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Old 24-03-2020, 12:32   #31
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Re: Ruin My Dreams Please

In addition to the above, factor in a 10% sales commission paid to the broker when paid when it gets sold and also factor in a year's marina costs and insurance, plus some annual on going maintenance for the boat while it remains on the market in Aussie. Also figure in considerable repairs, refitting costs discovered upon the new buyer's survey, e.g., you estimated something like $8,500 for such sail away repairs or 10% discount from the charter you were considering buying from, maybe much more if it requires some major refit such as repowering / new sails. You will have the same or greater issues on your end of ownership as did the end of the charter period of usage, the boat will have aged and gained considerable wear and tear during your use.

Hope you enjoy your dream, it could be grand.

Boating is expensive, no doubt about that.
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Old 24-03-2020, 12:55   #32
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Re: Ruin My Dreams Please

Quote:
Originally Posted by Rucksta View Post
Check out import duty and GST in Australia.
https://www.abf.gov.au/imports/Pages...g-a-yacht.aspx

My understanding payment due at time of entry.
Exactly. Schedule that considerable 15% of market value cash outlay upon arrival in Aussieland, not when it is eventually sold and you receive your portion of the cash settlement upon completion of the sale, IF ANY after paying of the loan balance.
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Old 24-03-2020, 13:31   #33
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Re: Ruin My Dreams Please

I would venture to tell you that your dream will become a nightmare. You cannot plan to set sail around the world with as little financial contingency as you say you have. One medium size issue and you are cooked - overheat your engine, hit a storm and blow a sail, and your day to day living cannot be done at that budget.
You want to cross oceans - do some more training and your partner as well and make yourself available to crew on boat that is set up and financed to passage sail.
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Old 24-03-2020, 14:31   #34
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Re: Ruin My Dreams Please

Hey Steve, very good advice given here. Think seriously about it. The only person I know that has made money on selling his boats, cars, and airplane is my son and I'm pretty sure you are not him.
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Old 24-03-2020, 14:33   #35
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Re: Ruin My Dreams Please

Sorry Steve, mean to sound mean. Meant to say Good Luck, I admire your courage. Jack
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Old 24-03-2020, 15:12   #36
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Re: Ruin My Dreams Please

Steve, I admire your dream & I hope that one day you can turn it into reality! Mate, have a serious think about it all, some very good serious advice on here by guys who have been there, done that. Learn by their mistakes!
We are currently living in a very unsure world. People are losing their jobs, businesses going bust, don't go into debt buying a boat. Hang in for a little while, search all the boat sales on the internet, visit as many Marina's and yacht clubs as you can. Over the next few months there will be many bargains coming up and if you have cash, then you are in the driver's seat for the buy of the year. As cruel as it is, people will be put into desperate measures financially and amongst the first things to go will be their boat. Don't jump at a deal straight away as I don't think people will be jumping in to hand over cash, wait a week or two or three, the price will come down quite considerably. Thirty percent off the asking price is the norm to ask. Remember, you can always go up on any offer you make!
Do your homework, go for an older boat in near enough turn key condition, private buy with cash, best of luck and let us all know how you go. Don't go into Debt!
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Old 24-03-2020, 15:24   #37
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Re: Ruin My Dreams Please

I'll leave the financial in's and out's to others...

You're 28, have no practical sailing experience (ASA training notwithstanding), and you want to cross oceans with your partner with NO sailing experience?

NOT A GOOD IDEA! (you said: ruin your dreams).

IMO you'd be better served investing in a less expensive vessel (why a boat in Croatia?), and then build your experience, not only in sailing but in boat maintenance repair, etc. Consider some longer off-shore runs with your partner, to get experience on the open ocean and experience living with someone in a (very) confined space. Plan on doing this for at least a couple years, then decide if you want to "cross oceans". Would also be a good idea to crew on some long passages again for experience and to make sure you really want to do this.
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Old 24-03-2020, 15:25   #38
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Re: Ruin My Dreams Please

Looking strictly at the math....

Why borrow 80% of the boat purchase when you have cash in hand? You would be paying 7% on the loan...when you have the cash.

Pay cash for the boat, and use it to secure a line of credit. A secured line of credit (LOC) will get you a much better interest rate...in the range of 3%.

I would expect them only to offer you HALF the survey/appraised value of the boat in credit.

So...you'll have no cash in the bank, but access to maybe $40,000 as you need it, at 3%. The savings in interest will be substantial. In fact, if you can get by mostly on your other, non-specified income, you could pay almost no interest at all. According to your own calculations, this would be a savings of around $18,000 or around 20% of your budget! And you have access to cash IF you need it.

If your interest charges change from $18,000 to $0, your budget plan looks a lot better.

The banks would rather you didn't know about this...they get more $$ if you just get a regular, high-profit-for-them, loan. But if you go in knowing what to ask for, you should have no problem.

This way, you are paying for the boat, and just borrowing money to live.

But I would still get an older, proven, ocean yacht for less money.
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Old 24-03-2020, 15:31   #39
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Re: Ruin My Dreams Please

You don't have enough money if you have to finance the boat. But, having said that, if you can work out the financing, factor in any required insurance, and still feel like you have enough to live on and maintain the boat (double whatever you think that will cost!!!), go for it! But, don't forget health care costs - hopefully negligible at your age but maybe not. Just realize that a realistic assumption is that you will very likely end up penniless at the end of 3 years (or less) and will have to start over from scratch. At your age that's doable as long as you have skills that will allow you to get a job that pays enough to get by irrespective of the economy at the time. Realistically, you're essentially risking it all and hedging your bet based being young, healthy and having a lot of years you have ahead of you to recover your losses.
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Old 24-03-2020, 16:09   #40
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Re: Ruin My Dreams Please

Now after reading all your plan... STOP! don't waste your time, your partners time, and all your money on something you only think you want to do. Please read your post out loud to yourself and your partner. then ask each other, is this the plan of a sailor? I think not! If you really want to sail, Just sell everything buy the boat that screams your name! Then you pick your ports of call, have all the correct documents,(best you can) and GO! Everything else just happens! (a sailors plan, live it, be it!) Good Luck! P.S. Live by this. (Que Sera Sera)
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Old 24-03-2020, 16:28   #41
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Re: Ruin My Dreams Please

Thanks for all of the responses, there are much more than I expected. I read each one 3 times and will likely do so several more times over the next few months.

Summary of your suggestions:
If you have to finance a boat you cannot afford it.
I agree and disagree with this. If I was to buy a boat for half as much as the one I mentioned ($42.5K) for cash I would be left with just $27.5K in cash which would cover less than a year and a half of operating expenses. I would then have to sell the boat and get something like $35K back in cash that I would have wished I had in my pocket on day 1 for operating expenses. On the other hand, paying cash would allow me to forgo expensive insurance coverage and Canadian registration that could help save on sales taxes. I am thinking that getting a personal line of credit might be the best bet as they won't ask any questions about what I will be doing with the money, I only pay interest when I withdraw and the payments would be interest only.

Your estimate for the selling price of the boat is too high.
This is one of my biggest oversights (of many), some have stated that the tax in Australia is 15% which will take a big chunk out of my expected equity. The only redeeming factor is the insane markup in Australia. In Australia a 2010 40í Bavaria is listed for $30K (36%) more than the 2015 37í Bavaria in the Med. This is even considering the recent weakening of the AUS$ against the USD, the difference would be 15% more if this was 2 months ago. Some mentioned exchange rate issues but these are relatively minor considering the AUS$ and the CAD$ usually trade at a relatively consistent exchange rate since both currencies heavily rely on commodity prices such as iron and coal in Australia and oil in Canada. I would like to reiterate a sentiment about the sailboat market I saw elsewhere: Itís a seller's market when youíre buying and a buyers market when you're selling.

You donít know if you or your partner will like cruising.
I donít know what I donít know but I do know I felt the call to sailing like I am sure all of you have that has put a lasting desire to be out on the water and feel the freedom that sailing brings. This isnít to say that it wonít be very tough at times that I will be regretting my decision to start cruising to begin with. If the cruising life isnít for me then I will pack up my bags after a few months in the Med and take the $20K+ loss and chalk it up to a learning experience. Fortunately, I am still young and have time to make these kinds of mistakes. I think the regret of not taking the leap will be more than the regret of never taking the leap and waiting until I have too many other obligations.

Comments that added a lot of value:
- Find a cheaper, older and better-equipped boat
- Start with an offer at ⅔ the price of the boat and adjust it based on the survey
- Do repairs yourself to ensure corners are not cut
- Offer to be a deckhand on a boat sailing from the canaries to the Caribbean before buying a boat
- A line of credit would be a better option for financing the boat
- Broker fees are 10% of selling cost
- Save up more $$
- One major repair to the engine, sails or hull could cut the adventure a year short
- It will take months to sell the boat at a good price
- Outfitting costs to get a boat safe enough and capable to cross oceans are very high

I likely missed a few other good suggestions but I will be sure to keep reading until they are all ingrained in my memory.
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Old 24-03-2020, 16:54   #42
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Re: Ruin My Dreams Please

So you have next to nil sailing skills and are already planning how to lock roughly 75% of your hard earned cash into a project you have no competence yet to pull thru.


Good luck, mate.


I do not think you know what it takes.


I think you should slow down.


Why not sail 'locally' (if the boat is in the Med, it is a good training field) a year or two. Learn sailing real well. Get to understand the boats, the weather, etc., see how others do things. And then, say in maybe 2 or 3 years, go ahead with this plan.


Do not over-plan the money thing. It always costs as much as you have. If you have 100k, you will spend it sooner than you think.



I am not saying 'don't'. I am saying slow down. Learn sailing real well, watch other cruisers for a time.


And mind people who are praying things on youtubes and instas of this world are out there to sell you something. Look up the words influencer, affiliated links, and AdSense.


Ruined?



Cheers,

b.
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Old 24-03-2020, 19:15   #43
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Re: Ruin My Dreams Please

Steve, after reading your response I now believe you're making a mistake. Too much emotion, too little real experience and probably too much youtube ... But I could be wrong.

I just hope your partner is reading this thread.

Good luck. I'm sure you'll figure it out -- likely after learning some unnecessary lessons.
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Old 24-03-2020, 19:24   #44
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Re: Ruin My Dreams Please

Lots of things you may be overlooking and tons of true advice on this thread.
Maybe the biggest mistake is donít buy a boat like a car thinking newer is better. This is where experience counts, or knowing somebody who knows a lot about boats. You need to look older and cheaper- better outfitted and tested and well found.
You will easily spend 30-50K to turn a charter Bavaria into an ocean crosser. Find a boat where someone already did the outfitting for you unless youíre budget is bigger or you want to spend 3-5 years in a boat yard
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Old 24-03-2020, 19:43   #45
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Re: Ruin My Dreams Please

Quote:
Originally Posted by Rucksta View Post
Check out import duty and GST in Australia.
https://www.abf.gov.au/imports/Pages...g-a-yacht.aspx

My understanding payment due at time of entry.
If he is not an Aussie, he can have the boat here for quite a while on a cruising permit, importing is not required on entry. If he then could find an offshore customer, he can make the transaction offshore without importing the boat (rather difficult to accomplish, but not impossible). If he wishes to openly market the boat in Australia it must be imported, and that attracts 5% duty (unless built in the USA or other free trade partner) and 10% GST on it's appraised value plus expenses of getting the boat to Oz.

Speculation about boat values in the future are damn risky in general and especially in our uncertain environment. Don't depend on recouping ANYTHING upon arrival, for their may well not be a market.

Jim (who has imported and sold a boat here in Oz in the past)
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