International Timeshare, Fractions & Travel Clubs

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If there are no pros AND cons in a decision process then no decision is necessary. This is especially true when considering the purchase of a Fractional Resort Home, Timeshare or Travel Club membership that is domiciled outside the US. We have heard all the stories about great deals AND about big time rip offs related to resort stuff around the world. Yep! My favorite story line is; “OMG, they kidnapped us and locked us in a sales meeting and tricked us and gave us food that made us throw up and laughed at us and the contract we signed was not legal and they would not refund our money and THEY DID ALL THIS IN SPANISH!!!”

We have heard this story to many times. Mexico is a third world country. You get that… right? They have different laws. You are a long way from home. You don’t speak the language and you don’t understand the culture or customs. Even in the States you can get hooked up with less than honest timeshare and fractional folks. Don’t blame it on Mexico or on “Those Mexicans”. You got a 6 day vacation at an all inclusive, 5 Star resort right on the beach for the entire family for $299. What were you thinking? How is that possible? Are you stupid? Really, ask yourself, “Why would someone sell me a $2,700 vacation for $299? ” So then you answer yourself, “Well its because I am a SMART gringo and these dumb Mexicans are going to lose money on me because I am not buying their timeshare”.

Well you are the stupid one…admit it. Just like in the States, there are good and bad players in every industry. Although in Mexico & around the world, the laws regarding timeshare and fractional ownership have come a long way in the last 20 years, you still do not have much recourse if something goes wrong. Also, if you are thinking you can go somewhere, sign some papers and put a down payment on your credit card, only to cancel and request a charge back when you get home to Cleveland, think again. You are now the con-artist, liar and “pinche gringo” and will find that it is not that easy. So, just be reasonable. There are many great timeshare & resort club operators on the planet including Real Group, Anantara, El Cid, Azure, and Playa Resorts as well as many large US companies selling and servicing timeshare under foreign branded names or companies. Do your homework. If you are trying to get a ridiculously cheap vacation anywhere you should be prepared to get what you pay for. List and understand the Pros and Cons.

According to Dos Mundos Developments, many large, global banks and other providers, service timeshare notes & stick to GAAP principals and the documentation is fairly standard. You can get some absolutely great values on timeshare and vacation club memberships at truly outstanding and luxurious resorts from Paris to Bora Bora to Venezuela but you have to be smart.

And if you are not smart, don’t also be naive. An easy way to take advantage of the Pros and Cons that have already been vetted by a global leader in the resort business is simply buy points from RCI. (Resort Condo International). Let them do the work and you just enjoy your vacations.

For more no-nonsense resort stuff from Chris Bounds, visit his site.

Rent? Buy? Share?…Timeshare!

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Well, timeshare has been around a long time. Jesus was born in the very first AirBnB that I have ever heard of and it was actually a kind of timeshare arrangement.

When traveling, its obviously more efficient to rent a hotel room while on the road. You would not want to buy a home or condo in each town you stayed in while traveling …makes not sense. Sometimes it is necessary to rent a car for special situations, if yours is in the shop or when traveling. Would not want to buy a car for each of those occurrences. This brings me to my late Father’s old axiom, “Boys, remember the Four Fs and life will be easy”. What are the Four Fs….?

My Dad said this to my three brothers and myself when we were all home from college one summer and I brought up that I was about to close on a small condo in Ruidoso, NM. A humble, mountain cottage but my first “second home”. My older brother then chimed in, “well I am buying a quarter horse and looking for a good riding saddle.” One of my younger brothers then offered that he had just bought a half interest in a ski boat to keep on Lake Austin and the youngest brother then said, “I just finished my pilot training & have found a nice, six seat, Cessna for sale.” Our Father just sat and stared at us for the longest time… then said, “Don’t you ladies remember the Four Fs of life?” He proceeded to remind us that “if you are thinking of buying something that Floats, Flys, Fornicates or is Far away, rent it don’t buy it! ”

Well timeshare solves my Dad’s dilemma for one of the Fs. While planes still need extreme maintenance, boats need constant attention and horses need food, vets and training, timeshare continues to solve the idea of owning a vacation, even in Far away places. And it is efficient, maintained and exchangeable to almost anywhere in the world.

For more no-nonsense resort stuff, contact Chris Bounds directly.

 

#timeshare sales, #resort management, #Chris Bounds Austin

Tiny Resort Cabins! Huh???

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So this Tiny House thing keeps growing. Started out as an efficient way to stack in resort or campground lodging facilities cheaply and quickly. Then the man-bun wearing minimalists who don’t were shoes to work got into the deal with their hipster buddies and the whole Glamping thing evolved. Like life, evolution continues.

Enter Resort Mini Cabins, vacation rental tiny units and Luxury tiny condos. Wow? The evolution continues. As the Gen X and Millennials age into peek buying years, they are driving the market like they did with Segways, Ride Sharing and grab n go scooter rentals. The new look and concept is also catching on with the old folks..40+ fo

lks who are a bit more thrifty than they once were.

So resort, campground, timeshare, hotel and glamping companies are cashing in. It is estimated that there are over 20,000 tiny homes in the Continental US as of 2018, that were build and sold by “Certified” manufacturers. This does not count the non-certified and privately held company units. As the 20+ crowd grows into prime spending years, this number will mushroom.

Chris Bounds of Dos Mundos Developments, when asked about the tiny resort unit craze, had this to say, “Well it looks an smells alot like the Condo & Timeshare craze of the 80s, when a good idea met up with favorable demographic trends and a good economy.” This is going to be really, really big and large players will jump in soon according to Bounds.

We are already seeing large “glamping” companies add this product to their mix as well as some of the largest timeshare companies, such as Bluegreen, ad a “tiny lodge” to their inventory at selected resorts. It is here to stay and will only get bigger. Aside from business travel lodging, many 30 somethings prefer to stay at more earthy and simple lodging and resort locations versus the traditional All inclusive, luxury resorts.

Don’t forget that developers love this concept. They can increase density dramatically, build for much less per square foot and have a much, much broader market to sell to. One developer in the Blue Ridge Mountains has disclosed that one Tiny Lodge, witch cost $60,000 to have delivered and set up, has produced over $1,000,000 in fraction sales and rental income. With numbers like these you can guess what is going to happen.

For more no-nonsense resort development sales stuff, contact Chris Bounds directly at 512-five six five-2616

If You Can’t Dance to This Music? Resort Management is playing our song!

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So its TIME to dust this off and get it out there. The current economic environment, regulatory roll backs and corporate tax rates make this, quite possibly, the best environment for the Hospitality industries that we will ever see again in our lifetime. SO DON’T SQUANDER IT. Don’t look back in six years (like you may have done before) and say, “I knew I should have done X”. Don’t be that guy. Get off your ___, put on you big boy pants and do some business. The following may help you focus.

#1 Ethical Sales will cure most other issues. Lets be clear, its all about sales. Sure, someone has to decide when to order more copier paper and yes, it is sad that Rick’s father is dying from cancer and that the swim up bar at the pool has a cracked sink; yeah those things must be dealt with BUT don’t let life’s distractions cloud your vision of what the goal is. Don’t stay busy all day doing things that don’t show up on the bottom line of the quarterly sales report. AND, don’t let your managers do it either. Is it coincidental that record setting sales figures seem to make it much easier and more pleasant to deal with life’s issues? I think not! SO & THEREFOR, never, ever let your management team get bogged down in stuff that has nothing to do with sales. NO, no excuses; just don’t let them do it. Try this for 3 months and watch what happens.

#2 Shift the focus of the time you spend with managers. With sales reps, you’d (hopefully) spend your time digging into the details of their sales production. But with your sales managers, you must dig into the details of their management. For example, in a review with an individual salesman (Bob), you might say, “ Bob, Lets review your 30 day sales efficiency”. But with a sales manager, you would say, “How are you working with Bob given his 30 day sales efficiency” Or rather than asking, “How could Bob have done better?” you instead should ask, “How could you have managed Bob to do better?” Make your managers answer these questions. Make them study and be accountable for their answers. This will bind the team and give them ownership of the process.

# 3 Know that you’ll teach by example, whether you want to or not. When you’re managing all phases of a project or development, you’re probably not real concerned that the kitchen staff sees you out of your professional dress when you snitch a cup of coffee on your day off. But when you’re managing managers, you and your behaviors, dress, habits, language etc., matter 24/7. REALLY. What they see, and so perceive of you, is what you are going to get back – and that can be good or bad. If you’re delegating effectively, providing useful and regular feedback, conducting useful check-ins, hiring wisely, and fairly holding all staff accountable, that’s what your management team will do. Conversely, if you tell one of your mangers that he can hold a pender over and close it the next month so he can get his Christmas bonus, then you just told him (and his piers) that cheating and breaking policy is ok.

#4 Feed the Tigers, ride the Horses & shoot the Dogs. It is very important that the sales mangers you manage, although operating fairly, for everyone, by the exact same policies and handbook of rules, understand that at the end of the day SALES is what we do. We do them ethically, straight forward and do not cut corners or skip any procedures, BUT our job is to sell. When managing a fast paced, high energy sales organization fairly and according to stated goals and budgets, your managers’ recipe must call for: a). Feeding the tigers: give more leads, tours, and prospects to the #1 salesman/manager/team. The #1 seed in a tourney gets the #8 seed for first game. That’s just how it is. Make your rules and policies match. b). Riding the horses: We don’t ride pigs, turkeys or cows. No, because it is much more efficient to ride horses. We want horses in our stable. When you have a horse why would you keep a pig or cow in the stable for riding. Horses are for riding, so when your salesman/manager/team is selling well, do not quit riding. Big mistakes are made when the top team is broken up because of promotions, lateral moves or reassignments. That is stupid…now your riding a pig. c). Shoot the dogs: we don’t want dogs in our stable or anywhere near our horses; it creates chaos. When a team/manager/salesman is just not performing and not performing consistently, despite your focused efforts and are dragging down moral and your numbers….then you must train your management team to get the dogs out of the stable as quickly as possible.

#5 Quick, fair & public trials: Nothing quite like a public hanging to get your attention and help you understand that rules must be followed and that the results of actions will not be dealt with in secrecy or privacy. Not withstanding proper adherence to employment and privacy laws, your mangers should see, know and understand that all things, good and bad, will be dealt with immediately and in a fair and open forum. Showing managers that it is OK to post the weekly sales reports and comment openly on efficiency numbers is a good thing. There are no secrets in sales numbers. They are exactly what they are. No excuses, no what ifs and no where to hide. If you are second place by $0.50 then you are second place. Your management team must have the confidence to openly admonish wrong behavior and reward good behavior. Actively treating managers with this same philosophy will trickle down.

SO START DANCING!!

For more NO BS sales management stuff, feel free to contact Chris Bounds, Austin, Texas.

To Sell or To Service — your Notes?

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Well your budget says that you spend about 50% of your variable expenses on marketing & G&A to get a sale. Ok. So now you have a $21,000, seven year, timeshare note paying 12.49%. What do you really have? After you figure that out then you must ask, What do you really want? To Sell or to Service.

That note is worth $ 31,600 over the next seven years. Based on the above, we know it cost you $10,500 to get that note. So you make $21,100 on a $10,500 investment. Not bad. 200% return. Your shareholders or partners or bankers will be happy with those numbers. But you are not so sure. Yes, you make 200% but that’s over 7 years and the money comes back to you in $300-$400 monthly payments that you have to service the note. It’s a capital intensive game and if you make the wrong move or the economy turns against you…you could suffer. The Principals at  Dos Mundos Developments, have over 100 years combined experience in making these difficult decisions and say, “Without decisions and proper planning we have seen faulty capital assumptions bring down many great developments.”

So you could sell that note the day it closes and get 90 cents on the dollar or $18,900 immediately on your $10,500. Your net gain is $8,400 on a $10,500 investment. That’s 80%….not bad but you are leaving 120 percent on the table.

Or you could “pledge” that note and get 100 cents on the dollar the day of closing and get to keep 90% of the monthly interest (only) payments as they come in and give recourse to the note “holder” in cases of default or late pays. Not a bad deal but requires third party administrators, legal stuff, guarantees and administration while you are are trying to market and sell more timeshare or fractional.

So, what’s the answer? Well, it depends on your capital structure and your risk tolerance. It’s that simple and that complicated. It kinda depends. Please call Chris directly

Generally, the priority among mortgages, trust deeds, and real estate contracts is determined by the date of recording, the first recorded instrument being the first in priority. In some situations, however, the parties may desire that a later recorded instrument have priority over an earlier recorded instrument. This is particularly common (or at least has been) in construction financing. A SUBORDINATION CLAUSE states that the instrument in which it is contained will be subordinate (junior) to a construction loan lien (mortgage or deed of trust) to be recorded later.

for more no nonsense vacation ownership stuff.

Mexican Timeshare: Pros & Cons

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OMG, they kidnapped us and locked us in a sales meeting and tricked us and gave us food that made us throw up and laughed at us and the contract we signed was not legal and they would not refund our money and THEY DID IT ALL IN SPANISH!!!.

We have heard this story so many times that it is NOT FUNNY. Mexico is a third world country. You get that right? They have different laws. You are a long way from home. You don’t speak the language and you don’t understand the culture or customs. Even in the States you can get hooked up with less than honest timeshare and fractional folks. Don’t blame it on Mexico or on “Those Mexicans”. So you got a 6 day vacation at an all inclusive, 5 Star resort right on the beach for your whole family for $199. What were you thinking? How is that possible? Are you stupid? Really, ask yourself, “Why would someone sell me a $1,700 vacation for $199? ” So then you answer yourself, “Well its because I am a SMART gringo and these dumb Mexicans are going to lose money on me because I am not buying their timeshare”.

Well you are the stupid one…admit it. Just like in the States, there are good and bad players in every industry. In Mexico, although the laws regarding timeshare and fractional ownership have come a long way in the last 20 years, you still do not have much recourse if something goes wrong. Also, if you are thinking you can go down there, sign some papers and put a down payment on your credit card, only to cancel and request a charge back when you get back to Cleveland, think again. You are now the con-artist, liar and “pinche gringo” and will find that it is not that easy. So, just be reasonable. There are many great timeshare & resort club operators in Mexico, such as Real Group, Garza Blanca and Playa Resorts as well as many large US companies selling and servicing timeshare under Mexican branded names or companies. Do your homework. If you are trying to get a ridiculously cheap vacation anywhere you should be prepared to get what you pay for.

Many large, Mexican banks and other providers, service timeshare notes and generally stick to GAAP principals and the documentation is fairly standard. You can get some absolutely great values on timeshare and vacation club memberships at truly outstanding and luxurious resorts in Mexico but you have to be smart. And if you are not smart, don’t also be naive.

For more no-nonsense timeshare stuff from Chris Bounds, visit his site.SWIMUPBAR

Fractionals vs Timeshare vs Individual Second Home

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So, is it light black, grey or charcoal? Is it close, not to far or a moderate distance.  Well, yes it is.  The debate rages as to whether a second home….notably a vacation home, is a fractional or if its timeshare.  Well, it kinda depends.  Depends on what State you are in… “not state of mind”…  Depends on how many owners are involved and in some cases depends on what type of deed is involved and other statutory and tax codes etc.

Lets boil it down to the simplest explanation and apply some common sense.  If you and your best friend from the club and your brother in-law go in together and buy a beach house jointly,  for each of your families to use as you agree and its not a commercial operation, then, in most jurisdictions, this is simply a second home with three owners on the deed. (We are not attempting to give legal advise.  For your particular need, please consult your legal advisers.)  So that’s simple and makes sense.   What if there are 4 owners or 8- what then?  What if a developer with a real estate license is one of the owners?  What if that developer sold “interests” to others in that property?  What if there are 50 owners…each with a deed?  What if you own points that convert to weeks and there are 50 owners with enough points to own an interest? What if the owners, by deed restrictions etc, are forced to be members of an HOA or POA or COA??  What if a management company owns most of the “weeks” or an “interest” in the home or condo?  It goes on and on…really.

So and again, we are not giving legal advise and are keeping it simple.

FRACTIONALS:  Are generally defined by being a truly luxury, 5 Star, single family property with fewer than 12 owners.  Real Simple.  Most owners get a deed and participate directly in the equity of the property, ie, depreciation or appreciation and share equally in the repairs and upkeep.  According to Jaime Escobar, with Dos Mundos Developments, Inc, fractional second homes are making a big move in the wake of the over-proliferation of low end and hard to resell timeshare properties.

Timeshare:  Deeded:  Very similar to Fractionals except that there may be as many as 50 owners and there may be a forced HOA membership and dues involved.  More often than not, these properties are multi-family or multi-unit in design and are often a step (or two) down in quality. It may also be hard or impossible to participate directly in the underlying equity of the property but this is often overshadowed by the ease of use and the exchange-ability to other properties.

Timeshare Points: An even more “user friendly and flexible” form of timeshare that allows a person to buy and accumulate points to be exchanged for various length stays at various different and various quality properties.  No equity is accumulated but exchange programs exist that allow use of points at thousands of resorts all over the world.  Points can often be exchanged for cruises, airline tickets and rental cars adding to the ease and value of the timeshare.

Taxes:  Property taxes, estate taxes, income taxes, etc.  Not gonna touch this, but anyone involved in any type of fractional or timeshare property (and we are big fans of both), should visit with their tax adviser regarding these issue.

Chris Bounds Austin Texas

For more no non-sense resort stuff, contact Terry Christopher Bounds Austin Texas directly.