Exhibit 10.3

              INVESTMENT GUIDELINES OF NEWCASTLE INVESTMENT CORP.

     Capitalization terms used but not defined herein shall have the meanings
ascribed thereto in that certain management and advisory agreement (the
"Management Agreement") by and between the Newcastle Investment Corp. (the
"Corporation" or the "REIT") and Fortress Investment Group LLC (the "Manager")
Newcastle.

1.   No investment of the Corporation shall be made which would cause the
     Corporation to fail to qualify as a real estate investment trust under the
     Internal Revenue Code of 1986, as amended.

2.   No investment of the Corporation shall be made which would cause the
     Corporation to be regulated as an investment company under the Investment
     Company Act of 1940.

3.   The Corporation shall not invest more than 20% of its Total Equity,
     determined as of the date of such investment, in any single asset.

4.   The debt of the Corporation (including the Corporation's pro rata share of
     debt of its subsidiaries) shall not exceed 90% of the sum of such debt and
     the Total Equity of the Corporation.

5.   The Corporation shall not co-invest with the Manager or any of its
     affiliates unless (i) Corporation's co-investments is otherwise in
     accordance with these Guidelines and (ii) the terms of such co-investment
     are at least as favorable to the Corporation as to the Manager or such
     affiliate (as applicable) making such co-investment with the manager.