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Partnerships to Own a Cat in Charter
#162729
06/06/2018 01:06 PM
06/06/2018 01:06 PM
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Joined: Aug 2014
Posts: 229 West Chester, PA
ligot
OP
Traveler
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OP
Traveler
Joined: Aug 2014
Posts: 229
West Chester, PA
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I've half-heartedly looked into this a little in the past but a recent email got me thinking about it again. That email was for a 1/5 spot on a 52' cat that would just be way too big for our interests. I'd like to explore the advantages and disadvantages of doing something like that with a 45' cat and would love to hash it out with someone who has experience.
Does anyone here have any specific experience, not just with owning a charter boat but owning it as a partnership? I feel like it's a big investment and a big risk that might be better is spread around. However I'm sure there are pitfalls I just can't predict.
I'm curious about requirements for proving non-passive income. Total strategy in terms of not just getting in but eventual exit strategy. What's the tax exposure when you cash out of a fully depreciated boat?
There's some other stuff but you get the idea. I feel like it would be great for getting us on the water more often but I feel like there is an awful lot I need to learn.
Thanks to anyone who wants to be my voice of experience.
Dave
S/V Tortuga Lagoon 46
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Re: Partnerships to Own a Cat in Charter
[Re: ligot]
#162742
06/06/2018 02:58 PM
06/06/2018 02:58 PM
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Joined: Aug 2014
Posts: 229 West Chester, PA
ligot
OP
Traveler
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OP
Traveler
Joined: Aug 2014
Posts: 229
West Chester, PA
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I want to jump in before too many assumptions are made here. I'm not looking to question what that other group has done. It's my understanding it's been going for over 10 years and has been successful for them. There are answers to some things Will questioned like there being only 2 owner weeks and that for each owner trip the traveler pays the turn around costs among other things that might be different than what most owners have.
But again, I'm not looking to dissect their system. Rather, I know these partnerships are out there and have worked for some people. What I'd like to hear about is from some people who have the experience of working this all the way through from conception to exit and see what their thoughts are. Both the successes and failures.
BTW, if you'd rather not put business out there feel free to PM me and we can exchange emails.
Thx
S/V Tortuga Lagoon 46
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Re: Partnerships to Own a Cat in Charter
[Re: ligot]
#162781
06/06/2018 08:59 PM
06/06/2018 08:59 PM
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Joined: May 2011
Posts: 1,215 JAX
jphart
Traveler
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Traveler
Joined: May 2011
Posts: 1,215
JAX
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Have you checked out the Moorings or Sunsail owner information? Cash positive for first five years. But most loan amortizations for 10+ years. So main issue is what you do after the 5 year phase out. I know two Moorings ownership groups. Formed LLCs with +-10 members. Good results, but must be structured properly.
JPH I spent my money on booze, broads, and boats...the rest I wasted.
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Re: Partnerships to Own a Cat in Charter
[Re: ligot]
#162835
06/07/2018 02:44 PM
06/07/2018 02:44 PM
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Joined: May 2010
Posts: 399 Pacific NW
snmhanson
Traveler
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Traveler
Joined: May 2010
Posts: 399
Pacific NW
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Or have more partners and don't put the boat in charter? Maybe 6 shares at 8 weeks per year, or 12 shares at 4 weeks per year, or even 24 shares at 2 weeks per year (owners could buy more than one share if they want more weeks). With twelve owners entry costs could be as low as $60-65,000 per share for a nicely equipped new 45' cat with no loan and ongoing costs could be allocated equally to each share. People could own more than one share and shares could be bought or sold with first rights of refusal to existing owners. I also think the boat would be better taken care of in this situation and the group would have more flexibility in terms of where it is located (and when) as well as control of the related costs and expenses. Plus, you could branch out and away from the typical charter boats if desired. As stated above, you would want a rock solid partnership agreement with a defined exit plan. If we weren't in the middle of another project right now I'd be interested in being part of that type of agreement.
Last edited by snmhanson; 06/07/2018 02:46 PM.
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