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                                                                   EXHIBIT 10.49

                           SECURED PARTICIPATION NOTE


$1,200,000                    Gardena, California             October 22, 1996


         FOR VALUE RECEIVED, INCO HOMES CORPORATION, a Delaware corporation
("Maker" herein) promises to pay to HUNTER'S RIDGE INVESTMENT PARTNERS, a
California partnership (whose partners are Thomas E. Gibbs, Jr. and Richard
Segal) ("Holder" herein), or order, the principal sum of ONE MILLION TWO
HUNDRED THOUSAND DOLLARS ($1,200,000), of which amount the sum of NINE HUNDRED
THOUSAND DOLLARS ($900,000) is advanced from Holder to Maker on the date
hereof, together with accrued interest from the date hereof computed and paid
to Holder as hereinafter set forth.

         1.      Definitions.

                 Unless otherwise expressly provided herein or unless the
context otherwise requires, the terms set forth below are hereby defined as
follows:

                 "Additional Advances" shall mean the additional cash, if any,
advanced by Holder to Maker from time to time (see Paragraph 2).

                 "Available Cash" shall mean all of the cash derived from the
Development from whatever source (after payment of all costs and expenses
related thereto), including, but not limited to, that which Maker has generated
from the sale of Homes and related assets in the Development and the provision
of services to others with respect to the Development and all net proceeds or
land draws received by Maker from any A&D loans, construction loans or other
financing sources, less funds reimbursed to Maker for amounts previously
advanced by Maker to the Development and less, subject to Holder's written
approval not to be unreasonably withheld, Maker's reasonable estimate of the
amount of cash that will be required by Maker to purchase the balance of the
Real Property (41 lots) not currently owned by Maker, and to construct and sell
the next phase or phases of the Development after taking into account the
additional cash Maker expects to receive from the sale of previously
constructed Homes, and from conventional financing sources, such as A&D loans,
land loans, and construction loans.

                 "Base Interest" shall mean the amount of interest earned by
Holder computed by multiplying the outstanding principal balance hereunder
times an interest rate of Ten Percent (10.0%) per annum times the actual number
of days elapsed during the period.

                 "Deed of Trust" shall mean the deed of trust encumbering a
portion (42 Lots) of the Real Property in the amount of One Million Two Hundred
Thousand Dollars ($1,200,000) that is executed by Maker in favor of Holder and
recorded in the Office of the County Recorder of San Bernardino County on the
date hereof to secure the payment of the Loan.  The Deed of Trust shall also
include the deed of trust executed by Maker in favor of Holder which encumbers
the balance of the Real Property (41 Lots) which deed of trust Maker will
deliver to Holder when Maker acquires fee title to the balance of the Real
Property.  The Deed of Trust shall initially be a second lien on the Real
Property.  The construction lender for the Development will receive a first
lien on the 42 lots of the Real Property.

                 "Development" shall mean the Eighty-Three (83) Homes to be
constructed on the Real Property, and the related assets and services, which
are sold and/or provided to buyers in the "move-up" price market in Fontana,
California.

                 "Event of Default" shall mean either of the following:

                 o        The failure of Maker to pay Holder in full all sums
                          due hereunder within Five (5) days of the date such
                          payment is due, provided that, if Maker fails to
                          timely make a payment when due, Holder shall give
                          Maker written notice thereof and Maker shall have
                          Three (3) days after the receipt of said notice to
                          cure by making payment in full to Holder; or

                 o        The occurrence of an Event of Default under the Deed
                          of Trust or any other agreement or document relating
                          to the Loan executed now or at any time during the
                          term of this Note.



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                 "Home" shall mean a single family home constructed by Maker or
one of the Lots of the Real Property.

                 "Inco G&A" shall mean Three Percent (3%) of the "Gross Sales
Price" of all of the Homes (total cash actually realized from the sale of a
Home less discounts and allowances).  For the purpose of computing Available
Cash and Net Income, Maker may draw against the Inco G&A in equal monthly
installments over the projected term of the Development computed on the basis
of the total projected Gross Sales Price of all of the Homes in the
Development.  Maker shall periodically revise the projected Gross Sales Price
expected to be realized from the sale of all of the Homes and shall adjust its
draw accordingly.

                 "Loan" shall mean the Nine Hundred Thousand Dollars ($900,000)
advanced from Holder to Maker on the date hereof evidenced by this Note plus
the Additional Advances, a total of One Million Two Hundred Thousand Dollars
($1,200,000), payment of which is secured by the Deed of Trust.  The Loan shall
thus also include the Additional Advances.

                 "Lot" shall mean One (1) of the Eighty-Three (83) mapped
single family lots which comprise the Real Property.

                 "Net Income" shall mean the net income realized by Maker from
the construction and sale of the Homes and all related assets and services.
The computation of Net Income shall be made by Maker on the accrual basis of
accounting and, except as hereinafter provided, shall be consistent with the
method it uses to compute net income for its other single family housing
development projects, an example of which is the Proforma dated August 2, 1996,
pertaining to the project referred to as Hunter's Ridge, a copy of which is
attached hereto as Exhibit A.  Net Income for the purposes of this Note shall
mean total gross revenues realized from the sale of the Homes, and all related
assets and services, less only those costs and expenses specifically related to
the construction and sale of the Homes (which costs and expenses are subject to
the reasonable review and approval of Holder), less the amount of Base Interest
paid by Maker hereunder and less the Inco G&A.

                 "Profit Participation" shall mean Fifty Percent (50%) of the
Net Income earned by Maker from the construction and sale of the Homes and
related assets, and the provisions of services, in the Development.  The Profit
Participation may be reduced pursuant to Paragraph 2(c) hereof.

                 "Real Property" shall mean the land located in Fontana,
California which has been subdivided into Lots generally described as follows:

                 Lots 1 through 83 inclusive of Tract No. 14571, in the City of
                 Fontana, County of San Bernardino, State of California.

         2.      Additional Advances.

                 (a)      Holder has advanced to Maker on the date hereof, the
sum of Nine Hundred Thousand Dollars ($900,000).  Maker desires for Holder to
make Additional Advances under the Loan of Three Hundred Thousand Dollars
($300,000), for a total loan of One Million Two Hundred Thousand Dollars
($1,200,000), on the following dates:

            Date of Advance                   Amount of Advance
            ---------------                   -----------------
            January 1, 1997                       $100,000
            March 1, 1997                          100,000
            June 1, 1997                           100,000
                                                  --------
                                                  $300,000
                                                  ========

                 (b)      If the Development is proceeding satisfactorily to
the total satisfaction of Holder and if other conditions of the housing market
and the availability of funds are satisfactory to Holder, Holder may, but is
not obligated to, make any or all of the Additional Advances to Maker.





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                 (c)      The Profit Participation of Holder is based on Holder
making total advances to Maker under the Loan of One Million Two Hundred
Thousand Dollars ($1,200,000).  The total cash equity required by Maker to
purchase the Real Property and construct the Development is One Million Six
Hundred Thousand Dollars ($1,600,000) which includes Four Hundred Thousand
Dollars ($400,000) borrowed from the construction lender.  In the event that
Holder advances to Maker the sum of One Million Two Hundred Thousand Dollars
($1,200,000), Holder shall receive a Profit Participation of 50% of the Net
Income (see Paragraph 6 hereof).  However, if Holder advances to Maker any
amount less than One Million Two Hundred Thousand Dollars ($1,200,000), the
Profit Participation of Holder shall be modified to be a function of the amount
actually advanced by Holder to Maker plus the sum of the land loan from the
construction lender, $400,000, as total of those two amounts bears to
$1,600,000 times 50%.  (For example, assume that Holder advances to Maker only
the original $900,000.  Then the Profit Participation of Holder would be
40.625%.  That is computed as follows:  $900,000 + $400,000 = $1,300,000
divided by $1,600,000 x 50%.)

         3.      Principal Payments.

                 Not later than the Twenty-Fifth (25th) day of each calendar
month during which period principal remains outstanding hereunder, Maker shall
compute the total amount of Available Cash.  After deducting the amount of
accrued Base Interest currently payable to Holder, Maker shall deliver all of
such remaining Available Cash to Holder on the Twenty-Fifth (25th) day of such
calendar month as payment of principal.

         4.      Term.

                 The entire unpaid principal balance hereunder, together with
all unpaid Base Interest accrued thereon, shall be due and payable in full on
December 31, 1998.  Profit Participation shall be earned on the sale of each
Home to be payable as hereinafter set forth, until all of the Homes have been
developed and sold.  Provided, however, at such time as the entire unpaid
balance of principal and accrued Base Interest have been paid in full, the Deed
of Trust shall continue to encumber the Real Property which has not been sold
and reconveyed.  The entire unpaid balance of Profit Participation shall be due
and payable in full on May 31, 2001 (the "Outside Date").  If, at the Outside
Date, Lots are not improved with Homes and have not been sold or Lots have been
improved with Homes but have not been sold and, therefore, Profit Participation
with respect to any such unsold Lots and Homes has not been paid, Net Income
and Profit Participation for each such unsold Lot and Home shall be calculated
based on the average Net Income for all Homes previously sold and the
calculated amount of Profit Participation shall be paid by Maker to Holder on
the Outside Date.

         5.      Payment of Base Interest.

                 Base Interest shall be computed for each calendar month during
which there is an outstanding principal balance hereunder and shall be due and
payable by Maker to Holder, in arrears, on the Fifth (5th) day of each calendar
month following the calendar month for which such Base Interest was earned.

         6.      Profit Participation.

                 Maker shall pay Holder as a Profit Participation an amount
equal to Fifty Percent (50%) of the Net Income earned by Maker from the
construction and sale of the Homes and all related assets, and the provisions
of all services, with respect to the Development.  Profit Participation which
is earned with respect to Homes that are sold shall be estimated by Maker on a
month-by-month basis and the estimate thereof shall be paid by Maker to Holder
from Available Cash not later than the Twenty-Fifth (25th) of the following
month.  Maker shall make a precise computation of Net Income and shall make any
additional payment of Profit Participation to Holder from Available Cash not
later than on the Fiftieth (50th) day after the end of each calendar quarter
for the first three (3) calendar quarters of each calendar year and not later
than the One Hundred and Fifth (105th) day after the end of the last calendar
quarter of each calendar year.

         7.      Payments to Holder.

                 All payments of principal, Base Interest, Profit
Participation, and all other payments due Holder from Maker hereunder shall be
payable only in the lawful money of the United States and payment thereof shall
be made to Holder without deduction or offset.  All payments due and payable
under this Note shall be paid to Holder in immediately available funds
delivered to Holder as follows:





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                          Hunter's Ridge Investment Partners
                          c/o Thomas E. Gibbs, Jr.
                          Suite 400
                          879 West 190th Street
                          Gardena, CA  90248

         8.      Deed of Trust.

                 (a)      Payment of this Note is secured by the Deed of Trust
of even date which Deed of Trust creates a second lien on a portion (42 Lots)
of the Real Property on which the Development is to be constructed.  This Note
is subject to the terms and conditions of the Deed of Trust, all of which are
incorporated herein by reference.

                 (b)      At such time as Maker acquires fee title to the
balance of the Real Property (41 Lots) that it does not own on the date hereof,
to further secure payment of this Note, Maker shall execute and deliver to
Holder a Deed of Trust encumbering the balance of the Real Property with a
first lien (or a second lien if a first lien is required by the construction
lender) in favor of Holder and shall cause said Deed of Trust to be recorded in
the Office of the County Recorder of San Bernardino County.

                 (c)      If and to the extent the Deed of Trust represents a
first lien on the Real Property, Holder agrees from time to time as necessary
to subordinate its lien imposed by the Deed of Trust on only that portion of
the Real Property on which Maker intends to immediately commence construction
of a portion of the Development and on which the construction lender, who has
agreed to provide construction and land acquisition financing therefor,
requires a first lien to secure its construction/land loan.  As a condition to
granting such subordination, Maker shall covenant that all funds advanced by a
construction lender shall only be used and applied to construct and sell the
Development and, as applicable, purchase the Real Property.  Maker agrees that
Holder shall retain a first lien under the Deed of Trust on all of the Real
Property which is not subject to a construction/land loan deed of trust and
Holder shall retain a second lien (superior to any rights of mechanics' or
materialmen) under the Deed of Trust on that portion of the Real Property that
is subject to a construction/land  loan deed of trust.  Provided that Maker is
not in default hereunder, including, particularly the payment of principal and
Base Interest, Holder agrees to release and reconvey its lien imposed by the
Deed of Trust on a Home by Home basis at the close of the sale escrow for the
sale of a Home in the Development to a third party buyer.  At such time as all
principal and Base Interest and any other costs or expenses due hereunder have
been paid in full, Holder shall release and reconvey its lien imposed by the
Deed of Trust.  Holder shall thereafter be a joint venture partner with Maker
and share in Net Income through its Profit Participation.

         9.      Title Insurance.

                 At the funding of the Loan and the recording of the Deed of
Trust, Maker shall provide Holder with a CLTA lender's policy of title
insurance with liability in the maximum amount of the Loan ($1,200,000) which
shows that Holder has a first deed of trust lien (prior to all mechanic's
liens, if any) and subject to only such exceptions and exclusions as approved
in writing by Holder.  Maker shall also provide Holder with such endorsements
and updated policies of title insurance as reasonably requested by Holder when
it subordinates its lien under the Deed of Trust to a first deed of trust lien
in favor of a construction lender, or re-records following the recordation of a
construction loan.  Such title policy, in connection with a subordination or
re-recording shall contain mechanics lien endorsements insuring priority of the
Deed of Trust, subordinated or re-recorded over all mechanics liens.  Maker
shall also furnish Holder with a CLTA lender's liability policy of title
insurance with liability in the amount of the remaining principal due hereunder
when Maker acquires fee title to the balance of the Real Property.

         10.     Escrow and Costs.

                 The funding of the Loan shall be consummated through an escrow
at Chicago Title Company, as a companion escrow for the purchase of the Real
Property by Maker.  Maker shall pay, or reimburse Holder as necessary, for all
escrow fees, recording costs, title insurance premiums (both at closing and if
title insurance is updated hereunder) and shall also reimburse Holder at the
funding of the Loan for certain legal costs and expenses incurred by Holder in
connection with this Loan in the amount of Five Thousand Dollars ($5,000).





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         11.     Reports.

                 Maker shall provide Holder periodic reports in the form and in
the manner reasonably requested by Holder about the construction and sale of
the Development and the amount of Net Income earned therefrom for each calendar
month in which any amounts are due and owing to Holder hereunder.  Such reports
shall include, but not be limited to, a monthly report due not later than the
Twenty-Fifth (25th) day of the following calendar month on status of
construction, sales, and closings, the amount of Available Cash, and the
computation of Net Income.  A final report on all such items shall be due not
later than the Fiftieth (50th) day after the end of each calendar quarter for
the first three (3) calendar quarters of the calendar year and not later than
the One Hundred and Fifth (105th) day after the end of the last calendar
quarter of the calendar year.

         12.     Late Payment Charge.

                 In the event Maker fails to make any payment due to Holder
hereunder, in addition to all other rights and remedies of Holder, to
reasonably compensate Holder for the costs and expenses it will incur due to
such delayed payment, Maker shall pay to Holder a Late Payment Charge equal to
Ten Percent (10%) of the total amount of such delinquent payment.

         13.     Right to Inspect Books and Records/Audit.

                 Maker shall keep and maintain a separate set of books and
financial records devoted solely to construction and sale of the Development.
Each monthly, quarterly, and annual computation of Net Income shall be computed
by Maker and certified by the Chief Financial Officer for Maker.  Holder may,
at any time during business hours, following reasonable prior notice, inspect
the books and financial records of Maker relating to the Development and make
copies thereof and any other documents, papers and materials related thereto.
Furthermore, Holder may, at its sole cost and expense, retain its own certified
public accountant to audit the books and financial records of Maker relating to
the Development.  Maker shall, however, pay Holder for the full cost of such
audit if such audit concludes that the Net Income of the Development had
previously been under reported to Holder for the period of the audit by at
least Five Percent (5%).

         14.     Use of Funds.

                 Maker hereby covenants and agrees with Holder that all
Available Cash shall exclusively be used in the following order: (i) to fund
the cost to construct and sell the Homes, (ii) to pay Holder the Base Interest
due hereunder, (iii) to pay Holder the outstanding principal of the Loan; or
(iv) to pay Holder the Profit Participation and concurrently therewith pay
Maker its proportionate share of Net Income.  Maker shall pay, only from
Maker's separate funds, all other costs, fees, and expenses of Maker.

         15.     Status of Title.

                 Holder has received a Proforma CLTA Title Policy from Chicago
Title Company Policy Number 6035069P-K07 (the "PTR"), which relates to the Real
Property.  Maker hereby represents, warrants, and covenants to Holder that on
the date hereof and during the term of this Note that:

                 (a)      All taxes and assessments which are assessed against
the Real Property and which are due and payable are currently paid in full and
will continue to be paid in full when due.

                 (b)      None of the exclusions and exceptions to title to the
Real Property as set forth in the PTR will have any material adverse affect on
the construction and sale of the Homes or in any material way increase any of
the costs and expenses relating thereto or reduce the Profit Participation
projected to be earned by Holder as set forth on Exhibit A.

                 (c)      Maker shall not further encumber the Real Property
except as required to construct and market the Development.

                 (d)      Maker shall not create any exceptions to title or
clouds on title which would materially reduce the Profit Participation to be
earned by Holder as set forth on Exhibit A.





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         16.     Representations and Warranties and Affirmative Covenants of
                 Maker.

                 As a material condition for the Holder to make the Loan to
Maker, Maker hereby represents and warrants to, and agrees with, the Holder as
follows:

                 (a)      Maker shall use its best efforts (using its own funds
and/or funds borrowed from third party institutional lenders) to timely
purchase the balance of the Real Property (41 Lots) not owned by Maker on the
date hereof and to effectively and profitably construct and sell the
Development.  (In the event that Maker does not purchase the additional 41
Lots, payment of Base Interest, principal, and Profit Participation shall be
based on the original 42 Lots of the Real Property.)

                 (b)      The Maker reasonably believes that it has and shall
use as necessary, all of the personnel, resources and expertise necessary to
construct and market the Development on a highly professional basis.  The Maker
shall use all of its personnel and resources necessary to construct the
Development in a diligent, efficient, cost effective, and highly professional
basis and to finance and market same in a manner that the Maker believes will
earn the maximum Profit Participation reasonably obtainable for the Holder.

                 (c)      The Maker shall use its best efforts to timely
construct, or cause to be constructed, the Development and all on-site and
off-site improvements related thereto:

                 (i)      In a workmanlike manner using subcontractors who have
                 the reputation of constructing a high quality work product
                 consistent with Maker's standards and prior developments of
                 Maker similar to the Development; and

                 (ii)     Shall use such materials that in all ways
                 substantially comply with plans and specifications and that
                 equal or, if necessary, exceed code requirements, to cause the
                 improvements constituting the Development to not have any
                 material defects as a result of the materials used to
                 construct same.

                 (d)      The Maker shall use its best efforts where it deems
it necessary to obtain warranties and guarantees, and, in only those instances
where Maker deems it appropriate, to also obtain performance and/or guarantee
bonds from all suppliers, materialmen and subcontractors who supply materials
and/or labor to the Development.

         17.     Remedies Upon Default.

                 Upon the occurrence of an Event of Default, at the option of
the Holder, without demand or notice to Maker, the entire outstanding balance
of principal together with all accrued Base Interest and Profit Participation
shall immediately become due and payable.  Furthermore, so long as such Event
of Default shall continue, all amounts due and payable to Holder hereof shall
bear interest at the Prime Rate plus Five Percent (5%) (the "Default Interest
Rate" herein).  All interest accrued at the Default Interest Rate shall not be
deducted from the Net Income of the Development to determine the Profit
Participation payable to Holder hereunder.

         18.     Arbitration.

                 The parties shall submit any dispute concerning the
interpretation of this Note and the calculation of Available Cash, Net Income
and Profit Participation to final and binding arbitration pursuant to the rules
of the American Arbitration Association.  At the request of any party, the
arbitrators, attorneys, parties to the arbitration, witnesses, experts, court
reporters, or other persons present at the arbitration shall agree in writing
to maintain the strict confidentiality of the arbitration proceedings.
Arbitration shall be conducted by a single, neutral arbitrator, or, at the
election of either party, three neutral arbitrators, appointed in accordance
with the rules of the American Arbitration Association.  The award of the
arbitrator(s) shall be enforceable according to the applicable provisions of
the California Code of Civil Procedure.  The arbitrator(s) may determine and
award amounts owing and payable to Holder, including, but not limited to,
principal, Base Interest and Profit Participation, based upon their calculation
of Available Cash and Net Income.  If proper notice of any hearing has been
given, the arbitrator(s) will have full power to proceed to take evidence or to
perform any other acts necessary to arbitrate the matter in the absence of any
party who fails to appear.





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         19.     Attorneys Fees.

                 If any and all amounts due and payable under this Note are not
paid when due or if any Event of Default occurs, Maker promises to pay all
costs of enforcement and collection, including, but not limited to, reasonable
attorneys' fees and court costs, whether or not any action or proceeding is
brought to enforce the provisions hereof as the arbitrator or the Court may
award.

         20.     Waiver by Holder.

                 No consent to any action, waiver of any provision, or waiver
of any breach of any duty or obligation of Maker hereunder, by Holder shall
constitute a waiver of any other provision or consent to any other action or
subsequent breach, whether or not similar.  No waiver or consent by Holder
shall constitute a continuing waiver or consent or commit Holder to provide a
waiver in the future except to the extent specifically set forth in writing.

         21.     Waivers by Maker.

                 Maker hereby waives diligence, presentment, protest and
demand, notice of protest, dishonor and nonpayment of this Note, and expressly
agrees that, without in any way affecting the liability of Maker hereunder,
Holder may extend any maturity date or the time for payment of any installment
due hereunder, accept additional security, release any party liable hereunder
and release any security now or hereafter securing this Note.  Maker further
waives, to the full extent permitted by law, the right to plead any and all
statutes of limitations as a defense to any demand on this Note, or on any deed
of trust, security agreement, guaranty or other agreement now or hereafter
securing this Note.

         22.     Subordination Agreement.

                 Maker and Holder have executed and delivered a Subordination
Agreement in favor of Independent Lending Corporation, a Delaware corporation
doing business as Construction Loan Corporation of America ("CLCA" herein)
pursuant to which Holder agrees that the Deed of Trust is second and
subordinate to a deed of trust executed by Maker in favor of CLCA to secure the
payment of a $6,314,000 loan from CLCA to Maker.

         IN WITNESS WHEREOF, Maker has executed and delivered this Secured
Participation Note at Gardena, California on October 22, 1996.


                                       INCO HOMES CORPORATION,
                                       a Delaware corporation


                                       By 
                                           ----------------------------------
                                           Ira C. Norris,
                                           Chairman and CEO





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