HYNES & HOWES INSURANCE COUNSELORS, INC.
                         Notes to Financial Statements
                                 March 31, 1998



Note 1.   Filing of Forms 8-K

          A form 8-K was not required to be filed for the quarter reporting
          any unusual charges or credits to the income or change in auditors.

Note 2.   Management's Analysis of Income From Operations

          Income from operations for the six months ended March 31, 1998
          decreased $6,036 as compared to the six month period ended March 31,
          1997.

          Interest income decreased $43,102 and interest expense decreased
          $41,317.  These decreases were the result of the interest receivable
          for sale of Tanglefoot Apartments being paid in full and part of the
          proceeds being used to pay off the mortgage payable.

          Management fees increased $3,250.  Six months management fees were
          paid in 1998 and only five months were paid in 1997.

          Legal fees decreased $7,321 due to the payoff of Tanglefoot
          Apartments and the acquisition of real estate contracts in 1997.

          Other operating expenses increased due to repairs needed on
          properties acquired on real estate contracts.

          The income from operations for the three months ended March 31, 1998
          is $4,650 less than for the preceding three months ended December 31,
          1997.  The decrease is due primarily to the repairs that were made on
          properties acquired on real estate contracts.