About VCI Residual Values
I am surprised that you think you will not get your full residual. If the
resort is sold for $100,000,000 or more, we will get our full residuals...
that is...
200 Villas x 50 weeks x $10,000 residual, if it is sold for $100,000,000
or more we get our full residuals. And it is worth that much EASILY.
Anyways... here is how it works... They are supposed to sell VCI to a
third party, such as Marriott or Hilton, etc. and to the highest bidder.
That money goes to the Fiduciary, which is Banco del Atlantico or
whoever is now in the place of Banco del Atlantico.
The fiduciary will FIRST pay us our guaranteed residual...
THEN the fiduciary will pay the developers an amount equal to our
guaranteed residual...
And finally, if there is any money left in the kitty, it is split fifty-fifty,
between us and the developers.
So... the question is : Is VCI worth at least $100,000,000 ?
The answer is: Definitely. It is worth more, but $100,000,000 is
enough to show that we all get our guaranteed residuals.
Let's look at the numbers:
As a Marriott or Hilton you get 200 Villas, each worth at least $1,500,000.
to you.
You also get a lot of empty and valuable land at VCI that you can still
develop something else on, like a restaurant or a theater or shopping mall,
etc...
So the answer is YES, it is worth at least $100,000,000 to Marriott or
Hilton... I'll bet they would pay more for it, if they could buy it.
Look at the numbers: Suppose 50% of the members renew for $20,000
and 50% take their residuals... .
Those that want to cash in their residual will leave a Villa that can be
sold for $40,000 on average.
200 Villas x $20,000 x 50 weeks x 50%=$100,000,000
and
200 Villas x $40,000 x 50 weeks x 50%=$200,000,000
minus
200 Villas x $10,000 x 50 weeks x 50%=$ 50,000,000
Again, VCI is worth plenty more than $100,000,000 so we will get
our full residuals.
How much would you pay for 200 Villas in Can Cun with tennis courts
and all the installations of VCI if you were Marriott or Hilton or whoever?
What do you think 10,000 meters (or how many meters is the property
built on?) in that section of Can Cun is worth? An architect friend of
mine told me that area is worth more per sq. meter than here where the
Mayan and Royal Sands etc are, because it is closer to Can Cun city and
is more commercial.
My C Villa in week 52, with a guaranteed residual of $14,500 sells for
$50,000 at Royal Sands and also at Royal Haciendas. So I think it should
sell for $50,000 here, too. This is not the VCI that I bought 30 years
ago... it now has Royal Sands, Royal Mayan, Royal Islander, Royal
Carribbean and Royal Haciendas as an extra privilege and extension.
This is A LOT more than I bought when I bought in 1977.
So again, it is worth more than $100,000,000 so we get our full residuals.
and we might get more...
In my case, I think I might get $14,500 or more for my 52 C, when it sells for
$50,000 or I can renew for $25,000... which is pretty good compared to
other week 52's in Can Cun that are R.T.U. and don't have the benefits
of being affiliated to the other Royals)
If you are Marriott, you are buying 1 dollar for 80 cents, since you
are guaranteed to sell each 50 week $1,000,000 Villa for $1,250,000 ...
aren't you? 25 x $20,000 plus 25 x $40,000 minus 25 x $10,000
If you are Marriott and you build a new resort, you have to find 10,000
new customers... Here you already have 10,000 old customers, about 5000
of which will stay with you, for $20,000 per week, on the average. plus,
you have 5000 maintainance fees, already...
So, somebody will surely buy it for at least $100,000,000 so we will
get our full residuals.
At $40,000 per week average, I'm sure it will sell out in 3 years at the
most because of the association with the other 5 Royal Resorts,
including one in Playa del Carmen. Which other timeshare on Planet
Earth gives so much, and has a proven track record as the best
timeshares on Planet Earth?
VCI may seem like the ugly duckling to you, but it is prime prime
property in the best area of Can Cun... It is like the Waldorf Astoria of
New York... it is old but it is sitting on the best prime property in the
city... It is much more valuable and expensive than the forests of
Playa del Carmen. It has 90% occupancy 365 days of the year. Like it
or not, CanCun is much more valuable and in demand than Playa
del Carmen, and VCI in CanCun has and will have far more demand than
Playa del Carmen, even if the Royal Haciendas is or will be ritzier and more
beautiful..
I [believe] that we will get our full residual value, or else
the developers won't get anything themselves... and they haven't been
maintaining these resorts like new for no reason.
In fact, I am so sure of it that I bought a week 52 two years ago, for
$6000 with residual rights, because it is like a sure winning lottery ticket
to me... I think it will be worth MORE than the residual value. I am betting
that my week 52 B unit Lagoon View (which is actually a very beautiful view)
will sell for, say $40,000, and that I will be given the option to receive
$6,000 or more, or renew a $40,000 villa for $20,000 (because I own
half of it) for 50 years this time, at the end of which we'll probably get
100% residuals.
And if I buy for $20,000 and then sell it to somebody else for $35,000
(which I can do, because they are selling for $40,000) I made a very nice
investment. Or I can rent the B Villa for about $2500 per week, which
is what I bet it will cost to rent after 2007.
I am guessing of course, but... that is how I placed my money.
So... what about the resales at Royal Mayan, Royal Caribbean, and
Royal Sands? My friends, this is the best part of it... If V.C.I. goes UP,
as it has to for us to get our full residuals, everything else goes UP with
it too. They'll all go up, as they should have a long time ago.
By the way... I wrote an article about this many years ago, in July 1997,
which is in the TUG Experts Advice section, and it says about the same as
I wrote here now...
(Residual Values at the Royal Resorts, Can Cun)
http://www.tug2.net/advice/vacintl.htm
Of course, I am only guessing, and my guess is not any better
than anybody else's, so it is just a guess... I believe we will get AT
LEAST our residual values...
- Ellis