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 March 31, 2002 | 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















GULLEDGE REALTY INVESTORS II, L.P.

(A Limited Partnership)



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                            | March 31,
2002 | December 31,
2001
|--------------------------------- | -------------- | -----------------
|                                  |                |                  
|Cash and cash equivalents         | $    76,764    | $     76,545     
|                                  |                |                  
|Advances to Project Partnerships  | 18,702         | 17,652           
|                                  |                |                  
|Total Assets                      | $     95,466   | $     94,197     
|                                  |                |                  
|                                  |                |                  
|                                  |                |                  
|LIABILITIES AND PARTNERS' DEFICIT |                |                  
|                                  |                |                  
|Accounts payable                  | $    44,750    | $     35,200     
|                                  |                |                  
|Escrow deposit                    |                | 10,000           
|                                  |                |                  
|Payable to affiliates             | 828,324        | 793,880          
|                                  |                |                  
|Note payable and accrued          |                |                  
|interest payable (Note B)         | 3,804,373      | 3,726,843        
|                                  |                |                  
|Capital contributions payable     | 50,000         | 50,000           
|                                  |                |                  
|Total Liabilities                 | 4,727,447      | 4,615,923        
|                                  |                |                  
|Partners' Deficit                 | (4,631,981)    | (4,521,726)      
|                                  |                |                  
|Total Liabilities and             |                |                  
|Partners' Deficit                 | $    95,466    | $     94,197     















See Notes to Financial Statements.



Statements of Operations

(Unaudited)





|                                               | Three Months Ended
|---------------------------------------------- | ------------------
|                                               | March 31,         
|                                               | 2002              
|Revenue:                                       |                   
|                                               |                   
|Interest income                                | $          219    
|                                               |                   
|Equity in (loss)/income of Project Partnership | --                
|                                               |                   
|Miscellaneous income                           | 10,000            
|                                               |                   
|                                               | 10,219            
|Expenses:                                      |                   
|                                               |                   
|Asset management fee                           | 28,645            
|                                               |                   
|Professional fees                              | 2,550             
|                                               |                   
|Consulting fees                                | 11,000            
|                                               |                   
|Operating expenses                             | 750               
|                                               |                   
|Interest expense (Note B)                      | 77,529            
|                                               |                   
|                                               | 120,474           
|                                               |                   
|Net loss                                       | $   (110,255)     





















See Notes to Financial Statements.





Statements of Changes in Partners' Deficit

(Unaudited)

Three Months Ended March 31, 2002 and 2001



|                            | Total        | General   | Special
Limited | Limited     
|--------------------------- | ------------ | --------- | --------------- | ------------
|Balances at January 1, 2001 | $(4,191,757) | $(54,730) | $(95,813)       | $(4,041,214)
|                            |              |           |                 |             
|Net loss for three months   |              |           |                 |             
|ended March 31, 2001        | (128,254)    | (1,411)   | (2,437)         | (124,406)   
|                            |              |           |                 |             
|                            |              |           |                 |             
|Balances at March 31, 2001  | $(4,320,011) | $(56,141) | $(98,250)       | $(4,165,620)
|                            |              |           |                 |             
|                            |              |           |                 |             
|                            |              |           |                 |             
|Balances at January 1, 2002 | $(4,521,726) | $(58,360) | $(102,082)      | $(4,361,284)
|                            |              |           |                 |             
|Net loss for three months   |              |           |                 |             
|ended March 31, 2002        | (110,255)    | (1,213)   | (2,095)         | (106,947)   
|                            |              |           |                 |             
|Balances at March 31, 2002  | $(4,631,981) | $(59,573) | $(104,177)      | $(4,468,231)
|                            |              |           |                 |             
|                            |              |           |                 |             
|Number of ownership units   | 11,814       | 131       | 225             | 11,458      

























See Notes to Financial Statements.



Statements of Cash Flows

(Unaudited)



|                                                   | Three Months Ended
|-------------------------------------------------- | ------------------
|                                                   | March 31,         
|                                                   | 2002              
|Cash Flows From Operating Activities:              |                   
|Net loss                                           | $ (110,255)       
|Adjustments to reconcile net loss                  |                   
|to net cash from operating activities:             |                   
|Equity in loss (income) of Project Partnership     | --                
|Distributions from zero-basis Project
Partnerships | --                
|Change in assets and liabilities:                  |                   
|Advances to Project Partnerships                   | (1,050)           
|Accounts payable                                   | 9,550             
|Escrow deposit                                     | (10,000)          
|Payable to affiliates                              | 34,444            
|Accrued interest on note payable                   | 77,530            
|                                                   |                   
|                                                   |                   
|                                                   |                   
|Net Cash From Operating Activities                 | 219               
|                                                   |                   
|Cash Flows from Investing Activities-              |                   
|Distributions from Project Partnerships            | --                
|                                                   |                   
|Net Change in Cash and Cash Equivalents            | 219               
|                                                   |                   
|Cash and Cash Equivalents Beginning of Period      | 76,545            
|                                                   |                   
|Cash and Cash Equivalents End of Period            | $       76,764    

















See Notes to Financial Statements.



NOTES TO FINANCIAL STATEMENTS

Three Months Ended March 31, 2002 and 2001

(Unaudited)



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") and Olympic Housing Limited Partnership ("Olympic").  The Project Partnerships previously included Pine West, Ltd., ("Pine West") and Rancho Vista Associates ("Rancho Vista"), which limited partner interests were sold in 2001 and Florence Housing Associates ("Florence") and Greentree Housing Limited Partnership ("Greentree"), which assets were sold in 2000 and 1999 respectively.  Each of the remaining 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, 2001.  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 three months ended March 31, 2002, are not necessarily indicative of the results for the year ending December 31, 2002.  Where appropriate, prior year's financial information has been reclassified to conform with the current year presentation.



Comprehensive losses for the three month periods ended March 31, 2002 and 2001 were equal to the Registrant's net losses.



Cash and Cash Equivalents



Cash equivalents consist of interest bearing money market account balances.





NOTES TO FINANCIAL STATEMENTS

Three Months Ended March 31, 2002 and 2001

(Unaudited)

(Continued)



Investments in Project Partnerships



The investment in Project Partnerships is 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 for a Project Partnership 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 Project 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 these estimates.



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 believes that the Partnership operates in one business segment.



NOTES TO FINANCIAL STATEMENTS

Three Months Ended March 31, 2002 and 2001

(Unaudited)

(Continued)



Derivative Instruments and Hedging Activities



Effective January 1, 2001, the Partnership adopted Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS Nos. 137 and 138.  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     Note Payable and Accrued Interest 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.  Under the terms of the promissory note, the Registrant pays an annual consulting fee of $19,000 to GAP and $25,000 to the noteholder.  The consulting fees are only payable out of distributions 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 $3,804,373 at March 31, 2002, and bears simple interest at a rate of 9%.  Any principal and interest remaining unpaid on June 30, 2002, will be due upon demand.  If the Registrant is unable to pay the principal and accrued interest on June 30, 2002, the interest rate on the note increases to 11% and the Project Partnership may revert to the noteholder.





NOTES TO FINANCIAL STATEMENTS

Three Months Ended March 31, 2002 and 2001

(Unaudited)

(Continued)





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 Three Months Ended March 31, 2002 and 2001









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 three months ended March 31, 2002 compared to the three months ended March 31, 2001 were due to a decrease in equity in loss from Hawthorn and an increase in miscellaneous income.  The increase in miscellaneous income was due to the Registrant recognizing income of $10,000 from a deposit received under the terms of a contract for the sale of Colony.  The prospective buyer exercised its right under the sales contract to terminate the sale, resulting in the deposit reverting to the Registrant.



The Registrant is liable for a promissory note that bears simple interest at a rate of 9%.  Principal and interest payable totaled $3,804,373 at March 31, 2002.  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 Three Months Ended March 31, 2002 and 2001

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 March 31, 2002.









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:  May 13, 2002 | By:   /s/Douglas L. Kelly         
|                    | Douglas L. Kelly                  
|                    | President, Secretary, Treasurer   
|                    | and Director