# What would you buy for $195,000?



## Steamboat Bill (Aug 30, 2006)

The Exclusive Resorts (luxury residence club/timeshare) is the #1 Destination Club with over 2,000 members. The cheapest ( membership is an "Affiliate" for $195,000, Executive is $295,000 and Elite is $395,000. MF is $9,500; $17,500; and $25,000 respectively.

I spoke with membership about the club and it seems fantastic if you can afford it  however, I told them that it would kill me to spend $195k and feel like a second class citizen as compared to the Executive and Elite members. An affiliate gets ZERO priority holiday reservations  

Is anyone a member or know a member?

What would you buy for $195,000? 

PS    This was inspired by the http://tugbbs.com/forums/showthread.php?t=31223 post.


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## Big Matt (Aug 30, 2006)

I would pay off my mortgage.


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## andrea t (Aug 30, 2006)

I'd put it all down as a deposit on a beach house on Fire Island or Montauk.


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## anne1125 (Aug 30, 2006)

I'd build my house in Englewood, FL on my lot that I purchased last March.

Anne


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## mamiecarter (Aug 30, 2006)

*Some people have more money than sense*

Well, first I would have to actually get the money. Then there are lots of places in the US that sum will buy a nice second home. Not fancy but comfortable. No getting around it, some people have more money than sense.


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## ricoba (Aug 30, 2006)

My guess it's easier to sell the Elite package to these kind of folks than it is to sell the Affiliate package.  Folks with this kind of $$$ are more interested in the perks & titles than they are in the program itself.


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## lfuhr (Aug 30, 2006)

My husband and I are elite members.  However, we were able to purchase this membership for $385,000 due to my husband's skillful negotiating techniques and my ability to remain silent while he did his stuff.  I was so proud of him. 

LFuhr


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## caribbeansun (Aug 31, 2006)

Perhaps you should consider Bellehavens instead - they have one tier, cost is $200k, mf's are $16k and they don't lease very many of their properties.


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## bruwery (Aug 31, 2006)

If I had $195,000 to spend on a vacation home, I'd probably just get drunk and gamble it all away...


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## PerryM (Aug 31, 2006)

*BelleHavens*

If someone were to give me $195k (plus enough to pay the taxes) and stipulated that it MUST be spent on something for family vacations I’d immediately buy into BelleHavens for $200k  Link:  www.bellehavens.com

This is the ONLY $200k fractional investment anywhere (except maybe 1) that appreciates with real estate.  Assuming a 10% real estate appreciation for 10 years, (very hot locations) that $200k will be worth $472k of which you get 90% or $425k - $200k investment = $225k selling 10 years from now.

MFs are $16k per year and if you compound them at their 5% then the 10 year MF cost is $201k.

That means I make a $24,000 profit over 10 years and you get 4 weeks of usage a year or 40 vacations to boot.


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## buceo (Aug 31, 2006)

In direct answer to your question, I would buy a bunch of timeshare weeks in a row, same unit or a couple units, prime location (where you like) in prime time in a top rated resort and winter there (or from FL, summer there).  Owning a second home while almost certainly a better investment is just that a second home; repairs, landscaping, taxes, improvements, utilities, problems with non occupancy etc.


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## GregGH (Feb 8, 2007)

Hello

This is a thread that Steamboat Bill needs to 'bump' - like he did on the one "what would I buy if I had 25k" ( great thread BTW )  - still think there is some life in this idea.

But - can we  take it one step further ...?   Why spend 195K in one spot or one club?

I have trouble with the security on some of the 'clubs' - especially after T-H went into Chapt.II .... but I love the idea of a more upscale location ....but I don't travel with 12 others so I don't need a 5000 sq. ft house!

I like the more moderate ( still way above the Marriotts )  locations of HCC - but .... could we not take that money and just RENT similar locations in some locations and buy the weeks when right in others?  And as such - we can put our own 'portfolio' together with the $195,000.  

Looking at Hawaii - noticed the HCC location in Big Island ...finally tracked the location to ....   Waikoloa Colony Villas  

Or a site I really have had fun with ( and their travel books on Hawaii are my favourites )  ...     Waikoloa Colony Villas    ...or we could do HCC one better and rent from their neighbours who get a better review     Kolea  .

Hope I have the links & typing right ...

If you want the full list for Hawaii ( with links to other islands ) - try this ...but for Oahu and Maui you need to own the book and get the password from the pages

  Wizard Publications - the Big Island Revealed  

So - we have $195,000   .... rent when we have to ( even at $500 a night you are still on par with the cost of ownership once the new rates for HCC kick in in March ... and buy the deals when owning adds the extra ... like at Avaria for the $50 rounds of golf.


With the new ( new for me anyways ) list of fractionals  in helium.com and the properties in theregistrycollection.com - more work to spend that 195,000

Life in the thread?   Keep the idea's coming - appreciate all your knowledge

Regards
Greg H


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## Steamboat Bill (Feb 9, 2007)

My original idea with this thread was to compare Exclusive Resorts to other options.

My current thoughts would be:

$30,000 HCC membership
$20,000 DVC membership
$12,000 Marriott Platinum
$12,000 Hyatt 2,000 pts
$12,000 WM account
$109,000 in a 5% CD

Of course that would be 7 weeks of vacation per year....more time that I usually have...but hey, thus is a fantasy thread.


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## Carmel85 (Feb 9, 2007)

Steamboat Bill said:


> My original idea with this thread was to compare Exclusive Resorts to other options.
> 
> My current thoughts would be:
> 
> ...



Please tell us all where you can get a Hyatt 2000 points for 12K. Sign me up!!


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## daventrina (Feb 9, 2007)

Cirrus SR-22


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## GregGH (Feb 9, 2007)

Hello Bill

Exclusive is $1700-$1900 / night stay as calculated by Helium.  Are we trying to compare apples and oranges?  I have read many of the reviews for various company locations below ( Marriotts, Hyatts, Westins etc etc ) - a lot have some issues that keep them at the  3 1/2 star locations they are ( worn out , poor house keeping, pay for daily housekeeping, out of date designs , thin walls,  etc ). 

I LOVE the idea of the cost per night used by a few of you people - it really hits the nail on the head -- then others don't fixate on MF's that 'are too high' ...if you have lower MF's - you have sloppy housekeeping and worn out and stained interiors!    $195,000 should buy you quiet comfort and ease of use - not complex trading nor monster size locations.

We need something better than a Marriott but less than the benefits from an Exclusive ( not the cost of Exclusive, nor the size, nor the capital risk ).   

Really looking for anyone who has used The Registry Collection on trades for 'upper scale properties'.  How do we find the 'gems' out there that just that 'little' bit better.  How can we get weekly use of the 'fractionals'?

Regards

Greg H






Steamboat Bill said:


> My original idea with this thread was to compare Exclusive Resorts to other options.
> 
> My current thoughts would be:
> 
> ...


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## Steamboat Bill (Feb 9, 2007)

GregGH said:


> Hello Bill
> 
> Exclusive is $1700-$1900 / night stay as calculated by Helium.  Are we trying to compare apples and oranges?  I have read many of the reviews for various company locations below ( Marriotts, Hyatts, Westins etc etc ) - a lot have some issues that keep them at the  3 1/2 star locations they are ( worn out , poor house keeping, pay for daily housekeeping, out of date designs , thin walls,  etc ).
> 
> ...



You are describing High Country Club....that is why I joined. There are many posts on TUG about HCC....check them out or send me a PM.


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## shagnut (Feb 9, 2007)

I'd buy a new house. I think I'm the  poorest person who timeshares. I wouldn't know what to do if I had that kind of money. I think I would save it for retirement. I do envy you guys who can afford 25K and up ts.  shaggy


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## travelguy (Feb 9, 2007)

*You are describing High Coutry Club!*



GregGH said:


> Hello Bill
> 
> Exclusive is $1700-$1900 / night stay as calculated by Helium.  Are we trying to compare apples and oranges?  I have read many of the reviews for various company locations below ( Marriotts, Hyatts, Westins etc etc ) - a lot have some issues that keep them at the  3 1/2 star locations they are ( worn out , poor house keeping, pay for daily housekeeping, out of date designs , thin walls,  etc ).
> 
> ...



Greg,

I agree with Steamboat Bill.  You are describing High Country Club membership.  On another post, I believe that Bill figured the cost-per-night to be around $300.  Check out the High Country Club website or talk to Bill for more info.  Be aware that the price of membership goes up in 20 days!


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## geekette (Feb 9, 2007)

shagnut said:


> I'd buy a new house. I think I'm the  poorest person who timeshares. I wouldn't know what to do if I had that kind of money. I think I would save it for retirement. I do envy you guys who can afford 25K and up ts.  shaggy



Yeah, me too.  It is fun to dream, tho.


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## PerryM (Feb 9, 2007)

*How's the weather in Albania?*

Since my original posts in this thread I would NOT advise anyone to invest in a DC – the risk is too great.  The DC industry needs to address the simple fact that the only thing that seems to protect your membership fee is that ebullient voice of the salesrep over the phone.

With timeshares, condo-hotels, condos, and fractionals there are deeds and a bunch of real estate laws that hold the agreement together.  This is NOT true with DCs.  They make it up as they go.

However, if the amount of money you invest with a DC is something that you would have no problems gambling at Vegas, then that amount of money will not be such a loss if the DC decides to liquidate, sell the deeds, and move to Albania tonight.  With $1+ M condos and homes as a minimum, it would not take much for the founders to split $100 M.


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## charford (Feb 9, 2007)

$195K is just about what I spent on my Smugglers Notch fractional. It gives me 16 weeks a year. Four weeks in a row in the winter, four weeks in a row in the summer. The other 8 vary (float) each year. MFs are around 10K/year. I can stay in my unit for 2 nights or several weeks. Any weeks that I don't use I can deposit  with RCI -it's also a Registry Collection property. Any nights that I don't use, Smugglers can rent them out for me. Smugglers really operates as a hybrid of a condo-hotel, although they don't use that term, and a timeshare resort. Resales appreciated about 10%  since I bought a year ago. 

Let's say I stayed there for all 8 fixed weeks this year (56 nights). If I get zero income for the float weeks, my cost is $10K/56 = $179/night. If I stay for one week (closer to the actual), my income is about $8K, so my outlay is 2K and cost per night is $2K/7 = $286/night. This doesn't take into account appreciation or depreciation which is a moving target. 

The property I own is more upscale than the Marriotts, IMO and suits us much better than any of the destination clubs or the condo-hotels I've looked into. While in Kauai, I toured one of the properties that the bankrupt destination club owned (the name escapes me) and it wasn't a place that I would want to stay - dark and kind of dingy. I've looked at the other destination clubs and agree that they would be the kind of place to go with 10 close friends.  I think condo-hotels would suit empty nesters. Smugglers suits families with kids. That's me!  

Cathy


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## hipslo (Feb 9, 2007)

I'd buy 5 platinum weeks at Marriott Mountainside and make consecutive reservations every year for weeks 8-12, and have 45k left over.  Annual MF of 4100.  Spend the heart of the ski season at the base of Park City Mountain every year in a 2 bedroom, ski in /ski out unit that would go for upwards of 1 million if it were a condo.  Without having to pay property taxes, insurance, condo fees, or deal with the headache of  renting out all of those excess weeks that I wouldnt use even if I owned it outright.  

So far, 3 weeks down, one (almost) under contract, one to go!


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## PerryM (Feb 9, 2007)

*Great!*



hipslo said:


> I'd buy 5 platinum weeks at Marriott Mountainside and make consecutive reservations every year for weeks 8-12, and have 45k left over.  Annual MF of 4100.  Spend the heart of the ski season at the base of Park City Mountain every year in a 2 bedroom, ski in /ski out unit that would go for upwards of 1 million if it were a condo.  Without having to pay property taxes, insurance, condo fees, or deal with the headache of  renting out all of those excess weeks that I wouldnt use even if I owned it outright.
> 
> So far, 3 weeks down, one (almost) under contract, one to go!




I predict that the money invested in MountainSide will outperform the money put into HCC.   HCC has a guaranteed 20% loss (80% returned on original investment)  In 10 years the MountainSides can be sold for much more than what they were purchased for (resale).

If a week is not needed, it can be rented out for cash, the HCC unit can not.

The MS weeks can be exchanged in II and easily get Maui or any other Marriott at any time and each week can be locked-off into 2 units that will exchange just as well.  The HCC can't.

I've been to MS (Used to own 3 weeks there 51& 2 52's) and I actually like Summit Watch better, but both are great 5-star resorts.  Sold all 3 after 3+ years of ownership and made a profit on all 3.

DC's:
I would feel much better about DC’s if they bought a Performance Bond and put their money where their mouth is – backup all the claims by the salesreps and written documents.  Someone must issue bonds like this – Lloyds or others – it just costs money to get this bond.

A simple bond paying out 100% of the money invested if the DC does not terminate according to their own rules - it's that simple - a 1 paragraph bond.  If the DC never terminates, the bond is never even considered.


Let’s see if any of them ever do this – I predict none will since that golden voice over the phone can convince folks to “invest” and they don’t need anything more to convince them.


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## rickandcindy23 (Feb 9, 2007)

Carmel85 said:


> Please tell us all where you can get a Hyatt 2000 points for 12K. Sign me up!!



Ebay is the place.


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## Carmel85 (Feb 9, 2007)

rickandcindy23 said:


> Ebay is the place.



Please foward me any of them at 2000 or 2200 point level. I have not seen any!


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## philemer (Feb 9, 2007)

For $195,000 I could feed, and clothe, a lot of poor people for a year or two.


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## Steamboat Bill (Feb 10, 2007)

PerryM said:


> Since my original posts in this thread I would NOT advise anyone to invest in a DC – the risk is too great.  The DC industry needs to address the simple fact that the only thing that seems to protect your membership fee is that ebullient voice of the salesrep over the phone.
> 
> With timeshares, condo-hotels, condos, and fractionals there are deeds and a bunch of real estate laws that hold the agreement together.  This is NOT true with DCs.  They make it up as they go.
> 
> However, if the amount of money you invest with a DC is something that you would have no problems gambling at Vegas, then that amount of money will not be such a loss if the DC decides to liquidate, sell the deeds, and move to Albania tonight.  With $1+ M condos and homes as a minimum, it would not take much for the founders to split $100 M.



Perry...this is one topic that I disagree with you....I feel that the current risk to reward benefit for DC's is well worth it for me and offers MUCH better odds than Las Vegas. I can tell you that I have never been told any empty promises by HCC, ER, or any DC I have spoken to. Fact is...they know they have a superior product compared to timeshares.

You MUST buy a DC from a developer and yes...you are guaranteed to lose an immediate 20% if you want to sell...this is actually MUCH better than almost all timehsares out there where you will lose 50% or more when bought from a developer.

I think of DCs like joining a private golf club, hotel social club, or even similar to joining Costco....you are getting access to something desirable for your membership fee....like a great discount at world class destinations.

As far as condo hotels, fractionals, condos....all these have the potential for $100k losses or more. Yes, you may be up 15% in Maui,  but I have heard of MANY people in south Florida walking away from their "pre-construction" deposits of $25k or more because the bottom is dropping out. I have heard of a school teacher filing for bankrupcy because she wanted to get rick quick and could not afford to pay the adjustable mortgage on the $700k Miami Beach condo that dropped in value by over $100k and got forclosed.

So far, the DC industry has been pretty reputable. Most owners of Exclusive Resorts and High Country Club are extremely happy. I would bet you $100 that the average member of a destination club is more satisified with their purchase than the average timeshare owner (bought from the developer). 

Yes, T&H went bankrupt as they were the original and had a flawed business plan...the T&H members have been absorbed by another DC that bought them out for over $100 million. Thus, the disaster has been solved.

TUG was started by frustrated timeshare owners and most TUGers ONLY buy resale. As far as I know....there are no frustrated DC owners.


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## PerryM (Feb 10, 2007)

*A house of cards*

Bill,

I love the concept of a DC – I could start a DC tomorrow built on premium timeshare weeks only; the concept is that robust.  That’s also THE main problem – anyone can start one of these things and from what I’ve seen *most are based on a house of cards*.

If the DC is 100% deed oriented, or the equivalent***, AND a performance bond backed up managements grandiose dreams with reality, the DC market would explode.  Sadly this is not the case – *it’s all blue sky*.

*Let’s discuss HCC* (Link: http://www.highcountryclub.com/about/CEO_Letter.asp) :

*Facts:*
Average property $850,000

Average occupancy 50%

95% are fully owned (5% leased) 23 condos/homes owned

6 members per property

Current membership fee $50,000

MF $8,400



*Using the numbers:*

$50,000 Membership fee * 6 owners per condo = $300,000 with a cost of $850,000?

We can stop right here – *the numbers make no sense at all.*  The membership fee should  $140,000 ($850,000/6)

The DC industry seems to universally charge 8% of the Membership Fee as a MF.  That means the $8,400 / 8% = *$105,000; that’s what the Membership Fee should be at a minimum.*

So the current prices make no financial sense at all.  I asked for an explanation when I first bumped into HCC and never got one that made any sense.

HCC has 205 members that paid, let’s say, an average of $35,000 = *$7 M.*

HCC says it owns 23 homes worth, let’s say, $700,000 each = *$16 M*.

The numbers just don’t make any sense to me.


*Conclusion:*

***There is only one DC I’d be interested in becoming a member – BelleHavens where you own 100% of your share of a condo/house and you get back 90% of the CURRENT membership fee – you participate in the real estate appreciation of the condo you bought into.  There is NO reason why HCC could not have adopted this model.

But, even with BelleHavens its built on the trust of a voice over the phone – the problem with the entire DC industry.  Someday, one of these DC’s is going to go belly up and the rest of the industry is not going to step in and shore it up – this could spell a major setback to the industry.  This key point needs to be addressed and I believe a solution is not hard to find.

If this calamity does happen, remember that a member can ONLY sell their membership back to the DC and not to someone else – another major flaw in the DC model.  Almost universally you can only get your money back AFTER 2 new members join.  If this calamity happens, who is going to want into a DC?  This means you could be stuck with your membership for a long long time.

Until then I believe timeshares offer a safer way to invest in destination condos; another form of DC.


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## PerryM (Feb 10, 2007)

*Ok, say the numbers don’t make sense*

Let’s take the numbers I presented above and try to figure out what’s really happening at HCC and other DC’s.  This is a guess and I have NO inside knowledge – I’ve signed no confidentiality documents.

Let’s say a bunch of smart guys/gals decide that they want to buy and invest in private homes/condos in the hottest markets in the world.  Being smart they certainly don’t need to use their own money in the process – use someone else’s:

They buy a condo worth $850,000 in Deer Valley in Park City, UT.  They put up half that amount in cash of $425,000 and this is pooled funds, each investor only put’s up about 100k – they get 50 or so investors to come up with $ 5M.

They then start a DC and only shoot for getting $425,000 per condo – they just charge $70,000 per membership fee and get 6 – 7 members per condo.

The members are prevented from getting any real estate appreciation and only get back 80% of what they initially paid.

They charge a hefty MF based upon the real value of the condo and that’s about $8,400 per year.  6 * $8,400 = $50k per year to pay the taxes, pay for cleaning and keeping up the place and reserves to replace furniture and fixtures.

This is a sweet deal for the investors – they own the deeds outright and put up just $100k each!

The members are left paying for the investor's condos.

The investors can sell their ownership in the DC for market value to others and those deeds are used as collateral for building other DCs.  This goes on and on and on.  Then when this DC has too much profit in it the investors liquidate the DC and get all their money and profits back.  The members of the DC get back just 80% of their original investment.  Is this a great deal or not? (For the investors of course)

To me, the greatest thing, as an investor or bank, is that little phrase “2 in/1 out”.  This insures that *memberships can ONLY grow and NEVER shrink in number *– this is fantastic and the reason lending institutions and smart investors are licking their chops.

This is all just a guess - tell me where I can sign up for this great deal!


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## Bourne (Feb 10, 2007)

The numbers do not make sense because any successful destination club, including Exclusive Resorts, has to use a staggered buy-in model to create a membership base. 

Set up Phase
The club has to initially come up with 10+ properties to even start marketing to any prospective member. That is about 8-10 Mil out of the investors pocket. 

Charter Phase
Even with a portfolio of 10 properties and being few months in business, the buy in price has to be lucrative enough to make it worthwile for a member to join in. Exclusive started with ~185K at the top level and HCC with 15-20. On top of it, you have to give deals like 80% of the future price. The extreme shortfall is coming out of the inverstors pocket and to a certian extent from new member sign ups. 

Growth Phase
At this point, you increase the buy-in price in a staggered manner. As the number of properties grow, so does the reputation and the marketability. 

Stabilization Phase
This is where the investors actually make money. The Club has reached a point where the growth of the club and the cost of running it is handled by member signups and annual dues. This is where the calculation between members and properties hold true. To make a point, Exclusive resorts is the only club to almost reach this point. By the managements own addmission, they are few years away from breaking even. i.e. investors to not need to add money into the pool to run the club. In the whole picture, the net unrealized gains in appreciation of properites is what the investors are banking on. 

Any club that does not follow this model is going to stunt their growth and probably not be successful.


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## PerryM (Feb 10, 2007)

*It's a great deal, for the investors at least*

Bourne,

Since all the internal workings of these DC’s are secret, like II and RCI, we can only guess – yours makes sense.  Those that signed the confidentiality agreements, and know how this works, can’t shed any light on this matter.

I’m assuming that the model I presented would immediately attract both investors and members – start up would need some “Today only” specials like the timeshare market to get the pump primed.  Slick salesreps are readily found in the high end timeshares or fractionals.

However, as I understand, ALL DCs can be liquidated anytime the investors decide and the members are left to the “Termination Clause” of the contract they signed as members.  That Termination Phase provides, in most cases, for 80% of original membership fee.  The investors, on the other hand get ALL the appreciation of that condo/house in the meantime and can then move on to other DCs that will, once again, ask folks to become members and abide by the rules.

Just think of that – anytime the investors have made enough unrealized profit you will get back your 80% of your original membership fee, and they get back big bucks – to use in yet another DC.

Attracting investors should not be any problem at all under the typical DC model.

The DC industry can easily solve my concerns - put up a performance bond and insure the DC will not be terminated for 30+ years under any circumstances and that the Termination Clause is executed per membership rules.


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## myip (Feb 10, 2007)

With $195K, I would buy full ownership Intrawest condo-hotel in Mount Tremblant.


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## RLG (Feb 10, 2007)

No offense intended Bill, but you should cut down on the koolaid.  Destination clubs offer some attractive features.  However, you seem to have far too little appreciation for the risk involved.

The most important difference between a destination club and a timeshare is that with a timeshare you have a legal ownership interest in real estate.  With a destination club you usually have nothing but unsecured promises from a company over which you have no ongoing control.

Some examples where you don't seem to appreciate the risk you're taking:

1) You make the comparison between real estate which *could* drop in value versus a destination club which is "guaranteed" to be worth 80% of what you paid.



Steamboat Bill said:


> As far as condo hotels, fractionals, condos....all these have the potential for $100k losses or more..





Steamboat Bill said:


> you are guaranteed to lose an immediate 20% if you want to sell.



Where exactly do you think the funds to pay your 80% are going to come from if the DC's real estate has dropped in value?  They typically have little or no equity.

In any case, you can only get your 80% IF they are able to get someone else in at 100%.  What's guaranteed about that?


2) You certainly don't understand the gravity of the Abercrombine & Kent/Tanner & Haley disaster.



Steamboat Bill said:


> T&H members have been absorbed by another DC that bought them out for over $100 million. Thus, the disaster has been solved.



T&H was the second largest company in the industry.  It raised over $350 million from almost 900 members.  Virtually all of the "proceeds" of the sale are going to pay off debt.  The members are losing 95-100% of their money.  The disaster most certainly has not been solved.


3) You seem to have fallen for the salesman's assurances that "this time is different".  



Steamboat Bill said:


> Yes, T&H went bankrupt as they were the original and had a flawed business plan..



T&H's business plan was the same as everyone elses.  The problem is that their management was at best incompetent.  What exactly did the salesman tell you was different about HCC's business plan?


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## bobcat (Feb 11, 2007)

I would not buy anything. I would save it.


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## Steamboat Bill (Feb 11, 2007)

RLG said:


> No offense intended Bill, but you should cut down on the koolaid.  Destination clubs offer some attractive features.  However, you seem to have far too little appreciation for the risk involved.
> 
> The most important difference between a destination club and a timeshare is that with a timeshare you have a legal ownership interest in real estate.  With a destination club you usually have nothing but unsecured promises from a company over which you have no ongoing control.



I am NOT offended, I have not been drinking any kool-aid, and I have a 100% appreciation for the risk involved as I have spent several months investigating DCs….and my conclusion was that they offered "Me" exactly what I was looking for.

I have participated in the entire spectrum of vacations: I have stayed at cheap hotels, expensive resorts, crappy timeshares, Disney Vacation Club, Marriott Vacation Club, Westgate ski week, fractional condos, house rentals, condo rentals, bought a full ownership condo in Breckenridge, bought several condo-hotels in Whistler, owned a house in the Florida keys, and even slept in my car once….I am now a proud member of a destination club.

I amazes me to see how much of a big deal people put into "owning a 1/52 deed" of a timeshare and think that really means so much. Trust me….I would much rather be a member of a DC than own a cheap timeshare any day. 

Perhaps I am jaded living in Boca Raton where it seems everyone in my neighborhood everyone drives a Mercedes Benz S550 or a Bentley and their house costs well over $1m and they spend $50k to join the Boca Raton Resort just so they can hang out at the pool (golf membership is even more $)…so the concept of joining a club that offers me the ability to stay in 6-star accommodations seems rather natural to me.

The way I look at it….joining HCC costs me about $300 per night to stay in a property that I would normally pay $500-800 per night to rent. Even if I account for the immediate 20% loss after joining…..I would make that back within two years. Thus, after 2 years of being a member….the 20% loss is moot to me.

There are no guarantees in life….I just know that a 1 Bdr condo-hotel in Whistler that sold for $400k in 2003 will now sell for $250k now…that is a $150k loss (but at least the loss is only in Canadian dollars). The studios that sold for $200k in 2004 are now selling for $150k…hmmm not such a great investment huh?

In reviewing the Abercrombine & Kent/Tanner & Haley melt-down…the two reasons they failed were: they leased many of their properties and they guaranteed members the ability to reserve a particular location (even if it was booked). All the DCs now have avoided repeating these two mistakes. It was the GREED of the members and inexperience of the owners that killed the club. Could it happen again….yes, but most DCs have made policies to avoid a complete crash like that.

In reality, I think PerryM has great ideas on how to start a DC….unfortunately none exist like he has outlined.

I am not a shill for the DC industry…just a satisfied customer. Truth be told…I would rather TUGers NOT join HCC as they will only compete with me to snag the best properties at the best times 365 days in advance….I would rather have a lazy rich dude join and not use the club to the fullest.

Only time will tell what will happen to the DC industry, in the meantime I will enjoy staying in the ultra-nice $1m properties and smile as I read about the hassles of trading with RCI, II and the complaints of traders getting the "dumpster view".


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## Steamboat Bill (Feb 11, 2007)

bobcat said:


> I would not buy anything. I would save it.



For the record...my membership in HCC cost me $30,000....not $195,000. 

This thread was originally started to compare the introductary fee the Exclusive Resorts charges and has morphed into a discussion on the entire DC industry.


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## GregGH (Feb 11, 2007)

Lets all take a deep breath .... ahhh ...   

Discussing DC vs TS is like my 'Chevy is better than your 'Ford'.  For me - TIME WILL TELL.

Anyways - there is a wonderful thread on 'what would you buy with $25,000' on which both Perry and Bill and many others gave WONDERFUL input and I for one was in aww on the knowledge shared.

Just wondering if we might swing back to the center and discuss LUXURY options --if I have $195,000 --what could I buy.  

Yes - one single condo hotel or on single DC membership -- but --what about some wonderful combination of things as in the other thread ...just more high end.   

Why ... I need the idea's from you smart guys on this.   Personally I need something on the beach in both Florida & Hawaii but prefer smaller places.  And really looking for opportunities to get into fractionals with a trade like  Registry Collection   or  Elite Alliance  ...but they too will take time to be tested and to see what will survive.  And what else is out there that hasn't been mentioned yet??  What wonderful option is just  waiting for someone to post?

So - back to dreaming and planning ---what would you do if you had $195,000  -- what would you put together as the best portfolio of locations to use or  trade
Regards
Greg  ( ps - send some warmth from Boca up this way ....  ccccoooollllddd or what, eh


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## PerryM (Feb 11, 2007)

*Who owns who?*

There is a primal desire, by mankind (womankind too), to own things.  I heard a wonderful quote once:

*“When you own something, it also owns you”*​
If I had $195,000 that I felt could be “Invested” into something for vacations but didn’t want to lose it or get tangled up with owning yet, another investment property or third home I would simply open a PayPal(s) account and move the money into their 5% Money Market account.

That $195,000 would generate 5% = $9,750 and say you pay 25% taxes would net out to $7,300 per year to spend on www.VRBO.com

On VRBO I can stay right on the Maui beach or right on the Ski slope, or right next to or on the amusement park grounds.  Many of these places are more expensive that a DC property!

Renting is such an alternative to owning timeshares or DC’s or second homes or whatever that ALL decisions MUST be based upon the VRBO baseline.

Right now VRBO has 70,000 places you can rent – most for around the MF the owner pays – that condo/home he bought owns him and he must feed it.

That money is about as safe a place as you can hope for - however it can't hide from inflation and it can't participate in real estate appreciation.

P.S.
So instead of getting involved with the wild and wooly DC market, park that cash in a very safe place and rent 6-star resorts/homes/condos and create your own DC.


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## caribbeansun (Feb 11, 2007)

Perry makes a very valid point - one that I proved just a month or so ago which is that renting can make a heck of a lot of sense.  My wife and I just went to New Zealand for 2.5 weeks and this is what we did:

Auckland/Titirangi - B&B (separate quarters - bedroom, lounge, bathroom but no cooking facilities - 3 nights cost $432cdn

Rotorua - Millenium hotel club level upgrade - 2 nights cost $232

Kaikoura - 2 bedroom apartment (all amenities) - 3 nights cost $660

Greymouth - B&B - 1 night cost $208

Wanaka - B&B - (top drawer facility and self-contained unit) - 1 night cost $200

Queenstown - 2 bedroom, penthouse condo/hotel - lake front and very high end - 5 nights cost $1,012

Christchurch - hotel room in small boutique hotel - 3 nights cost $336

There you have it 18 nights with a total Cdn $ cost of $2,948 or roughly $2,500US or $140/night.  The places in Queenstown, Wanaka and Kaikoura  were as good or better than any TS I've visited.  The others we on par with many TS I've visited with the exception that they didn't have full cooking facilities.

I tell you though - the condo.hotel was an absolute steal at that price and was truly a wonderful find.  Renting isn't so bad after all.


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## hipslo (Feb 11, 2007)

PerryM said:


> - however it can't hide from inflation and it can't participate in real estate appreciation.



As with any rent/buy decision, the above is the key (sometimes the only) factor favoring "buy", over the long term.  Given a long enough time horizon, owning (nearly) always turns out better.  The shorter the time horizon, the more likely renting could be the better option, other than in periods of rapid price appreciation and/or inflation.


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## Steamboat Bill (Feb 11, 2007)

PerryM said:


> There is a primal desire, by mankind (womankind too), to own things.  I heard a wonderful quote once:
> 
> *“When you own something, it also owns you”*​
> If I had $195,000 that I felt could be “Invested” into something for vacations but didn’t want to lose it or get tangled up with owning yet, another investment property or third home I would simply open a PayPal(s) account and move the money into their 5% Money Market account.
> ...



Ahhhhh...on this example I am in 100% agreement with you!

*Cash is King*

I looked into joining ER for $195,000 last year and now it is $225,000...I should probably update this thread title. In reality, I would have to join at the $325,000 level as the $225k membership does not include any holiday weeks  

At this level of $$$...I would just park the cash in a money market, CD, PayPal account @ 5.02%, or eTrade account @ 5.05% and use the cash for rentals.

Now on the other hand, I already own over $100k in timeshares and just bought a High Country Club membership.

It is time for me to reevaluate my current timeshare holdings to see if I need to sell some as I plan on exploring the HCC membership for the next several years.

Fortunately, I have been able to rent most of my unused weeks and that has generated more cash than 5%


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## RLG (Feb 11, 2007)

I guess I didn't adequately communicate the issue which I think is underemphasized in all the cheerleading for destination clubs.  Let me restate:

*There is a substantial risk that destination club members will lose 100% of their investment and be left with nothing.  That risk does not exist in most other forms of vacation ownership.*

I agree that destination clubs have a much higher end experience than a "cheap timeshare".  I'm not sure how that or your neighbor's Mercedes is relevant to the financial risk issue I'm raising.

The oldest club in existence already has experienced the meltdown scenario.  However, "this time is different" for HCC and others.

You think the problem with T&H was that the members were "GREEDY"?  Since you didn't explain, I'll guess that you mean they should have known the deal was too good to be true.  However, you then go on to talk about what a great deal you're getting from HCC.  When HCC goes bankrupt and leaves you with nothing in two years, are you going to say the same thing about yourself?


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## Steamboat Bill (Feb 11, 2007)

RLG said:


> I guess I didn't adequately communicate the issue which I think is underemphasized in all the cheerleading for destination clubs.  Let me restate:
> 
> *There is a substantial risk that destination club members will lose 100% of their investment and be left with nothing.  That risk does not exist in most other forms of vacation ownership.*
> 
> ...



Hmmm...I have never been known as a cheerleader.....

I disagree that there is a "substantial risk" that destination club members will lose 100% of their investment and be left with nothing. However, I think there is a "small risk" of this happening and I haven't ignored this risk.

One typical analogy is people that join golf clubs, health clubs, resorts, tennis clubs, boating clubs, car clubs etc....a destination club is not a new concept...it has just been applied in a new way.

The T&H members helped kill the club by insisting that T&H reserve them a house in Aspen when the one owned by T&H wa already reserved. This cost the club dearly. 

The new DC's like Exclusive Resorts are here for good! If I had an extra $425,000 + $30,000 MF I would love to join the Elite level. This destination club serves as the proper model for the industry to follow.

High Country Club has adapted the start-up model of ER and applied it to homes that cost 1/3 to 1/4 of a typical ER property. Thus, HCC when it is fully matured with 500-1000 members will cost about $100,000 to join.

2006 and 2007 represents a short window of opportunity for people to join HCC at "lower than market prices"....they raise their price every 6 months by about $10k.

Sure....there will be new DCs in the future and one may have all the features PerryM wants to see and he will possibly join. I for one, feel the temperature of the water is fine and it is time for me to jump in and enjoy a swim.

If HCC crashes within 5 years (and I get $0 back) but I was able to book 15 fantastic vacations....then I will still consider it to be a good deal. If however, HCC is still in business in 10-15 years.....that my friend would represent a home run in my book. If HCC goes bust in 2 years...I will agree that I made a mistake.

HCC is in the growth phase and their books seem very clean. They have done 100% of everything with the best interest of their members. If they get rich in the process...more power to them.

I am not being greedy with HCC....I have realistic expectations and this is the real deal and for me represents a smart purchase (or investment?).

I can only comment that I personally think the average DC members is MUCH more satisified with their purchase than the average Timeshare owner that bought from the developer.

HCC will have a $10k increase in their membership fees in 18 days....if you are thinking of joining...now would be a good time.


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## caribbeansun (Feb 12, 2007)

Risk exists with everything and yes there are differences in the magnitude of the risk.  Of course I have to question the use of the term risk when talking about vacation properties or clubs as there seems to be a line where people stop talking about vacations and start talking about investments and the two don't go comfortably in the same sentence.

Rent - lose 100% of your "investment" but can be the best choice in many situations - small $

Buy a non-branded TS and you will lose 80-90% the day you pass the rescind date on that TS.  Buy a branded TS and you'll do better but still likely lose 40-60% (it will vary by location and brand).  Moderate to Moderately high $

Destination club.  You will lose a percentage of your upfront costs depending on the club - ranges from 0-20%.  You could lose everything or just the above %'age.  Most closely parallel to TS ownership but at a high level accomodation and with much fewer of the problems that plague TS systems.  DC's that use leverage in their business model are at a higher risk of collapse if new sales don't feed the "beast".

Fractionals - personally I think fractionals are too similar to TS for my liking and I think you're asking for pain with most of them.  They haven't been around long enough to see what's going to happen to them in the resale market but I suspect they won't hold their value.  Moderately high $

If you can find a condo/hotel in a great location with solid management you should participate in the real estate appreciation - annual returns are likely going to be between 6-8% on the cost and another 5-6% on long-term capital appreciation.  Of course there are many condo/hotels that won't return anywhere near these figures due to inflated pricing at the front end.  Use of leverage - in the event of a change in economic circumstances the investor could struggle to met debt servicing obligations which could put all capital at risk.  Like all investments you need to find the good ones.  Moderately high to High $

Purchase a second home.  Full real estate participation but typically suffer from underutilization as many people won't want to rent out their "home" which means the carrying costs can become a burden.  If rented then the investment in time to secure and monitor maintenance etc can become a burden (even when using a service).  Use of leverage - in the event of a change in economic circumstances the investor could struggle to met debt servicing obligations which could put all capital at risk.  Moderate to High $

There is a decided trade-off between having the cash to go big or putting a smaller amount into renting, TS or fractional ownership.  DC's slide into the middle ground and don't promise a return on your investment.





RLG said:


> *There is a substantial risk that destination club members will lose 100% of their investment and be left with nothing.  That risk does not exist in most other forms of vacation ownership.*


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## BocaBum99 (Feb 12, 2007)

I would purchase about 100 or 200 low end timeshares and sell them for 50% above purchase price every 6 months, rent the excess weeks and net $150-200k in income per year.  In 3 years, I'd sell the business for $750-1M.


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## PerryM (Feb 12, 2007)

*Teach me how*



BocaBum99 said:


> I would purchase about 100 or 200 low end timeshares and sell them for 50% above purchase price every 6 months, rent the excess weeks and net $150-200k in income per year.  In 3 years, I'd sell the business for $750-1M.



I'm student #1 - reporting for duty


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## BocaBum99 (Feb 12, 2007)

PerryM said:


> I'm student #1 - reporting for duty



The good news is that timesharing is so lucrative that this algorithm works.  The better news is that you can do it all online and you can work in timeshares instead of an office.  The bad news is that it still takes more than a full time effort to sustain.  I'll have to put together an infomercial for the Robert Allen Institute after creating a timeshare module for his "no money down" course.  LOL.


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## Steamboat Bill (Feb 12, 2007)

BocaBum99 said:


> I would purchase about 100 or 200 low end timeshares and sell them for 50% above purchase price every 6 months, rent the excess weeks and net $150-200k in income per year.  In 3 years, I'd sell the business for $750-1M.



This idea....is the best one so far.

But this requires skills to know how to buy low and sell higher. It also requires skills in knowing how to rent. 

Either way...it sounds great on paper, but I don't think you would get SBA loans or find anyone that want to buy this business for $1m. Taking on an apprentice or holding the note would be the way to go.

However, if you can wrap this business idea around a slick web site with reoccuring revenue...it could be worth much more than $1m


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## K9HNDLR (Feb 12, 2007)

*PerryM;215629* *If someone were to give me $195k (plus enough to pay the taxes) and stipulated that it MUST be spent on something for family vacations I’d immediately buy into BelleHavens for $200k  Link:  www.bellehavens.com. *



If these were the rules, I would just get a couple of nice beachfront TS in San Diego and put the rest in the bank to collect interest and pay for the MF.

Otherwise, I second the "Pay off my mortgage"!!!


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## PerryM (Feb 12, 2007)

*20/20 hindsight is wonderful*



K9HNDLR said:


> *PerryM;215629* *If someone were to give me $195k (plus enough to pay the taxes) and stipulated that it MUST be spent on something for family vacations I’d immediately buy into BelleHavens for $200k  Link:  www.bellehavens.com. *
> 
> 
> 
> ...



Well, if those were the rules I’d do exactly what I stipulated at the time.

However, taking 20/20 hindsight into account, I’d buy a condo-hotel in Orlando and use it and put it into the rental pool.  I have a deed, guaranteed usage, and a little cash income to pay the MF’s.

I've seen many condo-hotels in this price range in the past 2 years.  Now they can be found on the MLS for close to the original purchase price.

P.S.
Thinking about it for 1 minute I'd stick with my original choice - the BelleHavens for $200k.  We already own 2 condo-hotels and a lot of timeshares so I'd take the gift as BelleHavens.  I just assumed the membership fee had increased since then, but it's still $200k.


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## Steamboat Bill (Feb 12, 2007)

As a condo-hotel owner....I can't reccomend them to anyone. I just have not seen the promised revenues and the capital appreciation....so far has been NEGATIVE.

We all know about NOT buying a TS in Orlando due to the glut of units...I hightly doubt the condo-hotel market will be different and doubt it will ever gain legs. This to me seems like a great way to loose money. I, of course, will change my opinion if some owner submits a PROOF of concept in the form of their year end REAL (not projected) statements.

I also think BelleHavens is a fantastic DC....this to me represents much better value than Exclusive Resports and the homes make HCC properties look tiny.

However....there is a catch....price!

BelleHavens
$200,000 deposit + $17,500 MF for 30 night use
$333 (lost opportunity per day @5%) + $583 daily MF = $916 per night

Why does BelleHavens only rebate memebrs $275 per unused night?...nice built-in profit....but at least they offer a rebate when other DC offer nothing.

Now compare that to HCC (my DC of choice) that costs about $300 per night and you can see why I bought HCC.

Thus, if I had $195,000...I would NOT choose ER (the current DC champion)and buy BelleHavens....but the $17,500 MF per year would be a killer.

I still choose HCC! and pocket the cash.


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## PerryM (Feb 12, 2007)

*Location...*



Steamboat Bill said:


> As a condo-hotel owner....I can't reccomend them to anyone. I just have not seen the promised revenues and the capital appreciation....so far has been NEGATIVE.
> 
> We all know about NOT buying a TS in Orlando due to the glut of units...I hightly doubt the condo-hotel market will be different and doubt it will ever gain legs. This to me seems like a great way to loose money. I, of course, will change my opinion if some owner submits a PROOF of concept in the form of their year end REAL (not projected) statements.
> 
> ...



Bill, my suggestion was for using the gift of $200k.  I'm fearless with other people's money.  I'm assuming you would have to buy 4 HCC's for that $200k and make the 4 MFs (HCC is $50k a mermberhip).  It's the ENTIRE $200k to be spent on some sort of vacation ownership.

A friend of mine did buy a condo-hotel right next to the convention center in Orlando - the condo is still being built and they have reservations for 3 years already.  It's an IntraWest (Playground) at The Orange County Convention Center is booked up 15-25 years in advance and this condo-hotel is a stone's throw away.  I believe it is branded a Westin.  So it's location, location, location like any business venture.


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## TomCayman (Feb 20, 2007)

PerryM said:


> If someone were to give me $195k (plus enough to pay the taxes) and stipulated that it MUST be spent on something for family vacations I’d immediately buy into BelleHavens for $200k  Link:  www.bellehavens.com
> 
> *This is the ONLY $200k fractional investment anywhere (except maybe 1) that appreciates with real estate. * Assuming a 10% real estate appreciation for 10 years, (very hot locations) that $200k will be worth $472k of which you get 90% or $425k - $200k investment = $225k selling 10 years from now.
> 
> ...



Caribbeansun, would you like to chime in and correct the statement in bold, knowing as you do another fractional that appreciates with real estate and costs about $200k  ?


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## Breezyone (Feb 20, 2007)

*I agree with Shagnett and Geekette.*

It is nice to dream about that kind of money. In PEI, Canada, I could build a mansion of a new home, or pay off the mortgages on my cottage(summer home), my house and the duplex we own plus all my credit card debt. Put the timeshare we bought last year from a developer on credit card and I would still have money left over.


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## PerryM (Feb 20, 2007)

*ooooppppppsssss*



TomCayman said:


> Caribbeansun, would you like to chime in and correct the statement in bold, knowing as you do another fractional that appreciates with real estate and costs about $200k  ?



Of course I meant DC and not fractional; sorry.  I will to 20 pushups later tonight as a punishment.


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