Restructuring my HGVC holdings

[brp]

Hey all,

Sorry for spamming my own thread last evening, but the auction was ending and I was looking for advice. I still have a shot at this from the seller. Trying to see why this might be a bad deal:

Pros:

Very low buy-in price on a high-point, low MF package (@Bao Nguyen's unicorn find notwithstanding ) - of course, eventual selling price likely lowe as well.

Got the estoppel, and all current and paid up, with full 2020 points.

Cons:

Two activation fees - but more than offset by buy-in savings
Lowe resale - as mentioned, but offset by lower buy-in
In the worst case (think Apollo catastrophe) we're stuck with two studio weeks in Vegas - willing to gamble on this.

Is there something I'm missing that makes this a bad thing to consider?

Cheers.

 

[CalGalTraveler]

As I understand it (Warning I may be a bit behind):

• You have two 2 bdrm Flamingos Gold that you are going to sell. 10,000 points total (5000 each)
• You wish to buy two 1 bedroom Platinum units at BLVD. 10,300 points total (5150 each)

1) How much are you saving compared to the MF of your two Flamingos?
2) What is the net difference in cost of buying these new units with to net cost of selling Flamingo after broker and if you pay selling costs (worst case)
3) What is your MF/point in each deal?
4) What is your breakeven year to recoup the cost of this transaction?
5) If you waited for another deal to consolidate into one unit similar to the unit you originally wanted how would that compare to this deal?

P.S. LOL. Love the play on words, "two studio weeks in Vegas - willing to gamble on this."

 

[brp]

Flamingo: Yes
Boulevard: Two 1BR Plat @ 4800 each (9600 total)

1. Flamingo is about $2100, Buoulevard is about $1261, so savings = $839/year
2. Buy = roughly $6500 + 2x$609+$409 = $8127, Sell might net about $3500 total for both
3. Flamingo = $0.21/point, Boulevard = $0.13/point
4. Breakeven = 5.5 years

This seems reasonable to me.

If we got a straight 9600 for, saqy $9500, the MFs are lower by about $100, so savings = $939/year. But buy-in is up by about $2000 (transfer is covered in this one), so BE = 7 years. So maybe this one makes as much sense, in the end.

Thanks for the reality-check questions

(Happy to have found a place to throw in gambling )

Cheers.

 

[CalGalTraveler]

$839/year is significant and 5 years is good. The biggest difference is that the 1 bdrms will sell for less or than the Blvd. How long do you intend to keep?

 

[brp]

We'll keep 20-25 years, I'd say

I did try on the straight 9600. Last bid for me was $9412. Was winning until 2 seconds, then outbid at $9512

Yes, they will sell for less, but we'll get them for less.

Cheers.

 

[CalGalTraveler]

BTW...now I understand why you wanted to restructure because we have one Paradise unit at 7k pts at about $1050/year and $.15 MF/point which is much lower than your $2100 MF. Quite a premium for only 3000 more points.

Lower buy-in was one of the reasons we opted for Paradise vs. Blvd. We also wouldn't mind being stuck in Vegas if the system rules changed. We could rent out the unit for Raider games or conventions if we didn't plan to use because it is near both venues.

 

[brp]

OK, seems done. The two-package deal on eBay ended with no bids at an opening of $6500. I got it for $6250 (probably could have fought harder for $6000, but it seemed not worth the effort). So $0.65/point, plus fees, of course.

Just need thit to pass the monkeys...

Now to sell those Albatross...I mean Flamingos...

Cheers.

 

[CalGalTraveler]

Congrats! How did you get it for below the reserve? Did you contact the seller after the auction closed?

 

[brp]

Yup. I'd actually contacted him before it closed to ask about getting estoppel prior to any payment. He got back to me quickly that it would be no problem. Then I decided to wait until the auction ended and contact him again because I figured that I could get it below the eBay asking price that way. And, since it ended with no bids and was now closed in eBay, no violations there.

Basically, I saved the Credit Card fee that they add (something I'm very much OK with to use a CC with these lower-priced transactions).

Cheers.

 

[CalGalTraveler]

Smart move! Will take note of other auctions that go unsold.

As a bonus of holding 1 bdrms platinums, if you had to rent you could probably rent them out for MF or a bit of a premium. Harder to do with a 2 bdrm.

 

[brp]

Smart move! Will take note of other auctions that go unsold.

As a bonus of holding 1 bdrms platinums, if you had to rent you could probably rent them out for MF or a bit of a premium. Harder to do with a 2 bdrm.

Could probably get a premium for Raiders' games if I rented a long weekend to "friends," even though it is a bit far from the venue. Closer than Oaktown.

Cheers.

 

[CalGalTraveler]

You could also split the home week i.e. rent the first half for Raider Game and then use the other half.

Might have to tip the housekeepers well during mid-week to clean up after your renters.

 

[Bao Nguyen]

Congrats whatever that make you happy....

 

[Bao Nguyen]

OK, seems done. The two-package deal on eBay ended with no bids at an opening of $6500. I got it for $6250 (probably could have fought harder for $6000, but it seemed not worth the effort). So $0.65/point, plus fees, of course.

Just need thit to pass the monkeys...

Now to sell those Albatross...I mean Flamingos...

Cheers.

so how many points did you get? 9,600?

 

[brp]

Yup, 9,600. Structured as 2 x 4800 1BR.

Cheers.

 

[Bao Nguyen]

Yup, 9,600. Structured as 2 x 4800 1BR.

Cheers.

nice!...I'm thinking rent out for Raider game too... but not sure how advance we know their game schedule. I'm sure entire town will sold out .

 

[hurnik]

I was in a similar boat, but ultimately the restructuring would never work out financially, I don't think.

I have a 3400 point (1 BR Gold) at BLVD - $610 MF
I have a 5000 point (2 BR Gold) at BLVD - $845 MF

So combined MF is like $1455 for 8400 points
The "cheapest" 8400 points (for MF) was BLVD at $1070, but $18,000 cost to buy. I think BE was like 33 years (not counting closing costs and activation fees, and assuming I could sell my two for $2500 total).

The "next" best was like MF at $1,118 at a buy in of $14k (not counting closing/activation).
I think even the 9600 point one (not quite apples/apples) on eBay would still take me close to 21 years to BE.

So I'll just keep 'em

 

[CalGalTraveler]

Having the Raiders in town will change the rental dynamic.

@hurnik Although you prob don't enjoy having two units that are lower value, the silver lining is the lack of a good BE option means that what you have is pretty good!

Could you flip the 3400 pt unit only for a 5k pt or more and get a better BE return?

 

[brp]

I was in a similar boat, but ultimately the restructuring would never work out financially, I don't think.

I have a 3400 point (1 BR Gold) at BLVD - $610 MF
I have a 5000 point (2 BR Gold) at BLVD - $845 MF

So combined MF is like $1455 for 8400 points
The "cheapest" 8400 points (for MF) was BLVD at $1070, but $18,000 cost to buy. I think BE was like 33 years (not counting closing costs and activation fees, and assuming I could sell my two for $2500 total).

The "next" best was like MF at $1,118 at a buy in of $14k (not counting closing/activation).
I think even the 9600 point one (not quite apples/apples) on eBay would still take me close to 21 years to BE.

So I'll just keep 'em

Wow, much lower MFs at BLVD for the 5000 pt. Gold. Knew it was lower, but didn't know it was this much lower.

As to the second part, you can get these points for a muhc lower buy-in. As an example, I know that judikoz has Carigendarroch (likely spelled that wrong, but don't feel like looking it up): 8400 points for $10K, and likely can get it for less. And this has even lower MFs. But it would still definitely be longer than our Flamingo BE as your MF ratio is better than ours.

Cheers.

 

[hurnik]

Having the Raiders in town will change the rental dynamic.

@hurnik Although you prob don't enjoy having two units that are lower value, the silver lining is the lack of a good BE option means that what you have is pretty good!

Could you flip the 3400 pt unit only for a 5k pt or more and get a better BE return?

Hmm, I've not checked/considered that. I'll have to run the numbers and see.
Odds are the 3400 point would have to go for $500 or $1000 at most (but by the time I paid for closing costs, probably close to zero net gain).

 

[CalGalTraveler]

@hurnik Perhaps keep your eye open this fall for a 5000 pt unicorn that someone is selling for next to nothing or giving away. You could calculate the highest price you could go and get a decent BE after disposing of the 3400 pt unit. I never thought @brp difference was that high but with 2 units it is significant.

 

[emoneybug]

I would like a few of the 5000pt unicorns ...I'm wondering if a seller would take $500 plus split closing/transfer costs for a low MF Las Vegas 5000pt HGVC.

 

[brp]

OK, seems done. The two-package deal on eBay ended with no bids at an opening of $6500. I got it for $6250 (probably could have fought harder for $6000, but it seemed not worth the effort). So $0.65/point, plus fees, of course.

Just need this to pass the monkeys...

Now to sell those Albatross...I mean Flamingos...

Cheers.

The monkeys have passed on this one (was sent to ROFR on 9/13, got the notification early).

Now I just have to decide if I really want to pay the remaining $6422 via Cashier's Check (and save the $225 in CC fees), or go for the points and added protection

If I don't sell the Flamingo units, there's always the Raiders in 2020

Cheers.

 

[hurnik]

The monkeys have passed on this one (was sent to ROFR on 9/13, got the notification early).

Now I just have to decide if I really want to pay the remaining $6422 via Cashier's Check (and save the $225 in CC fees), or go for the points and added protection

If I don't sell the Flamingo units, there's always the Raiders in 2020

Cheers.

typically, figure out how many points you'd get (I don't know which credit card you're using) and then use the $225 to calculate the "price per point".

IMO, it *almost* never makes sense to go that route.
UNLESS you're needing it for the SUB (sign up bonus), in which case, it may work out. (ie: 80,000 UR points from the CIP for $225? Sure, I'll bite) 50k AA miles for $225? eh, not so much.

Although the $225 seems rather high. That's like 3.3% or thereabouts?

 

[brp]

typically, figure out how many points you'd get (I don't know which credit card you're using) and then use the $225 to calculate the "price per point".

IMO, it *almost* never makes sense to go that route.
UNLESS you're needing it for the SUB (sign up bonus), in which case, it may work out. (ie: 80,000 UR points from the CIP for $225? Sure, I'll bite) 50k AA miles for $225? eh, not so much.

Although the $225 seems rather high. That's like 3.3% or thereabouts?

Yeah, they're at 3.5%. Definitely high, but they are very up-front about it. We pay most fee-requiring things (estimated taxes, any taxes owed, property tax) with a CC, but that's at 1.9%, and we can make that work. We use Hyatt card and this counts for stays and status.

I did pay the $500 deposit on a CC as I didn't really know these folks. Further research (and some very recent comments on the ROFR thread from a Tugger who has worked with them twice) has decided me on the Cashier's Check route.

Cheers.