SC 13D/A

                          SCHEDULE 13D

            Under the Securities Exchange Act of 1934
                          Amendment #1


                   Transcontinental Realty Investors, Inc.
                        (Name of Issuer)

                  Common Stock, $.01 par value
                   (Title of class of securities)

                          893617209
                         (CUSIP Number)

                      Marc Weingarten, Esq.
                     Schulte Roth & Zabel LLP
                         900 Third Avenue
                    New York, New York  10022
                         (212) 756-2000
   (Name, address and telephone number of person authorized to
               receive notices and communications)

                        September 1, 2000
     (Date of event which requires filing of this statement)

If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box [ ].

Check the following box if a fee is being paid with the statement
[ ].  (A fee is not required only if the reporting person: (1)
has a previous statement on file reporting beneficial ownership
of more than five percent of the class of securities described in
Item 1; and (2) has filed no amendment subsequent thereto
reporting beneficial ownership of five percent or less of such
class.)  (See Rule 13d-7.)

Note:  Six copies of this statement, including all exhibits,
should be filed with the Commission.  See Rule 13d-1(a) for other
parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.

The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).

  




                          SCHEDULE 13D

CUSIP No. 893617209                              Page 2 of 9 Pages

      1        NAME OF REPORTING PERSON
               S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
                    Gotham Partners, L.P.

      2        CHECK THE APPROPRIATE BOX IF A MEMBER OF A    (a) [x]
               GROUP*                                        (b) [ ]

      3        SEC USE ONLY

      4        SOURCE OF FUNDS*
                    WC

      5        CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS      [ ]
               IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

      6        CITIZENSHIP OR PLACE OF ORGANIZATION
                    New York

  NUMBER OF     7   SOLE VOTING POWER
   SHARES            1,376,000

BENEFICIALLY    8   SHARED VOTING POWER
OWNED BY EACH        0
                9   SOLE DISPOSITIVE POWER
  REPORTING          1,376,000
   PERSON
    WITH       10   SHARED DISPOSITIVE POWER
                     0

     11        AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
               REPORTING PERSON
                     1,376,000

     12        CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)     [ ]
               EXCLUDES CERTAIN SHARES*


     13        PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
               (11)
                     15.94%

     14        TYPE OF REPORTING PERSON*
                    PN





                           SCHEDULE 13D

CUSIP No. 893617209                             Page 3 of 9 Pages

      1        NAME OF REPORTING PERSON
               S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
                    Gotham Partners III, L.P.

      2        CHECK THE APPROPRIATE BOX IF A MEMBER OF A    (a) [x]
               GROUP*                                        (b) [ ]

      3        SEC USE ONLY

      4        SOURCE OF FUNDS*
                    WC

      5        CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS      [ ]
               IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

      6        CITIZENSHIP OR PLACE OF ORGANIZATION
                    New York

  NUMBER OF     7   SOLE VOTING POWER
   SHARES            35,660

BENEFICIALLY    8   SHARED VOTING POWER
OWNED BY EACH        0
                9   SOLE DISPOSITIVE POWER
  REPORTING          35,660
   PERSON
    WITH       10   SHARED DISPOSITIVE POWER
                     0

     11        AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
               REPORTING PERSON
                     35,660

     12        CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)     [ ]
               EXCLUDES CERTAIN SHARES*


     13        PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
               (11)
                     0.4%

     14        TYPE OF REPORTING PERSON*
                    PN





                          SCHEDULE 13D

CUSIP No. 893617209                            Page 4 of 9 Pages

      1        NAME OF REPORTING PERSON
               S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
                    Gotham International Advisors, L.L.C.

      2        CHECK THE APPROPRIATE BOX IF A MEMBER OF A    (a) [x]
               GROUP*                                        (b) [ ]

      3        SEC USE ONLY

      4        SOURCE OF FUNDS*
                    WC

      5        CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS      [ ]
               IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

      6        CITIZENSHIP OR PLACE OF ORGANIZATION
                    Delaware

  NUMBER OF     7   SOLE VOTING POWER
   SHARES            437,240

BENEFICIALLY    8   SHARED VOTING POWER
OWNED BY EACH        0
                9   SOLE DISPOSITIVE POWER
  REPORTING          437,240
   PERSON
    WITH       10   SHARED DISPOSITIVE POWER
                     0

     11        AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
               REPORTING PERSON
                     437,240

     12        CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)     [ ]
               EXCLUDES CERTAIN SHARES*


     13        PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
               (11)
                     5.10%

     14        TYPE OF REPORTING PERSON*
                    OO; IA





                                                           Page 5 of 9 Pages

Item 1. Security and Issuer

  This Amendment #1 amends and supplements the statement on Schedule 13D
(the "Statement") as it relates the Common Stock, $.01 par value ("Common
Stock"), of Transcontinental Realty Investors, Inc. a Nevada corporation (the
"Company").  The principal executive offices of the Company are located at
10670 North Central Expressway, Suite 300, Dallas, Texas 75231.

Item 3 is hereby amended to add the following information.

Item 3. Source and Amount of Funds or Other Consideration

     The aggregate purchase price of the Common Stock purchased by Gotham III
was $17,670 and the aggregate purchase price of the Common Stock purchased by
Gotham International was $155,518.  All of the funds required for these
purchases were obtained from the general funds of Gotham, Gotham III and Gotham
International, respectively.






                                                           Page 6 of 9 Pages

Item 4 is hereby amended to add the following information.

Item 4.  Purpose of the Transaction

The Reporting Persons hereby supplement, without in any way limiting, their
prior statements under Item 4.  The Reporting Persons have become involved in
previously filed litigation involving the Company, entitled Olive, et al.,
versus Phillips, et al., Case No. C 89-4331 (MHP), pending in the United States
District Court for the Northern District of California (the "Action").  In the
Action, currently, plaintiff's counsel is challenging certain recent actions by
the Company and others, including the Company's making loans to its manager
Basic Capital Management ("BCM") and American Realty Trust, Inc., two companies
controlled by Mr. Phillips.  Mr. Ackman, on behalf of the Reporting Persons,
submitted a declaration in the Action supporting the plaintiff's application to
have the Court reverse the challanged transactions, remove the Company's board,
remove BCM as the Company's manager and for other relief.  A copy of Mr.
Ackman's declaration is submitted as an exhibit hereto.

 In the Action, plaintiff's counsel is also challenging the Board of
Directors' handling of their obligation under prior settlement agreements
entered in the Action to review the terms and conditions of the Company's
management contracts with BCM.  The Reporting Persons have made inquiry to
independent third-party real estate managers about whether they could provide
management to the Company on terms more advantageous than those currently
burdening the Company under its arrangements with BCM.  The Reporting Persons
believe that, without any diminution in the quality of management, the Company
can realize material cost savings by changing managers.

 The Reporting Persons intend to remain actively involved in the Action,
including in any future Court hearings or discussions about appropriate
remedial measures that may result from the Action.



Item 5 is hereby amended to add the following information.

Item 5. Interest in Securities of the Issuer

     (a) Gotham owns 1,376,000 shares of Common Stock as of the date of this
Statement, representing an aggregate of approximately 15.94% of the outstanding
Common Stock of the Company.  Gotham III owns 35,660 shares of Common Stock as
of the date of this Statement, representing an aggregate of approximately 0.4%
of the outstanding Common Stock of the Company.  Gotham International owns
437,240 shares of Common Stock as of the date of this Statement, representing
an aggregate of approximately 5.10% of the outstanding Common Stock of the
Company.  The percentages in this paragraph are calculated based upon
8,633,845 shares of Common Stock issued and outstanding as of July 31, 2000 as
reflected in the Company's form 10-Q for the period ending June 30, 2000.  None
of Gotham Advisors, Section H, Karenina, DPB, Mr. Ackman or Mr. Berkowitz
beneficially own any Common Stock (other than the Common Stock beneficially
owned by Gotham, Gotham III and Gotham International).

     (b) Each of Gotham and Gotham III has sole power to vote and to dispose of
all of the Common Stock beneficially owned by it.  Pursuant to the Investment
Management Agreement, Gotham Advisors currently has the power to vote and to
dispose of all of the Common Stock beneficially owned by Gotham International.




                                                           Page 7 of 9 Pages

     (c) The tables below set forth information with respect to all purchases
and sales of Common Stock by Gotham III and Gotham International.  In
each case, the transactions took place in the over-the-counter market.





                              Shares of Common Stock
Date                            Purchased/(Sold)              Price per Share



Gotham III

8/07/00                               1,000                    12.8000
8/28/00                                 400                    12.1750


Gotham International

7/27/00                               3,800                    12.0961
8/08/00                               1,200                    12.3000
8/09/00                                 800                    12.4250
8/11/00                               2,800                    12.3558
8/14/00                               1,100                    12.3568
8/29/00                               2,900                    12.6427

Except as described above, none of Gotham, Gotham III, Gotham
International, Gotham Advisors, Section H, Karenina, DPB, Mr. Ackman or Mr.
Berkowitz has effected any transactions in the securities of the Company
during the past sixty days.

     (d) and (e).  Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.

     Except as described above, none of Gotham, Gotham III, Gotham
International, Gotham Advisors, Section H, Karenina, DPB, Mr. Ackman or Mr.
Berkowitz is a party to any contract, arrangement, understanding or
relationship with respect to any securities of the Company, including but not
limited to transfer or voting of any of the securities, finder's fees, joint
ventures, loan or option agreements, puts or calls, guarantees of profits,
divisions of profit or losses or the giving or withholding of proxies.

Item 7. Material to be Filed as Exhibits

     The following exhibit is being filed with this Schedule:

Exhibit 2   Declaration of William A. Ackman






                                                       Page 8 of 9 Pages

     After reasonable inquiry and to the best of our knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.

September 8, 2000

                    GOTHAM PARTNERS, L.P.

                    By:   Section H Partners, L.P.
                          its general partner

                          By: Karenina Corporation,
                              a general partner of Section H Partners, L.P.

                          By: /s/ William A. Ackman
                              William A. Ackman
                              President


                    GOTHAM PARTNERS III, L.P.

                    By:   Section H Partners, L.P.
                          its general partner

                          By: Karenina Corporation,
                              a general partner of Section H Partners, L.P.

                          By: /s/ William A. Ackman
                              William A. Ackman
                              President


                    GOTHAM INTERNATIONAL ADVISORS, L.L.C.

                    By:   /s/ William A. Ackman
                          William A. Ackman
                          Senior Managing Member

EX-99

                                                        Page 9 of 9 Pages
                         EXHIBIT 2

 UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA



JACK OLIVE, JONATHAN NOBLE, M.D., JOHN
P. PEDJOE AND ALLSOP, INC. PROFIT
SHARING PLAN & TRUST, on behalf of
themselves and all others similarly
situated and derivatively on behalf of
NATIONAL INCOME REALTY TRUST, a
California business trust, CONTINENTAL
MORTGAGE AND EQUITY TRUST, a
California business trust,
TRANSCONTINENTAL REALTY INVESTORS, a
California business trust, and INCOME
OPPORTUNITY REALTY TRUST, a California
business trust,

   Plaintiffs,

 vs.

GENE E. PHILLIPS; WILLIAM S.
FRIEDMAN; RICHARD N. LAPP;
MICHAEL E. SMITH; WILLIE K.
DAVIS; RAYMOND V. J. SCHRAG;
RANDALL K. GONZALEZ; JAMES W. HAMMOND,
JR.; NATIONAL REALTY ADVISORS, INC., a
Texas corporation; NATIONAL REALTY,
L.P.,

 -- caption continues --
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Case No.  C 89 4331 MHP

DECLARATION OF WILLIAM A. ACKMAN

Date:  August 8, 2000
Time:  2:00 p.m.
Place:  Courtroom of the
Hon.
  Marilyn Hall Patel

a Delaware limited partnership;
AMERICAN REALTY TRUST, INC., a Georgia
corporation; NATIONAL OPERATING L.P.,
a Delaware limited partnership;

   Defendants,

 -and-

NATIONAL INCOME REALTY TRUST, a
California business trust; CONTINENTAL
MORTGAGE AND EQUITY TRUST, a
California business trust;
TRANSCONTINENTAL REALTY INVESTORS, a
California business trust; and INCOME
OPPORTUNITY REALTY TRUST, a California
business trust;

   Nominal Defendants.
_____________________________________
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I, William A. Ackman, do hereby declare as follows:
1. I am one of the principals of Gotham Partners, L.P., Gotham
Partners III, L.P. and Gotham International Advisors, L.L.C., (collectively,
"Gotham").  I submit this declaration in support of the recommendation of
Settlement Counsel in the above-captioned matter that the advisory contract of
Basic Capital Management, Inc. ("BCM") with Transcontinental Realty Investors,
Inc. ("TRI") and Income Opportunity Realty Investors, Inc. ("IORI"), and the
contracts of BCM's affiliates with such entities, be terminated immediately.
The facts herein stated are true and correct of my own personal knowledge, and
if called to testify to such facts I could and would do so competently.
2. In June, 2000, following the substantial declines in the price
of the securities of TRI (and IORI) following the announcement that Gene E.
Phillips and A. Cal Rossi had been indicted, Gotham acquired a total of
approximately 1,835,000 shares of TRI (for which it paid about $10.5 million).
Based upon such acquisitions, it is my understanding that Gotham presently owns
approximately 21 percent of the issued and outstanding shares of TRI.
3. I have reviewed the materials heretofore filed by the parties
in response to the Court's Order to Show Cause, including, among other things,
the Declaration of Edward G. Zampa.  In my opinion, the loans by TRI of $12
million to BCM and American Realty Trust, Inc. described in such materials are
improper, not in the best interests of TRI and highly detrimental to TRI's
unaffiliated shareholders, including Gotham.  First, the loan is severely
undersecured.  Typically, margin loans are secured by collateral with a trading
value of not less than twice the principal amount of the loan.  Here, based
upon Mr. Zampa's Declaration, the $12 million of loans are secured only by
stock with a public market value of about $3.6 million.   The stock pledged as
security is itself highly volatile; BCM and ART have publicly stated that
they may not be able to meet their existing loans; and Mr. Phillips, the
principal or control person of the borrowers, is a defendant under a serious
criminal indictment - all of which calls into question the borrowers'
creditworthiness.

4. More fundamentally, I see no reasonable business purpose
behind TRI's making loans to BCM and ART at all.  A temporary decline in TRI's
share price in response to Mr. Phillips' criminal indictment had no affect on
TRI's underlying business.  Mr. Zampa's explanation for the board's action is
that it was concerned about TRI's trading price, stating:  "it was in the
interest of all shareholders of [TRI] to have the stock reflect the true value
of the company."  Zampa Decl. Par. 21.  If that were the board's true
objective, the logical course would have been for TRI itself to repurchase
shares that became available at discounted prices.  The opportunity for TRI to
repurchase its own and IORI shares at a discount to true value was an enormous
corporate opportunity.  If TRI had repurchased its own and IORI shares, it
would have simultaneously stabilized the price of TRI and IORI and served the
interests of all shareholders.  Instead, the board has squandered this
corporate opportunity and risked $12 million of corporate funds to assist BCM
and ART in maintaining control over TRI and IORI.
5. We purchased shares of TRI because we believe that its share
price at the time of purchase and at today's trading price of $12 substantially
understates the true value of the company.  We believe the stock trades at a
discount because the companies are controlled by BCM, which charges excessive
fees to TRI for managing its assets and business and because of Mr. Phillips'
reputation.  If the board believes that it is "in the interest of all
shareholders to have the stock reflect the true value of the company," it
should replace BCM with an outstanding third party real estate manager on
competitively bid terms.

6. In my opinion, there would be no deleterious effects on the
operations of TRI or IORI if the Court were to order the termination of the
advisory contract of BCM with TRI and IORI and the related brokerage and
property management contracts of BCM's affiliates with TRI and IORI.  In fact,
as I have stated above, we believe that such a change would have a positive
effect on TRI and IORI.  I am aware of several reputable and qualified real
estate organizations that could immediately take over the functions that BCM
and its affiliates have been performing for TRI and IORI, and which could do so
without any disruption of their operations or other adverse impact upon them.
I declare under penalty of perjury under the laws of the State of
New York that the foregoing is true and correct, and that this Declaration was
executed in New York, New York this 2nd day of August, 2000.

________________________________
William A. Ackman