[2008] SDKath's guide to 5* platinum [merged]

okwiater · Aug 23, 2014

Scenario 5: re-evaluate the value of SVN Elite and buy high-SO/low-MF resale weeks instead.

czar · Aug 23, 2014

okwiater said:
Scenario 5: re-evaluate the value of SVN Elite and buy high-SO/low-MF resale weeks instead.

Thanks.

I'm really less interested in the elite status and more interested in leveraging this strategy to get access to the cheap SO (e.g., SDO true plat), so maybe I'm posting in the wrong place.

The reality is that WSJ BV flexibility and location works best for us and its voluntary but I also want to have access to those SO should we want to book somewhere else. That's why I'm trying to leverage this strategy, and thinking about the cost of WKV (and yes, it's resale value is likely to remain stable), I'm spending a similar amount to get access to cheap SO with the potential to get some level of potential developer benefits and some reduced fees. But the elite status itself isn't the enticement for me.

I'm thinking by posting this I've answred my own question. Since I want the BV access, better to try to work out that scenario for the requal of the SDO week.

DavidnRobin · Aug 23, 2014

I think that this thread is appropriate, but really hard to piece together what you have, and what you are trying to accomplish. It seems like spending >$20K to get more SOs will be hard to justify - it may just come down to spending the money to get the vacations you want.

What do you own in the SVO family (resale, Developer)?
What SOs are associated with these? Which are resale SOs at V resorts that can be requaled?
What is offered by SVO to 'upgrade'?
What do you want to end up with? What is the cost? What would the annual MFs be?
How many SOs would you end up with?

SMHarman · Aug 23, 2014

czar said:
Thanks.

I'm really less interested in the elite status and more interested in leveraging this strategy to get access to the cheap SO (e.g., SDO true plat), so maybe I'm posting in the wrong place.

The reality is that WSJ BV flexibility and location works best for us and its voluntary but I also want to have access to those SO should we want to book somewhere else. That's why I'm trying to leverage this strategy, and thinking about the cost of WKV (and yes, it's resale value is likely to remain stable), I'm spending a similar amount to get access to cheap SO with the potential to get some level of potential developer benefits and some reduced fees. But the elite status itself isn't the enticement for me.

I'm thinking by posting this I've answred my own question. Since I want the BV access, better to try to work out that scenario for the requal of the SDO week.

Yes. You are doing this for the buy where you want to go and the 5*

There are no cheap star options.
You buy SDO PP and requal for say 30k and you have realistically given Starwood 30k.

You buy two WKV for 35k and unless SVO goes bust you have maintained most of that 35k.

Of course if you want to buy voluntary WSJ then as you not you need to use all tools available to mitigate the purchase price so a requal and trade in and discovery package and bonus star points are the tools you have.

czar · Aug 23, 2014

DavidnRobin said:
I think that this thread is appropriate, but really hard to piece together what you have, and what you are trying to accomplish. It seems like spending >$20K to get more SOs will be hard to justify - it may just come down to spending the money to get the vacations you want.

What do you own in the SVO family (resale, Developer)?
What SOs are associated with these? Which are resale SOs at V resorts that can be requaled?
What is offered by SVO to 'upgrade'?
What do you want to end up with? What is the cost? What would the annual MFs be?
How many SOs would you end up with?

SO per year:
BV summer 3br (developer) = 196k
SMV 2br plat us EEY (resale & requal) = 74,050
SDO 2br annual true plat (resale in escrow) = 148,100 (if I requal - bought for that purpose)
SBP Gold 2br (resale trader) = 44k if requaled but would not requal this week

Looking to stay 9-14 days per summer at WSJ
Looking for 1-3 weeks per year additionally to travel to somewhere warm like Harborside, WKORV, WSJ, Lagunamar, or to ski out west.

We really like the Starwood brand. Have the Amex. Put all of our monthly spend on it so have a bunch of SP.

In the last year I've booked pres week in a 2br at WSJ, Spring break at WKORV, 2 weeks of spring break at Harborside, and of course my summer week at WSJ. Right now because of the two weeks booked at Harborside we don't have any way to go to WSJ besides our Ex pkg

okwiater · Aug 23, 2014

czar said:
I'm really less interested in the elite status and more interested in leveraging this strategy to get access to the cheap SO (e.g., SDO true plat)...

If the Elite benefits aren't a motivator for you, then I think it's pretty tough to justify making any developer purchases at all. I know you already purchased from the developer once, but you should make sure you're being objective in your decision process so you don't throw good money after bad. Even though there are voluntary resorts that provide cheaper SOs when requalified (e.g. true Platinum SDO), you still come out ahead by purchasing mandatory resorts instead.

Based on your previous post, you currently own a 196,900 SO week and a 148,100 SO week, for a total of 345,000 SOs (unfortunately, that's just shy of being 4*). However, that does leave you just 1 developer purchase away from becoming 5*.

Let's evaluate both scenarios, consisting of obtaining enough SOs to reach 649,000 SOs (the 5* threshold).

1. Resale

1x WSJ Hillside Platinum Plus 3-br Pool Villa - 257,700 SOs
1x WKV Platinum Plus 2-br Lockoff - 148,100 SOs

Total acquisition cost: approx. $45K
Equity (i.e. value of ownerships on resale market): approx. $45K

Total SOs: 405,800
Annual maintenance: $4,400
Cost per SO: 1.08 cents

In total, you're out the opportunity cost of $45K and annual maintenance costs of $4,400, for enough SOs to put you in a 2-br lockoff in Hawaii (148,100 SOs) for 19 days. That's $230 per night.

Note: by going this route, you lose the ability to book in Bay Vista during the home resort preference period. You would be limited to booking 8 months out, when inventory has historically been more restricted.

2. Requalification

You could purchase an SDO Platinum Plus 2-br Lockoff (worth 148,100 SOs after requal) along with some additional cheap/free weeks to use for upgrade equity. Then, purchase a WSJ Bay Vista Platinum 3-br from the developer (worth 196,900 SOs).

Total acquisition cost: approx. $45K
Equity (i.e. value of ownerships on resale market): approx. $15K

Total SOs: 345,000
Annual maintenance: $3,400
Cost per SO: 0.99 cents

In total, you're out the same opportunity cost of $45K but also lose equity of about $30K right off the bat. Your annual maintenance costs of $3,400 are less, as is your cost per SO. However, it's only less by 0.09 cents. At that rate, it would take 96 years of usage before you recovered your $30K.

Note: this assumes the developer still has summer inventory, which I was told recently they do not. It also assumes they would allow you to use resale equity to upgrade into one of these units.

Another strategy would be to purchase the WSJ Bay Vista Platinum 3-br on the resale market, then obtain something like a SMV Platinum Plus from the developer (these become available once in awhile). This would result in the same number of SOs, but would likely bring your acquisition cost down by about $10-15K in exchange for slightly higher MF.

DavidnRobin · Aug 23, 2014

Another reason this forum is so great...

Bob808 · Aug 24, 2014

okwiater, what is an "opportunity cost"?

czar · Aug 24, 2014

Okwiater,

Thanks so much for the insights. Really helpful. I think the reason I got this in my head is because of BV. I know I can go sometime between weeks 19-33 whereas VGV is fixed and much harder to trade for a different week. I toyed with purchasing a VGV platinum plus week but I didn't see the value of it since I don't think I'd be able to use it much at all in the near future. I'm trying to find the best flexibility to be able to stay at WSJ most years but also have access to other SVN resorts. But maybe paying the premium I'm looking at for access to those SO just isn't worth it.

But your second scenario is what I had in mind but with a difference in the acquisition cost:

2. Requalification

You could purchase an SDO Platinum Plus 2-br Lockoff (worth 148,100 SOs after requal) along with some additional cheap/free weeks to use for upgrade equity. Then, purchase a WSJ Bay Vista Platinum 3-br from the developer (worth 196,900 SOs).

Total acquisition cost: approx. $45K
CZAR EDIT: $23k I'm projecting. That's what it cost me last year but they haven't committed to anything on this and right now there are only EOY 2br weeks. I have to imagine that more BV inventory will pop up as people trade into CV.

Equity (i.e. value of ownerships on resale market): approx. $15K
CZAR EDIT: I think closer to $10k

I worry about investing so much into WKV in case things change. I don't know if it's somewhere I would travel to. I know I'd go to WSJ.

Thanks again gives me lots to think about.

okwiater said:
If the Elite benefits aren't a motivator for you, then I think it's pretty tough to justify making any developer purchases at all. I know you already purchased from the developer once, but you should make sure you're being objective in your decision process so you don't throw good money after bad. Even though there are voluntary resorts that provide cheaper SOs when requalified (e.g. true Platinum SDO), you still come out ahead by purchasing mandatory resorts instead.

Based on your previous post, you currently own a 196,900 SO week and a 148,100 SO week, for a total of 345,000 SOs (unfortunately, that's just shy of being 4*). However, that does leave you just 1 developer purchase away from becoming 5*.

Let's evaluate both scenarios, consisting of obtaining enough SOs to reach 649,000 SOs (the 5* threshold).

1. Resale

1x WSJ Hillside Platinum Plus 3-br Pool Villa - 257,700 SOs
1x WKV Platinum Plus 2-br Lockoff - 148,100 SOs

Total acquisition cost: approx. $45K
Equity (i.e. value of ownerships on resale market): approx. $45K

Total SOs: 405,800
Annual maintenance: $4,400
Cost per SO: 1.08 cents

In total, you're out the opportunity cost of $45K and annual maintenance costs of $4,400, for enough SOs to put you in a 2-br lockoff in Hawaii (148,100 SOs) for 19 days. That's $230 per night.

Note: by going this route, you lose the ability to book in Bay Vista during the home resort preference period. You would be limited to booking 8 months out, when inventory has historically been more restricted.

2. Requalification

You could purchase an SDO Platinum Plus 2-br Lockoff (worth 148,100 SOs after requal) along with some additional cheap/free weeks to use for upgrade equity. Then, purchase a WSJ Bay Vista Platinum 3-br from the developer (worth 196,900 SOs).

Total acquisition cost: approx. $45K
Equity (i.e. value of ownerships on resale market): approx. $15K

Total SOs: 345,000
Annual maintenance: $3,400
Cost per SO: 0.99 cents

In total, you're out the same opportunity cost of $45K but also lose equity of about $30K right off the bat. Your annual maintenance costs of $3,400 are less, as is your cost per SO. However, it's only less by 0.09 cents. At that rate, it would take 96 years of usage before you recovered your $30K.

Note: this assumes the developer still has summer inventory, which I was told recently they do not. It also assumes they would allow you to use resale equity to upgrade into one of these units.

Another strategy would be to purchase the WSJ Bay Vista Platinum 3-br on the resale market, then obtain something like a SMV Platinum Plus from the developer (these become available once in awhile). This would result in the same number of SOs, but would likely bring your acquisition cost down by about $10-15K in exchange for slightly higher MF.

okwiater · Aug 24, 2014

Bob808 said:
okwiater, what is an "opportunity cost"?

"Opportunity cost" is the cost of having forgone an alternative choice. In the resale scenario I laid out, the cost of the resale ownerships was about $45K and the market value (equity) was $45K. So, although you haven't "lost" any money on paper, you've lost the ability to invest that $45K somewhere else.

czar said:
I think the reason I got this in my head is because of BV. I know I can go sometime between weeks 19-33 whereas VGV is fixed and much harder to trade for a different week.

I totally understand this hesitation. It's hard to know what the impacts on availability will be, from the addition of Coral Vista inventory as well as the increase in StarOptions across the board (resulting in much greater incentive to trade out of WSJ). My personal feeling is that these factors will make it easier to perform SO trades into WSJ. However, there are no guarantees.

Just as an additional data point: I acquired a WSJ Plat+ Pool Villa last year and was able to trade my fixed week to another week during my home resort fixed-to-float period (i.e. 8-10 months). The online reservation system makes this much easier than it was previously. (However, there is still far less flexibility than at BV as I only had my choice of the 3 weeks that happened to be tossed back in the pool by their owners.)

If it were me, I'd probably go ahead and make the jump to 5* if it could be done for $23K as you're saying. I would do it knowing full well that I'm paying a premium to do so and that it's probably not the most economical choice. But with all those SOs, the intangible benefits of 5* (such as possible early check-in, check-out, wait-list without cancelation, etc.) might make it worthwhile.

But, are you sure it can be done for $23K? Previously, the rule for WSJ and Hawaii was that $40K in new money was required to requalify (as opposed to $20K for mainland resorts). That's why I used the $45K number, and suggested an alternative approach of purchasing BV on the resale market and requalifying it with a mainland property. That would certainly change the math a bit. You might also consider purchasing a BV on the resale market and not requalifying it at all -- just use it to travel to WSJ and use your other SOs for the other resorts. That's another possibility that would prevent immediate loss of equity.

czar · Aug 24, 2014

Again, thanks for the input. Great advice.

I'm not sure about the requal or trade in opportunities at WSJ. Last year I did it because I purchased a ~$50k week minus equity trades I got for a total of <$1k IIRC. This is what it looked like:

$48,095 + $1095 closing costs = $49,190 less trade-in credit of $28,240 and $1985.50 from my Explorer Pkg = final purchase price of $18,964.50.

I requaled an EEY SMV which I paid about $2200 so total investment less than $23k (I used the Expl Pkg for SP conversion and at 2¢/point I consider that a wash).

I also earned lots of bonus SP on this transaction from my Starwood Amex, but no we are getting into murky waters, aren't we?

Right now they're saying no summer inventory, and no equity trades allowed into plat plus (although they offered me a $99k hillside 3br!). I think (hope) you're right about the CV inventory making things easier. I'm hoping that I'll be able to book 4-5 night towards the end of August next summer to tack onto my expl pkg.

I'll see what they say Monday. Worst case is I enjoy my Exp pkg next summer and sell my SDO week and then either buy a resale BV and just enjoy it or take the WKV plunge.

Good to know about plat plus trade flexibility. Maybe that could work for us. I have time on my side so I'll keep my eyes open. I expect so,e more inventory to hit resale market around MF time

Again thanks for all the advice and insight; incredibly helpful. I credit tug advice with getting me this far, and I'm super happy with what we own.

okwiater said:
"Opportunity cost" is the cost of having forgone an alternative choice. In the resale scenario I laid out, the cost of the resale ownerships was about $45K and the market value (equity) was $45K. So, although you haven't "lost" any money on paper, you've lost the ability to invest that $45K somewhere else.

I totally understand this hesitation. It's hard to know what the impacts on availability will be, from the addition of Coral Vista inventory as well as the increase in StarOptions across the board (resulting in much greater incentive to trade out of WSJ). My personal feeling is that these factors will make it easier to perform SO trades into WSJ. However, there are no guarantees.

Just as an additional data point: I acquired a WSJ Plat+ Pool Villa last year and was able to trade my fixed week to another week during my home resort fixed-to-float period (i.e. 8-10 months). The online reservation system makes this much easier than it was previously. (However, there is still far less flexibility than at BV as I only had my choice of the 3 weeks that happened to be tossed back in the pool by their owners.)

If it were me, I'd probably go ahead and make the jump to 5* if it could be done for $23K as you're saying. I would do it knowing full well that I'm paying a premium to do so and that it's probably not the most economical choice. But with all those SOs, the intangible benefits of 5* (such as possible early check-in, check-out, wait-list without cancelation, etc.) might make it worthwhile.

But, are you sure it can be done for $23K? Previously, the rule for WSJ and Hawaii was that $40K in new money was required to requalify (as opposed to $20K for mainland resorts). That's why I used the $45K number, and suggested an alternative approach of purchasing BV on the resale market and requalifying it with a mainland property. That would certainly change the math a bit. You might also consider purchasing a BV on the resale market and not requalifying it at all -- just use it to travel to WSJ and use your other SOs for the other resorts. That's another possibility that would prevent immediate loss of equity.

czar · Aug 25, 2014

Well I figured this out. Direct sales got very creative with me and I'm happy with the price point and equity I'll have with the units I'm getting.

Again thanks everyone for your feedback. Really helpful in thinking through the different scenarios.

DavidnRobin · Aug 25, 2014

czar said:
Well I figured this out. Direct sales got very creative with me and I'm happy with the price point and equity I'll have with the units I'm getting.

Again thanks everyone for your feedback. Really helpful in thinking through the different scenarios.

Are you going to share details with those of us who are interested?

KACTravels · Aug 25, 2014

DavidnRobin said:
Are you going to share details with those of us who are interested?

I've been watching this thread and am interested in the details too!

okwiater · Aug 26, 2014

KACTravels said:
I've been watching this thread and am interested in the details too!

Me three!!

czar · Aug 26, 2014

post deleted.

LisaRex · Aug 27, 2014

czar said:
post deleted.

How cryptic is that? :ignore:

DavidnRobin · Aug 27, 2014

Big Brother is watching...

czar · Aug 27, 2014

LisaRex said:
How cryptic is that? :ignore:

Haha. Well, David May have it right...but I don't want to count my chickens. Too many holes in the fence.

czar · Sep 26, 2014

Ok, well term sheet has been signed and paperwork delivered, so I am comfortable sharing what I was able to work out with *wood.

I am purchasing an annual (although they had no annual inventory so they are subbing an EEY and EOY) 2br SVV Bella for $25,900. They are allowing me to trade in a Gold SBP week I got for free on TUG (thanks RLG). That brings net cost down to $14,800. I can then take $1480 off that by applying Exp Pkg I bought. With this, I am re qualifying my SDO week and gettin 30k SP.

DeniseM · Sep 26, 2014

How many Staroptions will you end up with (total)?

What will your total MF's be?

czar · Sep 26, 2014

Total MF approx $5200 for 500,050 SO

Total approx Out of pocket: $37,000

Resorts now owned: WSJ, SDO, SMV, SVV

SP's rec'd: 250,000

Status: 4*

capjak · Sep 26, 2014

czar said:
Total MF approx $5200 for 500,050 SO

Total approx Out of pocket: $37,000

Resorts now owned: WSJ, SDO, SMV, SVV

SP's rec'd: 250,000

Status: 4*

That's a pretty low price for all those staroptions and MFs are not bad either...

Congrats

Bob808 · Sep 27, 2014

czar said:
Ok, well term sheet has been signed and paperwork delivered, so I am comfortable sharing what I was able to work out with *wood.

I am purchasing an annual (although they had no annual inventory so they are subbing an EEY and EOY) 2br SVV Bella for $25,900. They are allowing me to trade in a Gold SBP week I got for free on TUG (thanks RLG). That brings net cost down to $14,800. I can then take $1480 off that by applying Exp Pkg I bought. With this, I am re qualifying my SDO week and gettin 30k SP.

Outstanding! :banana:

YYJMSP · Sep 27, 2014

czar said:
Total MF approx $5200 for 500,050 SO

Total approx Out of pocket: $37,000

Wow, nice!

If we scale up your SOs to ours, our MFs are about 25% higher, and we spent 3x as much to get there...

[2008] SDKath's guide to 5* platinum [merged]

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