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Old 05-05-2008, 15:47   #1
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Who said you can't make $ on selling a boat?

I'm sure this is not common but it's becoming difficult to justify.

I entered a purchase contract about 2 years ago to have a semi-custom boat built. It's currently in that process. The Mfg. is well respected for blue water boats. It's a new model and it took a year and a half to get her started with all the new engineering etc. envolved. Over 20% has already been deposited and things are pretty much only a few months (2 to 3) behind schedule.

We agreed to a very respectable price that includes many things other builders list as options. It's been very exciting and as we get closer to the end (about 6 months away) it has become very difficult not to be completely focused on her. She is going to be beautiful and a sight to see.

Here is the issue: The price to purchase her (a new one) if you approach the builder has gone up at least 35% due to exchange rates, materials etc. I know they are under water on it but know it's the risk they took at the time. The odds are that it will go up in price even more by the time we would take delivery. I'm having a very difficult time justifying not selling her. The ammount I might make selling her could purchase, with cash, a slightly used 45 to 55 foot true bluewater cruiser. It may not have all the latest and greatest options on her but could easily be done. I admit, this is not common and it is true that it does take money to make money most of the time but we are so focused on her that it's painful to think about not taking delivery and begining our cruise with this boat.

What do you all think? Be gentle.....
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Old 05-05-2008, 16:29   #2
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Tough one Michael:

Looking at it from an economic point of view you will be saving a fortune by selling the boat. I'm assuming that you would have payments on the new boat. Multiply them by the term of the loan and there is that savings plus the Time value of money. You will save nearly twice the value of the boat at todays prices. Then you have to work on the used boat to get it up to snuff. A few questions that I would ask 1) Do you llike working on boats? 2) Is the money that you would make selling the boat a big percentage of your networth? and 3) What does the admiral say?

I think that if you answer yes to question 1) and question 2) is a large part of your networth and the admiral approves of the replacement boat then you are in position to have a nice nest egg to cruise on so question 4) Is How long can you cruise on the downpayment money?

If you want help with the emotional side of it . . . I can't answer.
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Old 05-05-2008, 17:59   #3
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Here's another side to it: How long were you planning on keeping the boat? Nice thing about this one is that it won't depreciate as much as another new boat - because you are already 35% above the depreciation curve.

From an emotional perspective, you will regret selling the boat without ever sailing it. Every repair you make on the replacement will nag you with "if I'd only bought the one we were having built...". So will she, by the way.
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Old 05-05-2008, 19:25   #4
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Charlie, the answers to 1 and 2 are no. I don't mind working on them but would rather not. I do however like the maintenance part. Loved to work on my aircraft when I owned one. Either way, we are prepared to cruise as long as we choose with or without a boat payment. We have choosen the 3 to 4 years so we can have our son (4 at the time of leaving) back for the real "social" years and such. If we really love the life, we'll return once he's out of school.

Our plan was to sell the boat once we've returned and purchase a more ICW friendly one. The mast height is somewhere around 82 ft. If we pamper it ( I am very anal) I don't expect to loose money on it when we return since the replacement value will be even greater and there won't be many if any on the market. You never know. At first we expected to loose 10 to 20% but now..... not so.

The emotional part is very tough. The odds are very small that I will try to sell it. The question is how crazy am I? Some days I think I am but most of the time, I know I'll regret it till I die. Also, I know the extral 10 feet will make a huge difference to the Admiral in a good way and her comfort & such will make all the difference in mine. "Happy wife, happy life!"
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Old 06-05-2008, 01:28   #5
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Go with your heart, not your brain!

I have been working on a design for a couple of years and expect to order the start of the build later this year. With all the ideas and details one has been working through, specifications etc. I personally have so much of "my dream" invested, that the money is not the sole factor. Opportunities to live part of the dream don't crop up often in life, so I suggest you keep the boat, live this part of your dream to the full. Later on other opportunities will arise again, but we don't know which ones....

In a few years the dollar value will be up again, so even though your boat depreciates in dollars, in other currencies it might not, you can use that to buy a boat away from home relatively cheaper.

Just my 2 cents worth

Good Luck

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Old 06-05-2008, 03:51   #6
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I understand the quandry - if you were older and the money was more material to you then I would sell.......but given your circumstances I would stick with yer original decision and keep the boat - and just take the lack of depreciation (compared to your original plans) as a bonus.
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Old 06-05-2008, 04:07   #7
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There are lots of industries and cases where an order built item builds value the closer you get to delivery. A lot of money was made in new housing this way.

You are not a speculator but you see this value there and it's yours to take. Pretty much a personal decision - The thing is in the future you won't be able to buy the boat you originally wanted...

If you do decide to sell I would keep it low key - The builder may be a little ticked off at you selling your boat before it's even done and killing a potential sale he could make on another one.
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Old 06-05-2008, 06:53   #8
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What kind of money are we talking about here, both in capital and appreciation? Without knowing that how can anyone say what they would or would not do? You are also assuming you will find a buyer prepared to pay for a custom boat - which he didn't customize himself. Most serious buyers are pretty canny nowadays - for anything - so don't you think a buyer would quickly find out what the reason for sale was, and offer accordingly?
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Old 06-05-2008, 07:22   #9
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The difference currently is about $500K. I'm not saying I would get the full ammount but I'm sure I could get, over time, a good bit of it. Also, even know it's semi-custom, we are not talking major changes from the base. The changes are very minor and someone I'm sure would be willing to accept the 2 or 3 small things we've done rather then wait 2 years for another one. Also, it's at a stage if we decided to sell it now, the changes we've made could be changed to the new owners likes. I think a quick sale would get around 250K -300K. As we all know, it's not realized until the money changes hands but I am aware that there are 2 or 3 others looking to purchase soon and at the full (or very close to it) price.
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Old 06-05-2008, 08:06   #10
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Michael:

I sent you a personal message
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Old 06-05-2008, 08:53   #11
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Put the money aside for a minute and imagine what kind of boat you would like most to cruise aboard. That is your answer. Yachts are meant for fun. To confuse them with an investment would be a mistake.
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Old 06-05-2008, 09:50   #12
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i think for me it would all depend on how much i needed the money. If i had it paid for in cash and was planning on keeping the boat for a long time i would prolly keep it, if i had a loan on a boat (something i've never done so take this with a grain of salt) I would prolly sell it take the money and buy a boat that I actually own outright, but that's me I hate owing money.
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Old 06-05-2008, 12:45   #13
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Thanks for the response. This really is the boat we want to cruise on. Not just size but comfort, peace of mind etc. It the difference was less, it wouldn't even be an issue. It's has become one due to the amount. Personally I think it would be foolish not to think and talk about it with the Admiral. I agree regarding the comment about this not being an investment. We were planning on loosing money before we started our search process. We are very lucky to be in the right place in the right time and now loosing money may not happen.

I'm fortunate that I would not need to finance it if I choose that course of action. It is that $ are in a better place for us. It's all about numbers and we could go either way.

If we choose to sell it, we would purchase the new boat through the same dealer/Mfg. Just a smaller boat (10 ft.) I'm sure he will be happy to do business with us either way. Again, I do know they are dealing with several people who are close to signing up. Not that he can start another one right now anyway due to no space at the factory. His pipeline is full.
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Old 07-05-2008, 08:56   #14
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Quote:
Originally Posted by michael201 View Post
I'm having a very difficult time justifying not selling her... What do you all think? Be gentle.....
I agree with David… sounds like you might be having a passion issue… generally, money is only a vehicle, not an end itself – boats, homes, motorcycles, light aircraft and the like are not solely investments (unless, one is in that trade, of course…), but rather items that reflect (or usually should reflect) one’s pastime, priorities and obsessions… if your “new” boat is not right for you, then that is certainly a most important consideration, but if you’re willing to retreat to an unidentified used vessel that may, or may not, embody what you originally had in mind, over cash… hmmmm…

On the other hand, if one’s nautical or personal priorities have changed markedly over the period of construction, well that is another issue altogether and the potential profit aspects seem intriguing enough to investigate thoroughly…
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Old 08-05-2008, 03:19   #15
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Originally Posted by michael201 View Post
... This really is the boat we want to cruise on...
... It's all about numbers and we could go either way...
... If we choose to sell it, we would purchase the new boat through the same dealer/Mfg. ... Not that he can start another one right now anyway due to no space at the factory. His pipeline is full.
Obviously, it’s not just about the numbers, or you wouldn’t be conflicted.

If this is truly the boat you want to cruise on, and you are ready to cruise (soon), then I suggest that you consider going now (this boat), and cash out your profit at the end.
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