Purchasing a Boat to Share?

[brienw]

I am wondering if anyone has heard of a group of cdory lovers, say 3 or 4 people going in together on a boat to have as a time share? I am in Seattle and would love to set up a time share with 2 or 3 other people. There are many ways we could arrange this so that all of our concerns, legal, cleanliness, and whatever else comes up, could be addressed. However, sharing the cost of a boat could make owning a beautiful cruiser easy and affordable.

I would love to hear ideas and thoughts and or interest from people.

Warmly,

Brien Wood
www.brienwood.com
206.571.3069

[iggy]

I've heard pros and cons, but this is something I'd be interested in. I live in Portland, but have family in Seattle and am up there often. Being on a trailer would provide a lot of flexibility.

Finances not so good at the moment, but perhaps possible late summer/early fall. My bro successfully shared a Catalina 30 for years at Shilshole -- worked fine. Everyone needs to be on the same page regarding scheduling, maintenance, cleanliness, etc., but I would encourage you to keep the issue alive.

Good luck!

iggy

[Will-C]

Hello,
I believe Les from www.eqmarine.com discussed this at one time. Les is well respected by all. His toll free number is 866 679 4783. EQ Marine is located in Oak Harbor, Washington
D.D.

[Matt Gurnsey]

I have seen good friendships blow up over a joint venture like this, and others become stronger, so a lot of it has to do with who the individuals are, and how the contract is drawn up.

And I would definitely have a contract that spells out how maintenance costs will be split up, and who pays for equipment that gets broken or damaged. What happened if one person wants to sell their share, do the other get a say in who buys in? Do they buy out the portion of the person selling? A handshake agreement probably isn't enough.

It can be done, as I know of three families that shared a 36 Fairliner, and were still friends at the end of the ownership.

[thataway]

I have been involved in two boat "Partnerships"--and as Matt says, you need a clear contract. Both were two family boating relationships, involving people who already knew each other. One was a 45 foot racing boat, and we had a full year's schedule, as well as which long distance race was to be involved. The other partner was welcome aboard during a race--but there was only one skipper.

A C Dory is much different than a boat worse expenses exceeded the cost of a 22 foot boat each year. But you still have to have very clear lines. One of the most important items which is often ignored, is how the partnership is to be broken up and the boat sold. Other things to look for are the level of expertise, insurance issues (since it may be more expensive, and depend on DMV records, Credit scores and education as well as experience). Also who pays deductables if there is damage to the boat etc.

It can be done, but takes a lot of co-operation and understanding.

[Capital Sea]

Some things to think about. I owned 1/2 and then 1/3 and then 1/2 and then all of the same boat over a 7 year period. We all started as friends and the boat relationship ended as friends as well.
We had a clear agreement and ground rules for investments in gear. More than one name was on the title, but then we paid cash so this did not create an issue. The insurance company charged a surcharge of 10% or so on the policy (they don't like partnerships).
Each time we made a change in ownership, we were able to agree on the market value without much difficulty. This could be an issue with a $50,000 boat. Ours was worth between $10,000 and $12,000 so a 10% dispute about 1/2 or 1/3 of the value was easy to negotiate.

It is important to dwell on how the partnership will buy out a departing owner including notice and what time of year this can occur. Also since you may make improvements over time, it is best to get an understanding about what down the road costs are part of the plan.

Use was never an issue for us. With a boat this size though, summer use could be an issue and limited events like shrimp season could pose a challenge.

In the end, it is all about who you partner with. I would recommend going in with folks of like age, chapter in life, and income.
Good luck.

[tpbrady]

I would think the best approach is to set it up as a rental with discounted rates to the owners. A dealer or single person could manage it. You could limit rentals to C-Dory owners. As a business, it wouldn't get into the way of friendships as easily. I've toyed with the idea a couple of times in Prince William Sound where you rent the boat for a week with a route and anchorages set up in advance on the plotter along with a written trip guide with all the appropriate cautions on weather, communications, etc.

I'd be interested in that type of arrangement.

[iggy]

Along these lines, does anyone have experience boat-swapping with other experienced owners? For example, rather than towing one boat from Puget Sound to Chesapeake Bay, and another from CB to PS, the owners could fly cross-country, swap cars and boats, and optimize their time, energy, and money.

Perhaps this has happened quietly behind the scenes? I can appreciate the logic behind keeping this rather private, depending on the circumstances.

This opens the possibility of renting boats out, or providing bartering 'credits' for a pool of boats around the country.

I'm not currently a boat owner (previous sailor), but I've taken several recent USPS courses. I'm not at all sure that I am (as yet) competent to take someone else's boat out for an extended trip. Likewise, I'm not sure if I owned a boat that I'd want someone like me renting it . . .

But I think these are all interesting possibilities, especially with such a congenial and considerate group as the C-Brats. Or maybe most owners would consider their boat just too 'personal' to take a chance on other people using it (as I might very well do as an owner . . ?).

I'm not trying to push any particular viewpoint here, but I'd really like to see all these variations discussed in more detail . . .

TIA,

iggy

[20dauntless]

A few resources are available for more information on this topic. First, you should look into the EQ program for the Rosborough. I looked at the info while ago and don't recall the exact information, but I think you could probably buy a few year old 22 Cruiser by yourself for the same amount that a 1/4 share of the Rosborough. There are advantages and disadvantages to each approach...

I also recall an article in Passagemaker within the last few years about fractional ownership of a larger trawler. I think you can search on the Passagemaker site and find more information on this.

Finally, an owner of a Nordhavn 68, Ken Williams, also shares a 48 foot sportfisher in Mexico. He writes an extensive blog about boating and cruising and recently wrote an entry on his experience with fractional ownership. Here is the link to that http://nordhavns68.talkspot.com/aspx/blob2/blobpage.aspx?msgid=463430&beid=17491. The expenses and scale of his partnership are much higher than those of a C-Dory, but the principles should be the same.

I just remembered another example. Some Whaler owners are on their third partnership Whaler in Northern California. I think they have found it to work well. If you look at www.continuouswave.com and search for "elaelap" you'll find more information.[/url]

[Alli Cat]

I think the biggest issue will always be the cost of maintenance and repairs. If you establish an hourly rate that each owner contributes for each hour of boat use, based upon the boats hour meter, you can have a maintenance fund that will be there when you need it. He who uses her the most will pay the most for maintenance. The key is to keep the log book filled out! ANY other way will end up a mess.

Fred

[Capital Sea]

In regard to maintenance, I do not from experience think the only basis should be hours of use. Boats require maint even when they are not used and things ware out even when abuse or an accident are not involved.

Repairs due to abuse or accidents are a sperate issue. Our boat policy had a high deductible and we had an agreement that if you break it, you buy it within the first $1,000.

Renting is another concept all together and requires a commercial policy in order to insure the boat. You might get away with allowing a skipper not on the policy operate the boat but if money is involved normal insurance will take issue with covering the damage.

[thataway]

Chartering: I have chartered out several of my boats--one on a long term charter (2 1/2 years) the other a few weeks at a time. In both cases, I was not entirely happy and probably would not do that again. The first boat was a 29 foot sailboat--and the engine broke, because it was abused. That was a point of contention--and eventually they paid for the labor and I paid for the parts. There was no compensation for the dings etc--but that is part of charter fees.

The second boat was a 35 foot sailboat--a bit more expensive--and each time the boat came back from a charter there would be a few new scratches. That experience was enough that I decided that I would not charter out my boat again.

Last summer a very close friend's boat broke down 200 miles from home, and I loaned him my Tom Cat (when I was in the PNW) to go and tow it back. I had really intended that another friend--a professional skipper run the boat--but that didn't happen. There were scratches on the boat and the batteries were friend. Plus he "cleaned" the boat with acid and caused some fading of the color stripe on the gel coat....So, no I don't even loan my boat to good friends!...Yet, my son shares the C Dory 25...family is different.

If you are in the rental business--then figure the boat will get dinged. I would expect the same, even with the most careful of other C Dory owners--things happen. Thus I would not ask to use another member's boat--unless I was paying for it, and the boat was in a charter fleet. Some charter fleets even have the boat hauled to check for running gear damage at the end of a charter.

[brienw]

I appreciate everyone’s ideas and comments. Here is my ideal situation in not so much detail:
1) 4 Cdory lovers, including me, get together. We dialogue until we have an agreement about what we want included in a legal contract. We then contact a lawyer who specializes in these sort of things; I actually happen to know a great one. We then create a legal contract which lays out all the details of sharing a boat. We will include everything from maintenance to selling.
2) We determine the best way to acquire a loan.
3) We then purchase a used 22 cruiser and rent moorage
4) We have so much fun on our boat that life is too good to be true.

So please contact me if you are interested and lets go boating.

Brien
206-571-3069

[mailbox101]

As Dave Deem pointed out, Les at EQ Marine would be a good person to contact regarding this. EQ Marine currently has fractional ownership for Rosborough boats. Why they don't have C-Dorys, or whether they would be willing to help set it up for you, would be a question for Les.

I have copied the entire article from their website since the discussion seems to come up from time to time, and links often become outdated. Currently the information is located at:
http://www.eqmarine.com/Rosborough_Boats/rosborough_fractional_ownership.htm

"Fractional Ownership for New Rosborough boats
Now accepting deposits for Fractional Ownership for new 2008 RF-246 Sedan Cruiser #446
(Brand new boat not rigged yet; estimated launch 60 days after third share is sold)

We are happy to announce our Fractional Ownership program designed to get folks out on the water in a more affordable way. We all know boats, moorage, fuel, insurance, and many other costs associated with boating are going up (...and up). At the same time more and more of us work longer hours and the end result is that many boats just sit. In fact, the U.S. Census Bureau reports that the average boat owner in the U.S. uses his or her boat just 20 days a year. But you know the costs never stop; typically 12 months a year you're paying for insurance, maintenance, moorage or storage, and such while being able to use your boat a fraction of that time.

So, what to do about it? The answer for many of us may be in a Fractional Ownership. This concept really got going with very expensive assets like private/corporate jets, destination vacation properties, and mega-million dollar yachts but it's trickling down to things like luxury/exotic autos, motorhomes, and boats. The basic premise is to share costs between a few folks so that the financial burden is spread out. What a Fraction Ownership is not is a get-rich-quick scheme or financial shenanigans. There isn't anything in this for us (the dealership) that's out of the ordinary either; we still sell the boats the same way we always have upfront and then we're paid a portion of the monthly fee for maintaining and managing the boats in the program. So our motivation for introducing these programs isn't to make a killing and disappear to a cheap foreign country but rather to make boating more affordable for more folks (which we do hope increases our boat sales level). The way we got interested in Fractional Ownership was due to my (Les Lampman typing here) situation; I can't justify having an RF-246 just sitting here most of the time that I don't get to use often enough but I thought if I could share the costs with some others I could afford it. That lead me on a quest for more information on how to do that. The more I learned more about it, the more I realized it would be a good thing for a lot of our customers, not just me.

I'm squarely in the middle of the Baby Boomer generation ('46 to '64) and I find a lot of us, while we're looking for relaxing times on a nice boat, still are not willing (or able) to commit to a boat on a full time basis because we still have other commitments (be it kids, grandkids, a job, another home, travel plans, other recreations, or whatever). It seems to me having a quarter interest (with a real underlying asset) in a fully equipped and fully maintained (by someone else which is the best part!) boat that will let me cruise a week a month (more time then I have available really) for a fourth of what it would cost me to have a the same boat all on my own makes a lot of sense. Fractional Ownership makes it possible to have the boat moored in a location like Whidbey Island with immediate access to the San Juan Islands, the Canadian Gulf Islands, Desolation Sound and beyond, and live (or travel) elsewhere knowing that the boat is being fully cared for and the investment is a quarter of what it would have been without sharing. It makes it easier to own the boat and enjoy it because you don't have to allocate days for cleaning and maintenance, or arranging for service work. Really, the days you have available to use the boat are truly the days you can use and enjoy the boat and let us worry about the rest. [Goodness! I sound like a darn brochure or advertising writer here but honestly I think this is an exciting opportunity for folks that don't want or aren't able to take on a whole boat on their own. Most folks that get involved with a fractional ownership situation like this can afford the boat on their own; they just choose to allocate their dollars to better take advantage of various opportunities in their lives.]

Please check out the FAQ (Frequently Asked Questions) for more information.

BASIC DESCRIPTION:

Fractional Ownership has four owners that each own an equal portion of the boat. In reality the boat is owned by a Limited Liability Corporation (LLC) set up for the purpose and each owner holds an equal portion of the LLC. The LLC is used to make sure that each partner is not liable for damages or injuries caused by another owner.

Since this is an ownership program there is a real asset there; the boat. Each share (one for each of the four owners) can be bought, sold, gifted, etc. The programs run for 3 years; at the end of that period the owners can choose to sell the boat (the proceeds of the sale are shared equally), one or more owner can purchase the other's shares, or the owners could simply decide to continue with the Fractional Ownership program.

To enable the program each owner provides 1/4 of the funds needed to purchase the boat. Each owner then pays an equal sum each month which covers moorage, insurance, maintenance, and cleaning for the 3 year period of the program. The only other typical expense for the boat is fuel. The boat is professionally maintained on a strict schedule and cleaned on a regular basis. It's our goal to keep the boat in better condition than even the fussiest owner would have time for. If unscheduled repairs (as opposed to scheduled maintenance covered in the monthly fee) are necessary these repairs are performed just as they would be on a single-owner boat but the cost is shared four ways.

BOAT USE:

The key to making this type of program work is the software and systems that support it. To that end we have chosen Nautic 7 software who developed the programs for Sail Time and the Beneteau ownership program. This software gives 24/7 access to owners for scheduling and communications, and also tracks check-in/check-out procedures and maintenance.

The use of the boat is guided by a set of rules in place for the program so that it's fair for everyone. The only reason to go into these programs is to make boating more affordable and fun and to share expenses but that only works if everyone is playing by the same rules. The program rules are not meant to be restrictive in any way; quite the opposite, the idea is to give everyone involved more time on the water for less money by sharing. Since the boat belongs to the four owners involved they're free to make any arrangement with the other owners they care to; as long as every one is in agreement pretty much anything goes. However, the rules are there to allow the management team (us) to step in if necessary to ensure fair play and equal access to the boat. [I suppose what I'm really trying to say is if turns out there's an owner involved that doesn't want to play well with others we have access to the means necessary to keep the situation under control. On the other hand, they have to purchase a share in the boat from us in the first place; it isn't likely anyone with that sort of attitude would make it past that stage anyway. This won't be successful situation for us or the Fractional Owners if we don't have happy owners.]

Each owner has use of the boat 7 scheduled days per month (12 weeks/84 days per year) and also has unlimited "as available" use. "As available" means you schedule the boat within 24 hours of use (but not before and assumes, of course, the boat isn't already scheduled) and those time do not count toward your scheduled days. Your 7 days per month do not have to be scheduled consecutively but to keep things fair you can only include 2 weekend days per month so that each owner has a least one weekend per month on the boat. Unused days can be rolled over from previous months and pulled from future months if an extended vacation time (up to 2 weeks) is desired. [Again, these are the "rules" but the owners, amongst themselves, are free to make whatever agreements they're comfortable with; we provide the online software and communications to make that easy. This is NOT about "controlling" the boat; only about making sure each owner has equitable access to the boat.]

VESSELS:

The boats eligible for this program at the moment are new Rosborough RF-246 Sedan Cruiser boats. These will be fully equipped boats with integrated navigation systems (GPS, chart plotter, radar, and depth sounder), autopilots, VHF radio, heating, refrigeration, dinghy w/motor, and other essential items (including safety equipment). Each is fully stocked with dishes, utensils, paper goods, and such; you need only bring bedding, food and personal gear.

Each vessel will be professionally maintained to the highest standards. These boats are not equivalent to a fleet of rental cars; each and every boat has private owners with pride of ownership in the boat and it's the one vessel that friends and family are brought to over and over again. Each skipper is responsible for returning his or her vessel to the dock in the same or better condition as when it left. We, as the management team, will provide periodic professional cleaning to keep the boats in tip top condition as well as performing regularly scheduled maintenance on the engines and boat systems. Since we're paying attention each and every day (and getting paid to do it) we can actually do a better job than even some of the fussiest owners (who typically just don't have the time available).

COSTS:

Fractional Ownership:
bullet

1/4 of the cost of the new RF-246 boat which is approximately $50,000 (this includes tax and licensing estimates)
bullet

$395/mo (Moorage, insurance, scheduled maintenance, cleaning, etc)
bullet

Fuel usage and unscheduled repairs (fuel charged to user; repairs split four ways)

WHY DO THIS?:

Or put another way...what's in this for me? That's not a selfish question, after all you're putting money out and should get something in return. First of all our philosophy is win-win; I know that sounds corny but it's the absolute truth, if you're not getting something out equivalent to what you're putting in you might as well not do it. We have no desire to make a living from folks paying for something they're not happy with.

So, what's in it for you? Time on the water on a meticulously maintained boat without the hassle of taking care of moorage, insurance, maintenance, repairs, and cleaning (things that an average boater spends many, many days doing) and at a much, much lower cost than you could ever hope for with an individually owned boat. There's no magic here; we don't get the boat slip any cheaper than the individual does but with the Ownership program that cost gets divided 4 times. Ditto for insurance, maintenance, and so forth. Since the average boat owner uses a boat 20 days a year and this program gives you a week a month (84 days per year) the available use time is generous.

With the program you essentially just show up on the boat, use it, return it to your mooring slip, and head home leaving the details to us (after all you are paying for that service!). Our intent to to give you concierge service so we'll do the refueling (and charge the appropriate owner) and clean the boat when it comes back (you do need to clean up after yourself but we'll take over for the detail stuff).

Are these programs for everyone? Of course not but hopefully we've given you enough information to make a decision about whether or not it will work for you.

WHAT'S NEXT?:

If you think one of our programs is for you please contact us at fractional@eqmarine.com. We'll be happy to answer any questions for you and help you decide (honestly) if this is a good fit for you.

Fractional Ownership boats must have three of the four partners available to make it a "go". We'll reserve a position on the next available boat with a $10,000 deposit which will be placed in an escrow account. There is a time limit on making the partnership work which is typically 3 months; if three partners aren't in place by then the deposit is 100% refundable. However, you're welcome to wait longer if you care to."

[Wefings]

This is an interesting concept that we will be looking into as well . If there is South Eastern U.S interest let me know at marc@wefings.com . We already have a rental program that has gone from an original CD 25 Cruiseship [which didn't rent enough to make sense at the time] to day skiffs that do pretty well in season. But the times have changed economically and fractional and charter/rental appear to make more sense now.
Ill be interested in any feedback .
Marc