SECURITIES AND EXCHANGE COMMISSON WASHINGTON,  D.C.   20549
                            FORM 10-K

[X]  ANNUAL  REPORT  PURSUANT  TO SECTION  13  OR  15(d)  OF  THE
     SECURITIES EXCHANGE ACT OF 1934
     
             For the year ended October 31, 1997

[ ]  TRANSITION  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OR 1934

             For the transition period from N/A

              Commission File Number: 33-72106

   THE FORECAST GROUP "Registered Tradename", L.P. and FORECAST
           "REGISTERED Tradename" CAPITAL CORPORATION

    (Exact Name of Registrants as specified in their charter)

         California                33-0582072
         California                33-0582077
(State of Organization)  (IRS Employer Identification Number)

10670 Civic Center Drive, Rancho Cucamonga, California 91730
(Address of principal executive offices)            (Zip Code)

Registrant's telephone number, including area code:(909)9877788


Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class   Name of Each Exchange on Which Registered
11 3/8% Senior Notes Due 2000                        None



Securities Registered Pursuant to Section 12(g) of the Act:
None


Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
     YES X           NO ____

There was no voting stock held by nonaffiliates of the Registrant
at January 28, 1998.

At January 28, 1998, Forecast "Registered Tradename" Capital
Corporation had 2,500 shares of Common stock outstanding.



<PAGE>


                                  PART I
                            ITEM I - BUSINESS


General

     The Forecast Group "Registered Tradename", L.P., ("Forecast"
"Registered Tradename" or the "Company") designs, constructs and
markets single-family detached homes targeted at "entry-level"
and "first time move-up" home buyers, and is a leading
homebuilder (based on the number of homes closed) in the
metropolitan areas of Southern California, Northern California
and Phoenix, Arizona.  Since 1971, the Company has built and
closed sales of approximately 11,600 homes, including 901 homes
during the fiscal year ended October 31, 1997.


Geographic Markets

     The Company presently conducts its homebuilding activities
through three separate divisions.  Initially, the Company's
operations were concentrated in Southern California, primarily in
regions know as the Inland Empire and Antelope Valley.  The
Inland Empire encompasses portions of Riverside and San
Bernardino Counties and the Antelope Valley encompasses portions
of northern Los Angeles County and southern Kern County.  In
1995, the Southern California division expanded into northern San
Diego County.

     In 1989, the Company diversified its operations into the
Sacramento Valley area of Northern California and in 1992 further
diversification took place through expansion into the Phoenix,
Arizona metropolitan area.  Geographic diversity provides greater
balance to the Company's earnings and reduces the Company's
exposure to potentially adverse economic conditions in any one
geographic area.

     Forecast "Registered Tradename" is a California limited
partnership.  Forecast's "Registered Tradename" sole general
parter is Forecast Homes, Inc., a California corporation ("FHI"),
which is wholly owned by Mr. James P. Previti.  Forecast Capital
Corporation ("Capital") is a California corporation and a wholly
owned subsidiary of Forecast "Registered Tradename" which was
formed solely to facilitate the offering of 11 3/8% Senior Notes
due December 2000 (the "Offering").  The Offering was completed
in February 1994 in the aggregate principal amount of
$50,000,000.  The Notes are the joint and several obligation of
Forecast "Registered Tradename" and Capital; however, Forecast
"Registered Tradename" received all net proceeds of the Offering.


Operating Strategy

     Key elements of the Company's operating strategy include the
following:

- Focus on Entry-Level Housing. The Company primarily builds
  affordable entry-level homes in markets with potentially high
  absorption rates. The Company's homes sell for approximately
  $89,990 to $219,990 and generally within FHA/VA maximum loan
  limits for the areas in which the Company operates. Some of the
  benefits of FHA/VA financing include smaller down payments,
  lower interest rates and guidelines which allow home purchasers
  to qualify for a loan when conventional financing would be
  unavailable. As a result, a majority of the Company's
  homebuyers obtain FHA/VA financing. The Company targets buyers
  of entry-level homes because, among other reasons, (i) the
  depth of the market for new homes is greatest in the entry
  level segment; (ii) first-time home buyers' purchase of a home
  from the Company is not dependent upon the sale of an existing
  home; and(iii) entry-level homes best accommodate the use of
  efficient standardized production and construction methods.
  
- Select Markets Anticipated to Have High Absorption Rates.
  The Company regularly conducts market research and demographic
  analyses of both its existing and potential markets to predict
  the likely absorption rates of affordable entry-level housing
  in those markets.
  
- Purchase Entitled Land or Condition Land Purchases on
  Obtaining All Necessary Entitlements Before Closing Escrow on a
  Land Purchase. Management believes that purchasing entitled
  land at low prices is the key component to profitability for
  the Company. When desirable unentitled land is available for
  purchase, the Company conducts an investigation into the timing
  and likelihood of obtaining the necessary entitlements, and
  will often condition its purchase upon the receipt of such
  entitlements.  This strategy allows the Company to begin
  selling and constructing homes quickly after closing land
  purchases, thus reducing the costs and risks associated with
  lengthly entitlement procedures.
  
- Maintain an Inventory of Land Generally Expected to be
  Developed Within Two Years or Less. The Company generally
  maintains inventories of land expected to be developed within
  two years or less in an effort to match land costs with current
  market prices for finished homes. Whenever possible, the
  Company negotiates phased purchasing or "rolling options" to
  minimize its investment in land inventory and the associated
  carrying costs.
  
- Require HomeBuyers to Pre-Qualify Financially Prior to
  Approving a Sales Contract. Prior to entering into a sales
  contract with a prospective homebuyer, the Company requires the
  Mortgage Company, typically its Rancho Mortgage "Registered
  Tradename" affiliate, to confirm that the homebuyer has the
  apparent ability to qualify for the purchase of the home.
  Management believes this pre-sales qualifying procedure results
  in sales that are more likely to close, thereby reducing the
  cancellation rate.
  
- Defer Construction of a Home Until After a Sales Contract
  Has Been Executed and a Deposit Has Been Received. In general,
  the Company does not commence construction of a home until
  after a sales contract has been signed and a deposit has been
  received. The Company limits the construction of speculative
  homes, based on the specific market conditions in any single
  community. As a result, the vast majority of the Company's
  homes are delivered to homebuyers within a few days after
  construction is completed.
  
- Build a Standardized Product That Can be Constructed
  Quickly, Efficiently and Cost Effectively. Each product line
  built by the Company has several different elevations and floor
  plans, but essentially consists of standardized features that
  allow relatively quick, cost effective construction.  Each
  product line is periodically value engineered to identify
  potential cost savings.
  
- Demand a Commitment to Quality. The Company acts as general
  contractor for each of its projects and requires its
  subcontractors and suppliers to use high quality, durable
  materials in the construction of its homes. The construction
  manager for each project is responsible for ensuring that each
  home meets the Company's standards for quality workmanship and
  materials. The Company measures product quality and customer
  satisfaction by conducting formal surveys with each customer
  immediately after they acquire title to their new home.
  
Summary of Residential Projects

     The following table presents information relating to the
Company's markets and communities in which construction is either
in progress or in the planning process.  All homes are single
family detached.  As of October 31, 1997, the Company owned 1,948
lots available for future home closings and had another 2,987
building lots under its control through acquisition contracts.


<TABLE>
---------------------------------------------------------------
                                Bldg.   Total   Sales    Sales
             No. of      Bldg.  Lots    Bldg.   Backlog  Price
             Active      Lots   Under   Lots    as of    Range
Market      Communities Owned  Constr. Avail.  10/31/97
                                (1)              (2)     (3)
---------------------------------------------------------------
<S>           <C>     <C>    <C>       <C>     <C>     <C>
Southern
 California    6       1,183  1,045     2,228   130     $101,990
                                                             -
                                                        $195,000
Northern
 California    7         317  1,492     1,809    90     $100,900
                                                             -
                                                        $219,990
Arizona        5         448    450       898    69     $ 89,990
                                                             -
                                                        $210,000
----------------------------------------------------------------
Company Totals 18       1,948  2,987    4,935   289
================================================================

</TABLE>

(1)  Building lots under contract include the Company has the
     right to acquire under option provisions in certain
     acquisition contracts; thus, there can be no assurance the
     Company will actually acquire these lots.

(2)  Sales backlog refers to sales contracts that have not yet
     closed.  There can be no assurance that closings of homes
     will occur.
     
(3)  Reflects base price, excluding any lot premiums and buyer
     selected options, which vary from community to community.
     
    
     
Land Acquisition

     In considering the purchase of land for the development of a
new home community, the Company reviews such factors as proximity
to existing developed areas; population growth patterns;
availability and quality of existing public services such as
water, gas, electricity, sewers and schools; employment growth
rates; the perceived absorption rate for new housing;
transportation availability and the estimated costs of
development.  The general policy of the Company is to complete a
purchase of land only when it can reasonably project commencement
of construction within a specified period of time.  Closing of
the land purchase is, therefore, generally made contingent upon
satisfaction of conditions relating to the property and to the
Company's being able to obtain all requisite approvals from
governmental agencies within a certain period of time.  The
Company customarily acquires unimproved or improved land zoned
for residential use which appears suitable for the construction
of 50 to 250 homes.


Development and Construction

     The Company functions as the general contractor for the
construction of its projects. Virtually all construction work for
the Company is performed by subcontractors.  The Company's
employees coordinate the construction of each community and the
activities of subcontractors and suppliers, and subject their
work to quality and cost controls and compliance with zoning and
building codes.  Subcontractors typically are retained on a phase
by-phase basis to complete construction at a fixed price.
Agreements with the Company's subcontractors are generally
entered into only after competitive bidding. The Company is not
dependent to any material degree upon the services of any one
subcontractor and believes that, if necessary, it could retain
sufficient qualified subcontractors for each aspect of
construction.  The Company believes that conducting its
operations in this manner enables it not only to readily and
efficiently adapt to changes in housing demand, but also to avoid
fixed costs associated with retaining construction personnel.


Sales and Marketing

     The Company normally builds, decorates, furnishes and
landscapes model homes for each community and maintains on-site
sales offices.  Management believes that model homes play a
particularly important role in the Company's marketing efforts.
Consequently, the Company expends a significant effort in
creating an attractive atmosphere at its model homes.  Interior
decorations vary among the Company's models and are carefully
selected based upon the lifestyles of targeted buyers.
Structural changes in design from the model homes generally are
not permitted, but homebuyers may select various other optional
construction and design amenities.

     The Company sells virtually all of its homes through Company
sales representatives, who typically work from sales offices in
the model homes or from on-site trailers located in each
subdivision.  To a lesser extent, the Company also uses
independent cooperative brokers to assist in selling its homes.
Company representatives are available to assist prospective
buyers by providing them with floor plans, price information and
tours of model homes, and by assisting them with the selection of
options.  Sales representatives attend periodic meetings at which
they are provided information regarding other products in the
area, the variety of financing programs available, construction
schedules and marketing and advertising plans.

    The Company makes extensive use of advertising and other
promotional activities, including newspaper and magazine
advertisements, brochures, direct mail and the placement of
strategically located signage in the immediate areas of its
communities.  As the Company typically offers multiple
communities within a single market area, it is able to utilize
regional advertising that highlights all Company projects within
the same market area.


Homeowner Warranty

     The Company provides homeowners with a limited one year
warranty wherein the Company will correct deficiencies due to
faulty workmanship, defective materials, or significant
construction flaws in the structural components of the home or in
the lot on which the home is located.  The warranty does not,
however, include items that are covered by manufacturer's
warranties (such as appliances and air conditioning) or items
that are not installed by employees or contractors of the Company
(such as flooring installed by an outside contractor employed by
the homeowner).  Statutory requirements in the states in which
the Company does business may grant rights to homebuyers in
addition to those provided by the Company.  California law
establishes a ten-year period and Arizona an eight-year period
during which a homebuyer may request the Company to repair any
latent defects in the architectural design or actual
construction.  The Company generally maintains reserves with
respect to units previously sold for the purpose of covering
future warranty expenditures.


Competition and Market Factors

      The homebuilding industry is highly competitive, with
numerous other developers and homebuilders competing for
desirable properties, financing, raw materials and skilled labor.
The Company competes with national, regional and local builders,
many of whom have greater financial resources than the Company.
Moreover, sales of homes and land by competitors at deeply
discounted prices or with substantial customer incentives could
have a material adverse effect on the Company. In terms of price,
expertise and knowledge of local markets and the governmental
permitting and approval processes, the Company believes it
competes favorably in each of the geographic areas in which it
operates.

     The homebuilding industry is cyclical and significantly
affected by consumer confidence levels, interest rates,
employment trends and other prevailing economic conditions. A
variety of other factors affect the homebuilding industry and
demand for new homes, including consumer preferences, demographic
trends, availability of mortgage financing and costs associated
with home ownership such as property taxes, assessments and
homeowner association fees.


Government Regulation and Environmental Matters

     The housing industry is subject to increasing environmental,
building, zoning and real estate regulations that are imposed by
various federal, state and local authorities. Such regulations
affect homebuilding by specifying, among other things, the type
and quality of building material that must be used, certain
aspects of land use and building design, as well as the manner in
which homebuilders, such as the Company, may conduct their sales
activities and other dealings with their home buyers. In
developing a community, the Company must obtain the approval of
numerous governmental authorities regarding such matters as
permitted land uses, housing density, the installation of utility
services (such as water, sewer, gas, electricity, telephone and
cable television), and the dedication of acreage for open space,
parks, schools and other community purposes. Furthermore, changes
in prevailing local circumstances or applicable laws, may require
additional approvals, or modifications of approvals previously
obtained.

     Environmental laws may cause the Company to incur
substantial compliance, mitigation and other costs, may restrict
or prohibit development in certain areas and may delay completion
of the Company's communities. As a result, the Company engages
outside professional consultants to evaluate any land prior to
its purchase by the Company. Although environmental laws have not
had a material adverse effect on the Company to date, and
management is not currently aware of any environmental compliance
issues that are expected to have a material adverse effect on the
Company, no assurance can be given that such laws will not have a
material adverse effect on the Company's operations in the
future.


Employees

     As of October 31, 1997, the Company employed approximately
156 persons, including corporate staff and other personnel
involved in sales, construction and customer service. Although
none of the Company's employees are covered by collective
bargaining agreements, some of the subcontractors and suppliers
engaged by the Company are represented by labor unions or are
subject to collective bargaining agreements. The Company believes
that relations with its employees, subcontractors and suppliers
are good.


                      ITEM 2 - PROPERTIES


     The principal executive offices of the Company are located
at 10670 Civic Center Drive, Rancho Cucamonga, California 91730.
The telephone number is (909) 987-7788.

     The Company leases approximately 15,500 square feet of
office space for its corporate headquarters in Rancho Cucamonga
and approximately 3,260 and 2,100 square feet of office space in
Sacramento and Phoenix, respectively.  The Company's corporate
headquarters and Sacramento office are leased from affiliates of
Mr. Previti.  See "Item 13 - Certain Relationships and Related
Transactions".  Management believes the Company's existing
offices are adequate for its present needs.


                 ITEM 3 - LEGAL PROCEEDINGS


     The Company is subject to routine litigation incidential to
its business.  In the opinion of management, the resolution of
such claims will not have a material adverse effect on the
operating results or financial position of the Company.


    ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


     There were no matters submitted to a vote of security
holders during the Company's fiscal year ended October 31, 1997.


                             PART II



       ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
                      STOCKHOLDER MATTERS


     The registrant's common equity has not been registered
pursuant to Section 12(b) of the Act and is not traded.


             ITEM 6 - SELECTED CONSOLIDATED FINANCIAL DATA


       The following selected consolidated financial data
(except operating and other data) are derived from the
consolidated financial statements of the Company, which have been
audited by Ernst & Young LLP, independent auditors. The selected
financial data should be read in conjunction with the
consolidated financial statements, related notes, and other
financial information included herein.



<TABLE>

-------------------------------------------------------------

                                Year Ended October 31
                      ---------------------------------------
Note:
$ are in
 thousands            1997     1996     1995    1994      1993
                      ----------------------------------------

<S>                  <C>      <C>      <C>     <C>       <C>
Operating Data:
---------------
Homes Delivered:
  Number of
   Homes Delivered       901    1,006      915     849     1,022
                         ===    =====      ===     ===     =====
  Ave. Price of
   Homes Delivered    $147.1   $140.8   $139.4  $124.7    $120.7
Sales Backlog (1):
  Number of Homes
   In Sales Backlog      289      165      200     155        56
                        ====      ===      ===     ===        ==
  Aggregate Value of
    Homes in Sales
      Backlog        $44,707  $22,659  $25,657 $20,530    $6,432
  Average Price of
    Homes in Sales
      Backlog         $154.7   $137.3   $128.3  $132.5    $114.9

Statement of
 Operations Data:
-----------------
Homebuilding
 Revenues           $132,518 $141,652 $127,538 $105,849 $123,339
Cost of
 Homes Sold          112,278  117,702 113,7792   90,624  100,703
Selling &
  Marketing Exp.      13,929   15,215   12,114     9,075   8,804
General & Admin. Ex.   7,397    7,006    7,508     8,032  10,172
Provision for Losses
 on Real Estate
 Inventory             6,635        0    2,937     1,400       0
                                
Loss on Abandoned
 Land Options            726        3      139     1,125       0
----------------------------------------------------------------
 Operating Income
  (Loss)              (8,447)   1,726   (8,952)   (4,407)  3,660
----------------------------------------------------------------
 Interest Income         395      274      200       256     158
 Interest & Fee Ex.(2)     0        0      119       346   4,851
 Other Income            156       14      472       609     257
----------------------------------------------------------------
 Income (Loss) before
   Income Taxes and
     Extrordinary
       Gain           (7,896)   2,014   (8,399)   (3,888)   (776)
----------------------------------------------------------------
Income Tax Expense
(Benefit)  (3)             0        0        0         0       0
Extraordinary Gain on
  Extinguishment of
   Senior Notes        1,634    1,876    3,312         0       0
----------------------------------------------------------------
Net Income (Loss)    ($6,262)  $3,890  ($5,087)  ($3,888)  ($975)
================================================================

Balance Sheet Data:
-------------------
Real Estate Inventory$71,012  $80,760  $82,572   $93,573 $58,526
Total Assets          91,582  102,186   97,241   113,926  79,897
Debt                  56,053   60,195   60,925    72,163  33,088
Partners' Equity      20,662   26,924   23,234    27,022  30,910

Other Data:
-----------
Gross Margin %         15.3%    16.9%    10.8%     14.4%   18.4%
EBITDA(4)             $2,433  $11,329     $692   ($1,173) $6,922
Interest Incurred (5) $7,076   $7,884   $8,073    $5,764  $3,179
Coverage Ratio (6)       0.3      1.4      0.1       n/a     2.2
Debt to Equity
  Ratio (7)              2.7      2.2      2.6       2.7     1.1


</TABLE>



(1)  "Backlog" represents the number of homes subject to sales
     contracts executed by buyers with respect to specific lots
     and the aggregate dollar value of such sales contracts
     outstanding at the end of the period.
     
(2)  Includes credit enhancement fees of $4,270,000, for the
     year ended October 31, 1993.  No credit enhancement fees
     were incurred for the years ended October 31, 1997, 1996,
     1995 and 1994.
     
(3)  As  a  partnership, Forecast is not subject to U.S.  federal
     and  state  income  taxes  for  periods  subsequent  to  the
     Reorganization. Pursuant to the Indenture, distributions for
     taxes  may  be  made to partners in Forecast. See  notes  to
     consolidated financial statements.
     
(4)  "EBITDA" means earnings before interest (including
     previously capitalized interest included in cost of sales),
     income taxes, depreciation and amortization, and has been
     computed on a basis consistent with the terms of the
     Indenture. EBITDA is not intended to represent cash flow or
     any other measure of performance in accordance with
     generally accepted accounting principles.
     
(5)  Interest incurred includes all interest incurred during the
     respective period, whether expensed or capitalized, and has
     been computed on a basis consistent with the terms of the
     Indenture. Interest Incurred excludes the credit enhancement
     fees described in footnote (2) above.
     
(6)  "Coverage Ratio" means the ratio of EBITDA to Interest
     Incurred as calculated in accordance with the definition of
     such term in the Indenture.
     
(7)  "Debt-to-Equity Ration" means the ratio of all outstanding
      Debt to Net Worth (Partners' Equity) as calculated in
      accordance with the definition of such term in the
      Indenture.
     
     
     
       ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS
     
     
     
     The Company's results of operations for any period are
affected by a number of factors including the number of
communities under construction, the length of the development
cycle of its communities, product mix, weather, availability of
financing, costs of materials and economic conditions in the
areas in which the Company operates.  Product mix (both product
line and size of home) has a substantial effect on the average
sales price of homes and gross margin from home sales because
smaller homes generally have lower sales prices and gross margins
than larger homes.  The average sales price of homes from period
to period fluctuates based on product line, home size, geographic
mix and changes in the market price of housing.

     The Company's results of operations reflect the cyclical
nature of the homebuilding industry and the Company's historical
focus on the Southern California housing market.  Following
approximately seven years of a regional economic downturn, those
markets in which the Company operates began to see a slight
recovery in the fourth quarter of 1997, as is evidenced by the
increase in the Company's backlog as of October 31, 1997.

     The Company commenced a geographic diversification strategy
in fiscal 1989 in order to reduce its dependence on the Southern
California real estate market.  The following table sets forth
certain information by geographic region for the fiscal years
1997, 1996 and 1995.

<TABLE>
                             For the Year Ended October 31
----------------------------------------------------------------
Note: $ are in thousands     1997         1996          1995
----------------------------------------------------------------



<S>                      <C>           <C>          <C>
Number of Homes
Delivered:
---------------
 Southern California          351          432           377
 Northern California          329          280           305
 Arizona                      221          294           233
                           ---------------------------------
  Total                       901        1,006           915
                           =================================
Housing Sales:
--------------
 Southern California      $51,723      $60,577       $50,962
 Northern California       51,880       43,484        44,741
 Arizona                   28,915       37,590        31,835
                         -----------------------------------
Total                    $132,518     $141,651      $127,538
                         ===================================


Gross Profit:
-------------
 Southern California      $7,585      $10,420        $6,336
 Northern California       7,589        6,304         5,416
 Arizona                   5,033        7,226         1,994
 Corporate Holdings           33            -             -
                         ----------------------------------
   Total                 $20,240      $23,950       $13,746
                         ==================================



Gross Profit Margin:
---------------------
   Southern California     14.7%       17.2%          12.4%
   Northern California     14.6%       14.5%          12.1%
   Arizona                 17.4%       19.2%           6.3%
                          ---------------------------------
     Total                 15.3%       16.9%          10.8%
                          =================================

</TABLE>
 

  During the fiscal year ended October 31, 1997, the Company
reported revenues of $132.5 million and a net loss of $6.3
million, which includes a $6.6 million provision for losses on
real estate inventory and a $1.6 million extraordinary gain from
the early retirement of a portion of the Company's Senior Notes.
The operating results for fiscal 1997, while reflecting a loss
for the year, did show the sale of over 1,000 houses which
produced the highest backlog at year-end in the Company's
history.  The net income from homebuilding operations for the
final three (3) quarters of the year was $1.3 million, net of
management's decision not to exercise a land purchase option in a
community in Arizona, while for the entire fiscal year ended
October 31, 1997.  Management believes that recent economic
reports of increasing job formation and continuing lower interest
rates are likely to sustain consumer confidence and result in
more potential homebuyers over the next few years.


Seasonality

     The Company's results of operations are highly seasonal. The
Company's annual operating cycle typically begins with fewer
customer orders from October through December, followed by
stronger orders from January through June and moderate orders
from July through September. Since home deliveries typically
follow customer orders by up to 120 days, the Company's revenues
are usually lowest in the first and second quarters which follow
seasonally slow sales periods.


Backlog

     The Company's backlog at October 31, 1997 and 1996,
respectively, was 289 homes with an aggregate sales value of
$44.7 million, and 165 homes with an aggregate sales value of
$22.7 million.  The backlog at October 31, 1997 was the highest
in the Company's history.  Sales of the Company's homes are made
pursuant to standard sales contracts generally entered into only
after customers have been prequalified for financing of their
selected home.  The Company only recognizes revenue on homes
covered by sales contracts when such sales are closed and title
passes to the buyer.  The period of time between the execution of
a sales contract for a home and the closing generally varies from
as little as one month to as long as three to four months
depending on, among other things, the stage of the development on
any single lot, and weather conditions.


Results of Operations

     A comparative summary of operating results for fiscal years
1997, 1996 and 1995 is presented in the following table:

<TABLE>
                              For the Year Ended October 31
                              -----------------------------
                              1997       1996       1995
                              -----------------------------
Amounts
as a Percentage
 Of Revenues:
-----------------------
  <S>                        <C>         <C>        <C>
  Homebuilding Revenues          100.0%    100.0%      100.0%
  Cost of Homes Sold              84.7%     83.1%       89.2%
                                  -----     -----       ----
Gross Profit                      15.3%     16.9%       10.8%
                                  -----     -----       -----

Operating Expenses:
  Selling & Marketing Expenses    10.5%     10.7%        9.5%
  General & Admin. Expenses        5.6%      4.9%        5.9%
  Provision for Impairment of
    Real Estate Inventory          5.0%      0.0%        2.3%
  Loss on Abandoned
    Land Options                   0.5%      0.0%        0.1%
                                  -----     -----       -----
   Total Operating Expenses       21.6%     15.7%       17.8%
                                  -----     -----       -----
   Operating Income (Loss)        (6.4%)     1.2%       (7.0%)
                                  =====     =====       =====

Average per Home Closed ($):
----------------------------
Homebuilding Revenues         $147,079  $140,807    $139,386
Cost of Homes Sold             124,615   117,000     124,363
                               -------  --------     -------
  Gross Profit                  22,464    23,807      15,023
                               -------   -------    --------
 Operating Expenses:
   Selling & Marketing Exp.     15,459    15,124      13,239
   General & Admin. Exp.         8,210     6,964       8,205
   Provision for Impairment
     Of Real Estate Inventory    7,364         -       3,210
   Loss on Abandoned
     Land Options                  806         3         152
                               -------    -------    -------
     Total Operating Expenses   31,839    22,091      24,807
                               -------    -------    -------
  Operating Income (Loss)      ($9,375)   $1,716     ($9,784)
                               ========   =======    =======
Other Data:
-----------
Number of Homes Closed             901     1,006         915
Number of Homes Sold             1,025       971         960
Number of Homes in
  Sales Backlog                    289       165         200
   Aggregate Value of
     Sales Backlog ($ millions)  $44.7     $22.7       $25.7


</TABLE>


Fiscal 1997 Compared to Fiscal 1996

     Homebuilding revenues for the year ended October 1997 were
$132.5 million, a decrease of $9.1 million or 6.4% from the year
ended October 1996 as the number of homes closed decreased 10.4%
to 901 as compared to 1,006 in the prior year.  Conversely, the
average sales price of each home closed in the year ended October
31, 1997 increased by $6,300 or 4.5% as compared to the prior
year.  Similarly, interest incurred and capitalized decreased
10.3% due to the decrease in home closings.

     Cost of homes sold for the year ended October 1997 was
$112.3 million, a decrease of 4.8%, or $5.4 million, from the
year ended October 1996.  The decrease in cost of sales
corresponds with the decrease in closing volume.  Although the
gross margin for the year ended October 1997 was $20.2 million,
as compared to $23.9 million from the year ended October 1996,
the gross margin for the final three (3) quarters of 1997 was
15.8% versus 16.9% in 1996, reflecting the Company's operating
results after the provision for real estate inventory.  The
decrease is primarily attributable to slower closings than
anticpated in some Northern California communities which
substantially closed-out in 1997.

     General and administrative expenses were $7.4 million or
5.6% of revenues in fiscal 1997 up from $7.0 million or 4.9% of
revenues during fiscal 1996.  This increase was the result of
both the reduced homebuilding revenues for the year ended October
31, 1997 and significant legal costs stemming from the resolution
of a long-standing case that was identified in the Company's
Prospectus.

     Selling and marketing expenses decreased to $13.9 million or
10.5% of homebuilding revenues for the year ended October 31,
1997, from $15.2 million or 10.7% for the year ended October 31,
1996.  This decrease is primarily attributable to fewer closings
than the prior year.  Point of sale costs decreased 1.1% to 6.9%
of revenues in 1997.  The decrease in point of sale costs is
primarily attributable to fewer incentives being offered.

     During the year ended October 1997, the Company repurchased
a portion of its Senior Notes having an aggregate outstanding
principal amount of $5,400,000.  These repurchases resulted in an
outstanding balance of $29,075,000 as of October 31, 1997 and an
extraordinary gain of $1,634,000 being recorded in fiscal year
1997.  In 1996, the Company repurchased $5,315,000 of its Senior
Notes resulting in an extraordinary gain of $1,876,000.

     During fiscal 1997, the Company recorded a $6.6 million
provision for impairment of real estate inventory as a result of
the application of FASB Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of.  No such provision was considered necessary in
fiscal 1996.  See Note 2 of Notes to Consolidated Financial
Statements.


Fiscal 1996 Compared To Fiscal 1995

     Homebuilding revenues for the year ended October 1996 were
$141.7 million, an increase of $14.2 million or 11% from the year
ended October 1995 as the number of homes closed increased to
1,006 at an average sales price of $140,800 in 1996 compared to
915 homes closed at an average sales price of $139,400 in 1995.

     Cost of homes sold for the year ended October 1996 was
$117.7 million, an increase of $3.9 million from the year ended
October 1995.  The increase generally corresponds with the
greater closing volume, however, gross margins increased as
percentage of housing revenues to 16.9% during fiscal 1996 from
10.8% during fiscal 1995.  This increase over the prior year is
generally attributable to an improvement in the Company's land
position.

     General and administrative expenses were $7.0 million or
4.9% of revenues in fiscal 1996 down from $7.5 million or 5.9% of
revenues during fiscal 1995 as a result of the Company's efforts
to maintain overhead expenses at a level commensurate with
homebuilding operations.

     Selling and marketing expenses increased to $15.2 million or
10.7% of homebuilding revenues for the year ended October 31,
1996, from $12.1 million or 9.5% for the year ended October 31,
1995.  The increased expense is attributable to both higher
closing volumes and increased competition in the Company's
markets which in turn required increased customer incentives.

     During the year ended October 31, 1996, the Company
repurchased a portion of its Senior Notes having an aggregate
outstanding principal amount of $5,315,000.  These repurchases
resulted in an outstanding balance of $34,475,000 as of October
31, 1996 and an extraordinary gain of $1,876,000 being recorded
in fiscal year 1996.  In 1995, the Company repurchased
$10,210,000 of its Senior Notes resulting in an extraordinary
gain of $3,312,000.

     During the year ended October 31, 1996, no provision for
impairment on real estate inventory was recorded, compared to a
provision of $2,937,000 in fiscal 1995, as a result of the
application of FASB Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of.  See Note 2 of Notes to Consolidated Financial
Statements.


Liquidity and Capital Resources

     The residential real estate development business is
inherently capital intensive. Significant cash expenditures are
typically needed to acquire and develop land, construct homes and
establish marketing programs for lengthy periods of time in
advance of revenue realization. The Company generally finances
its operations with secured borrowings from commercial banks,
financial institutions and private investors, unsecured
borrowings in the public market, and with available cashflow from
operations.

     The Company has commitments for $61.4 million under several
revolving credit facilities with commercial banks and financial
institutions of which $21.5 million was outstanding at October
31, 1997.  In addition, the Company had community specific
facilities to provide aggregate funding of $6.3 million of which
$2.1 million was outstanding as of October 31, 1997.  The Company
also benefits from a line of credit which is secured by some of
its model homes for an amount not to exceed $5.8 million of which
$3.4 million was outstanding as of October 31, 1997.  Borrowings
under the credit facilities are secured by liens on specific real
property owned by the Company.  The aggregate outstanding
principal balance under all of the Company's credit facilities
was $27.0 million as of October 31, 1997.

     In February 1994, the Company issued $50 million in Senior
Notes through a public debt offering, of which $29,075,000 were
still outstanding on October 31, 1997.  The notes are due in
December 2000.  Interest at the rate of 11 3/8% per annum is
payable semi-annually on June 15 and December 15 of each year.

     During the year ended October 1997, the Company repurchased
a portion of its Senior Notes having an aggregate outstanding
principal amount of $5,400,000 from Mr. Previti.  Net of
allocable issuance costs, the resultant income of $1,634,000 is
reported as an extraordinary gain in the Company's consolidated
financial statements for the year ended October 31, 1997.

     The Indenture governing the Senior Notes requires the
Company to maintain a minimum net worth of $25 million.  As of
October 31, 1995, the Company had not satisfied the net worth
requirement, however, the minimum net worth was restored in the
second quarter of fiscal 1996.  On January 31, 1997, the Company
once again fell below the minimum net worth requirement.  That
condition continued to exist through October 31, 1997.  See Note
5 of Notes to Consolidated Financial Statements for further
discussion regarding the net worth requirement.

     The Indenture covenants also limit total outstanding
recourse debt to $15 million unless, at the time the recourse
debt is incurred and after giving effect to the proceeds
therefrom, certain covenants, are met for interest coverage and
debt-to-equity ratios, as defined in the Indenture.  Although the
Company did not meet those ratios as of October 31, 1997, the
Company's outstanding recourse debt was only approximately $5.5
million, thus leaving the Company with approximately $9.5 million
in additional recourse debt that can still be incurred before the
recourse covenant's would be triggered.  The Company is not
precluded from incurring debt on a non-recourse basis.

     There can be no assurance that the impact of market
conditions affecting the demand for homes or the availability of
debt financing will not adversely affect the Company's future
needs for capital.  However, the Company expects that available
capital resources will be sufficient to meet its normal operating
requirements over the near term.


Impact of Year 2000

     Some of the Company's older computer programs were written
using two digits rather than four to define the applicable year.
As a result, those computer programs have time-sensitive software
that recognize a date using "00" as the year 1900, rather than
the year 2000.  This could cause a system failure or
miscalculations causing disruptions of operations, including
among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal business
activities.

   The Company has completed an assessment and is upgrading its
software so that its computer system will function properly with
respect to dates in the year 2000 and thereafter.  The project is
estimated to be completed not later than June 30, 1998, which is
prior to any anticipated impact on its operating systems.  The
Company believes that with modifications to existing software,
the Year 2000 Issue will not pose significant operational
problems for its computer system.


           ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


     See the index to the consolidated financial statements,
Report of Independent Auditors and the Consolidated Financial
Statements, which appear beginning on page F-1 of this report and
are incorporated herein by reference.


       ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                ACCOUNTING AND FINANCIAL DISCLOSURE


None.


                                PART III


      ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


     Forecast "Registered Tradename" is a limited partnership and
has no officers or directors. The sole general partner of
Forecast "Registered Tradename" is Forecast Homes, Inc. ("FHI").
FHI manages the business and affairs of Forecast "Registered
Tradename".  Capital is a wholly-owned subsidiary of Forecast
"Registered Tradename". The directors and executive officers of
GP and Capital are as follows:

Name                  Age    Position
----                  ---    --------
James P. Previti*      51    Chairman of the Board and President
Frank Glankler         47    Senior Vice President,
                             Chief   Operating Officer
Larry R. Day           48    Senior Vice President,
                             Chief Legal Officer and Secretary
Jack Firestone         76    Director
Steven Fowlkes*        43    Director
Peter T. Healy         46    Director
Leo Previti**          44    Director



     *  Member of the Compensation Committee
     ** Member of Audit Committee


      James P. Previti is the founder and organizer of the
predecessor of the Company. Mr. Previti has held the position of
Chairman of the Board and President of each of the predecessor
entities to the Company since their formation and has controlled
the management of the business of the Company since 1976.
Mr. Previti is the Chairman of the Board and President of FMC,
and Inland Empire Investments Inc. ("IEI"), each of which are
affiliates of the Company. Mr. Previti is also the Chairman of
the Board of Rancho Mortgage "Registered Tradename", an affiliate
of the Company. See "Relationships with Affiliates."  Mr. Previti
is the brother of Leo Previti.

     Frank Glankler has served as a Senior Vice President and
Chief Operating Officer since January 1996, after returning to
the company in July 1995 as Vice President of Operations.  From
July 1992 until October 1993 he served as President of the
Company's Arizona Division, and from October 1993 until July
1995, Mr. Glankler was President of MFR Holdings.  Mr. Glankler
has over 17 years in the homebuilding industry, including
previous senior management positions with U.S. Home Corporation.
Mr. Glankler was the former Chairman of the Arizona division of
U.S. Home Corporation, responsible for operations in Phoenix,
Tucson and New Mexico.  Positions held by Mr. Glankler at U.S.
Home include President of the Louisiana, North Houston, East
Houston and South Houston divisions, respectively.  He is former
board member of the Southern Arizona Homebuilders Association and
holds a Class B Arizona Contractors License and an Arizona Real
Estate License.

     Larry R. Day joined the Company's predecessor as Vice
President and General Counsel in December 1992 and now holds the
position of Chief Legal Officer and Senior Vice President.  He
was elected to GP's and Capital's boards of directors in November
1993 and served in that capacity until January 1996. Since March
1993, Mr. Day has also supervised the Company's human resources,
payroll and risk management departments. From 1989 to 1992, Mr.
Day was in private practice specializing in real estate finance
and transactional matters. From 1988 to 1989, Mr. Day was a
Director, Vice President and General Counsel of Guardian Savings
and Loan. From 1985 to 1988, Mr. Day was Director of Real Estate
Legal Services for Taco Bell Corporation. Prior to that, Mr. Day
served 6 years as Vice President of Corporate and Special Real
Estate with First Interstate Bank.   Mr. Day is admitted to
practice law in the States of California and Vermont, and is a
licensed California real estate broker.

     Jack Firestone, a private investor, became a Director of the
Company in January 1996.

     Steven K. Fowlkes became a Director of the Company in
January 1996.  Mr. Fowlkes is President and Chief Operating
Officer of R.W. Selby & Company, Inc., a real estate investment
and management firm in Los Angeles, California.

     Peter T. Healy became a Director of the Company in January
1996.  Mr. Healy is a Senior Partner with the law firm of
O'Melveney & Myers LLP in their San Francisco, California office.

     Leo Previti became a Director of the Company in January
1996.  Mr. Previti has been an attorney with the firm of Brown,
Michael & Carroll in Atlantic City, New Jersey since 1996 and
prior thereto was Associate Counsel of International Game
Technology.  Leo Previti is also a Certified Public Accountant
and is the brother of James P. Previti.

      The Board of Directors of FHI is elected annually by
Mr. Previti, the sole shareholder of FHI. Officers are elected
annually by the Board of Directors and serve at the discretion of
the Board of Directors.  The Board of Directors of Capital is
elected annually by FHI on behalf of Forecast "Registered
Tradename"as the sole shareholder of Capital. Officers are
elected annually by the Board of Directors and serve at the
discretion of the Board of Directors.

    The Boards of Directors of FHI and Capital meet three or
four times per year on a quarterly basis.  The Boards of
Directors of FHI and Capital each have an Audit Committee of
which Mr. Leo Previti is a member.  The Board of Directors of FHI
has a Compensation Committee of which Mr. Steven Fowlkes is a
member.



                  ITEM 11 - EXECUTIVE COMPENSATION


     The following table sets forth certain information with
respect to the compensation earned by the Chief Executive Officer
and each of the other most highly paid executive officers of FHI
and Capital whose total compensation for services rendered during
fiscal 1997 exceeded $100,000 (collectively, the "Named Executive
Officers"):

<TABLE>
                   Summary Compensation Table
---------------------------------------------------------------
                                         Annual Compensation
                                     --------------------------
Name             Principal Position  Salary  Bonus  All Other
                                                    Compensation
----------------------------------------------------------------
<S>              <C>                  <C>      <C>          <C>
James P. Previti President            $150,00      $0          $0

Frank Glankler   Chief Operating
                 Officer/Sr Vice
                 President            123,000   31,634      7,200

Larry Day        Sr. Vice President
                 /Chief Legal Officer
                 Secretary            117,000   10,000      7,200

Larry Young      Northern Division
                 - President          107,500   14,593      7,200


</TABLE>


     Forecast "Registered Tradename" and Mr. Previti are parties
to an employment agreement whereby Mr. Previti's annual
compensation is $150,000 plus a quarterly bonus of five percent
of the pretax consolidated net income of the Company. The
Indenture prohibits any amendments to such employment agreement,
and is renewable for successive periods of one year, each at the
discretion of the Board of Directors.  Mr. Previti's existing
contract extends through October 31, 1998.  See notes to
consolidated financial statements.


    ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                               MANAGEMENT



     The following table sets forth, as of November 1, 1997, the
beneficial ownership of the partnership interests in Forecast
"Registered Tradename" by (a) each of the directors of GP and
Capital, (b) the directors and officers of GP and Capital as a
group, and (c) each person known to the Company to own
beneficially more than 5% of Forecast "Registered Tradename" 's
limited partnership interests or general partnership interests.

<TABLE>
                                                %  of
                                                Profits/
Name of Beneficial Owner [1]   Type of          Losses/
                               Interest         Capital  Class
----------------------------------------------------------------
<S>                            <C>              <C>      <C>
James P. Previti [2]           General Partner  100.00%  100.00%
James P. Previti [3]           Limited Partner  100.00%  100.00%
Joseph M. Carman [4]           Limited Partner    1.50%    1.52%
All directors and officers
  as a group (( persons)[2][4] General Partner  101.50%  101.50%
All directors and officers
  as a group (9 persons)[3][4] Limited Partner  101.50%  101.50%
Forecast Homes, Inc.           General Partner    1.00%  100.00%
Forecast Corporation           Limited Partner   56.28%   56.85%
Forecast Mortgage Corporation  Limited Partner    1.04%    1.05%
Forecast Development, L.P.     Limited Partner   25.01%   25.26%
Inland Empire Personnel, Inc.  Limited Partner   16.67%   16.84%

</TABLE>

[1]  The address of each beneficial owner is:
     10670 Civic Center Drive, Rancho Cucamonga, California 91730
     and 341 West Second Street,  Suite 1, San Bernardino,
     California 92401
     
[2]  Reflects beneficial ownership resulting from status as sole
     trustor and trustee of the Trust, which owns all of the
     outstanding  interests in each of the current limited
     partners of Forecast "Registered Tradename".
     
[3]  Reflects beneficial ownership resulting from status
     as sole trustor and trustee of the Trust, which owns
     all of the outstanding  equity interests in each of the
     current limited partners of Forecast "Registered
     Tradename".

[4]  Reflects the subscription for limited partnership
     interests in Forecast by Mr. Carman consummated upon
     completion of the Offering.


        ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


Relationships Among Mr. Previti, the Trust and the Company

     The Company was formed in 1993 in connection with a
reorganization of the businesses owned by the James Previti
Family Trust (the "Trust").  Forecast "Registered Tradename" is
the successor to substantially all the assets and known
liabilities of the residential real estate development business
of the Trust's affiliates.  The Trust is a living, revocable
trust with James Previti as the sole trustor and trustee.

     From time to time, the Trust and/or Mr. Previti have
guaranteed indebtedness of the Company in order to enable the
Company to obtain financing on more favorable terms than would
otherwise be available.  There can be no assurances that the
Trust and/or Mr. Previti will continue to provide such guarantees
in the future.


Land Sales

     Subsequent to October 31, 1997, Mr. Previti purchased from
the Company a parcel of land in Moreno Valley, which the Company
elected not to develop.  The purchase price was $1.7 million, the
land's current book value, and the property was transferred in
consideration for a note secured by Mr. Previti's interest in
other real property with a value in excess of $1.7 million.  No
gain or loss will be realized as a result of the consumation of
this transaction.  See Note 10 of Notes to Consolidated Financial
Statements.


Receivables From Affiliates

     As of October 31, 1997, receivables from related parties
include: (i) a note receivable in the amount of $641,000 that is
due on July 31, 1998, bearing interest at 9 1/2% per annum, (ii) a
note receivable in the amount of $657,000 that is due in March
1999, bearing interest at 10% per annum, secured by land in
Flagstaff, Arizona, and is related to the sale of land in
Murrieta, California to Newport Murrieta Land Company, and (iii)
a promissory note from Mr. Previti in the amount of $1,083,000
that is due on June 15, 1999, bearing interest at 10 1/2% per
annum, and is secured by a partnership interest in River Road
Ventures (a California general partnership).

     The Company also holds a non-recourse promissory note,
executed in 1994 by Mr. Carman in the amount of $463,650, in
connection with his purchase of a 1 1/2% limited partnership
interest in the Company.  The Company also holds a $300,000 note
due from Forecast "Registered Tradename" Homes, Inc. in
connection with its initial investment in the Company.  See Note
3 of Notes to Consolidated Financial Statements.

     Subsequent to October 31, 1997, Mr. Carman tendered his
interest in the Company to Forecast by effecting a cancellation
of his capital contribution that was reflected by the note in the
amount of $463,650.  This transaction will reduce both the
Company's gross equity and the related note receivable from Mr.
Carman, which is reflected as a contra equity item on the balance
sheet, for a net effect of zero on equity.  See Note 10 of Notes
to Consolidated Financial Statements.


Management Services

     The Company entered into management service agreements with
several affiliates as a part of the above described
reorganization in 1993.  The agreements obligate the Company to
provide certain executive management, legal, tax, accounting,
human resources, payroll, environmental, risk management,
treasury and management information services to these affiliates,
in exchange for a fixed management fee specified in the
agreement.  The Company charged $142,000 in management fees to
affiliates under these agreements during fiscal 1997.


Transactions with Mortgage Banking Affiliate

     Rancho Mortgage "Registered Tradename" Corporation
("Rancho"), a corporation in which Mr. Previti is the sole
stockholder, was formed in 1987, primarily to provide financing
for customers of the Company. As a mortgage banker, Rancho
completes the processing of loan applications, performs credit
checks, submits applications to mortgage lenders for approval and
originates and sells mortgage loans. Rancho has warehouse lines
of credit to fund the mortgage loans on an interim basis. The FHA
and VA have each approved Rancho Mortgage as a qualified mortgage
lender.

     During the year ended October 31, 1997, Rancho Mortgage
provided mortgage financing for approximately 55% of the homes
sold by the Company, and the Company's customers accounted for
approximately 50% of Rancho's loan originations. The Company
believes that the pricing of mortgage loans for its customers is
substantially equivalent to the pricing available from
unaffiliated mortgage companies.

     Subsequent to October 31, 1997, Rancho entered into
negotiations with Norwest Mortgage, Inc. for the purpose of
forming a broader-based mortgage services entity that would be
better able to attract and fulfill the mortgage needs of the
Company's homebuyers.  To date, those negotiations have not
produced any written agreement and Rancho is continuing to fund
the mortgage loans for a significant number of the Company's
homebuyers.


Insurance Brokerage Services

     IEI, an affiliate of the Company that is owned by the Trust,
is a licensed insurance broker that does business as Inland
Southern Insurance Services, Inc. ("ISIS"). The Company purchases
various insurance policies through ISIS. Such purchases are made
on terms at least as favorable to the Company as could be
obtained through an unaffiliated insurance broker. In addition,
ISIS markets various forms of insurance to the Company's home
buyers.  The vast majority of the business of ISIS consists of
home buyers referred by the Company.  The Company receives no
referral fee from ISIS for such referrals or providing its
customer lists.

     The Company purchases insurance through independent
insurance brokers under an arrangement whereby ISIS receives a
commission as a co-broker on the insurance sold.  ISIS performs
no services for the Company in obtaining the insurance and no
portion of such commission is rebated to the Company as a
referral fee.  The Company believes that the aggregate cost of
the insurance coverage purchased pursuant to this arrangement is
no greater than the cost that would have been charged in an arms
length transaction with an unaffiliated party.


Office Leases

     The Company leases approximately 15,500 square feet of
office space for its corporate headquarters from Previti Realty
Fund, L.P., under a lease expiring in 1998 and approximately
7,800 square feet of office space for its Sacramento office under
a lease expiring June 30, 2004.  The leases contain "triple
net" provisions requiring the Company to pay insurance, taxes and
operating expenses associated with each building.  The minimum
rent may be increased annually based upon changes in the Consumer
Price Index.  The Company believes that the terms and conditions
of these leases are equivalent to such provisions as would be
available on an arms-length, fair market value basis.


Loan Payable

    From time to time, Mr. Firestone and Mr. Carman have made
non-recourse loans to the Company to partially fund the
acquisition of specific communities.  The loans bear interest at
the range of 11% to 12% and are repaid at maturity.  As of
October 31, 1997 the Company was obligated to Mr. Firestone for
$900,000 and Mr. Carman for $125,000, respectively, for such
loans.  The loans were made on terms commensurate with those
generally available for similar loans.

                  

                               PART IV



             ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES
                     AND REPORTS ON FORM 8 - K



(a) (1) and (a) (2) Financial Statements and Financial Statement
Schedules

The response to this portion of Item 14 is submitted as a
separate section of this report beginning on page F-1. All other
schedules are not applicable or not required and accordingly have
been omitted.

(a) (3) Exhibits

 Exhibit Description
 No.
 ------- -----------
 1.1     Limited Partnership Agreement of The Forecast
         Group "Registered Tradename", L.P. effective as of
         September 30, 1993 by and among Forecast "Registered
         Tradename" Homes, Inc., Forecast Mortgage Corporation,
         Forecast Corporation, Inland Empire Personnel Inc. and
         Forecast Development, L.P.
         
 1.2     Articles of Incorporation of Forecast
         "Registered Tradename" Capital Corporation.
                                
 1.3     Bylaws of Forecast "Registered Tradename"
         Capital Corporation.

 2.1     Form of Indenture by and among The Forecast
         Group "Registered Tradename", L.P., Forecast "Registered
         Tradename" Capital Corporation and United
         States Trust Company of New York, as Trustee.
                                
 2.2     Specimen of Note.

 3.1     Employment Agreement by and between The
         Forecast Group "Registered Tradename", L.P. and James P.
         Previti dated as of November 1, 1993.
         
 4.1     Subsidiaries of the Registrant.
                            _________
                                
Each of the foregoing exhibits was filed as part of the Company's
Form S-1 and Amendments thereto dated November 24, 1993, January
18, 1994, February 7, 1994 and February 11, 1994 and are
incorporated herein by reference.
(b)  Reports on Form 8-K

No reports on Form 8-K have been filed by the Company during the
last quarter of the period covered by this report.



                            SIGNATURES


Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

THE FORECAST GROUP                   By: FORECAST "Registered
"Registered Tradename", L.P.         Tradename" CAPITAL
                                     CORPORATION.
By: FORECAST "Registered             By:  /s/ James P. Previti
Tradename" HOMES, INC.               -------------------------
     A California                    President
       corporation
     its General Partner

By:  /s/ James P. Previti
-------------------------
     President



Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

THE FORECAST GROUP "Registered Tradename", L.P., by FORECAST
"Registered Tradename" HOMES, INC., General Partner:

Name                     Title                  Date

/s/ James P. Previti
--------------------
James P. Previti         Chairman of the        January 28, 1998
                         Board, President,
                         Principal Executive
                         Officer

/s/ Richard B. Munkvold
-----------------------
Richard B. Munkvold      Vice President,        January 28, 1998
                         Corporate Controller,
                         Principal Accounting
                         Officer


FORECAST "Registered Tradename" CAPITAL CORPORATION:

Name                      Title                   Date
------                    -----                   ----
/s/ James P. Previti
--------------------
James P. Previti          Chairman of the Board, January 28,1998
                          President,
                          Principal Executive
                          Officer

/s/ Richard B. Munkvold
-----------------------
Richard B. Munkvold       Vice President,       January 28, 1998
                          Corporate Controller,
                          Principal Accounting
                          Officer



REPORT OF INDEPENDENT AUDITORS



Partners
The Forecast Group "Registered Tradename", L.P.

     We have audited the accompanying consolidated balance sheets
of The Forecast Group "registered Tradename", L.P. and
subsidiaries (the "Company") as of October 31, 1997 and 1996, and
the related consolidated statements of operations and partners'
equity, and cash flows for each of the three years in the period
ended October 31, 1997. These financial statements are the
responsibility of the Company's management.  Our responsibility
is to express an opinion on these financial statements based on
our audits.

     We conducted our audits in accordance with generally
accepted auditing standards.  Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.

     In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the
consolidated financial position of The Forecast Group "Registered
Tradename", L.P. and subsidiaries at October 31, 1997 and 1996,
and the consolidated results of their operations and their cash
flows for each of the three years in the period ended October 31,
1997, in conformity with generally accepted accounting
principles.


                        ERNST & YOUNG LLP
                                
                                
Newport Beach, California
December 23, 1997


<PAGE>


<TABLE>
           The Forecast Group "Registered Tradename", L.P.
                    Consolidated Balance Sheets
                       (Amounts in 000's)

                                

                                               October 31
                                       ----------------------
                                            1997         1996
                                       ----------------------
<S>                                     <C>           <C>
Assets:
Cash and Cash Equivalents               $12,350       $13,550
Accounts Receivable                         575           466
Accounts and Notes Receivable,
 Related Parties                          3,486         5,239
Real Estate Inventory                    71,012        80,760
Property and Equipment, Net               1,036         1,171
Other Assets                              1,923         2,200
                                       --------       -------
   Total Assets                        $102,186       $91,582
                                       ========       =======

Liabilities & Partners' Equity:
Accounts Payable                        $12,294       $11,443
Accrued Expenses                          2,573         3,624
 Notes Payable:
   Senior Notes at 11 3/8% due
     December 2000                       29,075        34,475
Collateralized by Real Estate
  Inventory                              26,978        25,720
                                       --------       -------
     Total Notes Payable                 56,053        60,195
                                        -------        ------
   Total Liabilities                     70,920        75,262
                                        =======        ======

Commitments and Contingencies (Note 9)

Partners' Equity                         21,426        27,688
 Less: Capital Notes Receivable from
   Partners                                (764)         (764)
                                         -------       -------
   Net Partners' Equity                  20,662        26,924
                                         =======       =======

   Total Liabilities &
    Partners' Equity                     $91,582     $102,186
                                        ========     ========
</TABLE>


[FN]        See notes to consolidated financial statements.


<TABLE>

             The Forecast Group "Registered Tradename", L.P.
      Consolidated Statements of Operations and Partner's Equity
                            (Amount in 000's)


                                  For the Year Ended October 31
                                  -----------------------------
 
                                    1997      1996      1995
                                  -----------------------------

<S>                              <C>       <C>        <C>
Homebuilding Revenues            $132,518  $141,652   $127,538
Cost of Homes Sold                112,278   117,702    113,792
                                 --------  --------   --------
                                   20,240    23,950     13,746
                                  --------   -------   --------
Operating Expenses:
-------------------
  Selling & Marketing Expenses      13,929    15,215     12,114
  General & Admin. Expenses          7,397     7,006      7,508
  Provision for Impairment of
    Real Estate Inventory            6,635         -      2,937
  Loss on Abandoned Land Option        726         3        139
                                   -------    ------    -------
     Total Operating Expenses       28,687    22,224     22,698
                                   -------    ------    -------
Operating Income (Loss)            (8,447)    1,726     (8,952)

Other Income (Expenses):
------------------------
 Interest Income                      395       274        200
 Interest  Expense                      -         -       (119)
 Other Income and Expenses            156        14        472
                                    -----    ------      -----
   Total Other Income (Expenses)      551       288        553
                                    -----    ------      -----
 Income (Loss) before
   Extraordinary Gain              (7,896)    2,014     (8,399)

 Extraordinary Gain on
   Extinguishment of Senior Notes    1,634    1,876      3,312
                                    ------    -----      -----

Net Income (Loss)                  ($6,262)  $3,890    ($5,087)
                                   ========  ======    ========

Partners' Equity at Beginning
   Of Year                         $27,688  $23,998    $27,786
Capital Contribution
  (Distribution), net                    -     (200)     1,299
Net Income (Loss) this Year         (6,262)   3,890     (5,087)
                                  ---------  -------   ------
  Subtotal                          21,426   27,688     23,998
Less: Capital Notes Rec.
  From Partners                       (764)    (764)      (764)
                                  ---------  -------    -------
Net Partners' Equity at
 End of Year                       $20,662  $26,924     $23,234
                                  ========  =======     =======

</TABLE>


[FN]          See notes to consolidated financial statements.


<TABLE>


          The Forecast Group "Registered Tradename", L.P.
               Consolidated Statements of Cash Flow
                        (Amount in 000's)


                                   For the Year Ended October 31
                                   -----------------------------
                                      1997     1996      1995
                                   ----------------------------
<S>                                 <C>        <C>      <C>
Operating Activities:
---------------------
Net Income (Loss)                   ($6,262)   $3,890   ($5,087)
Adjustments to Reconcile
 Net Income(Loss) to
   Net Cash Generated from
   (Used for)Operating Activities
   Extraordinary Gain on
    Extinguishment of Senior Notes   (1,634)   (1,876)   (3,312)
   Depreciation and Amortization
    on Property and Equipment           316       281       240
   Loss (Gain) on Sale of
    Property and Equipment                -         5        41
   (Increase) Decrease in
    Accounts Receivable                (109)      199       228
   Provision for Impairment of
    Real Estate Inventory             6,635         -     2,937
   Decrease (Increase) in
    Real Estate Inventory             3,113     1,812     8,064
  Decrease (Increase) in Other
   Decrease (Increase) in
    Other Assets                        123      (203)      314
   Increase (Decrease) in
    Accounts Payable and Accrued Ex.   (200)    2,035    (1,648)
   Increase (Decrease) in Other
    Liabilities                           -       (50)       50
                                      -----     ------   -------
     Net Cash Generated from
      Operating Activities            1,982     6,093     1,827
                                      -----     ------   -------

Investing Activities:
---------------------
Additions to Property and Equip.       (181)     (226)     (426)
Proceeds from Sale of Property and
  Equipment                               -         3        78
                                      ------     -----    ------
     Net Cash Used for
      Investing Activities             (181)     (223)     (348)
                                       ------     -----    -----
Financing Activities:
---------------------
Retirement of Senior Notes at
  11 3/8% due December 2000          (3,612)   (3,251)   (6,485)
Decrease (Increase) in Accounts
  And Notes Receivable,
   Related Parties                    1,753    (2,944)     (436)
Proceeds from Notes Payable          75,013    72,614    39,003
Proceeds from Notes Payable,
  Related Parties                         -     2,221         -
Principal Payments on Notes Payable (73,755)  (68,029)  (38,510)
Principal Payments on Notes Payable,
  Related Parties                         -    (2,221)     (222)
                                      ------   -------   -------
     Net Cash  Used for
      Financing Activities             (601)   (1,610)   (6,650)
                                      ------   -------   -------
Increase (Decrease) in Cash
 and Cash Equivalents                  1,200    4,260    (5,171)
Cash and Cash Equivalents at
 Beginning of Period                  12,350    8,090    13,261
                                      ------   -------   -------
Cash and Cash Equivalents at
 End of Period                       $13,550  $12,350    $8,090
                                     =======  =======    ======
</TABLE>


[FN]        See notes to consolidated financial statements.


<PAGE>
            THE FORECAST GROUP "Registered Tradename", L.P. NOTES
                  TO CONSOLIDATED FINANCIAL STATEMENTS
                           OCTOBER 31, 1997
                                
                                
1.   Basis of Presentation

     The Forecast Group "registered Tradename", L.P. is a
California limited partnership (the "Company") which was formed
in October 1993 to be the successor to substantially all the
assets and liabilities of the single-family residential real
estate development business of the James Previti Family Trust
(the "Trust") and its affiliates.  The Trust is a living,
revocable trust with James Previti as Trustor.  The Company's
sole general partner is Forecast Homes, Inc. ("FHI"), a
California corporation, which owns a 1% interest in the profits,
losses and capital of the Company.  Forecast Capital Corporation
("Capital") is a California corporation and a wholly-owned
subsidiary of the Company that was formed in 1993 solely to
facilitate the offering of 11 3/8% Senior Notes due in December
2000.


2.    Summary of Significant Accounting Policies

Principles of Consolidation

     The consolidated financial statements include the accounts
of the Company and  it's wholly-owned entities engaged in single
family residential real estate development.  All significant
intercompany accounts and transactions have been eliminated in
consolidation.


Use of Estimates

       The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that effect the amounts reported
in the financial statements and accompanying notes.  Actual
results could differ from those estimates significantly in the
near term.


Cash and Cash Equivalents

     Cash and cash equivalents include unrestricted deposit
accounts at financial institutions, unrestricted certificates of
deposit with a maturity of less than 90 days and certain funds
not yet remitted and held in trust by escrow companies on homes
which have closed escrow.  These escrow funds are generally
received within one to three days after the close of escrow.


Real Estate Inventory and Recognition of Revenue

     Real estate inventory consists of single-family residential
projects and land held for future development of single-family
communities and property zoned for multi-family and commercial
use. Interest and property taxes are capitalized to inventories
during periods of development and construction.

     In accordance with FASB Statement No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of" (Statement 121), when events or circumstances
indicate that an impairment to an asset to be held and used might
exist, the expected future undiscounted cash flows from the
affected asset or group of assets must be estimated and compared
to the carrying value of the asset or group of assets.  If the
sum of the estimated future undiscounted cash flows, excluding
interest charges, is less than the carrying value of the assets,
an impairment loss must be recorded.  The impairment loss is
measured by comparing the estimated fair value of the assets with
their carrying amount.  Statement 121 also requires that long
lived assets that are held for disposal be reported at the lower
of the assets' carrying amount or fair value less costs of
disposal.

     On an ongoing basis, management analyzes future undiscounted
cash flows for all real estate projects where impairment
indicators are present.  Based upon such analysis, the Company
concluded that certain real estate projects were impaired, due
primarily to continuing deterioration of net selling prices and
the rate of sales during the first quarter of fiscal 1997. The
Company then estimated the fair value of those projects and
recorded a resulting impairment loss of  $6,635,000.  For the
fiscal year ended October 31, 1996 no provision for impairment
loss was recorded.  An impairment loss of $2,937,000 was recorded
for the fiscal year ended October 31, 1995.

     Estimated fair value represents the estimated amount at
which an asset could be bought or sold by willing parties in a
current transaction.  The estimation process involved in the
determination of fair value requires estimates as to future
events and conditions.  Such future events and conditions include
economic, political and market conditions, the costs to complete
development, as well as the availability of suitable financing to
fund development and construction activities, and the repayment
or refinancing of existing indebtedness.  As the amount and
timing of the realization of cash flows from the Company's real
estate projects is dependent upon such future uncertain events
and conditions, the ultimate realization may be materially
different from amounts presently estimated in determining fair
value.

     Sales of single-family residences and other real estate are
generally recognized when title is conveyed to the buyer at close
of escrow and other conditions for profit recognition have been
met.

     Selling expenses include escrow charges, commissions, sales
incentives, advertising, promotions, and the cost of model home
center operation and maintenance.  These expenses are generally
charged to operations as incurred. Cost of homes sold include
direct and allocated costs for land and construction including an
estimate for future warranty costs.  The Company allocates the
cost of land, common area development, production overhead,
capitalized sales center costs, interest, and property taxes
to homes within a particular subdivision on a pro-rata basis
which approximates relative value of the property.


Property and Equipment

     Property and equipment, consisting primarily of vehicles and
office furniture and equipment, is stated at cost. Depreciation
is provided using the straight-line method over the estimated
useful lives of five to seven years.


Warranties

     The Company provides one-year limited warranties to
purchasers of its homes.  Statutory requirements in the states in
which the Company does business may grant rights to homebuyers in
addition to those provided by the Company.  Estimated warranty
costs are accrued at the time of sale of the homes.


Senior Note Offering Costs

     Included in Other Assets as of October 31, 1997 and 1996 are
costs associated with the issuance of Senior Notes in the amount
of $669,000 and $1,043,000 (net of accumulated amortization of
$1,089,000 and $868,000, respectively). The Company is amortizing
these costs over seven years and treats the amortization as
additional interest incurred.


Income Taxes

     The Company, as a partnership, is not subject to federal and
state income taxes since the results of its operations will be
allocated to the partners for inclusion in their respective
income tax returns.


3. Accounts and Notes Receivable, Related Parties

Accounts and notes receivable, related parties, consist of
the following:

<TABLE>

(Amounts in 000's)
                                                 October 31
                                             ------------------
                                             1997        1996
                                            -------------------
<S>                                          <C>         <C>
Note receivable from Mr. Previti,
 collateralized by a partnership interest
  in River Road Ventures                     $1,083      $1,083
Note receivable from Mr. Previti, secured
by an interest in Senior Notes                  161       1,699
Note receivable from Newport Murrieta Land
Co., secured by real property in
 Riverside County, California                   657         844
Note receivable from Previti Realty Fund
 secured by real property in
  Mohave County, Arizona                        641         641
Receivables from other affiliates, net          876         907
Receivable from Rancho Mortgage Corp.            68          65
                                             ------      ------
   Total                                     $3,486      $5,239
                                            =======      ======

</TABLE>


   As of October 31, 1997 and 1996, amounts receivable from
related parties include a promissory note from Mr. Previti in the
amount of $1,083,000. The note, which is secured by a limited
partnership interest in River Road Ventures (a California general
partnership), is due June 15, 1999 and bears interest at 10.5% per
annum.

   The note receivable for $161,000 due from Mr. Previti as of
October 31, 1997 represents funds advanced, including interest,
to facilitate Mr. Previti's purchase of the Company's Senior
Notes from third parties. The loan bears interest at 12% and is
due in April 1999.  See Note 5 of Notes to Consolidated Financial
Statements.

     A note in the principal amount of $657,000 that is due March
1999, bearing interest at 10% per annum, secured by land in
Flagstaff, Arizona.

     Another note in the principal amount of $641,000 that is due
July 31, 1998, bearing interest at 9.5% per annum, secured by
property in Bullhead City, Arizona.  See Note 6 of Notes to
Consolidated Financial Statements.

     The Company has two other promissory notes from related
parties which were received in lieu of capital and are not
included above.  One note from FHI in the amount of $300,000
represents FHI's initial investment in the Company.  The note is
due on demand or in the event of no demand on the earliest of (1)
the end of the Company's taxable year in which FHI's interest in
the Company is liquidated or (2) December 31, 2002, with interest
at the Applicable Federal Rate (as defined in the note) payable
on December 31 of each calendar year.  The second note represents
an obligation of Joseph M. Carman, an officer of the general
partner in the form of a $464,000 non-recourse note payable to
the Company dated February 1994.  The note is secured by Mr.
Carman's 1.5% interest in the Company and bears interest at the
prime rate with all interest and principal due in October 1999.
Both of these capital notes are reported as a reduction of
Partners' Equity in the consolidated balance sheets.

      Mr. Carman entered into an agreement with the company
concerning the purchase and sale of his limited partnership
interest which provides that he may require the Company to
purchase his partnership interest at any time after February 1,
1995 at a price equal to the product of (a) 4.5% and (b) the
pretax profits of the company from November 1, 1993 to the end of
the most recent fiscal quarter, less 6% per annum times the
average partner's equity of the Company (excluding equity
attributable to Mr. Carman's interest in the Company) over the
same period (the "Put Price").  The agreement also provides that
the Company may require Mr. Carman to sell  to the company his
interest if he is no longer employed by the Company at a price
equal to the greater of (i) cost plus accrued interest on the
promissory note used to finance the purchase of the partnership
interest or (ii) the relevant Put Price.

     Subsequent to October 31, 1997, Mr. Carman tendered his
interest in the Company to Forecast by effecting a cancellation
of his capital contribution that was reflected by the note in the
amount of $464,000.  This transaction will reduce both the
Company's gross equity and the related note receivable from Mr.
Carman, which is reflected as a contra equity item on the balance
sheet as of October 31, 1997.  See Note 10 of Notes to
Consolidated Financial Statements.


4.    Real Estate Inventory and Related Notes Payable

Real estate inventory and related notes payable consist of the
following:


<TABLE>

(Amounts in 000's)

                                          October 31, 1997
                                       ---------------------
                                       Real          Notes
                                       Estate        Payable
                                       Inventory
                                       ---------------------
<S>                                    <C>           <C>
Land Held for Development              $15,223            $0
Residential Projects in Process         49,638        23,610
Model Homes                              6,151         3,368
                                       -------       -------
    Total                              $71,012       $26,978
                                       =======       =======

                                           October 31, 1996
                                       ---------------------
                                        Real                                        Real         Notes
                                        Estate       Payable
                                        Inventory
                                        --------------------
 Land Held for Development             $15,067            $0
 Residential Projects in Process        57,442        20,449
 Model Homes                             8,251         5,271
                                       -------       -------
   Total                               $80,760       $25,720
                                       =======       =======
</TABLE>


     Notes payable secured by real estate inventory bear interest
at rates ranging from the three month LIBOR rate (5.1% at October
31, 1997) plus 2.25% to prime rate (8.5% at October 31, 1997)
plus 1.25%.  The interest rate on $10.6 million of the loans
outstanding at October 31, 1997 which bear interest at the three
month LIBOR rate plus 2.25% will increase to the prime rate plus
 .5% if the Company fails to maintain average deposits with the
lender of $3 million. Principal payments on notes payable
collateralized by real estate held for development and sale are
generally due within one year.  Notes payable collateralized by
residential developments that are in process are generally repaid
as units in the related communities are sold.

     At October 31, 1997 and 1996, undisbursed amounts under
construction loans were approximately $2,558,000 and $4,142,000,
respectively.  Draws of undisbursed amounts under construction
loans are subject to varying requirements of the lenders
including progress of construction.  Approximately $2,126,000 and
$2,183,000 of the notes payable outstanding as of October 31,
1997 and 1996, respectively, were guaranteed by Mr. Previti.


     The following summarizes the components of interest expense
(including that associated with related party and other notes
payable):

<TABLE>
(Amounts in 000's)
                                  For the Year Ended October 31
                                 -------------------------------
                                    1997          1996      1995
                                 -------------------------------
<S>                                 <C>        <C>        <C>
Interest Incurred and Capitalized   $7,076     $7,884     $7,954
Interest Incurred and Expensed           -          -        119
                                    ------     ------     ------
   Total Interest Incurred          $7,076     $7,884     $8,073
                                    ======     ======     ======

Capitalized Interest Amortized
   to Cost of Homes Sold            $8,379     $7,158     $5,420
Interest Paid                       $7,371     $8,111     $8,546

</TABLE>


     The carrying amounts reported above for notes payable
secured by real estate approximate their fair value based upon
the indebtedness having short term maturities and variable
interest rates.


5.   11 3/8% Senior Notes Due December 2000

    In February 1994, the Company issued $50,000,000 in 11 3/8%
Senior Notes through a public debt offering.  The notes are joint
and several senior obligations of the Company and Forecast
Capital Corporation ("Capital"), with interest only payments due
semi-annually on June 15 and December 15 of each year.  The notes
are senior unsecured obligations of the Company and rank pari
passu in right of payment with all senior indebtedness of the
Company.  The fair value of the Company's Senior Notes is
approximately $27,621,000 based on the market price as of October
31, 1997.

    Subsequent to October 31, 1997, the Company repurchased on a
margin account a portion of its Senior Notes having aggregate
outstanding principal amounts of $1,325,000 in the open market.
The Company anticipates retiring these notes during fiscal 1998.
See Note 10 of Notes to Consolidated Financial Statements.

     The Indenture governing the Senior Notes permits the Company
to incur up to $15 million in recourse debt in addition to the
$50 million of Senior Notes, and to incur additional recourse
debt beyond this $15 million limitation if the Company maintains
certain debt-to-equity ratios and debt coverage ratios.  Although
the Company did not meet those ratios as of October 31, 1997, its
recourse debt as of that date was only $5.5 million, therefore
the Company was not required to be in compliance with the ratios.
The Company is not precluded from incurring debt on a nonrecourse
basis.

     The Indenture also requires that the Company maintain a
minimum net worth of $25 million.  If the Company's net worth at
the end of each of any two consecutive fiscal quarters (Trigger
Dates) is less than $25 million, the Company is then required to
make an offer ("Net Worth Offer") to all Senior Note holders to
acquire, on a pro rata basis, Senior Notes in the aggregate
principal amount of $5 million at a purchase price of 100% of the
principal amount plus accrued interest ("Net Worth Offer"). The
Company may credit against any such Net Worth Offer, the
principal amount of Senior Notes previously acquired by the
Company.

      For the fiscal quarters ended October 31, 1995 and January
31, 1996, the Company was not in compliance with the minimum net
worth covenant.  However, the Company had purchased or redeemed a
sufficient amount of Senior Notes necessary to meet repurchase
obligations resulting from its failure to satisfy the minimum net
worth requirement.

     For the fiscal quarters ended July 31, and October 31, 1996,
the Company's net worth was again above the $25 million
threshold, thereby preventing the occurrence of a second Trigger
Date.  As a result of the non-cash charge for the impairment of
real estate inventory at the end of the first quarter of 1997,
for the fiscal quarters ended January 31, April 30, July 31, and
October 31, 1997, the Company was again not in compliance with
the minimum net worth requirement, which resulted in Trigger
Dates occurring on April 30, 1997 and October 31, 1997.  The
Company's acquisition and retirement of over $20.9 million in
Senior Notes prevented the need to make a Net Worth Offer.  Using
the to-date amount of retired Senior Notes, management believes
it can prevent the occurrence of any Net Worth Offer up through
October 31, 1998.


6.     Related Party Transactions

    In May 1995, the Company sold to an affiliate a parcel of
land located in Bullhead City, Arizona that was approved for the
construction of 68 apartment units. The sales price of $641,000
represented 105% of the book value of the parcel as of the sale
date. As consideration for the sale, the Company accepted a note
receivable from Previti Realty Fund, which is secured by the
property.  See Note 3 of Notes to Consolidated Financial
Statements.

     The Company leases its corporate offices and certain of its
operating division offices from Mr. Previti or partnerships in
which Mr. Previti maintains at least a 50% ownership.  These
leases are generally noncancelable and have expiration dates
ranging through 2004.  Payments under these leases were $343,000,
$332,000 and $407,000 for the fiscal years ended October 31,
1997, 1996 and 1995, respectively.  See Note 9 of Notes to
Consolidated Financial Statements for aggregate operating lease
commitments of the Company.

     Mortgages for certain of the Company's customers are
provided by Rancho Mortgage "Registered Tradename" Corporation
("Rancho Mortgage "Registered Tradename",") a corporation in
which Mr. Previti is the sole stockholder.  During the normal
course of business, the Company has entered into certain
transactions with Rancho Mortgage "Registered Tradename" for loan
commitments under various governmental programs to facilitate its
customers ability to obtain financing.  Commitment fees paid to
Rancho Mortgage "Registered Tradename" were approximately
$758,000, $1,432,000 and $1,087,000 during 1997, 1996 and 1995.

     In fiscal 1997, 1996 and 1995, Rancho Mortgage "Registered
Tradename" incurred management, administration, servicing rights
and credit enhancement fees to the Company in the amount of
approximately $40,000 each year.

     The Company has entered into management services agreements
with several affiliates, whereby the Company provides certain
executive management, legal, tax, accounting, human resources,
environmental, risk management, treasury and management
information services to these affiliates, in exchange for a fixed
management fee.  The company charged $142,000, $142,000 and
$145,000 in management fees to affiliates under these agreements
during fiscal 1997, 1996 and 1995, respectively.

    In March 1996, the Company sold a 8.1 acre parcel of land
located in Murietta, California, at its book value, to a
corporation controlled by Mr. Previti for total consideration of
approximately $2.5 million consisting of a note payable to the
Company for $844,000 and the assumption by the buyer of
$1,679,000 of indebtedness related to the parcel sold.  No gain
or loss was recognized on the sale.  As of October 31, 1997, the
principal balance of that note was $657,000.  See Note 3 of Notes
to Consolidated Financial Statements.

     Subsequent to October 31, 1997, Mr. Previti purchased from
the Company a parcel of land in Moreno Valley, which the Company
elected not to develop.  The purchase price was $1.7 million, the
land's current book value, and was transferred in consideration
for a note secured by land in the amount of $1.7 million.  No
gain or loss will be realized as a result of the consumation of
this transaction.  See Note 10 of Notes to Consolidated Financial
Statements.


7.   Extraordinary Item

      During the years ended October 31, 1997 and 1996, the
Company repurchased a portion of its Senior Notes having
aggregate outstanding principal amounts of $5,400,000 and
$5,315,000, respectively.  The Senior Notes were purchased from
Mr. Previti and in the open market.  Net of allocable issuance
costs, the resultant income of $1,634,000 and $1,876,000 is
reported as an extraordinary gain in the Company's financial
statements for the years ended October 31, 1997 and 1996. FHI's
Board of Directors has authorized management to repurchase
additional Senior Notes through affiliates, at cost plus accrued
interest, or on the open market when such transactions are deemed
to be in the Company's best interests. As of October 31, 1997,
affiliates of the Company did not own any additional Senior
Notes.


8.   Profit Sharing and Pension Plans

     In fiscal 1995, the Company adopted a non-contributory
401(k) plan covering substantially all employees. There was no
contributions made by the Company to the Plan in fiscal 1996 and
1995.

    In fiscal 1997, the Company adopted a qualified matching
program relating to employees' contribution to their 401(k)
plans.  The program creates an obligation for the Company to
contribute 25% of any employee's contribution to the 401(k) plan,
up to the first 6% of any one employees' contribution.
Participating employees vest in the Company's matching over a
five (5) year period, at 20% per year expired.  After (5) years,
the employee becomes fully vested in all Company matched funds.
During 1997, the Company paid $6,000 to employees' accounts as a
result of this program.


9.   Commitments and Contingencies

COMMITMENTS

    The Company leases office facilities under noncancelable
operating leases expiring in 1998 and 2004.  Aggregate rental
costs incurred under such leases were $356,000,  $413,000 and
$473,000 for the years ended October 31, 1997, 1996 and 1995,
respectively.  Future minimum annual rental payments of  $109,000
for its Corporate Office, and $129,000, $131,000, $133,000,
$136,000, $138,000 for its Sacramento office are due during 1998,
1999, 2000, 2001, 2002 and thereafter, respectively.  See Note 6
of Notes to Consolidated Financial Statements.


CONTINGENCIES

     The Company is subject to routine litigation incidental to
its business.  In the opinion of management, the resolution of
such claims will not have a material adverse effect on the
operating results or financial position of the Company.

     In addition to the routine litigation, the Company's
contingent liabilities include warranty obligations and other
disputes arising from construction and sales of single-family
homes in the ordinary course of business.  In the opinion of
management, adequate reserves have been provided for warranty
obligations and ultimate outcome of any disputes on these other
matters will not have a material adverse effect on the Company's
consolidated financial position, results of operations or
liquidity.


10.  Subsequent Events


     Subsequent to October 31, 1997, Mr. Previti purchased from
the Company a parcel of land in Moreno Valley, which the Company
elected not to develop.  The purchase price was $1.7 million, the
land's current book value, and the property was transferred in
consideration for a note secured by Mr. Previti's interest in
other real property with a value in excess of $1.7 million.  No
gain or loss will be realized as a result of the consumation of
this transcation.

     Subsequent to October 31, 1997, the Company repurchased on a
margin account a portion of its Senior Notes having aggregate
outstanding principal amounts of $1,325,000 in the open market.
The Company anticipates retiring these notes during fiscal 1998.

     Subsequent to October 31, 1997, Mr. Carman tendered his
interest in the Company to Forecast by effecting a cancellation
of his capital contribution that was reflected by the note in the
amount of $464,000.  This transaction will reduce both the
Company's gross equity and the related note receivable from Mr.
Carman, which is reflected as a contra equity item on the balance
sheet as of October 31, 1997, for a net effect of zero on equity.


<PAGE>

REPORT OF INDEPENDENT AUDITORS


Board of Directors
Forecast Capital Corporation

     We have audited the accompanying balance sheets of Forecast
"Registered Tradename" Capital Corporation (the "Company") as of
October 31, 1997 and 1996 and the related statements of
operations and accumulated deficit, and cash flows for each of
the three years in the period ended October 31, 1997. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.

     We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.

     In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Forecast Capital Corporation at October 31, 1997 and 1996, and
the results of its operations and its cash flows for each of the
three years in the period ended October 31, 1997, in conformity
with generally accepted accounting principles.



                        ERNST & YOUNG LLP
                                
                                
Newport Beach, California
December 23, 1997


<PAGE>


          Forecast "Registered Tradename" Capital Corporation
                         Balance Sheets
                         
                         
<TABLE>
                                            October 31
                                          -------------
                                           1997    1996
                                          -------------
<S>                                        <C>      <C>
Assets:
  Cash                                     $100     $300
                                           ----     ----
      Total Assets                         $100     $300
                                           ====     ====


Liabilities & Shareholders' Deficit:


 Accounts Payable                         $300      $400
 Accounts Payable, Related Parties       3,400     2,300
                                         -----     ------
      Total Liabilities                 $3,700     $2,700
                                        ------     ------

Common Stock, $1.00 par value:
 Authorized 10,000 shares
   Issued and Outstanding 2,500 shares   2,500      2,500
    Accumulated Deficit                 (6,100)    (4,900)
                                       -------     -------
      Total Shareholders' Deficit       (3,600)    (2,400)
                                       -------     -------
      Total Liabilities &
        Shareholders' Deficit             $100       $300
                                       =======      ======

</TABLE>

[FN]            See notes to financial statements.





          Forecast "Registered Tradename" Capital Corporation
     Statements of Operations and Shareholder's Equity (Deficit)

<TABLE>

                                 For the Year Ended October 31
                                 -----------------------------
                                     1997      1996      1995
                                 ----------------------------
<S>                             <C>         <C>       <C>
  General & Administrative Ex.       $400     $1,000     $200
  Income Tax Expense                  800        800      800
                                 --------    -------   ------
    Net Loss                      ($1,200)   ($1,800) ($1,000)
                                 ========    =======   =======


Shareholders'  Equity (Deficit)
 at Beginning of Period           ($2,400)     ($600)    $400
 Net Loss this Period             ($1,200)   ($1,800  ($1,000)
                                  -------     -------  --------
  Shareholders' Equity (Deficit)


   At End of Period               ($3,600)   ($2,400)   ($600)
                                 ========    ========   ======


</TABLE>


[FN]               See notes to financial statements.

         Forecast "Registered Tradename" Capital Corporation
                         Statements of Cashflows
                         
<TABLE>
                                   For the Year Ended October 31
                                   -----------------------------
                                         1997    1996    1995
                                   ----------------------------
<S>                                  <C>       <C>      <C>
Net Loss                             ($1,200)  ($1,800) ($1,000)
  Increase (Decrease) in
   Accounts Payable and
    Accrued Expenses                    (100)    2,000      700
  Increase in Accounts Payable,
    Related Parties                    1,100         -        -
                                     --------   -------   -----
  Increase (Decrease) in Cash
    and Cash Equivalents               ($200)     $200    ($300)
  Cash and Cash Equivalents
    at Beginning of Period               300       100      400
                                     --------   -------   -----
  Cash and Cash Equivalents
    at End of Period                    $100      $300     $100
                                     ========   =======   ======
</TABLE>

[FN]             See notes to financial statements.

<PAGE>
             FORECAST "Registered Tradename" CAPITAL CORPORATION
                      NOTES TO FINANCIAL STATEMENTS
                           October 31, 1997


1.   Organization and Operations

     Forecast Capital Corporation (the "Company") was
incorporated in California on September 20, 1993. The authorized
capital stock of the Company consists of 10,000 shares of common
stock with a par value of $1.00 per share. The Company is a
wholly-owned subsidiary of The Forecast Group "Registered
Tradename", L.P., a California limited partnership that is
engaged in the residential real estate development business. The
Company is dependent upon its parent for funding.

2.   Income Taxes

     The Company is a C Corporation for federal and state income
tax reporting purposes, and accounts for income taxes in
accordance with Financial Accounting Standards Board Statement
No. 109 "Accounting for Income Taxes."