Stop water coming through

This is just a small project i'm working in physics, and i'm kinda new with this so please help me out.
below is the figure i drew (not pretty but ok):


So the motor level inside the boat will be under the water level. As you can see, water may come in through the hole where the fan and the motor connected (the red circle). Is there anyway i can fix this problem (I don't want to put the motor diagonally though).

 

its not uncommon for engines to be mounted at or below the waterline , you will have a stuffing box and periodically restuff and check it .boats are constant maintanance there is a miriade of things to monitor,I have never seen an engine mounted directly in line like yours,with the prop right out of the transome,may I suggest that if you embark on a project like this that you could get plans from a professional, lets face it ,your family and friends will be on it sooner or later. Plus all your work could be in vane, but if you want to build a boat ,,,,,,,,more power to you ,longliner

 

No, the boat's not gonna carry anyone, just a model. I'm not planning to go on any kind of pro. Anyways, do you you know any kind of oil, chemical, or whatever that i could put around the hole so the water won't come in but the motor still spin smoothly?

 

To properly do the thing you'd need an stern gland; if the model is small, simple, and intended for a short use, you could try to use a plastic or metallic tube of suitable length (the longer the better) through the hull with an internal diameter only slightly bigger than the propeller shaft (just enough to let the shaft spin freely), and fill it with , let's say, lithium grease, so sealing the tube-shaft clearance. That should avoid leaking at least for some time.
I recommend you a visit to:
http://modelboatmayhem.co.uk/
You may ask Martin Davis there to give you more advice.