AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT


     This Amendment No. 2 to Employment Agreement (this "Agreement"), made as of
February 20, 1996, is by and between Insignia  Financial Group, Inc., a Delaware
corporation  with an office at One  Insignia  Financial  Plaza,  Post Office Box
1089, Greenville,  South Carolina 29602 (the "Company"),  and Frank M. Garrison,
an individual with an office at One Insignia  Financial  Plaza,  Post Office Box
1089, Greenville, South Carolina 29602 (the "Executive").

                                   Background

     The Company and the Executive entered into an Employment Agreement dated as
of  September  1, 1993 (the  "Original  Agreement")  and an  Amendment  No. 1 to
Employment  Agreement (the  "Amendment")  dated as of April 1, 1995. The Company
and the Executive now desire to amend the Original Agreement, as amended.

                             Statement of Agreement

     In consideration of the foregoing,  the mutual covenants and agreements set
forth  herein  and for  other  good and  valuable  consideration,  the  receipt,
adequacy and  sufficiency of which are hereby  acknowledged,  the parties hereto
agree as follows:

     Section 1. Defined Terms.  Capitalized terms used in this Agreement but not
otherwise  defined  herein  shall  have the  meanings  ascribed  thereto  in the
Original Agreement, as amended.

     Section 2. Amendment of Section 1 of the Original  Agreement.  Section 1 of
the Original Agreement,  as amended, is hereby amended by deleting "September 1,
1997" and inserting in its place "June 30, 1998".

     Section 3. Amendment of Section 2 of the Original  Agreement.  Section 2 of
the  Original  Agreement,  as amended,  is hereby  amended by deleting the third
sentence of Section 2(b).

     Section 4. Amendment of Section 3 of the Original  Agreement.  Section 3 of
the  Original  Agreement,  as amended,  is hereby  amended by deleting the third
sentence of subsection (d)(i) in its entirety and renumbering subsection (d)(ii)
as subsection (d)(i).

     Section 5. Amendment of Section 3 of the Original  Agreement.  Section 3 of
the Original  Agreement,  as amended,  is hereby amended by adding the following
new subsection (g) to Section 3:


                                       
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          "The  Executive  shall receive a bonus in the amount of $250,000.00 on
          the  occurrence  of a Change In  Control,  Stock  Change In Control or
          other material  change to the equity capital  structure of the Company
          prior to the end of the Employment  Period and an additional  bonus of
          $250,000.00  ("Additional  Bonus") on the date which is eighteen  (18)
          months following the date of the occurrence of such event if, and only
          if, the Executive is still  employed by the Company.  If the Executive
          is terminated by the Company for cause,  the Executive shall no longer
          be entitled to and shall have no claim for the Additional  Bonus.  For
          purposes of this  Section 3 (g),  whether or not a material  change to
          the equity  capital  structure  of the  Company has  occurred  will be
          determined by a vote of the majority of the  disinterested  members of
          the Board of Directors of the Company acting in good faith."

     Section 6. Amendment of Section 3 of the Original  Agreement.  Section 3 of
the Original  Agreement,  as amended,  is hereby amended by adding the following
new subsection (h) to Section 3:

          In the  event of a Death  Termination  Event,  Disability  Termination
          Event,  or upon the  occurrence of a Change In Control or Stock Change
          In Control,  all options and warrants  then held by and granted to the
          Executive will  immediately  vest and be exercisable by the Executive;
          provided  however  that in the event of a Death  Termination  Event or
          Disability   Termination   Event,   any  options   shall  only  remain
          exercisable for a period of one year following such termination  event
          (but not later than the scheduled expiration date of such options). In
          the event of a Termination  Without Cause, the Compensation  Committee
          of the Board of Directors,  shall in its sole and absolute discretion,
          determine  whether or not to vest all options and warrants  granted to
          the Executive upon the occurrence of such Termination Without Cause.

     Section 7. Amendment of Section 3 of the Original  Agreement.  Section 3 of
the Original  Agreement,  as amended,  is hereby amended by adding the following
new subsection (i) to Section 3:

          (i) Automobile  Allowance.  In addition to the other benefits provided
          to the  Executive  hereunder,  and at the sole cost and expense of the
          Company, an annual automobile  allowance in an amount to be determined
          in the sole discretion of the Chief Executive  Officer of the Company,
          but in no event less than ten thousand dollars ($10,000) per year.

     Section 8. Amendment of Section 3 of the Original  Agreement.  Section 3 of
the Original  Agreement,  as amended,  is hereby amended by adding the following
new subsection (j) to Section 3:

          (j) Term Life Insurance. The cost of term life insurance,  providing a
          death


                                      
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          benefit of three  million  dollars  ($3,000,000)  upon the life of the
          Executive, the beneficiaries and owner of which shall be designated by
          the  Executive and which term life  insurance  shall be upon terms and
          conditions,  and in form and  substance  available  at the  time,  and
          otherwise  reasonably  satisfactory  to  the  Executive  in  his  sole
          discretion  and  which  term life  insurance  shall be paid for by the
          Company  during the  Employment  Period at the Company's sole cost and
          expense.

     Section 9. Amendment of Section 6 of the Original Agreement.  Section 6(b),
6(d) and 6(e) of the  Original  Agreement,  as  amended,  are hereby  amended by
deleting in each Subsection "September 1, 1997" and inserting in its place "June
30, 1998".

     Section  10.  Notices.  Any  notice  or  other  communication  required  or
permitted  to be given  hereunder  shall be in  writing  and  shall be mailed by
certified mail,  return receipt  requested,  or delivered against receipt to the
party to whom it is to be given,  at the  address of such party set forth in the
preamble of this  Agreement  (or to such other  address as such party shall have
furnished in writing in accordance with the provisions of this Section).  Notice
to the Estate shall be  sufficient  if addressed to the Executive as provided in
this Section. Any notice or other communication given by certified mail shall be
deemed given at the time of certification thereof,  except for a notice changing
a party's address which shall be deemed given at the time of receipt thereof.

     Section 11. Waiver. Any waiver by either party of a breach of any provision
of this  Agreement  shall not operate as or be  construed  to be a waiver of any
other breach of such  provision or of any breach of any other  provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this  Agreement  on one or more  occasions  shall not be  considered a waiver or
deprive that party of the right  thereafter  to insist upon strict  adherence to
that term or any other term of this Agreement. Any waiver must be in writing.

     Section 12. Binding Effect.  The Executive's  rights and obligations  under
this  Agreement  shall not be  transferrable  by assignment  or otherwise,  such
rights  shall not be subject to  commutation,  encumbrance  or the claims of the
Executive's creditors, and any attempt to do any of the foregoing shall be void.
The provisions of this Agreement  shall be binding upon and inure to the benefit
of the  Executive  and his  heirs  and  personal  representatives,  and shall be
binding upon and inure to the benefit of the Company and its successors.

     Section 13. Third Party Beneficiaries.  This Agreement does not create, and
shall not be construed as creating,  any rights  enforceable by any person not a
party to this Agreement.

     Section 14. Headings. The headings in this Agreement are solely for

                                       
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convenience  of reference  and shall be given no effect in the  construction  or
interpretation of this Agreement.

     Section 15.  Counterparts.  This Agreement may be executed in any number of
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.

     Section  16.  Governing  Law.  This  Agreement  shall  be  governed  by and
construed in accordance  with the laws of the State of South  Carolina,  without
reference to the conflict of law provisions hereof.

     Section  17.  Affirmation.  The  parties  hereto  agree  that the  Original
Agreement, and the Amendment, as amended hereby, are in full force and effect on
and as of the date hereof.

     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.

                                    INSIGNIA FINANCIAL GROUP, INC.


                                    By: /s/ John K. Lines
                                    ---------------------
                                    Name:  John K. Lines
                                    Title: General Counsel and Secretary




                                     /s/ Frank M. Garrison
                                     ---------------------
                                     FRANK M. GARRISON