Buying/selling for profit

Mikeymike2121

Earning My Ears
Joined
Jun 12, 2019
My wife and I recently purchased 155 points direct from Disney for Riviera.
As we are awaiting closing I begun to wonder if we needed additional points.

My question is, we know someone who owns key west since 1991. They purchased at $60/point. Is it possible for them to purchase add on points at $60? And if so could I then buy them for say $70/point? Even with disney first right of refusal the other person would be making a profit. Iam sure disney has figured this out and doesn't allow it I was justing how?

Thank you
 
DVC would happily sell your friends more points at OKW for their current price of $156 per OKW point, indeed they’ll sell you OKW points for that same price.
A lot of people end up selling their DVC contracts, thus there is an active resale market & on the resale market folks selling their OKW points are getting around $100 per point plus or minus.
DVC has the right of first refusal (ROFR) which means that even if you could find some one willing to sell you their contract for below market value, DVC can step in and buy those points from the seller on the terms you negotiated & the seller gets their money but you get nada.
 
DVC would happily sell your friends more points at OKW for their current price of $156 per OKW point, indeed they’ll sell you OKW points for that same price.
A lot of people end up selling their DVC contracts, thus there is an active resale market & on the resale market folks selling their OKW points are getting around $100 per point plus or minus.
DVC has the right of first refusal (ROFR) which means that even if you could find some one willing to sell you their contract for below market value, DVC can step in and buy those points from the seller on the terms you negotiated & the seller gets their money but you get nada.

Thanks. I was thinking the price you paid when purchasing the contract was "locked in" if purchasing future add on points. Seems I was wrong which explain away this potential loop hole.
 


They purchased at $60/point. Is it possible for them to purchase add on points at $60? And if so could I then buy them for say $70/point? Even with disney first right of refusal the other person would be making a profit. Iam sure disney has figured this out and doesn't allow it I was justing how?
Everyone and anyone who wants to buy direct points for sold out resorts pays what the going rate is -- so OKW is, I believe $155 per point. The only "deals" to be had might be if you are buying points at their new resort.

As for you buying them at $70 pp -- DVC will take that contract for sure. They would need to sell it to you for closer to $90 pp if they expire in 2042 and if they expire in 2057 (meaning they paid for the extension) then it would probably be around $100pp.

The only way someone could get rid of a contract and not have DVC step in would be if it was a gratuitous transfer from one family member to the next with no exchange of money.

Once there is money being exchanged DVC wants to make sure it is market value and if not they want the points because if they are cheap they can sell them for a great profit.

DVC has no problem with people making a profit. There are plenty of people who had bought early on or even just 10-12 years ago when prices were below $80pp. They could sell now and make a healthy profit. The only thing DVC doesn't want to see is people selling their product for cheap, which is why they have the ROFR system. DVC can regulate the resale market.
 
My wife and I recently purchased 155 points direct from Disney for Riviera.
As we are awaiting closing I begun to wonder if we needed additional points.

I hope you are aware that DVC has altered Riviera contracts so that there are resale restrictions now which have not existed before. I would not count on DVC holding its value in the resale market like it used to. If circumstances change and you are forced to sell, you might be taking a big hit from your purchase price. Just FYI.
 
I hope you are aware that DVC has altered Riviera contracts so that there are resale restrictions now which have not existed before. I would not count on DVC holding its value in the resale market like it used to. If circumstances change and you are forced to sell, you might be taking a big hit from your purchase price. Just FYI.
And the other thing to be aware of is if you do need more points and buy them resale (from your friends or another owner, not through Disney), you can’t use those points to book at Riviera.
 


The only thing DVC doesn't want to see is people selling their product for cheap, which is why they have the ROFR system. DVC can regulate the resale market.

Disney loves it when people are selling DVC for cheap. ROFR gives them the option to pick up the contract for cheap, or else pass on it if they are short on cash and nervous about the future (as they were during the "great recession.")

ROFR is a mechanism for annoying potential resale buyers to get them to buy direct, not to "regulate the resale market."
 
ROFR is a mechanism for annoying potential resale buyers to get them to buy direct, not to "regulate the resale market."
You and I have had this exchange before Charles, and I'm coming around to your point. I agree that Disney is not triggering ROFR as a policy to prop up the market, but I think functionally, that's what actually happens. In practice, as Disney continues to buy back (to fill a waitlist), prospective resale buyers not named @pangyal will adjust their offer price to eventually get one through. It's a small sample but the ROFR thread is replete with comments about offering above asking, offering more hoping this 2nd/3rd/4th offer makes it past the mouse.
 
You and I have had this exchange before Charles, and I'm coming around to your point. I agree that Disney is not triggering ROFR as a policy to prop up the market, but I think functionally, that's what actually happens. In practice, as Disney continues to buy back (to fill a waitlist), prospective resale buyers not named @pangyal will adjust their offer price to eventually get one through. It's a small sample but the ROFR thread is replete with comments about offering above asking, offering more hoping this 2nd/3rd/4th offer makes it past the mouse.

I just don't want the OP to think that historical resale values are guaranteed.

I do think that there is more of a risk that potential resale buyers will prefer L14 to Riviera and move in that direction rather than accept the restriction of RIV-only, reducing the demand side of the economic equation.

And the way ROFR works, if the only offers you get are lowball, then you can either accept that or continue holding out for months and hoping for a big Riviera fan willing to pay more in order to pass ROFR. In difficult times, accepting a lowball offer might be necessary.
 
Up to the most recent surge of buybacks in 2019, DVD has buyback percentage seems to have been decreasing as compared to 2007-2011.

From the Orange County website:

1/2007 to 1/2011- DVD bought back about 3500 contracts (not including foreclosures) and they passed on about 6000-7000 resales for a buyback percentage of about 33-36%

1/2014 to 6/2019 -DVD bought back about 7000 contracts (not including foreclosures) and they passed on about 23000 resales for a buyback percentage of about 23%

From 1/1-6/1/2019, buybacks totaled about 1200 contracts and resales about 1900 contract- almost 40%. On the other hand, from 2014-2018, the buyback percentage was about 20%.
 
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Up to the most recent surge of buybacks in 2019, DVD has buyback percentage seems to have been decreasing as compared to 2007-2011.

From the Orange County website:

1/2007 to 1/2011- DVD bought back about 3500 contracts (not including foreclosures) and they passed on about 6000-7000 resales for a buyback percentage of about 33-36%

1/2014 to 6/2019 -DVD bought back about 7000 contracts (not including foreclosures) and they passed on about 23000 resales for a buyback percentage of about 23%

Over the last 6 months, buybacks totaled about 1200 contracts and resales about 1900 contract- almost 40%. On the other hand, from 2014-2018, the buyback percentage was about 20%.
Why is there a gap in the data between 2011 and 2014?

ETA: Do the annual numbers follow the same trend? And how did you decide to group the data the way you did?
 
My wife and I recently purchased 155 points direct from Disney for Riviera.
As we are awaiting closing I begun to wonder if we needed additional points.

My question is, we know someone who owns key west since 1991. They purchased at $60/point. Is it possible for them to purchase add on points at $60? And if so could I then buy them for say $70/point? Even with disney first right of refusal the other person would be making a profit. Iam sure disney has figured this out and doesn't allow it I was justing how?

Thank you

If you are within your 10 day cooling off period -- you ought to consider breaking the purchase up into 2 contracts. It'll only add a few hundred dollars to closing (I think $200 more for county filing fee) -- but if you ever need to sell, you'll get a better price per point and you'll have the option of downsizing to 75 or 80 points.
 
Keep in mind, that if you rescind your Riviera contract, and purchase resale, you won't be able to use your resale points to book at the Riviera due to the new restrictions Disney put in place this year. If you want to stay at Riviera using your DVC points, then you'll need to buy there direct.
 

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