UNITED  STATES

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 June 30, 2001 | Commission        file number 2-89185 |
|---------------------------------------------------|---------------------------------------|

**GULLEDGE  REALTY INVESTORS II, L.P.**

| State      of Organization: **VIRGINIA** | I.R.S.        Employer Identification No. 54‐1191237 |
|------------------------------------------|------------------------------------------------------------|

**One North  Jefferson Avenue**

**St.  Louis, Missouri 63103**

Registrant's telephone number, including  area code: (314) 955‐4188

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 of 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 

INDEX

|          |                                                                 | PAGE |
|----------|-----------------------------------------------------------------|------|
| PART I.  | FINANCIAL INFORMATION:                                          |      |
|          | Balance Sheets          (Unaudited)                             | 1    |
|          | Statements of Operations          (Unaudited)                   | 2    |
|          | Statements of Changes          in Partners' Deficit (Unaudited) | 3    |
|          | Statements of Cash          Flows (Unaudited)                   | 4    |
|          | Notes to Financial          Statements (Unaudited)              | 5-8  |
|          | Management's Financial          Discussion                      | 9    |
|          |                                                                 |      |
| PART II. | OTHER INFORMATION                                               | 10   |
|          |                                                                 |      |
|          | SIGNATURES                                                      | 11   |

 

**Balance  Sheets****(Unaudited)**

| ASSETS                                                                                                                                                       |       June          30,                  2001       | December 31,                 2000       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|
|                                                                                                                                                              |                                                                                                                                                    |                                                                                                          |
| Cash and cash equivalents                                                                                                                                    |  $     60,546                                                                                                        |  $     14,740                                                              |
|                                                                                                                                                              |                                                                                                                                                    |                                                                                                          |
| Advances to Project          Partnerships                                                                                                                    |              769                                                                  |           6,751                                        |
|                                                                                                                                                              |                                                                                                                                                    |                                                                                                          |
| Investment in Project          Partnership (Note B)                                                                                                          |                                                                         |       254,246                                                              |
|                                                                                                                                                              |                                                                                                                                                    |                                                                                                          |
| Distributions Receivable                                                                                                                                     |                                                                         |         20,549                                                   |
|                                                                                                                                                              |                                                                                                                                                    |                                                                                                          |
|                                                                                                                                                              |                                                                                                                                                    |                                                                                                          |
|                   Total          Assets                            |  **$     61,315**                                                                                                    | ** $   296,286**                                                                     |
|                                                                                                                                                              |                                                                                                                                                    |                                                                                                          |
|                                                                                                                                                              |                                                                                                                                                    |                                                                                                          |
|                                                                                                                                                              |                                                                                                                                                    |                                                                                                          |
| LIABILITIES          AND PARTNERS' DEFICIT                                                                                                                   |                                                                                                                                                    |                                                                                                          |
|                                                                                                                                                              |                                                                                                                                                    |                                                                                                          |
| Accounts payable                                                                                                                                             |  $     16,600                                                                                                        |  $     10,200                                                              |
|                                                                                                                                                              |                                                                                                                                                    |                                                                                                          |
| Payable to affiliates                                                                                                                                        |       740,040                                                                                                        |       704,300                                                              |
|                                                                                                                                                              |                                                                                                                                                    |                                                                                                          |
| Notes payable and          accrued interest payable (Note B)                                                                                                 |    3,568,339                                                                                                                        |    3,723,543                                                                              |
|                                                                                                                                                              |                                                                                                                                                    |                                                                                                          |
| Capital contributions          payable                                                                                                                       |         50,000                                                                                             |         50,000                                                   |
|                                                                                                                                                              |                                                                                                                                                    |                                                                                                          |
|                   Total          Liabilities                       |    4,374,979                                                                                                                        |    4,488,043                                                                              |
|                                                                                                                                                              |                                                                                                                                                    |                                                                                                          |
| Partners' Deficit                                                                                                                                            |   (4,313,664)                                                                                                                            |   (4,191,757)                                                                                  |
|                                                                                                                                                              |                                                                                                                                                    |                                                                                                          |
|                   Total          Liabilities and Partners' Deficit | ** $     61,315**                                                                                                    | ** $   296,286**                                                                     |

See Notes to Financial Statements. 

**Statements  of Operations****(Unaudited)**

|                                                                                                                                      |        Three        Months Ended                March        31,             |        Six          Months Ended               June          30,          _     |
|--------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                      |      2001                                                                                                                                                                                                      |      2000                                                                                                                                                                                                              |      2001     |      2000     |
| Revenue:                                                                                                                             |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                     |  |  |
|                                                                                                                                      |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                     |  |  |
|       Interest        income                                                                           | $        195                                                                                                                                                                                                        | $      175                                                                                                                                                                                                                            | $        838 | $             1,065 |
|                                                                                                                                      |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                     |  |  |
|       Distributions                                                                                    |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                     |      87,911 |  |
|                                                                                                                                      |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                     |  |  |
|                Equity in (loss)/income                 of Project Partnership |       (7,975)                                                                                                                                                                                                                 |    51,188                                                                                                                                                                                                                                            |      32,324 |                82,441 |
|                                                                                                                                      |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                     |  |  |
|                                                                                                                                      |       (7,780)                                                                                                                                                                                                                 |    51,363                                                                                                                                                                                                                                            |    121,073 |                83,506 |
| Expenses:                                                                                                                            |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                     |  |  |
|                                                                                                                                      |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                     |  |  |
|       Asset          management fee                                                                    |      28,645                                                                                                                                                                                                                        |    28,645                                                                                                                                                                                                                                            |      57,290 |                57,290 |
|                                                                                                                                      |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                     |  |  |
|       Professional          fees                                                                       |        2,550                                                                                                                                                                                                             |      7,150                                                                                                                                                                                                                                 |        5,100 |                  4,667 |
|                                                                                                                                      |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                     |  |  |
|       Consulting          fees                                                                         |      11,000                                                                                                                                                                                                                        |    11,000                                                                                                                                                                                                                                            |      22,000 |                22,000 |
|                                                                                                                                      |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                     |  |  |
|       Operating          expenses                                                                      |           750                                                                                                                                                                                             |         750                                                                                                                                                                                                                 |        2,670 |                17,724 |
|                                                                                                                                      |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                     |  |  |
|       Interest          expense (Note B)                                                               |      77,529                                                                                                                                                                                                                        |    78,390                                                                                                                                                                                                                                            |    155,920 |              156,781 |
|                                                                                                                                      |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                     |  |  |
|                                                                                                                                      |      20,474                                                                                                                                                                                                                        |  125,935                                                                                                                                                                                                                                                       |    242,980 |              258,462 |
|                                                                                                                                      |                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                                     |  |  |
| Net loss                                                                                                                             | **$(128,254****)**                                                                                                                                                                                                                                          | **$(74,572****)**                                                                                                                                                                                                                                                   | **$(121,907****)** | **$(174,956****)** |

See Notes to Financial Statements.

**Statements  of Changes in Partners' Deficit****(Unaudited)**

**Six  Months Ended June 30, 2001 and 2000**

|                                                                                                                                   |       Total      |   General                                 |    Special   Limited   |     Limited        |
|-----------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------|---------------------------------------------------------------|----------------------------------------------------------------|------------------------------------------------------------|
|                                                                                                                                   |                                                                         |                                                               |                                                                |                                                            |
| Balances at January          1, 2000                                                                                              | $(3,882,659)                                                            |  $(51,330)                                               |  $(89,940)                                                | $(3,741,389)                                               |
|                                                                                                                                   |                                                                         |                                                               |                                                                |                                                            |
|       Net        loss for six months               ended June 30, 2000     |      (174,956)                                 |      (1,925)                         |      (3,324)                          |      (169,707)                    |
|                                                                                                                                   |                                                                         |                                                               |                                                                |                                                            |
| Balances at June          30, 2000                                                                                                | **$(4,057,615****)**                                                    | ** $(53,255)**                                           | ** $(93,264)**                                            | **$(3,911,096****)**                                       |
|                                                                                                                                   |                                                                         |                                                               |                                                                |                                                            |
| Balances at January          1, 2001                                                                                              | $(4,191,757)                                                            |  $(54,730)                                               |  $(95,813)                                                | $(4,041,214)                                               |
|                                                                                                                                   |                                                                         |                                                               |                                                                |                                                            |
|       Net          loss for six months                 ended June 30, 2001 |      (121,907)                                 |      (1,341)                         |      (2,316)                          |      (118,250)                    |
|                                                                                                                                   |                                                                         |                                                               |                                                                |                                                            |
| Balances at June          30, 2001                                                                                                | **$(4,313,664****)**                                                    |  **$(56,071****)**                                       | ** $(98,129)**                                            | **$(4,159,464**)                                           |
|                                                                                                                                   |                                                                         |                                                               |                                                                |                                                            |
|                                                                                                                                   |                                                                         |                                                               |                                                                |                                                            |
| Number of ownership          units                                                                                                | **        11,814**              |  **        131** |  **        225**  | **        11,458** |

See Notes to Financial Statements.

**Statements  of Cash Flows****(Unaudited)**

|                                                                                                                                                    |            Six          Months Ended                             June          30,                    |
|----------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                    |       2001                                                                                                                                                                                                                                                                                     |       2000       |
|                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                            |  |
| Cash Flows From          Operating Activities:                                                                                                     |                                                                                                                                                                                                                                                                                                                                                            |  |
|      Net          loss                                                                                                    |   $(121,907)                                                                                                                                                                                                                                                                                                                                     |   $(174,956) |
|      Adjustments          to reconcile net loss to net cash                from operating activities: |                                                                                                                                                                                                                                                                                                                                                            |  |
|           Equity          in income of Project Partnership                                       |       (32,324)                                                                                                                                                                                                                                                                                                               |       (82,441) |
|                    Distributions from zero basis Project Partnerships                                 |       (87,911)                                                                                                                                                                                                                                                                                                               |  |
|      Changes          in assets and liabilities:                                                                          |                                                                                                                                                                                                                                                                                                                                                            |  |
|           Advances          to Project Partnerships                                              |          5,982                                                                                                                                                                                                                                                                                                |         (1,972) |
|           Accrued          interest on note payable                                              |     (155,204)                                                                                                                                                                                                                                                                                                                          |     (180,110) |
|           Accounts          payable                                                              |          6,400                                                                                                                                                                                                                                                                                                |         (3,833) |
|           Payable          to affiliates                                                         |        35,740                                                                                                                                                                                                                                                                                                           |        46,580 |
|                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                            |  |
| Net Cash From Operating          Activities                                                                                                        |     (349,224)                                                                                                                                                                                                                                                                                                                          |     (396,732) |
|                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                            |  |
| Cash Flows From          Investing Activities -                                                                                                    |                                                                                                                                                                                                                                                                                                                                                            |  |
|      Distributions          from all Project Partnerships                                                                 |      395,030                                                                                                                                                                                                                                                                                                                      |      406,490 |
|                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                            |  |
| Increase in Cash                                                                                                                                   |        45,806                                                                                                                                                                                                                                                                                                           |          9,758 |
|                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                            |  |
| Cash and Cash Equivalents          Beginning of Period                                                                                             |        14,740                                                                                                                                                                                                                                                                                                           |        14,777 |
|                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                            |  |
| Cash and Cash Equivalents          End of Period                                                                                                   |   **$   60,546**                                                                                                                                                                                                                                                                                                                  |   **$   24,535** |
|                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                            |  |
| Additional cash          flow information:                                                                                                         |                                                                                                                                                                                                                                                                                                                                                            |  |
|      Interest          payments                                                                                           |   $ 311,123                                                                                                                                                                                                                                                                                                                                 |   $ 336,891 |

See Notes to Financial Statements.

Note  A          Summary of Significant  Accounting Policies

Partnership  Organization

Gulledge  Realty Investors II, L.P. (the Registrant) is a limited partnership organized  in December 1983 under the laws of the Commonwealth of Virginia for the purpose  of acquiring limited partner interests in real estate limited partnerships ("Project  Partnerships"). These Project Partnerships include Colony Place Associates,  Ltd. ("Colony"), Country Oaks Apartments Limited Partnership, Hawthorn  Housing Limited Partnership ("Hawthorn"), Olympic Housing Limited  Partnership ("Olympic"), Pine West Ltd., and Rancho Vista Associates.  The Project Partnerships previously included Florence Housing Associates ("Florence")  and Greentree Housing Limited Partnership, which assets were sold in 2000 and  1999, respectively. Each of the Project Partnerships is an operating real estate  project which receives mortgage interest subsidies and/or rental assistance  from the United States Department of Housing and Urban Development (HUD) or  Farmer's Home Administration. The Registrant commenced operations in March  1984.

The  financial statements include only those assets, liabilities, and results of  operations which relate to the business of the Registrant and do not include  any assets, liabilities, or operating results attributable to the partners'  individual activities. These financial statements should be read in conjunction  with the Registrant's annual report on Form 10-K for the year ended December 31,  2000. All adjustments which, in the opinion of management, are necessary for  a fair presentation of the results of operations for the interim period have  been reflected. All such adjustments consist of normal recurring accruals,  unless otherwise disclosed in these interim financial statements. The results  of operations, for the six months ended June 30, 2001, are not necessarily  indicative of the results for the year ending December 31, 2001. Where  appropriate, prior year's financial information has been reclassified to conform  with the current year presentation.

Comprehensive  losses for the six month periods ended June 30, 2001 and 2000 were equal  to the Registrant's net losses.

Cash  and Cash Equivalents

Cash  equivalents consist of interest bearing money market account balances.

Investments  in Project Partnerships

The investments in Project Partnerships  are accounted for using the equity method of accounting. Under the equity method,  investments are reflected at cost, adjusted for the Registrant's share of the  Project Partnerships' income or loss. The Registrant is under no obligation  to contribute additional capital, or to lend monies necessary to fund cash flow  deficiencies of the Project Partnerships, because the Registrant is a limited  partner in such partnerships. The investment account will not be reduced below  zero because the Partnership is not liable for Project Partnership losses in  excess of such investment. Losses in subsequent years will be maintained separately  for tax purposes. These losses are available to be applied toward any possible  future income from these partnerships. Any distributions received from the  Project Partnerships, subsequent to reducing the investment account to zero,  will be recognized as income in the year received.

Use  of Estimates

The  preparation of financial statements in conformity with accounting principles  generally accepted in the United States of America requires management to make  estimates and assumptions that affect the reported amounts of assets and liabilities  and disclosure of contingent assets and liabilities at the date of the financial  statements and the reported amounts of revenues and expenses during the reporting  period. Actual results could differ significantly from those estimated.

Income  Taxes

No  provision has been made for current or deferred income taxes since they are  the responsibility of each partner. Profits (or gains) and losses of the Registrant  are allocated to the partners in accordance with the partnership agreement.  

Segment  Reporting

The  Partnership's principal line of business is investing in Project Partnerships  that own and operate Projects that are financed and/or operated under federal  or state housing assistance programs. Management has considered the requirements  of SFAS 131 and believes that the partnership operates in one business segment.

Derivative  Instruments and Hedging Activities

In  June 2000, the Financial Accounting Standards Board ("FASB") issued  Statement of Financial Accounting Standards ("SFAS") No. 138, *Accounting  for Certain Derivative Instruments and Certain Hedging Activities, an Amendment  of FASB Statement No. 133.* In June 1999, the FASB also issued SFAS No.  137, *Accounting for Derivative Instruments and Hedging Activities-Deferred  of the Effective Date of FASB Statement No. 133.* SFAS No. 137 defers the  provisions of SFAS No. 133, *Accounting for Derivative Instruments and Hedging  Activities* until January 1, 2001. SFAS No. 133, as amended by SFAS  No. 138, requires, among other things, that all derivatives, be recognized in  the balance sheets as either assets or liabilities and measured at fair value.  The corresponding derivative gains and losses should be reported based upon  the hedge relationship. If such a relationship exists, changes in the fair  value of derivatives that are not designated as hedges or that do not meet the  hedge accounting criteria in SFAS NO. 133 are required to be reported in income.  Effective January 1, 2001, the Partnership adopted these Statements. This  adoption did not have an impact on the Partnership's financial statements.

Reclassifications

Where  appropriate, prior years' financial information has been reclassified to conform  with the current year presentation.

Note  B          Investment in  Project Partnership and Note Payable

Hawthorn  refinanced its mortgage during 1997. Proceeds from the refinancing were used  to make a partial payment on the promissory note which had come due December 31,  1996. The remaining balance of the promissory note was renegotiated. The mortgage  was refinanced under HUD regulations which limit the amount of debt that can  be collateralized by the project. Accordingly, HUD would not approve the mortgage  refinance unless the promissory note was no longer a liability of the project.  Therefore, the general partner of the Registrant and the noteholder agreed to  have the promissory note assumed by the Registrant. The promissory note is  now collateralized by the partners' interests in Hawthorn. Principal and interest  due on the promissory note are only payable from surplus cash received by the  Registrant from Hawthorn. The Registrant is not required to make any payments  from surplus cash it receives from any other project. The promissory note plus  accrued interest totaled $3,568,339 at June 30, 2001, and bears simple  interest at a rate of 9%. Any principal and interest remaining unpaid on June 30,  2002, will be due in full.

In  conjunction with assuming the liability for the promissory note, the Registrant  also recorded a corresponding investment in Hawthorn. The investment account  was then reduced by previously unrecorded losses of Hawthorn in accordance with  the equity method of accounting. The investment account will be adjusted in  future years by the Registrant's share of any additional income or loss from  Hawthorn as reported on Hawthorn's periodic financial statements. This investment  account will also be reduced whenever the Registrant receives a distribution  from Hawthorn. During the six months ended June 30, 2001, the investment  account was reduced to zero and the Registrant recognized approximately $87,000  in distribution income from Hawthorn.

None  of the Project Partnerships are experiencing significant cash flow deficiencies  after adding back non-cash items such as depreciation, amortization and accrued  interest on promissory notes not currently payable to the operating losses of  the Project Partnerships. 

**MANAGEMENT'S  FINANCIAL DISCUSSION****For the Six  Months Ended June 30, 2001 and 2000**

The  Registrant is a limited partnership formed to acquire limited partner interests  in real estate limited partnerships (Project Partnerships). The Registrant's  investments in the Project Partnerships are recorded using the equity method  of accounting (see Note A).

The  primary reasons for the decrease in net loss for the six months ended June 30,  2001 compared to the six months ended June 30, 2000 were due to an increase  in distributions partially offset by a decrease in equity in income of Project  Partnership, and a decrease in professional fees and interest expense. 

The  Registrant is liable for a promissory note that bears simple interest at a rate  of 9%. Principal and interest payable totaled $3,568,339 at June 30, 2001.  Principal and interest can only be paid from distributions received from Hawthorn.  The Registrant is not required to use distributions from any other Project Partnership  to make payments on this promissory note.

The  Registrant's ownership interest in two other Project Partnerships (Colony Place  and Olympic Housing) is pledged as collateral in connection with promissory  notes issued by the respective Project Partnerships. The Colony Place promissory  note was due June 30, 1997 and had been extended to November 30, 1999,  while the general partner attempted to locate a buyer for the project. A buyer  was not located before November 30, 1999. This note is currently in default.  Therefore, the noteholder may demand payment and the project may revert to the  noteholder. The Olympic Housing promissory note expired December 31, 2000.  This note is currently in default. The noteholder has notified Olympic of its  demand for payment. Therefore, the project may revert to the noteholder at  any time. 

**For  the Six Months Ended June 30, 2001 and 2000**

**PART  II OTHER INFORMATION**

Item  6:           Exhibits  and Reports on Form 8-K

                      (b)     Reports  on Form 8-K - There were no reports filed on Form 8‐K for the  quarter ended June 30, 2001.

**SIGNATURES**

Pursuant  to the requirements of Section 13 or 15(d) 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. 

|                                                                              | GULLEDGE        REALTY INVESTORS II, L.P.                                                                                       |
|------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|
|                                                                              |  

                                                                                                                   |
|                                                                              |      By:     GULL-AGE        Properties, Inc.                                 |
|                                                                              |                 Managing        General Partner |
|                                                                              |  

                                                                                                                   |
|                                                                              |  

                                                                                                                   |
| Date:            August 10, 2001     |      By:  /s/        Douglas L. Kelly _______                                                |
|                                                                              |              Douglas        L. Kelly                           |
|                                                                              |              President,        Secretary, Treasurer,           |
|                                                                              |              and        Director                               |