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                                                                  EXHIBIT 10.146




                                                                     Exhibit F-1


                                 PURCHASE MONEY
                                 PROMISSORY NOTE


U.S. $ 1,439,750.00                                             Denver, Colorado
                                                               February 20, 1998


1.   FOR  VALUE RECEIVED,  the  undersigned  (the  "Borrower")  promises  to pay
     to MERCANTILE  EQUITIES  CORPORATION,  a  Nevada  Corporation  and  HARTSEL
     SPRINGS  RANCH  OF  COLORADO,  INC.,  a  Colorado  Corporation,  or   order
     (collectively  the   "Noteholder"),   the  principal  sum  of  One  million
     four   hundred   thirty   nine   thousand   seven   hundred  fifty  DOLLARS
     ($1,439,750.00)  with  interest  on  the  unpaid  principal  balance   from
     the date  hereof  until paid at a rate per annum  equal  at  all  times  to
     2% of the  "Prime Rate" (as  hereinafter  defined). The  principal  balance
     shall   be   paid  in  20 equal,  consecutive,  quarterly  installments  of
     $71,987.50  payable on  the last day of each  March,  June,  September  and
     December,  with  the first such  payment due on  the  first  of  such dates
     to occur after the  "Closing  Date" (as defined  in  that  certain  Amended
     and  Restated   Real  Estate  Purchase  and  Sale  Agreement  dated  as  of
     November  25,  1997  (the  "Purchase  Agreement")). Accrued  interest shall
     be   due   and   payable   on  each  principal  installment  due  date  and
     shall be calculated  on the  actual  number of  days  elapsed  on the basis
     of a year consisting  of  360 days.  In  the   event  any  installment  due
     date is  not  a business  day, than such payment  shall be made on the next
     business  day  and  interest  shall  continue  to  accrue  during  any such
     extension.  For  the  purposes  hereof:  (1) the "Prime  Rate"  shall  mean
     the rate of  interest  indicated  in  the Wall Street  Journal as the prime
     rate.   Any  change  in  the  Prime  Rate  shall  take  effect  on the date
     announced  by  the  Wall  Street  Journal  as  the  effective  date of such
     change.  The Noteholder shall furnish to  Borrower  no later than five days
     before  each  installment  due  date  a  statement  satisfying  the  amount
     due on the next  installment  due date; provided, however, that any failure
     to  timely  furnish   such  statement   shall  not  affect  the  Borrower's
     obligations  hereunder  other than to  extend the date payment is due until
     the  fifth  day  after  such  statement  is furnished. All such  extensions
     shall  be  taken  into  account  in  calculating  interest  hereunder.  All
     payments   shall  be  made  by   wire  transfer  of  immediately  available
     funds  to  such  account  as  the  Noteholder  shall  specify  in  writing.

2.   If an "Event of  Default"  (as  hereinafter  defined)  occurs,  than,  upon
     written  notice to the Borrower,  the  Noteholder  shall have the option to
     declare the entire  unpaid  principal  balance  hereof,  together  with all
     interest accrued hereon,  to be immediately due and payable,  whereupon the
     same shall at once  become due and  payable  (an  "Acceleration").  Upon an
     Acceleration,  the unpaid  principal  balance  hereof  shall  automatically
     accrue  interest  until  paid in full at a default  rate equal to the Prime
     Rate plus 5%. For purposes  hereof,  each of the following shall constitute
     an "Event of Default": (1) the failure to make, within five (5) days of the
     date  due,  any  payment  required  to be made by the  terms of Note,  that
     certain  Deed of  Trust  dated  as of the  date  hereof  and  securing  the
     Borrower's  obligations  hereunder (the "Deed of Trust"),  and the Purchase
     Agreement;   (2)  the  Borrower   fails  to  comply   with,   breaches  any
     representation  or warranty  contained in, or is otherwise in default under
     any  other  provision  of,  this  Note,  the Deed of  Trust,  the  Purchase
     Agreement, or any other promissory note, deed of trust, or other instrument
     or document  between the Borrower and the  Noteholder (or any one of them),
     including,  without  limitation,  that certain "Post-72 Lots Purchase Money
     Note"  and  the "Post-72  Lots Purchase Money Mortgage" (both as defined in
     the Purchase Agreement); (3) the Borrower becomes insolvent or commences or
     has  commenced against it any bankruptcy, reorganization,  receivership, or
     like  proceeding.   The   Noteholder   shall  be  entitled  to collect  all
     reasonable  costs and expense of collection and/or suit, including, but not
     limited to, reasonable attorney fees.


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3.   The Borrower may prepay the principal amount  outstanding  under this Note,
     in whole or part, at any time without  penalty.  All such payments shall be
     applied to principal  installments  in the inverse  order of  maturity.  In
     addition,  the Borrower  shall be required to prepay the  principal  amount
     outstanding  hereunder at the times and in the manner set forth in the Deed
     of Trust securing this Note. Without limiting the foregoing, as a condition
     to  releasing   each  "Lot"  (as  defined  in  the  Deed  of   Trust),  the
     Borrower shall be required to prepay $5,000 of this  Promissory  Note.  All
     payments made on account of any  release  shall  (provided  no Event of
     Default  has occurred  and is  continuing)  be applied  to  principal
     installments  next maturing (and not to installments in the inverse order
     of maturity).

4.   The Borrower and all other  makers,  sureties,  guarantors,  and  endorsers
     hereby waiver presentment,  notice of dishonor and protest, and they hereby
     agree to any extension of time of payment and partial payments  before,  at
     or after  maturity.  This Note shall be joint and  several  obligations  of
     Borrower and all other makers,  sureities,  guarantors and  endorsers,  and
     their successors and assigns.

5.   Any notice to Borrower or the Noteholder provided for in this Note shall be
     in  writing  and shall be deemed to have been given if  delivered  by hand,
     sent by recognized  overnight  courier (such as Federal  Express),  sent by
     facsimile  transmission,  or mailed by certified or registered mail, return
     receipt requested,  in a postage prepaid envelope, and addressed as follows
     (or to such address as may be specified by like notice):

       If to the borrower at:                 Preferred Equities Corporation
                                              4310 Paradise Road
                                              Las Vegas, Nevada   89109
                                              Attn:  Frederick H. Conte and
                                              Jon Joseph
                                              Fax: (702) 369-4398

       If to Noteholder at:                   Hartsel Springs Ranch
                                              P. O. Box 5
                                              Hartsel, Colorado   80449
                                              Attn:  Richard Grumet
                                              Fax No. (719) 836-0321

       With a copy to:                        Gregory Lattimer
                                              2870 Juniper Drive
                                              Golden, Colorado   80401
                                              Fax No. (303) 215-1204

6.   The  indebtedness  evidenced  by this Note is secured by the Deed of Trust,
     and, until released,  said Deed of Trust contains  additional rights of the
     Noteholder.  Reference  is made to said Deed of Trust  for such  additional
     terms.  Such Deed of Trust  covers  the  property  identified  to Exhibit A
     hereto which is incorporated by reference herein.

7.   Payments  received for  application  of this Note shall be applied first to
     all  reasonable out of pocket costs and expenses to which the Noteholder is
     entitled to  reimbursement  (whether  under this Note, the Deed of Trust or
     otherwise),  next to accrued and unpaid interest, and finally to the unpaid
     principal  balance  hereof.  Payments made to release Lots from the Deed of
     Trust shall be applied as provided in paragraph 3 above.

8.   The  Noteholder may sell the Note and assign Deed of Trust or may otherwise
     assign the Note and the Deed of Trust to a bank or finanical institution as
     collateral  security  for a loan.  In the  event it does so,  the  Borrower
     agrees to execute such acknowledgement as to amounts owing under the Note


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     as the Noteholder may request and will,  provided all release and any other
     obligations  of Noteholder  under the Deed of Trust are met,  agree to make
     all payments under the Note without  offset,  deduction or  counterclaim of
     any type or nature whatsoever.

9.   This  Note  shall be  governed  by and  construed  in  accordance  with the
     internal laws of the State of Colorado.



ATTEST:

/s/  JON A. JOSEPH                               PREFERRED EQUITIES CORPORATION

                                                 By:  /s/ RICHARD L. RODRIGUEZ
                                                 It:   Vice President