			8-K
		12/21/05		6
		12/16/05		1		6
		12/7/05		6					8-K
		12/1/05		1		6			8-K
		11/22/05		6
		11/21/05		1		6
		11/18/05		6
		11/14/05		6					10QSB
		10/31/05		6
		10/25/05		1		6
		10/24/05		6
		10/7/05		6
		8/12/05		6					10QSB
		6/20/05		1		6
		5/12/05		1		6
		3/31/05		1		6			10QSB
		3/30/05		6					10KSB
		3/24/05		6					8-K
		3/18/05		1		6			8-K
		2/15/05		6					8-K
		2/9/05		1		6			8-K
		1/14/05		1		6
		12/31/04		5					10KSB
		11/12/04		6					10QSB
		11/2/04		1		6
		6/30/04		1					10QSB
		5/7/04		6					8-K
		4/30/04		1		6			8-K
		2/20/04		1		6			8-K
		2/6/04		1		6			8-K
		12/24/03		6					8-K
		12/10/03		6					8-K
		12/9/03		6					8-K
		9/11/03		1		6
		5/13/03		1
		4/14/03		6					SB-2/A
		1/22/03		6
		9/17/02		6					SB-2
		6/24/02		1		6
									List all Filings

3 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 2/01/08  SEC                               UPLOAD¶    10/21/17    1:20K  Aei Income & Growth Fund 25 LLC
 2/01/08  SEC                               UPLOAD¶    10/21/17    1:25K  Aei Income & Growth Fund 25 LLC
10/26/07  SEC                               UPLOAD¶    10/21/17    1:43K  Aei Income & Growth Fund 25 LLC