ROFR Thread Oct to Dec 2022 *PLEASE SEE FIRST POST FOR INSTRUCTIONS & FORMATTING TOOL*

[HIRyeDVC]

Oh so your bank pays for the roof if it leaks?

Not going to argue semantics with you. The fact is, if you borrow to buy a house, the bank can take your house if you don’t keep up the payments. The same applies to your DVC contracts. If an owner is under water, you either come up with the difference, forfeit the property, or file for bankruptcy. I’m not trying to be a jerk about it. Just describing how the system works

 

[Nursemanit]

Not going to argue semantics with you. The fact is, if you borrow to buy a house, the bank can take your house if you don’t keep up the payments. The same applies to your DVC contracts. If an owner is under water, you either come up with the difference, forfeit the property, or file for bankruptcy. I’m not trying to be a jerk about it. Just describing how the system works

We know how the system works - you made the inaccurate and false comment that "it was never their contract. Monera or some bank owned it" ( Direct Quote)

If the bank owned it, and it went up in value - the bank would get the capital gain. If you own it, even with a mortgage you get to keep the capital gain. This is the basis for the majority of wealth generated in the US.

 

[HIRyeDVC]

We know how the system works - you made the inaccurate and false comment that "it was never their contract. Monera or some bank owned it" ( Direct Quote)

If the bank owned it, and it went up in value - the bank would get the capital gain. If you own it, even with a mortgage you get to keep the capital gain. This is the basis for the majority of wealth generated in the US.

Yes you are partly correct. You own the equity, if the asset has generated it. In the context of this current discussion, current Riviera owners trying to sell their contract would be under water and would essentially owe Monera to get out of their contracts. So who owns what? The seller doesn’t own anything. My initial point was that it would be better for Riviera owners to sell for a loss and lessen their debt than get nothing.

 

[Nursemanit]

Yes you are partly correct. You own the equity, if the asset has generated it. In the context of this current discussion, current Riviera owners trying to sell their contract would be under water and would essentially owe Monera to get out of their contracts. So who owns what? The seller doesn’t own anything. My initial point was that it would be better for Riviera owners to sell for a loss and lessen their debt than get nothing.

Other options exist like renting, and refinancing debt ( almost anything is better than Monera) - I agree with the reasoning that loss of value may be one cause for lower amounts of resale contracts. But RR is only 3 years old and its owners are not in that window of " I am tired of DVC" I think this is the big reason for the lack of resale contracts.

 

[HIRyeDVC]

Other options exist like renting, and refinancing debt ( almost anything is better than Monera) - I agree with the reasoning that loss of value may be one cause for lower amounts of resale contracts. But RR is only 3 years old and its owners are not in that window of " I am tired of DVC" I think this is the big reason for the lack of resale contracts.

Everyone’s financial situations are obviously different so renting their points out may or may not be a feasible option. I agree that it’s still early to tell the true value or indication of RR resale market value. I think the true reason for the declining value of RR and all DVC is that DVC has gotten too big and there are more points both direct and resale than there is demand.

 

[Nursemanit]

Everyone’s financial situations are obviously different so renting their points out may or may not be a feasible option. I agree that it’s still early to tell the true value or indication of RR resale market value. I think the true reason for the declining value of RR and all DVC is that DVC has gotten too big and there are more points both direct and resale than there is demand.

I have the less technical view that we were in a bubble in 2022 and bubbles bust - I think in 2030 we will look back and see a blip from Covid - and that DVC stays on the course.

 

[HIRyeDVC]

I have the less technical view that we were in a bubble in 2022 and bubbles bust - I think in 2030 we will look back and see a blip from Covid - and that DVC stays on the course.

I hope so and I think you’re right. I wish I was in the market to buy more points but I really can’t justify adding on.

 

[AstroBlasters]

Other options exist like renting, and refinancing debt ( almost anything is better than Monera) - I agree with the reasoning that loss of value may be one cause for lower amounts of resale contracts. But RR is only 3 years old and its owners are not in that window of " I am tired of DVC" I think this is the big reason for the lack of resale contracts.

isn’t the interest on a loan for a timeshare (since it is real estate) tax deductible if you itemize? If so, which I am not 100% sure on, for people in a high tax bracket, that MAY make it in the ballpark to other forms of financing without having to put other forma of collateral.

i.e. 14% rate -32% Fed and 10% State would be 8%. With money markets @ 4%, that is an effective rate of 4% above cash.

 

[HIRyeDVC]

isn’t the interest on a loan for a timeshare (since it is real estate) tax deductible if you itemize? If so, which I am not 100% sure on, for people in a high tax bracket, that MAY make it in the ballpark to other forms of financing without having to put other forma of collateral.

i.e. 14% rate -32% Fed and 10% State would be 8%. With money markets @ 4%, that is an effective rate of 4% above cash.

I believe the only portion of DVC that is tax deductible is the property tax portion of the dues, which is a very small portion of the annual dues. I highly doubt that finance interest of a luxury good like timeshares are tax deductible.

 

[AstroBlasters]

I believe the only portion of DVC that is tax deductible is the property tax portion of the dues, which is a very small portion of the annual dues. I highly doubt that finance interest of a luxury good like timeshares are tax deductible.

https://monerafinancial.com/five-be...st,depending on your individual circumstances.

Monera Financial is a mortgage loan. We will issue you a 1098 at the beginning of each year throughout your loan term for tax purposes. Mortgage interest is eligible for tax deductions depending on your individual circumstances. We highly recommend you consult with your tax professional to see if this is something you can take advantage of.

 

[HIRyeDVC]

https://monerafinancial.com/five-benefits-of-using-monera-you-might-not-know-about/#:~:text=Tax Deductible Eligible Interest,depending on your individual circumstances.

Monera Financial is a mortgage loan. We will issue you a 1098 at the beginning of each year throughout your loan term for tax purposes. Mortgage interest is eligible for tax deductions depending on your individual circumstances. We highly recommend you consult with your tax professional to see if this is something you can take advantage of.

Hmm, interesting. I wonder what circumstances DVC mortgage interest would be eligible.

 

[AstroBlasters]

Hmm, interesting. I wonder what circumstances DVC mortgage interest would be eligible.

My interpretation from the article written, which was written in the summer of 2022, is that it is all eligible as long as you are itemizing because it is considered mortgage interest.

May not be as helpful if you are in a low tax bracket in TX or FL, but in a higher tax bracket and higher tax state it starts to become something to consider.

For the record I DO NOT work for Monera.

 

[Nursemanit]

My interpretation from the article written, which was written in the summer of 2022, is that it is all eligible as long as you are itemizing because it is considered mortgage interest.

May not be as helpful if you are in a low tax bracket in TX or FL, but in a higher tax bracket and higher tax state it starts to become something to consider.

For the record I DO NOT work for Monera.

None of the interest is deductible for a DVC timeshare at the federal level - In order for a timeshare to be deductible, it has to be a deeded week-style classic ownership style timeshare. Points-based "Right to use" timeshares like DVC do not qualify.

 

[Isabelle12345]

Isabelle12345---$136-$5268-35-AKV-Jun-0/21, 35/22, 35/23, 35/24-seller pays 2022 dues- sent 11/28 passed 12/22

It went in my junk mail folder so I realized we passed last night!
What a great Christmas gift
Now waiting on the closing documents from Mason (with the holiday break, I am expecting a delay… hoping to have the points loaded before February!)

 

[Sandisw]

Hmm, interesting. I wonder what circumstances DVC mortgage interest would be eligible.

Financing via DVD directly also gets you the 1098 for deduction.

Other sources out there may not. I have used Lightstream as bridge loan between a buy and sale and it was considered a personal loan and not a mortgage.

 

[AstroBlasters]

None of the interest is deductible for a DVC timeshare at the federal level - In order for a timeshare to be deductible, it has to be a deeded week-style classic ownership style timeshare. Points-based "Right to use" timeshares like DVC do not qualify.

That is not what Monera’s website says.

I also just went to the IRS website :https://www.irs.gov/publications/p936#en_US_2022_publink1000229912

Guess what, no mention of the timeshare needing to be week vs points. Nor would that be consistent with language for mixed use rentals.

Here is what it states:

• You file Form 1040 or 1040-SR and itemize deductions on Schedule A (Form 1040).
• The mortgage is a secured debt on a qualified home in which you have an ownership interest. Secured Debt and Qualified Home are explained later.

Secured Debt​

You can deduct your home mortgage interest only if your mortgage is a secured debt. A secured debt is one in which you sign an instrument (such as a mortgage, deed of trust, or land contract) that:

• Makes your ownership in a qualified home security for payment of the debt;
• Provides, in case of default, that your home could satisfy the debt; and
• Is recorded or is otherwise perfected under any state or local law that applies.

Qualified Home​

For you to take a home mortgage interest deduction, your debt must be secured by a qualified home. This means your main home or your second home. A home includes a house, condominium, cooperative, mobile home, house trailer, boat, or similar property that has sleeping, cooking, and toilet facilities.

The interest you pay on a mortgage on a home other than your main or second home may be deductible if the proceeds of the loan were used for business, investment, or other deductible purposes. Otherwise, it is considered personal interest and isn't deductible.

Time-sharing arrangements.


You can treat a home you own under a time-sharing plan as a qualified home if it meets all the requirements. A time-sharing plan is an arrangement between two or more people that limits each person's interest in the home or right to use it to a certain part of the year.

HOWEVER

Rental of time-share.


If you rent out your time-share, it qualifies as a second home only if you also use it as a home during the year. See Second home rented out, earlier, for the use requirement. To know whether you meet that requirement, count your days of use and rental of the home only during the time you have a right to use it or to receive any benefits from the rental of it.

 

[Bearval]

It is the operating expenses. Here is the language from the annual dues budget From VGF.

View attachment 726969

Thank you for the information. My question is that it states unsold shares. Is this only relevant to resorts that are not considered sold out yet or does it also include points they brought back?

 

[Bearval]

little money is better than no money?

Problem is the might not be able to sell unless they have the cash at closing to pay off the finance company they borrowed from. The finance company can block the sale.

 

[Sandisw]

Thank you for the information. My question is that it states unsold shares. Is this only relevant to resorts that are not considered sold out yet or does it also include points they brought back?

All points they own as when they ROFR, the points go back into inventory for sale.

ETA: it does not apply to points associated with inventory not yet declared Into the association.

 

[BamaGuy44]

Not going to argue semantics with you. The fact is, if you borrow to buy a house, the bank can take your house if you don’t keep up the payments. The same applies to your DVC contracts. If an owner is under water, you either come up with the difference, forfeit the property, or file for bankruptcy. I’m not trying to be a jerk about it. Just describing how the system works

By your logic the government owns my paid off house because if I don't pay my property taxes, they will seize it. You say you don't want to argue semantics, but saying people with a mortgage don't own their property is just playing sematic games. If we want to get technical, When I had a mortgage, it was my name on the deed and title. I was the owner by any definition, legal or otherwise. The bank was the lien holder, which means if I default, they can become the owner.