SECURITIES AND EXCHANGE COMMISSION                        
                            Washington, D.C. 20549

                                FORM 10-KSB

             Annual Report Pursuant to Section 13 or 15 (d) of the
                 Securities Exchange Act of 1934 (FEE REQUIRED)
                    For the fiscal year ended April 30, 1998
                         Commission File Number 1-6762

                          KILLEARN PROPERTIES, INC.
            (Exact name of small business issuer in its charter)

             Florida                          59-1095497
  (State or other jurisdiction     (I.R.S. Employer Identification No.)
  incorporation or organization) 

       385 Country Club Drive              Stockbridge, Georgia 30281
                (Address of principal executive offices)

       Issuer's telephone number, including area code: (770) 389-2020

       Securities registered pursuant to Section 12 (b) of the Act:

 Title of Each Class:
        Common Stock              Name of Each Exchange on which Registered:
      ($.10 Par Value)                 American Stock Exchange, Inc.

Securities registered pursuant to Section 12 (g) of the Act:  NONE

     Check whether the Issuer (1) has filed all reports required to be 
filed by Section 13 or 15 (d) of the Exchange Act of 1934 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 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 (     )

    Revenues for the fiscal year ended April 30, 1998 were $14,667,652.

    As of July 1, 1998, the aggregate market value of the voting stock 
held by non-affiliates of the Issuer was approximately $7,986,708.  This
is based upon a closing market price of $9.00 per share of common stock,
as reported on the American Stock Exchange - composite transaction tape.

    The number of shares outstanding of the registrant's common stock as
of July 1, 1998 was 887,412.

DOCUMENTS INCORPORATED BY REFERENCE

    Portions of the Issuer's Proxy Statement in connection with its 1998
Annual Meeting of Shareholders (Part III)





KILLEARN PROPERTIES, INC. AND SUBSIDIARIES 
INDEX

PART I

ITEM 1.        BUSINESS

ITEM 2.        PROPERTIES

ITEM 3.        LEGAL PROCEEDINGS

ITEM 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

PART II

ITEM 5.        MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

ITEM 6.        MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

ITEM 7.        FINANCIAL STATEMENTS

ITEM 8.        CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND ACCOUNTING AND 
               FINANCIAL DISCLOSURE

PART III

ITEM 9.        DIRECTORS AND EXECUTIVE OFFICERS OF THE ISSUER

ITEM 10.       EXECUTIVE COMPENSATION

ITEM 11.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 

ITEM 12.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 

ITEM 13.       EXHIBITS AND REPORTS ON FORM 8-K





PART I

ITEM 1.        BUSINESS

    Killearn Properties, Inc. (the "Company") was organized as a Florida
corporation in 1964.  The Company is engaged primarily in the development of
planned communities  (see "ITEM 1. BUSINESS - Land Development," below) in the
vicinity of Henry County, Georgia (see "ITEM 2. PROPERTIES," below).  The
Company's principal executive offices are located at 385 Country Club Drive,
Stockbridge, Georgia 30281, (770) 389-2020.

 
Henry County, Georgia

    In April 1986, the Company purchased approximately 2,600 acres of property,
known as the Eagle's Landing (see ITEM 2. "PROPERTIES," below), which is
located in Henry County, Georgia.  During fiscal 1987, the Company purchased
217 additional acres and obtained options to purchase 45 additional acres.
Additionally, the Company purchased approximately 88 acres in fiscal 1997 and 
366 acres in fiscal 1998.  Henry County is an attractive location for 
industrial, commercial and residential development due to its close proximity 
to the Atlanta International airport and downtown Atlanta.  The property is 
on an I-75 interchange.

    Henry County is a part of the metropolitan Atlanta area.  Its principal
cities are McDonough and Stockbridge.  A portion of the Company's property is
within the City of Stockbridge.  It is estimated that Henry County, at present,
has a population of approximately 98,103 persons and is projected to reach a
population of approximately 140,836 persons by the year 2003.

    The greatest influence on the economy of Henry County is the service 
industry, followed by manufacturing, retail and trade administration.

Sale of Tallahassee, Florida Assets

    During fiscal 1994 and the first quarter of fiscal 1995, the Company sold
substantially all of its Tallahassee properties, See Item 2. "Properties", 
Item 6. "MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS and 
Note 11 to the Company's Consolidated Financial Statements included in Item 7. 
Prior to the sale, the Company had developed communities in Tallahassee for 
thirty years, and had been the largest land developer in Leon County, Florida.

    At April 30, 1998, the Company had 22 fully developed lots remaining to be 
sold in Tallahassee, Florida.  It is anticipated these lots will be sold in 
fiscal 1999.

Land Development

    Historically, the Company has acquired large areas of unimproved real
estate, and has subdivided, developed and then resold the developed real estate
in smaller parcels to individuals and builders.  Following the acquisition of a
large area of unimproved real estate, the Company retains a landscape architect
who, together with personnel of the Company, prepares a master land use plan
for the entire subdivision.  The subdivision is platted and divided into units
and the units are further divided into lots.

    After securing the necessary zoning and other applicable regulatory
approvals from local, state and federal authorities, the Company commences the
development of the subdivision by developing one or more units located within
each such subdivision.

    In units where lots are sold, the Company generally makes provision for
water lines, storm drainage, underground or overhead electrical service,
telephone lines and paved streets.  (See "Item 1. BUSINESS - Liability for
Improvements," below.)  In all units where lots are sold by the Company,
arrangements are made with appropriate governmental agencies and utility
companies for police and fire protection and for electricity, telephone and
water service.

    The Company believes it is the largest land developer in Henry County,
Georgia.  At April 30, 1998, the Company had approximately 234 platted lots
available for immediate sale and approximately 526 acres of undeveloped land
available for immediate or future development.  The property remaining is
presently zoned approximately 20% for industrial uses, 75% residential uses and
5% for commercial and other uses.  The Company intends to continue to develop
and divide its Henry County property into lots and to sell certain parcels to
other developers.

    The management of the Company believes that, if the Company does not
acquire any additional real estate and if the Company makes no bulk
dispositions of real estate, the Company's present inventory of land is
sufficient, at present levels of land sales, for at least four years of
operation.

Liability for Improvements

    The Company is obligated to complete the improvements to each partially
developed lot sold by it on a specified date no later than one year from the
date of sale of each such lot.

    The Company is obligated to provide sewer in specified areas of the Florida
property which it previously owned and sold to other developers for investment
and resale.  The estimated cost to the Company is $32,298, all of which is
expected to be paid in fiscal 1999.

Sales and Marketing

    The Company's sales force consisted of 5 full-time salespersons at April 30,
1998.  These salespersons are compensated by the Company on a salary plus
commission or commission-only basis. Lots are sold by the Company primarily to 
builders and to persons who presently reside or who plan to reside in the 
Company's developments.

    Sales of lots to builders and prospective individual home buyers and sales
of commercial tracts are made by the Company primarily for cash.  (See notes 1,
2 and 4 of Notes to Consolidated Financial Statements of the Company.)

Employees

    At April 30, 1998, the Company had approximately 15 employees, including
salespersons.  Management of the Company believes that its relationship with
its employees is good.

Competition

    The land development industry in the State of Georgia is highly
competitive.  Land development firms located in all geographic areas of
Georgia, many of which possess greater sales and financial resources than the
Company, compete to attract local residents, retired persons, and other persons
who are relocating.  The Company competes with such firms on the basis of a
number of interrelated factors, including reputation, location, design, quality
and price.  Individual resales of residential units and lots provide additional
competition.

    The Company believes that it is the largest land developer in Henry County,
but it competes with larger developers in the metropolitan Atlanta area, as
well as with smaller developers.

Regulations

    As a land developer, the Company is subject to environmental, building,
zoning and real estate sales regulation by, among others, local zoning and
planning authorities, the Division of Georgia Land Sales and various state and
federal environmental protection agencies.

    All of the necessary local, state and federal regulatory approvals for the
development of its presently active subdivision projects in Henry County,
Georgia have been secured by the Company.  Additional permits and approvals may
be required as new subdivisions are constructed; however, the Company does not
anticipate any difficulty in securing such permits and approvals.  (See "Item
2. Properties", below.)

    The Company's management is not presently aware of any anticipated
revocation or amendment of any of its regulatory approvals.  However, in the
event that any regulatory approvals presently secured by the Company are
revoked or materially altered, the business of the Company could be adversely
affected.

Economic Conditions

    The Company's business, as well as the real estate industry in general, is
affected by a number of economic factors, including interest rates and
inflation.  Interest rates affect both the costs to individuals and builders of
purchasing homes and lots from the Company and the carrying costs of
undeveloped land.  During the past fiscal year, interest rates on residential
mortgage loans remained stable.  In the past, the Company has increased the
price of lots offered for sale to offset increased inflation.  Such increases
reduce the number of persons who are able to afford the lots and homes offered
by the Company.  If interest rates and inflation increase substantially, the
real estate and construction industries would be adversely affected and the
Company's ability to sell its real estate could be significantly adversely
affected.


ITEM 2.  PROPERTIES

    The Company's principal subdivisions are as follows:

Eagle's Landing (formerly known as Atlanta Tech Center)

    Eagle's Landing comprises approximately 3,000 acres in Henry County,
Georgia, and is approximately 23 miles south of downtown Atlanta and 15 miles
south of the Atlanta International Airport.

    This "mixed use" development is presently zoned to allow development in the
categories of office, industrial, retail, multi-family residential,
single-family residential, lodging, schools, municipal services, religious
institutions, parks and recreation, golf course, open space and lakes.  The
community is planned around Eagle's Landing golf course and country club, both
of which were originally developed by the Company.

    At April 30, 1998, approximately 1,143 residential lots and 645 acres of
other property had been sold by the Company.  Approximately 234 platted
residential lots remained to be sold and approximately 526 acres of other
property remained to be platted and/or sold.  In addition, the Company had
approximately 160 acres which will be used for road right-of-way, utility
easements and green areas.

    During fiscal 1997, in a transaction approved by the Company's 
shareholders, the Company transferred to J.T. Williams, Jr., the Company's 
former chairman and Chief Executive Officer, the Eagle's Landing Golf Course 
and Country Club, the Inn at Eagle's Landing, approximately 250 acres of 
commercial and industrial real estate, land sufficient to construct an 
additional nine hole golf course and certain other assets.  See "Item 6, 
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS" and Note 3 to the 
Company's Consolidated Financial Statements included in Item 7.


Tallahassee Properties

    The Company developed two major subdivisions in northeast Tallahassee,
Florida.  During fiscal 1994 and the first quarter of fiscal 1995, the Company 
sold substantially all of its remaining Tallahassee properties, See Item 6. 
"MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS" and Note 11 to 
the Company's Consolidated Financial Statements included in Item 7.

    At April 30, 1998, the Company owned 22 platted lots in Tallahassee,
Florida.  All of these properties are expected to be sold during fiscal 1999.

Encumbrances

    Substantially all of the land owned by the Company in the above described
subdivisions serves as collateral for the indebtedness of the Company.  See
Notes 6 and 11 of Notes to the Company's Consolidated Financial Statements
included in Item 7.


ITEM 3.  LEGAL PROCEEDINGS

    In November 1997, the company purchased a note receivable collateralized 
by a first mortgage on land owned by International Realty Development 
Partners, LTD., L.L.C. ("International Realty"), the borrower.  In 
February 1998 the Company declared the loan in default and commenced 
foreclosure proceedings.  In March 1998, International Realty filed a 
petition for relief in United States Bankruptcy Court.  At April 30, 1998, 
International Realty owed the Company $3,344,702 in principal and $249,772 
in accrued interest.  On July 24, 1998 International Realty filed a lawsuit 
against the Company in the United States Bankruptcy Court for the District of 
Georgia, alleging among other things, breach of contract and fraud claims and 
seeking compensatory and punitive damages for amounts greater than the 
Company's note receivable.  The Company believes that International Realty's 
lawsuit is without merit   The Trustee in International Realty's bankruptcy 
proceedings has received nonbinding written bids for the land that 
collateralizes the Company's mortgage that are sufficient to pay the Company 
in full. The Company intends to vigorously defend the lawsuit and continue to 
seek payment of it's receivable from International Realty.

    The Company is a party to certain other legal proceedings in the ordinary 
course of business.  In the opinion of the management of, and general counsel 
to the Company, none of these proceedings, alone or in the aggregate, should 
have a material adverse effect upon the Company.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    No matters were submitted by the Company to a vote of its security holders
during the fourth quarter of fiscal 1998.


PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

    The Common Stock has been traded on the American Stock Exchange since 1980.
Quarterly sales prices for the fiscal years ended April 30, 1998 and 1997 were
as follows:

      Quarter of          1998                          1997
      Fiscal Year    High         Low           High         Low
        First        5 5/8        4 1/2        10 1/4       8 1/4
        Second      10 7/8        5 1/2         9 3/4       7 1/8
        Third        9 7/8        7             8 1/4       5 3/4
        Fourth       9            7 7/8         7 1/4       5

    The Company has never declared nor paid dividends.

    As of July 1, 1998 there were approximately 473 shareholders of record of
the Company's Common Stock, excluding security position listings.


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

Liquidity and Capital Resources

    During the two year period ended April 30, 1998, the Company generated
positive cash flows from operations due to the opening of several phases of the
Company's subdivisions, increased bulk sales, and the receipt of principal and 
interest payments on notes received from the sale of the Company's 
Tallahassee properties.

    During fiscal 1998, the Company restructured its principal loan for 
its Georgia operations (which had a balance of approximately $5 million at 
April 30,1998). The loan is collateralized by first mortgages on substantially 
all of the undeveloped land in the Company's Georgia property.  Interest on 
this loan is payable at prime rate plus 1.25% per annum, and the loan matures 
in July 1998.  Upon the sale of the property serving as collateral, release 
prices, which vary with the development, are applied against the loan balance 
owed to the bank.  As these properties are developed, the Company has been able 
to secure development loans from lenders in an amount sufficient to pay the 
release price and all development costs, which are ultimately satisfied with 
proceeds from the sale of the properties.

    During fiscal 1999 and fiscal 2000, the Company has other debt maturing in
the amounts of approximately $15.3 million and $1.0 million, respectively.  The
Company normally borrows its development loans for its Georgia properties from
banks.  Although the notes are short-term, the debt historically has been
renewed or extended each year.  The Company anticipates that such debt will be
paid through funds generated by its normal operations, an extension of debt or
new borrowings on the same collateral.  During the past fiscal year, the
Company reduced its debt by approximately $20.6 million and had new borrowings
totaling approximately $17.0 million.  The Company continues to seek lines of
credit to satisfy its capital requirements.

    During fiscal 1999, the Company anticipates completing improvements of 
partially developed lots and tracts at an estimated cost of approximately 
$500,000 and improving undeveloped land at an estimated cost of approximately 
$1.4 million. The Company anticipates financing these improvements through: (1) 
funds Generated in the normal course of the Company's business; (2) utilization
of Existing lines of credit; and (3) securing additional lines of credit.  The 
Company anticipates that funds available from these sources will be sufficient 
to meet the needs of the Company during fiscal 1999.  At April 30, 1998, the 
Company had available lines of credit totaling $516,000.  These lines of credit
will be drawn as needed for the development of the Company's property and
operational expenses.

    The Company has a receivable at the end of the year for $3,344,702 principal
and $249,772 in interest from International Realty Development Partners, LTD.,
L.L.C., who has filed for Chapter 11 Bankruptcy.  See Item 3 "LEGAL 
PROCEEDINGS."

    On November 14, 1993, the Company entered into agreements to sell 
substantially all of its Florida assets for $25.7 million.  As of April 30, 
1998, the entire sale had closed with the purchaser assuming $9.2 million of 
the Company's debt; issuing notes to the Company totaling $8.1 million and 
paying $8.4 million in cash.  At April 30, 1998, the remaining balance of the 
purchase price due to the Company was $ 2,463,248 which is payable over the 
next 2 years. (See Note 12 of the Notes to the Company's consolidated 
Financial Statements).

    In May 1996, Proactive Technologies, Inc., which at the time was the 
Company's second largest shareholder, proposed to the Company a transaction 
pursuant to which the Company would transfer certain of its assets and 
liabilities to J.T. Williams, Jr., the Company's former Chairman of the Board 
and Chief Executive Officer, in exchange for 551,321 shares of Common Stock 
owned by Mr. Williams (approximately 42% of the then outstanding Common Stock, 
the "Redemption Shares") and the cancellation of his option to purchase an 
additional 100,000 shares of Common Stock.  On August 1, 1996 the Company 
entered into an agreement, subject to shareholder approval, pursuant to which 
it agreed to transfer assets comprised principally of the Eagle's Landing Golf 
Course and Country Club, the Inn at Eagle's Landing, approximately 250 acres of
commercial and industrial real estate, land sufficient to construct an 
additional nine hole golf course, the Company's interest in certain joint 
ventures and approximately $2 million cash.  The agreement provided that the 
transaction would be effective as of May 1, 1996.

     On September 30, 1996, the shareholders of the Company approved the
transfer agreement, and the transaction closed on November 16, 1996. The net
assets transferred had a historical cost basis of approximately $17,191,000
which has been reflected as a reduction to shareholders' equity in the
Company's Consolidated Balance Sheet.




Results of Operations

    During fiscal 1998, sales remained fairly consistent with lot sales 
decreasing slightly by $194,026 (3.2%) while other land sales increased by 
$851,341 (12.1%).  The Company reported a $113,882 gain as a result of a 
reduction in its allowance for estimated uncollectible sales related to a 
large reduction of it's Florida receivables. 

    The Company discontinued its residential construction activities in fiscal
1994 and sold its remaining home in fiscal 1997.

    Interest income was approximately the same in fiscal 1998 and fiscal 1997.
Interest income is expected to decline over the next few years as the notes 
receivables related to the Florida sale and various Georgia notes are paid.

    Gross profit on lot sales decreased to 34.5% in fiscal 1998 from 40.7% in 
fiscal 1997.  Gross profit on other land sales also decreased in fiscal 1998 
to 21.6% compared to 34.8% in fiscal 1997.  These decreases in gross 
profit margins in fiscal 1998 were due to land sales of commercial properties 
and bulk sales of land at discounted prices.  The Company's current sales 
policy provides for increased retail sales and less bulk sales at discounted 
prices in the future

    Commissions and selling expenses (net of commission income) as a percentage
of net sales of lots, land and residential construction remained fairly 
consistent at 11.4% during fiscal 1998 compared to 11.2% in fiscal 1997.

    Interest expense decreased $162,517 in fiscal 1998 compared to 1997.  
This decrease is primarily due to a reduction in debt and certain interest 
expense incurred by the Company being eligible for capitalization in 
accordance with Financial Accounting Standard 34.

    Depreciation decreased by $16,251 in the current fiscal year when compared 
to the prior year.

    Property tax expense increased $60,712 in fiscal 1998 compared to 1997, 
due to an increase in the appraised values of the Company's properties.

    General and administrative expenses decreased $197,616 in fiscal 1998 
when compared to fiscal 1997, as a result of the transfer of certain of the 
Company's assets discussed below.

 
Inflation

   The effect of inflation was negligible in fiscal 1998 and fiscal 1997.  If
inflation and interest rates return to their previously higher levels, they
could have a material adverse effect upon the real estate and construction
industries and could significantly and adversely affect the Company's ability
to sell its real estate.

Other

   The Company is presently reviewing the potential impact of Year  
compliance issues on its information systems and business operations, and has
preliminarily determined that any costs, problems or uncertainties associated 
with the potential consequences of Year 2000 issues are not expected to have a
material impact on its future operations or financial condition.

ITEM 7. FINANCIAL STATEMENTS





To the Board of Directors and Stockholders
Killearn Properties, Inc.

  We have audited the consolidated balance sheet of Killearn Properties, Inc. 
and Subsidiaries as of April 30, 1998, and the related consolidated statements 
of earnings, changes in stockholders' equity, and cash flows for the years 
ended April 30, 1998 and 1997.  These financial statements are the 
responsibility of the Company's management.  Our responsibility is to express
an opinion on these financial statements based on our audits.

  We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free of 
material misstatement.  An audit includes examining, on a test basis, evidence 
supporting the amounts and disclosures in the financial statements.  An audit 
also includes assessing the accounting principles used and significant 
estimates made by management, as well as evaluating the overall financial 
statement presentation.  We believe that our audits provide a reasonable basis 
for our opinion.

    In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the consolidated financial position 
of Killearn Properties, Inc. and Subsidiaries as of April 30, 1998 and 1997 and
the consolidated results of its operations and its cash flows for the years 
then ended, in conformity with generally accepted accounting principles.

Atlanta, Georgia 
July 10, 1998, except as to the 
information presented in Note 2, 
for which the date is July 27, 1998

                                         /s/ PricewaterhouseCoopers L L P 
                                             PricewaterhouseCoopers L L P 





<TABLE>
                    KILLEARN PROPERTIES, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF EARNINGS
<CAPTION>
                                                 Year Ended April 30
                                                 --------------------
                                               1998              1997
<S>                                 <C>        ----     <C>      ----
Revenues
Sales of lots                           $    5,936,591     $  6,130,617
Other land sales                             7,915,082        7,063,741
                                            ----------       ----------
Net sales of lots and land                  13,851,673       13,194,358

Sales of residential construction                    0          155,000
Commission income                               58,383          189,555
Interest income                                625,122          626,071
Other income                                   132,474           82,190
                                            ----------       ----------
Total revenues                              14,667,652       14,247,174


Costs and expenses:
Cost of lots sold                            3,888,391        3,635,661
Cost of other land sold                      6,203,896        4,603,253
Cost of residential construction sold                0          179,879
Commissions and selling expenses             1,639,802        1,663,933
Interest expense                               547,896          710,413
Depreciation                                    77,572           93,823
Property taxes                                 213,949          153,237
General and administrative expenses          1,175,040        1,372,656
                                            ----------       ----------
Total costs and expenses                    13,746,546       12,412,855
                                            ----------       ----------

Earnings before income taxes                   921,106        1,834,319

Income taxes                                   620,050          738,996
                                            ----------        ---------

Net income                              $      301,056     $  1,095,323
                                            ==========       ==========
Earnings per share (basic & diluted)    $          .34     $       1.23
                                            ==========       ==========

Weighted average number of common shares       887,412          887,412

</TABLE>
The accompanying notes are integral part of these consolidated
financial statements.



<TABLE>
                   KILLEARN PROPERTIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                 April 30, 1998
<CAPTION>
<S>                                                 <C>
ASSETS 

Cash                                                 $      366,054

Accounts receivable                                         163,977
Notes receivable from related parties                     2,484,986
Notes receivable                                          3,776,409
Land contracts receivable 
            Retail                                          105,949
            Other                                           370,640
                                                          ---------
            Total receivables                             6,901,961
Less: Allowance for uncollectibles                         (200,000)
                                                          ---------
Net receivables                                           6,701,961
                                                          ---------

Residential house inventory                                 222,156
Real estate held for development and sale, at cost  
             Land developed and under development        18,639,102
             Real estate under contract for sale          2,921,809
                                                         ----------
                                                         21,560,911
                                                         ----------


Property and equipment, at cost 
            Buildings                                       487,111
            Machinery, equipment and vehicles               339,701
            Furniture and fixtures                          213,123
                                                          ---------

            Total property and equipment                  1,039,935
            Less: Allowance for depreciation               (581,505)
                                                         ----------

            Property and equipment - net                    458,430
                                                         ----------

Other assets                                                 13,382
                                                         ----------

Total assets                                        $    29,322,894
                                                         ==========

</TABLE>

The accompanying notes are an integral part of these consolidated
financial statements.





<TABLE>
               KILLEARN PROPERTIES, INC. AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEET 
                             April 30, 1998

LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>
Liabilities:
<S>                                                <C>
    Accounts payable and other accrued expenses     $    1,193,465
    Income taxes payable                                 3,627,642
    Accrued interest                                       242,105
    Customers' deposits                                    106,000
    Debt (including current maturities                  16,294,254
            of $15,256,828 - see Note 6) 
    Deferred liabilities                                   548,653
    Deferred income                                      1,413,669
    Deferred income taxes                                2,468,988
                                                        ----------

Total liabilities                                       25,894,776
                                                        ----------

Commitments and Contingencies (see Note 10)

Stockholders' equity:

    Common stock - $ .10 par value - authorized 6,000,000 
     shares, 887,412 shares issued and outstanding          88,741
    Additional paid-in capital                           1,942,998
    Retained earnings                                    1,396,379
                                                        ----------

Total stockholders' equity                               3,428,118
                                                        ----------

Total liabilities and stockholders' equity          $   29,322,894
                                                        ==========

</TABLE>

The accompanying notes are an integral part of these consolidated
financial statements.






<TABLE>
                  KILLEARN PROPERTIES, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<CAPTION>

                                                 Year Ended April 30
                                                 -------------------
                                                1998           1997
                                                ----           ----
<S>                                     <C>            <C>
Common Stock: 
   Balance at beginning of year          $      88,741   $    143,873
   Stock redemption                                  0        (55,132)
                                             ---------      ---------
   Balance at end of year                       88,741         88,741

Additional paid-in capital:
   Balance at beginning of year              1,942,998      6,846,014
   Stock redemption                                  0     (4,903,016)
                                             ---------      ---------
   Balance at end of year                    1,942,998      1,942,998

Retained earnings:
   Balance at beginning of year              1,095,323     12,232,696
   Net earnings                                301,056      1,095,323
   Stock redemption                                  0    (12,232,696)
                                            ----------     ----------
   Balance at end of year                    1,396,379      1,095,323

                                            ----------     ----------
            Total stockholders' equity   $   3,428,118   $  3,127,062
                                            ==========     ==========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.





<TABLE>
                    KILLEARN PROPERTIES, INC. AND SUBSIDIARIES 
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
                                                     Year Ended April 30
                                                     -------------------
                                                  1998                  1997
                                                  ----                  ----
<S>                                 <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

 Net income                                 $   301,056         $   1,095,323
 Adjustments to reconcile net
  earnings to net cash provided
  by operating activities:
 Depreciation                                    77,572                93,823
 (Gain) Loss on disposition of assets                 0                (1,681)
 Equity in income from joint ventures                 0               (55,232)
 Changes in operating assets and 
   liabilities:
    Accounts receivable                          74,394                76,400
    Notes receivable                            365,848               755,823
    Deferred income                             138,499              (880,583)
    Residential house inventory                 (49,613)              (14,236)
    Real estate held for development
     and sale                                 3,122,981             2,091,807
    Other assets                                (25,887)              207,088
    Accounts payable                           (259,282)             (665,187)
    Current and deferred income
     taxes payable                              244,047            (1,193,949)
    Customers' deposits                         (24,900)             (144,397)
    Other liabilities                          (233,934)               28,075
                                              ----------            ---------
 Net cash provided by operating 
    activities                                3,730,781             1,393,074
                                              ---------             ---------
CASH FLOWS FROM INVESTING ACTIVITIES

 Purchases of property and equipment, net of 
    non-cash transactions                        23,789               (52,170)
 Investment in joint ventures                    (3,600)                    0
 Distributions from joint ventures                    0                55,232
 Proceeds from sale of fixed assets                   0                 6,800
                                              ---------             ---------
Net cash provided by investing activities        20,189                 9,862
                                              ---------             ---------

CASH FLOWS FROM FINANCING ACTIVITIES:

   Proceeds from loans                       16,970,373             8,904,246
   Principal payments on debts              (20,624,483)          (10,224,982)
                                             ----------            ----------
Net cash used in financing activities        (3,654,110)           (1,320,736)
                                             ----------            ----------
NET CHANGE IN CASH                               96,860                82,200
Cash - beginning of year                        269,194               186,994
                                             ----------            ----------
Cash - end of year                         $    366,054          $    269,194
                                             ==========            ==========
</TABLE>

Supplemental Information

Cash paid:
    Interest, net of amounts capitalized, was $351,796 and $619,483 in
fiscal 1998 and 1997, respectively.
    Income taxes were $981,492 and $1,234,276 in fiscal 1998 and 1997,
respectively.  

Supplemental Schedules of Non-Cash Investing and Financing Activities,
which are not reflected above:

    See Note 3 for description of non-cash stock redemption.

    See Note 12 for description of non-cash land sale.

The accompanying notes are an integral part of these consolidated financial
statements.






KILLEARN PROPERTIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Two Year Period Ended April 30, 1998

Description of Business

    The Company was organized as a Florida corporation in 1964 and is engaged 
primarily in the development of planned communities in the vicinity of Henry 
County, Georgia.  Henry County is a part of the metropolitan Atlanta area.  Its 
principal cities are McDonough and Stockbridge.  Historically, the Company has 
acquired large areas of unimproved real estate, and has subdivided, developed 
and then resold the developed real estate in smaller parcels to individuals 
and builders.  

NOTE 1 - Summary of Significant Accounting Policies

(a)      Principles of Consolidation

          The consolidated financial statements include the accounts of
Killearn Properties, Inc. and its wholly-owned subsidiaries (the "Company").
Additionally, all significant intercompany accounts and transactions have 
been eliminated.

(b)     Revenue Recognition

         Lot Sales
         The Company sells fully developed and partially developed homesites
primarily in Henry County, Georgia to builders and individuals under contracts,
which generally provide for small down payments and monthly installments.
Profit from lot sales is recorded on the full accrual, percentage of
completion, or cost recovery method depending upon the terms of the sale.  On
sales to builders, a small down payment is made at the time of sale and a total
of 20% to 100% is required at the time the builder receives a deed and gives
the Company a mortgage securing the balance due.  Sales prices are discounted
to produce a minimum yield on the contract balance over its life.  The amount
of revenue recognized at the time a sale is recognized is measured by the
relationship of costs already incurred to total estimated costs to be incurred.
If certain improvements are incomplete, the portion of revenue related to costs
not yet incurred is recognized as the costs are incurred.

         Until the required down payment percentage (generally 10% for
individuals and 20% to 100% for builders) and other accounting criteria are
met, all collections, including interest, are recorded as deposits.  
Commissions paid to salesmen, if any, are deferred, and the related land cost 
is segregated in inventory.  Once the required down payment has been received, 
a sale is recognized, previously deferred commissions are charged to expense, 
the related land costs and any improvements are charged to cost of sales, the 
interest portion of the deposit is recorded as income and the balance reduces 
the principal amount due from the purchaser.

         Upon cancellation of a contract, the difference between the unpaid
contract receivable balance and the cost of the related land is charged to the
allowance for uncollectible contracts.  When a contract cancels before
qualifying as a sale, deferred selling costs are charged to expense and
deposits forfeited are credited to income.

         The amount of the provision for uncollectible sales is based on the
Company's contract receivable cancellation history.  Additionally, the
allowance includes a provision relating to all other receivables where
management believes collection is doubtful.


         Other Land Sales

         Sales of bulk land tracts are accounted for in accordance with
Statement of Financial Accounting Standards (SFAS) No. 66.  Under the
Statement, the buyer's commitment must meet certain minimum requirements as to 
initial and continuing investment (generally 10% to 25%) before revenue and 
profit are recognized.  As appropriate, some sales are accounted for on the 
installment basis.

(c)       Cash 

          The Company classifies as cash equivalents any investment which can
be readily converted to cash and has an original maturity of less than three
months.  At times, cash balances at a limited number of banks and financial
institutions may exceed insurable amounts.  Management does not anticipate 
nonperformance by the financial institutions.  Management reviews the 
financial viability of these institutions on a periodic basis.

          At April 30, 1998 the Company had $250,000 of cash restricted 
as collateral with a local bank.

 (d)       Real Estate Held for Development and Sale

          Real estate held for development and sale is recorded at the lower of
cost or estimated fair value.  Expenditures for land development are 
capitalized and allocated to development projects by the specific
identification method.  Costs are allocated to specific lots based on the ratio
of the lot sales price to the estimated total project sales price times the
total project costs.  Interest and property taxes are capitalized while
development is in progress.  Total interest and property taxes capitalized
during 1998 and 1997 were as follows:



                         1998                     1997
                      ---------                ---------
    Interest          1,750,243                1,590,450
    Property Taxes       93,692                   97,978

(e)      Property and Equipment, and related depreciation

         The Company periodically reviews the carrying value of its long-lived
assets (primarily property and equipment) to assess the recoverability of these
assets; any impairments would be recognized in operating results if a permanent
diminution in value were to occur.  As part of this assessment, the Company
reviews the expected future net operating cash flows from its facilities, as
well as the values included in any of its facilities, which have periodically
been obtained in connection with various refinancings.

         Provision for depreciation is made primarily on the straight-line
method over the estimated useful lives of the related assets, as follows:

                                               Years
                                               -----
            Buildings                          10-40
            Machinery, equipment and vehicles   5-10
            Furniture and fixtures              5-10

         Expenditures for repairs and maintenance are charged to expense as
incurred.  Additions, improvements, and major renewals are capitalized.  Upon
the sale or retirement of properties, the cost of the assets and accumulated
depreciation and amortization are removed from the accounts, and any resulting
gains or losses are included in income.

(f)      Income Taxes

         The Company utilizes the asset and liability method of accounting for
deferred taxes. Deferred income taxes are recognized for the future tax
consequences of temporary differences between the financial reporting basis and
the tax basis of the Company's assets and liabilities.  Valuation allowances
are established when necessary to reduce a deferred tax asset to the amount
expected to be realized.  Income tax expense is the tax payable for the period
and the change during the period in deferred tax assets and liabilities.

(g)      Disclosures about Fair Value of Financial Instruments:

         The amounts recorded in the financial statements for the Company's
receivables, payables, and investment in unconsolidated joint ventures are
carried at amounts that approximate fair value.  Long-term debt is carried at
amounts which approximate fair value based on current borrowing rates for loans
with similar terms.

(h)      Earnings Per Share

         Effective April 30, 1998, the Company adopted Statement of Financial 
Accounting Standards No. 128, "Earnings per Share" ("FAS 128") which replaces 
the presentation of primary earnings per share with basic earnings per share 
and which requires dual presentation of basic and diluted earnings per share
on the Consolidated Statements of Operations.  FAS 128 requires restatement of
all prior-period earnings per share data presented.  Basic net earnings per 
share is computed by dividing net income by the weighted average number of 
shares of common stock outstanding during the period, and diluted net earnings
per share includes the effect of unexercised stock options using the treasury 
stock method.  The treasury stock method assumes that common stock was 
purchased at the average market price during the period.  Because there were 
no stock options outstanding for the years April 30, 1998 and 1997, both basic 
and diluted earnings per share were the same.

(i)      Reclassifications

         Certain amounts in the 1997 financial statements and notes to
consolidated financial statements have been reclassified to conform with the 
1998 presentation.

(j)      Use of Estimates

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

(k)      New Accounting Pronouncements

         In June 1997, the Financial Accounting Standards Board issued 
Statement of Financial Accounting Standards No. SFAS 130, "Reporting 
Comprehensive Income" ("FAS 130"), which is effective for fiscal years 
beginning after December 15, 1997.  FAS 130 establishes standards for 
reporting and display of comprehensive income and its components in full a 
set of general-purposes financial statements.  The Statement requires that 
all items that are required to be recognized under accounting standards as 
components of comprehensive income be reported in a financial statement that 
is displayed with the same prominence as other financial statements.  The 
Company does not expect this standard to have a significant impact on its 
reporting practices.

         In June 1997, the Financial Accounting Standards Board issued 
Statement of Financial Accounting Standards No. SFAS 131, "Disclosures about 
Segments of an Enterprise and Related Information" ("FAS 131"), which is 
effective for fiscal years beginning after December 15, 1997.  FAS 131 
establishes standards for reporting information about operating segments in 
annual financial statements and interim financial reports issued to 
shareholders.  Generally, certain financial information is required to be 
reported on the basis that is used internally for evaluating performance of 
and allocation of resources to operating segments.  The Company does not 
expect this standard to have a significant impact on its reporting practices. 


NOTE 2 - Land Contracts Receivable and Notes Receivable

    Land contracts receivable, arising from sales of lots to individuals and
builders, are generally due over periods which range from one to three years
and provide for stated interest ranging from 8.25% to 11% per annum.  The
weighted average stated interest rate of retail land contracts receivable was
8.89% at April 30, 1998.  Retail contracts receivable at April 30, 1998 are 
all due in fiscal 1999.  

    In November 1997, the Company purchased a note receivable collateralized 
by a first mortgage on land owned by International Realty Development 
Partners, LTD., L.L.C. ("International Realty"), the borrower.  In 
February 1998 the Company declared the loan in default and commenced 
foreclosure proceedings.  In March 1998, International Realty filed a 
petition for relief in United States Bankruptcy Court.  At April 30, 1998, 
International Realty owed the Company $3,344,702 in principal and $249,772 
in accrued interest.  On July 24, 1998 International Realty filed a lawsuit 
against the Company in the United States Bankruptcy Court for the District of 
Georgia, alleging among other things, breach of contract and fraud claims and 
seeking compensatory and punitive damages for amounts greater than the 
Company's Note receivable.  The Company believes that International Realty's 
lawsuit is without merit.  The Trustee in International Realty's bankruptcy 
proceedings has received nonbinding written bids for the land that 
collateralizes the Company's mortgage that are sufficient to pay the Company 
in full.  Management expects that all principal and interest will be paid upon 
the resolution of the bankruptcy.  The Company intends to vigorously defend the 
lawsuit and continue to seek payment of it's receivable from International 
Realty.

NOTE 3 - Stock Redemption

    On August 1, 1996, the Company entered into an agreement, subject to
shareholder approval, pursuant to which it agreed to acquire the 551,321 shares
of common stock in the Company held by J.T. Williams, Jr., the Company's former
Chairman of the Board and Chief Executive Officer, and the cancellation of his
option to purchase an additional 100,000 shares of common stock through the
transfer of certain of its assets and liabilities.  The net assets identified
in the agreement consisted principally of the Eagle's Landing Golf Course and
Country Club, the Inn at Eagle's Landing, a note for approximately $2 million
and approximately 250 acres of commercial and industrial real estate, subject
to certain mortgages and other liabilities.  The agreement provided that
subject to shareholder approval, the redemption would be effective as of May 1,
1996.  Accordingly, the net cash flows related to the transferred assets from
the effective date (May 1, 1996) until the closing date would be transferred to
or funded by J.T. Williams, Jr.

    On September 30, 1996, the shareholders of the Company approved the 
redemption, and the transaction closed on November 16, 1996.  The historical
cost basis of approximately $17,191,000 of the net assets transferred has been
reflected as retired treasury stock in the accompanying balance sheet and
statement of changes in stockholders' equity.  The net operating results of the
transferred assets have been removed from the statement of operations
retroactively to the effective date and have not been considered in the
determination of net income of the Company for the year ended April 30, 1997.
The following table reflects the assets and liabilities transferred in 
exchange for the shares held by J. T. Williams prior to the retirement of these
shares:

                            Description               Amount

                  Assets:
                  Cash                           $   (26,847)
                  Accounts receivable                433,402
                  Investment in joint ventures        74,695
                  Real estate                      7,402,242
                  Fixed assets, net               12,017,479
                  Other assets                       182,894
                                                  ----------
                       Total assets               20,083,865

                  Less:  Liabilities
                  Accounts payable                 2,474,388
                  Customers' deposits              1,243,440
                  Debt                            (1,604,287)
                  Deferred income taxes payable      779,480
                                                  ----------
                       Total liabilities           2,893,021
                                                  ----------
                       Net assets transferred     17,190,844
                                                  ==========

NOTE 4 - Real Estate Held for Development and Sale

    Information with respect to real estate held for development and sale at
April 30, 1998 is as follows:

Land developed and under development:
               Land fully developed            $   7,930,079
               Land under development             10,709,023
                                                  ----------
                                               $  18,639,102
                                                  ==========
Real estate under contract for sale:
               Lot sales                       $   1,414,729
               Other land sales                    1,507,080
                                                  ----------
                                               $   2,921,809
                                                  ==========

    Included in land under development are portions of the properties
undergoing development activity which have not reached the stage at which they
can be offered for sale.

NOTE 5 - Customers' Deposits

    At April 30, 1998, customers' deposits includes receipts relating to real 
estate under contract for sale which have not yet been recorded as sales of 
approximately $71,000 and deposits on contracts being negotiated of $35,000.

NOTE 6 - Debt

    At April 30, 1998, the Company had various note agreements with financial
institutions and individuals.  These note agreements are summarized as follows:


                                                          April 30, 1998
                                                              Balance
                                                          --------------
         Term notes payable to Bank (A)                   $  8,774,658
         Term notes payable (B)                              7,519,596
                                                            ----------
                                                          $ 16,294,254
                                                            ==========

(A)      The Company normally borrows its development loans for its Georgia
properties from a bank.  The approximate balance of such loans at April 30,1998
and 1997 was $8.8 million and $3.2 million respectively.  The terms of such 
loans require interest at the bank's prime rate plus 1.0% or 1.25%.  The bank's
prime rate on April 30, 1998 was 8.5%.  The principal reduction of these loans 
is from lot release prices which vary with the development.  Normally, the 
loan is due one year from the date of the loan and is extended for one year, 
if necessary.

(B)      The Company has other notes payable, including amounts payable to 
related parties (see Note 12), which are due in various installments through 
1999 and bear interest at 10% or the banks prime rate plus 1% at April 30, 
1998.

Maturities of debt outstanding at April 30, 1998 follow:

            Fiscal Years of Maturity                Amount
            ------------------------                ------
                    1999                      $    15,256,828
                    2000                            1,037,426
                                                   ----------
                                              $    16,294,254
                                                   ==========

    At April 30, 1998, the Company had available lines of credit totaling 
$516,000.  These lines of credit will be drawn as needed for the development 
of the Company's property and operational expenses.

    Subsequent to year end, in May 1998 the Company borrowed $1,588,900 from a 
new lender of which the Company used $1,000,000 to reduce debt described in (A)
above and used $588,900 to pay development costs.  In addition, the Company 
as available $1,273,440 to draw from the new lender for additional development 
cost.

    Substantially all of the Company's assets are mortgaged or pledged as
collateral for its indebtedness.  Most of the agreements with the lenders
provide that the Company will not declare or pay dividends to its stockholders.

NOTE 7 - Income Taxes

    The Company had net operating loss carryforwards for state income tax
purposes of $730,293 and $2,870,658 at April 30, 1998 and April 30, 1997,
respectively.  The state net operating loss carryforwards expire in years 2002
through 2010.  The Company has recorded a deferred tax liability for the
expected reversal of the taxable temporary differences.  For financial
reporting purposes, a valuation allowance has not been recognized to offset the
deferred tax asset related to the net operating loss carryforwards. 

    The provision for income taxes consists of the following:

Income taxes                       1998               1997

        Current             $   1,464,297      $  1,918,477
        Deferred                 (844,247)       (1,179,481)
                                 ---------        ---------
        Total provision     $     620,050      $    738,996
                                 =========         ========

     Significant components of the Company's deferred tax liability as of April
30, 1998 and April 30, 1997 are as follows:

Tax effect of                            1998               1997
    Net Operating Loss
    Carryforwards                  $   (43,055)       $   (268,552)
    Taxable Temporary Differences:
      Differences in the timing
       of Profit Recognition of
       Sale of Real Estate             291,481             805,558
    Differences in Land Basis        2,285,538           2,813,508
    Depreciation                        22,734              18,870
    Deferred Compensation              (87,710)                  0
    Other                                                  (56,148)
                                     ---------           ---------
      Net Deferred Tax Liability   $ 2,468,988         $ 3,313,236
                                     =========           =========

    Deferred tax expenses results from temporary differences in the recognition
of certain items for tax and financial reporting purposes. 

    The difference between income taxes computed using the statutory federal 
income tax rate and that shown in the consolidated statements of income are 
as follows:

                                          1998                1997
    Income tax provision at
      U.S. statutory rate          $    322,387       $    643,012
    Rate differences                     (9,211)           (18,343)
    State taxes                          92,968                  0
    Penalties                           294,015             91,427
    Adjustments for gain on 
      installment sales                 (72,264)                 0
    Other                                (7,845)            23,900
                                        -------             ------

                                   $    620,050        $   738,996
                                        =======            =======

    The Company has and continues to incur penalties for late payment of tax
which has been included in the tax provision as a component of the current
tax expense.  As of April 30, 1998, the Company has not paid income taxes 
totaling $ 3,020,747 which were due for the years ended April 30, 1998 and 
1997.  These income taxes, which are not paid on a timely basis, are subject 
to interest and penalties at prescribed Internal Revenue Service rates.  The 
Company anticipates paying current income taxes payable during the next fiscal 
year.

NOTE 8 - Employee Benefit Plans

    Pursuant to the agreement discussed in Note 3, the Company entered into an
employment agreement with J.T. Williams, Jr., whereby he will continue to 
serve the Company for periods of ten years.  The employment agreement will
provide for an annual salary for the first five years of $200,000 beginning in 
1997 and $150,000 thereafter, plus cost of living increases of 5% per year.

    Additionally, the Company also funds a retirement plan for the president 
of the Company.  The required payments to the employee are being funded by 
the purchase of insurance.


NOTE 9 - Stock Options

    The Company has a Stock Option Plan, which provided for issuance of shares 
to employees at prices not less than the fair market value on dates of grant 
(not less than 110% of fair market value for options granted to persons owning 
10% or more of the Company's common stock.)

    There were no stock options exercised or granted under the plan for years 
ended April 30, 1998 and 1997.

    On April 24, 1992, the Board of Directors issued a five-year non-qualified
option to the former President of the Company to purchase 100,000 shares of 
the Company's stock for $3.60, which was 10% above the market value on such 
date.  These options were canceled during the 1997 fiscal year in connection 
with the transaction discussed in Note 3.

NOTE 10 - Commitments and Contingencies

    The Company is required to provide improvements to certain properties that 
had been sold and developed by other developers.  As of April 30, 1998 the 
estimated cost is $32,298, which is included in the accompanying balance sheet,
and is expected to be incurred over the next fiscal year.

    The Company is a party to certain legal proceedings in the ordinary 
course of business.  In the opinion of management, none of these proceedings 
should have a material adverse effect upon the Company.

NOTE 11 - Sale of Florida Properties

    On November 14, 1993, the Company entered into two agreements to sell
substantially all of its Florida assets  for approximately $25.7 million.  As 
of April 30, 1998, the entire sale had closed, with the purchaser assuming 
approximately $9.2 million of the Company's debt, on which the Company remained
liable; issuing notes to the Company, collateralized by a second mortgage on 
most of the assets purchased, totaling approximately $8.1 million; and paying 
approximately $8.1 million in cash.  The notes are payable to the Company over
the next 2 years and bear interest at 10% per annum.  The amount of the notes 
due the Company at April 30, 1998 was $2.5 million, which is included in notes 
receivable from related parties in the accompanying consolidated balance sheet.
The Company's cost of the assets sold, and to be sold, is approximately 
$18.9 million.  The resulting gross profit is being reported by the Company on
the installment method over 5 fiscal years, beginning with fiscal 1994.  At 
April 30, 1998, there remains approximately $630,000 of gross profit to be 
recognized over the next 2 years as cash is collected.

Note 12 - Related Party Transactions

    On February 2, 1998, pursuant to a Final Agreement dated January 27, 1998, 
the Company deeded three parcels of land and its interest in three joint 
ventures to Proactive Technologies, Inc. ("Proactive") for $4.4 million, which 
is slightly higher than the book value of these assets.  Proactive has assumed 
the outstanding bank debt secured by these assets, together with all contracts 
and other obligations related to these projects incurred after December 31, 
1997.  Proactive was a major shareholder of the Company, and Proactive's 
Chairman and President was the Chairman and President of the Company until 
recently.  The Company had made demand on Proactive to pay three notes 
which were in default totaling $4.9 million, including past due interest 
through December 31, 1997.  Under the agreement, Proactive paid approximately 
$1.5 million to reduce the Company's debt.  The Company agreed to extend until 
December 31, 1999 the due date on the approximately $3 million balance of 
Proactive's debt, which bears interest at 10% per annum, payable quarterly.
In accordance with the agreement, the Company paid $115,000 to 3 officers of 
Proactive, upon their termination from the Company, in exchange for a Release 
and a Covenant Not to Sue.  The non-cash effect of the land sale was a 
reduction of investment in joint ventures and land of $3,995,365 and a 
reduction of notes payable of $ 4,382,703 and a deferred profit of $387,338.  
The deferred profit will be recognized when the company is no longer a 
guarantor on the loans.

    During fiscal 1997, the Company sold a building for $550,000 to a company 
that later was purchased by Proactive.  The purchaser signed a promissory note 
in the amount of $550,000 with interest at 9% per annum.  As part of 
an overall settlement with Proactive (see above), on January 27, 1998, the 
Company agreed to reduce the balance of this note to the approximate fair 
market value of the building of $480,000, which was paid in full during 
fiscal 1998.

    In June 1997, the Company sold nine lots for $12,000 each to Eleuthra 
Holdings, Inc., a company owned by Mark A. Conner.  At the same time, the 
Company sold eight lots for the same price to an unrelated third party builder,
with which Eleuthra Holdings, Inc. had an agreement for the construction of 
homes on such lots and the sharing of profits for the venture.  The purchase 
price was paid in cash.  During July 1997, Mr. Conner agreed to assign his 
interest in the profits, if any, from the venture to the Company.

    During fiscal 1998 and fiscal 1997, the Company paid $50,000 and $125,000, 
respectively in consulting fees to Proactive.

    In 1997, an individual (no longer employed by the Company) who was a Vice 
President of the Company at the time, and a Vice President of Proactive, 
purchased a home in the Company's golf course community.  The Company sold 
the home site to the Vice President's builder for $50,000, which was 
substantially less than market value.

    In October 1997 the Company sold 2.28 acres of commercial land for 
$148,200 to an entity related to Mark A. Conner, the Chairman and Chief 
Executive Officer of Proactive and former Chairman and Chief Executive 
Officer of the Company.  The Company incurred a loss of $92,222 in connection 
with the sale.

    In December 1997, the Company's primary lender notified the Company that 
it was in default on a $2.4 million note.  J.T. Williams, Jr. purchased the 
note from the lender in January 1998.  The loan bears interest at 10% per 
annum, matures in November 1998 and is collateralized by a $3.5 million dollar 
note receivable.  The balance at April 30, 1998 was $440,958.

    During January 1998, J.T. Williams, Jr. made a loan to the Company in 
the amount of $406,000 to permit the Company to pay certain past due 
obligations.  This amount was added to the existing loan (described in 
"Note 3. Stock Redemption" above), with a balance at April 30, 1998 of 
$3,214,776.  This loan currently bears interest at 10.5%, matures in December 
1999 (at which time the Company believes it will be renewed) and is 
collateralized by a $2.5 million note receivable and certain 
undeveloped land in Georgia.

NOTE 13 Significant Risks and Uncertainties

    As a land developer, the Company is subject to environmental, building,
zoning and real estate sales regulation by, among others, local zoning and
planning authorities, the Division of Georgia Land Sales and various state and
federal environmental protection agencies. 

    All of the necessary local, state and federal regulatory approvals for the
development of its presently active subdivision projects in Henry County,
Georgia have been secured by the Company.  Additional permits and approvals may
be required as new subdivisions are constructed; however, the Company does not
anticipate any difficulty in securing such permits and approvals.

    The Company's management is not presently aware of any anticipated
revocation or amendment of any of its regulatory approvals.  However, in the
event that any regulatory approvals presently secured by the Company are
revoked or materially altered, the business of the Company could be adversely
affected.

    The Company's business, as well as the real estate industry in general, is 
affected by a number of economic factors, including interest rates and 
inflation.  Interest rates affect both the cost to individuals and builders of 
purchasing homes and lots from the Company and the carrying costs of 
undeveloped land.  During the past fiscal year, interest rates on residential 
mortgage loans remained stable.  In the past, the Company has increased the 
price of lots offered for sale to offset increased inflation.  Such increases 
reduce the number of persons who are able to afford the lots and homes offered 
by the Company.  If interest rates and inflation increase substantially, the 
real estate and construction industries would be adversely affected and the 
Company's ability to sell its real estate could be significantly adversely 
affected.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND ACCOUNTING AND
FINANCIAL DISCLOSURE.

    None


PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE ISSUER

Executive Officers of the Company

    Information with respect to the Company's executive officers as of
April 30, 1998 is as follows:

Name                         Age       Position                   Held Since
------------------------    -----      -----------------          ----------
David K. Williams            38        President                     1997
William E. Daniels, Jr.      37        Chief Financial Officer       1998

    All executive officers of the Company serve at the pleasure of the
Company's Board of Directors.

    David K. Williams has been President of the Company since July 1997.  
Mr. Williams has been employed by the Company since June 1983.  He served 
as Vice President of Construction and Development from January 1987 until 
June 1989, President of Florida Operations from June 1989 until 1994, 
Chief Financial Officer and Executive Vice President from June 1994 until 
July 1997.

    William E. Daniels, Jr. has been Chief Financial Officer of the Company 
since February 1998.  Mr. Daniels was Chief Financial Officer of Proactive 
Technologies, Inc., a real estate development company, from July 1997 until 
February 1998. Prior to joining Proactive Technologies, Inc., Mr. Daniels was 
controller of EAR Enterprises, Inc. from 1995 to 1997, controller for KWC 
Management Corporation from 1993 to 1995. 

    The information required by this Item 9 concerning the Directors of the 
Company will be contained in the Company's 1998 definitive proxy material to 
be filed with the Securities and Exchange Commission and is incorporated 
herein by this reference.

ITEM 10.   EXECUTIVE COMPENSATION

    The information required by this Item 10 will be contained in the Company's
1998 definitive proxy material to be filed with the Securities and Exchange 
Commission and is incorporated herein by this reference.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

    The information required by this Item 11 will be contained in the Company's
1998 definitive proxy material to be filed with the Securities and Exchange
Commission and is incorporated herein by this reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

    The information required by this Item 12 will be contained in the Company's
1998 definitive proxy material to be filed with the Securities and Exchange
Commission and is incorporated herein by this reference.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

    (a)  The following documents are filed as part of this Annual Report
on Form 10-KSB:

1.  Financial Statements.  The following financial statements are
included in Item 7 hereof:

    1.  Reports of Independent Certified Public Accountants

    2.  Consolidated Balance Sheet of the Company as of April 30, 1998

    3.  Consolidated Statements of Earnings for the fiscal years ended
April 30, 1998 and 1997

    4.  Consolidated Statements of Changes in Stockholders' Equity for
the fiscal years ended April 30, 1998 and 1997

    5.  Consolidated Statements of Cash Flows for the fiscal years ended
April 30, 1998 and 1997

    6.  Notes to Consolidated Financial Statements

2.  Exhibits.

    See Exhibit Index, below.
     (b)  Reports on form 8 - K
On February 2, 1998, the Company filed a Form 8-K to report a Change in Control 
of Registrant, (Item 1) and a Disposition of Assets, (Item 2).  On April 3, 1998
the Company filed an amendment to the foregoing Form 8-K to file pro forma 
financial statements related to the Disposition of Assets.






SIGNATURES

    Pursuant to the requirements of Section 13 or 15 (d) of the Securities and
Exchange Act of 1934, the Issuer has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.



                                     KILLLEARN PROPERTIES, INC.

Date:    July 27, 1998               By: /s/ David K. Williams
                                     DAVID K. WILLIAMS,
                                     President



    Pursuant to the requirements of the Securities and Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Issuer and in the capacities and on the date indicated.

DATE:    July 27, 1998               /s/ Mallory E. Horne
                                     MALLORY E. HORNE, Chairman of the Board

DATE:    July 27, 1998               /s/ David K. Williams
                                     DAVID K. WILLIAMS, President and Director

DATE:    July 27, 1998               /s/ J.T. Williams, Jr.
                                     J.T. WILLIAMS, JR., Director

DATE:    July 27, 1998               /s/ Melvin L. Pope, Jr.
                                     MELVIN L. POPE, JR., Director



                             EXHIBIT INDEX

                                   Page No. or Incorporated by Reference
Exhibit No.    Description               to the Document Listed Below

   (3)         Articles of Incorporation as           1981 Form 10-K
               amended and Bylaws of the 
               Company

   (10.1)      Executive Compensation Plan and Arrangements

   (10.1)      1992 Incentive Stock Option Plan for   1994 Form 10-K
               Employees

   (13)        Annual Report to Shareholders for      1998 Form 10-K
               the fiscal year ended April 30, 1998

   (22)        Subsidiaries of the Company            1994 Form 10-K