Partnerships?

[C lectric]

Do the exit clauses provide for a share owner that wants out for whatever reason or are they stuck for the term?

No partnership ever appealed to us so I never paid much attention but i think i remember something similar in the back reaches of my mind[??] and one of the folk we knew ran afoul of one of these deals. I do not remember the why's or wherefores so cannot be more specific but just go in, if you do, carefully.

[Edelweiss]

If you haven't already done so, maybe you should try a bare boat charter of one of their boats first before you invest and make sure that is the boat for you. A 37' Nordi rents for $645 per night Spring and Fall at Anacortes Charters. A one week charter is roughly, just 1/2 of my annual slip fee.

[sunchaser]

In the PNW the best cruising is packed into about 3 months per year. Divided by eight doesn't sound like much fun to me. Also, with a vessel the size you are contemplating lots of TLC is needed, I can't see 8 owners being diligent. Who decides on upgrades and fix up stuff? C lectric has a very good point, selling out can be iffy.

What has been your previous boating experience? Also, you may be seriously underestimating the depreciation on a new vessel as well as the ease of selling.

[O C Diver]

I think partnerships can work, especially if you know everyone going in. My 2 brothers, sister, and I jointly own our parents summer / retirement home for the benefit of our children till the last one reaches 18. Works well. Where I think this falls apart is the amount of money that ends up going to the management company. If the boat is short term use, a week at most, and you can't keep your stuff on the boat, it's basically a rental. So what's the advantage over renting? If a $100K is the minimum buy in plus some number of $1,000 per annum for dock, insur., maint., and management costs, think you could rent 1 weekend a month and 2 weeks a year and invest the $100K. Reality is you may not use it that much depending on family commitments, and with rentals you only pay for what you use. Also gives you the option to rent out of your area. That's how I see it anyway.

Ted

[Art]

IMO

1. Love Boating
2. Know boats
3. Know how to buy at correct price
4. Shop boats
5. But a correct Boat
6. Enjoy boat
7. Sell boat.
8. Buy another boat

And the beat (err boat - lol) goes on!

[Edelweiss]

Originally Posted by O C Diver

Where I think this falls apart is the amount of money that ends up going to the management company. If the boat is short term use, a week at most, and you can't keep your stuff on the boat, it's basically a rental. So what's the advantage over renting? If a $100K is the minimum buy in plus some number of $1,000 per annum for dock, insur., maint., and management costs, think you could rent 1 weekend a month and 2 weeks a year and invest the $100K. Reality is you may not use it that much depending on family commitments, and with rentals you only pay for what you use. Also gives you the option to rent out of your area. That's how I see it anyway.

I knew Nordic Tug in my marina was offering these condo boats, but had never heard the numbers before. I wonder how they divide up the use?

Eight owners and about 12 prime summer weeks of use and another 12 Spring/Fall weeks. The prime owner gets 1/2 of the time, Plus a 1/4 share owner, and six 1/8 share owners to get. . . . . what? That doesn't work. . . can't be eight owners or am I doing something wrong? The 8 owners must be the case if they're all 1/8th share owners? Even then you would only have a week and a half during the summer months.

I think you're right OC. . . chartering would make more sense!!

[O C Diver]

Originally Posted by Edelweiss

I knew Nordic Tug in my marina was offering these condo boats, but had never heard the numbers before. I wonder how they divide up the use?

Eight owners and about 12 prime summer weeks of use and another 12 Spring/Fall weeks. The prime owner gets 1/2 of the time, Plus a 1/4 share owner, and six 1/8 share owners to get. . . . . what? That doesn't work. . . can't be eight owners or am I doing something wrong? The 8 owners must be the case if they're all 1/8th share owners? Even then you would only have a week and a half during the summer months.

I think you're right OC. . . chartering would make more sense!!

My guess is it's 4 owners, 1/2 + 1/4 + 1/8 + 1/8 = 100% . The other part to consider, do you want to pick your weekends after 75% has already picked theirs?

Ted

[Marin]

I think Sunchaser raises very important inssues in his post #23. If you count our use of our trailerable fishing boat as well as our diesel cruiser we have been boating in salt water in the PNW for close to 30 years now. While we enjoy boating in the fall, winter and spring, the majority of boat owners here don't. Our nearly 2000-boat harbor is nearly devoid of recreational boaters from the begining of October through April or May.

So the boating season is relativley short, partciulaly if boaters have school-age kids. Eight owners vying for boating time during a three or four month period could get frustrating.

Prior to deciding to buy our own cruising boat here, we chartered a similar boat. And while chartering can make a lot financial sense, particularly if one's boating is going to be confined to one vacation a year, it has definite drawbacks.

An option for the buyers of a newer boat is to put it into a charter fleet. While the owner generally never makes money with this sort of arrangement, putting one's boat in charter can often cover the annual ownership cost of a boat.

We never considered this, or a "condo" type boat ownership scheme for a couple of reasons. One is the time and schedule limitation it places on the owners. But the big one for us is that you can't set your boat up the way YOU want it. Like a charter customer, you have to schlep all your stuff off the boat when you leave it.

As I suspect is also the case with year-round frequent boat users on this forum like Art and FlyWright and Mark, one of the things we like best about boating besides the boating itself is the fact that we can set our boat up exactly the way WE want it. We can leave our foul weather gear in the hanging locker, my wife can have all her cooking doodads on board exactly where she wants them, we can keep all the books we want on board, from bird and plant identifers to navigation and cruising guides, we can hang the pictures we want, and on and on and on.

If we want to go up to the boat on any given weekend and just hang out because the weather's crappy or we don't have the time to take a longer run into the islands, we can do it on a moment's notice and we don't have to pack and drag a bunch of stuff with us and then take it all home again the next day.

We know people who have boats like ours in a charter fleet, and it's working very well for them. But they are not the kind of people who use a boat like we do. Their schedules and other committments only give them time to take a cruise once or twice a year.

So chartering one's boat, or buying into a "condo" boat or multiple partnership can certainly work, but its success depends entirely on what the owner or partners want out of their boating experience. It would never work for us, nor would it work, I suspect, for a boater like Art.

If the original poster will be time-limited in his use of a cruising boat and does not want the year-round demands a boat can make of its owner, then a partnership could be a good way to go.

[Edelweiss]

Originally Posted by O C Diver

My guess is it's 4 owners, 1/2 + 1/4 + 1/8 + 1/8 = 100% . The other part to consider, do you want to pick your weekends after 75% has already picked theirs?

Ted

Yeah that's what I think too OC. Looks like there are probably two formulas since he mentioned a max. of eight owners.

I know Nordic has been struggling for sometime now and they're trying different marketing strategies. I go by their plant going to and from the airport. Their offices are locked up and parking lot empty a lot of the time. I heard they weren't building spec. boats anymore, only custom orders now. $800,000. . . That must be full retail list price. This recession really hit the boat manufactures hard!!

[markpierce]

Originally Posted by Marin

As I suspect is also the case with year-round frequent boat users on this forum like Art and FlyWright and Mark, one of the things we like best about boating besides the boating itself is the fact that we can set our boat up exactly the way WE want it. ...

Yes, in purchasing a boat, I didn't want to have to share (share?!) it with others (it might as well be a rental). I want to go boating whenever the mood and weather strikes in a boat configured particularly for me. (I digress. Today, Perla sent an email to FlyWright saying we were in Suisun Bay near the reserve fleet unbeknownst of his location/activity. FlyWright immediately texted he was "on Highway 680" [which crosses the western end of the bay] heading toward Suisun. We interpreted that as going to Suisun City via highway. Then he posted he was going "under" the bridge. That totally confused us. After having reversed direction headed back to Vallejo, while approaching the 680 bridge and having focused on the many close-by anchored boats fishing to avoid collision or cutting their fishing lines, Al called us, saying we passed him. He had the advantage that we had an easily-identified boat. Meanwhile, Al is staying in the bay, or perhaps Montezuma Slough, overnight on a fishing expedition.)

[Drake]

I have owned boats both in partnership and not. IMO the only reason to use a partnership is so you can have a boat you really can't afford. Not the best idea.

I'm sure partnerships work for some, but never have for me.

How's that for a worthless contribution?

[Tru-Line]

Originally Posted by sunchaser

In the PNW the best cruising is packed into about 3 months per year. Divided by eight doesn't sound like much fun to me. Also, with a vessel the size you are contemplating lots of TLC is needed, I can't see 8 owners being diligent. Who decides on upgrades and fix up stuff? C lectric has a very good point, selling out can be iffy.

What has been your previous boating experience? Also, you may be seriously underestimating the depreciation on a new vessel as well as the ease of selling.

The calendaring is done by the brokerage twice a year, February for spring / summer months and September for fall / winter months. The brokerage works with the with the super share owner on initial upgrades and amenities. Once the boat is commissioned the brokerage handles ALL of the TLC from wash downs to haul out, bottom painting once a year. If a owner sells out early the brokerage is on the hook to resell the share until the term ends.

The breakdown of hard calendar and open time is as follows:
1/8 Share - 5 weeks per calendar year plus 7 days of open time.
1/4 Share - 10 weeks per calendar year plus unlimited open time.
1/2 Share - 20 weeks per calendar year plus unlimited open time.


My wife and I have been living in the PNW for 11 years now and have a small cuddy cabin. We typically do day trips or weekends. We are looking to increase that but both still work and our time is not as open as we would like. We would like to step up to a larger boat and really like the Nordic Tug. The factory shutdown was only a line stoppage and not a complete shutdown of operations. When you factor in the other tug manufacturers that either ceased operations altogether or also had a work stoppage, Nordic did well in
the recession. American Tug was building 28 boats a year prior to the recession and now only builds about 8. Nordic is currently building 18 per year.

Partnerships are not for everyone as I am finding. I have also heard plenty of horror stories of people who put their boats into charter.

As for depreciation and ease of sale this program is designed to keep the boat in the best shape possible for resale after five years. Thinking of a boat as an investment is not what we are doing, however we want to get the best bang for our dollars over a long term it would be nice to get some sort of return it could be as I described or less, as all investment advisers say
"All investments have a element of risk, it is up to the investor to decide how much risk they are willing to have."

[eyschulman]

If the idea behind a partnership is to do less boat care then that in itself is a problem. The care has to get done and unless both parties are able and willing there lies potential trouble. A partnership with the idea of less personal input would work if professional maintenance were part of the deal and the cost is divided.

[Dubnuh]

Well, Tru-Line, it's been a few years since this thread was last updated... Did you go ahead with Nordic fractional ownership program? How did it work out?

[Ken E.]

Boat partnerships are a good way to lose friends. Everyone has a different idea about what constitutes proper operation, use vs abuse, adequate maintenance, need for upgrades and lots more. A snake pit of potential conflict IMO.

[Comodave]

I agree, I would never enter into a boat partnership. No matter who it was.

[OldDan1943]

Originally Posted by Comodave

I agree, I would never enter into a boat partnership. No matter who it was.