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  #1  
Old 04-05-2011
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Used boat budget and "investment" question

Hi all,
I have never posted here before but have lurked around for quite awhile. My wife and I are considering the possibility of buying our own boat but are totally unfamiliar with the market. Not being ready to buy for the next six months or so, didn't want to go really crawling through boats yet and wasting seller's time.
We are pretty much capping our budget at 20K, live in the SF Bay Area, and thinking in the 27 foot ballpark, something suitable for the bay and for coastal cruising.
In that price range, should we be expecting to find boats in pretty good shape or just adopting someone else's headache?
My other question is around upgrading the boat and selling for a profit. While we both have professional type jobs now, pretty young (34), in my teens and 20s I was a cabinetmaker and am very good with finish carpentry and could do a lot of interior upgrades myself (I would shy away from anything needing structural work) In the yacht market, is there much of a place for upgrading and selling for more than you paid?
We are totally new to the purchase market, or the process, so any advice would be very appreciated
Thank you
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  #2  
Old 04-05-2011
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I'm in the SF Bay also. Six or seven months ago, my girlfriend and I bought a 1972 Ericson 27 for $4000. It had some problems, but nothing that serious or not easy to fix. It had no motor, so we paid an additional $2000 to fix that with a new outboard; we also immediately paid about $1000 for a bottom job. It came decently outfitted, but most of the stuff was pretty old, so we've been buying a lot of new stuff. I haven't yet done any repair work on it more serious than replacing light bulbs, but we've been on more than a dozen sails and are generally pleased so far.

My general impression is that the SF Bay has a huge market, and you can buy local boats at pretty much any price you want, with what we paid being close to the bottom end of it. The more picky you are, the more price goes up. The more you're willing to wait or be flexable, the more the price goes down. Regardless, you should never buy a boat that has serious problems, particularly one that would prevent actually sailing it, because it's just not worth it; there will be perfectly good non-broken boats at that price.

I'm not very experienced on the side of selling boats, but I have some thoughts that might be useful. Restoration work can increase a boat's selling price, only to a certain point, and not necessarily in an economical way. No matter how substantially a boat has been upgraded, it will be very difficult to sell past the normal high end for a boat of its type. Additionally, for most normal upgrades, each dollar of upgrade will be worth less than a dollar of additional sale price. The other factor is maintenance; a lot of expensive, time-consuming operations, such as painting, varnishing, etc., aren't really upgrades at all, but just regular maintenance, or compensating for deferred maintenance. These activities won't raise boat value much at all.

Since you're a professional in the bay area, it's most probable that all boating activities will have more opportunity cost (foregone income) than you could possibly get in fixer-upper income, given your decent pay rate. So my general advice is that you should consider general boating stuff as more of an expense than an investment. I think a buy-low-sell-high fix-and-flip business plan is possible, but the yields would probably be seriously unimpressive, compared to doing a 9-to-5 whitecollar.

One factor to consider is that the SF Bay has a very strong racing community. If you want to get involved in that, you should factor that in to your search.

In general, though, the way to get started is to look at what's out there. Sources that were good for me were, in approximate order of usefulness: Craigslist, Latitude 38 Classy Classifieds, Yacht World, sailboatlistings.com, Sailing Texas Classifieds, bulletin board outside marinas, Ebay. Start looking at that, then visit a few marinas around the bay, particularly the ones that are closest and are most likely to be your marina. See what sort of boats they have, and talk to anyone you can find there. A lot of people have suggested yacht clubs or sailing clubs, but it's not something I've personally gotten into yet.

I hope this helps. Good luck!
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Old 04-05-2011
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In terms of upgrading and selling for more; not really unless you buy a "marina boat"; and usually those boats need way more than just cabinetry work. Hardware is very expensive; slip fees more; and that's where you lose the cost effectiveness of boat buying and re-selling.

27 ft boat would be about the smallest keelboat you would want to be comfortable on SF Bay. Anything smaller than a ~36 will get wet and be rough on heavy wind days. Racers sail boats this size and smaller but are also prepared to be taking a green shower all day also. I think you could pick up a 'fixer' in the 30' range for under 20k. Look for a well kept but in need of cosmetics Newport 30 or Catalina 30. If you want more performance look at an Olson 30; but might be hard to find one as they have an active racing one-design fleet. Express 27 would also make a nice sport boat. You might also look at a Wylie 30.

Going out the Gate and coastal is another proposition. While smaller (30' or less) boats do go out; crossing the SF Bar can be treacherous even for larger boats. I don't know what your sailing experience is; but be careful when it comes to going out the gate, especially if you are in a boat less than 36' LOA. We have gone out many times when the predictions seemed OK and turned back after getting into steep 12-15' swells with cresting waves further out. Don't sail out on a strong ebb if there is any swell running. It only makes the swells 'stack up' taller and steeper on the Bar.

Take your time. It's a buyer's market. If you find something post some info here and ask for advice. Fall and winter weather is the best time of year to sail in light winds between storms and get acquainted with your new boat.
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Old 04-05-2011
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Welcome to Sailnet

You should be able to find a boat in pretty good shape inthe 27' range with your budget. Like this one:1986 ERICSON w/Oceanside Harbor Slip Sloop Sail Boat For Sale - www.yachtworld.com

As far as buying, upgrading and selling for a profit, it can be done but it is rare even for people in the business to pull off. If you buy a 25 year old boat everything you add to it will be at today's prices. The best investment is in pleasure, customizing a boat for yourself, to get just what you want. Especially in today's market with so many good values out there.
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Old 04-05-2011
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Keep in mind that any boat, even a brand new one, will require constant repair and maintenance. If you happen to find the right deal, invest sweat equity and just inch a profit from the increased value, the simple cost of carrying the boat for any period of time will take it all back.

Like many big toys, there are ways to partially offset your ultimate cost of ownership, but it is a cost.
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Old 04-05-2011
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Buying any boat, and thinking it will be an investment, is simply an error of fact.

You may find yourself "trading dollars" as we say in the south, but an investment implies long term gain on your purchase, and that is very unlikely...

Buy a boat to enjoy, piddle, look at, sit on, sail, clean, update or repair.
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Old 04-05-2011
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As a general rule you can expect to get back about half the value of your capital improvements when you sell a boat, ignoring the value of your time in any of the related work. Given the cost of parts and materials, I do not think many people ever make a profit on a used boat, let alone get back most of what they poured into it. Generally the cheaper the purchase price for a boat considering its type and size, then the more it will end up costing you to own.
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Old 04-05-2011
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As far as the investment stuff, these are pretty much the answers I expected, but wanted to ask to get other's opinions. I appreciate it.
I have looked at listings and seen quite a bit in this area for my price range, but from an ad, you just can't tell very much, and aren't far enough into it yet to be doing more than browsing and learning about the process.
Best part about it though, buying something wasn't my idea, it was hers, so im not in the doghouse for wanting to buy a toy!

Last edited by benajah; 04-05-2011 at 07:53 AM.
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Old 04-05-2011
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When buying a House OR Boat fixing stuff that should already work may make it more desirable on the resale market but it is always questionable how much you will get back

The less you pay the more likely the systems are near the end of there useful life
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Old 04-05-2011
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There is one potential way to "make" money on buying a boat.......ot saying you will pull this off or not. One person on here is sort of doing that right now, that is to find an older woody, that needs work, find a buyer up front who is willing to pay you to do the work. Otherwise, as mentioned, not sure a classic plastic yacht will succeed in this type of investment/idea. There are probably one or two boats per 100, that you might pull off something similar to the above woody idea, again, you have to find someone willing to pay your time to do the work.

If this is for you, buy what you like, put some time and money into her, enjoy her for a few years, then sell, knowing you time enjoying what you did is the payback per say.

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