Buy a timeshare or rent ? How about a LTO ? [MERGED]

[jeffwill]

This is my first post on Tug. I own Wyndham points and fixed weeks. I travel most via RCI last call and BOGO. I see three basic problems with buying prime timeshares--- they cost WAY to much up front, MF's are getting WAY to high, and they are costly to get out of. What if a new option were born ? I think I have one and I would like tuggers to comment.

While staying at Wyndham Panama City, the week before Christmas, pieces of this puzzle all came together.

Everyone know what a PSL is ? It started in Charlotte NC, in 1993, with the new Panther stadium. A "Personal seat licence", for a particular seat that allowed you to buy a season ticket for that seat. My new concept is a LTO. A "Licence to Occupy" for 20 years. I use Wyndham PC just to compare. It takes 275,000 points for a 1 BR deluxe (upper) for a prime week.

Why not buy a LTO for twenty years ? With a LTO you have---
No closing costs.
No resort transfer fees
No program fees
No deeded ownership LIABILITY
No exchange fees
No HOA's controlled by developers
No maid fees > and lastly our favorite<
No high pressure "update" meetings.

I have most of the answers---- Tuggers--please-- ask your questions.

 

[Ridewithme38]

Look into RTU's, most of them are in Mexico, but i think the Disney Vacation Club also uses them

 

[jeffwill]

I mention the Wyndham one bedroom deluxe as a comparison. I can buy the same condo, in the same building-- Emerald Beach Resort-- with the whole resort managed by Wyndham. There have been many discussions on tug about quiet and value weeks paying the same maintenance fees as prime weeks. My model program addresses this problem. It is a fixed week model with 29 Prime weeks, 13 High usage weeks, and 10 Value/Quiet weeks that I combine as Value. See Wyndham's points/weeks schedule on page 79 of their members directory. The following would work well for buyer and seller:
A Prime week LTO would cost $4500.00 with MF's of $600.00 yr.
A High week LTO would cost $3000.00 with MF's of $400.00 yr.
A Value week LTO would cost $1500.00 with MF's of $200.00 yr.
The first years MF's are included in the LTO fee. The LTO will always retain full value of unused years via buyback by contract. Again, this LTO model is based on Emerald Beach Resort in Panama City, Fl.

Compared to renting or owning a timeshare, you pay far less for the best.
There are many more benefits with a LTO that I hope will come out with more questions.

 

[MALC9990]

Look into RTU's, most of them are in Mexico, but i think the Disney Vacation Club also uses them

Also MVCI in Europe and Thailand.

 

[ronparise]

Jeff

Does you concept make the annual use (and fee) mandatory?
ie is this a right to occupy, or is it an obligation to occupy?

 

[jeffwill]

The LTO is a legal option to use a specific condo in a specified resort. The goal is to create a co-op group that identifies with their condo, gets to know each other, and work together--with the owner---to maximise value and vacation experience.

I use the term "maintenance fees" because we all understand what the are. With a LTO, MF's become an AUC or "annual usage certificate". This is issued when MF's are paid by the LTO holder. They must be paid in full 90 days before usage week. LTO holders cannot rent their units nor can they sell their LTO on the open market. But the condo owner can, to the advantage of the LTO holder.

If a LTO holder chooses to not use the condo in a particular year, and informs the owner within 90 days, the owner can rent the unit to the public, take responcibility for that renter, and the LTO holder pays no MF's for that year. If the week is rented for market price, the LTO holder receives a $100.00 credit on his next years AUC.

Each condo unit and their LTO holders are a unique group. Getting to all know each other is encouraged and supported. I believe, through this "family" approach, annual MF's can be kept constant or actually lowered.

 

[Rent_Share]

I mention the Wyndham one bedroom deluxe as a comparison. I can buy the same condo, in the same building-- Emerald Beach Resort-- with the whole resort managed by Wyndham. There have been many discussions on tug about quiet and value weeks paying the same maintenance fees as prime weeks. My model program addresses this problem. It is a fixed week model with 29 Prime weeks, 13 High usage weeks, and 10 Value/Quiet weeks that I combine as Value. See Wyndham's points/weeks schedule on page 79 of their members directory. The following would work well for buyer and seller:
A Prime week LTO would cost $4500.00 with MF's of $600.00 yr.
A High week LTO would cost $3000.00 with MF's of $400.00 yr.
A Value week LTO would cost $1500.00 with MF's of $200.00 yr.
The first years MF's are included in the LTO fee. The LTO will always retain full value of unused years via buyback by contract. Again, this LTO model is based on Emerald Beach Resort in Panama City, Fl.

Compared to renting or owning a timeshare, you pay far less for the best.
There are many more benefits with a LTO that I hope will come out with more questions.

Your proposing to sell a $150 K Condo 52 times for a slight premium of $ 35K

The negative image created by the industry has to be overcome, Typical marketing expenses are over 50 % if the sales price.

Obviously Disney believes their is still a market for vacation ownership based on their media spend for Aualani (sp) however at a premium, not at a discount

 

[jeffwill]

First of all--- Thank You for your comments. I spent a week looking at almost 20 condos in PC that fit my profile. My model is a 1Bed deluxe that originally sold for $275,000. and I can buy for $165,000. I am test marketing this LTO concept right here on TUG. When I buy the condo and put this system to work, I personally will not use it for 20 years. I will manage it properly and create my best future customers. I am benifiting from the negative image of the industry by offering something different that is incredibly SIMPLE. As to marketing costs, I never intend to go on the open market and solicit. I believe there are enough timeshare veterans here on Tug, that when they fully comprehend what I am proposing, they will be the pioneer subcribers. I believe the model program will have 20 to 25 individuals licenceing all 52 weeks. Then it's up to US as to what We create with OUR condo.
My last 15 years, before retiring, consisted of owning and operating antique malls. In 1985 I opened the first and won awards for having the best. My new company will be Hospitality Investment Management. My BSBA from U.of Florida is in this field. I have always thought "outside the box" in order to be the first with a successful idea. I am getting the comments here on Tug that perfect this model---- someone needed to get it started--- if it works well, any of you can do the same thing.
Therefore, I don't care about MVCI in Europe, RTU's in Mexico, or DVC in their corporate world. To repeat---- this a simple proceedure, it envolves a small group who know what they like and will work together to make it the BEST. So far we have a few twigs on the fire.
I am leaving now for Waterside on Hilton Head. I will be on this site for the next week. I look forward to all your questions later today. AND- I know I need spellcheck. Where is it on this site ??

 

[gnorth16]

This seems like a good concept, however it would not be as efficient as described in areas with a lot of off season periods with low demand. Stay in places where there is decent demand all season long.

The condo in Panama City, why not simply rent the weeks out on VRBO? What would be the cost benefit versus simply staying at the timeshare next door instead??? If I am a peak season user, why not stay with the big TS companies, the off season and shoulder season users are helping to keep my MF's lower. My guess is that most people want to stay at a resort, not a condo/apartment. When I want a condo, I can rent it on VRBO...
If the market values go up, the owners wouldn't see that since you are the title holder of the property?

Interesting concept, I 'll keep the questions coming...

 

[Rent_Share]

The OP is suggesting Limited Parnerships with 52 Shares available- Good Luck, The developer can't be bothered so some one would need to front the cash to buy it and resell the shares

 

[MOXJO7282]

This is my first post on Tug. I own Wyndham points and fixed weeks. I travel most via RCI last call and BOGO. I see three basic problems with buying prime timeshares--- they cost WAY to much up front, MF's are getting WAY to high, and they are costly to get out of. What if a new option were born ? I think I have one and I would like tuggers to comment.

While staying at Wyndham Panama City, the week before Christmas, pieces of this puzzle all came together.

Everyone know what a PSL is ? It started in Charlotte NC, in 1993, with the new Panther stadium. A "Personal seat licence", for a particular seat that allowed you to buy a season ticket for that seat. My new concept is a LTO. A "Licence to Occupy" for 20 years. I use Wyndham PC just to compare. It takes 275,000 points for a 1 BR deluxe (upper) for a prime week.

Why not buy a LTO for twenty years ? With a LTO you have---
No closing costs.
No resort transfer fees
No program fees
No deeded ownership LIABILITY
No exchange fees
No HOA's controlled by developers
No maid fees > and lastly our favorite<
No high pressure "update" meetings.

I have most of the answers---- Tuggers--please-- ask your questions.

What you should do is buy a resale Marriott 2BDRM plat LO. It won't be exorbitant, LO units bring more value so MFs are reasonble and Marriotts 2BDRM LO plats can always be sold on the open market.


Solves all three of your problems.

 

[MichaelColey]

Why not buy a LTO for twenty years ? With a LTO you have---
No closing costs.
No resort transfer fees
No program fees
No deeded ownership LIABILITY
No exchange fees
No HOA's controlled by developers
No maid fees > and lastly our favorite<
No high pressure "update" meetings.

I have most of the answers---- Tuggers--please-- ask your questions.

Only one question: What motivation would a developer have to create something like this?

 

[BocaBum99]

This is my first post on Tug. I own Wyndham points and fixed weeks. I travel most via RCI last call and BOGO. I see three basic problems with buying prime timeshares--- they cost WAY to much up front, MF's are getting WAY to high, and they are costly to get out of. What if a new option were born ? I think I have one and I would like tuggers to comment.

While staying at Wyndham Panama City, the week before Christmas, pieces of this puzzle all came together.

Everyone know what a PSL is ? It started in Charlotte NC, in 1993, with the new Panther stadium. A "Personal seat licence", for a particular seat that allowed you to buy a season ticket for that seat. My new concept is a LTO. A "Licence to Occupy" for 20 years. I use Wyndham PC just to compare. It takes 275,000 points for a 1 BR deluxe (upper) for a prime week.

Why not buy a LTO for twenty years ? With a LTO you have---
No closing costs.
No resort transfer fees
No program fees
No deeded ownership LIABILITY
No exchange fees
No HOA's controlled by developers
No maid fees > and lastly our favorite<
No high pressure "update" meetings.

I have most of the answers---- Tuggers--please-- ask your questions.

Sounds like a hard sell to me. I don't understand it, but I doubt I would buy into it. I don't see enough upside in it to spend more than 5 minutes analyzing it.

Sounds like a ton of legal risk and very little upside.

However, if you've found the next best vacation ownership model, I am sure you will come back to let us know. My general rule of thumb is that the value proposition has to be self evident or it will go nowhere. When you crack the nut, it will be obvious that it was a good idea when you post about it. For now, you don't have it.

I do admire that you are looking to spend real capital to test your idea. I like risk takers who believe in their ideas. 95 out of 100 of these ideas are wrong. But, in pursuing your idea, you will likely find something else that does work that you never imagined.

 

[jeffwill]

Arrived a little late to Hilton Head and am now settled in. I'm an early riser and look forward to answering some comments and clearing up some misconseptions. All good posts ----- still a little confusion that I will address as to my motives and what I am trying to accomplish. For now---- it's the second half of Giants & 49rs. Thanks for participating. Jeff

 

[ronparise]

Only one question: What motivation would a developer have to create something like this?

$$$$

As I understand Jeff's program; he plans on buying a condo and renting it by the week

By selling the right to 52 weeks according to his schedule posted above) he should get all his money back and break even on the purchase/sale He'll make his money managing the place....do 4 of them (200 sales) and he should be making 100k a year. The question is: can he actually find 200 buyers for his program?

What makes a program like this possible is the state of the real estate market (in Florida)

Wyndham is doing the same thing on a larger scale with their WAAM program, except that they dont plan on buying the units..they'll sell condos as timeshares to earn a commission and then manage the property for a fee

 

[jeffwill]

I know I will be redundant here because it will take a while for us all to get on the same page. If you dont like the beach, use your TS's for exchanging, buy timeshares to rent, or money to you is not an issue, then my system probably has no real advantage to your MO. If you love Panama City Beach, love the sunsets from the 20th floor of a gold crown resort, like quality and consistency in your accomidations, and feel good about paying half price, then you are more like me. Again--- this is so simple it's hard to understand.

Let me answer GNORTH first. I will be buying a condo as an investor. I can use VRBO and join the MANY who are hoping for enough high rent ($1000./wk.) to make it worth while. But then you get what you get and have to manage all problems. You could, as most investors do, retain a management company that handles all the STUFF and you pay them 30% for their service. NO thanks to the above. I want the same group of happy people comming back every year, in anticipation of what the next perk is that I spoil them with. When your sitting in the sky bar talking to a Wyndham guest (who occupies the right side of the building and paid $1650. to have the same unit) you can comment on how your unit is furnished like a Marriot and only cost you $600. Same building, same everthing. After he gets his choking under control, you can explain the LTO system and earn a referal commission when he joins the family.

As to the property values going up---- they very likely will. I'm counting on it. They just opened a new international airport in PC and casino gambling is a few years away. See why it's smart to lock in now ? My books will be open to my LTO guests. When you purchase an LTO from my company, you instantly become a VIP. More on that subject later.

In closing here----- it's hard to accept that I'm not just another developer that is only motivated by the bottom line. I had very little dealer turnover in my five antique malls. That is because I charged less, gave them more than they expected, and brought everyone together frequently so they identified with a sucessful group. That is exactly what I pledge to my LTO family.

In final closing here--- Remember--- we are talking about ONE RESORT CONDO as the model. It makes NO sense for me to NOT deliver everything I describe, because I want a waiting list for my next unit. I want five units at Wyndham/Emerald Beach Resort. They will all be Sunday to Sunday. Instead of Wyndham's coffee & donuts Monday morning, you will enjoy a cocktail party with tasty buffet Monday night. (I'm just getting started !)

 

[jeffwill]

Two t's in Marriott--- My fingers failed me. This is for Moxjo & Michael--

From reading past posts and enjoying your website, I say Moxjo got the MoJo when making Marriott work for you. I dont want a Marriott week. I want the 12 month BIG COCONUT so I can make the best Pina Colata Vacations a few seashells can buy.

You're exactly the type of forward thinker I would love to have in the first ever PCB family LTO vacation club. I can think of others on TUG, I hope they somehow find their way to this thread. Have you been to PCB ? If yes- when, where, and how much ?

Michael---- Developer motovation ? NONE. He's forced to charge $45,000. instead of my $4500. BTW--- at a recent Wyndham "update", I was told they currently charge $220. per thousand pts. That equates to $60,500. for one week in my LTO unit. We all know what happens next.

 

[jeffwill]

Trying to understand [Duplicate threads merged at this point]

Every comment I have read on this thread is something I have thought about for years. There is someone who is offering an alternative that is designed for the situation we face TODAY. ME. I call it a LTO-- licence to occupy---similar to a RTU. With my plan, you have a legal contract to use the unit for 20 years, MF's are determined by prime/high/value usage, and you can surrender your LTO, after 2 years, for 100% of its remaining value.

I started a thread just a few days ago to do exactly what you are suggesting. I believe there is no better group to help me perfect this new TS concept than my frllow tuggers. I dont know how to insert my thread into the this post-----Clicking on my name might do it---- or the next commenter can do it for you. Key word is LTO

 

[DeniseM]

Every comment I have read on this thread is something I have thought about for years. There is someone who is offering an alternative that is designed for the situation we face TODAY. ME. I call it a LTO-- licence to occupy---similar to a RTU. With my plan, you have a legal contract to use the unit for 20 years, MF's are determined by prime/high/value usage, and you can surrender your LTO, after 2 years, for 100% of its remaining value.

Jeff - is this a theoretical concept that you are sharing, or a product that you are selling?

Here is the problem - with all the current deeded timeshares, there is already a different form of ownership in place. It would be extremely difficult, if not impossible to change deeded ownerships, to the type of ownership that you are discussing.

 

[presley]

Another question I had:
If you wanted to sell your timeshare what would make you consider keeping it?: better accommodations? lower maintenance fees?

I like all of mine, but MFs will do me in some point.

I spoke to someone recently who had a TS for 20 years. The MFs are double this year what they were when he bought. He can't pay the MFs anymore. I suspect that is the most common scenario.

 

[Beefnot]

Jeff - is this a theoretical concept that you are sharing, or a product that you are selling?

Here is the problem - with all the current deeded timeshares, there is already a different form of ownership in place. It would be extremely difficult, if not impossible to change deeded ownerships, to the type of ownership that you are discussing.

Unless perhaps there was a company set up to buy these deeded timeshares and assume responsibility for MFs while simultaneously selling this LTO concept, either back to the previous owners from whom it purchased the deeds new buyers or to new buyers. I haven't really studied that thread, so I dunno really.

 

[jeffwill]

Denise---- right now my plan is conceptual. As I have mentioned in my thread, I am trying to get tuggers to think a little differently and get their brains and imaginations around my plan. Those that like PCB and see the "current problems" solved in my approach, will then become potential LTO subscribers. I have a Wyndham/Emerald Beach contract in hand with an owner that will work with me. Step 2 for me would be asking for verbal commitments from tuggers that are interested. Step 3 is signing the contract and forking out $50k of my cash. THEN the selling would begin here on TUG. I dont want to fudge on any Tug rules and I dont think I am. I fully believe my system will REPLACE the deeded ownership idea on NEW TS transactions. Currently Wyndham does not own any deeds, they pass that liability right through to their new "owners". I am NOT proposing changing deeded ownership for existing holdings. I have two deeds I have tried to give away (right here on Tug) and I will list them again. I hope you will read my whole thread and comment on it. Thanks-- Jeff

 

[DeniseM]

Jeff - I'm sorry, but promoting a commercial product on TUG violates the TUG posting rules. Your theoretical discussion was OK, but you've gone as far as you can go with it.

If you want to pursue it on TUG, you need to contact TUG owner, Brian Rogers, and get his approval. Please don't post about it any more until you have done that.

 

[jeffwill]

BEEFNOT----- thank you for opening another door for the LTO. What you are suggesting CANNOT be done---- that would be 50% NEGATIVE cash flow.

Example: My just paid Wyndham $860. for current yr. MF's for a Santa Barbara one bedroom deluxe, 8th floor ocean view, High season wk. 23.

Compare that to a 20th floor Wyndham PCB 1Bed deluxe prime season LTO with MF's of $600. Or--a PCB April or Oct. High week LTO with MF's of only $400. You can't buy something for $860. and sell it for $400. for very long. I wish I had the PCB choice I am offering --back then.

BTW--- where my LTO plan at Panama Cith Beach (PCB) has $600.MF's for prime-- the same unit, in the same building, the same week, but with a Wyndham key--- costs the Wyndham points holder $1650. Which would you choose ? Please read my thread and ask questions.

 

[jeffwill]

Denise--- I called Brian six times in four days last week and left messages asking to PLEASE call back. I emailed him every day and even outlined the LTO concept and ASKED for has advice on how to present it on TUG. To this day, I have not heard anything from Brian.

You are right--- My idea IS theoretical, I am not trying to break rules, and that's why I shared my future plans with you. I am therefore surprised that you have made this judgement. All I have ever suggested is that if enough people are interested in a new alternative, I will buy a condo in the future and give those people an opportunity to put this plan in effect.

PLEASE Denise----- do not pull this discussion. I have worked very hard and Tuggers are showing interest. What can I say and/or do ??