Financing a boat for liveaboard

[coot]

Originally Posted by Charlie

The people who bug me are those Gen Xers who wrote a little code put up a web site and then sold it for 10's of millions to Billions and the web site never has and/or never will make money.

My favorite example to pick on is Napster, which got US$60,000,000 (sixty million US dollars!) of venture capital without anybody having any idea how the company might make money. I don't really mind that some of the investors got screwed because that kind of irresponsible behaviour ruined the tech market for the rest of us, though some of them were surely fund managers and were losing other people's money for them.

(For the record, I worked for a high tech startup that failed to go public because people were too afraid of tech stocks after the "dot bomb" event. They should have been afraid of investing in companies that had no business plan, no viable product, etc...)

Originally Posted by ess105

They also took on personal risk as if the bubble had of burst as the naysayers said it would, we would have been left carrying the debt.

Sometimes it does go bad. In the 1990s, I lived in Montgomery County, Maryland which is physically adjacent to Washington DC and ranks high on the list of most affluent counties in the US. Shortly after I bought my first house there, housing prices in the immediate area around where I lived dropped, even though they continued going up in the rest of the county. I lost money on the house when I sold it several years later. That is, the sale price was much less than the purchase price.

That experience would make me hesitant to go into business flipping houses if I didn't think I could afford to lose sometimes. I know you can make money from real estate investments, but the people who lost money are not on TV selling a book about how to do it.

Like sailing, you have to learn about it and decide what risks are acceptable to you.

[cat man do]

Originally Posted by coot

Sometimes it does go bad. In the 1990s, I lived in Montgomery County, Maryland which is physically adjacent to Washington DC and ranks high on the list of most affluent counties in the US. Shortly after I bought my first house there, housing prices in the immediate area around where I lived dropped, even though they continued going up in the rest of the county. I lost money on the house when I sold it several years later. That is, the sale price was much less than the purchase price.

.

I asked this before and never got answered, maybe try again.


You only actually lose money when you sell, and have to buy back in at a later stage when prices are rising.

Or do the US Banks make them top up the loan to stay at the 80% LVR ?

Dave

[ess105]

Originally Posted by coot

Shortly after I bought my first house there, housing prices in the immediate area around where I lived dropped, even though they continued going up in the rest of the county. I lost money on the house when I sold it several years later. That is, the sale price was much less than the purchase price.

While you can make money on your primary residence, one should not look at it as an investment vehicle as you are not in control of factors that may cause you to sell at a time that is not suitable to you. Sorry to hear about your loss though. Your later comments about learning and making your own decisions is spot on.

[Pblais]

While you can make money on your primary residence, one should not look at it as an investment vehicle as you are not in control of factors that may cause you to sell at a time that is not suitable to you.

It's how we bought the house we have now. The seller has always built a brand new house then sold it after 3 years. This was number 7 and he really out did himself. It was built quite well ans he oversaw a lot of the construction. Number 8 ddin't do bad financially but his wife decided she had had enough. Number 9 is the last one.

I'm not sure it's worth waiting 27 years to get a house you want to keep.

He and his wife are our insurance agent with State Farm. I guess he gets a little extra money each year. Not an easy way to add clients. He does however have a very good sense of insurance values.

[hellosailor]

Weyalan-
"Tell your manager that you want 12% net gain per annum "
Nice idea, but you might also want to tell him how much risk you are willing to take. Here in the US, I don't think you can get 12% without speculating in something like the stock market--and that's all uninsured unguaranteed totally speculative risk. Even if some bets are safer than others.
Incidentally, last time I heard the numbers, here in the US historically some 95% of all stock market players LOST money, which is how the remaining 5% manage to make high profits.

Sean-
Sure, we've got lo-doc and no-doc loans. Ain't gonna cost 1/2% over "top tier" loans though.<G> Might cost 7-8% instead of 6.25% ("Tier 1" customers can get car and home loans for 6 to 6-1/2% right now) but the "no doc" folks often play like the credit card companies, who will give anyone a loan but then up the annual rate to 25+% if you miss any payment on anything on the planet, including just paying a phone bill two days late.

Catman, they're called "predatory lenders" here, and their intent is usually to make a good lowball offer, which is real, but is also very easy/likely to put the customer into bankruptcy or foreclosure, or those superhigh rates.

Ain't a pretty picture, and our governments seem inclined to say "Hey, you were dumb enough to sign up for it..."

[cat man do]

Originally Posted by hellosailor

Catman, they're called "predatory lenders" here, and their intent is usually to make a good lowball offer, which is real, but is also very easy/likely to put the customer into bankruptcy or foreclosure, or those superhigh rates.

Ain't a pretty picture, and our governments seem inclined to say "Hey, you were dumb enough to sign up for it..."

Over here it's 7.49% full doc, and mine was 8% no doc.

Sure they have had a few bunnies over here sign up for the big loan with no thought of paying it off, then they lose everything.

But if youre that stupid, you deserve what you get.

If a bit more switched on, low and no doc is a great tool, when you have maxed out your full doc lending.

It has allowed me to swing a deal that will pay out by almost 3 x the original loan amount, so I should be able to get some hired lackies to help finish the boat off.

I must stress we have only good debt. houses paying high rent's for low buy.

No car loan's, credit card's or boat loan's.

No nice thing's either and no fun, almost no life, but that will change in a few year's

Dave

[ssullivan]

Yeah, that low or no doc loan sounds GREAT! It's hard to believe a guy I knew once complained that Australia was the worst country and he couldn't get ahead there (and that's why he moved from Australia to the States). Sounds to me like you guys have a *few* perks at least!

The low or no doc lenders Hellosailor rightfully is warning against in our area are called shylocks. The are sometimes connected to organized crime, or sometimes just really greedy individuals. This term's use is expanded beyond any racial/religious affiliation and describes any predatory lender. I knew a few while I ran my business in Manhattan. Didn't use them, but know others that did.

I'm still absorbing these posts and trying to relate them to our own financial situation. Still a bit unsure which way to go... will post a little more later when a direction starts to materialize. Looks like real estate would be bad for us though. The costs are tremendous to shoulder it while you are waiting for your appreciation (what to do with boat, cars, land jobs, new clothing, taxes, mortgage interest, upkeep and "refits", broker's fees, etc.. etc..). We may have to work with the more liquid type of investments... still thinking though.

[Weyalan]

Originally Posted by hellosailor

Weyalan-
"Tell your manager that you want 12% net gain per annum "
Nice idea, but you might also want to tell him how much risk you are willing to take. Here in the US, I don't think you can get 12% without speculating in something like the stock market--and that's all uninsured unguaranteed totally speculative risk. Even if some bets are safer than others.
Incidentally, last time I heard the numbers, here in the US historically some 95% of all stock market players LOST money, which is how the remaining 5% manage to make high profits.

In the current market, 12% return would not, in my opinion, be considered particularly aggressive/risky. Sure, it wouldn't be bomb-proof, but is certainly not high risk. I am talking about managed funds where your capital is spread over a pretty diverse range of assets. I have my cruising kitty fund invested in this way and it looks like clearing me about 12.5% this year...

[hellosailor]

"sometimes connected to organized crime, "
Yo, Sully, my Sicilian friends ask me to remind you, there is no such thing as organized crime. These unprofessional predatory loan persons, if they were *organized* they wouldn't be getting caught in crimes, now would they? Such aspersions cast shame on the entire loansharking, ergh, banking, industry!

<weg>

And, PS, they remind me that 12% is hardly high enough to be counted as a good return for an overnight vigorish. More amateurs, bringing down profits for an entire industry.

[ssullivan]

Ahhh... the Sicilians are the *nice* ones! Love 'em. Never had a problem. Perfect gentlemen. It's some of the more recent organized groups we have in this country... now those ones are a bit frightening.

But I think those predatory lender *are* organized... aren't they called "credit card companies" or something??

[ArtM]

Originally Posted by sluissa

I will drop the idea here, I still feel it is viable, but I do not feel like explaining my thoughts under these circumstances.

Sorry if this point has already been expressed, but you should understand that the trackers you are speaking of typically require access to a wireless, ground based network - usually a cellular phone network.

If the vessel is taken far enough offshore, the trackers will no longer be useful.

Except for that, though, I think it's a decent plan as long as you (1) install the tracker in a way that is not obvious or easily defeated (meaning it will take more than a circuit breaker to turn it off), and (2) that you are able to provide a continuous source of power, or at least provide power frequently enough that the battery will not die.

Also, there will be some cellular subscription costs for this, though I don't have any idea what they would be. A cleverly designed device would only transmit once an hour or more when stationary, and more often when on the move - perhaps every several minutes.

[Brob2]

Originally Posted by Weyalan

In the current market, 12% return would not, in my opinion, be considered particularly aggressive/risky. Sure, it wouldn't be bomb-proof, but is certainly not high risk. I am talking about managed funds where your capital is spread over a pretty diverse range of assets. I have my cruising kitty fund invested in this way and it looks like clearing me about 12.5% this year...

We must have the same investment manager. Ernie or Bernie something?

I've noticed recently my statements are coming from some place called 'FCI Butner' in North Carolina instead of New York so he must preparing to retire soon

[ArtM]

Originally Posted by ArtM

Sorry if this point has already been expressed, but you should understand that the trackers you are speaking of typically require access to a wireless, ground based network - usually a cellular phone network.

If the vessel is taken far enough offshore, the trackers will no longer be useful.

Except for that, though, I think it's a decent plan as long as you (1) install the tracker in a way that is not obvious or easily defeated (meaning it will take more than a circuit breaker to turn it off), and (2) that you are able to provide a continuous source of power, or at least provide power frequently enough that the battery will not die.

Also, there will be some cellular subscription costs for this, though I don't have any idea what they would be. A cleverly designed device would only transmit once an hour or more when stationary, and more often when on the move - perhaps every several minutes.

Oops, sorry I resurrected a 5 year old thread

[Brob2]

Originally Posted by Brob2

We must have the same investment manager. Ernie or Bernie something?

I've noticed recently my statements are coming from some place called 'FCI Butner' in North Carolina instead of New York so he must preparing to retire soon

Doubles oops, Weyalan may well have been investing with Bernie....