Retro advice

[DanCali]

Along the lines of the point that DanCali makes - I don't understand what it really looks like to get rid of a Flexoptions purchase (such as the one outlined in DanCali's option 1 scenario). My question is specific to some date in the distant future when the owner of these Flexoptions decides that they no longer want them and their associated maintenance fees. I can imagine what it would look like to put the WKV platinum 1 BR (or DanCali's option 2) on the resale market. Can someone please help me to understand what re-sell (or otherwise "getting rid of") option 1 will likely actually look like?

You would basically have to list them for resale and find someone to buy them. That's not a position I would want to be in.

Because this product is restricted on the resale market (no Staroptions at 8 months) the demand for it is limited and it also doesn't help that 30K Flexoptions are only good for booking a 2-3 nights is most places. It'd be hard to find a buyer willing to take it from you even for free, although Vistana may exercise it's ROFR when you do eventually find a buyer. Here is the recent experience of a tugger who was looking to buy a similar Flex product (Aventuras):

Westin Aventuras ROFR

I thought I'd try to pick up a Westin Aventuras package, but ROFR was exercised twice: 1. 37K EY for $1 + closing; notified on 4/19/23 2. 44K EOY for $1000 + closing; notified on 5/3/23 Not surprised and TBH, it was for the best. We don't need more, and the idea of the potential hassle of not...

tugbbs.com

WKV is a mandatory resort. A resale buyer may not be able to use it in Abound but can use it in VSN. And 67.1K SOs is enough to book at least a studio for a week in most places and seasons. Therefore, imo it is likely to maintain a relatively decent resale value as it has for the past 20+ years.

 

[dioxide45]

Along the lines of the point that DanCali makes - I don't understand what it really looks like to get rid of a Flexoptions purchase (such as the one outlined in DanCali's option 1 scenario). My question is specific to some date in the distant future when the owner of these Flexoptions decides that they no longer want them and their associated maintenance fees. I can imagine what it would look like to put the WKV platinum 1 BR (or DanCali's option 2) on the resale market. Can someone please help me to understand what re-sell (or otherwise "getting rid of") option 1 will likely actually look like?

Since all of the Flex programs have been voluntary without StartOptions, I don't think their resale value will be impacted all that much. You can resell the Flex HomeOptions. Sheraton Flex pretty much has to be given away and Westin Flex does have some resale value. Vistana seems to be active in ROFR for Aventuras and it is the only way to reserve Los Cabos at 12 months. So I think Avewnturas will retain value and should be easy to get rid of. Nanea is Hawaii and will hold its own. Not sure about WSJ Flex phases given the rising fees there.

 

[celica7101]

You may be right that you have the "most economical" way to retro for what you own, but there are multiple things to consider when doing this type of transaction, not just the upfront cost or minimum threshold.

In particular, since developer prices may as well be pulled out of thin air, one should consider the amount of equity that you are immediately losing and also the ongoing maintenance fees. For example (using some hypothetical numbers):

Option 1: 30K Flexoptions purchase for $15K and maintenance fees of $650. Current resale value of purchase approximately $0

Option 2: WKV Platinum small 1BR worth 67K Staroptions purchase for $25K maintenance fees for $800. Current resale value of purchase approximately $8000.

Comaring the above options, one costs $15K upfront and the other costs $25K. But when you consider that the second option has a resale value of $8K and the first one has a resale value of zero, then they don't look that far apart anymore (in terms of the "equity value" you lost to accomplish retro). But in the second option you end up with more than double the Staroptions, double the Abound points, and maintenance fees that are substantially more economical per point.

Again, some of these numbers are made up as I don't know what they are selling and at what price but if I was going to requalify 2 weeks then, given the choice between these two options, I would pick the second one over the first.

These are fair points, and I did consider some fraction of these before making the decision, but here's what went into it for me:

1) Westin Flex has a ROFR attached to it, so there should be some minimal floor at which VSN / Marriott will always sweep up the points. Even if it is 30% of what I paid for it (which is what I would expect).

Note that Redweek right now has an offer listed for 37k annual HomeOptions on Westin Flex @ $6700. That seems a little bit high, but if I wanted to unload them, there's some residual value there (however low).

2) I was trying to minimize up front out of pocket costs.

3) Lower points typically also yields lower maintenance fees as a recurring share over time.

4) You're assuming a Plat week could be bought from the developer. I was only offered Gold weeks. I don't even know they had developer platinum weeks for sale. Gold weeks' resale is much lower than a Plat week.

5) 30K HomeOptions for Westin Flex has a "good enough" Abound conversion rate due to the Hawaii properties in the trust.

 

[Venter]

These are fair points, and I did consider some fraction of these before making the decision, but here's what went into it for me:

1) Westin Flex has a ROFR attached to it, so there should be some minimal floor at which VSN / Marriott will always sweep up the points. Even if it is 30% of what I paid for it (which is what I would expect).

Note that Redweek right now has an offer listed for 37k annual HomeOptions on Westin Flex @ $6700. That seems a little bit high, but if I wanted to unload them, there's some residual value there (however low).

2) I was trying to minimize up front out of pocket costs.

3) Lower points typically also yields lower maintenance fees as a recurring share over time.

4) You're assuming a Plat week could be bought from the developer. I was only offered Gold weeks. I don't even know they had developer platinum weeks for sale. Gold weeks' resale is much lower than a Plat week.

5) 30K HomeOptions for Westin Flex has a "good enough" Abound conversion rate due to the Hawaii properties in the trust.

I agree that Westin Flex with the included flexibility of using it in the Vistana or Abound system is good enough as product from the developer but comes with a cost.
For your reference and setting expectations. Last year Marriott invoked ROFR on 56 300 Westin Flex with a $350 offer but for some reason let 112 000 slip by with a $2700 offer. I don't know if the seller manipulated the price in any way because they handled transfer etc.

 

[dioxide45]

1) Westin Flex has a ROFR attached to it, so there should be some minimal floor at which VSN / Marriott will always sweep up the points. Even if it is 30% of what I paid for it (which is what I would expect).

Given the short term nature in what remains of Westin Flex (Vistana is moving toward selling Abound Club Points), I wouldn't put anything on Vistana being active in the ROFR market for this product long term.

 

[DanCali]

These are fair points, and I did consider some fraction of these before making the decision, but here's what went into it for me:

1) Westin Flex has a ROFR attached to it, so there should be some minimal floor at which VSN / Marriott will always sweep up the points. Even if it is 30% of what I paid for it (which is what I would expect).

Note that Redweek right now has an offer listed for 37k annual HomeOptions on Westin Flex @ $6700. That seems a little bit high, but if I wanted to unload them, there's some residual value there (however low).

2) I was trying to minimize up front out of pocket costs.

3) Lower points typically also yields lower maintenance fees as a recurring share over time.

4) You're assuming a Plat week could be bought from the developer. I was only offered Gold weeks. I don't even know they had developer platinum weeks for sale. Gold weeks' resale is much lower than a Plat week.

5) 30K HomeOptions for Westin Flex has a "good enough" Abound conversion rate due to the Hawaii properties in the trust.

Regarding your first point, I do have some reservations:

You should know that, realistically, you are very unlikely to get 30% of what you paid for it. ROFR does not create floor price and a resale buyer will not necessarily pay more just because a developer may (or more likely may not) exercise ROFR. ROFR is also cyclical - for example, back in 2020-2021 it was hardly exercised by any developer. Another data point is that Disney is currently exercising ROFR about 1/300 transactions because it has other priorities (https://www.dvcresalemarket.com/blog/dvc-right-of-first-refusal-report-rofr-march-23/). So ROFR is not something you can rely on as a seller.

Regarding the listing on Redweek asking for $6700 - it's meaningless. I can create a listing asking for $16,700 if that will make you feel even better, but I doubt I will get inquiries on that... Here is someone asking for $100,000 for a Hyatt week in shoulder season but at a resort that hardly ever shows up on resale - does that mean it's worth anywhere near that? I don't know what it's worth, but that listing has been there for over 4 months... The point is that asking prices are not selling prices and most buyers will not be influenced by a high ask.

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Your other points definitely make sense. Just regarding point #4 above, you did state earlier (post #18) that Platinum weeks were available, so I was going by that:

Kierland gold and platinum weeks were still available. But it was not the most cost efficient way to get to the $10k or $15k minimum threshold.


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[celica7101]

Quick update here.

After somewhere in the neighborhood of 2 months, I finally got both a letter and an email that Vistana / MVWC had processed my title change into their system, and that it should be registered to my name.

I logged in this morning, anticipating that I would have to call Vistana in order to try and get access to the new ownership, but both the resale Nanea AND the developer flex popped up in the "what I own" page. I was not expecting that. Maybe because they're all linked to the same Tax ID.