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Go Back   SailNet Community > On Board > Boat Review and Purchase Forum > Any advice on fractional ownership?
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Thread: Any advice on fractional ownership? Reply to Thread
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Topic Review (Newest First)
03-15-2009 05:16 PM
windpath
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.
03-15-2009 02:06 PM
sailingdog 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.
03-15-2009 01:19 PM
windpath
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
03-15-2009 08:46 AM
stpabr 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.
03-14-2009 06:03 PM
windpath 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.

Quote:
>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.
02-24-2009 03:23 PM
CatCo I know a company which offer fractional ownership program.
If you're interest, i can give you the address by PM
02-24-2009 12:10 PM
hellosailor "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.
02-24-2009 01:46 AM
sab30
Beneteau fractional ownership

Quote:
Originally Posted by Delirious View Post
A friend of mine went through this and he soon soured of it. When his turn can up there'd be moldy food in the iceless icebox, a full holding tank, no water in the freshwater tanks or diesel in the fuel tank, broken equipment, etc. He got out of it after two seasons.

It obviously depends on how you choose your partners.
I hope 4 months isnt reviving an old post...anyways I think the information provided here is assuming a private fractional agreement. I know a friend who is involved with the Beneteau fractional program and in retrospect I would have went this way for our first boat.

Four way split on a pre-ordered model with full options...1 week a month for 12 months (We never used our own boat for 12 weeks..more like 8 cumulative)..cleaning and maint agreement between owners (always a clean well kept boat) all four owners have a vested interest in the boats upkeep.

This isnt a plug for them as our plans are for 2-3 yr liveaboard cruising but in retrospect I would have saved 75% on our first boat (including depreciation) and and used it as much as we did..with even 4 more weeks available...for a 3 yr contract

I really think this type of arrangement is going to be the way of the future unless you need the boat more than one week a year, live on it, or just have to have your OWN boat and eat the 75% savings. Too many people seem to feel guily taking vacations elsewhere as so many funds are being allocated to "the boat" I think Beneteau's new deal offers the best of both worlds for the coastal cruiser who wants ownership...IMHO
10-08-2008 01:48 PM
Moonfish In addition to SailTime/Hunter, Beneteau has their own fractional ownership program, and Catalina seems to like working with Windpath (I think that's the right name). Those established companies are tailored for local day sailing/coastal cruising. The majority of people I run into that join these programs seem to be satisfied, though there are those who are not. Personally, I would think it to be a tough decision to make, as I LIKE owning my own boat and throwing money into a big hole in the water...

Also, there is a brand new world cruising fractional ownership program called seafaring360. They use Beneteau 57s and Shannon 52s to create a four-year circumnavigation.
10-08-2008 12:19 AM
AntiguaRum All very good points. Thank you!

I have looked at Moorings ad Sailtime. If they had a base in the area I'd be tempted. We have a few clubs, but they are geared to daysailing. You can charter, but the cost is not much less than the much nicer boats that are available exclusively for charter in the area.

Mike,
You raise a very good point about the purpose of owning the boat. I hadn't thought of it that way. I've seen many more adds for fractional boats for racing than day/cruising. For now my "race" boat is in the garage. But the wife doesn't like getting that wet. We need a sea kindly cruiser so she doesn't turn green!

Jonathan,
Can you query your brother-in-law for any pointers he may have for me? It would be great to hear about how the work out dissolution, improvements, etc.

Eric
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