Upgrade allowance

[AWood]

I am new to the forum. My husband and I are looking to buy a boat to livaboard. We have found one that really fits our needs, however will require a new mast step and sails along with new bottom paint. They also recommend while we are doing the step to replace the tanks.

I was wondering, does anyone know if you can build those expenses into the price of the boat so that you can figure that into the loan? Say we have the seller provide for 20,000 in upgrade allowances. I know this is possible when buying houses, just don't know if you can do this with boats.

Thank you,
Amy

[tomfl]

You can ask for anything and the seller may or may not agree.

How did you find out about the needed repairs?

The reason I ask is that many times a used boat has a long list of things that need fixing. One common procedure is to make an offer contingent on sea trials and a survey, then have a surveyor look at the boat and provide a report which includes everything that needs to be repaired. At that point the buyer and seller have to come to an agreement or the offer is null and void.

Not to put too fine a point on it, buy you may well need to get face to face advice from a more experienced person before proceeding.

[barnakiel]

Originally Posted by AWood

(...) I was wondering, does anyone know if you can build those expenses into the price of the boat so that you can figure that into the loan? Say we have the seller provide for 20,000 in upgrade allowances.(...)

?

Why not buy the boat as is and spend your own money in the updates.

Financially, you will most likely be better off.

b.

[bstreep]

I'm a real estate appraiser, in real life. You can't "build repairs into the price" UNLESS you can get the seller to agree to make those repairs as part of the sale. There are some home loan products (FHA/HUD 203k, for instance) that allow you to escrow repairs, but I know of no boat loan that does this.

If you'll give us some more info, we might be able to give you some advice. I'm still trying to figure out how replacing the mast step involves new tanks...

[AWood]

Was trying to look at our options. We know we will have to make the repairs with our own money, we were just looking at ways to finance it if it were possible. Don't know that the tanks have to be replaced, but need to be moved to change out step and with their age it is suggested.

[S/V Illusion]

Are you over-complicating this? Seems like just one more reason to never finance a depreciating asset.

[Ex-Calif]

Originally Posted by bstreep

I'm a real estate appraiser, in real life. You can't "build repairs into the price" UNLESS you can get the seller to agree to make those repairs as part of the sale. There are some home loan products (FHA/HUD 203k, for instance) that allow you to escrow repairs, but I know of no boat loan that does this.

If you'll give us some more info, we might be able to give you some advice. I'm still trying to figure out how replacing the mast step involves new tanks...

When I sold a house (years ago) there was a $5,000 reepair needed - some foundations bs. The buyer didn't have money to fix and I refused to fix it. A crack that had been there forever.

At closing there were 4 checks. One for bank, a smaller one for me, one for broker and one for buyer - the buyer financed the repair into the loan.

In hindsight probably illegal...

[bstreep]

Originally Posted by Ex-Calif

When I sold a house (years ago) there was a $5,000 reepair needed - some foundations bs. The buyer didn't have money to fix and I refused to fix it. A crack that had been there forever.

At closing there were 4 checks. One for bank, a smaller one for me, one for broker and one for buyer - the buyer financed the repair into the loan.

In hindsight probably illegal...

Lots of things USED to go on in Real Estate... Also depends upon how much the buyer is putting down. Lots of things "go away" when the buyer puts down a large downpayment. Even today.

[callmecrazy]

ask for 20k off the selling price.

if the seller doesn't go for that, go buy a boat that doesn't need as much work. hopefully for less than 20k more...

[denverd0n]

Wow. In certain circumstances, I can see borrowing a portion of the cost of buying a boat. But if I needed to ALSO borrow money to pay for the immediate repairs required by that boat... I would keep looking until I found a less expensive boat.

Good luck to you, whatever you do.

[hellosailor]

Most sellers would prefer to say no and have a clean transaction. They don't want to get in the middle or have responsibility for repairs or get stuck if you don't close. Still, you can always ask. Yes, it is possible to say "We'll pay you an extra $20k above your asking price, provided that is put into escrow against these repairs" and then of course, that means you pay it all up front and wait for the repairs to be done before the escrow is released. Of course that may mean they have to lay out money, or you may need to work with the "contractors" to get everyone on the same page.

But anything is possible.

[tomfl]

In my first post I tried to be subtle about this but can't hold my tongue any longer. The rule of thumb is you need to keep somewhere between 10-50% of the purchase price of the boat for first year repairs, and every year there after sink more money into maintaining the boat.

I am still not convinced the only thing this boat needs is a bottom job and a new mast step. Borrowing the money for these repairs because you can't pay for them up front when you will almost for certain have to sink more money into the boat quickly seems like a bad idea to me.

[keyspc]

get a survey!! sounds like you need to run not walk from this project boat!