insurance salvage boats

I didnt read the thread, but I have a mate who is very successful at buying salvage plastic sailboats in the 35ft to 40ft range then recycling them as Bareboat charter boats in second tier markets. Very profitable if you know the business.

Dont try this with a multi hull or you will get clobbered

Be careful with motorboats...wet systems are very expensive to repair

Go with basic mainstream Bavaria, Beneteau...sailing boats.

Aviod yachts with torn off keels or dismasted yachts. Expensive repairs. Look for yachts who were holed and sank.

 

The sailboat market is not a wise business decision, as it represents less then 10% of the pleasure boat market. The charter boat market is even a smaller percentage. In an economy such as this, you need as wide a market as you can draw from.

 

I'm sure you're right Par,the powerboat market would be a better bet, trouble is i dont know that market at all.
Steve.

 

I disagree. My mates latest salvage was a Bavaria 37. Picked it up for 40 grand, spent the winter repairing and the boat generated 55 thousand in charter revenue last year. He amortizes the purchase rapidly with charter, then sells the salvage job for a fair price and moves on to the next one.

 

That charter deal sounds interesting Michael, does he just put the boat into an established charter fleet or does he run the charter business himself? I have friends here that did the same with a landfall 38 they bought in run down condition cheap and refurbished,its been in the charter fleet for years now.

Steve.

 

here is a good deal....
http://gsaauctions.gov/gsaauctions/aucdsclnk?sl=31QSCI12123025

 

I can't connect the dots here so I'll ask. Why doesn't it work with a multihull?

 

Multihull ? Two hulls to fix, two engines to fix, two rudders to fix, two keels to fix.

Shipyards charge by the square meter for hardstanding. In water mooring space impossible or expensive to rent.

Very limited bareboat charter appeal. Limited resale market.

The typical salvage mono is put on a trailer and hauled inland for repair.

Stick with basic plastic charter boats with very simple systems. Use a good eye and purchase easy to repair boats. Preferably a minor hole and wet interior.

 

Everything else, I agree with, but limited resale market? Ha ha ha

Multihulls are the only boats selling at all right now.

 

While i agree with some of what you say Michael its a bit sweeping, for example Gemini cats are probably the most popular cats in the US and would be a great candidate imho as they fit a regular slip,cost no more to dry store and can be hauled over the highway and they have a ready market. Most of the time repairs are not spread over the entire boat so not necessarily twice the repair. I think one has to look at candidates on a case by case basis, i dont think it matters much if its sail, power, mono or multi, it has to have a ready market and the numbers have to add up for all of the expenses in getting it to a saleable condition.

Steve.

 

If you have a market for the boat...salvage it. The charter market my friend works prefers 35 to 40 ft sailing monhulls.

If the salvage is for private use the choice is yours.

Before you salvage any boat, do the numbers. Many boats are broken up and dumped because a similar brokerage boat, in working order, is cheaper than a refit .

 

Michael, im intrigued by the charter idea. Does your friend own the company that charters the boats out or does he put them into an existing charter fleet? We have a couple of charter operations in the area and they dont seem to care if boats are old as long as they are in good shape,the boats range from 30+ years old to new.

Steve.

 

The multi hull market is moving a little bit, but it still has a very small percentage of the pleasure boat market share. Of 100 boat sales, 92 will be powerboats, 6 will be sail and 2 will be a multi. That's a small market.

I ran a charter many years ago in the Caribbean and it's a cost intensive affair. If you have deep enough pockets to absorb a few years of costs and vessel procurements, then you have a shot, particularly with upgraded, not especially old purchases/restorations. Most don't have access to this market or the amounts of liquid discretionary funding and you could get caught holding a 50k white elephant, just because a new model of the same boat, has arrived in the bare boat fleets (or one of any number of reasons).

Having done this with cars and boats for some decades, the trick is local assessment of your market(s) and some luck. Selling skills and marketing are assumed, but volume is the usual road to success, not a hit or miss approach with one or two projects per year. With the hit or miss method, you can easily get hung, absorbing slip and maintenance fees on a freshly completed project for years, until it sells. A 20k profit can get eaten to nothing in that time, with related fees and costs associated with larger yacht sales.

On the other hand the volume approach permits land based storage, possably free if it's your land (one of my advantages), with minimum costs to keep until sold. It also keeps crews busy with new and different projects, which is important in the moral department. All too often I see huge projects get bogged down, just because the crew is really tired of working the same project.

Steve find out what's moving in your area, assembly a little data base of boats for sale, and related information, such as, original list date and price, sale date and price, price reduction, vessel type and configuration, area sold, etc. Very quickly you'll see patterns and this is where you hone in your strategy.

 

Yep- make the money when you buy.

Buy low enough that you can sell for a profit without touching the boat.
If you do any work for additional profit- icing on the cake.

Yep- know the market.
You should be able to walk up to a boat and know without question that you can sell it- at a profit.

I've done it a bunch of times and for me what works is being in the industry and just picking up the sure things that come along. I know the market, have a broker who I can trust to move the boat if I bring right one to them.

There are plenty of boats out there who can be purchased at under market value and sold at a profit. You have to know the market to know if what you are looking at is a deal or not.