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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 MARCH 31, 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      .
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                      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                            3,870,700
----------------------------                   -------------------------------
          (Class)                              (Outstanding at April 30, 1998)

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This Form 10-Q/A amends the Registrant's quarterly report on Form 10-Q for the
quarter ended March 31, 1998 as follows:


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS - LIQUIDITY AND CAPITAL RESOURCES - pages
10.
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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 $11.8 million at March 31, 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 $8.9 million for the
three months ended March 31, 1997 to use of cash of $147,000 for the three
months ended March 31, 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 $3.6 million for the three
months ended March 31, 1997 to $6.0 million for the corresponding period in
1998. This increase is primarily due to the Company having acquired twenty-two
income producing properties in 1997 and 1998 partially offset by the sale of
three income producing properties in 1997.

Interest collected decreased to $222,000 for the three months ended March 31,
1998 from $352,000 for the corresponding period in 1997. The decrease is due to
four mortgage notes receivable being paid in full in 1997.

Interest paid increased to $4.9 million for the three months ended March 31,
1998 from $3.7 million for the corresponding period in 1997. This $1.2 million
increase is due to 22 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 $414,000 for the three
months ended March 31, 1997 to $1.4 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.

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.

In the first three months of 1998, the Company paid dividends of $.15 per share,
or a total of $573,000. In January 1998, the Company also paid a special
dividend of $1.00 per share which was declared in December 1997.

The Company's Board of Directors has approved the Company's repurchase of a
total of 687,000 shares of its Common Stock. Through April 30, 1998, the Company
had purchased a total of 406,315 shares, for an aggregate purchase price of $3.3
million. The Company repurchased 10,500 shares at a total cost of $161,000 in
the first quarter of 1998.

In January 1998, the Company purchased (i) the Mountain Plaza, an apartment
complex in El Paso, Texas, for $4.0 million, consisting of $1.0 million in cash
and financing $3.0 million, (ii) the Junction, an apartment complex in Midland,
Texas, for $2.5 million, consisting of $600,000 in cash and purchase money
financing of $1.9 million, (iii) a 1.41 acre parcel of land in Dallas, Texas,
for $1.9 million in cash, and (iv) the Bent Tree Garden, an apartment complex in
Addison, Texas, for $8.1 million, consisting of $1.7 million in cash and
mortgage financing of $6.4 million.

In February 1998, the Company purchased (i) the Parkway North, an office
building in Dallas, Texas, for $5.4 million, consisting of $1.5 million in cash
and mortgage financing of $3.9 million, and (ii) a 2.14 acre parcel of land in
Dallas, Texas, for $3.4 million in cash.

In March 1998, the Company refinanced the mortgage debt secured by Tricon, eight
warehouses in Atlanta, Georgia. The Company received net

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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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