Would you buy? Foreclosure contract reselling for profit

[JETSDAD]

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

That's just the difference between judicial and non-judicial sales. Judicial sales are held online, non-judicial are at the lawyer's office. That being said, any contract that is worth more than what is owed will be bought by a third party rather than Disney. They just bid up to the judgment amount because they don't actually have to pay the money out of pocket that way. Disney isn't getting any good deals as a result of those sales being in person (and yes, I am totally jealous that I am in Canada and can't be there in person lol).

 

[kandlsutton]

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.

According to the deeds, the investor’s bid covered the original owners obligation for the direct loan. Therefore, the investor is making a nice profit by selling it for $3000 more than they paid for it AFTER stripping the contract of any remaining 2020 points as well as all 2021 points, which is additional profit if they rent or transfer the points.

 

[kilik64]

According to the deeds, the investor’s bid covered the original owners obligation for the direct loan. Therefore, the investor is making a nice profit by selling it for $3000 more than they paid for it AFTER stripping the contract of any remaining 2020 points as well as all 2021 points, which is additional profit if they rent or transfer the points.

Now imagine that being done by a big brokerage on a large scale (100s of contracts).

 

[Bearval]

According to the deeds, the investor’s bid covered the original owners obligation for the direct loan. Therefore, the investor is making a nice profit by selling it for $3000 more than they paid for it AFTER stripping the contract of any remaining 2020 points as well as all 2021 points, which is additional profit if they rent or transfer the points.

If that is true then they did the original owner a huge favor and helped them out in a big way especially if what the investor paid also covered all of the other fees that are involved in a foreclosure then the original owner would not owe anything.

 

[ScubaCat]

There are 2 separate decisions here: 1. Do you want the contract at that price? and 2. Is there an ethical issue to flipping a foreclosure? If you combine those 2 decisions, you could get lost in quite the rabbit hole.

Foreclosures are bad no matter how you cut it. Virtually all housing developments in this country that weren't recently built have had at least some number of foreclosures over the years, and it's always better for everyone if they're occupied. To me, flipping foreclosures is a service, and I have no issue with someone making a few bucks to ensure they're occupied for the benefit of the community as a whole.

Besides, DVD buys and sells foreclosures at full direct price all the time. Would you prefer they pocket all the money?

 

[Sandisw]

For me, I only consider me. So, if what I was buying was what I wanted, then it’s immaterial to me who owns and what profit they paid.

I bought BLT last summer for $150. Used over 200 points it came with, and sold it this summer..less than a year later.. for $189.

I was fortunate to capitalize on the current market to be able to turn around and buy RIV resale which is what I wanted.

 

[JETSDAD]

Just some fun reading for those interested. Here is the law regarding non-judicial sales:

http://www.leg.state.fl.us/Statutes...ute&URL=0700-0799/0721/Sections/0721.855.html
From what I've read regarding timeshare foreclosures in Florida there can't be any deficiency judgments after a foreclosure so regardless of what the property sells for the owner is off the hook (now it could affect credit rating and that sort of thing but they wouldn't owe the deficiency). From the link posted above:

(c) A sale conducted under subsection (7) releases the obligor’s liability for all amounts secured by the lien. The lienholder has no right to any deficiency judgment against the obligor after a sale of the obligor’s timeshare interest under this section.

If anyone wants to give foreclosures a shot go for it....you can outbid the investors and remove any profit that they could make especially if you're an end user not needing any sort of margin. The downside of that is that you're also taking on additional risk that you don't have with buying resale. If you're going to be spending anywhere near the same amount of money then you might as well go through a broker, be certain of clear title, know your exact costs upfront, and know how many points are remaining in the contract.

 

[Starport Seven-Five]

Just some fun reading for those interested. Here is the law regarding non-judicial sales:

http://www.leg.state.fl.us/Statutes...ute&URL=0700-0799/0721/Sections/0721.855.html
From what I've read regarding timeshare foreclosures in Florida there can't be any deficiency judgments after a foreclosure so regardless of what the property sells for the owner is off the hook (now it could affect credit rating and that sort of thing but they wouldn't owe the deficiency). From the link posted above:

(c) A sale conducted under subsection (7) releases the obligor’s liability for all amounts secured by the lien. The lienholder has no right to any deficiency judgment against the obligor after a sale of the obligor’s timeshare interest under this section.

If anyone wants to give foreclosures a shot go for it....you can outbid the investors and remove any profit that they could make especially if you're an end user not needing any sort of margin. The downside of that is that you're also taking on additional risk that you don't have with buying resale. If you're going to be spending anywhere near the same amount of money then you might as well go through a broker, be certain of clear title, know your exact costs upfront, and know how many points are remaining in the contract.

From a bit of reading this morning it sounds like buyers could be on the hook for back dues along with other potential expenses to remove liens. Definitely a situation where you want to do your research.

 

[JETSDAD]

From a bit of reading this morning it sounds like buyers could be on the hook for back dues along with other potential expenses to remove liens. Definitely a situation where you want to do your research.

Yup, back dues are the biggest risk for the most part. It does suck not knowing what those will be but you can come to a bit of a guesstimate based on when liens were filed. Some judgments will also contain the back dues as part of the judgment so they would be covered in the sale (at least to the date shown). The one I recently bought I had guessed 2 years of dues and it was actually a bit less. Then you just hope the points also happen to be there and UY can play an important role there. For me the points for both years of dues owed were there so I only had to pay for what I got (well, a little less) and it was within the banking deadline for the 2020 points so I will be able to use them.

 

[kandlsutton]

Now imagine that being done by a big brokerage on a large scale (100s of contracts).

Exactly my point. This isn’t a one-off, it’s a routine occurrence.

 

[JETSDAD]

Buying and reselling for a profit isn't against any DVC rules however renting points commercially is (not referring to brokers but individuals/companies renting out their own points commercially). Anyone can file a complaint if they wish to about the companies doing that. Maybe if enough people complain then something would be done because from what I've seen so far DVC really doesn't care about that rule being broken.

 

[poofyo101]

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.

Yinn,
I could not help but laugh at this post haha. I have regretted not buying the twin to your original PVB contract which I should have bought at the time as well. Anything then is an unbelievable deal now.
Good luck in all your future contracts as well!

 

[Sandisw]

Exactly my point. This isn’t a one-off, it’s a routine occurrence.

Could be true but then again, why would it matter?

I am not an investor at all but with the exception of one contract, I’ve sold plenty over the years to get better ones and made a great profit on them. By BWV contracts netted me over $50/point on each of them.

So, in essence I benefited off buyers too. Having said that, no one should buy something that doesn’t sit well with them and if this type of situation does bother you, it’s not the right fit!

 

[we"reofftoneverland]

Exactly my point. This isn’t a one-off, it’s a routine occurrence.

And in the process they are pushing resale prices up artificially. I get that it isn’t illegal, but I personally think it should be, or there should be more protections against such monopolistic practices. I have no problem with flippers in the housing market, but this is a completely different situation. I also don’t like dealing with things that are sketchy.

 

[davidl81]

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.

Preach