# DC club general questions.



## seatrout (Jan 9, 2008)

I have been trying to convince my spouse to join HCC.  

Her primary complaints have been: 1) we can not pass it on our children 2)we can not sell in like those of our timshares.

Although I know that HCC return 100% of the deposit in the first year and 80% after the first year.   How do one transfer ownership in HCC or other Destination club to other?  Is it possible to have any capital gain from selling such membership after many years of ownership??

triet


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## Steamboat Bill (Jan 9, 2008)

I would not worry about passing something like a timeshare or destination club to your kids...leave them cash (i.e. buy a nice life insurance policy). This is a very overrated selling feature of timeshares that has little, if any, value. 

There is no possible capital gain from joining HCC and then resigning at a later date as you have a guaranteed a 20% capital loss (assuming you are a member for more than 1 year). 

Some other DCs do offer an equity model and some can be passed to a family member.

HCC is the most popular DC on TUG because the cost per night is in the same range of high-end timeshares and are the lowest in the DC industry. Unlike a timeshare, joining a DC does not provide you with deeded real estate.

I would refocus your thinking on these questions:
1. Do you like the properties and locations HCC (or other DCs) offer?
2. Are you comfortable joining without financing your purchase?
3. Are you comfortable with the annual dues?

Compare the DC by looking at the membership price, annual dues, days offered, holidays offered, refund policy, equity vs nonequity, number of homes, sizes of homes, etc.


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## Tedpilot (Jan 9, 2008)

You may also consider a friends and family plan.  The last time I checked you can add/delete members as youy see fit over time.  It could be once they are of legal age you can add your children to your membership.


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## Bourne (Jan 9, 2008)

As I understand, a HCC membership can be transferred to kids. However, the transfer can take place only once i.e. they cannot transfer it further.


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## PerryM (Jan 10, 2008)

*And from the other side...*



seatrout said:


> I have been trying to convince my spouse to join HCC.
> 
> Her primary complaints have been: 1) we can not pass it on our children 2)we can not sell in like those of our timshares.
> 
> ...




To make this a “Fair and Balanced” discussion I’ll throw in my 2 cents worth.

I don’t own a DC and unless one comes along for $30k I doubt I’ll ever own one.  Why?

DCs are theoretically a “step up” to timeshares.  They represent a less hassle, more affluent, set of residences to use like a timeshare.  Sadly the DC industry is just too immature and has no safety nets like timeshares do.  To some folks this is no problem and if you have no problems considering the DC membership fee a “Throw away” item then taking the DC plunge is perfectly ok.

DC’s have not, in 10 years of existence ,addressed the problem of protecting your membership fee from willy-nilly impulses of the owners of the DC – they can decide to liquidate the DC tonight and I’d bet the clever lawyers who drew up the paperwork will shield the owners from any lawsuits.  Additionally, NO state laws exist, to my knowledge, to protect one single DC member from anything – there is NO regulations like the hundreds that exist for timeshares; and for good reason *a DC has nothing to do with real estate*.  (There are a few exceptions but 90% don't)

I could go on and on but I’ve presented my reasons for not buying – everyone needs to do their due diligence and decide if the DC membership is within their tolerance of risk as the DC industry exists today.  Someday I believe I will be a DC member, just not today.

Just remember what a DC really is:

*“8 folks get together and buy some rich guy a condo and then pay him rent to use it”*

I just don’t like the way the deck is stacked against the members right now.


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## vivalour (Jan 10, 2008)

Perry wrote:<<DCs are theoretically a “step up” to timeshares. They represent a less hassle, more affluent, set of residences to use like a timeshare. >>

Just to give a little more background: Perry and others here have been duking it out  --on the pros and cons of timeshares vs DCs  -- in dozens of posts, going back to the summer. 

You can get lots of detail by following earlier threads on this forum (try starting on page 2 with Steamboat Bill 's posts re HCC). 

We don't own a TS, and my own opinion is that there are many (though different) cons connected with TS's, as I read in TUGS' posts: MFs out of control, TS low resale value, property upkeep are a few that stand out.  

We  took a few months to research all this stuff and to get to know the folks behind HCC a bit before we bought in -- and I would suggest that you do the same and then see whether or not you are comfortable with HCC's DC product.


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## PerryM (Jan 10, 2008)

vivalour said:


> Perry wrote:<<DCs are theoretically a “step up” to timeshares. They represent a less hassle, more affluent, set of residences to use like a timeshare. >>
> 
> Just to give a little more background: Perry and others here have been duking it out  --on the pros and cons of timeshares vs DCs  -- in dozens of posts, going back to the summer.
> 
> ...




True,

I don’t want this to turn into a slugfest – I keep up with DCs because I truly believe that one day one will “feel just right” with us and we will become members.

That feeling has not overtaken me yet…


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## Bourne (Jan 10, 2008)

Here is a link to a news bit that may influence the due diligence process. 

http://www.heliumreport.com/archives/948-hawaii-says-no-to-destination-club-regulation


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## WhiteSand (Jan 10, 2008)

You can transfer your HCC membership once. It doesn't have to be to a family member. It can be to whoever you want.  No further transfers allowed after the first transfer.  If you have 2 kids who get along you can will it to one and then add a friends and family so they can effectivley share it.


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## PerryM (Jan 10, 2008)

*Yahoo - Wild West days...*



Bourne said:


> Here is a link to a news bit that may influence the due diligence process.
> 
> http://www.heliumreport.com/archives/948-hawaii-says-no-to-destination-club-regulation




Sounds like Hawaii can't find enough taxes to confiscate from DC clubs and their members so they did a pass.

DC members are on their own with NO protections from any state governments apparently.

This is truly the "Wild west days of the Destination Club industry", in that case size does matter; ie your lawyers clout v the DC's lawyers.


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## vivalour (Jan 10, 2008)

*Still theoretical, of course...*

PerryM wrote: <<This is truly the "Wild west days of the Destination Club industry", in that case size does matter; ie your lawyers clout v the DC's lawyers.>>

Since there is no DC case history yet--in Canada anyway, I sure wouldn't worry about this yet.  Besides, anytime you take anything through litigation, whether you are "right" or not, you have to be prepared to pay big bucks to support your lawyer and his/her firm. 

As well, unless it is a case of bankruptcy, IMO any reputable DC would go out of their way to settle outside a courtroom rather than spend 10s of thousands in a case that could also generate bad p.r. and affect their business for years to come.


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## PerryM (Jan 10, 2008)

*I don't know...*



vivalour said:


> PerryM wrote: <<This is truly the "Wild west days of the Destination Club industry", in that case size does matter; ie your lawyers clout v the DC's lawyers.>>
> 
> Since there is no DC case history yet--in Canada anyway, I sure wouldn't worry about this yet.  Besides, anytime you take anything through litigation, whether you are "right" or not, you have to be prepared to pay big bucks to support your lawyer and his/her firm.
> 
> As well, unless it is a case of bankruptcy, IMO any reputable DC would go out of their way to settle outside a courtroom rather than spend 10s of thousands in a case that could also generate bad p.r. and affect their business for years to come.



I don’t know about pooh-poohing the lawyers; as much as that rubs me the wrong way.

There is NOTHING to prevent a DC’s owners to use the deeds to the condos/homes in some other high risk venture as collateral.  I’m guessing that this is one of the reasons this DC scheme is so great for the owners.  The members are simply making an unsecured loan to the owners with no protection whatsoever.

Lawyers would be the only way to recover any scraps leftover.

I just can’t do that as part of my due diligence.  If a small $30k membership for 1/8 of a condo I'd take the leap.  I don't know if that will ever happen again - but I am waiting.


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## seatrout (Jan 10, 2008)

Perry

We just need to round up 8 guys (30K x8 =240K)
Then we can go out and buy anything for 1M and create our own DC.  We can call it TUG DC.

If the 8 founding owner use only  21 days then we can "sell" 5-6 more membership to other.

Are you ready to sign up?  I even put your name in the deed and the loan.

Triet


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## PerryM (Jan 10, 2008)

seatrout said:


> Perry
> 
> We just need to round up 8 guys (30K x8 =240K)
> Then we can go out and buy anything for 1M and create our own DC.  We can call it TUG DC.
> ...



If someone could put the paperwork together for 10 folks to each get 4 weeks of usage a year and the members owned the condos then I’d put up $50k and we could get a $500k condo which would not be in the heart of a resort area but a little outside of it.

Get a few of these and you have a DC – it’s really that simple.  

I think a lot of timeshare owners would go for it.


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## Tedpilot (Jan 10, 2008)

Perry - At that rate why not buy a 1/12th fractional?

Also, as far as DCs go they are clubs, nothing more...modeled just like a country club and I doubt anyone expects investment return from these as they might vs actually owning real property.

Ted


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## PerryM (Jan 10, 2008)

Tedpilot said:


> Perry - At that rate why not buy a 1/12th fractional?
> 
> Also, as far as DCs go they are clubs, nothing more...modeled just like a country club and I doubt anyone expects investment return from these as they might vs actually owning real property.
> 
> Ted



Why not?  DCs can be created by the stroke of a pen to be just about anything the owners want it to be.

4 weeks of vacation is just right for us.


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## seatrout (Jan 10, 2008)

From a business standpoint, it would be much better to setup DC as most people do not want to guarantee a mortgage--yet they want less upfront $$ and more luxurious place.  To pay cash for things cost more money upfront.

with 21 days usage as HCC you could technically set up 16 units

I would set up 8 "founding owner" units and 8 "member"  at 30K each you could buy a 1,000,000 condo with 520K mortgage.  

The Mortgage/tax/insurance/and expenses would likely run into 6k/units-  Close to HCC annual dues for similar membership.  

In 10 yrs however the "owner" who guarantee the mortgate and take the risks would have a sizable equity and capital gain.
while the "member" get the convenience and usuage of a better place at little risks  get no gain in capital.

I would think that the easiest way to set this up is hire a guy from another DC, give him some equity position without the initial cash outlay and then redo this.  In Texas, new banks pop up all the time -  with the same CEO.

It just I know nothing about DC to set it up otherwise my retirement would be set.


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