Renting timeshares for income -- better to specialize, or diversify?

[raygo123]

Got it now?

the points managers pay me,,,,, just A little more than the maintenance fees

Now Ron, didn't you mention in the thread concerning winpoint that they only deal with VIP gold or higher? Or, are you speaking of another points manager?

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[Jason245]

Yea I know, it's not a business it's a hustle. To keep the cash flow happening I have to keep buying. But I sell too

That math makes giving the stripped contracts away in the bargain basement make even more sense now...

Ultimately, if you can liquidate your purchases within 2 years of selling your points, you make 1 year of mf profit for doing very little. .

There is a lot of risk if things go the other way however...

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[Jason245]

Got it now?

the points managers pay me,,,,, just A little more than the maintenance fees

The only thing that would make this even more interesting is to put say 5 million points into a llc and pool and do this to get around 94k... and then down with the ship 1 year later after paying 30k in mf and 64k in salary to the llc ceo.

Note: above is highly unethical and I would recommend seeking legal advise to anyone considering it as it is most possibly fraud.

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[DeniseM]

Yes - but if Wyndham knew who the principal was behind the LLC they could lock down your other accounts.

 

[Jason245]

Yes - but if Wyndham knew who the principal was behind the LLC they could lock down your other accounts.

One time play with say 10 or 20 million points would probably be more than most people have saved in their retirement accounts. .

At that point, do you care if whyndam blacklisted you and banned you from ever visiting one of their properties again?

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[ronparise]

Yes - but if Wyndham knew who the principal was behind the LLC they could lock down your other accounts.

Dont worry Denise, it doesnt make sense to walk away, and you dont have to... or more to the point I walk away with the money and leave the account with the points manager

There will be something like 200 reservations in the account that the points manager paid for. you cant not pay mf.

but no matter

5 million points /1000 x 6 is $90000
you had to buy those 5 million so deduct your purchase price.. lets say $10000 and lets assume you did this toward the end of the year and only have 4 months of maintenance fees...deduct that $10000 and you are left with $70000 (my boat cost $60000)

When Jan comes you will have another million points that the points manager will pay you $30000 for
Mf is $30000 so break even from that point on. and while the points manager is doing his thing, remember the $10000 left over after buying the boat... buy 5 million more points and do it again

ezpz as long as you have a platinum account or two to work with

http://vacationmanagementservices.com/points-payout/

 

[ronparise]

That math makes giving the stripped contracts away in the bargain basement make even more sense now...

Ultimately, if you can liquidate your purchases within 2 years of selling your points, you make 1 year of mf profit for doing very little. .

There is a lot of risk if things go the other way however...

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I make the year of mf keeping the contracts too
keep it or sell it
It doesnt make any difference,

I sell just to reduce the dead weight of all those contracts that just break even

 

[ronparise]

Now Ron, didn't you mention in the thread concerning winpoint that they only deal with VIP gold or higher? Or, are you speaking of another points manager?

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has to be Platinum

 

[Jason245]

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If i was less honest here is my response : if I have the cash..paid it to my employee and am now insolvent what do I care about whyndam or the points manager, they can fight with each other to take deeds from the sinking ship if they want as part of bk proceedings.

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[ronparise]

quote containing spam - deleted

sorry I dont know what you mean..."nullified"

i know what nullified means but not in the context of your question.

In the Wyndham system points are symbolic of ownership of real property. Behind every point there is a deeded interest in a real resort property. It would seem impossible to nullify a point without a bulldozer to level the property

 

[Roger830]

There is a way to "front load" your sales with Wyndham reserving three years worth of points in the first year to recoop your initial investment almost immediately, and generating enough income to do it again

heres a real world example. I paid $1000 for a million points, took the first three years worth and turned them over to a points manager at $6/1000 and generated an immediate $18000. This was done mid year so I had 6 months of maintenance fees to pay so I set aside $3000 for that, leaving me with a first year profit of $15000.

I don't believe that the $15000 should be considered profit. The profit won't be known until the mf is paid. This years mf could be $5.50 per 1000, next year could be $6.00 per 1000, the following year could be $6.50 per 1000 where a loss would be incurred.

If Boeing sold an airplane for $5,000,000 and took a deposit of 50,000, they wouldn't consider the $50,000 as profit. The profit or loss won't be known until the plane is shipped.

The same is true when selling future years points.

It seems to me this is more like a one person ponzi scheme where more and more contracts have to be purchased to provide necessary cash flow.

 

[ace2000]

It seems to me this is more like a one person ponzi scheme where more and more contracts have to be purchased to provide necessary cash flow.

As long as Ron can get others to buy his stripped down contracts, he'll make easy money.

 

[Saintsfanfl]

As long as Ron can get others to buy his stripped down contracts, he'll make easy money.

But can they be unloaded as fast as the need to purchase more? It is highly doubtful.

It's a house of cards and then you walk when it falls.


Ron isn't denying what is going on with this model.

Yea I know, it's not a business it's a hustle....

 

[VacationForever]

You might be better off replacing cobra with Aca insurance. . One of those navigators might help you find an insurance with the formulary you need.

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Thanks, Judy for your explanation. It makes alot of sense now.

Jason, ACA medical insurance offers no advantage to going directly to medical insurance companies unless you want or qualify for a subsidy. They are not cheaper. The offerings in ACA are much more limited/narrow. I will have close to no income in 2017 as we retire this year and SS and RMD for my spouse will not start until 2018. I can qualify for subsidy in 2017 but I won't go down that road as 1) I can afford to pay full freight 2) lack of options in ACA policies and 3) worse still, I could end up in the black hole of being pushed into Medicaid when I really should not be (and get bounced back out after further qualifiers are looked at by Medicaid) and end up with no insurance

 

[ace2000]

But can they be unloaded as fast as the need to purchase more? It is highly doubtful.

It's a house of cards and then you walk when it falls.

The house of cards falls when the value of Wyndham points declines significantly - which has happened in the past.

 

[Saintsfanfl]

Jason, ACA medical insurance offers no advantage to going directly to medical insurance companies unless you want or qualify for a subsidy.

Can you get group health coverage without going to the ACA? I didn't think so. There is a huge difference between an individual policy and a group policy. The ACA plans are ridiculously expensive without a subsidy but if you have alot of claims or pre-existing conditions an individual policy is not an option.

In most cases Cobra is going to be cheaper than a plan on the exchange unless you can get a subsidy. Employer groups are filled with healthy people while the exchange is overloaded with high claims. This is why United is pulling out of the exchange. They cannot make any money because lower income sick people sign up while poor healthy people opt for no insurance.

 

[VacationForever]

Can you get group health coverage without going to the ACA? I didn't think so. There is a huge difference between an individual policy and a group policy. The ACA plans are ridiculously expensive without a subsidy but if you have alot of claims or pre-existing conditions an individual policy is not an option.

In most cases Cobra is going to be cheaper than a plan on the exchange unless you can get a subsidy. Employer groups are filled with healthy people while the exchange is overloaded with high claims. This is why United is pulling out of the exchange. They cannot make any money because lower income sick people sign up while poor healthy people opt for no insurance.

Group insurance and through Cobra are going to be cheaper than ACA. Jason was asking OP to go to ACA, and hence I said bad advice.

Anyone can go to private medical insurance companies and the price is the same as ACA for the same plan. But the offerings in ACA are very limited - very few players and plans. Private medical insurance does not look at claims or pre-existing conditions anymore. Individual market pricing is the similar to ACA, which is more expensive than group insurance. My choices for next year will be ACA or private insurance. I am still on my group plan this year and when I priced out private/ACA market, it costs $130 more per month. But in 2017, I will no longer have a choice for group insurance.

 

[Saintsfanfl]

Private medical insurance does not look at claims or pre-existing conditions anymore.

What you are describing is still an ACA plan. It is just purchased directly with the carrier instead of going to the market place. This is a group plan that is still subject to the open enrollment period and governed by all the ACA rules (although no subsidy allowed).

What I am referring to is a private plan purchased outside of open enrollment. These are the types of plans they used to sell before the ACA. They still sell them and they do look at claims and pre-existing conditions are not included. These days they are called short-term plans. They are meant to be an option to fill the gap until open enrollment.

They will sell you consecutive short term plans but the problem with a healthy person using it as a low cost option is they generally do not count as minimum essential coverage so you are still subject to a non-health insurance penalty.

I agree with you on the ACA cost. Unless your group had crazy expensive rates the ACA plan's are more expensive than Cobra. My company isn't that healthy but we are still cheaper than the ACA plans for the same or similar coverage.

 

[tschwa2]

But can they be unloaded as fast as the need to purchase more? It is highly doubtful.

It's a house of cards and then you walk when it falls.


Ron isn't denying what is going on with this model.

The other problem is he is able to unload the stripped contracts because he is offering ones with the best MF ratio's. Basically the taker is financing the purchase with monthly fees to Wyndham until the points are available. With the volume that he is purchasing, he is bound to have some mid level and even high MF resorts. Those are going to be a lot tougher to find a taker of a fully loaded contract let alone a stripped one. Ovations is a possibility but only if it continues and I doubt they won't find a way to pull back points even if they have to cancel some reservations.
Access, I believe is also easier to walk away from but I don't know how painless and what would happen in the case of stripped Access contracts.

 

[raygo123]

has to be Platinum

The problem with your premise, for THIS OP, is the real money, to support her needs. Unless platinum is achieved, how much can the OP make given a 20% return, and given very little if any funding?

To get the decent first units, it will take funds with moderate to little return.

I agree - but that means that for a long time, the OP would have to plow any profit back into the business to buy additional points and pay maintenance fees.

Which means it could be a long time before she makes enough income to pull a significant amount out of the business.

It doesn't seem like a practical plan, in the OP's situation.

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[Saintsfanfl]

There is likely no sustainable business model that makes renting large quantities of timeshares realistically possible. You can write up a plan in theory but I don't see any examples of someone getting past the eventual house of cards. As Ron put it, it's a "hustle".

The OP can ask the question to specialize or diversify but if the goal is actually high volume then whether the OP likes it or not any answers or advice to that direct question is moot. The only exception is if the OP has a goal of running a similar hustle.

 

[ronparise]

I don't believe that the $15000 should be considered profit. The profit won't be known until the mf is paid. This years mf could be $5.50 per 1000, next year could be $6.00 per 1000, the following year could be $6.50 per 1000 where a loss would be incurred.

If Boeing sold an airplane for $5,000,000 and took a deposit of 50,000, they wouldn't consider the $50,000 as profit. The profit or loss won't be known until the plane is shipped.

The same is true when selling future years points.

It seems to me this is more like a one person ponzi scheme where more and more contracts have to be purchased to provide necessary cash flow.

of course you are right its not profit, its only positive cash flow in the first year But I would only call it a Ponzi scheme if there was a fdanger of running out of points to buy. The reason that so many people fail at Amway and the pther ponzi schemes (I mean multilevel marketing companies) is that for everyone to be successful there needs to be a customer base larger than the worlds population> There are so few of us doing this, and so much advice against it (thanks Denise and Theo) that I dont think I have to worry about running out of points to buy or folks that want to go on vacation

Think about it.. even if I cant sell once in a while my 100000 point goal per year will only bring me to 250,000,000 points by the time Im 90 years old. and 250mm points is just 2500 reservations.. to put that in perspective one Wyndham resort, Bonnet Creek has 1500 rooms. and it fills up every week of the year.. Im not worried about about running out of customers for my reservations

There will no doubt be a day of reckoning. but as you suggest I can postpone that as long as I keep buying...and postpone it even longer if Im able to sell.. and Ive sold or given away, in excess of 30 million points in the last few years. So it hasnt kept growing. Rather it grows and it contracts; grows and contracts.


There are three legs to my timeshare strategy Ive only talked about two in this thread, Theres the thing you describe as a Ponzi scheme, and then there is buying and selling for profit and the third is a buy and hold strategy, I have a block of timeshares that I use for high value reservations. I just finished making my Mardi Gras 2017 reservations ( I have 64 of them) The maintenance fees will be paid before the event. And thats just one of several events I work I expect to slowly transition to doing most of what I do in this way. but not all in New Orleans, that would be risky, ie all my eggs in one basket... one hurricane and Im out of business

 

[ronparise]

The problem with your premise, for THIS OP, is the real money, to support her needs. Unless platinum is achieved, how much can the OP make given a 20% return, and given very little if any funding?

To get the decent first units, it will take funds with moderate to little return.


Ill give her access to a Platinum account if she wants,




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I knew a guy, now dead, who was the single largest property owner in Prince Georges County Md (DC suburbs)

he got his start with a mule and a wagon and a shovel. he would dig sand and gravel out of a stream bank, wash it in the stream, load his wagon and take it to a construction site. Those were the days before ready mix trucks and the concrete was made on site..

There came a time when an airport was to be built in the DC area and this guy bid to supply all the concrete for the runways.. he won the contract .

Understand he didnt own a gravel pit, or a wash plant or a concrete plant or any trucks, just a mule and a wagon and a shouvel. But he took that contract to a bank and got the money to make it happen

I dont know whether any of thats true or not, but thats the story and when he died he left the bank, that by then he owned, and the sand and gravel company and all the land to his heirs

I dont know why I think thats relative to this discussion but when Im told what Im doing is to risky and that no one should even try such a thing, I think of Mr Smith and the advice he must have gotten when he bid on that contract

 

[Jason245]

Thanks, Judy for your explanation. It makes alot of sense now.

Jason, ACA medical insurance offers no advantage to going directly to medical insurance companies unless you want or qualify for a subsidy. They are not cheaper. The offerings in ACA are much more limited/narrow. I will have close to no income in 2017 as we retire this year and SS and RMD for my spouse will not start until 2018. I can qualify for subsidy in 2017 but I won't go down that road as 1) I can afford to pay full freight 2) lack of options in ACA policies and 3) worse still, I could end up in the black hole of being pushed into Medicaid when I really should not be (and get bounced back out after further qualifiers are looked at by Medicaid) and end up with no insurance

Both OP and OP spouse are now unemployed = subsidy.

Unless my math is wrong.

 

[VacationForever]

Both OP and OP spouse are now unemployed = subsidy.

Unless my math is wrong.

I am also now unemployed, but I won't get a subsidy this year because I made substantial sum of money beginning of this year. I have close to zero income next year... but I aint going to ACA, I will tell you that.... I don't want to hijack this thread, so this is my last post on this topic. Thanks.