The Business of boats

[Yamamike]

Throughout this forum there is a lot of topics and discussions on people who have purchased a boat in order to upgrade, refit, clean up ect, as a hobby to do on the weekends as they have a full time job elsewhere. Most of these discussions end with the purchaser abandoning the project due to time, money and various other reasons and not recovering any of their original investment. What is far more difficult to find are topics and threads of people purchasing a boat that is in need of some TLC, doing the required work and selling it later for a profit (insert laughing here!!). The TV is flooded with folks buying older houses, repairing them and reselling them for a profit. Same stands for cars and motorcycles. If one had all the means in place (heated shop with overhead cranes, compressors and an endless supply of tools and equipment as well as a very strong mechanical ability to fix pretty much anything) would there not be some sort of market for older boats to be refit and finished and sold for a profit? I would also think that the boat itself might have a lot to do with it. For instance, an older production boat (hunt, bene, cat) may not be the best choice because the market is flooded with them where as something along the lines of a Tartan, Sabre ect might be a little more in demand. As we know, the cost of a new boat is extraordinary and out of the price range for 95% of the population. So would it not make sense to buy a gently used boat from the 80's, with good bones and structurally sound, put some time and money into it, (not as a hobby but as a full time project) and turn around and sell it a few months later? I'm not the first one to come up with this idea but I'm stumped as to why it is so difficult to find any info on this forum of people doing this or who have done this. Maybe sailboats are too much of a risk and powerboats are more recommended for this type of business? Anyway, it would be nice to here some thoughts on this topic and if there are people out there doing this, how they are going about it. Thanks!!!

[dwedeking2]

Without having done it I think you would find there are easier opportunities to make money "flipping" an asset than trying to do it with a boat. For example:

- A house has more opportunities to finance allowing you to renovate a higher dollar asset with the same investment of cash, so that you get a higher profit margin as your using leverage.

- Other assets have a larger market. Fixing an older boat will only fit a very niche group of potential customers.

Growing up I new a guy that bought cars at auction, fixed them up and resold them. He did well at it, it was just easier to make money in other ways so he stopped.

[La Porte Rouge]

A friend and I flipped about six or eight sailboats until we could finally afford a boat with wheel steering and air conditioning. We basically bought "dock derelicts" (in some cases we got them for free) fixed them up and sold them. We did alright, and enjoyed the work and being on the water.

[Cheechako]

Boats are usually a diminishing asset. Although occasionally you can make a profit, it's more likely you wont......... even if you were setup well as you mention. If you could find the rare bargain on a very popular boat that has been left to degrade... that may be the exception.... but it would have to be seldom seen bargain. I bought a popular boat at the "going rate" once. Put about $50k into it making it pristine. Sold it 2 years later at a loss of the $50k I put into it..
Now if you could buy a relatively new "hurricane boat" for nothing and repair it.. might make some money.

[GordMay]

➥ http://www.cruisersforum.com/forums/...ir-128242.html

[haw1961]

Boats are also much harder to sell than cars and houses.

[captain58sailin]

Having preformed several reconstructive surgeries on boats, including the one I currently own, I can tell you it is a trick. I was always trying to revive a dead boat to make it marginally viable for commercial fishing, due to the lack of capital, so the endeavors were pursued with minimal hand / power tools and more balls than brains. I have thought of doing it professionally, it is generally more work than I want as a job. My approach would have to be, obtaining derelicts for little or no money, bring them into the shop and have a squad of monkey boys tear everything of any value off the vessel, saw up the hull and take it to the dump, sell the used hardware to people like me, online. If you happen to come across a jewel in the rough, you will still have to get it at bargain basement prices to realize any kind of profit. You would make much more money repairing vessels for other owners instead of reviving the dead. You would have to be very hard nosed about what you would pay for any vessel. Once you were established then people would come to you. I know of one fella in Belize doing it (a local) and he had the shop for it, but he would not take any boat unless it was practically free, the local officials would come to his shop and beg him to come take a boat out of a marina or off their hands, I think he did okay. The other consideration of course would be location. So best of luck.

[markwesti]

This was a while back , a friend of mine sold his Catalina 30 to a guy from Australia . The guy had contracted shipping containers and was filling them up with Catalina 30's . He said back home he could double and even triple his money . We kind of got to know the guy so on his last night we took him to a bar , man could that guy drink beer !

[captain58sailin]

Cool, well sounds like you have a market there.

[Stumble]

The only people I know who have actually made money fixing up boats already own boat yards. They buy decent hulks, then when the yard is slow put the employees on their own boat. Even if they don't make much it usually at least minimizes the loss of wages to guys who aren't working.

The real problem is that a lot of work that needs to be done is beyond the capability of even a handy guy with unlimited tools. At a minimum to do it right you need a rigger, diesel mechanic, electrician, a plumber wouldn't be a bad idea, and a welder plus a couple of decent wood workers. Not to mention a helper for each of the techs. You would need an assembly line of boats to keep all these guys busy.

Of course you could do it all yourself, but the amount of time it will take you as opposed to a professional it going to drive your hourly rate to nothing.

[rgesner]

One big big impediment to your plan is that your market will probably be limited to cash buyers. It gets hard to insure boats older than 20 or 25 years and even harder to get a loan (which requires insurance too).

I just purchased a 25 year old boat (1990) which was in exceptional condition, (totally refit in 2001, lightly used and extremely well maintained) and it was extremely difficult to find a lender.

- Rusty

[hamburking]

OK...I've done it. A bunch of times.

I like sailboats. And to me, everything should work. And everything should have a place. The boat should be clean and organized. If somethings broken...it can be fixed or simply removed (if not essential). Thats just how I keep my boat. Thats me.

So when I went to sell my first boat, a C&C27, I was pleasantly surprised to get a little more than I paid.

My next boat I bought very cheap from an estate. It was filthy. But I was young and energetic, and it cleaned up very nicely! I sold it that same season (saving all the winter costs) for triple what I paid. I wondered, was this an anomaly? Or could I repeat this feat? This was in the early days of the internet, and I bought my next boat, sight unseen, off rec.boats.forsale. Again, lots of cleaning, some woodworking, engine tuneup, etc, then up for sale. This time there was a tremendous profit.

I should mention that all these boats I bought for me...because I wanted to sail. Unfortunately, sailing is expensive, and I was young (equates to little money). So, not owning a boat over the winter seemed like a good way to conserve what few $$ I had. I never bought a boat with the specific intention of selling for profit. I bought each boat to go sailing and have fun, which I did. But once it was clean and functional, I could see the profit. I'd also like to point out that selling a clean, fully functional boat is not difficult. I rarely showed a boat more than twice.

3 boats I owned less than 4 months. But most I owned more than a year.

I like to think I am a good boat owner. I keep my boat clean. I fix what needs to be fixed. I add good gear, like origo stoves (I've bought 5), marine cradle shop cradles (I've bought 4), inflatable dinghies (5), anchors (9), rodes (lost count), radios, gps, etc. Almost every boat got new docklines, fenders, and running rigging...these things are very cheap and easy to replace, but make the boat look so much better. Who wouldn't want to buy a boat you can sail away, with no wish list, and no todo list? Admittedly, these were all small boats, under 35'.

I also found location affects price. I bought several boats in Toronto Canada. The marinas and clubs there are hard to get to...security, parking, traffic, private ferries, etc. Its a hassle just to get to a boat. I put up with the hassle and logistics. But I sell my boats at my slip at a beautiful, downtown Kingston marina, which is a destination unto itself...a great place to be. Also, I have mostly sold during the sailing season and included my slip for the duration of the season....making it so very easy for someone to write a cheque, and step aboard...no urgent delivery, and fun from day one!

I guess I'm on my 8th sailboat now. Several of my previous boats remain in the area, and I keep in touch with the owners. One is even just 2 docks down from me...the new owners appreciate having someone who knows their boat so close at hand...when the engine won't start, or they need to know where a certain wire goes to...I'm right there.

Yes, I've sold every boat for more than I paid...sometimes MUCH more. But I've bought every boat for me, so I could go sailing. And I've had a ton of fun and adventure doing it. I've also proved that you DON'T need a lot of money to own a boat and go sailing. Hard work is worth a lot. Cleaning, sanding, painting, aren't really fun, but the sense of accomplishment when its done is totally worth it.

[Cadence]

Flipping money consuming holes in the water to make a profit? Good luck!

[Columbia29]

Too many boats on the market and not enough users (different from buyers). So even if a boat change hands it doesn't mean she is going to be upkept and her value will fall very quickly. Fiberglass is very long lasting and requires little maintenance so along the years a lot of boats were built cramming docks and yards. It is still possible to update them but the cost of this operation is huge, expecially in terms of labor.
Think about how many hours is going to take you to sand down an old paint job on a 30 ft....

[Island Time O25]

Biggest obstacle to OPs idea is the psychology of today's average boat buyer. They see a 30-40 year old boat and immediately equate it with "old and unappealing" when in reality fiberglass is fiberglass and everything but the hull itself can be and probabbly was upgraded in the meantime. Same with old diesel engines which both of my marine pro friends swear are way more reliable than anything now on the market whilst the parts prices for them are artificially inflated by the manufacturer to push their owners into re-powering with new engine.

About 10 years ago, pre-recession, we toyed with an idea of setting up just such a shop planning to use my marine pro friends' contacts locally and overseas to hire knowledgeable work force. The biggest stumbling block was the lack of suitable and financially feasible facililty within a reasonable distance from the water (nevermind waterfront) as well as long time it would take to get enough buyers for the boats to be turning over quickly, thus profitably.

We looked at enough such potential boats which could have been aquired for say around $5-15K and after spending $5-10K be sold for around $40-50K. But
getting a right buyer would take 6-12 months and in the meantime the yard workers, bills and rent would have to be paid. Having a bunch of such boats at the same time would only exacerbate the financial woes.

The only way to make it work realistically (and I personally know several people who dabble at it from time to time, more or less successfully overall) is 1) to have extensive contacts with the boat yards/marine community to get a whiff of a deal or have plenty of time to look around, 2) to have a rent free place for a boat while fixing it, or be able to do it on the hook, 3) to lower one's expectations as to the potential profit, 4) not having any other profitable activities to engage in, and 5) to have a close family member (admiral, kids, etc) willing to provide free labor and/or marketing.

IMO, in a perfect world old boats would be refurbished and re-purposed instead of scrapped as it is totally criminal to churnout more energy and resource gobbling new hull and systems while discarding mostly perfectly fine old boat. I believe most boat buyers are uneducated enough to be able to distinguish easily rectifiable old boat minor issues such as dirt/mildew and a major structural problem such as poorly tabbed bulkheads in a new chinese made hull.