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Old 13-03-2012, 17:50   #1
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Buying a Catamaran

I'm thanking of buying a catamaran through a charter company. They ask for 20-25% down and then take the boat for 5 years, pay all expenses (not the other 75-80%of the boat loan) and give you a check each month. they make it sound to good. is it. tugz
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Old 13-03-2012, 17:58   #2
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Re: Buying a catamaran

Based on the numbers, I'd guess you are probably dealing with the Moorings/Sunsail?

There are a lot of factors to consider. Such as the fact that when you end the program, you will be left with a boat that has been used a lot and (if you do their 15 year mortgage) have 10 years left on the mortgage with probably little equity in it.

So if the goal is to sail frequently for the next 5 years and then stop, or start over in the program and sail another 5 years, figure out what you might spend each of those 5 years - Is that cost less or greater than your down payment?

Also what are you going to do at the end? If the goal is to take possession of the boat and continue to pay it, then it may very well make sense.

It's really a numbers game. Can you make the numbers work for you. How many weeks will you charter a year? Will you use your boat every time? Will you upgrade to larger/more expensive boats on short notice time?

As an owner for the past year (we bought used in the program) with our boat coming out in June, we are actually looking at starting over. We do want to take possession at the end and cruise or if we can, sell the boat and buy a new Catamaran to cruise with. Our current boat is not something we'd do more than coastal cruising with and we are not ready which is why we are looking to start over. We also have made use of the upgrades and in just 1 year used time equally twice our down payment. We wouldn't have done that otherwise, but it just shows the value you can get.

Lot's to think about, but if you go into it knowing the facts, you can make it work. I think the other huge key is being able to afford to take possession of the boat at the end of the program. If you can't afford to do that, then I wouldn't buy it. There are no guarantees on it being sold at the end, just the 5 year contract you have.
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Old 13-03-2012, 18:51   #3
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Re: Buying a catamaran

Have not heard anyone making money at it. And the 12 weeks you can use the boat still coast you some money (turn around fee)

The highlights of the Mooring/Sunsail program include:
- Guaranteed Monthly Income
- No Operating Expense
- Up to 12 weeks of sailing time each year
- Use of a sistership in a variety of locations worldwide
- Comprehensive Phase Out Maintenance

See attached
Attached Files
File Type: pdf HOW THE Moorings-SunSail PROGRAM WORKS.pdf (46.0 KB, 115 views)
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Old 13-03-2012, 19:10   #4
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Re: Buying a catamaran

This isn't a recommendation of whether you should or shouldn't do it, just some thoughts you might want to consider: I find it an interesting business model that involves getting other people to capitalize your business and take on the long-term debt. Of course, the other interesting facet is that, if the Moorings/Sunsail, I understand that they also have a substantial ownership interest in the catamaran manufacturer, Robinson and Caine. You might consider that they don't see a profit in owning the boats themselves (like the car rental companies) and then selling them after they've gotten the use of them when still "new". Instead, that long-term debt, and the risk that you could be underwater on the debt once they are done with the boat, is yours.

From talking with various folks over the years who've been in "the program", it seems that the quality of the maintenance and phase out varies a great deal from location to location. So, factor that in, too.

A couple of personal observations: From scanning their used listings, it seems that they have an amazingly high number of boats where the engine hour meters are no longer working. I've never encountered that problem in a privately owned boat (although I'm sure it can happen, I just doubt that it wouldn't be quickly fixed). So, they can't accurately say just how much wear is on those engines. You can tell, though, that many of their boats have lots of hours (5000+) in only four or five years. If the meters are also broken, how much more do they really have?

The second thing I've seen is how the boats are treated by the charter base employees. I've seen this at three different Moorings/Sunsail bases -- it seems that the dock workers have never heard of "neutral" in the transmissions. Full forward and full reverse, and no attempt to pause for a bit in neutral.

I'd suggest that if you decide to do it, just go into it with your eyes wide open. Go hang around one of their bases for a bit. Ask questions. Charter a few times and see if you'd like to be on the ownership end.

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Old 13-03-2012, 19:15   #5
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Re: Buying a catamaran

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Originally Posted by Intentional Drifter View Post
From talking with various folks over the years who've been in "the program", it seems that the quality of the maintenance and phase out varies a great deal from location to location. So, factor that in, too.
I think this in turn is a great deal dependent upon how much the owners uses the boat and reports issues they find. Charterer's can report issues too, but I think many don't for fear of being charged for issues. An owner will report all the issues and see that they get fixed.

A good survey at the end of the program too and seeing that the phase out goes well can also help at the end.
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Old 13-03-2012, 19:19   #6
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Re: Buying a catamaran

A friend tells me that the deal works for him only when he subtracts the amount he would normally be paying to charter three or four weeks a year. At that point he comes out "ahead," assuming he can roll the boat over at the conclusion of his contract.

To me, that would be the troubling part. It used to be a lot easier to sell a boat coming out of charter than it is in the current market. If you have to discount the boat for less than you still owe for the last ten years of the mortgage, you're screwed.
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Old 13-03-2012, 19:25   #7
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Re: Buying a catamaran

I have charted 4 times now and from my experience I think the boat owners are left holding and empty bag.

My resent example is a 2012 boat that would cost $700,000 to purchase and then see the same boats they are selling in yachtworld after 5 years selling for $350,000.

I keep playing the numbers, but can not get them to work for me at least.
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Old 13-03-2012, 19:33   #8
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Re: Buying a catamaran

You'd have to factor in usage though, selling time and the fact that 25% of your mortgage is being paid in that timeframe Cotemar.

So $175,000 would be the down payment. Then you'd get $175,000 paid off by the program and that's how you get to the $350,000... Basically the boat is typically close in value (slightly higher usually) to the mortgage value (assuming 15 year mortgage).

The added value you can get though is the time you use. Say 4 weeks a year for someone who has a typical job. If the boat goes out at $10k a week, that's $40k a year or $200k for the time in the program. Then lets say you sell 2 weeks a year at $6k a week making $5k per week. That's another $50k you can bring in and add to the mortgage.

So really what you get by doing a program like this is either the usage and value from that - which if used enough is less than your down payment and you can start over again or you get a boat to use yourself after phase out that cost you a minimum of 25% less than if you bought it brand new.

Clearly there is wear and tear, but anything major can be addressed at phase out and the $175k you save can go a long way for maintenance..
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Old 14-03-2012, 00:23   #9
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Re: Buying a catamaran

Thanks for all the input. the plan would be to work for 5 more years,then have the cat to retire on. at least I could get a boat and use it some with know moorage or maintenance charge. tugz
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Old 14-03-2012, 01:12   #10
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Re: Buying a catamaran

We looked long and hard at buying an ex-charter Leopard Cat in our search.
3 years on and quite a few of those boats are still for sale ===== WHY?

We noticed the boats have minimal equipment which is probably fair enough.

We noticed the crewed versions were better looked after and quickly sold.

In your situation i'd quietly charter one prior, then leave a week to check out the units coming out of charter and checking the condition of those and consider yours will be in similar condition after five years.

Googling doesn't show bad experiences although maybe NDA's are part of the contract?

Good luck.....Frank
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Old 14-03-2012, 04:04   #11
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Re: Buying a catamaran

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Originally Posted by tugz View Post
Thanks for all the input. the plan would be to work for 5 more years,then have the cat to retire on. at least I could get a boat and use it some with know moorage or maintenance charge. tugz
That's when I think something like this can make sense. Even better is if you pay more up front or make a lot of added payments along the way.
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Old 14-03-2012, 05:26   #12
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Re: Buying a Catamaran

My Doctor did that a few years before he retired. In the final year of the boats contract he spent a lot of tax deductible money on the boat (sails, electronics etc) , bringing it up to date. So basically, when he retired the boat had paid for itself and he had a five year old (but still modern), fully paid for, boat to go cruising on.

But tax laws differ no matter where you are. No doubt you should take the contract to your accountant and do a business plan on the deal. good luck
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Old 17-03-2012, 13:42   #13
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Re: Buying a Catamaran

I think at the end you have a boat that has an average market value of what is shown on Yachtworld (minus maybe 20%). If you are lucky, yours is still OK. If you are not, the boat is a floating wreck. Depends on charter location and plain luck

Why take a chance here? If you want to get a cheap boat at the end why not buy an ex-charter that still looks good?

You think you are making money of it? Only if you get some tax writeoff. Otherwise never. I one could make money out of this why would Moorings get you to finance the boat instead of doing it all?
They get massive discounts from the builders and still they don't keep the profit of this part of the game. maybe because it's offset by the risks?
BTW: They don't pass the discount on to you.

If you think a boat can be in nice condition after 5 years of charter:
Charter for a a week or two and stay in areas where there are no moorings, like some areas of the Grenadines. Check out how these charter folks anchor, running the chain over fibreglass without care, rubbing it under the hull like a chainsaw, running over the anchor with full throttle to free a stuck anchor, all this while catching their dinghy painter in the prop, etc.
Last week someone run aground in Salt Whistle Bay in Mayrau right in front of us. The boat boys towed them from the reef with brute force and earned enough cash that they stopped working and started nice party. Do you think the skipper informed the charter company? Nope.


I will _never_ give any valuable boat to charter folks.
Skippered charter is a different story.
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Old 17-03-2012, 14:33   #14
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Re: Buying a Catamaran

If the owner visits and uses the boat regularly, the issues when it comes out should be minimal. It all depends on the contract, but the boat is expected to be kept in good condition so if it's a "floating wreck", it would be the responsibility of the charter company to rectify that situation.

I think the main reason charter companies do not want the ownership of the boats is simple cash flow. There'd be a pretty significant cost to them owning all the boats and then even more of a responsibility on selling them all every 5 years or so.
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Old 17-03-2012, 16:05   #15
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Re: Buying a Catamaran

Quote:
Originally Posted by shabbab View Post
I think at the end you have a boat that has an average market value of what is shown on Yachtworld (minus maybe 20%). If you are lucky, yours is still OK. If you are not, the boat is a floating wreck. Depends on charter location and plain luck

Why take a chance here? If you want to get a cheap boat at the end why not buy an ex-charter that still looks good?

You think you are making money of it? Only if you get some tax writeoff. Otherwise never. I one could make money out of this why would Moorings get you to finance the boat instead of doing it all?
They get massive discounts from the builders and still they don't keep the profit of this part of the game. maybe because it's offset by the risks?
BTW: They don't pass the discount on to you.

If you think a boat can be in nice condition after 5 years of charter:
Charter for a a week or two and stay in areas where there are no moorings, like some areas of the Grenadines. Check out how these charter folks anchor, running the chain over fibreglass without care, rubbing it under the hull like a chainsaw, running over the anchor with full throttle to free a stuck anchor, all this while catching their dinghy painter in the prop, etc.
Last week someone run aground in Salt Whistle Bay in Mayrau right in front of us. The boat boys towed them from the reef with brute force and earned enough cash that they stopped working and started nice party. Do you think the skipper informed the charter company? Nope.


I will _never_ give any valuable boat to charter folks.
Skippered charter is a different story.
A Moorings 50 Tboned another Moorings 50 in the recent Heineken Regatta in a Port and Starboard incident in 30 knots of wind. That left a BIG V in the boat on Starboard tack - damaged hull and deck and i am told the galley moved about two feet sideways...........glad it was not my boat.
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