Future Riviera Availability

[JETSDAD]

If you buy a foreclosure dose it become a “resale” purchase with the restrictions?

Yes it does.

 

[ziravan]

I believe that standard and tower studios will be problematic within the first decade of this 50 yr contract and impossible by year 15. By year 20, if this policy doesn’t change, every day at 11 months year round will be a scramble for those studios - and probably all studios.

I predict that DVC will have no choice but to either modify these rules or give direct buyers a booking advantage: Direct can book at 11, resale at 9, everybody else at 7. Those changes will be made about the time the 2042 resorts end not because those things are linked, but that’s about the 20 yr mark where resale owners start to reach a critical mass at RIV.

That said, DW and I stayed 2 days last weekend at RIV and we find that we love it.

We are now considering selling our 250 pt BCV contract we bought for $84/pt in 2014 and putting the gains into a RIV contract. But. Because of the concerns of the OP, we would only buy RIV:

WITH A FIXED/GUARANTEED WEEK.

I think a guaranteed week will be essential to avoid the 11-month scramble which these rules will eventually create for all RIV owners.

The reason why I think this will be more problematic is the nature of “buy where you want to stay”. All the BWV, BCV, and VGC contracts are being bought by people seeking the 11 month window.

A good chunk of RIV resale will be bought by current owners with experience in how DVC really works (Fall Frenzy, etc). And those that don’t know will figure it out fast.

Just like today’s BWV buyers are adding to the problems booking BWV studio standard during Fall Frenzy, every RIV resale buyer will book at 11 months on the dot. You just can’t afford to wait if you’ll have no other options.

It’s not just the number of resales that will matter, but also the behavior being manipulated: book at 11 months or lose out.

And THAT behavior will spread to direct owners. The message will take hold: If you want a studio, don’t wait.

This policy will create an ongoing 11 month panic to get the room you want. By both direct and resale owners. So. The problem will manifest itself long before there’s enough resale owners to create the problem on its own.

Not only will a guaranteed week hedge that, the guarantee is a deeded right that’ll transfer to resale. IF the 11 month issue becomes a problem, or IF DVC changes the booking window for resales, a guaranteed standard studio should hold its resale value quite well.

 

[RoseGold]

Nearly all foreclosures of properties sold direct in the last 5 years will not be sold to 3rd parties but will instead be bought by Disney. Most of those will be underwater because of accrued interest at extremely high rates, back dues, penalties, and legal costs associated with the foreclosure process. It is extremely rare that a Riviera contract would be purchased by a 3rd party via foreclosure right now.

What are you talking about? There is no "Disney." There is DVC which sells direct and there is the "Disney" financing, which is a separate entity. DVC can foreclose for dues, but any financial company can also foreclose. As dues are only due once a year, it's more likely lenders would foreclose faster and take whatever equity is there.

It's true that historically DVC buys most of the foreclosures at the foreclosure sale, because it knows all the dues and what building they need and all that, but plenty of private parties buy DVC at foreclosure and flip through resale. All of those contracts become resale.

Disney is not buying back RIV right now, they have plenty of RIV points they can't sell. So I'd say it's definitely possible for private parties to come into RIV through foreclosure in the next few years. Practically everyone will be underwater who bought at RIV/CCV, so it makes sense to me. The normal resale path might not be how these contracts hit the market.

Anyway, I agree with @ziravan. If you must buy RIV, GET A FIXED WEEK. Or just wait for DL tower or buy OKW if you really want Blue Card and universal booking.

 

[RoseGold]

We are now considering selling our 250 pt BCV contract we bought for $84/pt in 2014 and putting the gains into a RIV contract.

Don't forget taxes on the gains! Hooray!

 

[dvc lover 1970]

Another thing to consider....timeshare points though they offer great flexibility are ties to inventory not necessarily a specific week. Back in the day when timeshares were tied to weeks there was more control over availability because you purchased unit B for week x. Now there are a bunch of subjective points. Everything I have read has said buying the set weeks were the best timeshare deals. I have never given this a second thought because of my love affair with disney. However between the cabins at CCV, poly bungalows and now RIV resale restrictions I am waiting to see how the cards fall.

 

[dvc lover 1970]

I believe that standard and tower studios will be problematic within the first decade of this 50 yr contract and impossible by year 15. By year 20, if this policy doesn’t change, every day at 11 months year round will be a scramble for those studios - and probably all studios.

I predict that DVC will have no choice but to either modify these rules or give direct buyers a booking advantage: Direct can book at 11, resale at 9, everybody else at 7. Those changes will be made about the time the 2042 resorts end not because those things are linked, but that’s about the 20 yr mark where resale owners start to reach a critical mass at RIV.

That said, DW and I stayed 2 days last weekend at RIV and we find that we love it.

We are now considering selling our 250 pt BCV contract we bought for $84/pt in 2014 and putting the gains into a RIV contract. But. Because of the concerns of the OP, we would only buy RIV:

WITH A FIXED/GUARANTEED WEEK.

I think a guaranteed week will be essential to avoid the 11-month scramble which these rules will eventually create for all RIV owners.

We also are considering selling one of our bcv contracts for riv. It is a beautiful resort but so many unknowns. I completely agree that Fixed week is the way to go.

 

[JETSDAD]

What are you talking about? There is no "Disney." There is DVC which sells direct and there is the "Disney" financing, which is a separate entity. DVC can foreclose for dues, but any financial company can also foreclose. As dues are only due once a year, it's more likely lenders would foreclose faster and take whatever equity is there.

It's true that historically DVC buys most of the foreclosures at the foreclosure sale, because it knows all the dues and what building they need and all that, but plenty of private parties buy DVC at foreclosure and flip through resale. All of those contracts become resale.

Disney is not buying back RIV right now, they have plenty of RIV points they can't sell. So I'd say it's definitely possible for private parties to come into RIV through foreclosure in the next few years. Practically everyone will be underwater who bought at RIV/CCV, so it makes sense to me. The normal resale path might not be how these contracts hit the market.

Anyway, I agree with @ziravan. If you must buy RIV, GET A FIXED WEEK. Or just wait for DL tower or buy OKW if you really want Blue Card and universal booking.

If you want to get technical it's actually Palm Financial Services and Disney Vacation Development.

And yes, DVD buys nearly every single Riviera foreclosure. This is a matter of fact that you can check on the OCC site, not just an opinion. They do not buy back via ROFR but they get almost all of the foreclosed contracts because they are under water. DVD can credit bid up to the amount of the judgment and most judgments are greater than fair market value of the contract. If the judgment amount is lower than FMV then DVD will not end up being the buyer but a third party will. They are not bidding up contracts beyond the amount they are owed (including expenses, interest, dues, etc.) so they are not having to bring money to the table.

When a contract is underwater it will not be bought by a 3rd party buyer because the amount that they would have to bid would be greater than the amount that the contract is worth. Those will be bought by DVD.

I've tracked the last few years of foreclosure sales and have bid on a bunch, winning one this year. The way you seem to think foreclosures work is not correct. The ones purchased by investors will have profit margins above the judgment amount, they won't be under water.

 

[ProudMommyof2]

OP here.
Thanks to everyone for the great insight. I am trying to decide about RIV direct. Buying the fixed week makes a ton of sense. Now off to learn about that.

 

[RoseGold]

I've tracked the last few years of foreclosure sales and have bid on a bunch, winning one this year. The way you seem to think foreclosures work is not correct. The ones purchased by investors will have profit margins above the judgment amount, they won't be under water.

You're saying what I'm saying, I think? The seller being underwater (having to bring money to the table to sell) isn't the same thing as the finance company being underwater (foreclosing with some equity). That's why the seller would choose foreclosure over normal resale, which was the better choice in recent history for DVC.

Anyway, I think CCV/RIV are going to trap a lot of buyers, like a normal timeshare, because practically every buyer is underwater, even if they paid cash. DVC hasn't really seen that yet, but get ready for the fury.

Yes, DVC has bought a lot of them, but there are plenty it didn't buy, like the one you bought.

 

[npatellye]

Anyway, I think CCV/RIV are going to trap a lot of buyers, like a normal timeshare, because practically every buyer is underwater. DVC hasn't really seen that yet, but get ready for the fury.

Yes, DVC has bought a lot of them, but there are plenty it didn't buy, like the one you bought.

Why would CCV and RIV trap a lot of buyers? I don’t understand what is meant by the statement that “practically every buyer is under water”. Would you please explain it a bit more?

I’m not being snarky; I really don’t understand that statement.

 

[RoseGold]

Why would CCV and RIV trap a lot of buyers? I don’t understand what is meant by the statement that “practically every buyer is under water”. Would you please explain it a bit more?

I’m not being snarky; I really don’t understand that statement.

Whew, CCV resale at $172! I guess the early buyers aren't underwater anymore! Two months ago, when it was 157, almost everyone was underwater. I guess you better sell now if you can't cover your CCV payment.

And VGF at 197!!! And people thinking VGF2 will open at RIV pricing...

 

[JETSDAD]

You're saying what I'm saying, I think? The seller being underwater (having to bring money to the table to sell) isn't the same thing as the finance company being underwater (foreclosing with some equity). That's why the seller would choose foreclosure over normal resale, which was the better choice in recent history for DVC.

Anyway, I think CCV/RIV are going to trap a lot of buyers, like a normal timeshare, because practically every buyer is underwater, even if they paid cash. DVC hasn't really seen that yet, but get ready for the fury.

Yes, DVC has bought a lot of them, but there are plenty it didn't buy, like the one you bought.

I bought BLT because the judgment was far lower than FMV (they owed approx $2000 on a 125 BLT contract, then the cost of foreclosure on top of that meant that they could have redeemed prior to the sale for under $3200). If you look at the contracts that sold via foreclosure at Riviera you will see that the buyer of almost all of them (if not all of them) will be DVD because the owner is underwater. You would also be surprised by the number of foreclosures sold where the owner is not underwater....that is the case with all of the contracts purchased by investors. An investor will not be buying a contract where the owner is underwater because they would have to bid more than FMV to get it. The contracts purchased by DVD will be the ones where the owner is underwater.

 

[Akck]

I was under the assumption that most members reserve at the 11-month window and maybe change at 7 months to another resort. Resale restrictions shouldn’t have any effect on the above, other than less will be changing at 7 months. This will be offset by other resort resale owners (and they will be a lot more), who can’t book at RIV, so the net effect may be nil. This was my main reasoning for not worrying about the restrictions when we bought, plus now it looks like there are resale buyers who only want to stay at RIV. In fact, I can see us only staying at RIV as we get much older.

 

[ziravan]

I was under the assumption that most members reserve at the 11-month window and maybe change at 7 months to another resort. Resale restrictions shouldn’t have any effect on the above, other than less will be changing at 7 months. This will be offset by other resort resale owners (and they will be a lot more), who can’t book at RIV, so the net effect may be nil. This was my main reasoning for not worrying about the restrictions when we bought, plus now it looks like there are resale buyers who only want to stay at RIV. In fact, I can see us only staying at RIV as we get much older.

That hasn’t been accurate for me and I think that depends on availability.

We currently have BCV, Poly, and AKV contracts. I would really only rush to the 11 month mark if I wanted BCV in the Fall or value or concierge at AKV.

Most times AKV and Poly studios are avail close to the 7 month mark, and we book accordingly.

I think booking at 11 and switch at 7 is a common tactic - but it’s not the only one and I’m not even sure if it’s the predominant one for room types that don’t usually book up at 11 months.

My real point is that if studios at RIV - because of the resale restrictions - begin to dry up at exactly 11 months, that will change how people book. As I said, if I want BCV in the Fall, I’m online at 11 months out. If I want Poly in Mar - meh I got some time.

 

[Sandisw]

Whew, CCV resale at $172! I guess the early buyers aren't underwater anymore! Two months ago, when it was 157, almost everyone was underwater. I guess you better sell now if you can't cover your CCV payment.

And VGF at 197!!! And people thinking VGF2 will open at RIV pricing...

If nothing is owed on a property, not sure that means underwater. You can sell it without an issue because you dont need to bring cash to the table.

For me, underwater means you financed and can’t sell it and pay what is owed. I don’t consider myself underwater for my direct RIV since I paid cash.

 

[RoseGold]

If nothing is owed on a property, not sure that means underwater. You can sell it without an issue because you dont need to bring cash to the table.

For me, underwater means you financed and can’t sell it and pay what is owed

Sure, you paid cash and RIV is worth more than nothing. if you don't pay your dues, they can foreclose your cash purchase and pay the dues out of the proceeds, or you can sell and pay those dues out of the proceeds. Of course you would just sell instead of getting foreclosed and take a loss.

If you financed, odds are you can't sell RIV for what you paid, especially after all the closing and finance and brokerage cost. All of those costs can flip the math. If you financed, you might have no choice but to let the foreclosure happen, or it might be a smarter choice over bringing money to the table to sell in a difficult circumstance. Plenty of people finance timeshares.

Just because you are underwater doesn't mean the financing company is. The house always wins.

 

[ziravan]

Sure, you paid cash and RIV is worth more than nothing. if you don't pay your dues, they can foreclose your cash purchase and pay the dues out of the proceeds, or you can sell and pay those dues out of the proceeds. Of course you would just sell instead of getting foreclosed and take a loss.

If you financed, odds are you can't sell RIV for what you paid, especially after all the closing and finance and brokerage cost. All of those costs can flip the math. If you financed, you might have no choice but to let the foreclosure happen, or it might be a smarter choice over bringing money to the table to sell in a difficult circumstance. Plenty of people finance timeshares.

Just because you are underwater doesn't mean the financing company is. The house always wins.

I would imagine no matter how underwater you are, if Disney finances, the house wins. If you put 10% down and never make another payment, they’ll still resale those points at full value. And keep your 10%.

There is no “drive off the lot depreciation” so far as Disney is concerned.

Interests rates are often a calculation of risk, but Disney has no risk. Interest is just another profit center.