United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2012

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

For the transition period from ____________ to ____________

Commission file number 0-11149

CAPITAL REALTY INVESTORS, LTD.

(Exact Name of Issuer as Specified in its Charter)

District of Columbia	52-1219926
(State of Incorporation)	(I.R.S. Employer Identification No.)

11200 Rockville Pike
Rockville, MD	20852
(Address of Principal Executive Offices)	(ZIP Code)

(301) 468-9200

(Issuer’s Telephone Number, Including Area Code)

_____________________

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

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

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

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

CAPITAL REALTY INVESTORS, LTD.

INDEX TO FORM 10-Q

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012

		Page

Part I	FINANCIAL INFORMATION

Item 1.	Condensed Financial Statements
	Condensed Balance Sheets
	- September 30, 2012 and December 31, 2011	1
	Condensed Statements of Operations and Accumulated Gain
	- for the three and nine months ended September 30, 2012 and 2011	2
	Condensed Statements of Cash Flows
	- for the nine months ended September 30, 2012 and 2011	3
	Notes to Condensed Financial Statements
	- September 30, 2012 and 2011	4

Item 2.	Management's Discussion and Analysis of Financial Condition
	and Results of Operations	12

Item 4.	Controls and Procedures	14

Part II	OTHER INFORMATION

Item 1.	Legal Proceedings	14

Item 5.	Other Information	14

Item 6.	Exhibits	15

Signature		16

Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements

CAPITAL REALTY INVESTORS, LTD.

CONDENSED BALANCE SHEETS

(Unaudited)

ASSETS

	September 30,		December 31,
	2012		2011

Investments in and advances to partnerships	$	6,303,930	$	5,297,827
Cash and cash equivalents		2,003,865		2,194,867
Acquisitions fees, principally paid to related parties,
net of accumulated amortization of $99,176 and $108,671, respectively		33,716		40,733
Property purchase costs,
net of accumulated amortization of $30,410 and $39,489, respectively		9,779		14,028

Total assets	$	8,351,290	$	7,547,455

LIABILITIES AND PARTNERS’ CAPITAL


Accounts payable and accrued expenses	$	72,876		$	66,072

Total liabilities		72,876			66,072

Commitments and contingencies

Partners' capital:

Capital paid in :
General Partners		14,000			14,000
Limited Partners		24,837,000			24,837,000

		24,851,000			24,851,000
Less:
Accumulated distributions to partners		(16,251,682	)		(16,251,682	)
Offering costs		(2,689,521	)		(2,689,521	)
Accumulated gain		2,368,617			1,571,586

Total partners' capital		8,278,414			7,481,383

Total liabilities and partners' capital	$	8,351,290		$	7,547,455

The accompanying notes are an integral part

of these condensed financial statements.

- 1 -

Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements

CAPITAL REALTY INVESTORS, LTD.

CONDENSED STATEMENTS OF OPERATIONS

AND ACCUMULATED GAIN

(Unaudited)

	For the three months ended					For the nine months ended
	September 30,					September 30,
	2012		2011			2012			2011

Share of income from partnerships	$	323,609	$	345,116		$	1,006,103		$	834,009

Other revenue and expenses:

Revenue:
Gain on disposition of investment in
partnership, net of disposition fee		200,525		-			200,525			-
Interest and other		2,474		15,190			8,767			44,787

		202,999		15,190			209,292			44,787

Expenses:
General and administrative		68,806		53,392			207,514			189,796
Professional fees		51,543		22,750			135,643			115,633
Management fees		23,802		23,802			71,406			71,406
Amortization of deferred costs		1,267		2,035			3,801			6,107

		145,418		101,979			418,364			382,942

Total other revenue (expenses)		57,581		(86,789	)		(209,072	)		(338,155	)


Net income	$	381,190	$	258,327		$	797,031		$	495,854

Accumulated gain, beginning of period	$	1,987,428	$	956,650		$	1,571,586		$	719,123

Accumulated gain, end of period	$	2,368,618	$	1,214,977		$	2,368,617		$	1,214,977



Net income allocated to
General Partners (3%)	$	11,436	$	7,750		$	23,911		$	14,876


Net income allocated to
Limited Partners (97%)	$	369,754	$	250,577		$	773,120		$	480,978


Net income per unit of Limited Partner
Interest, based on 24,747 units outstanding	$	14.94	$	10.13		$	31.24		$	19.44

The accompanying notes are an integral part

of these condensed financial statements.

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Part I.	FINANCIAL INFORMATION
Item 1.	Financial Statements

CAPITAL REALTY INVESTORS, LTD.

CONDENSED STATEMETNS OF CASH FLOWS

(Unaudited)

	For the nine months ended
	September 30,
	2012			2011

Cash flows from operating activities:
Net income	$	797,031		$	495,854


Adjustments to reconcile net loss income to net cash
used in operating activities:
Share of income from partnerships		(1,006,103	)		(834,009	)
Amortization of deferred costs		3,801			6,107
Gain on disposition of investment in partnership		(200,525	)		-

Changes in assets and liabilities:
Increase in accrued interest receivable on advances
to local partnership		-			(25,495	)
Decrease in other assets		-			2,382
Increase in accounts payable and accrued expenses		6,804			6,463

Net cash used in operating activities		(398,992	)		(348,698	)

Cash flows from investing activities:

Proceeds from disposition of investment in partnership		299,990			-
Disposition fee paid		(92,000	)
Receipt of distribution from partnership		-			44,097

Net cash provided by investing activities		207,990			44,097



Net decrease in cash and cash equivalents		(191,002	)		(304,601	)

Cash and cash equivalents, beginning of the period		2,194,867			2,552,538

Cash and cash equivalents, end of the period	$	2,003,865		$	2,247,937

The accompanying notes are an integral part

of these condensed financial statements.

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CAPITAL REALTY INVESTORS, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

(Unaudited)

1. ORGANIZATION

Capital Realty Investors, Ltd. (the “Partnership”) is a limited partnership which was formed under the District of Columbia Limited Partnership Act on June 1, 1981. The Partnership was formed for the purpose of raising capital by offering and selling limited partnership interests and then investing in limited partnerships ("Local Partnerships"), each of which owns and operates an existing rental housing project which was originally financed and/or operated with one or more forms of rental assistance or financial assistance from the U.S. Department of Housing and Urban Development ("HUD"). The Partnership originally made investments in eighteen Local Partnerships. As of September 30, 2012, the Partnership retained investments in five Local Partnerships.

The General Partners of the Partnership are C.R.I., Inc. (“CRI”), which is the Managing General Partner, current and former shareholders of CRI and Rockville Pike Associates, Ltd., a Maryland limited partnership, which includes the shareholders of CRI and certain former officers and employees of CRI. Services for the Partnership are performed by CRI, as the Partnership has no employees of its own.

2. BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP) and with the instructions to Form 10-Q. Certain information and accounting policies and footnote disclosures normally included in financial statements prepared in conformity with US GAAP have been condensed or omitted pursuant to such instructions. These condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Partnership's annual report on Form 10-K at December 31, 2011.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other bodies that may have an impact on the Partnership’s financials reporting or accounting. The Partnership does not believe that any such recently issued pronouncement has had or will have a material effect on the Partnership’s financial statements.

In the opinion of CRI, the Managing General Partner of the Partnership, the accompanying unaudited financial statements reflect all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the financial position of the Partnership as of September 30, 2012, and the results of its operations and its cash flows for the three and nine month periods ended September 30, 2012 and 2011. The results of operations for the interim period ended September 30, 2012, are not necessarily indicative of the results to be expected for the full year.

3. INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS

At September 30, 2012 and 2011, the Partnership had limited partnership equity interests in five and six Local Partnerships, respectively, owning four and six apartment complexes, respectively.

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CAPITAL REALTY INVESTORS, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

(Unaudited)

3. INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

A schedule of the apartment complexes owned by the Local Partnerships at September 30, 2012 in which the Partnership is invested is provided below:

PROPERTY	CITY	STATE	UNITS
Capitol Commons	Lansing	MI	200
Chestnut	Fresno	CA	90
New Sharon Woods	Deptford	NJ	50
Westwood Village	New Haven	CT	48
Hillview Terrace	On September 27, 2012, the Partnership sold its limited partner interest in the Local Partnership which owns the Hillview Terrace Apartments.
Shallowford Oaks	Foreclosed in September 2011 – Local Partnership in process of wind up and termination.

Under the terms of the Partnership's investment in each Local Partnership, the Partnership was required to make capital contributions to the Local Partnerships. These contributions were payable in installments upon each Local Partnership achieving specified levels of construction and/or operations. At September 30, 2012 and 2011, all such capital contributions had been paid to the Local Partnerships.

a. Summarized financial information

The Combined Statements of Operations for the five and six Local Partnerships in which the Partnership was invested as of September 30, 2012 and September 30, 2011, respectively, follow. The combined statements have been compiled from information supplied by the management agents of the Local Partnership properties and are unaudited. The information for each of the periods is presented separately for those Local Partnerships which have investment basis (equity method), and for those Local Partnerships which have cumulative losses in excess of the amount of the Partnership’s investments in those Local Partnerships (equity method suspended). Appended after the combined statements is information concerning the Partnership’s share of income from partnerships related to cash distributions recorded as income, and related to the Partnership’s share of income from Local Partnerships.

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CAPITAL REALTY INVESTORS, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

(Unaudited)

3. INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

COMBINED STATEMENTS OF OPERATIONS

(Unaudited)

	For the three months ended
	September 30,
	2012						2011
	Equity						Equity
	Method			Suspended			Method			Suspended

Number of Local Partnerships		3	(a)		2	(b)		3	(a)		3	(c)

Revenue:
Rental	$	899,941		$	286,080		$	935,602		$	651,793
Other		98,472			6,846			93,792			14,368

Total revenue		998,413			292,926			1,029,394			666,161

Expenses:
Operating		508,667			182,097			461,531			696,477
Interest		57,569			39,620			93,288			139,693
Depreciation and amortization		101,942			27,663			113,626			80,674

Total expenses		668,178			249,380			668,445			916,844

Net income(loss)	$	330,235		$	43,546		$	360,949		$	(250,683	)

Cash distribution	$	--		$	--		$	27,437		$	--

Interest payment recorded as
expense	$	--		$	--		$	--		$	(8,592	)

Partnership’s share of Local
Partnership net income		323,609			--			353,708			--

Share of income from partnerships	$323,609						$345,116

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CAPITAL REALTY INVESTORS, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

(Unaudited)

3. INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

COMBINED STATEMENTS OF OPERATIONS

(Unaudited)

	For the nine months ended
	September 30,
	2012						2011
	Equity						Equity
	Method			Suspended			Method			Suspended

Number of Local Partnerships		3	(a)		2	(b)		3	(a)		3	(c)

Revenue:
Rental	$	2,753,429		$	955,874		$	2,767,911		$	1,846,510
Other		278,957			26,106			265,501			41,141

Total revenue		3,032,386			981,980			3,033,412			1,887,651

Expenses:
Operating		1,527,151			676,483			1,468,020			1,610,050
Interest		172,705			121,387			279,865			419,080
Depreciation and amortization		305,828			92,545			340,878			242,022

Total expenses		2,005,684			890,415			2,088,763			2,271,152

Net income (loss)	$	1,026,702		$	91,565		$	944,649		$	(383,501	)

Cash distribution	$	--		$	--		$	44,097		$	--

Interest payment recorded
as expense	$	--		$	--		$	--		$	(25,495	)

Partnership’s share of Local
Partnership net income		1,006,103			--			859,504			--

Share of income from partnerships	$1,006,103						$834,009

____________________

(a) Capital Commons; Chestnut; Westwood Village

(b) Hillview Terrace; New Sharon Woods

Cash distributions received from Local Partnerships which have investment basis (equity method) are recorded as a reduction of investments in partnerships and as cash receipts on the respective balance sheets. Cash distributions received from Local Partnerships which have cumulative losses in excess of the amount of the Partnership’s investments in those Local Partnerships (equity method suspended) are recorded as share of income from partnerships on the respective statements of operations and as cash receipts on the respective balance sheets. As of September 30, 2012, the Partnership's share of cumulative losses to date for two of five Local Partnerships exceeded the amount of the Partnership's investments in those Local Partnerships by $3,267,561. As of September 30, 2011, the Partnership’s share of cumulative losses to date for three of six Local Partnerships exceeded the amount of the Partnership’s investments in those Local Partnerships by $5,071,443. As the Partnership has no further obligation to advance funds or provide financing to these Local Partnerships, the excess losses have not been reflected in the accompanying condensed financial statements.

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CAPITAL REALTY INVESTORS, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

(Unaudited)

3. INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

b. Advances to Local Partnerships

As of September 30, 2012 and December 31, 2011, the Partnership had advanced funds, including accrued interest, totaling $0 and $1,008,738, respectively, to ARA Associates-Shangri-La Ltd. (Shallowford Oaks). On April 15, 2010, the Partnership advanced $100,000 to Shallowford Oaks for operating expenses. For financial reporting purposes, these loans have been reduced to zero by the Partnership as a result of losses at the Local Partnership level during prior years. As a result, the amount advanced has been reflected as a reduction of share of income from the Partnership in 2011.

On December 19, 2002, the Local Partnership which owned the Baltic Plaza apartments sold the property. Cash proceeds received by the Partnership totaled $2,053,358. As part of the consideration, the Local Partnership took back a 30-year purchase money note in the principal amount of $2,300,000, collateralized by the partnership interests of the general partner of the maker/purchaser. The Local Partnership assigned the purchase money note to an escrow for the benefit of its partners (with CRI serving as escrow agent), so that the Local Partnership entity could be dissolved. The purchase money note bears interest at 4.6% compounded annually, and requires a minimum annual payment equal to 50% of the maker/purchaser’s annual audited cash flow, as defined, with the balance of unpaid principal, if any, plus accrued interest, due and payable on December 31, 2032. As of September 30, 2012, no payments of principal or interest have been received on this purchase money note. The Partnership’s 98% beneficial interest in this purchase money note is reflected in the accompanying balance sheets at September 30, 2012 and December 31, 2011, at its original principal balance of $2,300,000 plus estimated accrued but unpaid interest, all discounted to $619,000 to provide for an effective interest rate commensurate with the investment risk. The resulting discounted amount has been fully reserved due to uncertainty of collection of the purchase money note and related interest.

c. Pending Sales

Capitol Commons

On May 15, 2012, the Local Partnership entered into an option agreement to sell Capitol Commons Senior Apartments for $9,500,000. The Partnership’s investment basis in this Local Partnership at September 30, 2012 and December 31, 2011 was $4,859,242 and $4,186,351, respectively. The Partnership expects to receive $6,257,353 as a result of the sale. The sale is expected to close during the fourth quarter of 2012.

New Sharon Woods

On June 29, 2012, the Partnership entered into a partnership interest purchase agreement to sell their partnership interests in New Sharon Woods for $1. The Partnership’s investment basis in this Local Partnership at September 30, 2012 and December 31, 2011 was $0.

- 8 -

CAPITAL REALTY INVESTORS, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

(Unaudited)

3. INVESTMENTS IN AND ADVANCES TO PARTNERSHIPS - Continued

c. Pending Sales - Continued

Chestnut

On August 2, 2012, the Local Partnership entered into a purchase agreement to sell The Chestnut Apartments for $5,440,000. The Partnership’s investment basis in this Local Partnership at September 30, 2012 and December 31, 2011 was $1,122,194 and $956,356, respectively. The Partnership expects to receive $3,466,861 as a result of the sale. The sale is expected to close during the fourth quarter of 2012.

Westwood Village

On August 2, 2012, the Local Partnership entered into a purchase and sale agreement to sell Westwood Village for $3,085,000. The Partnership’s investment basis in this Local Partnership at September 30, 2012 and December 31, 2011 was $322,491 and $155,120, respectively. The Partnership expects to receive $2,113,863 as a result of the sale. The sale is expected to close during the second quarter of 2013.

d. Completed Sales

Hillview Terrace

On September 27, 2012, the Partnership sold its limited partner interest in Traverse City Elderly, LP, which owns the Hillview Terrace Apartments, for $299,990. In accordance with the terms of the Partnership Agreement, in September 2012, the Managing General Partner paid a disposition fee of $92,000 related to the sale. The net proceeds received as a result of the sale was $207,990. The Partnership’s investment basis at the date of sale and December 31, 2011 was $0. Net acquisition fees and property purchase costs netted against the gain on disposition of investment in partnership at September 30, 2012 were $7,465.

e. Investment Reconciliation

The following is a reconciliation of investments in partnerships at September 30, 2012.

Investments in partnerships at December 31, 2011:	$	5,297,827

Share of income from partnerships		1,006,103

Investments in partnerships at September 30, 2012:	$	6,303,930

- 9 -

CAPITAL REALTY INVESTORS, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

(Unaudited)

4. RELATED PARTY TRANSACTIONS

In accordance with the terms of the Partnership Agreement, the Partnership is obligated to reimburse the Managing General Partner or its affiliates for certain direct expenses and payroll expenses in connection with managing the Partnership. Payroll expenses are reimbursed at a factor of 1.75 times base salary. For the three and nine month periods ended September 30, 2012, the Partnership paid $27,147 and $74,964, respectively, and $33,214 and $115,611 for the three and nine month periods ended September 30, 2011, respectively, to the Managing General Partner or its affiliates as direct reimbursement of expenses incurred on behalf of the Partnership. In addition, certain employees of the Managing General Partner provided legal and tax accounting services to the Partnership. These are reimbursed comparable to third party service charges. For the three and nine month periods ended September 30, 2012, the Partnership paid $38,653 and $114,377, respectively, and $12,999 and $57,362 for the three and nine month periods ended September 30, 2011, respectively, to the Managing General Partner or its affiliates for these services. Such reimbursed expenses are included in the accompanying statements of operations as general and administrative expenses.

In accordance with the terms of the Partnership Agreement, the Partnership is obligated to pay the Managing General Partner an annual incentive management fee (“Management Fee”) after all other expenses of the Partnership are paid. The Partnership paid the Managing General Partner a Management Fee of $23,802 for each of the three month periods ended September 30, 2012 and 2011, and $71,406 for each of the nine month periods ended September 30, 2012 and 2011.

In accordance with the terms of the Partnership Agreement, in September 2012, the Managing General Partner paid a disposition fee equal to 5% of the proceeds received from the sale of Hillview Terrace. The disposition fee of $92,000 is netted against the related gain on disposition of investment in partnerships.

5. CASH DISTRIBUTIONS

During the three and nine month periods ending September 30, 2012, no distributions to partners were made or authorized.

6. CASH CONCENTRATION RISK

Financial instruments that potentially subject the Partnership to concentrations of risk consist primarily of cash. The Partnership maintains two cash accounts at SunTrust Bank and three cash accounts at Eagle Bank. As of September 30, 2012, the uninsured portion of the cash balances was $1,535,450.

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CAPITAL REALTY INVESTORS, LTD.

NOTES TO CONDENSED FINANCIAL STATEMENTS

September 30, 2012 and 2011

(Unaudited)

7. SIGNIFICANT SUBSIDIARIES

The following Local Partnership invested in by the Partnership represents more than 20% of the Partnership’s total assets or equity as of September 30, 2012 and 2011 or net income for the nine month periods ended. The following financial information represents the performance of this Local Partnership for the nine month periods ended September 30, 2012 and 2011. The combined statements have been compiled from information supplied by the management agents of the Local Partnership properties and are unaudited.

Capitol Commons	2012	2011
Total Assets	$4,984,504	$4,819,098
Total Liabilities	304,151	1,124,832
Revenue	1,804,546	1,802,758
Net Income	686,694	614,442

8. SUBSEQUENT EVENTS

Events that occur after the balance sheet date but before the financial statements were available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at the balance sheet date are recognized in the accompanying financial statements. Subsequent events which provide evidence about conditions that existed after the balance sheet date require disclosure in the accompanying notes.

- 11 -

Part I.	FINANCIAL INFORMATION
Item 2.	Management's Discussion and Analysis of Financial Condition
	and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations section is based on the financial statements, and contains information that may be considered forward looking, including statements regarding the effect of governmental regulations. Actual results may differ materially from those described in the forward looking statements and will be affected by a variety of factors including national and local economic conditions, the general level of interest rates, governmental regulations affecting the Partnership and interpretations of those regulations, the competitive environment in which the Partnership operates, and the availability of working capital.

Critical Accounting Policies and Estimates

The Partnership has disclosed its selection and application of significant accounting policies in Note 1 of the notes to financial statements included in the Partnership’s annual report on Form 10-K at December 31, 2011. The Partnership accounts for its investments in partnerships (Local Partnerships) by the equity method because the Partnership is a limited partner in the Local Partnerships. As such the Partnership has no control over the selection and application of accounting policies, or the use of estimates, by the Local Partnerships. Environmental and operational trends, events and uncertainties that might affect the properties owned by the Local Partnerships would not necessarily have a significant impact on the Partnership’s application of the equity method of accounting, since the equity method has been suspended for three Local Partnerships which have cumulative losses in excess of the amount of the Partnership’s investments in those Local Partnerships. The Partnership reviews property assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. Recoverability is measured by a comparison of the carrying amount of an asset to the estimated future net cash flows expected to be generated by the asset. If an asset were determined to be impaired, its basis would be adjusted to fair value through the recognition of an impairment loss.

Generally accepted accounting principles (GAAP) in the United States provides guidance on when a company should include the assets, liabilities, and activities of a variable interest entity (VIE) in its financial statements and when it should disclose information about its relationship with a VIE. Generally, a variable interest entity, or VIE, is an entity with one or more of the following characteristics: (a) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) as a group the holders of the equity investment at risk lack (i) the ability to make decisions about an entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the equity investors have voting rights that are not proportional to their economic interests and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately few voting rights. The primary beneficiary of a VIE is generally the entity that will receive a majority of the VIE’s expected losses, receive a majority of a VIE’s expected residual returns, or both.

The Partnership does not consolidate the Partnership's interests in these VIE’s under this guidance, as it is not considered to be the primary beneficiary. Accounting guidance requires continued reconsideration as to the consideration of the primary beneficiary. The Partnership currently records the amount of its investment in these partnerships as an asset on its balance sheet, recognizes its share of partnership income or losses in the statements of operations, and discloses how it accounts for material types of these investments in its financial statements.

The Partnership’s balance in investment in Local Partnerships represents its maximum exposure to loss. The Partnership’s exposure to loss on these partnerships is mitigated by the condition and financial performance of the underlying properties as well as the strength of the local general partners.

- 12 -

Part I.	FINANCIAL INFORMATION
Item 2.	Management's Discussion and Analysis of Financial Condition
	and Results of Operations - Continued

Financial Condition/Liquidity

The Partnership's liquidity, with unrestricted cash resources of $2,003,865 as of September 30, 2012, along with anticipated future cash distributions from the Local Partnerships, is expected to be adequate to meet its current and anticipated operating cash needs. As of November 15, 2012, there were no material commitments for capital expenditures.

The Partnership closely monitors its cash flow and liquidity position in an effort to ensure that sufficient cash is available for operating requirements. For the nine month period ended September 30, 2012, existing cash resources were adequate to support net cash used in operating activities. Cash and cash equivalents decreased $191,002 during the nine month period ended September 30, 2012, primarily due to operating costs.

Results of Operations

The Partnership recognized an increase in the net income of $122,863 for the three month period ended September 30, 2012 as compared to 2011, primarily due to the gain recorded as a result of the Partnership’s sale of the limited partner interest in the Local Partnership which owns Hillview Terrace.

The Partnership recognized an increase in the net income of $301,177 for the nine month period ended September 30, 2012 as compared 2011, primarily due to an increase in the share of income from Local Partnerships and the gain recorded as a result of the Partnership’s sale of the limited partner interest in the Local Partnership which owns Hillview Terrace.

For financial reporting purposes, the Partnership, as a limited partner in the Local Partnerships, does not record losses from the Local Partnerships in excess of its investment to the extent that the Partnership has no further obligation to advance funds or provide financing to the Local Partnerships. As a result, the Partnership's share of income from Local Partnerships for the three and nine month periods ended September 30, 2012, did not include income of $42,096 and $88,504, compared to excluded losses of $238,562 and $428,424 for the three and nine month periods ended September 30, 2011, respectively.

No other significant changes in the Partnership's operations have taken place during the three month period ended September 30, 2012.

Certain states may assert claims against the Partnership for failure to withhold and remit state income tax on operating profit or where the sale(s) of property in which the Partnership was invested failed to produce sufficient cash proceeds with which to pay the state tax and/or to pay statutory partnership filing fees. The Partnership is unable to quantify the amount of such potential claims at this time. The Partnership has consistently advised its Partners that they should consult with their tax advisors as to the necessity of filing non-resident returns in such states with respect to their proportional taxes due.

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Part I.	FINANCIAL INFORMATION
Item 4.	Controls and Procedures

a) Disclosure Controls and Procedures.

The Partnership’s management, with the participation of the principal executive officer and principal financial officer of the Managing General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. A control system, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the control system are met. Based on such evaluation, the principal executive officer and principal financial officer of the Managing General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures are effective.

b) Changes in Internal Control Over Financial Reporting.

There has been no change in the Partnership’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

Part II.	OTHER INFORMATION
Item 1.	Legal Proceedings

The Partnership is unaware of any pending or outstanding litigation involving it or the underlying investment property of the Local Partnerships in which the Partnership invests that are not of a routine nature arising in the ordinary course of business or that would have a material adverse effect on the business.

Item 5.

Other Information

There has not been any information required to be disclosed in a report on Form 8-K during the quarter ended September 30, 2012, but not reported, whether or not otherwise required by this Form 10-Q at September 30, 2012.

There is no established market for the purchase and sale of units of limited partner interest (Units) in the Partnership, although various informal secondary market services exist. Due to the limited markets, however, investors may be unable to sell or otherwise dispose of their Units.

On June 16, 2012, the Partnership issued a press release regarding an unsolicited tender offer commenced by Equity Resource Concord Fund LLC to purchase up to 295 Units in the Partnership.

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Part II.	OTHER INFORMATION
Item 6.	Exhibits

Exhibit No.

Description

31.1		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32		Certification of Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99		Press Release dated June 16, 2012 Press Release dated June 21, 2012

All other items are not applicable.

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SIGNATURE

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CAPITAL REALTY INVESTORS, LTD.
	(Registrant)

	by:	C.R.I., Inc.
		Managing General Partner



		by:	/s/ H. William Willoughby
			H. William Willoughby
November 13, 2012			Director, President, Secretary,
DATE			Principal Financial Officer and
			Principal Acount Officer

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CAPITAL REALTY INVESTORS LTD 10-Q