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                                                                  EXHIBIT 10.204



                               THIRD AMENDMENT TO
                   ACQUISITION AND CONSTRUCTION LOAN AGREEMENT



               THIS THIRD AMENDMENT TO ACQUISITION AND CONSTRUCTION LOAN
AGREEMENT (the "Third Amendment") is made as of the 22nd day of December, 1999
by and between Heller Financial, Inc., a Delaware corporation ("Lender") whose
address is 500 West Monroe Street, Chicago, Illinois 60661 and Preferred
Equities Corporation, a Nevada corporation ("Borrower") whose address is 4310
Paradise Road, Las Vegas, Nevada 89109.

               WHEREAS, the parties entered into that certain Acquisition and
Construction Loan Agreement dated March 27, 1996, as amended by that certain
Amendment to Acquisition and Construction Loan Agreement dated December 23, 1997
and that certain Second Amendment to Acquisition and Construction Loan Agreement
dated July 7, 1998 (collectively and as amended hereby, the "Agreement"); and

               WHEREAS, the parties desire to further amend the Agreement
pursuant to the terms and conditions as set forth herein.

               NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the parties agree as follows:

               1. The Recitals set forth above are true and correct and
incorporated herein by reference.

               2. Section 1.1 regarding Acquisition Commitment is hereby amended
to provide that the term "Acquisition Commitment" shall be deemed to be
increased hereby and include (i) an additional One Million Dollars and No/100
($1,000,000.00) , which taken together with the One Million Dollars and No/100
($1,000,000.00) acquisition commitment set forth in that certain Letter
Agreement between Lender and Borrower dated as of October 19, 1999, shall be
hereafter jointly referred to as the "First Supplemental Acquisition Commitment"
in the amount of Two Million Dollars and No/100 ($2,000,000.00) and shall be for
the purpose of providing Borrower with additional working capital subject to any
agreement regarding the use of such funds under Section 2.1 of the Agreement as
amended hereby and (ii) an additional Nine Hundred Forty Thousand Dollars and
No/100 ($940,000.00) (the "Second Supplemental Acquisition Commitment") for the
purpose of acquiring eighteen (18) condominium units (the "Additional Units")
adjacent to the existing Resort for the development of additional timeshare
units (jointly, the "Supplemental Acquisition Commitments"); provided, however,
that the Supplemental Acquisition Commitments shall only be advanced pursuant to
the terms and upon satisfaction of the conditions set forth in Section 2.1 as
modified hereby.



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               3. Section 1.2 regarding Acquisition Note is hereby amended to
add to the end thereof the phrase "together with any and all promissory notes
given to evidence funds advanced pursuant to the Supplemental Acquisition
Commitments, and shall also include any and all amendments, modifications and
substitutions thereof, including, but not limited to, that certain Future
Advance Acquisition Promissory Note No. 1 dated as of October 19, 1999, in the
amount of One Million Dollars and No/100 ($1,000,000.00), and that certain
Future Advance Acquisition Promissory Note No. 2, in the amount of One Million
Dollars and No/100 ($1,000,000.00) to be given in connection with the advance of
the balance of the First Supplemental Acquisition Commitment, all of which shall
be replaced by an Amended, Restated and Consolidated Acquisition Promissory Note
No. 1 which shall evidence the First Supplemental Acquisition Commitment in the
amount of Two Million Dollars and No/100 ($2,000,000.00) plus the outstanding
balance of that certain Amended and Restated Acquisition Promissory Note dated
December 23, 1997 in the original principal amount of Four Million Eight Hundred
Sixty-Five Thousand Dollars ($4,865,000.00)."

               4. Section 1.46 regarding Renovation Commitment is hereby amended
to provide that the term "Renovation Commitment" shall be deemed to be increased
by and include an additional Seven Hundred Sixty Thousand Dollars and No/100
($760,000.00) (the "Supplemental Renovation Commitment") for the purpose of
construction and renovation of the Additional Units; provided, however, that the
Supplemental Renovation Commitment shall only be advanced pursuant to the terms
and upon satisfaction of the conditions applicable to Advances of the Renovation
Commitment and the terms and conditions that specifically apply to the
Supplemental Renovation Commitment.

               5. Section 1.6 regarding Approved Budget is hereby amended to
provide that the term "Approved Budget" shall also be deemed to refer to any
exhibit executed by Borrower and Lender setting forth an approved budget for the
renovation of the Additional Units to be used for timeshare purposes, the
expenses of which shall be reimbursed under the Supplemental Renovation
Commitment pursuant to the terms and conditions hereof, and the approval of
which budget shall be a condition precedent to any Advance under the
Supplemental Renovation Commitment.

               6. Section 1.7 regarding Approved Construction Schedule is hereby
amended to provide that the term "Approved Construction Schedule" shall also be
deemed to refer to any exhibit executed by Borrower and Lender setting forth the
approved schedule and order of renovation and construction of the Additional
Units and any modifications thereto permitted in accordance with Section 2.7,
and the approval of which schedule shall be a condition precedent to any Advance
under the Supplemental Renovation Commitment.

               7. Section 1.8 regarding Approved Timeshare Document Filing
Schedule is hereby amended to provide that the term "Approved Timeshare Document
Filing Schedule" shall also be deemed to refer to any exhibit executed by
Borrower and Lender setting forth the approved schedule for filing and approval
of the Timeshare Public Offering Statement for the Additional Units with and by
all Governmental Authorities for the sale of Interval Units and the operation of



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the Additional Units as a portion of the Resort Property, and the approval of
which schedule shall be a condition precedent to any Advance under the
Supplemental Renovation Commitment.

               8. Section 1.19 regarding Declaration of CCRs is hereby amended
to provide that the term "Declaration of CCRs" shall be deemed to include any
supplemental declaration that subjects the Additional Units to the governance of
the Declaration of CCRs.

               9. Section 1.27 regarding Guarantee is hereby amended to add to
the end thereof the phrase "together with all amendments, modifications and
substitutions thereof."

               10. Section 1.29 regarding Improvements is hereby amended to
provide that the term "Improvements" shall also be deemed to refer to the
Additional Units upon their acquisition by Borrower.

               11. Section 1.38 regarding Loan is deleted in its entirety and
replaced by the following:

               The term "Loan" shall mean the loan by Lender to Borrower, in the
        maximum amount of the Acquisition and Renovation Commitment, not to
        exceed, in the aggregate, the advance of (a) the lesser of Seven Million
        Eight Hundred Five Thousand Dollars and No/100 ($7,805,000.00) or 90% of
        the costs of acquisition of the Property plus (b) 100% of the costs of
        labor, materials, and services supplied for the construction of the
        Improvements and all other expenses incident to construction of the
        Property, as to each item only to the extent specified in the Approved
        Budget which amount shall not exceed a total of Four Million Five
        Hundred Twenty-Three Thousand Dollars and No/100 ($4,523,000.00) over
        the term of the Loan and shall not exceed the amount of Two Million Five
        Hundred Thousand Dollars and No/100 ($2,500,000.00) outstanding at any
        one time.

               12. Section 1.39 regarding Loan Commitment is deleted in its
entirety and replaced by the following:

               The term "Loan Commitment" shall mean a maximum of Twelve Million
        Three Hundred Twenty-Eight Thousand Dollars and No/100 ($12,328,000.00),
        which is the maximum amount of Advances of the Loan which Lender may be
        obligated to make under this Loan Agreement, and is comprised of the
        Acquisition Commitment and the Renovation Commitment.

               13. Section 1.41 regarding Mortgage is hereby amended to provide
that the term "Mortgage" shall be deemed to refer to the existing Mortgage
together with any modification or amendment thereto for the purpose of spreading
the lien thereof to the Additional Property (defined below).



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               14. Article I - Definitions is hereby amended to add the
following defined term:

               The term "Overlook Repayment" shall mean the receipt by Lender of
        all outstanding amounts due Lender under that certain Interval
        Receivables Loan and Security Agreement between Borrower and Lender and
        dated as of the 6th day of August 1996, as modified by that certain
        First Modification to the Interval Receivables Loan and Security
        Agreement dated as of the 7th day of July 1998 (collectively, the
        "Overlook Receivables Loan"), and that certain Acquisition and
        Renovation Loan Agreement between Borrower and Lender and dated as of
        the 6th day of August 1996, as modified by that certain First
        Modification to the Acquisition and Renovation Loan Agreement dated as
        of the 7th day of July 1998 (collectively, the "Overlook Acquisition and
        Renovation Loan"), and any further amendments, modifications and
        substitutions therefor.

               15. Section 1.43 regarding Permitted Exceptions is hereby amended
to provide that the term "Permitted Exceptions" shall also include, at such time
as the Resort is expanded to include Additional Property (as defined below),
such exceptions to and encumbrances on title that have been approved by Lender
and set forth on an exhibit to the Agreement to be executed by Borrower and
Lender.

               16. Section 1.45 regarding Property is hereby amended to provide
that the term "Property" shall also be deemed to include and refer to the
property upon which the Additional Units are located (the "Additional Property")
at the time the Additional Units are acquired by Borrower, the legal description
of which shall be set forth in an exhibit to be executed hereafter by Borrower
and Lender.

               17. Section 2.1 regarding Commitment of Lender is hereby amended
by adding the following thereto:

               The initial One Million Dollars and No/100 ($1,000,000.00) of the
        First Supplemental Acquisition Commitment has been advanced by Lender to
        Borrower, as evidenced by that certain Future Advance Acquisition
        Promissory Note No.1 dated October 19, 1999, for application by Borrower
        to the payment of its accounts payable.

               Upon Lender's receipt of the portion of Overlook Repayment due
        Lender under the Overlook Acquisition and Renovation Loan and Borrower's
        delivery to Lender of a statement executed by Borrower which describes
        Borrower's intended use of the One Million Dollars and No/100
        ($1,000,000.00) balance of funds to be advanced under the First
        Supplemental Acquisition Commitment (the "Statement of Use"), and
        provided that such Statement of Use is acceptable to Lender as set forth
        below, the balance of the First Supplemental Acquisition Commitment
        shall be made available and applied as set forth in the Agreement and
        the Statement of Use, concurrently with the recording of a Notice of
        Future Advance and delivery of a Future Advance Acquisition Promissory
        Note. Borrower and Lender hereby agree that the Statement of Use shall
        be acceptable to Lender if it



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        provides that Five Hundred Thousand Dollars and No/100 ($500,000.00)
        shall be used for working capital purposes and that that remaining Five
        Hundred Thousand Dollars and No/100 ($500,000.00) shall be used for the
        establishment of Borrower's sales centers or off-premises contact
        operations, provided that the budgets for such centers and operations
        are acceptable to Lender in Lender's sole discretion.

               In addition to and separate from Lender's commitment to advance
        the First Supplemental Acquisition Commitment as set forth above,
        commencing November 1, 1999, and ending April 15, 2000, and provided
        that Lender has received the Overlook Repayment and that the Conditions
        Precedent to Second Supplemental Acquisition Commitment (defined below)
        have been satisfied, the Second Supplemental Acquisition Commitment
        shall be made available concurrently with the recording of a Mortgage
        Spreader Agreement and Notice of Future Advance and the delivery of
        Future Advance Promissory Note made by Borrower, which shall together
        spread the lien of the Mortgage to encumber the Additional Property and
        Additional Units and evidence Lender's advance of funds to reimburse
        Borrower for up to ninety percent (90%) of the acquisition costs of the
        Additional Property and Additional Units to be sold as Interval Units,
        the acquisition of which shall have occurred prior to March 31, 2000.
        The Conditions Precedent to Second Supplemental Acquisition Commitment
        shall be defined as and consist of the approval in Lender's sole
        discretion of the following items with respect to the Additional
        Property or Additional Units, as applicable: Survey, flood hazard
        certification, mortgagee title commitment, Phase I environmental audit,
        appraisal, building inspection report, certificate of occupancy and
        evidence of compliance with Fair Housing Act and Americans with
        Disabilities Act.

               Subject to all conditions precedent applicable to advances of the
        Renovation Commitment and provided that Lender has received the Overlook
        Repayment and that Borrower has acquired the Additional Property,
        commencing November 1, 1999, the Supplemental Renovation Commitment
        shall be made available for reimbursement of renovation costs for the
        Additional Units in accordance with the Agreement.

               Until such time as the Overlook Repayment has been received by
        Lender, Lender shall not be obligated to make any Advances or disburse
        any portion of the Acquisition Commitment or the Renovation Commitment
        if at any time the combined outstanding balance of the Acquisition Note,
        the Renovation Note and the Promissory Note given by Borrower to Lender
        pursuant to the Interval Receivables Loan would exceed Eighteen Million
        Dollars and No/100 ($18,000,000.00). Upon and after such time as the
        Overlook Repayment has been received by Lender, Lender shall not be
        obligated to make any Advances or disburse any portion of the
        Acquisition Commitment or the Renovation Commitment if at any time the
        combined outstanding balance of the Acquisition Note, the Renovation
        Note and the Promissory Note given by Borrower to Lender pursuant to the
        Interval Receivables Loan would exceed Thirty Million Dollars and No/100
        ($30,000,000.00).



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               18. Section 2.4 regarding Advances is hereby amended by adding
the following:

        Lender shall withhold twenty percent (20%) of all advances under the
Supplemental Renovation Commitment (the "Reservation") to be held by Lender
until such time as all conditions precedent set forth in the Agreement to the
final Advance under the Supplemental Renovation Commitment have been satisfied,
whereupon the Reservation shall be disbursed together with the final Advance.

               19. Section 4.1(b) regarding Mandatory Payments is hereby deleted
and replaced with the following:

        So long as there is any indebtedness outstanding under the Acquisition
Note or the Renovation Note, if during the period of the Loan Agreement ending
on the following dates ("Ending Dates"), the outstanding principal balance of
the Loan evidenced by such notes exceeds the following amounts ("Maximum
Principal Balance"), the Borrower shall pay the amount of such excess
immediately to Lender:

<TABLE>
<CAPTION>
Ending Dates                               Maximum Principal Balance
------------                               -------------------------
<S>                                        <C>
February 28, 2000                          $2,333,000.00
May 31, 2000                               $1,860,000.00
August 31, 2000                            $1,391,000.00
November 30, 2000                          $  925,000.00
February 28, 2001                          $463,000.00;
</TABLE>

provided, however, that if Lender shall have advanced funds to Borrower under
the Second Supplemental Acquisition Commitment and Supplemental Renovation
Commitment, the following Ending Dates and Maximum Principal Balances shall be
applicable, and any excess thereof shall be immediately payable by Borrower to
Lender:

<TABLE>
<CAPTION>
<S>                                        <C>
February 28, 2000                          $3,368,000.00
May 31, 2000                               $3,183,000.00
August 31, 2000                            $2,907,000.00
November 30, 2000                          $2,440,000.00
February 28, 2001                          $1,978,000.00.
</TABLE>


               20. Section 6.16 regarding Commitment Fee is hereby amended by
adding the following thereto:



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               Borrower has agreed to pay Lender a commitment fee in the amount
        of one percentage point in connection with the First Supplemental
        Acquisition Commitment. Borrower has previously paid Lender the amount
        of Ten Thousand Dollars and No/100 ($10,000.00) which represents a
        portion of the Lender's commitment fee payable in connection with the
        First Supplemental Acquisition Commitment. At the time of Lender's
        receipt of the portion of the Overlook Repayment due Lender under the
        Overlook Acquisition and Renovation Loan and the satisfaction of other
        conditions precedent to the advance of the balance of the First
        Supplemental Acquisition Commitment, Lender shall be paid a commitment
        fee of Ten Thousand Dollars and No/100 ($10,000.00) representing the
        balance of the commitment fee payable in connection with the First
        Supplemental Acquisition Commitment, together with the amount of
        Forty-Three Thousand Seven Hundred Fifty Dollars and No/100 ($43,750.00)
        representing the balance of the loan fee payable in connection with
        availability under the Interval Receivables Loan , all of which shall be
        withheld by Lender from disbursement of the balance of the First
        Supplemental Acquisition Commitment.

               Buyer has further agreed to pay Lender a commitment fee in the
        amount of one percentage point in connection with the Second
        Supplemental Acquisition Commitment and in connection with the
        Supplemental Renovation Commitment, each of which shall be payable by
        Borrower and withheld from disbursements by Lender at the time funds are
        advanced under such commitments.

               21. In connection with this Amendment, Borrower hereby certifies
that (a) all Borrower's representations, warranties, covenants and agreements
contained in the Agreement are true and correct and in full force and effect as
of the date hereof with the exception that (i) the Financial Statements
referenced in Section 3.3 of the Agreement are true, correct and complete as
reflected in the quarterly financial report dated May 31, 1999, and the monthly
financial report dated July 31, 1999, and (ii) there are no material adverse
changes to the information reflected in the disclosure of litigation matters
concerning PEC and dated October 6, 1999 and attached hereto as Exhibit "A", (b)
as of the date hereof there are no Events of Default thereunder, and (c) all of
the Loan Instruments as defined therein are in full force and effect.

               22. Except as modified by this Amendment, all other terms and
conditions of the Agreement and other Loan Instruments shall remain in full
force and effect. Should Borrower currently be in default under the Agreement,
which default would not have existed if this Amendment were effective, such
default is hereby waived.

               23. As consideration for, and as a mutual inducement to Lender
entering into this Amendment, Borrower hereby waives and releases any and all
setoffs, counterclaims and defenses it has of the date hereof with respect to
the Loans and performance by Lender under the Loan Instruments, and hereby
acknowledges that Lender has fully performed all of its obligations and is not
in default under the Loan Instruments. Execution of this Amendment shall not be



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deemed to constitute a waiver or release by Lender of any its rights or remedies
under the Loan Instruments.

               IN WITNESS whereof the parties have executed this Agreement as of
the date above.




PREFERRED EQUITIES CORPORATION,             HELLER FINANCIAL, INC., a
a Nevada corporation                        Delaware corporation


By:  /s/ JON A. JOSEPH                      By:
     -----------------------------              -----------------------------

         Jon A. Joseph
----------------------------------          ---------------------------------
Print Name                                  Print Name

Its:       Vice President                   Its:
    ------------------------------              -----------------------------




                                            APPROVED BY GUARANTOR:

                                            MEGO FINANCIAL CORP., a
                                            New York corporation


                                            By: /s/ JON A. JOSEPH
                                               ------------------------------

                                                     Jon A. Joseph
                                           ----------------------------------

                                            Print Name

                                            Its:     Vice President
                                                -----------------------------



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deemed to constitute a waiver or release by Lender of any its rights or remedies
under the Loan Documents.

               IN WITNESS whereof the parties have executed this Agreement as of
the date above.



PREFERRED EQUITIES CORPORATION,             HELLER FINANCIAL, INC., a
a Nevada corporation                        Delaware corporation


By:  /s/ JON A. JOSEPH                      By: /s/ DENNIS K. HOLLAND
     -----------------------------              -----------------------------

         Jon A. Joseph                              Dennis K. Holland
----------------------------------          ---------------------------------
Print Name                                  Print Name

Its:  Vice President                        Its:  Senior Vice President
    ------------------------------              -----------------------------




                                            APPROVED BY GUARANTOR:

                                            MEGO FINANCIAL CORP., a
                                            New York corporation


                                            By: /s/ JON A. JOSEPH
                                               ------------------------------

                                                     Jon A. Joseph
                                           ----------------------------------

                                            Print Name

                                            Its:     Vice President
                                                -----------------------------



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