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Overvaluing low mfs?

Railman83

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A 436k Bali Hai contract just went for $8650 on EBay.

A lovely contract no doubt and the price makes me feel great about the 375k contract I bought at Bali Hai last month for $1600 total?

But is it a good deal for a resale? Assuming the buyer was not a mega renter or VIP, my rough calculations show it would take 8-12 years to break even over renting or a low/free contact(s) to accomplish the same amount of vacation time in Wyndham resorts. That is with some very favorable assumptions.

Thoughts?
 

Avislo

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A wise and skilled person that put together a lot of deals in the settlement of civil rights complaints told me the answer to a continuing office debate on when the parties are happy with the settlement. His response was when the parties sign the agreement. I think this advise would be equally applicable to timeshare resale agreements.
 

scootr5

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IMHO It's a good deal if they intend to hold on to it for 15 years or more. Sometimes people get too wrapped up in the low-fee resorts and fail to see the big picture.
 

Railman83

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A wise and skilled person that put together a lot of deals in the settlement of civil rights complaints told me the answer to a continuing office debate on when the parties are happy with the settlement. His response was when the parties sign the agreement. I think this advise would be equally applicable to timeshare resale agreements.

I deal in settlements daily and view the notion that settlements are a win-win as an intellectually lazy notion, particularly in cases where the underlying grievance is being settled for nuisance value.

But we aren’t talking about a settlement between parties to avoid a mutual nightmare of protracted litigation. We are talking about a free market exchange and determining value. Extending your metaphor if they would have bought retail for 50k he’d have got a good deal because, well, both parties signed it.

I am asking the question as to whether this was a good deal or not from a community that understands the product. I think a case could be made over some period of time they would come out ahead of a cheaper high mf contract but there are so many unknowns over 10-15 years that it is hard to gauge and I was looking for some others to provide their thought processes over whether this was a good deal or not.

For example, if Wyndham went bankrupt in five years the person who had a higher mf contract for free definitely came out ahead. What is the mf rate of increase is higher at Bali Hai by a point——at the end of 15 years their fees become average.

Curious on how others view this.
 

Braindead

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The Bali Hai contract MFs is $2.00 per thousand points lower than CWA.
CWA has been selling for around $10.00 per thousand points
The Bali Hai sold for about $20.00 per thousand points
The Bali Hai contract will pay for itself in about 5 years verses a CWA contract if you don’t need the ARP resorts that come with CWA
 

Railman83

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Tha Bali Hai contract MFs is $2.00 per thousand points lower than CWA.
CWA has been selling for around $10.00 per thousand points
The Bali Hai sold for about $20.00 per thousand points
The Bali Hai contract will pay for itself in about 5 years verses a CWA contract if you don’t need the ARP resorts that come with CWA

For example, if Ron were around he might take the approach that 436k plus two years of stripping contract = X rental dollars and be able to say whether or not he thought the difference between the purchase price and rental price of stripped contact would give him a comfortable margin to make deal.

Others who use only for personal use or Princeville lovers who need ARP might value against competing local properties at their chosen time instead of rental value or general system value.
 

vacationhopeful

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ARP and resort location is valuable to many owners.

Look at Wyndham Royal Vista ... mfs are more than lesser resorts, all units are points only but with ONLY 90 units it is small. But it has less than 10% OCEANFRONT 2/2 units .. which has caused ANST and GLEE. My avartar is a picture from one of those OF 2/2 units .. full length balcony off both BDRs and Living room .. kitchen duty was just soooo farrrr from the ocean (other side of open LR .... lol). Balcony over sand dune, beach, rolling waves. And which Pompano Beach resorts cost MORE points and is the hardest to get into .... Royal Vista, hands down. Still just under $1400MF per PRIME SEASON week in those 2/2 beachfront units ... if you are lucky to get one!

PS Got one ONCE on my first stay for 3 nights ... also, booked a unit which my renter got, HAPPIEST renter ever!
 

Avislo

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As it relates to a developer purchase, the rule of thumb definition of happy on the purchase would probably apply. Both sides presumably would be happy with the provision that permits the buyer to get out of the contract within X number of days. Ron appears to still be around maybe he could jump in on if what you suggested he might do pertaining to stripping of the contract to get his margins to make the deal. Heck, maybe a contract stripper got it.
 

Braindead

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For example, if Ron were around he might take the approach that 436k plus two years of stripping contract = X rental dollars and be able to say whether or not he thought the difference between the purchase price and rental price of stripped contact would give him a comfortable margin to make deal.

Others who use only for personal use or Princeville lovers who need ARP might value against competing local properties at their chosen time instead of rental value or general system value.
As it relates to a developer purchase, the rule of thumb definition of happy on the purchase would probably apply. Both sides presumably would be happy with the provision that permits the buyer to get out of the contract within X number of days. Ron appears to still be around maybe he could jump in on if what you suggested he might do pertaining to stripping of the contract to get his margins to make the deal. Heck, maybe a contract stripper got it.
Stripping of contracts is a moot point as you can no longer do it and it has nothing to do with the value of the contract that sold last night
 

Braindead

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Heck, maybe a contract stripper got it.
You been around here long ? Thought you would’ve known any stripping of contracts stopped about a year ago.
Hint-don’t buy contracts with plans of becoming a contract stripper!!
 

raygo123

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When where and for how much. Both access and deeded provide different attributes. I would like to see a couple bids on prime San Francisco.

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Railman83

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You been around here long ? Thought you would’ve known any stripping of contracts stopped about a year ago.
Hint-don’t buy contracts with plans of becoming a contract stripper!!
I understand you can’t strip anymore I was using it as an example of how different people could approach valuing a contract.

I gave the example because the first response was essentially it must be good for the person or they wouldn’t have done it; and I was hoping for some deeper thought.
 

vice

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I was wondering if anyone would bring up that $8650 Bali Hai, I was pretty shocked to see it go so high. Looked like it had several highish bidders and it wasn't a private listing so I am assuming it was legit. Prices do seem to be creeping up in general but perhaps we are at the dawn of big bump in resale prices that is the result of Ovations eliminating much of the bottom of the market and establishing a floor above $0. Maybe someone posted that Wyndham points are moving to the blockchain and we now have bitcoin speculators in the market. (JK but blockchain would be perfect for transparent timeshare point accountability). I am also thinking with Wyndham having the ability to catch and hold back virtually all of the desirable reservations that are now released and then funnel them to Extra Holidays, they themselves need more points as well as any renters that are still making a go of it in the Wyndham rental market. The guy that likes to stay in Wyndham resorts but figured out it was cheaper to rent from an owner than buy resale himself, now the math isn't so clear and his go to agent may have retired last year. In short everyone from small Silver VIP owner to megarenter to Wyndham needs more points to accomplish what they used to with less points. End result, purchase price of resale points gradually rises until a couple of bulls run up the price of a medium sized Bali Hai contract to $8650. If prices continue upward and follow the traditional "summer bump" we may be at $20 per thousand for CWA and other mediocre maintenance fee contracts before you know it.
 

Railman83

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Also, not to harp on this, but it occurs to me that I personally might have bought this contract at about 4K had it been my first or second contact but value it less as my point stack has grown.

I suppose there is a point that, even if given a great contract for free you wouldn’t take it because you have reached diminishing returns. Though here if you got for free you could presumably sell at a profit
 

vice

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A 654 K Bali Hai was recently listed on eBay for Buy it Now for $8995 plus $800 closing. A relative bargain I guess but I don't think it is an ultra low mf contract. $4.92 per 1000 points is what I calculated it at. I haven't kept a close eye on what is considered ultra low vs. pretty low vs. average lately.
 

Roger830

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It would make sense for Wyndham to buy it, then sell it for $75,000.

I noticed that a 200K Royai Garden went for $1800 + $800 closing = $2600.
That seems high.
 

Braindead

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CWA buying Bali Hai contracts ? I’ve heard rumblings at owner updates for a couple of years that CWA is coming to Hawaii via Bali Hai.
 

Railman83

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CWA buying Bali Hai contracts ? I’ve heard rumblings at owner updates for a couple of years that CWA is coming to Hawaii via Bali Hai.

My fear has always been that my “at 10 months points are points” account will be crushed as CWA grows and everyone takes inventory out 13 months in advance, hence nothing left.

I am banking on that not happening because most people have windows of travel tied to school and aren’t good at planning a year in advance. That said, I fully expect availability Christmas and summers to shut me out past 10 months at some point in my ownership. Luckily I’m looking for Jan-Feb mostly.
 

uscav8r

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A 654 K Bali Hai was recently listed on eBay for Buy it Now for $8995 plus $800 closing. A relative bargain I guess but I don't think it is an ultra low mf contract. $4.92 per 1000 points is what I calculated it at. I haven't kept a close eye on what is considered ultra low vs. pretty low vs. average lately.

Bali Hai UDI is $4.12/1000 points including the Program Fee, so your number is way inflated. Converted fixed weeks can be more expensive than UDI... wonder if that is the case here.


Sent from my iPhone using Tapatalk
 

vice

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Bali Hai UDI is $4.12/1000 points including the Program Fee, so your number is way inflated. Converted fixed weeks can be more expensive than UDI... wonder if that is the case here.


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Yeah, I am just basing the calculation off what is stated in the listing, knowing it may not be accurate. May well be converted weeks with that odd number of points.
 

Dave Landry

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Was watching that auction myself. Even thought about putting in a bid but it grew tremendously in the last few minutes. I was thinking that I spent too much for my Panama city Beach contract but seeing this really makes me happy to have it already .I personally wouldn't have spent any more than 3000 for it as it is only 65 cents per thousand less and the payback would be very long for me. I am still hoping to be able to get good deals renting from platinum owners when I use up the points owned
 

ronparise

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You been around here long ? Thought you would’ve known any stripping of contracts stopped about a year ago.
Hint-don’t buy contracts with plans of becoming a contract stripper!!

Oh but you can still strip points, just not in the aggressive fashion I used to do it

This contract is 436000 points for $8500 mf will be roughly let’s assume mf at $150 a month and let’s further assume settlement will be in 6 months. And that the contract comes complete with all 2018 points in it

I can immediately make 2 one bedroom reservation with the 2018 points and 2 reservations for sometime in 2019 with my 2019 points and in dec 2018 I can make two reservations for Jan 2020.

So $150 x 18 months = $2700 mf plus the $8500 purchase price = $11,200

Then sell the contract for penny a point or $4200. Net cost is $7000

So net cost of about just $1000 per vacation

That’s not stripping points like I used to doe it, but it is using 3 years or points in 18 months And the contract is now stripped of points
 

Braindead

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Oh but you can still strip points, just not in the aggressive fashion I used to do it

This contract is 436000 points for $8500 mf will be roughly let’s assume mf at $150 a month and let’s further assume settlement will be in 6 months. And that the contract comes complete with all 2018 points in it

I can immediately make 2 one bedroom reservation with the 2018 points and 2 reservations for sometime in 2019 with my 2019 points and in dec 2018 I can make two reservations for Jan 2020.

So $150 x 18 months = $2700 mf plus the $8500 purchase price = $11,200

Then sell the contract for penny a point or $4200. Net cost is $7000

So net cost of about just $1000 per vacation

That’s not stripping points like I used to doe it, but it is using 3 years or points in 18 months And the contract is now stripped of points
As you say —not like you use too— is what I was referencing. You can’t use all of the 2019 & 2020 points in the first few months of 2018 and then get rid of the contract like you use to!
 
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Railman83

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Oh but you can still strip points, just not in the aggressive fashion I used to do it

This contract is 436000 points for $8500 mf will be roughly let’s assume mf at $150 a month and let’s further assume settlement will be in 6 months. And that the contract comes complete with all 2018 points in it

I can immediately make 2 one bedroom reservation with the 2018 points and 2 reservations for sometime in 2019 with my 2019 points and in dec 2018 I can make two reservations for Jan 2020.

So $150 x 18 months = $2700 mf plus the $8500 purchase price = $11,200

Then sell the contract for penny a point or $4200. Net cost is $7000

So net cost of about just $1000 per vacation

That’s not stripping points like I used to doe it, but it is using 3 years or points in 18 months And the contract is now stripped of points
It’s like Godfather part III, they keep pulling him back in.
 

Braindead

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It’s like Godfather part III, they keep pulling him back in.
In Rons example he is tying up the 2019 & 2020 points but not stripping the contracts. If Ron were to sell the contract in 2018 in his example the 2019 & 2020 reservations would be cancelled. As a result the 2019 & 2020 points would get transferred with the contract
 
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