Newbie looking for advice on purchasing fully stripped contract

[malba2366]

Hi,

I saw a posting for a fully stripped Bay Lake Towers contract with 200 points. Points will not be available until 2018. I see that BLT contracts sell for $115 - $118 range normally so I think I should pay no more that $95-$98 for this contract. What are some thoughts on this? Thanks in advance.

 

[CarolMN]

IMO, every point missing from the 2016 and 2017 use years is worth $10 - $12. So I'd only offer the list price less $12 * Number of missing points. If the seller is offering to reimburse dues, I'd back it down to asking less $6 - $7 * Number of missing points. I've assumed list price is about what the contracts seem to be actually going for based on recent ROFR data.

For example, if it's a 100 point contract and the seller wants $11,500, I'd offer $9100 (11,500-(200 missing points * $12/point)).

Remember the owner of record in 2017 (you) will be responsible for the dues for those missing points. Some sellers will offer to reimburse for future dues if the points are not available - that means the future dues are estimated and the total price of the contract is adjusted accordingly. The estimates may turn out to be good, but they may be off quite a bit. One never knows. Seller should have already paid 2016 dues or pay the remaining months if paying monthly. I would not pay dues for points I am not getting unless the price was adjusted accordingly.

In the end, it will come down to what the seller is willing to accept. For some of the smaller contracts at the near park resorts, the sellers have been getting more than what I personally think the contract is worth. Some owners will negotiate and some will not.

So bottom line - offer what you are willing to pay. Be willing to walk away if the seller wants more than you think the contract is worth.

Good luck!

 

[suebeelin]

Depends on how much you want the contract. Offer whatever you want if you don't care. Saw a recent BLT not stripped that sold for $89, but that was so crazy low, everyone wants to know how!?? And it passed rofr as well!!

 

[malba2366]

Well its a good Use year for us, and we wouldn't really use the points until then anyways due to a new baby on the way. This way i will just pay less rather than the headache of renting out the points. If I pay 95, it is somewhere around $20 below the majority of sales. The listing already says no dues until 2018 so I am assuming I will get a settlement at closing for the approximate 2017 Dues.

 

[malba2366]

Lowest seller will come is $99 a point. Is this a good price for BLT. It is about $19-23 cheaper than the points go for...discounting the $89 a point purchase.

 

[Dean]

Hi,

I saw a posting for a fully stripped Bay Lake Towers contract with 200 points. Points will not be available until 2018. I see that BLT contracts sell for $115 - $118 range normally so I think I should pay no more that $95-$98 for this contract. What are some thoughts on this? Thanks in advance.

As a rule loaded contracts are a better value than stripped ones. Stripped contracts generally aren't discounted to the degree that they should be given the lost points. I agree with your numbers in general but in reality you likely won't get one discounted to that level. If you value the lost points at $10 a points (likely low) including any dues you have to pay, that should give you a fair comparison. You're likely better off getting a loaded contract and renting out the points to get an ultimate discount even if you don't need to points for a while. Of course there are other considerations like home resort, UY and how difficult it is to find a good contract at a given resort.

 

[jmmess]

Lowest seller will come is $99 a point. Is this a good price for BLT. It is about $19-23 cheaper than the points go for...discounting the $89 a point purchase.

You have to figure that you'll also have to pay the dues next year for the contract.