Securing your investment or knowing where the exits are!

[Schooner Member Find all posts View Profile Close Schooner]

Hi folks! I'm brand new at this. What a great forum! Like so many others who come to this forum I could use your help! I like what I see at Sunterra and plan to buy-in through resales. To this end I have profited immensely from the knowledge imparted on this site and Tug2. I have read all of the threads on Sunterra and, as scary as it sounds, I believe I am beginning to understand how to get on board the good ship Club Sunterra. It sounds like a great voyage with wonderful ports of call once you get past the “standard” $3 to $5K negotiation with Sunterra’s sales force!

That said, I could really use some further guidance/clarification so I can go in with my eyes wide open. Several threads speak of folks trading their deeded weeks for points in the new Club Sunterra as opposed to using an assignment agreement as mentioned in others. 1) If deeds are actually traded-in what is the “equity” left for the consumer who decides to get out or dies? 2) How do some folks manage to hang onto the deed while joining the new club? 3) Is there any different answer if a CSV-1 trust is traded or assigned? 4) Any other words of wisdom on safeguarding investments while maximizing the timeshare experience with Sunterra?

Many thanks!

[T. R. Oglodyte Moderator Find all posts View Profile Close T. R. Oglodyte]

1) If deeds are actually traded-in what is the “equity” left for the consumer who decides to get out or dies?

The deed is transferred to a trust formed to hold those deeds. In exchange, you receive an ownership interest in the trust; the amount of ownership is proportional to the number of SunOptions you receive. When you want to get out, what you sell is your ownership in the trust. Since the trust is not real estate, most rules regarding transfer of ownership of real estate do not apply.

2) How do some folks manage to hang onto the deed while joining the new club?

That's an option usually offered when you go through the sales process to join Club Sunterra. They might not offer that unless you say you want to join the Club but keep your deeded ownerships. Note that to join the Club and get SunOptions for your deeded interests, you need to buy something at developer pricing. What you buy can be either a Trust ownership or an additional deeded interest.

Can't answer your other questions.

[Schooner Member Find all posts View Profile Close Schooner]

Thanks Steve, this is helpful. Do you have any sense of the nature of the trust ownership you would get back? Would it be CSV-1 with any prospective buyer having to renegotiate their way back into Club or is it too early to tell with all the recent changes at Sunterra?

I understand why they are trying to discourage resales but boy the business model the TS industry is following of high pressure sales with disincentives for resale isn't sustainable ... someone from the competition is going to figure out someday that demonstrable resale value is the key to new TS sales, just like in the rest of the realestate world! In the meantime I will enjoy the bargains to be had!

Thanks again ... I'm still reading and learning much so may be back with more questions!

Regards , ... John

[Spence Super Moderator Find all posts View Profile Close Spence]

Thanks Steve, this is helpful. Do you have any sense of the nature of the trust ownership you would get back? Would it be CSV-1 with any prospective buyer having to renegotiate their way back into Club or is it too early to tell with all the recent changes at Sunterra?

I understand why they are trying to discourage resales but boy the business model the TS industry is following of high pressure sales with disincentives for resale isn't sustainable ... someone from the competition is going to figure out someday that demonstrable resale value is the key to new TS sales, just like in the rest of the realestate world! In the meantime I will enjoy the bargains to be had!

Thanks again ... I'm still reading and learning much so may be back with more questions!

Regards , ... John

First of all, it's not real estate, it's vacation ownership, it just isn't the same deed or no deed. Developers have been sustaining this for quite awhile while finding ways to suppress the resale market.

If you convert or buy into Club Sunterra vacations CSV-1, when you go to sell, all you can sell is that membership in that Trust. Club Sunterra membership doesn't normally transfer and all the new owner is buying is interest and reservation opportunity in those 19 resorts, not the 100 Club resorts.

I personally think that Sunterra should pick some price point for the Trust at which they will scarp up anything on the market, heck, it can be resold as new. That would prop up resales and end the bargains that are out there now. They could also have a publisized department at corporate that could/would work with resale buyers who pay more than that price point to unambiguously tell them the straightforward cost to re-join full Club.

[Schooner Member Find all posts View Profile Close Schooner]

First of all, it's not real estate, it's vacation ownership, it just isn't the same deed or no deed. Developers have been sustaining this for quite awhile while finding ways to suppress the resale market.

If you convert or buy into Club Sunterra vacations CSV-1, when you go to sell, all you can sell is that membership in that Trust. Club Sunterra membership doesn't normally transfer and all the new owner is buying is interest and reservation opportunity in those 19 resorts, not the 100 Club resorts.

I personally think that Sunterra should pick some price point for the Trust at which they will scarp up anything on the market, heck, it can be resold as new. That would prop up resales and end the bargains that are out there now. They could also have a publisized department at corporate that could/would work with resale buyers who pay more than that price point to unambiguously tell them the straightforward cost to re-join full Club.

Thanks Spence! Your point is well taken that the business model is one of vacation ownership ... that is after all what I want to buy into!

Your reply on conversions is clear. However, as a newbie who has read all the threads here I have been left with a sense (perhaps erroneous!) that there is a third type of product underlying Club Sunterra Memberships besides deeded weeks or the CSV1 Florida Trust. The third product I wonder about is what is being sold at full retail today. Let's say I purchased 10,000 Sun Options and Club Sunterra Membership at full retail today through a Sunterra sales office. I understand that if you were to then try to sell those 10,000 points the club membership would not transfer. My question is whether the 10,000 points on resale would be considered part of CSV-1, a UDI at the resort sales office they were purchased from or worthless??

One other question I have on conversions is the treatment of float weeks. I read a response in an earlier thread that they are valued at the average for the year. For greater certainty, if I were to look at a SVM 2 bedroom it has 6 wks at 7000, 6wks at 12,000 and 40wks at 9000. I get a 52 week total of 474,000 points or an average of 9115 sunoptions for conversion of a float week ... is this the correct way of looking at floats?

Many thanks!

[Spence Super Moderator Find all posts View Profile Close Spence]

Your reply on conversions is clear. However, as a newbie who has read all the threads here I have been left with a sense (perhaps erroneous!) that there is a third type of product underlying Club Sunterra Memberships besides deeded weeks or the CSV1 Florida Trust. The third product I wonder about is what is being sold at full retail today. Let's say I purchased 10,000 Sun Options and Club Sunterra Membership at full retail today through a Sunterra sales office. I understand that if you were to then try to sell those 10,000 points the club membership would not transfer. My question is whether the 10,000 points on resale would be considered part of CSV-1, a UDI at the resort sales office they were purchased from or worthless?

It all depends on what those points are 'based' on. Sunterra's current product is the Trust. This can be CSV-1/Florida Trust, Hawaii Trust, and now we've heard there's a California Trust. When you sell you revert to only that trust membership. There have been reports that you could still buy a deed if that's what it took to close the deal, but I've not seen that.

One other question I have on conversions is the treatment of float weeks. I read a response in an earlier thread that they are valued at the average for the year. For greater certainty, if I were to look at a SVM 2 bedroom it has 6 wks at 7000, 6wks at 12,000 and 40wks at 9000. I get a 52 week total of 474,000 points or an average of 9115 sunoptions for conversion of a float week ... is this the correct way of looking at floats?

That is how I've seen it, you've given an example of a deeded 1-52 float, there are other types like a Platinum Float at Branson or a Diamond Float at Cypress pointe PhII where the average is higher because the float is avg of better weeks. That SVM example would probably be 9000 SunOptions.