Pondering a Trawler Partnership

[Major Martin]

After ten years of adventures, I recently sold my converted wooden fishing trawler and am now pondering my next boat purchase. Meanwhile, to keep my boatin' blues away, we bought a share of a 47-foot sailing catamaran in the Caribbean. This partnership seems to be working out okay. (We spent four months cruising the Eastern Caribbean last winter!) I also once owned a share in an aircraft partnership.

Since I plan to spend my summers in the Pacific Northwest and my winters down south, the thought has occurred to me that it might make sense to form a NW partnership and buy a larger trawler than I'd otherwise be inclined to purchase by myself. (There are some very attractive boats on the market these days -- at very tempting prices!)

I wonder if there's anyone out there who has considered a similar arrangement? Have you gazed wistfully at those $300,000-plus passage makers, thinking you could never actually afford one? Well, if you had a couple of partners, you could!

Of course, this requires a much less possessive attitude toward one's boat. However, if the boat were large enough, say a 48-foot Krogen Whaleback, one could also make long, comfortable voyages with several (if not all) of the partners aboard at once! You need someone else to stand watch, after all. Plus, it's always nice to split the fuel bills. Not a bad arrangement -- if you can get along with your partners, of course.

So, what do you think? Are you into sharing your toys, kids?

 

[Marin]

So, what do you think? Are you into sharing your toys, kids?

No. Taking all one's stuff on and off the boat, quibbling over who's responsible for what, arguing over what maintenance to perform and pay for and what to defer, not being able to use the boat whenever we want, sharing the boat with a potentially poor operator---- don't need the aggrievation, the hassle, or the extra work.

 

[CPseudonym]

I explored that possibility early on and discovered that it is far more popular with the sail crowd than with power boaters. Both equity and non equity partnerships are readily available almost anywhere sailboats congregate.

Not exactly sure why but finally settled on the theory that sailing is a far more cooperative/social venture by nature. Most small sail boats can be single handed but it's far more fun to have friends on board to help with the rig. As no extra physical help is required to operate a power boat the owners tend to wish to keep things more private and less likely to share ownership.

Marin makes a good point about personal items. My observation has been power boat owners keep far more gear aboard than sailors. There are obvious exceptions to that observation but overall I find it holds true. The partnerships we have looked into have had all maintenance scenarios spelled out in advance and are very straight forward.

 

[ksanders]

It would take most of the fun out of owning a larger boat if I couldn't at any moment walk up, and set sail for anywhere my heart desires.

When I go out on a voyage, short or long, or never leave the dock for that matter all I bring are some groceries, and except for fresh vegies I don't even have to do that.

I cannot imagine the fun of sharing that with anyone.

Personally I'd just have a smaller boat, given the choices the OP presented.

 

[Major Martin]

Personal junk

Yep, you certainly have to keep your stuff under control in a partnership.

On the other hand, in a big boat, you can have your own dedicated cabin.

 

[Edelweiss]

It would take most of the fun out of owning a larger boat if I couldn't at any moment walk up, and set sail for anywhere my heart desires.

When I go out on a voyage, short or long, or never leave the dock for that matter all I bring are some groceries, and except for fresh vegies I don't even have to do that.
.

---------------------------------------
here, here!! Agreed and I will drink to that one.

Larry B,

 

[Keith]

Hell, no! For more reasons than I care to list. You'd be better off bareboat chartering.

 

[markpierce]

So, what do you think? Are you into sharing your toys, kids?

No way, Jose, for the reasons others have said.

 

[Peter B]

It has worked for me when I was half owner of a vessel in charter, so the hire co looked after all maintenance and servicing and the cleaning, hiring etc, so we were effectively using it as one does a bareboat charter, but we could book in advance when we wanted it, and had the say regarding however long it was for, and we didn't have to pay for the week, other than fuel used. It was also a good legit tax off-set, as all running costs were deductible, and recognised the relatively little time both owners had to use it. However, as I freed up more time, I did miss not being able to just mess about on it and do my own maintenance, and yes, not being able to keep personal item so on her was also a nuisance.
Another quite a popular way of owning here in Oz for those who can afford a part share of a large new vessel, but are time poor, is to buy into a managed boatshare arrangement which is managed by the share company, but in this case not for hire, so no tax off-set benefit. This suits the suits - literally - those who just want a nice flash boat when they want it and like to say they own it, but don't want to have to look after it, or don't have time to, and like the walk on walk off aspect. These are usually large powerful fast new boats, (eg Riviera, Maritimo, Princess, etc), and not the sort of so-called trawler style we are usually talking about.

 

[FF]

"$300,000-plus passage makers, thinking you could never actually afford one?"

Not many real offshore boats at $300K

 

[swampu]

Not having the money to buy a good running trawler a lot of people I know buy "Investment" trawlers. Two guys go in on a non running hull and start to rebuild it. It never fails that they butt heads and sell it off with not much progress. The guys I know that have the money look at the boat as a reflection of themselves. The boat is meticulously maintained, canvass are replaced almost as much as the oil and they are not going to share the pride of ownership with anyone. Not much middle ground.

 

[sunchaser]

Swampu X2

Two financially strapped partners does not make for a happy marriage. Best to do as Marin cites - charter. Since you live on Pender Island, why not get a smaller low cost to own/purchase fast trailer boat that allows you to enjoy the nice days and forget about the crummy ones? You could be in Desolation Sound in 2-4 hours and all points in between. We have some BC friends with a Fountain who do exactly that.

 

[Lucy 11]

Hi Neighbor

Since being involved with this site I've found there are several Penderites posting-- small world...... Why would one want a large gas/diesel guzzling boat that can get to desolation sound in two hours?????? For me the process of boating ----- whales/birds/fresh air /phosphorescence etc.etc. -- is what it's all about....my philosophy is find a good quality boat that fits ones budget and go forth and enjoy the Salish Sea and beyond..... Thieves Bay has loads of BIG boats that never leave the dock--not that there's anything wrong with that BUT what a waste of $$$$$$$ -- wouldn't cost a dime to borrow a comfy chair and go sit by the water at Port Wash...... A friend on Whidby Island shared a boat with his ex-friend...ended up in court haggling over who was to pay for the broken prop....life is too short...relax and smell the roses or kelp or salt air or ................ john

 

[Major Martin]

The Devil's Advocate is Back!

Hmmm...lots of posts while I slept.

Keith: Bare-boat chartering is not cost-effective for long cruises. Going that route down in the Caribbean last winter would have cost us almost what we paid for our share in the boat!

Peter B.: I always knew you guys from downunder were a reasonable bunch!

FF: You'd be surprised what you can get these days for $300K. The market is soft.

Sunchaser: You don't understand my proposal. It's not that the prospective partners are cash-strapped. It just might make sense to team up, for many reasons.

Lucy 11: Howdy, neighbor! I kept my boat at Otter Bay because it was too big for Thieves Bay. I used it frequently, rain or shine.

I used to visit the Elliott Bay Marina in Seattle looking at colossal yachts that never left the dock. I often wondered why the owners bought those boats. Maybe they're an elaborate tax dodge or possibly they just come down with business friends to have a drink on board. Or maybe they're owned by one-percenters who just couldn't think of anything else to do with their excess cash. Puzzling....

It just seems to me there might be a middle-ground between those who must always possess their boats and those who have a more flexible, cooperative outlook. One needn't be a Buddhist monk or a former submariner to make this work; just a mature attitude and the ability to follow a few common-sense rules.

 

[sunchaser]

MM

I understand your proposal completely. You don't have the money to own your "big" boat 100% and are looking for a like minded qualified person. Good luck in this quest. If you had the money, you'd buy the "big" boat yourself. Do like the rest of us, set your sights on a less costly "smaller" boat.

 

[Budds Outlet]

I've been in a number of very successful business partnerships but I've not had a successful toy/recreational property partnership. I believe looking back that the reason the businesss partnerships succeeded was that there was little pride of ownership and a strong focus on profits. Boat and recreational property ownership are just the opposite. There is a large focus on pride of ownership and very little return on investment if any.

I can't speak to the sailboat sharing as being a good thing as I've had bad luck there. I attribute that failure to having the wrong partner. He was also a negative as a business associate.

The ability to use my boat when I want, go where I want, drill holes in the boat where I want is the reason I own a boat rather than charter one. I can't imagine having any fun sharing a boat as I would have none of the advantages and still probably over half the costs.

 

[Keith]

The Devil's Dictionary:

"Advice" N - Asking for someone's approval for a course of action you've already decided upon.

 

[BruceK]

As my ex wife was often heard to say : "I don`t share".

 

[Major Martin]

MM

I understand your proposal completely. You don't have the money to own your "big" boat 100% and are looking for a like minded qualified person. Good luck in this quest. If you had the money, you'd buy the "big" boat yourself. Do like the rest of us, set your sights on a less costly "smaller" boat.

Actually, I could buy a big boat by myself. What I'm questioning is whether this would be an intelligent use of resources, given that such boats spend the bulk of their time in one place, collecting bills and barnacles.

 

[swampu]

Actually, I could buy a big boat by myself. What I'm questioning is whether this would be an intelligent use of resources, given that such boats spend the bulk of their time in one place, collecting bills and barnacles.

Mr. Martin, My only advice would be to find someone other than a life long friend to join you on your endeavor because this one item seems more than any other to make giant rifts in friendships and relationships. The rules are simple.
Rule #1: Your significant other must be onboard completely.
Rule #2: Don't have a significant other
Rule #3: Don't partner up with someone who is not a significant other who is not completely on board.

 

[Larry M]

We have good friend who just bought a 40' Mainship in a partnership. He had previously owned (successfully) recreational property in a partnership.

Here's the a copy of the draft agreement. He is delivering the new boat as we speak to FL. Keep an eye out for a south bound 40' Mainship. Yesterday she was near Brunswick, GA.

DRAFT Term Sheet​

The …. LLC​

09/17/12​

Form of Co-Ownership: LLC with 50/50 ownership shares. Set up concurrent with purchase offer. Attorney’s fees split 50/50.
Term of the Agreement: Until the Sale of the Boat. A minimum period of 2.5 years from the purchase of the boat.
Boat & Equipment: 2004 or later Mainship 40. Propane stove & washer dryer. Full electronics & thruster(s). $200K including sales tax. Other boats possible. Purchase offer on or before Dec 1, 2012
Sea Trail Inspection and Haul out: Both parties will be present if possible and share costs 50/50
Boat registration & sales tax: Florida
Financing: None. The boat will not be used as collateral by either partner.
Insurance: Co-owner in control of the boat pays deductible for any claims. Coverage to extend to the Bahamas during the winter months.
Hailing Port/ Moorage: The hailing port will be Dinner Key Marina in Coconut Grove. The marina fees will be split 75/25 by Francisco/ John. These will be paid one year in advance on or before January 1 of each year. Estimated marina fees are $8,328 /year to be shared $6246/$2082 by Francisco/John. Boat must be returned to Dinner Key Marina at the end of each owners use, unless co-owners agreed to another location for hand off.
Boat scheduling: Parties will agree each year, on or before August 1, to a usage schedule. The year is divided into 2 halves. The summer half runs from May 1- October 31 and is for Francisco’s exclusive use. The winter half runs from Nov 1 through April 30. Francisco may select a period of no more than 4 consecutive weeks for this half. John will then select 4 months. The final month can be used for boat maintenance or by either party as agreed to.
For the first year Francisco has Dec. 15, 2012 – January 9, 2013. John has the period Jan 10 2013- April 30, 2013. Francisco has May 1, 2013- October 31, 2013.
Authorized Operators: Only the owners and spouses of the LLC can operate the boat without the written permission of the other co owner. Permission will require demonstrating that the operator is a competent ship captain that has previous experience operating a power boat this size or greater. An e-mail will suffice.
Fixed Expenses, major equipment repair & annual haul out: Fixed expenses other than moorage will be shared 50/50 and include insurance, registration fees, taxes, major equipment repair and annual haul out which includes:
· bottom painting
· zinc replacement
· check or replace water pump impellers
· coolant flush as needed
· other annual maintenance items identified in the boat manuals
These will be paid one year in advance on or before January 1 of each year. Estimated fixed expenses including an reserve account for unanticipated expenses are estimated at $8000/ year for $4000/ party and will be adjusted to actual costs for the prior year after the first year. The haul out will occur in the November time frame of each year unless a different time is agreed to by the parties. The parties may agree to a different haul out schedule after the first haul out in November 2013.
Operating Expenses: Each party will be responsible for operating expenses during their period of use. Prior to hand over, each party is responsible for completing regular maintenance items including oil change for engine and generator, new fuel filters, diver cleaning, battery fluids and coolant check and other items agreed to by the co-owners. Boat will be handed over topped off with fuel and water and empty holding tanks.
Log Book:Each party will maintain the log book for the ship detailing maintenance and usage.
Expenses: A separate bank account will be maintained for paying moorage, fixed expenses and equipment replacement. Equipment repair or replacement in excess of $200 will require both co-owners written approval which can be done by e-mail. Minor equipment repair such as a leaking water pump will be the responsibility of the operator to repair.
Upgrades: The parties may from time to time agree on necessary upgrades. These will not be done without the other co owners written permission.
Legal considerations: The boat will be used only for legal purposes and operated according to the Rules of the Road as required by the insurance contract. Any liabilities arising from operating the boat illegally will be the sole responsibility of the operator. The boat may not be used for any commercial purpose.
Pets: Pets are allowed on board. Repairing any damage they cause will be the sole responsibility of the operator.
Smoking: No smoking is allowed in enclosed areas (e.g. the cabins)
Boat cleanliness: The boat will be thoroughly cleaned (interior and exterior) before handing the boat over.
Financial Management: Need to decide who will be responsible for maintaining business and accounting records and checking account.
Failure to meet Financial or Contractual Obligations: Notice may be served by either co-owner that the other party is not meeting their financial or contractual obligations and provided a period of 30 days to rectify the situation. If the parties can not settle the dispute, then it will be elevated to binding Arbitration.
Sale of the Boat: Two and a half years from the purchase of the boat, the parties will:
· agree to extend the agreement another 2 years (at which time the clock starts again), OR
· agree that one of parties can purchase the other parties share in the boat at 85% of the original purchase price plus sales tax (e.g. depreciation of 5% per year), OR
· agree to list the boat with a broker for sale.
Death of co owner: In the event of a death of a co-owner, the Sale of the Boat will be initiated and the deceased co-owners partnership proceeds will go the surviving spouse.
Arbitration:Binding arbitration will be used to settle disputes that cannot be resolved between the co-owners. Each party will bear 50% of the arbitration costs.
Other restrictions: The co-owners cannot sell or pledge their partnership shares to a third party or use the boat as collateral for a loan.

 

[Moonstruck]

I'm questioning is whether this would be an intelligent use of resources, given that such boats spend the bulk of their time in one place, collecting bills and barnacles.

Major, this is not a subject that should ever be brought up on this board.

 

[sunchaser]

MM

OK, I'm convinced you have the money to put $150K into a 50% partnership. As you said, there are many $300K boats out there - maybe one of these currently for sale would be the place to look with the current owner willing to become your partner. What boats for sale in Canada have you seen that would fit the bill - 47' Bayliner, 37' Nordic Tug, 44' Tollycraft or what?

 

[Major Martin]

Larry M: Thanks for the document! Very helpful.

Moonstruck: You're right, of course. Fools rush in where wise men fear to tread!

Sunchaser: I would have to review the market again to provide a serious answer to your question but, off the top of my head, here a few sub-$300K boats that are good values. The Cheoy Lee finally found an offer, after languishing on the market for two years or more. The second probably does not have the range for a true passagemaker but seems like a good value. The third is a beautiful wooden trawler (which most boaters these day would not even consider, of course). Believe me, there are good prospects out there, if you look for them.

http://www.yachtworld.com/core/list...access=Public&listing_id=77106&url=&imc=pg-fs

http://www.yachtworld.com/core/list...rency=USD&access=Public&listing_id=64991&url=

1962 Romsdal North Sea Trawler Power Boat For Sale - www.yachtworld.com

I actually prefer a single-diesel boat for reasons that knowledgeable writers have spelled out. (See the book Voyaging Under Power.)

 

[Marin]

If range is one of your primary criteria then a displacement boat with one right-sized engine is the smart way to go.

For us in our cruising area, fuel is readily available from Olympia at the lower end of Puget Sound to Skagway and Haines at the top end of the Inside Passage. As this is the only area in which we will ever be using a boat, range is not a consideration at all for us even though our current boat has a theoretical no-wind, no-current range of some 600 miles.

Even if our range was half that it would still not be a consideration which is why we will always have a twin engine boat.

 

[charles]

Martin,
If you do get a boat with a partner, here is some free legal advice, and from someone who owned a boat with a partner, NO SPECULATION here.
Get all in writing at the outset, everything, then the exit strategy.
Party A wants out and tells party B how much he wants.
This is the important part, if pary B says that is too much, I will not pay.
At that point party A is OBLIGATED to purshase A's interest AT THAT PRICE.

Since A thinks it is so valuable he now has the opportunity to capitalize on his belief and it also keeps everybody honest.
I put this clause in quite a number of business partnerships over the years.

 

[BruceK]

A caution. Years ago I owned a sailboat. A friend I had sailed with proposed buying a half share. I could continue to race the boat; he was not interested in racing and would use it to cruise locally.I decided against it, partly on the principle I don`t like the compromises partnerships bring (l left a law office to became sole practitioner trial lawyer). My friend bought his own same class sailboat,and promptly began racing it, at the same Club, in the same races.
What would have happened had we gone into partnership? I`m not sure, but kind of glad I never had to find out.
My advice would be do your own thing, without a partner. Others may have opposite stories to relate of harmonious enduring partnerships.

 

[Pineapple Girl]

We were "partners" on a sailboat. We didn't enjoy the situation as it did not feel like "our" boat. we got out of the partnership and bought our trawler. No hard feelings on our part. Don't see the ex partners much as they moved out of state so don't know how they feel but they still have the boat.

 

[Major Martin]

Okay, you guys have convinced me! Boat partnerships are bad idea!

In fact, having anything to do with human beings is probably a bad idea!!!

I'm taking my boat proceeds and buying beans, guns, ammo, and a cabin in Idaho.

 

[Pineapple Girl]

Okay, you guys have convinced me! Boat partnerships are bad idea!

In fact, having anything to do with human beings is probably a bad idea!!!

I'm taking my boat proceeds and buying beans, guns, ammo, and a cabin in Idaho.

Lol it's not THAT bad. Yet.