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Have you as a private investor not often envied banks and lenders in how they make money with other people's money? And how they display their affluence with the monuments in real estate they build to themselves. It doesn't seem fair, does it, when usually the only way you can earn money on your investments is by putting up your own money.

With our new unique program at Allied Mortage Realty you can now do even better than the banks and lenders do.

HOW? By investing in wraparound morgages.

Here is how it works:

We find properties for homebuyers and real estate investors. Since by "normal" lender's guidelines they are not quite up to snuff, you as the wraparound mortgage investor would essentially buy the property for them. You could finance a large part of it, up to 95% of appraised value. Then you would transfer an equitable interest in the property to our buyers and investors with your wraparound mortgage. You would charge above market interest on the money that you borrowed and you would also get a handsome return on the money that you put in yourself.

Since you may not want to have your money tied up for some 30 years, you could sell the wraparound mortgage paper within five years at a slight discount. Since about 94% of the first year's payments are interest only, even within five years you would still have left a sizeable principal. We could even stipulate a five year prepayment penalty so that you would be assured of your return. When you consider that banks and lenders only get 6.5% on a 30 year mortgage for a qualified buyer, you can do much better with these buyers who didn't quite meet their high standards.

This is a unique opportunity, because, with the exception of a few months in '98 and '99, mortgage interest rates have not been in the 6% range for over 30 years.

In contrast to some other parts of the country, the Los Angeles economy is strong because Hollywood is doing great. We have a highly unusual situation here in that interest rates are low and property values are still appreciating.

As to the quality of our buyers, we don't want to belabor the obvious, but we will as a reminder. Even though many of our buyers have excellent credit and stable incomes for now and the future, local lenders have rejected their applications because of some minor flaw that did not exactly fit their guidelines. Lenders tend to become more conservative as interest rates become lower. Your somewhat higher risk would be more than offset by the higher interest rates that you would be charging on your wraparound mortgage besides having an interest in real estate that is appreciating.

The side of the home buyer and real estate investor is such that since they have been turned down by the normal lenders, but still want to acquire real estate, of which they are perfectly capable in view of their income, they are more than willing to pay a higher interest rate. What other choices do they have. And yet, in the Los Angeles Area real estate market it is still worthwhile for them to do that, since real estate is continuously appreciating in almost every area. Consequently, we have a win-win situation for both parties, the wraparound mortgage investor and the home buyer or real estate investor.

We at Allied Mortgage Realty are mortgage and real estate brokers and find the buyers and sellers of homes or investment real estate. We can also process the loans for the wraparound mortgage investor to acquire the home or investment property for our buyers. Since we have our own in-house escrow company, all details of the entire transaction can be handled quickly and efficiently and the wraparound mortgage investor does not need to be a resident in the Los Angeles Area.