UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
(Mark One)
[X]    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

                 For the fiscal year ended December 31, 2004


[ ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

           For the transition period from __________ to __________

                         Commission file number 0-09782


                        REAL ESTATE ASSOCIATES LIMITED II
                 (Name of small business issuer in its charter)

                        A California Limited Partnership

          California                                           95-3547609
(State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization                             Identification No.)

                          55 Beattie Place, PO Box 1089
                        Greenville, South Carolina 29602
                    (Address of principal executive offices)

                                 (864) 239-1000
                           (Issuer's telephone number)

     Securities Registered Pursuant to Section 12(b)of the Exchange Act:

                                      NONE

     Securities Registered Pursuant to Section 12(g)of the Exchange Act:

                            Limited Partnership Units
                                (Title of class)

Check whether the issuer(1) filed all reports required to be filed by Section 13
or 15(d) of the  Exchange  Act during  the past 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___

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of the  registrant's  knowledge  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year.   $12,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests as of December 31, 2004. No market exists for the limited  partnership
interests of the Registrant,  and,  therefore,  no aggregate market value can be
determined.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None
The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including,  without limitation:  national and local
economic  conditions;  the terms of  governmental  regulations  that  affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates;  financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest;  real estate risks, including variations of real estate values and
the general  economic  climate in local markets and  competition  for tenants in
such markets;  litigation,  including  costs  associated  with  prosecuting  and
defending  claims  and  any  adverse   outcomes,   and  possible   environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.

                                     PART I

ITEM 1.     Description of Business

Real Estate Associates  Limited II ("REAL II" or the "Partnership") is a limited
partnership  which  was  formed  under the laws of the  State of  California  on
December 4, 1979. On March 17, 1980,  REAL II offered 3,000 units  consisting of
6,000 Limited Partnership  Interests and Warrants to purchase a maximum of 6,000
Additional  Limited  Partnership  Interests through a public offering managed by
E.F.  Hutton Inc. REAL II received  $13,365,000  in  subscriptions  for units of
Limited  Partnership  Interests (at $5,000 per unit) during the period March 17,
1979 to September 15, 1980,  pursuant to a registration  statement on Form S-11.
As of  December  31,  1981 REAL II had  received an  additional  $13,365,000  in
subscriptions  pursuant to the exercise of warrants  and the sale of  additional
Limited Partnership Interests.

The  Partnership  shall be  dissolved  only upon the  expiration  of 52 complete
calendar  years  (December  31,  2031)  from  the date of the  formation  of the
Partnership  or the occurrence of various other events as specified in the terms
of the partnership  agreement.  The principal  business of the Partnership is to
invest, directly or indirectly, in other limited partnerships which own or lease
and operate federal, state and local government-assisted housing projects.

The  general  partners of REAL II are  National  Partnership  Investments  Corp.
("NAPICO" or the "Corporate  General  Partner"),  a California  Corporation  and
National Partnership  Investments  Associates  ("NAPIA").  NAPIA is a California
limited partnership and consists of Messrs.  Nicholas G. Ciriello,  an unrelated
individual,  as general  partner and Charles H.  Boxenbaum and Leonard Crosby as
limited partners. The business of REAL II is conducted primarily by NAPICO.

On December 3, 2001,  Casden Properties Inc. entered into a merger agreement and
certain other  transaction  documents with  Apartment  Investment and Management
Company, a publicly traded real estate investment trust ("AIMCO") and certain of
its  subsidiaries,  pursuant to which, on March 11, 2002,  AIMCO acquired Casden
Properties  Inc. and its  subsidiaries,  including  100% of the stock of NAPICO.
Prior to March 11, 2002, Casden Properties Inc. owned a 95.25% economic interest
in NAPICO, with the balance owned by Casden Investment Corporation ("CIC"). CIC,
which is wholly owned by Alan I. Casden, owned 95% of the voting common stock of
NAPICO prior to March 11, 2002.

REAL II holds limited partnership interests in eleven Local Limited Partnerships
(the "Local Limited  Partnerships")  as of December 31, 2004, as a result of one
Local Limited  Partnership  selling its investment  property in August 2004, one
Local Limited  Partnership  selling its  investment  property in April 2003, and
after REAL II selling  its  interest  in seven  Local  Limited  Partnerships  in
December 1998. Subsequent to December 31, 2004 another Local Limited Partnership
sold  its  investment  property  in  February  2005.  All of the  Local  Limited
Partnerships  own low income housing  projects which are subsidized  and/or have
mortgage  notes  payable  to or  insured  by  agencies  of the  federal or local
government.

The  partnerships  in which  REAL II has  invested  were,  at  least  initially,
organized by private developers who acquired the sites, or options thereon,  and
applied for  applicable  mortgage  insurance and  subsidies.  REAL II became the
principal  limited  partner in these  Local  Limited  Partnerships  pursuant  to
arm's-length  negotiations with these developers,  or others, who act as general
partners. As a limited partner, REAL II's liability for obligations of the Local
Limited  Partnership is limited to its investment.  The local general partner of
the  Local  Limited   Partnership   retains   responsibility   for   developing,
constructing,  maintaining,  operating  and managing the Project.  Under certain
circumstances  of default,  REAL II has the right to replace the general partner
of the Local Limited  Partnerships,  but otherwise does not have control of sale
or refinancing, etc.

Although each of the  partnerships  in which REAL II has invested owns a project
which must compete in the market place for tenants,  interest subsidies and rent
supplements from governmental  agencies make it possible to offer these dwelling
units to eligible "low income" tenants at a cost significantly  below the market
rate for comparable conventionally financed dwelling units in the area.

The  Partnership  does not have any  employees.  Services are  performed for the
Partnership  by  the  Corporate  General  Partner  and  agents  retained  by the
Corporate General Partner.

In order to stimulate  private  investment  in low income  housing,  the federal
government  and  certain  state and local  agencies  have  provided  significant
ownership  incentives,   including  among  others,   interest  subsidies,   rent
supplements,  and mortgage insurance, with the intent of reducing certain market
risks and  providing  investors  with  certain tax  benefits,  plus limited cash
distributions  and the  possibility of long-term  capital  gains.  There remain,
however,  significant  risks.  The long-term nature of investments in government
assisted housing limits the ability of REAL II to vary its portfolio in response
to changing economic,  financial and investment conditions. Such investments are
also subject to changes in local economic circumstances and housing patterns, as
well as rising operating costs, vacancies, rent collection difficulties,  energy
shortages and other factors  which have an impact on real estate  values.  These
projects also require greater management expertise and may have higher operating
expenses than conventional housing projects.

Under recently adopted law and policy,  the United States  Department of Housing
and Urban Development ("HUD") has determined not to renew the Housing Assistance
Payment  ("HAP")  Contracts  on a long  term  basis on the  existing  terms.  In
connection with renewals of the HAP Contracts under such new law and policy, the
amount of rental  assistance  payments under renewed HAP Contracts will be based
on market rentals instead of above market  rentals,  which may be the case under
existing HAP Contracts.  The payments under the renewed HAP Contracts may not be
in an amount  that  would  provide  sufficient  cash  flow to  permit  owners of
properties  subject to HAP  Contracts to meet the debt service  requirements  of
existing  loans  insured by the Federal  Housing  Administration  of HUD ("FHA")
unless such mortgage loans are  restructured.  In order to address the reduction
in payments under HAP Contracts as a result of this new policy, the Multi-family
Assisted Housing Reform and  Affordability  Act of 1997 ("MAHRAA")  provides for
the  restructuring  of  mortgage  loans  insured  by the  FHA  with  respect  to
properties  subject  to the  Section 8 program.  Under  MAHRAA,  an  FHA-insured
mortgage  loan can be  restructured  into a first  mortgage  loan  which will be
amortized on a current basis and a low interest  second mortgage loan payable to
FHA which will only be payable on  maturity  of the first  mortgage  loan.  This
restructuring results in a reduction in annual debt service payable by the owner
of the  FHA-insured  mortgage  loan and is  expected  to result in an  insurance
payment from FHA to the holder of the  FHA-insured  loan due to the reduction in
the principal amount. MAHRAA also phases out project-based subsidies on selected
properties  serving  families not located in rental markets with limited supply,
converting such subsidies to a tenant-based subsidy.

When the HAP  Contracts are subject to renewal,  there can be no assurance  that
the Local Limited  Partnerships  in which the Partnership has an investment will
be permitted to restructure its mortgage indebtedness under MAHRAA. In addition,
the  economic  impact  on the  Partnership  of the  combination  of the  reduced
payments  under  the  HAP  Contracts  and  the  restructuring  of  the  existing
FHA-insured mortgage loans under MAHRAA is uncertain.

Laws  benefiting   disabled  persons  may  result  in  the  Local  Partnerships'
incurrence of unanticipated expenses.  Under the Americans with Disabilities Act
of 1990,  or ADA,  all places  intended to be used by the public are required to
meet certain Federal requirements related to access and use by disabled persons.
Likewise,  the Fair Housing Amendments Act of 1988, or FHAA,  requires apartment
properties  first  occupied  after  March  13,  1990  to be  accessible  to  the
handicapped.  These  and  other  Federal,  state  and  local  laws  may  require
modifications  to  the  Local  Limited  Partnership's  properties,  or  restrict
renovations of the properties. Noncompliance with these laws could result in the
imposition  of fines or an award of damages to private  litigants and also could
result in an order to correct any non-complying  feature,  which could result in
substantial  capital  expenditures.  The Corporate General Partner believes that
the Local Limited Partnership's  properties are substantially in compliance with
present  requirements.  The Local Limited  Partnerships may incur  unanticipated
expenses to comply with the ADA and the FHAA.

The following table details the Partnership's ownership percentages of the Local
Limited  Partnerships  and  the  cost of  acquisition  of  such  ownership.  All
interests are limited  partner  interests.  Also included is the total  mortgage
encumbrance  on each property for each of the Local Limited  Partnerships  as of
December 31, 2004.

                              REAL II     Original Cost

                             Percentage    Of Ownership      Mortgage
 Partnership                  Interest       Interest          Notes
                                          (in thousands)  (in thousands)

 Azalea Court                   95%           $ 165           $ 1,435
 Branford Elderly               99%              195              629
 Cherrywood/Saturn Apts.        98%              308            2,662
 Clearfield Manor               95%              173            (A)
 Crystal Springs                98%               95              596
 Lakeside Apts.                 99%              285            1,792
 Landmark Towers                99%              190              542
 Magnolia State                 98%              200            1,153
 Sugar River Mills              98%            1,800            6,861
 Valebrook                      98%              850            2,107
 Willow Wick Apts.              99%               80              417
                                              $4,341          $18,194

(A)   Local Limited  Partnership sold its investment  property in February 2005.
      Information at December 31, 2004 was not available to the Partnership.

Although each Local Limited  Partnership in which the  Partnership has invested,
owns an apartment complex which must compete with other apartment  complexes for
tenants,  government  mortgage  interest and rent  subsidies make it possible to
rent units to eligible tenants at below market rates. In general, this insulates
the Projects from market competition.

During  2004,   all  of  the  projects  in  which  REAL  II  had  invested  were
substantially  rented  except for Willow  Wick  Apartments  which had an average
occupancy  of 49% for 2004.  The  following  is a  schedule  of the status as of
December 31, 2004, of the projects  owned by the Local Limited  Partnerships  in
which REAL II has invested as a limited partner.

The Local  Operating  General  Partner for Willow Wick  Apartments has requested
approval from the  Partnership  to sell the  property.  The request is currently
under consideration by the Partnership. The Partnership has no investment in the
Local Limited Partnership which owns the property at December 31, 2004.

           SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
                       IN WHICH REAL II HAS AN INVESTMENT
                                DECEMBER 31, 2004
<TABLE>
<CAPTION>

                                           Financed
                                            Insured       Units       Occupancy Percentage
                                              And      Authorized      For the Years Ended
   Property Name                  No. of  Subsidized   For Rental         December 31,
   and Location                    Units     Under     Assistance       2004         2003
   Azalea Court
<S>                                   <C>                    <C>        <C>           <C>
     Theodore, AL                     48      (A)            47         100%          98%
   Branford Elderly
     Branford, CT                     38      (B)            38          98%          99%
   Cherrywood/Saturn Apts.
     Twin Falls/Idaho Falls, ID       78      (C)            78          98%          97%
   Clearfield Manor
     Clearfield, KY                   40      (A)            40          (E)          99%
   Crystal Springs
     Crystal Springs, MS              28      (A)            28         100%         100%
   Lakeside Apts.
     Mishawaka, IN                    48      (B)            48          96%          98%
   Landmark Towers
     Nampa, ID                        40      (C)            40          99%          99%


   Magnolia State
     Gulfport, MS                     60      (A)            24          92%          93%
   Sugar River Mills
     Claremont, NH                   162      (B)           162          97%          97%
   Valebrook
     Lawrence, MA                    151      (D)           100          98%          99%
   Willow Wick Apts.
     Centre, AL                       24      (A)             5          49%          47%
   TOTALS                            717                    610
</TABLE>

(A) The project is financed by the Rural Housing Services Section 515 which also
  provides for interest and rental subsidies.

(B) The  mortgage is insured by the  Federal  Housing  Administration  under the
  provisions of Section 236 of the National Housing Act.

(C) The mortgage is regulated by the Idaho Housing and Finance Association.

(D)  The  mortgage  is  regulated  by  the  Massachusetts  Housing  and  Finance
  Association.

(E) Property was sold February 8, 2005.

ITEM 2.     Description of Properties

The Local  Limited  Partnerships  in which REAL II holds  interests  own various
multi-family  rental  properties.  See "Item 1.  Description  of  Business"  for
information pertaining to these properties.

ITEM 3.     Legal Proceedings

The  Corporate  General  Partner is involved in various  lawsuits  arising  from
transactions  in the ordinary  course of business.  In the opinion of management
and the Corporate  General  Partner,  the claims will not result in any material
liability to the Partnership.

ITEM 4.     Submission Of Matters To A Vote of Security Holders

On December 20, 2004, the Partnership sought the vote of the limited partners to
amend the agreement of limited  partnership  of the  Partnership to 1) eliminate
the  requirement  that cash proceeds from the sale of an individual  property or
interest  in a Local  Limited  Partnership  must be at least as great as the tax
liability to the limited  partners  resulting from the respective sale and 2) to
modify the provision that requires limited partner approval for a sale of all or
substantially  all assets so that a sale of a single  property  or interest in a
Local Limited Partnership does not require limited partner approval.

On January 10, 2005, the consent solicitation expired pursuant to its terms. The
consent of the requisite number of limited  partners was received.  Accordingly,
the Restated  Certificate  and Agreement of Limited  Partnership  of REAL II was
amended, effective January 12, 2005, for the above provisions.


<PAGE>



                                     PART II

ITEM 5.     Market For The  Registrant's  Partnership  Interest  And  Related
            Partnership Matters

The Limited  Partnership  Interests are not traded on a public exchange but were
sold through a public offering managed by E.F. Hutton Inc. It is not anticipated
that any public market will develop for the purchase and sale of any Partnership
interest,  therefore,  an investor may be unable to sell or otherwise dispose of
his or her interest in the  Partnership.  Limited  Partnership  Interests may be
transferred only if certain requirements are satisfied. At December 31, 2004 the
Partnership  had  5,324  Units or  10,648  interests  outstanding  held by 1,372
limited partners of record.  The Partnership has invested in certain  government
assisted  projects  under  programs  which in many  instances  restrict the cash
return available to project owners.  The Partnership was not designed to provide
cash  distributions  to investors in  circumstances  other than  refinancing  or
disposition of its investments in limited partnerships.

The  Partnership  distributed  the  following  amounts  during  the years  ended
December 31, 2004 and 2003 in thousands, except per interest data):

<TABLE>
<CAPTION>
                                         Per Limited                      Per Limited
                         Year Ended      Partnership      Year Ended      Partnership
                     December 31, 2004     Interest    December 31, 2003    Interest

<S>           <C>           <C>              <C>             <C>             <C>
Sale proceeds (1)           $ --             $ --            $ 500           $46.94
</TABLE>

(1) From distribution received from sale of Westward Ho Apts.

AIMCO and its affiliates  owned 870 limited  partnership  units (the "Units") or
1,740 limited  partnership  interests in the Partnership  representing 16.34% of
the  outstanding  Units at December  31,  2004.  A Unit  consists of two limited
partnership interests.  It is possible that AIMCO or its affiliates will acquire
additional  Units in  exchange  for cash or a  combination  of cash and units in
AIMCO  Properties,  L.P., the operating  partnership  of AIMCO.  Pursuant to the
Partnership Agreement,  unitholders holding a majority of the Units are entitled
to take action with  respect to a variety of matters that  include,  but are not
limited to, voting on certain amendments to the Partnership Agreement and voting
to remove the Corporate General Partner.  Although the Corporate General Partner
owes fiduciary duties to the limited partners of the Partnership,  the Corporate
General partner also owes fiduciary duties to AIMCO as its sole stockholder.  As
a result,  the duties of the Corporate  General  Partner,  as corporate  general
partner, to the Partnership and its limited partners may come into conflict with
the duties of the Corporate General Partner to AIMCO as its sole stockholder.

ITEM 6.     Management's Discussion And Analysis Or Plan of Operation

This item should be read in conjunction with the financial  statements and other
items contained elsewhere in this report.

The Corporate  General  Partner  monitors  developments in the area of legal and
regulatory   compliance  and  is  studying  new  federal  laws,   including  the
Sarbanes-Oxley  Act of 2002. The Sarbanes-Oxley Act of 2002 mandates or suggests
additional compliance measures with regard to governance,  disclosure, audit and
other areas. The Partnership  expects that it will incur higher expenses related
to compliance.

Liquidity and Capital Resources

The  Partnership's  primary sources of funds include interest income earned from
investing  available  cash and the receipt of  distributions  from Local Limited
Partnerships in which the Partnership has invested.  It is not expected that any
of the Local Limited  Partnerships  in which the  Partnership  has invested will
generate cash flow from operations  sufficient to provide for  distributions  to
the Partnership's  limited partners in any material amount. An infrequent source
of funds would be funds received by the Partnership as its share of any proceeds
from  the  sale of a  property  owned  by a  Local  Limited  Partnership  or the
Partnership's sale of its interest in a Local Limited Partnership.  As mentioned
below, Redfern Grove Associates and Westward Ho Associates sold their investment
properties during the years ended December 31, 2004 and 2003, respectively.  The
Partnership  distributed  $500,000 to its limited partners during the year ended
December  31,  2003 from the funds  received  from  Westward Ho  Associates.  No
distributions were made during the year ended December 31, 2004.

The properties in which the Partnership has invested, through its investments in
the Local Limited Partnerships, receive one or more forms of assistance from the
Federal  Government.  As a result,  the Local Limited  Partnerships'  ability to
transfer  funds either to the  Partnership  or among  themselves  in the form of
distributions,  loans or advances is generally  restricted  by these  government
assistance programs. These restrictions, however, are not expected to impact the
Partnership's ability to meet its cash obligations.

Distributions  received from Local Limited Partnerships are recognized as return
of  capital  until  the  investment  balance  has been  reduced  to zero or to a
negative  amount  equal to future  capital  contributions  required.  Subsequent
distributions received are recognized as income.

As of December 31, 2004 and 2003, the Partnership had cash and cash  equivalents
of  approximately   $1,905,000  and  $503,000,   respectively.   Cash  and  cash
equivalents  are on deposit  with a financial  institution  earning  interest at
market rates.  The amount of interest  income varies with market rates available
on  deposits  and with  the  amount  of funds  available  for  investment.  Cash
equivalents  can be converted to cash to meet  obligations of the Partnership as
they arise.  The Partnership  intends to continue  investing  available funds in
this manner.

Results of Operations

At December 31, 2004, the  Partnership  has  investments in eleven Local Limited
Partnerships,  all of which own housing  projects  that were  substantially  all
rented.  The Partnership,  as a limited partner,  does not exercise control over
the activities and operations, including refinancing or selling decisions of the
Local  Limited  Partnerships.  Accordingly,  the  Partnership  accounts  for its
investment in the Local Limited  Partnerships using the equity method.  Thus the
individual  investments are carried at cost plus the Partnership's  share of the
Local Limited  Partnership's  profits less the Partnership's  share of the Local
Limited  Partnership's  losses,  distributions and impairment charges.  However,
since the  Partnership  is not legally  liable for the  obligations of the Local
Limited  Partnerships,  or is not  otherwise  committed  to  provide  additional
support to them, it does not recognize losses once its investment in each of the
Local Limited  Partnerships  reaches zero.  Distributions from the Local Limited
Partnerships  are accounted for as a reduction of the  investment  balance until
the investment balance is reduced to zero. Subsequent distributions received are
recognized as income in the  accompanying  statements of  operations.  For those
investments  where the Partnership has determined that the carrying value of its
investments  approximates  the estimated  fair value of those  investments,  the
Partnership's  policy is to  recognize  equity  in  income of the Local  Limited
Partnerships  only to the extent of  distributions  received and amortization of
acquisition  costs  from  those  Local  Limited  Partnerships.   Therefore,  the
Partnership  limits its  recognition of equity earnings to the amount it expects
to ultimately realize.  The Partnership  recognized no equity in loss of limited
partnerships   for  the  years  ended   December,  31, 2004  and  2003,  as  the
Partnership's  investment in all Local Limited Partnership's had been reduced to
zero prior to January 1, 2003.

On August 18, 2004,  Redfern  Grove  Associates  sold its  investment  property,
consisting of 72 units, to a third party for  approximately  $2,700,000.  During
the year ended December 31, 2004, the Partnership received a distribution of the
sales proceeds of approximately $1,541,000 for its 99% interest in Redfern Grove
Associates after repayment of the mortgage  encumbering the investment  property
and the payment of other liabilities.

On  April  29,  2003,  Westward  Ho  Associates  sold its  investment  property,
consisting of 290 units,  to an affiliate of its third party general partner for
approximately  $12,362,000.  During  the  year  ended  December  31,  2003,  the
Partnership  received proceeds of approximately  $1,504,000 for its 94% interest
in Westward Ho Associates  after the repayment of the mortgage  encumbering  the
investment  property and the payment of other liabilities.  The Partnership used
approximately  $478,000  of the  funds  received  to  pay  current  and  accrued
management fees and expense reimbursements owed to the Corporate General Partner
during the year ended December 31, 2003.

Subsequent  to December 31, 2004,  Clearfield  Manor  Associates  Ltd.  sold its
investment property,  consisting of 40 units, to an affiliate of its third party
general  partner  for  approximately   $291,000  plus  assumption  of  the  loan
encumbering  the investment  property.  During  February  2005, the  Partnership
received  proceeds of approximately  $276,000 for its 95% interest in Clearfield
Manor Associates Ltd.

Distributions  from the Local Limited  Partnerships  in which the  Partnership's
investment  in the Local  Limited  Partnerships  has been  reduced  to zero were
approximately  $68,000 and $94,000  for the years  ended  December  31, 2004 and
2003, respectively.  These amounts were recognized as income on the accompanying
statements of operations, in accordance with the equity method of accounting.

Under recently adopted law and policy,  the United States  Department of Housing
and Urban Development ("HUD") has determined not to renew the Housing Assistance
Payment  ("HAP")  Contracts  on a long  term  basis on the  existing  terms.  In
connection with renewals of the HAP Contracts under such new law and policy, the
amount of rental  assistance  payments under renewed HAP Contracts will be based
on market rentals instead of above market  rentals,  which may be the case under
existing HAP Contracts.  The payments under the renewed HAP Contracts may not be
in an amount  that  would  provide  sufficient  cash  flow to  permit  owners of
properties  subject to HAP  Contracts to meet the debt service  requirements  of
existing  loans  insured by the Federal  Housing  Administration  of HUD ("FHA")
unless such mortgage loans are  restructured.  In order to address the reduction
in payments under HAP Contracts as a result of this new policy, the Multi-family
Assisted Housing Reform and  Affordability  Act of 1997 ("MAHRAA")  provides for
the  restructuring  of  mortgage  loans  insured  by the  FHA  with  respect  to
properties  subject  to the  Section 8 program.  Under  MAHRAA,  an  FHA-insured
mortgage  loan can be  restructured  into a first  mortgage  loan  which will be
amortized on a current basis and a low interest  second mortgage loan payable to
FHA which will only be payable on  maturity  of the first  mortgage  loan.  This
restructuring results in a reduction in annual debt service payable by the owner
of the  FHA-insured  mortgage  loan and is  expected  to result in an  insurance
payment from FHA to the holder of the  FHA-insured  loan due to the reduction in
the principal amount. MAHRAA also phases out project-based subsidies on selected
properties  serving  families not located in rental markets with limited supply,
converting such subsidies to a tenant-based subsidy.

When the HAP  Contracts are subject to renewal,  there can be no assurance  that
the Local Limited  Partnerships  in which the Partnership has an investment will
be permitted  to  restructure  their  mortgage  indebtedness  under  MAHRAA.  In
addition,  the economic  impact on the  Partnership  of the  combination  of the
reduced  payments under the HAP Contracts and the  restructuring of the existing
FHA-insured mortgage loans under MAHRAA is uncertain.

Operating expenses,  other than management fees, consist of legal and accounting
fees for services rendered to the Partnership and administrative expenses. Legal
and accounting fees were approximately  $94,000 and $107,000 for the years ended
December 31, 2004 and 2003,  respectively.  The decrease in legal and accounting
fees for the year ended  December 31, 2004 is primarily due to a decrease in the
cost associated with the  Partnership's  annual audit.  Administrative  expenses
were approximately $32,000 and $34,000 for the years ended December 31, 2004 and
2003,  respectively.  Included in administrative  expenses are reimbursements to
NAPICO for certain expenses, which totaled approximately $20,000 for both of the
years ended December 31, 2004 and 2003.

A recurring partnership expense is the annual management fee. The fee is payable
to the Corporate  General  Partner of the  Partnership  and is calculated at 0.4
percent of the Partnership's original remaining invested assets at the beginning
of each year. The management  fee is paid to the Corporate  General  Partner for
its continuing  management of partnership  affairs. The fee is payable beginning
with the month following the Partnership's initial investment in a Local Limited
Partnership.  Management fees were  approximately  $116,000 and $176,000 for the
years ended  December  31, 2004 and 2003,  respectively.  The decrease in annual
management  fees is the result of the  reduction in  investment  assets on which
such fees are based as a result of the sale of Westward Ho in 2003.

Total revenues for the Local Limited  Partnerships was approximately  $5,794,000
and $6,080,000 for the years ended December 31, 2004 and 2003, respectively.

Total expenses for the Local Limited Partnerships were approximately  $5,552,000
and $6,057,000 for the years ended December 31, 2004 and 2003, respectively.

Total net income for the Local Limited Partnerships for 2004 and 2003 aggregated
approximately  $242,000 and $23,000,  respectively.  The net income allocated to
the  Partnership  was  approximately  $235,000  and  $21,000  for 2004 and 2003,
respectively.  However,  none of this allocated net income was recognized by the
Partnership  as the  investment  balance had already  been  reduced to zero from
prior years' losses.

The Partnership, as a limited partner in the Local Limited Partnerships in which
it  has  invested,  is  subject  to the  risks  incident  to  the  construction,
management,  and ownership of improved real estate. The Partnership  investments
are also subject to adverse general economic conditions,  and, accordingly,  the
status of the national economy,  including substantial unemployment,  concurrent
inflation and changing  legislation which could increase vacancy levels,  rental
payment defaults,  and operating  expenses,  which in turn, could  substantially
increase the risk of operating losses for the projects.

Other

AIMCO and its affiliates  owned 870 limited  partnership  units (the "Units") or
1,740 limited  partnership  interests in the Partnership  representing 16.34% of
the  outstanding  Units at December  31,  2004.  A Unit  consists of two limited
partnership interests.  It is possible that AIMCO or its affiliates will acquire
additional  Units in  exchange  for cash or a  combination  of cash and units in
AIMCO  Properties,  L.P., the operating  partnership  of AIMCO.  Pursuant to the
Partnership Agreement,  unitholders holding a majority of the Units are entitled
to take action with  respect to a variety of matters that  include,  but are not
limited to, voting on certain amendments to the Partnership Agreement and voting
to remove the Corporate General Partner.  Although the Corporate General Partner
owes fiduciary duties to the limited partners of the Partnership,  the Corporate
General partner also owes fiduciary duties to AIMCO as its sole stockholder.  As
a result,  the duties of the Corporate  General  Partner,  as corporate  general
partner, to the Partnership and its limited partners may come into conflict with
the duties of the Corporate General Partner to AIMCO as its sole stockholder.

Recent Accounting Pronouncements

As of December 31, 2004,  the  Partnership  adopted FASB  Interpretation  No. 46
"Consolidation  of  Variable  Interest  Entities"  (or "FIN 46") and applied its
requirements  to all of the Local Limited  Partnerships in which the Partnership
held a  variable  interest.  FIN 46  addresses  the  consolidation  by  business
enterprises  of  variable  interest  entities.  Generally,  a variable  interest
entity, or VIE, is an entity with one or more of the following  characteristics:
(a) the total equity  investment at risk is not  sufficient to permit the entity
to finance its activities without additional subordinated financial support; (b)
as a group the holders of the equity  investment at risk lack (i) the ability to
make decisions  about an entity's  activities  through voting or similar rights,
(ii) the  obligation to absorb the expected  losses of the entity,  or (iii) the
right to receive the expected  residual returns of the entity; or (c) the equity
investors  have  voting  rights  that are not  proportional  to  their  economic
interests and  substantially all of the entity's  activities either involve,  or
are conducted on behalf of, an investor that has  disproportionately  few voting
rights. FIN 46 requires a VIE to be consolidated in the financial  statements of
the entity that is  determined  to be the primary  beneficiary  of the VIE.  The
primary beneficiary  generally is the entity that will receive a majority of the
VIE's  expected  losses,  receive  a  majority  of the VIE's  expected  residual
returns, or both.

Upon adoption of FIN 46, the Partnership  determined it held variable  interests
in 11 VIE's for which the Partnership was not the primary beneficiary.  Those 11
VIE's consist of Local Limited Partnerships in which the Partnership acquired an
interest  prior to the  adoption  of FIN 46 that  are  directly  engaged  in the
ownership and management of 11 apartment  properties  with a total of 717 units.
The  Partnership  is  involved  with those  VIE's as a  non-controlling  limited
partner equity holder. The Partnership's maximum exposure to loss as a result of
its  involvement  with  unconsolidated  VIE's is  limited  to the  Partnership's
recorded  investments  in and  receivables  from those VIE's,  which was zero at
December 31, 2004. The  Partnership  may be subject to additional  losses to the
extent of any financial support that the Partnership voluntarily provides in the
future.

Critical Accounting Policies and Estimates

A summary of the Partnership's  significant  accounting  policies is included in
"Note 1 - Organization and Summary of Significant  Accounting Policies" which is
included in the financial  statements  in "Item 7.  Financial  Statements".  The
Corporate  General  Partner  believes that the  consistent  application of these
policies enables the Partnership to provide readers of the financial  statements
with useful and reliable  information about the Partnership's  operating results
and financial  condition.  The preparation of financial statements in conformity
with accounting  principles generally accepted in the United States requires the
Partnership to make estimates and  assumptions.  These estimates and assumptions
affect  the  reported  amounts  of  assets  and  liabilities  at the date of the
financial statements as well as reported amounts of revenues and expenses during
the  reporting  period.  Actual  results  could  differ  from  these  estimates.
Judgments  and  assessments  of  uncertainties  are  required  in  applying  the
Partnership's  accounting  policies in many areas.  The  following may involve a
higher degree of judgment and complexity.

Method of Accounting for Investments in Limited Partnerships

The  Partnership,  as a limited  partner,  does not  exercise  control  over the
activities and operations,  including  refinancing or selling decisions,  of the
Local  Limited  Partnerships.  Accordingly,  the  Partnership  accounts  for its
investments  in the Local  Limited  Partnerships  using the equity  method.  The
Partnership  is allocated  profits and losses of the Local Limited  Partnerships
based  upon  its  respective   ownership   percentage  (between  95%  and  99%).
Distributions  of surplus cash from  operations  from most of the Local  Limited
Partnerships  are  restricted  by the  Local  Limited  Partnerships'  Regulatory
Agreements  with the United States  Department of Housing and Urban  Development
("HUD") and /or are  restricted  by the terms of the mortgages  encumbering  the
Projects. These restrictions limit the distribution to a portion, generally less
than 10%, of the initial invested capital.  The excess surplus cash is deposited
into a residual  receipts  reserve,  of which the  ultimate  realization  by the
Partnership is uncertain as HUD  frequently  retains it upon sale or dissolution
of the Local  Limited  Partnership.  The  Partnership  is allocated  profits and
losses and receives distributions from refinancings and sales in accordance with
the Local Limited Partnerships' partnership agreements. These agreements usually
limit the Partnership's  distributions to an amount  substantially less than its
ownership percentage in the Local Limited Partnership.

The individual  investments are carried at cost plus the Partnership's  share of
the Local  Limited  Partnership's  profits less the  Partnership's  share of the
Local Limited  Partnership's  losses,  distributions and impairment charges. See
"Item 7. Financial  Statements Note 1 - Organization  and Summary of Significant
Accounting Policies" for a description of the impairment policy. The Partnership
is not legally liable for the obligations of the Local Limited  Partnerships and
is not otherwise committed to provide additional support to them. Therefore,  it
does not  recognize  losses  once its  investment  in each of the Local  Limited
Partnerships reaches zero. Distributions from the Local Limited Partnerships are
accounted  for as a reduction of the  investment  balance  until the  investment
balance is reduced to zero.  When the  investment  balance  has been  reduced to
zero,  subsequent  distributions  received  are  recognized  as  income  in  the
accompanying statements of operations.

For those  investments  where the  Partnership  has determined that the carrying
value  of its  investments  approximates  the  estimated  fair  value  of  those
investments,  the  Partnership's  policy is to recognize equity in income of the
Local  Limited  Partnerships  only to the extent of  distributions  received and
amortization  of  acquisition  costs  from  those  Local  Limited  Partnerships.
Therefore,  the  Partnership  limits its  recognition of equity  earnings to the
amount it expects to ultimately realize.

ITEM 7.     Financial Statements

                       REAL ESTATE ASSOCIATES LIMITED II

LIST OF FINANCIAL STATEMENTS

      Report of Independent Registered Public Accounting Firm

      Balance Sheet - December 31, 2004

      Statements of Operations - Years ended December 31, 2004 and 2003

      Statements  of Changes in Partners'  (Deficiency)  Capital - Years ended
      December 31, 2004 and 2003

      Statements of Cash Flows - Years ended December 31, 2004 and 2003

      Notes to Financial Statements

           Report of Independent Registered Public Accounting Firm



The Partners
Real Estate Associates Limited II

We have audited the accompanying balance sheet of Real Estate Associates Limited
II as of December 31, 2004, and the related statements of operations, changes in
partners'  (deficiency) capital, and cash flows for each of the two years in the
period  ended   December  31,  2004.   These   financial   statements   are  the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  We were not engaged to perform an
audit of the Partnership's internal control over financial reporting.  Our audit
included  consideration of internal control over financial  reporting as a basis
for designing audit  procedures that are appropriate in the  circumstances,  but
not for the  purpose  of  expressing  an  opinion  on the  effectiveness  of the
Partnership's internal control over financial reporting. Accordingly, we express
no such opinion.  An audit also includes  examining,  on a test basis,  evidence
supporting the amounts and  disclosures in the financial  statements,  assessing
the accounting principles used and significant estimates made by the management,
and evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Real Estate Associates Limited
II at December 31, 2004,  and the results of its  operations  and its cash flows
for each of the two years in the period ended  December 31, 2004,  in conformity
with accounting principles generally accepted in the United States.


                                                          /s/Ernst  &  Young LLP


Greenville, SC
March 29, 2005

                        REAL ESTATE ASSOCIATES LIMITED II
                                  BALANCE SHEET
                                 (in thousands)

                                December 31, 2004
<TABLE>
<CAPTION>


                           ASSETS
<S>                                                                            <C>
Cash and cash equivalents                                                      $ 1,905
Investments in Local Limited Partnerships (Note 2)                                  --
       Total Assets                                                            $ 1,905

       LIABILITIES AND PARTNERS' (DEFICIENCY) CAPITAL
Liabilities                                                                     $ 23

Contingencies (Note 6)

Partners' (deficiency) capital:
  General partners                                               $ (194)
  Limited partners                                                 2,076         1,882
       Total Liabilities and Partners' (Deficiency) Capital                    $ 1,905

               See Accompanying Notes to Financial Statements.
</TABLE>



<PAGE>


                        REAL ESTATE ASSOCIATES LIMITED II
                            STATEMENTS OF OPERATIONS
                    (in thousands, except per interest data)
<TABLE>
<CAPTION>

                                                              Years Ended December 31,
                                                                2004              2003
REVENUES:
<S>                                                             <C>               <C>
  Interest income                                               $ 12              $ 3

OPERATING EXPENSES:
  Legal and accounting                                             94               107
  Management fees - general partner (Note 3)                      116               176
  Administrative (Note 3)                                          32                34
      Total operating expenses                                    242               317

Loss from partnership operations                                 (230)             (314)

Distributions in excess of investment in Local
  Limited Partnerships (Note 2)                                    68                94

Gain on sale of investment in Local Limited Partnership
  (Note 2)                                                      1,541             1,504

Net income                                                    $ 1,379           $ 1,284

Net income allocated to general partners (1%)                   $ 14              $ 13
Net income allocated to limited partners (99%)                  1,365             1,271
                                                              $ 1,379           $ 1,284

Net income per limited partnership interest (Note 1)          $128.19           $119.32

Distribution per limited partnership interest                   $ --            $ 46.94

               See Accompanying Notes to Financial Statements.
</TABLE>



<PAGE>


                      REAL ESTATE ASSOCIATES LIMITED II
           STATEMENTS OF CHANGES IN PARTNERS' (DEFICIENCY) CAPITAL
                   (in thousands, except per interest data)

<TABLE>
<CAPTION>

                                             General         Limited
                                             Partners        Partners          Total

<S>                         <C>                               <C>
Partnership interests (Note 1) (A)                            10,648

Partners' (deficiency) capital at
  January 1, 2003                            $ (221)         $   (60)        $  (281)

Distribution to partners                                        (500)           (500)

Net income for the year ended
  December 31, 2003                              13            1,271           1,284

Partners' (deficiency) capital at
  December 31, 2003                            (208)             711             503

Net income for the year ended
  December 31, 2004                              14            1,365           1,379

Partners' (deficiency) capital at
  December 31, 2004                          $ (194)         $ 2,076         $ 1,882

(A)   Consists of 10,648  partnership  interests at December 31, 2004 and 10,652
      partnership interests at December 31, 2003 (see Note 7).

               See Accompanying Notes to Financial Statements.
</TABLE>

<PAGE>



                        REAL ESTATE ASSOCIATES LIMITED II
                            STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                    Years Ended December 31,
                                                                      2004            2003
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                 <C>             <C>
  Net income                                                        $ 1,379         $ 1,284
  Adjustments to reconcile net income to net cash used
   in operating activities:
     Gain on sale of investment in Local Limited Partnership         (1,541)         (1,504)
     Increase (decrease) in accounts payable                             23             (13)
     Decrease in accrued fees due to affiliates                          --            (279)
         Net cash used in operating activities                         (139)           (512)

CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
  Proceeds from sale of investment in Local Limited
   Partnership                                                        1,541           1,504

CASH FLOWS USED IN FINANCING ACTIVITIES:
  Distribution to partners                                               --            (500)

Net increase in cash and cash equivalents                             1,402             492
Cash and cash equivalents, beginning of year                            503              11

Cash and cash equivalents, end of year                              $ 1,905         $   503


               See Accompanying Notes to Financial Statements.
</TABLE>

                        REAL ESTATE ASSOCIATES LIMITED II
                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2004


Note 1 - Organization and Summary of Significant Accounting Policies

Organization

Real  Estate  Associates  Limited  II (the  Partnership)  was  formed  under the
California  Limited  Partnership  Act on December 4, 1979. The  Partnership  was
formed to invest in other limited  partnerships  which own and operate primarily
federal,  state or  local  government-assisted  housing  projects.  The  general
partners are National Partnership  Investments  Associates ("NAPIA"),  a limited
partnership,   and  National  Partnership  Investments  Corp.  ("NAPICO"),   the
Corporate  General  Partner.  NAPIA  is a  California  limited  partnership  and
consists of Messrs.  Nicholas G. Ciriello, an unrelated  individual,  as general
partner and Charles H.  Boxenbaum and Leonard  Crosby as limited  partners.  The
business of the Partnership is conducted primarily by NAPICO.

On December 3, 2001,  Casden Properties Inc. entered into a merger agreement and
certain other  transaction  documents with  Apartment  Investment and Management
Company, a publicly traded real estate investment  trust("AIMCO") and certain of
its  subsidiaries,  pursuant to which, on March 11, 2002,  AIMCO acquired Casden
Properties  Inc. and its  subsidiaries,  including  100% of the stock of NAPICO.
Prior to March 11, 2002, Casden Properties Inc. owned a 95.25% economic interest
in NAPICO, with the balance owned by Casden Investment Corporation ("CIC"). CIC,
which is wholly owned by Alan I. Casden, owned 95% of the voting common stock of
NAPICO prior to March 11, 2002.

The general  partners share a one percent  interest in the profits and losses of
the Partnership. The limited partners share the remaining 99 percent interest in
proportion to their respective investments.

The  Partnership  shall be  dissolved  only upon the  expiration  of 52 complete
calendar  years  (December  31,  2031)  from  the date of the  formation  of the
Partnership  or the occurrence of various other events as specified in the terms
of the Partnership agreement.

Upon total or partial  liquidation  of the  Partnership  or the  disposition  or
partial  disposition of a project or project  interest and  distribution  of the
proceeds,  the  general  partners  will  be  entitled  to a  liquidation  fee as
stipulated  in the  Partnership  agreement.  The  limited  partners  will have a
priority return equal to their invested  capital  attributable to the project(s)
or project  interest(s) sold. The general  partners'  liquidation fee may accrue
but shall not be paid until the limited  partners  have  received  distributions
equal to 100 percent of their capital  contributions.  No such fees were accrued
or paid during the years ended December 31, 2004 and 2003.

Basis of Presentation

The  accompanying  financial  statements  have been prepared in conformity  with
accounting principles generally accepted in the United States.

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Method of Accounting for Investments in Limited Partnerships

The investments in limited partnerships are accounted for on the equity method.

Net Income Per Limited Partnership Interest

Net income per limited partnership interest was computed by dividing the limited
partners'  share of net income by the number of  limited  partnership  interests
outstanding at the end of the year. The number of limited partnership  interests
was 10,648 for 2004 and 10,652 for 2003 (see Note 7).

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and in bank accounts.  At certain
times,  the amount of cash  deposited  at a bank may exceed the limit on insured
deposits.  Cash balances included approximately  $1,905,000 at December 31, 2004
that are maintained by an affiliated  management company on behalf of affiliated
entities in a cash concentration account.

Impairment of Long-Lived Assets

The  Partnership  reviews its  investments in long-lived  assets to determine if
there has been any  impairments  whenever  events or  changes  in  circumstances
indicate that the carrying amount of the assets may not be  recoverable.  If the
sum of the expected  future cash flows is less than the  carrying  amount of the
assets, the Partnership recognizes an impairment loss. No impairment losses were
recognized during the years ended December 31, 2004 and 2003.

Segment Reporting

Statement of Financial  Accounting Standards ("SFAS") No. 131, "Disclosure about
Segments of an Enterprise and Related Information" established standards for the
way that public business enterprises report information about operating segments
in annual  financial  statements  and  requires  that those  enterprises  report
selected information about operating segments in interim financial reports. SFAS
No. 131 also established  standards for related  disclosures  about products and
services,  geographic areas and major customers. As defined in SFAS No. 131, the
Partnership has only one reportable segment.

Fair Value of Financial Instruments

SFAS No.  107,  "Disclosures  about Fair  Value of  Financial  Instruments",  as
amended by SFAS No. 119, "Disclosures about Derivative Financial Instruments and
Fair  Value  of  Financial  Instruments",  requires  disclosure  of  fair  value
information  about  financial  instruments,  whether  or not  recognized  in the
balance sheet, for which it is practicable to estimate fair value. Fair value is
defined in the SFAS as the amount at which the instruments could be exchanged in
a  current  transaction  between  willing  parties,  other  than in a forced  or
liquidation  sale. The  Partnership  believes that the carrying  amount of other
assets  and  liabilities  reported  on  the  balance  sheet  that  require  such
disclosure approximate their fair value.

Recent Accounting Pronouncements

As of December 31, 2004,  the  Partnership  adopted FASB  Interpretation  No. 46
"Consolidation  of  Variable  Interest  Entities"  (or "FIN 46") and applied its
requirements  to all of the Local Limited  Partnerships in which the Partnership
held a  variable  interest.  FIN 46  addresses  the  consolidation  by  business
enterprises  of  variable  interest  entities.  Generally,  a variable  interest
entity, or VIE, is an entity with one or more of the following  characteristics:
(a) the total equity  investment at risk is not  sufficient to permit the entity
to finance its activities without additional subordinated financial support; (b)
as a group the holders of the equity  investment at risk lack (i) the ability to
make decisions  about an entity's  activities  through voting or similar rights,
(ii) the  obligation to absorb the expected  losses of the entity,  or (iii) the
right to receive the expected  residual returns of the entity; or (c) the equity
investors  have  voting  rights  that are not  proportional  to  their  economic
interests and  substantially all of the entity's  activities either involve,  or
are conducted on behalf of, an investor that has  disproportionately  few voting
rights. FIN 46 requires a VIE to be consolidated in the financial  statements of
the entity that is  determined  to be the primary  beneficiary  of the VIE.  The
primary beneficiary  generally is the entity that will receive a majority of the
VIE's  expected  losses,  receive  a  majority  of the VIE's  expected  residual
returns, or both.

Upon adoption of FIN 46, the Partnership  determined it held variable  interests
in 11 VIE's for which the Partnership was not the primary beneficiary.  Those 11
VIE's consist of Local Limited Partnerships in which the Partnership acquired an
interest  prior to the  adoption  of FIN 46 that  are  directly  engaged  in the
ownership and management of 11 apartment  properties  with a total of 717 units.
The  Partnership  is  involved  with those  VIE's as a  non-controlling  limited
partner equity holder. The Partnership's maximum exposure to loss as a result of
its  involvement  with  unconsolidated  VIE's is  limited  to the  Partnership's
recorded  investments  in and  receivables  from those VIE's,  which was zero at
December 31, 2004. The  Partnership  may be subject to additional  losses to the
extent of any financial support that the Partnership voluntarily provides in the
future.

Note 2 - Investments in Local Limited Partnerships

As of December 31, 2004, the Partnership holds limited partnership  interests in
eleven limited partnerships ("Local Limited  Partnerships").  As of December 31,
2004, all of the Local Limited  Partnerships  own  residential low income rental
projects consisting of 717 apartment units. The mortgage loans of these projects
are payable to or insured by various governmental  agencies. On August 18, 2004,
Redfern Grove Associates sold its investment  property,  consisting of 72 units,
to a third party for  approximately  $2,700,000.  During the year ended December
31, 2004,  the  Partnership  received a  distribution  of the sales  proceeds of
approximately  $1,541,000 for its 99% interest in Redfern Grove Associates after
repayment of the mortgage encumbering the investment property and the payment of
other liabilities. On April 29, 2003, Westward Ho Associates sold its investment
property,  consisting  of 290 units,  to an affiliate of its third party general
partner for approximately $12,362,000.  During the year ended December 31, 2003,
the  Partnership  received  proceeds  of  approximately  $1,504,000  for its 94%
interest  in  Westward  Ho  Associates  after  the  repayment  of  the  mortgage
encumbering the investment  property and the payment of other  liabilities.  The
Partnership  used  approximately  $478,000  of the  proceeds  to pay current and
accrued management fees and expense reimbursements owed to the Corporate General
Partner during the year ended December 31, 2003 (see "Note 3 - Transactions with
Affiliated Parties").  In addition,  during the year ended December 31, 2003 the
Partnership  distributed  $500,000 to the limited  partners of the  Partnership.
There were no distributions  to the limited  partners of the Partnership  during
the year ended December 31, 2004.

The  Partnership,  as a limited  partner,  does not  exercise  control  over the
activities and operations,  including  refinancing or selling decisions,  of the
Local  Limited  Partnerships.  Accordingly,  the  Partnership  accounts  for its
investments  in the Local  Limited  Partnerships  using the equity  method.  The
Partnership  is allocated  profits and losses of the Local Limited  Partnerships
based  upon  its  respective   ownership   percentage  (between  95%  and  99%).
Distributions  of surplus cash from  operations  from most of the Local  Limited
Partnerships  are  restricted  by the  Local  Limited  Partnerships'  Regulatory
Agreements  with the United States  Department of Housing and Urban  Development
("HUD")  and/or are  restricted  by the terms of the mortgages  encumbering  the
Projects. These restrictions limit the distribution to a portion, generally less
than 10%, of the initial invested capital.  The excess surplus cash is deposited
into a residual  receipts  reserve,  of which the  ultimate  realization  by the
Partnership is uncertain as HUD  frequently  retains it upon sale or dissolution
of the Local  Limited  Partnership.  The  Partnership  is allocated  profits and
losses and receives distributions from refinancings and sales in accordance with
the Local Limited Partnerships' partnership agreements. These agreements usually
limit the Partnership's  distributions to an amount  substantially less than its
ownership percentage in the Local Limited Partnership.

The individual  investments are carried at cost plus the Partnership's  share of
the Local  Limited  Partnership's  profits less the  Partnership's  share of the
Local Limited  Partnership's  losses,  distributions and impairment charges. The
Partnership  is not  legally  liable for the  obligations  of the Local  Limited
Partnerships  and is not otherwise  committed to provide  additional  support to
them. Therefore, it does not recognize losses once its investment in each of the
Local Limited  Partnerships  reaches zero.  Distributions from the Local Limited
Partnerships  are accounted for as a reduction of the  investment  balance until
the investment  balance is reduced to zero. When the investment balance has been
reduced to zero, subsequent  distributions  received are recognized as income in
the accompanying statements of operations.

For those  investments  where the  Partnership  has determined that the carrying
value  of its  investments  approximates  the  estimated  fair  value  of  those
investments,  the  Partnership's  policy is to recognize equity in income of the
Local  Limited  Partnerships  only to the extent of  distributions  received and
amortization  of  acquisition  costs  from  those  Local  Limited  Partnerships.
Therefore,  the  Partnership  limits its  recognition of equity  earnings to the
amount it expects to ultimately realize.

The   Partnership  has  no  carrying  value  in  investments  in  Local  Limited
Partnerships as of December 31, 2004.

The  difference  between the investment  per the  accompanying  balance sheet at
December  31,  2004,  and the  deficiency  per the Local  Limited  Partnerships'
combined financial statements is due primarily to cumulative unrecognized equity
in losses of certain limited  partnerships,  costs capitalized to the investment
account,  cumulative  distributions  recognized  as income  and  recognition  of
impairment losses.

Although the  Partnership's  recorded value of its investments and its equity in
distributions from the Local Limited Partnerships are not individually  material
to the overall financial  position of the Partnership,  the unaudited  condensed
combined balance sheet of the  aforementioned  Local Limited  Partnerships as of
December 31, 2004, and the unaudited  combined results of operations for each of
the two years in the period ended December 31, 2004 are as follows (2003 amounts
have been restated to exclude the operations for Redfern Grove Associates, which
sold its investment property on August 18, 2004 and Clearfield Manor Ltd., which
sold its investment property on February 8, 2005):

                        Condensed Combined Balance Sheet
                        of the Local Limited Partnerships

                                                    December 31, 2004
                                               (in thousands - unaudited)
Assets:
   Land                                                  $ 1,014
   Buildings and improvements, net of
     accumulated depreciation of
     approximately $21,165                                 6,552
   Other assets                                            8,369
     Total Assets                                        $15,935

Liabilities and Partners' Deficit:
Liabilities:
  Mortgage notes payable                                 $18,194
  Notes payable                                              220
  Other liabilities                                        1,007
      Total Liabilities                                   19,421

Partners' Deficit                                         (3,486)
      Total Liabilities & Partners' Deficit              $15,935

                   Condensed Combined Results of Operations
                        of the Local Limited Partnerships

                                                      December 31,
                                                   2004          2003
                                               (in thousands - unaudited)
Revenues:
  Rental income                                  $ 5,324       $ 5,615
  Other income                                       470           465
     Total revenues                                5,794         6,080

Expenses:
  Operating                                        3,752         3,550
  Financial                                        1,053         1,581
  Depreciation and amortization                      747           926
     Total expenses                                5,552         6,057

Net income                                        $ 242          $ 23

Under recently adopted law and policy,  the United States  Department of Housing
and Urban Development ("HUD") has determined not to renew the Housing Assistance
Payment  ("HAP")  Contracts  on a long  term  basis on the  existing  terms.  In
connection with renewals of the HAP Contracts under such new law and policy, the
amount of rental  assistance  payments under renewed HAP Contracts will be based
on market  rentals  instead of above market  rentals,  which may not be the case
under existing HAP  Contracts.  The payments under the renewed HAP Contracts may
not be in an amount that would provide  sufficient cash flow to permit owners of
properties  subject to HAP  Contracts to meet the debt service  requirements  of
existing  loans  insured by the Federal  Housing  Administration  of HUD ("FHA")
unless such mortgage loans are  restructured.  In order to address the reduction
in payments under HAP Contracts as a result of this new policy, the Multi-family
Assisted Housing Reform and  Affordability  Act of 1997 ("MAHRAA")  provides for
the  restructuring  of  mortgage  loans  insured  by the  FHA  with  respect  to
properties  subject  to the  Section 8 program.  Under  MAHRAA,  an  FHA-insured
mortgage  loan can be  restructured  into a first  mortgage  loan  which will be
amortized on a current basis and a low interest  second mortgage loan payable to
FHA which will only be payable on  maturity  of the first  mortgage  loan.  This
restructuring results in a reduction in annual debt service payable by the owner
of the  FHA-insured  mortgage  loan and is  expected  to result in an  insurance
payment from FHA to the holder of the  FHA-insured  loan due to the reduction in
the principal amount. MAHRAA also phases out project-based subsidies on selected
properties  serving  families not located in rental markets with limited supply,
converting such subsidies to a tenant-based subsidy.

When the HAP  Contracts are subject to renewal,  there can be no assurance  that
the Local Limited  Partnerships  in which the Partnership has an investment will
be permitted to restructure its mortgage indebtedness under MAHRAA. In addition,
the  economic  impact  on the  Partnership  of the  combination  of the  reduced
payments  under  the  HAP  Contracts  and  the  restructuring  of  the  existing
FHA-insured mortgage loans under MAHRAA is uncertain.

Clearfield Manor

Subsequent  to December 31, 2004,  Clearfield  Manor  Associates  Ltd.  sold its
investment property,  consisting of 40 units, to an affiliate of its third party
general  partner  for  approximately   $291,000  plus  assumption  of  the  loan
encumbering  the investment  property.  During  February  2005, the  Partnership
received  proceeds of approximately  $276,000 for its 95% interest in Clearfield
Manor  Associates Ltd. The  Partnership  has no investment  balance in the Local
Limited Partnership which owned the property at December 31, 2004.

Willow Wick Apts.

The Local Operating General Partner for Willow Wick Apts. has requested approval
from the  Partnership  to sell the  property.  The  request is  currently  under
consideration by the Partnership.  The Partnership has no investment  balance in
the Local Limited Partnership which owns the property at December 31, 2004.

Note 3 - Transactions with Affiliated Parties

Under the terms of the Restated  Certificate and Agreement of Limited  Partners,
the  Partnership  is liable to NAPICO for an annual  management fee equal to 0.4
percent of the  original  invested  assets of the  limited  partnerships  and is
calculated  at the  beginning of each year.  Invested  assets are defined as the
costs of acquiring project interests,  including the proportionate amount of the
mortgage loans related to the Partnership's interests in the capital accounts of
the respective partnerships. The fee was approximately $116,000 and $176,000 for
the years ended December 31, 2004 and 2003, respectively.

The Partnership  reimburses  NAPICO for certain  expenses.  The reimbursement to
NAPICO  was  approximately  $20,000  for both 2004 and 2003 and is  included  in
administrative expenses.

During the year ended  December  31,  2003 the  Partnership  paid  approximately
$478,000 of accrued fees and expenses owed to the Corporate General Partner. The
payments  were made  with  proceeds  from the sale of  Westward  Ho  Apartments.
Approximately $452,000 of the fees and expenses paid were for accrued management
fees and approximately $26,000 were for accrued  administrative  reimbursements.
There  were no fees  and  expenses  owed to the  Corporate  General  Partner  at
December 31, 2004 or 2003.

AIMCO and its affiliates  owned 870 limited  partnership  units (the "Units") or
1,740 limited  partnership  interests in the Partnership  representing 16.34% of
the  outstanding  Units at December  31,  2004.  A Unit  consists of two limited
partnership interests.  It is possible that AIMCO or its affiliates will acquire
additional  Units in  exchange  for cash or a  combination  of cash and units in
AIMCO  Properties,  L.P., the operating  partnership  of AIMCO.  Pursuant to the
Partnership Agreement,  unitholders holding a majority of the Units are entitled
to take action with  respect to a variety of matters that  include,  but are not
limited to, voting on certain amendments to the Partnership Agreement and voting
to remove the Corporate General Partner.  Although the Corporate General Partner
owes fiduciary duties to the limited partners of the Partnership,  the Corporate
General partner also owes fiduciary duties to AIMCO as its sole stockholder.  As
a result,  the duties of the Corporate  General  Partner,  as corporate  general
partner, to the Partnership and its limited partners may come into conflict with
the duties of the Corporate General Partner to AIMCO as its sole stockholder.

Note 4 - Income Taxes

The  Partnership  is not taxed on its income.  The  partners  are taxed in their
individual  capacities based upon their  distributive share of the Partnership's
taxable  income  or  loss  and are  allowed  the  benefits  to be  derived  from
off-setting  their  distributive  share of the tax losses against taxable income
from other sources  subject to passive loss  limitations.  The taxable income or
loss differs from  amounts  included in the  statements  of  operations  because
different  methods  are used in  determining  the  losses of the  Local  Limited
Partnerships as discussed below. The tax loss is allocated to the partner groups
in accordance with Section 704(b) of the Internal  Revenue Code and therefore is
not necessarily proportionate to the interest percentage owned.

A reconciliation is as follows:

                                                  Years Ended December 31,
                                                     2004            2003
                                                       (in thousands)
Net income per financial statements                $ 1,379         $ 1,284

Other                                                    1            (267)
Partnership's share of Local Limited
  Partnership                                         (586)          7,961

Income per tax return                               $ 794          $ 8,978
Income per limited partnership interest            $ 73.09         $815.62

The following is a reconciliation between the Partnership's reported amounts and
the  federal  tax basis of net assets  (liabilities)  at  December  31, 2004 (in
thousands):

      Net assets as reported                          $ 1,882
      Add (deduct):
       Investment in Partnerships                      (6,841)
       Deferred offering costs                          3,516
       Other                                               41
      Net liabilities - federal tax basis             $(1,402)



<PAGE>


Note  5  -  Real  Estate  and   Accumulated   Depreciation  of  Local  Limited
         Partnerships in Which REAL II has Invested (Unaudited)


                         Gross Amount At Which
                                Carried
                              At December 31, 2004
                           (in thousands - unaudited)
<TABLE>
<CAPTION>

                                        Buildings
                                           And
                                         Related
                                        Personal             Accumulated    Date of
    Description     Encumbrances Land   Property    Total    Depreciation Construction

<S>                   <C>        <C>     <C>       <C>         <C>       <C>   <C>
Azalea Court          $ 1,435    $ 62    $ 1,879   $ 1,941     $ 1,073   10/80-3/81

Branford Elderly          629      138     1,627     1,765         879    6/80-4/81

Cherrywood/Saturn
Apartments              2,662      146     2,640     2,786       2,100    9/79-4/80

Clearfield Manor        (A)       (A)      (A)        (A)        (A)         (A)

Crystal Springs           596       36       803       839         671    7/80-3/81

Lakeside
Apartments              1,792      115     1,874     1,989       1,600   10/80-6/81

Landmark Towers           542       39     1,690     1,729       1,518   4/79-10/80

Magnolia State          1,153       57     1,664     1,721       1,235    3/80-8/80

Sugar River Mills       6,861      310     9,458     9,768       6,928    2/81-4/82

Valebrook               2,107       89     5,458     5,547       4,625    2/79-2/80

Willow Wick
Apartments                417       22       624       646         536    9/80-5/81

  Totals              $18,194   $1,014   $27,717   $28,731     $21,165
</TABLE>

(A) Local Limited  Partnership  sold its  investment  property in February 2005.
 Information at December 31, 2004 was not available to the Partnership.

Reconciliation of real estate (unaudited)

                                                 Years Ended December 31,
                                                   2004           2003
                                                      (in thousands)

Balance at beginning of year                     $ 32,722       $ 48,561
Net disposals during the year                      (3,991)       (15,839)
Balance at end of year                           $ 28,731       $ 32,722

Reconciliation of accumulated depreciation (unaudited)

                                                 Years Ended December 31,
                                                   2004           2003
                                                      (in thousands)
Balance at beginning of year                      $23,396       $33,143
Depreciation expense for the year                     747         1,031
Disposals for the year                             (2,978)       10,788)
Balance at end of year                            $21,165       $23,396

Note 6 - Contingencies

The  Corporate  General  Partner is involved in various  lawsuits  arising  from
transactions  in the ordinary  course of business.  In the opinion of management
and the Corporate  General  Partner,  the claims will not result in any material
liability to the Partnership.

As  previously  disclosed,  the  Central  Regional  Office of the United  States
Securities  and  Exchange   Commission   (the  "SEC")  is  conducting  a  formal
investigation relating to certain matters.  Although the staff of the SEC is not
limited  in the  areas  that it may  investigate,  AIMCO  believes  the areas of
investigation include AIMCO's miscalculated monthly net rental income figures in
third quarter 2003,  forecasted  guidance,  accounts payable,  rent concessions,
vendor  rebates,  capitalization  of payroll and certain  other  costs,  and tax
credit  transactions.  AIMCO is cooperating  fully. AIMCO is not able to predict
when the matter  will be  resolved.  AIMCO does not  believe  that the  ultimate
outcome  will have a  material  adverse  effect on its  financial  condition  or
results of operations. Similarly, the Corporate General Partner does not believe
that  the  ultimate   outcome  will  have  a  material  adverse  effect  on  the
Partnership's financial condition or results of operations.

Note 7 - Abandonment of Limited Partnership Interests

During 2004 and 2003, the number of limited partnership  interests decreased for
both years by 4  interests,  respectively,  due to limited  partners  abandoning
their interests.  In abandoning his or her Limited  Partnership  Interest(s),  a
limited partner  relinquishes all right,  title, and interest in the partnership
as of the date of abandonment.  However, the limited partner is allocated his or
her  share  of net  income  or loss  for  that  year.  The  income  per  limited
partnership interest in the accompanying  statements of operations is calculated
based on the number of interests outstanding at the end of the year.


<PAGE>



ITEM 8.     Changes in and  Disagreements  with Accountants on Accounting and
            Financial Disclosures

            None.

ITEM 8A.    Controls and Procedures

(a) Disclosure Controls and Procedures.  The Partnership's management,  with the
participation of the principal executive officer and principal financial officer
of the Corporate  General Partner,  who are the equivalent of the  Partnership's
principal executive officer and principal financial officer,  respectively,  has
evaluated  the  effectiveness  of  the  Partnership's  disclosure  controls  and
procedures (as such term is defined in Rules  13a-15(e) and 15d-15(e)  under the
Securities  Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this report.  Based on such  evaluation,  the principal
executive  officer and  principal  financial  officer of the  Corporate  General
Partner, who are the equivalent of the Partnership's principal executive officer
and principal  financial officer,  respectively,  have concluded that, as of the
end of such period,  the  Partnership's  disclosure  controls and procedures are
effective.

(b) Internal Control Over Financial  Reporting.  There have not been any changes
in the Partnership's  internal control over financial reporting (as such term is
defined in Rules  13a-15(f)  and  15d-15(f)  under the Exchange  Act) during the
fourth quarter of 2004 that have materially  affected,  or are reasonably likely
to  materially  affect,  the  Partnership's   internal  control  over  financial
reporting.

ITEM 8B.    Other Information

            None.


<PAGE>



                                    PART III

ITEM 9.     Directors and Executive Officers of the Registrant

Real Estate Associates Limited II (the "Partnership" or the "Registrant") has no
directors  or officers.  The general  partner  responsible  for  conducting  the
business  of  the  Partnership  is  National  Partnership   Investments  Corp  a
California Corporation ("NAPICO" or the "Corporate General Partner").

The names and ages of, as well as the positions and offices held by, the present
directors  and officers of NAPICO are set forth  below:  The  Corporate  General
Partner manages and controls  substantially all of the Partnership's affairs and
has general  responsibility  and ultimate authority in all matters affecting its
business.  There are no family  relationships  between or among any directors or
officers.

Harry G. Alcock                 42    Executive Vice President and
                                        Director
David R. Robertson              39    President, Chief Executive Officer
                                        and Director
Charles McKinney                53    Senior Vice President and Director
                                        of Asset Management
Jeffrey H. Sussman              39    Senior Vice President, General
                                        Counsel and Secretary
Brian H. Shuman                 42    Senior Vice President and Chief
                                        Financial Officer

Harry G. Alcock was appointed as a Director of the Corporate  General Partner in
October 2004 and was appointed Executive Vice President of the Corporate General
Partner  in  February  2004 and has been  Executive  Vice  President  and  Chief
Investment Officer of AIMCO since October 1999. Prior to October 1999 Mr. Alcock
served as a Vice President of AIMCO from July 1996 to October 1997,  when he was
promoted to Senior Vice  President  Acquisitions  where he served until  October
1999. Mr. Alcock has had responsibility for acquisition and financing activities
of AIMCO since July 1994.

David R. Robertson has been President, Chief Executive Officer and a Director of
the Corporate  General  Partner since  October 2002.  Mr.  Robertson has been an
Executive  Vice  President  of AIMCO  since  February  2002,  and was  appointed
President and Chief  Executive  Officer of AIMCO  Capital in October  2002.  Mr.
Robertson  is  responsible  for  property   operations,   asset  management  and
transaction   activities   within  AIMCO   Capital's   portfolio  of  affordable
properties,  and for  redevelopment  and  construction  activities  for both the
conventional  and  affordable  property  portfolios.  Since  February  1996, Mr.
Robertson has been Chairman and Chief Executive Officer of Robeks Corporation, a
privately held chain of specialty food stores.

Charles McKinney has been Senior Vice President and Director of Asset Management
of the  Corporate  General  Partner and AIMCO Capital since January 2003 and has
overall responsibility for monitoring the construction, lease-up, operations and
compliance  issues for all  assets  constituting  a part of  AIMCO's  affordable
portfolio.  Mr.  McKinney  joined AIMCO as Vice President of Transactions in the
Affordable  Group  in  June  2002  and  had   responsibility   for  value  added
dispositions  of  affordable  properties  in the  Western  portion of the United
States.  From  September  2000  through  May 2002,  Mr.  McKinney  was  Managing
Underwriter for Real Estate Recovery, Inc. where he was responsible for the real
estate loan underwriting and loan review for the company's  clients.  From March
1998 through August 2000, Mr.  McKinney was the Executive  Managing  Director of
American Capital Advisors, Inc. an investment banking company.

Jeffrey H. Sussman has been Senior Vice President, General Counsel and Secretary
of the Corporate  General  Partner since joining  NAPICO in 1998. Mr. Sussman is
responsible for the legal affairs of NAPICO and its affiliates. Prior to joining
NAPICO in 1998, Mr. Sussman was an associate with the law firm of Rus, Miliband,
Williams & Smith in Irvine,  California.  His  practice  emphasized  real estate
finance  and  insolvency  law and  included  the  representation  of  borrowers,
lenders, and court-appointed  trustees in matters involving apartment complexes,
retail centers and hotels.

Brian H. Shuman has been Senior Vice  President and Chief  Financial  Officer of
the  Corporate  General  Partner  since  joining  NAPICO in 2000.  Mr. Shuman is
responsible  for  the  financial  affairs  of  NAPICO  as  well  as the  limited
partnership  sponsored by it. From 1996 until joining NAPICO in August 2000, Mr.
Shuman was Vice President - Finance for Preferred  Health  Management  Inc., the
largest  provider  of  worker   compensation   diagnostic  imaging  services  in
California formed in 1996, and was responsible for establishing and managing the
accounting, billing, collection, treasury and financial reporting departments.

The board of directors of the Corporate General Partner does not have a separate
audit  committee.  As such,  the board of  directors  of the  Corporate  General
Partner fulfills the functions of an audit committee. The board of directors has
determined  that Brian H. Shuman meets the  requirement  of an "audit  committee
financial expert".

The directors and officers of the Corporate  General Partner with authority over
the Partnership are all employees of subsidiaries of AIMCO.  AIMCO has adopted a
code of ethics that applies to such  directors  and  officers  that is posted on
AIMCO's  website  (www.AIMCO.com).   AIMCO's  website  is  not  incorporated  by
reference to this filing.

ITEM 10.    Executive Compensation

None of the directors and officers of the Corporate General Partner received any
remuneration from the Partnership during the year ended December 31, 2004.

ITEM 11.    Security Ownership of Certain Beneficial Owners and Management

(a)   Security Ownership of Certain Beneficial Owners

The General Partners own all of the outstanding general partnership interests of
REAL II.  Except as noted below as of December 31, 2004,  no person or entity is
known to the  Partnership  to own  beneficially  in excess  of 5 percent  of the
outstanding limited partnership interests.

                                         Number of Limited
      Entity                           Partnership Interests     Percentage
      AIMCO Properties, LP
        (an affiliate of AIMCO)               1,740.0              16.34%

AIMCO  Properties,  LP is  indirectly  ultimately  controlled  by  AIMCO.  Its
business address is Stanford Place 3, 4582 S. Ulster St. Parkway,  Suite 1100,
Denver, Colorado 80237.

(b)   None of the  directors or officers of the  Corporate  General  Partner own
      directly or beneficially any limited partnership interests in REAL II.

ITEM 12.    Certain Relationships and Related Transactions

Under the terms of the Restated  Certificate and Agreement of Limited  Partners,
the  Partnership  is liable to NAPICO for an annual  management fee equal to 0.4
percent of the  original  invested  assets of the  limited  partnerships  and is
calculated  at the  beginning of each year.  Invested  assets are defined as the
costs of acquiring project interests,  including the proportionate amount of the
mortgage loans related to the Partnership's interests in the capital accounts of
the respective partnerships. The fee was approximately $116,000 and $176,000 for
the years ended December 31, 2004 and 2003, respectively.

The Partnership  reimburses  NAPICO for certain  expenses.  The reimbursement to
NAPICO  was  approximately  $20,000  for both 2004 and 2003 and is  included  in
administrative expenses.

During the year ended  December  31,  2003 the  Partnership  paid  approximately
$478,000 of accrued fees and expenses owed to the Corporate General Partner. The
payments  were made  with  proceeds  from the sale of  Westward  Ho  Apartments.
Approximately $452,000 of the fees and expenses paid were for accrued management
fees and approximately $26,000 were for accrued  administrative  reimbursements.
There  were no fees  and  expenses  owed to the  Corporate  General  Partner  at
December 31, 2004 or 2003.

AIMCO and its affiliates  owned 870 limited  partnership  units (the "Units") or
1,740 limited  partnership  interests in the Partnership  representing 16.34% of
the  outstanding  Units at December  31,  2004.  A Unit  consists of two limited
partnership interests.  It is possible that AIMCO or its affiliates will acquire
additional  Units in  exchange  for cash or a  combination  of cash and units in
AIMCO  Properties,  L.P., the operating  partnership  of AIMCO.  Pursuant to the
Partnership Agreement,  unitholders holding a majority of the Units are entitled
to take action with  respect to a variety of matters that  include,  but are not
limited to, voting on certain amendments to the Partnership Agreement and voting
to remove the Corporate General Partner.  Although the Corporate General Partner
owes fiduciary duties to the limited partners of the Partnership,  the Corporate
General partner also owes fiduciary duties to AIMCO as its sole stockholder.  As
a result,  the duties of the Corporate  General  Partner,  as corporate  general
partner, to the Partnership and its limited partners may come into conflict with
the duties of the Corporate General Partner to AIMCO, as its sole stockholder.

ITEM 13.    Exhibits

See Exhibit Index.

ITEM 14.    Principal Accountant Fees and Services

The Corporate  General Partner has reappointed  Ernst & Young LLP as independent
auditors to audit the financial  statements  of the  Partnership  for 2005.  The
aggregate  fees billed for  services  rendered by Ernst & Young LLP for 2004 and
2003 are described below.

Audit Fees. Fees for audit services  totaled  approximately  $49,000 and $44,000
for 2004 and 2003,  respectively.  Fees for audit services also include fees for
the reviews of the Partnership's Quarterly Reports on Form 10-QSB.

Tax Fees.  Fees for tax services  totaled  approximately  $8,000 and $20,000 for
2004 and 2003, respectively.


<PAGE>




                                   SIGNATURES



In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                    REAL ESTATE ASSOCIATES LIMITED II
                                    (a California limited partnership)


                                    By:   National Partnership Investments Corp.
                                          Corporate General Partner


                                    By:   /s/David R. Robertson
                                          David R. Robertson
                                          President, Chief Executive Officer
                                          and Director


                                    By:   /s/Brian H. Shuman
                                          Brian H. Shuman
                                          Senior Vice President and
                                          Chief Financial Officer


                                    Date: March 31, 2005


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
dates indicated.


/s/Harry G. Alcock            Executive Vice President      Date: March 31, 2005
Harry G. Alcock               and Director


/s/David R. Robertson         President, Chief Executive    Date: March 31, 2005
David R. Robertson            Officer and Director


/s/Brian H. Shuman            Senior Vice President and     Date: March 31, 2005
Brian H. Shuman               Chief Financial Officer



<PAGE>


                        REAL ESTATE ASSOCIATES LIMITED II
                                  EXHIBIT INDEX


Exhibit     Description of Exhibit

 3          Articles  of  incorporation  and  bylaws:  The  Registrant  is not
            incorporated.  The Partnership  Agreement was filed with Form S-11
            #266171 which is hereby incorporated by reference.

          3.1  Amendments  to  Restated  Certificate  and  Agreement  of Limited
               Partnership.  Incorporated by reference to the Registrant's  Form
               8-K filed on January 24, 2005.

          3.2  Restated   Certificate  and  Agreement  of  Limited   Partnership
               (complete  text as  amended).  Incorporated  by  reference to the
               Registrant's Form 8-K filed on January 24, 2005.

10          Material  contracts:  The  Registrant  is not party to any  material
            contracts,  other than the  Restated  Certificate  and  Agreement of
            Limited  Partnership  dated  December  4, 1979,  and the  twenty-one
            contracts representing the Partnership's investment in Local Limited
            Partnerships  as  previously  filed at the  Securities  and Exchange
            Commission, File #266171, which is hereby incorporated by reference.

31.1        Certification  of equivalent of Chief Executive  Officer pursuant to
            Securities  Exchange  Act  Rules  13a-14(a)/15d-14(a),   as  Adopted
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2        Certification  of equivalent of Chief Financial  Officer pursuant to
            Securities  Exchange  Act  Rules  13a-14(a)/15d-14(a),   as  Adopted
            Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1        Certification  Pursuant  to  18  U.S.C.  Section  1350,  as  Adopted
            Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


<PAGE>


Exhibit 31.1


                                  CERTIFICATION


I, David R. Robertson, certify that:


1.    I have  reviewed  this  annual  report  on  Form  10-KSB  of  Real  Estate
      Associates Limited II;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the small  business  issuer as of, and for, the periods  presented in this
      report;

4.    The  small  business  issuer's  other  certifying  officer(s)  and  I  are
      responsible  for  establishing  and  maintaining  disclosure  controls and
      procedures (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
      the small business issuer and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            small business issuer, including its consolidated  subsidiaries,  is
            made  known to us by  others  within  those  entities,  particularly
            during the period in which this report is being prepared;

      (b)   Evaluated  the   effectiveness   of  the  small  business   issuer's
            disclosure  controls and procedures and presented in this report our
            conclusions about the  effectiveness of the disclosure  controls and
            procedures, as of the end of the period covered by this report based
            on such evaluation; and

      (c)   Disclosed in this report any change in the small  business  issuer's
            internal  control over financial  reporting that occurred during the
            small  business  issuer's  most  recent  fiscal  quarter  (the small
            business  issuer's  fourth  fiscal  quarter in the case of an annual
            report) that has  materially  affected,  or is reasonably  likely to
            materially affect, the small business issuer's internal control over
            financial reporting; and

5.    The  small  business  issuer's  other  certifying  officer(s)  and I  have
      disclosed,  based on our most recent  evaluation of internal  control over
      financial reporting, to the small business issuer's auditors and the audit
      committee of the small  business  issuer's  board of directors (or persons
      performing the equivalent functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely  affect the small business  issuer's
            ability  to  record,   process,   summarize  and  report   financial
            information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees who have a significant  role in the small  business
            issuer's internal control over financial reporting.


Date:  March 31, 2005

                                    /s/David R. Robertson
                                    David R. Robertson
                                    President and Chief  Executive  Officer of
                                    National      Partnership      Investments
                                    Corporation,   equivalent   of  the  chief
                                    executive officer of the Partnership


<PAGE>



Exhibit 31.2


                                  CERTIFICATION

I, Brian H. Shuman, certify that:

1.    I have  reviewed  this  annual  report  on  Form  10-KSB  of  Real  Estate
      Associates Limited II;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the small  business  issuer as of, and for, the periods  presented in this
      report;

4.    The  small  business  issuer's  other  certifying  officer(s)  and  I  are
      responsible  for  establishing  and  maintaining  disclosure  controls and
      procedures (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
      the small business issuer and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            small business issuer, including its consolidated  subsidiaries,  is
            made  known to us by  others  within  those  entities,  particularly
            during the period in which this report is being prepared;

      (b)   Evaluated  the   effectiveness   of  the  small  business   issuer's
            disclosure  controls and procedures and presented in this report our
            conclusions about the  effectiveness of the disclosure  controls and
            procedures, as of the end of the period covered by this report based
            on such evaluation; and

      (c)   Disclosed in this report any change in the small  business  issuer's
            internal  control over financial  reporting that occurred during the
            small  business  issuer's  most  recent  fiscal  quarter  (the small
            business  issuer's  fourth  fiscal  quarter in the case of an annual
            report) that has  materially  affected,  or is reasonably  likely to
            materially affect, the small business issuer's internal control over
            financial reporting; and

5.    The  small  business  issuer's  other  certifying  officer(s)  and I  have
      disclosed,  based on our most recent  evaluation of internal  control over
      financial reporting, to the small business issuer's auditors and the audit
      committee of the small  business  issuer's  board of directors (or persons
      performing the equivalent functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely  affect the small business  issuer's
            ability  to  record,   process,   summarize  and  report   financial
            information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees who have a significant  role in the small  business
            issuer's internal control over financial reporting.


Date:  March 31, 2005

                                    /s/Brian H. Shuman
                                    Brian H. Shuman
                                    Senior Vice President and Chief  Financial
                         Officer of National Partnership
                                    Investments  Corporation,   equivalent  of
                                    the  chief   financial   officer   of  the
                                   Partnership


<PAGE>


Exhibit 32.1


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                Section 906 of the Sarbanes-Oxley Act of 2002



In connection  with the Annual  Report on Form 10-KSB of Real Estate  Associates
Limited II (the  "Partnership"),  for the year ended  December 31, 2004 as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
David R.  Robertson,  as the  equivalent of the chief  executive  officer of the
Partnership,  and Brian H.  Shuman,  as the  equivalent  of the chief  financial
officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that, to the best of his knowledge:

      (1)   The Report fully complies with the  requirements of Section 13(a) or
            15(d) of the Securities Exchange Act of 1934; and

      (2)   The  information  contained in the Report  fairly  presents,  in all
            material respects, the financial condition and results of operations
            of the Partnership.


                                           /s/David R. Robertson
                                    Name:  David R. Robertson
                                    Date:  March 31, 2005


                                           /s/Brian H. Shuman
                                    Name:  Brian H. Shuman
                                    Date:  March 31, 2005


This  certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley  Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.