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Buying Under LLC

Discussion in 'Wyndham Vacation Resorts' started by Agoldsc1, Feb 5, 2019.

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  1. Agoldsc1

    Agoldsc1 Guest

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    Sorry for starting a new thread, but I couldn't find any information on this topic after searching for a while.

    I want to know if it is possible to purchase into Wyndham Vacation Resorts using an LLC (or some other limited liability entity) without a person guarantor, and thereby avoid liability in the unlikely case of foreclosure? Has anyone done this or seen this done? Conversely, has anyone seen any verbiage which forbids this practice?

    Thanks!!
     
  2. paxsarah

    paxsarah TUG Member

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    Foreclosure on a loan, or foreclosure/collections due to non-payment of maintenance fees? Most here would advise simply not to buy if it requires a loan, and would also advise in most situations to purchase resale rather than from the developer. If you're anticipating the possibility of no longer being able to pay the maintenance fees, I believe there are sufficient opportunities to divest of one's points (especially if strategically purchasing a desirable contract in the first place) that there isn't really a need to protect oneself via an LLC for that particular reason (though there may be other reasons to put the ownership into a trust or LLC). I think in almost every circumstance, a proactive owner could divest of their points before foreclosure/collections becomes an issue.

    All that being said, I apologize for not answering your actual question, because I have no experience owning a timeshare via LLC or trust, but I'm not sure it's actually necessary.
     
  3. Agoldsc1

    Agoldsc1 Guest

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    Foreclosure due to non-payment of fees. I am thinking about taking a "free" timeshare, so there would be no associated loan. And while I hope to never be in a situation where I cannot pay my fees, in such an event, I'd like to have the option to simply abandon the timeshare if I cannot resell it.
     
  4. paxsarah

    paxsarah TUG Member

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    If you're talking Wyndham, a number of people here have had success giving back their contracts via Wyndham's Ovation program, including resale owners. Wyndham seems to be much less selective than they were initially with that program, and I don't remember seeing any instances recently in which someone reported a contract was rejected (not including points management issues). Hopefully someone else can specifically answer regarding the use of an LLC, but from what I've seen that's a potential problem that has other, simpler solutions.
     
  5. Agoldsc1

    Agoldsc1 Guest

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    But then why are there so many people offering to transfer their points for free? Why go through the hassle of a closing when they can simply be returned to Wyndham?
     
  6. paxsarah

    paxsarah TUG Member

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    Honestly, I don't know. Some people want to stick it to the man and keep those points out of Wyndham's hands to be resold at full price - a laudable goal, but probably more expensive for the divesting owner. Others may not be aware of the program (though on TUG, that seems less likely). As soon as my latest contract transfers into my account, I plan to use Ovation to give back one or two of my other contracts.
     
  7. Agoldsc1

    Agoldsc1 Guest

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    OK, thanks for the info. If I find out that it is possible to take title under an LLC, maybe I'll reach out to you about those contracts you are returning!

    BTW, since you obviously have experience with these programs, can you tell me if there is any fee required to make a reservation (in addition to the points), such as a reservation fee, booking fee, cleaning fee, etc...?
     
  8. paxsarah

    paxsarah TUG Member

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    Every owner receives a certain number of free reservation transactions (1 per 77k points) at the start of each calendar year. Depending on how many reservations you make, or if you cancel (which doesn't require one) and book again (which does), you may run out of freebies, and additional transactions are $19 online, $39 by phone. Housekeeping credits are similar - you received one HK credit per 1,000 points issued at the start of your use year, and they are used according to a fixed chart that can be found in the Wyndham directory. Basically, if you take longer trips (generally averaging 5+ nights per reservation), you probably won't run out of housekeeping; if you take more 2-3 day weekends, you might run out and need to pay housekeeping ($2.25 per credit) towards the end of your use year.
     
  9. Agoldsc1

    Agoldsc1 Guest

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    Thank you for that explanation!
     
  10. breezez

    breezez TUG Member

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    The term “Viking Ship”. Started with LLC’s. People created them for sole purpose of charging owners wanting out excessive fees to take over their contracts. They put them under LLC’s, with the intent of never making MF payments. Then after they had a few hundred under one would file for bankruptcy.

    This left HOA’s, Timeshare Companies, and owners of timeshares in a quandary thousands interval weeks were not getting MFs paid. So prices rise for those paying. HOA’s were stuck trying to foreclose on these non paying units. Then Timeshare companies spent tons going after “Viking Ship Owners”. Many went to jail and many paid huge fines. Some owners that sold to them had HOA’s going after them too.

    The result is most timeshare companies no longer allow units in LLC or S-Corps. Some will, but normally still require an owner to secure payments, like banks typically do for new LLC’s
     
  11. Pathways

    Pathways TUG Member

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    The answer is yes.

    !00% of my timeshares are in an LLC - No problem with Wyndham. Numerous advantages to using the LLC, as I'm sure you know which is why you are asking.
     
  12. Agoldsc1

    Agoldsc1 Guest

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    Last edited: Feb 5, 2019
  13. Pathways

    Pathways TUG Member

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    Can't say about 'most timeshare companies', but I do know about Wyndham, Marriott, Hilton, Hyatt, and DVC. Either I or family/friends have recent experience with all of these and LLC was no problem. Never had any ask for anything special to 'secure payments' either, or a bank for that matter. (Could be a state-by-state thing)

    No one would ever ask for a personal guaranty with an LLC unless the LLC was borrowing funds. There would be no point- nothing to guarantee.
     
    Last edited: Feb 5, 2019
  14. Pathways

    Pathways TUG Member

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    BTW -All my independent timeshares are also in LLC's. Closed last month (using a Realtor) on a week in Beavercreek, CO. Formed a new LLC just for that week after the offer was accepted. No issues
     
  15. happyhopian

    happyhopian Guest

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    I don't know if you can purchase one with a loan as an LLC with their financing company but you certainly can transfer ownership into an LLC. You just have to fill out the paperwork to transfer to Wyndham and if it is deeded then the deed must be recorded in the name of the llc.
     
  16. OutSkiing

    OutSkiing TUG Member

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    I would like to learn more about the advantages of owning in an LLC.

    Bob
     
  17. Braindead

    Braindead TUG Member

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    Anytime a deed is filed it’s a change of ownership, that’s why you file a deed.
    If your initial purchase from Wyndham is in the LLC name I’d feel safe.
    As everyday passes I would say we’re closer to Wyndham changing the LLC rule also.
    One of these days someone is going to transfer a Platinum or PR,Platinum account from their personal name to an LLC and lose the VIP,PR in the process. I would hate to be that individual explaining to their spouse that they just lost the benefits that they paid $150k plus for.
     
  18. Pathways

    Pathways TUG Member

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    By definition you are correct, we are closer, even if it never comes. But what does the 'also' mean? Where specifically are the timeshares that don't allow LLC's?

    There are many, but #1 is ease/cost of selling/transferring ownership. I just purchased a nice unit in Beavercreek, CO. There were a lot of $ spent on the deed transfer/costs. If I want to transfer this timeshare to one of my kids, or you, I could now do it in 24 hrs for less than $10. For the major timeshare companies who require $$ for guest certificates or require the 'owner' to occupy for certain benefits, as my kids have aged to travel on their own I have just added their name to the LLC with the resort. I think the most I've been charged to add them was $25. They usually limit the number of names on an LLC ownership to four, a couple allow five.

    Use your imagination at to what this can allow as you get older and need/want to move assets to your children (if you have that issue)or others. There will/could be tax considerations with a sale/transfer, but the transfer itself is very easy.

    Again, these benefits are state dependent. Where I live, I can log on and form an LLC for $95 at 9:00pm, and have it approved and official docs by 5pm the next business day (The real wait is a human doing the final verification that the name you chose doesn't too closely match any other Corp). And the annual fee works out to about $30/year.
     
  19. Braindead

    Braindead TUG Member

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    I used the word “also” in referencing that Wyndham has been eliminating ways to transfer a contract that keeps developer bought status.
    Wyndham may always allow an LLC to own contracts, but they could stop transferring developer bought status tomorrow or they might of stopped today for all I know. New deed, new owner of the LLC that’s not an allowable transfer to keep developer status, the developer bought status goes away. Before long you will not be able to add an owner or anyone that has the right to be a user of an account unless you meet Wyndhams definition of being able to keep developer status. It won’t matter if you use a LLC, trust or any other form of adding a user on an account, the membership will lose developer bought credit on all contracts in the membership.
    That’s my 2 cents worth!!
     
    Last edited: Feb 6, 2019
  20. Pathways

    Pathways TUG Member

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    Got it! As many people out there that are transferring into a trust, I doubt they will ever cut that off. (LLC is the same process) But you are correct, it could happen.

    I see a lot of comments on TUG about not being able to deed in an LLC, but see very little actual evidence. Only exception that I've seen is maybe small independent resorts that are having financial problems. And why would anyone want to buy there?
     
  21. Braindead

    Braindead TUG Member

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    To be clear, Wyndham may always allow you to transfer your contract into a LLC,trust or anything else.
    But that doesn’t mean Wyndham has to allow that contract to retain developer bought status.
    You have a contract in your personal name upon filing a deed transferring that contract to the LLC,trust or anything else Wyndham has the right to drop the developer bought status.

    Wyndham could announce that LLC,trust etc will no longer receive any VIP benefits unless grandfathered in at the time of the announcement.
    VIP is for real persons,individual owners.
     
    Last edited: Feb 6, 2019

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