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Old 01-08-2014, 03:26 PM   #1
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Shared ownership

We are considering a shared ownership arrangement with our 40' Willard Trawler. Is anyone in involved in a shared ownership? And what would be the ups and downs? Our Willard was purchased originally in 1975 by a group of five owners and the article says they did well enough to trade up to a bigger boat a few years later. What do you guys think?
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Old 01-08-2014, 04:57 PM   #2
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A recipe for disaster. Pure and simple. Just my opinion, now, and worth what you paid for it. But I've seen quite a few of those, and they never work.
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Old 01-08-2014, 05:03 PM   #3
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Check the archives. This discussion came up about 8 (?) months or so ago. We have a friend who is in a partnership owning a 40' Mainship. After about a year all is good.
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Old 01-08-2014, 05:13 PM   #4
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jwnall, I have to disagree with you. I have been involved with a group arrangement on a 41' Beneteau in the British Virgin Islands for the last 15 years as well as doing the same thing with my airplanes for the last 20 years. Candidly, these arrangements will work out in direct proportion to the effort one puts into them. I do know that there are very few of us who can justify or even rationalize our "toys". It makes a lot more sense to spread the cost among several users. Two cuts the cost by 50% / three by 67% and seldom affects availability. The key is to select people with your values and attitudes toward their equipment. To those who can shoulder the entire expense without having it burden them, my congratulations! You have done well! Most of the rest of us need to keep an eye on the costs. How many multi hundred thousand dollar motor homes / yachts / etc. do you see that spend the greater part of their time just sitting. Most "toys" have a high "Cost of Ownership", not a high "Cost of Operation", ie; insurance / slip fees / scheduled maintenance / etc. Sharing helps spread that around. I would be happy to discuss my experiences with anyone interested. George
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Old 01-08-2014, 05:22 PM   #5
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jwnall, I have to disagree with you.
Don't mind anyone doing that. :-) Sometimes it does work out, and sounds as if you have one of those.
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Old 01-08-2014, 05:31 PM   #6
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I think you should have a well-written (legal) agreement that specifies items such as: cruising area; time allocations for co-owners (like a time share condo); responsibility for protecting the vessel during inclement (hurricane) weather; responsibility for damaged sails/equipment during use; shared costs (routine repairs/updates, insurance, towing, dockage, etc);and anything else you can think of (who drank my scotch??).
I would guess this arrangement works best between good friends who intend to get similar levels of use from the vessel. Otherwise the co-owner not using the boat may eventually tire of paying his/her way.
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Old 01-08-2014, 06:18 PM   #7
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From some experience with clients in co-ownership arrangements, everybody here is right. They can be very good, sharing the ownership costs, or they can be a nightmare. A few points-Make sure your co-ownership agreements covers as many things as you can think of, no matter how small or trivial they may seem to be. Written upfront and clearly understood eliminates a lot of issues down the road. On maintenance and upkeep-who is responsible for seeing it is done and who does it? Generally, at least with the larger boats my clients have been involved in, all maintenance and upkeep is outsourced to professionals and the costs shared. In many cases, a professional yacht management company is used. That eliminates a lot arguments about what needs to be done and when it needs to be done. To me, it is not a great idea if one owner intends on doing a lot of the maintenance and upkeep himself. That leads to issues of how he gets credit for his time for doing it? Does he get additional cruising time? Does he actually get paid? Builds up some bad feelings when one owner spends a disproportionate amount of time on the boat. Also, doing one's own maintenance may create liability issues and, if something done fails, disagreement on the quality f the work and the cost of fixing it again!

Again, it can work, but as was noted, all parties have to be prepared to put a lot into it.
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Old 01-08-2014, 06:28 PM   #8
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I looked into it a couple of years ago for all the obvious reasons pointed out by George in post #4. What I found in my area is that shared use agreements are far more common in the sailboat crowd than with power boats(at least in the typical size found in this forum).

I see a ton of upside potential to get into a newer or larger boat for fair money but the maintenance seems to be the biggest source of discontent in the sailboat partnerships I personally looked into locally. Aside from that I think it can be structured to benefit all parties but the trick is finding like minded parties near your chosen boating grounds.
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Old 01-09-2014, 10:04 AM   #9
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I was involed in a 1/6 partership on a 36' sailboat in the Abacos for about 2 years - be careful of the ego's & personalites among the partners - we had an extensive contact - but maintenance, spare parts, each member putting things back in it's place became a problem - some were very knowledgable; some not at all - there was also a fair amount of BS - as my wife finally concluded - " we needed a full time mariage counselor on staff " - i was trilled to get out !! it really became a bit of " nutsville " -
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Old 01-09-2014, 10:30 AM   #10
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Several cities have what are essentially time share arrangements with a professional staff monitoring usage and taking care of maintenance. My knowledge is of the Chicago operation. Not cheap but then nothing about boating appears to be cheap. Paying a professional staff eliminates a lot of the mickey mouse and disputes among the co-owners. Then again mainly of these operations are really just lease operations giving you the right to so many days per season.

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Old 01-09-2014, 12:39 PM   #11
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I think you should have a well-written (legal) agreement...
Absolutely.

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I would guess this arrangement works best between good friends...
Actually, I'd say that at least as often it works best between strangers who all treat it as a simple business arrangement. Kind of like the way borrowing money from strangers usually works out better than borrowing money from friends.

As others have mentioned, key is having partners who have similar attitudes about various aspects such as how much insurance should be carried, what kind of routine maintenance should be done, and so on. Another useful quality, if you can find it, is different desires when it comes to using the asset--like one who prefers weekdays and another who prefers weekends.
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Old 01-09-2014, 05:18 PM   #12
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I don't like to have partnerships in anything that is personal until and unless I really know and like a person... i.e. my wife and my relationship functions as a 100% unit (50-50 partners). For my boats, cars, trucks, houses... etc... I'm pretty much a do it my way type of guy. My items are classics that bring me pleasure in one way or another; their intricacies are established, controlled, and massaged by me. I appreciate having and am willing to pay for 100% ownership. In business I am more flexible, in that sometimes I need partners who have skill sets I don’t. However, I do try to not reduce my position in business I begin to less than 51%, and usually keep my percentage considerably higher.

That said... I'm in midst of rolling one corp into another. Wherein some previous option holders will be removed and the person who has been my lead engineer for years will remain with me. He and I are hoping to soon embark on a well funded multi year product development journey that will entale close cooperation with other companies and organizations from U.S. and Canada. I may end up with less than 51% position... because scope of this business is too great to miss out on - we shall see!
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Old 01-09-2014, 06:49 PM   #13
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Several cities have what are essentially time share arrangements with a professional staff monitoring usage and taking care of maintenance. My knowledge is of the Chicago operation. Not cheap but then nothing about boating appears to be cheap. Paying a professional staff eliminates a lot of the mickey mouse and disputes among the co-owners. Then again mainly of these operations are really just lease operations giving you the right to so many days per season.

Marty
I've been kicking around the idea of joining something like that locally Marty. Majority of the boats are sail but last time I checked there was a Mainship 39 and a Nordic Tug or two in the fleet.

Kinda pricy but as you said nothing about boating appears to be cheap. I also have no desire to sell my Owens and supporting two boats seems foolish.
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Old 01-09-2014, 07:51 PM   #14
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Renting a boat makes a hell of a lot more sense financially than owning one. I have contemplated sharing my boat with other NT 26 owners; as we have a common bond and financial input.
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Old 01-09-2014, 07:54 PM   #15
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My boat is always available anytime for me within 25 minutes. That's the joy of single ownership.
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Old 01-09-2014, 08:08 PM   #16
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Gentlemen, Here is another solution to the cost sharing arrangements that have been proposed and the solution that I used with my airplanes. I formed MT corporations (no sales tax state) to own the airplanes that I owned, one corporation per airplane. Said corporations had the authority to issue 100,000 shares of stock. I then CAREFULLY SELECTED user partners to share the use of the airplanes, and yes, I have turned several people down, issuing each user partner 1 share of stock for insurance purposes, thus retaining 99.99% control while shedding 100% of the Ownership Costs. I was still able to use the equipment by scheduling it on a website. I figured that that was my compensation for shouldering 100% of the Capital Cost. Again, as previously mentioned, I would be happy to discuss this type of arrangement with anyone interested. By the way, I never had to exercise that 100% control, operating very democratically, due to very careful selection procedures! George
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Old 01-09-2014, 08:26 PM   #17
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George ( the above post ) has an interesting arrangement - that said, - as in any partership / marriage - " keep both eyes open before jumping in and once in, close one eye " - it sometines helps !
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Old 01-09-2014, 08:43 PM   #18
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George that sounds very similar to but more formal than the non equity partnership opportunities I've seen in the local sailing community. So are the shares to revert to the corp. when the shareholder wants to sell?
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Old 01-09-2014, 10:38 PM   #19
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My boat is always available anytime for me within 25 minutes. That's the joy of single ownership.
25 minutes?

I'd have to crawl to take me that long to get to my boat. Maybe 3 minutes by car or bike.
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Old 01-09-2014, 10:46 PM   #20
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25 minutes?

I'd have to crawl to take me that long to get to my boat. Maybe 3 minutes by car or bike.
You're the fortunate one!
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