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Royal Resorts Residual Values and offer to buy-back now

Discussion in 'Mexico Timesharing' started by pjrose, Jun 30, 2009.

  1. pjrose

    pjrose Tug Review Crew: Rookie TUG Member

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    In answer to RI Mike's query in another thread . . . . (I hope other Royals regulars will chime in with corrections and/or more details)

    At the VCI, RM, and RC, the original purchase price ("residual rights") was/is to be returned to owners at the end of the trust after the resort is sold for the best price IF there are sufficient funds after deducting taxes, legal fees, and so forth. That's not necessarily what you bought it for if you bought resale - it's what the original purchaser of that particular unit/week paid the developer. It is listed at the top of the cover of your ownership papers.

    There are various differences between the VCI, RM, and RC. For example at the RC after the resort is sold and the fees deducted, payback of the owners' residual values is first, then the developers get a like amount, then any additional proceeds are split 50/50 between owners and developers.

    With the RI, they stopped the "residual value" part of the agreement, and instead the proceeds minus fees are split equally among all owners, regardless of the original purchase price, week, unit, etc. I can't remember if the developers get 50% of the pot or if it's 100% divvied among owners. I'll check my contract when I get home (I'm at the Tris right now). I know that the 50/50 owners/developers split stopped with the RS, and there it is 100% divvied among the owners. In any case, the "residual" AKA original purchase price does not apply to the RI, RS, and RH.

    In no case is the original price absolutely guaranteed to be returned - it depends on the final selling price of the resort. The presumption is that after 30 years real estate will have gone so high that there will be more than enough for a return of the original price, but with VCI/CIC they found that wasn't the case. They still honored the original agreement by injecting more money and using funds from those who re-upped to pay back (over four years) those who wanted to stop after the original 30 years.

    The offer I mentioned in another thread was that if I bought now at the RH, they would buy back my RC (and I think RM) for the full residual value (original purchase price) and apply that to the RH purchase, so I could get my payback now instead of in 4 years (RM) or 2018 (RC). They also will take off an owner discount and whatever else they offer. (The average Royals owner has about 4 units and a large portion of the sales are to owners.) They are not doing that for the RI because (so they told me) they don't have a planned buy-back value for the RI units.
     
  2. RIMike

    RIMike TUG Review Crew: Expert TUG Member

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    RI

    From your experience, what would estimate the value of the RI units? It seems like the Royals are trying to honor contracts.
    RIMIke
     
  3. pjrose

    pjrose Tug Review Crew: Rookie TUG Member

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    I am confident that they will honor the contracts, but the price depends on the highest offer on the property. Who knows what the situation will be in 2018 and 2025 with the beach, laws on what can and can't be built, the economies of the US and Mexico, etc.

    For our RC units the residuals are around $14-15K, summer beachfront and holiday not-beachfront. That's what they offered us last week as trade-ins on RH units, but even so the RH units are pricey. I assume the RI units originally sold for more than the RC ones, but probably the only way to estimate value now is to look at all the for-sale ones online and figure less than asking price. You could also check if there are any that have sold on eBay and check the completed price.
     
  4. mamadot

    mamadot TUG Member

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    I got my RI for $2800 of Craigslist in Jan. 09.

    Are you thinking of trading up to RH?
     
  5. pjrose

    pjrose Tug Review Crew: Rookie TUG Member

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    That was a fantastic price!

    I'm not thinking of trading up - the RH has a lot of plusses, but I'm happy at the Tris. I might regret that in 10 years, but there'll always be resales, rentals, and exchanges.
     
  6. tonyg

    tonyg TUG Lifetime Member

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    Resales are now at a very low price- at least the lowest I've seen. The eventual values may be determined by political and environmental factors which are now reducing values.
     
  7. geoffb

    geoffb TUG Member

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    Even if it is not in the residual rights there is an original sale price of units at the Islander, Sands, Haciendas (and VCI round 2 of course). The developer does use that value when making offers to owners.
     

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