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

[DeniseM]

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

No one has said that NO ONE should do this.

No one has said that YOU shouldn't do this.

What has been stated over and over is that it is probably not a good fit for someone who is struggling financially, and cannot afford to lose their investment.

 

[Roger830]

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

I'm aware of what you have been doing and your apparent success. Your multiple strategy approach could work well for you.

However, it might not work well for the op who is under a good deal of stress because of other issues. The horse players say that you can't gamble with scared money if you want to win. It seems that you have the attributes to make it work, not everybody does.

 

[Saintsfanfl]

Both OP and OP spouse are now unemployed = subsidy.

Unless my math is wrong.

Probably but not necessarily. Employment in itself is not a qualifying factor. There are other qualifications besides just income.

The main issue though is once you elect Cobra you cannot end it early and sign up for a Marketplace plan unless it is during open enrollment. Ending Cobra early is not a qualifying event. You can only switch if Cobra runs out involuntarily or you have another qualifying event. I would have brought that up sooner if I had thought about it.

 

[ronparise]

No one has said that NO ONE should do this.

No one has said that YOU shouldn't do this.

What has been stated over and over is that it is probably not a good fit for someone who is struggling financially, and cannot afford to lose their investment.

Ok I get it. no one should do this except maybe Ron and he's crazy

Denise , you have it exactly backwards. and you are thinking like the banker who only loans money to people that dont need it

Doing this is only a fit for someone that needs it. Hell, the only reason I did this is because I had to do something to buy groceries. If I didnt need it I wouldnt have done it

 

[ronparise]

I'm aware of what you have been doing and your apparent success. Your multiple strategy approach could work well for you.

However, it might not work well for the op who is under a good deal of stress because of other issues. The horse players say that you can't gamble with scared money if you want to win. It seems that you have the attributes to make it work, not everybody does.

... you cant gamble with scared money, True enough, but I dont think you canbe successful at working a business (or hustle) unless you are scared.
There a reason so many companies dont survive the death of the founder... the heirs are spoiled


and it might not work for me , as Theo said,, I havent failed yet But your point is well taken and its why I dont recommended anything, Ive only told my story... and its not a success story ...yet... either The jury is still out on that

and I wont sell to the op until we've met and Ive been able to judge the degree of her scared-ness for myself.

 

[DeniseM]

Ron - That may be, but then we have to look at the other piece of the puzzle and that is your liability/risk.

From reading your posts for many years, I am guessing that you are prepared to default on your loans, go into foreclosure, and/or declare bankruptcy with your LLC's if this falls apart.

I'm also guessing that you have it set up, so you have no personal liability.

Not everyone is comfortable with that.

 

[Saintsfanfl]

That's with any business though. If you are not ok with the potential for business failure you should not start a business. This applies to any type of business. The sole proprietor route should only be considered if there is no risk of liability and it is something more casual in nature.

 

[DeniseM]

Yes - but there are different degrees of risk, and with Ron's self proclaimed "ponzi scheme," he has an "unusual" business structure, that some might say has a higher degree of risk.

 

[SMHarman]

Both OP and OP spouse are now unemployed = subsidy.

Unless my math is wrong.

It rolls on your prior 1040 and current year earnings.

So if you earned $100k and lived in NYC and lost your job mid year you are pretty much shut out for 18 months.

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

 

[Saintsfanfl]

It rolls on your prior 1040 and current year earnings.

So if you earned $100k and lived in NYC and lost your job mid year you are pretty much shut out for 18 months.

That can be misleading. The calculator used to estimate income for the Advance Payment of Premium Tax Credit to help with the monthly premiums may use that type of calculation but that is only for the estimate. The actual tax credit is computed at the end of the year on form 8962 and I believe it only has income for that year on it. Any difference will either be refunded or owed back.

Ultimately only the current year income matters but it is impossible to know the exact number in advance. There are thousands of people out there who signed up for premium subsidies who then got a job and kept getting the Advance Payment of Premium Tax Credit. Then they may have lied on their tax return stating they did not receive an offer of coverage from their employer. Eventually the IRS is going to come knocking once they reconcile all those 1095-C's and thousands are owed back. It's a mess.

 

[raygo123]

It rolls on your prior 1040 and current year earnings.

So if you earned $100k and lived in NYC and lost your job mid year you are pretty much shut out for 18 months.

Personally, I don't think Ron has a thing to worry about. He may not make a bundle in liquidation, but 50 million points is not too large for Wyndham to just take back, which I think they will without a hassle. There is no debt, and will eventually fall back to Wyndham having to deal with the situation. 50 million points and one transaction to deal with is much more cost effective than ovation.

Sent from my Nexus 7 using Tapatalk

 

[Jason245]

It rolls on your prior 1040 and current year earnings.

So if you earned $100k and lived in NYC and lost your job mid year you are pretty much shut out for 18 months.

It is based on projections so you might not get subsidy on front end, but you will most definatly get it on the back end as a tax credit.

http://www.valuepenguin.com/understanding-aca-subsidies

What happens if my income changes? Do I have to pay back subsidies?

Most consumers receiving premium subsidies will receive it in the form of an advanced tax credit, with the subsidy applied directly to the cost of their insurance. Since these amounts will be based upon your projected income for the year, the actualy amount of subsidies you are eligible will in many cases differ. If you end qualifying for more subsidies than any amount will be received in the form of a tax credit when income taxes are filed.

 

[DeniseM]

Originally Posted by SMHarman View Post
It rolls on your prior 1040 and current year earnings.

So if you earned $100k and lived in NYC and lost your job mid year you are pretty much shut out for 18 months.

Personally, I don't think Ron has a thing to worry about. He may not make a bundle in liquidation, but 50 million points is not too large for Wyndham to just take back, which I think they will without a hassle. There is no debt, and will eventually fall back to Wyndham having to deal with the situation. 50 million points and one transaction to deal with is much more cost effective than ovation.

Sent from my Nexus 7 using Tapatalk

Ray - SMHarmen's quote is about HEALTH INSURANCE - not Ron.

 

[raygo123]

Sorry, Denise I read within that post "the house of cards etc." And missed it was also a post from ace2000.

Sent from my Nexus 7 using Tapatalk

 

[ronparise]

Ron - That may be, but then we have to look at the other piece of the puzzle and that is your liability/risk.

From reading your posts for many years, I am guessing that you are prepared to default on your loans, go into foreclosure, and/or declare bankruptcy with your LLC's if this falls apart.

I'm also guessing that you have it set up, so you have no personal liability.

Not everyone is comfortable with that.

duh...of course,

and if the op asks for my advice (and she has) I will advise her to do the same thing

Denise what I see is that you are acting like a mother hen, trying to protect her babies..and I can respect that, but if the chicks are going to survive they have to be nudged out of the nest

Once again I haven offered any advice here, only telling a story. If the op or anyone else can learn something from it thats great, and if there is nothing in it for others, thats great too... but its just a story...

 

[ronparise]

Yes - but there are different degrees of risk, and with Ron's self proclaimed "ponzi scheme," he has an "unusual" business structure, that some might say has a higher degree of risk.

I didnt self proclaim a ponzi scheme, that was Roger830's characterization of what I do

I called it a hustle and its not unusual, I see it as pretty much the same thing that made Mitt Romney all his money, buy something with borrowed money, borrow more money against the assets of the company and then try to operate under that monstrous pile of debt all the while paying yourself enormous fees...keep the loan proceeds for yourself and have the company pay the interest and then find another company and do it again

Donald Trump too, profited from heavy borrowing

Gorden Geko did it in "Wall Street" and so did the Richard Gere character in "Pretty Woman" You might not like it, and there are risks, but its not unusual

there is a risk reward relationship that has to be examined before you embark on any venture, but the mere presence of risk, even a high risk is no reason to shy away at least not until you examine the reward potential

I know people that by a lottery ticket every week, I dont, I know the potential reward is enormous, but for me the risk of losing that dollar is almost 100% and Im not willing to bet against those odds

 

[DeniseM]

Ron, I'm curious - do you have business liability insurance?

 

[Jason245]

I didnt self proclaim a ponzi scheme, that was Roger830's characterization of what I do

I called it a hustle and its not unusual, I see it as pretty much the same thing that made Mitt Romney all his money, buy something with borrowed money, borrow more money against the assets of the company and then try to operate under that monstrous pile of debt all the while paying yourself enormous fees...keep the loan proceeds for yourself and have the company pay the interest and then find another company and do it again

Donald Trump too, profited from heavy borrowing

Gorden Geko did it in "Wall Street" and so did the Richard Gere character in "Pretty Woman" You might not like it, and there are risks, but its not unusual

there is a risk reward relationship that has to be examined before you embark on any venture, but the mere presence of risk, even a high risk is no reason to shy away at least not until you examine the reward potential

I know people that by a lottery ticket every week, I dont, I know the potential reward is enormous, but for me the risk of losing that dollar is almost 100% and Im not willing to bet against those odds

I would clasify your business as grey... not Illegal, just creative and somehow possibly slightly unethical (depending on your point of view).

If it makes you money and is legal then everyone elses opinion doesn't matter. The Tabacco companies are fine killing millions with cancer each year, who am I to complain if a developer has to eat the cost of these things when in the end they are the ones who have taken advantage of so many.

 

[Saintsfanfl]

Ron, I'm curious - do you have business liability insurance?

What assets are there that would require insurance protection? Also, with the nature of this venture any potential lawsuit could name the person and not just the business.

 

[Jason245]

Ron, I'm curious - do you have business liability insurance?

He has shielded himself from needing any on himself.

very smart legally, just like the oil shipping companies leverage the heck out of their ships and have each one under a seperate LLC to protect them from an oil spill.

very smart.

 

[ronparise]

I would clasify your business as grey... not Illegal, just creative and somehow possibly slightly unethical (depending on your point of view).

If it makes you money and is legal then everyone elses opinion doesn't matter. The Tabacco companies are fine killing millions with cancer each year, who am I to complain if a developer has to eat the cost of these things when in the end they are the ones who have taken advantage of so many.

Eat what costs. I pay my fees

 

[DeniseM]

Bear with me, because I honestly don't know - can't the principal of an LLC be sued whether or not they have an LLC?

 

[Saintsfanfl]

He has shielded himself from needing any on himself.

very smart legally, just like the oil shipping companies leverage the heck out of their ships and have each one under a seperate LLC to protect them from an oil spill.

very smart.

There is a difference between shielding from unforeseen accidents and openly admitting a cash flow scheme that could easily crumble. It is fine until the cards fall but if they do it is possible the limited liability could be penetrated.

Bear with me, because I honestly don't know - can't the principal of an LLC be sued whether or not they have an LLC?

Absolutely and business liability insurance is not necessarily going to pay up or step forward to defend. They will look for any way they can to have the case not be covered.

I am not trying to attack Ron and his venture but just stating the potential risks with this or any other business.

 

[raygo123]

He has shielded himself from needing any on himself.

very smart legally, just like the oil shipping companies leverage the heck out of their ships and have each one under a seperate LLC to protect them from an oil spill.

very smart.

It is even more common in real estate. That's why cities place performance bonds on developers. Land owners will set up an LLC, deposit the land as consideration, and develop it. When the development is completed, the money is made, LLC is desolved, and everyone goes on their merry way with no further liability. And basically, that is what Ron is doing, except, the land is still in the LLC.

That's also what the banks did with the bank loans they packaged together which lead to the bank failures, when they lied about their value.

I don't, however feel that Ron's demise would create such a ripple effect will it?

Sent from my Nexus 7 using Tapatalk

 

[ronparise]

Ron, I'm curious - do you have business liability insurance?

To protect myself against what specific risk?

i spend over $1500 a month on insurance of various kinds to protect myself against risks of various kinds I have a life insurance policy to provide an income for my wife if I die too soon because the business will die with me. but I don't have anything specific to protect my business. im not sure what you are suggesting