Place chicken into bowl. Pour buttermilk over; marinate at least 1 hour. In another bowl, mix flour, salt and pepper. Remove chicken from buttermilk. Roll pieces in flour. Pour 1 inch of oil in skillet. cook until one side is browned, then turn and brown other side, about 15 minutes per side.
Remove chicken and place on paper towels to drain. Remove oil except for 1/3 cup from skillet. Add 1/3 cup flour to oil and brown lightly. Add 2 cups water and allow to thicken, then add more if needed to thin.
Serve with mashed potatoes or rice.