SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549

                                FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE
ACT OF 1934


For the quarterly period ended:

                              MARCH 31, 1998

                                    OR

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 33-22805


MASTER REALTY PROPERTIES, INC.
(Exact name of registrant as specified in its charter)

          Delaware                         48-1056392
          (State of jurisdiction of        (I.R.S. Employer
          incorporation or organization)   Identification No.)

          712 Broadway, Suite 700
          Kansas City, Missouri 64105
          (Address of principal offices)  (Zip Code)

     Registrant's telephone number, including area code:(816) 474-9333


     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 for the preceding 12 months (or 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     No X_

     As of March 31, 1998, the Registrant had 2,491,622 shares of preferred
stock and 32,888,208 shares of common stock outstanding.  The aggregate book
value of all shares of the Registrant, based on the March 31, 1998 unaudited
financial statements was $15,066,989.
<PAGE>
                      MASTER REALTY PROPERTIES, INC.
                         MARCH 31, 1998 FORM 10Q
                                INDEX




Part I: Financial Statements

     Financial Statements*

A.  Balance Sheets as of March 31, 1998 and December 31, 1997       3-4

B.  Statement of Operations for the three months Ended 
    March 31, 1998 and 1997                                           5

C.  Statement of Changes in Shareholders' Equity for the 
    three months ended March 31, 1998 and 1997                        6

D.  Statement of Cash Flows for the three months ended 
    March 31, 1998 and 1997                                           7

Notes to Unaudited Financial Statements                            8-16

Management's Discussion and Analysis of 
Financial Condition and Results of Operations                        17

Signatures                                                           19

* All financial statements, except the balance 
sheet as of December 31, are unaudited

                      MASTER REALTY PROPERTIES, INC.
                           AND SUBSIDIARIES

                       CONSOLIDATED BALANCE SHEETS

                    March 31, 1998 and December 31, 1997


                                            March 31,      December 31,
                                              1998             1997

                                A S S E T S

CASH                                       $ 1,664,761     $  2,348,692

RESTRICTED CASH                                373,874          294,866

MORTGAGE NOTES RECEIVABLE, 
net of allowance for loan losses             1,023,881        2,829,615

NOTE RECEIVABLE                                221,531          193,460

PROPERTY HELD FOR INVESTMENT                 1,000,000        1,000,000

INVESTMENT IN REAL ESTATE PARTNERSHIPS         188,458          188,938

INTEREST RECEIVABLE                              5,425            ---

ACCOUNTS RECEIVABLE                          1,551,943        1,155,214

INDUSTRIAL REVENUE BONDS                       276,452          276,452

PROPERTY AND EQUIPMENT, 
at cost less accumulated depreciation       43,006,869       37,638,765

OTHER ASSETS                                 1,384,162        1,267,660
                                           -----------      -----------

                    TOTAL ASSETS           $50,697,356      $47,193,662
                                           ===========      ===========
<PAGE>
                           MASTER REALTY PROPERTIES, INC.
                                 AND SUBSIDIARIES

                      CONSOLIDATED BALANCE SHEETS (Continued)

                      March 31, 1998 and December 31, 1997

                                            March 31,      December 31,
                                              1998             1997

                           L I A B I L I T I E S

NOTES PAYABLE                              $ 34,258,555    $  30,842,693

OTHER LIABILITIES                             1,025,594        2,037,553

                                           ------------    -------------

          TOTAL LIABILITIES                $ 35,284,149    $  32,880,246
                                           ============    =============

MINORITY INTEREST IN SUBSIDIARIES               346,218          515,960

COMMITMENTS AND CONTINGENCIES (Note 16)


                  S T O C K H O L D E R S'   E Q U I T Y

CAPITAL CONTRIBUTED
     Convertible preferred stock, par 
     value $.01, liquidation preference 
     up to 5% of the Company's net assets, 
     authorized 2,500,000 shares                 24,916           24,916

     Common stock, par value $.01, 
     authorized 45,000,000 shares               328,881          291,814

     Additional paid-in capital              41,539,801        40,926,229
                                            -----------       -----------

          TOTAL CAPITAL CONTRIBUTED          41,893,598        41,242,959

RETAINED DEFICIT                            (26,811,273)      (27,430,67)

TREASURY STOCK, 67,990 shares of common 
     stock, and 475 shares of preferred 
     stock                                      (15,336)         (15,336)
                                            ------------       ----------

          TOTAL STOCKHOLDERS' EQUITY         15,066,989        13,797,456
                                            ------------       ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 50,697,356       $ 47,193,662

<PAGE>
                           MASTER REALTY PROPERTIES, INC.
                                AND SUBSIDIARIES

                       CONSOLIDATED STATEMENTS OF OPERATIONS

                    Three Months Ended March 31, 1998, and 1997

                                               1998            1997

REVENUES
     Rental income                         $    843,115     $   666,262
     Hotel Income                               696,000         576,774
     Interest and fees on mortgage loans         27,515           5,131
     Other income (loss)                         41,080          45,100
     Gain on sale of assets                      81,884
                                           ------------     -----------

          TOTAL REVENUES                   $  1,689,594     $ 1,293,267
                                           ============     ===========

EXPENSES
     Loan Servicing Fees                   $      7,945           9,363
     Rental expenses                            366,747         368,637
     General and administrative expenses        101,776         227,888
     Legal and accounting                       125,714          68,163
     Payroll and employee benefits              139,426         131,078
     Depreciation and amortization              381,467         222,183
     Interest expense                           570,991         642,925
     Provision for loan losses (recoveries)    (623,366)       (300,538)
                                            -----------     ------------

          TOTAL EXPENSES                   $ 1,070,700      $ 1,369,699
                                            -----------     -----------

MINORITY INTEREST IN LOSS (INCOME) OF
CONSOLIDATED SUBSIDIARIES                                         2,971

          NET INCOME                           618,894          (79,403)
                                           ===========      ============

BASIC EARNINGS PER SHARE                       0.0175           (0.003)

DILUTED EARNINGS PER SHARE                     0.015            (0.002)
<PAGE>
                        MASTER REALTY PROPERTIES, INC.
                              AND SUBSIDIARIES
                  STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

                   Three Months Ended March 31, 1998 and 1997

                                   PREFERRED   PREFERRED    COMMON    COMMON
                                     STOCK       STOCK       STOCK     STOCK
                                    SHARES      AMOUNT      SHARES    AMOUNT

Balances, December 31, 1996        2,491,622     24,916    1,308,669  155,546
Debenture Conversion to Stock                             18,728,793   44,828
                                   ---------    -------   ----------  -------
Balances, March 31, 1997           2,491,622     24,916   20,037,462  200,374
                                   =========    =======   ==========  =======

Balances, December 31, 1997        2,491,622     24,916   29,181,486  291,814

Debenture Conversion to Stock                                413,527    4,135
Unsecured Director's Fees 
   Converted to Stock                                        282,738    2,827
Pension Plan Stock Conversion                                863,095    8,631
Stock Bonus                                                2,147,362   21,474
                                   ---------    -------   ----------  -------
Balances, March 31, 1998           2,491,622     24,916   32,888,208  328,881
                                   =========    =======   ==========  =======



                           CAPITAL IN                            TOTAL
                         EXCESS OF PAR  UNDISTRIBUTED TREASURY SHAREHOLDER'S
                             VALUE     EARNINGS (DEF)   STOCK     EQUITY

Balances, Dec. 31, 1996   38,587,104   (28,937,294)              9,830,272
Debenture Conversion 
   to Stock                  959,318                             1,004,146
Net Income for the Period                  (79,403)
Treasury Stock               (15,336)                              (15,336)
                           ----------  ------------   --------- -----------
Balances, March 31, 1997  39,531,086   (29,016,697)            (10,739,679)
                          ==========   ===========    ========= ===========

Balances, Dec. 31, 1997   40,926,229   (27,430,167)    (15,336) 13,797,456

Debenture Conversion 
   to Stock                   88,495                                92,630
Unsecured Director's Fees     
   Converted to Stock         16,173                                19,000
Pension Plan Stock 
   Conversion                 49,369                                58,000
Stock Bonus                  459,535                               481,009
Net Income for the Period                  618,894
                           ----------  ------------   --------- ----------
Balances, March 31, 1998  41,539,801   (26,811,273)    (15,336)  15,066,989
                          ==========   ===========    ========= ===========
<PAGE>
                      MASTER REALTY PROPERTIES, INC.
                           AND SUBSIDIARIES

                  CONSOLIDATED STATEMENTS OF CASH FLOWS

                Three Months Ended March 31, 1998 and 1997


                                                     1998             1997

CASH FLOWS FROM OPERATING ACTIVITIES
     Net income (loss)                            $   618,894    $  (79,403)
     Adjustments to reconcile net income 
         to net cash provided by (used in) 
         operating activities
         Minority interest                           (169,742)       (2,971)
               Interest receivable                    (5,425)        5,425
               Accounts receivable                   (396,729)   (1,245,795)
               Prepaid Expenses                                      (3,002)
               Other assets, net                    (116,502)      692,343
               Increase (decrease) in 
                  operating liabilities
               Other liabilities                    (474,004)       42,728
               Prepetition liabilities                (13,770)      (71,728)
               Interest payable                       126,454       (56,968)
                                                 ------------     ----------
NET CASH PROVIDED BY (USED IN) 
     OPERATING ACTIVITIES                            (430,824)     (719,371)
                                                 ------------     ----------

CASH FLOWS FROM INVESTING ACTIVITIES
     Increase mortgage notes receivable            1,777,663        73,345
     Acquisition of real estate partnerships              480      (399,895)
     Increase in fixed assets                      (5,368,104)     (114,041)
                                                 ------------     ----------


NET CASH USED IN INVESTING ACTIVITIES           $  (3,589,961)   $ (440,591)

CASH FLOW FROM FINANCING ACTIVITIES
     Increase (Decrease) in notes 
        payable - related
     Increase in notes payable                  $   3,415,862    $   (1,419)
                                                 ------------     ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES       $   3,415,862    $   (1,419)
                                                 ------------     ----------

NET INCREASE (DECREASE) IN CASH                      (604,923)   (1,161,381)

CASH, BEGINNING OF PERIOD                          2,643,558     3,855,754

CASH, END OF PERIOD                             $  2,038,635    $2,694,373
<PAGE>
(1)  Restricted cash and escrows

The Company entered into a Cash Management, Collateral and Security Agreement
(Cash Collateral Agreement), on December 19, 1997, as part of the First
Mortgage Note and Mezzanine Note transactions.  As a result, all cash
received from the operations of the collateral pledged for the First Mortgage
Note, after December 19, 1997, is deposited into a central operating account. 
A monthly sweep of this account is used to fund, in priority, certain
reserves and sub-accounts created pursuant to the Cash Collateral Agreement. 
All remaining funds, if any, are paid to the Company.  The following reserves
were established under this agreement.

                                         March 31, 1998     December 31, 1997

Debt service reserve                       $147,271             $146,000
Capital expenditure reserve                 163,079               91,035
Impound costs sub-account                   122,313               57,831
                                           --------             --------
Total restricted cash and escrows          $432,663             $294,866
                                           ========             ========

Debt service reserve - This account was created to fund the First Mortgage
Note debt service to the extent necessary.  Withdrawals from this account
occur only when there are insufficient funds in the central operating account
to fully fund the First Mortgage Note debt service.

Capital expenditure reserve - This account was created to fund the payment of
replacement expenditures, furniture, fixtures and equipment replacement
expenditures and leasing expenditures.  Funding is provided in monthly
deposits from the central operating account.  Withdrawals may be made from
this account for approved expenditures.

Impound costs sub-account - This account was established to pay impound
costs.  These impound costs are defined as all taxes of the First Mortgage
Note borrowers and insurance (if insurance not otherwise provided for by the
Company) for the pledged collateral of the First Mortgage Note.  Funding is
provided in monthly deposits from the central operating account.  Withdrawals
may be made from this account for approved costs.

The Cash Collateral Agreement is secured by a pledge of the central operating
account and all income derived from the investment of that account.  The
First Mortgage Note and Mezzanine Note are also cross-collateralized and
cross-defaulted with the Cash Collateral Agreement.
<PAGE>
(2)  Mortgage notes receivable

                                         March 31, 1998     December 31, 1997

Mortgage notes receivable, 
   partially-earning                       $2,692,590           $6,521,108
Allowance for losses                       (1,668,709)          (3,691,493)
                                           ----------            ---------
Net mortgage notes receivable              $1,023,881           $2,829,615
                                           ==========           ==========

Mortgage notes receivable are collateralized by real estate, assignment of
rents, certain future earnings of borrowers, other borrower assets, investor
notes and borrower personal guarantees.  The collateralized real estate is
located at various geographical locations, with a concentration in a downtown
area of Kansas City, Missouri.  A substantial portion of the Company's
debtors' ability to honor their contracts is dependent upon the real estate
economy.  Effective February 1, 1998, the Company converted its partially-
earning mortgage note receivable with a net carrying value of $1,748,633 into
a partnership investment (see Note 13).

Due to the uncertainty of future collections and possible foreclosures, it is
not practicable to estimate the scheduled maturities of mortgage notes
receivable over the next five years and thereafter.

(3)  Property held for investment

                                         March 31, 1998     December 31, 1997

Non-earning, land in New Mexico            $1,000,000           $1,000,000
                                           ==========           ==========

The carrying amount of the land in New Mexico is based on an estimate of
value established at the time the contractual right to the property was
acquired in foreclosure on collateral for a note receivable.  The estimate
was based on prior appraisals, studies of the development possibilities for
the property, and local economic conditions.  The land is in a remote part of
New Mexico and access to the property is limited.  There is limited real
estate sales activity in this region to determine the likelihood of realizing
the carrying value of this investment.  Because of these factors, it is
possible that the estimate of the realizable value of this land may change
materially.
<PAGE>
(4)  Investment in real estate partnerships

Investment in real estate partnerships consists of the following:

                                                              Ownership %
                                           Ownership            at March
                                            Interest         1998    1997

OPP IX, Limited Partnership                 Limited          25.12%   24.9%
OPP X, Limited Partnership                  Limited            2.3%    2.3%
Historic Suites of America - KC             Limited           19.8%   19.8%

The Company acquired an additional 10 limited partnership units in OPP IX on
January 7, 1998.


(5)  Accounts receivable - related party

Amounts due from Embassy Hotel Management, Inc. are in connection with the
leases and funds advanced for operations of the following hotel properties:

                                         March 31, 1998     December 31, 1997

Ramada Inn - Phoenix, Arizona            $  395,085         $  353,085
Ramada Inn - Euless, Texas                  561,714            525,755
Historic Suites - Kansas City, Missouri     114,479            114,479
Holiday Inn - Wichita, Kansas               118,824            118,824
                                           --------           --------
Total                                    $1,190,102         $1,112,143
                                         ==========         ==========

(6)  Industrial revenue bonds

As disclosed in Note 12 the Company is contingently liable as a guarantor on
Industrial Revenue Bonds (Soho Office Center Project) Series 1996 between the
Land Clearance for Redevelopment Authority of Kansas City (the Issuer) and
Soho Office Center, L.P. (the Borrower).  The Company owned the bonds, which
totaled $2,655,000 as part of a note receivable, and distributed $2,345,000
in 1996, and $33,548 in 1997 in satisfaction of certain notes payable
obligations. The Company sold all of its remaining bonds in April 1998 at
their face value.

(7)  Property and equipment

                                         March 31, 1998     December 31, 1997
Cost
   Land and land improvements              $ 6,869,699          $ 6,880,699
   Building and building improvements       34,956,801           30,750,746
   Furniture and equipment                   4,305,812            2,840,758
                                           -----------          -----------
Total Cost                                 $46,132,312          $40,472,203
   Accumulated depreciation                 (3,125,443)          (2,833,438)
                                           -----------          -----------
Net property, plant and equipment          $43,006,869          $37,638,765
                                           ===========          ===========
<PAGE>
Expenditures for maintenance, repairs and improvements which do not
materially extend the useful life of the asset are expenses.  The aggregate
depreciation charged to operations for the period ended March 31, 1998 and
1997 was $320,119 and $114,483, respectively.

(8)  Notes payable

                                         March 31, 1998     December 31, 1997

Salomon Brothers mortgage note            $19,622,617          $19,675,000
Salomon Brothers Mezzanine note               930,000              930,000
Salomon Brothers
   Tranche A                                     -                    -
   Tranche B                                     -                    -
Midland Bank mortgage note                  7,249,997             7,249,997
Hillcrest Bank                              3,600,000
Convertible subordinated debentures         1,546,203             1,646,534
Alternative treatment plan                       -                    -
Unsecured alternative treatment note        1,016,331               994,430
Unsecured non-interest bearing note payable   158,975               174,406
Real estate tax notes                         111,388               147,890
Hotel van loan                                 23,044                24,436
                                          ----------             ----------
Total notes payable                       $34,258,555           $30,842,693

Salomon Brothers mortgage note - Mortgage note payable (First Mortgage Note)
of December 19, 1997 with monthly principal and interest payments of $145,397
based on an interest rate of 7.5% and a 25-year amortization period.  The
initial payment of accrued interest only through January 31, 1997 was paid on
February 1, 1998.  The outstanding principal and interest are due at maturity
on January 1, 2008.  The nonrecourse First Mortgage Note is collateralized by
commercial, residential and hotel properties in Kansas City, Missouri, a
hotel in Phoenix, Arizona and a hotel in Euless, Texas.  This note is also
cross-collateralized and cross-defaulted with the Mezzanine Note and the Cash
Collateral Agreement.

Salomon Brothers Mezzanine note - Mortgage note payable (Mezzanine Note) of
December 19, 1997 with interest payable monthly based upon the one-month
London Interbank Offered Rate (LIBOR) plus 4.95%.  The interest rate at
December 31, 1997 was 10.92% with the initial payment due February 1, 1998. 
Monthly principal payments begin in January 1999 based upon a monthly
calculation using the outstanding principal balance, the interest rate from
the preceding month and a 48-month amortization period less the months
elapsed since January 1, 1999.  The outstanding principal and interest are
due at maturity on January 1, 2003.  The Mezzanine Note is secured by the
pledge of the Company's general partner interest in New Historic Suites
Partners, L.P. and a full payment guaranty by the Company.  The Mezzanine
Loan Agreement requires that the monthly aggregated Adjusted Property Net
Cash Flow for the properties securing the First Mortgage Note to at least
equal the monthly calculation of the Debt Service Coverage Threshold.  The
Debt Service Coverage Threshold is defined as 1.05 times the sum of the
annual debt service on the First Mortgage Loan plus the debt service payable
on the Mezzanine Loan at an assumed principal and interest constant of 27%. 
This note is cross-collateralized and cross-defaulted with the First Mortgage
Note and the Cash Collateral Agreement.

Salomon Brothers Tranche A - Mortgage note payable (Tranche A) of December
11, 1996 with interest payable monthly based upon the one-month London
Interbank Offered Rate (LIBOR) plus 3.75%.  The rate at December 31, 1996 was
9.35% with the initial payment due February 5, 1997.  Payments are contingent
on the availability of net operating income (NOI) generated by the collateral
less priority funding of certain reserves.  The outstanding principal and
interest is due at maturity, December 5, 1998.  The nonrecourse note was
collateralized by various property and equipment and the related restricted
cash and reserve accounts.  The note was refinanced in December 1997.

Salomon Brothers Tranche B - Mortgage note payable (Tranche B) of December
11, 1996 with interest payable monthly based upon the one-month London
Interbank Offered Rate (LIBOR) plus 3.75%.  The rate at December 31, 1996 was
9.35% with the initial payment due February 5, 1997.  Payments were
contingent on the availability of net operating income generated by the
collateral less priority funding of certain reserves.  Also, any remaining
net operating income from the note collateral after payment of its debt
service was available to fund these payments.  The outstanding principal and
interest is due at maturity, December 5, 1998.  The nonrecourse note was
collateralized by commercial properties in Kansas City, MO and the related
restricted cash and reserve accounts, a full payment guaranty by the Company
and a pledge of the Company's general partner interest in New Historic Suites
Partners, L.P.  The note was refinanced in December 1997.

Midland Bank mortgage note - Mortgage note payable of October 1, 1997 with
interest payable monthly at an initial rate of 7% until April 1, 1999.  The
rate then increases to 8% through March 31, 2001 and to 8.5% from April 1,
2001 until maturity.  Interest only is payable monthly through October 5,
1998.  The interest payments are based on the Deemed Balance (as defined)
determined annually beginning on April 1, 1999.  The initial Deemed Balance
is the face amount of the note.  From November 5, 1998 through October 5,
2000, monthly payments of principal and interest are based on a 30-year
amortization of the outstanding principal balance.  Beginning on November 5,
2000, the monthly principal and interest payments are based on a 25-year
amortization of the outstanding principal balance.  The outstanding principal
and interest are due at maturity on April 1, 2004.  The note is
collateralized by a hotel in Wichita, KS and the Disbursement Account
(required reserve account to fund property improvements).

Hillcrest Bank mortgage note -Mortgage note payable of February, 1998 with
interest and principal payable monthly at an interest rate of 9.25%. 
Principal is amortized based on a twenty year amortization.  All unpaid
principal and interest is due in February, 2000.  The Company has guaranteed
payment under this note.  The note may be renewed for an additional year.

Convertible subordinated debentures - Convertible Subordinated Debentures
issued January 1994.  The securities were issued in the initial aggregate
principal amount of $9,127,752, and bear interest at the rate of 6% per
annum.  Interest accrues semiannually on January 1 and July 1 of each year. 
The securities mature December 2003.  At any time prior to maturity, the
securities are convertible into shares of common stock of the Company, unless
the securities are called for redemption.  The number of shares issuable upon
conversion is based on the Company's book value of $.224/share as of the
December 31, 1993 financial statements. Related accrued interest expense is
not subject to conversion to common stock and the liability is eliminated
upon conversion of the debenture principal.  Accrued interest eliminated upon
conversion of debentures during the periods ended March 31, 1998 and 1997
amounted to $92,630 and $50,393, respectively.  The securities are
subordinate and junior in right of payment to all senior indebtedness of the
Company (which includes all collateralized debt of the Company).  Senior
Indebtedness is to be paid in full before holders of the Subordinated
Debentures are to be paid any principal or interest.

Alternative treatment plan - As part of a previous reorganization plan,
certain individuals elected an Alternative Treatment Plan, whereby holders of
certain debentures elected the option to receive a direct loan participation
interest in a collateral pool loan involving the Ramada Inn in Phoenix, AZ. 
After December 31, 1994, the electing Alternative Treatment Plan participants
agreed to expand the collateral pool to include additional future investments
of the Company.  On the closing date of the Alternative Treatment Plan of
August 31, 1996, the participants elected to substitute the held debentures
totaling $3,062,162 for the collateral pool loan and to continue the ratable
collateral assignment of the Company's general partner revenues from a
limited partnership owning commercial property in Kansas City, MO.  During
1996, certain participants elected to receive specific Kansas City, MO
industrial revenue bonds owned by the Company totaling $2,345,000 which
reduced their Alternative Treatment at the closing date.  The remaining
Alternative Treatment participants were to be repaid in quarterly
installments including interest at 9% based upon a 20 year amortization with
unpaid principal and interest due at maturity in December 2003.  On September
1, 1997, the remaining alternative treatment participants agreed to release
their alternative treatment claim for an interest in an unsecured loan from
the Company which pays interest only at 9% quarterly until maturity in August
2000.

Unsecured alternative treatment note - 9% unsecured note payable to previous
participants in the alternative treatment plan, with interest only payable
quarterly until maturity in August 2000.

Unsecured non-interest bearing note payable - Note due September 2000,
payable in an installment of $75,000 on January 31, 1996 and 60 monthly
payments of $7,333 with the remaining unpaid principal due at maturity. 
Interest has been imputed at a rate of 9%.

Real estate tax note - Unsecured note payable consisting of an agreement with
the taxing authorities for delinquent real estate taxes on a foreclosed
property with interest imputed at 9% and monthly payments of $3,220.30 until
maturity on August 15, 2002.  On March 31, 1998 the Company sold a property
which was the subject of an unsecured real estate tax note.  This note was
paid off as part of the closing of this sale.

Hotel van loan - 9.25% note payable, collateralized by a vehicle, payable in
monthly installments of $646 until maturity in September 2001.

<PAGE>
(9)  Other liabilities

Other liabilities consist of the following:

                                         March 31, 1998     December 31, 1997

Interest payable                           $  126,454           $   -     
Accounts payable                              131,121              169,550
Accrued bonus pool                            296,398            1,324,113
Due to affiliates                             349,849              367,707
Other liabilities                             121,772              176,183
                                           ----------           ----------
                                           $1,025,594           $2,037,553
                                           ==========           ==========

At March 31, 1998 and December 31, 1997, other liabilities includes the
accrued bonus pool liability. The Company's bonus pool became effective June
15, 1994 to provide additional compensation to Company employees.  Bonus pool
expense charged to operations for the period March 31, 1997, was $178,000.

(10)  Treasury stock

During the year ended December 31, 1996, the Company acquired 67,990 shares
of preferred stock and 475 shares of common stock.  These shares were
obtained under a provision in the Company's Plan of Reorganization which
allowed  holders of convertible debentures over 65 years old to convert their
debentures into alternative treatment debt. Since no value was assigned to
the treasury stock, management has used $.224 per share as the cost of the
treasury stock acquired.

(11)  Business segment information

Description of the types of activities for reportable segments - The Company
has three reportable segments:  hotel leasing, residential/mixed use
properties, and assets held for restructure.  The hotel leasing segment
realizes rent income on Hotel properties leased to operators.  The
residential/mixed use properties segment realizes income from residential and
commercial real estate properties.  The assets held for restructure are
assets recovered as collateral on notes receivable for which the Company has
no long-term objective of owning and operating.

Revenue from segments below the quantitative thresholds are reported as all
other.  Those activities are predominantly non-recurring gains and losses. 
The assets in all other are predominantly administrative assets, intangible
assets, and assets held for long-term capital appreciation.

Measurement of segment profit or loss and segment assets - The accounting
policies of the segments are the same as those described in the summary of
significant accounting policies. The Company does not have intersegment sales
and transfers.

Factors management used to identify the enterprise's reportable segments -
The Company's reportable segments are strategic business units that are in
distinct markets consistent with the Company's long-range strategic business
plan.  They are managed separately because each business requires different
management practices.

The following table illustrates information concerning segment profit or loss
and segment assets:

                                   Residential/    Assets
                         Hotel      Mixed Use       For       All
Period ended 3-31-98    Leasing    Properties   Restructure  Other   Total

Revenues from 
   external customers  $ 696,000   $ 753,678    $ 89,437   $ 30,793 1,569,908
Interest revenue           7,049       1,002      23,058      6,693    37,802
                       ---------   ---------    --------   -------- ---------
Total revenues         $ 703,049   $ 754,680    $112,495   $ 37,486 1,607,710

Percentage of segment
   revenues to total       44%         47%          7%         2%       100%
Interest expense         211,723     157,297       2,892    199,078   570,990
Depreciation and
   amortization          235,094      82,815       7,073     56,484   381.466
Segment profit (loss)    256,232     342,128      30,596    (10,062)  618,894
Percentage of segment
   profit (loss) to total  41%         55%           5%        (1%)     100%

Other significant non-
   cash items:
   Convertible sub-
     ordinated debentures
     converted to
     common stock           -           -             -       92,630   92,630


March 31, 1998

Segment assets        27,219,197  16,489,789   2,086,148 4,902,222 50,697,356
Percentage of segment
   assets to total         53%        33%         4%        10%
Expenditures for
   segment assets        109,047   5,255,380       3,677     -      5,368,104

In addition to the above measures for business segments, the Company monitors
Funds from Operations (FFO) as defined by National Association of Real Estate
Investment Trusts (NAREIT).  Real Estate Investment Trusts use FFO as a
standard measure of operating performance.  FFO is defined by NAREIT as net
income (computed in accordance with generally accepted accounting
principles), excluding gains (or losses) from debt restructuring and sales of
property, plus depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures.  The calculation of FFO for
the Company for each operating segment is as follows:

<PAGE>
                                   Residential/    Assets
                         Hotel      Mixed Use       For       All
Period ended 3-31-98    Leasing    Properties   Restructure  Other   Total

Net income             $ 256,232   $ 342,128    $ 30,596   $(10,062) $618,894
Monthly interest           -           -            -          -        -
Less partnership
   investment income                                           (479)    (497)
                       ---------   ---------    --------   -------- ---------
Income before 
   minority interest   $ 256,232   $342,128     $ 30,596   $(10,541) $618,415

Add: Depreciation and
   amortization of 
   real estate assets    232,294     57,061        7,073     40,716   337,144

Less: Gain on sales
   of assets               -           -            -       (81,884) (81,884)

Less: Non-recurring
   items:  accrued
   interest expense
   foregone on 
   converted debentures                                     (25,653) (25,653)
                       ---------   ---------    --------   -------- ---------
Funds from operations  $ 488,526   $399,189      $ 37,669  $(77,362) $848,022
                       =========   ========      ========  ========= ========

(12)  Guaranty:

The Company is contingently liable as a guarantor on Industrial Revenue Bonds
(IRB's) (Soho Office Center Project) Series 1996 between the Land Clearance
for Redevelopment Authority of Kansas City (the Issuer) and Soho Office
Center, L.P. (the borrower) in the amount of $2,655,000.  The Series 1996
bonds were reissued to pay amounts due to the Company on Series 1984 Bonds. 
The Company entered into the Guarantor Agreement to effectuate the
transaction whereby these funds would be available to the Company.  The
Company has pledged collateral to secure the guaranty.  The collateral
consists of the Company's Deed of Trust and Security Agreement executed by
the borrower in favor of the Company on the Series 1984 Bonds, and assignment
on a ratable basis of General Partnership Interest of River Market Venture,
Inc. (a wholly owned subsidiary of the Company) in River Market Venture I,
L.P.

In 1996, the Company assigned the IRB's, which were originally part of a note
receivable, to the participants in the Company's Alternative Treatment Plan
who elected to receive them as reductions of their Alternative Treatment. 
The Company's guarantee and collateral remain in place for these bonds.

Minimum rents:

The Company receives income on commercial and residential properties under
noncancelable operating lease agreements expiring through 2001 in connection
with its rental operations.  Future minimum rental payments under these
leases as of December 31, 1997 are as follows:

<PAGE>
Years Ended December 31
   1998                                                $1,391,344
   1999                                                   380,903
   2000                                                   150,984
   2001                                                    50,610
   2002                                                    40,204
   Thereafter                                              37,225
                                                       ----------

Total                                                  $2,051,270
                                                       ==========

(13)  Acquisitions

On February 1, 1998, the Company acquired a 90% managing general partnership
interest in Soho West III, L.P. by converting its note receivable from the
partnership to an ownership interest. The Company is to receive all of the
partnership's distributions until certain returns to the Company have been
attained.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (dollars in thousands, unless otherwise stated):

Background:

     The following discussion compares historical results of operation for
the period ended March 31, 1998 and 1997.  The discussion should be read in
conjunction with the financial statements and notes thereto included
elsewhere in this report.

The Company:

    The Company is a public real estate investment trust that is primarily
engaged in the acquisition, development and operation of mixed use
apartment/commercial properties and the acquisition and development of hotel
properties.  The Company operates these leases either directly or through
subsidiaries or partnerships.

Results of Operations:

     Period Ended March 31,1998 Compared with Period Ended March 31, 1997

Rental Properties

     Revenue from rental properties increased by $176,853 for the three
months ended March 31, 1997 to March 31, 1998.  This increase was due to the
increases in rental rates in all of the Properties,  reduction in vacancies,
and the purchase of a mixed-use property in February, 1998.

     Rental expenses decreased from $368,637 at March 31, 1997 to $366,747 at
March 31, 1998.  This decrease of $1,890 was due to cost efficiencies
achieved in operating costs at the properties.

<PAGE>
Hotel Properties:

     Revenues from hotel lease income increased from $576,774 at March 31,
1997 to $696,000 for March 31, 1998.  This substantial increase was due to
the addition of a hotel property in October, 1997.

Other Revenues and Expenses:

     The Company continued to receive interest income on its remaining real
estate loans.  The amount received was $27,515 and $5,131 for March 31, 1998
and March 31, 1997 respectively.

     The Company disposed of a rental property on March 31, 1998 at a gain of
$81,884.

     The Company had a $126,112 decrease in general and administrative
expenses for the three months ended March 31, 998 compared to March 31, 1997. 
This decrease was entirely attributable to a decrease in the Company's bonus
pool for employees from March 31, 1997 to March 31, 1998.

     Interest expense decreased by $71,934 from $642,925 at March 31, 1997 to
$570,991 at March 31, 1998.  This decrease was due to the refinancing of the
Companies assets and the decline in interest attributed to debentures.

     The Company has continued to recover losses previously reserved related
to the Company's former loan portfolio.  The recovery for March 31, 1998 was
$623,362 compared to $300,538 for March 31, 1997.

Liquidity and Capital Resources:

     The Company had deficits in cash flow from both the operating and
investing activities which represented the payment of Company liabilities and
the acquisition of additional real estate assets.

     The Company had an increase in cash flows from financing activities
related to the debt financing of the acquisition of additional real estate
assets.

Funds from Operations:

     FFO is defined by the National Association of Real Estate Investment
Trusts ("NAREIT") as net income (loss) (computed in accordance with generally
accepted accounting principles) excluding gains (or losses) from debt
restructuring and sales of property, and distributions in excess of earnings
allocated to Minority Interest, plus depreciation/amortization of assets
unique to the real estate industry.  Depreciation/amortization of assets not
unique to the industry, such as amortization of deferred financing costs and
non-real estate assets, is not added back.  FFO does not represent cash flow
from operating activities in accordance with generally accepted accounting
principles (which, unlike FFO, generally reflects all cash effects of
transactions and other events in the determination of net income) and should
not be considered an alternative to net income as an indication of the
Company's performance or to cash flow as a measure of liquidity or ability to
make distributions.  The Company considers FFO a meaningful, additional
measure of operating performance because it primarily excludes the assumption
that the value of real estate assets diminishes predictably over time, and
because industry analysts have accepted it as a performance measure. 
Comparison of the Company's presentation of FFO, using the NAREIT definition,
to similarly title measures for other REITs may not necessarily be meaningful
due to possible differences in the application of the NAREIT definition used
by such REITs.

     The following reflects the FFO of the Company for the periods ended
March 31, 1998 and 1997.

                                       March 31, 1998    March 31, 1997

Net income (loss)                          $618,894         $(79,403)
Add minority interest                          -               2,971
Less partnership investment income             (497)
                                           ---------        ---------
Income before minority interest            $618,415         $(76,432)
Add depreciation and amortization
   of real estate assets                    337,144          152,427
Less non-recurring items: accrued
   interest expense foregone on
   converted debentures                     (25,653)
Gain on sale of assets                      (81,884)
                                           ---------        ---------
Funds from operations                      $848,022         $ 75,955
                                           ========         ========

<PAGE>
                                 SIGNATURES

     Pursuant to the requirements to the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



Dated:                        , 1998, MASTER REALTY PROPERTIES, INC.
       -----------------------


By:  --------------------------
     /S/ John J. Bennett, Chairman
     (Principal Executive Officer)



     --------------------------
     Thomas H. Trabon, Executive Vice President
     and Chief Financial Officer