UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

[ X ]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
       OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended      SEPTEMBER 30, 1995

                                       OR

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

For the transition period from               to               .

                          Commission File Number 1-9496

                          BODDIE-NOELL PROPERTIES, INC.
             (Exact name of registrant as specified in its charter)


         Delaware                                     56-1574675
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

                3710 One First Union Center, Charlotte, NC 28202
                    (Address of principal executive offices)
                                   (Zip Code)

                                  704/333-1367
              (Registrant's telephone number, including area code)


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X    No

                      APPLICABLE ONLY TO CORPORATE ISSUERS:
         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of November 1, 1995 (the latest practicable date).

         Common Stock, $0.01 par value                       3,016,740
-----------------------------------------------         ------------------
(Class)                                                 (Number of shares)


<PAGE>





                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

  ITEM NO.                                                                             PAGE NO.

<S>                     <C>                                                             <C>   
                       PART I - FINANCIAL INFORMATION
 1                     Financial Statements                                             1
 2                     Management's Discussion and Analysis of Financial Condition
                       and Results of Operations                                        7

                       PART II - OTHER INFORMATION
 1                     Legal Proceedings                                                12
 6                     Exhibits and Reports on Form 8-K                                 12

</TABLE>

<PAGE>



                                     PART I

ITEM 1.  FINANCIAL STATEMENTS

BODDIE-NOELL PROPERTIES, INC.
--------------------------------------------------------------------------
BALANCE SHEETS
<TABLE>
<CAPTION>



                                                                                     SEPTEMBER 30,     DECEMBER 31,
                                                                                         1995              1994
                                                                                    ----------------  ---------------
                                                                                      (Unaudited)
<S>                                                                                  <C>               <C>  
ASSETS
Real estate investments at cost:
   Restaurant properties                                                                $43,205,075      $43,205,075
   Apartment properties                                                                  55,032,907       54,723,503
                                                                                    ----------------  ---------------

                                                                                         98,237,982       97,928,578
   Less accumulated depreciation                                                         (8,455,916)      (6,827,337)
                                                                                    ----------------  ---------------

                                                                                         89,782,066       91,101,241
Cash and cash equivalents                                                                   718,879          952,363
Rent and other receivables                                                                  419,693          493,306
Other assets, net of applicable amortization:
   Intangible related to property management
     operations, net                                                                      2,507,929        2,318,335
   Deferred financing costs, net                                                            504,725          466,217
   Deferred acquisition costs                                                               321,401          255,999
   Prepaid expenses and other
      assets                                                                                662,983          366,753
                                                                                    ----------------  ---------------
         Total assets                                                                   $94,917,676      $95,954,214
                                                                                    ================  ===============
                                                                                    ----------------  ---------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgage and other notes payable                                                        $59,718,526      $59,827,256
Notes payable to affiliates                                                               7,056,300        7,056,300
Deferred acquisition and financing
     costs payable                                                                                -           91,000
Accounts payable and accrued
     expenses                                                                             1,059,878          785,886
Escrowed security deposits and deferred
     revenue                                                                                194,741          225,863
                                                                                    ----------------  ---------------
      Total liabilities                                                                  68,029,445       67,986,305
                                                                                    ----------------  ---------------

Shareholders' equity:
   Common stock, $.01 par value, 100,000,000 shares authorized,
      3,016,740 shares issued and outstanding at September 30, 1995,
      2,990,990 shares issued and outstanding at December 31, 1994                           30,167           29,910
   Additional paid-in capital                                                            33,785,335       33,452,611
   Dividends distributed in excess
      of net income                                                                      (6,927,271)      (5,514,612)
                                                                                    ----------------  ---------------
      Total shareholders' equity                                                         26,888,231       27,967,909
                                                                                    ----------------  ---------------
         Total liabilities and shareholders' equity                                      $94,917,676      $95,954,214
                                                                                    ================  ===============

</TABLE>

                                                                             1

<PAGE>


BODDIE-NOELL PROPERTIES, INC.
--------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>


                                                      THREE MONTHS ENDED                   NINE MONTHS ENDED
                                                          SEPTEMBER 30,                      SEPTEMBER 30,
                                                    1995              1994               1995              1994
                                               ----------------  ----------------   ----------------  ---------------

<S>                                            <C>                <C>                <C>                <C>  
REVENUES
Restaurant rental income                            $1,211,546        $1,333,003         $3,548,270       $3,793,685
Apartment rental income                              2,178,661           941,323          6,322,226        2,157,396
Management fees                                        127,119                 -            514,419                -
Interest and other income                               13,048             4,890             26,669           43,453
                                               ----------------  ----------------   ----------------  ---------------

                                                     3,530,374         2,279,216         10,411,584        5,994,534
                                               ----------------  ----------------   ----------------  ---------------

EXPENSES
Depreciation                                           544,299           339,744          1,639,167          912,246
Amortization                                            95,306            48,794            303,064          124,022
Apartment operations                                   724,659           244,094          1,947,240          635,194
Property management fees                                     -            50,216                  -          111,575
Administrative                                         339,507           105,375          1,087,097          316,125
Advisory fees                                                -            57,013                  -          152,747
Interest                                             1,359,463           683,442          4,031,506        1,646,754
Write-off of deferred loan costs
   at refinancing                                            -           109,489             22,139          109,489
                                               ----------------  ----------------   ----------------  ---------------

                                                     3,063,234         1,638,167          9,030,213        4,008,152
                                               ----------------  ----------------   ----------------  ---------------
NET INCOME                                            $467,140          $641,049         $1,381,371       $1,986,382
                                               ================  ================   ================  ===============


                                    
NET INCOME PER SHARE                                     $0.16             $0.22              $0.46            $0.70
                                               ================  ================   ================  ===============

WEIGHTED AVERAGE NUMBER
  OF SHARES OUTSTANDING                              3,012,990         2,850,000          3,002,125        2,850,000
                                               ================  ================   ================  ===============
</TABLE>


                                                                              2

<PAGE>





BODDIE-NOELL PROPERTIES, INC.
--------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>


                                                                                           NINE MONTHS ENDED
                                                                                             SEPTEMBER 30,
                                                                                         1995              1994
                                                                                    ----------------  ---------------

<S>                                                                                 <C>               <C>   
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income                                                                              $1,381,371       $1,986,382
Adjustments to reconcile net income to
   net cash provided by operations:
   Equity in income of unconsolidated subsidiary                                            (2,710)               -
   Depreciation and amortization                                                         1,942,231        1,036,268
   Write-off of deferred loan costs                                                         22,139          109,489
   Changes in operating assets and liabilities:
      Rent and other receivables                                                            73,613          (71,797)
      Prepaid expenses and other assets                                                   (310,113)         224,407
      Accounts payable and accrued expenses                                                181,972          148,303
      Escrowed security deposits and deferred revenue                                      (25,117)          26,160
                                                                                    ----------------  ---------------
Net cash provided by operating activities                                                3,263,386        3,459,212
                                                                                    ----------------  ---------------

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of apartment properties                                                             -       (9,366,719)
Additions to apartment properties                                                         (259,403)         (99,160)
Payment of deferred acquisition and financing costs                                       (334,707)        (893,998)
                                                                                    ----------------  ---------------
Net cash used in investing activities                                                     (594,110)     (10,359,877)
                                                                                    ----------------  ---------------

CASH FLOWS FROM FINANCING ACTIVITIES
Payment of dividends                                                                    (2,794,030)      (2,650,498)
Proceeds from notes payable                                                             10,675,000       25,850,000
Principal payments on notes payable                                                    (10,783,730)     (15,258,184)
                                                                                    ----------------  ---------------
Net cash provided by (used in) financing activities                                     (2,902,760)        7,941,318
                                                                                    ----------------  ---------------

Increase (decrease) in cash and cash equivalents                                          (233,484)        1,040,653
Cash and cash equivalents at beginning of period                                           952,363          121,530
                                                                                    ----------------  ---------------

Cash and cash equivalents at end of period                                                $718,879       $1,162,183
                                                                                    ================  ===============


</TABLE>


                                                                              3

<PAGE>


BODDIE-NOELL PROPERTIES, INC.
--------------------------------------------------------------------------
STATEMENTS OF SHAREHOLDERS'
EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
(Unaudited)

<TABLE>
<CAPTION>


                                                                                      DIVIDENDS
                                                                    ADDITIONAL       DISTRIBUTED
                                         COMMON STOCK                PAID-IN         IN EXCESS OF
                                    SHARES          AMOUNT           CAPITAL          NET INCOME           TOTAL
                                 -------------   -------------   ----------------  ----------------   ----------------
<S>                               <C>                <C>            <C>              <C>                 <C>        
Balance at December 31, 1994       $2,990,990         $29,910        $33,452,611      $(5,514,612)        $27,967,909

Net income, 1st quarter                                                                   388,106            388,106
Common stock issued                     3,712              37             49,611                               49,648
Dividends paid ($.31 per share)                                                          (927,207)           (927,207)
                                 -------------   -------------   ----------------  ----------------   ----------------
Balance at March 31, 1995           2,994,702          29,947         33,502,222       (6,053,713)         27,478,456

Net income, 2nd quarter                                                                   526,125             526,125
Common stock issued                    10,538             105            141,561                              141,666
Dividends paid ($.31 per share)                                                           (931,634)          (931,634)
                                 -------------   -------------   ----------------  ----------------   ----------------
Balance at June 30, 1995            3,005,240          30,052         33,643,783       (6,459,222)         27,214,613

Net income, 3rd quarter                                                                   467,140            467,140
Common stock issued                    11,500             115            141,552                              141,667
Dividends paid ($.31 per share)                                                          (935,189)          (935,189)
                                 -------------   -------------   ----------------  ----------------   ----------------

Balance at September 30, 1995      $3,016,740         $30,167        $33,785,335      $(6,927,271)        $26,888,231
                                 =============   =============   ================  ================   ================

</TABLE>




                                                                              4

<PAGE>


BODDIE-NOELL PROPERTIES, INC.
--------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
(Unaudited)

NOTE 1.  INTERIM FINANCIAL STATEMENTS

The accompanying financial statements of Boddie-Noell Properties, Inc. (the
Company) have not been audited by independent accountants, except for the
balance sheet at December 31, 1994. In the opinion of the Company's management,
all adjustments (consisting of normal recurring accruals) necessary for a fair
presentation of the financial position and results of operations for the periods
presented have been included.

Certain notes and other information have been condensed or omitted from the
interim financial statements presented in this Quarterly Report on Form 10-Q.
Therefore, these financial statements should be read in conjunction with the
Company's 1994 Annual Report on Form 10-K.

The results for the first three quarters of 1995 are not necessarily indicative
of future financial results.


NOTE 2.  PREFERRED STOCK

In June, 1995 the Company's shareholders approved amendments to the Company's
bylaws and certificate of incorporation to authorize the issuance of ten million
shares of preferred stock, issuable in series the characteristics of which would
be set by the Board of Directors. As of September 30, 1995 no such shares have
been issued.


NOTE 3.  NOTES PAYABLE

In June, 1995 the Company obtained an amendment which extends its current
variable rate revolving line of credit ("credit facility") to April, 1996
(previously June, 1995) and increases the amount of the facility to $24 million
(from $20 million).

During the quarter ended June 30, 1995 the Company applied $4,500,000 proceeds
of draws against its credit facility to the final $4,000,000 installment on a
8.625 percent note payable and the refinancing of Harris Hill apartments debt.
In addition, $6,175,000 proceeds of an 8.55 percent fixed rate note payable were
applied to pay off a variable rate note balance of approximately $6,472,000
related to Harris Hill apartments.

In conjunction with these transactions, the Company paid and recorded $142,000
in loan costs and wrote-off approximately $22,000 in unamortized loan costs
previously deferred.

Notes payable consist of the following at September 30, 1995 and December 31,
1994:

<TABLE>
<CAPTION>


                                                                               September 30,      December 31,
                                                                                    1995              1994
                                                                              ----------------- -----------------

<S>                                                                           <C>                <C>
Variable rate revolving line of credit, originally at $15,000,000 increased to
$24,000,000, due April, 1996. Interest is charged and payable monthly, at the
Company's option, at LIBOR plus 1.625%, floating CD rate plus 1.625%, or prime
rate. At September 30, 1995 the weighted average rate in effect was 7.486%. The
Company is obligated to pay quarterly a fee equal to 0.25% per annum on the
unused amount. Lender has the right to require Boddie-Noell Enterprises, Inc. to
purchase 24 restaurants in the event of a
default.                                                                           $22,750,000       $18,250,000

                                                                           5


<PAGE>



                                                                               September 30,      December 31,
                                                                                    1995              1994
                                                                              ----------------- -----------------

Fixed rate notes payable comprised of four loans as of September 30, 1995 (three
loans as of December 31, 1994), payable in monthly installments totaling
approximately $292,000 including principal and interest at rates ranging from
7.86% to 8.55%, with maturities in 2000 (balloon of approximately $12,500,000)
through 2020. The notes are secured by deeds of
trust and assignments of rents of four apartment properties.                        36,968,526        31,077,256

8.625% note, payable in equal annual installments plus interest payable
monthly.  The note was secured by a mortgage on 14 restaurant properties
and assignment of the master lease as it related to such properties.  The
note was retired June, 1995.                                                                 -         4,000,000

Variable rate mortgage note, payable in monthly principal installments based on
a 25-year amortization schedule (approximately $7,000) plus interest at 30-day
LIBOR plus 1.85% (7.85% at December 31, 1994). The note
was retired May, 1995.                                                                       -         6,500,000

Variable rate notes payable to affiliates comprised of two loans due May, 1999,
interest at the lower of 30-day LIBOR plus 1.5% (7.4375% at September 30, 1995)
or 8%, payable quarterly. Liability for these notes was assumed at the
acquisition of BT Venture Corporation.
                                                                                     7,056,300         7,056,300
                                                                                   $66,774,826       $66,883,556


</TABLE>

In addition, Boddie-Noell Enterprises, Inc. has extended to the Company an
unsecured revolving line of credit up to $2,000,000. The line of credit bears
interest at a variable rate equal to a bank's prime rate. At September 30, 1995
and December 31, 1994 there was no obligation outstanding.

As of September 30, 1995 scheduled principal payments are approximately as
follows: 1995 - $224,000; 1996 - $23,226,000; 1997 - $517,000; 1998 - $561,000;
1999 - $7,665,000; thereafter - $34,693,000. Loan agreements related to the
credit facility, as amended, include covenants and restrictions relating to,
among other things, certain minimum ratios of dividend and debt coverage and
application of equity issue or loan proceeds.


NOTE 4.  SUBSEQUENT DECLARATION OF DIVIDEND

On October 17, 1995 the Company declared a cash dividend of $0.31 per share,
which will be paid on November 15, 1995 to shareholders of record on November 1,
1995.

                                                                              6


<PAGE>


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

OVERVIEW

Boddie-Noell Properties, Inc., formerly known as Boddie-Noell Restaurant
Properties, is a Delaware corporation organized in April, 1987. From its
inception through 1992, the Company's investment strategy was limited to the
purchase and ownership of 47 restaurant properties leased on a triple net basis
to Boddie-Noell Enterprises, Inc. ("BNE"). During this period the Company
operated as an advised real estate investment trust ("REIT"). In 1993 the
Company embarked on a plan to diversify its assets and to reorganize as a
self-administered, self-managed REIT with an emphasis on apartment properties.
The Company acquired its first apartment property in June, 1993, and in 1994 the
Company acquired three apartment communities and BT Venture Corporation
("BTVC"), a fully integrated apartment management and development company. As a
result of these acquisitions, the Company now owns 47 restaurant properties and
four apartment communities containing a total of 1,130 apartments. The Company,
through its unconsolidated subsidiary, BNP Management, Inc. (the "Management
Company") also manage three shopping centers and an additional nine apartment
communities containing a total of 1,715 apartments. The Company now operates as
a self-administered, self-managed REIT with over 80 employees experienced in the
acquisition, development, management and finance of apartment communities.

The following discussion should be read in conjunction with the financial
statements and notes thereto included in this Quarterly Report on Form 10-Q and
with the Company's audited financial statements and notes thereto included in
the Company's 1994 Annual Report on Form 10-K.

RESULTS OF OPERATIONS

REVENUES. For the quarter ended September 30, 1995, the Company's revenues
increased 54.9 percent from the same period the previous year. For the nine
months ended September 30, 1995, revenues increased by 73.6 percent. For both
the quarter and year-to-date periods, the increase in revenues was attributable
to the acquisition of BT Venture Corporation and three apartment communities
during 1994 [Oakbrook Apartments (June 7, 1994), BT Venture Corporation (October
1, 1994), Latitudes Apartments (October 1, 1994), and Harris Hill Apartments
(December 28, 1994)] and continued improvement in operations at the Company's
apartment properties. Company-owned apartments contributed revenues of
$2,179,000 for the third quarter and $6,322,000 for the year-to-date period of
1995 as compared to $941,000 and $2,157,000, respectively, for similar periods
in 1994.

Summary amounts related to apartment properties occupancy are as follows:

<TABLE>
<CAPTION>


                                                                                
                                 Harris Hill     Latitudes     Oakbrook     Paces Commons     Overall
<S>                                  <C>           <C>            <C>           <C>            <C>   
 Number of units:                     184           448            162           336            1,130

Quarter ended September 30, 1995:
   Average physical occupancy        95.7%         95.7%          97.7%         96.6%          96.2%
   Average economic occupancy        96.3%         96.2%          97.7%         97.5%          96.8%
   Average monthly revenue
      per unit                       $696          $621           $761          $658           $664

Nine months ended September 30, 1995:
   Average physical occupancy        96.5%         94.8%          97.0%         93.7%          95.1%
   Average economic occupancy        96.6%         95.6%          97.4%         93.8%          95.5%
Average monthly revenue
     per unit                        $671          $611           $745          $649           $651

</TABLE>

                                                                             7

<PAGE>


Summary amounts for Paces Commons for third quarter, 1994, were average economic
occupancy of 97 percent and average monthly revenue per unit of $594.

The Company continues to experience negative comparisons for restaurant rental
revenues. For the third quarter of 1995 restaurant rental revenues declined by
9.1 percent as compared to the third quarter of 1994. Year-to-date restaurant
rental revenues declined by 6.5 percent. "Same-store" restaurant sales for the
locations open for the full periods in both years declined by 9.9 percent for
the quarter and 8.2 percent year-to-date. The difference in the trends for
rental revenue and "same-store" sales can be attributed to the closing at
various times during 1994 of several stores for scheduled remodeling. Widespread
price discounting in the quick-service restaurant industry is the primary reason
for the decline in restaurant sales volume.

Since the acquisition of BT Venture Corporation in October 1994, the Company has
dramatically reduced its dependence on restaurant rental revenues. The Company's
apartment properties are located in strong markets and apartment operations
continue to improve. Boddie-Noell Enterprises, the restaurant operator, and
Hardee's Food Systems, the restaurant franchisor, are taking aggressive steps to
improve restaurant sales. This includes a new advertising campaign and
introduction of several new food items including the "Big Hardee" burger. While
it is too early to judge the impact of these steps, management is cautiously
optimistic that the Company will begin to realize improving restaurant rental
revenues in 1996.

The Company receives property management and administrative fees arising from
the management contracts it obtained as part of the acquisition of BTVC in
October, 1994. These fees totaled approximately $127,000 in third quarter, 1995
and $514,000 through nine months of 1995. Effective June 1, 1995 the Company
transferred five third-party management contracts to the Management Company, a
subsidiary in which the Company owns a 1 percent voting interest and a 95
percent economic interest. The remaining interest in the Management Company is
held by certain officers of the Company. The Company's interest in the
Management Company was initially accounted for under the cost method, however,
was changed to the equity method in response to recent FASB Emerging Issues Task
Force guidance. The Company does not expect the formation or operations of this
subsidiary to have a significant effect on the financial position or results of
operations of the Company. Equity in the income of this subsidiary totals
approximately $3,000 for the four months ended September 30, 1995.

Effective October 1, 1995 the Company transferred management contracts for three
shopping centers and five apartment properties to the Management Company. After
this transfer, all third-party management activities are conducted by the
subsidiary Management Company. Effective November 1, 1995 one of those apartment
properties was sold, and the management contract with the Management Company was
terminated. Following this sale, the Management Company provides property
management services for three shopping centers and nine apartment properties.

EXPENSES. Depreciation and amortization totaled $640,000 for the quarter and
$1,942,000 for the nine months ended September 30, 1995, almost double 1994
amounts. The significant increase is due primarily to acquisition of three
apartment properties totaling approximately $40 million in June, October, and
December, 1994 along with the $2.3 million intangible related to property
management operations acquired in October, 1994.

Apartment operating expenses totaled $725,000 in third quarter and $1,947,000
through nine months of 1995, compared to $244,000 and $635,000, respectively, in
1994. The significant increase again reflects the impact of 1994 apartment
property acquisitions. Through September, 1995 these expenses were generally
consistent with budgets and management's expectations. Operating expenses
related to restaurant rental income are insignificant because of the restaurant
properties' triple net leases.

Administrative expenses totaled $340,000 for the three months and $1,087,000 for
the nine months ended September 30, 1995, compared to $212,000 and $580,000,
respectively, for administrative and property management and advisory fees
expenses during the same period in 1994 (prior to becoming self-managed and
self-advised in October, 1994).


                                                                              8

<PAGE>


Interest expense of $1,359,000 in third quarter and $4,032,000 through nine
months in 1995 (compared to $683,000 and $1,647,000 in 1994, respectively) again
reflects the impact of approximately $40 million debt assumed in conjunction
with 1994 apartment property acquisitions. The weighted average interest rate in
third quarter, 1995 was approximately 8.1 percent compared to approximately 7.4
percent in third quarter of 1994.

SUMMARY RESULTS OF OPERATIONS. Funds from operations ("FFO") is defined by the
National Association of Real Estate Investment Trusts as "net income (computed
in accordance with generally accepted accounting principles), excluding gains
(or losses) from debt restructuring and sales of property, plus depreciation and
amortization, and after adjustments for unconsolidated partnerships and joint
ventures." The Company considers FFO in evaluating property acquisitions and its
operating performance and believes that FFO should be considered along with, but
not as an alternative to, net income and cash flows as a measure of the
Company's operating performance and liquidity. FFO does not represent cash
generated from operating activities in accordance with generally accepted
accounting principles and is not necessarily indicative of cash available to
fund cash needs.

A reconciliation of net income, funds from operations, and net cash provided by
operating activities is as follows (all amounts in thousands):

<TABLE>
<CAPTION>

                                         Three months ended    Nine months ended
                                            September 30,         September,
                                           1995      1994      1995       1994
                                ----------------------------------------------------------------------------

<S>                                     <C>        <C>       <C>        <C>   
Net income ...........................   $   467    $   641   $ 1,381    $ 1,986
Depreciation .........................       544        340     1,639        912
Amortization--
 --property mgmt. intangible .........        66       --         186       --
 --deferred financing costs ..........        30         48       118        124
Write-off deferred loan costs ........      --          110        22        110
                                         -------    -------   -------    -------
Funds from operations ................     1,107      1,139     3,346      3,132
Equity in income of subs .............        (3)      --          (3)      --
Changes in operating assets
   and liabilities ...................       191        137       (80)       327
                                         -------    -------   -------    -------
Net cash provided by
   operating activities ..............   $ 1,295    $ 1,276   $ 3,263    $ 3,459
                                         =======    =======   =======    =======
</TABLE>

To a large extent, the addition of apartment properties and improvement in
apartment operations have offset the decline in restaurant rental revenues. As a
result, funds from operations has remained relatively stable in third quarter of
1995 compared to 1994 and increased by approximately 7 percent on a year-to-date
basis through September 30.

As expected, net income declined approximately 27 percent for the quarter and 30
percent year-to-date compared to 1994, reflecting the effect of depreciation and
amortization of assets related to apartment property acquisitions. Changes in
operating assets and liabilities reflect advances made to BNP Management, Inc.
($150,000 through September 30, 1995) along with timing of rent receipts and
payments for trade payables, taxes, escrow funds, etc.


LIQUIDITY AND CAPITAL RESOURCES

CAPITAL RESOURCES. As of September 30, 1995 the Company's total book
capitalization was $93,663,000, comprised of $26,888,000 of shareholders' equity
and $66,775,000 of debt. In March, April, and July, 1995 the Company issued a
total of 25,750 shares of common stock to the former BTVC shareholders in
conjunction with an earn-out provision of that acquisition agreement. Under the
terms of the acquisition agreement, the former BTVC shareholders are due
additional consideration totaling $141,667 as of September 30, 1995. The Company
may, at its election, make this payment in cash or common stock.


                                                                             9

<PAGE>

During second quarter, 1995, the Company obtained an amendment which extended
its current credit facility to April, 1996 (previously June, 1995) and increased
the amount of the facility to $24 million (from $20 million). In addition,
during second quarter, 1995 the Company refinanced the Harris Hill debt
(previously variable rate debt at 30-day LIBOR plus 1.85 percent) at a fixed
8.55 percent, with monthly principal and interest payments of $47,699 and a
balloon payment of $5,485,000 in June, 2005.

A summary of long-term debt as of September 30, 1995 has been included in the
notes to the financial statements included in Item 1 herein. At September 30,
1995 the weighted average interest rate on debt outstanding was 7.9 percent. A 1
percent increase in variable interest rates would impact the Company by
increasing interest expense by approximately $276,000 on an annual basis;
conversely, a 1 percent decrease in variable interest rates would impact the
Company by decreasing interest expense by approximately $298,000 on an annual
basis.

Consistent with management's plan to reduce the Company's exposure to variable
rate debt, subsequent to September 30, 1995, the Company obtained a commitment
from a bank for a credit line of $25.5 million at a fixed rate of 8.0 percent
for a term of three years. The Company expects to execute this note prior to
December 31, 1995. The Company intends to apply proceeds of this loan to retire
its existing credit facility and for general corporate purposes. Following this
refinance, a 1 percent increase in variable interest rates would impact the
Company by increasing interest expense by approximately $49,000 on an annual
basis while a 1 percent decrease in variable interest rates would impact the
Company by decreasing interest expense by approximately $71,000 on an annual
basis.

CASH FLOWS AND LIQUIDITY. The Company's cash and cash equivalents increased by
$149,000 during the third quarter; however, decreased by $233,000 year to date
in 1995. While funds from operations improved by 7 percent through nine months
of 1995 compared to 1994, cash flows from operating activities decreased by 6
percent, or $196,000 during the nine month period compared to 1994, primarily
attributable to $150,000 operating advances to the unconsolidated subsidiary
Management Company and timing of receipts and payments for operating activities.
(See discussion of FFO and operating activities above in summary results of
operations.)

Net cash used in investing activities through nine months of 1995 totaled
$594,000, including $259,000 improvements to apartment properties and $335,000
payment of deferred acquisition and financing costs (including $163,000 in loan
costs and $91,000 costs related to 1994 acquisitions and previously accrued in
1994). Investing activities during the first nine months of 1994 included
$9,367,000 for acquisition of Oakbrook Apartments, $99,000 for improvements to
existing apartments, and $894,000 payments for deferred costs.

As discussed above and in the notes to the financial statements, during second
quarter, 1995 the Company amended and increased its revolving line of credit,
and applied approximately $4,500,000 proceeds of draws against that credit
facility to the scheduled final $4,000,000 installment on a note payable secured
by certain restaurant properties and the refinancing of Harris Hill apartments
debt (in addition to $6,175,000 proceeds of an 8.55 percent fixed rate mortgage
applied to retire a variable rate mortgage balance of $6,472,000). Net cash used
in financing activities during the first nine months of 1995 totaled $2,903,000,
including $2,794,000 payments of regular quarterly dividends. Financing
activities during the first nine months of 1994 included $13,750,000 proceeds
from revolving and other notes payable for acquisition of Oakbrook apartments
and payment of the scheduled installment on the restaurant note payable,
$944,000 net proceeds of refinanced mortgage debt for Paces Commons, along with
dividends of $2,650,000.

SHORT- AND LONG-TERM LIQUIDITY REQUIREMENTS. The Company continues to produce
sufficient cash flow to fund its regular dividend and has positioned itself for
future growth. The Company has announced that it will pay a regular quarterly
dividend of $0.31 per share on November 15, 1995, to shareholders of record on
November 1, 1995.

The Company expects to meet its short-term liquidity requirements generally
through net cash provided by operations and utilization of credit facilities.
The Company believes that net cash provided by operations will be 


                                                                             10

<PAGE>


adequate and anticipates that it will continue to be adequate to meet both
operating requirements and payment of dividends in accordance with REIT
requirements in both the short- and the long term. The Company anticipates
funding acquisition activities, if any, primarily by using secured debt. The
Company expects to meet certain of its long-term liquidity requirements through
long-term secured and unsecured borrowings and the issuance of debt securities
or additional equity securities. The Company believes that it has sufficient
resources to meet its short- and long-term liquidity requirements.

CAPITALIZATION OF FIXED ASSETS AND PROPERTY IMPROVEMENTS. The Company has
established a policy of capitalizing those expenditures relating to acquiring
new assets, materially enhancing the value of an existing asset, or
substantially extending the useful life of an existing asset.

Capitalized property additions, replacements and improvements are summarized as
follows:

<TABLE>
<CAPTION>

                                              Three months
                                                  ended        Nine months ended
                                              September 30,      September 30,
                                                  1995        1995          1994
                                               ----------   ----------  ------------
<S>                                            <C>          <C>          <C>       
Acquisition of new apartment properties ....   $     --     $     --     $9,366,719
Capitalized carpet, vinyl, and wallpaper
   replacements ............................       27,251       69,604       75,123
Exterior painting ..........................       11,048       85,636         --
Other property additions and improvements ..       41,621      104,163       24,037
                                               ----------   ----------   ----------
                                                   79,920      259,403    9,465,879
Allocation of BTVC purchase price additional
   consideration ...........................       16,667       50,001         --
                                               ----------   ----------   ----------
                                               $   96,587   $  309,404   $9,465,879
                                               ==========   ==========   ==========

</TABLE>

INFLATION. Management does not believe that inflation poses a material risk to
the Company. Leases of the Company's apartment properties are short-term in
nature, the majority for terms of one year or less, with none longer than two
years. All apartment leases allow, at the time of renewal, for adjustments in
the rent payable thereunder and thus enable the Company to seek increases in
rents to compensate for increases in expenses brought about by inflation. In
addition, the apartment lease agreements give the Company the right to terminate
any lease at the end of its term on 60 days notice. The restaurant properties
are leased on a triple-net basis, which places the risk of rising operating and
maintenance costs on the lessee.


                                                                             11

<PAGE>


                                     PART II
ITEM 1.  LEGAL PROCEEDINGS

The Company is a party to a number of legal actions arising out of its normal
business activities related to the ownership and management of apartment
properties. In the aggregate these are not considered to be material.

The Company is a party to one legal action alleging damages of $2,000,000
arising out of a rape of a tenant at one of the Company's managed apartment
properties by an unaffiliated assailant. The Company's involvement is as a
successor-in-interest to BT Venture Corporation, and its exposure to the claim
is covered by its primary insurance policy ($2,000,000), an umbrella liability
policy ($5,000,000), and a hold-harmless agreement with Boddie Investment
Company. As such, the claim is not considered to be material to the Company's
operations and financial condition.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

a)   Exhibits:

     Exhibit 11    Computation of per share earnings                Page 14
     Exhibit 27    Financial data schedule (electronic filing)      Page 15

b)   Reports on Form 8-K:  none


                                                                            12

<PAGE>


                                   SIGNATURES

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



                                             BODDIE-NOELL PROPERTIES, INC.
                                             (Registrant)




November 14, 1995                                 /s/ Philip S. Payne
                                             ------------------------
                                             Philip S. Payne
                                             Executive Vice President and
                                             Chief Financial Officer
                                             (Duly Authorized Officer)




November 14, 1995                                 /s/ Pamela B. Novak
                                             ------------------------
                                             Pamela B. Novak
                                             Vice President - Controller
                                             (Chief Accounting Officer)



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