Any advice on fractional ownership? - Page 2 - SailNet Community
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post #11 of 17 Old 02-24-2009
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"in retrospect I would have saved 75% on our first boat "
I think that's the same logic that explains why buying a boat and putting it in charter service is a great deal. Or not. (If it was a great deal, I'd expect the charter companies to invest on their own as well.)

The catches with a split ownership would be:

1 & 2 -The boat takes a lot of wear, equal to a charter boat now. It will depreciate more and need more repairs, i.e .the sails will get as much wear in 1 year as they would have gotten in 4 years privately. Typical life of sails? Five years. Maybe two in the split ownership program if one of the owners lets them blow out. Result, faster depreciation and higher maintenance bills.

3- Liability issues. If one partner t-bones a Hinckley...or the boat breaks free from a mooring "Well I secured it properly!" who eats the costs?

And if the partnership is wrapped in a limited liability corporation (as it should be) what does that add to the costs?

I'm not saying it isn't be an overall saving--just that it CAN'T be that simple a saving. Even if you're lucky with your choice of partners.
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post #12 of 17 Old 02-24-2009
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I know a company which offer fractional ownership program.
If you're interest, i can give you the address by PM
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post #13 of 17 Old 03-14-2009
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Hi Eric,

As I have some experience with these issues I thought I'd chime in.


Quote:
> Did you create a LLC, if so did you find an attorney that specialized in that? How much did it cost? Are there reoccurring government fees for the LLC?


This is probably the most important aspect of your relationship with your partner. I would strongly suggest the boat be owned by a corporate entity. Additionally you will need a separate agreement that dictates the terms of your relationship, it needs to cover a lot including; maintenance, insurance, slip fees and location, how the time is divided, etc... U.S. corporations do have annual filing fees that vary depending on which state you set up your company in, Delaware seems to be the least expensive for this type of arrangement and there are plenty of companies out there that will handle getting it set up for a nominal fee.

Quote:
> How did you manage the accounting?


After you have your entity set up I would suggest creating a separate bank account for it and have all partners put in an equal deposit for operating expenses. All involved should agree before an expenditure is made, when the account gets low each partner has to re-up.

Quote:
> Is it easier to contract maintenance or were you able to work out an equitable DIY approach?


The DIY approach is obviously both less expensive and more time consuming. Also it would be important to take each partners skills into consideration. If one of you is a diesel mechanic you probably do not need to worry about winterizing and oil, belt and filter changes. That being said, if a partner decides they do not like maintaining the boat anymore you should be prepared to hire a professional.

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>Have you dealt with a partner leaving and if so, how?
This needs to be clearly spelled out in the agreement. It is a certainty that eventually the boat will need some type of disposition. I'm not a lawyer, but you do need to cover all eventualities; bankruptcy, moving, disinterest, etc..

A partnership can be a great way to share a boat, but if it is not managed correctly it can rapidly deteriorate into a bad situation for all involved. Plan carefully, choose good partners, and have great insurance.


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post #14 of 17 Old 03-15-2009
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Special Interest Declaration: I am the founder of WindPath Sailing Inc. a fractional yachting company.

I checked out the site and very informative, but with a maximum of 8 members sharing a boat, how does that equate to "7 Guaranteed uses each month, plus as available use at no extra cost." 7days a month X 8 members =56 days in a month...that does not equate.
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post #15 of 17 Old 03-15-2009
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Quote:
Originally Posted by stpabr View Post
I checked out the site and very informative, but with a maximum of 8 members sharing a boat, how does that equate to "7 Guaranteed uses each month, plus as available use at no extra cost." 7days a month X 8 members =56 days in a month...that does not equate.
Thanks for your interest! Great question. There are 2 time slots in each 24 hour period (usually 9am to 5pm, and 5pm to 9am the following day). We base our guaranteed use on a short 28 day month, here is the simple math:

28 days in a month
2 uses per day
--------(multiply)
56 uses per month
8 members per boat max
--------(divide)
7 uses minimum per member


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post #16 of 17 Old 03-15-2009
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That assumes that people can get the morning off to go sailing on a week day... which isn't the case for a lot of people.

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post #17 of 17 Old 03-15-2009
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Quote:
Originally Posted by sailingdog View Post
That assumes that people can get the morning off to go sailing on a week day... which isn't the case for a lot of people.
Excellent point sailingdog, actually a lot of our members do use the boat during the week, both for day sails and extended trips.

We are currently evaluating implementing different membership plans. Our standard plan as described above. A “weekday only” plan that would be considerably less expensive, and a “weekender” plan that would double the amount of weekend use for a premium.


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