Timeshares w/ Alexandra Olson

Hey , simple passive cashflow listeners. Today, we are going to talk about giving up your time, share, why they’re not the best of investments and what the process is to unload them. And I personally am always looking to take advantage of a distress. Seller, whether it’s an apartment building or I’ve interested in these timeshares to buy, but not from the the first buyer, but the second owner.

I’ll get into this and this kind of goes into the whole hobby lately. I’ve been having buying cars lately I’ve been realizing it’s not the greatest to buy a car new, all this, because of that, you take that big gut punch as you drive it off the lot. But as you, if you pick up a one to two year old car, you ride that decay curve down and then you sell it at some point before the warranties expire or shortly thereafter of you can capture a low cost of ownership.

And it’s very counterintuitive to the course. But as we’ve seen through the first two or 300 podcasts, passive cashflow land things normally are, but yeah. Why don’t you introduce Aleksandra Olson, who is from. The you guys want to check this out on your computer to give up my time, share.com, but welcome Alexandria.

Thank you so much for having me. Yeah. So I’m from give up my timeshare. We help people to get out of their timeshares. And we also, of course always sourcing a buyer for that, seller that is distressed, that wants to get out whose kids don’t want their ownership. yes, we are uniting sellers and buyers.

Some of them are taking over ourself and that’s our business. Friends don’t let friends buy timeshare. That’s a pretty kind of a crummy investment. It’s scabbing how they do things, right? You see them here in Hawaii and every time I go on vacation, you got like people handing out flyers and like trying to trick people into talking to them, especially at Las Vegas, by these timeshares. Let’s go through the process. So young couple, they get that booze loaded, the buying this thing up. How does somebody really end their time share? What’s the process like? First of all, if there is no mortgage on the property so it’s free and clear the maintenance fees are current.

Then it comes down to a matter of finding a new owner. There’ve been a lot of scams that have emerged about trying to help people say, Oh, we were frauded in the purchase or, all these different things. But what it really comes down to is this is deeded ownership. This is real estate. So you do need to find a new buyer just as you can’t walk in the street and declare, I don’t want this home anymore.

The property tax, bill and HOA fees and things are still gonna find you whether or not you’ve declared that to the world. It’s the same with a timeshare. It is a deed and you need to find a new buyer and that’s really the trouble is that the resell market has diminished incredibly in the last five to 10 years, just because of the different travel options that have emerged.

And just so that we can pinpoint it because every time people ask me why do you. I’m a real estate investor. I have a time share. I’m like, dude, that’s not, you’re not an investor. You just got suckered into a deal, but I can never explain. I can’t explain to myself. I just walk up upset and frustrated.

My understanding it’s because when people buy a timeshare, they not only is it an expensive and when you figure out the cost of ownership that you do, like a life cycle cost analysis, it doesn’t start a good deal. But also you get into these nasty arrangements where you have

annual maintenance fee. And then like you have a termination fee since they like negative equity. If you can explain that a little bit. Sure. It’s ultimately a timeshare was once sold as an investment and there was a resell market now because of Airbnb. VRVO the internet. Consumer confidence and being able to plan a trip short notice and having a condo, with accommodation, similar to the timeshares where you have a kitchen and space, there’s just no resale market for it.

That’s gone away. So what you have is it’s basically a prepayment of vacations and it can be really quality vacations. I, I actually believe there can be some value in the ownerships if you use them. Now getting back your original upfront investment that’s, as you’re speaking to them, With auto purchases certainly buying resale would be, much more advantageous.

You don’t have that 30 grand or whatever to recoup from the upfront. It can be a good value. I always tell people at our seminars or whatever, don’t feel bad. 10 million homes in America owned timeshares. And, you bought this because you wanted to spend time with the people that you love and a beautiful place.

And if it gave you those good memories, you probably wouldn’t trade those for the money. That being said, It’s really, not a good investment because at this point, and you can jump online, make reservations for anywhere in the world for this weekend and pay less than what the maintenance fee is.

In most cases. And that’s a bash on timeshares that much, but I got a buddy. See he bought him because it forces him to go on a vacation. If not, they never go on it. And, for. For kind of higher net worth families that are very tightly personality workaholics. It needs stuff like that.

Absolutely. If it ends up being the catalyst to create memories with the people you love. That’s awesome. And that is a great reason to look at owning one. Really, for probably most of your viewers, the maintenance fee annually is nominal, but if it does, force that commitment to doing the trip and knowing, okay, we have a week we’re going to do every year as a family.

Then it comes down to just picking something that’s going to offer the most flexibility and sometimes value. Isn’t the most important thing. But the economics have shifted, like you said, right? Because people can just go on Airbnb VRVO et cetera. Just book it. And it’s not like hotels, they don’t have availability.

Let me show you. You have to pay 600 bucks a night care on Hawaii, but there’s no lack of, I. Right. And, at the same time, like doing so many vacation rentals with timeshares, I definitely see that, if you are willing to understand the system, there’s no learning curve on the internet, that kind of thing.

Actually, most times your owners are older. Rather than young couples, it’s typically retired couples that now want to go and travel. They want to provide trips to their families. It’s not to say that young families don’t buy it, but more commonly the consumer’s kind of a baby boomer type. Just less educated on, what’s a good purchase and they just don’t have lack of information.

They just don’t care. I don’t work the system, so many ownerships that we take over, we’re able to get good value out of, book weeks in Hawaii for the equivalent of about a thousand dollars of costs. You’ve got to know where to click online and have the patience to do that.

What’s the process, somebody wants to sell their timeshare and then we’ll skip over to, I think most of us. Don’t really want, we want to buy timeshares from these distress buyers or sellers get into that at the end, but what’s the process if somebody wants to unload it, so if they want out of it what they would do is I recommend that everyone first contact your resource, see if they’ll let you out for free. That does happen on occasion, usually with, higher end brand so explore that option first, plus, you want to know that, you didn’t go and pay someone to get out of it when you could’ve gotten out of it for free through the developer.

That would be step one. If that’s not the case, then you know, you need to go through a company that can secure a buyer for you. And I would encourage everyone to be very careful and not pay anyone up front. And I’m sure that your viewers are certainly a little more savvy than many of the people that have fallen victim to the scams.

But in general, don’t pay anyone upfront. If a client comes to us, all we’re going to need is the deed. A copy of the deed. If they have it copy of their IDs, copy of a recent maintenance fee bill, we can then price it out. We use a calculator, so we already have pricing preset for every resort in the world.

And get them a quote within minutes, and if they want to move forward, we send them an e-sign contract open escrow and it follows a normal real estate process. So we’re never paid until the close of escrow and we don’t even collect payment. It all goes through the title company. So it’s a very secure transaction and.

A guaranteed one. If we are not able to secure a buyer on our own, then we’re going to transfer it into our own name and turn it into vacation rental. It’s a guaranteed quick process. And what our clients are looking at is, Hey, we don’t use this thing. We’re paying for it every year anyway. And then, it’s going up at six to 10% a year.

We’re just throwing money away. Let’s, basically stop the bleeding . So what’s the normal commission structure like, with real estate. No deals. It’s 6% is usually the commission. And then how does it, what’s the normal range, to keep in mind.

 

 

Are you asking, what do we charge? Two, three to five years of maintenance fees is a good rule of thumb. The exception, there are some outliers to that which would be resorts that have very high transfer fees or require prepayment of two or three years of maintenance fees. Something like that.

I do have a webinar on our website that explains why we have to charge in the first place, all the scams to watch out for, if you’re just starting to explore how to get out of a timeshare and really covers the entire process. Yeah. What’s one of the better ones. The less nasty wants to get up and what are like the worst.

Okay. Probably the simplest would be a straightforward deeded week what’s happened over the last 10 years in the industry is a lot of resorts have moved to a, trust-based like it’s a real estate trust where they now, upgrade all the inventory into that trust. And it’s.

It’s points that the client is using collateralized by, this real estate trust. Those are a little more difficult because it’s basically a membership and you have to have the resort approval before you can transfer your title. So I am always like that, I think. Yeah. Disney your diamonds, your Wyndham’s, the big players.

And I prefer to deal with. Straight deeded, old legacy properties where someone owns week 42 and unit 10 that’s, always the quickest and easiest transaction that being said we’re familiar with and pride ourselves on being the best in the world at, getting through the process with whatever property it is.

That’s, how we’ve built. Our whole business model is around not getting paid until we’ve completed the transaction. And it has, of course encouraged us to be the best at getting it done. I’m not too familiar with timeshares. Normally they cost, what about 50 grand in cash in the beginning?

You can’t finance it, right? Average is about 20,000, you can finance usually at about 18%., and then they’re putting in 20 grand, the maintenance fees are about how much for a year is very typical. Okay. So for me to dump my 20 grand timeshare that I might have access to what, five, 10 days out of the year or something, correct?

Yeah. Typically seven days a year is what that will get you. I would have to pay maybe five grand to dump it and then get the 20 grand back or be a little bit more. There will be no getting the 20 grand back. And that’s the hard pill to swallow is that this is not an investment that, has any return other than in memories.

So if you used it had some good times great. But whether or not you use it, you’re paying for it forever. And there is no one on the other side, that’s going to pay for this repeat at this point. Okay. So what if I want to buy one of these things? How much could I buy one of those four? There are thousands of timeshares online for free?

Is that available on your guys’ website? Or how would I get for this? Yeah. This is actually never really come up in this kind of a setting. We don’t advertise it in that way. We do actually use like a shared Google sheet that will list all of the available bums on. So I guess the thing would be if someone had interests that was, listening to this, or, I can certainly send you.

Thanks for that. And we have seen, over the last few years, some nice portfolios be sold or, taken over by larger vacation rental companies. And if you want to work at, you can do well. You can make 10, 20% above the maintenance fees on these ownerships and sometimes much more.

It’s just a matter of, a lot of times, our owners don’t want to become an expert on vacation rental to deal with their one week a year. Now, if you’re doing like we do where you have a whole bunch of them and you’re making a business out of it. Yeah. Of course you can do well. And we are happy to give them away if there’s interest.

Our business model is, to get paid for getting someone out of it. We don’t worry about trying to money, reselling them. If I wanted to stock something here in Hawaii, just use an example like that, that somebody had previously paid 20 grand for maybe paying five grand a year. How much would I have to pay to acquire something like that for myself?

Oh, for free actually paying rather than the buyer in these transactions. And that’s what can be, a little confused. It’s so unusual, right? There’s not many things where you pay to sell it. And it could be like, not want to have it makes me not want to have it now. It’s like a, it’s like a monkey on your shoulder that you get for free.

And now you have that monkey. There are certain ones that, can be a good value. And if you’re going to use them great, we get a lot of Hawaii inventory. It’s a specific week, in a specific unit, if you’re going to go and use it, to pay 800, a thousand dollars for a week in a condo on the beach in Hawaii is amazing.

I don’t know. It’s just that these folks might live in Nebraska and aren’t wanting to fly far because of COVID now. And they’re looking at, Hey, we didn’t go the last couple of years anyway. And we paid, let’s just dump the thing. Yeah, I’ll definitely get on that list and I’ll be stocking it a little bit.

Cause I’m like one of those people that I need that motivation to actually spend money. If not, I just keep it in my bank or so it might be good for folks like myself with our listeners. Sure. To make a commitment, to doing something, With your loved ones at a specific time of year that you can plan around.

If that’s something that is of interest, we’re happy to, give you any of the ownerships that our clients are trying to unload. Anything else that you think listeners would be interested or you get very commonly asked on this topic that you think need mess. Probably, the biggest thing that I always want to communicate is to be very careful.

Unfortunately, the timeshare industry is not very regulated. Especially on the exit side of the industry, getting people out there are almost no regulations. And so there are a lot of scams, any kind of situation where you’re, bringing money to a transaction. Having to pay up front. If it’s not a legitimate title company, just stay away from it.

There are unfortunately a lot of bad players in this space. And I would just caution anyone to, do a little background research, look someone up on BBB, make sure they don’t have attorney general complaints because there’s very few out there that don’t. Yeah anybody can get on BBB.

I’m on there. I have an a plus rating, but just joking. But yeah, if you guys want our reach out to Alexandria, you can go to give up my timeshare.com. Yes. Any other, that’s probably the best way to get ahold of you guys the best way or a quick Google search, Alexandra timeshare, I’ll pop up, watch our webinars that will give you a lot of background information.

Feel free to reach out. If you are wanting to, have access to what properties are we in loading right now, we can definitely hook you up if you want to step in as a buyer. Or if you have one that you want to get out of then definitely start with watching the webinar and reaching out.

And I’d love to chat with you about it. Hey guys. So if Hey, no shame. If you bought a time share, we all make mistakes in the past. Luckily you can unload this monkey off your shoulder to somebody else be a, this means, if you guys have any friends or family members that need this information, feel free to pass this along a little hint, hint in there for you.

But Hey, if you get rid of that $5,000 a year payment, right? That’s a rental property of four years, or if it’s another syndication deal I think once you realize that there’s this alternative investing world out there, you start to look around the house in the points and the couches money all around.

You start to look to really deploy that money and you got a lot of dead Basie equity or Astro going out the door, one of these timeshares and you do the math, right? If you’re investing, making 10, 20% returns on your buddy with a tax advantage basis, Who cares about a $500 hotel timeshare that you get access to five times a year.

You could probably go like baller status and the Maltese for a thousand dollars a night, right? With the cash that you have in cash is King cash gives you freedom. Timeshares. You’re just stuck in that arrangement, but thanks for listening guys. Make sure you join the investor clubs and we’ll pass the cashflow.com/club.

All right. We’re back guys. Now it’s time for a little real talk with Alexandria as my personal questions here, which I use my podcast to ask my selfishly questions. All so if I’m thinking about buying like a Lonnie, just use that as the example, which is the Disney berserk here at Walker.

I got to pay the annual maintenance fees, which is like five grand a year for something like that once. Oh no, probably about 1200, a hundred while. So 12 pay 1200. And that gives me access to the property for how many nights a year you think, it will depend on this time of year, what week it is, what size unit, but around, a thousand to $1,200 for a week, pretty much anywhere in the world.

Okay. And of course I live here in Hawaii, so it’s the same season every freaking day out of the year. And I live here. So that would be ideal. So maybe I’m just trying to get a price for a day in my head, so is that five days? I find with doing the vacation rentals, we end up averaging around 80 to a hundred a night for what our cost is to make a reservation.

Okay. But this Alani thing is really exp, to stay there is like $600 I could think is a complete rip off. I’d never do that, but that’s what they charge. So that’s $1,200. Basis, they can charge $50,000 up front for a week at a place like Aillani because, then it’s all about the, Oh over the next seven to 10 years, you’re going to break even, on, because you’re only paying a thousand a year and, so you’re saying if I pay like my maintenance fee of a couple of grand, for that one, maybe. I would be able to stay there for five nights or something like that. So an average night of 200 bucks. Yes. It would be unusual in timeshare to ever even average paying $200 a night for somewhere.

Okay. That I can do. Cause I have to take these quarterly break out to do like personal goals and stuff like that and family stuff. This would actually work to that, yeah. And if know when you’re going to be doing those breaks, for the planner, for someone who’s organized plans ahead and schedules and is fine planning a year out, two years out, time’s just going to work very well for, that’s just not how people plan travel typically anymore.

And that’s where, there’s been this imbalance where about 80% of timeshare owners want out of their ownership. Yeah. And for you guys, listen, this is where it’s important to like the imbalance, right? So many people in California, Hawaii, Seattle, New York, they all think the buy their house.

This is why I see do the complete opposite. The imbalance. There’s so many desperate landlords out there that would love to rent their house for two to three grand to somebody like you guys. That’s where you guys make money on the Delta, just like in this circumstance. Cool. I’ll I’m going to try this out and, maybe update you guys on a future show.

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