Fractional Ownership Of Jeanneau 44i Good or Bad Idea?

[rswanson]

Originally Posted by Cadence

JMHO, run.

Why do you say that?

[CarstenWL]

I am paying $24,000. I am not sure how you get $1200 per week? Please explain.

$24k for 4 weeks a year for the duration of 5 years (= 20 weeks) = $24k / 20 = $1200,-

How much are the turnaround fees and the monthly management fee?

Regards,

Carsten

[alansmith]

Somehow the math has gotten goofed up here. The OP stated 24,000, all in, for 5 years @ 4 weeks per year. So, 5 yr X 4 wk/yr= 20 times to use the boat. Then 24,000 divided by 20 times = 1,200 dollars per week of use. Does not include management or turnaround costs.


RSwanson, here is what I would want to know up front:


1. How is it determined who gets what weeks? Is it based on first into the partnership gets the first choice of weeks? Is it based on whose cheeks get kissed the most? How are the weeks allocated is the deal maker or breaker for me. For example....let's say the boat is in the Bahamas and the prime sailing season is between November to April. What if you can only get one week during the prime time, what then?


2. You did not mention how many partners are in the group. So, factor that into what your chances are of getting good usage of the boat.


3. How will the pecking order of who gets what week change or not change during the 5 years of partnership? If you are low man on the stick in year one...you better be first man on the top of the stick in year 2...so on and so on...so that it is fair.


4. Make sure that before you sign a contract that it is reviewed carefully by someone who understands partnerships. What if the boat is damaged by one of the other partners and you lose your prime time ...what is the recourse? You not only lost your prime time ..you lost money for your airline, hotels, loss of vacation time from work...etc etc...It can get dicey...and pissy in a hurry.

[Cadence]

Originally Posted by rswanson

Why do you say that?

The additional cost are vague. I guess there will be twelve investors? Maybe not time of on the hill and moving her. Conflicts over weeks? Recouping any money at the end? I would almost bet the additional costs would be such that you may want out probably without your recouping any of the $24,000.

I believe you would be better off chartering at that amount. Sounds like a hook on Ponzi.

JMHO take it for what it is or isn't worth.

[Lizzy Belle]

Originally Posted by rswanson

I have an opportunity to buy a 4 week a year ownership of a Jeanneau 44i for $24,000 // but it is to be divided between twelve owners.

Twelve owners? Wow. And these 12 are all in for 4 weeks/yr?

12 x 4 = 48 weeks a year of the boat being 'booked', which doesn't sound likely?
Also see alansmith's post, those are VERY valid questions.

As to all the locations 'they' are discussing: who gets to vote and how does that work?
How much are the turnaround fees and the monthly management fee?
Who decides when what maintenance will be taken care of, and who'll do the work?
Will the boat be in the water all year for 5 years?

FWIW - just hearing '12 owners' would make me run, never mind the rest ... Even if some only bought one week a year. It's simply way too many people for one boat.
Just charter a boat where you'd like to sail, it'll save you a lot of frustration and headaches

[wayne.b]

Originally Posted by rswanson

I have an opportunity to buy a 4 week a year ownership of a Jeanneau 44i for $24,000. I can use all 4 weeks once a year or break up the weeks. There is a turnaround fee and a monthly management fee. The yacht will be sold after five years and the proceeds goes back to the owners. The main owner formed a management firm to handle all the management of the yacht. Does this sound like a good idea?

===

Personally I would not touch the deal. Why? Because there are too many things not under your control, primarily the expertise and commitment of the managing owner. The expertise and commitment of your co-owners is also an unknown and surely it will vary. Some will take good care of the boat and equipment, others not so much. Maintaining a boat that size which is heavily used is a major undertaking and there will be squabbles about the condition of the boat and also its availability. There will be unscheduled downtime that will surely disrupt usage of the boat at a time when people have made plans to be on it. All of that will lead to disagreements between co-owners and with the managing owner. There will be bickering about costs and quality. It's inevitable and eventually leads to the break up even small boat partnerships. You will also find it difficult to get out of the deal once you are in. Almost surely some of the co-owners will eventually throw in the towel as maintenance costs exceed their budget, and that will drive up costs for those remaining.

[Phisher]

I agree with Wayneb. Having been involved in a partnership before, I would steer clear. In my experience the more people the more problems. Sounds like a good deal, but.......

[Valmika]

I did something very close to this one time on a 35 Fountaine Peugeot. Most of the owners had other boats . I lived the closest to the boat and the way we had it set up I almost never had a problem taking the boat out midweek if I wanted. Weekends were assigned to partners based on one week every 12 but you could swap and change with others from a web calendar we set up. Summer weeks were a bit tougher but doable .

Maybe mine was different because about half of the partners had smaller boats but I loved it. This was a used boat worth about 120K My buy in was $2400 and $500 a quarter for everything else. We had a loan on the boat but the quarterly took care of that.

the only issue I had was that the main partner /organizer was a bit crooked I believe. The boat was sold with the majority of partner voting to sell to one of us. The problem is I was never asked to vote on the sale and either were 4 other partners that I knew personally. the boat was sold at a fair price but we never got an accounting of the slush fund for improvements that I estimate was around 12K at the time and nothing was included in the payout.

I guess my point is you can do it for much less or set up your own partnership with less partners. If you don't want brand new this could help you sail a lot and for much less.

[leftbrainstuff]

Originally Posted by rswanson

I have an opportunity to buy a 4 week a year ownership of a Jeanneau 44i for $24,000. I can use all 4 weeks once a year or break up the weeks. There is a turnaround fee and a monthly management fee. The yacht will be sold after five years and the proceeds goes back to the owners. The main owner formed a management firm to handle all the management of the yacht. Does this sound like a good idea?

It's no cheaper than a charter for 4 weeks a year. Would be cheaper or same cost to charter.

Add in the turnaround and management fees and you have a good deal... For the management company.

Is there a guaranteed return after 5 years?

Are there any hidden fees? Are the management and turnaround fees fixed?

What happens if the boat is damaged and out of action for an extended period?

Sent from my SM-N900T using Cruisers Sailing Forum mobile app

[vtomanov]

fractional is good if you are starting in sailing ion 5-6 years you will want your own boat... e.g. been there done that

[alansmith]

Now that I heard there are 12 partners I have one piece of advice run away as quickly as you can. Disaster is looming on the horizon

[Sandero]

I think this appeals to certain types... not me... and it's not the money aspect.

A yacht you OWN is very personal... It's like your home and for many it IS their ONLY home. We rent an apartment and OWN our boat and so I consider it our home. It is personalized and we keep our personal things there, art and so on.

What the OP is describing is a time share and that's like a sailing hotel room. If you like that.. fine. But you may want to pay a bit more and charter other boats in different locations... if sailing on other people's stripped out boats is your cuppa.

I think fractional ownership for DAY use makes sense...not as a "lodging" product.

YMMV

[l2ridehd]

If this is set up properly as a club it can work. I have belonged to a couple flying clubs and they can work well if set up correctly and managed properly. Ensure the agreement provides everyone with equal ownership and equal access. Make sure you have an elected club president, maintenance officer, and a financial officer. Don't try to sail for cheap. Make sure the club has adequate funds for the unexpected. Understand all the possibilities and it can work.

48 weeks of sailing in the Caribbean probably will not work. Something called hurricane season will get in the way. Make sure you have a good plan, elect new officers every year, provide compensation (maybe a free week) to the officers, and a good scheduling method.

[rswanson]

Originally Posted by l2ridehd

If this is set up properly as a club it can work. I have belonged to a couple flying clubs and they can work well if set up correctly and managed properly. Ensure the agreement provides everyone with equal ownership and equal access. Make sure you have an elected club president, maintenance officer, and a financial officer. Don't try to sail for cheap. Make sure the club has adequate funds for the unexpected. Understand all the possibilities and it can work.

48 weeks of sailing in the Caribbean probably will not work. Something called hurricane season will get in the way. Make sure you have a good plan, elect new officers every year, provide compensation (maybe a free week) to the officers, and a good scheduling method.

I think they have the hurricane season handled by moving the boat down to Aruba during the hurricane season so that it can still be utilized during July through October. Does that sound right?

[rswanson]

Originally Posted by leftbrainstuff

It's no cheaper than a charter for 4 weeks a year. Would be cheaper or same cost to charter.

Add in the turnaround and management fees and you have a good deal... For the management company.

Is there a guaranteed return after 5 years?

Are there any hidden fees? Are the management and turnaround fees fixed?

What happens if the boat is damaged and out of action for an extended period?

Sent from my SM-N900T using Cruisers Sailing Forum mobile app

They explain and it makes sense that one party needs to be responsible. No guaranteed return but the fee's seem reasonable. When you add in revenue received by the owners for chartering the boat to others when not in use and depreciation because of the way the partnership is structured it seems pretty good.