EXHIBIT 10.4



                             REVOLVING CREDIT NOTE
                             ---------------------


$25,000,000                                                     October 16, 1998

     FOR VALUE RECEIVED, the undersigned, CORNERSTONE REALTY INCOME TRUST, INC.,
a corporation organized under the laws of Virginia ("Cornerstone"), and CRIT-NC,
LLC,  a  limited   liability  company  organized  under  the  laws  of  Virginia
("CRIT-NC",  and together with Cornerstone,  the "Borrowers") hereby jointly and
severally promise to pay to the order of FIRST UNION NATIONAL BANK (the "Bank"),
at the times,  at the place and in the manner  provided in the Credit  Agreement
hereinafter  referred to, the principal sum of up to Twenty-Five Million Dollars
($25,000,000),  or, if less, the aggregate  unpaid principal amount of all Loans
disbursed  by the Bank under the Credit  Agreement  referred to below,  together
with the  interest at the rates as in effect  from time to time with  respect to
each portion of the principal amount hereof,  determined and payable as provided
in the Credit Agreement.

     This Note is the Note  referred to in, and is entitled to the  benefits of,
the  Credit  Agreement  dated  of even  date  herewith  (as  amended,  restated,
supplemented  or otherwise  modified,  the "Credit  Agreement") by and among the
Borrowers  and the Bank.  The Credit  Agreement  contains,  among other  things,
provisions  for the  time,  place  and  manner  of  payment  of this  Note,  the
determination  of the interest rate borne by and fees payable in respect of this
Note,  acceleration  of the payment of this Note upon the  happening  of certain
stated  events  and  the   mandatory   repayment  of  this  Note  under  certain
circumstances,

     The  Borrowers  agree to pay on demand all costs of  collection,  including
reasonable  attorneys' fees, if any part of this Note, principal or interest, is
collected after maturity with the aid of an attorney.

     Presentment for payment, notice of dishonor,  protest and notice of protest
are hereby waived.

     THIS NOTE IS MADE AND DELIVERED IN THE STATE OF NORTH CAROLINA AND SHALL BE
CONSTRUED  IN  ACCORDANCE  WITH AND  GOVERNED  BY THE LAWS OF THE STATE OF NORTH
CAROLINA.

     The Debt  evidenced  by this  Note is  senior  in right of  payment  to all
Subordinated Debt referred to (either directly or by incorporation by reference)
in the Credit Agreement.

                            [Signature Page Follows]






     IN WITNESS  WHEREOF,  the  Borrowers  have  caused this Note to be executed
under  seal by a duly  authorized  person  as of the day and  year  first  above
written.

                                           

[CORPORATE SEAL]                    CORNERSTONE REALTY INCOME TRUST, INC.

                                    By:/s/ S.J. Olander
                                       ------------------------------------
                                    Name: S.J. Olander
                                         ----------------------------------
                                    Title: Chief Financial Officer
                                          ---------------------------------
                      

                                    CRIT-NC, LLC             [SEAL]

[CORPORATE SEAL]                    By:  CORNERSTONE REALTY INCOME TRUST, INC.
                                          its sole Member/Manager


                                    By:/s/ S.J. Olander
                                       ------------------------------------
                                    Name: S.J. Olander
                                         ----------------------------------
                                    Title: Chief Financial Officer
                                          ---------------------------------