Cruisers Forum
 


Reply
  This discussion is proudly sponsored by:
Please support our sponsors and let them know you heard about their products on Cruisers Forums. Advertise Here
 
Thread Tools Search this Thread Rate Thread Display Modes
Old 16-05-2021, 15:50   #1
Registered User
 
Elimax's Avatar

Join Date: Aug 2016
Location: S.F. Bay Area
Posts: 13
Seawind Build Slot Deposit - What am I missing?

I would be interested in some feedback. Wife and I are reasonably serious on the purchase of a Seawind 1260. Current build slots are pushing out about 2 years. I have recently received a purchase agreement from a North American Seawind dealer to take a look at. If I am interpreting this correctly here is how it works.


$40K FULLY REFUNDABLE build slot deposit. Held in escrow up until the point that the boat commences construction. We can pull out with 100% refund of deposit, prior to commencement of the build.



At time deposit is made - boat pricing is locked in based upon how it is configured.


So my questions are as follows: If we are reasonably serious about this purchase and have the 40K available for the deposit, why would we NOT secure the slot as a hedge against inflation? We would likely have 14-16 months to determine if this is indeed the direction that we want to go. If at that time we have decided this is not for us, or the market has shifted, our only "loss" would seem to be what we would have made on the 40K deposit.


Any idea If I am missing something here? Any thoughts would be appreciated.......
Elimax is offline   Reply With Quote
Old 16-05-2021, 16:13   #2
Registered User

Join Date: Mar 2019
Posts: 1,001
Re: Seawind Build Slot Deposit - What am I missing?

Quote:
Originally Posted by Elimax View Post
I would be interested in some feedback. Wife and I are reasonably serious on the purchase of a Seawind 1260. Current build slots are pushing out about 2 years. I have recently received a purchase agreement from a North American Seawind dealer to take a look at. If I am interpreting this correctly here is how it works.


$40K FULLY REFUNDABLE build slot deposit. Held in escrow up until the point that the boat commences construction. We can pull out with 100% refund of deposit, prior to commencement of the build.



At time deposit is made - boat pricing is locked in based upon how it is configured.


So my questions are as follows: If we are reasonably serious about this purchase and have the 40K available for the deposit, why would we NOT secure the slot as a hedge against inflation? We would likely have 14-16 months to determine if this is indeed the direction that we want to go. If at that time we have decided this is not for us, or the market has shifted, our only "loss" would seem to be what we would have made on the 40K deposit.


Any idea If I am missing something here? Any thoughts would be appreciated.......
The biggest risk is that if Seawind becomes insolvent at any point in the next 2 years you become an unsecured creditor and get pennies on the dollar of your deposit back. I don't have any information to suggest Seawind is in any financial distress, but as literally hundreds of failed boat builders of the past 50 years indicate, any boat builder is a recession away from failing, and who knows what the next two years will bring. Look at it another way, if Seawind issued a corporate bond it would probably have to be at an interest rate north of 10% vs AAA rates in the 2% range. That extra interest represents the risk that Seawind defaults, which is the risk you're running while being compensated with 0% interest. So it's not the interest you're forgoing by not investing elsewhere, it's the interest you're forgoing they would have to pay you to take the risk of giving that money to Seawind specifically.

That said, I don't personally think that's reason enough to avoid making the deposit, given it's size vs what you can clearly afford for buying the whole boat. But it is a slightly different picture of the potential down side in reality than you listed that's worth considering so at least you go into it eyes open.
redneckrob is offline   Reply With Quote
Old 16-05-2021, 17:11   #3
Senior Cruiser

Cruisers Forum Supporter

Join Date: Mar 2009
Location: Annapolis, MD
Boat: B373; Southerly 42 by Discovery on order
Posts: 50
Images: 1
Re: Seawind Build Slot Deposit - What am I missing?

The OP indicates the deposit will be held in escrow in which case Seawind can disappear and the money is safe.

I'd investigate the escrow agent carefully. If they're solid, then I think you're right.
shimari is online now   Reply With Quote
Old 16-05-2021, 17:17   #4
Registered User

Join Date: Mar 2019
Posts: 1,001
Re: Seawind Build Slot Deposit - What am I missing?

Quote:
Originally Posted by shimari View Post
The OP indicates the deposit will be held in escrow in which case Seawind can disappear and the money is safe.

I'd investigate the escrow agent carefully. If they're solid, then I think you're right.
You're right, I missed that. If it is a third party escrow with someone reliable like a bank then my point can safely be ignored.
redneckrob is offline   Reply With Quote
Old 16-05-2021, 17:28   #5
Registered User
 
Elimax's Avatar

Join Date: Aug 2016
Location: S.F. Bay Area
Posts: 13
Re: Seawind Build Slot Deposit - What am I missing?

My understanding is it is a US based escrow account and refundable up until the build commences. I agree that after the build commences and additional payments are made, then certainly there would be additional risk involved. Up until that point, we are not seeing a lot of downside to an "inflation hedge" as well as getting in line....
Elimax is offline   Reply With Quote
Old 17-05-2021, 05:20   #6
Registered User

Join Date: Jan 2020
Location: EC
Posts: 402
Re: Seawind Build Slot Deposit - What am I missing?

I would want to make sure the contract says they give you a months notice that the build is about to commence and the hull number that it will be, if it is open they could tell you it started any time and you wouldn't know.
Tin Tin is offline   Reply With Quote
Old 17-05-2021, 05:54   #7
Registered User

Join Date: Mar 2014
Location: Port Canaveral
Posts: 515
Re: Seawind Build Slot Deposit - What am I missing?

Quote:
Originally Posted by Tin Tin View Post
I would want to make sure the contract says they give you a months notice that the build is about to commence and the hull number that it will be, if it is open they could tell you it started any time and you wouldn't know.
Good point, because it is quite likely in the next year+ that you would come across a young used SW or a comparable cat. You'd want to be able to back out with being surprised by some statement from the builder "Oh, we just started prepping the mold last night... what a coincidence!"
mako is offline   Reply With Quote
Old 17-05-2021, 07:48   #8
Registered User

Join Date: Jun 2012
Location: Port Aransas, Texas
Boat: 2019 Seawind 1160 Lite
Posts: 1,963
Re: Seawind Build Slot Deposit - What am I missing?

Quote:
Originally Posted by Tin Tin View Post
I would want to make sure the contract says they give you a months notice that the build is about to commence and the hull number that it will be, if it is open they could tell you it started any time and you wouldn't know.
Not likely to happen. The second payment (deposit is the first) is due upon commencement of construction. You are going to get a notice that they want to start your hull, and they will want a payment before it starts, pronto. If its the same way as when we built our Seawind in 2018.
sailjumanji is offline   Reply With Quote
Old 17-05-2021, 08:09   #9
Registered User

Join Date: Jun 2012
Location: Port Aransas, Texas
Boat: 2019 Seawind 1160 Lite
Posts: 1,963
Re: Seawind Build Slot Deposit - What am I missing?

Quote:
Originally Posted by Elimax View Post
I would be interested in some feedback. Wife and I are reasonably serious on the purchase of a Seawind 1260. Current build slots are pushing out about 2 years. I have recently received a purchase agreement from a North American Seawind dealer to take a look at. If I am interpreting this correctly here is how it works.


$40K FULLY REFUNDABLE build slot deposit. Held in escrow up until the point that the boat commences construction. We can pull out with 100% refund of deposit, prior to commencement of the build.

At time deposit is made - boat pricing is locked in based upon how it is configured.
Our Seawind was built in 2018. We put a deposit down in January, but since we had never sailed on the 1160 Lite, we wanted it refundable thru the test sail at the Miami Boat Show in late February. Seawind was ok with that. But that said, it became non-refundable/sole discretion of seller a couple of weeks later, as per the contract. The build wasn't scheduled to start around until around June.

I am surprised that they let you wait all the way up until commencement of construction, to back out. Are you sure that is what the contract says?

As you stated, the deposit locked in the price list. We made several changes - almost all additions - to the build before it commenced, and it was just a matter of adding items from the list at price, and revising the contract. Once construction begins, they have the right to charge a surcharge for changes, as some changes can cause them additional labor, etc.

Seawind did a very good job of updates every 3-4 weeks, with pictures. It was something we really looked forward to. The pictures also proved the level of completion required for them to request payments. You will need to have the funds ready to be wired when requested. Our dealership contract was pretty straight-forward, and only a couple of pages of terms and conditions. And several pages of detailed invoice, the warranty, the boat specs, and the standard equipment specs and the price list. Didn't need a lawyer to interpret.

Overall it was a very good experience for us. We owned a Seawind 1000 for 12 years prior, and the history with that boat, the support from the factory, etc., made it easy to decide on another Seawind. That said, we attended Miami and Annapolis shows and went thru a lot of other cats before committing to the new build.
sailjumanji is offline   Reply With Quote
Old 17-05-2021, 10:27   #10
Registered User

Join Date: Oct 2019
Location: So Cal
Posts: 875
Re: Seawind Build Slot Deposit - What am I missing?

Quote:
Originally Posted by Elimax View Post
I would be interested in some feedback. Wife and I are reasonably serious on the purchase of a Seawind 1260. Current build slots are pushing out about 2 years. I have recently received a purchase agreement from a North American Seawind dealer to take a look at. If I am interpreting this correctly here is how it works.


$40K FULLY REFUNDABLE build slot deposit. Held in escrow up until the point that the boat commences construction. We can pull out with 100% refund of deposit, prior to commencement of the build.



At time deposit is made - boat pricing is locked in based upon how it is configured.


So my questions are as follows: If we are reasonably serious about this purchase and have the 40K available for the deposit, why would we NOT secure the slot as a hedge against inflation? We would likely have 14-16 months to determine if this is indeed the direction that we want to go. If at that time we have decided this is not for us, or the market has shifted, our only "loss" would seem to be what we would have made on the 40K deposit.


Any idea If I am missing something here? Any thoughts would be appreciated.......
I think the only hesitation I'd have is the bona fides of the escrow company - too many of these have been set up as a scam . Looking at it from the builders side, the deposit means you're serious and they won't find themselves in a mares nest of Craig's List (aka Flakes List) scenarios where people take up a free slot and never are heard from again. I suspect any interest loss you take would be covered by the lack of inflation.
joelhemington is offline   Reply With Quote
Old 17-05-2021, 13:34   #11
Registered User
 
Cadence's Avatar

Join Date: Dec 2008
Location: SC
Boat: None,build the one shown of glass, had many from 6' to 48'.
Posts: 9,582
Re: Seawind Build Slot Deposit - What am I missing?

If I read it correctly you are only securing a slot. Once the keel is laid you no longer have the option of getting out?
Cadence is offline   Reply With Quote
Old 17-05-2021, 14:47   #12
Registered User
 
Elimax's Avatar

Join Date: Aug 2016
Location: S.F. Bay Area
Posts: 13
Re: Seawind Build Slot Deposit - What am I missing?

Yes, that would be how I read the contract. Refundable deposit up until the time construction begins. Then it becomes contractual and likely I would lose funds if I backed out.


The only reason this is appealing is due to the long lead time to get a build, and my expectation that we are going to see significant inflation that would impact the contract price, plus the timing works out well for our plans.
Elimax is offline   Reply With Quote
Old 17-05-2021, 16:14   #13
Registered User

Join Date: Jun 2012
Location: Port Aransas, Texas
Boat: 2019 Seawind 1160 Lite
Posts: 1,963
Re: Seawind Build Slot Deposit - What am I missing?

Quote:
Originally Posted by Elimax View Post
Yes, that would be how I read the contract. Refundable deposit up until the time construction begins. Then it becomes contractual and likely I would lose funds if I backed out.
Wow, I am really surprised by that. In 2018 - when the demand was not even close to what it is today - the deposit was paid to confirm your order. After that, refund was "at the sole discretion of seller." You really didn't want to put down a deposit, unless you were sure you wanted to have a boat built. It did lock in the price list, and it guaranteed your spot in the production schedule. But it was pretty clear it was not just a refundable option for you to decide later whether you wanted to go forward.

That said, the time between when we put down our deposit, and the construction began, was about four months.

If you think about it from Seawind's perspective, they don't want a bunch of deposits from people that are not committed to having a boat built. The wait time is killing sales, as many people don't want to wait two years, or up to 4-5 years for some models. If you were the company, you would want to have some way to assure people are serious buyers, not just putting down a refundable deposit that allows them to shop for used boat for two years, and then decide at the last minute to pull out with no monetary penalty.

If your contract is as you have stated, then its a no-brainer. Seawind is taking all of the cost inflation risk, and hoping you are still around in two years. You are out the interest you'd make on $40k.

Finally, as for "timing working out for your plans", I would be prepared for something quicker. It happened to a friend of mine a couple of months ago, although in his case, he was very happy about it. I would expect Seawind to find a way to produce more boats to take advantage of the market, rather than continue to lose sales because people don't want to wait years for a new boat. IMO
sailjumanji is offline   Reply With Quote
Old 17-05-2021, 17:02   #14
Registered User
 
Elimax's Avatar

Join Date: Aug 2016
Location: S.F. Bay Area
Posts: 13
Re: Seawind Build Slot Deposit - What am I missing?

Update: So when I put my questions into a confirmation email and requested a specific response back.....the situation has changed. I am going to chalk this one up to a new salesman that might have gotten his wires a bit crossed. (I'm thinking positive)


#1 - Funds are NOT being held in Escrow and will be sent to Seawind.


#2 - Funds will be refundable up until they begin construction ASSUMING they can sell my slot to another party. This works in a market that is on fire with lots of buyers. However, it is far from a guarantee, and certainly much different than what was originally discussed.


At this point the metrics have changed from what we considered a no-brainer, to something that is more along the lines of what I would have expected. I appreciate the sounding board and those that chimed in with their build experience. This is all a bit new for us.



What I can say is I have now had two separate experiences where the phone discussions and questions are far different then the answers that are received when those questions are put in writing......I must just be a poor listener!
Elimax is offline   Reply With Quote
Old 17-05-2021, 17:10   #15
Registered User

Join Date: May 2020
Location: Eleuthera/Lennox Head
Boat: Seawind 1260
Posts: 110
Re: Seawind Build Slot Deposit - What am I missing?

Our boat was finished in early January this year. We signed the contract and paid a deposit in May 2020. We had been looking at a build slot in late 2022 but one became available, presumably through someone opting out.
With demand what it is for Seawinds I imagine that they have no problem filling a build slot that becomes available. As per our contract the initial US$20,000 deposit was non refundable however the agent said that they would have no problem selling the slot on. They could also adjust the schedule for a buyer who would like the boat earlier when possible.
As for Seawind going belly up? Not a chance in the foreseeable future.
Alistair242 is online now   Reply With Quote
Reply

Tags
Seawind, wind

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Rocna anchor slot bobs Anchoring & Mooring 12 07-10-2013 21:00
Manson Surpreme Rock Slot sailorboy1 Anchoring & Mooring 26 18-09-2012 19:16
Chain Plate Slot Cutting ShipShape Construction, Maintenance & Refit 22 16-04-2012 04:38
Mast furling slot Pinched at spreaders ctsbillc Deck hardware: Rigging, Sails & Hoisting 11 21-12-2011 20:05
Manson Supreme Rock Slot - Part 1 skipmac Anchoring & Mooring 29 25-05-2011 09:58

Advertise Here


All times are GMT -7. The time now is 20:00.


Google+
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.
Social Knowledge Networks
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.

ShowCase vBulletin Plugins by Drive Thru Online, Inc.