FIRST POST--Looking for your opinions.....TIA!

[AZ Parothead]

Hello!

Long time lurker, first time poster here!

I did a search but am interested in your opinions from a financial/investment view (yes, I know, boats are NOT investments....)

My wife and I have a long term plan to cruise >50% of our time starting from our second home in Puerto Penasco, Mexico. Over time I'd like to make it down the Mexican coast, then through the canal, up the Caribbean, and on to the ICW. Ideally we'd like to start our adventure in 5 years. Currently we own a home in Phoenix and a Condo in Rocky Point (Puerto Penasco). We would rent our primary home in Phoenix (cash neutral) and rent our RP place part-time reducing our on-shore expenses.

Experience: we have owned boats in the past--most recently a 28 foot Pro-Line in the Virgin Islands and I grew up sailing on Cape Cod. Our plan would be to get cruising certified (101-104) and training in mechanics, electrical, and other systems in our 'prep' period.

Here is the decision. We plan on budgeting approx $50K for the boat and upgrades over the prep-period. We can either:

1. Buy a boat in the next year inexpensively (10-20K), keep it (relatively) inexpensively in Mexico and upgrade it substantially over the next 2-3 years to make it cruise-ready. Obviously this would involve one or more haulouts, bottom job, glass repairs, electronics, motor.......ETC.

2. Put the money into a market account and purchase a more expensive boat (40K+) in 3-4 years with fewer (if any) upgrades to be completed.

Pros/Cons for Plan 1

PRO: Buy a good shell and design your floating home to be exactly the way you want it.

PRO: Learn the boat over time reducing risk of "unknowns" away from homeport.

PRO: Can purchase upgrade items overtime at better prices.

Con: Storage costs and wear/tear over 3-4 years. (10% of boats value per year?)

Pros/Cons for Plan 2

Pro: Market investment (in a hmmm...normal market) can yield 2-8 percent over time reducing the overall expenditure

Pro: No storage expenses

Pro: More budget to find a "better" boat.

Con: Shorter time frame to find the right boat. Smaller budget for upgrades.

Con: Less time to "learn" the boat.

So I'm interested in your opinions on what you think the better plan is and why. Further food for thought:

1. I am 36, wife is 55--kids grown and out of the house. No grandkids yet.
2. We both work from home either in PHX or Mexico. For our "kitty" we will take short term PM projects (3-6 months) during our sailing breaks.
3. Risk tolerance=medium. Not afraid to take a chance but try to take all facts into consideration.

Looking forward to your thoughts! THANKS!

[skipmac]

Originally Posted by AZ Parothead

1. Buy a boat in the next year inexpensively (10-20K), keep it (relatively) inexpensively in Mexico and upgrade it substantially over the next 2-3 years to make it cruise-ready. Obviously this would involve one or more haulouts, bottom job, glass repairs, electronics, motor.......ETC.

Very unlikely you're going to find much boat for $10-$20K, at least not a decent sized, decent quality boat, large enough to live aboard and cruise unless it is a major fixer upper. It could happen but the odds are more likely you'll win the Powerball lottery.

I would suggest saving the money and looking for something in the $30-$40K range when you can afford it.

[sailorboy1]

#1 is a money waster. If you aren't going to sail NOW owning a boat is just a money pit. It has cost me between $7-10k/yr the past 8 years to maintain and use my boat.

#2 is probably a dream that you can really find a boat that needs no upgrades etc for $40k that isn't needing a lot of maintenance etc.

OTOH - Mexico is full of boats that people thought they could get cheap and sail the world in and now that they have come to their senses are for sale.

[AZ Parothead]

Originally Posted by skipmac

Very unlikely you're going to find much boat for $10-$20K, at least not a decent sized, decent quality boat, large enough to live aboard and cruise unless it is a major fixer upper. It could happen but the odds are more likely you'll win the Powerball lottery.

I would suggest saving the money and looking for something in the $30-$40K range when you can afford it.

Thanks for the insight. Certainly any shell would be closer to 20 than 10. Ideally that would be 38-42 feet. But you are definitely correct that they are very difficult to find in Pacific Mexico. Lots of choices in the 30s though most are older.

[AZ Parothead]

Originally Posted by sailorboy1

#1 is a money waster. If you aren't going to sail NOW owning a boat is just a money pit. It has cost me between $7-10k/yr the past 8 years to maintain and use my boat.

#2 is probably a dream that you can really find a boat that needs no upgrades etc for $40k that isn't needing a lot of maintenance etc.

OTOH - Mexico is full of boats that people thought they could get cheap and sail the world in and now that they have come to their senses are for sale.

Our power boat was about 7K per year as well in the VI plus fuel/consumables.

Storage on the hard in Mexico is about 100 a month with access to work on it at our marina in RP.

The plus side is that skilled marine labor is inexpensive--approximately 30 percent of the cost in the US. We are fortunate in that we can get parts/materials in the states and drive them south (we are down every other week) to be installed.

Lots of boats currently sitting in La Paz and San Carlos.......

[Sea Dreaming]

We bought our boat in San Carlos in May after having looked in SC and La Paz.
For a 38-40 foot boat in the 10-20k price range, you are indeed looking at just a shell. If you can get in the neighborhood of 40,000 your choices are better but still slim.

We looked at 10-12 boats while we were there. None were ready to go. But there were a few with less extensive needs in the mid 40's.

Having looked at current offerings I cannot recommend you even start in the 20,000 range. I think 40,000 45,000 will get you closer but your boat will still require work.

I would seriously save your money now and look to buying later when your bank account has more in it. Hopefully there will be a better selection too.

[barnakiel]

Considering your info and your plans, if I were to make the decision, I would opt for option 2) above.

Cheers,
b.

[AZ Parothead]

Originally Posted by barnakiel

Considering your info and your plans, if I were to make the decision, I would opt for option 2) above.

Cheers,
b.

Thanks for your opinion!

[AZ Parothead]

Originally Posted by Sea Dreaming

We bought our boat in San Carlos in May after having looked in SC and La Paz.
For a 38-40 foot boat in the 10-20k price range, you are indeed looking at just a shell. If you can get in the neighborhood of 40,000 your choices are better but still slim.

We looked at 10-12 boats while we were there. None were ready to go. But there were a few with less extensive needs in the mid 40's.

Having looked at current offerings I cannot recommend you even start in the 20,000 range. I think 40,000 45,000 will get you closer but your boat will still require work.

I would seriously save your money now and look to buying later when your bank account has more in it. Hopefully there will be a better selection too.

This is very helpful. Really appreciate the insight on the Mexican market since that's where we will (most likely) be looking to purchase.

[barnakiel]

One of many possible disadvantages of 'buying now, sailing later' is the cost of owning the boat thru the non-sailing period: - marina or boatyard fees, insurance, running costs, AF paint, interest lost, etc. etc. These added together can grow exponentially if the boat happens to be not where you are. I think if you can buy a deal boat now and store it covered in your own backyard, then it may be a good deal. But still, it will be a deal that will attract plenty of your time and energy thru the years. We tend to lose the vision of what is essential to the boat and what is just a mobile home optional extra when we look at a boat docked in the backyard ...

Hence my view that it is better to buy just before departure and buy a boat as ready as can be. With s/h boats this basically boils down to buying a bare but thoroughly sound, boat, replacing whatever is just old and worn (most often: standing rigging, possibly sails, possibly engine) then just taking off and replacing other stuff only if found absolutely necessary as moving on along the coast.

Not to say other 'methods' do not work. Just translating our own experience that took us from no boat to a complete rtw in less than 4 years. We got the boat in May and we sailed away in June.

Have fun shopping, updating and cruising yours!

b.

[AZ Parothead]

Originally Posted by barnakiel

One of many possible disadvantages of 'buying now, sailing later' is the cost of owning the boat thru the non-sailing period: - marina or boatyard fees, insurance, running costs, AF paint, interest lost, etc. etc. These added together can grow exponentially if the boat happens to be not where you are. I think if you can buy a deal boat now and store it covered in your own backyard, then it may be a good deal. But still, it will be a deal that will attract plenty of your time and energy thru the years. We tend to lose the vision of what is essential to the boat and what is just a mobile home optional extra when we look at a boat docked in the backyard ...

Hence my view that it is better to buy just before departure and buy a boat as ready as can be. With s/h boats this basically boils down to buying a bare but thoroughly sound, boat, replacing whatever is just old and worn (most often: standing rigging, possibly sails, possibly engine) then just taking off and replacing other stuff only if found absolutely necessary as moving on along the coast.

Not to say other 'methods' do not work. Just translating our own experience that took us from no boat to a complete rtw in less than 4 years. We got the boat in May and we sailed away in June.

Have fun shopping, updating and cruising yours!

b.

Yes, I agree with the 'take life by the horns and go' approach as well. In our case, we live in Phoenix and a condo in Mex--not much room for a boat in the backyard. Our Mexico marina is about 10 mins from the condo so that's not bad.

To be 100 percent honest, we probably are a little more on the "creature comforts" side of the fence than the "bare boat" side. We like reliable internet access, modern electronics, and interior comforts. A good AC system , shore power connection, and working "conveniences"--like a new head--are important to us.

To give you an idea, when we bought our proline, the first thing we did was to install a marine head in the center console, some charging ports for the I-devices, and added an extra house batter bank.

Working toilet = Happy Wife = Happy Life

[JPA Cate]

Not to be cruel, but, fwiw, I think you're under-capitalized, lack mechanical experience that would allow you to do your own maintenance, and that your plan for renting out your home depends on having either expensive good overseeing by a pro, or the risk of poor tenants. Your plan seems predicated on nothing ever going wrong with your boat, and that is not a realistic expectation, and a high degree of complexity because of your desires for creature comforts.

During our first 20 years of cruising full time, poor tenants were the cause of expensive trips home for many of our fellow cruisers, and in one case, the relative left in charge of their home stripped all their accounts. That is why I have strong reservations about the rental property schemes. However, to be fair, some people are, in fact able to work them out well.

I hope you can prove me wrong, here. Good luck with it.

[captlloyd]

Option #2 would be the direction I would go but at the same time, search, search, search. There are distressed sales to be found, offers to be made, just keep looking until you find the right boat.

[AZ Parothead]

Originally Posted by Ann T. Cate

Not to be cruel, but, fwiw, I think you're under-capitalized, lack mechanical experience that would allow you to do your own maintenance, and that your plan for renting out your home depends on having either expensive good overseeing by a pro, or the risk of poor tenants. Your plan seems predicated on nothing ever going wrong with your boat, and that is not a realistic expectation, and a high degree of complexity because of your desires for creature comforts.

During our first 20 years of cruising full time, poor tenants were the cause of expensive trips home for many of our fellow cruisers, and in one case, the relative left in charge of their home stripped all their accounts. That is why I have strong reservations about the rental property schemes. However, to be fair, some people are, in fact able to work them out well.

I hope you can prove me wrong, here. Good luck with it.

Hi Ann,

Thanks for chiming in. Some additional comments.

1. I agree that we like creature comforts. We lived in the Caribbean on St Thomas for 2 years and learned quickly that there are certain things that make life easier in the tropics--most notably a generator and AC! Though this adds complexity, it also (literally!) helps me sleep easier at night. I am not one who likens living on a boat to living in a tent.

2. Under-capitalized. Fair comment given what I have posted. We have several large assets and just because we could afford to buy--say--a 100k boat doesn't mean we want to. I tend to like things that appreciate (like real estate) and not depreciate--obviously a boat is the latter. While 20K is probably too low to find a good shell--I'd rather keep the looking lower. Would be lousy to fall in love with a boat thats outside of our (self-imposed) budget.

3. House rentals. This is a matter of personal risk and management IMHO. We rented our home in Phoenix for 2 years to great tenants but we made sure to do a background check, credit check, and collect deposits. We kept the rent reasonable because they took good care of our property. In Mexico, we have a management company that takes good care of the condo and handles the rentals. We also are lucky enough to have close friends and family to keep an eye on both places.

4. Lack mechanical experience. Yep, no question, and I'm not mechanically inclined. I am, however, interested in learning.

[AZ Parothead]

Originally Posted by captlloyd

Option #2 would be the direction I would go but at the same time, search, search, search. There are distressed sales to be found, offers to be made, just keep looking until you find the right boat.

Yes sir. Just keeping our eyes open at this point.