First RIV resale contract sold for?

[KAT4DISNEY]

How d


How do you know it’s the exact same contract?

Isn’t it possible these are two different contracts with the same points and use year? Most likely the last seller did not finance and needed to sell. The new listings probably did finance and are trying to break even on the loan.

That's a possibility too.

For the original resale, unless they were threatening the owner somehow, the owner did not have to accept such a low price and it was their prerogative if they did and if this person jumped at it. As mentioned there's another broker that has an instant buy back and it's lower than market too so that must be shady as well? We don't know how it transpired but unless the broker flat out lied it may have just been a need for money asap - like what DVC Resale Market offers. There's no where near enough info to decide they were underhanded. I've also seen plenty of contracts just in listings that I know I could have bought and flipped and earned money on and moreso if I were a brokering the listing . Lower priced listings than others on the same brokers website so I doubt they were getting differing info on what to price the contracts at. There are lots of real estate agents that flip houses as well. They are closer to the opportunities and if they have the means there's not necessarily anything shady about it unless they are misleading.

 

[zavandor]

Maybe the owner contacted the broker to sell the contract and told him he wanted $100 as soon as possible and the broker answeres "deal". He then listed the contract to get some publicity but it never went to the market for real.

 

[anomamatt]

Maybe the owner contacted the broker to sell the contract and told him he wanted $100 as soon as possible and the broker answeres "deal". He then listed the contract to get some publicity but it never went to the market for real.

I was wondering this, too. Maybe it was agreed to be sold to the broker prior to even listing it? And then the broker got a lot of free site visits by having the first Riviera listing posted.

However, it still seems sketchy to list the flipped contract so soon. Had they stripped the points (using them) and re-listed in another 6 months, it wouldn't appear so illegitimate.

 

[anomamatt]

Curious, would this be your first contract? Or do you own points already? I think the ultimate value of RIV on resale market will not be known for a few years, until people have owned for a while, there are more resale contracts sold, and the effect on ability to book when that is your only option is known.

No, I already have a fair number of points and already own a fixed week (1st week of December) at Riviera. It's possible I won't like the resort once we've stayed in it (we are headed there over New Years), but I do like what I have seen from the promotional materials (and we did the room model tour).

But thinking about it, I'll concede that I wouldn't want my only DVC points in Riviera resale.

As I said earlier, I do expect Riviera to sell for a lower % of the current direct price than any other resort. I just don't think the bottom is as low as most people here.

 

[hlhlaw07]

How were they shady with the first transaction? Do you know something or are you just guessing something isn’t right?

I don’t have any inside information only the information that was posted here as well as the posts the broker posted on her Facebook group page. While it is possible it was an instant sale type of transaction, the broker’s post on Facebook would indicate otherwise. She didn’t state that the firm had bought the contract back but said it was listed at $130ish and sold for “well below listing.” Her wording does not indicate it was an instant sale.

I also think that it was in poor taste to boast about the sale on her Facebook page in the way she did to get more business. Posting and saying I can’t give any more details, but making it seem as though it was sold on the open market, especially when her firm was on the other end of the transaction, was shady. Also, I obviously do not know what was disclosed to the seller at the time of the sale about the buyer but if she didn’t disclose she had a financial interest and partnership with the buyer then that makes it even more shady.

Again, I will reiterate, I do not know all the facts regarding the sale. But from what I have seen, I would definitely steer clear of working with that broker and resale website. I don’t think “instant sales” at below market price are shady at all. It was all the fanfare that made it shady. I’ve never seen DVC Resale Market post on their Facebook page, or anywhere else for that matter, a post boasting about an instant sale and passing it off as though it was sold under different terms. And if I don’t give the broker the benefit of the doubt that it was an instant sale, then the shady factor is even greater.

But that’s just my two cents. You are free to disagree and think everything was on the up and up. I just choose to give my money to people I don’t have misgivings about.

 

[Bing Showei]

That's a possibility too.

For the original resale, unless they were threatening the owner somehow, the owner did not have to accept such a low price and it was their prerogative if they did and if this person jumped at it. As mentioned there's another broker that has an instant buy back and it's lower than market too so that must be shady as well? We don't know how it transpired but unless the broker flat out lied it may have just been a need for money asap - like what DVC Resale Market offers. There's no where near enough info to decide they were underhanded. I've also seen plenty of contracts just in listings that I know I could have bought and flipped and earned money on and moreso if I were a brokering the listing . Lower priced listings than others on the same brokers website so I doubt they were getting differing info on what to price the contracts at. There are lots of real estate agents that flip houses as well. They are closer to the opportunities and if they have the means there's not necessarily anything shady about it unless they are misleading.

It doesn’t take a gun to the head for a broker to take advantage of a seller. I agree that ultimately it’s the seller who bears final responsibility to know what they are selling, but fiduciary duty laws exist for a reason. If at any point, the broker was approached and asked “what is this worth?" or “what should I sell this for?” I would maintain that the fiduciary responsibility was ignored in this case for the personal gain of the owner of the brokerage firm that ultimately bought it (and potentially turned around to try and sell it for 44% more).

Maybe this was a desperate seller (or an indifferent executor of an estate) who just wanted to offload an asset quickly. If that were the case, then as other brokers do, this should not have been advertised as available to the market, and that this contract was nothing more than a ploy to generate traffic.

Whatever the case, I would have zero faith that my own best interests are being looked after, if I were to ever engage this firm.

ETA: Your bigger point is a fair one, Kathy. There really isn't enough factual information available to us, and coming down on them the way I did involved relying on a lot of preconceived bias. This particular case made it far too easy to lean on "if it quacks like a duck..." which I will acknowledge is an inherently flawed way pass judgement on anything.

 

[KAT4DISNEY]

It doesn’t take a gun to the head for a broker to take advantage of a seller. I agree that ultimately it’s the seller who bears final responsibility to know what they are selling, but fiduciary duty laws exist for a reason. If at any point, the broker was approached and asked “what is this worth?" or “what should I sell this for?” I would maintain that the fiduciary responsibility was ignored in this case for the personal gain of the owner of the brokerage firm that ultimately bought it (and potentially turned around to try and sell it for 44% more).

Maybe this was a desperate seller (or an indifferent executor of an estate) who just wanted to offload an asset quickly. If that were the case, then as other brokers do, this should not have been advertised as available to the market, and that this contract was nothing more than a ploy to generate traffic.

Whatever the case, I would have zero faith that my own best interests are being looked after, if I were to ever engage this firm.

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And you edited and added a bit while I was typing! haha
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And of course I'm not arguing to use them to sell or buy thru. Just like the Riviera owner that is up to everyone to decide. There's just a whole lot of conjecture here which of course is fine as it is a discussion board. I happen to think that if an owner can find one broker to sell thru - and a very newly established one at that - they could find another broker to ask what they think. And 3rd if they wished. If they were "forced" to accept the offer via a phone converation then imagine the force DVC applied if the original sale was done in person? The buyer didn't have a chance.

I don't know what is reasonable actually. So far that's been the only sale I'm aware of so maybe it was the proper price? If the seller needed funds as quickly as possible it might have been the way for them to go otherwise it could still be sitting on the market. It was higher than I'd consider taking the risk on a Riviera resale for flipping and there doesn't seem to be people jumping at the contracts that are available and a couple are lower than direct by more than I think other resorts first sales were.

 

[kboo]

But thinking about it, I'll concede that I wouldn't want my only DVC points in Riviera resale.

Totally agree. I could see a RIV resale being worth *something* to a DVC owner who has other, more liquid points, who just wants to use RIV for a few nights here and there (e.g. F&W)

 

[Drewferin]

I've been watching this thread for awhile now. It almost seems like it's a law suit case being setup between known parties. Party A sells to party B so a earily law suit could be filed ASAP. Maybe I'm in left field but this idea is as possible as some I've seen suggested... I know the RiV contract is different and details thinks out but I'm just floating this idea.

 

[Brianstl]

I think there is a zero percent chance that Disney offers an extension, at least on BWV and BCV. If I were a DVC executive I would have a dart board in my office with the BWV point chart on it. 10 points for a studio during Food and Wine Festival is the steal of the century. I bet they can't wait to remodel and resell that resort at an exorbitant price while at the same time adding 50% more points to the booking requirements. They are sitting on a literal pot of gold with those two resorts.

I would say there is a 0% chance they don’t sell extensions. Disney is a publicly traded company. The people running the funds that hold Disney don’t give a rat’s *** about what Disney can make off those two resorts in 20+ years. They care about quarterly returns. Selling extensions allows Disney to make money much sooner without an upfront investment on Disney’s part. To an activist investor that is free money sitting on the table.

 

[ChimneyJim]

Just saw a listing for December/175pts@$144 at a different site. Odd that it's an exact match.

 

[DGHProp]

Yes. Good point! I doubt the same number of points and the same UY is a coincidence. And we know that broker is a flipper...

Talk about shady... they buy the contract themselves and then turn it around a couple weeks later asking for 40% above what they paid.

They are a broker and flip with what company?

 

[DGHProp]

That's a possibility too.

For the original resale, unless they were threatening the owner somehow, the owner did not have to accept such a low price and it was their prerogative if they did and if this person jumped at it. As mentioned there's another broker that has an instant buy back and it's lower than market too so that must be shady as well? We don't know how it transpired but unless the broker flat out lied it may have just been a need for money asap - like what DVC Resale Market offers. There's no where near enough info to decide they were underhanded. I've also seen plenty of contracts just in listings that I know I could have bought and flipped and earned money on and moreso if I were a brokering the listing . Lower priced listings than others on the same brokers website so I doubt they were getting differing info on what to price the contracts at. There are lots of real estate agents that flip houses as well. They are closer to the opportunities and if they have the means there's not necessarily anything shady about it unless they are misleading.

I agree with what you are saying. BUT if the deal was taken from the seller to the broker buyer WITHOUT advertising that same price...not good. I am a Texas Realtor and yes we are closer to the deals but I always tell my sellers if you lower your price you might sell faster if they agree and list at a lower price and no one buys than I feel it’s fair game for a broker-agent to buy AT THAT PRICE. My problem with the deal would be for the broker buyer buying at a lower price before offering the property at any and all prices in between the first price and the price the broker-agent bought. Make sense? Just my two cents.

 

[ELMC]

FWIW, I offered $100 on the 125 point contract when it was first listed. And my offer was declined.

Full disclosure that I own at Riviera (one of 5 resorts I own at), but I bought a fixed week (first week of December) to hedge against potential resale problems. That said, I would buy Riviera for $100 all day. Here is why:

Let's look at the math of staying at Riviera and let's say you are interested in a long weekend: April 2-5, 2020.

- This is 60 points in a Tower Studio.

- The cash rate for a Tower Studio is $1,995. No one pays rack rates, so let's assume you get an amazing 35% off. That ends up at $1,297.

- The DVC rental rate would be $1,020 from DVC Rental Store ($17/point).

At $100/point, you are at $2/year in upfront cost. Add $8.31 for dues. So $10.31 per point... your cost for that room in Year 1 is $618.60. (Yes, the dues will go up yearly, but so will the rack rate for the room).

You are 50% of the best potential cash rate you'll find and 40% off the current rental rate (and rental rates are currently way too low, IMO).

Even if you bought the contract to rent the points out, at $100, you will do quite well.

Of course, my big assumption is that people will want to stay at Riviera. I think that will be the case, but the resort isn't open. If the skyliner is a flop, Riviera could be in trouble. But if people do want to stay there, $100/point will be the bottom. I think $125-140 (in today's $) will be the ultimate settling price for resale.

I think this is a fair analysis, but I fundamentally disagree using 1/50th of the purchase price of a contract that requires payment upfront. I think that doing so ignores the time value of money which, as much as I dislike infusing that variable into the equation, has to be accounted for if you are going to amortize the purchase price over 50 years. The counter to using your methodology is to use the invest and rent model which would have the initial purchase price of $12,500 invested at X% and then having that return offset the delta between purchasing and renting/CRO. Depending on the percentages you feel comfortable using it changes to the conclusion to anywhere between the range of "much longer breakeven than anticipated" all the way to "losing option at that price".

That's a possibility too.

For the original resale, unless they were threatening the owner somehow, the owner did not have to accept such a low price and it was their prerogative if they did and if this person jumped at it. As mentioned there's another broker that has an instant buy back and it's lower than market too so that must be shady as well? We don't know how it transpired but unless the broker flat out lied it may have just been a need for money asap - like what DVC Resale Market offers. There's no where near enough info to decide they were underhanded. I've also seen plenty of contracts just in listings that I know I could have bought and flipped and earned money on and moreso if I were a brokering the listing . Lower priced listings than others on the same brokers website so I doubt they were getting differing info on what to price the contracts at. There are lots of real estate agents that flip houses as well. They are closer to the opportunities and if they have the means there's not necessarily anything shady about it unless they are misleading.

I'm not saying that this was a shady deal and I'm not saying it wasn't. My opinion is that there are simply not enough facts in evidence for us to make that call. But I would like to weigh in for a moment to remind everyone that in Florida, agents are transaction brokers. They are not required to get the highest price for the seller or the best deal for the buyer. They represent the transaction and it is their duty to see that the transaction proceeds according to law. We don't know if there were any other offers or if all offers were presented. But according to my understanding of the law I do not think that they did anything illegal simply by being the purchaser of the contract. If anything they saw to it that the contract sold, which was their duty. That's my interpretation anyway.

I would say there is a 0% chance they don’t sell extensions. Disney is a publicly traded company. The people running the funds that hold Disney don’t give a rat’s *** about what Disney can make off those two resorts in 20+ years. They care about quarterly returns. Selling extensions allows Disney to make money much sooner without an upfront investment on Disney’s part. To an activist investor that is free money sitting on the table.

Interesting point. While I agree that the stockholders would certainly rather see profit this quarter than in 20 years, I don't think that Disney executives are that single-minded. GM could make infinitely more money this quarter if they sold off all their factories and equipment. The value of plant and property far exceed the revenue they would generate from selling cars over the next three months. But what are they going to do next quarter, next year, etc.? It's a loose example but I think you get my point. Yes, Disney execs are required to show quarter over quarter growth. But I don't think they would be willing or able to do so in a way that so obviously torpedos prospects for long-term greater properity.

 

[Brianstl]

I really don't see how on the resale market RIV points can be more than $100. You can get AKV contracts right now with similar point totals for just over $100 pp. Your contract is 12 years shorter, but you aren't confined to one resort. I am exploring my options when it comes to buying resale and AKV would be an easy choice for me at similar cost pp. That is with me not being a huge fan of AKV.

 

[Brianstl]

IInteresting point. While I agree that the stockholders would certainly rather see profit this quarter than in 20 years, I don't think that Disney executives are that single-minded. GM could make infinitely more money this quarter if they sold off all their factories and equipment. The value of plant and property far exceed the revenue they would generate from selling cars over the next three months. But what are they going to do next quarter, next year, etc.? It's a loose example but I think you get my point. Yes, Disney execs are required to show quarter over quarter growth. But I don't think they would be willing or able to do so in a way that so obviously torpedos prospects for long-term greater properity.

They can make their big profits selling high priced extensions at BCV and BWI. Plus they can add RIV resale restrictions to the contract extensions they sell. This is especially true at BCV. People are already willing to overpay on the resale market for BCV right now when you consider how many years are left on the contracts, just to be at BCV. Those same people are a great market for Disney to sell extensions to in three to five years. You offer them that extension with the perk of getting that blue card and you have them sold. They won't care about the resale restrictions because they already paid a premium to be at BCV. They don't want to be anywhere else. Disney is then free to invest that cash however it wants 15+ years before they ever could if they let the contracts expire.

 

[anomamatt]

They can make their big profits selling high priced extensions at BCV and BWI.

If they extent BCV, it won't be cheap. Right now, they have a wait list for BCV that sells at ~$10/point per year remaining (that excludes MFs). I doubt any extension would be cheaper than that. How many people that own at BCV would pay $100/point for an extra 10 years? I wouldn't. Yet demand for BCV even @ $225 for 23 more years is massive.

And, IMO, BWI won't be extended unless they can find a way to dramatically change (increase) the point chart in the process.

 

[ELMC]

If they extent BCV, it won't be cheap. Right now, they have a wait list for BCV that sells at ~$10/point per year remaining (that excludes MFs). I doubt any extension would be cheaper than that. How many people that own at BCV would pay $100/point for an extra 10 years? I wouldn't. Yet demand for BCV even @ $225 for 23 more years is massive.

And, IMO, BWI won't be extended unless they can find a way to dramatically change (increase) the point chart in the process.

The problem with the extension is you are buying something today (or two years from now or five years from now) that you can't actually utilize until 23 years from now. This is America. We are all about instant gratification. 23 years from now is not in the plans.

As for the sentence in bold, this is exactly the point I'm trying to make. Regardless of whether or not they can grab some quick cash by offering an extension now, it will only be a fraction of what they can make if they relaunch as a new resort. First, because you can simply get more from a new contract sale than you can an extension - OKW taught us that. But also, they can sell 50% more points by reworking the points charts in a major way. They can make more money on more points if they just hold out. Something tells me they will.

 

[DaveNan]

It has now been several weeks. We heard of that first resale (confirmed on OCC) going for $100. There has been multiple other properties listed for $130 to $170 with several resale companies. One went to pending, but went back to available. Has anyone heard of another selling? If not, they have been listed for weeks with no sales at those prices.

 

[Matty B13]

https://www.fidelityresales.com/resort/disneys-riviera-resort