1
                                                                    EXHIBIT 10.1


                                 FIRST AMENDMENT
                                       TO
                              MANAGEMENT AGREEMENT

         This First Amendment to Management Agreement is executed effective as
of April 1, 2000 by and between AMRESCO Capital Trust, a Texas real estate
investment trust (the "Company"), and AMREIT Managers, L.P., a Delaware limited
partnership (the "Manager").

         A. The Company and the Manager are parties to a Management Agreement
dated as of May 12, 1998 and desire to amend the Management Agreement with
respect to the fee to be paid to Manager under the Management Agreement.

         B. In consideration of the mutual covenants and agreements and $10.00
and other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged by the parties, it is agreed that the Management Agreement
will be amended as follows:

         1.       Section 7(b) of the Management Agreement relating to Manager's
                  incentive compensation is deleted in its entirety and replaced
                  with the following provision:

                  (b)      In addition to the base management fee, beginning
                           April 1, 2000, the Manager will be entitled to
                           receive reimbursement for its quarterly operating
                           deficits, if any. As used in this Section 7(b),
                           "operating deficits" means the excess, if any, of the
                           Manager's expenses as described in Section 8(a) below
                           (excluding those expenses described in 8(a)(iii)
                           relating to the year 2000 issues and (iv) relating to
                           the Manager's errors and omissions insurance policy)
                           over the sum of its quarterly base management fee and
                           any other fees received by the Manager from sources
                           other than the Company.

         2.       Section 12(b) of the Management Agreement relating to
                  Manager's termination fee is deleted in its entirety.

         3.       Section 8(c), 8(d) and 9 of the Management Agreement relating
                  to the Manager's reimbursement expenses are deleted in their
                  entirety.



   2



         Except as amended hereby, all other terms and provisions of the
Management Agreement shall remain in full force and effect.

AMRESCO CAPITAL TRUST                       AMREIT MANAGERS, L.P.

                                            By:  AMREIT Managers, G.P., Inc.,
                                                 its general partner

By:    /s/ Jonathan S. Pettee               By:  /s/ L. Keith Blackwell
    -----------------------------                -------------------------------
       Jonathan S. Pettee                            L. Keith Blackwell
       President                                     Senior Vice President