Would you buy? Foreclosure contract reselling for profit

kandlsutton

Mouseketeer
Joined
May 22, 2019
We have been looking for a relatively small Copper Creek contract to round out our “portfolio”. We made a low bid ($14 below asking) on a 100 pointer (0-50-100) on Sunday but found out from our broker that the seller had already accepted an offer for $11 below asking. Disappointed because that was the total amount of $$$ we wanted to spend.

Then yesterday we decided to bid $2 below asking ($3 more pp than we bid on the 100) on a 120 pointer (0-0-120) with seller paying closing costs. The contract was listed for a couple of weeks ago. Thought we had a deal but seller won’t pay closing costs and held firm on the $2 below asking price. Paperwork came in today but haven’t signed or sent in deposit.

Tonight I got nosey and did a couple of deed searches. Contract originally was direct from Disney around $182 pp in 2018. An investment company had the high bid on the foreclosure last month or so for around $138 pp, if I did the math correctly, and the list price is more than $25 above what they paid for it. So $3000 profit plus any proceeds from stripping the points minus commission and fees, all in less than 2 months.

Overall, I don't think it‘s a bad deal and seems to be in line with a lot of other sellers, but it’s definitely not the great deals that were available in Q1 2021. I get that the investor is in the business to make quick money, but I am a little ticked over the additional $3k and can’t decide whether to walk away. It’s the right UY, a few more points than I was targeting, and at the top end of what I want to pay overall.

Sorry for the long post. Curious if y”all have any advice…
 

kandlsutton

Mouseketeer
Joined
May 22, 2019
Not sure why the price someone else paid for it would matter to you at this point.
It just feels like we are being taken advantage of by the investors that prey on other people‘s hardships in order to turn a quick profit. And I”m just a little aggravated that we went slow (1 contract at a time) and missed the $140 per point contracts 6 months ago.
 

ajiuo

Practically Perfect In Every Way
Joined
Feb 23, 2020
It just feels like we are being taken advantage of by the investors that prey on other people‘s hardships in order to turn a quick profit. And I”m just a little aggravated that we went slow (1 contract at a time) and missed the $140 per point contracts 6 months ago.
Anyone who buys a foreclosure is taking advantage of somone else’s misfortune, either by saving money or making money. There is nothing wrong with it either way, as long as you did not cause the persons misfortune so that you could benefit from it. JMO
 

MICKIMINI

Love the Mouse!
DVC Premium
Joined
Sep 6, 2003
Anyone who buys a foreclosure is taking advantage of somone else’s misfortune, either by saving money or making money. There is nothing wrong with it either way, as long as you did not cause the persons misfortune so that you could benefit from it. JMO
I look at it the other way...perhaps you are helping them pay their mortgage and keep a roof over their head. Always two sides to the story!
 

Starport Seven-Five

DIS Veteran
Joined
Aug 16, 2019
I look at it the other way...perhaps you are helping them pay their mortgage and keep a roof over their head. Always two sides to the story!
A foreclosure also makes the lein holders whole which benefits the rest of us. It sucks and I would prefer no one had circumstances that led to a foreclosure but if the bank/developer had to eat the losses, it would increase interest rates or annual dues for the rest of us.

It's not like the person who bought the foreclosure went door to door at OKW trying to find people who didn't know the value of their contract.
 

sndral

DIS Veteran
Joined
Feb 3, 2008
If you think prices have peaked and will cool down, walk away, if not and this is the contract you’ve wanted in your use year I’d go ahead, smaller contracts aren’t easy to come by.
At least w/ a seller in the business of flipping contracts you won’t have to worry about them dragging their feet at closing like sometimes happens w/ private sellers.
 

RoseGold

DIS Veteran
Joined
Jan 21, 2020
This is a $300 discussion. If you are sweating that much money, you shouldn't be buying a luxury vacation anyway.

I like getting a good deal, but this level of haggling is insignificant to the overall cost of going to Disney multiple times.
 

we"reofftoneverland

Registered
Joined
Aug 5, 2015
Some of these “investment companies” are the brokers you are dealing with. It is shady if you ask me. When you purchase a previously foreclosed home that someone else is “flipping,” the flipper isn’t also your agent. Usually they have also put additional equity into the house. Updates, etc. We also looked into (I.e. did our own title search) each contract we bought resale to make sure that individuals were selling.
 

RamblinWreck

Mouseketeer
Joined
Feb 16, 2008
It just feels like we are being taken advantage of by the investors that prey on other people‘s hardships in order to turn a quick profit. And I”m just a little aggravated that we went slow (1 contract at a time) and missed the $140 per point contracts 6 months ago.
They put in the time and the work to get that contract and now they want to be compensated for it.

You could have done the same thing. They're not doing anything wrong here.
 

kandlsutton

Mouseketeer
Joined
May 22, 2019
This is a $300 discussion.
More like $3000, but you’re right. There are no contracts out there now for $138 pp but there were 6 months ago. Steep climb on the asking prices.

Nobody knows what will happen to the resale market down the road, but we do know that direct prices are always higher and will go up over time. And this contract is over $7000 below direct and we already have blue card. So not a bad deal on a small contract, but just a bit more than I wanted to pay.
 

Bearval

DIS Veteran
Joined
Dec 31, 2017
It just feels like we are being taken advantage of by the investors that prey on other people‘s hardships in order to turn a quick profit. And I”m just a little aggravated that we went slow (1 contract at a time) and missed the $140 per point contracts 6 months ago.
Why do you feel anyone let alone an investor is preying on anyone's hardship??? No one made the former owner buy this contract in the first place. If they now can longer afford it due to job lose, divorce death in family etc. it is not like the person who is buying it caused the hardship. Actually the investor is helping them out by bidding on the foreclosure and helping them get a higher price which means the former owner will now owe less. Just because the contact went to foreclosure does not mean the former owner claimed bankruptcy and will have all of their debt forgiven. And last but not least, if DVC had the high bid in foreclosure it would be resold by them at the current direct price and anyone looking to by a resale contract would be bidding against others with one less contract on the resale market.
 
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Suzabella

HHI, BRV, BWV
Joined
Jun 24, 2019
If it's the contract I was looking for at a price I expected, I'd go for it. Prices are crazy right now and have likely gone up since the investor purchased thus changing the average selling price. They may have been on the hook for some past due maintenance fees also.
 
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JETSDAD

DIS Veteran
Joined
Jan 7, 2016
Some of these “investment companies” are the brokers you are dealing with. It is shady if you ask me. When you purchase a previously foreclosed home that someone else is “flipping,” the flipper isn’t also your agent. Usually they have also put additional equity into the house. Updates, etc. We also looked into (I.e. did our own title search) each contract we bought resale to make sure that individuals were selling.
Individuals could also be investors buying/selling foreclosures.

There is risk to buying foreclosures and anyone can do it if they want. What someone pays for a contract has no affect on the current value of it. I bought a contract via foreclosure with the plan to resell.....just because I bought it via foreclosure doesn't mean I would be willing to take less money than market value. In the meantime I've decided that I'll likely just keep the contract because who doesn't want more points??? lol
 

Yinn

DIS Veteran
Joined
Sep 4, 2019
We have been looking for a relatively small Copper Creek contract to round out our “portfolio”. We made a low bid ($14 below asking) on a 100 pointer (0-50-100) on Sunday but found out from our broker that the seller had already accepted an offer for $11 below asking. Disappointed because that was the total amount of $$$ we wanted to spend.

Then yesterday we decided to bid $2 below asking ($3 more pp than we bid on the 100) on a 120 pointer (0-0-120) with seller paying closing costs. The contract was listed for a couple of weeks ago. Thought we had a deal but seller won’t pay closing costs and held firm on the $2 below asking price. Paperwork came in today but haven’t signed or sent in deposit.

Tonight I got nosey and did a couple of deed searches. Contract originally was direct from Disney around $182 pp in 2018. An investment company had the high bid on the foreclosure last month or so for around $138 pp, if I did the math correctly, and the list price is more than $25 above what they paid for it. So $3000 profit plus any proceeds from stripping the points minus commission and fees, all in less than 2 months.

Overall, I don't think it‘s a bad deal and seems to be in line with a lot of other sellers, but it’s definitely not the great deals that were available in Q1 2021. I get that the investor is in the business to make quick money, but I am a little ticked over the additional $3k and can’t decide whether to walk away. It’s the right UY, a few more points than I was targeting, and at the top end of what I want to pay overall.

Sorry for the long post. Curious if y”all have any advice…
I bought a PVB contract several years ago. Going through it, I thought it was a great deal. Then I read the boards and I see @poofyo101 found a similar PVB contract for cheaper than I did. I started regretting it and wondering if I could do better. I ended up gritting my teeth and closed on that contract.

A little later, I found a great deal on a SSR contract at $99/pt..and then saw @poofyo101 posted he was in ROFR with an amazing deal at less than that. So I backed out of that one thinking I could do better.

In my search to do better, I found a subsidized HH contract for $88/pt and was at signing until @poofyo101 posted he had a HH contract for almost 30% less. So back to searching..

I then found a loaded CCV contract for $130/pt. I wasn't sure since it was so much more than the other two contracts I walked away from. I had second thoughts. I searched and had an inkling that I might be able to do better. But in all my searches, I didn't see any posts by @poofyo101. So I closed on it, and regretted it for a couple of months. Wondering if I paid more than I needed to.

Looking back, it was silly. All four contracts would have gone up in value. That's not always set in stone, but that's what happened. Meanwhile I had some pretty good vacations. Looking back I regretted walking away from the two I did and should have just closed - even if they didn't go up.

Moral of the story...the grass can always be greener. Don't overthink it. If you're willing to pay it, pay it. If not, walk away. And for your own mental health, don't follow @poofyo101.
 

Bearval

DIS Veteran
Joined
Dec 31, 2017
Individuals could also be investors buying/selling foreclosures.

There is risk to buying foreclosures and anyone can do it if they want. What someone pays for a contract has no affect on the current value of it. I bought a contract via foreclosure with the plan to resell.....just because I bought it via foreclosure doesn't mean I would be willing to take less money than market value. In the meantime I've decided that I'll likely just keep the contract because who doesn't want more points??? lol
If you want to go one step further you can say DVD is looking to take advantage of foreclosures. I believe DVD petitioned that bidders must be present at the auctions which would reduce the competition if no one can bid online
 

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