Premier Destinations Stumbles Early

and my point is that a deed buys me nothing...

Speaking of timeshares, HGVC has the audacity to offer me 9K on something that I bought for 18K from them and they are currently selling it for 26K. To them, it is a different department.

My point is that you can be blinded by a deed and not see the true value. If the price is overinflated, a deed gives you nothing but the ability to exercise the option to sell what you own at a highly discounted price.

I would rather have an unsecured membership with a DC that is well run than a timeshare that is deeded but is overinflated by 100-150%.

To me, it is same as my investments in Pre IPO Private Equity placements.

Bourne said:

and my point is that a deed buys me nothing...

Speaking of timeshares, HGVC has the audacity to offer me 9K on something that I bought for 18K from them and they are currently selling it for 26K. To them, it is a different department.

My point is that you can be blinded by a deed and not see the true value. If the price is overinflated, a deed gives you nothing but the ability to exercise the option to sell what you own at a highly discounted price.

I would rather have an unsecured membership with a DC that is well run than a timeshare that is deeded but is overinflated by 100-150%.

To me, it is same as my investments in Pre IPO Private Equity placements.

Click to expand...

I still have my challenge open - show me ONE timeshare where the owners lost the use of their unit with that deed in hand.

A deed to your house does mean something to our court system - so too that timeshare deed.

Blanket statements like "All deeds mean nothing" is specious at best.

PerryM said:

Blanket statements like "All deeds mean nothing" is specious at best.

Click to expand...

The same goes for DCs too. A DC membership means something too. It's not hot air.

Bourne said:

The same goes for DCs too. A DC membership means something too. It's not hot air.

Click to expand...

Ok, it's worth the paper it was written on. There are no precautions like simple checks to insure that a condo/home isn't over saturated with membership sales.

Is there a single DC out there that addresses this simple question - if the DC says 8 full memberships comprise each unit that 8 full memberships are verified by a CPA?

I don't think so. I know of no protection, either in state statutes or CPA opinions that verify this simple concept - no over selling of units.

Maybe I'm wrong - in fact I'd love to be proven wrong. I do, one day, want to become a DC member. If some of my concerns are satisfied.


Timeshares have this simple precaution normally - a deed is recorded by the state and it keeps track of how many owners per unit.

maybe a DC member can post details on the audit/etc data theyve seen, if there is no NDA? or let us know which clubs other than Crescendo have NDAs, etc.

"If some of my concerns are satisfied." >
http://www.tugbbs.com/forums/showthread.php?p=413833#post413833

PerryM said:

Ok, it's worth the paper it was written on. There are no precautions like simple checks to insure that a condo/home isn't over saturated with membership sales.

Is there a single DC out there that addresses this simple question - if the DC says 8 full memberships comprise each unit that 8 full memberships are verified by a CPA?

I don't think so. I know of no protection, either in state statutes or CPA opinions that verify this simple concept - no over selling of units.

Maybe I'm wrong - in fact I'd love to be proven wrong. I do, one day, want to become a DC member. If some of my concerns are satisfied.


Timeshares have this simple precaution normally - a deed is recorded by the state and it keeps track of how many owners per unit.

Click to expand...

You don't think so. Hah!!

Yes. A CPA does verify it. That's what the Asset Test is implicitly all about.

The PPM does detail the information regarding the assets and the allocation of those assets across various line items of the Balance sheet.

IMHO, the train has left the station. The price point that you want a DC membership at does not exist anymore. It did before...

i dont think perrym ever gave a price range for a DC that he felt had a "good guarantee" or whatever..

im also kind of curious why he didnt get into more of a financial/business model discussion with nick from DHH. maybe because he just wasnt interested in DHH specifically.

PerryM said:

As I’ve said many times before, someday we will buy a DC membership – I suspect that when that happens that DC will be considerably different than the model currently used, or a new one will come around and my “throw away” tolerance of $35k will have us in a club that offers at least 2 holiday weeks per year. I can’t guess which will come first.

I also suspect that we will be in units that are a bit better than high end Westins/Marriotts but not above $1 M.

Until then I’ll keep reading the exploits of DC owners.

Click to expand...

Not once but multiple times...

i seem to recall him saying either ~$35K "throwaway" for X, or a DC run by some big hotel company that he has confidence in or something. and not saying what he would pay for the latter.

Bourne said:

You don't think so. Hah!!

Yes. A CPA does verify it. That's what the Asset Test is implicitly all about.

The PPM does detail the information regarding the assets and the allocation of those assets across various line items of the Balance sheet.

IMHO, the train has left the station. The price point that you want a DC membership at does not exist anymore. It did before...

Click to expand...

Implicitly - is this like AssUme - you know makes an ass out of U and me?

Implicitly assuming that the books have been audited to insure that if the DC owns 100 properties no more than 800 full memberships have been verified by the CPA and is clearly stated is what I'm after. That's exactly what all 50 states do with timeshares - no more than 52 owners per condo if Deeds are involved.

Somebody show me the wordage to the fact that anyone is explicitly doing this in an audit. I've yet to read about this...

Kagehitokiri said:

i seem to recall him saying either ~$35K "throwaway" for X, or a DC run by some big hotel company that he has confidence in or something. and not saying what he would pay for the latter.

Click to expand...

What I've said is that if a new DC comes around and a full membership costs $35k and I like the units they offer that I would consider this a "Throw away" investment and probably become a member. Beyond that I'd need the DC industry to grow up and act like adults.

There is no reason not to assume this can't happen in the future and supply me with units that rival the best Marriotts and Westins - I would be happy.

I would think that most DCs have audited financial statements with the information that Perry wants (i.e., number of members (or in some cases, the equivalent number of full members) and properties)). That should not be hard to satisfy.

However, while there will be further evolvement in the DC industry to address the issues that Perry has raised, I doubt he'll ever see the price that he is looking for.

PerryM said:

My point was and is very simple - DCs are totally unsecured and offer NO sort of consumer protection what so ever. This compared to timeshares.

Click to expand...

Well we both agree that a timeshare deed provides some protection, however, don't get fooled into thinking a deed covers everything.

Here is a cut and paste from my previous post on the subject.

Even with a deed there is significant risk. A timeshare developer often uses timeshare purchase money or receivables to fund the construction, often as collateral for loans. If the develper goes bankrupt the project may never be finished.

A timeshare contract may or may not have "escrow," "non-disturbance" or "non-performance" clauses. Look these up and understand them.

With a completed project a deed does provide some security, however, it may also make the owner responsible for a lot of debt not paid by the management/resort. A deed carries responsibility to pay for the cost to operate the resort. Special assessments may be required to help pay for unexpected maintenance, repairs, taxes, lawsuits, etc.

Perry - A number of years ago I looked into timeshares. Specifically, I was interested in some south of Cancun. I never bit on the deal because all I had was some half-ass'd Mexican paper that was not a deed because US citizens cannot own own Meican property along the coasts. AKA - NO DEED. Now, given that in Mexico, I wonder how many timeshares outside of the US, and inside for that matter, that do not have any deed whatsoever, but simple right to use clauses for a given period. That to me is nothing more firm than what I have as a contract with my DC.

BTW, do all of your timeshares have deeds? Within the TS industry, do you knwo what percentage of them are deeded vs right to use?

Tedpilot said:

Now, given that in Mexico, I wonder how many timeshares outside of the US, and inside for that matter, that do not have any deed whatsoever, but simple right to use clauses for a given period. That to me is nothing more firm than what I have as a contract with my DC.

Click to expand...

Marriott Custom House is right to use until approx. year 2057.

PerryM said:

I still have my challenge open - show me ONE timeshare where the owners lost the use of their unit with that deed in hand.

Click to expand...

SPECIAL REPORT: Ski Side Village In The Poconos, Pennsylvania, Learns The Hard Way
March 9, 2001
The Timeshare Beat
Owners at the 57-unit Ski Side Village in Pocono Township, Monroe County, Pennsylvania, a deeded-weeks property, have learned the hard way the importance of keeping tabs on their TOA/HOA.

Owners at this resort have been sending in their maintenance fees regular as clockwork for years, and part of those maintenance fees were supposed to go toward paying property taxes, as detailed in their contracts. Yet in late 1998 Monroe County and a court-appointed custodian were in the process of trying to collect some $700,000 in owed taxes from the 1,750 shocked timeshare owners, who were naturally concerned that they are being asked to pay property taxes twice-- once to the homeowner's association and now again to the court-appointed custodian.

The director of Monroe County Tax Claim Bureau said her office had made agreements with the Owners Association, controlled by realtor Frank Carr III, to collect $500,000 in back taxes and Carr "defaulted on the agreements." Carr denied the allegation. Ivan J. Krouk, a Philadelphia lawyer who is the current court-appointed custodian, contends that the shortfall is due to the fact that Carr never billed himself for the timeshares he owns, reportedly some 29 percent of the total inventory.

Krouk's appointment by Common Pleas Judge Jerome P. Cheslock early in 2000 arose from a suit brought on behalf of timeshare owner Heddy Ann Vymazel of York, PA. Krouk's report charges

Vymazal said she learned in 1999 that taxes on her property had not been paid since 1995 despite the fact that she had paid her $275 maintenance fee for her one-week share every year, plus a one-time $50 special assessment for real estate taxes, ever since buying her timeshare in 1986.

Because it is the HOA/TOA that is notified by the County of taxes due, not the individual owners, neither she nor other owners ever knew that the taxes were not being paid.

The County tried to auction off all the units at a tax sale in 1998, but was unsuccessful. On September 21, 1999, the County did indeed sell off one entire unit (Unit 30), which was purchased by Charlie and Victoria Keller-- who operate as Greenwood Trust, Inc. It was sold for $4,269.83; the deed was issued on June 23, 2000. Frank Carr allegedly owned 13 weeks in Unit 30.


Result of appeals:

http://www.aopc.org/OpPosting/Supreme/out/872mal2002.pdf

So much for blanket assertions, huh? They sure can come back and bite you in the ahem.....

3 out of 25 failed (so far) vs maybe 6 out of thousands. Do the math

vivalour said:

So much for blanket assertions, huh? They sure can come back and bite you in the ahem.....

Click to expand...

One case, and that of lax control and management, out of thousands of timeshare resorts for a week that, purchased at resale as all timeshares should be, cost a couple thousand at most with a deed VS 3 (or more) collapses of high cost paper operated by slick managements who, undoubtedly, got out well paid after the mere byers got hosed for tens of thousands of dollars. The percentage of loss and failure is astronomical for the DC vs the nearly non-existent percentage of deeded timeshare failures.

It isn't only the likelihood of failure, the pyramid style resale promise or the lack of anything resembling ownership beyond a promissory note but the level of investment required to buy in that makes the whole DC program concept a shaky one no matter how you cut it. If you can afford to laugh off such a loss then it's a fun risk to take. If you need to watch your pocketbook even a little it's one I'd steer clear of.

<<If you need to watch your pocketbook even a little it's one I'd steer clear of.>>
__________________
I agree. Renting is the "safest" way to go for the faint of pocketbook.
I have to say though, that a TS isn't my thing for its complications and risks, even at a few thousand a pop. At the same time, I have lost many tens of thousands in "secure" investments that went sour -- and not for lack of due diligence (gold, property, blue chip stocks) when I was under the age of 40. Now I understand that everything has its risks and you can't take your $$$ with you to the great DC/'TS in the sky, so enjoy and don't worry!

People keep touting that this is set up like country clubs. Country clubs go broke quite often. I payed to join the Capstone Club as a charter member near Birmingham Alabama about 10 years ago. As membership didn't grow as they had hoped (or needed), they delayed building the pool and tennis courts. As time went on I heard throught the grapevine that the club was for sale. After not finding any buyers they filed bankruptcy for this course and 6 others that they owned. We had reciprocal agreements at the other 6 courses per our membership.

A new company bought our course from the bankruptcy courts and ended all previously signed contracts. They informed all current members that we could remain members under the new owners terms terms for the time being, but that all membership agreements with the previous owners are now null and void. We no longer have the ability to use the other 6 courses. The pool and tennis courts are still not built or even planned. I have friends who payed an extra $10,000 to become founding members which gave them unlimited free golf cart usage, free lockers, reserved parking, and several other benefits for the additional fee. That $10,000 is totally gone because the new owners are not honoring any of those benefits any more. When they joined, they would never have to pay for a cart rental again according to the salesman. New owners and guess what, they pay the same cart fees non founding members pay. Even worse, non members (people who never payed anything to join) can play by paying green fees so the new owners can make more money.

If a membership based club is sold or goes bankrupt, your membership is worthless because you never owned anything. The new owners decide the rules, who the new members are, and what membership entitiles them to.

Everyone has thier own risk level. If I bought some vacation club on ebay for $300.00 and it turned out to be worthless no big deal I wouldn't be happy but no harm done if I get great vacations out of it fantastic. To some a $300,000 DC would work the same way. Good luck to those who can afford the risk level I hope it works well. The idea of how these DC's work is interesting it sounds like a great way to vacation.I would like to see it done on an even more affordable scale and see what happens. If the entry level at HCC turns out in the next few years to be a supurb vacation arrangement many who read about it here on TUG and could have tolorated the risk factor will be disapointed they bought that expensive timeshare.

Transit said:

Everyone has thier own risk level. If I bought some vacation club on ebay for $300.00 and it turned out to be worthless no big deal I wouldn't be happy but no harm done if I get great vacations out of it fantastic. To some a $300,000 DC would work the same way. Good luck to those who can afford the risk level I hope it works well. The idea of how these DC's work is interesting it sounds like a great way to vacation.I would like to see it done on an even more affordable scale and see what happens. If the entry level at HCC turns out in the next few years to be a supurb vacation arrangement many who read about it here on TUG and could have tolorated the risk factor will be disapointed they bought that expensive timeshare.

Click to expand...

Could not have put it better.

It is about risk. DC's are more riskier than TS in many ways than one due to infancy of the industry. It is also about the dollar amount you are willing to take a risk with.

The only thing I question on this forum is a blanket statement that the industry is doomed for failure.

PerryM said:

Implicitly assuming that the books have been audited to insure that if the DC owns 100 properties no more than 800 full memberships have been verified by the CPA and is clearly stated is what I'm after. That's exactly what all 50 states do with timeshares - no more than 52 owners per condo if Deeds are involved.

Somebody show me the wordage to the fact that anyone is explicitly doing this in an audit. I've yet to read about this...

Click to expand...

Quote:
I guess I've given everyone enough time to respond to my challenge of ANY DC verifying that they are NOT overselling their memberships with a CPA statement of the fact.

PE does do this annually, and also publishes (on the members-only website) quarterly updates on memberships sold, ratio of members to homes, and occupancy rates for the quarter, and includes a link to download the quarterly financials and minutes of the board of directors minutes. In addition, the statutory board (as well as an advisory board) has member representation.

Click to expand...

The above was posted in the "VRBO" thread on October 29th; as usual, you simply ignore any posts that contradict the fallacies that you depend upon to support your assertions.

Your M.O. of making an outrageous statement (or a 'bold challenge') and then simply ignoring any facts to the contrary, is getting as old and tiresome as your numerous fallacious arguments ('the strip mall where I go to karate has had n+5 tenants in the last n years, therefore, >90% of businesses fail in the first year, regardless of what SBA studies have shown..."

PerryM said:

I don't know what you are talking with DIA - must have missed that one.

My point was and is very simple - DCs are totally unsecured and offer NO sort of consumer protection what so ever. This compared to timeshares.

Show me ONE I say ONE timeshare where the owners have lost their deeds - their access to the units they bought.

Just one is all I'm asking for - just one.

DC's have NO protection at all.

That's my point.

Click to expand...

Perry,

I've posted several times that your statements though maybe generally true regarding protection aren't true. Bellehavens and Crescendo provide equity protection.

My request is that you stop lumping these two clubs into your generalizations. It's flat out inaccurate and does a disservice to those clubs.

FYI - I should post this in a new thread, but it applies here.

I am typing this from a suite at the Hard Rock Hotel in Orlando. I am coordinating a school trip for about 200 people and I am relaxing in the suite after throwing a party by the pool for everyone. Interestingly, one of the dads there is a member of Quintess (founding equity member) and we talked for over 30 minutes about DCs and his love of Quintess and my love of HCC. He is an extremely successful attorney and not once did the topic of risk come up. In fact, he agrees with me that DCs represent the future of upscale travel for affluent families. This is the second Quintess member I have met that has kids in the same school as my kids and they really love this DC.