# It's time to pick up some Platinum weeks for cheap



## BocaBum99 (Dec 13, 2008)

Since Marriott is not exercising ROFR, it's time to pick up some good Platinum weeks for cheap.

My criteria would be platinum weeks with sustainably modest MF that are good drive-to locations for rentals (1.5-2.0 times MF) that can be locked off and will likely have great future trade value.

In the past, Manor Club and Branson were considered decent traders with relatively low MF.

What are the Marriott's that are 2 bedroom lock offs that have MF less than $1000 per year and have great trading power which is likely to continue in the future?  The rentals for these units need to be at least $1500-2000 as well.

My guess is that you pick them up for $.50 on the dollar or less.  When Marriott starts exercising again, you will earn a superior return.

By the way, same is true of other high end timeshare resorts.


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## Dave M (Dec 13, 2008)

BocaBum99 said:


> What are the Marriott's that are 2 bedroom lock offs that have MF less than $1000 per year and have great trading power which is likely to continue in the future?


You can see the history of MFs for all Marriott resorts - back to 2001 - in the historical MF database accessible from the FAQs for this forum and from the Marriott section of TUG Advice. Then it should be realtively easy to discern trading power (now and ongoing) based on location.


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## thinze3 (Dec 13, 2008)

BocaBum99 said:


> .... What are the Marriott's that are 2 bedroom lock offs that have MF less than $1000 per year and have great trading power which is likely to continue in the future?  The rentals for these units need to be at least $1500-2000 as well.
> 
> My guess is that you pick them up for $.50 on the dollar or less....



Beachplace Towers.  Renovations are just completed and maintenence fess haven't changed much at all in three years.

I just bought one for much less than what you mentioned (waiting on the process).  I am still in the market for another Marriott and would also consider Starwood and other high end resorts companies.

Terry


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## Transit (Dec 13, 2008)

When everything sorts itself out and prices begin to recover .How will the resorts with lots of blue weeks fare ? There are plenty of great resorts with Plat units for sale but many carry a ton of blue weeks.


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## timeos2 (Dec 13, 2008)

*Off season time is a real problem. Always has been.*



Transit said:


> When everything sorts itself out and prices begin to recover .How will the resorts with lots of blue weeks fare ? There are plenty of great resorts with Plat units for sale but many carry a ton of blue weeks.



Off season (Blue) time is a problem for any resort - Marriott or not. They will get hit hardest with drop outs from the current crunch and will be hard to impossible to remarket when the turnaround happens just as they were initially. Except now they are saddled with much higher fees than when sold from the developer making the potential value lower than it already was. In the long run it may mean higher fees for the better weeks as they have to pick up the slack from those unwanted times.  Or it may be mitigated to some degree if the resorts figure out a way to more fairly distribute the costs (points?) so the better weeks pay more, the less demanded weeks less. Either way it appears the Red times are in for even more fee increases as this shakes out.


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## dioxide45 (Dec 13, 2008)

You may be able to meet all your criteria except for the rental rates. It would be tough to rent a TS week for 1.5 - 2X MF. Many people are lucky to even rent for what they pay in MF. Personally it makes no sense to buy a week now as rental rates are low. If you are thinking long term, then now is definitly the time to buy.


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## Steve (Dec 13, 2008)

BocaBum99 said:


> Since Marriott is not exercising ROFR, it's time to pick up some good Platinum weeks for cheap.
> 
> My criteria would be platinum weeks with sustainably modest MF that are good drive-to locations for rentals (1.5-2.0 times MF) that can be locked off and will likely have great future trade value.
> 
> ...



Hi Boca Jim,

I understand your logic and reasoning, but I think you'll have a tough time finding Marriotts that meet your criteria.  Neither Manor Club nor Horizons Branson are likely to rent for two times their maintenance fees.  I have stayed at both resorts and used to own at Manor Club.  They are great places,  but both Williamsburg and Branson are extremely overbuilt with timeshares.  Consequently, exchanges into these resorts are easy and rents are very low.  

A couple other Marriotts with relatively low fees that are located an easy drive from major population centers are Fairway Villas in New Jersey and Legend's Edge in Panama City Beach, FL.  However, neither of these locations are on the beach (even though they are in beach areas).  Exchanges are easy and rents are low.  

One that might make sense is Marriott's Canyon Villas in Phoenix.  If you can get a platinum week for cheap, and IF you can reserve a prime March week, then you may get some pretty good rental income.  However, the north Phoenix/Scottsdale area has a lot of competition when it comes to high quality timeshares.  Both the Four Seasons and the Westin Kierland Villas are, in my opinion, nicer than the Marriott.  Also, the true prime season is pretty short in this area.  Nevertheless, this is one resort that it might make sense to own based on your criteria.  

Steve

Steve


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## Big Matt (Dec 13, 2008)

What happens if a bunch of people decide to walk away?  Marriott does'nt take a hit (even if they foreclose, they get the week back), but the owners do.  I"m concerned about how my maintenance fees will increase.  Buying now, may award the winner a huge assessment to pay for those who defaulted.

JMO, or course.


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## PerryM (Dec 13, 2008)

*Ho Ho Ho...*



BocaBum99 said:


> Since Marriott is not exercising ROFR, it's time to pick up some good Platinum weeks for cheap.
> ...
> My guess is that you pick them up for $.50 on the dollar or less.  When Marriott starts exercising again, you will earn a superior return.
> 
> By the way, same is true of other high end timeshare resorts.




Gee I get slammed for talking like that – folks here now into the timeshare investment market?  Buy low sell high?  (Remember; it's not the other way around)  And just who could sell you these great bargains?

So let me get this right – Marriott stops exercising the ROFR and prices fall – one can then conclude that the ROFR supports higher prices.  Q.E.D.

Wow, this is a great Christmas present to myself.

Happy holidays everyone.


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## dioxide45 (Dec 13, 2008)

PerryM said:


> So let me get this right – Marriott stops exercising the ROFR and prices fall – one can then conclude that the ROFR supports higher prices.  Q.E.D.



I think the point many try to make is that the mere presence of ROFR doesn't prop up resale prices.  That is most evident now. Most of the Marriott resorts being sold cheap right now have ROFR, it isn't keeping prices up at all.


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## BocaBum99 (Dec 13, 2008)

Steve said:


> Hi Boca Jim,
> 
> I understand your logic and reasoning, but I think you'll have a tough time finding Marriotts that meet your criteria.  Neither Manor Club nor Horizons Branson are likely to rent for two times their maintenance fees.  I have stayed at both resorts and used to own at Manor Club.  They are great places,  but both Williamsburg and Branson are extremely overbuilt with timeshares.  Consequently, exchanges into these resorts are easy and rents are very low.
> 
> ...




Steve,

I'm thinking that some of those Maui Marriott units in the Napili Tower might be good targets.

My biggest concern is the county of Maui and it's anti-timeshare position.  Maintenance fees may increase substantially over time.

But, I remember how amazed I was that Joe was able to command such a premium for this rentals at the Maui Marriott.  What I could never cost justify is the return on capital.  His return was decent, but it wasn't possible to own many without going broke.

There is a price at which those Marriott's are a steal.  What if you could get a 2br oceanview unit for less than $10,000 that was a lock off.  That might be pretty interesting.  

I am assuming people will want to go to Hawaii again in the future.


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## m61376 (Dec 13, 2008)

dioxide45 said:


> I think the point many try to make is that the mere presence of ROFR doesn't prop up resale prices.  That is most evident now. Most of the Marriott resorts being sold cheap right now have ROFR, it isn't keeping prices up at all.



At the present time, Marriott has seemingly and unofficially suspended ROFR...at least it seems that way. Since Marriott is buying back few deals, the "fire sales," which probably have always existed but are more prevalent in an economic downturn, are becoming obtainable.


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## PerryM (Dec 13, 2008)

dioxide45 said:


> I think the point many try to make is that the mere presence of ROFR doesn't prop up resale prices.  That is most evident now. Most of the Marriott resorts being sold cheap right now have ROFR, it isn't keeping prices up at all.



Cops don't need to be on every street corner, radar guns in hand, to instill fear into the hearts of speeders - just random enforcement is all that is needed to impact drivers behavior.

The ROFR is there when the developer needs it and if the developer doesn't need it only folks like us can tell the difference-for a while.  If folks know the traffic cops are busy doing other things they speed.

The important thing is that some developers do work with owners to prop up resales if it makes sense.  Some developers don't work with owners but against them to kill resale prices.  Marriott seems to want to work with their owners - it makes sense to them.


Attention wheeler-dealers:
When trying to play timeshare wheeler-dealer the idea is, of course, to buy low and sell high.  That assumes that current prices won't go lower and that prices will go higher in the near future.  Both seem to be very questionable for the next few years (2 - 4 years) - at least to me.

Timeshares have always been sold as a lifetime of usage that then is passed on to heirs - all the timeshares salesreps sell them that way.  Flipping timeshares in this market seems to be great if you want to make a small fortune (the investment joke is "What's the easiest way to make a small fortune?.....Start with a large fortune and flip timeshares".

I'm sorry but flipping timeshares in this market is just a dumb idea.


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## Garnet (Dec 14, 2008)

PerryM said:


> ......"very questionable for the next few years (2 - 4 years) - at least to me....."
> 
> ...... "Flipping timeshares in this market seems to be great if you want to make a small fortune (the investment joke is "What's the easiest way to make a small fortune?.....Start with a large fortune and flip timeshares"
> 
> I'm sorry but flipping timeshares in this market is just a dumb idea....."



Good to see your posting again, Perry.  Wow----I am hoping this doesn't last 2-4 years.  I see as reasonable, another 1.5 years.  Credit markets "marketably" improving in 9- 14 months.  Debt yet again for the debtors...Only credit worthy debtors this time.  I hope!!!


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## m61376 (Dec 14, 2008)

Perry- Not that I disagree about whether it is a good investment to buy now for flipping purposes (although I tend to think it may be a good idea in a few isolated cases but am too conservative to follow through), but I sure hope your prognostication for the economy is wrong. 

The pricing free-for-all is due, at least in part, to the credit crisis, and if it takes at least 2-4 years for it to ease, as you suggest, then the prices of timeshares will be the least of our worries. Looking back at the last real estate dive of the late 80's, it will likely take a few years though for prices to come back and timeshare prices may follow a similar time line.

The next dew years will surely be interesting. As the economy improves, will people once again want to splurge to enjoy life (effecting a timeshare market increase) or will the memory linger and they remain more conservative wrt vacation travel? I tend to think that our parents' generation would be/have been more conservative but our generation and our children's will again go out and spend. Of course, that's just my opinion....


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## PerryM (Dec 14, 2008)

*Tipping point??*

Looking at past cycles of up and down is helpful but the key question is “What’s different now then back then?”

We have an out of control federal government spending trillions of dollars like it was Monopoly money – the FED has spent 2 trillion dollars and they won’t even tell us where the money went.  That’s about $7,000 of additional debt for each man, woman, and child in America.  With interest and the inefficient way government collects taxes that will easily be $14,000 for each American to pay back.  And for what?

Our government, both parties are guilty of this, has bankrupted us – wait until Social Security all of a sudden becomes a problem “out of the blue”.  That monster has been kept in the closet for 60 years and it grows each day.

My forecast for the USA is so gloomy that I can’t even write out scenarios as to what will happen to us.  I think the best analogy is the 3 car manufactures in Detroit – the more cars they make the worse their situation.  The same here and I only see a depression as the outcome – an eye-popping depression to make the last one look like child’s splay.

So my advice to folks is to keep every penny you have and put it somewhere – I don’t even have a clue where that is – stocks, bonds, real estate, and gold will continue to free fall.  It’s called deflation and we don’t know how to handle it.

Trying to flip timeshares makes sense if you are the broker both buying and selling them to you.  And that’s what we have here – the advice to flip timeshares comes from a reseller – *what a self serving piece of advice*.


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## dioxide45 (Dec 14, 2008)

PerryM said:


> Cops don't need to be on every street corner, radar guns in hand, to instill fear into the hearts of speeders - just random enforcement is all that is needed to impact drivers behavior.
> 
> The ROFR is there when the developer needs it and if the developer doesn't need it only folks like us can tell the difference-for a while.  If folks know the traffic cops are busy doing other things they speed.
> 
> The important thing is that some developers do work with owners to prop up resales if it makes sense.  Some developers don't work with owners but against them to kill resale prices.  Marriott seems to want to work with their owners - it makes sense to them.



I have picked up a response here since it relates to the ROFR debate.


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## m61376 (Dec 14, 2008)

PerryM said:


> Trying to flip timeshares makes sense if you are the broker both buying and selling them to you.  And that’s what we have here – the advice to flip timeshares comes from a reseller – *what a self serving piece of advice*.



Perry- Who knows- you may be right on the rest- I certainly hope not, but I am more of a cup half full type of person I guess- but in defense of Boca, I don't think that's fair. I think he was commenting on what he was thinking of doing personally. He has posted that he has not been involved in selling Marriotts and, unless I misunderstood, just thought it might be a good investment to make at this time. I don't think he was trying to promote his own business interests (at least that was my perception). 

Personally, I am not confident enough in the economy to do so, although I do think it is a good time to buy for use and may be a unique opportunity. Maybe I will look back in 6 months and realize I was a fool and threw out $5000; I hope not. If things turn around, I will be smiling smugly. At any extent, many of us have made worse investment mistakes and I will be making a purchase that will, hopefully, be something my family enjoys for years to come. And, I wouldn't be surprised if Boca posts a year or two down the road with an "I told you so." Time will tell....


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## Zac495 (Dec 14, 2008)

Hi Perry! Long time, so see.
I don't think Jim (Boca) would post to make money off of us - I think he thinks of us as his (loosely termed)friends. He sells Bluetree (something like that - I don't even know what that is - bet it's cheaper than Marriott, though). Anyway, I guess I'm the type that believes in people - NOT that I'd take his advice without really thinking it through, checking my finances, discussing it with my husband, etc. 

When I go on ebay, I'm sorely tempted to buy something that I can USE that is so inexpensive. I wouldn't buy to flip because I don't have that kind of capital as a little school teacher - but I sure would like to be on the + side of a sale.


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## PerryM (Dec 14, 2008)

*It's just a dumb idea...*

My point is that the advice of this thread is to:

*“My guess is that you pick them up for $.50 on the dollar or less. When Marriott starts exercising again, you will earn a superior return.”*

Buying timeshares, especially when not even the developer is doing so, is incredibly irresponsible at this time in our history.  Think about that for a second – Marriott doesn’t even want to flip timeshares and we are advised to do so?

Hold on to your money in these times and don’t go blowing it on things that are crashing like a lead balloon.

At some point the cycle will bottom out – how much damage will be inflicted upon your family is the key question here – do you really need another timeshare and the $1,000 per year MF to go with it?  Really?

Timeshares are not sold as investments to flip – to find suggestions that this is perfectly ok to do so now is just dumb; and that’s me being polite.

P.S.
This entire scheme of flipping timeshares is predicated upon Marriott exercising the ROFR at 60% of current sales prices.

What happens if Marriott starts lowering the sales price to reflect real estate's lost value?  What happens if Marriott decides that enough owners are dumping Marriotts and Marriott only has to offer 25% for the ROFR?  That means more profit for Marriott.

Lots of assumptions here waiting to bite you in the ass....

P.P.S.
My response to the ROFR and how it can bite you.


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## JudyS (Dec 15, 2008)

PerryM said:


> ...
> So my advice to folks is to keep every penny you have and put it somewhere – I don’t even have a clue where that is – stocks, bonds, real estate, and gold will continue to free fall.  It’s called deflation and we don’t know how to handle it....


I'm concerned about deflation, too.  In times of deflation, the best thing to do is keep your money in cash.  This is why the interest rate on t-bills is just about zero now.  (Or even a bit below zero.)  However, the risk with keeping your funds in cash is that you tend to lose out on gains when the economy starts to recover. 



Zac495 said:


> ....
> I don't think Jim (Boca) would post to make money off of us - I think he thinks of us as his (loosely termed)friends. He sells Bluetree (something like that - I don't even know what that is - bet it's cheaper than Marriott, though). Anyway, I guess I'm the type that believes in people - NOT that I'd take his advice without really thinking it through, checking my finances, discussing it with my husband, etc....


Yes, Jim specializes in Bluegreen.   Perry, I don't think Jim was looking to sell us Marriotts that he owns; rather he, wanted suggestions for Marriotts he could buy and rent out.  This thread was about Platinum Marriotts, and last I heard, Jim didn't even own any of those, so he'd have none to sell us. 

Jim, why not Summitwatch or Mountainside in Park City?  Those are lock-offs with MFs around $1000, aren't they?  The Platinum Plus weeks should rent for loads of $$$.  But you own a bronze there, if I recall correctly, so I'm assuming you already thought of them and ruled them out.


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## Steve (Dec 16, 2008)

BocaBum99 said:


> Steve,
> 
> I'm thinking that some of those Maui Marriott units in the Napili Tower might be good targets.
> 
> ...



I think resorts in Hawaii are more of a risk than mainland resorts.  The potential rewards are a lot higher as well, though, as the rents some people get are incredible.  

Still, with the combination of rapidly rising maintenance fees and the fact that almost no one can drive to the resort, I personally wouldn't buy the Maui Marriott for investment purposes.  If you want to use it, that would be different.   

Steve


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## BocaBum99 (Dec 16, 2008)

PerryM said:


> My point is that the advice of this thread is to:
> 
> *“My guess is that you pick them up for $.50 on the dollar or less. When Marriott starts exercising again, you will earn a superior return.”*
> 
> ...



My role in timesharing is merely a science project that turned into a business that allowed me to spend full time on a hobby.  In the case of Marriott's, I have no financial interest as others have pointed out.   You can claim that I have an ulterior motive, but I think that most on this board believe my posts at face value and use the information to make their own decisions as they do yours.   

My advice is much more sound than advice you've provided in the past.  Let's review some of them.

1) buy pre-construction timeshares from developers to profit.  While it's true that it is possible to make money on a timeshare from a developer, the expected return on invested capital is very low and not worth it.  Investing in CDs has a better return with far lower risk.  This IS one of your past recommendations and you cited your own purchases as proof that it was a good idea.   Very Bad idea.

2) Ignore the capital for purchasing a timeshare since it is just a luxury purchase.  By doing that, buying a timeshare for $1 is no different than buying it for $100,000.  That makes no sense.  Very bad idea.

3) Condo Hotels are the new business model for vacationing.  Daytona Beach and Maui I think were the hot prospects.  There is no housing bubble.  These are great investments at this time.   Only problem is that it was the height of the housing bubble which you denied by using zillow as your proof.   Very bad recommendation.

4) Planet Hollywood as the number 1 timeshare in the world and buying a penthouse suite as a good investment.  I think it was $10,000 per week or something like that you expected to get.  This was an extraordinary bad idea.  Even the sales guys in Las Vegas were posting congratulations to the sales guy who sold it to you.  They couldn't believe you fell for it.

5) At the same time you were rightly predicting that WorldMark credits would drop in price, you kept advising that it was the best thing to buy and that you would add to your portfolio.  You also were proud of TravelShare and recommended that WorldMark expand maintenance fees to become Marriott.  WorldMark and Marriott are so vastly different that this is an extraordinarily weak idea.

6) You were promoting the wisdom of buying a small acount and renting credits when you never did it.  In fact, what you did instead was buy a Trendwest Fractional with a high capital cost and an annual cost of ownership that is higher than you can rent credits.  Very bad idea.  Weren't you claiming that fractionals were the next big thing because it could be sold like real estate?

7) Buying an RCI Points account and depositing South African weeks into points for deposit for a total cost HIGHER than buying the airline tickets directly from the airlines.  Why would anyone want to go through all that trouble for it to cost more?  Very bad idea.

8) Jumping into Redweek with both feet before thinking about their business model. Then, having to spend 2 months slamming them for not meeting your expectations.   You end up getting two halves of a unit at the Marriott Maui for President's week.  Did Marriott ever remarry those units for you when you arrived even though they had different check in dates?  I just took a Marriott Summit watch bronze week studio and used it to book week 52 at the Marriott Maui and it was already married.  Recommending Redweek as the next revolution in exchange.  Very bad idea.

9) Investing 99% of one's personal net worth into the Dow Jones industrial stock index because it has had a history around 14% annual returns.  When you posted that I said you need to be careful because there can be decades where the Dow gains 0%.  We entered into such a period within one year of your declaration.  Extraordinarily bad idea.

10) Now you are saying that virtually all timeshares will be sold on eBay for $1.  If that happens, the timeshare industry is dead and they won't even be selling at $1.  That is a possible scenario.  I'l grant you that.  However, I believe that it is about as likely to happen as another great depression.  Possible, but not probable.   If the disaster scenario doesn't happen, odds are the the timeshare industry will resume in a couple years in a growth mode again after probably a 50% correction in annual sales.

I have already outlined my theory extensively for when and why it makes sense to purchase a Marriott Platinum week now.  And, that since Marriott is NOT exercising ROFR that it is the best time ever to pick one up, especially if you will use it every year.  I expressed an upside that is POSSIBLE and PROBABLE if you believe the market and economy will return.  I also claim that if the disaster scenario occurs in the market, that all bets are off.

And, if you read the thread, you will see that there are a ton of posters on this message board who also believe that it is a good time to buy.  Are the resellers, too?  Or, could it be that someone with deep experience in the industry might just have some good helpful insights.

The idea of flipping is definitely a risky proposition.  I'll definitely agree with that.   But, if you have a destination that you like, that you can indeed get for really cheap and it is likely to be a good trader and/or renter in the future, then it is indeed a good time to purchase a Platinum Marriott week.

I've only pointed out the things you were wrong on.  You were right on a number of other things.

They are:

1) Implosion of the ponzi scheme that is destination clubs.
2) dramatic decrease in the resale value of WorldMark credits
3) The bursting of the timeshare bubble
4) The idea of a timeshare portfolio
5) VRBO as a good rental option for vacationers
6) WorldMark as a great ownership and trader

As I review the above things you were right on vs. wrong, I can only conclude that what you do is run into a new concept you have never seen before, declare it as the next best thing and make a wild extrapolation on what things will be in the future that is wrong more times than not. 

So, if we are going to make a determination of who is making responsible vs. irresponsible recommendations, I'd take my track record is far superior to yours.

Your up.   I hope you have more facts that "you are a self interested reseller."  People aren't buying it.


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## mjs (Dec 16, 2008)

4) Planet Hollywood as the number 1 timeshare in the world and buying a penthouse suite as a good investment. I think it was $10,000 per week or something like that you expected to get. This was an extraordinary bad idea. Even the sales guys in Las Vegas were posting congratulations to the sales guy who sold it to you. They couldn't believe you fell for it.

I think you forgot a zero.   I believe Perry said he was going to pay $100,000 for the week.


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## m61376 (Dec 16, 2008)

mjs said:


> 4) Planet Hollywood as the number 1 timeshare in the world and buying a penthouse suite as a good investment. I think it was $10,000 per week or something like that you expected to get. This was an extraordinary bad idea. Even the sales guys in Las Vegas were posting congratulations to the sales guy who sold it to you. They couldn't believe you fell for it.
> 
> I think you forgot a zero.   I believe Perry said he was going to pay $100,000 for the week.



Yes- but I think that he was also counting on renting it for $10,000 per week, if I am not mistaken. Of course, he made the purchase when the economy was very different. 

If only we all had the benefit of hindsight  . But, just to put things in perspective, as those of us who felt smug about buying resale and getting good prices over the past few years look at the current sales and  , remember the wonderful vacations we've taken in the interim  . I know I'm sounding a bit like a timeshare salesperson but, at least for us, that's true.


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## PerryM (Dec 16, 2008)

*Waaaaa*

BocaBum99 is a reseller of timeshares and some of my predictions/actions impact his bottom line.  He has a business to protect – this I understand.  With timeshare sales grinding to a halt I guess its time to lash out at a straw dog.

*My recommendation is still to NOT BUY TIMESHARES in the foreseeable future – developer nor resale.*

I’m sorry if you resellers here are impacted by that.  Quite frankly my heart doesn’t bleed for you folks.

BB was shut down in another thread for this same exact bashing – I plan to just go on vacation and enjoy our timeshares in the next 2 weeks.

Just remember folks that if you step on some folks toes they will cry.


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## thinze3 (Dec 16, 2008)

*How about this?*

Today we concentrate on finding the very best deal for the money within the Marriott system. I know we all have our own oppinions, _but we don't have to mention other Tuggers by name to do this._

Which Marriott resorts offer red, platinum, or platinum plus weeks that give you the most bang for the buck in today's market.


Things to condsider:

today's price
history of stable MF's and lack of high assessments
quality of resort and amenities
quality of surrounding areas and amenities
tradeability with II
rental rates
lock-off ability
accommodation certificates
driveability or cheap airfare


IMHO
A perfect platinum unit would be between $5-10K
MF's would be no more than $1000-1100
rental from the lock-off would be $1000
1BR deposit would get an AC from II each year
1BR deposit would trade for a 2BR at just about any other Marriott
Pool bar/restaurant (unless ski resort)


My current vote is Desert Springs Villas I


Terry


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## ondeadlin (Dec 16, 2008)

Terry,

Two potential problems I see with your plan/formula are that, A) All current trends indicate today's price will be higher than tomorrow's price; and B) All current trends indicate historical maintenance fees may not be any indication of future maintenance fees as people walk away from timeshares much the way they're walking away from homes.

I'll acknowledge that there is a scenario where the economy bounces back quicker than expected, Marriott reintroduces ROFR at previous levels, and timeshare prices rise a bit (although I don't think resales are ever going back to previous levels).

I just hope people realize there's also a scenario where - as we speak - thousands of people are walking away from their timeshares, and we won't see the effects of that until 2009 fees are not paid, and then 2010 fees explode a year from now. And if that happens, there will be even more walk-aways, fueling an even harder downward trend.

Even if reality lies in the middle, that's very bad news for current owners, and will drive resale prices even lower.


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## thinze3 (Dec 16, 2008)

PerryM said:


> ...I plan to just go on vacation and enjoy our timeshares in the next 2 weeks...



Perry,
FWIW, I have enjoyed reading your posts here on Tug since the day I arrived. Have a Great Vacation and enjoy the Holidays!

Terry


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## thinze3 (Dec 16, 2008)

ondeadlin said:


> Terry,
> 
> Two potential problems I see with your plan/formula are that, A) All current trends indicate today's price will be higher than tomorrow's price; and B) All current trends indicate historical maintenance fees may not be any indication of future maintenance fees as people walk away from timeshares much the way they're walking away from homes.
> 
> ...



So, which resort do you recommend?


----------



## PerryM (Dec 16, 2008)

thinze3 said:


> Perry,
> FWIW, I have enjoyed reading your posts here on Tug since the day I arrived. Have a Great Vacation and enjoy the Holidays!
> 
> Terry



Thanks, this will probably be my last snowboarding trip - 61 years old and my son graduates from college and will get a job which won't let him vacation during the holidays probably.

I will miss Park City...
P.S.
Timeshares made our 10+ years of snowboarding a fantastic adventure for my son and I.  Thanks timeshares.


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## PerryM (Dec 16, 2008)

*Not there yet*



ondeadlin said:


> Terry,
> 
> Two potential problems I see with your plan/formula are that, A) All current trends indicate today's price will be higher than tomorrow's price; and B) All current trends indicate historical maintenance fees may not be any indication of future maintenance fees as people walk away from timeshares much the way they're walking away from homes.
> 
> ...



Yesterday Cramer forecasted the bottom of the real estate debacle to occur in mid 2009 – another real estate expert forecasted that we are but 1/2 way thru this mess with turn around in the last part of 2009.

Why buy when lots of well respected forecasters say we haven’t hit bottom yet?  Buying low requires a low to be already established.

P.S.
The way cycles works is that the panic sets in right at the bottom (dah) and *prices accelerate the most downward there *. Wait for it folks...  

*Probably an excellent timing signal will be when Marriott starts to exercise their ROFR again. * They understand their market far better than any of us do.

So you have an excellent timing indicator right here - wait for folks to report a substantial usage of the ROFR by Marriott.  Who could ask for more?  The general public won't know of this and still hold firesales of their timeshares.  Marriott can only absorb so many units and they will pass on the ROFR again until they sell them.


----------



## PerryM (Dec 16, 2008)

oops......


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## thinze3 (Dec 16, 2008)

Let's assume someone gave you $10K to spend, but you HAD to buy a Marriott timeshare within a month, and you HAD to keep it for five years.

Which resort would you pick.  

Terry


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## PerryM (Dec 16, 2008)

thinze3 said:


> Let's assume someone gave you $10K to spend, but you HAD to buy a Marriott timeshare within a month, and you HAD to keep it for five years.
> 
> Which resort would you pick.
> 
> Terry



I for one would be forced to buy a Bronze SummitWatch for $1,500 from Marriott which includes the closing costs – I don’t know if they still do this though.  we paid $5k for our Gold SW 3+ years ago and maybe you could get a Gold for the $1,500 - I don't know.

The $8,500 I’d put in a bank and use to make the $1k MFs for 5 years and to pay the fee to lock-off the unit and make 2 deposits into RCI/II and exchange back to the Maui Ocean Club.

We have done the above for 3+ years now and will be back for President’s week and the next week in MOC in 2009 – we do own a Gold SW but Bronze should do the same.  We have spent 2 Christmas weeks in MountainSide and Summit Watch doing the same exact thing.

If you believe the rumors of a Point system then this approach will be moot - but many folks believe in Santa too.

That’s the most bang for the buck I can think of in the Marriott system.


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## ondeadlin (Dec 16, 2008)

Just to make you happy: I'd buy two gold weeks at Newport.

The MF are reasonable, the location is outstanding (not dependent on air travel like Hawaii), and I think you could rent for well above MF if you selected your weeks carefully.


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## thinze3 (Dec 16, 2008)

That Timber Lodge that sold for $5K and change yesterday sure looked nice. I called II and was told that every week Jan. thru Sept. had been offered AC's for '08 & '09. Forgot to ask if 1BR qualified.

Marriott calls it 'platinum summer' which is another way of selling a 'gold' week for a higher price. It appears that the summer lock-off rent would go for $800+ covering most of the MF's. It's probably a very good trader as well.

Terry


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## m61376 (Dec 16, 2008)

Terry-
I'd sure bet your MBT bargain would fit your parameters  .
Although it misses on some of your points, wrt tradeability and desirability I would think Aruba SC Gold would warrant a mention. There have been some good buys on that around and although the MF's are a little higher, it trades really well, gets AC's from II, airfares from the East coast are similar to cross-country airfare, and there is a good rental market.

There may be a few other Gold weeks that are worthy of consideration as well.


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## tarabell (Dec 16, 2008)

Perry:  

I think you give really good timeshare advice, but you might want to learn a little more about how the fed operates



PerryM said:


> Looking at past cycles of up and down is helpful but the key question is “What’s different now then back then?”
> 
> We have an out of control federal government spending trillions of dollars like it was Monopoly money – *the FED has spent* 2 trillion dollars and they won’t even tell us where the money went.  That’s about $7,000 of additional debt for each man, woman, and child in America.  With interest and the inefficient way government collects taxes that will easily be $14,000 for each American to pay back.  And for what?
> 
> ...


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## James1975NY (Dec 16, 2008)

I thought this site was for experienced timeshare folks helping others maximize their ownership and vacation experience. When did this turn into a real estate advice column?


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## m61376 (Dec 16, 2008)

James1975NY said:


> I thought this site was for experienced timeshare folks helping others maximize their ownership and vacation experience. When did this turn into a real estate advice column?



Well, in a sense discussing whether this is a prime opportunity to purchase additional weeks is relevant to maximizing ownership.


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## stevens397 (Dec 16, 2008)

Hard to believe how this thread has developed.  Most of us who have been in this for years have gone through a number of phases.  We start gung-ho and stupid!  Then we get some experience, learn about resale, trading, renting, etc. 

In the end, the earliest advice I learned was to buy where you're happy going most of the time.  And pay a price you feel good about.  I paid retail for Kierland early in the process - about $27,000.  I ended up with 152,000 Starpoints when they were worth a fortune, and it got me over $7,000 in hotel stays.  And four years of great vacations.    No regrets.

I'm a dentist and I've taken lots of practice management courses.  The best advice about my fees was that a fair fee is one that makes the dentist feel richly rewarded and that the patient pays with gratitude.  Any person who can only be happy if they pay absolute rock-bottom will be unhappy most of the time.  This past summer I purchased a 2BR Platinum resale at the Westin Kierland for $7,000 - a price that I felt was an unbelievable coup.  Do I feel like a schmuck now?  Now way.  It is definitely worth $7,000 to me and I'll get lots of wonderful usage - it will be a bargain in my life.  And I'm happy for those who recently bought it for less.  

I think the best advice now is to not only buy where you like to go, but to buy what you can truly use.  The rental market is in the crapper and who knows where it will go.

Finally, I wish the two protagonists would move on.  Our country is in big trouble from a lot of people who were sure about everything.  A little humility goes a long way.


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## SpikeMauler (Dec 16, 2008)

stevens397 said:


> Hard to believe how this thread has developed.  Most of us who have been in this for years have gone through a number of phases.  We start gung-ho and stupid!  Then we get some experience, learn about resale, trading, renting, etc.
> 
> In the end, the earliest advice I learned was to buy where you're happy going most of the time.  And pay a price you feel good about.  I paid retail for Kierland early in the process - about $27,000.  I ended up with 152,000 Starpoints when they were worth a fortune, and it got me over $7,000 in hotel stays.  And four years of great vacations.    No regrets.
> 
> ...



Amen......


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## thinze3 (Dec 16, 2008)

stevens397 said:


> ... This past summer I purchased a 2BR Platinum resale at the Westin Kierland for $7,000 - a price that I felt was an unbelievable coup.  Do I feel like a schmuck now?  Now way.  It is definitely worth $7,000 to me and I'll get lots of wonderful usage - it will be a bargain in my life.  And I'm happy for those who recently bought it for less...



So I take it your vote would be for Kierland.  

Terry


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## djyamyam (Dec 16, 2008)

thinze3 said:


> Today we concentrate on finding the very best deal for the money within the Marriott system. I know we all have our own oppinions, _but we don't have to mention other Tuggers by name to do this._
> 
> Which Marriott resorts offer red, platinum, or platinum plus weeks that give you the most bang for the buck in today's market.
> 
> ...




If this seller follows through with the sale, then I would say this auction meets the criteria.  THIS is the best deal I've seen so far in the past few months

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&ssPageName=STRK:MEWAX:IT&item=150315270306


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## cp73 (Dec 17, 2008)

djyamyam said:


> If this seller follows through with the sale, then I would say this auction meets the criteria.  THIS is the best deal I've seen so far in the past few months



Wow, I agree. $3650 for a Platinum every year Shadow Ridge Week. Plus it says if you buy with an ebay mastercard you can get 15% off on that. Weeks in Feb, March, and April, could easily rent for at least $2000. Maintenance fees and taxes are probably around $1050.


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## JudyS (Dec 17, 2008)

djyamyam said:


> If this seller follows through with the sale, then I would say this auction meets the criteria.  THIS is the best deal I've seen so far in the past few months
> 
> http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&ssPageName=STRK:MEWAX:IT&item=150315270306





cp73 said:


> Wow, I agree. $3650 for a Platinum every year Shadow Ridge Week. Plus it says if you buy with an ebay mastercard you can get 15% off on that. Weeks in Feb, March, and April, could easily rent for at least $2000. Maintenance fees and taxes are probably around $1050.



The seller says, "We will look at and consider ALL BIDS."  This sounds to me like they don't consider the auction to be binding.  (And technically, eBay real estate auctions _aren't_ binding.)  So, there may be an "unstated reserve" that the seller has in mind.

Also, I think that 15% off w/eBay Mastercard has a pretty low maximum cap.  I seem to recall you could only get $50 or so off with it. 

Hey, Jim, if you're still here, why not buy a Summit Watch or Mountainside Platinum?


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## m61376 (Dec 17, 2008)

stevens397 said:


> Hard to believe how this thread has developed.  Most of us who have been in this for years have gone through a number of phases.  We start gung-ho and stupid!  Then we get some experience, learn about resale, trading, renting, etc.
> 
> In the end, the earliest advice I learned was to buy where you're happy going most of the time.  And pay a price you feel good about.  I paid retail for Kierland early in the process - about $27,000.  I ended up with 152,000 Starpoints when they were worth a fortune, and it got me over $7,000 in hotel stays.  And four years of great vacations.    No regrets.
> 
> ...



I agree with your vantage point about buying/enjoying completely. As a case in point, I bought resale 2 years ago and have recently commented that, while I paid a really good price in '06, by today's standards I threw perhaps 6K away; however, I had 2 fabulous vacations the first year and, after losing my Dad last year, the memories of those trips with my parents are irreplaceable. I think (or at least hope) most of us can look back on our family's trips and feel they were worth every penny of what we might have "overspent"- although hindsight is a wonderful thing. 

However, I do rather enjoy both Boca's and Perry's posts. I don't really think they are being nasty, I think that some of their posts are designed just to be a little flip, for lack of a better word. I know that I for one have learned a lot from their discussions here and elsewhere, and it is kinda nice to hear both sides of the coin, so to speak.


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## Zac495 (Dec 17, 2008)

MC1376 - you said it all. My vacations with my parents and my kids are priceless. My picture trail is priceless. (I pay 150 per year to maintain it - priceless). Yeah - my Aruba Ocean Club's fees are making me mad. Yeah, I shouldn't have bought developer Manor Club since the point system dropped. but guess what? I'm going to HAWAII with the points from that silly purchase. 

I worry about retirement - but I have a great job with a great pension (nothing safer than being a teacher these days). I'm going to continue to vacation because those are the stress-free days with the people I love most, and who won't be here forever. (or the other way around with the kids - god willing).

Perry - love hearing from you. I don't think anyone on this board is out to hurt anyone else. Some advice may or may not be good - but we're looking into a crystal ball with our economy - and that ball is very foggy. Don't take anyone (Boca, Perry, or anyone's) advice without using your own head! That's why it's called ADVICE.


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## PerryM (Dec 17, 2008)

*A freight train leaves St. Louis going 80 mph and you jump in front of it...*



Zac495 said:


> MC1376 - you said it all. My vacations with my parents and my kids are priceless. My picture trail is priceless. (I pay 150 per year to maintain it - priceless). Yeah - my Aruba Ocean Club's fees are making me mad. Yeah, I shouldn't have bought developer Manor Club since the point system dropped. but guess what? I'm going to HAWAII with the points from that silly purchase.
> 
> I worry about retirement - but I have a great job with a great pension (nothing safer than being a teacher these days). I'm going to continue to vacation because those are the stress-free days with the people I love most, and who won't be here forever. (or the other way around with the kids - god willing).
> 
> Perry - love hearing from you. I don't think anyone on this board is out to hurt anyone else. Some advice may or may not be good - but we're looking into a crystal ball with our economy - and that ball is very foggy. Don't take anyone (Boca, Perry, or anyone's) advice without using your own head! That's why it's called ADVICE.



Thanks, my point is still that trying to pick the bottom of the real estate collapse and bargain hunting is foolish at this time – wait for something to indicate that a bottom is forming and I’d have no problem with it.

I think most of us can put ourselves in the “loser column” when it comes to real estate price back then and price today.  Everything cycles and when you feel that you are safe in your life and have some “pocket change” to blow on something like a timeshare go ahead and do it.  But folks dump timeshares all the time - they thought it was fine to buy it at some point and are now facing bankruptcy - this decision is NOT made in a vacuum - do you really need another $1,000 per year expense (MF) for the rest of your life right now?

I don’t know about you guys but when I look at real estate its collapsed 50% in some areas and 15% in others with about 25% being an average?  I don’t have exact numbers just a gut feeling from watching Zillow.

*Timeshares are the only thing in the United States safe from all this carnage? * When it hits timeshares 40+ years of phony-baloney artificial markets will implode the timeshare market.  I truly believe “blood will run in the streets” before its safe to buy a timeshare again.

But I’m only 66% correct in my stock picks and maybe I’m wrong here – maybe timeshares are special and immune from the normal mayhem that is inflicting everything else around us.

You decide – I just report my opinions.

So let me restate my original reaction to this thread – *Buying a timeshare, even resale, at this point is an incredibly dumb thing to do.*  (And that’s me putting on my holiday PC hat).  But its your money and if you do the due diligence you can smile and report back that stepping in front of that freight train was an incredibly brilliant thing to do.


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## thinze3 (Dec 17, 2008)

PerryM said:


> ...So let me restate my original reaction to this thread – *Buying a timeshare, even resale, at this point is an incredibly dumb thing to do.*  (And that’s me putting on my holiday PC hat).  But its your money and if you do the due diligence you can smile and report back that stepping in front of that freight train was an incredibly brilliant thing to do...



Good morning Perry!  

I hope to close on my Marriotts BeachPlace Towers by the end of the year (twenty cents on the dollar). :ignore:  It looks like my first use with it will be to bank my '09 week and trade it for a Marriott in Hawaii in 2010. I will then let my friend use it while I use his newly-bought-from-the-developer Royal Haciendas in 2011.

Terry  

P.S.
I also called my broker a few weeks ago and bought bank stocks.  He said, "Terry, why does this not surprise me. All my other calls today have been to sell the financials."

P.S.S.
I wish I had a few hundred thousand bucks in the bank. I wouldn't have bought an MBP timeshare, I would have bought an entire condo in Ft Lauderdale.


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## PerryM (Dec 17, 2008)

*Timeshare "Superior Returns"?  Really?*



thinze3 said:


> Good morning Perry!
> 
> I hope to close on my Marriotts BeachPlace Towers by the end of the year (twenty cents on the dollar). :ignore:  It looks like my first use with it will be to bank my '09 week and trade it for a Marriott in Hawaii in 2010. I will then let my friend use it while I use his newly-bought-from-the-developer Royal Haciendas in 2011.
> 
> ...



If you buy a timeshare and hold it for a long period of time, 25+ years then buying from the developer or on eBay is moot.  As long as the resort is stable and the owners aren't jumping ship to declare bankruptcy then this is fine.

But the other part of this thread is:
*"My guess is that you pick them up for $.50 on the dollar or less. When Marriott starts exercising again, you will earn a superior return."*

This advice is coming from a licensed timeshare real estate broker offering "Superior Return" - this sounds like a security to me and that's a conflict.  Timeshares are sold as something that you use and pass down to your heirs.

It's ok for you and I to talk about a timeshare as an "investment" but I believe it's against the law to a licensed real estate broker to be hawking "superior returns" on timeshares.

But maybe I'm wrong - all those timeshare real estate agents do talk about "superior returns" on your timeshare portfolio.

That's why I'm so ticked at this suggestion - it came from a licensed timeshare real estate broker.

Again, you decide - I report my opinions.  Take them for what you paid for them.

P.S.

Congratulations 20 cents on the dollar sounds like a great bargain.  I love BPT and we have exchanged into it many times over the years - well done.

Maybe we should hold a contest and see who gets the best discount on a Marriott week?  Some kind of prize would be nice.  Probably have to have groups like "Platinum", "Platinum Plus", "Silver" ect.  But we should see who get's the absolute best discount.

20 cents on the dollar is actually lower than WorldMark credits which are now selling for 28 cents on the dollar.  Well done.  (I really never thought I'd see this day in any of my wildest forecasts; Marriotts selling for less than WorldMarks)


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## BocaBum99 (Dec 17, 2008)

Perry,

I always felt that your recommendations provided investors in anything you've posted about with a tremendous contrarian indicator.   In other words, if you are recommending it, everyone should run from it.

Little did I know just how good you are as that contrarian indicator.

On Oct 8, 2007 in this thread:  Perry's thread on investing in stocks vs. Real Estate, you make the recommendation to buy and hold DIA, the Dow Jones industrial averages ETF.

On Oct 9, 2007, the Dow Jones Industrial average peaked at 14164.

At the time you recommended DIA, the ETF was trading at 140.52.  At this time, it is trading at 89.57.

Anyone who bet that you were wrong and shorted DIA would have made a profit of 36%.

Any of us can bloviate on these forums.  What matters is the track record of those recommendations.  Your track record of being wrong is truly astounding.

I think we should book mark this thread and come back to see it in several years.  Then, we should evaluate whether your recommendation or mine was the right one.  It will be easy to determine.  If we look at eBay and see every conceivable Marriott being sold for $1 on eBay, I will post that you were right.  If Marriott resumes exercising ROFR above today's prices, I was right.  Time will tell.


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## Eric (Dec 17, 2008)

I think Perry suffers from Napoleon's complex and wants to be a leader even if the kool aid is tainted  




BocaBum99 said:


> Perry,
> 
> I always felt that your recommendations provided investors in anything you've posted about with a tremendous contrarian indicator.   In other words, if you are recommending it, everyone should run from it.
> 
> ...


----------



## thinze3 (Dec 17, 2008)

Yeah, but these boards are much more fun to read when Perry sticks his head in the door every couple of months.

Terry


----------



## BocaBum99 (Dec 17, 2008)

thinze3 said:


> Yeah, but these boards are much more fun to read when Perry sticks his head in the door every couple of months.
> 
> Terry



I totally agree.  Perry is such a colorful and interesting writer that he should write some books.  Fiction would be my recommendation.  

But, he should stay away from making buy and sell recommendations.  

Perry was once really high on condo hotels and bought one in Daytona Beach in Dec of 2005.  That was right near the top of the Real Estate bubble in Florida.  His track record as a contrarian indicator is getting even more amazing as I check his past recommendations.

In this thread:  Condo Hotels thread, Perry discusses a strategy for buying and holding real estate for 5 years.  I'll be very surprised if he has a capital gain when he sells it in 2010.

In this thread:  Thread where Perry tells us the criteria for purchasing a condo hotel



PerryM on May 18 said:


> Trump is the king of condo-hotels (CH).  One can argue whether Trump is the winner or his clients, or both.
> 
> A condo hotel is yet another way to own real estate and participate in its appreciation that inevitably follows.  But if you buy a CH to become a Trump you are buying for the wrong reason.
> 
> ...



What is intersting about this post is not the logic.  He has used this same logic to purchase pre-construction timeshares from Marriott.  What makes it so off the charts astounding is the timing.  Dec 2005 is right near the peak of the Florida Real Estate market.


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## PerryM (Dec 17, 2008)

*Mark this thread please...*

Guys there are two completely different threads intertwined here:

1)	You buy a timeshare as the developer says it’s to be used
2)	You play timeshare mogul

I’m assuming this thread is all about flipping timeshares – that’s the reference to “My guess is that you pick them up for $.50 on the dollar or less. When Marriott starts exercising again, you will earn a superior return.”

If your goal is to use timeshares for a “superior return” that’s just dumb in this climate.  2 years ago you could do this (and many did) but not now guys; come on use a little common sense.

If you buy a timeshare and use it (use, rent, exchange) for a long period of time it makes little difference where you buy it from.  The folks who buy Marriotts from the developer get MRPs that at the time were offsetting to the 40% discount you could get resale.

Additionally Marriotts appreciated 5% per year and thus 5 – 7 years of ownership would bring you back to the purchase price.

Maybe some of you missed the last year – the stock market lost about 50% of its value and the real estate about 25% and the credit markets are shot to hell too.

That changes everything and I don’t remember folks making these predictions 1 – 2 years ago.  So just about everyone who owns stock is a loser and that goes for you home owners too – all are losers.

Sooooo?  Everything cycles and until you actually complete the transaction there is no gain or loss – even Uncle Sam can’t get its grubby little hands on most of that (there are plenty of exceptions though).  So until a transaction closes one can only make the decision as to how much glee or pain to endure.

Going back to snippets of past posts is fun and I’d bet I could selectively pull out may phrases that now look foolish to a lot of folks.  That’s playing 20/20 and only has entertainment value.  I'm not trying to play this game.

So if you want to buy a timeshare and hold it for a long time and make the yearly MFs then buying now from the developer or on eBay makes little difference after 25+ years.  That’s always been my point.

I’ve predicted the timeshare bubble bursting and pointed out that looking for “superior returns” of timeshares is a foolish way to invest your money.  

Book mark this thread and see if I’m wrong in the upcoming years.

I fully understand that folks who make money buying and selling timeshares to us on this chat room might get a little upset with me.  So be it.

P.S.

I mean the timeshare market is no GM or Ford or Chrysler - nothing to worry about here guys - go ahead and play timeshare mogul if you want.  I still think its a dumb idea; but that's just me.


----------



## Latravel (Dec 17, 2008)

Go Perry go!    Go Perry go!   (I used to be a cheerleader in college.)

Though I don't agree with some of your posts, I appreciate how you stand your ground politely when someone else isn't being polite.


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## PerryM (Dec 17, 2008)

Latravel said:


> Go Perry go!    Go Perry go!   (I used to be a cheerleader in college.)
> 
> Though I don't agree with some of your posts, I appreciate how you stand your ground politely when someone else isn't being polite.


----------



## PerryM (Dec 17, 2008)

PerryM said:


>



I don't know about the rest of you folks here but I'm scared out of my mind. 

Read about a new report on how America is bankrupt and that was before the last few months of our insane government's antics.  More and more of this will come out - this is turning out to be a repeat of 1929 folks.

Keep your powder dry until things settle down and you might be able to make one-in-a-lifetime purchases that will then remain within your family for generations.


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## BocaBum99 (Dec 17, 2008)

Perry,

I, too, have been scared out of my wits within the last 2 months several times.  Each time I felt that way about the stock market and deflation, I look at the markets the next day and something pops up that tells me we are not headed to the great depression.

Moreover, I believe we are reaching a bottoming process for most markets.  I am a big fan of Jim Cramer and he is predicting a bottom for the real estate market by mid-June of next year.  If that indeed happens, then everything else can heal.

One of the indicators I am using to detect a bottom of the real estate market is when I become personally motivated to buy residential real estate again.  I've been in the market to buy a new home since 2005.  I haven't done it for fear of dropping prices.

If interest rates head down to 4.5% like many pundits are predicting and if this is happening at the same time housing starts have reached the lowest levels since 1959 (that's a 50 year low) and housing prices have dropped 30-40% in many locations, that seems like the right time to buy for me.  Jim Cramer is saying to purchase a house in the early Spring and quickly re-finance it in the summer when he believes interest rates could be down below 4%.

As Warren Buffet once said,  “be greedy when everyone else is afraid and be afraid when everyone else is greedy.”


----------



## PerryM (Dec 17, 2008)

BocaBum99 said:


> Perry,
> 
> I, too, have been scared out of my wits within the last 2 months several times.  Each time I felt that way about the stock market and deflation, I look at the markets the next day and something pops up that tells me we are not headed to the great depression.
> 
> ...



I not only see the timeshare market going belly up I see many timeshare resorts going bust - too many owners throwing in the towel.  Buying a $1 Platinum Marriott and paying MFs that could skyrocket to cover the folks bailing out makes that $1 Marriott a real drag.

The developers will simply become the management company and send the collection agencies after delinquent owners.  They might then start to allow the owner to pay them $5k to get out of their unit and wait for the storm to clear.

They are timeshare developers who know how to make a buck or two from even a disaster.

But folks here are all grown ups and they can do what ever they want.


----------



## BocaBum99 (Dec 17, 2008)

PerryM said:


> I not only see the timeshare market going belly up I see many timeshare resorts going bust - too many owners throwing in the towel.  Buying a $1 Platinum Marriott and paying MFs that could skyrocket to cover the folks bailing out makes that $1 Marriott a real drag.
> 
> The developers will simply become the management company and send the collection agencies after delinquent owners.  They might then start to allow the owner to pay them $5k to get out of their unit and wait for the storm to clear.
> 
> ...



If you truly believe that scenario, then you should sell out your entire timeshare portfolio now.  Why hold when you could end up with no vacation like many bankrupt DCs. That's because there will be significant maintenance fee increases and special assessments to cover for dead beat owners who default on MFs.

I think delinquencies will increase significantly this coming year.  And, there will probably be increased fees and additional reserve fees collected to cover for the losses.  This is near term.

Many developers will go belly up and the market will likely consolidate.  Once that happens, the market can heal itself and resume growth after about a 50% correction.  That is my guess.


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## taffy19 (Dec 17, 2008)

thinze3 said:


> Yeah, but these boards are much more fun to read when Perry sticks his head in the door every couple of months.
> 
> Terry


I agee. I really enjoy reading their views and value them too plus it makes for interesting reading during this time of doom and gloom.

I still believe that working people will try to take vacations but they will look for bargains first and you can find them everywhere.

Jim, I believe that the Marriott Palm Desert timeshare condos fit the bill or the NCVs. They are in easy driving distance from Los Angeles but you need to buy the platinum season when the rents are high. The rest of the year, you can find many deals staying there. They are excellent traders too but you need more than one week or you will have another problem and that is making reservations at both resorts. You already own one so you are OK but you may need more weeks to get the best weeks that everyone is trying to get. This may change if the Marriott goes over to points but will they?


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## BocaBum99 (Dec 17, 2008)

iconnections said:


> I agee. I really enjoy reading their views and value them too plus it makes for interesting reading during this time of doom and gloom.
> 
> I still believe that working people will try to take vacations but they will look for bargains first and you can find them everywhere.
> 
> Jim, I believe that the Marriott Palm Desert timeshare condos fit the bill or the NCVs. They are in easy driving distance from Los Angeles but you need to buy the platinum season when the rents are high. The rest of the year, you can find many deals staying there. They are excellent traders too but you need more than one week or you will have another problem and that is making reservations at both resorts. You already own one so you are OK but you may need more weeks to get the best weeks that everyone is trying to get. This may change if the Marriott goes over to points but will they?



Thanks Emmy, those are good ideas.  Like I said, this is an experiment.  If I find something that meets the criteria, I'll buy it and post the details over time.  My theory could be wrong, but I think the odds are in my favor.


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## PerryM (Dec 17, 2008)

BocaBum99 said:


> If you truly believe that scenario, then you should sell out your entire timeshare portfolio now.  Why hold when you could end up with no vacation like many bankrupt DCs. That's because there will be significant maintenance fee increases and special assessments to cover for dead beat owners who default on MFs.
> 
> I think delinquencies will increase significantly this coming year.  And, there will probably be increased fees and additional reserve fees collected to cover for the losses.  This is near term.
> 
> Many developers will go belly up and the market will likely consolidate.  Once that happens, the market can heal itself and resume growth after about a 50% correction.  That is my guess.



Sounds like we have some agreements here.

Will hold on to our timeshares since we are already booked them up to 2010.

2009 may be a wild and woolly year for the United States.

Best wishes to everyone.  I sure wish everyone a profitable 2009.


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## Vacation Dude (Dec 17, 2008)

I think both Perry and Boca have good and bad points.

I think NOW is a great time to be a buyer of timeshares or anything else if you have cash.

Marriotts are at a historic low especially w/o ROFR and if you want a ski week in park City, owning beats renting any day. If you want to get a beach place, same thing.

Thus, I think now and all of 2009 will be a great time to buy.

I think Perry is pretty doom and gloom, who knows, but if a depression hits, owning a timeshare and paying maintenance will be the last of your worries. Besides a new president will inspire hope and will represent change.

Bronze weeks may work if you get lucky, but I doubt that "most" people can trade it for prime time Hawaii or holiday week in Utah.

I don't want to enter the battle or debate, but both have interesting points.

Perhaps Perry should stick to the stock market as there is more opportunity to profit than timeshares and then he can rent whatever he wants from his stock profits.

Boca appears to be a Bluegreen expert (reseller?) and I don;t see any Marriotts for sale, thus he does not have a conflict of interest.


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## taffy19 (Dec 17, 2008)

Jim, since you often come to southern CA, I thought this was a good choice for you. If you buy the platinum season, it would be easy to rent them out but if you do not succeed, you can always use it yourself or you can exchange it with an extra week.

I guess, you could find a resort too in or near FL where you also visit often but I don't know anything about the resorts over there.

If you buy for the highest rental income, the ski weeks should be the best because HI is risky with the airline fares only going higher. Since you live there, you should have no problem making these last minute exchanges anyway. How nice that is!


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## PerryM (Dec 17, 2008)

Vacation Dude said:


> I think both Perry and Boca have good and bad points.
> 
> I think NOW is a great time to be a buyer of timeshares or anything else if you have cash.
> 
> ...



We love timeshares – they have added a lot to our lives.

What's about to befall them is truly heart wrenching.

We love looking ahead 1 year (13 months) and the thrill of trying to snag something in II.  Love snagging a $65k timeshare using a $5k timeshare.

Love actually using them for vacations.  I can’t tell you how nice its been to snowboard down the Park City Mountain Resort right up to the Marriott MountainSide and be 5 steps from entering the resort.  We used to own there but now just exchange there.  Same with SummitWatch.

When our son was small an hour on the slopes would be followed with hot chocolate and movies in the villa overlooking PayDay the main lift at the resort.  We have fond memories of doing this at Park City for 10 years now.

I enjoy going back to familiar haunts but we have had 59-day II exchanges and jumped in the car and had a ball – again a $45k timeshare for $5k on our part.

I dread the day Marriott might dump II and our WorldMark credits will have much less use to us.  But in this climate who knows what will happen.

I still recommend timeshares to folks and if you can use them the way they are sold you can basically buy them anytime from the developer or resale – it really doesn’t matter in the long run.  I must caution folks that the horrific scenarios I envision are just guesses but something is going to happen to this timeshare market.

So the temptation might be there in 2009 to snap up an unbelievable timeshare deal and I know my knees will weaken and if it’s MountainSide or SummitWatch I’ll be sweating bullets but I hope to pass on all those deals until I see blood in the timeshare streets.

But, I'm not selling them - they are too valuable to our memories and lives.


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## BocaBum99 (Dec 17, 2008)

Vacation Dude said:


> I think both Perry and Boca have good and bad points.
> 
> I think NOW is a great time to be a buyer of timeshares or anything else if you have cash.
> 
> ...



Excellent summary.  I actually like Perry a lot. I think he's really smart and has a lot of good ideas.  Plus, he is extremely entertaining.  I just don't agree with a lot of his most colorful recommendations (as he doesn't agree with mine) and I have a rational, fact based, analytical reason for that disagreement.

The whole point of such debates is to get the pros and cons out on the table so that people can make up their own minds.  I think they have done it.

In order for there to be a trade, there has to be someone who believes selling is right and someone else who believes buying at that time and price are right.

Regarding Marriott Summit Watch Bronze units, you can absolutely get PRIME trades with them as long as it is within the Flexchange period.  I've done it for 3 years straight.  My $1500 capital investment including closing costs completely paid itself off in my first year of ownership just via exchanges vs. renting.  100% payback in the first 3 months of ownership.  Not many timeshares have thaqt type of payback.   Each year I use them and it works is pure Gravy.  Heading over to a poolside 2br unit at the Marriott Ko'Olina for week 51 on Saturday using it.  Also had a week 52 for a 2br Maui Marriott that I released since I already have a unit for a 2br week 52 also at the Ko'Olina.

At this time, I am actively seeking an upgrade opportunity for these Marrriott's.  I'm willing to dump these on eBay for $1 if I can get a platinum 2 bedroom lockoff at the same resort for under something under $10k (I haven't figured out the price point yet).


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## sernow (Dec 17, 2008)

"but I hope to pass on all those deals until I see blood in the timeshare streets"

Good grief Perry! If there isn't enough blood in the timeshare streets now, then I'm really not looking forward to getting to the time you're envisioning.


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## Vacation Dude (Dec 17, 2008)

sernow said:


> "but I hope to pass on all those deals until I see blood in the timeshare streets"
> 
> Good grief Perry! If there isn't enough blood in the timeshare streets now, then I'm really not looking forward to getting to the time you're envisioning.



I guess this would be timeshare Armageddon


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## stevens397 (Dec 17, 2008)

Does anyone here remember the old Saturday Night Live Point-Counterpoint where Jane Curtain would sya, "Jane, you ignorant slut!"


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## PerryM (Dec 18, 2008)

*1/10 full or 9/10 empty - you decide...*



sernow said:


> "but I hope to pass on all those deals until I see blood in the timeshare streets"
> 
> Good grief Perry! If there isn't enough blood in the timeshare streets now, then I'm really not looking forward to getting to the time you're envisioning.



For years now Wyndham (old Fairfield) has been commanding 15% of the sales price 5 seconds after the ink dries on the sales contract from the developer.  No one raises an eyebrow in that resale market.  Wyndham has no ROFR and no resale program and considers each Wyndham owner the son of Satan.

I believe that for years to come 15% is probably a realistic figure for ALL timeshares (Disney excluded).  But you can find Wyndhams for $1 on eBay occasionally.

However, I’d expect the timeshare industry, as a whole, to stop the piggish 4 to 1 ratio of sales price to acquisition cost and drop that to 2 to 1.  That and a massive restructuring of how timeshares are sold means that resales probably will be close to 5% of current prices.  A current $35k Marriott should go for $1,750 resale.

Marriott does have a ROFR and supports resales and they might step in and actively start to contact members to repurchase prime units – I can only guess.

I don’t recommend anyone sell their timeshare as prices implode – hold on and use them – that’s why you bought them.

The only fly in the ointment is the resorts themselves – we own units at the Park Plaza in Park City and when we bought them 4+ years ago they were for sale everywhere – the HOA had 35% delinquent rate and luckily Raintree stepped in and bought most of them.  The resort was in a world of hurt due to a bad HOA.  Many timeshares might succumb to the owners just walking away and the lengthy process of foreclosure starts – it takes a lot of time and no dues come in during that time.  Then they have to find folks wanting to buy them and pay the MFs at a timeshare on the verge of going belly up.

With real estate far from bottoming out the prospect of a complete rout of the industry is a possibility.

But I’m just guessing and maybe timeshares can outrun the tsunami that is overtaking our country – maybe we should ask Santa for some help.

And yes, folks here will report unbelievable deals on top of the line timeshares - each person here has to decide on their risk/reward level.  Again, if you buy these fantastic bargains and plan for the family to use them for a generation then they might make sense - even now.  But I'm guessing that as low as they might seem now they will be way over priced from a year from now.


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## Vacation Dude (Dec 18, 2008)

PerryM said:


> A current $35k Marriott should go for $1,750 resale.
> 
> Again, if you buy these fantastic bargains and plan for the family to use them for a generation then they might make sense - even now.  But I'm guessing that as low as they might seem now they will be way over priced from a year from now.



I seriously have to question these above statements as that would indicate that it will be possible to buy a Marriott Utah ski week (SW or MS) for $1,750?

Really? Perhaps you mean Bronze weeks.

When a 2 bedroom ski week rents for about $750 per day from Marriott for non-owners, then this timeshare would pay for itself in 3 nights.

Let me know where I can buy a platinum 2 bedroom Marriott ski week (ski-in/out) for this low price.


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## BocaBum99 (Dec 18, 2008)

Vacation Dude said:


> I seriously have to question these above statements as that would indicate that it will be possible to buy a Marriott Utah ski week (SW or MS) for $1,750?
> 
> Really? Perhaps you mean Bronze weeks.
> 
> ...



I agree with what you are saying.  I think that the reason why this doesn't make sense is that Perry is extrapolating a couple of data points he sees with his real fear for the entire economy and generalizing his claims to the entire timeshare industry market.    There are lots of reasons why a) his armagedon scenario isn't likely to happen and b) even if it does, it won't happen over night.  His predictions will happen for some resorts.  But probably not for the whole industry.  It rarely happens.  Even in the great depression, 70% of the working population had jobs.  It didn't go to zero.


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## m61376 (Dec 18, 2008)

And, what I think is very different today, is that lifestyles and expectations are very different. Our parents' generation was used to making do with what they had, but there are a lot of people in our generation and certainly our children's generation who are accustomed to a more luxurious lifestyle. Even though savings may have been depleted, many are still employed and making nice incomes and have some disposable income. Vacations for many are not considered a luxury but a way of life and, while many may curtail their spending, they will still go on vacations.

That said, timeshares in a sense lend themselves towards nice vacations with the ability to cut back a little. A family can eat breakfast in, pack lunch for the beach and perhaps grill a couple of nights and still have a great trip, yet save hundreds of dollars just by doing so. 

Maybe I am just convincing myself of what I want to believe to justify buying another unit now, but I don't think the bottom is going to fall out of the market like Perry predicts. Of course, no one has any real facts and we are all just pontificating here, but as the credit market eases I think Marriott's hiatus from exercising ROFR will end, and then the only one to benefit from desperate sellers will be Marriott. The small proportion of people who need to sell at any price will still exist, but the regular buyers won't get a chance to buy them. I really feel now may be a unique opportunity.

I may be wrong, but given their price-point Marriott tends to attract a more affluent buyer in the first place. Certainly Marriott owners are not immune from what's going on, but like most of us here who are even contemplating buying another, many of them still can afford to travel.

Who knows...some of us will be feeling pretty smug this time next year as we reflect back, and some of us will be kicking ourselves.


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## taffy19 (Dec 18, 2008)

Personally, I believe that prices may be lower yet in January just before the maintenance fees are due but after that the prices may stay the same unless the economy gets bleaker yet and many more people get unemployed.  It's the media who is at fault because they love to down play any good news but the bad news are headlines so people have the tendency to cut back even if they have a job and are making the same money as before.  Uncertainty is hard to deal with for most people.  JMHO.  I know it is for me.


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## MOXJO7282 (Dec 18, 2008)

Vacation Dude said:


> I seriously have to question these above statements as that would indicate that it will be possible to buy a Marriott Utah ski week (SW or MS) for $1,750?
> 
> Really? Perhaps you mean Bronze weeks.
> 
> ...



I agree. I think too many make blanket statements that are just not always relative to every region or name brand. 

I do think many TS resorts, in overdeveloped areas, still have more room to drop, maybe alot, but I don't think Marriott prime weeks will suffer the same fate. 

I don't know the prime ski market, but I do know the prime beach market and I just don't see those going down more than another 10-15%. I would then expect a rebound in 3-5 years. 

That's just my opinion, but I think its more likely that will happen than a total cave-in of pricing. Again I'm just talking Marriott prime beach weeks, because that is what I know, but from what I've seen on TUG, prime ski behave the same.


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## Vacation Dude (Dec 18, 2008)

Quality name brand timeshare + beach/ski location + 2-4 bedroom size + prime week or holiday will always command value and it is doubtful that the resale value will approach the annual dues (as PerryM suggests). 

A tired timeshare + poor location (long way from beach or chair lift) + offseason + high annual dues will always be hard to sell and is probably worth less than $1 on ebay.

With timeshares and everything else, you usually get what you pay for and if something is too good to be true, it probably is.


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## stevens397 (Dec 18, 2008)

Maybe I'm just praying but I don't see depression as a real possibility.  That said, what will the effect be if Detroit's big 3 are allowed to go into bankruptcy?  Chrysler already just closed for one month.  And if it happens, how will that psychologically affect the rest of the economy.

I don't think we're done.  That said, it's easy to predict depression.  If you're wrong, so what?


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## london (Dec 18, 2008)

*Well Said*



Vacation Dude said:


> Quality name brand timeshare + beach/ski location + 2-4 bedroom size + prime week or holiday will always command value and it is doubtful that the resale value will approach the annual dues (as PerryM suggests).
> 
> A tired timeshare + poor location (long way from beach or chair lift) + offseason + high annual dues will always be hard to sell and is probably worth less than $1 on ebay.
> 
> With timeshares and everything else, you usually get what you pay for and if something is too good to be true, it probably is.



I agree with your thoughts, well said......


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## PerryM (Dec 18, 2008)

Vacation Dude said:


> I seriously have to question these above statements as that would indicate that it will be possible to buy a Marriott Utah ski week (SW or MS) for $1,750?
> 
> Really? Perhaps you mean Bronze weeks.
> 
> ...



Simply using the going rate for Wyndhams (15%) and the developers settling for 200% gross return on their money instead of 400%.  (Resulting in just 5%) Some here report 20% of current sales price - not much of a stretch to me; the panic hasn't started yet.

When bubbles burst the prices we have gotten accustomed to fool us as to how little something is actually worth to folks who don't want these things.  People like to follow the crowds - they can't wait to buy when prices are at all time highs (Don't want to miss out on a good deal) and can't wait to sell when prices start to crash - want to dump a bad deal.  It takes a contrarian to buck the trends.

But we'll see...I'm just guessing based upon my studies of the "Madness of the Crowds".

P.S.
I went thru the rare coin market bubble bursting 20+ years ago - in the blink of an eye they lost 90% of their value - all of them.  Took 10 years to recover.  No one then could contemplate how coins could be worth their base metal price - that's exactly what happened - they assumed the value of the metal they were made from.

Just what is 1/52 of a condo worth?  There are 51 other owners in that one condo - they all want to do something different and thus the 1/52 slice becomes worthless until folks feel comfortable with disposable income again.

We see our largest companies imploding,, stock market losing 1/2 of 200 years of gains in 12 months, real estate fading, and our government spending 5+ trillion dollars on boondoggles in 1 year - plus we are now bankrupt.  Assuming a 1/52 slice of a condo has some value is a stretch of the imagination in this environment; at least to me.


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## lark (Dec 19, 2008)

Vacation Dude said:


> I seriously have to question these above statements as that would indicate that it will be possible to buy a Marriott Utah ski week (SW or MS) for $1,750?
> 
> Really? Perhaps you mean Bronze weeks.
> 
> ...



A platinum summit just went for about $17.5k on ebay, so I think we're still about 16k shy of that mark.


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## BocaBum99 (Dec 19, 2008)

PerryM said:


> Simply using the going rate for Wyndhams (15%) and the developers settling for 200% gross return on their money instead of 400%.  (Resulting in just 5%) Some here report 20% of current sales price - not much of a stretch to me; the panic hasn't started yet.
> 
> When bubbles burst the prices we have gotten accustomed to fool us as to how little something is actually worth to folks who don't want these things.  People like to follow the crowds - they can't wait to buy when prices are at all time highs (Don't want to miss out on a good deal) and can't wait to sell when prices start to crash - want to dump a bad deal.  It takes a contrarian to buck the trends.
> 
> ...



I figured your conclusion was based on something like what you state in this message.

In summary, you read a book for what you thought was an analogous market situation, looked at a couple Wyndham data points and extrapolated a conclusion across the whole industry.

It makes for interesting message board reading, but not so much for sound buy, sell or hold advice.


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## ondeadlin (Dec 19, 2008)

I must say it's absolutely fascinating to watch this thread.

On the one hand you have the actual financial numbers. Every major timeshare company reporting that after years of growth, sales have  tanked. Employees being laid off. Timeshare prices absolutely cratering on eBay - pretty much a "Did you see THAT?" thread concerning a different auction every day on TUG. Historical resale lows on just about every property.

Yet despite all this actual, factual evidence, on the other hand, you've got people suggesting Perry is the one who's nuts for suggesting it might get worse.

It's all got a touch of "The Emperor's New Clothes" feel to it.

With Perry playing the role of the small child who cries, "He's got nothing on!"


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## BocaBum99 (Dec 19, 2008)

ondeadlin said:


> I must say it's absolutely fascinating to watch this thread.
> 
> On the one hand you have the actual financial numbers. Every major timeshare company reporting that after years of growth, sales have  tanked. Employees being laid off. Timeshare prices absolutely cratering on eBay - pretty much a "Did you see THAT?" thread concerning a different auction every day on TUG. Historical resale lows on just about every property.
> 
> ...



You and Perry are clearly in the same camp.  That's fine.  For every seller who has a strong reason to sell, there is a buyer who has a strong reason to buy.  The equilibrium point where the buyers equal the sellers in the tug of war of opinion is called the price.

Just because there is a lot of factoids that suggest prices will continue to drop, it doesn't mean a) that it will continue to drop, b) that prices at this level are bad to take advantage of, or c) that it won't later rebound.  In fact, I believe that prices will rebound, but nowhere near to the levels they were at their peak.  And that resort sales won't resume to more than about 50% of their peak within 2 years.  But prices have dropped on the resale market by more than 50% for many prime weeks.  So, perhaps it could be that the news and facts you are seeing are already priced into the market.

Perry believes in timeshare armagedon.  Hardly anyone else believes that scenario.  They could all be wrong and it could be Perry and you that are right.  At this point in time, the majority on this message board clearly disagree with both of you as evidence by their posts.  Why don't you just accept that they don't agree and that's fine.

If you find a Summit Watch 2 br platinum unit for sale for less than $10k, let me know because I'm going to buy it.  I want to trade up my bronzes for platinum.  I'll just donate my bronze units to charity if I can replace them with platinums.


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## ondeadlin (Dec 19, 2008)

I prefer to believe I'm in my own camp, Boca, not predicting the complete collapse Perry is, but aware prices appear to be getting lower each day, and the annual eBay timeshare dump we see when 2009 MF come due in January is looming.

My point is simply to be wary. The trend is obvious, and there's a considerable lurking danger in that fact that if people are walking away from timeshares right now the way they're walking away from houses, we won't see that until the 2010 MFs explode at resorts that are particularly hard hit.

Is that going to happen? I don't know, but it could.

So, again, I think it's a good time to be wary.


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## thinze3 (Dec 19, 2008)

ondeadlin said:


> I prefer to believe I'm in my own camp, Boca, not predicting the complete collapse Perry is, but aware prices appear to be getting lower each day, and the annual eBay timeshare dump we see when 2009 MF come due in January is looming.
> 
> My point is simply to be wary. The trend is obvious, and there's a considerable lurking danger in that fact that if people are walking away from timeshares right now the way they're walking away from houses, we won't see that until the 2010 MFs explode at resorts that are particularly hard hit.
> 
> ...



So when would be a good time to buy? Let's say you wanted to purchase a BeachPlace platiunum unit. Retail is $30K and resale hase been $12-15K the last two years. At what price would you wait to make a purchase?

Do you think MBP will be worth $1 within the next year or so as Perry has suggested? Generalities have been tossed around but I would like to hear specifics.

Terry


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## BocaBum99 (Dec 19, 2008)

thinze3 said:


> So when would be a good time to buy? Let's say you wanted to purchase a BeachPlace platiunum unit. Retail is $30K and resale hase been $12-15K the last two years. At what price would you wait to make a purchase?
> 
> Do you think MBP will be worth $1 within the next year or so as Perry has suggested? Generalities have been tossed around but I would like to hear specifics.
> 
> Terry



Terry,

I think you set up an excellent question.  The answer regarding buying and selling should always be followed with "at what price?"

In ondeadlin's thread entitled, "Please don't buy into the idea this is a buying opporunity,"  he clearly indicates that the TIME is not right to buy.  But, TIME is NOT the right metric to determine whether or not a person should buy.  PRICE is the determinant.

What if you did get an opportunity to purchase a Beachplace Tower platinum 2br for $1?  If that was NOW, then that would be a fantastic deal NOW.

One of the major falacies of Ondeadlin's logic for not buying now is he assumes that the resale market is fairly efficient.  When a market is efficient, the standard deviation of price around the mean is very very small.  That is the definition of an efficient market.  Buyers and seller are knowledgeable about the market price and therefore don't deviate from it much.

But, timesharing is an extremely inefficient market.  Even in its hey day 2 last year, on a given day, a person would pay $20k for a unit.  Another person paid $5k.  And yet another paid someone $2995 to take it off their hands.  The standard deviation is very large indicating inefficiency.

It's the same now with the major difference that Marriott is no longer competing for many units meaning that buyers have an edge in this market for the first time ever.  If someone sees that $3000 Marriott, they have a chance to get it whereas last year they didn't.

So, despite what Perry and Ondeadlin's opinion about this not being a good time to buy, they are just plain not in the majority in that opinion and the rest of us have solid logic for believing so.


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## GregT (Dec 19, 2008)

This is a fascinating thread -- we are trying to determine if this is a good time to buy timeshares.

It's the same answer as always -- if you can afford the upfront (and assume you flush the upfront payment) and are not concerned about the ongoing MF's and probably increases in MF's then it's a great time, as always, to be a buyer.  But we should be prudent about making sure all bases are covered before further commitments.  It's not an investment, it's an expense.  If you can salvage a little bit of the upfront cost someday, then good for you, but don't buy it assuming it will appreciate.

I don't know the details of what's Perry's expecting, but in my opinion, it's going to get worse, alot worse.   I'm a predictor of a Great Recession, not a return of the Great Depression, more like 1974 than 1933.  Personal (and corporate) liquidity is what matters, having sufficient cash reserves.  I am thrilled and encouraged by Ben Bernanke's actions, but all this will still take time to resolve.   It's one thing to talk about massive layoffs, it's another to experience the reality of what comes from having massive layoffs. 

This will be very painful for many good folks.  If you have the cash reserves to survive it, it will be a feast to pick up cheap assets of all kinds, including timeshares.  But timeshares are different because they will never meaningfully appreciate, they are a toy -- you might get a modest profit, but it won't generate the returns a different asset might.  Take the same money and buy discounted homes or stocks that yield something, and use the dividend to buy your timeshare.

So please, don't bang on Perry, don't bang on Boca, these only distract the issue.  It's the same as always, use only your play money for timeshares, money you'll never miss.  

And please don't minimize my comments by asking if I understand the Fed -- yes I do  - and despite the Fed, it's going to get much worse before it gets better.  But I may differ from Perry in that I don't predict a dollar crash, and I think we will be emerging from this in 12 months.

So, during that time, and, please forgive me for being a viking, but I will be an opportunistic buyer of true assets, with timeshares, as always, treated as a toy and bought with gambling money.


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## ondeadlin (Dec 19, 2008)

thinze3 said:


> So when would be a good time to buy? Let's say you wanted to purchase a BeachPlace platiunum unit. Retail is $30K and resale hase been $12-15K the last two years. At what price would you wait to make a purchase?
> 
> Do you think MBP will be worth $1 within the next year or so as Perry has suggested? Generalities have been tossed around but I would like to hear specifics.
> 
> Terry



Terry, my advice is today the same as it's always been for timeshares: The right time to buy is when you truly intend to use the property, you believe you can afford the purchase and will be comfortable losing a large portion of your investment, because timeshares typically depreciate more than they appreciate.

Maybe the "comfortable losing a large portion of your investment" part deserves a little more emphasis today, maybe not, that's essentially our debate here.

That isn't to say that folks like Boca - who invest a tremendous amount of time and enterprise acquiring above-average skills and knowledge of the marketplace - can't game the system and see their purchases appreciate more than they depreciate. But the average person doesn't have the time or dedication to do that IMO.


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## PerryM (Dec 19, 2008)

*Hers's a guiding light...*

I like Zillow – it has always pegged our house price correctly.

The average US house was $238k in Sep ’06 and is now $210k – a loss of 12%.  My suggestion is that when Marriott lowers the selling price of the same exact unit 12% buy then; either from Marriott or resale depending what goodies are being offered by Marriott and if there is that internal exchange system that rumors tout.

It’s that simple.

Beyond that simple method you might as well flip a coin.

P.S.
This is a moving percentage - if Marriott lowers the price to 12% in 6 months you must check Zillow and see what the new percentage is for the average US home.

At some point timeshares will stop the 40 year climb and start to follow reality - it will be important to keep a list of those high sales prices for ALL timeshares.


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## BocaBum99 (Dec 20, 2008)

PerryM said:


> I like Zillow – it has always pegged our house price correctly.
> 
> The average US house was $238k in Sep ’06 and is now $210k – a loss of 12%.  My suggestion is that when Marriott lowers the selling price of the same exact unit 12% buy then; either from Marriott or resale depending what goodies are being offered by Marriott and if there is that internal exchange system that rumors tout.
> 
> ...



I can't believe you just posted this message.  Do you even realize how flawed your post is?  You are using the exact same logic for real estate as you did the Dow Jones Industrial averages.  You claimed it had over 13% average annual return and therefore made the decision to buy and hold and recommend it the day before it peaked and lost 36% of its value.  Using this type of gross averaging will lead you to make very dubious predictions.

Let me illuminate:

1) Usually, numbers such as the ones your reported are MEDIAN numbers, not mean.  All this indicates is the 50 percentile sale made during the period.  This gives you an indication of a trend in how much buyers are paying in aggregate.  It does NOT tell you how much a given house has appreciated or depreciated.  To arrive at that number you need to do a comparative market analysis for an individual house over time time periods and then calculate the compound annual growth rate over that period.  Then, do it for collections of houses in the same geography.  That gives you the best indication of how much housing prices are actually increasing vs. decreasing in that geography.

Moreover, if the median priced home selling at $238k was a 3 bedroom ranch home with 1500 square feet in living space and the $210k home was a 1 bedroom studio unit with 500 square feet, you can actually say that home prices have increased since the median cost per square foot has increased.

2) Various geographies and even neighborhoods have varying compound annual growth rates based on various market factors including changes in taste, availability of mortgages for that level of house and family income in the area.  There is no gross average across all households that you can apply to all houses like you did.  Using the stock analogy, it would be like saying that Caterpillar and General Motors stock should rise and fall the same amount because they are both industrial manufacturers.  Jim Cramer said it well today.  He said the major difference between these companies is that one is making great products cheaper and the other is making terrible products more expensive, therefore a difference is stock price appreciation.

3) Even if the numbers you used were homogenous across all homes, let's take a closer look at what they mean.  If an individual homeowner purchased the median priced home in Sept 2006 at $238k and that house was now appraised at $210k, that does represent 12% loss in home value.  But, it's leveraged.  If they only put 5% down, they have negative equity in their home of ($16,100) excluding closing costs on both sides of a potential sale.  That is over 200% loss of invested capital.  That's right.  An investment of $11,900 turns into a negative equity of ($16,100).   No wonder owners are just walking away.  And this is just with houses that have decreased only 12%.  If you have an average of 12%, there are some homes that have lost 30-40% and other that have lost only 5-8%. 

Moreover, look at how small a change in foreclosure rates nearly brought down the entire financial industry in the US and the world.  In Nov 2008, one in every 488 homes were sent foreclosure notices.  On an annual basis, that is about 2.5%.  That's right, it took ONLY 2.5% of the households to create this entire financial industry mess.  

So, using the change in median home values is extremely unreliable in determing the likely market value change in home values.  And, don't blow off 12% as a minor loss that is easy to absorb.  It's not.


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## m61376 (Dec 20, 2008)

Perry-
Following this logic, then, wouldn't it be fair to say that purchasing a timeshare now at 12% or less of a discount from the selling prices a year ago would be considered a bargain? Maybe I'm missing something in the argument here, but that would seem a reasonable conclusion from your post.

While I don't look at ownership as an investment (unless you want to consider the salesperson line of "investing in your family" ) but I do feel, like the real estate market, it will turn around again. After all, you are still buying a piece of property, and there is inherent value to that- especially if it is prime real estate like a beachfront or ski location or in a prime vacation destination. Unless you feel that you'll be able to buy a beachfront condo or ski house, etc., for $1 in the future (and, I'd love a piece of that real estate purchase), then I don't see how you can predict that 1/52nd of one will be worth that.

I do think that what you buy may be a big factor here; sad to say, but I think certain groups are going to remain harder hit than others and take longer to bounce back, and that the recovery to more normal lifestyles will occur faster at the upper ends. That said, I think the appeal of Marriotts and the like will bounce back faster than some of the lesser resorts. 

Given the marketplace, why hasn't DVC dived? If all timeshares suddenly have devaluated and the bubble just burst, then why not Disney? Despite, the hype, they are not magical and their owners not immune. I am sure there are desperate Disney sellers just like Marriott and Starwood and the like. I think the difference that we are seeing is that Disney is not letting these hit the general marketplace for consumption (they are still buying them back via ROFR). Is there any other explanation here that I am missing? 

Unless you have a crystal ball, there is no way of telling for sure. I do agree that discretion is important and that disposable income should be used if making a purchase. I think it may be a unique opportunity to buy that extra unit you've toyed with the idea of buying if you have the money in the bank to do so; financing now would be a terrible idea. I hope that this time next year we will look back smugly and say we made such a good decision, despite the naysayers. As for buying for profiteering- I'm not sure about that- although I do think that there have been some isolated buys, like Terry's BPT and a few others, that might truly turn out to be an investment in a year or two.

This will be an interesting thread to resurrect at this time next year.


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## PerryM (Dec 20, 2008)

*Simpler the better...*

Local home developers in our area are selling new homes reflecting the loss in real estate - they are selling for less than 2 years ago; why not timeshare developers?

I see no reason why timeshare developers should live in a fantasy world and be exempt from reality - on the whole you can buy real estate for 12% less than 2 years ago - that's what a loss of 12% means.  It’s that simple.  Hell, most of the resort areas have suffered double that rate - maybe you might want to wait for Marriott to lower their prices 25% - you won't get any arguments from me on that number either.

So if a person wants to buy a timeshare, why give the developers an additional 12% - 25% that they don’t deserve?  Why are they so special?  This trickles down to the resale market too.

I do understand that the timeshare real estate brokers won’t get much business with this simple mechanical way of putting the decision back on the developer’s back but I don’t care about them.  I hope its clear by now.

*Folks what ever happened to the “If their lips are moving they must be…”*  come on my folks, my advice results in timeshare brokers, that would be BocaBum99 and others here, getting less money in their pockets – of course they're going to go ballistic.  I'm advising folks to neither buy or sell timeshares until the developers wake up to reality - it's that simple.  What's wrong with that logic?  At some point they will be forced to wake up to reality.

In fact, the more they attack me the more I must be impacting them or folks who have a relationship with them.  I can simply look at the attacks and gage that I must be doing something right; job well done.

Wait for it folks.....wait...wait....wait for the developers to wake up to reality.  That goes for timeshare brokers as a whole too.

I'm simply one timeshare owner expressing my opinion - it seems to drive the brokers mad.

P.S.
This whole argument seems surreal - kind of like what Detroit is going thru now.  Reality will force them to wake up too.


Going on vacation for 2 weeks and won't even bring the laptop - hope you all have a great holiday season.

I'll be back next year and will gladly answer any questions.

All the best for 2009.

Perry


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## m61376 (Dec 20, 2008)

So, Perry, why wouldn't a resale week priced at >12% less than it was a year ago be a good value/purchase? I understand with your rationale that Marriott and other developers should be lowering their retail prices, but in line with your argument, if resale prices are reflecting this decrease, why aren't they a good value now?


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## thinze3 (Dec 20, 2008)

It appears to me that this is all about risk vs reward. Perry, correct me if I'm wrong, but I believe your view is that there is still great downside potential in the timeshare market and the potential implosion of a view timeshare developers. If this is true, I can easily understand your view.

I on the other hand do not believe there is 'great' downside potential for the most *prime* timeshares, already priced at very affordable prices . Some downside potential - yes, but great downside potential - no. I more so believe that trying to time the market can cost you a great purchase opportunity or two. When the credit market frees up a bit, and both buyers and developers have full access to this credit, these Marriott resale opportunites can be gone in a hurry.

Assuming that Marriott wil have access to plenty of cash, they will begin buying back these resales in droves. BeachPlace at $7K, Ocean Pointe and NCV at $10K is much cheaper than developement cost of $15-20K. Marriott has to turn dollars to make money and you can bet they will continue turning dollars.

As far as prices, YIKES! Marriott did get a little out of control with places like Marco Islnad and the new Maui towers. I do believe that Marriott has begun lowering prices in their way of doing business. Last month they were offering discounts at NCV and a few months ago, they were offering the 'other half' of an OEY at 40% of annual cost. I checked yesterday and found that Oceana Palms is the same price as it was last year. BUT here is the difference. *Marriott offered me FULL retail price on my Legends Edge as a trade in.* That's right FULL retail price!

This is Marriott's way of 'lowering' their prices, and I do expect even better bargains to come along from them in the nears future. Maybe they'll offer buyers of Marco Island a free silver week at another resort.

Anyhow, yes  I do know that there is a downside risk in todays timeshare world, but I strongly believe that the Marriott risk-reward currently tilts in favor of reward.

Terry


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## BocaBum99 (Dec 20, 2008)

PerryM said:


> I do understand that the timeshare real estate brokers won’t get much business with this simple mechanical way of putting the decision back on the developer’s back but I don’t care about them.  I hope its clear by now.
> 
> *Folks what ever happened to the “If their lips are moving they must be…”*  come on my folks, my advice results in timeshare brokers, that would be BocaBum99 and others here, getting less money in their pockets – of course they're going to go ballistic.  I'm advising folks to neither buy or sell timeshares until the developers wake up to reality - it's that simple.  What's wrong with that logic?  At some point they will be forced to wake up to reality.
> 
> ...



Perry,

Come back soon.  You've made this message board interesting again.  It's boring when you go hiatus.  More importantly, I need for you to come back so I can plan my investment actions.  Let me know when you want to sell your condo hotel.   That will be a clear signal to buy.  In fact, whatever you bought yours at, I'll offer you 25% sight unseen.


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## timeos2 (Dec 20, 2008)

*Prime time still depends on the other 48 +/- weeks*



thinze3 said:


> I on the other hand do not believe there is 'great' downside potential for the most *prime* timeshares, already priced at very affordable prices . Some downside potential - yes, but great downside potential - no. I more so believe that trying to time the market can cost you a great purchase opportunity or two. When the credit market frees up a bit, and both buyers and developers have full access to this credit, these Marriott resale opportunites can be gone in a hurry.



The problem with that theory is that operationally there is no difference between a prime week at resort "X" and the (majority) of weeks which would be considered lesser value times.  The annual fees - the only item you are certain of dealing with once you buy - could potentially sky rocket as the non-prime owners drop out (can't sell at any price or feel the annual fees aren't worth paying compared to value received) thus making even the prime weeks unattractive to purchase/own. This is in fact the most likely outcome at most largely seasonal resorts.  It has started at many even before the economic problems and will accelerate in the near term as people deal with those unprecedented changes.  

The questions surrounding all timeshares as a sustainable model preclude any purchase except one where you plan to use the resort or system, understand your upfront money may never be recovered much less provide any gain and that fees may rise quickly and without any recourse to owners. If you feel the value is there given those likely occurrences then its a great time to buy a deal. If you plan on any of those factors in reverse (fees holding steady or dropping, resale value rising, buying to flip, rent or otherwise use to make money) you are taking a real risk That can lead to great rewards or big losses but its a risk regardless. How sure are you that things will change as you believe they will? You pay your money and you take your chances.


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## ondeadlin (Dec 20, 2008)

timeos2 said:


> The annual fees - the only item you are certain of dealing with once you buy - could potentially sky rocket as the non-prime owners drop out (can't sell at any price or feel the annual fees aren't worth paying compared to value received) thus making even the prime weeks unattractive to purchase/own. This is in fact the most likely outcome at most largely seasonal resorts.  It has started at many even before the economic problems and will accelerate in the near term as people deal with those unprecedented changes.



This is the point most people don't seem to understand.

There's been a ton of talk about, "Well, a ski week at Summit Watch will always be valuable ..." 

It won't be if annual fees go to $2,000 a year. Think it can't happen? It's happened at Streamside Aspen after they left the Marriott system. You know why it happened? At least in part because everybody dumped their fall and summer weeks and the association was stuck with hundreds of defaulted weeks (and, in fairness, also because they then had to invest in modernizing the resort).

Streamside Aspen ski weeks now regularly go for a dollar on eBay.

This is an example, not a prediction. But when you see it happen once, you see the downside a lot better. At most ski resorts, two-thirds of the weeks are either completely undesirable (fall/spring) or marginally desirable (summer). That's a lot of exposure.

The downside isn't about prices as much as MF risk as people default IMO.


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## BocaBum99 (Dec 20, 2008)

ondeadlin said:


> This is the point most people don't seem to understand.
> 
> There's been a ton of talk about, "Well, a ski week at Summit Watch will always be valuable ..."
> 
> ...



This is definitely a real risk.  I do know that delinquencies at many of the resorts are increasing.  That does lead to higher maintenance fees as paying owners have to cover for non-paying owners.

The question is whether or not the resort manager can come up with a strategy for keeping owners paying maintenance fees.  They can do that by creating and fostering a vibrant resale market so that owners who do have timeshares they want to get rid of can offer them to those who want to pay the maintenance fees and take the vacations.

They can also cut costs at the resorts by offering fewer services and amenities so that maintenance fees stay substantially below rental rates in the geographies with equivalent units.  That would make it economically attractive to own vs. buy.

I have always felt that these two actions are critically important for the long term viability of any resort over time.  I think this environment really makes it obvious that resort developers should take these actions.  Otherwise, the delinquency trap could become a real problem.

I've wondered what the impetus would be for the resort developers to stop building and change their sales and marketing model.  It appears that the credit crunch has helped immensely toward this reforming some of their actions.

Now, if delinquences dramatically pick up, I believe they will also take the remaining actions of amenties cost cutting at the resorts as well just for survival.  This, in the end, is all good.  Recessions, especially deep ones, kill off the weaker players and makes room for the stronger ones with the superior business models to flourish long term.


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## timeos2 (Dec 20, 2008)

*May not be possible or at least not done very easily*



BocaBum99 said:


> They can also cut costs at the resorts by offering fewer services and amenities so that maintenance fees stay substantially below rental rates in the geographies with equivalent units.  That would make it economically attractive to own vs. buy.



Much like my primary need for most resorts - varied fees between the top value times and the lower, off season times - accomplishing cost savings by cutting services and especially features could be hard to impossible to do. Varied fees often cannot be done (except possibly within a points based approach) as State laws require equal fees for all owners. It takes some real creativity to get around that if its even possible. Same with features and at least some services. They may be spelled out in the the original sales agreements/resort docs thus requiring an almost impossible to obtain majority owner vote to change.  They often aren't within the rights of the Board to alter and doing so puts the Board at risk of owner lawsuits. 

Timeshares tend to be tough places to run, tougher to change and REALLY tough to disband.  If the current state of affairs leads to many or even any resort failures we'll find out just how hard it is to end a timeshare and get the owners to agree.


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## BocaBum99 (Dec 20, 2008)

timeos2 said:


> Much like my primary need for most resorts - varied fees between the top value times and the lower, off season times - accomplishing cost savings by cutting services and especially features could be hard to impossible to do. Varied fees often cannot be done (except possibly within a points based approach) as State laws require equal fees for all owners. It takes some real creativity to get around that if its even possible. Same with features and at least some services. They may be spelled out in the the original sales agreements/resort docs thus requiring an almost impossible to obtain majority owner vote to change.  They often aren't within the rights of the Board to alter and doing so puts the Board at risk of owner lawsuits.
> 
> Timeshares tend to be tough places to run, tougher to change and REALLY tough to disband.  If the current state of affairs leads to many or even any resort failures we'll find out just how hard it is to end a timeshare and get the owners to agree.



I agree it could be tough. However, if it isn't tried, then it could be disasterous for the timeshare resort.   I don't even believe it has been tried because many who govern the resorts have the same views as you do.

The good news is that if delinquencies get too bad and the resort must declare bankrupcy, then all agreements can be terminated and the resort can be sold off to pay off creditors.  Believe it or not, owners may make out more in that case than holding on to a failed timeshare resort concept that doesn't make sense in a particular geography or setting.  If the highest and best use for land in that particular area is something else, then the timeshare resort should be allowed to die in favor of that other better use.

In the armagedon scenario that Perry predicts, what would happen is a new industry would emerge for timeshare conversions back to condos.   We all know that there has been some tremendous overbuilding in many geographies.   It's probably time for some of that to emerge.

Perry did make a good argument for timeshare resorts having a definitive end after say 30 years.  I completely agree with that.  It should be terminated in favor of a new project with the net proceeds being distributed to current timeshare owners.


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## JimIg23 (Dec 20, 2008)

timeos2 said:


> *understand your upfront money may never be recovered much less provide any gain and that fees may rise quickly and without any recourse to owners*.



I bought into Marriott believing this.  When I did my "cost analysis"  I did 10 year and 20 year projections, with the entire cost of the TS purchase and MF (with a 4% increase) to see what my true nightly cost would be.  I assumed from the beginning one day my TS would be worth $1.  Although I hope it wont, I bought thinking this, and I am happy with the price I paid for the value it has given my family, and hopefull will continue to.  (Although I still am going to try to snag a dirt cheap EOY NCV so I can get 2 weeks at NCV EOY....)

Here is old link to a thread I started about it.  http://www.tugbbs.com/forums/showthread.php?t=62261

Alot of people thought Marriott TSs would retain their value......................


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## larue (Dec 20, 2008)

BocaBum99 said:


> This is definitely a real risk.  I do know that delinquencies at many of the resorts are increasing.  That does lead to higher maintenance fees as paying owners have to cover for non-paying owners.
> 
> The question is whether or not the resort manager can come up with a strategy for keeping owners paying maintenance fees.  They can do that by creating and fostering a vibrant resale market so that owners who do have timeshares they want to get rid of can offer them to those who want to pay the maintenance fees and take the vacations.
> 
> ...



I am probably really ignorant on this, but why would defaulting owners cause other owners' maintenance fees to go up?  If maintenance fees per week owned are the same across the board, and Marriott takes back the defaulting weeks, how could Marriott pass those costs on to other owners?  Marriott owns the defaulted weeks, right?  It would seem that the developer would have to pay their share of maintenance fees on weeks that they own and have not yet sold or that they have reclaimed through default.  

for example, the first person to buy a week at a newly developed resort does not have to pick up the entire costs of maintenance on the entire property, right?  I think that Marriott and other developers are asking for a class action lawsuit if they up maintenance fees of other week owners when the developer maintains ownership of the defaulted units.  Now, on the other hand, if Marriott offered those defaulted weeks to other owners at cost, with a condition of picking up the maintenance fees on that week, that would be a real partnership.  Good luck, right?


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## dioxide45 (Dec 20, 2008)

larue said:


> I am probably really ignorant on this, but why would defaulting owners cause other owners' maintenance fees to go up?  If maintenance fees per week owned are the same across the board, and Marriott takes back the defaulting weeks, how could Marriott pass those costs on to other owners?  Marriott owns the defaulted weeks, right?  It would seem that the developer would have to pay their share of maintenance fees on weeks that they own and have not yet sold or that they have reclaimed through default.
> 
> for example, the first person to buy a week at a newly developed resort does not have to pick up the entire costs of maintenance on the entire property, right?  I think that Marriott and other developers are asking for a class action lawsuit if they up maintenance fees of other week owners when the developer maintains ownership of the defaulted units.  Now, on the other hand, if Marriott offered those defaulted weeks to other owners at cost, with a condition of picking up the maintenance fees on that week, that would be a real partnership.  Good luck, right?



There are cost in collecting delinquent MF. Also once they forclose, it is next to impossible for them to collect any back MF that were not paid. Those monies need to come from somewhere, in most cases the other owners.


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## larue (Dec 20, 2008)

dioxide45 said:


> There are cost in collecting delinquent MF. Also once they forclose, it is next to impossible for them to collect any back MF that were not paid. Those monies need to come from somewhere, in most cases the other owners.



I realize you are probably right, but I don't know why Marriott, as the new owner of the defaulted week, gained for nothing more than foreclosure costs, would be able to pass those fees, back or otherwise, onto other owners who do not gain a beneficial interest in the defaulted week now owned by Marriott.  I liken this to taking a tax deed on a property.  The person who takes the tax deed does not get to pass off costs to other owners in the subdivision/homeowners association.  They pay all costs, with the benefit being ownership of the defaulted week upon completion of foreclosure.  If Marriott ends up being the sole owner of the defaulted week, which they do, why should the rest of us have to pay the costs associated with their gain?


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## vacationtime1 (Dec 20, 2008)

larue said:


> I am probably really ignorant on this, but why would defaulting owners cause other owners' maintenance fees to go up?  If maintenance fees per week owned are the same across the board, and Marriott takes back the defaulting weeks, how could Marriott pass those costs on to other owners?  Marriott owns the defaulted weeks, right?  It would seem that the developer would have to pay their share of maintenance fees on weeks that they own and have not yet sold or that they have reclaimed through default.



It is not Marriott (or whoever the developer was) that takes back the defaulting weeks, it is the homeowner's association that takes them.  That's how and why the risk of non-payment is on the remaining owners.


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## ondeadlin (Dec 20, 2008)

larue said:


> I am probably really ignorant on this, but why would defaulting owners cause other owners' maintenance fees to go up?  If maintenance fees per week owned are the same across the board, and Marriott takes back the defaulting weeks, how could Marriott pass those costs on to other owners?  Marriott owns the defaulted weeks, right?



No, unfortunately, you have a very common misunderstanding about how things work with defaulted weeks.

When a week defaults, it goes back to the owner's association. Until it's sold and back to paying MF, all the other owners must split the remaining costs to be covered. Most of the weeks that default are typically low-season weeks, so in some cases the owner's association has trouble even giving them away. Even when the weeks have value, it takes time and effort to move them along, and a year or more's worth of fees often go unpaid.

Marriott has nothing to do with it, and does not take these weeks back.

To give a very simplified explanation, let's say there were only 8 "shares" in a particular timeshare, and they all split $1,000 in costs ($125 each). If 4 of those shares defaulted, the remaining 4 owners would still be obligated to pay the $1,000 in costs, so their MF would double to $250 each (which would then possibly result in even more defaults).

That - in a very simplified way - is how timeshare MFs work, except the numbers involve thousands of owners at a particular project.


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## dioxide45 (Dec 20, 2008)

larue said:


> I realize you are probably right, but I don't know why Marriott, as the new owner of the defaulted week, gained for nothing more than foreclosure costs, would be able to pass those fees, back or otherwise, onto other owners who do not gain a beneficial interest in the defaulted week now owned by Marriott.  I liken this to taking a tax deed on a property.  The person who takes the tax deed does not get to pass off costs to other owners in the subdivision/homeowners association.  They pay all costs, with the benefit being ownership of the defaulted week upon completion of foreclosure.  If Marriott ends up being the sole owner of the defaulted week, which they do, why should the rest of us have to pay the costs associated with their gain?



If Marriott does take those weeks back they do take on the MF costs. However, if the HOA takes ownership of those weeks, then the owners have to take the extra burden.


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## thinze3 (Dec 20, 2008)

dioxide45 said:


> If Marriott does take those weeks back they do take on the MF costs. However, if the HOA takes ownership of those weeks, then the owners have to take the extra burden.



Many Colorado weeks fall within this category. Spring, fall and most summer weeks are just about worthless. My Christie Lodge is a prime example. The HOA literally owns hundreds of these weeks and tries VERY hard to make rental of these weeks break even on an annual basis. This will become much more difficult with lower occupancy rates at hotels nationwide. 


Terry


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## london (Dec 20, 2008)

*Platinum Weeks For Cheap*

With over 100 posts, this thread has found much interest among our BBS group.

It appears that timeshare owners are now evaluating what their ownership costs gives them in real terms.

Granted there is some intrinsic value perceived by many owners.


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## larue (Dec 20, 2008)

ondeadlin said:


> No, unfortunately, you have a very common misunderstanding about how things work with defaulted weeks.
> 
> When a week defaults, it goes back to the owner's association. Until it's sold and back to paying MF, all the other owners must split the remaining costs to be covered. Most of the weeks that default are typically low-season weeks, so in some cases the owner's association has trouble even giving them away. Even when the weeks have value, it takes time and effort to move them along, and a year or more's worth of fees often go unpaid.
> 
> ...



So who sells and generates the revenues from the defaulted unit?  I assume that Marriott is the exclusive agent for sales on behalf of the HOA, probably at the same commission rate of 40% that they charge for selling anyone else's unit?  If that is the case, it likely accounts for why the HOA is taking a bath.  They are getting right back in bed with the developer that caused the defaults by selling at rates that cannot be sustained in the secondary market.

It would be interesting to see what would happen if the HOA offered the defaulted weeks back to current owners (if they had the power to do so), for the costs of foreclosure and an agreement by the party assuming the week to pay maintenance fees thereafter.


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## ondeadlin (Dec 20, 2008)

I've never actually heard of Marriott re-selling weeks for the HOA. I'd imagine that's because, again, the weeks are typically not platinum weeks, and because until now, the largest numbers of defaults would typically be at the older resorts. It might also be because, in the case of the better weeks, the HOA doesn't want to give Marriott a cut.

It might be helpful for you to realize that Marriott and the HOA boards are often in fairly adversarial relationships, not buddy-buddy. Marriott is trying to maximize the fees it gets for managing, while the HOA are trying to minimize those fees. Marriott does not go out of its way to help the HOA at its resorts once the developer units have been fully sold.

In many cases, the HOA sell the weeks in bulk to a reseller like Holiday, and they end up on eBay for minimum starting bid.


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## Garnet (Dec 21, 2008)

ondeadlin said:


> I've never actually heard of Marriott re-selling weeks for the HOA. ............
> 
> In many cases, the HOA sell the weeks in bulk to a reseller like Holiday, and they end up on eBay for minimum starting bid.



I'm surprised at that Marriott doesn't re-package and resell.  I know of a few that did (in HI).  However, thanks to the HOA, I picked up a DSVII GOLD at a pretty good price ($2500).

So, Marriott has stopped building Shadow Ridge Enclaves (Palm Springs area, CA).  What do  you think was the cost per sq foot to build?  Might seem cheaper these days to buy foreclosures and repackage.  (Like those DSVII's that were sold by Riverside County Tax Auctions, run by Bid$Assets, or something?)  When we were looking to add an addition to our house (but not in this economy...) our architect (SF Bay Area, suburbs) thought $300 per sq ft (NOT touching the kitchen).  Palm Desert, particularly new construction is probably less,...but still...


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## larue (Dec 21, 2008)

ondeadlin said:


> In many cases, the HOA sell the weeks in bulk to a reseller like Holiday, and they end up on eBay for minimum starting bid.



Have you ever heard of an HOA offering defaulted weeks back to the existing owners?  I would think that would be a way to increase the stake of existing owners in the future success of the timeshare.  If I were an HOA, I would much rather have fewer owners owning multiple weeks rather than more buyers owning single weeks.  

Thanks to everyone for the helpful responses.  I learned a lot about HOA's and the process of reclaiming defaulted weeks.


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## timeos2 (Dec 21, 2008)

larue said:


> So who sells and generates the revenues from the defaulted unit?  I assume that Marriott is the exclusive agent for sales on behalf of the HOA, probably at the same commission rate of 40% that they charge for selling anyone else's unit?  If that is the case, it likely accounts for why the HOA is taking a bath.  They are getting right back in bed with the developer that caused the defaults by selling at rates that cannot be sustained in the secondary market.
> 
> It would be interesting to see what would happen if the HOA offered the defaulted weeks back to current owners (if they had the power to do so), for the costs of foreclosure and an agreement by the party assuming the week to pay maintenance fees thereafter.



There are a whole host of problems with defaulting weeks. First they are past due on fees. That means the association has unpaid fees due that are in the budget thus a shortfall for the year. They have to cut the budget and leave things undone or raise fees to those that pay to cover the missing funds. if it goes through the proper collections procedures and still isn't paid then the expensive ($1000/week or more), long (can be months or even years) foreclosure process starts. Money paid by the Association - billed to paying owners. More higher fees. Then once that process finishes, most likely with thousands in fees due and costs to foreclose, the Asociation now owns those weeks. But they may not have much resale value - heck, the old owner was willing to take a major credit hit and suffer a foreclosure to get away. So selling them isn't easy and may not generate anything close to the fees due and the costs expended. The other owners pay. 

But that isn't all.   They may not only be past due on fees but also mortgage if they have one.  If that's the case then the Association claim is secondary to the mortgage holder. Even if they foreclose they can't resell the week as it is encumbered by the mortgage. Many mortgages have bee sold off to other buyers - the base of the mortgage crisis - and many of those don't bother to try to clear up the mortgage. They sit in limbo for years and possibly forever. Almost impossible for the resort to clear up. More virtually permanent delinquent weeks, higher fees to cover those weeks. 

The problem of delinquent weeks has always been a big one, getting worse and likely to impact all resorts even those with "premium, platinum weeks" in a negative way. Those great weeks aren't isolated from the impact and the fees are likely to diminish the value if things continue to slide and cause delinquencies.


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## Quimby4 (Dec 21, 2008)

Garnet said:


> I'm surprised at that Marriott doesn't re-package and resell.  I know of a few that did (in HI).  *However, thanks to the HOA, I picked up a DSVII GOLD at a pretty good price ($2500).*
> So, Marriott has stopped building Shadow Ridge Enclaves (Palm Springs area, CA).  What do  you think was the cost per sq foot to build?  Might seem cheaper these days to buy foreclosures and repackage.  (Like those DSVII's that were sold by Riverside County Tax Auctions, run by Bid$Assets, or something?)  When we were looking to add an addition to our house (but not in this economy...) our architect (SF Bay Area, suburbs) thought $300 per sq ft (NOT touching the kitchen).  Palm Desert, particularly new construction is probably less,...but still...




Thanks to the HOA?  Did you buy from the tax auction?  

The Maint.  dues are separate from the CA taxes.  Chances are good that if an owner doesn't pay the maint. fee, they also won't pay the annual property tax.  Interesting that the County takes posession when likely more money is owed to the HOA then the county.  Anyone have any insight to this?


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## timeos2 (Dec 21, 2008)

*The tax man cometh - bye bye fees*



Quimby4 said:


> Thanks to the HOA?  Did you buy from the tax auction?
> 
> The Maint.  dues are separate from the CA taxes.  Chances are good that if an owner doesn't pay the maint. fee, they also won't pay the annual property tax.  Interesting that the County takes posession when likely more money is owed to the HOA then the county.  Anyone have any insight to this?



The fees that were due to the Association are wiped out (never collected) in a tax sale. The new owner of a week purchased through a tax sale starts out with only the current use year fees due if the use date hasn't passed. If it has then they only owe starting the next year (first year with a use right they can actually take advantage of).  

Tax sales are not a good thing for the resort or the paying owners as, again, they take a big hit.


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## AwayWeGo (Dec 21, 2008)

*Renting Out Delinquent Weeks.*

Am I correct in assuming that once a timeshare week goes delinquent, the owner is locked out & the HOA-BOD has the right to rent out the unpaid week, using the proceeds (if any) to offset what's owed ? 

Also, I think I remember reading (here on on Yahoo) that some creative HOA-BODs were bundling up their limbo weeks into RTU leaseholds that were being offered to the public -- not deeded units, in that the title situation remains encumbered by mortgage defaults, but leaseholds in which the HOA-BOD essentially sells its clearly recognized right to rent out units whose owners are locked out because of nonpayment. 

I would think a timeshare HOA-BOD could easily wrap itself around the axle as it tries to do the right thing on renting out delinquent weeks.  On the 1 hand, the HOA-BOD would want to rent'm out for the highest prices possible, to offset as much as they can of the amount that's owed.  On the other hand, the HOA-BOD would want to rent'm out cheap so that they'll at least get _something_ for'm instead of nothing, in case nobody rents'm when the prices are high & so they go unused, bringing in no money. 

In short, a timeshare HOA-BOD trying to rent out delinquent weeks for the benefit of the owners is like a person with a mouthful of blazing hot coffee -- whatever they do next is bound to be the wrong thing. 

In any case, this sort of vexing problem illustrates once more why it is that collections is the No. 1 most important job of any timeshare HOA-BOD. 

-- Alan Cole, McLean (Fairfax County), Virginia, USA.​


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## Robert D (Dec 22, 2008)

Couple comments.  First, I don't understand why a property taxing authority selling a TS for the amount of delinquent taxes would wipe out past due maintenance fees.  This makes no sense.  When you buy a foreclosed property, you buy it subject to all liens and encumbrances and it sure seems like this would include past due maintenance fees.  Also, if a mortgage holder takes back a TS, that lender has to pay the maintenance fee to protect their collateral or the HOA should be able to seize the TS and resell it.

Also, regarding rapidly increasing maintenance fees, I think a big part of the problem is that there's a disconnect between the HOA's in big name resorts such as Marriott and the TS owners.  Marriott is in it for themselves, not for the owners.  They look as a TS as a continuing profit center and increasing maintenance fees keeps their profits growing.  My experience is that independent TS's do a much better job of controlling costs and I think one reason is they don't have a big dominant company breathing down their throats and probably in most cases, the big company such as Marriott, controls the HOA board and they exercise this control to their benefit and to the long term detriment of the owners.


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## Garnet (Dec 22, 2008)

*ooops, misleading...got from ebay*



Quimby4 said:


> Thanks to the HOA?  Did you buy from the tax auction?
> 
> The Maint.  dues are separate from the CA taxes.  Chances are good that if an owner doesn't pay the maint. fee, they also won't pay the annual property tax.  Interesting that the County takes posession when likely more money is owed to the HOA then the county.  Anyone have any insight to this?



Sorry-I see that was "thanks to HOA" was misleading.  I guess I was thinking thanks they didn't take back into inventory (contacting delinquent owners,  whatever.  I purchased off ebay.  I looked into the Riverside County tax auctions...there was a discussion a bit ago.  Didn't register as there wasn't any info on getting title transferred, notifying Marriott, questions would Marriott recoginize me as owner (in a timely fashion at least) etc.


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## RLG (Dec 22, 2008)

Robert D said:


> When you buy a foreclosed property, you buy it subject to all liens and encumbrances and it sure seems like this would include past due maintenance fees.



Not correct. 

To my knowledge in all US states, you buy it subject to any liens that were SENIOR to the lien which was foreclosed.  Any liens which are subordinate are extinguished by the foreclosure.  (Assuming proper notice, etc.)  In many/most/all jurisdictions, HOA fees are very junior in priority, unlike taxes.  HOA's which let delinquent fees accumulate are unlikely to collect.


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