shared ownership- trade equity for upkeep and fees? - SailNet Community

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  #1  
Old 12-05-2009
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shared ownership- trade equity for upkeep and fees?

I have this wonderful Nicholson 31. I got a very good deal on it, It's worth far more than I have in it. New baby and logistics make it difficult to give it the attention it deserves. i was ready to sell it but my wife said no. She holds out hope that the weekend cruises around the Sound and Outerbank will be a reality.

I'm less optimistic.

So I had this idea to give 50% ownership to the right person in exchange for that person taking care of the upkeep and fees.

And we both get to use the boat.

There would be some provision for an annual review, optional buyout, contingencies for big expenses. I don't have any details beyond that. Ideally, the right guy would be a retired person with the time and econimc stability who does not want to drop a wad of cash.

Maybe the stake i give them would be 25% and they pay toward 50% ?

Has anyone ever heard of something like this?
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Last edited by hertfordnc; 12-05-2009 at 04:04 PM.
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Old 12-06-2009
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i could be interested, depending on where you live. you don't say. i'm in seattle. i do love that boat!
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Old 12-08-2009
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Quote:
Originally Posted by DanRichman View Post
i could be interested, depending on where you live. you don't say. i'm in seattle. i do love that boat!
I'm in North Carolina, but at this point I'm not looking for applicants.

And given the huge number of retired Navy and Coast Guard around me, i don't think i'd have any trouble finding someone.

But I had never heard of such a thing and I wondered if anyone else had.

There are lots of people with equity in a boat who lack the time or skill to maintain it and end up letting it decay and selling it cheap when it becomes too much work.
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Old 12-09-2009
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Hi I am helping a very good friend that I'm sharing slip fees with. I don't have any equity in the boat, just full access to it.

I think it works if there is trust and fairness involved.

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Old 12-09-2009
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I like toast's deal. Personally I wouldn't give any equity away at all up front. That's hard to unwind. For example, if the guy turned out to be a total flake within the first few months - and you've given him 25% equity, you know have to buy that equity back from the flake who only made one fee payment.

It makes more sense to me to have that 50% number defined for both parties (I'd actually recommend 49/51, etc. in your favor), then put whatever money the guy tosses into the kitty against that amount. They get into a nice boat cheaply, and you get some relief.

The biggest hurdle will be the definition of "taking care of the upkeep". This can leave a lot up for interpretation. So you should really spell that out clearly.

Do you have any lawyer buddies?
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Old 12-09-2009
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We share a boat with another couple, but we both went in on it together originally. We figure that none of us has enough free time to justify sole ownership, and halving the costs is a win/win. Having helpers you don't have to pay is good too. Getting someone to buy in as an equity partner may be tricky, as has been suggested. The most important part of the equation is getting the right partner(s). If they're the right people, you will all be satisfied with whatever the arrangement is. Our family once got full use of a 28' ketch so long as we maintained it every year and paid the mooring fees. The owner wanted to give it to his young son, so we benefitted from this arrangement for about 8 years. (The boat just had it's 60th birthday.) What's it worth to you to not have to pay the mooring fees? Eight weekends? Three? Getting the bottom painted-- is that worth five, or two? Do you not care about sailing on typical weekends now, when your kids are busy playing soccer or away at camp, but want to hold onto the holiday periods for some family time? How will that change in three years? Flexibility is good over the long haul, because things do change. Lots of good advice here, lots of different angles to explore. Enjoy it!
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Old 12-09-2009
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Sorry to be a buzz kill but that is my nature.

I doubt that it is a good idea. It would be hard enough for that type of arrangement to work between good friends and even then you might not stay friends.

You might look at charter rates and try that formula or a variation with discounts for longer term use. A charter is really what you're talking about, right?

There is one exception. What about a live aboard who doesn't sail? It would be easy enough to monitor and, with a little courtesy, could work. Maybe they could sail with you.
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Old 12-10-2009
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Buzzy bee here. For several seasons an owner at our club allowed me to race his C&C 35 on Wednesday nights (with my own crew, and without him on board) for the whole season because I painted the bottom and kept the teak looking reasonable. He couldn't get out of work for Wednesdays, and I had other things on weekends. My point is that just getting someone to share operating costs with you might be worth it to them, and make it more economically feasible for you, without any skin off your teeth, since there's no way you're going to be able to sail every weekend anyway. Asking around won't hurt. If there's no equity "buy-in" on their part, they can't expect to control everything, but if it's cheaper than if they were to charter something, they come out ahead, along with you.
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Old 12-11-2009
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I trade slip for use of the vessel. It has worked well for me.

Be a little careful in your choice of consorts for your favorite girl. No worse than vetting boyfriends for your daughter!

Marina fees will eat up your boat in a few years anyways. When I advertised for a partner I got over 15 replies. I keep my boat with a property owner on a canal in SW FL. He uses her when I can't. Maybe I am just lucky but I am pretty happy with the arrangement.
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Old 12-11-2009
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There are lots of ways to run a partnership. I would, like others, suggest not offering equity, however. Equity is one-time, and upkeep is forever--I don't think you'd get any serious takers. Better to sell half outright. Deals where one side puts up more money and the other puts up more work (or some other resource) can work well, though.

If you are selling part ownership, even (and especially) to the best of friends, put it in writing, and include provisions for one side not holding up their end of things and for how it works when somebody wants out. (I've been there and done that, and having expectations all clear and explicit on paper saved a lot of stress when one partner was laid off and couldn't hold up his end of things. Having it be cut-and-dried in writing is probably the reason we're still friends.)
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