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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                  FORM 10-Q/A


              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED JUNE 30, 1998
                                                            -------------

                          Commission File Number 1-9240



                     TRANSCONTINENTAL REALTY INVESTORS, INC.
             ------------------------------------------------------

             (Exact Name of Registrant as Specified in Its Charter)


               Nevada                                           94-6565852
 --------------------------------                           -----------------
 
 (State or Other Jurisdiction of                            (I.R.S. Employer
  Incorporation or Organization)                           Identification No.)



     10670 North Central Expressway, Suite 300, Dallas, Texas     75231
     ---------------------------------------------------------------------
     (Address of Principal Executive Office)                    (Zip Code)



                                 (214) 692-4700
                         -------------------------------
                         (Registrant'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 [ ].


                      APPLICABLE ONLY TO CORPORATE ISSUERS:


Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.


Common Stock, $.01 par value                               3,872,505
----------------------------                     ------------------------------
          (Class)                                (Outstanding at July 31, 1998)


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This Form 10-Q/A amends the Registrant's quarterly report on Form 10-Q for the
quarter ended June 30, 1998 as follows:


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - Liquidity and Capital Resources - page 13.
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                     TRANSCONTINENTAL REALTY INVESTORS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


NOTE 7. SUBSEQUENT EVENTS (Continued)

required escrows and the payment of various closing costs associated with the
refinancing. The new mortgage bears interest at 6.85% per annum, requires
monthly payments of principal and interest of $35,692 and matures in August
2005. The Company paid a mortgage brokerage and equity refinancing fee of
$54,000 to BCM based on the $5.4 million refinancing.

In July 1998, the Company collected a mortgage note receivable which had been
written off in a prior year as uncollectible. The Company will recognize a gain
of $671,000 on the collection of such note receivable.

                                   ----------

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

Introduction

Transcontinental Realty Investors, Inc. (the "Company") invests in real estate
through direct ownership, leases and partnerships and invests in mortgage loans,
including first, wraparound and junior mortgage loans. The Company is the
successor to a business trust which was organized on September 6, 1983 and
commenced operations on January 31, 1984.

Liquidity and Capital Resources

Cash and cash equivalents aggregated $7.1 million at June 30, 1998 compared with
$24.7 million at December 31, 1997. The Company's principal sources of cash have
been and will continue to be from property operations, proceeds from property
sales, the collection of mortgage notes receivable and borrowings. The Company
anticipates that its cash on hand, as well as cash generated from the collection
of mortgage notes receivable, sales of properties, borrowings against certain of
the Company's unencumbered properties and refinancing or extensions of certain
of its mortgage debt will be sufficient to meet all of the Company's cash
requirements including debt service obligations and expenditures for property
maintenance and improvements.

Net cash provided by operating activities decreased from $8.7 million for the
six months ended June 30, 1997 to $1.3 million for the six months ended June 30,
1998. The primary factors affecting the Company's cash from operations are
discussed in the following paragraphs.

The Company's cash flow from property operations (rents collected less payments
for property operating expenses) increased from $7.6 million for the six months
ended June 30, 1997 to $15.0 million for the six months ended June 30, 1998.
This increase is primarily due to the Company having acquired twenty-six income
producing properties in 1997 and 1998. The Company's management believes that
this trend will continue for the remainder of 1998 as the Company continues to
benefit from the acquired properties and increased rental rates and occupancy
rates at both the Company's apartments and commercial properties.

Interest collected decreased from $653,000 for the six months ended June 30,
1997 to $397,000 for the corresponding period in 1998. The decrease is due to
four mortgage notes receivable being paid in full in 1997.

Interest paid increased to $10.0 million for the six months ended June 30, 1998
from $7.4 million for the corresponding period in 1997.  The increase is due to
thirty properties acquired subject to debt and financings and refinancings
obtained on previously unencumbered properties during 1997 and 1998.

Advisory and net income fee payments increased from $904,000 for the six months
ended June 30, 1997 to $2.1 million for the corresponding period in 1998. The
increase is primarily due to the 1998 payment of the accrued fourth quarter 1997
net income fee of $1.0 million.  The net income fee is based on 7.5% of the
Company's net income.  The remainder of the increase is due to an increase in
the advisory fee paid, such increase is due to an increase in the Company's
gross assets, the basis of such fee.

In January 1997, the Company received an insurance settlement of $9.5 million
relating to 1995 hail storm and flood damage to the Republic Towers Office
Building in Dallas, Texas. No such amount was received during 1998.




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                                   SIGNATURES



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


                                      TRANSCONTINENTAL REALTY
                                      INVESTORS, INC.



Date:    January 27, 1999             By:  /s/ Randall M. Paulson
     ------------------------             ------------------------------
                                          Randall M. Paulson
                                          President



Date:    January 27, 1999             By:  /s/ Thomas A. Holland
     ------------------------             ------------------------------
                                          Thomas A. Holland
                                          Executive Vice President and
                                          Chief Financial Officer
                                          (Principal Financial and
                                           Accounting Officer)







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